were received during the season of navigation, including 197 cargoes of between 1,000 and 2,000 tons, 353 cargoes of from 2,000 to 3,000 tons, 169 cargoes of from 3,000 to 4,000 tons, 47 cargoes of from 4,000 to 5,000 tons, 64 cargoes of from 5,000 to 6,000 tons, 28 cargoes of from 6,000 to 7,000 tons, and 6 cargoes of from 7,000 to 8,000 tons.

QUICK DISPATCH, LOWER RATES.

One of the marvels of lake traffic is the rapidity with which immense cargoes are received and discharged. Work which in early days required the labor of many men during periods of several days is now done in a comparatively few hours by machinery. Originally the hoisting machinery was made to conform to the construction of the vessel, but gradually the vessel was made to conform to the dock apparatus, until now we have steamers whose decks are cut by numerous hatchways through which the hoisting machinery can operate with the smallest amount of supplementary labor. A new steamer, named the Augustus B. Wolrin, a steel craft 560 feet long over all, recently discharged a cargo of 10,560 tons of coal at this port, and subsequently carried a cargo of 12,289 net tons of iron ore from Escanaba to Chicago. This huge craft represents the latest concession of the vessel builders to economic facilities. She has a series of 33 hatchways, and is practically a long steel hopper, built internally with especial reference to the sweep of the dredge scoops for discharging cargoes.

This deference of the lake vessel owners to the economies of dock apparatus has contributed immeasurably to the development of the lake marine and to the lowering of freight rates. The tendency of freight rates has been as steadily downward as the tendency of the tonnage has been steadily upward. The reduction of rates for grain carrying has been remarkable. In 1857 the average rate on wheat to New York by lake and canal was 25.29 cents per bushel; in 1861 it was 26.55 cents; in 1864, 28.36 cents; in 1866, 29.61 cents; in 1899, 5.65 cents. In Chicago at the present time they are haggling over a rate of 1 cent flat to Buffalo.

The traffic through the ship canal at Sault Ste. Marie is generally cited as evidence of the tremendous activity of lake shipping, but the traffic through the Detroit River is more complete as an index, because it includes the Lake Michigan traffic also. The Blue Book of American shipping states that the tonnage record of the Detroit River for the season of 1902 is in round numbers 48,000,000.

During the season of 1903, 18,596 vessels passed through the Sault Canal, carrying an aggregate of 34,674,437 tons of freight. The traffic through this waterway reveals the size of the later-day lake carrier. During 1903, 97 of the carriers were over 400 feet in length; 175 were between 300 and 400 feet; 314 between 200 and 300 feet; 227 between 100 and 200 feet, and only 82 of less than 100 feet.

AGREES WITH MR. CLYDE.

The sympathy of the general public being in favor of assisting our languishing merchant marine engaged in the foreign trade, the question before you is whether it is possible to extend assistance sufficient to overcome the heavy handicap, and if so, to ascertain how the assistance

shall be extended. I have followed the hearings of your honorable Commission with great interest, and have noted the points that have been raised and the arguments that have been advanced. In my humble opinion, Mr. Thomas Clyde, of the Clyde Line of steamers, stated the proposition succinctly at your New York hearing. As it costs from 30 to 40 per cent more to build a ship here than abroad, he suggested a construction bounty to offset this difference; as the cost of operating an American ship is about 30 per cent more than the cost of operating a foreign ship, he suggested an operating bounty or subsidy; and as speed is expensive, he suggested a mail-service bounty.

These views are in accord with my own. It has been said that the extra cost of the American ship would not deter investment in shipping for the foreign trade if the cost of operating the American ship were not higher than the cost of operating foreign ships. This is probably true; but a subsidy plan might be made to comprehend an interest return for a fixed period an annual rebate large enough to pay a nominal rate of interest on the extra investment plus a percentage for depreciation. Roughly, a rebate representing a 4 per cent rate of interest on the extra capital and a 5 per cent rate on the same extra capital to cover depreciation ought to put an American investor on an even footing with the foreigner, so far as the ship is concerned. If a rebate of this kind were provided, it could be limited to a fixed term of years, as it is probable that with a revival there would eventually be a standardization of hulls like that which has obtained in the shipbuilding trade of Great Britain, and in consequence ships might eventually be built as cheaply on this side of the Atlantic as in foreign yards. This element of the proposition is within the scope of the protective tariff idea-that of building up struggling industries.

A WAGES REBATE.

The problem of extra cost of operation is one that will probably resist ultimate solution. It can not be solved unless American wages decline to the level of European wages, or foreign wages increase to the level of American wages. As neither of these changes are within the bounds of rational expectation, the disadvantage in the matter of operation must be regarded as permanent. As the aim of protection to American industries is to provide a barrier against the foreign competitor equal in height to the difference between foreign and American wages, a rebate is suggested in the case of shipping, based upon a close estimate of the percentage of increased cost of operation. For instance, after a vessel owner had presented his statement as to cost and received his annual rebate in interest upon the extra capital invested, plus an allowance for depreciation, he could be allowed a rebate based upon his expense account for the year, or a rebate per head based on this showing as to the number of men employed during the year and the number of days of employment. This would keep the subsidy or rebate down to actual losses, and obviate payment by the Government for the time during which ships are lying idle. It seems to me that assistance could be extended in this way without danger of overpayment in any case. Besides, a tonnage rebate system and a wages rebate system could be understood by the average taxpayer, and would therefore be viewed with less suspicion..

SPEED MUST BE PAID FOR.

The mail-service bounty could be extended on the principle upon which compensation for mail-train service is based. Speed is costly, and in order to insure it a liberal price should be paid the mail service. It has been stated that the railroads get $8.10 from the General Government for carrying mail matter whose weight does not exceed in amount that of freight which is carried for the express companies for $2.434. In other words, it is said that the Government pays three times as much for carrying the mails as the railroads charge the express companies for the same service. If this be true, the difference can be said to represent the premium paid for the rapid carrying of the mails. If this is allowable in the mail service on the railroads, it ought to be fair to pay a high rate for the carrying of the mails on the seas in order to stimulate the development of steam ship traffic.

Gentlemen, the problem is a knotty one, because of the great handicap of American shipping. If this handicap is not too great to be counterbalanced by Government assistance, the help that is extended for the purpose of rehabilitating our merchant marine should be given in such manner that the taxpayers will be able to analyze the subsidy. No involved system of tonnage bounties, based upon the number of miles sailed or the average speed, should be adopted. The taxpayers must be reckoned with as well as the shipbuilders and vessel owners. [Applause.]

STATEMENT OF FRANK G. BIGELOW.

The CHAIRMAN. It has been suggested that Mr. Frank G. Bigelow, president of the First National Bank, may desire to say a word to the Commission. We shall be pleased to hear Mr. Bigelow.

Mr. BIGELOW, I thank you, Senator. I have very little to say except as speaking for the interests here. I am in the banking business, to which I give most of my time, and there are also some other interests that I have. I believe that all progressive business men in Milwaukee, without much regard to party perhaps, are in favor of some help to the shipping interests of the country and especially to those interests that you are considering. I think that is all that can be said, because after all the merit of any bill and the way any bill would be considered by the same business men must depend entirely upon its terms. If it can be accomplished so as not to overdo it, if it can be eracted into a law that will appeal to the sense of fairness, I think you are on the right track and that something should be done for these interests.

The CHAIRMAN. Mr. Bigelow, I should like to ask you a question as a banker. In Boston the Commission called some of the leading bankers of that city and interrogated them as to whether they would, under existing conditions, be willing to invest any money in ships for the foreign trade. The answer was that unless conditions could be equalized to a much greater extent than they are to-day there was not a dollar of capital that could be obtained from the banks in the East for that purpose.

I assume that in view of the fact that the lake shipping has the protection of nature and the protection Congress has given it by the

exclusion of foreign ships there is no difficulty in securing capital for the building of ships on the Great Lakes?

Mr. BIGELOW. None whatever; it is growing all the time. They have their up and down years

The CHAIRMAN. Certainly.

Mr. BIGELOW. But there is no trouble in getting capital to increase the lake shipping.

The CHAIRMAN. Do you agree, Mr. Bigelow, with the Boston banking men, that if by judicious legislation an equalization of conditions could be brought about capital would invest in ships for the foreign trade, as well as in lake shipping?

Mr. BIGELOW. I certainly do..

Mayor ROSE. Mr. Bigelow is the president of the American Bankers' Association, Mr. Chairman.

STATEMENT OF DAVID HARLOWE.

David Harlowe appeared before the Commission.

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

Mr. HARLOWE. I am representing the Allis-Chalmers Company. I am traffic manager of our firm, which, by the by, is the largest manufacturer of machinery in the United States.

The CHAIRMAN. The Commission will be pleased to receive any suggestions you may feel like favoring us with.

Mr. HARLOWE. We ship extensively to all parts of the world, and to some ports there are very good shipping facilities. There are a number of vessels from New York and other Atlantic ports to the Baltic and Northern Europe, but to Mediterranean ports the vessels are very small and sailings infrequent.

A number of large shipments have to be transferred at Hull and other English or German ports. There are very few vessels going from New York to Mediterranean ports which can handle large pieces of machinery. In fact, there are not many vessels equipped for handling any large pieces. We had a shipment for Glasgow three or four years ago, in which there was a piece weighing 30 tons, and there was only one steamship line in the United States that could handle it. To South America the vessels run very irregularly, possibly at periods of once a month or every six weeks.

The CHAIRMAN. And they are all foreign steamships?

NEED OF STEAMSHIPS TO SOUTH AMERICA.

Mr. HARLOWE. They are all foreign steamships. The same condition applies to the west coast of America. There are very few vessels sailing from New York or from any other Atlantic port to the west coast of America, and from San Francisco there is only one line of steamers coasting as far as Panama, but none south of Panama. It seems to me that there should be a line of steamships from Pacific coast ports to the west coast of South America, and that there should be steamers sailing oftener than at present from New York and other Atlantic ports to the east coast of South America.

It appears to me that there would be considerable advantage in having a large American merchant marine by reason of the fact that

at present most of the vessels sailing from our ports are owned by foreign capital and these foreign owners are interested in lines to the the same ports from Europe. Consequently they will make no rates from United States ports lower than those that apply from European ports.

If we could have a marine of our own it would be cut away from all foreign entanglements, and our steamship agents would be in a position to make a rate to help the home manufacturer as against the foreign manufacturer. Competition is very keen in all manufactured articles, I presume. It is the case in ours, and especially in shipments from England and Germany. We should have a marine of our own that would pay no attention to the rates which are promulgated from the other side, but just go on and enable us to meet competition in the delivery price at destination. Ithink that point should be borne in mind, gentlemen.

A LINE TO BUENOS AYRES.

The CHAIRMAN. If we had, for instance, Mr. Harlowe, a line of steamships from New York to Buenos Ayres, which could be aided in some way, by mail subventions or otherwise, do you think it would tend to build up American trade in that country, where we get less than our share now?

Mr. HARLOWE. Certainly, particularly in enabling the manufacturer to get a rate which will meet foreign competition. Now the boat lines make about the same rate from New York and London, at least they charge no less from New York than they charge from London, and occasionally shipments have to be made via England for South American ports-Brazilian ports.

The CHAIRMAN. Of passengers almost exclusively so?

Mr. HARLOWE. Yes; they prefer to go that way; it takes too long to go the other way. As I said, to the west coast there are no vessels from Atlantic ports. We ship considerably to Chile, Peru, Ecuador, and Bolivia, and that has to go mostly by Panama. As you know, on the route via Panama there is a continual handling of machinery shipments, which makes it very expensive, and shipments are more liable to break; and then when they do break, our customers are in a hurry. They have a mine there which must stop for a piece of machinery, and we can not duplicate it as quickly as we wish.

Representative MINOR. You are bothered somewhat at times, in shipping to South America, in securing a proper ship to convey the shipment?

Mr. HARLOWE. Time cuts a considerable figure with our customers. If we have to ship around the Horn and transship it, it will take possibly two months, and we have therefore to ship via Panama and pay a higher rate in order to get quick service.

Representative MINOR. You think if we had ships running direct from a few ports in the United States to those ports in South America, we would get better dispatch and more regular service?

BUILDING UP A TRADE.

Mr. HARLOWE. Yes, sir; and we would be building up a trade as well as taking care of it. Also please bear in mind that there should be service from the Pacific coast to the west coast of South America.