intercoastal water carriers, or the ocean carriers between the Atlantic and Pacific ports, including Gulf ports, should be placed under the regulatory jurisdiction and control of the Interstate Commerce Commission to the same extent that rail carriers now are.

"On July 1, 1923, there was a serious rate war among the ocean carriers known as the 'conference lines' operating between Atlantic, Gulf, and Pacific ports, the rates breaking in some cases from $25 per ton to as low as $6 and $7 per ton. It is reported that not only was this damaging to the ocean carriers, but that this 'overnight dislocation of rates' also resulted in serious disadvantages and injury to commercial interests as well.

"The United States Shipping Board, it is understood, takes the position that the intercoastal service has resulted in the development of a large volume of traffic, and that either the Interstate Commerce Commission or the Shipping Board should be empowered to regulate this medium of transportation and to establish fixed differentials between the rail and water carriers engaged in transcontinental traffic.

"It seems to us that the regulation here proposed is imperative in order to stabilize intercoastal rates and service; to protect the bona fide investment of responsible carriers in the enlargment of their business from irresponsible and migratory competing lines, which at present may enter the service for the purpose of forcing a sale to established lines, or which lack the necessary capital and experience to finance and properly operate such service.

"By the provisions similar to the certificate of public-convenience sections of the interstate commerce act, the number of ocean carriers entering coastal business should be limited to the extent of the public necessity and convenience, and, in return therefor, be subject to the provision that adequate service, schedules, etc., shall be rendered at just and reasonable rates-compensatory to the ocean carriers and just and reasonable to the shipping public.

"Section 500 of the transportation act, 1920, declares it to be the policy of the National Government to promote both rail and water transportation, but the authority thus far granted for the regulation of water carriers under section 6 of the interstate commerce act, section 8 of the merchant marine act of 1920, and the Panama Canal act is apparently inadequate and not of the same comprehensive and effective character as applied to railroad common carriers by the States and the Federal Government, as there are no regulations which cover the port to port intercoastal carriers here under discussion.

"In our view we should, by efficient State and Federal regulations, see that our inland, coastwise, intercoastal, and international water transportation is developed to a point where our country will have available a modern and adequate water-freight and water-passenger service, both domestic and foreign, in proportion as the countries growth and necessities demand, and that there shall always be available a highly efficient 'transport service,' an indispensable arm of the Navy Department of our Government.

At the 1924 convention the committee in dealing with this subject, and after reviewing and approving the above report of 1923, said:

"If the Interstate Commerce Commission is charged with the duty of looking after this additional medium of transportation, and of carrying out the declared policy of Congress 'to foster and preserve in full vigor both rail and water transportation' there is no doubt in the view of this committee that its general allround experience in the field of regulation would be of great benefit and that it would fully and impartially measure up to this new duty. We are certain the same assurance may be given on behalf of the State commission."

PRESIDENT HARDING'S VIEWS ON INTERMOUNTAIN TERRITORY

I quote from a speech of President Warren G. Harding to the western governors on August 3, 1920:

"The intermountain and Pacific West is endowed with riches known to no other region of the world. We came to a new appreciation of those riches during the anxieties of the World War. Necessity and a new realization of self-dependence led us to appraise the vast deposits of phosphates and the lakes of potash and mines of tungsten, and we encouraged the production of silver and added to the output of lead and copper, because the warring world had no other such dependable supply. We turned to the abundance of spruce for our airplanes and the rare metals for alloys, and we found the limitless abundance of coal and used it to bunker the shipping of the Pacific. We increased the supply of the longstaple cotton, and of wool, and of meats and fruits. Whatever it was that the

world greatly needed and was listed in our necessities, we discovered a goodly and reassuring share of it in the vast storehouse of the almost untouched natural resources of the great West.

But

"During the war we made a good deal of progress toward development of these resources, because the war made rapid and intensive effort necessary. with the end of the war there came a tendency to slacken development. We find that some things were started and then neglected or forgotten. With correct vision of a long future, contemplating continued growth, we might well recognize that to this intermountain empire we must turn for the same service as that which was rendered by our central plains when they were brought intc productivity following the Civil War.

"Our vision, then, of the ultimate development of the mountain empire, reveals a great region, developed uniformly, with regard to all its variegated possibilities. I have never been able to think of 'reclamation' as connoting merely the construction of ditches, and dams, and reservoirs, to put water on dry lands. In my view this has been only a phase-though a most important phase-of reclamation. I have believed that our mountain West is one day to be one of the richest and most completely self-contained economic areas in the world. My vision of the future pictures it as a wonderland whose streams are harnessed to great electrical units, from which flows the power to drive railway trains, to operate industries, to carry on the public utilities of cities, to smelt the metals, and to energize the activities of a teeming population.

* *

*

"The only problem in the conservation of waters is to see to it religiously that this great inheritance of the people is not monopolized for private enrichment, and of this there can be little danger if the State and the Nation, when it has the jurisdiction-shall wisely exercise the powers of regulation which it possesses in respect to all public utilities.

"Not long ago, a great journal of the South published an interview in which I attempted to suggest my hope and aspiration for the new South as a developed, renewed and finished community, based on the proper and complete utilization of all its opportunities. I have a similar thought about the possibilities of the mountain West. The 'Great American desert' disappeared out of our minds and geographies long ago, but we have retained the impression that our Rocky Mountain area could never sustain populations and industries comparable with those of the central valley or the East, or the South. This has done injustice to the far West. The richness of its mountains, the power of its streams, the productivity of its valleys, and the variety of its climate and opportunity, the possibility of its dry areas, all suggest its destiny to become the seat of an idea. civilization. * * *

"We must have that far-western awakening which shall prove an effective corrective of the concentration of population and the regional specialization of industry which has been repeatedly called to our attention and has inclined to make of us a sectional America.

"We must make our mountain West a country of homes for people who need homes. It has everything that they will need. It can provide them with food, with the materials for industry, with lumber from its forests, with metals and minerals from its mines, with power from its streams, and waters for the irrigation of its land. And the work must be so done that it will inure most to the advantage of society and the development of the independent, self-sustaining family unit in our citizenship. There must be proper cooperation and direction in this development, but there must be all care to prevent monopolization of resources and opportunities.

"It has been intimated by some who take, I feel, the narrow view, that the industry of the East, and the agriculture of the Middle West and South, will not view favorably the proposal to develop new industry and new agriculture in the mountain country to compete with them. I confess to very little sympathy with this attitude. The sons of New York and New England built the great States of the Ohio valley; and the sons of the Ohio valley reared the splendid Commonwealths beyond the Mississippi. The sons of every generation, in our country, have been the pioneers of some new land.

"To-day we are informed on the basis of statistics that if the demands of a rapidly-increasing population are to be met, new farms must be opened at a rate of 100,000 annually. The sad fact is that only half that number are being added to our equipment for production every year. The United States has changed from a basicly agricultural to an agricultural and industrial Nation. In 1920 statistics, we are told, will show that our population is preponderously urban. More foodstuffs must be had; farms now operating will not supply present demands. The one solution is to bring more land into production.

I offer for the record at this point copy of resolution No. 5, indorsing the Gooding long-and-short-haul bill, adopted at the Twentyeighth Annual Convention of the American National Livestock Association, held at Ne v Mexico, January 14-16, 1925.

AMERICAN NATIONAL LIVE STOCK ASSOCIATION RESOLUTION NO. 5 GOODING LONGAND-SHORT-HAUL BILL

Whereas proceedings are now under way before the Interstate Commerce Commission, upon application of the railroads, to reestablish long-and-shorthaul rates to Pacific coast terminal points and to Gulf ports and on the Mississippi River, in violation of the declaratory provision of section 4 of the interstate commerce act, in violation of section 3 of the discriminatory provision, and in violation of the minimum rate provision of section 15, paragraph 1, of said act; and

Whereas the carriers are now attempting voluntarily to throw off a large amount of revenue through these means for the purpose of taking a relatively small volume of traffic away from the river, coastal, and intercoastal lines, with the object of destroying or neutralizing transportation by boat lines, which will result in placing an unjustifiable burden upon shippers at intermediate points or inland from waterway points and will substantially lessen the ability of the railroads to grant reduced rates for the movement of livestock and low-grade agricultural products; and

Whereas Senator Frank R. Gooding, of Idaho, has introduced and had passed through the United States Senate on May 19, 1924, a bill which so amends section 4 of the interstate commerce act as to prevent railroads from charging a higher rate for a shorter haul than for a longer haul over the same lines and in the same direction to meet waterway transportation; and

Whereas said Gooding bill is now before the House Committee on Interstate Commerce and is set to be heard January 20, 1925, with a view to final consideration and action: Therefore, be it

Resolved, That the American National Live Stock Association indorses the Gooding bill (S. 2327).

I offer for the record at this point copy of resolution indorsed by the Nevada Live Stock Association at its annual convention, December 19-20, 1924, at Elko, Nev.

RESOLUTION OF NEVADA LIVE STOCK ASSOCIATION IN SUPPORT OF GOODING BILL

Whereas Senator Frank R. Gooding has introduced a bill which so amends section 4 of the interstate commerce act as to prevent railroads from charging a higher rate for a shorter haul than for a longer haul over the same lines and in the same direction to meet waterway transportation; and

Whereas such legislation is no more than fair and equitable to interior sections such as our own and necessary if we are ever to be allowed a chance to proceed with our settlement and development without heavy discrimination favoring other sections; Now, therefore, be it

Resolved by the Nevada Land and Live Stock Association, in convention assembled, That we indorse the Gooding bill (S. 2327) and urge its prompt enactment into law; and be it further

Resolved, That copies of this resolution be sent Hon. Key Pittman, Hon. T. L. Oddie, our United States Senators; Hon. C. L. Richards, our Congressman; and Hon. Samuel E. Winslow, chairman of the House Committee on Interstate and Foreign Commerce.

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

HOUSE OF REPRESENTATIVES, Washington, D. C., January 27, 1925. The committee met at 10 o'clock a. m., Hon. Samuel E. Winslow (chairman) presiding.

The CHAIRMAN. The committee and others will come to order, and we will go on with the hearing on Senate Bill 2327.

This week, of which four days are already set aside, the committee expects to hear from the opponents of the bill. For the sake of convenience, and to facilitate the fullest possible consideration, we have undertaken, with all those who have presented themselves thus far, to have the opponents get together and arrange for the appearance of witnesses.

According to the arrangement as it has come to the Chair, Mr. Beek has undertaken to mobilize the forces which can be described as representing the miscellaneous commercial interests, and two days will be given to the representatives of those general interests. As contrasted with that group, there will be what we call the railroad interest group, and Mr. Thom, at the request of those who appear for those interests, has undertaken to arrange the order of witnesses.

If there are any here who may not have known of the effort of Mr. Beek and Mr. Thom to provide for witnesses, and they will come to the chairman's desk immediately after the adjournment of this morning's session, we will undertake to see what can be done to help them out.

Mr. Beek, will you kindly take charge of the witnesses for the day in such manner as you choose?

STATEMENT OF MR. JOSEPH H. BEEK, EXECUTIVE SECRETARY THE NATIONAL INDUSTRIAL TRAFFIC LEAGUE, CHICAGO, ILL.

Mr. BEEK. Mr. Chairman and gentlemen of the committee, we are very much embarrassed, and the committee, I assume, is equally embarrassed, because of the lack of time to adequately present to you the magnitude of the legislation that is contemplated. The ramifications of the effect of this bill are so much greater and so much more important than most people recognize, that it would be gratifying to us if we could have time enough to get the whole matter clearly before you. We recognize, however, the limitations of the committee's time, and we have gotten together and attempted to boil down everything and to put everything in the smallest possible

compass.

I want to say, however, in order that you may know something of the interest that is being taken in this matter, that there are witnesses here that have crossed the continent from the Pacific coast, from the Pacific Northwest, from the Southwest, from the East, from New England, and from the Canadian border on the north to the Gulf on the south. Of course, the committee is not going to be able to hear them all. We hope that you will be able to hear some of them, and I am going to request now, if I may, that some of these gentlemen who really have something to contribute be allowed to file statements for the benefit of the record. Will that be permitted, Mr. Chairman?

The CHAIRMAN. Subject to the approval of the Chairman, by order of the committee, that will be allowed. The statements may be submitted, and we will consider each one of them, and probably accept them all.

Mr. BEEK. Thank you.

Now, Mr. Chairman, I have asked our witnesses to confine themselves distinctly to the issue; that is, the provisions of this bill. We

do not understand that it is proper or necessary or desirable to discuss here, before this committee, pending fourth section applications before the Interstate Commerce Commission. The place to discuss those is before the commission. We want to discuss, if you please, the provisions of this bill, because that is what you gentlemen are considering and what you gentlemen are going to pass upon.

It has been stated that there is a great deal of flexibility in this bill. Well, there is some flexibility in the language, but the flexibility is in the language only; because in practical effect this bill is a rigid fourth section. In practical effect, I say.

I want to call your attention, in the first place, to the fact that the words in the present act "in special cases, after investigating," are stricken out, and that takes away from the Interstate Commerce Commission the power to grant fourth-section relief in that class of cases. Then the words "after public hearing" are inserted as new matter. That means that the commission can grant no fourthsection relief except after a public hearing. If you will look at the latter part of the bill, you will find that there are many applications that were made in 1911 which have never been passed upon; and in 12 months after this bill becomes a law, if it does, all of the outstanding fourth-section applications will expire, and thereafter all in violation of the fourth-section rates will be unlawful unless granted, after public hearing, by the Interstate Commerce Commission. As a matter of fact, if from 15,000 to 50,000 applications for fourth-section relief are made, it is a physical impossibility for the commission to hear and pass upon them within any reasonable time; and in the meantime the rates are frozen and you have what is in effect a rigid fourth section.

This bill will not permit fourth-section relief against water transportation or rail and water. It permits fourth-section relief only via the circuitous rail route. That is the only relief that is provided for, except in cases of drought or emergency, which are provided for

Those are the distinct provisions of the bill which we have asked our witnesses to discuss, and, so far as we are able, we are going to illustrate just a few of the traffic situations that exist and the manner in which they will be affected by the passage of this bill.

Now, there is no room for doubt as to the effect of this bill after it becomes a law, if it does. Physical conditions are not going to be changed. San Francisco is not going to take the place of Detroit. We are not going to have the transposition of cities that we heard discussed here a few days ago. The Pacific Ocean will remain where it is, the Atlantic Ocean will not change, and the Panama Canal will do business. All of those conditions will remain, and when we come to apply the provisions of this proposed law to that situation, without fourth-section relief, it will reflect back into the country and upset existing rate adjustments.

It was stated here, in reply to some member of the committee, that it would not change many rates. That statement, gentlemen, was made without a very comprehensive investigation. It will change rates in every section of the country and change them very greatly. We hope to show you just how it will change them and show you so clearly that there will be no doubt about it.

Now, Mr. Chairman, I want to present our first witness.