than when shipped in an ordinary tramp, with imperfect machinery, and handled in any possible way they can handle it? Would not the American handle it more carefully and be more interested in it?

BREAKAGE A SERIOUS MATTER.

Mr. HARLOWE. He would have more interest in it and be quicker. We do not have the same difficulty in getting a claim settled when the shipment is made via the Pacific, where the railroads themselves are interested more or less in the steamship companies. But this question of breakage is a serious matter.

Representative MINOR. I think so.

Mr. HARLOWE. We had a claim involving $250 in the case of a shipment from New York to an Australasian port. The ship's agents at one end would say, "take it up with the ship's agents at the other end," and then they would send it to and fro, notwithstanding this law which specifies that there shall be no stamp across the bill of lading relieving the vessel from liability. Of course we can not afford to go to law in every case of that kind; and it is not good policy to raise matters on a line you are shipping by continually, because you have got to make use of it.

The CHAIRMAN. Is that a statute or a Treasury regulation?

Mr. HARLOWE. It is a statute issued by the Treasury Department. The CHAIRMAN. They could not issue a statute unless Congress enacted it.

Mr. HARLOWE. I understand.

The CHAIRMAN. It is probably a regulation of the Department.
Mr. HARLOWE. No; it is a law.

Representative MINOR. It is not merely the damage the machinery sometimes sustains. You would prefer to stand that if the company would ship promptly and give satisfaction?

Mr. HARLOWE. Yes; but I think the steamship company should be held responsible for any and all breakages while the shipment is in their possession. If you load a car by rail you have opportunities of protecting your shipment by blocking it and doing other things, and if it does not arrive at its destination in a good condition, with ordinary handling, there may be a good excuse for the railroad company declining to pay the claim. But you have no redress from a steamship company. You can not load the shipment; the stevedores attend to that.

AMERICANS MORE CAREFUL.

Representative MINOR. If an American line were established and running, and intended to continue in that business permanently, not like a tramp, chartered to-day to take a load from New York to Argentina and the next time to Africa, here to-day and there to-morrow, but a permanent American line, trading between our Atlantic ports or Pacific ports and some country where we desired to build up a trade, is it not more than likely that it would exercise great care about breakage in order to preserve its own reputation?

Mr. HARLOWE. I think so. It may be merely a coincidence but it is a fact, nevertheless, that the shipments we have forwarded via the Pacific coast, by lines in which American capital is more or less interested, have reached their destination without any breakage, while

shipments via New York and other Atlantic ports are oftentimes broken. Then, as you see, it is not a question so much as to the value of the breakage, but as to the time consumed in getting new parts of the machinery.

Mr. Harlowe subsequently handed to the Commission a copy of the following circular:

CIRCULAR.-Bills of lading, transportation of merchandise in vessels,

etc.

[1893. Department, No. 104. Bureau of Navigation.]

TREASURY DEPARTMENT, Washington, D. C., June 30, 1893.

To collectors of customs and others:

The act relating to "navigation of vessels, bills of lading, and to certain obligations, duties, and rights in connection with the carriage of property," approved February 13, 1893, is printed below to supply requests made to the Department for copies.

O. L. SPAULDING,
Assistant Secretary.

[PUBLIC-No. 57.]

AN ACT Relating to navigation of vessels, bills of lading, and to certain obligations, duties, and rights in connection with the carriage of property.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That it shall not be lawful for the manager, agent, master, or owner of any vessel transporting merchandise or property from or between ports of the United States and foreign ports to insert in any bill of lading or shipping document any clause, covenant, or agreement whereby it, he, or they shall be relieved from liability for loss or damage arising from negligence, fault, or failure in proper loading, stowage, custody, care, or proper delivery of any and all lawful merchandise or property committed to its or their charge. Any and all words or clauses of such import inserted in bills of lading or shipping receipts shall be null and void and of no effect. SEC. 2. That it shall not be lawful for any vessel transporting merchandise or property from or between ports of the United States of America and foreign ports, her owner, master, agent, or manager, to insert in any bill of lading or shipping document any covenant or agreement whereby the obligations of the owner or owners of said vessel to exercise due diligence properly equip, man, provision, and outfit said vessel, and to make said vessel seaworthy and capable of performing her intended voyage, or whereby the obligations of the master, officers, agents, or servants to carefully handle and stow her cargo and to care for and properly deliver same, shall in any wise be lessened, weakened, or avoided.

SEC. 3. That if the owner of any vessel transporting merchandise or property to or from any port in the United States of America shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped, and supplied, neither the vessel, her owner or owners, agent, or charterers shall become or be held responsi

ble for damage or loss resulting from faults or errors in navigation or in the management of said vessel nor shall the [the] vessel, her owner or owners, charterers, agent, or master be held liable for losses arising from dangers of the sea or other navigable waters, acts of God, or public enemies, or the inherent defect, quality, or vice of the thing carried, or from insufficiency of package, or seizure under legal process, or for loss resulting from any act or omission of the shipper or owner of the goods, his agent or representative, or from saving or attempting to save life or property at sea, or from any deviation in rendering such service.

SEC. 4. That it shall be the duty of the owner or owners, master or agent of any vessel transporting merchandise or property from or between ports of the United States and foreign ports to issue to shippers of any lawful merchandise a bill of lading, or shipping document, stating, among other things, the marks necessary for identification, number of packages, or quantity, stating whether it be carrier's or shipper's weight, and apparent order or condition of such merchandise or property delivered to and received by the owner, master, or agent of the vessel for transportation, and such document shall be prima facie evidence of the receipt of the merchandise therein described.

SEC. 5. That for a violation of any of the provisions of this act the agent, owner, or master of the vessel guilty of such violation, and who refuses to issue on demand the bill of lading herein provided for, shall be liable to a fine not exceeding two thousand dollars. The amount of the fine and costs for such violation shall be a lien upon the vessel, whose agent, owner, or master is guilty of such violation, and such vessel may be libeled therefor in any district court of the United States, within whose jurisdiction the vessel may be found. One-half of such penalty shall go to the party injured by such violation and the remainder to the Government of the United States.

SEC. 6. That this act shall not be held to modify or repeal sections forty-two hundred and eighty-one, forty-two hundred and eighty-two, and forty-two hundred and eighty-three of the Revised Statutes of the United States, or any other statute defining the liability of vessels, their owners, or representatives.

SEC. 7. Sections one and four of this act shall not apply to the transportation of live animals.

SEC. 8. That this act shall take effect from and after the first day of July, eighteen hundred and ninety-three.

Approved, February 13, 1893.

STATEMENT OF H. M. MERRYMAN.

Representative OTJEN. If the Commission is not ready to take a recess, Captain Merryman, an old sea captain, is here who perhaps would say a word.

The CHAIRMAN. We shall be pleased to hear from Captain Merryman. Mr. MERRYMAN. What little I have to say will be from personal experience.

The CHAIRMAN. That is the best kind of testimony, Captain.

Mr. MERRYMAN. I was engaged in the merchant marine for over twenty years as master and owner. I was with American shipping in its great prosperity and also in its decline. I have joined with others

in making an effort to induce Congress to save American shipping. During the seventies some 200 of us in New York and Philadelphia signed a petition to get Congress to do something to aid American shipping; but it never amounted to anything, because they thought we asked for too much. We went over all the different methods, discriminating duties, carrying per cent per mile for all freight-foreign, and also a direct subsidy. Discriminating duties we put aside because it would not save the cotton trade. The cotton trade is what built up American shipping, and as about half the shipping coming West has to come as ballast, there would be no discriminating duties. We also saw even then, and that was some years ago, that freight coming to the West would invariably come by the way of Montreal, if anything could be saved, in foreign vessels.

AN EARLIER EFFORT.

We decided that the only thing that would save American shipping would be to ask for a direct percentage of 20 per cent. That was hardly equal to what would be required to put the American on an equal footing with the foreigner, but yet 20 per cent in addition to the business done would undoubtedly have kept the American marine going.

We considered that the sentiment of carrying the American flag on our ships to all parts of the world was very beautiful and that every American should help to maintain it, but, yet, as the shipowner wanted dollars in return for his investment, we believed that the General Government should make up something in regard to it, and we made an effort, as I said. That was in 1874. But that bill never got beyond the committee. We were satisfied that it was no use to ask for anything else, because nothing else would save the shipping. We made a strong effort then; and I still believe that is the only thing that can build up the merchant marine. I am now a member of the Shipmasters Association of New York, and feel a great interest in the subject. But after that we saw that the American shipping was doomed, and hundreds like myself, in middle life, were obliged to seek other

business.

The word "subsidy" is an awful expression to many, but I think the people generally, especially in the West, if it was considered that it was the only thing that would save our American ships, would be more lenient with it.

Representative SPIGHT. Captain, I have had no experience and but little observation along the lines which you have studied. I did not exactly understand your statement with reference to the effect of discriminating duties upon the cotton market.

Mr. MERRYMAN. Because there would be nothing to be paid; there would be no duty.

Representative SPIGHT. There can not be any such thing as an export bounty. We can not pay anything for carrying our exports. Mr. MERRYMAN. No, sir.

DIFFERENTIAL DUTIES AND COTTON.

Representative SPIGHT. But I do not understand why an American ship carrying cotton from this country could not, under the discrimi

nating-duty policy, bring back a cargo of foreign goods just as well as any other vessel.

Mr. MERRYMAN. As I stated, one-half the ships in the cotton trade are coming this way in ballast.

Representative SPIGHT. Why would that be so?

Mr. MERRYMAN. There are not imports enough.

Representative SPIGHT. If the inducement is held out to foreign shippers to ship their goods in American vessels by giving them a lower rate of duty, why would those ships come back in ballast?

I

Mr. MERRYMAN. Foreigners would be willing to take freight less the discriminating duty. They would take any freight to hold their ship down in the water. There are some 6,000,000 bales of cotton now shipped from our shores to Europe, and that requires a large fleet. Our Government has done a great deal to forward the foreigners. have sailed out of the port of Galveston when we could carry only 12 feet on the bar, but now the Government has made it so the foreigner can carry 16 feet. At New Orleans, also, it is the same way; it has gone from 16 feet to 22 feet, and the foreigner gets the benefit, because he can build large ships and carry large cargoes.

Representative SPIGHT. Well, if we build those large ships, tooMr. MERRYMAN. Yes, sir; if we could.

Representative SPIGHT. I understand there is a difference in the cost of construction in favor of the foreign shipbuilderMr. MERRYMAN. Oh, yes, sir.

WE CAN CONTROL IMPORTS.

Representative SPIGHT. But our idea is that we can compensate in part for that by in some way encouraging the shipping of foreign goods in American bottoms. We can not control our exports, we can not prevent them from being sent in foreign bottoms if foreign ships offer lower rates, but we can in some way, perhaps, control the importation of foreign goods in American vessels or induce the shipment of foreign goods in American vessels. That is the idea, I imagine, of a discriminating-duty policy.

Mr. MERRYMAN. Yes, sir; but of course merchants are always studying different ways to get their goods in on the cheapest line. If it is cheaper to bring goods by way of Montreal to Chicago that will be done and the American ship will be avoided.

Representative SPIGHT. You think that under the discriminatingduty policy the foreign shippers would meet that reduction in the duty and ship their goods at cheaper rates?

Mr. MERRYMAN. There would be so much doubt in the mind of the American shipbuilder that he would hardly chance it to build suitable ships to engage in the trade. He must be assured by the Government that he is going to be put somewhere on an equal footing with the foreigner. Then he would go ahead.

Representative SPIGHT. If your idea is correct, that in order to meet our discriminating duties foreign shippers would reduce their rates, I can see how at last our people would get the benefit, because we would get goods here cheaper than we have been getting them, and therefore the consumer would get the benefit of lower rates.

Mr. MERRYMAN. But the ship would not get any benefit. We are speaking of doing something for the benefit of ships.

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