withstanding all this, we confess to you that we have no right to use it as we please in any direction not expressly prohibited by the HayPauncefote treaty. Gentlemen of the committee, I submit that the majority of you are lawyers, and if you were employed to care for the moral, not to say legal, rights of a client, and if the contention was this same case, that each of you would find himself fighting strenuously for the right to own, control, and operate for your coastwise vessels in any way that you saw fit.

We believe the economical question demands careful consideration. This country is poor indeed in regard to coastwise as well as international ocean transports. Mr. Cockran stated yesterday that our coastwise vessels had not improved for 30 years. Anyone who has ever sailed upon the high seas or visited foreign ports looks a long time before finding the American colors fastened to the mast. The union jack is everywhere, and while I have no quarrel with it it does not produce the same tachycardia within my breast as does the Stars and Stripes. We want to see our flag by the thousands going through the canal. We want the mast from which it flies firmly embedded in modern ships. We want Newport News and all our American shipbuilders busy. We want the laborers paid a living wage, and we want you to give them the benefit of the dollars and the quarter a ton free toll just as you give to manufacturers the benefit of the tariff. We want you to take away a part of the handicap that has prevented progress in shipbuilding,

Oh, I'm not worrying about a ship monopoly. We found in the Interstate Commerce Commission an instrument to restrain the railroads, and if the powers of this commission are not adequate for the coastwise shipping then Congress can enlarge them or create another commission. I come to you as the president of the Republican Club of Illinois, delegated by them through a unanimous resolution to ask you in their name and in their behalf to defeat this bill calling for the repeal of free tolls for our coastwise vessels. Fifteen months ago, when a Democratic House and a Republican Senate passed a law giving our coastwise vessels free toll and when this was signed by a Republican President, we in Illinois were told then and believe now that this did not in any way interfere with the Hay-Pauncefote treaty nor with any of the rights or privileges of other nations. Later the Democratic national convention and the Progressive national convention incorporated in their platforms a plank guaranteeing to the people of this country free tolls for their coastwise shipping, and we believed that the question was settled for all time. While we concede the right of anyone to change their mind, we believe that when the President of this great United States reversed the lever and started the machine in the opposite direction he should at least take the people into his confidence, and if not all the people, it seems that this committee should know all the reasons why. We believe that Abraham Lincoln would have done this, and we believe it is the proper thing for Woodrow Wilson to do, but as he has chosen not to take the people of this country into his confidence on this great question, then he can scarcely blame us for not following him blindly in this new course.

We in Illinois were taught that free tolls meant cheaper freight rates from the Atlantic to the Pacific. We in Illinois believed when this was passed, and we believe now, that any benefit that may be

derived from the shipping interests would only act as a stimulus for the building of more boats for our coastwise trade, and we Republicans of Illinois believe that the building of more boats would give more employment to our American workmen, and as our shipping interests are already handicapped by the cheaper construction of boats abroad than in this country, we felt that they were entitled to this much of a subsidy for the purpose of stimulating increased construction of boats in this country. We were taught then, and we believe now, that the building of these boats will give to this Nation a greater prestige in this country and abroad, and in times of war, when transports are needed, these boats would be available for the use of this Nation. It has been said that the Central States have no interest in this great question, but this the Republicans of Illinois deny by a resolution which was passed by them a short time ago. Our club believes, and our people believe, that what benefits one part of this country benefits all of it, and the great State of Illinois, with the "Father of Waters," a direct canal to the Gulf of Mexico, which canal some day will be made available for ocean-going vessels taking the corn and the wheat from the broad prairies of Illinois, loading them upon these vessels, and sending them to any part of the world by way of the Gulf of Mexico or the Great Lakes. Illinois looks hopefully forward to that day when this great deep-waterway project will be completed. They of all the States are vitally interested in free tolls for our vessels and for every project that will facilitate an accessible waterway to all the ports of the world.

The CHAIRMAN. Who will be the next, Doctor?

Dr. ROBERTSON. Mr. O'Connor, secretary of the Republican Club of Illinois.

STATEMENT OF MR. CHARLES J. O'CONNOR, SECRETARY REPUBLICAN CLUB, CHICAGO, ILL.

The CHAIRMAN. Please state your business or profession.

Mr. O'CONNOR. I am a lawyer by profession. I come here not so much as secretary of the Republican Club as I do as a citizen of the United States.

I speak not only for myself, but for a great many younger men in Chicago with whom I am associated and with whom I have debated questions that are involved in this controversy. We meet at lunch in divers places and discuss these questions with perhaps as much acrimony, and even more, than do the Senators themselves evince in their discussion. We feel that there is a debatable ground. We do not feel that every argument is on one side, but we feel that every doubt should be resolved in favor of our own country. We feel that, because we feel that the United States is the owner of the canal and the owner of the territory for the purposes of the canal.

Blackstone, the great English law giver, stated in his first book on property and his doctrine of property rights that there is nothing which so generally strikes the imagination or engages the affections of mankind as the right to private property, or that sole despotic dominion which one man claims and exercises over the external things of this world in total exclusion of every other being in the universe. That is the English definition of the right to property.

They have been brought up on that, and we have been brought up on that.

Blackstone goes back into the history of the right of property, and his first illustration of the development of a claim of ownership in an individual was that Abraham claimed a well dug in the plains of Beersheba, because he had dug that well. That is the first instance of a claim of private property, and it came up in a very similar manner to the claim which we make for the right of the United States as the owner of the Panama Canal.

The sole and despotic dominion which one man claims and exercises that sole and despotic dominion has been acknowledged by all courts in our country in all cases where rights of property have been inv lved. It is true that a man can alienate his property; he can grant an easement over his land, and that easement makes his land a servient estate to the man to whom he grants his easement. is practically the right which is claimed by England in the Panama Canal. It is right of easement a right of way-and that right of way is a right of way which they claim should be on an equality with all the rest of the world.

That

The law, as our courts construe it and have developed it in dealing with the rights of property and the granting of easements, is that in any case where there is a doubt as to the extent of an easement granted, the existence of the doubt denies the existence of the right. Our courts have laid that down in numerous decisions and I do not believe there is a State in the Union where it has been passed on that that is not the law-that the existence of a doubt as to the construction of the language which is used in granting the right denies the existence of the easement-the extent of it.

That is all that we claim the United States should stand for in this, as long as Mr. Wilson acknowledges a debatable ground, as long as every man that has passed on the question acknowledges a debatable ground, except those whose interests are adverse to the United States and who are making claims which we know and which they know are the very limit and the very largest extent of the rights which they possibly could claim. That is human nature. That is the selfishness of it.

If we grant this right and back down from the position we have taken, what is the next claims-where would it stop? It would be just as reasonable for a foreign country-England, for example-to make a claim that there is an unjust discrimination; that the tolls are inequitable; and as there is a provision in this treaty that the tolls shall be fixed upon an equitable and just basis, there would be nothing to prevent their making a claim that they have a right to fix the equitable and just basis and that we must abide by their decision and take their construction.

So far as the other questions which are involved, such as the economic question of whether or not we should exempt our vessels, that is a question that should not be confused with this question of the honor and integrity of the United States and the right of the United States. If it is deemed wise by the Senate of the United States to tax American vessels in their coastwise trade, let them fix it on a basis which is different from the amount fixed for the English vessels, whether more or less, but not concede that England has a right to adopt a construction which the United States must hold to.

I think that is all. I thank you.

The CHAIRMAN. We are very much indebted to you.

Senator SIMMONS. We have some statements of witnesses who have been here and gone away.

Senator OWEN. I move that they be inserted in the record without objection.

Senator WALSH. Mr. R. H. F. Phillips requested an opportunity to be heard. I am going to ask him to be here only in case the testimony of the other witnesses is concluded before Monday night.

The CHAIRMAN. Gentlemen, before I leave I want to call your attention to a letter I have received from Senator Gallinger, speaking of Mr. Outerbridge's testimony the other day, and by the saine mail I have a letter from Mr. Outerbridge, and I ask that those letters go in the record. If there is no objection they will go in the record. UNITED STATES SENATE, Washington, D. C., April 22, 1914.

MY DEAR SENATOR O'GORMAN: I notice that you had before your committee a Mr. Outerbridge, of New York. From a casual glance at the testimony the whole tone of his statement is most anti-American, and exceedingly offensive. I have known for some years that he was interested in foreign shipping, and that in every way he had belittled our efforts to enlarge the American merchant marine. I notice that in his testimony he said that Americans "had no talent" for the shipping business, and did not know how to manage it. The truth is we have several American steamship lines that are much larger and equally as well managed as the Outerbridge Quebec Steamship Co., with which he is connected. If it can be done I would like to have Mr. Outerbridge recalled, and such of the inclosed questions as you consider pertinent put to him. I feel sure that you can show that his opposition to free tolls to American coastwise vessels through the Panama Canal is plainly because he is interested in foreign steamship lines.

I have the honor to be, very respectfully, yours, Hon. JAMES A. O'GORMAN,

J. H. GALLINGER, U. S. S.

United States Senate.

Are you at the present time or have you lately been an officer or director of a company interested in and operating foreign steamers out of the port of New York? Where do these steamers run?

Do these steamers or the steamers of the Quebec Steamship Co. or any company in which your brothers are interested receive a mail subsidy or any other subsidy from the British, Canadian or British-West Indian government?

Do you know what is the policy of the Canadian Government in the matter of shipping subsidies? (The Canadian Government expends for this purpose from $1,200,000 to $1,500,000 a year, exclusively to British vessels.)

Are you aware that the Canadian Government has just granted to the Royal Mail Steam Packet Co. of England a subsidy of $340,000 annually for a steamship line from Halifax and St. John to the West Indies, that is likely to be extended to and through the Panama Canal?

Are you aware that this subsidy was given under a stipulation that the steamships receiving it should not touch at any American port?

Is it not probable or possible that the British-Canadian steamship companies in which you and your brothers are interested will extend their service through the Panama Canal when it is opened, and that they will receive additional subsidies for this extension of service?

Is it not a fact that the principal maritime nations of Europe all pay indirectly or specifically to their principal lines of steamships through the Suez Canal subsidies that substantially pay the tolls there?

Is it not possible that they will pursue the same policy at Panama?

If the principal lines of British and other foreign steamships are indirectly or specifically furnished with subsidies to pay their tolls at Panama, will not that be a serious discrimination against all American ships in coastwise or foreign commerce that will have to pay their tolls out of their own earnings?

If the foreign steamships in which you yourself and your brothers are interested should be in receipt of a subsidy sufficient to pay all or a part of the tolls at Panama, would not this be a discrimination against American vessels, which would have to pay their tolls out of their own earnings?

In view of the apparent tendency of the Canadian Government to grant a larger and larger amount of money in subsidies for the encouragement of more lines of steamships, is it not probable that the principal lines of ships plying from Halifax and St. John to Vancouver, whether owned by Canadian railroads or not, will be supplied with all or a considerable part of the sums necessary to pay the tolls out of the Dominion treasury?

Will these British or Canadian steamships not have an advantage in that case over American coastwise steamships?

Will there not be an actual discrimination against the American flag in the coast-tocoast trade through the Panama Canal?

When this subject of free tolls was under discussion by the New York Chamber of Commerce, was it known to your associates that you were an officer of foreign steamship interests?

And was this known when you were appointed on the committee to protest agains free tolls for American ships at Washington?

In your testimony of April 17 you asserted that one reason why there are not more American steamships was that "we have not the talent in this country to manage them." Has not the Ward Line to the West Indies and Mexico been reasonably successful? Has not the Red D Line to Venezuela been reasonably successful?

In the coast-to-coast trade are you aware that the American-Hawaiian Steamship Co., managed by Americans, has increased its fleet from 4 steamers in 1901 to 26 in 1914, all American-built, with a dead-weight capacity of 290,000 tons?

You state that you have two brothers in the steamship business in New York who have been in it for 40 years, "and are still in it successfully." Are they American citizens?

As one reason why Americans should keep off the sea you stated the other day that there is only a "narrow margin of profit" and a “terrific hazard" in the ocean steamship business. Are you aware of the fact that the Cunard Steamship Line, of England, has lately declared a dividend of 10 per cent for the year ending December 31, 1913. and that its total profits of the year amounted to $6,383,000?

Do you know that the North German Lloyd Steamship Co. paid a dividend of 8 per cent last year, that the Hamburg-American paid 10 per cent, that the Peninsular & Oriental (British) paid 15 per cent, the Holland-America 15 per cent, and the Japanese Nippon Yusen Kaisha 10 per cent?

Are you aware that the average usual profits of the ocean steamship business under foreign flags are such that it is estimated that American capitalists have at least $100,000,000 invested in foreign shipping properties, outside of whatever holdings some may have in the International Mercantile Marine Co.?

If the steamship business is so hazardous and profitless as you have represented it, why do Americans invest in many shipping enterprises under foreign flags?

Are you aware of the fact that besides the American-Hawaiian Steamship Co. the old firm of W. R. Grace & Co., of New York, the Luckenbach Co., of New York, and the Emery Co., of Boston, all controlled by experienced steamship managers, are preparing to run coastwise lines through the Panama Canal?

Is it fair to these American shipowners that they should be required by Congress to pay full tolls on their ships, which must be earned out of their freight money, when it is possible or probable that the Canadian Government will supply subsidies to pay the tolls of its own principal lines of coastwise ships, and that subsidies will be given for a similar purpose or to a like effect to the principal lines of Europe and Japan?

Hon. JAMES A. O'GORMAN,

Chairman Committee on Interoceanic Canals,

HARVEY & Outerbridge,
New York, April 23, 1914.

Washington, D. C.

MY DEAR SENATOR: I venture to trespass on your time by inclosing you a manifold copy of a letter which explains itself, in elaborating a little more clearly certain remarks which I gave in my testimony before your committee in answer to questions by Senator Bristow, of Kansas.

I am sending also a copy to Senator Simmon, but not to the other members of the committee generally.

With kindest regards, I remain,

Yours, very truly,

E. H. OUTERBRIDGE.