and may compete with all the rail lines of which we are a part, therefore we have got to drop the steamship lines. I was here to plead for privilege of retaining them.

Senator BRISTOW. That, of course, is a matter of construction of the language of the bill.

Mr. MELLEN. It is a very serious thing if I am right or wrong. I do not think I should bear the burden of interpreting the bill, when in the meantime I have $25,000,000 in jeopardy in my investments in steamships. If this bill were so arranged that there could be an investigation by some tribunal by which every railroad owned steamship line were to be investigated, and that tribunal said it would be for the public interest that the railroads should part with them, and then having given their decision the railroads were given a reasonable time in which to part with them, the bill would not be so objectionable. But the bill puts the burden of everythingHeaven only knows what construction the court may give to it. I have been advised by the best legal talent in this country that I could do certain things with absolute safety, and the courts have turned those lawyers down and spanked them soundly in my presence for doing it. I do not want any more of that. I want to know. The CHAIRMAN. The bill as at present drawn provides that the Interstate Commerce Commission shall be the tribunal which will decide whether the steamship company may compete with the railroad, and if they find that it may, then you will have immediately to get rid of your boats.

Mr. MELLEN. Then do this, leave everything as it is until the Court of Commerce or the commission does decide. Then give the railroads a reasonable time to dispose of that which the commission holds they should not retain.

The CHAIRMAN. You have indicated a different policy. You have indicated that instead of providing that the railroads shall be divorced from their steamship companies provided that the Interstate Commission finds that they may compete, that the true test should be provided some tribunal should find that it is not for the public interest that the railroads should own the steamships, whether or not they compete.

Mr. MELLEN. I think that is right. If the public interest is served by the railroads owning the steamships I think they should be permitted to own them.

The CHAIRMAN. Even if they do compete?

Mr. MELLEN. Even if they do compete. Why not?

The CHAIRMAN. I do not know why not.

Mr. MELLEN. The public interest all over this country has permitted railroads that did or might compete to be merged one with another. There has been compulsory legislation in Massachusetts forcing two parallel lines from Boston to Portland to unite. They were forced to unite.

The CHAIRMAN. What lines?

Mr. MELLEN. The Boston & Maine and the old Eastern Railroad Co. Why, if the public interest is protected by the steamship line being owned by the railroad, even though it does compete, should the mere fact of that competition force the railroad to sell?

The CHAIRMAN. If somebody has a theory it ought to be the other way, the public interest would have to suffer so that the theory would be sustained.

Mr. MELLEN. I suppose we are all trying in a poor way to operate in the public interest. We are sometimes liable to confuse the public interest with our own personal interest, I will admit.

The CHAIRMAN. Does any other Senator care to inquire further of Mr. Mellen? If not, that is all, Mr. Mellen, unless you have something you wish to state.

Mr. MELLEN. I have nothing further to state except to express my thanks to the committee for giving me an opportunity to be heard. Thereupon, at 12.10 p. m., the committee took a recess until 2 o'clock p. m.

AFTER RECESS.

The committee reassembled at the expiration of the recess.

FURTHER STATEMENT OF MR. EDWARD G. BUCKLAND, VICE PRESIDENT NEW YORK, NEW HAVEN & HARTFORD RAILROAD CO., NEW HAVEN, CONN.

Mr. BUCKLAND. I wish to correct a mistake in my testimony of May 8, on page 421 of the record. Senator Townsend asked me the following question:

Senator TOWNSEND. How do your water rates from water ports compare with the rail rates between those same ports?

Mr. BUCKLAND. They are the same. Although the line is a preferential line, they are the same.

Mr. Campbell advises me that I was in error in making that statement; and I wish to file here a schedule of our class and commodity rates, showing that the class rates by water are 3 cents per 100 pounds, or 60 cents per ton on the average, cheaper than the all-rail rate, and the commodity rates are 11 cents per 100 pounds, or $2.20 per ton, cheaper than the all-rail rates.

The statements submitted are as follows:

Senator PERKINS. Do your rates include marine insurance? Mr. BUCKLAND. They are covered by marine insurance during the voyage and for 72 hours after landing. I have filed a copy of our bill of lading showing that, Senator, in my testimony.

The CHAIRMAN. Can you give a short definition of class as distinguished from commodity rates?

Mr. BUCKLAND. The commodity rate is a rate applicable to a particular class of goods. For instance, the commodity rates to which I have referred are on cotton piece goods, woolen, boots and shoes, and dry goods, and the rate, as I have stated, by water or by rail and water is 11 cents per 100 pounds or $2.20 a ton, cheaper than the rate all rail. The class rates are those which are fixed by the official classification. They are divided into six classes, and, without going into detail, I may say the official classification is a large book showing all the various kinds of goods handled and under which class they fall. The commodity rate is a rate made to encourage a shipper to ship a particular commodity or class of goods manufactured in his particular community, and when a rate is made upon that class of goods, according to railroad men, it is said to then be taken out of the classification and put into the commodity.

The CHAIRMAN. Official classification also means referring to particular sections of the country, does it not?

Mr. BUCKLAND. I was coming to that. The official classification committee is a committee

The CHAIRMAN (interposing). Oh, no; I did not mean that. Is there not such a particular phrase as "official classification territory?"

Mr. BUCKLAND. Yes. The official classification territory is the territory represented by the official classification committee and is, generally speaking, the territory east of the Mississippi River and north of the Ohio and Potomac Rivers.

The CHAIRMAN. Is that all you care to state?

Mr. BUCKLAND. Yes. I have misled Senator Townsend in saying those rates were the same, and I wanted to correct my statement. The CHAIRMAN. Now, Mr. Evarts, you may proceed.

FURTHER STATEMENT OF MR. MAXWELL EVARTS.

Mr. EVARTS. Mr. Chairman and gentlemen of the committee, as I understand it all of us, the committee, Mr. Wheeler and his associates, who believe that railroad-owned ships should not use the canal, and those who believe that railroad-owned ships should use the canal, are all working toward the same goal; that is to say, that the canal when built should be used to its utmost capacity and in a way which will be of the greatest advantage to the greatest number of people in the country.

The only difference between Mr. Wheeler and his associates and our side is as to the way that this can be accomplished. He says to the committee that this can be done only by excluding railroadowned ships from the use of the canal. We say that by regulation of the traffic through the canal Mr. Wheeler's ships use the canal, and in addition the ships of the railroads would use it. It is for you, gentlemen of the committee, to determine which is right, but since we have started on the hearings it seems to me that the proposition has narrowed very much, and that all this time Mr. Wheeler and ourselves have been getting nearer and nearer together, or at least, to put it more accurately, that Mr. Wheeler is coming to our position, for, as I understand it, he has no objection to railroad-owned ships using the canal if somebody can but devise some system of regulation. He says this in answer to a question of Senator Thornton:

Understand me, Senator, I should be very glad if any effective regulation could be thought out that would in no way impair the public interest. That is my position.

That is in accord, as I understand it, with the experience of his 30 years of business, where he learned that commercial interests were benefited by stable rates, regularly established rates, and by a situation where there cannot be unrestricted competition. He is very clear on this proposition. He has no doubt about it, and he has put it in writing, and this is what he says. He is speaking now about the Panama route:

It is generally conceded that a line of steamers plying betewen San Francisco and Panama is a commercial necessity. In this connection merchants favor a service with a regular schedule to one without schedule. Such schedule is warranted by freight requirements, and should be maintained by one or more companies, with a fixed tariff based upon a fair revenue, which would provide more equitable rates on freight. Regular established rates would doubtless better serve the commercial interests of San Francisco than open competition in rates which might fluctuate to a degree that would be disastrous.

The CHAIRMAN. Give the book and page reference to that letter, please.

Mr. EVARTS. This is a letter which Mr. Wheeler wrote to the president of the board of trustees of the Chamber of Commerce of San Francisco on April 20, 1905, and is to be found in the report of Senator Bristow.

The CHAIRMAN. At what page?

Mr. EVARTS. At page 390. Senator Bristow was so impressed with the common sense of those words that he inserted them verbatim in his report, at page 41.

That is to say, we are getting, as I look at it, nearer and nearer together, and the only thing that remains between us is whether somebody has got intelligence enough to devise a system of regulation.

Now, again, on another point Mr. Wheeler and ourselves are getting together.

The CHAIRMAN. I should say that you had been together, but that they had left you.

Mr. EVARTS. We are trying to get together again. Mr. Wheeler has said that whether regulated or unregulated he is willing that railroad-owned ships should operate through the canal if they could carry passengers only. He has no objection to that. He says:

I do not think there would be any objection to the passenger business one way or the other.

So we are getting down to a pretty narrow proposition and one which requires a very short argument, but before I make that argument I want to get away from one or two things that have come up and which tend to confuse the issues.

Senator Bristow yesterday asked the Secretary of War a question which I am not sure was answered, and the Senator perhaps was entitled to believe that it could not be answered. It was this, as I understand it: He asked the Secretary of War if it was not the policy of this country that a railroad should not acquire a competing line, and what was the difference between a railroad owing a line to San Francisco and a boat line by the canal, and having two competing railroads. Is that correct, Senator? I do not want to put the question otherwise than as it was asked.

Senator BRISTOW. What I had in mind was, why a railroad should be forbidden to acquire a competing line with its own rails by land and be permitted to acquire a competing line by water.

Mr. EVARTS. That was with reference to the canal, was it not? Senator BRISTOW. Yes.

Mr. EVARTS. Of course, it is true under the constitution of many States, and by the laws of many States, that a railroad company can not acquire a competing line; but that does not seem to me for a moment to be the proposition that is here involved. I do not believe that the State of Kansas, or that anybody in the State of Kansas, would object to a railroad company which had a line from Kansas City to Denver building another line from Kansas City to Denver, serving another country, but, because of the termini being the same, forming a competing line. I do not think they would

object to the building of another line right alongside it, within a few miles of it, or the building of as many competing lines as the railroad wanted to build. It would give additional service to the public. Nobody would object in New York if a line had been built from New York to Albany to that railroad building another line from New York to Albany on the other side of the Hudson River. There is no policy of any State of the United States, or of the Federal Government, that a railroad can not build a competing railroad if it wants to, and when this canal is opened there would be no line through it, and the proposition here is that if a railroad builds a line of boats to go through the canal, it is exactly as if a railroad built a railroad line competing with itself. There is no policy of any State nor any policy of the General Government against such a proposition, and there is no parallel, as I see it, to be drawn here as to the canal from the policy that one railroad can not acquire the property of a competing railroad. The situation in the canal does