Mr. TEAL. No; I can not.

Senator PAGE. Would you be willing to give an estimate?

Mr. TEAL. It would be simply an opinion. I think that they ought to sail at 60 to 70 per cent full.

Senator PAGE. On the average through the canal?

Mr. TEAL. I should think so; yes.

Senator SIMMONS. Do you know what the Suez rule would be with respect to that? If a ship only had 100 tons of actual freight, would she be charged with her full capacity?

Mr. TEAL. I do not recall. I have the rules down at the hotel; but I really do not recall it, so I can not say.

It might be interesting to note the effect in the middle section of the country of tolls and water distribution. We have been recently trying to make arrangements, through a company organized in Chicago, to ship lumber not lumber alone, but other products, but particularly lumber so that lumber would be carried by the Mississippi River to East St. Louis and Chicago at a 30-cent rate. That is particularly important on the Mississippi River, because tonnage moving on the Mississippi River is largely southbound. There is not the nec essary northbound freight movement on the river to balance the traffic. It is an important thing to have the traffic balanced, and this lumber movement would have a tendency to do it. If, however, the tolls are charged, and Mr. Donaldson's figures are correct (about 6 cents a hundred toll as an average on, say, about 2,500 pounds of lumber to 1,000 feet), it would make the rate 36 cents, the rail rate now to St. Louis being 55 cents. Naturally, the railroads are not going to lose that business; and they could drop the rate, I believe, to 45 cents and still leave a profit. That would make the difference of 9 cents between the 36 and 45 cent rates for distributive purposes and would limit and narrow the effect of the canal very largely to Mississippi River points.

Senator SIMMONS. You said, a little while ago, about the products of the Pacific coast that would likely be shipped to the Atlantic seaboard--heavy products. Can you give us any idea about the character of products that would likely be shipped from Atlantic seaports to Pacific seaports?

Mr. TEAL. Certainly. You take it from the south, we get large quantities of rice; we get molasses; we get oysters; and things of that kind from Baltimore. We are getting now some cotton from the Carolinas. You are speaking, of course, by water?

Senator SIMMONS. Yes.

Mr. TEAL. Heavy cotton piece goods move by water and steel products move by water. In fact, the commodities that move by water (anything can go by water) are generally the heavy commodities and not the lighter goods or higher grades. You take the higher class dry goods, boots and shoes, and fancy goods, clothing, and things of that kind, they move by rail, and I think always will so far as that is concerned.

Senator PAGE. Because of the time?

Mr. TEAL. Both. The rate enters but little into a commodity of that kind. Take a case of goods that may measure only a quarter of a ton, it would be worth $500 or $1,000, and the rate does not enter into that. Take a keg of nails of 100 pounds, the rate does enter into it. That is the reason.

Senator SIMMONS. Would there be much demand on the Pacific coast for the iron and steel products?

Mr. TEAL. Yes, sir. Why not?

Senator SIMMONS. You get those largely from the Atlantic seaboard?

Mr. TEAL. Almost altogether, though since the tariff has been changed there is going to be a competitive condition as between Belgium, Great Britain, and the Eastern States. That has begun to show itself some now, and I may say, much to our satisfaction. To give you an idea what a freight rate means in distribution I want to leave this tabulation with the committee. I am speaking of the effect upon business and the effect upon the consuming public. This map [indicating] shows the rail rates from the Pacific coast to many eastern points, East St. Louis, and as far as points in Maine. It shows the rates back from the coast from New York and Philadelphia. That is, it gives the through rates one way and the local rate back. Therefore, if you know the water rate you can take this column and see how far back into the interior you can go as against the through rail rate. I will only refer to one or two illustrations.

Senator SIMMONS. How far back into the interior do you think it would go?

Mr. TEAL. That would be determined by the coast rate. If you take, for instance, a 40-cent rate on lumber, it would go back until you met the rate coming the other way. That might be one point or another point. It would depend, of course, upon the local rate. I will tell you what has been done, Senator, in actual practice. I have known of salmon to go by water to New York, then through the Great Lakes to Duluth, and back as far as an 11-cent carload rate would take it before it met the Pacific coast rate east by rail. We have shipped, not large quantities, but continually, starch and other products from Iowa to New York or other eastern ports by rail and thence to Portland by water. We can distribute our salmon by water even to-day as far back as Ohio on the back haul.

Senator SIMMONS. In sending salmon from San Francisco you would not want to bring it around by water to New York and then ship clear across the continent again?

Mr. TEAL. We do not want to, but we have done it, and shipped it cheaper than by rail.

Senator SIMMONS. Would it not be cheaper to ship by rail to San Francisco?

Mr. TEAL. No. I stated that was an actual occurrence. seems rather peculiar, I know.

Senator SIMMONS. It does indeed.

That

Mr. TEAL. I can explain it to you so that you can see why it is not so peculiar. At certain seasons of the year there is not a demand for salmon. I think Senator Perkins would understand it. It would have to be stored anyhow. It is put aboard a ship going around the Horn, and in going around the Horn they save the storage charges, desiring to arrive in New York just about the time the market opens. In this particular instance a very cheap rate was obtained around the Horn up to New York, and then the particular shipment did, just as I say, go by water up to Duluth.

Senator SIMMONS. You were speaking about a very exceptional

case?

Mr. TEAL. Yes. I said it was exceptional.

Senator SIMMONS. You would not contend that it would be economical to take the salmon all the way around by the canal from San Francisco to New York and then send it half way through the continent?

Mr. TEAL. Say back to Chicago or St. Louis?

Senator SIMMONS. Yes. I will say anywhere within the 2,000 mile zone outside of what I call the back haul zone of 500 miles on each coast.

Mr. TEAL. Yes, I do; and I will prove it to you presently that it can be done regularly. It would be the natural way to do it.

Senator SIMMONS. It would be a very uneconomical process, would it not?

.

Mr. TEAL. Why?

• Senator SIMMONS. I should say you could carry it at just the same cost from San Francisco to the center of the continent as from New York to the center of the continent. Why carry it around the continent to get it from San Francisco to New York?

Mr. TEAL. There are two reasons. In the first place, the water rate to New York is much lower, and the rates back to Chicago are on a much lower basis than the rates from San Francisco to Chicago on account of the density of traffic and the movement generally. For instance, there has been a 75-cent rate for 1,000-mile haul, firstclass, between Chicago and New York for a generation. The 75-cent first-class rate out West does not carry us 200 miles.

I

Senator OWEN. What is the rate around the Horn for salmon? Mr. TEAL. I am sorry that I did not bring that memorandum. have the other water rates that I will give you in just a moment. They are shipped, as I told you, aboard a sailing ship, and as the Senator says, that was of course an exceptional case.

Senator OWEN. Do you know how low they are, substantially? Mr. TEAL. No; I do not recall just at this time.

Senator BRISTOW. Mr. Teal, before you leave that point, the actual cost of hauling the traffic, we will say, from New York to Chicago where the grades are not great, is very much less per ton per mile than hauling over the mountains where they have to climb 8,000 feet into the air and down again and up again?

Mr. TEAL. Unquestionably. And then there is the density of traffic. They carry thousands of tons where we carry hundreds.

As I say, that 75-cent rate to Chicago which has been the basis of the Chicago rates for a generation

Senator SIMMONS. It seems to me that your argument would probably lead to this: That it is cheaper to bring products from the Pacific coast through to New York and then ship them from New York to any point east of the Rocky Mountains than it would be to ship them direct from the Pacific coast to points East? Mr. TEAL. No; I did not say that.

Senator SIMMONS. Does it not lead to that?

Mr. TEAL. No, sir; it does not.

Senator SIMMONS. It is not far away from that, is it?

Mr. TEAL. A very considerable distance-about 1,500 miles, or 1,000 miles from it. I did not say you could ship to New York and then go back to Denver, or Kansas City. Kansas City is 2,000 miles from the coast.

Senator SIMMONS. After you get across the Rocky Mountains you are outside of the back-haul zone from the coast, are you not?

Mr. TEAL. Yes, sir.

Senator PAGE. I should like to ask what you think would be the effect of the opening up of the waterway by way from New York through the Hudson River, and then through the canal up to Lake Champlain, and down through the Richelieu of Sorrel Rivers to the St. Lawrence River, and then back by water in that way without transshipment. Is it possible to have a line of boats go through the Panama Canal that could be taken without transshipping back to Chicago or Duluth?

Mr. TEAL. I do not believe that kind of a boat would operate through the canal, Senator.

Senator PAGE. It would have to be transshipped?

Mr. TEAL. Yes, sir.

Senator PAGE. You know there is a proposition now before the Congress to open that waterway, and it is making some headway, and New York has already opened the Champlain Canal and to boats drawing 12-foot draft, and the Canadian government has said that as soon as we would provide for an outlet of Lake Champlain north they would seek to open the waterways of Canada so as to give us a through traffic that way.

Mr. TEAL. I do not believe that the character of vessels that would normally operate, such as you are speaking of, through the canal, could use that waterway.

Senator SIMMONS. I had supposed that you had a very good system of rail communication from San Francisco into the interior. I had supposed those roads were in competition, and it is amazing to me to hear say in effect, as I understand you, that you can bring those products all around the continent from the Pacific coast, Oregon, and Washington, to New York, and then send them into some halfway point in the center of the country, for about the same that it would cost you to send them direct from San Francisco to that point by rail.

Mr. TEAL. Senator, you do not want to misunderstand me

Senator SIMMONS. No; I do not, and that is the reason I am asking you.

Mr. TEAL. That particular shipment of salmon that I referred toI told you it was a special shipment, and I told you of the conditions under which it went. The shipment of salmon and other commodities of that kind by water through the canal, if there are no tollsor whether there are tolls or not, so far as that is concerned-will necessarily be measured by the water rate to whatever point they go to plus the local back haul until it meets the through rail rate. The point I was trying to make was how far, and the effect upon movement in many places of a slight difference in rate. For instance, from Saginaw in Michigan-I have just selected these just as they happened to come-to Hammond, Ind., on lumber, the addition of the rate there is 2 cents. I do not know how far it would be, probably 200 miles. For some reason 1 cent per hundred on the through rate would carry lumber from Cincinnati to Indianapolis. From Buffalo to Cleveland it would take 5 cents. I will leave this map, if it is of any service, because it simply shows the effect that in that way can be measured.

(The map and rates were filed with the committee.)

Senator SIMMONS. One of the witnesses said that by the use of oil instead of coal you could bring lumber from the Pacific coast to New

York by water for $4. Do you know what the present rate from New Orleans by water on lumber to New York is?

Mr. TEAL. No; I do not, Senator. I will say this as to that statement, I never have heard such a rate intimated as having been made. Senator SIMMONS. Mr. Dunn said that.

Mr. TEAL. I am simply stating that I never heard of such a rate as that being intimated.

Senator WAI SH. It is generally stated to be about $9. I was interested in the statement Mr. Wheeler gave us to the effect that they got a $9 rate now on canned fruit. I should naturally think, Mr. Teal, that we ought to get a better rate on lumber than can be given on canned fruit.

Mr. TEAL. We will get a better rate; but canned fruit stows pretty well.

Senator OWEN. The rate on canned goods from San Francisco, Cal., to New York is 85 cents.

Senator WALSH. That is by rail. What would you expect would be the lumber rate, Mr. Teal?

Mr. TEAL. They are figuring on about, I think, a 35-cent rate about $7 a ton. They hope to get that.

Senator WALSH. That is exclusive of the tolls?

Mr. TEAL. That is exclusive of the tolls.

Senator BRISTOW. Would not the ability to get cargo back in a lumber vessel affect the rate very much?

Mr. TEAL. It would absolutely control it.

Senator SIMMONS. If you can carry a ton from the Pacific coast to New York for $4 on lumber, do you not think that would be about as cheap as they could carry it from New Orleans?

Mr. TEAL. As I do not know what they are carrying it for from New Orleans, but I would think that rate from New Orleans would be pretty reasonable under present conditions. I do not think they pay any less than that. I do not know what they are paying there. I do not think there is anything further to be added to what has been said about the difference in charters between the foreign vessels and the American vessels. I think you have been told that it would be some place between $3 and $3.60 a thousand feet - that is, between an American ship charter and a foreign ship charter, say, from British Columbia and Puget Sound to the same American port. Senator SIMMONS. I do not know anything about the lumber rates; but I was asking the question about the cotton rate, a distance of 150 miles by rail and probably 175 by water from my town to Norfolk, and according to the statement it would cost about $3.20 a ton to carry it just that distance on the Atlantic coast.

Mr. TEAL. How much did you say?

Senator SIMMONS. Eighty cents a bale. A bale weighs 500 pounds. Mr. TEAL. Cotton?

Senator SIMMONS. Cotton, yes. There is both rail and water transportation.

Mr. TEAL. I really do not know. I will say this, as to water and rail transportation on short distances, there is very much difference in the cost, either in rates or in cost on a water haul of 50 to 75 miles, or even 100 miles, than one would think. That is on account of the terminal expenses in both cases-in the handling and that sort of thing. Where you get the benefit of water competition is on the longer haul. But on our coast, Senator, they figure that 3 water