Mr. BOOTH. Those rates are, of course, Interstate Commerce Commission rates, and I do not know whether they would apply here except in this respect, that I presume the rate from New Orleans to Denver is probably the same as the rate from New York to Denver. Senator THOMAS. Oh, yes; we get it coming and going. That is the way the trap is set for us out there.

Mr. BOOTH. Then, perhaps we are justified in presuming that in the event we were able to obtain by the way of Panama a lower rate to New Orleans by water, and if it were coastwise business, and the Interstate Commerce Commission were empowered to make both the rail and water delivery rate, which we all anticipate and live in the hope of, then no doubt you would be able to get a lower Denver delivery than you are getting now. That is our ambition and our hope, that we will be able to get the product which we are obliged to produce and upon which our area must live to every other area in the United States at the lowest possible price. The detriment which you have to buying oranges in Denver at this time is not anywhere as near a serious detriment to you as it is to our people, who are producing those things and can not find a market for the reason that they are charged the terrible price for shipping.

Senator THOMAS. I think I can not agree on that. I think you are making a great deal more money than you ought to out of our people, to the extent, at least, of $1.36 a hundred.

Mr. BOOTH. We do not get that. I can say in refutation of that, if you are at all interested-it is not perhaps germane to this discussion

Senator THOMAS. Somebody gets it.

Mr. BOOTH. We do not get that. That is part of the trouble. I can say to you this, that I happen to be in the banking business in Los Angeles in a considerable way, and we have a considerable amount of money advanced in one way and another in the orange industry, and if you had attained the gray hairs we have in the last couple of years trying to see our orange fellows through you would realize it is not a bed of roses.

Senator THOMAS. I have not a particle of doubt that the man who grows the oranges in California is robbed just as the man who eats them in Colorado is robbed.

Mr. BOOTH. There is no doubt of that. We are both seeking the same relief, I am sure.

Senator SIMMONS. Robbed, you think, by the transportation companies?

Senator THOMAS. Robbed by the transportation companies and by the commission dealers, and I presume that there are other agencies that feed upon the excess of profit; I do not know.

Senator SIMMONS. Is it not your opinion that the transportation companies are going to charge about all the traffic will bear?

Mr. BOOTH. Of course, that is only an opinion. I am not familiar with the operations of the transportation companies. Our past experience causes us to believe that.

Senator SIMMONS. Suppose the rail rate is $1.20 a hundred across the continent, and that the water rate should be fixed at half that price, and yet allow a reasonable profit for the owner of the vessel, do you not think that instead of fixing it at the basis of the reasonable

profit they will fix it at the point where they will be able to get the business as against the railroad?

Mr. BOOTH. Do you mean in the determination of their rates? Senator SIMMONS. Yes; they will fix it for all it will bear, keeping it always under the railroad rate?

Mr. BOOTH. That depends, Mr. Senator-and that is the only argument which I wish to submit to you-and in answer to that I will give you the gist of all we have to say. The discussion of the legal and ethical issues of this controversy you have had presented to you by persons who are familiar with them and on that we would not intrude. The question which you ask me is the question which has united us in the section in which I live in, the belief that free tolls is the only solution for our troubles.

Senator SIMMONS. Let me make that a little bit clearer. The railroad rate is $1.20 a hundred. I want you to get my idea in mind, if you can. Suppose the water transportation companies could take their products to New York, pay a toll and make a profit for 60 cents a hundred, do you think that they would give you the 60-cent rate, or would they give you a rate just enough less than the $1.20 railroad rate to enable them to get the business as against the railroads?

Mr. BOOTH. That is just the question I was going to answer. I think I have that clearly in mind.

Senator SIMMONS. That is what I want to get.

Mr. BOOTH. The rate which we will get from the steamship companies depends entirely upon the competition which exists between such steamship companies, going down to the point, averaging down to the point where they can do business competitively at a profit. Do I make myself clear on that?

Senator SIMMONS. Yes.

Mr. BOOTH. Under the plan for tolls on coastwise vessels which it is proposed now to employ, the steamship lines which are now in operation-the Grace Line, the Luckenbach Line, the AmericanHawaiian Line, the United Fruit Co. Line-might possibly be able to do just exactly what you outline as a possibility to be done, for the reason that they being established and doing business and having the volume westbound, can do the business eastbound at a price and under a combination with the tolls existing which would make it impossible absolutely for new companies organizing to get established and do business competing with them. And for that reason and by that sign they would be able to do just exactly what you fear may be done. We on the coast are looking with longing eyes to the development of new lines of transportation. It is not going to be sufficient that our coastwise marine between the East and West be restricted to a few. It is only going to be adequate competitively as between themselves and competitively as between the transcontinental railroads when there is real competition and actual competition between the intercoastal business East and West. A new company starting business, which we must offer encouragement to, to do business, is confronted with two situations: Either it must use small boats, because it has a restricted tonnage under which it begins its operation, in which event it is hampered competitively on a question of time, and that applies particularly in perishable fruits; or it must handle a large boat with a limited tonnage, which means that the actual per ton cost of the cargo which it actually conveys will be

greater than the tonnage cost per actual ton of the steamships already established, and the only way that that competing position, in our judgment I am only giving you our business judgment on that; I do not like to take an extravagant position-but in our business judgment the only way we are going to get real competition on the Pacific coast-competition worth while both for the transcontinental railroads and for the fruit shippers themselves-is by giving a free hand, an open hand, and a clear hand as we now do to our coastwise business. I believe there is of record now the opinions of the manager of the American-Hawaiian Steamship Co. and other companies of that character in substantiation of the position I have outlined in this. That is our plea. That is our reason for the feeling that is in us, that we want to get real competition out there.

Senator SIMMONS. I have no question about this, judging from the testimony we have had about lumber. We had a gentleman here who gave the cost of carrying lumber by rail from Seattle, I believe it was, to New York, and he gave the actual cost of carrying it by water, showing a very wide difference between the rail rate and the water rate, even after the tolls had been paid.

Mr. BOOTH. Yes; I heard that testimony.

Senator SIMMONS. And I have no doubt, although you do not know what the water rate would be on lemons, that the water rate would be very much less than the rail rate. Probably without paying any tolls they could carry it for almost one half, and probably when it had paid the tolls they could carry it, they say, 50 cents a hundred less. We know the difference between the water and rail rates. If conditions are such that the consumer received the benefit of that difference in the actual cost of rail transportation and water transportation, the question is what will they do? What do they generally do? What are railroads doing now, and what are steamboat companies doing now? Are not the railroad companies and the steamboat companies in our transcontinental trade and in our trade down. your coast and down the Atlantic coast, where there is no canal to cross, where there is no question of tolls-are they not now charging all that the traffic will bear? Do you think that now the steamboats that are running up and down your coast are giving you the most reasonable rate they could? Do you not think that they are charging you now all that traffic will bear? Do you not think they are charging on the Atlantic coast all that traffic will bear? And why do you think because this canal is built they are going to change that general principle of transportation which obtains now to-day everywhere, both by rail and by water?

Mr. BOOTH. Senator, I can not see but what I agree with you absolutely that far.

Senator WALSH. Let me ask you this question: What is the difference between your rail rate to Seattle and your water rate to Seattle? Mr. BOOTH. I know nothing about the water rates at all. Senator WALSH. Do you not ship both ways?

Mr. BOOTн. We ship small quantities on limited merchandise to Seattle.

Senator WALSH. Take San Francisco

Mr. BOOTH (continuing). And bring back a cargo-if I might be excused

Senator WALSH. Yes.

Mr. BоOTH. Bring back a cargo of lumber, down. Los Angeles is the biggest lumber port on the coast for inbound lumber, because it is mostly consumed there; and then our rates back to Seattle are rates back on lumber steamers, and they are very low.

Senator WALSH. That is the question I asked you. What is the difference between your water rate and your rail rate? Never mind about what the conditions are. I suppose we will have the same here. You will be shipping lumber East from the Pacific coast and they will be taking general freight back, and the same conditions will exist substantially. Now, what is the difference between your water rate and your rail rate, either to San Francisco, Portland, or Seattle as compared with your rail rate on oranges, for instance, as a commodity?

Mr. Bоотн. We do not ship any oranges by water to any extent, on account of the lack of refrigeration.

Senator WALSH. Take oil, for instance.

Mr. BOOTH. Oil goes in tankers owned by the companies that operate the wells, and that rate is not a competitive rate. The small amount of cargo that we ship back from the southern part of the State and that is the only one I would be authorized to speak forto the Great Northwest is merchandized cargo, beans to some extent, walnuts to some extent, and articles of that character, but very restricted in amount as compared to the lumber volume from the North and other points, so that the rates are very, very low.

Senator WALSH. I should like to get what the fact is in relation to the question asked by Senator Simmons. What I want to know is whether the steamers plying along the coast do, as matter of fact, make their rate just a little below the rail rate?

Mr. BOOTH. No, sir; they do not, Senator. They make them a very great deal below. But what I was trying to explain, in order to do justice to the situation in every way, is that those rates are very much lower than the rail rate, and delivery is so much cheaper; but in order to be positively fair I wanted to say that is caused not entirely by normal competing conditions. It is caused by the fact that we have an enormous amount of inbound lumber boats, which would go back empty if they did not go that way, so it is not a fair competing condition.

Senator WALSH. Will not that same condition exist; will it not be the case that boats will ply from the Pacific coast to the Atlantic coast with lumber and other commodities, and then for the purpose of getting a cargo back they will in the same way take their commodities at a particularly low rate?

Mr. BOOTH. That is our ambition, that is our hope, but I can not say that is what we believe will be done.

Senator SIMMONS. That is your experience so far as your Pacific boats are concerned?

Mr. BOOTH. Yes, that is our experience locally. There is also something in substantiation of that. As you know, a line of steamboats plying daily between San Francisco and Los Angeles has been put into service two years ago for the transportation of passengers and quick freight, and their rates are still lower. That is the Harvard and Yale.

Senator PERKINS. They are owned in Boston.

Senator WALSH. That is not the Southern Pacific Line?

Mr. BOOTH. No.

Senator SIMMONS. That is a passenger line?

Mr. BOOTH. That is a passenger line, and carrying freight, also. Senator SIMMONS. That runs down the coast?

Mr. BOOTH. It runs from San Francisco to Los Angeles and San Diego and back. It makes a daily service.

Senator SIMMONS. Is there a railroad line running down the coast? Mr. BOOTH. It parallels the entire proposition.

Senator WALSH. Let us take the passenger rate. Let us see what the difference between the passenger rate

Mr. BOOTH. The passenger rate via the Southern Pacific first class is $14; and on the Harvard and Yale I believe it is $10.80. Mr. WHEELER. $10.35?

Mr. BOOTH. $10.35 as against $14.

Senator WALSH. Does the boat rate include berth and meals?
Mr. BOOTH. No; it does not include the berth or meals.

Senator SIMMONS. What is the difference in the time?

Mr. BOOTH. The difference is this: You leave Los Angeles at 2.30 to go to San Francisco, and you arrive there at 9 o'clock in the morning by boat. By rail you leave at 6 o'clock and arrive at 8.30 in the morning, I think it is. That is the difference.

Senator SIMMONS. A very considerable difference in time?

Mr. BOOTH. A few hours.

Senator SIMMONS. A considerable difference in daylight hours? Mr. BOOTH. Three and a half hours in the afternoon.

Senator SIMMONS. The difference in the daylight hours is very considerable?

Mr. BOOTH. It depends on the time of the year.

Senator SIMMONS. Can you give us the difference in the freight

rates?

Mr. BOOTH. No; but I could obtain them for you, because those boats are running full all the time now.

Senator WALSH. Do you not ship oranges by those boats?

Mr. BOOTH. We ship oranges by those boats because the question of refrigeration for one day does not enter.

Senator WALSH. So that you could tell us the difference, could you not, between the water and rail rate?

Mr. BOOTH. Yes; on that product. I will obtain that for you with great pleasure.

Senator SIMMONS. I should like, if you can obtain in any way the difference between the water and rail rates now

Senator PERKINS. I think Mr. Wheeler has all that data.

Mr. WHEELER. I do not think the tariff of the Pacific Coast Steamship Co. is on file here.

Senator THOMAS. Have you no competition now on the Atlantic seaboard for California or Pacific coast fruit?

Mr. BOOTH. You mean from Los Angeles, or from points of origin? Senator THOMAS. From any point in California. I was in Jacksonville, Fla., in the fall of 1911 and saw a Clyde steamer unloading a cargo of oranges, and I was told that that was a competitive market with existing rates right there in Florida. Oranges are also one of the large enterprises and industries in that section. Do you know whether that was the result of land transportation, or whether they were brought by way of the Tehuantepec Railroad?