Mr. ALLEN. I sell my product in the interior, in Kansas, Oklahoma, and Nebraska. The thought that I wanted to convey in that is that if we pursued in America the new policy which seemed to be in the mind of Congress when it sought, as the President so happily pointed out in New Jersey, to revive the building of a merchant marine, the thought that was in our mind was that we, being within 500 miles of the Gulf of Mexico, might see a revival of river commerce along with coastwise commerce, and that we might have some benefit arising out of our geographical location, and therefore that the building of this great enterprise might produce a revival of commerce in the Mississippi Valley larger than we have originally dreamed we would ever have. When the President asked us to take the back track on this for various reasons, we were very much disappointed; but we are a kindly and simple folk out there, and we want to do the right thing, and when the President says that "unless you grant me this in ungrudging measure I will not know what to say in matters of even greater delicacy and more immediate concern," we supposed he might refer to the Mexican War and delicate diplomatic situations that demanded that we make a sacrifice of our commercial rights to meet what might be a delicate situation of immediate concern. Now that the situation seems to have reached its crisis and we can help him count the cost, the sentiment back there is just what it was a year and a half ago, that we protect the possibilities of benefit and profit that exist in free transportation.

Senator SIMMONS. Let me ask you a question. You say that the crisis has been reached. I suppose that you mean that we are now substantially and practically in a state of war with Mexico. Do you not think right now that if we are in a state of war with Mexico that we need probably more than we did a few months ago to maintain the most cordial relations with foreign nations?

Mr. ALLEN. I think we need now, more than we ever did before, Se ator, to take the American people into complete confidence in the matter, and delay on as important a matter as this what we do until the American people may have for themselves the opportunity to count with the President the cost of what we are giving away.

Senator SIMMONS. I do not know what the President meant, so far as Mexico is concerned, but you had applied his meaning to Mexico, and it occurred to me possibly if that was in his mind that since the trouble has come that was merely a matter of apprehension that probably the need of amity and cordial relations might be greater than it was before the calamity occurred.

Mr. ALLEN. I think that all who are gifted, as you are, with healthy American imaginations, were naturally led to conclude when the President said this pointed thing that he meant that he must have the friendly attitude of Great Britain toward his policy in Mexico, then defined as the policy of "watchful waiting," and the change that has come to that condition is that we are no longer pursuing that policy, unfortunately, and through no lack of ability on the part of the President, but through unfortunate circumstances. That is the only change that has come, but having come it reveals to us apparently what was in his mind, and having been unable to avoid. the thing he dreaded then why pay, if this is, as has been rather pointedly stated, the price we give to Great Britain for her friendliness in this juncture? Anyhow, why pay any price to Great Britain

or any other nation unless we seek to do them wrong? Out in my country we observe that in a very able way both schools of opinion have been presented in such a way as to satisfy the prejudices of both sides, and in such a way most assuredly as to create a very healthy and a very honest doubt, and we are prejudiced out there where doubt exists of giving our own country and our own interests the benefit of the doubt, since it prevails in a business matter, either to our hurt or to our profit. We do not recognize in this a question. of international honor so much as a question of tra le between nations. Senator SIMMONS. Let me interrupt you?

Mr. ALLEN. Yes.

Senator SIMMONS. I believe a little disagreement between this country and Great Britain some years ago about an alleged discrimination against American commerce in the Welland Canal brought about a very acute situation between this country and Great Britain. Have you considered the possibility of the same thing happening if we insist upon construing this treaty in our own way, and refuse to give any consideration to Great Britain's dissent from our view of what is the proper construction of the treaty, what are her rights under the treaty as well as our rights under the treaty, and refuse at the same time to arbitrate that difference? Can you not foresee that possibly a condition might arise similar to that which was created when Great Britain refused to give any consideration to our construction of the treaty with reference to passage through the Welland Canal, resulting in our imposing discriminating retaliatory duties upon the commerce of Great Britain?

Mr. ALLEN. I do not realize, Senator, this as a situation that bears any resemblance. This is a matter that has to do with our interstate commerce, that has to do with what policy we shall pursue in reference to the boats that ply in the commerce between States, and that England has no more right to tell us what we shall do in that interstate commerce than she would have to go before the Interstate Commerce Commission of this country and complain on some freight rate that we had established for an American transcontinental railroad that might be displeasing to the Canadian Pacific Railroad. This is a matter purely of domestic thought, purpose, vision, and right, and we would be weak if we should allow England to come in and tell us what we should do concerning a matter in which she has no interest and therefore no rights.

Senator SIMMONS. Are you aware of the fact that vessels engaged in our coastwise trade also engage in the foreign trade?

Mr. ALLEN. Why, yes; but when the they do that they are not engaged exclusively in coastwise trade.

Senator SIMMONS. You do not contend that this act giving exemption of tolls as it reads is confined to vessels exclusively engaged in the coastwise trade?

Mr. ALLEN. I contend that a vessel not engaged exclusively in a coastwise trip would not be entitled to exemption from tolls under the Panama Canal act, and the question whether some vessel engaged in the overseas got through without tolls is purely a question of the honesty and efficiency of administration.

Senator SIMMONS. But the Canal act does not limit the exemption to vessels engaged exclusively in the coastwise trade, does it? Mr. ALLEN. That is the general purpose of it.

Senator SIMMONS. The Commissioner of Navigation tells us that our vessels that are engaged in the coastwise trade do also engage in the foreign trade; that is, if they want to they stop at a Mexican port on the Atlantic and a Mexican port on the Pacific coast.

Mr. ALLEN. Senator, let us not confuse the duties of legislation with the duties of administration. I think we have no controversy over the declaration of the treaty that it is to exempt from tolls those ships engaged excusively in the coastwise trade while engaged in the coastwise trade. It is the purpose of our law to create that condition. If we fail at some particular time or with some particular vessel that is something for an administration organization to look out for.

Senator SIMMONS. You are aware that Sir Edward Grey made the point in his note that our vessels engaged in the coastwise trade which would be entitled to this exemption were not engaged exclusively in coastwise trade? And you are aware of the fact that the Commissioner of Navigation confirmed that statement?

Mr. ALLEN. Yes.

Senator SIMMONS. You are aware that Great Britain is making the point that in exempting our coastwise trade and in refusing to exempt her coastwise trade, because she has a coastwise trade on the Atlantic and on the Pacific, an intercoastal trade, just as Mexico has an intercoastal trade, and as we have an intercoastal trade-that we were discriminating against her coastwise trade? And you are aware of the fact that there are a great many people in this country that regard this law as infringing on the agreement of the treaty with reference to the equality of treatment of vessels, so as not to discriminate against the citizens of any country? The President agrees that this is a correct interpretation. The Secretary of State agrees that that is a correct interpretation.

Mr. ALLEN. I understand they agree.

Senator SIMMONS. In that condition, in that state of cntroversy over this question, I want to ask you if you do not think in case we should refuse to repeal this act, and refuse to recognize any possible question as to discrimination under the treaty, if we ought not without raising any objection to it submit this question at once to arbitration ?

Mr. ALLEN. Senator, it being a question that has to do solely with our own rights of a domestic kind, and the character of an arbitration board which we would go before, having an interest against us, a difficulty arises at once as to what sort of arbitration we would get. We would be going out into the nations of the world and saying, "Here, tell us what we shall do with this new 40 miles of American coast line which has been created across our possessions in the Panama Zone."

Senator SIMMONS. But you say it deals exclusively with domestic questions?

Mr. ALLEN. Yes; I say, so far as that class of shipping which we seek to exempt is concerned, it deals with a purely domestic question; that we do not want to grant to Great Britain the same right is due to the fact that we are talking about the coastwise business of the country that owns the canal, and what it shall do with its own shipping in its own canal; that we do England no injustice because she has no coastwise shipping in America in our canal that competes with us in relation to this particular form of commerce.

Senator SIMMONS. But she has a coastwise trade that wants to go through that canal, has she not?

Mr. ALLEN. Oh, yes; but it does not compete with our coastwise trade. We do not compete with it. So Germany has a coastwise trade that wants to go through the canal

Senator SIMMONS. She has a coastwise trade

Mr. ALLEN. Not in America.

Senator SIMMONS. She has a coastwise trade upon this conti

nent

Mr. ALLEN. To which she gives a monopoly.

Senator SIMMONS (continuing). That wants to go through this canal?

Mr. ALLEN. Yes.

Senator SIMMONS. Just as out coastwise trade wants to go through the canal?

Mr. ALLEN. Yes.

Senator SIMMONS. If we discriminate against her coastwise trade from one coast to the other coast, is not the effect upon Great Britain just the same as if we discriminated in favor of our over-seas trade and against her over-seas trade?

Mr. ALLEN. Senator, the contention I make is that we do not discriminate against Great Britain's coastwise trade. We merely give to our coastwise trade - to have discrimination there must be competition. We merely give to our own coastwise trade, which does not compete with the coastwise trade of Great Britain, that which goes through our canal or otherwise, in any sense, and hence we might as well give to England the right to say what we should do with any other 40 miles of American coast line while engaging in a purely interstate business.

Senator SIMMONS. Suppose Great Britain should say "I supposed you were making this agreement with me so that I should be on equal terms with you so far as my traffic is concerned. Now you do not let me engage in your coastwise trade, and I do not let you engage in my coastwise trade, but you want to use this canal for your coastwise trade, and I want to use this canal for my coastwise trade. Now, if you charge me a toll for my coastwise trade and do not charge yourself a toll for a coastwise trade, you are discriminating against my coastwise trade, just as much so as you would be discriminating against my foreign trade if you charged my vessels engaged in the over-seas carriage a toll, and did not charge your ships engaged in the over-seas carriage a toll?

Mr. ALLEN. My answer to Great Britain in respect to that, after straightening out her vision on the subject, and saying that she wholly misunderstood us, and gave us credit for a generosity which we do not possess, would be that her coastwise trade is not being discriminated against by the mere tremendous accident of fact that we have built a $400,000,000 canal for America at our cost, for which we must be responsible. We would say to England, "Your misfortune, if it be a misfortune in this respect, exists in the fact that it is our canal and not your canal, but we will give to you, Great Britain, the rights that we give to everybody else in the class of business that goes through this canal in competition with our business. If a ship is going from an English port to an Australian port we will charge it

tolls even though your ship may be going through in the coastwise business." But when it comes to the mere little question—and it has become a very little question through our own very little policywhen it comes to the very little question of what we do with our interstate commerce, we would say to Great Britain we have a right to pet this cripple, we have a right to create for our own benefit a merchant marine that will give to us the honest, natural, and logical advantage which belongs to us by reason of the tremendous investment that we have made.

Senator SIMMONS. Let us go a little step further. You will admit that while Great Britain could not engage in our purely domestic trade, that a British vessel sailing from Vancouver with lumber-we can talk about lumber-we will take that

Mr. ALLEN. Yes.

Senator SIMMONS. And can deliver that lumber to dealer in New York or in Boston.

a lumber

Senator SIMMONS. Or any point on the coast. Do you not think that to charge a toll upon the lumber brought in a British vessel from Vancouver to New York would be a discrimination against that lumber if it shall be required to pay a toll, and the like kind of lumber brought from San Francisco in an American coastwise vessel to New York, which is not required to pay a toll?

Mr. ALLEN. I would not regard that as a discrimination.

Senator SIMMONS. Let us look at the individual purchaser of that lumber. We will say that you are a lumber dealer in the city of New York; that you have a right to buy that lumber in Vancouver, if you want to, or in Seattle.

Mr. ALLEN. Yes.

Senator SIMMONS. If you buy that lumber in Vancouver, and you bring it around under this toll act to you at New York, you will have to pay, if the toll is thrown upon you, that charge?

Mr. ALLEN. Yes.

Senator SIMMONS. If you buy it at San Francisco and bring it through there you would not have to pay a toll on it. Would not that be a discrimination against you?

Mr. ALLEN. No, it would not be a discrimination. It would be the general result of the fact, Senator, that we have the great good fortune to own this tremendous enterprise which really ought to be of some value to us, and it was not presumed when we built it that we should surrender all practical business sense in reference to the practical benefit of its possession, and so I say that that is a difference, but not a discrimination. There is no dishonor in the fact that I can buy some commodities in Washington cheaper than I can buy them at Wichita, because Wichita is so far away, and you who can buy them in Washington have the good fortune to live here while I have the accident to live elsewhere.

Senator SIMMONS. Have you not overlooked that clause of the treaty which says that "vessels of all nations shall be treated entirely equal, so as not to discriminate against the citizens or subjects of any nation in respect to the conditions or charges of traffic, or otherwise?