APRIL 23, 1914.

Hon. JOSEPH L. BRISTOW,

Senator from the State of Kansas, Washington, D. C.

DEAR SENATOR BRISTOW: In reading over the testimony given before the Committee on Interoceanic Canals on the 17th instant by the delegates from the chamber of commerce, including my own, I see that I did not sufficiently clearly bring out in answer to some of your questions the practical points relating to transportation matters which I think are not generally apprehended, but which are of tremendous significance to the business and industrial interests of the country. I venture therefore to address this letter to you.

You spoke of transportation being a tax upon production and that you did not see how a tax upon the producer or consumer for the support or benefit of others would likewise benefit either the producer or consumer who had to pay that tax.

First, as a matter of elemental justice, let me say that the laborer is worthy of his hire.

You would, I am sure, be among the first to insist that every man who drove a plow or operated the harvester or thrashing machine should receive a living wage, and that if the cost of living advanced he should still receive a living, and therefore an advanced, wage.

These wages are a tax upon products and commodities of whatever description. Transportation charges are also necessarily a tax, but transportation performs another service in that it is a creator of new values. It transports surplus products and commodities, which because they are surplus have no value at the point of production, to points where they are no longer surplus, but in demand and immediately convertible into cash or its equivalent in credit.

Furthermore, and this is very frequently if not generally overlooked, the celerity and dispatch with which transportation can perform this translation of products and commodities into cash or credit materially affects the net proceeds of the sale, and therefore the net profits of the producer.

Again, the celerity and dispatch with which products and commodities may be placed in consuming markets or, on the other hand, the delays which may occur in accomplishing that often affects actual consumption, and therefore the volume of the producer's turnover.

"If the baker can not deliver at your house to-day because of storm or strike, you do not consume two loaves tomorrow because of the one you could not have to-day, and it is equally true as to a large proportion of the products and commodities being transported to consuming markets, that lost consumption through delays is never made

up.

The arteries of transportation in this country are to general industry what the arteries and veins of the human body are to the human system-they convey the life blood for the support of the whole system and absorb a toll for their own sustenance in the service. If congestion or stoppage of circulation at any point occurs, paralysis or atrophy ensues, and in the same manner with products and commodities-if congestion of transportation and undue delays occur paralysis and atrophy of business ensues. There is the tying up of capital and the loss of interest thereon, which is a direct loss.

The provision of adequate facilities, therefore, for the very prompt translation of product or commodities into cash or credit has a very direct relation to the ultimate profit of the realization to the producer as well as to the volume of turnover of his business.

Adequate facilities can only be provided when sufficient means are available. Sufficient means can only be available either when surplus income provides it or when sufficient income to attract borrowed capital obtains.

Furthermore, the high cost of living and the high cost of doing business, which affects both the laborer and the transportation agencies, necessarily means that there is prevailing a high value for the products and commodities of the country which enter into the cost of living.

When those high values prevail it would not be equitable that the producer should obtain the entire benefit but that all should share in due proportion in relation to their contributive effort.

I hold no brief whatsoever for any agency of transportation, and, what is more, I personally own no stock, bonds, or securities of transportation agencies, but my active business experience has taught me that adequate facilities for the rapid transportation of products and commodities from the point of production to the point of ultimate use is an enormously important factor in the volume and in the profits of any producer's business, and I repeat what I stated in my testimony-that, next to the wealth produced through agriculture, the greatest stimulating force to all industry in this country is

the purchasing power and operations of the great transportation agencies, and that in that stimulation producers of all kinds, whether agricultural of manufacturing, share in a greater benefit than it costs them in the tolls they pay to assist in producing such a general result.

With apologies for tresspassing on your time, I remain,

Yours very truly,

STATEMENT OF HON. WILLIAM E. MASON, OF CHICAGO, ILL.

The ACTING CHAIRMAN (Senator Bristow). Will you kindly give your name and address to the stenographer?

Mr. MASON. My name is William E. Mason; residence, Chicago, Ill. I will make my statement just as short as I possibly can. Probably

I shall not take over 15 or 20 minutes.

The ACTING CHAIRMAN. I think we have plenty of time to hear it from Senator Mason.

Mr. MASON. I want to give to the committee my reasons for voting against the Hay-Pauncetote treaty No. 1 and for voting for the HayPauncefote treaty No. 2.

When the matter first came up for discussion in the Senate, Senator Cushman Davis was chairman of the committee, or had charge of the bill or the treaty, and my recollection is-and I must state some things from recollection, as we know the uncertainty of our memories that he died before the ratification of the first treaty, and that Senator Lodge, as I remember, had the treaty in charge. The ACTING CHAIRMAN. You do not mean the ratification of the first treaty; it was not ratified, was it?

Mr. MASON. Yes; it was ratified by the Senate.

The ACTING CHAIRMAN. With amendments?

Mr. MASON. Yes; it was ratified as amended by the Senate by a two-thirds vote.

Acting under the feeling that I was representing my constituents and my own conscience as well, I determined that I should never vote for a treaty which left the question of neutralization or the guaranteeing of neutralization to any power except the United States, and that I would not vote for a treaty which did not either affirmatively or by construction give us the power to fortify the property. I was entirely satisfied with the proposition first made that we were to have all the rights of construction and all of the rights that are incident to construction. I had been practicing law; I had studied common law and equity, and about that time in order to help out our senatorial salary, which at that time was not quite so large as you gentlemen get now, I was employed lecturing upon international law in one of the colleges here, and I naturally took an interest in it. and I found in Senator Davis a man of large experience and broad learning in matters of international law.

I also made up my mind that there were three things, as I have said to you, that I would not support in any treaty. That is, the right to fortify; the right to declare neutralization of our own territory and guarantee it by the United States alone, and that it would also leave us the right to determine the question of our treatment of the coastwise trade.

Upon the question of neutralization it will be remembered that the Hay-Pauncefote treaty adopts the general principle of neutralization of Article VIII of the Clayton-Bulwer treaty, but it is adopted by

the high contracting powers or parties. That is, Great Britain and the United States. It was a joint adoption in the Hay-Pauncefote treaty number one, as to that general principle of arbitration as contained in Article VIII of the Clayton-Bulwer treaty. That was not the adoption of neutralization as finally approved by the treaty known as the Hay-Pauncefote number two, which became the existing treaty between the United States and Great Britain.

Gentlemen, understand the definition in international law of neutralization, the general principle of neutralization as applied to a joint high contracting party, is one thing, whereas an independent nation does not consent, and we did not consent, that Great Britain, or any other nation in the world, should be called in jointly to guarantee the neutralization of this, which we conceived to be our property, since the right to construct was granted us, and all the rights incident to that construction.

When we came to the second treaty, where it was discussed for hours in the Senate, I remember very well the able argument of Senator Beveridge upon that subject, and of others, and when the second Hay-Pauncefote treaty came in, of course you gentlemen must remember there was a year between the ratification by the Senate of Hay-Pauncefote number one and the adoption of the treaty. Hay-Pauncefote number one was sent in by President McKinley. It was ratified by the Senate. It was rejected by Her Majesty before the death of President McKinley. It was known that it would be rejected almost at once, and was so announced-not officially but semiofficially. After the death of President McKinley came Col. Roosevelt, a more strenuous man in all of his avocations of thought and action, and when this proposition came again to the Senate of the United States, which voted against the first one because we called upon Great Britain to guarantee the neutrality of our property, which was humiliating to every American who studied international law, and when it came back again the second Hay-Pauncefote treaty said: "The United States adopts the principles of neutrality or neutralization." Great Britain, by that surrender of her right to contribute to protect us in neutralization was relieved of all responsibility of neutralization, and if the Panama Canal were blockaded tomorrow she could answer that under the treaty between the United States and herself she is under no obligation to assist in making that neutral territory. They did not even agree in the second HayPauncefote treaty, if I remember right, that at the closing and ratification of the treaty they would notify the other people of the world and ask them to consent to it, but they did in the first Hay-Pauncefote treaty, because they, jointly with the United States, adopted the general principles of neutralization as contained in Article VIII of the old Clayton-Bulwer treaty.

So I felt relieved, so far as my vote was concerned upon that treaty. We were granted the concession to own the property; the right to manage and control; the right to pay for it; and, what is the broader and better right, the burden of the guaranty of neutrality to the nations of the world.

What is that guaranty of neutrality? Giving the six rules that are adopted by the United States, they say: "Yes; in the preamble we adopted again Article VIII, but in the treaty we give construction to Article VIII. We do not say in that treaty that the United States

guarantees neutrality to the people of the world in conformity with Article VIII of the Clayton-Bulwer treaty, but we do give that construction to Article VIII as construed by the treaty which was executed between the parties," and the very first section of No. 2, announcing it as the settled doctrine what had theretofore been inserted as an amendment, that it was an absolute surrender of the Clayton-Bulwer treaty and that this was substituted in its place, the words used; and the Hay-Pauncefote treaty No. 2 supersedes, takes the place of it, so that as one who voted for that second treaty I felt that the neutralization guaranteed by the United States, which relieved Great Britain from any costs or charges upon her policing of the high seas, was a sufficient consideration for her abandonment of any claim she might make under section 8 in regard to the use or discrimination of our vessels or our commerce against hers.

Gentlemen, I claim that under the existing treaty between the United States and Great Britain there is not any line that requires Great Britain to spend one cent in guaranteeing the neutrality of our property. If there is any such I should be glad to have it pointed out to me now. Germany and France might be engaged in war, and we might be in a position where the navy of Great Britain could assist in neutralizing that canal in 24 hours, and yet she could well say that by the abandonment of the Clayton-Bulwer treaty and the adoption of this treaty, whereby her name is stricken out on the question of the guaranty of all nations, "I am not a party to any guaranty of neutralization of that canal. You, the United States, assumed that."

Ah, the construction given to that treaty is so strange to me. It says, "The canal shall be free and open"-this is the first suggestion of neutrality, the basis of neutralization-"shall be free and open to the vessels of commerce and of war of all nations observing these rules."

We might apply the common-sense rule. If I say to you, gentlemen of the committee, "I am going to treat you all alike. If you are here at 2 o'clock to-morrow I will hand you a campaign cigar, a nickel cigar," such as we use in campaigns in Illinois, that would not debar me from taking a 10-cent cigar or a highball. My guaranty is to you. The Government of the United States says, "We do not guarantee as a basis of neutralization to all nations," but "to all nations observing these rules."

The family rule is a good illustration, gentlemen. I say I will treat all my neighbors alike, but it does not follow. if I buy my wife a new dress I must buy one for the wives of all my neighbors. The rule of law is apparent in all the avenues of life. A railroad company, by the action of Congress in the interstate commerce law, must treat all passengers alike, giving the same rate, but the Government of the United States recognizes that it is a rule of ownership that they may ride upon it themselves, their employees, their officers, or their families as a part of the rights of ownership. And to say that because we guarantee a railroad company it is under the law bound to treat all passengers and freight alike, it shows that the Congress of the United States has interpreted the common-sense rule, namely, that the owner of the property may use it for his own benefit.

Take the question of fortification: There was an affirmative declaration in the Hay-Pauncefote treaty No. 1, taken from the Clayton-Bulwer treaty, that no fortifications should ever be erected.

I offered an amendment, as you probably have observed, and it was defeated, not by a two-thirds vote, but by a majority vote. And if you will notice, gentlemen of the committee, that all of the proposed amendments, including the coastwise amendment, the neutralization amendment, and the fortification amendment, were not beaten by a two-thirds vote, which is required for the ratification of a treaty. I will speak only for one vote, but I will say to you, giving my best recollection and my best judgment as a matter of honor among gentlemen, that I have no idea that treaty could have been ratified if it had had written in it in the affirmative proposition that we could not discriminate in favor of our own commerce.

On the question of fortifications I was satisfied, because every student of international law knows that when one of the high contracting parties tenders a proposition which is afterwards abandoned the affirmative of that proposition is written in the final treaty. It is like the guaranty that the law reads in when you sell me an article. In other words, the first Hay-Pauncefote treaty said no fortifications should ever be erected. The second Hay-Pauncefote treaty, which I voted for, said nothing about it. It was clear to me as a mere tyro in international law, and after hearing it discussed by men in charge of the bill, that having abandoned it in the former treaty, because the Hay-Pauncefote treaty No. 1 is a substitute or takes the place of the Clayton-Bulwer treaty, it is as if it had never been passed by the Senate. So under the law of construction, which is the true rule-and I challenge any gentleman to find me any court of international law that deals in international law that does not adopt this simple rule-when there is a treaty between two high contracting parties, and another treaty substituted for it, and there is taken out of that treaty anything, that part is presumed to have been abandoned, and written in affirmatively. In other words, Great Britain concedes to-day we have a right to fortify. Why? Because under this rule of construction it is exactly the same as if that had been striken out and they had said that "the United States may fortify."

Applying that rule, if you please, gentlemen, to the question of the coastwise trade, the Clayton-Bulwer treaty in the very Article 8 which you speak of-and which we had called to our attention, for it was debated by the hour, and if we lacked experience on that subject we had men who were older and more experienced in international law than I was attention was called to the fact that the ClaytonBulwer treaty did provide that we could never discriminate in favor of our commerce, but that having been abandoned, and a new treaty adopted between the high contracting parties, there was an abandonment of the demand of Great Britain.

If you will turn to the Clayton-Bulwer treaty you will find in article 8 a severe penalty if any one owning that canal should make any unfair discrimination in favor of the commerce of one of the contracting parties over the commerce of the other, and yet the treaty that by agreement supersedes that treaty leaves it entirely out. If there is any other rule of construction that any lawyer can find I will be obliged to him. I insist that this is the rule, that there having been a treaty between the two high contracting parties in which there is an inhibition against you for doing a certain thing, which is natural and follows the rights of ownership, and afterwards