Mr. DONNELLY. Possibly so.

Senator SIMMONS. And a dollar carries it only 130 miles by rail? Mr. DONNELLY. Yes.

Senator THOMAS. I believe you said Trenton was at the head of navigation on the Delaware?

Mr. DONNELLY. Yes.

Senator THOMAS. And the Pennsylvania Railroad is your chief land avenue of transportation?

Mr. DONNELLY. Yes.

Senator THOMAS. How much of the water front there does that road own or control?

Mr. DONNELLY. None at the present time. It did own about 400 feet

Senator THOMAS. How much does it control?

Mr. DONNELLY. None of it at all, sir.

Senator THOMAS. Then the city has control of its water facilities there?

Mr. DONNELLY. The city has at the present time control of its water facilities which are being developed, except one small spot of 400 feet which has been condemned at the present time. We expect to own all of our water front.

Senator THOMAS. How much of the coastwise trade is done from the port of Trenton?

Mr. DONNELLY. We have no port at the present time. We have shipping at South Trenton. Improvements are being made in the heart of Trenton. These improvements are going on.

Senator THOMAS. How far away is South Trenton?

Mr. DONNELLY. It is about a 3-mile haul.

Senator THOMAS. All in the same municipal corporation?
Mr. DONNELLY. Yes, sir.

Senator THOMAS. The advantages which Trenton as a municipality, as a community, is to obtain from the use of this canal toll free are all prospective, are they not?

Mr. DONNELLY. No; not at all. The funds have been provided, all the contracts have been made, and the city is advertising for terminals.

Senator THOMAS. You are getting ready for it?

Mr. DONNELLY. We are getting ready for it.

Senator THOMAS. You have now no coastwise trade

Mr. DONNELLY. No; only river trade.

Senator THOMAS (continuing). That has its initial point at Trenton? Mr. DONNELLY. No, sir.

Senator THOMAS. So that whatever is done hereafter is prospective? Mr. DONNELLY. Yes. We have river traffic now.

Senator THOMAS. I understand. We are speaking about coastwise trade.

Senator SIMMONS. That suggests one other question I want to ask you. I understood you to say that the tolls on a ship of a certain tonnage you estimated would be some $10,000 or $12,000; I forget which you said.

Mr. DONNELLY. Yes.

Senator SIMMONS. Now, you say if that is remitted that will be saved. Do you mean that either the shipowner, the producer of the

thing shipped, or the purchaser of the thing shipped-one or the other, or all three combined-will get the benefit of that $12,000 remitted? Mr. DONNELLY. We would naturally presume so; yes, sir.

Senator SIMMONS. The United States Government Treasury would lose that $12,000?

Mr. DONNELLY. Yes, sir; but it is losing the investment on $600,000,000 that it has spent on other improved waterways. Senator SIMMONS. It loses it from the Treasury?

Mr. DONNELLY. I do not agree with you.

Senator SIMMONS. Either the shipowner, or the man who ships the goods, or the man who buys the goods, one or all three, will get the benefit of that remission, but it will not go into the United States Treasury? Is that your view?

Mr. DONNELLY. But it comes back directly to the people, the same as the shipping on the Delaware River, the Hudson River, or the East River, and with the plan we are working out at Trenton.

Senator SIMMONS. But it will be taken out of the United States Treasury, and, as the Government has got to bear the expense of maintaining that, all the people of the United States have got to pay it? Is not that so?

Mr. DONNELLY. Without a question of doubt.

Senator SIMMONS. What the shipowner makes by the remission of tolls, or what the owner of the goods shipped, or the buyer of goods shipped makes in that case, all the people of the United States will have to pay out of their pockets?

Mr. DONNELLY. They will be greatly benefited. It will perhaps reduce transportation charges, which is the greatest tax they have to pay.

Senator SIMMONS. You would not advocate, I suppose, that the Government pay a bounty of 60 cents a ton on traffic shipped across the continent for the benefit of the railroads or the shippers! Mr. DONNELLY. Shipped by rail across the continent?

Senator SIMMONS. No.

Mr. DONNELLY. No; I do not think so.

Senator SIMMONS. You would think that was a bad proposition would you not - an indefensible proposition?

Mr. DONNELLY. Without a question of doubt.

Senator SIMMONS. The effect would be substantially the same, so far as the effect on the Treasury is concerned. The effect woud be exactly the same, would it not?

Mr. DONNELLY. There would be no effect on the Treasury. The Treasury is spending money on modern improvements everywhere, and the money is coming back to the people.

Senator THOMAS. I think your argument is a very pertinent one, but why does it not apply more extensively? Why not make the Panama Canal free to all kinds of commerce instead of limiting the freedom of vessels shipped through it to our coastwise trade, which is a monopoly?

Mr. DONNELLY. You mean to limit it free to all nations?
Senator THOMAS. Yes.

Mr. DONNELLY. To engage in the coastwise traffic?

Senator THOMAS. No; although I am absolutely in favor of that personally. Leaving our coastwise traffic just as it is now, why does not your argument, however, justify the opening of the canal free to

the commerce of the world, just as we have opened the Soo Canal, just as our expenditures for coast improvement, in buoys, in the deepening of our harbors, is free to the commerce of the world?

Mr. DONNELLY. We are a very patriotic people, but I do not think we spend $400,000,000 on the Panama Canal for the benefit of England or Germany or Russia. We spend it for our own benefit, and we ought to absorb that.

Senator THOMAS. I am not putting it on the ground of patriotism at all. I am following your material argument, which as I understand it, is that we get indirect benefits which more than compensate for this policy, and with that I agree. But that being the case, what would more powerfully promote the establishment of a merchant marine of our own for the carrying on of foreign commerce than to make this Panama Canal a free highway?

Mr. DONNELLY. I never viewed it in that light. I look at it from a local standpoint. I can not see the way clear

Senator THOMAS. Did you ever read the articles of Admiral Robley D. Evans on that subject, published in Hampton's Magazine in

1910?

Mr. DONNELLY. No. I think we would be under a great disadvantage under such conditions as that.

Senator THOMAS. Would we be under such a great disadvantage as we would be with the ships engaged in the foreign trade paying tolls?

Mr. DONNELLY. On our ships engaged in foreign commerce we would have to pay tolls.

Senator THOMAS. Yes; if we had any. How many have we?

Mr. DONNELLY. Well, we are building them. I can cite three instances that I know of now that ships are being built for the coastwise traffic and they are laying dormant. There is no work being done on them. The refrigerator factory at Trenton has stopped work on the part of the ships they were to supply, assuming that there was a development coming in the foreign and coastwise trade.

Senator THOMAS. Let me assume that you are the owner of a vessel engaged in foreign commerce; you are an American citizen, and your vessel is registered with the American Government; and I am the owner of a vessel engaged in the coastwise traffic similarly registered. Why should you be required to pay tolls through an American canal and I be permitted to go through free?

Mr. DONNELLY. I think that would conform with the treaty that is in existence on which we are basing our arguments.

Senator THOMAS. I will put it differently. A use of the canal if free for all traffic could not violate the treaty, could it?

Mr. DONNELLY. Without a question of doubt as to a foreign power. Senator THOMAS. You think it would? I did not understand your answer.

Mr. DONNELLY. I think it would.

Senator THOMAS. You think if the canal were free and open to the vessels of all nations engaged in all kinds of traffic that that would violate the treaty?

Mr. DONNELLY. No; I do not think so, because as the landlord we have the right to dictate any terms.

Senator THOMAS. It is not any question of the violation of the treaty at all, because my suggestion would not violate the treaty, but

as a matter of justice I should like to know upon what ground, if you can give it to me, you as the owner of an American vessel engaged in foreign commerce could be required to pay tolls, while I, as the owner of a vessel engaged in coastwise commerce should not be required to pay tolls? That is the question.

Mr. DONNELLY. Well

The CHAIRMAN. I understand the witness does not offer himself as a lawyer, Senator.

Senator THOMAS. I do not think it is a legal question.

The CHAIRMAN. I understand there was some suggestion as to the interpretation of the treaty.

Senator THOMAS. That question was caused by the witness's

answer.

Senator SIMMONS. The witness has attempted to interpret the treaty.

The CHAIRMAN. Is there anything else to ask the witness? Senator SIMMONS. I wanted to ask him just one question suggested-

Senator THOMAS. I did not understand that the witness had answered my last question.

The CHAIRMAN. The stenographer will repeat the question.
The stenographer repeated the question, as follows:

"It is not any question of the violation of the treaty at all, because my suggestion would not violate the treaty, but as a matter of justice I should like to know upon what ground, if you can give it to me, you as the owner of an American vessel engaged in foreign commerce could be required to pay tolls, while I as the owner of a vessel engaged in coastwise commerce should not be required to pay tolls? That is the question."

Mr. DONNELLY. I can only answer the question by saying, as I said before, that it is an American canal under the treaty we are existing under, and we are the landlords of it, and we have the right to prescribe rules and regulations to operate that canal, and if we see fit to derive income from taxing foreign ships for passing through there, we are justified in doing it.

Senator THOMAS. We are both American citizens; we both contributed to the building of the canal and its maintenance. We are both taxed for it, and yet I use it free and you are required to pay for it. Is that just?

Mr. DONNELLY. We are in different vocations. I am indulging in the foreign business and you are indulging in the domestic business. Senator THOMAS. I am competing with the world and you have a monopoly.

Senator SIMMONS. There is one other question suggested by Senator Thomas's inquiry. Mr. Donnelly, if you would be willing to throw the canal open to the free use of commerce of the world-I understood you to say in the remarks which you made that there was no difference between our interior waterways, and that in our harbors and our rivers we do not charge our coastwise trade anything for their use, exempting them from tolls, and that you thought there was no reason why the canal should not be treated in the same way. That is what you said, was it not?

Mr. DONNELLY. Yes.

Senator SIMMONS. Carrying your analogy a little bit further, we do not exact tolls on foreign vessels or vessels engaged in the foreign trade at any of our harbors, or for passage up and down any of our rivers, do we?

Mr. DONNELLY. No, sir.

Senator SIMMONS. Then the analogy ought to hold, ought it not, and we ought to exempt them too if you are correct in your assumption and in your analogy?

Mr. DONNELLY. As I understand the regulation of the inland waterways, foreign ships can not engage in the coastwise business.

Senator SIMMONS. I do not think you understand my question. If you think that we ought not to charge tolls upon our coastwise trade through the canal simply because we do not charge for tolls for the use of our rivers and harbors, do you not think, by the same token and by the same process of reasoning, that as we do not charge foreign vessels or vessels engaged in the foreign trade tolls on our rivers and harbors that we ought not to charge them tolls upon the Panama Canal?

Mr. DONNELLY. That might be very satisfactory, Senator, if all vessels were admitted free without the payment of tolls through the Panama Canal, providing that they did not participate in domestic business.

Senator SIMMONS. But we do permit all foreign vessels-all vessels engaged in the overseas trade, whether they sail under the American flag or under a foreign flag, free entrance into all of our harbors just as we do our coastwise ships and we do permit them free entrance over all our rivers just as we do our coastwise trade.

Senator BRISTOW. Senator, they pay pilot charges.

Senator SIMMONS. We are talking about tolls. Pilot charges is a matter that I think is not involved in the treaty. I think that has been held over and over again.

Senator BRISTOW. But it was a matter of litigation.

Senator SIMMONS. Just let me get an answer from the witness and then you can cross-examine.

The CHAIRMAN. Have you any view to express on that question, Mr. Donnelly?

Mr. DONNELLY. Nothing more than I have said, that I am perfectly willing to admit that the canal should be open to all nations free provided that we prohibit them from indulging in the coastwise business. Senator SIMMONS. You mean all kinds

Mr. DONNELLY. Anything, if you want to put it that way. It is bad business judgment to lose the income from the earnings. I would not recommend it.

Senator WALSH. I want to ask you a question. Have you in mind any particular commodity which you think could go to the Pacific coast from the port of Trenton which you can not transport now by rail by reason of the expensive freight charges?

Mr. DONNELLY. There is no particular commodity. We have a great variety of products there. Automobiles are shipped there largely to the coast. It is very expensive, and the rates are very high, and under the new conditions they would go more conveniently and just as quickly by water.