A VICTORIOUS ISSUE.

I think, gentlemen, that you need spend no more time in Ohio in order to find expression of the approval of its people on this subject. We believe in a protective tariff. We believe that a merchant marine is an essential part of that great industrial system, and that the same rules that applied to that apply also to the merchant marine.

I am satisfied that when the people of other States, however far removed they may be from the seaboard-for that really does not alter the case-understand our relation to other nations upon this subject and the benefits that will accrue to us, they will not only acquiesce but that they will demand a merchant marine.

I thank you, gentlemen. [Applause.]

STATEMENT OF CHARLES L. PACK.

Mr. GOULDER. Mr. Chairman, in introducing the next speaker I will say that you may give great weight to what he may say on this subject, as he is the best informed man in forestry in the United States. He is also a man of large affairs here in our financial institutions and in the timber interests of this country.

I take pleasure in introducing Mr. Charles L. Pack, the former president of the Cleveland Chamber of Commerce.

Mr. PACK. Gentlemen of the Commission, my friend, Mr. Goulder, always has the faculty of flattering me, a fact which I hope you will take into consideration.

Our governor has referred to the fact that our financial institutions are willing to invest in bonds on the floating property on the Great Lakes. I take it that American capital is always willing to invest in great enterprises when they are profitable. When they are not profitable, capital is not willing to invest. It has been thoroughly demonstrated that the working of ships on the Great Lakes is profitable, and we all know very well that it is exceedingly unprofitable in most cases for American bottoms on the ocean.

Some people have thought it might be difficult, even were it made tolerably profitable, to get the people generally in this country interested in the financial side of a merchant marine. I am glad that our governor referred to the purchases of bonds by Cleveland banking institutions. Recently, within a few weeks, a trust company, of which Mr. Morris is the president, purchased $1,800,000 of bonds, which is no unusual amount, on a number of boats on the Great Lakes; but the point to which I want to call attention is that the trust company no longer owns the great majority of those bonds, but they have been distributed and are owned to-day by hundreds of people in Ohio and Michigan, which shows that the rank and file of the people, not the rich people, not the capitalists, but the everyday man who has some savings, is perfectly willing, if he feels sure of his interest, to invest in floating property.

THE SOUTHERN LUMBER TRADE.

Mr. Goulder has very ably expressed to you some thoughts which I had in my mind, and I will not impose upon you by repetition. My

chief interest is not as an owner of ships. I know very little about it, but I and my father and my grandfather and my great grandfather have been lumbermen, starting in Maine, lumbering in the North, on the Pacific coast, and in the southern States; and recently my attention has been more particularly called to the export lumber business from the Gulf ports. Most of you know that the region of greatest lumber production in the whole country is the southern States. The production of lumber there in 1903 was over 10,000,000,000 feet, which is an enormous quantity. If this southern lumber alone were loaded on cars, with the normal load to a car, the train would extend all the way from New York to San Francisco.

About one-tenth of that lumber is exported. About 1,000,000,000 feet were exported in 1903, and the export trade from the southern ports has been the safeguard of the lumber business in the South for the last twenty-years, for the reason that it has taken a good deal of production that we could not well use at home, and the foreign demand has often been good when our demand at home was very poor.

This export business is very much handicapped because it has to be done to a large extent in tramp steamers. That 1,000,000,000 feet of lumber goes to a very large portion of the world. Last year the exports from the southern States went to over 150 different foreign ports in Europe, in Asia, as far east as the Straits Settlements, and to both coasts of Africa, and the export would have been very much increased if we had had line steamers running from the southern ports rather than having to depend on occasional tramps, as we could pick them up. It often happens that at times we can get more steamers than we have need of, and then there will be weeks and sometimes even months when it is very difficult to get sufficient tonnage to fill the orders. Oftentimes orders are canceled for lack of regular shipping facilities.

It has seemed to me, gentlemen, that if you can devise some plan, by subsidy or by differential tariff or, as has always seemed to me perhaps the best, a premium on exports carried in American bottoms, you will very much benefit the southern lumber trade.

Representative GROSVENOR. That, if you will allow me, would be a very plain violation of one of the provisions of the Constitution. Mr. PACK. I suppose it would be. I mentioned it, hoping you would bring that up.

The CHAIRMAN. It would be a very simple remedy if we could do it. Mr. PACK. Somebody here wants to know what the Constitution is among friends. [Laughter.]

Representative GROSVENOR. It is not always an obstruction.

DO NOT FORGET THE SAILING VESSELS.

Mr. PACK. I hope, gentlemen of the Commission, that you will devise some way to benefit the regular line steamer, but do not forget the sailing vessel. It has been my observation in the southern Gulf ports that the American sailor, so far as he is made, is made on the small boat and on the sailing steamer; and in any scheme you may devise to establish large lines of steamers, and make it possible for them to run to South America, Europe, and other parts of the world, I think you should have in mind-I hope you will, at least-the little fellows.

The same thing is true, as I presume you gentlemen have learned, on the Pacific coast. The great amount of lumber that is shipped

from Oregon, Washington, and California has to largely go in stray steamers; and if we could have it in regular line boats, as we could have with even a small subsidy to American bottoms, it would be a vast help to a very large number of people.

As Mr. Goulder has so aptly covered some things I expected to speak of, I will not detain you longer. I thank you very much. [Applause.]

STATEMENT OF C. A. GRASSELLI.

Mr. GOULDER. I have pleasure in introducing to you now Mr. C. A. Grasselli, president of the Grasselli Chemical Company, which has ramifications throughout the world.

Mr. GRASSELLI. Gentlemen, statistics show that in 1861 American ships carried 65 per cent of our foreign commerce and in 1903 they carried less than 8 per cent. In January, 1904, out of 292 steamships that passed through the Suez Canal only one carried the American flag. Comparing the commerce, the products of industry, and agricultural products of the United States of 1861 with 1903 the growth is marvelous. When we compare our exports of 1861 with 1903 it is equally marvelous, as our present foreign trade represents the stupendous sum of one and one-half billions of dollars.

Now, when we consider that in the month of January, 1904, only one steamship out of a total of 292 passing through the Suez Canal carried the American flag, and that during 1903 not one American ship cleared from any port in Austria-Hungary, Denmark, Germany, Greece, Italy, the Netherlands, Norway, Russia, Sweden, or Turkey, it clearly indicates that our merchant marine has not kept pace with the general growth of this country.

Foreign countries have for years regarded as a matter of the greatest importance to their interests adequate facilities for reaching foreign markets by providing suitable and growing facilities for dealing with this question. This is indicated by the enormous development in the merchant marine of England, Germany, France, and other countries; and when it is borne in mind that the United States has left all the foreign countries far in the rear in almost every other respect it is deplorable, indeed, to note that instead of progressing in our merchant marine we have retrograded. The foreign countries have a magnificent array of steamship lines regularly traversing all parts of the world, which carried in 1903, 92 per cent of our foreign trade, for which this country paid to the foreign countries $185,000,000, and at the same time giving employment to foreign enterprise, to foreign labor, and to foreign capital.

NO LINES TO SOUTH AMERICA.

Furthermore, bear in mind that in order to make shipments to South American ports, with some few exceptions, Americans are compelled to forward the goods to some European port from which it is sent on to South America. The handicap to American industry becomes a very serious question, and when it is considered that foreign steamship lines are owned and controlled by corporations favorable to the countries to whom they belong, and interested in their exports and in their own products, they do not give to the export of the American product the same careful handling and consideration that they naturally do their own; this resulting in the American goods arriving in more or less damaged condition, due to repeated

and careless handling, thus causing another serious obstacle in our export business. Besides, with our own flag flying over her, the American ship, in a sense an extension of our own territory, and with her own officers, entering into foreign countries, brings us in physical contact with these countries, insuring our exports in reaching their destination.

When it is considered that the production of the United States far exceeds its own consumption, it, therefore, is necessary that we find markets and export this difference. Otherwise we will suffer the consequences of a stagnant market, the closing down of our mills and factories, and throwing out of employment vast numbers of laborers, hundreds of thousands of whom have come to our shores and are receiving American wages, which are the most remunerative received anywhere in the world. Therefore, anything and everything that can be done to give employment to the greater number is of vital interest to this country.

WHAT OTHER NATIONS DO.

Let us for a moment consider what other foreign maritime powers are doing.

Firstly. Under present conditions they are building steamships cheaper than they can be built in this country.

Secondly. They are manning and officering their steamships for very much less than it costs to man and officer an American ship.

And it is therefore due to wise administration and the enactment of adequate laws that makes this condition in the United States possible. If our wage-earners are enjoying better pay than any other nation of the world (and God grant there may be no change in regard to this wise policy) how can it be expected that our workmen would work for one-half or one-third less than they are receiving for the sake of taking employment in our merchant marine? As labor enters so largely into this question it is a factor that must be dealt with, as it affects the construction of the steamship and the operation of the same. Therefore, there are three important factors in this question: Firstly. The greater cost to build steamships in this country. Secondly. The additional cost of operation.

Thirdly. They are subsidized annually, if my information is correct, about as follows:

Great Britain aids its shipping interests by annual payments of over. $6,000,000 France to the extent of over.

Germany pays over

Austria-Hungary about

Spain, last year

7,000,000

2,000,000

1,724,000

1,629,000

3,492,000

Japan expended in like manner.

The United States paid altogether

988,000

and these subsidies in countries where the wage scale is about on a parity, but far below what it is in the United States. So, therefore, in order to compete conditions ought to be the same. The conditions, however, are far different; protection gives protection to our American wage-earners, which enables the American breadwinner to earn a higher rate of pay than is enjoyed by his fellow-workman in any part of the world.

Thirdly. The subsidies given by foreign countries to their shipping. And consequently these discrepancies will have to be met in some way before any material progress can be made.

Therefore, gentlemen of the Merchant Marine Commission, it is for you to determine how this can be done. And I do most sincerely hope that you will be able to lay before the next Congress a solution of this great question, in order that it may decide and place the United States in the first rank as a maritime power.

A BRITISH EXAMPLE.

I should like to say, gentlemen, that I was in England a few years ago, at the time the International Marine Company was organized in this country, and it sent a tremor throughout the shipping interests of the world. The Leyland Line, the White Star Line, and other British lines, which before that had enjoyed the supremacy of the seas, were merged into the International Marine. The owners of the Cunard Line saw their opportunity and went to the British Government with propositions based upon the fact that they had not merged into the International Marine, but were loyal to Great Britain; that the necessity existed for them to build two monstrous steamships to cope with the other steamships afloat, operated by the German lines and others, but that they needed some help, and they asked without any hesitation for $10,000,000, on which they offered to pay 24 per cent, and to receive as a subsidy, to help them run the boats after they got them finished, $750,000 a year.

Capital is the first thing you must have to build a steamship. If you should go to an American capitalist and say, "Here, you put $10,000,000 into two such ships as the Cunard Line has built and run them, and you will have to run them against the two ships of the Cunard Line, which are receiving $750,000 a year and getting that $10,000,000 at 24 per cent," I do not know how you could induce him to go into the enterprise except through patriotism.

I hope, gentlemen, you will find a way to accomplish the object that is so much desired, but in order that it may succeed do not impose any more restrictions than are necessary.

I thank you very much.

STATEMENT OF A. S. UPSON.

Mr. GOULDER. I have pleasure now in introducing Mr. A. S. Upson, the president of the Upson Nut and Bolt Company, of Cleveland, who has had much experience in foreign shipping matters.

The CHAIRMAN. The Commission will be pleased to hear from Mr. Upson.

Mr. UPSON. Mr. Chairman and gentlemen, I will detain you but a moment. I want to call your attention very briefly to the fact that a few years since we saw the necessity of increasing our export business, and I concluded that I would take some observations in South America. I found on investigation that in order to get there with any comfort and within a reasonable time I must go by way of England. I found in England two lines of steamers, subsidized by the English Government, being paid liberally for carrying the mail. The two lines ran alternately, so that a fast steamer sailed every week alternately from Southampton and from Liverpool.

On reaching South America I found English, German, Italian, and French steamers touching semimonthly at nearly all the principal