PURCHASE OF THE CAPE COD CANAL. THURSDAY, OCTOBER 9, 1919. UNITED STATES SENATE, The committee met, pursuant to call, at 10.30 o'clock a. m., in the committee room, Capitol, Senator Wesley L. Jones presiding. Present: Senators Jones (chairman), Nelson, Sherman, Fernald, Calder, Lenroot, Colt, Ball, Edge, Fletcher, Chamberlain, Sheppard, Simmons, and Kirby. The CHAIRMAN. This is a hearing on Senate bill 2083, a bill to authorize the acquisition and operation by the United States of the Cape Cod Canal. Senator Lodge has suggested that this bill be amended as follows: On page 2, in line 1, by striking out "$10,000,000" and inserting "$1,500,000"; in line 2 by striking out the word "acquisition" and inserting in lieu thereof the word "maintenance," and after the word "improvement," in line 2, inserting the words "and operation"; in line 4 striking out the words "in the aforesaid condemnation proceedings" and inserting the words "under section 3 of this act" in line 5, after the word "awards," inserting the words "under condemnation proceedings." Proceedings for the acquisition of this canal were started under a provision of the river and harbor act approved August 8, 1917, under an item which is set forth on page 3 of the report from the Chief of Engineers of the United States Army to the Secretary of War, on page 3 of House Document No. 1768, Sixty-fifth Congress, third session, which item is as follows [reading]: Waterway connecting Buzzards Bay and Cape Cod Bay, Mass.: The Secretary of War, the Secretary of the Navy, and the Secretary of Commerce are hereby authorized to examine and appraise the value of the works and franchises of the Cape Cod Canal, Massachusetts, connecting Buzzards and Cape Cod Bays with reference to the advisability of the purchase of said canal by the United States and the construction over the route of the said canal of a free waterway, with or without a guard lock, and having a depth and capacity sufficient to accommodate the navigation interests that are affected thereby. This investigation shall be conducted under the direction of the Secretary of War and the supervision of the Chief of Engineers in the usual manner provided by law for making preliminary examinations and surveys, except that the Secretary of War shall call upon the Secretary of the Navy and the Secretary of Commerce for such data and evidence as these Secretaries may wish to have incorporated in the report of survey, and, further, that the final report of the investigation, with its conclusions upon probable cost and commercial advantages and military and naval uses of the said canal, shall be submitted to the 3 Secretary of War, the Secretary of the Navy, and the Secretary of Commerce for their action before it is transmitted to Congress. If the said Secretaries are all in favor of the acquisition of the said canal, the Secretary of War is hereby further authorized to enter into negotiations for its purchase, including all property, franchises, and appurtenances used or acquired for use in connection therewith or appertaining thereto; and he is further authorized if, in the judgment of the Secretary of War, the Secretary of the Navy, and the Secretary of Commerce that the price for such canal is reasonable and satisfactory, to make contracts for the purchase of the same, at the option of the United States, subject to future ratification and appropriation by the Congress, or in the event of the inability of the Secretary of War to make a satisfactory contract for the voluntary purchase of said Cape Cod Canal and its appurtenances he is hereby authorized and directed, through the Attorney General, to institute and carry to completion proceedings for the condemnation of said canal and its appurtenances, the acceptance of the award in said proceedings to be subject to the future ratification and the appropriation by Congress. Such condemnation proceedings shall be instituted and conducted in, and jurisdiction of said proceedings is hereby given to, the district court of the United States for the district of Massachusetts, substantially as provided in "An act to authorize condemnation of land for sites for public buildings, and for other purposes," approved August 1, 1888; and the sum of $5,000 is hereby appropriated to pay the necessary costs thereof and expenses in connection therewith. The Secretary of War is further au thorized and directed to report the proceedings hereunder to Congress. I have here a letter from the United States Railroad Administration in answer to the request of the committee for further information, which is as follows [reading]: Hon. W. L. JONES, UNITED STATES RAILROAD ADMINISTRATION, Chairman Committee on Commerce, United States Senate, Washington, D. C. MY DEAR SENATOR JONES: I am in receipt of your letter of the 2d instant, in which you inclose a copy of Senate 2083, a bill to authorize the acquisition and operation by the United States of the Cape Cod Canal, and in which you ask, on behalf of the Committee on Commerce, that I furnish the committee with statement as to present status as to this matter and such suggestions as I may deem proper touching the bill. The present status is that the Cape Cod Canal is under Federal control under a proclamation of the President issued under date of July 22, 1918, copy of which I inclose herewith for convenience of reference. I am attaching a statement which shows the tonnage of vessels passing through the canal during the period of Federal control, the revenue collected, and the amounts expended, which have been divided between operating expenses, deferred maintenance, and capital charges, the last two covering expenditures which were required by the condition of the canal at the time it was taken over by the Government in order to restore it to the depth required by its charter and to enable it to be utilized by vessels to the extent of the physical capacity contemplated by such charter. No contract has been made with the Boston, Cape Cod & New York Canal Co., which owns the canal, for the use thereof during the period of Federal control. An offer was made to the canal company to give it a contract providing for the return of the property at the end of Federal control in as good condition as when it was taken over, and no other compensation for its use during the period of Federal control, but the company declined to make such contract and applied to the Interstate Commerce Commission for the appointment of referees to determine its compensation under section 3 of the Federal control act, approved March 21, 1918. Thereafter the company withdrew its application for the appointment of such referees and I applied on behalf of the President for their appointment. They were appointed, and the matter is now being tried before them. I assume that you will not require any further information in regard to this proceeding, but Nathan Matthews, Esq., is counsel in the case for the Railroad Administration, and, as I understand, that he will attend before your committee, I suggest that if you do desire any further details as to the situation in this legal proceeding, you can readily obtain them from Mr. Matthews. |