susceptible of immediate development, the application of tolls, under this condition, will make service irregular or infrequent.

Only frequent and regular service on fresh fruits will be of any benefit to the industry and enable shipment through canal. The lowest possible rate available by vessel is the only inducement that will attract tonnage to the water movement, and make possible any reduction in freight rates from the present maximum basis which the fruit can not stand.

Apple production (estimated) Northwest States, Oregon, Washington, and Idaho: 1914. Now estimated at 25,000 cars. All fruits at 35,000 cars.

1916. Estimated as 35,000 to 40,000 cars. All fruits, upward of 50,000 cars. 1918. Estimated as 50,000 cars. All fruits, upward of 65,000 cars.

At best, a very nominal tonnage of Northwest fruits can get into Atlantic seaboard markets at the present rail rates. The apple movement must amount to 25 per cent of total annual tonnage in those markets in order to safely balance general distribution. Nothing but the lowest possible rate will enable distribution in large quantity in Atlantic seaboard territory, and only the cheapest water rate will enable that.

Any rate exceeding $8 to $9.60 per cubic 40-foot ton, will prevent water movement at this stage of production. It is evident that a lower rate must be anticipated for future years' movement.

The Northwest fruit industry in detail will not survive except at minimum costs of transportation, possible only by water movement. To-day the soft fruit (outside of apples) industry is in a critical condition. We can not ship those products from Northwest sections annually at the present freight costs profitably. The peach industry has been destroyed by removal of trees to the extent of 40 per cent in different sections because of repeated losses accordingly.

Present freight rate on apples per box Northwest to New York City approximates 50 cents. Box of apples packed and loaded costs 65 to 90 cents; box of apples contains less than 50 pounds. The fruit must be laid down in Atlantic markets at not to exceed 75 cents, including transportation and production costs, to enable distribution, and that will not include any profits.

A greatly reduced rate on other fruits by water will make the industry reasonably profitable, and allow the peach industry to survive, instead of being destroyed. The canal tolls will severely affect both the producer and the consumer. Northwest produces 30,000,000 to 35,000,000 pounds of dried fruits annually. This must have an exceedingly low rate.

Mr. TEAL. In connection with the fruit matter it might be of interest to call your attention to the fact to what they do in New Zealand and Australia to help their fruit growers. Bounty acts of Australia in 1907 provide for a bounty at the rate of 10 per cent on the market value for 10 years from July 1, 1907, total payable in any one year not to exceed £6,000.

Senator CRAWFORD. On what?

Mr. TEAL. On dried fruits except currants and raisins.

Senator SIMMONS. I think we are all anxious to conserve time this evening as we have other witnesses here who want to testify.

Mr. TEAL. Would a comparative statement of the transcontinental rates westbound, ocean and all-rail routes, and the changes for 1913, be of service to the committee?

The CHAIRMAN. Yes; that may go in the record.

Mr. TEAL. These show the rates checked to April 17, 1914. I have the figures here in red ink, but as this will not be printed in red ink I will say that the figures that appear to be less in each instance under the head of 1913 will show the old rates, and the others are under the heading "Ocean rates" and "All-rail rates." They show the rates as corrected to April 17, 1914.

(The comparative statement of rates is as follows:)

Comparative statement of rates to Portland on various commodities in carload and less than carload lots, by water and all rail.

[Rates shown are those in effect via the American-Hawaiian Steamship Co. and the transcontinental railroads. Checked to Apr. 17, 1914.]

Comparative statement of rates to Portland on various commodities in carload and less
than carload lots, by water and all rail—Continued.

Mr. TEAL. Would it be of any service to have the shipments by
water last year?

Senator BRISTOW. Yes, I should like to have that.

Senator WALSH. Shipments from where?

Mr. TEAL. From the Atlantic to Pacific coast by all-water lines.
Mr. TEAL. The tonnage moving by the American-Hawaiian Steam-
ship Co. last year was 335,657 tons. By the Panama route, 94,314
tons. All others 42,293 tons, making a total of 472,264 tons.

As you want to save time, I will not refer to the wool rate and the
rate on hops and barley, because the rame general rules apply.

Just this general statement before I close. Speaking now of the
canal as an American waterway, the people on the Pacific coast, com-
peting in eastern markets with the people of the East, of the South,
and of the North, who are enjoying the benefits of artificial waterways,
paid for by the public money, and for the use of which no charge is
made, do not and can not see on principle- irrespective of the treaty
question why a charge should be made upon their traffic passing
through the only canal that can be of service to them in meeting their
competitors in the competitive markets.

Senator THOMAS. Does that remark have reference to charges upon
one kind of traffic or all kinds of traffic?

Mr. TEAL. 1 am speaking now of the charges on any kind of traffic
on any waterway. Take the Soo Canal, which has been referred to.
All of the West competes on nearly all the products passing thorugh
that canal. Take the intercoastal canal which is being built along the

Atlantic coast from the North to the South-I think you are all familiar with it. I know of no intention of making any charges upon any of those waterways.

Coming to the question of the treaty-I find I have to be very brief. I should like to say something on that question. An analysis of the reasons leading up to the making of the treaty, the purposes and reasons which brought about the construction of the canal, the decisions of our courts, the expressions of our Presidents, and others in authority, the language of the treaty makes it impossible for me to arrive at any other conclusion than that the clause so much discussed of equality of treatment does not apply to the United States. I can not conceive how under the conditions the treaty was made it would have been possible for the United States or any representative of the United States to have entered into a treaty that would defeat the purposes for which the canal was built.

Another feature of it that I desire to call attention to is this: I never had understood in view of the protest that has been filed

Senator SIMMONS. Did you ever read Mr. Choate's letter to Senator McCumber that appeared in the record?

Mr. TEAL. Yes; I think I did. I have tried to read all of them. Every act we have taken under the treaty until the repeal of the free-toll act was proposed to my mind negatives the idea that we ever considered the canal in any other way than our own. By our own I mean in the sense that we were the proprietor.

There is one other feature I wish to speak of. The discussion to my mind, and I think to the minds of a great many others

Senator SIMMONS. Let me ask you one question. What do you think would have been the situation with reference to that canal if it had been built by a private corporation under the auspices of the United States? The treaty authorizes the United States to build it or to assist financially or otherwise a private enterprise, a private corporation, in its construction. If instead of building it ourselves the Government had granted a franchise, and even extended some aid to a private corporation to build that canal, what do you think would have been the rights of our coastwise trade through that canal? Mr. TEAL. Well, I really never had considered it from that standpoint at all and it would be a very offhand opinion if I should express That was not the way it was undertaken, but I do not want to avoid your question

it.

Senator SIMMONS. But you do not deny the fact that the treaty provides that the United States may build it itself, or it may be built by a private corporation?

Mr. TEAL. Under the auspices of the Government of the United States.

Senator SIMMONS. Under the auspices of the Government of the United States.

Mr. TEAL. I would say, feeling as I do as to the policy of this country as expressed over and over again, the Government of the United States could have made any terms it desired. But I assume

it would not have given up any of the rights of this country whether it was privately owned or publicly owned. But, as a matter of fact, that is not what was done. We did build it. But I should like, before I get to that, because I have only a few moments

Senator SIMMONS. Go ahead; I did not mean to interrupt you.

Mr. TEAL. That is what I want to bring up. It seems, to my mind, that the vital things in this treaty and protest are lost sight of. In the first place, in the original protest that was filed by Mr. Innes, it was practically conceded that we did not have the right to exempt vessels engaged in the coastwise trade. He admitted if the trade was so regulated as to be confined to bona fide coastwise traffic it might be done, but that to his Government it appeared impossible to frame regulations. The principle we contend for was conceded in the first protest, but that is not the important feature to me. The imortant features to me in this question are the other contentions of Great Britain, that we seem to be conceding if we concede this. Great Britain, in effect, contends in its protest that we have no right to grant a subsidy to our own shipping passing through the canal, yet it and every nation in the world maintain that right themselves.

Senator SIMMONS. I think President Taft made that same contention in a speech that I put in the record, made by him in Ottawa some time during the present year.

Mr. TEAL. That we had no right to grant a subsidy?

Senator SIMMONS. That is my present recollection.

Mr. TEAL. I disagree with President Taft utterly on that. You will find also in connection with section 11 of the treaty

Senator SIMMONS. I may have that confused. I will withdraw that. Senator CRAWFORD. Mr. Taft contended under the treaty we had a right to exempt a coastwise vessel.

Senator SIMMONS. I got that confused with something else. I will withdraw that part.

Mr. TEAL. I also find on an examination of this protest that the British Government called attention to the fact that if the provisions of section 11, referring to control by trust-owned vessels, applies to it, that is a matter it will desire to take up. They protest the Panama treaty 8 or 10 years after it was made, but when one considers these protests with the act sought to be repealed it seems to me the effect of the admission that will be made if the act is repealed can not be measured. The exemption of coastwise shipping is certainly of the smallest consequence to Great Britain of any of the protests. This is evident when one considers that Great Britain can not engage in our coastwise trade and has not been able to for 100 years; that her business is not affected, and the only effect, so far as I can see or so far as I can measure, is to impose an additional burden upon our own people dealing in our own market, either eastbound or westbound. It limits our opportunity to distribute eastbound by the measure of the toll, whatever it may be. It limits the people of the South and the people of the East and all sections of this country shipping our own goods westbound into our own territory, a trade in which England can not participate.

Therefore, it has always seemed to me that under those conditions and under those circumstances, if it is Great Britain pressing this, about which I have always had a doubt, then it must necessarily be being pressed for some other reason than appears on the surface, because in this particular question she has no interest. It may be that the Canadian railroad interests, the British Columbia interests in lumber, but beyond that I can find no reason why Great Britain should insist on this protest. As I have said, and as I repeat again, I do not think she is insisting.