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Adjourned Meeting, Thursday, February 13, 1913.

An adjourned meeting of the Chamber of Commerce was held in the Hall of the Chamber on Thursday, February 13, 1913, at halfpast twelve o'clock, P. M.


John CLAFLIN, President.
Jacob H. SCHIFF,

SERENO S. PRATT, Secretary.

And three hundred and thirty-four other members.

The President laid before the meeting the report presented on February 6th from the Committee on Foreign Commerce and the Revenue Laws endorsing Senator Root's Bill Senate No. 8114 to amend the Panama Canal law by striking out the clause providing for the exemption from payment of tolls, through the canal, of the coastwise shipping of the United States. The President #suggested that the debate be limited to one hour, thirty minutes being accorded to each side. On motion it was voted thus to limit the debate.


MR. BERNHEIMER.—The arguments in regard to this subject bave heretofore concentrated on paragraph 3 of the HAY-PAUNCEFOTE Treaty. That treaty went into force in November 1901. MR. JOHN Hay and Lord PAUNCEFOTE at that time knew, as everybody else knew, that the Panama Canal Zone was then foreign territory. The BUNEAU-VARILLA-HAY Treaty, went into force two years later, and provided for the transfer of ten miles of coast strip on the Atlantic side and ten miles on the Pacific side to this country. When the HAY-PAUNCEFORE Treaty was made it was undoubtedly in the minds of those who signed it that it was necessary to avoid misunderstandings, and, therefore, they put into it paragraph 4, which has been pretty nearly forgotten in the discussions of the subject. I will read the four lines of that paragraph 4:

“It is agreed that no change of territorial sovereignty or of international relations of the country or countries transversed by the aforementioned canal shall affect the general principle of neutralization, or the obligation of the high contracting parties

under the present treaty." In accordance with this, the section of the coastline under discussion is still foreign coastline, and hence our coastwise shipping laws cannot here apply.

We are dealing here with a matter which seriously affects the whole discussion. MR. Hay and Lord PauxCEFOTE knew exactly what they were about.


MR. CowPERTHWAIT.—I should like to say one word in favor of the treaty as drawn, and in justice to MR. Hay. I believe the treaty as it stands, is exactly in the interest of the United States; and I believe if Mr. Hay were living and could be at this meeting, he would convince the gentlemen here that the treaty is in our interest just as it stands.

When a city builds bridges or opens highways or builds docks it never reserves to its citizens, or to its taxpayers any other privileges than are accorded to all of the people.

When a state builds a great waterway like New York State building the Erie Canal, it does not reserve to its taxpayers any privileges whatever. The caval is as free and open to the citizens of all states as it is to the citizens of the state which paid the money to build the canal.

When the French built the Suez Caval, and started to build the Panama Canal, I doubt if any Frenchman ever thought that French vessels should have any rights in either canal which were not accorded to the vessels of other nations.

When British stockholders obtained possession of the Suez Canal, and the British Government assumed control over that canal, I do not believe there was a Britisha officer or a Britislı subject, who thought that was good reason why British vessels should have any rights in that canal not accorded to the vessels of other nations; and when Lord PAUNCEPOTE and ('OLONEL Hay formulated a treaty, they had in their mind, and they had before them, the custom of the whole world, and they knew perfectly well that that treaty should accord equal rights to the vessels of all nations and that the rates of toll should be just and equitable.

If those great statesmeu had been of the calibre of a majority of the Sixty second Congress, they would have had a wholly different view. Americans would have been given the right to go through the canal at a very low rate of toll. Great Britain would have been given a medium rate, for her vessels and the vessels of all other nations would have been charged a higher rate; and in that way they would have antagonized the whole world, because they would have gone against the custom of the world, which meant that a great waterway between two oceans, or an international waterway, should be free and open to vessels of all nations or on equal terms to the vessels of all nations. No nation building a waterway should reserve itself any privileges which it does not accord to all other nations. Certainly our nation is great enough to think in terms of the world rather than in terms of narrow provincialism.

We have now over $2,000,000,000 of export trade, and this sum it is quite possible to double in a few years. Every good merchant knows that he gets many orders by favor, and ongbt to know that the growth of our foreign trade can be stimulated by good feeling towards us, or, on the other hand, can be retarded by ill-feeling. Throughout the world there are plenty of people who believe that we worship the almighty dollar; and the Sixty-second Congress has seen fit not only to give new gro nd for that belief, but to confirm it by the repudiation of our solemn pledge to a friendly nation. Everybody should try to help Senator Root in his efforts to bring us back to the path of good sense and good morals.


MR. DOUGLAS. —On the 12th of August 1912 President TAFT signed the Panama Bill, and issued a proclamation explaining his reasons for approving that measure.

This action officially announced to the world the basis on which vessels of all nations could use this great waterway. It provides for uniform tolls to ships of every flag engaged in the deep sea business.

American vessels engaged solely in coastal trade are granted free passage.

No vessel owned by a railroad shall go through the canal.

For nearly one hundred years our coastal trade has been wisely conserved, and protected, and alien ships were not allowed to engage in carrying freight between our ports. No nation has ever questioned our right to so protect.

Other nations claim similar exemption for their home protection. England has done so in the past, and although she now nominally allows alien ships on her coast, she differentiates in tonnage dues, and other charges in her favor, so that they are practically excluded.

An American vessel arriving at Bristol would be charged 50 cents a ton for entering and departing, while English vessels would only pay 20 cents. At Liverpool our rate would be 28 cents and her rate 9 cents per ton.

If we chose to interpret it that way, this is a direct violation of our treaty rights. The treaty of 1815 provides “that no higher rates or other duties or charges shall be imposed in the ports of any of his Britannie Majesty's territories in Europe on the vessels of the United States than shall be payable in the same ports on British vessels.”

If England's interpretation of the HAY-PAUNCEPOTE Treaty holds good, then how does she justify these tonnage duties in favor of her coasting vessels ?

The United States bas expressly excepted its coastwise trade in


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thirty-one treaties. Great Britain on her part has made the same reservation also in thirty-one treaties.

This question has been further definitely settled by the suit of OLSEN V. SMITH, 195 U. S. 34+ judgment rendered by the Supreme Court in 1904 which declared that a British vessel engaged in foreign commerce was not entitled, under the treaty of 1815, to the exemption from paying pilotage accorded by law to American vessels engaged in coastal trade. Great Britain now, however, has raised the issue that we cannot exempt our coastal tonnage passing through the canal, and also objects to that section of the law which prevents ships owned by railroads from enjoying the privileges of the canal, claiming a violation of the HaY-PAUNCEFOTE Treaty. She filed a protest with the Secretary of State before the law was enacted. No other nation, although several are almost as much interested, has made a protest, and it is said Germany, France and Italy now practically concede to our rights.

President Tart, being aware of the feeling of England on these matters, fully answered their claims and clearly shows the fallacy of arguments advanced. Our members have had the President's paper and it is fair to assume they have read his argument. He distinctly states the law violates no provision of the treaty, and if Great Britain and other nations are not prevented from extending favors they may see fit to their shipping, and if there is nothing in the treaty which gives the United States any right to complain, then the British protest leads to the absurd conclusion that this Government in building, maintaining and defending the canal, cannot regulate its own affairs, and finds itself shorn of its rights to deal with its own commerce in its own way, while other nations in competition with America enjoy the right and power unimpaired. The President also strongly endorses the exclusion of railroad owned vessels so as to prevent monopoly of canal transportation by these powerful interests, and approves the value of free tolls for coastal business to create the necessary competition with the trade of the transcontinental railroads.

Strenuous efforts are being made to make it appear the President has changed his views on these points, but I challenge the production of any evidence to this effect.

Efforts are also being made to have the President committed to a policy of arbitration, but he has never compromised himself beyond stating that he would pass on such question if necessary, but that the Tribunal would have to be an impartial one. The Hague would not be an Impartial Court for reasons well known to all, and which have been sharply brought out in debates tbroughout the country.

A careful search of all records available warrants the statement that no business interest in the United States has appealed to Congress, and asked for tolls on coastwise trade except the railroads, supported by alien interests. Should our Chamber now do so and prove the sole exception?

The charging of tolls simply means additional freight on the necessities of life, and the products of this country, thus hampering the commercial interest of the people, and the railroads would take advantage of tolls to raise their rates accordingly.

The owners of American vessels engaged in coastal business do not benefit, and do not care so long as our coastal laws remain unchanged ; it is the American people who care and who will benefit by this law.

It is well said there can be no discrimination, when there is no competition and our coastal vessels do not compete with foreign vessels, engaged in deep sea voyages.

Improvements on the Great Lakes, the Mississippi and Missouri Rivers and tributaries, canals cut, etc., have cost us more than the Pauama Canal. The law of July 5, 1884 says “no tolls or operating charges whatsoever shall be levied, or collected upon any vessels, dredges or other passing water craft through any canal or other work for the improvement of navigation belonging to the Crited States." The Panama Canal passes through United States territory. It is covered by this law, and an appeal to the United States court by our coastal trade would prevent any charge.

The interests involved in this controversy are so vast that it would amount to a national calamity to change the Panama Law, unless to further strengthen it for our benefit. No one can accurately predict the enormous tonnage which will go from East to West and West to East within a few years.

We have an empire building up on the west coast. Its millions need the manufactured goods of the East, and we need the fruit, lumber, salmon, oil, etc., of the West.

The passenger and immigrant trade will exceed all present dreams. A great boom must result to American ship building. Magnificent steamers will be required to handle this great commerce. England knows this full well, and so she wants, before it is too late, to stab our coastal trade in the back, which has already been done to our deep sea business. She enjoys hundreds of miles of seacoast on the Atlantic and equal coastal facilities on the Pacific. We need this just protection, or she will largely dominate the trade. She is really fighting Canada’s battle. The Canadian Pacific Railroad is one of the largest owners of vessels in the world. Naturally Canada wishes their ships to go from Montreal to her provinces on the West, as cheaply as we can go from our Atlantic ports to San Francisco, and the north, but no true American should so wish.

Fairminded men are surprised at England's action. She is mistress of the seas, and will remain so for many years to come. The canal has not cost her one dollar to help build, and will not cost her a farthing to maintain, but her ships engaged in foreign commerce will go through on a parity with our own. Our navigation laws, however, a re such that we will remain handicapped as much as ever in our endeavor to build up our foreign shipping trade. Her ships can ply the $1.20 a ton and hold the trade, even if our vessels engaged in foreign trade were also granted free passage.

It is true we can now purchase ships where we please, and many times in this Chamber foreign interests, or those allied with it, have stated with free ships the American shipping issue would be settled.

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