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ings should be instituted. Those proceedings were instituted. The case went to the district court in Massachusetts and it was fought by the legal giants of the United States for several weeks. A decision was finally rendered that the Government should pay the canal company something like $16,000,000.

Thereafter a writ of error was issued and the case was taken back to the United States district court, and, while I am not a lawyer, I understand it is on the calendar now. The canal is still operated by the Government. After the change of the Secretaries of War, Navy, and Commerce the matter was taken up with a view to having an adjustment made and a price agreed upon as between the Cape Cod Canal Co. and the United States Government. That price was $11,500,000, and the bill passed the House with that provision. Now, that brings the matter up to about this time.

While the bill was left entirely with the subcommittee to consider I felt that as it was a very large proposition all of the older members of the committee ought to be present especially as they have had it under consideration many years. It has been considered periodically since I have been in the Senate, for 8 years, and it has been considered by the Government for the past 100 years, and it seems to me that it is time some action is taken; that either it is a good proposition for the Government and we ought to do something, or else the matter should be dropped. That brings us up until to-day. Knowing that Congressman Winslow's committee has held hearings on this matter covering many months I invited him over thinking he might be able to answer any questions the members of this committee had in mind.

I want those who are not members of the subcommittee to feel that they are just as entitled to ask questions as the members of the subcommittee. I might say further that while I have invited no one here except Congressman Winslow, this morning Mr. Matthews, who was attorney for the United States, appeared at my office and said if the committee wanted to reach him we could reach him at the Powahatan Hotel.

I told Mr. Matthews that the subcommittee didn't contemplate going into this matter in the way of any further extensive hearings. He also thought that Mr. Whipple, on the other side of the case, should be called. Personally I do not feel that we ought to go on here with investigations and hearings all winter and that we already have sufficient evidence for the committee to decide just what they ought to do. Now, gentlemen, that is about the story of the Cape Cod Canal. The gentlemen on my right, Senators, and on my left, too, have had this matter under consideration many, many times, and I think they feel as I do in so far as there ought to be some prompt action and not carry these hearings on for weeks and months, which might be the case if we got these different attorneys here on each side of the case.

Senator RANSDELL. Personally I don't believe we need hold any more hearings. Certainly I am quite familiar with this matter. We have had it before us for many years. I think it is enough to have Congressman Winslow here to review it and we can ask him questions, but I don't think there is going to be a lot gained by having witnesses appear here on both sides of the question.

Senator FERNALD. Representative Winslow came on my invitation. He is thoroughly familiar with the entire subject.

Representative WINSLOW. If any of the members of the committee desire to go into it with me as a witness, I shall be very glad to give them whatever information I can.

Senator FERNALD. I am very much obliged to you, Congressman. I may say further that both Senators from Massachusetts are present and the committee may desire information of them of a local character, although this is not a local matter by any means. It is of as much interest to Florida, Texas, and other States as it is to New England. Senator Couzens, how would you like to proceed with this matter?

Senator COUZENS. I don't desire to duplicate the records, but I confess absolute ignorance of the matter from beginning to end. I don't want to delay the other Senators by taking the time for further hearings because of my own unfamiliarity with it. I can perhaps get the records and go over them without taking the time of the committee.

Senator FERNALD. Senator Ferris, you are a member of the committee, would you like to proceed with further hearings?

Senator FERRIS. No, sir. I am satisfied with what has been accomplished.

Senator FERNALD. Senator Sheppard, how do you feel about this matter?

Senator SHEPPARD. Mr. Chairman, I feel very favorably disposed toward the project and I think the time has come for action. We in Texas are very much interested in this entire intracostal waterway chain beginning with the Massachusetts coast and extending to Brownsville, Tex. I think this is one of the most useful projects that the nation has in view at the present time. It is an important vital link and I am for prompt favorable action.

Senator FERNALD. Senator Weller, how do you feel about it?
Senator WELLER. I am in favor of the proposition.

Senator FERNALD. Senator Fletcher.

Senator FLETCHER. I feel, Mr. Chairman, that if these Senators from Massachusetts want to be heard we ought to hear them. It Congressman Winslow desires to be heard we ought to hear him, without any further testimony from witnesses. I don't suppose there is anything new, but if there is anything new we would like to have it submitted, I think. I am inclined to want to hear the man who is in charge of the canal, the man who is operating it as trustee. He has been there operating this canal and can give us more information as to its present condition and possibilities, perhaps, than any other man. Mr. Huddleston in this report before

us says:

The Cape Cod Canal can never be an economic success. Its present shoaly and unsafe condition prevents such general use as would yeild a return on present cost. If it should be widened and deepened as contemplated, the total cost would prove so great that no possible use with any toll charge that the traffic would bear could possibly pay cost of operation and maintenance.

That is a very definite statement of fact and it seems to me it has a relevancy in determining whether it is a wise thing for the Government to take over this canal or not. On that point the colonel who is operating the canal can probably give more light than anyone

else. I feel like inquiring a little as to that and a few other points mentioned in this minority report.

Senator FERNALD. Senator Ladd, how do you feel about it?

Senator LADD. Mr. Chairman, I am wholly unfamiliar with the history of the project because I haven't been present at any of the hearings. I came in to-day to try to gather what little information I could about it.

Senator FERNALD. When would the committee be ready to hear the Senators from Massachusetts, or, would you at any time? [ am ready to hear a motion.

Senator RANSDELL. Mr. Chairman, I move that we hear the Senators from Massachusetts and Mr. Winslow, and that then we decide whether we want to hear anybody else.

Senator WILLIS. I second the motion.

Senator FERNALD. Senator Walsh, we would be very glad to hear from you.

STATEMENT OF SENATOR DAVID I. WALSH, OF MASSACHUSETTS

Senator WALSH. Mr. Chairman and gentlemen of the subcommittee, the question of ownership of this canal has been agitated a good many years in Massachusetts. There is a unanimity of sentiment in favor of the Government taking over the canal. The chambers of commerce, the manufacturing and business interests of the State have long been of the opinion that the canal should be owned and operated by the Government. I don't think that it is necessary at this time to relate in detail the advantages of this canal in shortening the route from Boston to New York and other ports along the Atlantic, in the saving of human life and the saving of the cost of transportation and in the saving of fuel by reason of the cut-off made by the steamship lines going through the canal. In a measure, of course, all this is already accomplished by private ownership. The canal is there and the route has been shortened. Massachusetts alone wouldn't benefit, every seaport along the Atlantic and to the Gulf would benefit by the advantages that would follow by Government ownership of this canal.

The people of New England, so far as I know, without any objection from any source, believe the time has come for Government operation of this canal. It would be more satisfactorily operated than by private capital. I don't suppose there was ever any question about it except as to the cost. I knew during the war and shortly following the war the price asked of the Government was thought to be excessive by Mr. Baker, who was then Secretary of War. The matter was litigated in the courts. A jury trial was held and the cost that the Government should pay was fixed by the verdict of the jury, and I think Mr. Baker, if my recollection is correct, took the position that the sum was too high.

As to the necessity of widening the canal and as to the financial benefits that have accrued to the private owners who operated it in the past I have no knowledge; but I do know that the people of our community and the people interested in shipping along the Atlantic seaboard strongly favor this project. I do know that nearly all our Government officials, among them the present Sec

retary of War, and, indeed, the President of the United States, himself, strongly favors this project. I think this canal should have been built originally by the Government and not by private interests. It is one of those necessary lanes in ocean transport that should belong to the Government. It has not only advantages in time of peace in promoting commerce, but also in time of war.

In a word, I want to be recorded as strongly in favor of the project, and also to express the sentiment of my community and of my State in favor of the passage of this bill.

Senator COUZENS. I would like to ask the Senator if he can tell us what the advantages of this canal would be if any, if it were Government owned rather than privately owned.

Senator WALSH. Well, I personally think it had not been a financial success in the hands of private ownership and that they haven't been able to keep it up to the standard that it ought to be kept up to and would be kept up to if it were owned by the Government, due to the fact that the investment has not been a particularly profitable one I can only say, all those advantages which come from the owning of a highway by the public would be enjoyed by those using the canal if it were owned by the Government; and all the disadvantages of a highway being owned by private capital are now experienced in the use and operation of this canal. That is the best explanation I can make.

Senator RANSDELL. Do you know what big waterways in the United States are toll waterways except the Panama Canal? Senator WALSH. No, sir.

Senator RANSDELL. Do you know of any in which great sums have been expended by the Government that are toll free?

Representative WINSLOW. Yes, sir.

Senator RANSDELL. If this is retained as a toll canal it would make a distinction between it and the great waterways of the Union, with the single exception of the Panama Canal, would it not?

Senator WALSH. Yes.

Senator RANSDELL. There is no provision in this present bill relating to tollages, is there?

Representative WINSLOW. There is no Government-owned waterway except the Panama Canal that has tollages.

Senator COUZENS. Does the Congressman have any information as to the cost of this canal to its present owners?

Representative WINSLOW (in answer to Senator Ransdell). That answers your question. With the exception of the Panama Canal there is no Government-owned canal charging tollages. The public would be greatly in favor of the abolition of tolls.

Senator COUZENS. Of course, you could have abolition of all the expense if the Government bears it. It isn't any more true in this case than in the case of any other activity the Government may care to assume. I asked the Congressman if he has any information as to the cost of this canal to the present owners.

Senator FERNALD. Has the Senator read the report on page 13 of the amount estimated by Price, Waterhouse & Co., the auditors who went into this matter? The cost of constructing the Cape Cod Canal is stated in the report of Messrs. Price, Waterhouse & Co., international chartered accountants, who were specially engaged by the United States Army engineers to make a complete examination of

the accounts of the Boston, Cape Cod & New York Canal Co. and the Cape Cod Construction Co. They reported the combined expenditures of both companies to August 31, 1917, as $13,763,605.35. Senator FLETCHER. You can see that they state further on, page 21, that the direct cost of actual construction of the canal was found to be $6,243,171.01; interest and taxes during construction, $748,112.40; total, $8,265,743. that is substantially the same as Mr. Baker · offered to pay for it-$8,200,000. But the canal company insist that they had some expenditures of capital stock in the amount of $4,787,410.67 for rights, franchises, and services of promoters. They expended that in capital stock, bringing it up to $13,053,153.71. I would like to ask Senator Walsh if the principal reason for the Government's taking over the canal is to get rid of the tolls. Is that one of the main reasons?

Senator WALSH. Well, I think the main reason is that the private company now owning it can not continue to operate it much longer because it is losing money and eventually it will have to be closed. Senator FLETCHER. Is it contemplated that if the Government should take over the property there would follow very promptly a request to have the canal widened and deepened, say to 35 feet deep by 200 feet wide?

Senator WALSH. It is my opinion that that request would be made. shortly. I have no reason for saying that, but I would expect that request to follow in due time.

Senator FLETCHER. Very likely. If we took over the canal we would consider that we are in for a much larger outlay later on for its development.

Senator WALSH. I think that is very likely, sir. But I don't want the committee to lose sight of the advantages which are before you of having a waterway through this canal rather than compelling the ship traffic to go around the dangerous coast of Cape Cod. Ĭ think that ought to be considered together with the question of the expense.

Senator FLETCHER. The cut-off through that canal saves us four hours' time.

Senator FERNALD. Sixty-five miles, Senator; about six hours between Boston and New York.

Senator FLETCHER. That would be a saving, I think, of about four hours between Boston and New York, and six hours between Norfolk and Boston.

Senator RANSDELL. Of course, that is for steam vessels. For sailing vessels it may be a great deal more.

Senator WALSH. I may say to Senator Fletcher that the private interests have really been carrying it along, keeping it open, with the expectation that the Government was to take it over eventually. I know it has been a very heavy burden to them and a great financial loss.

Senator FERNALD. We will hear from Senator Butler.

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