British Columbia export commerce with foreign countries, which I have estimated at 400,000 net vessel tons, there is very little of such commerce. There would be none at all by Mexico or the Central American Republic; none at all by Chile, Peru, or Ecuador, if toll be imposed, and if toll free a little, principally import, conducted through the free port of Panama; none by New Zealand and the Pacific Islands if toll be imposed, perhaps 150,000 net vessel tons annually if the canal be toll free. British Columbia, from its geographical position, has its own foreign commerce fed by the foreign commerce of our Pacific coast ports. The cargo ships which carry that commerce through the canal run coastwise both ways by our Pacific coast States ports and will touch them going and coming, collecting foreign export cargo and distributing foreign import cargo. Compared with our American coastwise commerce through the canal and our States foreign commerce through it, the exclusively foreign commerce by means of it will be a trifle-3 per cent, maybe, 4 per cent, maybe, but not 5 per cent of the total with the canal toll free. With toll imposed, about 10 per cent, because British Columbia foreign commerce will be held up by feeding on our foreign commerce, as has been explained. COMMERCE OF COLOMBIA BY THE CANAL. The foreign commerce of the Pacific coast of Colombia is insignificant, and there appear to be no commercial forces, present or prosspective, likely to increase it. So far as the canal commerce is concerned, it will be transhipped in the free port of Panama. The commerce between the Atlantic coast of Colombia and the Pacific coast is still smaller. It is difficult to conceive of it being measured in net vessel tons. The proposition that it shall be toll free while other commerce pays toll seems, on the face of it, nothing but a juggle of words to excuse the exercise of diplomacy. But, the law of Colombia either permits or can be made to permit, registry of foreign-built ships under its flag. Let us then assume that a 5,000-ton German-owned ship with a British captain registers under the flag of Colombia. The captain takes a cargo of nitrates from Chile consigned to the port of Buenaventura on the Pacific coast of Colombia. The consignee at Buenaventura receipts for the cargo and charters the ship to carry it coastwise, toll free through the Panama Canal, to the port of Cartagena, on the Atlantic coast of Colombia. The consignee at Cartagena receipts for the cargo of nitrate and charters the ship to carry it to New York, where British Captain John in the customhouse meets Yankee Skipper Jonathan, whom he left loading nitrate into his American ship in Chile. "How's the price of nitrate"? says British Captain John. "I say $40 a ton," says Yankee Skipper Jonathan; "paid my brother quartermaster sergeant Sam $6,000 canal toll and reckon to get it back from the farmers." "Right you are," says British Captain John, "that's my price now." And the next day the United States Commissioner of Navigation franked his new gospel tract to the farmers, telling them the people were getting rich from Panama Canal tolls. THE REAL PANAMA CANAL TOLL LAW. My discussion to this point has been of the economic consequences following from the operation of the Panama Canal toll law as everybody thinks the law to be, and as everybody thinks the law will be if it is amended by taking out of it the provision that "No tolls shall be levied upon vessels engaged in the coastwise trade of the United States." I now discuss the real Panama Canal toll law-the law which meets the ship when she comes to-day into the free port of Colon applying to the canal keeper for passage through the canal to the port of Panama. This is the law which the keeper lays on the lock bar of the canal for the ship to read. First. From the act of Congress of August 24, 1912, this: Sec. 5. That the President is hereby authorized to prescribe and from time to time change the tolls that shall be levied by the Government of the United States for the use of the canal: Provided, That no tolls, when prescribed as above, shall be changed, unless six months' notice thereof shall have been given by the President by proclamation. No tolls shall be levied upon vessels engaged in the coastwise trade of the United States. * When based upon net registered tonnage for ship of commerce the tolls shall not exceed $1.25 per registered ton, * each passenger shall not be more than $1.50. * * * The tolls for Second. From the proclamation of President Taft, November 14, 1912, fixing rates of toll on the Panama Canal: 1. On merchant vessels carrying passengers or cargo $1.20 per net vessel ton-each 100 cubic feet-of actual carrying capacity. 2. On vessels in ballast without passengers or cargo 40 per cent less than the rate of tolls for vessels with passengers or cargo. Third. From the proclamation of President Wilson, November 21, 1913: ARTICLE I. All vessels, American and foreign, including vessels of commerce * applying for passage through the canal shall present a * * * stating the vessels' * * * * certificates net tonnage as determined by these rules. Vessels of commerce * without such certificate shall, before passing through the canal, or being allowed to clear therefrom, be measured, and shall have tonnage determined. * net Let us suppose that it is the British steamship Cedric, bound from Liverpool in Great Britain to San Francisco in California, carrying passengers only, which applies to-day for passage through the canal. By the rules of President Wilson's proclamation the Cedric measures about 18,000 net vessel tons. By the rate fixed by President Taft's proclamation the Cedric will be charged $21,600 canal toll for passage. The Cedric has accommodations for 315 first-class passengers, 415 second-class passengers, and 2,100 third-class passengers, 2,850 passengers in all. Let us assume that the Cedric has her passenger accommodations all filled when she applies for passage through the canal. Then, is it not plain that there must be paid $7.63 canal passage toll for each passenger on the Cedric going through the canal? Let us assume again, that only half the passenger accommodations of the Cedric are filled, 1,415 passengers carried, when she applies for passege through the canal. Then is it not plain that there must be paid $15.26 canal passage toll for each passenger on the Cedric going through the canal? But the British ship Cedric will not pay these canal toll charges for passengers. No foreign ships will pay more than $1.50 canal toll charge for a passenger. Nor will the British ship Cedric, or any other passenger carrying ship from a foreign country, come to the keeper at the lock bar of the canal to discover that by paramount. force of a proclamation of the President of the United States she must pay more than $1.50 canal toll for each passenger. Passenger carrying ships from or to foreign countries, American ships the same as foreign register ships, will stay away from the free ports which mock the locked canal between them. Senator SIMMONS. Let me see if I understand you. Do you mean under the proclamation of the President the vessel would have to pay $15 a head? Mr. DUNN. Yes, sir. Senator SIMMONS. We had better change that if that is so. The real Panama Canal law does not promote foreign passenger trade of the United States across our Canal Zone in the Isthmus of Panama. It affects an absolute prohibition of foreign passenger vessel trade by that intended highway of commerce. The law is an act of embargo on that passenger vessel trade. If the American passenger-carrying ship Yale, bound coastwise from San Francisco to New York, were to-day to come into the free port of Panama, and there apply to the keeper to be let through the canal to the free port of Colon, the keeper would say that the Yale can have passage through the canal without paying any canal toll charge for the passengers; but, before passing through the canal or being allowed to clear-before being allowed to clear from a free canal the Yale must be measured and her net tonnage determined, because of the paramount force of President Wilson's proclamation made November 21, 1913. Why should a free ship entitled to pass toll free through the free water of the Panama Canal be barred from passage unless it first be measured and certificated as to net tonnage? The answer to that question is the pending amendment to section 5 of the act of August 24, 1912, which strikes out of it the provision which reads: "No tolls shall be levied upon vessels engaged in the coastwise trade of the United States." If that amendment become adopted it will effect the same absolute prohibition of coastwise passenger vessels passing through the Panama Canal that the law now effects against foreign passenger vessels passing through it. The law which is now an act of embargo against some passenger vessels passing through the canal will then become an act of embargo against all passenger vessels passing through it. Nor could this embargo, once effected, be lifted. The Panama Canal tolls, once fixed, can not be changed, unless six months' notice thereof be given by the President by proclamation. Senator SIMMONS. Those regulations that you speak of with reference to passengers, is there any difference between President Wilson's proclamation fixing those rates and President Taft's? Mr. DUNN. President Taft's proclamation fixed the rates, and in the final paragraph of his proclamation it directed the preparation of the rules of measurement and regulations to put the toll rates into effect by the Secretary of War. Subsequently, President Wilson issued as a proclamation the rules of measurement, and owing to the unfortunate words used-or, I should perhaps say, the form of words used in the beginning of that proclamation, the effect will be that if this pending bill be passed, taking out of the law as it now stands the clause exempting coastwise ships, the law imposing tolls will then immediately apply by virtue of that proclamation to the coastwise ships without any further proclamation-under the effect of the proclamation which provides for measurement, and under President Taft's proclamation which provides for the amount of tellwithout any opportunity to make a change at once by proclamation-I think, by the statute, that the toll rate can not be changed by proclamation without six months' notice. Senator SIMMONS. You would say, I suppose, without any hesitation, that if either President Taft or President Wilson had issued a proclamation that required passengers to pay $15 a head, that it was an inadvertence? Mr. DUNN. Why, unquestionably. I think so far as President Taft or President Wilson are concerned, it was a sheer inadvertence. They merely each signed a paper which they supposed was absolutely right. Senator WALSH. I suggest that the secretary be required to transmit to the Secretary of Commerce those paragraphs from Mr. Dunn's address referring to the subject of passenger tolls and measurement of ships. Senator SIMMONS. I think that ought to be done. The motion was agreed to, and the secretary was instructed to comply with Senator Walsh's request. Senator WALSH. Personally, I desire to express to Mr. Dunn my thanks for his address here which is in the line of information that I have been looking for. The ACTING CHAIRMAN. Mr. Dunn, you appeared a week ago, but you did not conclude, but so it should appear in this section of the hearings what your business is and whom you represent. Mr. DUNN. I stated I was a consultant, both engineer and legal, in large enterprises. While I did not say it, I really appear as an expert, having knowledge of these matters, and willing to give the committee the benefit of all I know, of all my thought. The ACTING CHAIRMAN. You are not representing any board of trade or commercial organization? Mr. DUNN. No; except that it is perhaps fair to say that the people I am associated with contemplate, in three or four enterprises, investments which will aggregate something in the neighborhood of $100,000,000 in the vicinity of San Francisco-at and in the vicinity of San Francisco--and those investing are very much dependent on the action which is taken in this legislation. If a canal toll is imposed I doubt very much whether any of those large enterprises will be undertaken. I am quite sure that some of them will be undertaken at once-in fact negotiations are pending to that end now for enterprises that aggregate nearly $50,000.000 if the canal be free. Senator SIMMONS. In other words, I understand you to say that you are interested with some other gentlemen, corporation or syndicate, in the establishment of some industries on the Pacific coast that will engage in the coastwise trade? Mr. DUNN. No, sir. While there are some lesser affairs, such, for instance, as the establishment of a large sawmill plant, which will be undertaken if the canal is toll free, and the establishment of certain mining enterprises, the investments I have reference to are in very large public works, which would be undertaken if the population increases, and we are very sure that the population will increase very fast if there is a toll-free canal. We know that there are something like 200,000 passage tickets to California being paid for in installments in some of the countries of Europe at the present time. Senator SIMMONS. Taking lumber; you said a lumber plant was one, I think? Mr. DUNN. Yes. Senator SIMMONS. I understood you to say that if you can get a reduction of rate from $24 a thousand, the railroad rate, to $5 a thousand, which you say would be the canal rate without tolls, you will go into this business, but if your rate is reduced from $24 to $6.20 you would not go into it? Mr. DUNN. Yes, sir; in substance that is it, and the explanation of it is that we could not market what would otherwise be waste with that $1.20 toll. (Thereupon, at 6.15 o'clock p. m., the committee adjourned until Monday, Apr. 27, 1914, at 10.30 o'clock a. m.) Hon. J. A. O'GORMAN, United States Senate. WAR DEPARTMENT, OFFICE OF THE CHIEF OF ENGINEERS, SIR: In response to your request in letter dated the 9th instant, there is sent you herewith a statement showing the tonnage using the canals and locks on canalized rivers in the United States during the calendar year 1912. Very respectfully, DAN C. KINGMAN, Chief of Engineers United States Ármy. Statement of commerce on canals and canalized rivers of the United States during the District. calendar year 1912. Charleston, S. C.. Chattanooga, Tenn.. Do.. Chicago, Ill.. Do.. Congaree River, S. C. Muscle Shoals Canal, Tennessee River, Ala. Cincinnati, Ohio, second district. Muskingum River, Ohio.. Do.. Do. Dallas, Tex.. Do. Detroit, Mich. Do.. Duluth, Minn.. Kansas City, Mo. Big Sandy River, W. Va. and Ky. Locks and dams, section 1, Trinity River, Tex. St. Marys Falls Canal, Mich.. St. Clair Flats Canal, Mich. Portage Lake and Lake Superior Canals, Mich 12,734 head of cattle also passed through this lock. 4,307 5,520 31,913 129,532 2 15,844 66,214 188, 743 186,300 2,050, 362 36, 425, 015 72,871, 432 1, 153, 816 3,100 |