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of much traffic or the diversion of any traffic from the Suez route to the Panama route, because coal is comparatively cheap. I think the vessels can fill their bunkers with Welsh coal almost anywhere this side of the Suez Canal at $10 a ton; at any rate, the average difference between these two-because please understand that I am advancing nothing original-is the difference between $4 and $8. Now, coal on the South American coast, I think, sells for $12 to $16 a ton. If we establish a coaling station at Prieta, which is inevitable, the probabilities are that coaling will be no cheaper for some time, and as a consequence the element of cost of operation, which is one prime, if not the prime factor in all commercial transactions, transportation as well as manufacture, bargain and sale, is going to determine the question. On the other hand, the cheap coal, if through the canal coal is cheapened on the Pacific coast of South America and other places, will not of itself divert traffic through the Panama Canal.

I am told that vessels leaving Great Britain for Valparaiso, for example, fill their bunkers with $2.50 per ton coal for their entire trip. They get coal there for $16, but only take enough to take them to Rio de Janeiro, where they get cheap coal to take them back. The saving which they can make is so much greater than to go through the canal and pay tolls that vessels will persist in going through the Strait of Magellan and they can transact business on equal terms as far north as Guayaquil, and the cheaper coal gets on that coast the farther up they can come, but that would be offset if in connection with cheap coal at the Panama Canal they were given the advantage of free transportation through that canal.

The difference is not so great when we come to consider the traffic between Europe and the Atlantic coast and the western ports of the United States and Alaska on the Pacific. But when coal becomes cheap in Alaska the advantage is still with Suez and against Panama, for the reason that vessels can then, going through the Suez Canal, utilize all the trading ports at coaling stations between and at the same time obtain the cheap coal of Alaska for the return trip.

If that is so, and I think the admiral proves his point beyond all controversy, we are face to face with the probability of a diversion of a comparatively small amount of trade from Suez and other routes through the Panama Canal. Of course, that has its effect upon transcontinental traffic and to some extent upon coast to coast


On the other hand, if the canal can be thrown open to the commerce of the world, and I am only giving the barest outline of a part of the argument, it will naturally and necessarily promote the establishment not only of coaling stations, but of trading stations, and most powerfully promote our traffic with South America, because on the Pacific coast of South America we are in competition with the traffic of the world-no exemptions there at all-and in order to utilize and get our part of that traffic we have got to use the canal, and if we can not use it as cheaply as vessels can by going through the Strait of Magellan, then, of course

Senator BORAH. If we open the canal, as you suggest, who will do the trading on the west coast of South America? Whose ships will carry the traffic?

Senator THOMAS. There is no question but foreign ships will carry it for a while, but if we are going to compete, as I hope we will, and

compete successfully, we have got to have some advantage by virtue of the building of the canal.

Senator BORAH. The immediate effect of making the canal absolutely free would be almost exclusively to benefit the foreign ships? Senator THOMAS. The effect will be to benefit foreign ships as to foreign commerce whether you make it free or not.

Senator BRANDEGEE. Then how would it operate as a powerful stimulant to our commerce?

Senator THOMAS. It will operate, if anything will operate, as a stimulant to our commerce, by promoting and encouraging American merchant marine. Of course, it may not have that effect, but I regard it at this juncture not only as important from a commercial standpoint, but also as a solution of the present controversy.

Senator PERKINS. Does not your amendment, if adopted, mean the cancellation and abrogation of our navigation laws relating to coast


Senator THOMAS. It does not. I wish to the Lord it could. I think that is the great handicap to American commerce.

Senator PERKINS. You believe in closing up our American ship yards?

Senator THOMAS. On the contrary I believe in opening them as they were opened before we had this system of navigation laws. At the same time I do not hesitate to say that I believe that any vessel built anywhere should be permitted to register under the laws of the United States and do business, although that is not contemplated in this project.

Senator WALSH. Does the project contemplate such as proposed in the amendment offered by Senator Reed to open the coastwise traffic to the vessels of the world?

Senator THOMAS. Yes; it contemplates the repeal of all those portions of the existing act which impose tolls upon ships.

Senator WALSH. What does this mean on the debit side of the ledger, interest on the investment of $400,000,000 and the upkeep of the canal and the care and handling of it, what does it amount to? Senator THOMAS. It means that this is this country's contribution, or additional contribution, to the commerce of the world. Senator WALSH. That would be about how much annually? Senator THOMAS. As to that I am not prepared to say.

The CHAIRMAN. Estimated at $5,000,000 a year.

Senator WALSH. And interest, $12,000,000.

The CHAIRMAN. Interest, $12,000,000, and the estimated cost of upkeep, $5,000,000, making a total of $17,000,000 a year. Senator THOMAS. That is a mere bagatelle.

Senator BRISTOW. What does that estimated upkeep include? The CHAIRMAN. The cost of operating the canal, maintaining the fortifications, and interest.

Senator BRISTOW. I do not think we should take into consideration, or do you take into consideration, the fortification and the maintenance of the fortifications there?

Senator THOMAS. I am willing to take them all into consideration. Senator WALSH. But it is needed.

Senator THOMAS. But I think the advantage, the benefits, fully counterbalance that.

Senator WALSH. We need it only because the canal is there.

Senator BRISTOW. The canal is there for that reason, in a very great measure. It would never have been there if it had not been regarded as important from a military point of view.

Senator THOMAS. I do not agree with you. That is one purpose, of course.

Senator BRISTOw. The trip of the Oregon during the SpanishAmerican War around the Horn was the illustration that awoke the sentiment in the United States that led to the construction of the canal.

Senator THOMAS. And broke down the hitherto successful opposition of the Pacific railroads to the building of that canal?

Senator BRISTOW. Public opinion.

Senator THOMAS. Public opinion as a consequence of that trip. Senator BORAH. You said the "hitherto" opposition.

Senator THOMAS. The hitherto opposition to the construction of the canal.

Senator CRAWFORD. We were told it would double the efficiency of our Navy and war equipment upon the ocean.

Senator THOMAS. That is unquestionably one of the reasons, but the primary reason for building the canal, and the reason that has been held up ever since the construction of the canal was contemplated, was as an aid to the commerce of the world.

Senator BRISTOW. I agree that the great benefit was a commercial


Senator THOMAS. Pardon me, just one other thought.

Of course my statement is very incomplete. I have not attempted to make a synopsis-I have not had the time-of the argument to sustain the proposition here. But one result of the canal, instead of increasing will be to cause the greater decadence of transportation by sailing vessels, owing to the atmospheric conditions on both sides of the canal, and the consequent cost of the tollage, so that we have got to depend on steam transportation, which makes the coal problem one of the factors, and possibly one of the decisive factors, in the use of that canal.

In reference to cost, when we consider cost of the upkeep of our present canals, of our system of coast lines and buoys, deepening of harbors and improvement of rivers, to calculate the interest upon all those things, the other would cost about the same; the annual interest upon the investment plus the cost of operation is a comparatively small factor in the problem.

Senator BORAH. The tonnage of Great Britain through that canal will be greater than all other maritime nations of the earth, will it not?

Senator THOMAS. Upon the assumption that her naval tonnage is greater than that of any other nation of the world, which I suppose to be true.

The CHAIRMAN. That is a recognized fact.

Senator PERKINS. They operate their ships with 33 per cent less cost than we possibly can.

Senator THOMAS. That is true. Those are the conditions as they now are; there is no question about that. But that is true in any event, whether we have tolls or not.

Senator BORAH. Yes; but it is not true that we continue to donate to her.

Senator THOMAS. We are donating to the commerce of the world and the benefits that we will derive from it.

Now, if you gentlemen will do me the honor to listen to the presentation of this matter, and I propose to adopt the argument of another, giving full credit for it, you may not be convinced of this matter, but you will certainly be interested.

I do not care to take up any more time of the committee at this time.

The CHAIRMAN. Senator Owen, have you any desire to say anything with respect to your bill?

Senator OWEN. The bill I introduced is the same one which passed the House, so it is not necessary for me to discuss the bill which I introduced. I would like at a convenient time to the committee to present some reasons which I think would justify the passage of the bill.

Senator PERKINS. Have you changed your views since it was passed in the House?

Senator OWEN. No; I have been confirmed in them by the action of the House. I believe in the wisdom of the bill I have introduced. The CHAIRMAN. The other Senators who have introduced measures bearing on this question have been invited to attend, but several of them are out of town, and it is not likely that any other Senator will care to present his views to us this morning.

Senator OWEN. I could not, in the few moments that are remaining, present the matters I think should go before the committee, but I should be glad to do it to-morrow morning, unless you have some one else who desires to be heard at that time. Since I am here every day I shall be entirely willing to present them at the convenience of the committee.

The CHAIRMAN. I assume the main purpose of the committee in desiring to have the Senators come before them and present their views was more to ascertain the features of the bills that have been introduced, so far as they disagree with the main bill, the bill which has passed the House, with which everybody, of course, is familiar, which, as you say, is really the bill which you have introduced here.

Would the committee care to hear Mr. Chamberlain, the Commissioner of Navigation, with respect to certain phases of the shipping situation? We could not hear him to-day, but we could have him on another occasion. Some of the points suggested by Senator Thomas might be treated.

Senator PERKINS. I think that would be a good plan.

Senator SIMMONS. I think by all means Mr. Chamberlain ought to be heard. I think, however, members of the committee who have views about this one way or the other ought to advise Mr. Chamberlain of the line of inquiry that we want to follow, so that he can bring his official data here with him. I think probably it would be better to wait a day or so before we bring him here.

The CHAIRMAN. Yes. There is a Dr. Huebner, of Pennsylvania University, who was the expert employed by the committee on the Merchant Marine and Fisheries of the House, and I am advised he is very familiar with the entire subject of the American marine, and he doubtless might have some information which would be instructive to the committee if he came before us.

Senator SIMMONS. Is he present now?


Senator SIMMONS. What is his name?

The CHAIRMAN. Dr. S. S. Huebner. He was the expert employed by the House Committee on Merchant Marine. I am also advised that the House committee has upward of 400 reports concerning the ownership of coastwise vessels. Dr. Huebner could probably save time for this committee by giving, in a brief period, his views on these various features of the situation without requiring the members to go through these numerous reports.

Senator OWEN. I assume the members of this committee know about the investigation made by the Committee on Merchant Marine and Fisheries of the House a couple of years ago. If not, it would be well for the members of the committee to be furnished with copies of that report. It is a report of about 400 pages, giving the ownership of the ships engaged in this traffic and the methods by which they have established a monopoly on the Atlantic coast.

The CHAIRMAN. As I understand it, in a report recently made-not two years ago, but made a few weeks ago-it is stated that probably 92 per cent of all the present

Senator OWEN. It is 94.6 per cent.

The CHAIRMAN. That probably that per cent of all the present coastwise shipping of the country is owned by the railroads or consolidations of the trusts.

Senator THOMAS. How much of that 94.6 per cent is under railroad control?

The CHAIRMAN. A very large proportion. Under the provisions of the existing act all of the railroad-controlled boats would be excluded from the use of the canal, and all other boats part of a trust would be excluded, with the result that probably only 8 per cent of all the existing coastwise trade, which is independent coastwise trade, would have the use of the canal.

Senator BRISTOW. This Dr. Huebner of whom you speak would be very familiar with all those facts, and could we not, if we have him come before us, elicit from him the information which has been collected and which bears directly upon these questions?

The CHAIRMAN. If there be no objection, the Chair will invite him at an early hearing.

Senator SIMMONS. I do not think there will be any objection to having him here. I hope he will be brought here. I understand he is a man who has given very great study to this and is an authority upon it, but I also suggest that Dr. Johnson

The CHAIRMAN. I was about to come to that. I had it in my mind. If there be no objection, these three gentlemen will be invited to come before us--Mr. Chamberlain, Dr. Huebner, and Dr. Emory Johnson.

Senator SIMMONS. I think the statement the chairman made a few minutes ago about the present law excluding all railroad-controlled ships is slightly erroneous. In this I have been corrected by the Senator from Kansas, because he knows better than I do. He was on the committee and, I think, is very much interested in that question. I think it is only railroad-controlled ships that are in competition with the railroads.

Senator BRISTOW. Yes; in competition themselves with their rail lines.

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