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issue. Mr. O'Bryne accepted it as his platform. The candidates running against him stood on the free-tolls platform. Senator James stated at Paterson that New Jersey was expected to stand by the President in his Panama Canal policy; that if Mr. O'Byrne were defeated it would be looked upon as an insult to President Wilson.
The tolls question was the issue in that campaign. The press of the country so declared, and the people of the country waited for the result. You know how our American citizens in the sixth district voted. Mr. O'Bryne was snowed under. Is there any further evidence needed as to the feeling of the people of New Jersey on this question, and can it not be truthfully said that the people throughout the Nation feel as the Jersey people do? It is safe to say that not a single Congressman in New Jersey who voted against the free tolls can be reelected in the fall. God knows it is in no spirit of exultation that I make this statement. I am a Democrat, and have held the highest admiration for President Wilson. Most of the Jersey Congressmen are my good friends.
Gentlemen, the question is now in your hands; you must decide. In New Jersey we feel that the question is in safe hands. The Members of the Senate are big men, otherwise they would not be elevated to such high station. They are mostly broad minded Americans and able statesmen. We believe they can safely decide as to whether we will continue to guide our ship of state by the wise counsel of patriotic Americans, or by the treasonable advice of Andrew Carnegie, who is using some of the millions he made by methods well known to every school boy to betray the interests of this Republic into the hands of the foreigner.
HORACE TURNER & Co., EXPORT LUMBER,
Mobile, Ala., April 17, 1914. Senator JAMES A. O'GORMAN,
Chairman, Washington, D. C. My Dear Sir: As I testified before your committee when the Panama act was being considered, and as I am dead against the repeal of the "free-toll” provision, naturally, I have followed with interest the arguments advanced for the repeal. It is astonishing to read the excuses given by many Democrats for going back upon the Democratic "free-toll plank." If a man ran upon a prohibition ticket and after election voted “wet,” 'no possible excuse would be accepted; but to swap positions upon this Democratic platform seems to be quite the proper thing: How different would be the situation if either Mr. Champ Clark or Mr. Oscar W. Underwood had been the Democratic nominee instead of Mr. Wilson. We would hear the voice of President Clark or President Underwood raised for “the right to regulate and control our own coastwise traffic through our own canal," and the country would have backed this position to a finish. The Republicans forgot their tariff” platform pledge and lost out, and the Democrats will, I believe, find great difficulty in satisfactorily explaining to the American people at the next election just why they violated their "free-toll pledge and in convincing the public that the next Democratic platform is a genuine one and not subject to change overnight.
Treaty.--I think it would be difficult to find many men amongst the most ardent repealers of free tolls who would assert that the Hay-Pauncefote treaty, as signed, would have been ratified just the same by the Senate (in 1901) even if the British Government had in 1901 questioned our right to grant "free tolls" to our coastwise vessels. If they had interfered with our right to regulate our coastwise trade while the treaty was in the Senate we all know that the treaty would never have been ratified in its present shape. If in 1912—when the Panama ('anal Act was drawn--the Hay-Pauncefote treaty had come up for consideration and the British Government had, for the first time, questioned our right to grant free tolls to our coastwise vessels, we all know there would have been a very different treaty signed, so why, at this late date, after the canal is completed, should we permit Great Britain to interfere because she reads our treaty differently from what we know it was intended to cover? The action of Great Britain seems to be nothing short of sharp practice in a trade-just an effort to take an unfair advantage.
If the clause, the canal shall be free and open to the vessels of commerce and of war of all nations” does not include the United States so far as its war vessels are concerned (and this seems to be admitted even by Great Britain), how on earth can it include the vessels of commerce of United States? Those against "free tolls” can assert that the United States in paying tolls upon its own war vessels would simply be taking money from one poeket and putting it in another pocket of the same trousers. But if this is correct, and if Great Britain admits the absolute right of the United States to grant its vessels of commerce a subsidy, amounting to exact sum of the canal tolls just the system adopted by Spain as to Panama Canal tolls) then what is the difference between the United States collecting $5,000 in canal tolls from an American vessel, depositing
the vessel's check in United States Treasury, the same Treasury official at once drawing a United States Treasury check, sending same back to vessel owner, and the United States granting its coastwise vessels "free tolls" outright under Panama Canal act of 1912? Just a little useless bookkeeping, that is all the difference. The United States once owned some vessels of commerce, and I think there is a plan by present administration to use some of our war vessels for carrying mail, etc., through the canal-in other words, making them vessels of commerce.' Will they not be free of tolls" like all United States war vessels? Then one American vessel of commerce (and one not in coastwise trade either) can pass free of tolls (with permission of all concerned) and the right to pass another American vessel-engaged purely in the coastwise trade is questioned by Great Britain. The only difference is, Uncle Sam owns one vessel while Bill Smith owns the other vessel-a matter of ownership only. If Great Britain does not pay any more canal tolls than her pro rata share of the canal expense, why she has no complaint, and it is not likely that any foreign nation will ever pay even its pro rata proportion of the grand total expense of the canal. There will be an actual loss to the United States.
Free tolls. Now does not free tolls on coastwise traffic in the last analysis mean, first, assisting our manufacturer to meet the competition of the foreign manufacturer; second, reducing our domestic freight bill just the amount of the canal tolls?
We find the Canadian, using cheap foreign vessels, loading lumber in British Columbia to New York or New England. We find the American, living in Washington or Oregon, manufacturing the same lumber, yet forced to use the higher-priced American tonnage to reach New York or New England. Result: The American receives a less price for his lumber than the Canadian. For example, the rate of freight, via foreign vessels, is $7 per 1,000 feet, British Columbia to New York, while the rate via American coastwise vessel, Oregon to New York, is $10 per 1,000 feet. If lumber sells for $22 in New York, the Canadian receives net price of $15, whereas the American receives $12 or, if this is below cost of production, quits business. The same difference against the American would exist upon everything that the American on the Pacific coast shipped to New York or New England in competition with the Canadian.
What would the situation be as to products of this state-Alabama-such as coal, iron, cotton goods, oak and other hardwoods? Take iron, for example, now that China is awake. The State of Alabama will have to deliver iron to San Francisco in American coastwise vessels in competition with China, the latter possessing the cheapest labor on earth and having the selection of vessels from the cheapest ocean fleets of the world. If the American coastwise vessel (more expensive to build and to operate than the foreign vessel) was free of tolls, the Alabama iron shipper would be just the amount of the tolls better able to meet the competition of China.
Another example. The South and New England must manufacture cotton goods in competition with China and Japan and use the more expensive American vessel to reach San Francisco and the Pacific coast of the United States. Free tolls to American vessels would help offset the advantage China and Japan have in cheaper foreign tonnage. Why the manufacturer in England, skilled in manufacture of cotton goods, shipping in British vessels, whose first cost and operating expense is less than the American vessel, upon these long ocean trips will have an advantage over American cotton goods. The freight cost from Liverpool to San Francisco in British vessels will be less than the freight cost New York to San Francisco. When China and Japan get well started, with labor that costs less per year than our labor per month, why we will be out of the race in everything these countries can produce.
By giving the American coastwise vessel “free tolls” we are just attempting to equalize, to some extent, the disadvantage that the American vessel, with its higher first cost and greater operating expense, is working under in competition with the lower priced foreign vessel-bringing goods from those foreign countries in competition with the different sections of the United States. The oak of Japan will be put upon the Pacific coast in foreign vessels and the Gulf coast, to meet this competition, must receive a less net price because of the higher freight bill of the American vessel or quit business. On such articles as the Atlantic and Gulf manufacturers have no foreign competition to meet, why, of course, the amount of tolls will be added to and form part of the freight bill paid in the end by consumers on Pacific coast.
I appreciate fully the argument used by opposition that the American coastwise vessels are a monopoly, controlled by several large corporations-a regular trust so to speak. But is it not better to pay tribute to an American shipping trust than to a British shipping trust? At least we can get back at the American trust by taxation or similar means, whereas we can not reach the British or other foreign shipping trusts; our money once paid them is gone. I, for one, am thankful to have the American flag left upon the sea and am willing to take my chances in regulating the American shipping trust so that it will be a benefit to the country, and we should not lose sight of the fact that we have a large fleet of American sailing vessels, suitable for bulk cargo, in addition to numbers of independent American freighters, all of which will make the basis of ocean rates upon bulk goods. Really there is nothing in the shipping trust idea, for once there is a public ownership of water terminals at the different ports of the United States and a fair chance for the independent American vessel you can rest assured that there will be competition in such trade as the independent American vessel has a fighting chance. The American sailing vessel to-day makes the rates of freight upon the Atlantic and between Gulf and Atlantic ports for the regular American line steamers, in coal, cement, lumber, cross ties and other wood goods, and all such bulk goods. The Panama Canal act forbids our railroads passing vessels owned by them and supposedly competing with them through the canal, so this will stop the railroads from crushing out competition by lowering rates until independent boats are gone and then raising rates to recoup their losses. The other weapon, and the greatest one, has been the control of water terminals by the railroada and their affiliated steamship lines. When this evil is fully realized and is remedied and an “open door” given to all, there will be competition wherever there is a living chance for the American vessel in this Atlantic to Pacific trade against the foreign vessel bringing goods to United States in competition with our own goods. What good is an exclusive right to American vessels in the Atlantic to Pacific coastwise trade if there is nothing to carry by reason of our American goods being forced out by foreign goods?
I have read with amusement the fear entertained by some that "free tolls" on American coastwise vessels would be used to hurt American manufactured goods; that a British vessel with foreign goods for San Francisco or the Orient would come to New York, discharge there into an American vessel, which would take goods "free of tolls” to San Francisco and there discharge, or there transfer into a foreign vessel bound for the Orient. Undoubtedly those who have this view never shipped a cargo of any kind. The tolls would be $1.20 per net registered vessel ton--equivalent to 50 cents to 60 cents per cargo ton of 2,000 pounds. To save 50 cents per cargo ton, the British vessel discharges at New York on a dock (stevedoring at least 50 cents per ton), the American coastwise vessel loads (stevedoring at least 50 cents per ton again), then at San Francisco the American coastwise vessel discharges on dock (stevedoring at least 50 cents per ton again), and, if destined to the Orient, the foreign vessel loads at San Francisco (stevedoring at 50 cents per ton), a total cost for stevedoring of $2 per cargo ton if for Orient, or $1.50 if for San Francisco proper. In addition, there is the lost time of the vessel making transfer at New York--two vessels, say, with quick dispatch of 3 days each—-6 days at $400 to $300 per day for such freighters, or $2,400 19 $3,000, equivalent to 25 cents at least per cargo ton. The same delay, or another 25 cents per cargo ton at San Francisco, if transferred there to foreign vessel bound to Orient. And nothing has been added for wharves and warehouses at New York used to store the goods discharged by one steamer and held awaiting arrival of the American coastwise steamer--which service would be at least 25 cents per cargo ton. At some ports this cost would average 50 cents per cargo ton. The same wharfage and storage expense must be incurred at San Francisco, whether goods are for San Francisco proper or held there for loading to the Orient. The goods must be discharged rapidly by steamer into warehouses to release the steamer, and goods are later loaded out by car or drayed away. Docks and wharves cost money, and the goods must, by a wharfage and storage charge, pay the interest and maintenance cost of these properties. Pog. sibly the idea occurred to some that each British steamer would meet each American coastwise steamer at New York at the exact same moment, tie alongside, and there discharge or transfer into the American steamer; further that the cubic dimensions of the British steamer would be exactly the same as those of the American steamer; therefore the cargo of one would fit exactly the cargo space of the other. Again, that the American vessel would reach San Francisco at the exact same moment that the foreign vessel arrived from the Orient; that these boats would touch each other and there the transfer be made--the cargo of the American vessel fitting exactly the cargo space of the foreign vessel. And really this might happen, once at least in a lifetime, but I doubt it. Vessels cost too much money to wait upon anything--their charter time per day is too high-and the weather conditions are such as to make a schedule on a long trip for cargo boats anything but accurate. All of these costs-stevedoring, wharfage, storage, and delay at New York and San Francisco-would cost at least $2.25 per cargo ton on the San Francisco freight and at least $3 per cargo ton is a transfer of freight was made to an Orient steamer-all to save 50 cents per cargo ton in canal tolls. And no mention made of damaged goods, by additional handling, which damage is an item, and which transfer would not be permitted in any event hy shippers or consignees. Reference was made to a possible transfer at Colon to save the toll:. The extra steredoring makes this out of the question. For example, 50 cents per ton
for discharging upon docks, 50 cents per ton for loading into American vessel at Colon making trip to San Francisco, plus the cost of wharfage or storage at Colon, say 25 cents, and the delay to two steamers, amounting to, say, 25 cents per cargo ton; total, $1.50 per cargo ton spent to save 50 cents per cargo ton in canal tolls. No man familiar with shipping believes that the two vessels will meet at Colon at the same time, and, as the delay of the steamer costs more than extra stevedoring, there will be no waiting at Colon one for the other. Then great docks must be provided at Colon to hold all this freight.
Rates of freight.- Some Members of Congress have stated that the consumer would receive no benefit from free tolls--there would be no reduction in rates. Steamers are chartered right along in the Gulf by reliable steamship lines to take cargo to Europe upon an estimated profit per steamer per trip of $1,000. Steamship lines would be glad to count upon an absolute net profit each trip of a large freight steamer of even $500. Thus you can see the margin of profit for the chartering of steamers and the risk of booking parcel lots to fill such steamers. The tolls would amount to $4,000 to $6,00 on these freighters, according to size, each trip. If the American merchant marine is ever given a fair break with
the foreign vessel, then steamers will be built for charter. The many steamship lines and agencies will charter these steamers and make ocean rates that the strongest steamship lines of the world must follow. This is the history of the European trade where the strong European freight lines make their rates based upon the competition of tramp steamers, chartered per trip or per year, in this trade.
Subsidy. --Il permitting American vessels to pass through the canal free of tolls is a subsidy, then we are subsidizing the freight steamers from Duluth and other Lake cities in passing them through the locks free of tolls on the trip eastward to Ohio and New York; we are subsidizing the coal barges from Pennsylvania down the Ohio and Mississippi to New Orleans; and we are subsidizing the barges now being loaded with coal and iron in mineral district of Alabama, and passing through locks and dams of Warrior and Tombigbee rivers on their trips to Mobile and New Orleans. These waterways all cost Federal money just as did the Panama Canal, and will have to be maintained in the same manner. Are we to reverse our waterway policy of a century and in the end really subsidize the railroads competing with these waterways? For just the moment tolls are charged at the locks in the rivers of Alabama, at that moment the barge freight must increase. When the barge freights increase, so at once do railroad freights wherever there is rail and water competition. Result, we lose our cheap water rates, coal and iron cost more, and in the final settlement the public pays the freight bill in increased cost of iron and coal. When a man argues that canal tolls are a subsidy, then he might just as well argue that every dollar spent by the Government for a lower transportation cost and a reduction of the American freight bill is a subsidy--that Government money spent upon a public highway is a subsidy to the farmers, who must pay toll for the interest and maintenance of these highways. The argument can be extended to cover almost every act of the Federal Government for benefit of the American public. The Government runs a fishery department and furnishes free stocks of fish to individuals and communities. Is this not just as much a subsidy as free tolls? I don't eat fish, but I do eat beef; yet I see no reason for yelling subsidy at the fish eater because the latter is assisted in getting a cheaper food supply. I can build a fish pond and have fish, too, if I want fish; and, in turn, the fish eater can build a boat and pass it “ toll free” through the locks and dams of American waterways excepting, possibly, the Panama ('anal– where the opposition of Canada and Great Britain may prevent his free passage.” It is very strange that while the Panama Canal act was being considered the Democrats did not know hat “free tolls" meant "subsidy"; that Mr. Wilson and Mr. Bryan did not know a subsidy during the Presidential campaign; and that for almost two years the minds of all of these statesmen (now favoring a repeal) remained a blank, and they did not know a subsidy when they
How many other alleged mistakes have they made during the past two years while in this most unfortunate state of mind?
To sum up the situation, I would say:
First. That granting free canal tolls on coastwise vessels is simply following the fixed American principle of “the free use of all United States waterways to its citizens and their boats.'
Second. That free canal tolls whether at Panama, on the Great Lakes, or in our rivers, mean a cheaper freight bill for the American public upon all American goods shipped upon American waterways.
Third. That free canal tolls mean to aid the American farmer and manufacturer on Atlantic and Gulf—-forced to use higher priced American vessels to market his goods with his American brother on the Pacific coast, and vice versa-in competition with the goods of Canada, Great Britain, and other foreign nations shipping in the cheaper foreign vessels.
Fourth. That free canal tolls will, to some extent, aid in offsetting the disadvantage the American vessel has--of higher cost and higher operating expense--and will tend to encourage the building of more American vessels.
We have wasted and are wasting our natural resources, and the time is coming when we must aid and encourage every branch of our trade and transportation—that is if we expert to continue our present expensive scale of living and successfully meet the less expensive living scale of certain other nations.
I end by asking if we can afford to drive a nail in the coffin of our American farmers and manufacturers, who, with higher priced labor, must compete with the cheaper labor of Europe and Asia, and who will have to pay a higher freight bill—to get their goods from one coast to the other—than the foreign manufacturer using cheaper tonnage? If we can afford to further handicap our American vessel-in this coast-to-coast trade-already at a disadvantage with the foreign vessel? If we can afford to surrender to our competitors, Great Britain and Canada, our invention for cheaper transportation, so that these countries and others can haul their cheap-labor goods, by reason of our invention, to our own American customers while we are powerless to compete?
Should we not save the American domestic trade for Americans? Remember, if we do not look out for ourselves, why, no one else will. Very truly, yours,
The committee met at 2.30 o'clock p. m., after recess.
STATEMENT OF MR. JAMES G. CLARKE, OF CHICAGO, ILL. The CHAIRMAN. You may proceed with your statement, Mr. Clarke.
Mr. CLARKE. Mr. Chairman and gentlemen, I am not a lawyer and I am not an economizer in any way. I simply came as one of a small group in Chicago who are interested a good deal in this matter here. I am connected with Irish societies; in fact, at the present time I am president of the United Irish Societies of Chicago, and we are interested in this tolls matter, and I will simply give you, in a very brief manner, the sentiment which prevails amongst the people I am associated with principally, and, of course, I might say other people, too, but I will make it very brief. The first thing I will do will be to read a paper that was passed unanimously at a mass meeting a short time ago in Chicago in reference to this case.
(The paper is as follows:) Fond as are our hopes and desires for the future of Ireland, we wish it to be known in this land of our adoption that we have no compromises to make in Ireland's behalf, when by that compromise we would sacrifice one cherished tradition or one single right that is the heritage of our America.
It is in that spirit of unyielding fidelity to this our adopted land that we oppose with united voice the efforts of American statesmanship to permit foreign nations, and especially England, to shape our treaties and organic law against the interests of America's ocean traffic and to lay down the law for our transocean trade.
The pretext that granting free toll to American coastwise commerce is fostering a monopoly in American shipping has no foundation in fact, and is a direct surrender to our commercial enemy. There is but one supreme monopoly in the world to-day, and that is England's monopoly of the seas. She builded it by subsidies infinitely larger than all the canal tolls that all the world will pay at the gates of Panama. She raised her coast cities to be the mightiest cities on earth because from their harbors cleared the ships fostered by national monopoly, and to dare to deny America's rights to encourage her coastwise shipping by free toll in American waters is to invite America to crush her own water transportation and surrender the American flag over to the British shipping. The policy of the men who advocate tolls through our own waters for our own commerce is serving England's purpose with as much fidelity as Lord Castlerow when he took Ireland's legislature and joined it to England on England's soil.
As men of Irish blood we are out of sympathy with the movement on both sides of the water that is declaring for a closer bond between England and America. England