But to go further, if the committee will allow me, it seems to us that by far the greatest benefit that has been shown and that is to come if there is a benefit, which I very much doubt; in other words, I doubt very much whether it is going to make any difference whether the tolls are remitted or not, because the difference between the lowest rate that the transcontinental railroads can make and the shipping rate is so great for the majority of products that I can not see where it is going to make much difference so far as stimulating anything or helping any traffic, because it seems to me that it has been the experience of all carriers of traffic that they will charge as much as they can reasonably expect to get. And if there is such a wide variance the comparatively small tolls will not avail to make much difference one way or the other.

Senator BRANDEGEE. Irrespective of who pays the tolls, leaving out of account whether they are paid by the shipper of the goods, the owner of the ship, or the ultimate consumer, do you know anything about whether the coastwise shipping, as such, needs this advantage or subsidy, or whatever you choose to call it?

Mr. DOBSON. I am not a shipping man myself. The senior member of the biggest ship brokers in Pennsylvania is on the board of directors of the chamber of commerce. He was one of the most outspoken advocates of this resolution.

Senator BRANDEGEE. You do not know, then, of your own knowledge, whether shipping through the canal our coastwise ships will be able to compete with the transcontinental railroads without the subsidy or not?

We

Mr. DOBSON. I do know that the difference between freight is so great they are bound to compete. I have made comparisons, and in some instances there will be a difference of $5 to $10 a ton. have a traffic manager with whom I have talked a good deal about this matter, and it seems-of course, it is like a good many other figures which have been submitted, you can figure and figure, and two men can take large figures of this sort and make them thousands and maybe hundreds of thousands of dollars apart.

Senator WALSH. What is your business?

Mr. DOBSON. I am a real estate dealer.

The CHAIRMAN. Did you finish your sentence, Mr. Dobson?

Mr. DOBSON. No; he broke me off, so I have rather lost the thread. Senator BRANDEGEE. You were talking about two men, talking about very large figures.

The CHAIRMAN. You said you had been talking with some railroad

man.

Mr. DOBSON. Speaking very roughly, about the lowest cost upon which the railroads could handle traffic as a general rule, is threefourths of a cent per ton per mile.

The CHAIRMAN. That is what this traffic man told you?

Mr. DOBSON. That is what I gathered in my conversations with him, and in the readings we did together.

The CHAIRMAN. The two of you were engaged in studying the subject?

Mr. DOBSON. We were engaged in studying the subject, and have been for some time. In fact we brought this matter up before our directors and postponed it for about two weeks in order that all the

members, so far as might be in that limited time, should have the opportunity to try to familiarize themselves with the subject, so we would not be making resolutions simply because somebody asked us

to.

The CHAIRMAN. Who is this traffic man you speak about?

Mr. DOBSON. Mr. James F. Phillips.

The CHAIRMAN. With what railroad is he connected?

Mr. DOBSON. He is traffic manager of the Pensacola Chamber of Commerce. He has worked for the Clyde Line, for the Florida East Coast; for the Georgia, Florida & Alabama Railroad, and for various other railroads.

The CHAIRMAN. Was it his suggestion that the Pensacola Chamber of Commerce should take action on this matter?

Mr. DOBSON. No, sir; it was brought up by some of the directors. It was brought up by people who desired us to take the contrary action from the action we took.

The CHAIRMAN. Are there other railroad men in your chamber of commerce besides this Mr. Phillips?

Mr. DOBSON. He is not a railroad man. He is an employee of the chamber of commerce.

The CHAIRMAN. Did I not understand you to say that he had had some relations

Mr. DOBSON. No; I said he had worked in the past for certain transportation companies. If he had not he would not be eligible to be traffic man for the chamber of commerce, but he is employed by the chamber of commerce and is a traffic man. He is also our secretary. He is our secretary and traffic manager, but we got himprimarily for his traffic ideas.

The CHAIRMAN. I gather your view to be that in your judgment, the American coastwise vessels should pay toll going through the canal?

Mr. DOBSON. They should pay toll from more than one standpoint; first, because we think

The CHAIRMAN. I am not asking your reasons, you probably have indicated them pretty fully.

Senator THORNTON. I think he has the right to finish his statement. The CHAIRMAN. I think before the Senator came in he had stated all those reasons. If you wish them he may repeat them. You may repeat your reasons again, as Senator Thornton was not here when you began.

Mr. DOBSON. I desired to say that we think for the first and foremost reason, that the granting of free tolls to American coastwise ships would be a discrimination against other nations and that the treaty plainly provides against such discrimination; certainly that, even if by a very close interpretation we might manage to squeeze out an interpretation which would allow us to remit these tollsthat apparently every other country considers them-we would by that act violate the treaty, and that we would be going to people, to new customers whom we are seeking, with a blot on our good name, and that we would not recommend ourselves very highly by that method. Also that the principle of remitting tolls is not a sound principle, in that it is an indirect subsidy, and is taxing the great mass of the people of the country indirectly. That is what it will amount to, to pay for benefits which will come to only a few.

The CHAIRMAN. Of course, you said all that before. I want to ask you a question as to the legal aspect of it, concerning which you gave an opinion. Are you a lawyer?

Mr. DOBSON. No, sir.

The CHAIRMAN. Do you think that you are qualified to pass a judgment on the interpretation of that instrument?

Mr. DOBSON. It would seem that I am about as well qualified as most people who have passed judgment, since they have differed so widely.

The CHAIRMAN. Do you think, then, that President Taft and his Secretary of State, Mr. Knox, and Secretary of War, Mr. Stimson, and Secretary of Commerce, Mr. Nagel, all of whom were experienced lawyers, are all wrong in their views?

Mr. DOBSON. Then I might ask if you thought

The CHAIRMAN. No; you are not to ask questions. It is your privilege to answer them.

Mr. DOBSON. You get my answer, Senator, from that.

The CHAIRMAN. Do you think those gentlemen are all wrong? Mr. DOBSON. They are as likely to be wrong as the other gentlemen, who are just as eminent, are to be right.

The CHAIRMAN. Very good. With regard to the other phase of it. You regard it as a subsidy and you do not believe in encouraging that practice. A great deal of public money has been used in the State of Florida for local waterway improvements, has it not?

Senator WALSH. In the harbor of Pensacola ?

Mr. DOBSON. There is where you are wrong. It is a natural harbor, very little money has been used.

The CHAIRMAN. You know that a great deal of money has been spent in your State, Mr. Dobson?

Mr. DOBSON. Yes, sir.

The CHAIRMAN. And you know that no tax or toll has been imposed upon any vessels making use of those improvements?

Mr. DOBSON. No, sir.

The CHAIRMAN. Do you think a tax should be imposed for making use of them?

Mr. DOBSON. If it were imposed on one it should be imposed on all, yes.

Senator WALSH. Should it be imposed on all?

Mr. DOBSON. If necessary by solemn treaties, yes.

Senator WALSH. We have dismissed the subject of the treaty. The CHAIRMAN. On the second branch of the question now, you think every American ship, outside of the question of the treaty, should pay toll going through this canal, and I should like to know how you differentiate the two expenditures of moneys on the Panama Canal and the other expenditures for river and harbor improvements

in the State of Florida?

Mr. DOBSON. Because there is considerable difference between local improvements and an international highway.

The CHAIRMAN. Where is the local improvement?

Mr. DOBSON. The local improvement is in the various States and for the benefit of local commerce. The Panama Canal is an international highway, which benefits the whole nation, and the only requirement should be that it should be used on terms of equality

for all the States. It does not matter what you charge, if you charge everybody the same. That is my proposition.

Senator OWEN. You mean for all the States of the world?

Mr. DOBSON. For all the states of the world, for all the States of the Union, so far as this particular point is concerned. He is making the point that we ought to charge, when we do not charge, in Florida. I say it is all right to charge in Florida provided you charge everybody the same.

Senator BRISTOW. Do you understand that you think it would be all right to charge a fee for the use of the Pensacola harbor because the Government has spent large amounts of money on Pensacola harbor?

Mr. DOBSON. If the Government should do that for every other local improvement.

Senator BRISTOW. Do you think the Government ought to do that for all these river and harbor improvements?

Mr. DOBSON. No; because they are local improvements and are not international highways. There is a vast amount of difference.

Senator BRISTOW. Is not the Pensacola Harbor for the use of all ships of the world?

Mr. DOBSON. It is, but not to connect the commerce of the countries of the world.

Senator BRISTOW. The commerce of the world goes in there? Mr. DOBSON. To get in the local harbor, yes; but not to connect the countries of the world with one another.

Senator WALSH. The Government spent a lot of money, did it not, blowing up Hell Gate in the East River?

Mr. DOBSON. Yes, sir.

Senator WALSH. Do you call that a local improvement?

Mr. DOBSON. To some extent, yes.

Senator WALSH. You would not call that an international highway?

Mr. DOBSON. I would not.

Senator WALSH. By the way, the Government must have spent an enormous amount of money in the improvement of New York Harbor. Would you call that local, too?

Mr. DOBSON. I suppose the Government has spent a good deal of money on the Pacific coast harbors, too?

Senator WALSH. We will confine ourselves to New York at present. Do you call that a local improvement?

Mr. DOBSON. Certainly.

Senator WALSH. About how far into the interior do you think the advantages of the improvement of the New York Harbor would go? Mr. DOBSON. There is no international connection between sovereign States through New York Harbor, is there?

Senator BRISTOW. What about the Soo Canal?

Mr. DOBSON. The Soo Canal is for the

Senator BRISTOW. Do you call that local, also?

Mr. DOBSON. That is for the purpose of American coastwise traffic which does not connect any international traffic. It is no highway through which the various States of the world communicate.

Senator BRISTOW. Do you not know that more commerce passes through the Soo Canal than through the Suez?

Mr. DOBSON. I do know that, but I also know it is not an international highway. It is restricted as to ships of war entirely, except on permission.

The CHAIRMAN. Do you know the name of the city in your State that for a couple of years paid one of its citizens $10,000 a year to come to Washington and get appropriations, or encourage appropriations, for local improvements in the State?

Mr. DOBSON. I know the name of the city which had an agent here. What they paid him I do not know.

The CHAIRMAN. What is the name of that city?

Mr. DOBSON. It is only a matter of hearsay, so I should not like to say. It is not Pensacola, i will say that.

Senator BRISTOW. The Government expended more than a million dollars on the harbor of Pensacola, and Kansas helped to furnish that. What interest has Kansas got in the harbor at Pensacola? Mr. DOBSON. Senator, where did you get those figures? Senator BRISTOW. From Secretary McAdoo.

Mr. DOBSON. They may be correct. I am surprised, though. But that does not alter the conditions of the case.

Senator BRISTOW. That is, you think Kansas ought to be taxed for the benefit of Pensacola Harbor?

Mr. DOBSON. Does not Kansas get the benefit of the improvement of the Mississippi River or the Missouri River?

Senator BRISTOW. We are a long ways from it.

Mr. DOBSON. Or the tributaries of those rivers?

Senator BRISTOW. No; not so much as we would get the benefit of the Panama Canal.

Senator WALSH. Substitute Montana for Kansas.

Mr. DOBSON. Whenever you go into that question you enter a question as broad as the country. You bring in the irrigation projects in the West for which the Government has advanced enormous amounts of money for which the East receives no benefit. Senator BRISTOW. You say the Government advances enormous sums of money for these irrigation projects?

Mr. DOBSON. Building dams and

Senator BRISTOw. Do you not know that the Government simply loans the money?

Mr. DOBSON. I know all that is to be paid in the course of time. Senator BRISTOW. Suppose the Government loans the money to Pensacola and expects Pensacola to return it?

Mr. DOBSON. Suppose you go into public buildings, and everything the Government does. Suppose you go into pensions. You are opening up a field that has no connection whatever

Senator BRISTOw. I am not opening up a field; you seem to be opening up the field. I am talking about the improvement of water transportation and trying to find out why you think that Kansas should be taxed to provide you a harbor at Pensacola for your local benefit, as you say it is local.

Mr. DOBSON. Because we are taxed to provide Kansas for improvements to her waterways, for her Government buildings, and for the general good, and take all Government matters-

Senator BRISTOW. Let us see. Florida received from the Federal Government $13,000,000 for the improvement of her waterways.