Senator SIMMONS. Is that your idea, that you wanted all of them to go through free?

Mr. RANSOM. No; I meant that I would like to see our shipping laws changed so that you could use any vessel that was obtainable. Senator SIMMONS. In other words, you would like to see our navigation laws changed so that any vessel, foreign or domestic, could engage in our coastwise trade?

Mr. RANSOM. Yes, sir.

Senator SIMMONS. If you could only do that the rest of it would be mighty easy.

The ACTING CHAIRMAN. Are there any further questions to be asked of this witness?

Senator BRISTOW. The changing of the navigation laws would require a reduction in the wages of the men very materially in order to put them on an equal basis with the foreign competition? Mr. RANSOM. It would, Senator.

Senator BRISTOw. The thing that makes our navigation laws expensive are the laws that protect the seamen from this foreign wage scale, and the law which requires the ships to be built in this country, where the expense of construction is more?

Mr. RANSOM. Those are the two essentials.

Senator THOMAS. I understood you to say that the cause of high wages was the Seamen's Union. Did I understand you on that?

Mr. RANSOM. The Senator, I understood, asked the question as to what was the cause of the high rate. He did not ask me what caused the wages to be higher.

Senator THOMAS. But I understood you to say a few moments ago, in answer to the suggestion of Mr. Wheeler or

Mr. RANSOM. That was the rate fixed by agreement with the Sailors' Union.

Senator THOMAS. That is, the rate of wages the American seamen get is a rate fixed by the Seamen's Union?

Mr. RANSOM. The rate agreed on by the American sailors.

Senator BRISTOW. But if these shipowners could go and operate their ships according to the English laws instead of the American laws, they would not be compelled to pay this $50 a month? Mr. RANSOM. No, sir.

Senator THOMAS. It would depend on the union, I should think. Mr. RANSOM. That is an industrial question that might involve a great deal of

Senator BRISTOW. What you are asking is that this free tolls provision, which is a slight favor, comparatively, to the American shipowner, be permitted to remain because your water transportation between ports of our own country must be carried in those bottoms? Mr. RANSOM. Yes, sir.

Senator BRISTOW. While your competitor across the line can use the other bottom and can make a much lower rate?

Mr. RANSOM. Yes, sir.

Senator BRISTOw. So that in transporting our products from our own country on the Pacific coast to our own ports on the Atlantic coast, you have got to compete with the foreigner, and you have got. this frightful handicap in expense of transportation, and you want these free tolls, because they, to some extent, relieve you from that handicap?

Mr. RANSOM. It assists us materially.

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Senator BRISTOW. And Great Britain that owns the country that we are competing with says we can not have it, because it would take some profits out of the pockets of her subjects?

Mr. RANSOM. Yes. There is another point that I might bring out also, speaking now particularly of the lumber business. The lumber is more economically loaded into vessels built especially for lumber carrying, and such lumber vessels can not always find return freight. This toll charged, we will say, on the net measurement of that vessel, this vessel coming back after taking a cargo of lumber to the Atlantic coast, and not being furnished with a return cargo, would be embarrassed by having to pay tolls on the entire vessel.

Senator SIMMONS. Let us see about this vessel that can not always get a return cargo. My understanding is that you have a larger amount of low-grade lumber than you have a demand for on the Pacific coast. I understand the lumbermen on the Atlantic coast say they have a much larger output in this same grade lumber than they can find a demand for on this coast. If in order to relieve your situation over there you send a vessel over here loaded with lumber, the situation of the lumber producers here being identical with yours with reference to supply and demand, why could they not carry back à cargo of Atlantic coast lumber and try to sell it over there in your country?

Mr. RANSOM. I believe that your lumber is so much higher priced that we could not pay for it after it was delivered on the coast, Senator.

Senator SIMMONS. Why is our low-grade lumber so much higher than yours?

MI. RANSOM. You have a higher estimate for your stumpage. You probably are used to getting more for your lumber. You have not, probably, been satisfied with the margins that we have had to be satisfied with on the Pacific coast.

Senator SIMMONS. If we have more than is necessary to supply the demand that fact would bring down the price, would it not?

Mr. RANSOM. I am not familiar with your conditions in the South, and I take your statement on that. There is a lack of demand at the present time in every part of the United States; the railroads are buying little, and even the foreign trade is not up to its standard. I discussed, as I said the lumber business

Senator SIMMONS. Suppose we leave that. One witness said here I do not recall his name that even after you eliminate the tolls-that is, after the foreign vessel has paid its toll and the American vessel has been relieved from the payment of tolls-the difference in the cost of shipping 1,000 feet of lumber from British Columbia, from Seattle, would still be a matter of $1.50 a thousand. I think Senator Walsh will recall that statement of the witness, because he crossexamined him about it.

Mr. RANSOM. I presume that you refer to the testimony that Mr. Randall brought forth yesterday?

Senator SIMMONS. I think that was the name, but I am not quite sure about it.

Mr. RANSOM. That was the gentleman from Boston who has some considerable idea about bringing lumber. I presume his vessels would make a lower freight rate from a port of the United States in the Northwest to New York or Boston or Philadelphia than they

would from Vancouver, because they would have to steam from a port below Seattle to Vancouver, an expense which would probably be on the basis of $2 or $3 a thousand to get a cargo of lumber to come back with to this coast.

Senator SIMMONS. I am glad you called my attention to Mr. Randall. I had almost forgotten his testimony except as to the feature of it that I just alluded to. But now that you call my attention to it, I think Mr. Randall said he was engaged in building some lumber vessels, and his purpose in doing that was to use this canal in order to carry low-grade lumber from this country over to the Pacific

coast.

Mr. RANSOM. I think you misunderstood him, Senator.

Senator SIMMONS. Do you think I did?

Mr. RANSOM. Mr. Randall is not a lumberman. He made the statement

Senator SIMMONS. No; he is engaged in shipping lumber. But I understood him to say that he would carry this low-grade lumber over to your coast.

Mr. RANSOM. I heard his testimony, Senator.

Senator SIMMONS. And he would get a high-grade lumber from that coast and bring it over here. You may be right. I may have misunderstood him.

Mr. RANSOM. I remember some of Mr. Randall's testimony. I know he said positively

Senator SIMMONS. Now, you say you want to bring your low-grade lumber over here, and if I understood Mr. Randall, he said he was building ships to take his low-grade lumber over there.

Mr. RANSOM. No; I think you are mistaken. He made the statement positively that he could take oak lumber. Oak lumber is used to a certain extent in our country for finishing and for hardwood floors, etc. That is what he said positively they could bring in that direction. And he stated also, although I as a lumberman question the feasibility of it, that he could get some high-grade lumber, some of your long-leaf yellow pine

Senator WALSH. And cypress.

Mr. RANSOM. Yes; and cypress, and take it to the western coast. I thought at the time it was such folly to bring that to our northwest coast that I thought he referred to the west coast of South America, because I believe that Southern lumbermen will have a new market opened in competition with us to the west coast of South America. And there is a comparatively large trade to-day to the west coast of South America from the west coast of Nouth America. I have a relative who keeps a vessel ruuning steadily between Chilean ports and Oregon.

Senator BRISTOW. Under what flag does he run that vessel?

Mr. RANSOM. That is the only vessel that I know of registered in the Northwest under the American flag.

Senator SIMMONS. We are very anxious, I think, to extend our trade with South America, and one of the reasons why we built this canal, I imagine, was to enable us to encourage trade. You buy on the Pacific coast iron. We produce that. Now, let me say that the east coast of South America produces that also. Let us assume that it does. Do you think it would be any encouragement to the South

American trade with the Pacific coast for you to have to pay $1.20 or 60 cents-we will put it at 60 cents; that is the correct figure60 cents more for the South American iron and steel than you would have to pay for the American iron and steel? What effect do you think that condition would have upon encouraging South American trade with the Pacific coast in iron?

Mr. RANSOM. There would be the same canal charge whether it came from here or from a foreign country.

Senator SIMMONS. Not if it was brought free, being carried in coastwise vessels through the canal to you, and if it had to pay a toll, being brought from the eastern coast of South America to you.

Mr. RANSOM. That is merely an assumption, which I do not assume will be a condition.

Senator BRISTOW. I do not just understand what your proposition is, Senator Simmons.

Senator WALSH. He means, assuming the manufacture of iron in Rio de Janeiro and Buenos Aires.

Senator SIMMONS. I did not say they did. I was saying if they shipped from the east coast of South America, if he thought that would tend to encourage trade in iron with the South American Republics.

Mr. RANSOM. I think that is an assumption that will not be a condition.

Senator WALSH. What rate are you expecting on lumber from Portland to Boston, for instance?

Mr. RANSOM. We have had, Senator, a rate at one time from Portland to New York of 40 cents, which included a lighterage charge over the Panama Railway. I do not think that rate was profitable. Senator WALSH. That is 40 cents a hundred?

Mr. RANSOM. That is 40 cents a hundred.

Senator WALSH. What would that amount to a thousand?

Mr. RANSOM. That would mean on our rough lumber about $13.25 per 1,000 feet. There was a congestion of freight that I saw myself in Panama so that I realized why we could not ship at that.

Senator WALSH. You could not ship that lumber at that $13.25 rate?

Mr. RANSOM. We could ship certain lumber. We did ship some of the higher grades, such as ships' decking.

Senator WALSH. That is, special and high-grade varieties you could ship on that $13 rate?

Mr. RANSOM. We could.

Senator WALSH. You have got to have something better than a $13 rate, as I understand you, then, in order to ship your common grades of lumber?

Mr. RANSOM. We have.

Senator WALSH. What rate are you expecting?

Mr. RANSOM. We are anticipating a rate of 30 cents, or approximately $10 a thousand.

Senator SIMMONS. You now pay $1.20 across the continent a hundred?

Senator BRISTOW. No.

Mr. RANSOM. Across the continent?

Senator SIMMONS. By rail.

Senator WALSH. Twenty-four dollars, or something like that.

Mr. RANSOM. Our rate from the North Pacific coast terminal to an Atlantic terminal, Boston or New York, is 75 cents per 100 pounds. That on our rough lumber is approximately 24 and a fraction. On our lighter lumber, kiln dried, flooring, it would be less.

Senator SIMMONS. Then the difference between the present rail rate and the rate you are expecting to get through the canal would be the difference between 75 cents and 30 cents a hundred?

Mr. RANSOM. To the Atlantic coast ports; yes.

Senator SIMMONS. That is a difference of 45 cents. So that even if you had to pay the toll, which would be 3 cents, you would still have a differential of 42 cents over what you have now?

Senator BRISTOW. But he has not the business now.

Mr. RANSOM. We have no business now, and if we -

Senator SIMMONS. Do you think the railroads will be able to meet that rate?

rates.

Mr. RANSOM. I do not think they will attempt to, on coast-to-coast Senator SIMMONS. Then the remission of tolls would have no effect in reducing rail rates on lumber?

Mr. RANSOM. No; I do not think the railroads have interested themselves very materially in this matter. I think they have taken it for a foregone conclusion that the canal is going to be used from coast to coast, and they will then endeavor to secure business from Atlantic coast ports west bound-possibly from the south-north. Senator SIMMONS. Do you think the railroads will go out of this transcontinental haul; that they will rely upon their hauls to and from the interior?

Mr. RANSOM. I do not think they will go entirely out.

Senator WALSH. I did not understand that there was any testimony that the railroads do as a regular commercial business haul lumber from coast to coast. They do not haul anything at all except special qualities and high grades of lumber, I understand.

Mr. RANSOM. Senator, for your information, the Southern Pacific Co. has very recently cut their rates in two for water-borne business from points in the Willamette Valley, which is one of our valleys south of Portland, so that those mills in that valley may have an outlet for their lumber for a subsequent water shipment.

Senator SIMMONS. What proportion of the through traffic-transcontinental traffic-now held by the railroads do you think will be lost by the railroads to the water lines when the canal is opened? Mr. RANSOM. They have practically none to lose now. I say practically none; they have a few carloads.

Senator SIMMONS. I am not talking about lumber in particular; I am talking about all that transcontinental traffic.

Mr. RANSOM. That is a very difficult question. The classification of freight, such as lumber your classification 6, or as we classify it in the East, classification E-is something like 65 or 70 per cent of the entire railroad tonnage, and they will probably loose considerable of that low classification across the country.

Senator SIMMONS. But you have no idea how much they will lose? Mr. RANSOM. No; I have not.

The ACTING CHAIRMAN. The committee will take a recess now, and Mr. Skinner will be the first witness after recess.

(Thereupon, at 1.30 o'clock p. m., the committee took a recess until 2.30 o'clock p. m.)