Dr. HUEBNER. The railroad rates, I feel, will go down, but the boats operating through the canal will follow up the railroad rates just as near as they can in order to get a proper share of the traffic.

Senator BRISTOW. You spoke of tramp steamers. How many tramp steamers are there in operation in the commerce of the world

now?

Dr. HUEBNER. That I can not answer. I think it has been estimated that there are in the neighborhood of 22,000, but I give that merely from hearsay.

Senator BRISTOW. Is there not competition between the tramp steamer and the line steamer?

Dr. HUEBNER. Some, but it is getting less all the time. It is true that the tramp exerts an influence over line rates all over the world. If a conference of steamship lines should become unreasonable, which they are not likely to be, because they are charging what the traffic will bear but suppose that they put the rates too high-then the big forwarding agencies in New York and other places would promptly rebel against those unreasonably high rates, and would effect what they call combination cargoes, and charter tramps for the carriage of the same.

Senator BRISTOW. Is it not a matter of fact in commerce that a tramp is regarded as the enemy of the line steamer, and is there not a bitter rivalry between them?

Dr. HUEBNER. It is becoming so less and less all the time.

Senator BRISTOW. Is not that the fact up to this time? We will not deal in anticipations.

Dr. HUEBNER. They were until the time we had these conferences so universally in existence.

Senator BRISTOW. As you say, the very fact that when water rates became high that there is an opportunity for a company or a shipper, or a combination of shippers, to charter a ship and put it on the water to carry the traffic, is not that the possibility of competition, and do not high rates invite competition, and can not competition come in? Dr. HUEBNER. In certain parts of the foreign trade, but I do not anticipate it as regards the intercoastal trade through the canal, because the tramp and the liners will carry different kinds of cargoes. The tramp will be used by that man only who conveys freight in such. large quantities that he can afford to use an entire ship. The great mass of the shippers for nearly all of the articles will have to use the line service. At the present time only about one-tenth to one-fifth of the intercoastal traffic is carried by tramps. I believe it has been computed that within four years, 1906-1911, the traffic carried by line stamers between the two coasts has trebled, while the traffic carried by the tramps has decreased 50 per cent. I anticipate that in the future it is the line service that will gain on the tramp still more. Senator BRISTOW. You are speaking of four years as between the You mean between the Atlantic and Pacific coasts? Dr. HUEBNER. Yes.

coasts.

Senator BRISTOW. Has not that been due very largely to competition that sprung up on the Pacific coast by a firm known as Bates & Cheseborough?

Dr. HUEBNER. Bates & Cheseborough did not operate tramp steamers.

Senator BRISTOW. I know they did not. But you are speaking of line steamers, and you state that because of the increase in the business of the line steamers that the tramp steamers are handling less of that traffic. Now, as a matter of fact, did not the competition of the Bates & Cheseborough Co. with the Pacific Mail Steamship Co., and their facilities at Panama for transferring their cargo across the Isthmus, lead to a great increase in the traffic by the way of Panama between the coasts?

Dr. HUEBNER. I do not know that the California-Atlantic Line was really a competitor. I do know this, that the Pacific Mail and the California-Atlantic Line charged the same rates, and I have seen a great deal of correspondence to demonstrate beyond question that every time the Pacific Mail Steamship Co. changed the rate they promptly sent notices to the other line.

Senator BRISTOW. Do you not know as a matter of fact that the Pacific Mail Steamship Co., through its relations and its intrigues, broke up the Bates & Cheseborough Co. in that competition contest there?

Dr. HUEBNER. I do not know that.

Senator BRISTOw. Is not the Pacific Mail Steamship Co. controlled by the Southern Pacific Railroad Co., and has it not broken up all competition on the Pacific coast, sooner or later?

Dr. HUEBNER. I know that it is a member of various conferences. As to whether it drove the California-Atlantic Line out of business I can not say.

Senator BRISTOW. I think if you will communicate with the president of the California-Atlantic Line that he can give you some very interesting information regarding it.

The CHAIRMAN. Doctor, have you heard that shipping agents have for some months been making alternate contracts as to rates for business through the Panama Canal, giving one rate if the tolls are to be paid and a different rate if the tolls are not to be paid?

Dr. HUEBNER. No, sir.

The CHAIRMAN. You have not heard of such a thing?

Dr. HUEBNER. No. I may add that this investigation was not conducted and this report was not prepared with any reference at all to the tolls question.

The CHAIRMAN. I understood that.

Dr. HUEBNER. And for that reason I am not familiar with what has been going on in the last two months.

Senator THOMAS. Suppose that the Government of the United States should construct a line of vessels for commercial purposes through the canal, and should operate it for the public benefit. Do you not think that that would result in benefit to the consumer?

Dr. HUEBNER. Why, of course, if a Government line deliberately cuts rates, and has the Treasury of the United States behind it, it can do things that no doubt will lead to a reduction in freight rates. As to whether the consumer will get the reduction, or the middleman get it, is another question.

Senator THOMAS. From what you say I assume it may be your opinion at least that the opening of the canal, whether it is operated free or whether tolls are charged, will make no difference in regard to the reduction of cost to the consumer? In other words, there is to be no competition on the ocean because it admits of universal

competition? There will be no competition on land because there combination is comparatively easy? Is there any way to break that except that the Government itself shall build a line of ships to go into the freight business?

Dr. HUEBNER. Of course, the Government line is in the freight business, and the Government line is a party to various conferences at the present time.

Senator BRISTOWw. Do you say that the Panama Steamship Line has gone into these conferences to fix rates according to those? Dr. HUEBNER. The Government line's tariff has been acceptedSenator BRISTOW. When was that done? Let us have the details of it.

Senator THOMAS. I should like to have the time stated when that arrangement was made.

Dr. HUEBNER. I can furnish that later.
Senator THOMAS. About what year?

Dr. HUEBNER. I will not venture a guess.

Senator THOMAS. I was told it was done between 1909 and 1911, some time.

The CHAIRMAN. What is your best impression about the time? Dr. HUEBNER. It would be a mere guess, Senator.

The CHAIRMAN. We want that for what it is worth. What is your guess, if that is the best it is?

Dr. HUEBNER. I should say somewhere around 1908 and 1909. Senator BRISTow. Do you not know, as a matter of fact, that the general manager of the Panama Railroad Steamship Co. Line refused to go into the conference and refused to make his rates in harmony with the agreements?

Dr. HUEBNER. A conference, Senator Bristow, is not necessarily outlined on paper. Most of the conference arrangements are nothing more than gentlemen's agreements. For instance, in the trade to the west coast of South America, via the United Fruit Co., the Hamburg-American Line, the Royal Mail Steam Packet Co., and the Government line, the four lines are acting in absolute harmony. They adopt the same freight tariff. All of the lines have sent us their tariffs, and while the title page is different, the rest, I think, has come from the same press. The same is true with reference to the traffic to the Pacific coast, in connection with the California-Atlantic Line and the Pacific Mail Line. These lines, supported by the Government line, charged the same rates; and the American-Hawaiian Line, which goes via the Isthmus of Tehuantepec, refused to join with the Government, although there is a great deal of testimony to show that the matter was talked over, and that the Government was anxious in a way to get the American-Hawaiian Line to make some arrangement as to what its rates would be as compared with the rates of the California-Atlantic Line and the Pacific Mail Line.

Senator BRISTOW. Do I understand that the Government tried to get the Hawaiian Steamship Line to go into this agreement, and it refused?

Dr. HUEBNER. It refused to do anything definitely.

Senator BRANDEGEE. What did it do about its rates?

Dr. HUEBNER. I will give you the summary as I have it in the report.

Senator THOMAS. While you are looking for that, can you state the name of the manager of this Government line?

Dr. HUEBNER. No, sir; but I can furnish that very easily.

Senator BRISTOW. Mr. E. A. Drake, of New York, is the business manager?

Dr. HUEBNER. Yes.

The CHAIRMAN. Doctor, did not the House committee, as a result in part of your investigation and report, recommend that the jurisdiction of the Interstate Commerce Commission be extended to water transportation?

Dr. HUEBNER. Yes, sir.

The CHAIRMAN. If that becomes a law, and the Interstate Commerce Commission regulates the rates on the Panama Canal, will not the Interstate Commerce Commission be influenced in the rates it will fix by the fact as to whether the shipper pays $1.20 a ton to the Government or not?

Dr. HUEBNER. I am inclined to think that in case we have governmental regulation, and if the Government will wait until the steamship companies have fixed their schedules of rates-voluminous schedules of 60 or 70 typewritten pages-fixing the rates on the basis of what the traffic will bear and then say, "Gentlemen, we have your rates, but remember you are exempt from tolls, and we insist that you mark down every rate proportionately," I believe, then, you will accomplish something for the shippers, but it will be done by force. The CHAIRMAN. Do you think that the Interstate Commerce Commission performs its duty in that intelligent manner you have just described?

Dr. HUEBNER. I had no intention to reflect on anyone.

The CHAIRMAN. Of course, I do not know that you intended really to give us your view as to the efficiency or lack of efficiency of the Interstate Commerce Commission, but if the Interstate Commerce Commission were as inefficient as one might imply from your reference to it, I would vote for its abolition.

Senator THOMAS. I want to say that I do not understand the inference was made by this witness as the Chairman does?

The CHAIRMAN. I understand the witness to indicate that all these shipping companies might be permitted in their own way and to suit their own purpose to agree upon certain schedules, and not until then would the Interstate Commerce Commission interpose, and even then the only recommendation to be made by the Interstate Commerce Commission would be to reduce their rates $1.20 per ton.

Senator THOMAS. I understood the witness to be stating a supposititious situation. Possibly my understanding was incorrect. Dr. HUEBNER. Of course, at the present time we have no regu

lation.

The CHAIRMAN. Yes.

Dr. HUEBNER. There is absolutely no control over port-to-port traffic. Regulation of water transportation also must differ in some respects from regulation of land transportation. There are peculiar factors that require a difference to be kept in mind, and the recommendations of the Committee on the Merchant Marine and Fisheries have in mind the regulation of the tariffs of a boat line after they have been promulgated. It is utterly impossible to require a steamship line to serve 30 days' notice before it can change a rate. You must

allow a steamship line to make its rate, and then to require that rate to be changed if it is unreasonable. We would, for instance, greatly damage our foreign trade if we required foreign steamship lines to serve 30 days' notice before they could alter a rate.

The CHAIRMAN. Which foreign trade are you speaking of our foreign trade?

Dr. HUEBNER. Yes.

The CHAIRMAN. The 15 ships we have in the foreign trade?

Dr. HUEBNER. No; I mean as regards all lines. The recommendations of the Committee on the Merchant Marine and Fisheries cover the regulation of foreign carriers as well as American carriers.

Senator BRISTOW. How could we here pass a law regulating the rates of English ships, for instance?

Dr. HUEBNER. That is not for me to say. I may say this, that the foreign steamship lines are perfectly willing to be regulated. They have expressed themselves to that effect again and again.

Senator BRISTOw. That is, the Cerman, English, and French ships would be willing for us to pass laws here regulating their operations? Dr. HUEBNER. They might not be willing, but they feel they must be willing if that is the desire on this side.

Senator BRISTOW. Why can we not so legislate, then, as to give our ships a chance in competing with them?

The CHAIRMAN. We have not the ships.

Senator BRISTOW. If we could regulate it we can soon fix the conditions of traffic so that our ships could enter this trade.

The CHAIRMAN. That is possible.

Senator BRISTOW. Let me get back to these tramp ships. If a tramp ship is wandering around, hunting business-that is what they do, I am told. That is how they happened to get their name. They happen to be in New York, and they can pick up a cargo there for San Francisco. Suppose that she is about two-thirds or threefourths full, and they find some business in the country they might get by making a special low rate, do they not seek business by offering this low rate in order to fill up their cargo and have a full cargo? Dr. HUEBNER. There may be instances of that, but as a rule the tramp is a carrier that is owned or chartered by some one with sufficient cargo to fill that boat.

Senator BRISTOW. Do I understand you to say, as a matter of fact, that the tramps are chartered for special voyages by those who own the cargo themselves?

Dr. HUEBNER. Or who can bring together a mass of cargo sufficiently large to utilize that ship properly.

Senator BRISTOw. Have not these tramp ships agents and representatives that get business for them, and do they not go wherever they can find business in competition with anybody on the earth? Dr. HUEBNER. Yes; but it is always cargo that is called bulk cargo, and in quantities sufficient to operate that vessel properly. Senator BRISTOw. And does not the line ship as a matter of fact complain of the fact that it has to meet the competition of the tramps, and that it ought to be given advantages in the matter of charging rates, and so forth, that the tramp does not have to obey?

Dr. HUEBNER. The lines do to some extent find it necessary to protect themselves against tramps. I can give an illustration for