Mr. RANDALL. Yes, sir. I think the difference in the amount of tolls that would be paid would just about put us in that position; and it seems to me, if I may be permitted to say so, why should we not be? If we are building our boats here in America and paying $200,000 apiece more for those boats in order to engage in that coastwise trade, and that money is going into American industries and labor as an example, we are paying our captains of those boats $200 a month, while the British are paying their captains $100 a month; we are paying our sailors and every man aboard that ship 15 to 20 per cent higher wages, on account of the unions and on account of the higher standards of American living if we are doing all of that, why should we not have the advantage, if this Government can honorably give it to us, of free tolls, doing simply our coastwise business? If these boats should go from Boston or New York to a foreign port, we pay toll just the same as the foreign vessel, but simply limiting us to the coastwise trade we are producing a product in this country which makes us pay at least 40 per cent more in cost in order to do that closed coastwise business. The Government ought to, if it can, give to American shipping that advantage, now that it has it in its power to do it.

I never have appeared and asked a subsidy. When the congressional committee came to Boston a number of years ago, I was called before that committee, and I rather disfavored a subsidy at that time. But I think here is an opportunity of doing something not in the line of subsidy, but I think it would be a tremendous encouragement. We certainly will build two, four, or six more large boats, if we can go on with our plan, operating between Boston and Pacific ports. We have already invested about $5,000,000, and we will find capital that will encourage us to continue, but if we can not have free tolls our enterprise looks to me very doubtful.

Senator BRANDEGEE. You are against subsidy, you say, but in favor of free tolls?

Mr. RANDALL. Not against it, but not particularly in favor of it. I have always hoped that some advantage and stimulation might be given to American shipbuilding a little outside of the idea of subsidy. Senator BRANDEGEE. What distinction do you draw between a subsidy, which you say you are not prepared to advocate, and the money advanced or stimulus acquired by the people of the United States paying for the upkeep of the canal instead of getting as much out of it as we can by the imposition of a reasonable toll from the ships which benefit by the use of it?

Mr. RANDALL. Because the people of the United States will get the benefit of every pound of merchandise I bring in those steamers. They will get the benefit of that $5,000 or $6,000 on every trip or every passage through the canal. They are getting the benefit in the merchandise we move.

Senator BRANDEGEE. Would they not be getting the benefit of that if it were carried free across the Panama Railroad at present, in the same way?

Mr. RANDALL. Yes; but the freight rate is higher now going that way. When the canal is open the freight rate will be lower.

Senator BRANDEGEE. It is only a question of degree, then? Is there anything substantial-I am asking to get your opinion about this-do you consider there is any substantial difference between the

law which enables your ship to get a money advantage out of the Treasury and getting a subsidy direct?

Mr. RANDALL. I suppose in dollars and cents-
Senator BRANDEGEE. In principle, I mean?

Mr. RANDALL. Yes; I think in principle there is.
Senator BRANDEGEE. What is that?

Mr. RANDALL. Because I think we have already committed ourselves to a free toll passage of American boats.

Senator BRANDEGEE. No; I mean the difference in principle between the Government paying your fare through the canal and the Government handing you the money as a subsidy and paying your fare?

Mr. RANDALL. Well, perhaps in principle not; but I would rather have it appear the other way. I think it I think it appears better.

Senator BRANDEGEE. I agree with you it is not quite so glaring, perhaps, but in substance it amounts to the same thing, in my opinion. Senator SIMMONS. You say you built these ships. How many do you say you built?

Mr. RANDALL. We have four now in the water, and are building two that will be off in June. They carry about 9,000 tons apiece. Senator SIMMONS. Have you been engaged heretofore in the coastwise trade?

Mr. RANDALL. For 25 years in sailing vessels.

Senator SIMMONS. These are not sailing vessels?
Mr. RANDALL. These are steamers.

Senator SIMMONS. Assuming that you built these vessels for the purpose of engaging in the coast to coast trade; that you calculated very closely the difference between the present cost of coast to coast trade by water, either around the Horn or by the Tehuantepec Railroad, and the cost through the canal-will you please give to the committee the result of your conclusions as to what you will save by reason of the shortening of the distance by the opening of

the canal?

Mr. RANDALL. What we would save in operating expenses, you mean?

Senator SIMMONS. Yes; in operating expenses. I suppose you have considered that question very carefully?

Mr. RANDALL. The saving is just the saving in the difference of time.

Senator SIMMONS. What is it per ton? Let us get down to the unit. You have been talking about the full cargo. How much do you save per ton of lumber? You say you are building these ships to enter the lumber trade?

Mr. RANDALL. Yes, sir; $8 a thousand feet.

Senator SIMMONS. That is, it would be $8 per thousand feet less; the toll on a thousand feet is about 75 cents, is it not?

Mr. RANDALL. But on a thousand feet of lumber it would be, on our boats, about $1.50 per thousand.

Senator SIMMONS. According to the capacity of measurement basis of $1.20 ?

Mr. RANDALL. We would carry about 4,000,000 feet per boat. Senator SIMMONS. I am trying to get down to the unit.

Mr. RANDALL. I am getting to the unit. I am going to tell it to you. We would pay toll of $6,000, and we would carry 4,000,000 feet, and that is $1.50 per thousand feet.

Senator SIMMONS. Well, we will say $1.50 per thousand feet. The saving, you said, would be $7.50, did I understand you?

Mr. RANDALL. I should think we could bring it at $8 per thousand cheaper, yes.

Senator SIMMONS. So, after taking the toll out, the saving would be--

Senator WALSH. I do not understand. Cheaper than what? Do you now carry lumber around the Horn?

Mr. RANDALL. Yes, sir.

Senator WALSH. You are now engaged in that business?

Mr. RANDALL. We have brought some around at different times; yes, sir.

Senator THOMAS. That was on sailing vessels?

Mr. RANDALL. Yes, sir.

Senator SIMMONS. Can you pay the toll and carry it through for $6.50 per thousand less than you can now ship it around the Horn? Mr. RANDALL. Yes, sir; I should think, just about.

Senator SIMMONS. Will you give us the present transcontinental rates on lumber?

Mr. RANDALL. Rail rates?

Senator SIMMONS. Yes.

Mr. RANDALL. In the neighborhood of $24 per thousand.
Senator SIMMONS. From what points?

Mr. RANDALL. From Seattle to New York and Philadelphia. I will not say that it is absolutely so, but those are rates that have been given me.

Senator SIMMONS. What can you carry it from Boston to Seattle for in your vessels through the canal and pay the toll there-what would it cost you?

Mr. RANDALL. I would not take lumber that way, because there would not be lumber goir g that way. I would take other cargo out that way. Do you want to put it all on the basis of lumber?

Senator SIMMONS. Yes; I understood you were building these vessels to engage in the lumber trade.

Mr. RANDALL. To bring lumber from the Pacific coast eastward, going from the East to the West, we would bring general cargo. Senator SIMMONS. That is all right. Then reverse it and give what would be your rate, what would be your charge-the cost? Mr. RANDALL. To bring it from the Pacific coast around? Senator SIMMONS. Yes.

Mr. RANDALL. $10 to $12 per thousand, according to competition. Senator SIMMONS. And pay the toll?

Mr. RANDALL. No; if you have got to pay toll I should think that would be about $1.50 per thousand more.

Senator SIMMONS. That would be, then, $11.50 to $12.50 ?

Mr. RANDALL. It would be $11.50 to $13.

Senator SIMMONS. That would give you a margin over the railroads of over 50 per cent, would it not?

Mr. RANDALL. Yes, sir.

Senator SIMMONS. So that you can pay tolls and carry it for 50 per cent less than the railroads now charge?

Mr. RANDALL. I should think pretty nearly; yes.

Senator SIMMONS. You have given us your rate for taking it from Seattle to Boston per thousand feet of lumber. Can you give us the rate charged for taking it from Vancouver, British Columbia, in a British vessel, to Boston?

Mr. RANDALL. No; I have seen no rates of that kind made, but I can guess, the same as everybody can.

Senator SIMMONS. Well, guess, then, if you can not do it any better. I thought you had looked into this question very carefully.

Mr. RANDALL. I should think $6 to $7 per thousand.

Senator SIMMONS. They would charge $6 to $7 per thousand less! Mr. RANDALL. No; $6 to $7 per thousand feet freight to bring it around.

Senator SIMMONS. They would charge $6 to $7, as against your $11.50?

Mr. RANDALL. Yes, sir.

Senator SIMMONS. If you add the toll, their rate would be $7.50 and $8.50, would it not, they paying the toll just as you pay?

Mr. RANDALL. Yes, sir.

Senator SIMMONS. So then, so far as your competition with a British vessel engaged in the lumber trade from British Columbia to Boston is concerned, if you should be required to pay the toll and they should be required to pay the toll, your rate would be from $11.50 to $13 and theirs would be from $7.50 to $8.50 ?

Mr. RANDALL. Yes.

Senator SIMMONS. Therefore the payment of the tolls or the nonpayment of the tolls would not bring you at all upon a parity with these foreign vessels engaged in the same trade?

Mr. RANDALL. If there were no other consideration but just that. But you want to take into consideration my boats cost 40 per cent more as an investment, and it is going to cost me from 15 to 20 per cent more, at least, in operating. Therefore I have that all against I could build these boats, say, in England, for $400,000, as against $600,000.

me.

Senator SIMMONS. Your complaint, then, is not with reference to the tolls, but it is the navigation laws, is it not?

Mr. RANDALL. No.

Senator SIMMONS. You can pay the tolls. If you are both required to pay the tolls, you would have to pay-on a load of lumber, to bring it from Seattle to Boston, it would cost you $11.50 to $13?

Mr. RANDALL. That would be my price for bringing it.

Senator SIMMONS. And you say a foreign ship would bring it from Vancouver, or some other point in British Columbia, to Boston for $7.50 to $8.50 and pay the tolls?

Mr. RANDALL. Yes, I think that is just about it.

Senator SIMMONS. So that if your tolls are remitted you would not be able to compete with them without a change in our navigation laws?

Mr. RANDALL. No, I could not compete with them.

Senator SIMMONS. Without a change?

Mr. RANDALL. No man will pay me $3 more for that lumber than he can get it for in Boston.

Senator SIMMONS. How did you expect then, when you entered upon this enterprise, to compete with them?

Mr. RANDALL. I was going to bring my lumber from Portland, Oreg., in my ships.

Senator SIMMONS. Would not the difference be still as great, or very nearly as great?

Mr. RANDALL. No, sir.

Senator SIMMONS. What is the difference now between the cost that you charge for bringing 1,000 feet of lumber from Portland, Oreg., to Boston, and what this foreign vessel charges for bringing a like 1,000 feet of lumber from Vancouver?

Mr. RANDALL. I have given it to you. You have the figures right there.

Senator WALSH. The difference would be against the Portland manufacturer of lumber, would it not?

Mr. RANDALL. Yes.

Senator WALSH. He would be obliged to take less for his lumber? Mr. RANDALL. Yes.

Senator WALSH. In order to equalize the thing, than the British Columbia manufacturer would?

Mr. RANDALL. Yes; if he decided to compete on the prices. Senator SIMMONS. But will the remission of tolls at all equalize the conditions with reference to the traffic rate?

Mr. RANDALL. Yes.

Senator SIMMONS. How will it equalize the difference when the difference in freight rate is $4 to $6? How can $1.50 equalize that difference?

Mr. RANDALL. I have to send my boat out, to start with, and there is $6,000 tolls; and I have to bring her back again and there is $6,000 more. I have to do both those in order to get that lumber back to Boston; so on both my freights, one going and one returning, I am going to get the benefit of that toll of $12,000, which are from the figures I have made; and I am perfectly willing to continue the enterprise if the discrimination is sufficiently favorable to the American boats for us to do that business.

Senator SIMMONS. I can see very well how the lesser rate will enable you to meet railroad competition.

Mr. RANDALL. I do not think railroad competition is going to trouble us.

Senator SIMMONS. It will not trouble you at all?
Mr. RANDALL. No, sir.

Senator SIMMONS. It will not affect you at all?

Mr. RANDALL. No; there is a certain amount of bulk cheap cargo going to seek a cheap water rate. Expensive and high-class goods are probably going on the railroad anyway, but the bulk cargo, such as iron, coal and lumber, and manufactured goods, low-priced commodities, will seek a water rate, which is much cheaper that the railroad rate.

Senator SIMMONS. Therefore you do not think it will affect the railroad transcontinental rates very seriously?

Mr. RANDALL. No; but it will affect me very deeply if I have to give up my lumber business.