and the Canadian ports at Owen Sound and Collingwood on the Canadian side, and those are built in part in England.

Representative GROSVENOR. There are only three or four of them, are there not?

Mr. KREMER. Only three or four; just about enough to make a semiweekly line.

STATEMENT OF R. H. FERGUSON.

R. H. Ferguson, of Chicago, Ill., appeared before the Commission. The CHAIRMAN. Mr. Ferguson, will you kindly state to the Commission in what line of business you are engaged?

Mr. FERGUSON. I am at present in the water office of the city hall, in the meter division. My former business experience has been in the transportation of grain. In fact, I organized the American Cheap Transportation Association in 1873, of which I was made the secretary, and the venerable Josiah Quincy, of Boston, was the president.

I saw by the press this morning that this meeting was to be held to-day, and a general invitation was extended to citizens to offer suggestions. That is my excuse for presenting myself before you.

The CHAIRMAN. Mr. Ferguson, the Commission will be pleased to hear any views you may wish to express.

Mr. FERGUSON. I presume I am like all other American citizens. I have a patriotic desire to see our commerce floated to all the ports of the world and carried under the American flag. If the policy that has been pursued during the past has resulted in what was stated last night by a citizen, that he had traveled 50,000 miles without seeing the American flag floating over a merchant marine, it seems to me that the patriotic course and the practical course for us to pursue would be to adopt any policy that will enable American citizens to ship under the foreign flag.

FOR A TONNAGE SUBSIDY.

I believe, sir, that if the Government should say to all owners of vessels, no matter where they were constructed, "If you will fly the American flag we will pay you so much per ton for transporting American goods to foreign ports "of course I do not mention any amount; that is for the Commission to determine, after thorough consideration"and upon all tonnage returned from foreign ports to our country we will pay you a certain amount of tonnage as subsidy," it would accomplish the desired result.

I do not favor giving any special shipping line or shipbuilders a particular subsidy, for I believe that would create a monopoly; but Ì think that if all were given the opportunity to ship under our flag, and that should be made a part of the consideration for the contract, it would not be long before the American flag would be seen in every port in the world where vessels could land. There are auxiliaries also to be added if you wish to improve American commerce. Under the policy which has been adopted our manufacturers now are able to compete with all the world, and it seems a sad commentary that we can not ship our goods under our own flag.

What are the practical things which a manufacturer in Illinois, and peradventure in all the other States, requires to enable him to transport his products to a foreign country? First, it seems to me, is the ability to go to the bank, after he had received his bill of lading, and

there obtain a sufficient amount of advance on his products that are loaded in the car or the vessel to enable him to continue his manufacturing and to carry the goods to another country, wherever that may be.

It seems to me that if our National Government had established in foreign countries a system of banking by which the banker here, for instance, this great institution in whose building you are holding your meetings, forwards a bill of lading to his correspondent in Germany, France, or any other country, it would be a great advantage to the shipper. The bill of lading would go directly to a representative of this Government in that country. That representative could also be made a commercial agency and issue reports such as are issued by the Bradstreet Agency. For exampie, this bank would ask the bank there if this German or this Frenchman or this other foreigner is good. A report would be made on it, and then when the bill of lading is sent to that country the bank there can advance on it and can also look after the collection.

That is one of the auxiliaries that I think is necessary to enable our merchants here to carry on their business. A man gets a great amount of goods in transport. If he can not borrow enough from the local banks to enable him to continue business, he has to shut down. I do not know that there is anything more that I wish to say. The CHAIRMAN. We are much obliged to you, Mr. Ferguson. Is Capt. J. G. Keith present?

Mr. KEITH. Mr. Chairman, I do not care to say anything at the present time.

The CHAIRMAN. Is there any gentleman present who desires to be heard during this session? If not, the Commission will take a recess until the hour of 2.30 o'clock this afternoon.

The Commission (at 12 o'clock and 35 minutes) took a recess until 2 o'clock and 30 minutes p. m.

The Commission reassembled at the expiration of the recess.

STATEMENT OF W. L. BROWN.

W. L. Brown appeared before the Commission.

The CHAIRMAN. Mr. Brown, the Commission will, if agreeable to you, be pleased to hear your views in reference to the matter under consideration. Will you state to the Commission the line of business in which you are engaged?

Mr. BROWN. I am president of the American Shipbuilding Company, builders of ships on the Great Lakes. We have building plants at Buffalo, Cleveland, Lo ain, Wyandotte, Detroit, Bay City, Duluth, and Chicago, and repair plants at all of those places and at Milwaukee. The CHAIRMAN. Before commencing, Mr. Brown, I will ask you as to the condition of business in your shipyards at the present time? Mr. BROWN. At present it is practically nil. We have a little work in construction that we are completing. We have no new contracts. On the other hand, our repair and dry-dock work, because of the large fleet employed on the Lakes, is fair.

Senator PENROSE. Are you doing any Government work at present, Mr. Brown?

Mr. BROWN. We never do any Government work.

Senator PENROSE. I had an idea that you built some revenue cutters. That is the reason I asked the question.

3A-VOL 2-04-3

Mr. BROWN. I ought to qualify that by saying that at one time we built two revenue cutters. The result of that construction was, how

ever, that we did not want any more of it.

Mr. PATTON. Did the Government pay you?

Mr. BROWN. The Government paid us.

The CHAIRMAN. You took that work in competition with other firms, I suppose?

Mr. BROWN. In competition with coast yards, when the coast yards were not at all busy. They needed work very much more than we needed work, and that condition has prevailed almost up to the present date, because until quite recently, owing to various conditions, we have been very busy. For instance, in the past five years we have built 175 modern steamers, both freight and passenger. The carrying capacity of the fleet that we built amounts to about 1,000,000 tons. I mean by that not the registered tonnage of the ships, but the quantity of coal or iron ore or grain that they could carry on one trip would amount, in round numbers, to about 1,000,000 tons.

Senator PENROSE. Can a vessel be built as cheaply on the Lakes as on the seaboard?

Mr. BROWN. I think so. I am satisfied from my investigation and observation of it that it can be.

The CHAIRMAN. Now, Mr. Brown, proceed in your own way.

Mr. BROWN. Unquestionably this is true, to add one more word in regard to that construction. We on the Lakes standardize our type. It goes without saying that any plant or plants can build 2, 4, 6, 8, or 10 ships of the same general type much cheaper than it could build 2, 4, 6, 8, or 10 ships of distinct and separate types.

Representative GROSVENOR. What would be the difference? Take the average variety in type of vessels, and say 10 of a single type, first. What would be the difference, in percentage?

Mr. BROWN. I should say easily 6 per cent.

Senator PENROSE. Are there any shipyards, Mr. Brown, on the Canadian side of the Lakes? Do the Canadians build any ships?

Mr. BROWN. Yes; there are shipyards at Toronto and Collingwood, and a projected one up in the Thunder Bay country; I do not remember now at just what point it is.

PROTECTION BY NATURE AS WELL AS LAW.

Senator PENROSE. Do they build lake vessels more cheaply than we can on the American side?

Mr. BROWN. I think not.

Senator PENROSE. Then, as far as lake traffic is concerned, it does not require protection?

Mr. BROWN. We have the protection that nature gave us.

Senator PENROSE. You really do not require any protection of law? Mr. BROWN. No, sir.

Representative MINOR. We are under the coasting law up here. Senator PENROSE. I know you are; but the point I have in mind is that you can get along without the protection of the coastwise laws. Mr. BROWN. We can get along without any protection from the coastwise laws; nor do we need for our own protection, in my judgment, any Government aid.

The CHAIRMAN. Mr. Brown, I am afraid you might mislead the Commission in that reply. If you did not have the coastwise laws, the ships of England, Germany, and Norway would be in our coastwise

trade. You do not mean to say you could compete with those nations, do you? Mr. BROWN. You are quite right about that one point, excepting that nature, at present at least, prevents Sweden, Norway, or the other nations from getting into our territory.

The CHAIRMAN. Then you had reference simply to the lake region? Mr. BROWN. Yes; that is all.

Senator PENROSE. That is all I am talking about the lake region. Mr. BROWN. That is the way I understood the question.

Representative GROSVENOR. That was the question; but how about Canadian-built ships? They do not come into your ports here, do

they?

Mr. BROWN. Any ship carrying about 1,800 tons of freight or 60,000 bushels of grain can get up through the Canadian and Welland Canal on the Lakes, but that type of vessel now is so small that they could not compete with us, even if they did come. In addition to that, of course our coastwise laws do not permit any foreign bottom to trade between United States lake ports.

Representative MINOR. But you do get vessels from Canada to our ports here?

Mr. BROWN. And vice versa.

Senator PENROSE. Mr. Brown, what is the tonnage and draft of the latest type of lake vessel?

GREAT SHIPS ECONOMICAL.

Mr. BROWN. We have just completed what we call a modern bulkfreight carrier that is 560 feet long, 56 feet beam, and 32 feet deep. She has quadruple expansion engines of about 2,000 horsepower, and, loaded, will run about 12 miles an hour. We measure everything here not in knots but in miles. On her maiden trip she carried from Lorain, Ohio, to Duluth about 10,000 tons of coal. She is now on her way back from Duluth to Buffalo with about the same quantity of iron ore.

Senator PENROSE. What is her draft? What does she draw?

Mr. BROWN. She is drawing, on her present load, about 173 feet. Representative MINOR Captain, I want to ask you a question right there. What is the difference in the cost of operating that vessel, that carries 10,000 tons and makes 12 miles an hour, and the cost of operating one that carries 6,000 tons and makes about the same speed? Mr. BROWN. It is rather difficult to answer that question positively, but, in my judgment. there will not be any difference.

Representative MINOR. Do you not think that is the secret of cheapening the freights here on the Lakes, where they are cheaper than in any other place on earth?

Mr. BROWN. Yes, excepting when other conditions have been created, the other conditions being these: All our harbors will not accommodate the larger vessels. Our unloading facilities have not kept pace with the increase i size of the larger vessels. Naturally all those conditions will be corrected, as they always have been.

Representative MINOR. We are getting there just as fast as possible? Mr. BROWN. Yes.

Representative MINOR. And we are improving the harbors all along the Lakes. You people here in the Chicago River are the slowest. You are not removing your tunnels. That is what you ought to do. Mr. BROWN. They ought to be removed altogether.

WOULD BENEFIT ALL STATES.

Representative MINOR. Milwaukee beat you last year. What I want to get at is this: If by building up the merchant marine engaged in the foreign trade we can cheapen transportation, we can benefit every State in this Union, no matter whether it is Colorado or Kansas or Nebraska. What we want is cheap transportation for American products. The tramp ship to-day, that carries the bulk of American products from American ports to European markets, is carrying about 5,000 tons dead weight. Now, if the Government can do something to encourage the investment of money in ships to engage in the foreign trade, thereby insuring a reasonable profit to the operator and a sure job to the shipbuilder, is it not a fact that naturally they would drift in the same direction in which we have been drifting when we moved from the canal schooner to the great steel steam barge, and thereby cheapen transportation to European markets? That is what I want to get at.

Mr. BROWN. I want to answer that question by saying yes, decidedly, and especially in connection with our lake marine.

Representative MINOR. I want it to go on record that we here on the Lakes can transport a ton of coal a thousand miles for 90 cents and a bushel of wheat for 14 cents. Those freights would startle the people down on the Atlantic, simply because they have not kept pace with you people on the Lakes in terminal facilities and in expediting the loading and unloading of cargoes. I wish you would state to the Commission, if you will, what we can do in the way of loading and unloading, and what we can afford to carry a bushel of wheat for, or a ton of coal, and make these big ships pay. That will be interesting to the Commission.

CHEAPENING LAKE FREIGHTS.

Mr. BROWN. I can go back, as an operator in moving freights on the Lakes, for a considerable period before I was directly interested in shipbuilding. I have personally paid for moving iron ore from the head of the Lakes to Lake Erie $2.25 a ton. That was in the days when vessels carried from 1,000 to 1,800 tons each. Last year we moved that same class of freight at 85 cents a ton, and to-day we are struggling to get contracts to move it for 75 cents. That, I think, answers your question.

Representative MINOR. Mr. Brown, I have made this statement down on the Atlantic coast, and I want to know whether I am right or not, and I want this Commission to know it: I have said that we can load a vessel in Chicago with 150,000 bushels of wheat or other grain, we can put her into Buffalo in the morning, and if she gets to her dock at 7 o'clock and everything works right, we can unload that cargo and put into her a cargo of three or four thousand tons of anthracite coal and have her out before sundown.

Mr. BROWN. It is done repeatedly.

Representative MINOR. I wanted to get that in the record.

Mr. BROWN. I was recently in Duluth when a vessel carrying about 5,700 tons of coal arrived in the morning. She did not have any coal in her that night. She went to the dock along about 7 or 8 o'clock and left the dock in two hours loaded with 5,700 tons of iron ore. I know enough about the operations of that boat to know that at her destination she would be undoubtedly unloaded in less than eight hours. In other words, the same day that she arrived her cargo