steps into the jury box. I have no prejudice on the subject, and I would not know what to do about it if it were left to me. I am ready to cooperate with the best wisdom of this Commission, strengthened and enlightened by the best wisdom of the country, if we can get it.

SUBSIDIES TO THE LAKES.

But I want to speak a word or two about subsidy. Subsidy is a frightful word, and yet you have no property in the city of Detroit that would be worth 25 cents on the dollar if it were not for direct subsidies by the United States Government. What has been done? When I went to Congress we found you with obstacles to commerce all along the line of your present great waterway. Those obstacles were removed. How? By contributions from the public Treasury of the United States for the benefit of your internal commerce. The enormous sums of money that were contributed by the taxpayers of New England and Ohio and Tennessee for the opening of your lines of communication were subsidies to the commerce of the Lakes.

What was your situation? You boast now of cheap transportation, and sometimes we hear the cost of transporting ballast put forward as the rate of freight on the Great Lakes-that is, the price for the carrying of coal to the upper end of Lake Superior and the bringing down of iron ore. I have never noticed, however, that when there is a cheap rate quoted upon coal the rate upon iron ore is quoted at the same price.

But what were the two obstacles in your way, say, twenty years ago? First, the obstructions in your navigation, and included in that the low water in the harbors where your commerce must go, and, second, the natural and inevitable result of that, small vessels carrying small cargoes. His honor, the mayor, has spoken of witnessing the inauguration of a 2,800-ton ship. If you had those ships and the old-time harbors to-day, what would your commerce be worth?

When I went upon the Committee on Rivers and Harbors the water at Lorain was 7 feet, at Ashtabula 9 feet, and so on all along the harbors of the lakes, where your commerce now finds access with 16, 18, and 19 feet of water. You are boasting now of the cheapness with which you can carry this freight, when the primal fact is the size of the ship, because that is the first and original proposition that cheapens your freight, and that ship is made possible by the subsidy of the United States Government to your commerce in the form of the digging out of the harbors where your commerce has to go.

LIVING ON SUBSIDY.

Then some of you turn around and say, "We don't beg; we are not begging for subsidy." Why, you are living on subsidy. You are getting rich on subsidy, and you have built on subsidy what is in my judgment the prettiest city on earth. Who would go to Grosse Pointe for a Sunday afternoon if it were not for the subsidy of the United States Government, that dug out the channel and sent this mighty train of commerce right through there?

Just recall, you gentlemen who are old enough, what has been done for you by the people of the United States. Lime Kiln Crossing! Grosse Pointe! Ten million dollars were spent. Whose money was it and for what purpose? The money of the people of the United States, spent to subsidize your commerce. 'Money," says the dictionary, "in aid of commerce," is one of the definitions of subsidy.

St. Clair Flats Canal, Port Huron, Sault Ste. Marie, and Hay Lake Channel! When I first went through the upper Lakes we worked our way through the canal at about an hour or perhaps half an hour before sundown, and the vessel went to anchor or was stopped. We began to inquire and we discovered that ahead of us was a tortuous channel, and that we were forbidden to travel it at night. What sort of commerce would you have to-day with the upper Lakes if that condition existed? Every rock that was taken out of there was taken out by subsidy voted by Congress to the benefit of your commerce.

But again, where did you propose to go with your enormous contribution to the commerce of the world? You proposed to go to Toledo; and there stood a zigzag channel that could not be run in the night time. The first appropriation for which I ever voted in a river and harbor bill was to dig what we call the straight channel. So we went on, step by step. Lorain, then called by some other name; Ashtabula, then with a few tons of ore per annum, now one of the mightiest receptacles of iron ore on the whole Lakes, as I understand it. And all this time by the law of Congress no foreign ship could load a cargo of this commodity at Duluth and carry it to Buffalo or Ashtabula. You stood protected by a system of legislation that is the strongest subsidy in the world of your commerce.

SHALL AMERICAN SHIPS HAVE AID?

It seems to me that if there is a place anywhere in this country where there ought to be an appreciation of the work done by Congress it is up here in this section, and I believe, on reflection, that is the feeling. Now, the question is whether you will turn in and help us devise come means of getting your commerce as well as ours out into the ocean and across the ocean. Your money is excavating the harbors of the New England coast. We are making them exceedingly valuable, with 30 and 35 feet of water, and lighting them at an enormous expense. For what purpose? For carrying your commerce out and to bring the commerce of the world in. But it is all going out and all coming in in foreign ships, and the question is not whether you are now fixed by subsidy beyond any further claim or want or wish or desire for aid, but whether at last the great system that has built up your inland trade may not, by some process of legislation and with your cooperation, extend your commerce directly to the old countries.

The time for the discussion of the question whether Congress has the power to dig rivers and improve harbors has gone by. I can well remember, in the very first Congress of which I was a member, an old-time gentleman, a distinguished lawyer and leading politician of one of the Southern States, Alabama, came before the committee and began in a peculiar form of sound of words to say that he had belonged to the school of American politics that denied the legitimate power of Congress to improve a river or a harbor; but he said: "Mr. Chairman, I have lived to a time when the necessities of my people have driven me to waive my peculiar views on the Constitution." [Laughter.] From that day to this-and that was in 1885-I have never heard a word said about the constitutional power of Congress to improve a river, to improve a harbor, or to do any other thing that will contribute to the fostering of commerce among the States; and that is exactly the scheme we are looking for. [Applause.]

STATEMENT OF WILLIAM LIVINGSTONE.

The CHAIRMAN. The Commission is ready to hear from any gentleman who desires to be heard.

Mr. STOCKING. Mr. Chairman, Mr. Livingstone, president of the Lake Carriers' Association, is next on the order of speakers.

The CHAIRMAN. Mr. Livingstone, will you state to the Commission what kind of business you are engaged in?

Mr. LIVINGSTONE. I am engaged somewhat in the operation of vessels. I am president of the Lake Carriers' Association.

The CHAIRMAN. Mr. Livingstone, the Commission will be pleased to hear from you regarding the matter we have under consideration.

Mr. LIVINGSTONE. I have been asked, Mr. Chairman, to give this Commission a few facts relative to the rate of growth of the tonnage on the Great Lakes, and to talk on the question of subsidy; but it almost seems to me, from the remarks of the Chairman and of General Grosvenor, that all the members of the Commission are so well posted on that question that it is like carrying coals to Newcastle. Therefore I will endeavor to be brief in what I have to say in the matter.

The CHAIRMAN. I think, Mr. Livingstone, your views will be of great interest to those who will take the trouble to read the report of the Commission, and I trust you will express them at such length as you had originally contemplated.

Senator PENROSE. I think it is very important to have in our hands a statement of the commerce on the Lakes, because its extent is not generally realized by the rest of the country.

The CHAIRMAN. That is true.

Mr. LIVINGSTONE. I have always believed, Mr. Chairman, the best barometer of the great increase of prosperity of any country or any specific data as to whether the year has been a successful or an unsuccessful year in the point of business is the freight tonnage which it handles during the year. I regard it as the great main artery of the business industry of the nation, and, like my friend Mr. Hudson, president of the chamber of commerce, I am an optimist as to the future of the United States.

Last year the railroads of this country handled a billion and a half tons of freight and over six hundred millions of passengers. The tonnage handled by the railroads in the United States exceeded the entire tonnage moved by all the railroads and all the rest of the world together, including the ocean tonnage.

I doubt if a majority of the people, outside of those engaged in the business, begin to realize the immense proportions the commerce on the Great Lakes has attained. The Soo canals are the largest in the world in point of freight tonnage passing through them.

THE VAST LAKE COMMERCE.

The tonnage passing through these canals is probably the best indication of the enormous growth of lake commerce, particularly as the greatest development in the grain and iron ore trade has been through ports at the head of Lake Superior.

The first year in which was recorded the number of tons of freight passing through the Soo Canal was 1881. In that year the records

show a fraction over a million and a half tons, or, to be accurate, 1,567,740 tons. They did not pass the 10,000,000-ton mark until 1892, and in the next decade, at the close of 1902, they had increased to almost 36,000,000 tons, the increase being nearly 250 per cent in ten

years.

Similar gains are shown in the registered tonnage of vessels. In 1892 the registered tonnage amounted to 10,647,203 tons, but in the succeeding ten years, at the close of 1902, had increased to 31,955,582

tons.

At this point I want to refer to the Suez Canal by way of comparison. The general impression prevalent all over the world is that the Suez Canal is the great canal of the world. There seems to be a certain amount of sentiment about it; hence, without looking up the facts and comparing them with other canals, by a sort of tacit consent, it seems to be conceded that that is the canal.

In 1902 the traffic which passed through the Suez Canal was about 10,000,000 tons. The amount passing through the Soo Canal in 1902 was about 26,000,000 tons, over three and one-half times as much. In addition to this, the fact must be borne in mind that the Suez Canal is open the entire three hundred and sixty-five days in the year, while the Soo canals are only open an average of about two hundred and fifteen days per year, being icebound the balance of the time.

But more important still in the tonnage figures is the proof which these reports contain of the low cost of moving freight on the Lakes. During the past six years the cost of moving a ton of freight 1 mile on the Lakes has been ninety-eight hundredths of a mill-less than a tenth of a cent per ton per mile. The lowest cost by rail for which I have any data is 3 mills per ton per mile, this being on the Lake Shore Road. On account of the absence of grades and the thickly settled population along its entire line, giving it a large volume of local freight in addition to its immense through traffic, it is generally conceded among railroad men to be one of the best roads in the United States for moving freight at the smallest possible cost.

I have not the figures of the Lake Shore for a year back because it has ceased giving the cost of moving freight per ton per mile, and in lieu of this now gives the rate per ton per mile.

I should, perhaps, say in this connection, having referred to the increase of Lake Superior traffic, that the movement of freight now to and from Lake Superior is more than half the entire freight movement of the Lakes. A conservative estimate, in my judgment, would be that it amounts to 60 per cent, leaving, say, 40 per cent for Lake Michigan and all other lake ports.

BETTER SERVICE, CHEAPER COST.

By way of comparison as showing the enormous reduction which has been obtained in freight rates owing to the tremendous increase in tonnage-carrying capacity of boats, combined with modern improvements and facilities for loading and unloading, the following figures may prove interesting:

In 1861 the average rate of freight on wheat per bushel by lake from Chicago to Buffalo was 11.53 cents; in 1886, 12.34 cents, and in 1902, 1.51 cents. In 1894, a year of great depression, it struck the extremely low average of 1.27 cents per bushel. The entire average for the last forty-three years is 4.69 cents per bushel. As a matter of 3A-VOL 2-04-5

fact, the lowest rates ever made were during the past week, when grain was taken from Chicago to Buffalo at three-fourths of a cent per bushel.

It should be stated in this connection, however, that no vessel owner could afford to carry grain on any such basis, as the charge to vessels for shoveling, trimming, and tallying weights of grain alone would amount to $4.15 per thousand bushels; and in addition to this, of course, is to be added all the other operating expenses of running the boat.

I will also briefly add that for loading and unloading facilities, the facilities for dispatch on the Great Lakes far exceed any and all other points in the world. As an illustration of this, in several instances steamers of 7,000 gross tons capacity have been loaded in four hours and unloaded in ten hours, incredible as the statement may seem. In grain the steamer Superior City delivered at the Northern Elevator in Buffalo 270,000 bushels of oats and barley in ten hours.

The unloading record at Lake Erie ports (an exceptional case, however), with automatic machines and everything specially arranged for fast work, was the unloading of 5,217 gross tons of ore from a ship in three hours and fifty-six minutes.

HUGE LAKE CARGOS.

About thirty-seven years ago a vessel passing through the Welland Canal, carrying 600 tous, or the equivalent of 20,000 bushels of corn (and it had to be shaped like a dry goods box to fit the canal), was considered a large vessel and large cargo. Last year the steamer Clemson carried the largest number of bushels ever taken out of Lake Superior, clearing from Duluth for Buffalo with 336,365 bushels of barley, its weight being 8,073 tons, and the steamer J. H. Read carried the heaviest grain cargo ever loaded on Lake Michigan, having on board 271,000 bushels from South Chicago to Buffalo, the weight being equal to 8,130 tons.

Now comes the new steamer Augustus B. Wolvin, just completing her first round trip, with over 10,844 net tons of ore; but she will undoubtedly hereafter load to her full draft, 183 to 19 feet, and on that depth will carry an equivalent of 400,000 bushels of grain. As she now carries the broom for size and carrying capacity, it may not be amiss to give her dimensions. Her length is 560 feet over all, her beam 56 feet, and her molded depth 32 feet. The cubical capacity of her cargo hold is about 500,000 cubic feet, which is equivalent to 401,000 bushels of grain, or 12,500 tons of coal. And. in this connection, as showing the great facilities now possessed by our shipbuilding plants on the lakes, I may state that the Wolvin was built in a fraction over four months' time.

Some mathematician has taken the trouble to figure out what the first cargo of ore carried by the Wolvin would amount to in various ways, and, as it is interesting, I herewith give it.

The steamer Augustus B. Wolvin's first cargo of iron ore from Two Harbors was 9,227 gross tons, 10,844 net tons, or 21,788,480 pounds. Figuring this same weight of wheat, the Wolvin, on paper, would carry 363,141 bushels, and this reduced would make 80,698 barrels of flour. To bake this flour and convert it into bread the result would be, at 1 pound per loaf, 20,981,481 loaves of bread, or one each for one-fourth of the population of the United States.

To carry the Wolvin's present cargo of iron ore it would take 217