country upon this continent, Canada, or Mexico, for illustration. They both engage in coastwise trade, and Canada is as much interested in her coastwise trade, her intercoastal trade, I will say, as we are in our intercoastal trade. Mexico is as much interested in her intercoastal trade as we are in our intercoastal trade. I want to ask you what you have to say with reference to Senator Root's and Senator Culberson's view, that to exempt our coastwise trade and impose tolls upon their coastwise trade is a discrimination in the same class of trade. Senator Root expressed that in these words:

I can see very good reason why the argument that you suggested (that is, an argument suggested by Senator O'Gorman) should not be controlling on the question as to whether we can remit tolls from American coasting vessels, so-called, in the canal, and the reason is that ordinary coasting trade is quite a different class of trade from over-sea commerce. The discrimination between the two is a classification of trade. When Great Britain imposes different tonnage dues upon her coastwise trade from those which she imposes upon her over-sea trade she discriminates between classes of trade, not between nations. American vessels can engage in the British coastwise trade.

Senator O'GORMAN. Only in recent years.

Senator ROOT. Well, for many years.

Senator O'GORMAN. For 50 years after the treaty of Ghent American vessels could not engage in the coastwise trade in England.

Senator Roor. That is neither here nor there; what I am saying is that American vessels can engage in the British coasting trade, and they would be entitled to the same treatment in respect of harbor and tonnage dues that British coasting vessels are. Senator O'GORMAN. At this time.

Senator Roor. At that time. So the distinction is not a distinction as between nations; it is a distinction as between kinds of trade. It so happens that we do not admit any vessels but American vessels to our coastwise trade. If we did, the foreign vessels would be entitled to the same treatment that our coastwise vessels are entitled to under the treaty of Ghent. But when you come to the Panama Canal you find that the British Government has the same class of coastwise trade that we have. When you discriminate by the kind of trade you are bound to say that a voyage from Halifax on the Atlantic to Victoria on the Pacific is the same kind of trade as a voyage from Portland, Me., to Seattle or from New York to San Francisco. If you call that coasting trade, then Great Britain has the same class of trade we have, and the same principles would require the same treatment.

That is what Senator Root says about it.

Now let me read to you what Senator Culberson says, and you might answer both at the same time. This is an interview given out by Senator Culberson from Mineral Wells, Tex., where he is now, April 17. I will have to read a little more than is necessary in order to get exactly what he says. He says:

In my opinion, after a thorough reexamination of the subject, the act of the Congress referred to is in conflict with this provision of the treaty. Argument is unnecessary to show that Great Britain and the United States, parties to the treaty, are included in the term "all nations," nor that ships engaged in the coastwise trade are "vessels of commerce." Both the United States and Great Britain have coastwise trade on this continent and it is a plain and manifest discrimination to allow our vessels engaged in that trade to pass through the canal free of tolls, for the coastwise trade of the two countries is the same kind and class of trade. Moreover, the exemption from tolls of a class of vessels will tend to lay an unnecessary and heavier burden on ships which are taxed, which will affect the justness and equitable character of the tolls.

The economic and secondary question which is involved is equally clear to me. The American vessels of commerce engaged in the coastwise trade of the United States now enjoy a monopoly, in as much as vessels of other countries are prohibited from engaging in that trade and an exemption of the payment of canal tolls would add to that monopoly. This is not only true, but such an exemption would not appreciably benefit the general public by a reduction of freight rates

I will not read that because it does not pertain to the question I ask. That is another phase of the question.

I just ask you that so that you may have their views before you and may have an opportunity to answer them, if you can.

Mr. WHEELER. I am glad to have their views, and I think I can answer them. Answering those contentions, first of all, let me say, while I am not arguing it as any reason why it should not be answered, as a practical matter I never knew of a vessel sailing from Halifax to Victoria, or between the Canadian coasts at all. It must be borne in mind that the Panama route has been open to such vessels for many many years since it was built. It must be borne in mind that the route around the Strait of Magellan is open to them, and the route around Cape Horn is open to them. I do not think it will ever become a practical question, because it would be pretty much like "carrying coals to Newcastle," the product of both of those coasts being much of the same nature, namely, lumber. It is that which gives the basis of cargo.

Senator SIMMONS. Does that affect the principle?

Mr. WHEELER. If you will remember, Senator, I was careful to say that it did not. As to the principle involved, we are the proprietors of the canal; we have built the canal; it is out of the Treasury of this Government that it has been built, and so long as you do not charge a toll in excess of the proportion-I believe Senator Culberson, if I recall, makes a point of that there

Senator SIMMONS. That was only to reinforce his argument.

Mr. WHEELER. Yes. As long as you do not charge beyond the proportion foreign vessels should pay in order to maintain and support the canal, I think it is entirely proper that the toll be assessed. They have paid nothing in the way of taxation, in the way of customs, duties to raise the revenues with which to build that canal, and it is only their contribution to the use of it. That is my answer to both of those contentions.

I would say this, however, as to the coastwise trade of the countries mentioned there, that is a lawyer's argument pure and simple that is presented by both of these gentlemen, for whom I want you to understand I have the highest respect, and when I say a "lawyer's argument," it means I have the highest respect for the legal profession, but it is only one of those arguments that would be brought into a case that sounds well in argument, and perhaps well in principle, but it is not a practical question. If it is a practical question, if it is deemed in violation of the treaty to pass our coastwise vessels through there without tolls, and not pass the Mexican vessels or the Canadian vessels through without tolls, we can well afford to pass them through without tolls also if it comes to that point. I am not admitting, however, that that contention is well made.

Senator SIMMONS. Let me put a question to you. Assuming it was the desire of Great Britain in all of these negotiations that led up to the treaty, and in the making of the treaty, to protect her vessels against any discrimination in favor of our vessels, and to put the vessels of the two nations upon a parity with reference to the charges or conditions of passage through the canal, is it not clear that Great Britain was just as much interested, and that the opportunities of discrimination against her were just as great in reference to her coastwise trade as in reference to her overseas trade? That is to say, if it was to her interest to prevent her vessels engaged in the overseas

trade from being discriminated against in favor of our vessels engaged in the overseas trade, was it not equally to her interest to prevent her vessels engaged in her coastwise trade on this continent from being discriminated against in favor of our vessels engaged in our coastwise trade on this continent?

Mr. WHEELER. I do not call it a discrimination, Senator, when the exemption which we are granting is confined to a trade in which Great Britain or no other nation can engage. We ourselves can not engage in that same Canadian coastwise trade; we can not put our vessels on between Vancouver and Halifax. And if we want to engage in the foreign trade-that is, to put a vessel on between Vancouver and New York- we have got to pay exactly the same tolls under the law as the British vessel between Vancouver and New York has to pay. That is the answer to that.

Senator BRANDEGEE. Mr. Wheeler, before you go on would you allow me to ask you this: You say it is not a practical question? Mr. WHEELER. It has not so developed up to date, Senator.

Senator BRANDEGEE. Have you not been here in the room while shipowners have been testifying that the imposition of tolls on our coastwise vessels in the canal would turn over the carrying of the lumber of the Northwest to British ships?

Mr. WHEELER. That is in the foreign trade.

Senator BRANDEGEE. Did not the gentlemen from Boston who was here claim that the steamships which he had built, and contemplated building, could not do business in the lumber trade if tolls were imposed on them?

Mr. WHEELER. I did not hear all of his testimomy, Senator, but if that is your understanding I am entirely satisfied to accept it as such, of course. What he referred to, I take it, was the fact that the British Columbia lumber destined to New York could be carried in a British bottom very much cheaper than could lumber from Puget Sound be carried necessarily in an American bottom to New York.

Senator WALSH. Mr. Chairman, as I understand the question now mooted, it is not the question of discrimination arising between the American coastwise shipping plying between Seattle, for instance, and Boston, and the foreign shipping plying between Vancouver and Boston. The question is raised as to discrimination as between ships plying between Boston and Seattle, and ships plying between Halifax and Vancouver. That is to say, whether there is not a discrimination when we permit our coastwise shipping to go through and deny the English coastwise shipping an opportunity to go through

free.

Senator SIMMONS. You have stated my view about the question, Senator.

Senator WALSH. Understand that I was not expressing a view. I was endeavoring not to confuse the two questions in our consideration of the matter.

Senator SIMMONS. What I meant to say was that that raised the question I was contending for.

Senator BRANDEGEE. Of course, various cases have been put to us involving traffic between the Atlantic and Pacific coasts of both Canada and the United States, and if I have caught the drift of the tlaims of those who are asking to be freed from tolls passing through

the canal it is this, that the ultimate consumer will be compelled to pay more for the product if tolls are imposed on American vessels in the coastwise trade, and that in that respect it will operate to the disadvantage of our own people and our own trade.

Now, I wanted to ask you in the first place about this treaty clause to which you allude. You have read the first rule under article 3, of the Hay-Pauncefote treaty, and you say that in your opinion the particular part of the treaty which is important in this repeal is the part that reads:

On terms of entire equality, so that there shall be no discrimination against such nation or citizens or subjects in respect of the conditions or charges of traffic or otherwise.

Then you have gone on to state that certain things would not be a discrimination against the nation. I wanted to call your attention. to the fact that the discrimination, if this rule applies against that st all, is prohibited not only against the nation, but against all the "citizens or subjects of the nation in respect of the conditions or charges of traffic or otherwise." So that if the rule applies to us at all, any sort of a discrimination against the vessel or the citizen or subject in respect of a condition or charge of traffic through the canal is prohibited. Why would it not be a discrimination against a subject of Great Britain, who was a shipowner of a vessel plying between Great Britain through the canal and any port on our Pacific coast, if we allow our vessels to pass through free and do not exact any charge. from their owners, and compel the owners of the British vessel to pay tolls?

Mr. WHEELER. Because we do not discriminate in favor of our own vessels in that same trade that that British vessel is engaged in.

Senator BRANDEGEE. I have not said we did. I have said why have we not discriminated against the owner of the vessel, as between the American owner of our coastwise vessel and the British owner of a British vessel?

Mr. WHEELER. For the same reason that they are not engaged in the same trade.

Senator BRANDEGEE. They are engaged in trade, are they not? Mr. WHEELER. Yes, but the discrimination is not there.

Senator BRANDEGEE. I am calling your attention to the fact that it seems to me that a British owner of a British vessel might claim he was discriminated against. He is in the trade carrying goods from Great Britain to San Francisco, and our resident on the Atlantic coast is engaged in the trade of carrying goods from the Atlantic coast to San Francisco. And if we say to the owner of our American vessel: "You need not pay any tolls," and to the owner of the vessel: "You must pay tolls," why have we not discriminated against the owner in contravention of the treaty which provides: "So that there shall be no discrimination against the citizens or subjects" of either of the countries?

Mr. WHEELER. Senator, I can only come back to the original answer, that they are not in the same trade, and therefore a discrimination does not exist.

Senator BRANDEGEE. But that answer, if you will pardon me for saying so, seems to me to be irrelevant. The treaty does not say "so that there shall be no discrimination between the citizens or

subjects of either country who are engaged in the same trade," but it prohibits discrimination not only against the nation

Mr. WHEELER. I do not admit that there is a discrimination. Senator BRANDEGEE (continuing). But against the vessel and the "citizens or subjects of the nations in respect to the conditions or charges of traffic or otherwise." That seems to me to be broad enough to prohibit any kind of a discrimination in favor of the subjects of one country which operates against the citizens or subjects of the other country, and I am asking you whether that strikes you as a reasonable construction of the treaty, or whether it is unreasonable, and whether my view is wrong, and what answer you can make to the points I make.

Mr. WHEELER. Senator, I have a great deal of respect for your views, as you know.

Senator BRANDEGEE. I do not want them to carry any more respect than the impression that they make upon people for their reasonableness.

Mr. WHEELER. I can again only answer that by the statement in all sincerity that in my opinion there is no discrimination where it is already rendered impossible to engage in the traffic.

Senator BRANDEGEE. I have assumed a case where it is not impossible to engage in it, but where they were actually engaged in it, the traffic being the selling of merchandise to the people of San Francisco, the British ship selling their goods to the people of San Francisco and the American ships selling the American goods. Now, I say, if the Britisher is compelled to pay a $1.25 per ton on the cargo he is shipping, and the American is given a free pass through the canal in competition with him, and you were the owner of the British vessel, would you consider yourself treated on the same plane as respecting the conditions and charges of traffic through the canal?

Mr. WHEELER. I most certainly would, and so, I am very happy to state, do a great many British shipowners to my own knowledge. Senator BRANDEGEE. Would you pardon me a moment? I received a short letter to-day from a gentleman in New York asking me to read it to the committee. It is in relation to this subject.

The letter is as follows:

Senator FRANK B. BRANDEGEE.

THE SHERWOOD, 104 LENOX AVENUE,
New York City, April 21, 1914.

DEAR SIR: Pardon me for addressing you on the subject of the Panama Canal tolls, but being an author of 35 years' standing and having already published bulletins and pamphlets on the subject from the beginning of its consideration, and desiring to help the committee and Senate to a right determination in regard to it by contributing my views on the subject, may I hope that you will not consider it amiss my addressing yourself and another member of the committee, Senator Chilton, presenting the views and desiring that you will, if you think them helpful, make them known by reading this letter to the rest of the committee.

To plunge in medias res, I think rule 1 of article 3 of the Hay-Pauncefote treaty can not rightly be regarded as including our own nation's vessels, because the terms of equality of tolls are there declared to be for "vessels of commerce and war," and, of course, the United States' vessels of war, being Government vessels, must of necessity pass through the canal free, otherwise we would be merely passing the tolls from one pocket to another, as it were, from and to the United States Treasury, into which all tolls go; and on the other hand, it is just as evident that we could by no means allow all other nations, or any other, to pass their warships through the canal free, except those of Panama, and possibly those of Colombia, if we so allow them by the treaty. Nevertheless, I think, and have thought all along, from the beginning of the consideration of the subject in 1912, and so contended in my bulletins or pamphlets then