Kansas has, I think, received-I do not catch the statement- has received $131,000. Senator BRANDEGEE. What are the particular improvements that went into? Senator BRISTOW. Some graft that some fellow got in order to vote these enormous appropriations for New York, Pensacola, and other places, in order to get the river and harbor bill through. Senator BRANDEGEE. I thought probably it was an artesian well. Senator BRISTOW. It is something of that character. But the gentleman says these river and harbor improvements are for local advantage. I want him to tell me why my State should be taxed for the local advantage of Pensacola, when he is objecting to the General Government providing a waterway that will be of some benefit to Kansas, at least so its people think. Mr. DOBSON. Because, as I have said before, in the first place, because there is a solemn treaty which provides Senator BRISTOW. We are not talking about the treaty. You were discussing the economic question. Mr. DOBSON. In the second place this is a matter entirely apart and different from the matter you are discussing. Senator BRISTOW. Yes; one canal is different from another canal. Mr. DOBSON. Yes; one is an international highway and the other is a local improvement. Senator BRISTOW. One leads to your direct local benefit, from your point of view, and the other is of general benefit to all the States; therefore the Government ought to pay for the local benefit, but not for the general benefit. Mr. DOBSON. The Government ought not to tax a few of its people to provide a market-all of its people to provide a market for a few. Senator BRISTOW. But it ought to tax all the people in order to provide Pensacola with a harbor? Mr. DOBSON. And Kansas with public buildings, and it gives away its public lands in Kansas so that Kansas could prosper. This Government is not run on the basis of trying to give every Statethis is no cheeseparing policy we are running this Government onto see that Kansas gets more than any other State. Nor are we running entirely on the basis of dollars and cents. Senator BRISTOw. It would seem so from the attitude you gentlemen take, who do not want to tax the general public to construct a great highway that you say will benefit every State in the Union. Mr. DOBSON. For the benefit of the ship owners. Senator BRISTOW. But you are insisting that we ought to tax the general public for local improvements? Mr. DOBSON. Because those are matters of give and take, which are given at one place and another place, and they equalize each other. Senator BRANDEGEE. Are you quite sure the railroads did not influence your chamber of commerce to pass this resolution? Mr. DOBSON. That is very amusing. The CHAIRMAN. That is all, Mr. Dobson, The hearings of the committee are now closed. Senator SIMMONS. Mr. Chairman, I want to put in the record a little memorandum from the assistant to the chief, in the absence of the chief of office of the Panama Canal, to correct some figures given in the statement of Col. Goethals. At the time I offered the statement, I stated that the department said they thought that in transmission by cable he had got his tolls wrong, and they cabled him to make corrections. The CHAIRMAN. Will you state what he really said? Senator SIMMONS. He had stated first $11,950,000, instead of $12,200,000. The CHAIRMAN. Is that the only correction? Hon. F. M. SIMMONS, Committee on Interoceanic Canals, PANAMA CANAL OFFICE, Washington, D. C., April 25, 1914. United States Senate, Washington, D. C. SIR: Referring to my letter to you of yesterday's date, transmitting two copies of a cablegram addressed to you by Col. Goethals, dated April 23, containing his views on the economic side of the Panama Canal tolls question, and particularly to the postscript to that letter regarding the apparent error in the total "amount to be secured annually through tolls," I beg to advise you that a further cable has been received from Col. Goethals this morning, indicating that the items given in the cable are correct and that, therefore, the total should be changed to $12,200,000, instead of $11,950,000. Will you kindly, therefore, make this change in the copy of cablegram sent you yesterday? An additional corrected copy is inclosed herewith. Very respectfully, (In the absence of the chief of office.) A. L. FLINT, Assistant to the Chief of Office. The CHAIRMAN. I wish, to point out another defect in Col. Goethals's statement, showing that his business view of the situation is not entitled to the same public approval that his views on the engineering matter might properly receive. In estimating the probable annual expenses at $11,000,000 or $12,000,000 a year he has only taken into account the interest on about $130,000,000 of bonds when, as a matter of fact, the total expenditure will be about $400,000,000; and he pays no attention at all to the need of charging up an interest on $270,000,000 of the expenditure of public moneys. Senator SIMMONS. He gives all the items and then gives the total. If he has left out anything, it can be supplied. Now, Mr. Chairman, I want, as Mr. Reeda, whom I requested should be brought here, came and left without testifying, but requested me to hand this statement to the committee. The CHAIRMAN. Who is Mr. Reeda? Senator SIMMONS. He is a gentleman from Chicago, as I recall. I asked that he be summoned. You have got the statement of where he is from. Senator BRISTOW. You do not know where he resides, Senator? Senator SIMMONS. Yes; I know. The CHAIRMAN. I think he presented some resolutions from the lawyers' association. Senator SIMMONS. He says, "My presence here as an official representative of the Lawyers' Association of Illinois." The CHAIRMAN. He is a young man? Senator SIMMONS. A very able young man. 43756-14- -62 The Hon. F. M. SIMMONS, United States Senate. WASHINGTON, D. C., April 23, 1914. DEAR SIR: At your request and in response to the invitation of Senator O'Gorman I came to attend a hearing of the Interoceanic Canals Committee. I arrived here Saturday, but owing to unforeseen contingencies the time of the committee was consumed in the most important considerations that can affect the status of a nation, preventing me from testifying. My presence here is as the official representative of the Lawyers' Association of Illinois, and personally as a protest against the nasty, contemptible, pernicious, and criminally libelous editorials and cartoons contained in some of our public press, which insult the dignity of American citizenship. The public press are performing a public duty of a most important character and ought to be subject to reasonable public regu lation. Though their policies differ on public questions from those who are the constituted authorities of the Nation, that should be no justification for such papers to heap insult upon insult upon the Government, represented by the President of the United States. An insult to the President in his official capacity is an insult to American citizenship. Vile editorials and cartoons are the actuating motives that compel me to take a public interest in the Panama Canal tolls question. ་ In the opinion of many the exemption clause of the Panama Canal act is violative of treaty obligations. The tanchest advocate of free tolls concedes that the question is debatable. Man's greatest achievement is the respect and well wishes of his neighbors; likewise, the enduring greatness of a nation is its national honor. To obtain a national advantage by narrow construction is unbecoming the dignity of a great people. If a nation amongst its neighbors gives the impression of being slippery, that reputation is reflected on each individual citizen. The national status but reflects the individual status. The legal aspects have been so frequently presented to the committee that I content myself by calling your honorable attention to the inclosed resolution unanimously adopted by the lawyers' association of Illinois on March 7, 1914. Aside from the legal aspect of the question, it appears that from an economic standpoint the exemption clause should be repealed. The foundation stone of the American Government is special privileges to none, special favors to none. The granting of the exemption to coastwise traffic is violative of that fundamental maxim and a taking away from each individual citizen of his birthright to the extent that the special privilege is granted. The primary purpose of the building of the canal was for national defense, but the greatest use to which the canal will be put is a commercial one. Why should the Government pay the cost of up-keeping the canal? The Government has invested $400,000,000. It will continue to invest annually millions more. The traffic that will pas through the canal in 1915 is estimated at 10,500,000 tons, of which the coastwise traffic will furnish somewhat over 1,000,000 tons. For the purpose of illustration we will assume that the total tonnage will be 12,000,000 tons and the coastwise shipping 2,000,000 tons. If the tolls are fixed at $1 per ton the revenue produced by the canal on that basis, provided there are no exemptions, will be $12,000,000. The cost of up-keep in the form of interest charges on a 3 per cent basis (but what people would be satisfied to invest $400,000,000 at 3 per cent?) is $12,000,000. The cost of operation and maintenance, exclusive of the military and naval costs, according to some authorities, is $4,000,000. On that basis there is a total of $4,000,000 that must be made up from the public treasury. Why should any citizen be called upon to pay a tribute to any particular class or sect of individuals in the shape of a remission or exemption from the payment of tolls? The exemption of coastwise traffic from the payment of tolls would be a standing invitation to the capital of foreign lands to come in and take advantage of the monopoly created by the Panama Canal act in favor of coastwise shipping. A foreign capitalist would organize shipping corporations to comply with the requirements of citizenship, have a dummy board of directors and officers, citizens of the United States, for the purpose of complying with the act, and thereby taking a profit from each American citizen in the shape of the tolls not required to be paid under the present act. True, the National Government would get its income tax on the income of such corporations; likewise, the State for taxing purposes; but the earnings, which unquestionably would be large, would flow to foreign shores, and American citizenship will be paying an indirect tax to foreign capitalists. I am proud of New York, of New Orleans, of San Francisco, and each and all of the great cities that dot our land, but it is not fair to the citizens of one community to give the citizens of another community a commercial advantage, the results of a united enterprise. To illustrate, New Orleans now has all the advantages of the coastwise shipping from the East to points in the Gulf district and the West that she could have by the opening of the canal. However, with the opening of the canal New Orleans will have the same advantage over interior cities on shipments from the West to the East. The distributing centers on eastward traffic from the coast presently are Omaha, Chicago, and Minneapolis. With the opening of the canal this line of traffic will be diverted, particularly when coastwise shipping will not be required to pay tolls. The requirement to pay tolls on the coastwise shipping would equalize the advantages of the Gulf cities in a large measure. To exempt coastwise traffic from the payment of tolls would unbalance the situation to the advantage of the Gulf towns and other seaboard ports. The Government has given by legislative enactment every possible incentive for the creation of an American merchant marine, particularly for the coastwise traffic. No industry has ever been so signally favored. It has been the policy of the American Government not to subsidize in any form. The exemption from the payment of tolls constitutes a subsidy, and before Congress should reverse the policy of the Nation which has been stable for generations the people ought to be given an opportunity to consider the advisability of subsidizing the shipping industry. With the opening of the canal capital will be readily invested in the building of suitable ships to carry on the coastwise traffic and the impetus that the shipping industry will thus receive and the opportunities that will be derived trom engaging in the trade will be the mucleus upon which will be builded a future and great American merchant marine. We all long and hope for the day from when we can see on the masthead of ships on all the highways of commerce and in all ports of the world, Respectfully, yours, "Sun-kissed and storm-tossed, The red, the white and the blue." WM. REEDA, Chairman Public Service Committee of the Lawyers' Association of Illinois. P. S.-If it is agreeable to the committee, our association would like to have the views berein expressed made matter of record of the committee hearings to the same extent as though the testimony were given orally. Senator SIMMONS. I wish also to put in the record an interview given out by Senator Culberson from Mineral Wells, Tex., April 17. do this because I am afraid that Senator Culberson will not be here during our deliberation. Also here are some rates that were furnished-railroad transcontinental rates that were furnished by an official of the Interstate Commerce Commission at my request. The CHAIRMAN. They will be received. Senator SIMMONS. I should like to have those go in the record. INTERSTATE COMMERCE COMMISSION, Memorandum.-Statement showing rates in cents per 100 pounds on various articles named from California and North Pacific coast terminals to New York, N. Y., a all rail and rail and water (via Galveston, Tex.). 100 150 Fiber, flax, in bales, tightly compressed, minimum weight, 24,000 pounds.. 100 Fish (dry), smoked or salted, in packages, minimum weight, 30,000 pounds... Fruits, citrus, víz, oranges, grape fruit, limes, mandarines, Fruits, dried, including raisins, prunes, and figs, in boxes, Handles, broom, without metal fixtures, minimum weight, Hops, in bales, machine compressed, minimum weight, Liquors Wine, California, minimum weight, 30,000 pounds. Lumber, built-up, combined or veneered wood, n. o. s., minimum weight, 40,000 pounds. Milk, condensed, liquid or dry, minimum weight, 40,000 pounds. Peas and beans, dried, in packages, minimum weight, 40,000 pounds.. Reels or spools (cable or wire, second-hand), minimum weight, 30,000 pounds.. Seed, alfalfa, clover, canary, cotton, flax, grass, hemp, millet, rape, garden seeds, etc., minimum weight, 30,000 pounds.. 100 110 100 1 Applicable from Portland, Oreg. Class rates, westbound, to California terminals (San Francisco, Cal., etc.) and North Pacific coast terminals (Seattle, Wash, etc.) from New York, N. Y. (Covered by western classification): 115 100 115 * છ છ છ અને ૩ ૪ ૐ ૐ ૐ ૐ ૐ 150 100 85 100 150 1125 1 100 110 110 110 85 85 $5 Rates named from North Pacific coast terminals (Seattle, Wash., etc.) appear to also apply via rail and lake (via Duluth, Minn., and Mutual Transit Co., etc.) during season of navigation. DIVISION OF TARIFFS. J. M. J. |