were supplemented by fleets of the Luckenbach Steamship Co., Wm. R. Grace & Co., and others, making an aggregate of 49 steamships placed in the Panama Canal service.

During the calendar year 1934, as shown by the Panama Canal record, there were 23 steamship companies operating west bound from Atlantic and Gulf ports to Pacific ports, a total of 206 steamships with cargo capacity of 2,031,619 gross tons in this service.

During the same year, there were 22 steamship companies operating eastbound from Pacific ports to Gulf and Atlantic ports, a total of 182 steamships with cargo capacity of 1,790,532 gross tons in this service.

I will inject that those are regular lines operating that service. There is some traffic carried on in what is commonly known as "tramp boats", cargo loadings, in addition to traffic carried by the regular lines.

In 1916, although the United States had not entered the World War, the demand for vessels to transport food and munitions to Europe became so great that very high prices were offered for vessels or charters, and the steamship lines then engaged in the intercoastal trade withdrew from it to enter into the more profitable European trade. Please bear in mind that at that time these boats were not drafted by this Government, but were withdrawn voluntarily from our intercoastal trade to make larger profits. Later, when this country had entered the war, it needed these vessels and they were used in its service.

Following the close of the war intercoastal traffic through the Canal was resumed in 1920. In the years 1921 to 1934, inclusive, the movement of intercoastal tonnage between the Eastern and Western coasts of the United States, excluding eastbound oil in tankers, was as follows: I shall not read all of these figures but would like to have them printed in the record.

(The figures above referred to are printed in the record as follows:)

I want to call your attention to the increase in total tons in 1921,

of 1,961,874, to the high point in 1929 of 8,230,679 tons.

The figures just given are taken from the Canal Record, an official Government publication, restated in net tons and are the only figures we have which go back to 1921. The totals eastbound for 1926 to 1934 are somewhat higher than the totals for the same years shown in a statement which I will introduce later, when I shall explain this difference.

You will note a marked increase in the movement via the Canal in the first 2 years after it was resumed and a steadily continuing increase until the peak year of 1929. Since then there has been some falling off in Canal tonnage during the "depression " years, but this decrease via the Canal has not been as great as the decline in rail traffic and I will show a little later that on some classes of traffic the movement via the Canal has continued to increase, regardless of the "depression ", and the Canal is now taking a larger part of the business than at any time in the past.

In July 1914 the transcontinental railroads asked the Commission to modify the fourth-section order then in effect on westbound traffic on a list of commodities subject to Canal competition, known as" Schedule C," but did not include therein such articles as automobiles, glassware, and musical instruments, which were not then believed to be subject to boat competition. In more recent years, we have found practically all manufactured articles originating in the Eastern, Central, and Southern States moving largely via the Canal. This has been true of such articles as automobiles, glassware, and pianos, as well as the heavier and cheaper commodities. Experience has shown that they can be and are transported by boat as successfully as by rail and at lower rates, the only handicap of the boat lines being their slower time, and the difference between the time via the Canal and via the rail routes is not so great as formerly.

The average time from port to port of the regular intercoastal steamship lines for 1933 and first half of 1934 as reported by United States Shipping Board Bureau ranged from 13 days for the fastest line, which operates combination freight and passenger boats, to 20.8 days for the slowest freight line.

Today and for several years past, practically all of the commodities manufactured in the Eastern, Central, and Southern States are moving to the Pacific coast via the Canal in much greater volume than via the railroads.

These manufactured commodities from the Eastern States are moving via the Canal not only to the Pacific coast cities but also back from Pacific ports to the interior territory. This back haul of westbound Canal-borne traffic is quite general to the interior of the three Pacific coast States and to such important points as Spokane, Wash.; Reno, Nev.; and Phoenix, Ariz.; and frequently reaches farther inland to western Montana; Idaha; Salt Lake City, Utah: and even to El Paso, Tex. Under present conditions the railroads often do not profit even from the back haul from the Pacific where the movement is largely by truck.

For the past 2 or 3 years, corn which is not produced in volume or the Pacific coast but where there is a large consumption for poultry and stock feeds, has been moving mostly via the Canal. This corn is shipped from Illinois, Iowa, and other Mississippi Valley States by Federal and other barge lines to New Orleans, thence by boat to Pa

cific coast cities where it has displaced the corn formerly shipped by rail from Iowa, Missouri, South Dakota, Nebraska, or Kansas.

Canned goods, dried fruit, beans, wool, and other Pacific coast products are now moving eastbound in large quantities via the Panama Canal to Atlantic and Gulf ports and into a large section of the eastern and southern parts of the United States. Into the territory Pittsburgh, Buffalo, and east, substantially all of this traffic moves via the Canal route and a substantial part of it moves via the Canal to points in Ohio, Indiana, and surrounding States, and to both the Southeast and the Southwest. The movement of lumber from the Pacific coast to the Atlantic seaboard and for some distance inland has been practically monopolized by the Canal route.

The business that moves via the Canal from or to interior points in Eastern and Southern States does not nearly all pay revenue to even the railroads between the Atlantic or Gulf ports and the interior. In addition to the movement via inland waterways I will mention elsewhere, much of the haul between the coasts and interior is now by highway trucks.

Often shipments from an interior point in the east to an interior point in the West, or vice versa, do not use the rails at all but move by truck or inland waterways at both ends and through the Canal in the middle. The railroads, deprived of their long haul by the canal lines, are now losing the shorter hauls.

Nearly all the sugar which moves in heavy volume from California to Chicago and the Mississippi Valley is shipped via the Canal and thence via either the Erie Canal and the Great Lakes or by barge lines up the Mississippi River.

Copper produced in Montana, Utah, Nevada. and Arizona is shipped via Pacific ports and canal to refineries or consumers on the Atlantic seaboard. This copper is desirable for ballast and pays extremely low rates to the boats. Some of the copper from Arizona, at least, has moved to a Pacific port by truck. This canal movement of copper has forced down the eastbound rail rates from the western producing States, but a substantial part of the Western copper continues to move via the Canal.

In some of our discussions with the Canal lines and in some of their testimony before the Interstate Commerce Commission, the steamships have claimed that in addition to what is substantially a monopoly of the transcontinental traffic in States adjacent to the Atlantic, Gulf, and Pacific coasts, the boats should be allowed to take as much as half of the business in the interior States, at least wherever there is a route via the canal and barge or Lake lines including all points reached by inland waterways such as Chicago, Cincinnati, Peoria, St. Louis, and St. Paul.

I want to lay before the committee a map which I have prepared. I would be glad if each one of you would look at that map. (The map referred to is here inserted in the record.)

This is simply an outline map of the United States with the population of each State from the Federal Census of 1930 inserted on the map. To this I have added colored lines dividing the United States into four sections and, as shown in the legend, the population of the States which border on the Atlantic and Gulf coasts and which are served directly by the intercoastal boats is 49.8