M~Y _2~,-1914 •. dONGRESSIO~ A-~ ~ECORD-SEN .ATE.

SENATE. THURSDAY, May 28, 1911,..

The Senate .met at 11 o'clock a. m. The Chaplain, Rev. Forrest J. Prettyman, D. D., offered the

following prayer : . Almighty God, the fairest vision that we have gained in life

is that which has brought Thee to a personal relation to Thy creatures. We have seen Thy handiwork in the sky above us and Thy gre_at glory in all the work of creation. But our su­preme vision is when we look into the face of God as our Father and know that Thou dost reveal Thyself unto us. We pray that

· this day the light of this vision may guide us in the discharge of the duties that are before us, for Thou in Thyself hast opened to us the portals of the temple of truth. So do Thou lead us on. Grant that Thy grace. ministered through those that know Thee. may . push back the boundaries of ignorance and lift ·the burdens that are unbearable in life. and bring in the reign of God's love and pence among men. For Christ's sake. Amen:

The VICE PRESIDENT resumed the chair. 11he Journal of yesterday's proceedings was read and approved.

BATES ON SUGAR.

The VICE PRESIDEi'\~ laid before the Senate a communica­tion from the Interstate Commerce Commission, transmitting,

· in response to a resolution of the 26th instant, a copy of the transcript of testimony taken before the Interstate Commerce Commission in the matter of the application of R. H. Countiss, agent, in behalf of transcontinental carriers, for reUef from certain provisions with .respect to rates on sugar from points in California and other States to Chicago, which, with accom­panying papers, was referred to the Corumi ttee on Printing. ·

MESSAGE FROM THE HOUSE.

A message from the House of Representatives, by D. K. Hemp­stend, its enrolling clerk, announced that the House agrees to the conference asked for by the Senate on the amendments of the Senate to the bill (H. R. 13679) making appropriations for the Department of Agriculture for the fiscal year ending June 30.

_1915, and had appointed Mr. LEVER, Mr. LEE of Georgia, and Mr. HAUGEK managers at the conference on the part of the House.

The message also announced that the House further insists upon its an1endments to the bill (S. 2860) providing a temporary method of conducting the nomination and election of United States Senators, disagreed to by the Senate, agrees to the fur­ther conference asked for by the Senate on the disagreeing votes of .the two Houses thereon. and had appointed l\Ir. RUCKER, 1\Ir. BRoussARD, and :Mr. AINEY managers at the further conference on the part of the House.

PETIT10KS AND MEMORIALS.

The VICE PRESIDENT presented petitions of sundry citizens of Homer City, - Broomall, North Girard. and Khedive, in the State of Pennsylvania; of Wichita and Walton, in the State of· Kansas; of Mount Ayr and Bussey, in the State of Iowa; of Omaha, Nebr.; of Smithfield, Ohio; of Springfield. Mass.; of ·Los Angeles, Cal.; of Milan, Minn.; of Green Bay, Wis.; and of North Yakima. Wash, praying fo1· the adoption of an amend­ment to the Constitution to prohib-it polygamy,· which were re­ferred to the Committee on the Judiciary.

Mr. DU PONT presented memorials of sundry citizens of Edgemoor and Wilmington, in the State of Delaware, remon­strating against the adoption of an amendment to the Constitu­tion to prohibit the manufacture, sa1e, and importation of intoxi­cating beverages, which were referred to the Committee on the Judiciary. · .

Mr. ROBINSON presented a petition of sundry citizens of Wilmar, Ark., praying for the adoption of an amendment to th~ Constitution to prohibit the manufacture. sale, and importation .of ~ntoxicating beverages, which was referred to the Committee on the Judiciary.

' Mr. 'LOD'GE. I present resolutions adopted by the Chamber of .. Commerce of Boston, Mass., which I ask may be printed in the

RECORD and referred to the Committee on Interstate Commerce. There being no objection, the resolutions were referred to the

0{1mmittee on Interstate Commerce and ordered to be printed in the RECORD, as follows : ·

Resol<~:ed, 'fhat, In the opinion of the board of directors of the Bostolf Chamber of Commerce--

(1) What the country needs at the present time Is a t·est from new legislatlo~ .affecting business and an opportunity to adjust Itself to the n~w cond1tiC?ns created by t•ecent Federal le~islation. such as the income

, t~x. the revisi.on of the tuiff, and .the currency law. . _ (2) There . 1s not sufficiE'nt time during the p1·esent session or Con­

gress to consider, with th: -deliberation to which it is entitled, ·th.e

LI--589

matter _of so-called. trust re~lation or any general IegislaUon con­templating changes 10 or additions to the present restrictions on inter-state or foreign trade. .

(3) Accordingly the board of directors is oppost>d to the consideratio-n or enactment of any form of such legislation during the present session of Congress. - ·

( 4) The whole subject of such legislation should be postponed until the next session of Conl!ress. and in the meantime Congress. by its committee. should take the opportunity to invite the cooperation of . business men throughout the country in framing needful legislation.

.:.t•

FRANCIS R. BANGS. LOUIS A. COOLIDGE. ALBERT Glt.EF:::'Hl . DUNCAN, EDWARD K. HALL.

. ·. CHARLES J. HUBBARD. JOHN MASON LITTLiil. GEORGE F. MEAD.

DANIEL D. MORSS. JAMES J. PHELAN. RUSSELL ROBB. CHARLES STEW AR'l'. ALEXANDER WHITESIDI'l. SYDNEY R. WRIGHTINGTON.

Mr: LODGE presented petitions of sundry citizens of Fitch· burg, New Bedford, Gardner, Provincetown, and Middleboro, all in the State of Massachusetts, praying for national prohibi­tion. which were referred to the Committee on the Judiciary.

He also presented memorials of sundry citizens of New Bed­ford, Boston, Lowen, Worcester. Roslindale,' Westport, Matta­poisett, Holyoke, Lawrence. Fall River, Chelmsford, Chicopee, Methuen, Cambridge, Randolph, Dedham, Fairhaven. and Spring­field, all in the State of Massachusetts, remonstrating against niltional prohibition, which were referred to the Committee on the Judiciary. · 1\Ir. HITCHCOCK presented petitions of sundry citizens of Fillmore County, Omaha, and Edgar, all in the State of Ne­braska, praying for the adoption of an amendment to the Con­stitution to prohibit the manufacture, sale, and importation of intoxicating be-verages, which were referred to the Committee on the Judiciary.

1\Ir. PAGE presented a petition of sundry citizens of Plain­field, Vt., praying for the adoption of an amendment to the Con­stitution to prohibit the manufacture, sale, and importation of intoxicatiRg beverages, which was .referred to the Committee on the Judiciary.

Mr. liENYON presented memorials o:f sundry citizens of Iowa, remonstrating against the adoption of an amendment to the Constitution to prohibit the manufacture, sale, and importation of intoxicating beYerages, which were referred to the Commit­tee on the Judiciary.

He also presented petitions of sundry citizens of Iowa pray­ing for the adoption of a.n amendment to the Constitution to prohibit the manufacture. sale, and importation of intoxicating beverages, which were referred to the Committee oh the Judi­ciary.

He also presented memorials of sundry citizens of Iowa re­monstrating against the repeal of the law granting comp~nsa­tory time privilege for Sunday services performed by emplovees of the Post Office Department, which were referred to the Com­mittee on Post Offices and Post Roads.

He also presented a petition of sundry citizens of Iowa, pray­ing for FeL.eral inter\ention in an effort to settle the difficulties between miners and operators in the State of Colorado which was referred to the Committee on Education and Labor. '

1\Ir. KERN presented petitions of sundry citizens of Warren County, Laporte, and Indianapolis. all in the State of Indiana praying for the adoption of an amendment to the Constitutio~ to prohibit the manufacture, sale, and impc:tation of intoxicat­ing beverages, which were referred to the Committee on the Judiciary.

He also presented memorials of sundry citizens of Indian­apolis, Clinton, Anderson, Fort Wnyne, and _Terre Haute, all in the Stnte of Indiana. remonstrating against the adoption of an amendment to the Constitution to prohibit the masu:acture, sale, and importation of intoxicating beverages, which were re­ferred to the Committee on the Judiciary.

Mr. CRAWFORD presented a petition of sundry citizens of Parker, S. Dak., praying for the adoption of an amendment to the Constitution to prohibit_ the mnnufacture, sale, and importa­tion of intoxicating beverages, which was referred to the Com­mittee on the Judiciary. ·

Mr. GALLINGER presented a petition of the 1\Ien's Club of Grace Church, of Manchester, N. H .. praying for the enactment of legislation to promote the welfare of American seamen in the merchant rna rine, which was ordered to lie .on the table.

He al~ presented a petition of Local Branch No. 3, National Association of United States CiYil Service Employees, of Ports­mouth, N. H.; praying for the enactment of legislation grnnting leaves of absence to per diem clerks and other employees in the na YY yards of the country, which was ordered to He on the table.

1\fr. JAMES presented a. petition of sundry citizens of the _state o~ ·-Ken~ucky, pmying ~OJ.' the ena_ctment of ~egislation prC)-

9344 CONGRESSIONAL RECORD-SENATE. 1IAY 28,

viding . for the building annually by the Government of two• battleships. which was ordered to lie on the t:-~ble.

Mr. SMITH of Maryland presented petitions of sundry cit­izens of lloynl Oak. Mount Rainfer, and Travilah, all in the Stnte of .Maryland, praying for the adoption of an amendment to the Constitution to prohlbit the manufacture, snle. and im­portation of intoxicating beverages, which were referred to the Committee on the Judiciary. ·

He also presented memorials of sundry citizens of Baltimore. Md .. remonstrating ngninst the adoption of an amendment to the Constitution to prohibit the manufacture, sale, nnd importa­tion of intoxicating be•erages, which were referred to the Com­mittee on the Judiciary.

He also presented a petition of the Woman's Chri tinn Tem­penmce Vnion of Washington .. D. C .. praying for the enactment of legjslation to pr'o,·ide for Federal censorship of motion pic­tures, whlch was referred to the Committee on Education and Labor.

:Mr. SHIVELY presented a petition of Ralph N. Smith, Thomas Brown, M. A. Chase, and sun{lry other citizens of Lnporte, Ind., praying for the adoption of an amendment to the Constitution to prohibit the manufacture, sale, and iJ;Uporta­tion of intoxicnting be•erages, whlch was referred to the Com­mittee on the Judiciary.

He also presented a memorial of WiUinm Haley, Charles T. Se!lL'S, William Sears. and sundry other citizens of New Alb:my. Jnrl .. remonstrating against the adoption of an amend.ment to the Constitution to (lrobibit the manufacture. snle, and importa­tion of into:xicntinJr beYerages, which was referred to the Com­mittee on the Judiciary.

He nlso presented a petitio:n of Local Lodge No. 465. Inter­national Brotherhood of .:\1aintennnce-of-Way Employees of the Cincinnnti. HamjJton & D<tyton Rnilwny Co .. of Connersville, Ind , praying for the enactJ.Tient of legislation to promote the safety of employees and pnssen~ers on railronds engaged in interstate or foreign commerce, which was referred to the Com­mittee on InterstMe Commerce.

l\Ir. LEE of ~laryland present€'d petitions of sundry citizens of Uaryhmd. praying for the adopti{)n of an amendment to the Constitution to prohibit the manufacture, sale, and importation of intoxicating beverages, which were referred to the Committee on the Judiciary.

Mr. MYERS presented petitions of the Christian Endeavor Society of·the Presbyterian Church of Oliver Gulch. Mont., an{l of sundry citizens of Kalispell. :Uont., praying for national pro­ffibition. which were referred to .the Committee on the Judiciary.

l\lr. POL'IDRXTEH presented a memorinl of Local Union ~o. 25S. United Mine Worl\ers of America. of Roslyn. Wash .. remon­strating against existing conditions in tbe mining districts of Colorndo. which was referred to the Committee on Education ancl Labor.

Senator's ::tssertions and deductions. In reply I have a letter from the Secretary, which I think it would not be inappropriate to read. If it ls considered objectionable to read a communi­cation of this character from a Cabinet officer criticizing a Sena­tor's statement made in debRte, ·I wiU not rend it, but merely use the information conveyed in the communication.

Mr. S~lO<J'r. I certainly have no objection. becau~>e every figure that t quoted to the Senate in that statement is quoted from the Department of Commerce. I shnll be pleased indeed if the Senator win have the lettel' read, and then I will n~k that the report of the Department of Commerce be put in the RECORD.

Mr. STO~~- I did not ask particularly whether it would be pleasing or displeasing to th.~ Senator from Utuh, but whether it would be proper as a senatorial proceeding to re d the 1 tt r. H no one objects. I wiU read it. It is dated M:.ly 25, 1014. The Secretary of Commerce says :

UY DtM.n SEN;"-TOU: I bave. thanks to your kind favor o.r the 22d, l'ead with some mterest, not unmixed with amusement- .

I hope it is not offen ive to the· Senator from Utah that the Secretary should be amu ed.

hlr. S:\IOOT. Not in the least. Mr. STO~"E (reading)-

not unmixed witll amu~;rmrnt, the outnuttlng of Srn<>tor ~hron1· ~~~ re­ported In the CO~GRESSIO"NAL REcono for May 20, 1914, page 8874 to which YOll ldnd1y <'ali my attention. '

l\fy first su~g-estion Is that to sele<'t any single month ns indicating anything- sprcial is so absurd a proceeding as to need no rrp!y. l'tctty much anything <.>ould be shown by such a course as that. Such a slate· ment taken by ltSt'lf alone amounts to nothing at all.

Senator S:uooT dwells upon "a loss in exports"~ The Secretary is quoting from the Senator now-

"a loss in exports of $37,434,586 in a single month." This was the month of April. We do not know fully yet what the exports were that thus fell off.

We do. bowevet•, know that $11>.000.000 of them. mot•r than half, wer·e in E-Xports of raw cotton. cotton!l('{'d oil, and fooostnffs, in<'luding ml:'nt. Trese are not relatPd to tbe tariff at all. Nor do we know yet in wbat 11nes of ,goods the incren, ed imports from A prll are. Nothln~ <'an be Ru:.rgp_stpd as to tariff effects from these April figures tlll the facts are known. which is not yrt the cac:f'.

It is amusing, howpver, and instructive, in view of the outbrP:tk you hring to my attention, to call to your notice the following words of Senator S~100T-

Now, the Secretary ngain quotes from the Senator-" The imports ex<'t>Pded exports In April by $1 0,271.Ri2. Tbuq we

a:re coming to a condition which has existed under former Democl'/ltlc tnrifi' laws, whee distre!<s everywhere prevailed."

'That is whnt the Senntor said. Undoubtedly thP main purpose the Seantor had in rising on that occnsion wns to make the ob­sen·ntlon which nppenrs in the closing paragraph I hay~ just quoted. with several others of like kind.

The Secretary proceeds to say : Looking back to the last tlme-Thnt is. the last time before April-He also presentf•d petitions of sundry citizens of the State of

Washington, pra,'l'ing for nationnl prohibition, which were re- Looking back to the last time when the imports-ferred to the Committee on the JudicL·uy. I want the attention of the Senator from Utah when be is . He also presented memorials of sundry citizens of Tacoma, through with the conversation he is holding. for I 11m rectding this Seattle. WnJia WaJJa. Spokane. and ''ancou>er, all in the State e:-::pecially for his benefit. I want to rub this on his sore spots of Wnshington, remonstrating against nntional prohibition, with cayenne ointment. hoping that in spite of the pain it mny which were referred to the Committee on the Judiciary. ha,·e some good effect on the intellectual nnd moral obtuseness

nn;>oRTS AND EXPO.RTS. be displays whenever he undertakes to discuss the tariff. I read again :

Mr. ST0)1E. Mr. President. I ask leave of the Senate to Looking bnc:k to the last time when imports exceeded exports, we occupy n few moments of time. l desire to call attention to discover thnt 1t was while tile I'ayne-Aldricb-sowe remnrk:;; made a few days since by the senior Senator from I am not content with that designation; I prefer to name it Utuh [l\lr. SMOOT] and to mHke some remark cf my own by way the Payne-Aldl:ich-Srnoot law, for that much is due the Senator of a response. and this I shall do for the especial benefit of the from Utnh-Senator from Ctah. tl' e Pa:me-Aldrlch law was in effect that this event took place. The

On tbe 20th of the present month the ~n:ltor from Utah took trllde tinJ.ance in oUl' favor dw.·ing the 10 months ending with April, an inopportune oC'casion to make a tu lift' speech. bnsing his re- l!HO-murks on a Go•ernment report showing imports and exports for During the period when the Smoot-Aldrich-Payne law was in the month of April last. I did not bear the Senator's Slleech. effect-not being present at tbe time. I read his remnrks. however. in tr e trade balan<'e in our favor during the 10 months ending with April, the RECORD the following day, alwnys being interested in his uno. was $170,931,416, or over $300.000,000 less than Qming the 10 fulmiuations. 'They will be found on pages 8874 and 8875 of the montbs ending with the present April. fucocn. Let the full force of that be understood. During the first 10

After reacUng this address by the Senator-- month!:'! of the operation of the t~rifi' law which befll's the names Mr. S:JIOOT. Not an ~ddl·ess, a stMement. of Smoot, Aldrich. and Payne the bal:mce of trade in our fnvor Mr. STOXE. Well, after reading the statement of the SPna- was $300.000.000 IE!ss thnn it was during the 10 months ending

tor from Utah, and not having immediate facilities at haud nor with April, 1914-tha April which looks so dark to the Senator time at my diS}lOSnl to e:xnmine into the accurHcy of the Sene~- from Utah. tor's compilations and assertions. I wrote n note to the Secretary Mr. JA.MES. That was under the existing law. of Commerce, who has ready and nbundnnt facilities for ex.'lm- Mr. STO:\"E. Yfs; ns my friend from Keutncky sRys, "that ining into statistical dnta, and asked him to examine the state- wns under the existing law." It was tmder tbe Underwood­ment of the Sen11tor and furnish me with information with re-I Simmons _law that this larger trade bal.ance occurred-this spect to the matter covered by the Senntot·'s speech, with any Democratic law whlch tbe Senator- from Utah strives so hard comparative data that might be pertinent as bearing on the but vainly to discredit.

1914. ·coNGRESSIONAL= RE-CORD-- SENATE. '9345 I proceed· with the Secretary's tetter:·

la:ot only so, but dudng the first year of tbe Payne-Aldrich tarur

The Smoot-Aldrich-Payne law-five months showed the imporb3 in excess of the exports, and one of these months, namely, March, 1910, showed an excess of imports of $19,341,578.

Mr. SMOOT. 1\Ir. President--Mr. STONE. Now, wait a moment. I want this to sink in

deep on the Senator's consciousness: And one of these months­Says Secretary Redfield-

namely, March, 1910, showed an excess of imports of $19,341,578-0r nearly twice as much as the shortage, so called, occurring

in the month of April, 1914, about which the Senator uttered such tenrful, albeit vociferous, lamentations. '

1\Ir. SUOO'.r. Not half as much, instead of twice as much. 1\lr. STONE. Here is what the Senator said: The imports exceeded exports in April by $10,271,872.

That is what the Senator said. I am reading from his own speech. The Senator may not be correct in his statement; that is a possibility always when he is discussing the tariff. When he is talking about post offices and other things he gets nearer to dependable facts.

Mr. SMOOT. I believe the Senator wants to be correct in his statements.

1\Ir. STONE. The Senator can have his chance; out I want to rub th!s on now. I want the Senator to be still while I apply this remedy to his disease.

Mr. S~IOOT. I thought the Senator wanted to state the facts regarding a statement which I have made.

l\fr. STONE. I do. I have read absolutely word for word whnt appears in the Senator's speech.

Mr. S~IOOT. I wiU rend it afterwards, 1\Ir. President. Mr. STONEl. Well, read it afterwards. The Secretary fur­

ther says: Any st..'ltement as to the ell'ects of a tarill' based upon figures for six

or eight months is necessarily illusive. The Secretary does not seek to take advantage of what the

figures show for fil·e months of the first year of the Smoot bill. He says such figures are more or less illusive and unre­liable as a bHsis for sound calculation, and the Senator from Utah knows that, too, though he did not say it the other day. H~ would have said it if he had been back to 1010 and talking abont the excess of imports over exports during five months of that year, but he happened to be talking about this Democratic bill, and that was a horse of another color. Hence be did not remember last week that the exports and imports for one month were not a oound basis upon which to make an argument as to the continuing effects of a tariff measure. It did not suit his purpose to remember it at that time.

A-?Y statement as to the effects of a tariff based upon figures for six or c1ght months-

Says the Secretary-Is necessarily illusive, but if the present tariff is to be judged that way and condemned because of the excess of imports in one month since its passage, what shall be said of the Payne law-

Or, rather, I say, of the Smoot law-when in a like period afte1· it came into effect thet·e were three months in which the imports exceeded exports, and in one of these that excess was nearly double that about which so much is now said.

I see the Senator is putting on a serious look and well he might. [Laughter.] I know it hurts. I am applying this caus­tic, however, with as great tenderness as possible. I really do not mean to be cruel.

Mr. SMOOT. I am sure the Senator is not. • l\fr. STONE. But it is necessary some_times to burn a little.

Now, again, the Secretary says: The criticism made of the present law on the basis of April figures

Js either good or bad--That is, it is justified or it is not-If It is good, then by so much .the more is the Payne law­The Smoot law-

condemned for showing t·esults of the same charactet• but to a far greater extent. . '

Is not that so? I am asking the Senator from Utah if that is ~ot so? If you condemn the Underwood law for an excess of Imports over exports for one month since it came into effect and if for the same corresponding period of time after th~ Smoot law went into effect there were three months of such excess, should you not likewise condemn that law?

The Secretary says : I! the ~riticlsm is bad, as I think it is, it falls by Its own utterance. "You m1~bt fairly olfset Senator SMOOT's remarks about "one ship-

ment of tm plate of 12,000 cases -landed in the port of New York" by

t~~s~ words from ·Bradstreet's for May 23, volume · 42; No. 1873, pllge

" The Standard Oil Co. has awarded a contt·act for GOO 000 base boxes, or 30.000 tons, of tin plate to the American Sheet & 1nn Plat~ Co. The order was taken in active competition with Welsh mills."

In the present law we reduced the · duty on tin plate from the equivalent ad valorem of about 25 per cent to 15 per cent. and the Senator, by calling attention to the fact that 12.000 cases of tin had come into New York, sought to create the im­pression and send it broadcast that the tin industry could not compete with foreign mills, and yet here is a statement from a source so authoritath·e that it will not be questioned that the enormously large contract referred to was gi>en to mt American concern in open competiUon with foreign mills.

Mr. President, I think this communication from the Secre­tary _demolishes absolutely the bad impression, the wrong im­pressiOn, the remarks of the Senator from Utah were intended to convey to the public.

1\Ir. GALLINGER. Mr. President, may I ask the Senator a • question?

The VICE PRESIDENT. Does the Senator from Missouri yield to the Senator from New Hampshire?

1\Ir. S"l:'ONE. Yes. .Mr. GALLINGER. Is it or is it not a fact that during the

six months of the present tariff law 33,000,000 pounds of tin plat~ ba ve come into this country as against 3,000,000 pounds previOusly for the same length of time?

Mr. STONE. Does the Senator assert that to be absolutelT the fact as to the amounts stated?

Mr. GALLINGER. I nssert it as a fact, as it comes to me from what I conceive to be an entirely reliable source.

Mr. STONE. The Senator is not in the habit of making state. ments that are not very well authenticated, and . I am not prepared at this moment to say whether he is correct as to his figures or not. It may be that more came in during the first six months of the present Jaw than came in during the first six months of the Smoot law. Pethaps, as the Senatot' says, during the last--

1.\Ir. GALLINGER. No; ten times as much-33,000,000 poumls as against 3.000,000 pounds. ·

Mr. STONE. Possibly ten times as much; but the point I make is that if the American tin-plate manufacturer:J can suc­cessfully compete with foreign mills under present duties, I see no reason why Ameri-can manufacturers usinu tin plate as well as American ultimate consumers, should not bRve the benefit of this competition and of consequent l6wer prices. We have ar­gued that question here over and over again, and I do not care to go oYer it again at thi.s time. 1\Iy present purpose is simply to put against what the Senator from Utah said the other day­not wishing it to go uncontradicted-the statement which I have read from Secretary ReflfiPld.

And now, for the benefit of the Senator from Utah also the Senator from North Dakota [ l\Ir. McCuMBER], and for' the other side of the Chamber generally, I want to read a few lines from a letter which I receiYed the other day from a prominent farmer in my State, 1\Ir. B. B. Adams, of Republic, l\1o. This letter was written in response to some letters I sent out into the State making inquiry of the people along the lines of indus­trial conditions in our Commonwealth, since so much is being said here regarding existing conditions. Senators ha>e a habii:. some of them, of getting up here from time to time anu launch­ing attacks with bold assertions, and they <lo it with such con­fidence and with such long faces and upward eye rollings that it is a little hard to stand up in their presence and on the s1mr of the moment contradict what they say. I have been trying to load up a little on this subject. [LanglJter.] Here is one sam­ple of the ammunition I ha>e been able to gather--

1\!r. OLIVER l\lr. President-- · The VICE PRESIDE~T. Does the Senator from 1\Iissomi

yield to the Senator from Pennsylrania? 1\Ir. STOSE. Always-with pleasure. Mr. OLIVER. l\Ir. President, I hesitate to break in npon

this enlightening discourse of the Senator from Missouri· but in the interest of the orderly conduct of the business of th~ Sen~ ate, I feel that I must ask that the regular order be proceeded with.

l\1r. STOXE. Well. the Senator from Utah desires to be heard, and therefore I suppose the Senator from Penns:vl>anin. does not wish now to urge the regular order so much. ~

1\Ir. OLIVER. .Mr. President, I <lo not think the Senator from Missouri lias any right to brea~ into the regular order of the business of the Senate in this way. He can talk upon . this subject at the proper time; but this is not the proper time.

Mr. JAMES. Nobody objected to the Senatot· from Utah pro­ceeding the other day.

1\fr. STONE. How did the Senator from Utah break in?

(

9346 CONGRESSIONAL RECORD-SENATR MAY 28,

.Mr. S:\fOOT. I asked unanimous consent of the Senate. l!r. STOXE. So did I. :tir. OLIVER. I beg pardon of the Senator; he ask€d for

no unanimous consent. Mr. STOXE. I ~aid In the beginning thnt I wished by the

eonf;ent of tbe Sennte to submit some remnrks. Mr. OLI\'ER. I in~ist on the regubtr order. Mr. President. Mr. J..<UIES. I should like to ttsk the Senator from Penn·

sylvania if. in view of the- fact thnt the Senntor from Utah [Mr. SMooT] made a speech on this subject by unanimous eon~ent, in gi·anting which this side pnrticipated. would the Senntor now call for the reg:uL1r order and shut off the Senntnr from Missouri. who is replying to the speech of the Senator from Vtah. unc'ler such eircn-rustnnces? Is that the Idea of fn irne~s the Senator from Pennsylvania would invoke in this Chamber?

Mr. OLIVER. There can be no objection to the Senator • from .Mist::om·i proceeding at the proper time with his remarks.

Mr. STO. ' E. Yery wPll: I will proceed. 1\lr. S~IOOT. Mr. President, I sincerely trust that the Sen­

ntor from Pennsylvania wiJJ withdraw his rPquest that the reg:ular order he proceeded with. I should like to hear the Senntor from Missouri conclude, and I think that he ought to be allowed to conclude. ·

1\Ir. OLIVER. 1\lr. President, I thought the Senator from Missouri was through. I haYe listened to bls remarks, but he is now starting out upon a new line, and we do not know where he win lead ns.

l\lr. STOXE. No; tbe- Senator does not know where I nm going to ]('.ad him; ~h<lt is the trouble with bim. [Laughter.) ~'he Senator does not want to be led. IIe ls like some other erentures that I know of. distinguil'hed In my St.Me; you can le-Hd them 'to water, but you can not mnke them drink; yon c~m tell the Senntor the trutb.lmt be will not flbf;orb it. [La·ugbter.)

hlr. OLJYER. Mr. President. I am willing to henr the truth nt all times, anrl I am always amused when listening t<> tbe Senlltor from Missouri; but just now I hnppen to be looking forward to saying something myself on another subject. and I should lik(' tbe Seu<ltor to get · through ln some. -reasonable time:> I withdraw my point of order. Mr. President.

l\lr. STOXE. Ob. I thought the Senator would withdraw it in llue time and on proper solicitntion from ngrl:'enble sources.

The letter I was going to read from this very prominent and le::ding farmer in my State is as follows. Let me rend now from l\Ir. Adams's letter:

Public sentiment here is strongly behind Wilson. Of course4 there au·e knockei·s-

Yes ; knockers there, as there are here- . Ot course, there are knockers ; we expect that; but the thinking

business people are all p leased w1th the tar1ff and the bank bill, and are uebfnd \\'ilson in Mexico, too. Now, Us ten : Wool is selling at :!1 cents per ponnd, the hlghest price In 10 years; frying chickens ~r) cents, old hens 13 cents, llo~ 8 eents on foot, and an ordinary yeal·lln~t calf brings $40 and up; horses nod mules almost out of slgbt. Manu· factured goods are lower. Clothing from one-fourth to one-third : ha1·dware do'l\-n some. and sugar . ·1.50 a llundred pounds-It has been $6.50 and ~7 per hundred for 8 or 10 years. Ttmt looks good. A mnn can sell a 200-pound bog for $Hi, buy a hunllred pounds of sugar, and have $1 U)O left; und!'r the Republiean tariff he could only have $9 left. Some difference ; see?

Mr. President, so as not to trespass further upon the pa­tience and good nature of the Senator from Pennsylvania. I will conclude my obsPrvations this morning with this letter. nsldng the Senator from Utah especinlly to give prayerful nt­teution to both the masterly communications I have submitted. They ought to help him.

:Ur. S~fOOT. Mr. President, I did not think the short state­ment I made would touch the tender nenes of the Secretary of Commerce and the distinguished ~en.ator from 1\lissonri so keenly and wound so deeply. I mnde no comments in present­ing the figures to speak of, and I wish to sny now that I defy the Secretill'Y of Commerce and I defy the Senator from Mis­souri to say thnt there is one assertion or one figure in the statement tbM Is incorrect.

I have here the statement of the Department of Commerce from which I quoted e,·ery fignre. and I say now thnt there is not one figure th<tt I quotec'l thnt is not fmmd in and based upon the report of the Devn rtment of Commerce-not one. I call the attention of the Senator to the very opening statement thnt I made:

1\fr. President, the tar!t'l' law bas been 1n force now some six months. and It can now be judged as to wbat the future t·esult of tbe workings of that bill will be as atfectln~ our comm!'I'Ce.

I am in t·ecelpt of tbe repm~t from the Bu1·eau of Foreign and Domes­tie Comme1·ce. Depa1·tment of CommPr<:e. sbowlng the total valut>s o! imports and exports of the United States fo1· the month of Ap1·11, 1914. . Mr. President, I knew well wbnt the importntions and expor­tations were for the lnst 10 months. They are found in this same report. But how often lla Ye t11e Senators upon the other

side of the Chamber. when attention hns heen cnl1ed In tlle past to tile working of the bHl. stwted that there bnd not yet been time to j~1dge of the results of the Democratic tnrifl' bill; and I agreed wHb them. Order·s could not be placed at once; goods conJd not be made at once In a foreig:n country; it tal;::es time for the goods to nrrh·e In this country: nnd it wns unfair to judge of the workings of the tariff bill until time bad elapsed. I particularly stHted that the tlg:nres I gn,·e were for the month of April; and. Mr. Pr('sident. is it any better for the month of l\lay? Are not our importations so far this month exceeding the Rmount of importutions a year ago to n greater extent than the impor·tations of April did a year ago lnst April?

I received but thls morning th.e daily statement of the United States Treasury. I find that in the cnse of the l'P.ceipts to the Gm·ernment from ~nstoms during this month, up to dnte, the Rmotmt collected upon goods Imported Jnta tllis . conntry is $17,742.117.43. In the case of the corre!oiponding month Hnd dnte of the fiscnl year 1913. n year Rt!:O. with a rate cousirlernbly ex· ceeding the present rate-as announced by the Senutor having the bil1 in charge, 26 per cent ad valorem as again ' t 42 per cent-we find that the reYenue collectec'l at tb~tt time for that particular month was $16.920.542.0. . There has b~o collected for the Treasury of the United States for thP present month, as flgainst a year ngo. $82T.575.35 more up until the 2<1tb of ~Jny, 1914. Think of the mill ions of dollars ruor·e tba t tun·e been im· ported into this country at the present rate to bring about that condition.

1\lr. REED. Mr. President, will the Senator l}ermit me to ask him a question?

Mr. S:\IOOT. Certainly, 1\Ir. President . .Mr. REED. Does the .Senator think the goods are being sold

any cheaper? 1\Ir. SMOOT. Mr. President, in my in>em-igation I ba,·e failed

to find a case where they h:we been sold cbeH per. 1\lr. REED. Then. if they nre not sold Hny cheaper, why is

it that they should come in at all, if the prices remain just the same as thev did before? · ~Ir. S)100T. Ob, :\Jr. President, th.1t Qtlel':tlon bas been asked anc'l answered nt least a hundred times in the Senate; but I will answer the Senator once more.

.Mr. REED. I should like to bear it nnswered once. Mr. S~IOOT. I will gladly do so if I can. nnd I hope it will

be to the sntisfnction of the Senator from llissouri; but if not 1 can not help it.

The goods thnt are imported into this country are imported at a cost sUghtJr below the goocls that are made in tl.lis eountry­just enongh below to secure the order. When they a rri n~. tl.ley are in the bands of the importer. 'Ibe difference l>et\Yeen the cost In a foreign country nnd in this. aud the difference between the price for which the importer sells the )'!Oods and the pri f'e which the ultimnte consnmer pnys is dh·irtt->d. first. with the f()f· eign manufactm·er; spcond. with the impo1·ter; third. wi th the wholesalers and johhers of this country: nnd. fourth. with the retailer. The customer at the enc'l reteives no benetit.

Take, for instnnce. glm·es. A difference of $1 a dozen in the cost of- gloYes woulc'l mean a great ad,·aotage to nn importer; it would. in some cases. mean a fair profit. But do you think the retailer is going to sell R $2 p;-tir of glcrn~s for any less tllnn be did before? TbR t b:1 s been demonstrated sa many times that I thought everybody understood it.

Ry the way .• Ir. Prel'irlent. at this particular time I wish to disav-ow any of the credit thnt the senior Senutor from l\ti . souri [:\1r. SToNEl unflertake to ~:1 scribf' to rue for the pas~1~e of the Pnyue-Alrlrich bill. I had not the hill in charg:e; but I wnnt to acknowled{!e that I die'! eYerything in my power to see that it did pass, humble RS that may have been.

1\1r. REED. Mr. Prt> ic'lent--'l'he VICE PRESJDEXT. Does the Senator from Utah yield

to the Senator from Missouri? 1\lr. S.~IOOT. I yield. Ur. REED. I simply wish to ask the Senator if there nre

two sources of SUflply inste11d of one. and If one of those som·c0s of supply. the foreign source. nugrnents so tl.lnt th€re He more goods actually brought into the country, doe not that ine\'itabiy produce a reduction?

l\lr. s::uoorr. To the importer, the jobber, and to the retailer, yes; bot not to the consumer.

Mr. llEED. If the jobher--1\lr. S)IOOT. 1\lr. Pre:o;ident. r b:tve not tbe time now to go

into the details of this question further, becuuse---Mr. REED. Very w('ll. 1\lr. S~100T. The Senator from PennsylvRnia r~rr. 0LTV1tR]

is wniting to proeeed with his sr1eech. aurl tbeN>fore I do not want to take the t1rue of the Sennte aoy longer than necessary. I simply wish to say to the Senator f1·oru Missouri and to the

191 !. CONGRESSIONAL RECORD-SENATE. 9347 Senate that from the same report from which I quoted I now ·want to qu-ote the excess of exports for the 10 months endjng the fi en! year 1!)12-13, and for the year 1914. Let them speak for themselves. I care not what the Secretary of Commerce mny say. These are the figures, and these figures tell the truth.

1\lr. President, the excess of exports for the 10 months ending ApJ·i!, Hn2, was $il24.112.35S. For 1U13, $559.833,167. Now, mark you, the excE'ss of exports for 1914 was but $474.371,465.

I care uot what the Secretary of Commerce may ha,·e written to the Sen a tor from Missouri. Those figures emanated from his office. Tbey :ue the figures showing the customs receipts of the Government of the United States, and also showing the amount of exports as reported by the Department of Commerce.

In order tllat the Senator from Missouri may know exactly whn t I did sny as to the excess of exports, I read from my remarks of l\Iay 20:

The rPturns of the Department of Commerce show that the merchan­dise exports for Api"il of this yeat· amounted to $162 ... 368,~52, as com­pal·ed with $1 99.813,4~8 for the corresponding ~onth of last }:ear. un~~~· n protective ta1·ifl. This is, a-s I stated, a loss m exports of $37,43-!,<>86 ln a siLgle month.

'!'hat is what I stated, and that is exactly what the RwoBD 11buws, and that is exactly what is shown by the sta tem.ent I hold in my hnnd from the Department of Commerce.

M1·. STO:'\E. Does the Senator deny that he used the words I read from his speech ?

Mr. KMOOT. I think the Senator, in quoting the words, ap­plled the $10.000,000 to another subject matter entirely. and compnred it with another subject matter-not the Secretary of Commerce-that I do not say, but the Senator, as I understood IUm.

Mr. STO~'"E. The Secretary of Commerce shows that over $Hl.OOO,OOO of it was for foodstuffs, ruw cotton, and cotton seed. That bas nothing whatever to do with the tariff.

~lr. S:\lOOT. Why, .Mr. President, cottonseed oil and food­stuffs and cotton are always exported every year; the percentage of decrease in these articles no doubt is about the sarue as all other goods exported. We all know there would be a less exportation of cotton if there was such a falling off in exports as was t.be case, but it was unhersnl in all lines of exportations.

Mr. Pr·esident. I do not wisb to detain the SenMe any longer. I simply wish to say to the Senator and to the SenMe that there is no~ a single statement mnde by me on the 20th of 1\lay that can be successfully contradicted. l\Iy statements are true: and, if the Senate will remember. I confined my elf on that day to just whu.t the figures show. I did not go into any elabornte rliscus,~ion. I was not on the floor more than five minutes; but I thought wbnt I then ~aid ought to go into the RECORD, nnd for that purpose I took the floor.

1\lr. SDL\IONS. 1\lr. Presjdent. I should like to ask the in­dulgence of the Senate, not for the purpose of mnking any argu­ment supplementary to the •ery admirable stiltement made by the Senlltor from ~Iissouri [:\lr. STONEl, but sjmply in order to put iuto tbe RECORD (';()IDe figures with reference to our im­ports nntl exports during the past nine months. as compared with the same nine months of lRst yenr. and during the month of 1\lHrch of this yenr. as compnred with the month of :\lnrch of 1ast yenr. I shall not attempt Rny discnssion. I expected to do tbnt to-morrow morning. but the Senator from l\Iissouri [:.\lr. STONEl has anticipated me, and I am very glad that he has done so.

J\lr. President. \nth reference to the increase of imports :mil f1.lling off' of exports for the month of April. referred to by tbt:> S~nntor from titnh f~lr. RMOOTl fl few dnys ngo. during my ah!'l.ence on nrcouot of illness. I thinl{ it will be ndmitted. nnd it not ndmitted the officinl statistics will flemonstr::~te the fRet. tl.nt the incrense in imports for thnt month wns very lnrgely tlte r·esn:t of the incrensed imports of food products. and that tl1e fn I ling off in exports in thRt month wns likewise rlne to th€' do4crense in exports of certnin rnw products. including food .rroflucts. rnw cotton. cottonseed oil, and so forth.

It is a fact thnt for the In~ 16 yenrs there h::~s been a Mnstn nt i ncr en se in our i mportn tions of food prortucts from 1orPign countries. This has heen due to the fact thnt in recent years the inrre11se in our foofl produrtion hns not kept pare with the incrense in our populntion nnrt the increased demand for thoRe prodncts for domestic consumption.

I want to cnll the nttentiou of the Ren:ltor from Utah, if the Senator from l\1ns1'lnchusetts [:\lr. LoooEt will permit me to ha,·e the nttention of the Rt:>nntor from Utah--

Mr. OLIYER 1\fr. President--The VICE PRESIDE:'\T. Does the Senator from North

Carolina yield to the- Senator from Pennsylvania 1

Mr. SIIDIO~S. It is going to take but a few minutes for me to complete my statement.

l\lr. OLIVER. I h:we no ubjecti(}n to the Senntor putting in all the figures be wishes. but I do object to further discussion of this subject nt this time.

Mr. SI:\DIO~S. The time for the Senator to hnve mnde thnt objection was when I asked consent thnt I might he allowed to make this statement. He was silent then, and I think it comes--

1\lr. OLIVER. I call for the regular order. Mr. SDD10NS. It comes with bad grace for tl1e Senntor to

interrupt me in the mifld!e of a sentence to mnke this objection. 1\lr. OLIVER. The Senntor snid be did not intend to diSf'uss

the question, and he is now proceeding to discuss it, an<l I object to the rliscussion of it at this rime.

l\lr. Silll'\10~8- I h:we to stn te facts in ord~r thil t tbe Senate may understand the significance of the figures which I give.

The VICE PRESIDE::\'T. Does the Senator from Pennsyl­varua insist on the regular ordE>r?

Mr. OLIVER I insist on the regular order. Mr. SD.BlOXS. I trust the Senator from Pennsylvania will

permit me to proceed for a few minutes. Mr. OLJV"Ell. I do not ir.siRt on it to the extent of objecting

to the Sen a tor putting in any figures. 1\fr. SDDIO~S. It wm not tnke 10 minutes. l\1r. OLIVER. Ten minutes are too 1 ·uch. and e\en fiye mln·

utes are too much. The discussion never should have taken place at this time.

~~r. SBlliONS. I ask the Senator to permit me to finish Dty statement.

1\Ir. OL~ VER. Well. Mr. President. I ha•e the reputatfon .)t being very ensy, and I withdraw the objection.

l\Ir. SDfllOXS. i\Ir. PresirlP.nt. to show to what extent the ' importntions of food prodncts of this country hnve been increas­ing in recent years. I desire to put in the RECORD the fact th n t in 1898 our imports of food products to this countr;y amounted to only $1!30.000.000. nnd in 1913 our importati'ons of food r1rodncts amounted to $405.000.000. This incrense "-as under Republican t1uiff iflws. In 18DS our export of food products amonnted t6 $500.000.000. and in 1913. 15 years afterwards, it amounteo to onJy $502,000.000. This falling off was under Repub~can tnrit1 laws.

If the Senator from Utah had gone back to the month of Mnrch he would ha -:-e seen that a conrlition existed thnt is very different from that which existed in the month of )_pril. If you confine yourself to a single month in any yenr, unuer any tariff law-by picldng out n particular month, you can show a mark-:!d discrepancy with reference to the imports and tl.te exports of tru1t month as com1•ared with the like month in a iJre\'ions ye:1 r. That would be no inrtictltion of the current of trnde at all. You must take a period extending over se\'erHl months in a year in order to as:!ertain what is th2 indication of trade.

If the Senator had tnken the month of :\Ia;ch, 1913, lle would have found that in thnt month the imports of merchandise nmounted to $155.000.000. in round numbers. nnd to *'-82,000,000 in the month of Mnrch, 1914. He would ha>e fonnd that the exports of merchandise for the month of llarch, 1913, amounted to $18.3.000.000, while the exports for the month of ~lnrch. 1914, amounted. in round numbers, to exactly the s·1me amonnt­$183.000.000. In the month of llarch. WH, our exports were al­most exactly equal to our exports in .:\I~rch. 1913.

Now. take the il:rports for the r1eriod of nine months ending witL March during the last three years. We hn<1 during tbm::e nine months in W12 imports amounting to $1.203.000.000 in ronnd figures. and in l'Hi! amounting to $1.401.000.000. In 1!>13, with tbe Payne-Aldrich In"· in oper;~ti(}n. there wns nn inrre11se in imports from $1.203.00.0.000 to $1..401.000.000 during :hose ui· - ~ months. For 1914. dming those nine mouths the imports ·.ve~·e $1.3!18,000.000. So the imports for the nine months euding in ~Inr~h. 1914. were less than the imports for tbe nine months ending in 1\larch. 1913, when the Payne-AJdrich bill was in opera· tion.

Now, when you come to the exports. you find that during the nine months enfling in l\lnrch, 1912. the exports of merchandise were $1.6SD.OOO.OOO: in 1!)]3, $1.881,000.000; in 1914. for theRe nine month.~. $1.859.000.000. There wns a Yery srunl1 fnlliug off' during the nine .monrhs ending with ~larch. 1914. as com· parPd. with the exports for the nine mouths enning :\!arch. 1913.

Mr. WlLL.lAMS. I sboult1 Uke to nsk the Senator before he takes his seat, were these goods which we iruported in sufficient qunntitie!'I-

1\Jr. OLIVER. :Mr. President, I will .ask the Senator from North Carolina if he has concluded? ,

9348 CONGRESSION-AL RECORD-· SENATE. 1\IAY 28,

Mr. SIMMONS. I have concluded; but I think the Senator ought to have the courtesy to permit the Senator from Mis­sissippi to ask me a question.

1\!r. OLIVER. If the Senntor has concluded, I object to further discussion.

Mr. WILLIAMS. Never mind, I shall not insist. I just wanted to ask the Senator a question before he took his seat.

Mr. SIMMONS. I have not said what I wanted to say, but owing to the impatience of the Senator from Pennsylvania, who seems this morning to be exceedingly desirous to suppress any discussion on this side in reply to what the Senator from Utah said some days ago, I will not consume any further time.

:Mr. OLIVER. The Senator from Pennsylvania is exceedingly patiimt. I do not object to the Senator from North Carolina concluding, but I do object to further discussion here on the part of otheJ' Senators.

Mr. Sil\IMONS. I will not interrupt the Senator further. l\fr. WILLI.Al\IS. I had no idea of discussing anything. I

wanted to ask a question of the Senator from Noi·th Carolina before he took his seat.

l\lr. OLIVER. I supposed the Senator from Mississippi was only coming in with one of his little interludes. We know what that means.

l\1r. WILLI.Al\IS. I will state further that I am heart and soul with the Senator from Pennsylvania, and I hope the example he now sets of discussing the tolls bill and keeping it under discussion, with nothing at any time to interfere, will be adopted by the Senate and followed out.

1\Ir. OLIVER. I should be glad to hear the Senator from Mississippi on one subject--

1\fr. O'GORl\IAN. I ask that the tolls bill be laid before the Senate.

1\Ir. RANSDELL. Before that is done--The VICE PRESIDENT. · The morning business has not been

concluded, and the rec;.uest of the Senator from New York is not in order. We are still on the presentation of petitions and memorials.

1\Ir. O'GORMAN. · I withdraw the request. '.fhere have been so many addresses this morning I assumed that the morning business had been closed.

COEUR D'ALENE INDIAN RESERVATION.

1\Ir. BRADY. On the 26th of l\Iay I introduced a bill appro­priating $100,000 for the construction of a system of wagon roads on the Creur d'Alene Indian Reservation in Idaho.

I have a letter which I have receiYed from the officials of the Plummer highway district stating in very concrete form many good reasons why the bill should be passed.

Every homesteader had to pay the Gove~·nment for his land. There are many Indian allotments in the wstrict, and the In­dians pay no taxes and do no work on the roads, and the home­steaders even have to pay for the right of way and must build the roads over the Indian lands. I am desirous L...at the records may show the great need of the passage of this bill. People have settled in the Plummer district from all 1_1arts of the United States and have taken up homesteads with the intent to build homes and develop the country. These people are among the best class of our citizens and certainly deserve this recognition. I ask that the letter may be printed in the RECORD and referred to the Committee on Indian Affairs.

There being no objection, the letter was referred to the Com­mittee on Indian Affairs and ordered to be printed in the RECORD, as follows :

llon .. TAlliES H. BnADY,

BOARD OF Co;o.BIISSIO~ERS, PLUM:\IER HIGHWAY DISTRICT,

Plummer, Idaho, May 9, 1914.

United States Senate, Washington, D. 0. DEAR SENATOR : Inclosed herewith you will find a certified copy of our

minutes of a special meeting held to-day. 'l'he Coeur d'Alene Re ervation was opened to entry May 2, 1910.

Plummer is virtually tbe center of that reservation. l'eople came here from all over the United States and took up homesteads with the desire to build homes and to develop the country and make it a good place in which to live. Homesteaders. as you know, are poor, ordinal'ily. There was not one mile of road built within miles of the village of Plummer. Thet·e were no roads laiU. out, even. Homesteaders cut trails across the mountains to reach some place whet·e they could secure supplies.

In 1912 we formed a highway distt·ict under the laws of the State. We bonded ourselves for $-!5,000 in the year 1913. We taxed ourselves for the puroose of building roads as heavily as we could, with the result that we will have in taxes this year about $16,000, all told. This indicates \Ve believe. the good faith of the people bet·e. It shows that they are in earnest. that they nt·e taking the Government domain that was raw land and are attempting to change it into farms -and beautiful homes.

Evet·y homesteader had to pay the Govel'llment for his land. The country is sprinkled with Indian allotments. The Indians pay no taxes, do no work on the roads, but, on the contrary, charge the people for a right of wa1, and the people must build over the ·e Indian lands. These roads benefit the Indians as much as they do anyone else. This is a hard country to build roads in. Bt·ush must be cut, stumps must be blown out. and tbe roads graded at great expense. Under the clrcum­iltnnces, we believe that no one would oppose a bill appropriating the

-sum of $100.000 to the Plummer Highway District for the purpose of building a system of roadways. Nothing could do more to build up the country, and in view of the hardships and the sntl'erings that home­steadet·s here have gone through, no one is mot·e entitled to Federal aid.

We would like to impress upon you as forcibly as we can the necessity of the appropriation which we ask. It would simply be a case where the Government would be treating its own homesteaders in a manner in which they deserve to be treated.

We therefore ask and petition you that you use your best effol'ts to have the appropriation we ask for passed at this session of Congre~s.

If there is anything that we can do to help you in the matter, kindly let us know.

Very respectfully,

Attest:

THE PLU:\DIER ITIG'HWAY DISTRICT, WILL!A~r HOGCK.

President Board ot Commissioners. WILLIA~I RIORD.~~. Oommissione1·. MAHLO:-;" E. HAR\'EJY, Oommissionet·.

GEORGE J. MCFADDE~. Sect·ctm·y. REPORTS OF COMMITTEE ON MILITARY AFFAIRS.

l\1r. DU PONT, from the Committee on l\lilitary Affairs, to which were referred the following bills, submitted adver e re­ports thereon . .which were agreed to, and the bills were post­poned indefinitely:

A bill (S. 3869) to amend the military record of John Mor­row (Rept. No. 564); and

A bill (S. 3989) for the relief of Alfred E. Smith (llept. No. 565) .

RESTORATION OF ANNUITIES.

l\1r. LEWIS. In behalf of the Senator from l\linnesota [Mr. CLAPP J I ask that the bill (H. n. 11246) for the restoration of annuities to the Meda wakanton and Wahpakoota (Santee) Sioux Indians, declared forfeited by the net of February 16, 1863. be taken from the calendar and recommitted to the Com­mittee ori Indian Affairs.

The VICE PRESIDENT. Without objection. it is so ordered. MABLE PETERS AND LORETTA PETERS.

Mr. WILLIAMS. From the Committee to Audit and Control the Contingent Expenses of the Senate I report back favorably without amendment Senate resolution 360. I call the attention of the Senntor from Kentucky [111r. JAMES] to the report, and I ask unanimous consent for the present consideration of the reso­lution.

1\lr. SMOOT. I shall not object to this resolution on ac­count of its nature, but I shall object to the consideration of any bills during the morning hour.

l\!r. WILLIAMS. I should not ask for the cons.i·Jeration of any measure that would take much time. This is merely the usual routine matter.

The VICE PRESIDENT. Is there objection to the present consideration of the resolution? ·

There being no objection, the resolution \vas read, considered by unanimous consent, and agreed to, as follows: . Resolved, That the Secretary of the Senate be, and be is hereby, authorized and directPti to nay, out of the contingent fund of the Senate, to Mable l'eters and Loretta Peters, sisters of George Peters, late a messenger to the Committee on Patents, a sum equal to six months' salary, at the rate he was receiving by law at the time or his death, said sum to be considered as including funeral expenses and all other allowances.

SENATOR FROM MARYLAND.

11:{r. KERN. I am directed by the Committee on Privileges and Elections to submit a report (No. 566) relative to the claim of Hon. BLAIR LEE for $2.500 for expenses and counsel fees mnde necessary by the objections made to his taking his sent in the Senate as a Senator from the State of l\Iaryland. Ac-company­ing the report is a resolution, which I ask may be rend and referred to the Committee to Audit and Control the Contingeut Expenses of the Senate.

The VICE PRESIDENT. The resolution will be read. The resolution (S. Res. 379) was rend and referred to the

Committee to Audit and Control the Contingent Expenses of the Senate, as follows:

Resolved, That the sum of $1,500 be paid to BLAin LEEJ out of the contingent fund of the Senate, which payment shall be in full of all demands of the said BLAIR LEE for expenses incurred by him in the pro­ceedings involving the validity of his credentials and his right to a seat in this body.

HON. FRANK P. GLASS.

:Mr. KERN. From the Committee on Privileges and Elections I submit a report (No. 567) relative to the claim presented by Frank P. Glass for 2.889.53 for personal expense and conn el fees in the ·prosecution of his application to be admitted to a seat in the Senate as a Senator from the State of Alnbamn. Accompanying the report is a re olntion, which I a k way be read and referred to the Committee to Audit nnd Control the Contingent Expenses of the Senate.

The VICE PRESIDENT. The resolution will be read.

' '1914. CONGRESSIONAL REGORD-SENATE. 9349 The resolution (S. Res. 330) WfiS read and referrerl to the

Committee to Audit and Control the Contingent Expenses of the Senate. as follows:

R esolt•ed, That tbe sum of $1,500 be- paid to Frank P. Glass out of tbe cont lngrnt fund of trt> Senate. w ._ 4'ch payment s balJ be In full of all oemands of the said Glass for expe!..s~>s incurred by bim in tbe proceed­ings brought to establish his rigb t to a seat in this body under the appointment of the governor of Alabama. ·

PRIBILOF ISLANDS FUR SEAL.

1\fr. THOR~TOX. From the Committee on FiRheries I report back fwvontbly, with an nmendment. the joint resolution ( ~- J. Ites. 150) providing for the taking for purposes of illustration of :10 specimens of Pribilof Islands fur sen! for the collection of the United States !\ntional l\luseum. I nsk unanimous <'Onse"lt tor the present consideration of the joint resolution. for the reason that it is necessary to act promptly, because the Commis­sioner of Fisheries has just left for Alaska, and it will be neces­sary for him to make the collection this summer in order to make it a,-ailnble.

The VICE PRESIDENT. Is there objection to the present consideration of the joint resolution?

Thf're being no objection. the Senate, as in Committee ot the 'Whole, proceeded to cons:der the joint resolution.

The amendment was, in line 4, after the wnrd "taken," to strike out "from" and insert "for," so as to make the joint resolution read :

Resolved, etc., That tbe S~>cretary of Commerce be, and be ls bereby, authorized to bave taken for the colleetlons of th~> United States National Museum a series of spe<'imens of the Pribllof Islands fur seal. to properl~· illustrate the ran~e of variation In both saes at all ages, said colle<'tion not to exceed 30 specimens in number.

The amendment was agrPed to. The joint resolution was reported to the Senate as amended

and the amendment was concurred in. The joint resolution was ordered to be engrossed for a third

reading, read the third time, and passed. BILLS INTRODUCED.

Bills were introduced, read the first time, and, by unanimous consent, .the Fecond time, and referred as follows:

By Mr. SHIVELY: A bill ( S. 5687) granting an increase of pension to George

:Willis; and A bill ( S. 5688) granting a pension to Eliza L. Johnsonbough

'(with accompanying papers); to the Committee on Pensious. . By Mr. \ lLLlA...\lt-\:

A bill ( S. 5689) for the relief of Alice Petrie Watkins. Charles Petrie. and the heirs of Eva Petrie Hamilton, or their personal representati>es (with accompanying paper); to the Committee en Claims.

By ' :.\lr. SMOOT: A bill ( S. 5690) granting an increase of pension to Charles

Brink (with accompanying papers); to the Committee on Pen­sions.

By ~1r. LANE: A bill ( S_ 5691) granting an increase OI vension lO Gevfi;,d W.

SulliYan (with accompanying papers); to the Committee on Pensions.

By ;\lr. BRYAN (for ~r. FLETCHER) :

A bill (S. 5692) granting an increase ot J:K!.Uti!Uu to Diary .H. J"enks; to the Committee on Pensions.

By Mr. l\IARTI~ of Virginia: A bill ( S. 5693) to prodde fo-r the promotion of Pny Director

William W. Galt, United States Navy, to the r::mk of rear admiral in the Pny Corps of the Na ,-y upon his retirement from the serYice: to the Committee on Naval Affairs.

By Mr. BRADY: A bi II ( S. 5694) J?;ranting an increase of pension to George .M.

Getts; to the Committee on Pensions. By !\Jr. S~HTH of hlnryh:md: A bill ( S. 56f)5) for the relief of the :Southern Tran8pOt·tatlon

Co. (with nceompanying pnpers); to the Committee on Claims. By :.\lr. CHA:\IBF.RLATN: A bill (S. 5G9U) granting n pension to Andrew J. Mills (with

accompanying papers) ; to . the Committee on Pensions. AMENDMENTS TO APPROPRIATION BILLS.

1\lr. WILLIA:\1~ submitted an amendment relative w tne rll!hts of the l\Iissi~iPTii Choctaw Indbms whose nnmes do- not appear upon the approYed rolls of the Choctaws in Oklahom~. etc .. intended to be proposed bv him to the Indi<ln appropriation biJJ. which wns ordered to lie on the tnble aud be printed.

l\lr .dORIXS0:"-7 subm itted an amendment proposing to u.p­proprinte $3.'34.435 for labor and material required in the in­stallation of n drainage system in the city of Hot Springs. Ark., to ca re for storm waters from the monntains of the Hot Springs Reservation and tpr ~rf.ecting a sanitary sew& sys-

tern In thnt city. etc., intended to be propo~ed by him to the sundry cidl appropriation bill. which was referred to the Com­mittee on Appropriations and ordered to be printed.

l\Ir. snD10XS submitted four ame!ldments Intended to be proposed by him to the river find ha rbor nppropriation bill, which were referred to the Committee on Commerce and or· dered to be printed.

Mr. GORE submitted an amendment provining that the un­obligHted bHiances in the approprintion •· Puhlie work~. Rure:tu of Yards and Docks," for the year ending June 30, 1914. or so much thereof as mny be deemed necess:n·y by the ~eeretn ry of the :-\avy. may be by him expended for the con ~truction of storage tanks for oil. for the purchHse and trea tment of oil for naval purposes. etc .. intended to be proposed by him to the n~t ,·aJ appropriation bill, which was crdered to lie on the table and be printed.

NAVAL CLAIMS.

Mr. S:\IITH of Maryland sPbmitted 11n nmendrnent intended to be proposed by him to the bill (S. 5489) makin~ nppropria­tion for payment of certnin clHims in accordance with fin din;;s of the Court of Clnims. reported under the pro>isions of the acts approYed :\I:uch 3. 18~. and :\l arch 3. 1837. nnd commonly known as the Bowman and the Tucker Acts. which w n s referred to the Committee on Cla ims and ordered to be p1·inted.

FUNERAL EXPENSES OF THE LATE SENATOR RRADLEY.

1\fr. JAMES submitted the following resolution ( S. Res. 381), which was read and referred to the Committee to Audit and Control the Contingent Expenl"es of the ~ennte:

Resolved, Tbat tbe SecrPtary of tbe Senate be, and be is herl:'hy, au­thorized and directed to pay. from the mls<'ellan~>ous Items of the <'OD· tlngt.>nt fund of tht> Senatt>. tbe actual and ne<'essar:v expens<•s i ncurr~>d by the committre appointed by the President of tbe Sena te in arranging for and attending; tht> funeral of the la te S~>nutor William 0. Br:tdl~>y, rrom tbt> Stat~> of K~>ntucky, vou<.ne-1 s for 1 ht> same to hp approved by tht> Committee to Audit and Control the Contingent Expenses of the Senate.

NEW YORK CENTRAL & HUDSON BIVEB RAILROAD CO. ,

Mr. NORRIR. I submit a resolution and ask unanimous con-1

sant for its present con:sider::ttion. Tbe resolution ( S. Res. 3R2) wns rend .. as follows:

Wberells the N~>w York Central & Hudson River Railroad Co., through Its ownership of the stock of tht> Lake Shore & Michigan Southe-rn Railway Co.. forms a cont•nuous lin~ of railway from Chicago, through Buffalo. to New Yor k City; a nd

Whereas said New York Central & Hudson River Railroad Co. controls by lease tbe West Sborp Railroad Co. : and fbi> said LakP Shore & J.Ulchi~an gouthern Railway Co. owns the sto<'k of the ~~>w York, Ch"cago & St. Louis Railroad Co. (Xlck~>l Pla re), which. to<>ethPr with the said W~>st Shore Railroad Co .. constltu· p!l a r ::~ ilroad run­ning parallel to tbi> Lakt> S hore & Mi<'bigan Southern RaUway Co. and the Nrw York Ct>ntral & Hudson River Railroad Co. from Chicago, thr·ougb Bulfalo, to Xe-w York Cit': and

Wbt>reas thP Nt>w York Central & Hudson River Railroad Co. owns tho stock In tb~> Michigan Central Railway Co .• a line of railway ex• tending ft·om Chlca(\"o to Ruffa lo: and

Wbt>reas said Nt>w York Central & Hudson River Railroad Co. 0wns the stock In the WPstpr·n Transit Co. and the Rutland Tramdt Co., constituting a water-n :1vigation lint> enga~t>d in intt>r·sta•e commerce betw~>en Buffalo and Cb'cago and in t errredlatp points: and

Wher·ea~ this ownership results In a combination under one control of four compt>tlng lin es of tmnsportat1on between Chic. go nnd Bu"!'alt> and two competing lines bPtwePn Buffalo and :-;'pw York f'itv: and

Whi>J'Pas th<.' said Lakl' ~horp & Michigan Southt>t'D Rfl.ilway t:o .. in ad· dition to the ownpr·sblp of thp said l'\ew York. Chicago & St. Louis Ralh·oad Co., owns a 11 of the stock of tht> Tnlpdo & Ohio Centra I Railway Co.; o! 1 he Chicago. Indiana & Southpr·n RailroHd Co.: and of the .Jamestown. Frankl 'n & Clearfield Railroad Co.: and also owns mnre than 50 per cent of the stock of the Pittsburgh & Lake Erie Ra Uroad Co.: ~nd

Wber·eas the said New York Central & Hudson River Railroad Co. con­trols the Western llnryland Ra ilway Co., whkh tog-ether with the said Pittsburgh & Lake Erie Railroad Co. constitutes another <'om­peting line between territory coveri>d by the Lak~> Sbot·e & !\1ich1-J?an Southern Railway Co. and t he New York. Chicago & St. Louis Railroad Co. with the Atlantic seaboard: and

Whereas the said N~>w Yark Centra l & Hudson River Rai !road Co. fs now taking the necessa1·y steps to mor..e completely consolidate all ot !~d ~~~~~~~~~ .g~:.~~~~:· b~o1~ther with othe1·s. under one ownership

Re.•wl ved, That tbe Attorney Gt>n~>ral bi>. and he Is hereby. dire<'ted to inform the Senate wb('ther thP various combin ations of r·ai lroads above s~>t fortb are in vio lation of the Sherman antitrust law or any otber statute of tbe Pnited States. and whether the Depa rtment of Justice has ln contemplation. any action for the dissolution of said combination.

The VICE PRESIDE:\"'T. The Senator from Nebr11ska asks unanimous consent for the present consideration of the resolu­tion. Is there objection!

Mr. REED. Has this resolution been before a committee of the Senate?.

The \'ICE PRE~IDEXT. It Is an original 1esolution sub­mitted by the Senator from ~ehrH ska.

Mr. REED. I think a resolution of it!'! Importance ought to go to H committee. If I have caugtc its import. I :rm hear·til:v in accord with it; bot to ba>e a resolution read with­out ha.v~g it printed a.nq thu.s being betore the Senate, and lin·

9350 CONGRESSIONAL ·RECOR·D-SENATE. lfAY 28,

media~ely put · on its passage, without ·apy consideration, and especially a resolution of this importance, demanding st..<tte­ments from a department, it seems to ·me is not according tha.t degr~e of care which we ought to manifest. I repeat, if I have properly understood the resolution, I shall probably · be heartily in accord with it; but it is a little hasty, it seems to me, to

. have a resolution offered in this way, with unanimous consent asked for its consideration, and action expected on the instant. Is not the Senator from Nebraska willing to let the -resolution lie over for a day, so that we may examine it?

The VICE PRESIDENT. Is there objection to the present consideration of the resolution?

Mr. REED. I did not wish to put it in that form. Mr. NORRIS. I should like to say to the Senator that an

objection, of course, will take the resolution over until to-mor­row, and I have no objection to its going o>er. I am perfectly willing, if the Senator from Missomi or :my other Senator de­sires to examine the resolution, to allow it to go over. It only calls for certain informt"\tion from the Attorney General, and, I repeat, I have no objection to its going over until to-morrow. if the Senator from Missouri desires that it shall do so in order that he may fully examine it.

Mr. REED. I made the request, but I did not wish to put it in the form of an objection. I should. however, like an oppor­tunity to examine the resolution, and I probably shall be in faxor of it when I shall have examined it. I ask that it may go over.

The VICE PRESID&.~T. The resolution will go over until to-morrow.

LOCATION OF FEDERAL RESERVE DISTRICTS. Mr. HITCHCOCK. 1\lr. President, I desire to ask for a recon­

sideration of the order of the Sem1te for the printing of certain briefs and articles presented to the organization committee of the Federal Reserve Board relati>e to the location of reserve districts in the United States. I make this request for the pur­pose of amending the order.

The VICE PHESIDEXT. Is there objection? The Chair hears none, and the ordeP is reconsidered.

Mr. HITCHCOCK. I ask that the letter of the reserve bank organization committee submitted to the Senate May 18, 1914, h·ansmitting the briefs and arguments presented to the organi­zation committee of the Federal Resene Board relative to the location of reserve districts in the United States, together with such accompanying maps and diagrams as may be necessary, be printed as a Senate document. . A{r. President, by way of explanation, I will say that the first order did not give authority for the printing of maps and dia­grams and accompanying documents. I have since th[J.t time gone over the maps and diagrams with the printing clerk and have eliminated such as are not necessary, and this order merely contemplates the printing of those that are necessary to explain the written matter.

I ask for the entry of the order. The VICE PRESIDENT. Is there objection? The Chair

bears none, and it is so ordered. RURAL CREDITS.

On motion of Mr. HoLLIS, it was Ordered, That 8,000 additional copie.s of the bill (S. 5542) to provide

capital for agricultural development, to create a standard form of in­vestment based upon farm mortgages, to equali~e rates of interest upon farm loans, to furnish a market for nited States bonds, to provide a method of applying postal savings deposits to tbe promotion of the pub­lic welfare, and for other purposes, be printed for the use of the Senate document room.

ADDRESS BY HON. JOHN D. RYAN. Mr. WALSH. Mr. President, I send to the desk a copy of an

address delivered yeSterday before the national foreign.trade con>ention by a distinguished citizen of 1\Iontana, Ron. John· D. Ryan, entitled "The Sherman Law and its Effect on Export Trade." It deals with an important feature of the trust prob­lem now engaging the attention of Congress. I ask that it may be printed as a Senate document, for the information of Mem­bers of both Houses.

Mr. S:\IOOT. Will the Senator allow it to be referred to the Committee on Printing?

Ur. WALSH. I will be v.ery glad to have that done. Mr. SMOOT. It is the course that is usually t~ken in such

matters. Mr. WALSH. Very well. The VICE PRESIDEXT. The address will be referred to the

Committee on Printing. DEMOCRACY IN BANKING.

1 lir. JAMES. I ask to have printed in the RECORD an address by. John Skelton Williams, Comptrofler of the · Currency, deliv­ered before the annual convention of the North Carolina Bank.-

ers' Association in the_ house of r~presentatiyes at the c:-~pitol at Raleigh 1\Iay 13, 1914, on the subject of Democracy in Bn.nking.

1\Ir. SMOOT. Will the Senator allow it to be referred to the Committee on Printing. just a.s all similar matters are?

l\Ir. JA.l\IES. I desire it printed in the RECORD. I do uot wish to have it printed as a public document, but merely that it be printed in the RECORD. It is a very able address.

Mr. SMOOT. I; have not any question as to that, nor have I any d~sire to withhold it from publication.

1\Ir. JAMES. It is not usual to have referred to the Commit­tee on Printing matters intended to be printed in the RECORD.

l\Ir. SMOOT. Oh, no; not if it is only intended for the R!!:c­mm.

l\Ir. JAMES. This is only for the RECORD. The VICE PRESIDENT. Is there objection? The Chair henrs

none, and it is so ordered. The matter referred to is as follows:

DEMOCRACY I:'< BA:-<KING.

[Address of John SkPiton Williams, Comptroller of the Currency, delivered before tbe annual convention of the North Carolina Bankers' Association in the house of representatives at the capitol at llaleigb, May 13. 1914.] Mr. President and members of the North Carolina BankPrs' Associa­

tion, about a week from now those of you who believe in tbe liPcklen­bur~ Declaration of Independence will celebrate it. Maybe some of those who will celebrate will have doubts. and I shall ·not unt1Prtake either to change those doubts to full faith or to confirm them. Tbe Government assumes that I am to do a certain amount of work for it, and experi­ence proves that be who becomes thoroughly involved and interes tPd in discussion of the Uecklenburg deelaration, wh~ther for tl,e affirmative ot· the negative, will bave no time left for other matters. Whether Thomas Jefferson . . of Virginia, borrowed his decla ration from the work of a talented North Carolinian may be left. like that otller questlon bPtween the two States-of which sent to the front the gallant soldier whose lifeblood flowed highest on the heights of Gettysburg-for each

. man to decide for himself. In both those grea t events of Amet·ican history there is honor enough for all the participants.

My purpose is to talk to you of a new declaration of independpnce, involving no shock of armc:., no shedding of blood, no t:everance of ti<'S, yet mighty in its consequences for the present and the times to come after. Nowhere ln the world could such a theme he presented more appropriately than in the capital of a people who from the beginning of their history on this eontin E'nt have bePn foremost in protest ao-aJnst error, evil. and oppression ; most rE'stless under iniustice; most energetic ln demand for freedom, and the rights conferred by freedom and con­stituting it.

The new banking law. of which I. as Comptroller of the Currpncy, am asked to talk h you North Carolina bankers, is not only a dPclara­tion but a guaranty of the frePdom of tbe financial and commercial interests of our country from the possibility of the t•ule of a small group of men, sometimes unknown, sometimes too well known.

It is a plan of decentralization and dis tribution, demanded by the expansion and growth of out· Republic. It is not lnt<'nded to injme anybody, and it will nut injm·e any but those who insist on bl' ing injured. and let us hope that there will be none such. There is strength in voluntary and accepted unity, but there is none in ~ervitude of units enforced by law. There is vigor irresistible in the willing . combination of many for a common purpose. There is weakness and inevitable and Infinite corruption in the concentration of power which means tyranny on one Ride and enslavement on the other. We have been living in swaddling clothes, which . have become fettet:s-tightened or loosenert lJy a few strong hands. Alternately business has been stimulated to feverish and sometimes wild exertion, and given knock-out drops. reducing it to helplessness and the very appearance of death. We have grown, but ,tlre growth bas been uneven and therefore som<'times un­healthy. Too oftE>n onr pl'O~perity has been of the kind that shows in" statistics splendid aggregates, but is not felt or enjoyed by the aver­age individual citizen.

Tbe system we have endured through half a century hampered us, because it checked our growth and was unequal to our needs. It was

·dangerous-deadly dangerous-not only because it compressed control of our increasing rpsources and wealth into the keeping of a sma 11 number of individuals at certain great cel!ters. but because it aided in

. the heaping up of vast fortunes. inciting discontent and resentment. the parents of revolution. the forerunners of de<>truction.

Poverty is not always felt acutely until contra ted with riches. · In­equalities vividly evident are the worst foes of any Government. the surest evidence of its Inadequacy. the urgent signals fo1· its amendment. When nobody is swollen abnot•mally with riches nobody feels pinched or is made angry or desperate by lack of them.

This new measure is part of a general and deep movement for a new life, new standards. new methods for the United States . . A change is necessary and is coming. and common sense tells us to prepare our~elves and our affairs for It When loans and discou nts of the national banks in the :50 reserve and central reserve citil's inct·ease. as they have done, from $1.800,000.000 in 1903 to more than $3.000.000,000 In Hl14 we surely need a banking and cul'l'ency system with the c~pacity to stretch and give .

. When a dozen men own among themselves $1.600.000.000. and throuf!b a system of Interlocking directorates control as much more directing an amount equal to the total currency supply for 100.000.000 people. we should realize that such power is a peril. not only to out· commerce and to the people at large. but to the Government itt-:elf. I have heard it sald those men have held this huge Republic by the throat. but If that statement is strong, we do know that under the condition which have existed they could precipitate a panic or force artificial and in­jurious activity at their will. Working from ambush. seen by none, felt by all. they could have shaken the credit of the country so us to paralyze and make in time of peace ruin and desolation worse tha n war. , There is no need to quarrel with thel"e men. Considering what tbey could and might have done. we may say. as was said of \Varren Hastings in India. we are astonished at tbelr modex·atlon.

Some of these commanders· In chief of finance and captains of in­dustry have proved that they had high patriotic instincts and came to the help of the Government and people in time of stx·e s. Other~ had the sound wisdom to realize that then· real prosperity and the stalJillty

1914 .. CONGRESS! ON AL RECORD-SENATE. 9~51

of theil' great possessions were best promoted by reasonable pl.'osperity and hopefulness umon"' the masses of the people. Yet it is not right or safe that the happiness and hope of all these scores of millions of our citizens should depend on tbe mercy, tbe caprice, or the opinions of any 12 or 50 ·or 1 00 men.

Some of the gt·eatest fortunes, the magnitude of which takes the breath of the ordin ary man and strains his ima~lnatlon, are results of our system of banking and finance, of a protective tariff, taxing many for the benefit of the few, and of laxity in the enforcement of laws, inadequate and feeble at theit· best. '!'bey are dangerous not only to the general body of the people but to their possessors, and it must be remembered that a huge mass of money does not always either prove or supply wisdom, and to the contrary sometimes upsets it.

There Is a suggestion of cynical sa.tire in the mythological story that King Midas, whose touch changed to gold everything upon which it fell, was given at last the ea rs of an ass. He prayed to the gods to relieve him ot the rich but deadly faculty which forbade him even from eating food possible to digest. So men with the genius, the faculty, the in­stinct-whatever it Is-for what we call making money may well pray for a law or dovetailing plan of laws forbidding them from piling up money in quantities greater than any man can use comfortably or can be intrusted with safety.

There is no natural limit to greed and the ambition to acquire. If we can not provide artificial limitations we can, at least, devise and provide plans to prevent centralization and to protect the public. As we have seen within the last few years, men who have learned arrogant confidence In the overwhelming power of gathered gold have been led, perhaps -almost imperceptibly to themselves, to Hse it for the mastery of politics and legislation. 'The man of the most ordinary mind must know that secret partnership between private capital and the machinery of government is far ~ore destructive to both than could be any assault of either on the other. An open wound may be healed and a direct attack ma;v be repelled, but bidden rot in the vitals will kill the strongest living thing, and poison saps the sources and roots of life.

We were led unseeing from the concentration of financial power to the concentration of political by tte aid of financial power; from the interlocking directorates to the interlocking of the interests and Influ­ence of the concealed controllers of money, and the known leaders of politlc'al parties. We lived beneath a potent despotism; we could not see a touch or quite understand, but which every man of us could realize and feel every day of his life.

We could see things done; effects were before us plainly. But we could not know how nor by whom they were done nor the processes by which the effects were produced. We stood on a gathering volcano of unrest. Observing men could note the symptoms and threats, but were bewildered in seeking causes.

No sane- or patriotic man or party or administration desires to seek Yengeance, to destroy, overthrow, or uproot. All sane and patriotic men will understand that the time has come to reconstruct, to rebuild on a better and broader plan than we have used heretofore. We need to replace the foundation, to discard the patchwork and false work on which we have operated. The strongest, surest, the deepest foundation possible for our financial structure is the confidence and assured safety and contentment of the people who do the voting, with whom rests the final decision-the ultimate giant power, which, blinded and strong, would pull away the pillars of the temple; which, seeing and working intelligently and hopefully, will help, in our work of building, those <>f us who are trying to build.

We have grown and prospered in spite of an imperfect, repressing, nnd perilous banking and cunency system. We have grown as a vine !Sometimes forces its way through a crevice in a wall, our very growth inviting disaster and death our wonderful vitality hastening catas­trophe, because the more briliiant the flower a.nd the more abundant the fruit the sooner must the withering be when the roots are among stones and can gather no new life. Over 50 years of growth under the old banking act bas been forced by the generosity of the soil of a new land, by the unconquerable energy and resiliency of a virile and cour­ageous people; yet It has been interrupted by periods of business depres­ISion and stagnation; our progress punctuated by panics, discreditable

1 appalling-to many ruinous. These have usually come at intervals or about 10 years, more or less, sometimes preceded by long months of sickening apprehension, sometimes foreseen by the far-seeing. some­times bursting upou us with dreadful suddenness. The immediate re­sults, seen by all, have been crashing of banks and trusted commercial houses, the wholesale stoppage of indm;tries, the wiping away or cruel draining of the ~·esults of honest thrift, denial to willing and hungry labor of the opportunity to earn bread and shelter.

We believe one of the most valuable and beneficial effects of this new banking bill will be to make such panics as we have bad in the past virtually impQssible. When there is confidence there can be no panic. 'i'he panic is, as ' its name signifies, fear, distrust. When the people know that their financial institutions are stable, that behind them 11tanrls a Gibraltar of solid assets, that checks will be honored on pres­entation. and that their deposits are safe, there is no fear or doubt. It is a familiar maxim that a bank is like a woman's reputation-likely to be injured by the faintest whisper. When the banks have behind them substantially the combined strength of all other banks and sup­plies of currency ready to answer their needs, limited practically only by their valid values, malice can not invent nor credulity or ignorance accept reports to hurt or drag them down.

Nor will their credit or their lives any longer be held at the mercy of any so-called Money Trust. Help fo1· their jnst needs will be theiis by ri·;ht, by r equh·ement of law; they can ask with high confidence of receiving aid, instead of depending for It on the doubtful answer to their supplications. They will not know, as many of them have known the misery of begging vainly for the use of their own money held by reserve or central reserve banks, and of suffering Impairment or disaster because of being denied return of what they bad intrusted for safe-· keeping. A leading banker of Seattle, vice president of the clearing house, testified before the reserve bank organization committee, sitting in th11t city a few weeks ago, as follows : .

" Let us go back," said he, " for a moment to the panic of 1907. It we could have drawn our money in this district from Chicago New York, and St. Louis we would not have known that tbet·e was a' panic in existence. Conditions were all right out here, but our resources were simply tied up and we were helpless."

Understand it is not assumed or promised that this new law will per­form the functions of Divine Providence-shower blessings on everybody or establish universal prosperity. Nor will it bolster up or save banks improvidently, recklessly. or corruptly managed. It is intended to en­able- banks honestly and sagaciously conducted to enjoy the legitimate results of their own integrity and sagacity. Its purpose is to enable the natur~l aDd just l~ws of trade, beautiful, symmetrical, and sane, when undisturbed-as lB the law of gravitation-to work to their re-

suits naturally and smoothly. It will provide no artificial stimulant or prop. It will ren;tove artificial barriers to pro!:'perity, unneceRsary bur­d~ns. perils, and impediments. It can not provide Immunity ft·om such disasters as short crops, great fires ot· earthquakes, or disorders at home, or complications abroad. It will, we think, restrain the effects of these within the limits of the unavoidable and prevent them f1·om being exaggerated and wantonly magnified in their effects.

It will save prudence and good faith from sharing the punishment earned by imprudence and bad faith, perhaps a thousand miles away. It will guard straight and open business against the evils brought by crooked and crafty business. It will protect sturdy conse1·vation and well-intetided enterpri<=e from the violence, the cupidity, and the mas­tery of dollars assembled and used for bt·igandage; establish barricat.les about capital properly employed against what a distinguished tmve1er nnd expert has described as "predatory wealth." It is hoped and be­lieved that this law will prevent the altPrnating mone.v gluts and money famines daily repol'ted in the newspapers, b:v providing supplies of money to flow automatically, responsive to need. We can not see how it is possible with this law that we can undergo a gain the dismal, man-killing, beat·t-t·acking conditions of 1907 and 1893 and other "panic years," when money could not be borrowed for any emergency or on any collateral or terms; or that it will hereafter be within the powei· of any group or confederation of financiers, however ravenous, cruel, or crazed, to force a panic or conditions to cause one; for the money supply may not hereafter be Impounded, locked up, or deviated from its channels, but should rise Irresistibly to the level of the neces-~~ .

The history of commerce teaches us that the bnsiness man can pro­vide against every danger that may come in the natural course of things; he · i~ overwhelmed by manuf11.ctured explosions or insidious at­tacks coming suddenly from rear or flank. We are told that for every diseuse, loss, or pain natm·e inflicts she provides a remedy ; that for every sorrow and trouble permitted by Divine Providence to come upon the sons of men there is alleviation. It remained fo1· the rapacious ingenuity or blundering blindness of man, or the two in diabolic com­bination, to devise hurts for which there is no t·eiief but comprehensive changes of systems and machinery.

New York bas become the commercial capital of the country, the great citadel of the money power, the reservoir of money supply. rt is the walled city from which the barons have levied tribute on a t erri­tory and population vaster than any lord or king of the l\liddle Ages dreamed of, yet sometimes using methods ruthless and savage as those of the fiercest of the robber nobles-forays and levies devastating by scientific, artful methods; pillaging under form of law, smiting with swords which bite deep, although we can not see them, consuming with fire which comes invisible and unsuspected. The simile seems strong, but it is justified by facts.

No sudden swoop by a feudal magnate on his peaceful neighbors was a mot·e cruel or shameless plundering expedition than some of the transactions which have been brought to light by which the share­holders of railways 11nd other great enterprises, established to build up the country and to promote the public interests, were despoiled. Their property and money were taken from them by the might of masse!'l of money working stealthily. The raids bad none of the attractions of the picturesque or the merit of courage. They were cold-blooded, relentless seizure of other men 's goods by plots, treachery, and be­trayal of trusts which f'hould have been held sacred.

Yet it would be foolish, unjust, and wicked to hold New York as a community, or her leading citizens generally, among whom are men as high and honorable as any country contains, responsible for the misdeeds, treachery, and lawlessness of certain conspicuous offenders. \Yithout doubt the overwhelming majority of the citizPn~ of our great cities, as of our people generally, have viewed ~uch violations of laws, legal and moral, with as great abhorrence as any of us and have felt the blush of shame that such crimes are possible in this enlightened age and under the form of government which has also produced om· long procession of heroes, patriots, and statesmen.

Every thinking and pati·iotic American must exult in New York's splendid achievements, in the glories she has built. which have made her the wonder and admiration of the world. The people of the South would be ungrateful if they forgot the generosity of her people when trouble bad come upon them from fire, earthquake, and pestilence, and her purse has been opened wide to every appeal from any part of the land.

The purpose should be to change the relation of New York to the country generally from an attitude of dominating ownership to friendly partnership. Big as N~w York is, it is not big enough to direct the destinies of this continent. Fast as it bas grown, It has not gt·own so fast as the United States has grown in wealth, capacity, population, thought, and aspiration. ·

No one reservoir Is wide or strong enough to bold and control the money supply for the inconceivably tremendous activitiPs in which we a1·e engaged, for our endless variety of industries and enterprises, our different climates, seasons, and products, our r·equirements sometimes crowding and conflicting with each other. No group of men at any center, however broad In mental grasp or earnest In intent to seek the best results for all, can be intl'Usted safely with the unlimited and unre­strained control and direction of the flowing and recall of supplies of currency for the needs of the present, and the increasing needs that will come with the near future.

In our political affairs we impose on those to whom we intrust au­thority tbe most careful and elaborate restrictions. We draw lines be­yond which no Government or representative of Government is per­mitted to step. We have decreed that the humblest home shall not be invaded by State or Federal officials, the smallest bit of property shall not be seized, the most obscure man shall not be deprived of his liberty without due process of law. Yet we have permitted to g1·ow up what is aptly called an "invisible government," more powerful In many 1·espects than the visible government, touching our daily lives more intimately and immediately than any government can do, reaching into the vaults of our banks~ the safes of our merchants, the cupboards of our house­wives. on· tne power of this we have set no limit. We have left it unrestrained. We have allowed it omnipotence without rPsponsibility; permitted its operations to be conducted, too often, without possibility of appeal or redress.

We demand of a township constable, the pettiest officer of the law that he give bond for faithful performance of his duties; that he shali oppress no citizen, shall faithfully return the few dollars he may col· lect. Under our laws control of millions and billions of dollars, power to confiscate or destroy railway systems, great manufacturing Industries, towns, and cities at·e forced to the keeping of unknown men who give no security, are l'esponslble to nobody, who 1·emaln undiscovered. and act frequently through acknowledged "dummies," until some accident, some chance questiQn by an inve.stl~atin~ Con~ressman, or inquiry by a news·

.......

9352 CONGRESSIONAL RECORD-SENATE. ]fAY 28,

paper report~r. brings them and their transactions Into the light: E>en then usually the1·e is no provision for r·ecovery by t he injured Ol' for punishment of the wr·ongodoer·. nu bond on w hich anybody can SUP. ·

Heneath his skin e:ver·y American citizen of every station and avoca­tion. and whatever pa r·ty name be may weat·. Is a Democra~ in all the essentials and fundamelJtals. That is, be is attached r 'l.SSIOnately to the pt·inclples of local self-govet·nment, of the widest individual lii.Jerty compatiblE' with the genel'3l weal and order of soc iety. This new cur­ten l'y measm·e is demlX·m.tic essentially. lt looks to decentralization of dit·ect financial cuntr·ol, to financi a l local self-government, so fat· as iS consistent with stability and the l!eneral safety; to a curreqc:y which will be worth Its facl:" value ever·vwhet·e, which will be based on the actual v-alues it purports to repr·e;ent, as we ll as the faith and credit of the G~ner·al Gover_nment. and wllicb yet \Viii be elastic, expandin'! to mer t needs where anlf \"\'hen they dE-velop, r·eceding when not needed; a system fitted to me£>t any emergency. mo\"ing smoothly and noiselessly for t be ordinary nses of business in tranquil times.

Too much money and too little money are al :ke evil and dan-gerous. Opinions- differ as to which is the wot·se. l'rohahly one Is a s bn.d as the other. ThE' d esign of the new law is to supply just enough money or ct·edit. ~n and whe-re business needs it, to ct·eate for our· commer·ee, as bas been said, foundations. so even, so l.u·oadly Laid, a.nd so. deeply planted that tbey can not he shaken.

As it is, the count1·y hleeds and sweat& to tbe bl~•" financial centers. Take the South as an instance-and the condit ions wlth whkll you here in ~OJ·tb C'a1·olina art> familiar exist everywher·e in the countt·y. Most of our railway systems are contt·olled frequently thwugh the trustJ known as the votin .~ trust-by men who ar·e interested in tli e gr~at banks in the thr·ee centr-a.l reserve cities. So it happens that the large deposits of the railways, their col~ctlons from the southern people-. as also from the western people, are sent on largely to those b-anks. The same i~ true of the telegraph and telephone compan ies, the life and' fit-e insurance companieR. and of man.v of the lar .::-er manufaeturin~: entet·pt·ises. The met·chants and manufacturers o.f North Cai'Oiina pay the it· frel!!bt bills to the railw-a~s. The money ~oes largely and pr·omptl:y to ~ew York". and is- lent out and used tbet·e in stoek-market opemtions, or as the direetors of t h e hanks, who are al o often the directors Of the roads and other eot·poratlons. may elect. Ot course the-r·e Is no law wbi<'h provides for· the. carrying of t-he r-eserves and bank balances o1 t•allways 3.Jid industrial corporations In the centr·al reser·ve elties, where thE' national banks of tbe country' have also been accustomed to kePp t hetr I'P.Set·ves.

When ~orth c-arolina nPeds money tG move the eotton crop her l1flnks must caiJ on :-lew Yo:rk for money: which should be in their own vaults: for the return of money pai in ht>re in freight bills, insura.nce premiums. and otht>rwisP.: "nd your banks sometimes think tll~mselves lucky if thE-y can he allowPd tlw nse of anr part of it. Let llS Illustrate mOJ·e eond~ely : In Ft>hruat·y last tbe nat1onal banks of :'ll'ew York and Chicag-o helfl on rlepo!:llt from tbe banltSo and tr•.1st companies tbroug'h­out the United ~tatPs morE' than a thousand mtllwn rtollar"S--an ammmt eqnal to nPfl!·ly ontl'-tbh·d of "the total mone;v in dt·eulation In the entire countt·y. !'<o wonder yon a-nd the financinl hnsiness men of the rountt·y shook with v1olent agne wbenevPt' !'l"Pw York chol'<e to show lndiC'ations of bavln!! colrl feet. Of tb ; ~ thom~snd million dollars placed witb the New York anrl C'hica~:o national lumks b~· the- hanks anrl trHst <'om­panies thron~hout thP eonntry. le!:'ls than E'igl'lty-five million. in .Ta.nmrry­la::<t. was hPing loaned hAc-k to the ha·nks ann trust compan-Ies of the l:lnUed ~t!ltes. Of thP halant't:' of the mon(>"V l'<ent to the national hanks of :'\ew Yo:rk anlt C'hieal!'n. ahont tw·o hnnoirPd millions was lnv~stl'd in bonrl~ and AA<'nritlPs: af1ont threP hundrPn million~ hnd ht>l"n loane<J to noncnstomE-rs o! th(>SlP hnnln::-th::tt s to ~a:v . tn lvwrowers who kept no ar-eounts with them---i>n "hought paper •· nnd loans secured by stoek­ex:chaD!re anCI other <'Oil::ttE'I''Il-this 1~. of com-se. in addition. to hun­dr!'<ls of mlllions which tht> h•mks wes·e lending their own customet-s on stock·excban!!t' and ot'~-E-1' l"lmilar ~<'nrltiPs.

Tb.e~~> !lt>poslt!! of $1.000.001\000 fllaePd with the national hanks of NPw York and Chicag-o by other banks and trust companies are exclu­sive, it should bt> onRervPd. of tbe hngP balance~ st>nt on to thr•m by tltP tntsts and gr~>at corporations toeatP.d evt>-rywbPJ-e, but controllPd la1·~c>l;c In the b ig citiPS. As you know, and as the SPnttle bankPr I have quo tPd testiDed. therE' havt• hePn times when yom· hanlts werE' frl~btE'nPd ot• crlpplf'd ht•cau'*' ynu could not gPt bnrk from thE' banks- wb1ch car­ried your N'serves th(' money you had· intrusted to them at 2 per cent in tPrest to ki'Pfl for you. .

It is rwt bard to spe bow centralization of financial resotrrce<> and monpy !'lllllnly llnd eoncentra tion of financial power bas b~n t'orcPd, and tbe invi:siblP acd lrr('>l<ponsible despotism crea tf'd by acts of Congress and policies of govPrnment made nE'CP~~a.ry bJ thoSf> a (,'ts.

~ow. wE' do not propm:;p to usc> vio1Pn:ce to force di~integration and dP· C('Dtralization, to do anything with a jolt and a .ierk. It is nndl>rfltood ctear·Jy that to rnsb lwalflon~ and at, f'ull sp~>Pd O\•er an evil or an ob.c;taclP may <'8use fl .. railmPnt m· j:u-rin~. nncomfot·tablP and had for pas~ngr-1:s. TbP thou~] t or plan. a>~ I nnflPT'stand it, is- to invite dP· een t t•nli7ation. to en<'onral!e it. to give oppot·tnnit,T for t. to makl' locnl SPif-govN'TlmPnt po!'R!hle. to r·~>mo-ve thE' infln-ences wbt.:h dratY to a fpw Cl'ntPrs tbe mnnPy that is paid out to t-he corpot·atlons and deposited in thP local banks.

111'111 !<Cif'DCf' ~~ thP exploration of the s-ecr~>ts and hiitden forcps ot nature, and intell igent application of tbPm "hl'n tlwy have bt>en dis· cover«'d. T hi;:; npw sn:;tem hal> hPPD dra wn w-Ith infini te pains and carP on that principle--tht> t>rplot·atlnn, di~eovE'ry. and apflt ication of thP n:rtur al laws of tradt> Rud human natuJ'P-the conditions in our own CO liD ti'Y. I!Dd" OUr r!>] >l tlon-; v.·ith othe-1' COIIDtriPS.

or cour:o;;t> , ah«oln t l>ly frpe hauking i!> as lmpossihlt> as it wouiCI hP to Jpav~ to Pach indiVldnal thP r••!!nlation of hiE> own eonduet accnrdin!! to his own i' mJlUI>~Ps or conclnslom. Vou would rPnli7.e thi~ mort:> clt>arly than yon do If ,V(}U con 'd he hPhlnd thf' scPnt>!'l in tht> comptrollt>r's office. You wonlo learn tbu t t lw hank ing hu.;lnPR~ I!' onP of thE' safE'~t as well 8!' one of th1• mo>~t wot·th v In 'hE' wo.rld whf'n cnnrlnctP<l with clo~e com­pllanrt> to thP law~ &nrl ·r~u~ations and the dt>mand~ of honE>sty. D~>· talC"at ions.. PXCNlsive loans. lHHi co,c!'ntrntlon of ITE'dits to single m· .allil'd inteN'sts art> thP thrPl" mo,.t flltlll mal a rll<>s.

It would rlo no barm If' PVPI',\' pret<ident of a national bank would J1'ead over iUJd ~tudv his ca tb of offic·p at IPa!>t onet> a month. I VPnture thP a <:sPt'tion thHt i.o mP t~f thE'm-prPsPnt eompnny exePptPd, of eonrse­do not know wbat rhP'\' bav•• swot·n tn do fiDil nof to dn. On ont> oc­l';ll"ion a :\Jt>mb.-.r of Cr)ni.:T•'ss. l).(lW past bl>•tn-ry, comr1lained pet·sonally to a ('omrtmllE'r of thP rur·t·Pncy or- eritlrism or t>-xr·c>s>~lvP loans m»rlP f)y thE> hank of wh ieh lw was rm•>~lrlf•nt~lon ns 1"1\r ht>yond tbl' IPg-al limit be· hnd sworn should nM hf> vxc!"+'ded He did not understand really ltJs ohli!!:atinns anil )P-'!'81 limitations.

A nothPt hank In 1 hP Wt>-!<t thnt {'111m'- HndPr thP. oh.servatl'on of the­comptroller's oflkf' had a board of dlrPctors rompo~Pc1 of (be pN'!l'<!dPnt, liis wife, son. daughtell', and son~in.·law, and reported that directors•

mt>etings w-t>re hPid t>ach morntn~ l'lt tbe brPakfa<rt table. llath~r dif­ferc>nt \Yas anotbPr bank· in which tbe cac;h if•r and president rc>fu<wd to eall a meeting of the d ' rPcto!'s uutil Pmnbatically i'PIJUirt>d by the E'XaminPr to do so. The dirrctors app;•::Hed. r·pioiclng. and it waR dis· covered tbat by a hy-law tl•ey wPrP ent ftlr-n to $10 Paeh for every mee-t­ing attt>ndt>d. The dirPctors ur!!Pd tbe hark Pxaminer to call again soon. but thP prt>~ident was not at 1111 ho!:lpitnhle.

r have taken advanta'!E' of th£> privile~t> of b.-in.,.. thP only speakPr te talk" to yon at somE' IPng+h. It is an unn~n:tl nnfl hanp:v experii'DCP to have no competition or limitntlon In oratory. with th C' knm · Jerl~E' that I shall <'SCA e thP criticism by taking an P::trly trntn for \Vashin !rton. rt Is dt>li gobtfut for a ~t)Pakc>-r to hnvc> an audl c> nce .at hi~ mr>rcy: mokr>!i him fE' PI qu 'te like a !'\ew 'lork flnanclnl potpn tatP. Now. r will dPt'lin you jnst a littlE' longer to tell .vou cr>rtain nc>tails of thE' pra ctical opera, tion of tb!' new J.aw. wb ich may llE' of spPcial intt> rl'st to you.

T be lnw does not I'PCl'•irP a sln ~ri P bnSlinPss mnn to chang-e hts account from the banlt with which hE> h::~~ Irept It or nny husi n<'ss m nn or bank to snspPnd deallnl?'l'l with t hP hank or banl.:s In Uw cpn1ral r esPrve or l'eserve cities with which tbpy hnve in the past heen doin.~ b11s iness. Jt does o~er to banks freerlom of choiC"e. It says tA the b-ankl't' that he can follow bis prpfer~n!'es. s-entim Pnt!l. or haNt in $electing the source of his borrowing; a r d the mPmber banker of any Fedl:'ral resE>n' e district mny fee-1 *'rE>e and pPa.cc>f'l,l and at Pnse wh en he- knows that he bas in bis portfolio not<>s. drafts. and oi'ls of er­cllange arising out of aC'tnnl commereiRI transar-tlnns. which he can convert Into money a.t his Federal rc>sPrve bank with grrater ease and promptne ss than it llHs sometimes bPen possi hle for him to withch·::nT his cash balances fi'Om bis res<>rve :u~ents and almo. t with 11s mncla {'ll.Re as it has ever been p0ssil~IP to dr-aw- on Ct'c>dit hal:m<'<'S with any conespondent. Ile iR not def)f'ndent on the whims or fm·tlmt>s oP on.r other hank. He- need not shi vPr at th.- oi·o~PP<"t of nbtmdnnt crop~'< for fear he may not ban.• available tht> fonds with which to m«>et d l'mnnds hw moving them. H e will know that If be. nP~>ds 'monc>y- to acrommo­d a te the ban~r-··s enstomers he can, as a matter of right, call on bill Federal reserve- bank.

Sect·etary McAdoo last summer met with admirable foresight :md wisdom the annunl crop~movin~ scare by pntting the re~onrces of the f'"edl'l'8l Trea~ur.v at the service of' the farml:' rs. :JDd llankPrs of tba country just when there were l'videncPs of a purpose to make mont'y scarce and hig-h and to brin~ on tmuhle. Tht' connh·;v ls under end­l!:'ss obli~ations for that. but we can not depend on having always ht command of the Yreasn ry Dt>partm<>nt a man so couragpous. so rPady, so careful of thE' pulJUc ne~ds, and so careless of the wishes of a selfish- money power.

Among otl1er benefits the new curn-ncy law. by Its direct systE-m of clearanees, will telease nnd make available for purposes of trade and eomm.-r·ce bundrl."ds of millions of dollar-s which nnder thl' old system have been tied np in tl'd.ions processes ot coliPetion. It wtll" also save to banlts and to mf'I'ehant~ and bnslness men genr>rally some millions of' do ' ll1t'S whieb they nr«' now paying. dirPctly and indirectly, for the collection of country chPcks and ehPeks on o nMiit> efti·C?s.

To refer more particula 1.1y to yom· own di s trict. the fifth. I will tr:y to ex-plr~in to you !low the new method will work in tt·ansac.tio.ns •l dom{'stic e"(Ch &n::re.

In this tHstrlct, embracing the St.-'ltcs or· North and South Carolina. Vtr~.'inla. WPst \'ir<,.:inia (ext>ept four C'OUntit>s). t.he District or Columbla, and Maryland. th<>re arE' ~orne 475 mPmhc r hanks.

A cotton miJl at Columbia. S. C., under t '' e old plan sends Its check on Its Colnmbia bank for a shipment of coni to tl!e coal comp:1ny :~t BluPfiPid. W. \'a ThP local bank at B'luPfiPirl forwards this c l• et·l> t• Its ccwrPRpondPnt in Richmond. T is eonespondent &Pods thl' ch eck to it8 own corrPspooo1Pnt In Columbia, who makPs t ~t" col!••ction from the Columbia bank and t:,en draws. a. check on ~cw YorK for NPw Vnt·k exchan~e. \T hich it- rPmlts to llichmond. T he llic'l mond b1nk thc>reuuon notifies tbt> Bluefit>ld bank of t e coll~etlon of t l• e item. The coll,.ction nnd exc.hanc:e .:har~ea on dl~tant counh·y banlts amount n~'<ually t • from ODE>·tenth to one-fonrth of 1 per cPnt. or possJbl.v mort>. and lll'na­ahly a WPPk or mm·p Pl:tp!:lc's hetWPf'D the remittanc·p of thE' Routh Care­linn- chl>ek to the BluetiPld bnnlt and t ]le timE' \vlwu t he Rinf'tiPid hank I!Pts itl'l r£•port that tile item ha.s been collected nnd placed to its! cr£>dit In Itlc l] mond.

Undpr t he new currency act "evE-r:v J?eder·al re..:wrve bank shall rt"<'l"l'l"ft on dPposit nt par fro.m member banks • * • c 'I"Cks nnrl dr~fta drawn upon any of Its fippositor<t" That meam:t t at the RlnPfiPid hrmk I'Peeivin~ thl' c-heck on thE' f'olnmbia, S. C .. lmnlt mails it to t h e> Ferl~ l"r:tl t·psen·e hank at Ric mood. Tl' e F.edl'rnl rc•servl' hank at fUcbmnnd t h ~>reupon c l' arl!PS t 1e Colnmula bnnl< with t hl" amonnt of the- c 1Pr>k, crc>dltc;; the Bluefield bank. with the proce<'lf& a.nd notitic>s the two banks. acr·nrct in!!IY.

T'he Ft>rfpral t'P!:ler·v:c act also provitlP!> that E>IICh Fl"rlPral rl"l'<('t"Te tumlt shall rPceive at pnr. and CT'Pdit nccordin::r ly. nil t•hecks and dr·nft!'l dr:::~wn upon any of Its mPmlwJ• hanks. from PYPI'Y otllPr Ff'rll"t·al r·f',-pJ .. t'E' bank; t l'> ftt all ehf>C'k~ and rlrafts drawn h.v an:v fippusltor-t hat ls to sn.v. ·hy anv mt>mbf>t• bnnlr-on anv Ft>rlE'rnl r<>~PI'VP h:tnk shall hP l'f't'PiYI"d t~nd creditPd at p:t r by ('Vf'I'J ot'' PI' FPOPJ'al r •'fli"I'\'P h:'l nk. This m••:tns tho t t he chPCks of the mc>mb<'r bunk~ in the eountr:r t(lwns throwrhont thl"se flvp ~tatPs a rP worth t hPir full fnee Y:'llnc>, wtt ont rl o•rluctlon for l":t"· cl'all.l!e or collee-tion char!!P~. to (>\'Pry othPt' mPmht>r hRnk, onrl t lMt t "' ~ nmmmt of e:1ch c lwck nu1v lw ca!'lheri at [lllr lmm«>ctfat.-I,Y. vdthont tol­Jowinl! thP liP fous anfl nmnci:lhont eonrl'<t>El nmv ohl<t>t''l"f•d in tlw coiii"C· ttnn of c Pc-ks. Virtually f'VPr-y bank In tht> fifth rll>~lrkt is onl.1' onl'l nbzht dll>tant from Rlc 't> mond, ani! 11 checl( maiiPd ont• ~tftl'l·nnon in t "J a most dktant portions of t t> ~:> dt~trict shmtln rl"nch Ric·h mond t he fol­lmYinl! da)· in time to be Included in that da,·s operations ot tbe Fed· eral r<>scn•e bank.

LPt us nmv cnnsid:er anotbt>r aspE-ct of- thP n~>w law: Unrtrr thl" old national bank" act a n>~tlnnal hank with a capital of, ~a~. $~no.ooo. de­posits of. say. $UiOO.uoo. hills rpePlv~thll' amonnting to $1.~110 . 01lfl. ilnd :poo.ooo rest>rve wou ld only he permittPd to horrow a tntal of $:!00.000; t he amount of its capital. If a run should !:ltart on !'llll'h 11 hank. the amount which it couln r~I$:P hy loans. if ,.trh·t;y hPlci to thP Hid law, wonld be but $201),000. the amount of Its capital. which ml\!ht be (]\lite lnnd»qnate tn mPet a run. and the bank. though tbot"'ughly solvent, m~.ht he forcPd to sn . .::p.-nd.

rodr> r thP neow l>l\Y, bnwp~er. it a bnnk wltb $:!01•.000 c:tplt~tl and deposits of' t:I,nOO.flflt) l'<hO.IIId 1'18-Vl' ]03DPd $1.21)0,0111~ to Its CU~OmPrS on commer·ci.al paper and ~hfltJld eneount~>r an unexpE-cted rnn. in arir'li· tioo to hol'l'~wine $:!On.ooo. thP amount of its cflpitnl. sncb a hank wonld havE> autbor·ity to rediscount with the li'Pdernl I'Pl"E'rve h nlt of whic-h It Is a mpmlwt·, nntPs. drafts. nnd bill~ of exchange iS'-'lWd ou dt·awil' for ag-TieulturRI. lndnstrlal. or commeJ·ciaJ pm·pl)Res, bavinl! not mort" than 90 dav!'> to run. to any reasunahle ex:tPnt which may bE' a-p;­proved 8.r the Federal reserve bank te which application tor such re·

=

.1914~ .- ~ONGRESSIONAL REC.OR.D-SENATE. 9353 discounts may be made. In other words, if such a national bank as we have used in this illustration should have loaned the entire amount of its deposits, less the 15 per cent which it is required to keep as re­serve, to its customers on acceptable commercial paper, and for any unexpected reason should be subjected to a run, the Federal reserve bank of its district would have the authority to rediscount for the member bank the entire amount of its bills receivable, as represented by its commercial paper, thus enabling the bank to pay its depositors immediately and in full.

We can not overestimate the value of the additional security which this provision of the act confers upon every honestly, capably managed member bank, and the relief from strain and anxiety and from the fear and apprehension of panics and unreasoning runs which it gives to the officers of every member bank. ·

Another important chang:e provided for by the Federal reserve act is the new arrangement for the compensation of national bank examiners. Under the present law the compensation of national bank examiners is based, except as to reserve cities, on the capital stock of the bank ex­~mined. Undet· the operations of this law a national bank examiner bas been receiving for the examination of a certain national bank in the fifth district, with over $0,000,000 of assets and many thousands pf accounts, the munificent sum of $25. It is, of course, clear that an examiner could make only an imperfect examination of such a bank in the space of three days at a compensation of, say, $8 per day. out of which $8 allowance be bas to pay his own railroad fare. hotel ex­penses, as well as clerical assistance. It is not unnatural that but few examiners would willingly spend the 10 days or two weeks which it ):night require to make a thorough examination of such a bank when he is running personally in debt in doing so. ·

nder the new currency law the Federal Reserve Board, upon the rec­ommendation of the Comptroller of the Currency, is given authority to fix the compensation of bank examiners on the basis of annual salary so that those banks which need additional time and attention from the examiner may receive the careful, close scrutiny which the case may call for . It is believed that the new system of bank examinations will reduce materially the number of bank failures and enable the depart­ment to ch·eck up many abuses and correct many evil situations which in the past have been ignored or glossed over by examiners in their busty and incomplete Investig-ations.

I thank you, gentlemen, . for the opportunity to address you. Ap­proaching the study of this new and revolutionary measure with the cau.tion natural to every man trained in !Janking under the system with Which we have grown up, I have become more thoroughly aroused to .its merits and more deeply impressed as I have watched the methods of construction, the processes of growth, and have considered the under­lying principles directing those who did the work. . It .would be unjust, i~ congratul~ting ourselves upon the benefits and ulessmgs we are to receive from this epoch-marking piece of legislation not to acknowledge the obligations we owe for the splendid result~ achieved to the patient and untiring labors, resourcefulness and con­structive genius of the distinguished chairmen of the Banking and Cur­renc.v Committees of the Senate and House of Representatives and to the ~ecretary of the Treasur,v, ' whose counsel, skill, and support in the shapmg. and enaetmen~ of th1s great measure were of inestimable value.

Herem North C~rol!na the r.ecords show. magnificent natuml progress and you have spect~l mterest -m changes m the banking system which are so. surely destmed to promote and encourage your growth and expansiOn.

In the triumphs of peace and industry, as in the glories won on battle fields, and in the domain of statesmanship, all classes of your people have done full and honorable parts; have united in making the name of your State stand high and shine bright in the roll of the ~tates in building and maintaining this mighty Republic Of ours. ):ou. are living true to your record; have furnished to the Cabinet two of. Its ablest and most useful membet·s, North Carolinians, tireless, fa1th~ul, and coural:!eous, the strong supporters of huge responsibilities.

I mvoke your md to promote the success of this new system in · which yom· ~ailing give.s y_ou special interest and opportunity. It is a sys.tem destgned to d1stnbute the. benefits and blessings of ever in­creasmg resources and wealth eqmtably among your people of all stations who have done '>O well their respective parts toward creating your greatness. I beUeve this new system, for which we are indebted in a great measure to the patient guidance and masterly leadership of the scholar and statesman chosen to the Presidency, will bring new strength, new scope, new assurance to our entire commercial system, and for you!' State and my State and all the States and the people as a whole mean deiiverance from dangers that !Jeset us and a •new . eareer of advancement based on the solid foundation of real sub­stance, honesty, justice, and democracy in its highest meaning and purpose.

RIVER A.ND HARBOR BILL.

l\fr. R,ANSDELL. I ask unanimous consent to have printed in the RECORD a very interesting and learned article on rivers and harbors. It is entitled "The Inside of the Pork Barrel," by non. BENJAMIN G. llUUPHREYS, Of Mississippi, published in the Saturday Evening Post of May 23.

The VICE PRESIDENT. Is there objection? 1\Ir. GALLINGER. What is the request? 1\Ir. RA..l'\SDELL. That an article on the rh·er and harbor

bill entitled "The Inside of the Pork Barrel," by Hon. BENJAMIN G. HuMPHREYs, of Mississippi, published in the Saturday Even­ing Post of May 23, may be printed in the RECORD.

Mr. ·GALLINGER. That is a most interesting pork barrel­the river and harbor bill. I have been looking at it, and if this throws any light on the subject I think we ought to have it printed in the RECORD.

Mr. RANSDELL. It throws a good deal of light on it, and ~ hope the Senator from New Hampshire will read it and that every other Senator will read it.

There being no objection, the matter referred to was ordered ~o be printed in the RECORD, as follows:

THE IXSJDE OF THE PORK BARREL.

[By B. G. Humphreys.] . In a few days Congress is going to pass an omnibus river and harbor

bill, and then in a few more days the newspapers will be discoursing on the

I

evils of the pork barrel-and why not? Heaven Jrnows . they fre­quently discourse on much worse things, though rarely, it must be ad­mitted, on topics about which they really know quite so little.

'rhe first thing one does when he leaves the gi·ammar school is to forget his geography. Why should these gentlemen who write editorials for our great newspapers, and who know about tariffs and things, burden their. m~nds with mere geography? Why bother about Raccoon Creek when 1t 1s so easy to remember the Suwanee River? Why l{eep such prosy old names as Pollock Rip and Cooper River ln mind when it is so much pleasanter to let one's thoughts rest on the banks of the Wabash, or where rolls the Oregon?

A good Massachusetts friend, for many years a member of the Rivers and Harbors Committee, told us that a Harvard man took him to task on one occasion for wasting money on so many insignificant and worth­less streams. "Why," he replied, "the trouble is not with the legis­lation-it is with you; you don't know the geography of your country." Naturally this was protested. "Well, I will name a river in thiS country navigable for 300 miles that you never heard of." And naturally enough this, too, went to protest. "The Coosa." And his friend owned up.

When the new man comes to Congress he bas to start something­so many of them believe; and about the surest way to the headlines ls to denounce the pork barrel. A very wise old man told me many years ago down in Mississippi, when I was beginning to look around politically and take notice, that the very best thing a young man so mtentioned could do was to get into a fight with the devil. " It does not make much difference what devil it is. An imaginary one will answer the purpose, just so you fight him loud." Since that day I have come to believe that this old sage has lectured pretty generally around this country.

THE INTRACOASTAL CANAL.

When the river and harbor bill was uefore Congress a year ago one of this old teacher's pupils grew almost eloquent-at any rate, he fought loud-denouncing the pork barrel. Naturally he was requested to indicate the particular project he wished to have eliminated, so be concluded to read the bill and try to guess the answer. The House adjourned over Sunday, and when we resumed consideration of the bill on Monday he was ready to specify. Somebody has had a big map of the United States printed, with a broad blue strip running from Boston a short distance inland along the whole Atlantic coast, across l!,lorida, around the Gulf to the Me.xican border.

This is supposed to indicate the course of the intracoastal canal. The usual amount of study devoted to this project con~ists of a more or less casual glance at the map and a somewhat more definite "Well, I'll be darned ! " The real project for this inland ·t·oute may be stated in a few words, and a somewhat careful examination of the map will prob­ably suggest the thought that it is manifestly feasible. A cut across Cape Cod-and private enterprise is now making it-gives a protected course behind Long Island into New York from Boston. The tonnage actually carried now and subjected to the dangers of the passage through Marthas Vineyard and round Cape Cod is difficult to ascertain with exactness. It is very large-just how many mlllions can only be roughly estimated;. but certainly larger than the tonnage that passes through the Suez canal ; and the passenger traffic is enormous.

Surely it would not be a foolish thing to make the way safe. The next cut is across New Jersey from Rat·itan Bay to the Delaware River, and private enterprise dug that many years ago. The next cut is across Delaware from the river to Chesapeake Bay; and there, too, private enterprise bas long since constructed the Delaware & Chesapeake Canal. Running down this protected course several hundred miles through Chesapeake Bay, the next cut is from the Chesapeake to Albemarle Sound.

Strangely enough, these two waters are already connected by two privately du.e: canals-one through the Dismal Swamp; the other known as the Chesapeake & Albemarle Canal. The traffic carried tbroug:h both these canals, though the depth is only 6 feet, was given as 700,000 tons the year before Congress purchased the last named. All of it, ·of course, was compelled to pay toll to the companies that owned and operated them. It would requil·e an ordinary freight train of 30 loaded cars two trips daily every day in the year to transport this tonnage.

Just what the saving to the commerce of the coast will amount to when this canal is deepened and widened and made a free waterway can only be guessed ; but the Engineer Corps of the Army, after a very thorough study of the question, reported that the expense of the im­provement, including the purchase price, was justified by the needs of commerce; and thereupon Congress adopted the project. It will enable the smaller craft engaged in the coastwise trade to avoid the storms and hidden reefs off Cape Hatteras, the most dangerous point on our ~~\~ntic seaboard, where many fortunes and human lives are annually

From Beaufort to Savannah the difficulty will be greater, but future Congresses may find it worth while to undertake this section. From Savannah to Key West the project will require little excavation and the cost will be small. . Along the Gulf .of M~xico nature has providently so disposed the sea Islands as to provide th1s section of the canal almost without the neces-~~~YU:~i~~~i!nrg~~~1ties to amplify. Look at the map if your curiosii!

However, as one of those immortals who used to g;ather arouqd the table at the coffeehouse and bear Dr. Johnson's long sentences -ex­pressed it, "This is going far afield." I must return to our friend the orator. To use expressive slang, the intracoastal canal "got its!" It was the biggest and the greasiest piece of pork in the barrel ! When Clearwater Harbor was reached in the bill it must be stricken out. The chairman explained that this was not a part of this inland waterway.

" J'udging from its name I bad assumed that it must be some dis­'tance inland," the objector explained. Most natural assumption. How could Clearwater Harbor be near the ocean? Traversing thtl broad prairies from the land of the cactus on his triumphal march to the Nation's Capital, be had crossed many rivers-the Red, the Arkansas, and even the Father of Waters. All were rushing in tawny currents on and into the sea, and surely this common t·eceptacle of so much silt mtrst be the muddiest hole in Christendom. Clearwater Harbor near the ocean-the idea !

The rivers whose improvemE;nt and maintenance are provided for in the bill now pending in Congress floated last year a commerce amount­ing to 203,313,128 tons. Thls is exclusive of the traffic on the rivers connecting the Great Lakes, and does not include the tonnage of o'ur harbors. These figures will bE; more readily understood when com·­pared with the tonnage of other transportation routes which hold a prominent place in the public mind. Mr. Emery Johnson, the · official expex:t upon whose figures the House relied whe'n the rate of tolls was

9354 CONGRESS! ON AL RECORD-SEN ATK 1\fAY· 2R,

fix!'d for the Panama Canal, estimated that tbe total tonnage wbieb would pass through the eanal in 1915 \vould be ten and a half million tons. The tonna~e of tb~ Suez Canal for 1!H2 was 20.125,120 t ons. The freig-ht canied from eoast to coast by a ll nnr tr-,mscontineotal rail­rands comhined iR ~.000.000 tons. It is estimated thnt t he coa twise traffic which will pas tbro n_gb tbe canal will be 1.~50.000 tons an­nuallv. and it is the exemption or nooexempti(m of this million and a qmtrt!'r tons from the pa_\ment of toll. which bas caused so much acrimoninus delYJte. In other words, the rivf' rs. large and small, for which we are pro·dding in n11r 1·h·e t·s and harbors b-ills. float nearly as much tonnage annunllv as will paRs throngb the l'ftnama Canal and tbe Suez f'an11l. pin~ the cross-continent tonnage of all the raliL"oads during the next 10 year·s.

SE~ATOR :BlJRTO~'S CHANGE {)F TUNE.

Then the creekR and the insi.,.nifi cnnt rivers-what of the mont>y wasted in their improvement? §urE'I,v this is pork, and distrihuted, too, among the Alrmi.Jers in sncb fashion as to make the passage of t J e lm.rrel certa1n. '\'\·ha t n curlons notion, that a ('ongr~ssman could gain favor at borne by .-ecu ring appmpriations of money to waste on wonb· less creeks! Surt>l.\' this could gain votes only in tiN! immediate vicin­ity of the mise1·ahle erl"ek. and there better than anywhere else would it be known that tJ1e money wns In f a ct being wasted. Are the peo>­pl~ dum·es "! Do thf'Se creeks all flow through the g1·ounds of some in­sane asvlum? OthPrwise bow could a Congre:-;sman gain popuJnt· favor b.v ~less exr-enditures of the tax-raised money on impossible and wortble s M"eeks?

.. ·enator Rt JUTO~ was chairman of the Rivers and H:ubors Committee f-<>r 10 ,r~an. During tbilt time he t;pen t much money an thE' 0 t·ea t Lakes and viewf'd thf' mag!cnl growth of commet·ee the1·e with commend­able pL"ide. He also spent much money on the ridiculous cref'ks, and was sevE'rer perhaps than anyone else in his judgment and in his criticisms of those "'·flo spo"ke of the porl; barreL When the fi1·st tivers and har­bors bill . after he rPnched the Semite, was ~"(>ported to that body, wot·d came over to the llouse that he was making a most vi~orous attack on it. Pork baTrel, in fa<·t, bnd been one of the phrases used.

D. S. Alexander. one of the most conscientious patriots wbo ever S('rved in C'ongress, u nd certainly one of the ruost Iova ble of men, bad been ~Jr. llntTox's pupil for thosE' 10 years and now bad sncceedl"d to thE' cha:lrmanship of the Rouse commlttPe. He hnd framed tbts bill -on the idPn tica I lines so long laid down and so well d~fe-nded by blr. BGR­To~. and hE' refused to belie\'e the tory. The old ~1emhet·s followc>d bim post h.a~te to the other Chamber, to be r.esolved if Brutus so un­kindly knockerl or no. \\'bich partkuhu role he was es ·aying, Brutus or Cnsca, nobody !m{'W. All soon w·ere aware, h<>wever, that be was knocking. and knoeking hard at that.

The Brazos, the> Trinity, and some othPr projf'cts thRt were the chil­dren of bio;; own brnl:n-or, at len~ had been tl berf:'d luto this breatb­i:ng wo1·ld under his sldllful legislative attention-sha1·ed fhe -shafts "of his forceful c•·iticisms. In tbis he seemed to be playing no favorites, whatevet· Plse be mirllt be plnying.

AleX1lnd r was s.pee."'hless; but betn-g a Member of tbe Honse, and at the momE'nt only a vi. I tor de gratia in tbe Sen.a te, this was not surpris­ing; the m,es required ii. He had known Saul of TaTsus . .but thi-s was l'aul! AftN It was over he led bis committee coll~agues back to the House, a mudder lf not a wisN man. Th('y believed the great ~ator, at whose fl"t't they bad learned bow ro frame river and harbor bills. bud for orne reason put an antic di position on. The charge of pork barrel, however, had been revived and this time sponsored by a man wbo.se opinion w11s worth omething and whose worus carriPd weight.

The oJd adage says tl.lat bad ne·ws travels fast. There are some sto­ries that are hardly to be cl-assed as bad nPWs, but that are nevertheless entitled to bonorablE' mention in these RpE'ed contpsts. VIdelicet: OnL-e npon a timE' there was an .old priest., Abb~ Hue, -who vlAited China and wr·o1e a book. in whjcb he said the Yellow River had, by l'eason o! tht> levees along Its banks. filled Irs channel nntil the bottom of the river was higher than the adjacent territot-y. The1·e was no truth In the story; .but it took the wings of tbe morning .and ilew to the uttermost parts Di the earth.

WORK 0~ THE TRINITY.

How very many J)eople h:lve hE'ard it, and how ve-ry few people ever l'{'Bd the buuk o1· heard of the abba So with the Trinity River. Ua.llu.s, Tex., is on this river, a few mil~ 11'hove its confluence :with the E:u;t Fork. Tbei'E' bns rarely been a Ritoatlon where a eompeting wat('r route to the sea was .morf' clearly lndicateo, fl the doct-<>rs say, than at Dallas. In the cen.tet· of the greatest cotton belt in the world, It wa.s actually being strangled by the railroads. It was proposed to improve the Trinity; but thE'n th{> question wns rals1!d wh('ther there was sufficient water in the Rbort s1 N>tch down to the point wher-e the two fot·ks united to maintain the requirPd depth 1f a Jock nod dam were put there.

In an unhappy moment an !'-n~inee1· suggested that if there were any doubt~ on this point arteAian wells could be sunk to supply the deficiency. How that tal-e spread nn.d bow tt b.as grown and waxed fat as repetition as well as distan ce lent encbantmt>Dt. It has been r-epeart:ed in Infinite variations until there a.t·e but few who have not heard at least one ver­sion of it.

'rbe v-f'ry matter-of-fact bul'liness men of Dallas we1-e confronted wHh tbe condlt1on, whill" the theory was cutting Its fantastic tricks a:s clever paragraphet· about the country gave tt additions and much cunency. Everybody Hmlled when tbe T•·inity wa mentlon('d; and so tbe;;e SP!f­snme bus!ne.;s men went -down into tbt>ir pockets and dug up same $6A,OOO wbel't'with to conRt l'Hct a lock and d1tm to dem-onstrH te that there was ample '\\'1lter In tbl shQrt SE'ctlon of tbe I'iVE'I'. This they did to everyhod_v· satisfaction. and Con gress tbet·eupon 11dopted the proJect. It was undet"8tood from the verv outset tbat DO eommer<'e could develop until thP se1·ies of lucks aDd dams wt>r e completed to thE' Gulf. Tber~ was nothing stranger In this than tbnt tb~re would be no commerce at I 31l8mlt until the canal wns eompl('tt'd. In a few years the improv-e­m~nt of the Trinity will be completed and tbts greatE.'st cotton-producing ~ctlon of the we rid will then be t'Dnhlt>d to use it. t:ntll that good dav eomPs, bow ver, it must set·ve our orators and editors as no IllustrAtion of the wkked waste lnv6lvf'<1 in the annnal pork barrel, where money is SIX>Dt on a strf:'am that be1tt'S no· commet·ce.

'The Bru2:o has to nm this ·same gantl~t until Us progressing im­provement uring~ \Yaco In touch with the Gulf of ~texico.

The1;e are thl' bt·ight rmrtl-culnr spots that llln.mine every article on the ··pork barre~1 " and they are the horrible examples pointed to by the orators who ngbt this ·SHme dl.'vil-that is, by those who happen t{) know these pl'ojeds IHP be-in~ provided for. As a ·rule, of eotwse, your poritical orator does not labor under tbe handicap o! -accurate Infor­mation.

The climax of pork-barrel orations and editorials nsuaJiy-almust -ln­yariably-finds its fitting ·cap in the waste of the people's -money .on

f~~c~~.~~: creeks. How I have heaxd tbe changes rung .on tbe o wot-th­

d. party of Congressmen w<>r~ riding round Boston Ila.rb~r !'orne years a~o. We were b-t>ing shown the shipping anrl the wonderful facilities o.f that great -port by one of the joltlf'. t and ch.•vere t son of tht' Old Bay 'tate. We ·p3.s ed a em·ions old hnlk lying in a rather neg.IPCted nook

of the harbor, wb(>n our guide pointed it out as. the old Crmt~ti/ Ltio ll and really grew eloquent .in his •·ecount of :its heroic achievem ents. We WE'rE' charmed.

Then anot_her less imaginative Bo tonian broke in to explain tbat tllis was all a nnstake. So !ar from lH?in~ thE' C.uustitfl1ion, it as nothing more than an unwOl'th.v barge converted into a bouselloat. Turning on this iconocla~t. our bost shouted :

"Wf'IJ, I knew that all along: but it was serving the purpose most ex~llent ~ell. an~ now. you 'fuive conve•·te<l this dt•lizhtful surprise into tbe b1gg-est d1sa.ppomtment of tbe morning-and that too simply tor the sake of unintPresting truth." ' '

THE "l'ONNAGE O"F THE CRiiJE'KS.

If it were not for the fact ·that it would ue doin~ tu service to the cause of waterway impl·ovement bv lloisonint; the public <'Onscil'OCe with pa_lat~b l~ tbuugb thorough!. unwholesome .fa lla.cie ·, I woulu not break tbts lnSignlfica-nt-cJ"l'ek idul; but I must. Let ns, theretol'e, consider some dry tbou~rb ve ry pl'rdnent fact .

Dttring the past four year.- Cong-rl:'ss has passed four rivers and har­bors -approprla tlon hills. The 1otn I carried in thoR<' four bills rm· tbe lmpro-vPment of cret>ks. all told. was $fl01.000. Thest' sa me hills car­ried, for all rivers and all harbors, something more tbnn $100.000.1100 • Of this sum the creeks got something less than 1 IJer Cl:'nt. Hut·i ng those same four year:;: tho ·e same crePk-R, countin g a I, f'lo:atPd to com­merce among onr people a tonnage officially valul:'fl at $1.000,000.000.

The Ohio River runs for a ·thousand miles tbrou~h one of t ht' hnsiest vall~ys of this turhuleot earth. WE' tll'e now bnnying to completion a proJect tht>re for !l 9-foot dept? !1-om l'itt~bur;;b to the i\lls.-i sslppi H1ver, where it wtll conn ... et w1tb aootller !l-fo.ot channel 0111 to the Gulf. We ;Lre going to sptmd on this Ohio River projer~ $6:1,000.000, and eve1-yhody appl a uds the E'Dterptise, as evet·ybolly must. The ton­nacoe of the Ohio R!vf:'r is about 10.000,000 annna lv.

Those en>eks, which cost us le s than $l.OO<i.OOO In fonr years. bear an annual commE.>rce of nearly 7.0il0.000 tons. 'llow many Tall­roads arE' there in these United State.· that can caTry a hflllun dolla1·s of commr:>rce with a trackage-maintenance charne of $001,t)OO? Our m11intenancE' cbarges at Pttrrnma. military Included, are gotng to be some twenty-five or thirty million doll-Irs annually.

Is there n.:ny poet now in capth1ty who expects to sPe $:ttl.OOO.OOO.OOO of commE'l'CE' p~ss through the Panama Canal annually? 11 1t does not, then the Cl'C:'ekS will show b£>ttE'-r in the comparison.

'\'i'e.a1·e all ~l'atifiPd at tbe commerce on the Grt>at Lakes. H amounted last year to 7R.OOO.OOO tons. '\'\'~ have spent something less than $;:)0,-000.0lJO In tbe-Jr Improvement .and maintPnance to -date. Four-flftl!s of thl" commt>rce of the Lakes is ore and coal. Expt·essE'd in tons of ot·e this billion dollars of commel'(-e ftoated on ou1· Cl't>Pks dru·ing thE' pa::~t four yeat·s -would load 55.000 ore sb.ips of 6 .000 tons' burdE'n ear·b. It these could set out on the orean In line. ·tbree ships to tbP mile--and the l11w wtll not permit them to tt·avel tbat clOSE" togt>tber-we Rhould bave a lln.e of loaded ships from Boston tluough .tbe l'anama Canal and across the Pacific Ocean to Hon1,"kong.

If this ore we1·e loadPd on car!l canying ilO tons ench, It would fill 11.000.000 cars and requh·e 370.000 locomotives to pull thf'm. Puttlnl{ the trains 1 mile apart-less distance would he dan,gei'Ous-thE'y wouJa cover evet·y mile of :t ra("k in the ['nlted , tate and b11ve enou~ trolns left over to enc-ircle the world f.our times. a doubl-e track 1·ound tbe world at the Equator, and another doublE' trark round the wol'ld pass­ing through the 1'\ortb and South Po~es on the way.

If one is at ali lntet·estt•d in the development of our transportation facilities. tbe next time be meets one of tbes.e much-ma.lig.Md creeks ho should take his hat off to lt.

This Is what tht> ln:slde of the pork barrel looks like. Senator ReRTo:"' criticism was not coufi.n:E\d to tbe Items of the bill.

No man understands aU the "phases of watel'\>ray tmproYemE'nt bettt>r than be. That Con~-?:ress bas lnvested man,y dollars In waterway projerts wblcb have not l'PturnPd tbe service ho[JE'd 1'or and expected is most ce•·talnly true. That the future will demon trate we art> to-day no bet­ter prophets in such matte1·s than our p1·edece. sors may well be grant!•d. No project was ever mot·e ardently advocated both in and out of Con­:-r.ess than the old Hennepin Can.al.

HOW '!'HE MO~EY IS SPE::-<T.

·Re-presP.ntatives, and maybe som!' Sl".nator as well, came in on the flow as their predect>ssors w~nt out on the ebb of tbe tide of popular clamor for the constt·uction of this once fa1·-famed canal. It was the most paramount of all the paramount issues in a number of districts ot the Middle West. It set·ves to-day as tbe horrible ex.ampl.c.

"But yesterday thE' word of f':esar mi)!ht Have stood against the world; DOw lie he there, And none so poor to d<> him reve1·ence."

Yr. BuRro~'"' erltki,sm went t.o thP -mE'tbod of appropriating rather than to the items fo1· which the appropt·iatlo.ns wen• made. I should say. perhaps, his shafts were better aimed at the method tllan at the items.

· In the days of his chairmanship. rivers and harbors bills ~re paRsed only every two or three yea rs. .A cash .appropriation would bp maile and tben authority given thE' Secretar.v of "Yar to enter into contracts for eontinul.ng the lmpJ·ovflment for evf'ral years abend. to be paid t'or by the Committee on Appropriation~ from time to time as the work pro­gressed.

Great pressure was brought on Con:::ress to have an annual rivers and harbors bill just as we bave annual bllls for the Army, tbe Navy, and so on. This plan became so popular. In fact, and fo1· ohvious rea-ons, that the commlttl'e could not •·esist E'lthf'J' tbe cl11mor or th~ ar;;u·

ments iD 1ts fAVOT . ~1·. ALEX <\ XnEH therefm·e detf'rmjned t;o tt·y it. Gntil It could be tested by actual pt·actke and experience no .man could foretell with certainty its success o1· failure as an economic policy. Tbe1·e we1·e no pt·opbets to read tbe futu1·e--none. at a-ny t'.alt!, who could show any divine commission; so the policy was looked on as an experiment.

1f lt wa-s •to be attPmpted, ce"'ery cons-ideration -of wisdom and expedi­ency reqult·ed that tbt' test be fnlr and complete. I Dterpret<>d In tho light of this pm·pose. the conclusion was irresistible that the annual bill should carry n:o author!Ultion fot· continuing contracts. 'asb suf· flrl t>n t to cat'I":V on the work fot• onE' yE'a1· only made It cet·taln that the next yea1·'s bill wonlrl pass. In this way alone could a fair tt·ial be had.

Four annual bllls have sin~ been passed, and the fiffb 1s on the H-onse ealenda.r to-day •nmd.y ·tor action. 'The .policy Is now as eemple"tely

\

•

1914 .. CONGRESSIONAL_ REC:ORD-. SENATE. 9355 ftx-ed a:s a p:u·t of tbe- legisi'S.tive- pro~r.am aSJ tbe policy of any otbe annual aporopriation bill. Several la..~ons have been learned ..

Under the plan onfversally followed by Con~ress no river or harbor improvement Is e-ver undertaken until It has first b_een investigated by the engineers of the Army and recommended by them as desirable, cost and cgmmerce botb considered. Befo1·e the a.nnual-blll policy was adopted It therefore frequently happened that a bill providing for a snr>E'y would remain on the commJttee's calendar for three years; and afte1· the survey wa-s ordered another three years wou-ld in.te1·vene- before the re-pnrt of the engineers could be acted on.

This country is growing at a very rapid pace. SiX yQars ts a long tim to walt; Sl) It can be asserted with assurance that the annual bill. in obv·tating thiS! needless and costi:y delll.Y\ has justifled itself.

This, bnwever, is not the whole story. Mr. BURTON thought the- con­tinuing-contract system was the economlcal way to do the wot·k, and time and experience have abundantly justtlied bls theory. When a project has b¥en adonted that will requh·e I> or even 10 years to com­plete--the 9-foot project for the Ohio lUver, for Ulustratlnn--the busl­nE>sslike course Is to ascertain j ust how rapidly the work can most eco­nomica lly progress. and then authorize the en~neers to proceed.

One Congre:o~s can not bind its su~sor, and there- carr be no guaranty that funds will be. pr<>vtded next yean if the matter be left entirely to the determ tnatlon of a future Congre$S. Contractors hesitate to Invest In the necessary plant if work for only one year Is absolutely assured, and but one method of' assurance is possible, and that is to give authori.Q' by statute to the Secretary of War to enter into binding contracts..

THE SHIBBOLETH OF ECO~OMY.

Experience is the best of all schools, and Congress now has taloon thP course prescrfh~d. We have learned the lesson and must either ~return to that sys:tem or be convtctPd of wasteful negligence. The pol~ kv o-f annual bills has been thoroughly justified for t.b1i! reasons ab<tve referr<'d to. tbou'4"h not amplified, and should a.nd will continue; but tf j1 flt criticism and even cen-sure arP- to he avoided, those projects whtch can be most Pconomically prosecuted under authority, to make contracts for work or materials for several years ahead must be so undertaken.

Congress Ls always SE'nsitlve-supersensitlve. ln fact. Members must retnrn to their constituents every two years for judgment. The cry of economy and the charge of extravagance are always the shibboleths of tht> oppnsition.

Tbt> temptation. then. ls Indeed great to ad.bere to the policy of mak­ing allowanee only for one year's work. though conscious all the wbUe tl1at bv so doing the cost of the completed peoject will be Increased. 'l'.his is the r<•al measure of the sE-rvice rendered to the taxpayers of the country by those whose zPal ror economy focuses their mental vislon on the total. lf't th-e- Item-s be what they may.

If constitul:'!lcles ean be satisfied by assurance that the year's budget is. no lar~er than Its p1·edl:'cPssor. the election returns w!U give no c-Juse for complaint. and thP professional economist can con.tinue his wasteful praf'tices while the htippy taxpayer foots the bills.

EvE'ry thoughtful citi:r.E'n nnile1·stands and confidently expects tbat the J!'l'O.\t"in,g neE'dR of th!s deYeloping countr:Y will hE" reflected in fnceeasin~ fipmands on the Puhlic T1·easnry. What It ts their right to demand and tl n ty to reonire Is that no project for tbe Improvement of any wate1·way be undertaken by Congress that can not rea.sona.bly be expected to pt·o­m.ote the ~reneraJ welfat-e. Wbl.'n such a p.~·ojPct ls adopted tt Is the part of statesmanship, as ft ls the duty of patriotism. to p1·ovide for :tt~ compl.-(?tion In such manner and in such reasonable time as wlll .e!fe.ct the resnlt at th-e minimum cost.

If this rule be faithfa:lly followed, the crit1cl.,m ol those who speak without lrnowlE'di!E' and the censure of those who scold wltbout reason may well be disreguded.

PRESIDENTIAL .APPBOV '\.LS.

A. message from the President of the United States. by Mr. LRttR, executi•e clerk. announced that the President had ap­proYed and signed the following acts:

On May 27, 1914: S. 409ft An aet to amend the act authorizjng the National

Acndemy of Sciences to receiTe and hold trust funds f.or the promotion of science, and for other purposes.

On ~Iny 28, 1914:: S. 4632. An act for the relief of settlers on the Fort Berthold,

Cheyenne RiYer. Standing- Rock. Rosebud, and Pine Ridge Indian Reservations, in the States of North and South Dakota.

PAN AYA CAN .il. TOLLS.

Mr. THOR~O~. Mr. President, I ask that the unfinished business. hetng tlle- Panama Canal tolls bill. be laid before the Senate for cons;der:ttion.

The VICE PRESIDEXT. Is thel"e objection? There being no objection, the Senate, as in Committee ot the

Whole, ref:lnued the <'onsideration of the bill (H. R. 14385) to nmend seeti{)n G of an act to provide for the opening, mainte­nance. protection, and operntion of the Panama Canal and the san itation of the C:;mal Zone. approved August 24, 1912.

Mr. OLn""ER. Mr. President, on the· 7th of August, 1912. when the Panama Canal bill was before the Senate, I wns one of the elen•n Senators who voted to strike from the bill the provision for exempting vessels engaged exclusively in the constwise trade of the United States from the pay­ment of tol1s. I did so because it then seemed to me that the exemption of our vessels wns in contravention of the o.bli­gntions. imposed on 0111" coontry by th~ Hay-Panncefote trenty of 1001. As to the economic policy involved in such exemp .. tlon 1 nevei' was in doubt., and i1f the question had been free from the complicatfons involved fn the treaty I would, with­out he~itation, ba;e cast my vote tn favor of exemption; b-ut I am one of those who believe that men and nations shot1ld li'\e up to their contracts under all clrcumstanees and at what­e·yer eust, and I ~oted as I did b<!Ca use U then seemed to me .that. the trea:ty imposed on us the obllpt1an· of charging our

own vessels the same tolls us we proposed to charge tbose tty­tng other flags. I will ftankty confess that I ha,·e <"hnru;ed illf mind on thfs proposition. In doing this r bn;e followed an illustrious example. In Au~st. 1912'. immedintely after the enactmeiJt of tha legisLation which he DOW nsks US to reneat the distinguished gentleman who is now Pt·esldent of the United States gave that legislation his ap-pro,·al in these words:

One o.f tbe bills passed yesterd11y by tbe Senate, as It bad passed ~~al~ou.se, •pr~vides for tree tolls for Americaa ships through the

We want water ·carrfa.~re to compete with land earrta2:e so. as to oo perfectry sure that you are going to get bett1'1· rates arou'nl'l the canal than you would acroo;;s the continent. EvM"yt'hlnl! tbRt Is ilnne in tbe interest of free tl'anflportat1on is done dirl"ctJ.v for the farm"Pr as well aR for othpr men. So that you ought not to f,!:rUdJ[e>- the million-s poured out for the deepPnlng and opPning of eJd a.nd DI"W waterways. Our plat­form Is not molnss.es to. catch fifes. lt mPan~ tmstnl"~. It means w-hat it s~ys. Jt Is the uttt>rance- of E-arnest and bonf'l'lt men. who Intend to do busine-.c;s along those lines. and who are not waitiif'g- to see w-hetbev they can catch votes with those promises before tbey de· termine whether tbey are- going te act upon them or aot.

The pfatform upon which the Presldent was nominated con­tained tlle following plank:

We favor the exemption from tolls of Amerl~an ships engaged in tb..e eoastwi.se trade in passing through tlx! Panama Canal.

The President's acceptance of this plank wns distinct and unequivocaL So that as late as. the rmrumer and !all of 1912 l\!r. Wilson was unquestionably fa vorHblE> to this exemption, n nd yet on the 5th of March last he addressed Congress in the following wordS':

I lia ve come to ask you for the rep~>nl of that provisfon of the Pan­ama. C:uml aet o1 August 24, 1912, wbl(!h exempts vessels enga ... ed tn tbe coastwise trade o~ tbe United Stutes trom payment of tolls :nd to urge upon you the justice, the wisdom. and the la1·ge. policy of such a repeal with the utmost earnestness of wb.ich I am capable.

I have as much rtgbt to. change my mind as tbe ~resident of the United States bas to change his. In DJct, I think that my right in tllat respect is e,·en gt:e<Her tht111 his. becau~ my re­spons:biHty i3 less. When I undergo a chauge of wind it is only my own opinion that is being altered. while. as must be evident to everybody who has observed the conrRf> of events during the past few months. a change of mind on the purt of th.e President in•olYes a shifting of opinion on the par·t of a gre.u.t majority of' those who re))resent his pnrty in both Ho·uses of Congress. No one for an instant believes that this legislation could' recelve the support which is now being givpn it on the other side of the CllRmber if it were not for th~ into:istence of the masterful and all-compelling man who moves the wlnd.s of his followers from plnce to place lil~e the figure~ on n cbP:-:~bcard~

As I stRted before. I voted against exemption becam~e it then seemed' to me that It was In violntion of our treaty obligations. Upon a more careful study of the treaty nnd of tht> circum­stances which ted to its adoption. and of the radlcnl difference::~ between it and the Clayton-Rulwer treaty which it superseded, as wen as an enrne~t considerntion of mAtters which hJn-e come to 'lig-ht since the enactment of the legislation whi<'h it is now propo~ed to repeat. I am con>incecl thllt the exemption of our- shipping, coastwise or otherwise, from the payment of tolls, is tn ~o way an infraction of the trE>l:lty. Not only thU;, but. notwithstanding the protests of the Briti~h Government. I do not be~ieve that, so far as coa8-twise shipping is conremed, thn_t Gove.rnment In reality entertRins the ,·iew that it fs such an Infraction. The President .says .. whatever runr be our own di.f­ferences of opinion concerning this much-debatect measure, its meaning Is not debated outside of the t.nited 8tates." I must take issue with this statement. Our rig-ht to exempt our const­wise shipping has been offic1ully conceded outside of the United States, e'\en hy the British Go'\ernment. On the ~th of July, 1912. jnst before the pns&'lge of the Panama Cnnal bilL l\Ir. A. .Uitc.bell Innes. chRrge d'affaire.s of the British Embnssy at Washington.. nddressed n note to Secreta.ry Knox, in which he used this language :

As to tbl" proposal that exemption shall be gjven to ves~pls. engaged 1.n th<> coastwls~ tradt", a mot"'" d'llficnlt questio11 arises. If tile trade s-hould be so re;rulatE'd as to make It cE'1·tain that onlv hona fidE' co:•st­wlse- tra.ffic wbfcb Is re~;Crved for Unit{'d StatPS VPsseis would In> bene­fited' by this ('Xemptlon, It mny be that n.o obJection CQUld be taken.

He tben foJJows It by saying: Bnt tt ap)P.8l'!l to my Govt-rnment that it would be lmpo!'lsible to

frame regulaHons whif'h wonld prE'vent tbP P-:tf?'mptlon frQm reRuJting, In fad, In n preference to Unlted States sblpping a.nd consequently in an Infraction of ~ treaty.

At the time when the canal bill wns passed. in Au~rrst. 1912, th1s note of Mr. Innes w::ts ::til tl1:1t our GoYernment knew con­cerning tlte- sentiment of the British GoYernmt"nt on tbis subject. At that tlme we had not hearn of the do('trine. which has since been advaneed, thnt th~ neutrality of the cunaJ mennt equality wftb Its- owner. No argument or renson of nuy kincl hnd then ~n adYanced showing or tending to· show that we hnd parted with the rlg.ht to regulate- our own commerce between the

•

9356 00 N G RESSI 0 N:A.Ii REOO RD.::_:SEN ATE~ lfri '28 '

different ports of our own country. in our own way. The utmost consideration , the t611S ·of ~veu nonp·nyiug Yessels. The tolls suggestion contained in Mr. Innes's note with reference to our .were therefore fixed on a basis fully in agreement with the sug­coastwise vessels was that it might be difficult to . enforce a ges_tions of the British Government, and the chief contention of law exempting them from payment of tolls. He in effect ·con- Sir Edward Grey falls to the ground. cedes our right to mnke such a law. Now, this right being Here again was a place where this controversy should have conceded; tile suggestion seems. presumptuous and prep·osterou~ ceased, and so far as anyone seems to kn-ow the information that the United States, having enacted such a law, could not to Great Britain in Mr. Knox's answer to Sir Edw:ud - Grey or would not in good faith provide against its infraction or was accepted at its face value. The ground of the British evasion. protest had· been swept away ·and our canal act stood unim·

The protest of the British Government .was not received by peached. Great Britain had mistakenly assumed that our tolls our Secretary of State until the 9th of December, 1912, and then at Panama would be fixed without reference to the use of the· for the first time Great Britain disclosed the strength nnd canal by American coasting vessels, and based her argument of weakness of her demand, and set out in detail the reasons upon treaty violation on thilt mistaken assumption, and asked us which it was founded and the arguments in support of such to arbitrate on the soundness of her position. We showed her reasons. There is a sharp distinction between what we did in that we had taken the same position and that the tolls were 1912 and what we are now called upon to do. We were then fixed in exact conformity to her own contention. What more · melely considering an economic question of a purely domestic was there, then, to the case? Nothing. until we are now urged nature, the answer to which could in no way affect our to repeal the act on the ground that the arguments were sound dominion over the canal or our power to encourage the upbuHd- as advanced by Great Britain to maintain a demand which we ing of our domestic commerce. Now our action involves the had already granted by anticipation. acceptance or rejection of a demand to surrender for a 11 time The present issue as presented to us by the President is: attributes of sovereignty and rights of ownership, the full Shall we Tepeal the law that does Grent Britain no h:um for import and consequence of which upon our peace and prosperity the reasons assigned by Great Britain when she mistakenly su~ it is impossible to foresee. posed it did her an injury? That is to say, bas Great BritRin

In the note of 1\ir. Innes, which antedated the passage of thl.! the equality with the United States under the Hay-Pauncefote canal act, he mentions the fact that it was proposed to exempt trellty which she claimed when she supposed that equality was

·not simply the coastwise shipping but all American shipping infringed? f1·om the payment of tolls, and he stated that this would, in The real purpose of the Hay-Pauncefote treaty was to settle the opinion of His Majesty's Government, be an infraction of the privileges other nations should enjoy in the use of the the treaty. When the canal act was signed by President Taft, canal which the United States had determined to build. H

_ be thought it wise to take cognizance of this sugg<>stion, and in required no treaty to settle the owner's privileges or rights­a memorandum accompanying his approval he repudiated the they are incident to ownership. claim that we could not exempt our vessels engaged in foreign Note the language of the treaty. The rules for the government as well as domestic commerce if we elected so to do. The state- of the canal are not the joint rules of the two contracting ment of President Taft in this respect is lucid and convincing, parties, but are adopted by the United States in order to pre* but the act contained no such exemption and only exempted scribe the terms under which the canal could be used by such coastwise yessels, and this right the British Government had nations as would observe the rules. It required no rules to

·admitted. Here the business should have ended; but the forces establish the owner's right to use its own canal, and what shall behind the British foreign office were insistent, and as a result be the terms of such use is a matter solely for domestic legis­of this insistence, on the 9th of December, 1912, there was lation. handed to Secretary Knox a lengthy statement by Sir Edward The effort to take advantage of the general language ot rule 1, Grey, the purpose of which was to advance an argument why extending the use of our canal to all nations upon equal terms, the United States could not exempt its coastwise vessels using and . to construe them in utter disregard of our different rela· the canal, a right which was admitted in the first protest and tion to the subject, constitutes a plausible but unsound argu­a thing which the United States had already done. The chief ment upon which, to the credit of Great Britain, it is only fair to argument in this statement was that in computing tolls, in say, she does not rely. Sir Edward Grey does not find the order to insure that equal treatment which the treaty called terms of limitation wholly in rule .1. He predicates his claim for, all vessels using the canal should be taken into consider- that we are limited in our fr-eedom of action in respect to the ation, and that to grant an exemption to our coastwise vessels canal by the Hay-Pauncefote treaty upon the ground that. as would be to increase the tolls on British ships over and above he claims, the neutrality which we established by thnt treaty what they would have to pay if no such exemption were made. means equality, and that equality between the United Stntes

Now, tbis is all there was to the British caf:?e at that time, and Great BriU!in Is the same equality that was stipulated and all there is in the protest beyond this claim is argument put in the Clayton-Bulwer treaty. The Clayton-Bulwer treaty can forth to establish the proposition that the treaty gives Great only be read intelligently when the purposes -designed to be Britain that equality with us which makes our refusal to con· accomplished and the means of their accomplishment are sider all vessels in computing tolls a . violation of British steadily kept in mind. The purposes were to establish a com­rights. The answer to this complaint was obvious. President mon policy of the two nations to require of a canal to be built Taft in fixing the tolls to be paid had taken into consideration by outside parties that it should be neutral territory-that both all the Yessels of eYery nation, our own included, which it was countries should enjoy it upon the snme terms-and that this expected would pass through the canal, and Secretary Knox: should be accomplished by encouraging· such outside party to lost no time and wasted no energy in discussing reasons why construct the canal, which they joint~ agreed to protect, if we should fix the tolls upon a formula which we had already such third party would give them as good terms for its use as adopted. it gave to any other nation.

After first informing Gre11t Britain that we did not agree In the protest of Sir Edward Grey (see Senate Document No. with the construction placed by the British GoTernment upon I 11. Sixty-third Congress, page 14) he uses the following Ian-the Hay-Pauncefote treaty or upon the Clayton-Bulwer treaty I gunge: - · as set out in the communication, and that we did not deem it They (the British Government) considet· that by the CJayton-Bulwer nl'Cessary at that time to . amplify or reiterate the American treaty the UnltE:>d States nad surrenderE>d the right to construct the

. · . . , canal, and that by the Hay-PauncefotE:> treaty they rE>covered that right position upon the constructJOn of those treaties, the Secretaiy I upon the footin"' that the canal should be open to Bx·itish and United proceeded to point out thnt the complaint had no basis of fact. States vessels upon terms of equal treatment. He directed nttention to the fact, which I have already referred This assertion takes ~o account of the essentinl purposes of to, that the President in fixing th_e rate on the basis of $1.20 per 1

1

the treaties and the changed circumstances under which the net ton took into consideration all vessels of every description Hay-Pauncefote treaty was effected. under any flag wllich will use the canal; that th,e proclamation Article 8 of the Clayton-Bulwer treaty says: of the President fixing the tolls is based upon a report by Prof. In granting. however, their joint protection to any such canals• or Johnson. which estimates that the revenue necessary to main- railways as are by this arf1cle specified, it is always understood by the tain the canal will be $1!) 000.000 · thnt the report took as a United States and Great Br1taln that the parties constructing or owning

· . . ' · ' . . the same shall impose no other charges or conditions of traffic there· bas1s all competittYc ,·essels engaged m the coastwise trade of upon than the aforE>said Governments shall approve of as just and the United States. "CnHed States vessels engRged in foreign equitahle; and that the same c;anals or railways, being open to the citi­commerce. and foreign Yessels of a like description. and that zPns and subjPcts of the Um.ted States and Great Britain on equal

· · · . . l\~~" terms. shall also be open on IJI{ E:' terms to the citizen$ and l'lubjects of upon th1s JUSt nnd eqmtable basts the tolls were fixed. .~ore- every other State which Is willing to grnnt tllereto such protection as over, British attention was directed to the fact thdt this revenue the United States and Great Britain engage to afford. would not be sufficient to mnintain the canal-at le:;tst for the From this it will be se~n-and it seems to me that it ought first few years-and that by this basis for tolls the United States to. be accepted without question-that the consideration :tor Government b9ars ·whatever loss is necessitated by taking into equal terms rested solely upon the protection to be granted by

1~14. CONGRESSIONAL REOO-n.D-· 'SENATE. ~357

!the :two nntions :00 the c-a.lla1. 0~ no ot"h-e'r c~~ditl?n ,~m:e : equal tet'ms to be grnnted to the -subJects of Great Brtb:tm and the citizens of the United ·states. ·sit• Edwal'd Grey .attempts 'to lft1se tbis with the "..general principle ·•· of neutranzation "l.'efer~ea tn 1n tbe eighth article trf the 1Clayton-Bulwe1· treaty, "to w.hicb .tt 1has no relation whste•er. _

Tbe .. ~general principle'" I'"eferred to in the , 13renmble e_f t~e .}liay-Pa:uncef<:it:e trea1'y is, 'by the languag~ of the treaty Itsel~, ·the H genel'aJ principle" of article 8 of tire. Cluy~on-:BttlWBr treaty. Now, the "general principle." of thts a1'tt~le of._ the latter treaty is the -princ:lple o"f prgtectwn, lln.d prote_ct10n _a'lone; 'thnt is that '1t11 eount:Nes protecting the l:!ant~.l shall enJOY an equality ·of treatment in the use of the ctmal, with the pr~nr:1-sion ·that if .at rrny time the 'tr~errtment fbeeornes unequa1 the '"Dation discriminated rrgain~t shall tl:lere-a-:fter be relie>etl from t.he -dnty of 'J)rotection. In other words, ·equality o'f trea'tment was pre::licated and ·dependent upon pt·ote·ctien. Thi~ a'l·ti~le -~of the CJajton-HUlwer .treaty, a.nd nll other itreaty ·articles dealmg "with tLJ question, show beyond doubt, :first, that the po~rs ·~­tending protection to the canal ~auld enjoy vre'fet~en~iul treat­ment in the use of the cann:Land, ·sec:ontl.:ty, tbat protet:'uon ·o~ the cn1Jnl nnd "quality of treatment were mutually interdepenclen't conditions· ·tha:t protectitm was to be extended only-so tongt~.sthe treu:tment ~a:S eqna'l, _an:d tbat the ·.only ·l'erneity of such ·na-tions in case of unequal tre-atment was to :withdraw th_eir prot-ection. Protection antl equal treatment went .3and in hand; 'Were mutu­ally interdependent.

The first Hay-Pauncefote treaty incorporated thts '' gerreral nrtnciple" by pro-viding for joint p-roteetion of the canal .by ilie United States and Great "Btita1n, and for an -equality of n·eal:n.Jent nnd management <if the canal as between them. Tile two things, protection and equality, were in this treaty mutually interdependent, as they were in tne Clayton-l3ulwer ·tre<tty, bnt the Senate .refused its advi~e and c?n-sent to this treaty and sent :it 'back to the President so modli:ied as to re­lim-e England ::fr'Om any duty -or responsibility to ']Jrotect, all snch duty and !responsibility being ]Jut upon ·the United 'Stutes, ~d also so modified as to reserve to tb~ United 'States tlle wllole right to regulate the crrnnl. Great ·Britain 'declined to accede to these modifications and tbe trenty fell; but an the principles inn)lYed in the modifications were 1neorporated in the trenty o'f 1901, which .is now existent. Therefore England, no longer bound to protect the canal-the sole :md only eon­sideration upon which a dem11nd for equality of treatment could be bn!".ed-Iost the only right she possessed to demand equnlity of treatment with the protecting power, the United St~-ttes. As a consequence, the demand for equality of treat­ment now made stands without any equin1lent from her. No longer bound to protect, slle is no longer e~titlea ~o 'the sn1ne tre<:ltment whkh is extended to the protectmg na twn, una by the Yery "general principle" which she inYoke~. protecting t;ra­tions stnnd upon a difff'rent and pref~rerttial basis as to equality of treatment from all the rest of 'the world.

Article 3 of the Hay-Pauncefote .treaty, the only treaty 'whidh is now in force. nppears to me to adequ::tely carry ·out ·the "general principle" of neutrality, whicb was not to be impaired, nnd a lso comprehends the spirit ·of tll.:lt principle. If abso)ute rights of ownership nna control, and therefore fi'eedom to tleal with its own commerce in the use of the canal as it :Sees fit, are not recognized und conferred by article 2 of thnt treaty, then it is Yerily a source Cif wonder what the language does .mean. I will refi d it :

AnT 2 It is agreed that the canal may be constructed under the auspices · of the Government of the United States either directly at its own cost o1· uy gift o1· loan of money to indtviounls or corporations or tbrougb subscripti ons to or purchase of stock or s~ares, and that, sub­j t>ct to the provis ions of tbe Pl"f'sent treat-y. the srud Go~ernment shall bave and f'njoy all the rights incident to such construct1on as well as 'tb€ exclusive ri,!!ht of providing for 'the regulation and management ot the canal. CS. Doc. 4i:'iG, G3d ·cong., 2d sess., p. 2L)

With respect to the value of the consideration given G.reat Brjtain for superseUing the Clnyton-Buhver treaty, SiT Edward Grev refet·s to the account ·of the negotiutiorrs pTeeeding the ruti­ficntion by the Unite(] States Senate of the Hay-Pauncefote treaty, which Secretary Hny sent to the Senate Committee on Foreign Uelations. (See Senate Bocument No. 4'56. CSixty-thtrd Congress. second session.) Since the British Government, by that reference; recognizes the credibility aud authority of thjs document, I feel warranted in referring to it in answering their contention. In that document SecTetary Ray says:

'fhe whole theory of the treaty is that the cunal is to be an entir~Ty Ame1·ican canal. Tl1e enot·mous C{)St of const1·uctlng it is to be borne bv tbe Unit-ed States alone. When eonst1•uc~d It is to be exclusively tiic property of tbe Cnitt>d States, nnd ·Is 'to ·be ma11aged, contl"olled, and defended by lt. Und<'r these circumstances, .and consld£>1'1ng t;hat ~w by the new treaty Great Britain ts rPlleved o'f .an ~he. responsibility and l.mrden of maintaining its 'lleutl'allty and seCUTity, 1t rs thought tentlrely

"fa:Jr 'to ornlt 'the ·-PM'bi:blt1on t.Ju!.t "!tJ:O "i'orttftca:tton "Shall -be !ttl!Cted .com­manding the .canal or waters adjaront."

Further ruon_g in i:he snme .doeument it is stated: Upon n full r<rxchunge of views ·this article propo~t>d by .'~e United

States ·was neeepted ey ·G'l'eftt •Britain an~ be~m~s lll'ttcle~ .of ..the treaty now -submitted. It is · thought to do e.ntue JUStice ·to . tb~ ·reasonabl~ · d~­m-ands "<lf Grea.1: Br:it3in Ln .p1·eserving tile general prmerple of neutrnld­zation .and at the ·t~ame time ,to ..relieve ·the Dnited ' Stntes ·of · the vague, ,i.mlet'iiHte. ~ ~mb-arrassin.g nbUga tions .imposed by the ·eighth arti-cle ..of ·the Clayton-'Bulwer tl:eaty.

The elear :purport of these .statements is i:hnt the British Gov­erillllent. in agreei:Qg to -the su11ercession of the Clayton-Bulwer ­ttreaty, ilirrd in l'\~ew ·ns .:n ~consider<ttion -the 'relief l:t wnnld h1nr:e .:from the obfign:fion to 'pro·tect the net:ttTnli.ty ·auil seCllrity of tlre cana~I. This Yiew 1Fl abundantly 'SUbstantiated in a memoranllnm Jn.cl't:lsed tn .a dispatch -from ·Lori! Lrmooowne to Mr. Lowtlli!r, unde1· dsrt-e of August B. 19<X1 (-see Senn te Document ..~. • o. 456, Sixty.third Cong1:ess, .second session, page :50}, whkh sn:ys:

rt :i:s ruso -to ':be :borne In mind ' that -owing to t;he omission of the words under which the countt-y became jointly bound to defend the neutralit;Y .of the canal, and the ..abrogati-on ~f tbe .cla:ston·B~llweF t1·eaty

1 tJ?e ?bh­

gations of Great Britain would be matenally 'dimLDished. :rh1s 1s a most important consideration.

It <:!an thus ·be seen thnt Oreat ·Britn'in in consenting to any .mollific.:'l"tio:n of the Claston-Bulwer treaty was not ;unmindful -of nbe obligations impo~en ·:Upon ;ller .IJy tlfat tr.eaty. arrcl o1' tl.Je ·relief whlch such mudificu-tien would 'bring fram the .otUga tion df -protecting a:na defending tbe canal and of gua-ranteeing its neutrality. But it seems to me that there was another and more compelling .r.e::~son why the Gov:e.rnment of . Great Britain Should not only ·be willing but anxious to accede to any terms which the United States .might propgse, and that is the a i.han­.tuge wb.ich would inetitably •nccr.ue to thnt country irom the very construction of the c:mal. Great Britain is the greatest shipowner in the world. Her flag flies on every se·1. Accordi ng to the report of tlle Commif'sioner of NaYigat1on, tbe steam mer­cantile marine 6f Great B1·itain on the 3st of July lnst consisted of 10;009 vessels, with a total gross tonmrge of 1D.S49.167 ·ton:s. This is .more ,than equal ·to fbe combined mercantile madnes of ibe ·United States, Germany, France, Itfl ly. Japan, Hussia, the 1-etherlands . .Norwa-y, and Sweden. .These countries to­gether own 10,523 vessels, and their combined capacity is only 16.173,936 tons. The canal will, of course. fncilitnte and stimu-

. late ocean navigtrtion, and ffs u conseque.p.,ce of her ·enormous pTeponderance as a shipowner Great Rri tain Will nHtur:~lly reap more benefit from its construction than all the world he­sides. Her goy-ernment, therefere. could in no way afford tv be a .stickler for terms when another government was ready and willing not only to ·construct the ·canal but to assume the ·entire respon~ibilizy fo.r its maintenance nnd protection.

The a vowed pHrpose of the H ay-Pnun(>efote tren ty w as to facilitate the construction of a ship canal b.IJ the United States and to .remo•e any objection .which might arise out of the Clnyton-Bulwer tr~1ty to the construction of sucb a canal under the auspices of the Dniteil "Stutes without impairing the "..general principle of neutL"alization ,. .estabLished in article 8 of the com·ention.

Now, note. the trbjeet wn-s to facitirnte the com:truction by the United States-not 1o :gke the United States permiHsion ·to construct. How did it facilitate the construction? In one wny only. lt was the fuHHiment of uur ·engagement in the -c::rrt<:>n­Bul-wer · tre::~ty to extend the principle of neutr alization to the 'Pannmn Can~1l as we hntl agreed to do.

The contention Of •Greut •Britain is not advnnced IJy the alle­.gntion that we ·s-ecured our right 1o 'build the cnn~cll ~Y t~1e nbrogation of the Clfljt-on-Bul.wer treaty. The real questiOn 1-s, \That eights bas Great ·Brit::~in in ·our c:mal under the Bny­

"Pauncefote tre<tty·? Gre-at BI;itain never had any rights in any mma:J under the Clayton-Bulwer treaty. 'There wns no cnnal. All that the United Stntes and Great BritaJn n~r~ea to was that if one were ~o-nstructeu by some country ·other thnn the llJnlted Stat-es or Great B:citain, or by pri-ntte parties or n pri­'fRte corpor::rtion, the two contrnctlng ::nations wouJU defcnll 1t if they were giYen equal rights and equal toll-s,~ ~oliey:~n which they agreed 'they would nsk nil ·the world to JOin, wmch they ne,:er did.

The Clnyton~'BuJ .wer tre..•rty, under ·wflich tlm two nnti.ons, the United States and ·Gre.1t Rritatn, jointly agreed to protect a canal to be built by outside parties. is ·abl'ogatea iJ?. ~press terms. Its .pla<.'e is tnken by the iHay-Pauncefote treaty, by t_he ·terms of which ·the Uni'tell -stn1es Junliertakes not only ·1o bmlu but to protect and defend the canal. and as its bu_ilder, pro~ector, defender ::~nd owner it ·adopts r·uies :under Wblch the c1ttzens ~rnd subj~ets of other nations •cnn --shul:e the results of its -ent-e~·-prise and -expendltrrr·e. _

N-ow, Jet us look at the t-erms tlf this treaty. :Bnt 'fi~<st I wiSh to point out tne stvong line•of alstinetion bc~.tween Cle •Clay,-

~ -

-

9358 _CONGRESSIONAL RECORD- SEN ATE. ~fAY 28,

ton-Bulwer treaty and tbe first IIuy-Pauncefote treaty on the one hand and the existing Hny-Pauncefote treaty on the other. Article 1 of the Clayton-Bulwer treaty reads as follows:

The Governments nf the United States and Gt·eat Britain hereby de­clare that neither the one nor the other will ever obtain or maintain for itself any exclusive control over the said ship canal; agreeing that neither will ever et·eC't or maintain any fortifications commanding the same or in the vicinity thereof, o1· occupy, or fortify, or colonize, or assume, or exercise any dominion over Nicaragua, Costa Rica, the Mos­quito coast, o1· any part of Central America ; nor w1ll either make usP of any protection which either af!'ords or may afford, or apy alliance which either bas o1· may have to or with any state or people, for the purpose of erecting or maintaining any such fortifications, or o1' occupy­ing, fortifying, or colonizing Nicaragua, Costa Rica, the Mosquito coast. 01' any part of Central America, or of assuming or exercising dominion over the same; nor will the United States or Great Brltuin take ad­vantage of any intimacy, or use any alliance, connection, or influence that either may possess with any state or government through whose territory the said canal may pass, for the purpose of acquil'ing or hold­ing, directly or Indirectly, for the citizens or subjects of the one any rights or advantap-es in t•egard to commerce or navigation throu?h the said canal which shall not be offered on the same te1·ms to the c1tizens or sobjects of the other.

The first paragraph of ·article 2 of the Hay-Pauncefote treaty of 1900, which was nm·er ratified, reads:

Tile high contraeting parties, desiring to preserve and maintain the "general principle" of neutralization established in article 8 of the Clayton-Bulwer convention, adopt as the basis of such neutrall:isatlon the following rules, substantially as emhodled in tbe convention betwel'n Great Britain and certain other powers signed at Coru;tantinople October 29, 1888, for. the free navigation of the Suez Maritime Canal; that is to say:

It will be noted that in both of these treaties the two nations stood on terms of exact equality, and Great Britain equally with the United States was a party to the adoption of the rules under which the proJ}Osed canal should be operated. Now, compare this with articles 2 and 3 of the present Hay-Paunce­fote treaty :

ARTICLD 2.

It is agreec1 that ttl~ canal may be constructec1 under the auspices of the Government of tbe United States either directly at its own c.ost, or by gift or loan of money to individuals or corporations, or through subscription to or purchase of stocks or shares; and that, subject to the provisions of tbe p1·esent treaty, the said Oovel'tlment shall have and enjoy nil the ri.{:hts incident to such construction, as well as the exclusive right or providing for the regulation and management of the canal.

ARTICLE 3, PARAGRAPH 1.

'l'he United States ad&pts, a11 the hasl9 of the neutralization of sucli ship canal, the following rules, substantially as embodied in the con­vention of Constantinople. signed the 28th Octol.ler, 1888, for the free navigation of the Sue21 Canal; that is to say:

It will thus be seen that Great Britain in this treaty retires from the posiLon she occupied under both of the others, nnd that the United States, and the United States alone, adopts and prescribes the rules under which the canal shall be operated. The first of these rules is the chief bone of contention:

RilLB 1.

The canal shall be free and o}3en to the vessels of commerce and of war of all nations observing these rules on terms of entiL·e equality, so that there shall be no discrimination against any such nation, or its citizens or subjects, in I'Nipect of the conditions or charges of traffic or otherwise. Snell conditions and cbargea of traffic shall be just and equitable.

Now, let us examine this rule, always keeping in mind that it is a rule laid down by the United States, the sole owner of the cana I. It says :

The canal shall be free and open to the vessels of commerce and of war of all nations observing these rules on terms of entire equality.

I presume it will be cllnceded that the phrase "vessels of commerce" as applied to any nation means the vessels of com­merce belonging to citizens or subjects of that nation and fly­ing its fiHg, and that the phrase "vessels of war" menns the vessels owned by the government itself. "Vessels of commerce and of war" of the United States would then•fore mean all vessels flying the flag of the United State,s. Now, under this rule vessels of war as well a.s of commerce must pay tolls. That i~ conceded: On the 19th of Novembar, 1912. following the en­actment of the Panama Canal bill, President Taft issued his proclamation prescrwing the following rates of toll to be paid by vessels using the canal :

1. On merchant Teasels carrying l)assengers or cargo, $1.20 per net vessel ton-each 100 cubic feet--{)f actual eat·ning capacity.

2. On ve!';se!s in ballast without passengers or cargo, 40 per cent less than the rate of tolls for vessels with passen~et·s or cargo.

3. Upon na v:tl vesseJs, other than b·ansports, colliers, hospital ships, nnd supply ships, 50 cents pet• displacement ton. . -

4. Upon army and navy transports, colliers, hospital ships, and supply ships, $1.20 p&- net too. the vessels to be measured by the same rules as are empleyed in determining the net tonnage of merchant vessels.

It win here be seen that all vessels, both of commerce and of war, must pny tons. None a re excluded. If, then, the phrase "an nations observing these rules," as contained in rule 1 of the Ray-Pauncefote treaty, includes the United . Sta:tes, the £rantor, _it must neces~rilf f&llow that the naval vessels of the

United States and the army and navy transpGrts, colliers. hospital ships, and supply ships owned. by it, must be chnrged tons as well as like ships of other nations. Now, this is a construction which nobody places upon this rule. Everybody concedes that the naval vessels of the United States cnn pass free, or, at lem;t, that the United States bus the powar to allow them free passage without being charged with a violation of the treaty. How, then, can we escape the conclusion that this power or this rule carries with it the right to exempt its ships of commerce as well? There can be no other conclusion.

Now, let us suppose that two battleships appear in the harbor of Colon at the same time, bound for ihe Pacific. One belongs to the United States Navy, the other to Great Britnin. 'l'hey pass through the canal on the same day. The British ship pays toll at the rate of 50 cents per displacement ton· that of the United States pays nothing. Neither Grent Britai~ nor the ad­vocates of repeal, nor any other person, will contend that this is an infraction of rule 1. Why construe the rule one way as to warships and another as to merchant vessels? The language of the treaty is precisely the same with regard to both-

The canal ' shall be free and open to the vessels of commerce and or war of all nations observing these rules, on terms of entire equality.

But let ns go a little further in the examination of this treaty. Jn addition to rule 1, which is the main subject of contention, it lays down five other rules under which the cannl shall be used. Not one of these five can by any possibility be held to apply to the United States as a user of the canal.

The second rnle provides that-The canal shall never be blockaded, nor shall any right of war be ex:·

ercised nor any act of hostility be committed within lt. The United States, however, shall be at liberty to maintain such mllitary police !1odn~11~~;d~:_nai as may be necessary to protect it against lawlessness

It surely can not be contended that this rule is in any way intended to apply to the United States, for it stands to reason that no country would ever under any circumstances institute a blockade of its own canal, and its right to fortify and to pro­tect it is conceded by everybody. This rule is laid down by the United States as one of the conditions under which other na· tions shall be allowed to use its canal.

Third. Vessels of wa1· of a belligerent shall not revictual nor take any store~ in the canal, except so far as may be stri ctly necessary ; and t lle transit of such vessels through the canal shall be effected with the least • possible delay in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service.

· Prizes shall he in all respects subject to the same rules as vessels ot war of the belligerents.

If these rules are intended to govern the United States as well as other nations, it would prevent our Government from using the canal as a harbor of refuge in case of war with nny other power, and such use is in reality the chief reason wby this Government incurred the enormous expense involved in building and assumes the great responsibility of maintaining it.

The other rules read as follows: Fourth. No belligerent shall embark or disembark troops, munitions

of war, or warlike materials iu the canal, except in case or accidental hindrance of the transit, and in such case the transit shall be resnmed with all possible dispatch.

:Fiftb. The provisions of this article shall apply to waterR adjacent to the canal within 3 marine miles of either end. Vessels of war of a belligerent shall not 1·emain in such waters lon~er than 24 hours at any one time, except in case of distress, and in such case shall depart as soon as possible, but a vessel of war of one belliJGer~nt shall not depart within 24 hours from thl.! departure of a vesse1 of war of the other belligerent.

Sixth. The plant, establishments, buildings, and all works necessary to the construction, maintenance, and operation of the canal shall be deemed to be part thereof for the purposes of this treaty and in time of war as in time of peace shall enjoy complete immunlty from attack or injury by belligerents and from acts calculated to impair their use­fulness as part of the canal.

If these rules are to control the United Stutes as well as other nations, we could not maintain any depot of supplies on the canal; we could not revictual our ships or maintain a coal· ing station; or, in fact. use the canal or the canal territory for any other purposes of war. Why, then; may I ask. did we build it? It is not necessary to go into any lengthy discussion of this proposition, for nobody contends that the United Stntes is in any wny bound by the last five of the treaty rules. Why, then, contend that It is bound by rule 1? To use the concise and convincing words of Mr. Olney :

When five out of six of the treaty rules for . the use of the canal do not apply to the United States it is a reasonable conclusion that the sixth also was not meant to apply. ·

Mr. President, it seems to me that a careful consideration of the subject leads inevitably to the conclusion that t;he canal ls the property of the United States, built across her own ter­ritory by, her own sons with her own money; that she can handle and manage this property of hers in any manner that seems best to her, . subject only to the limitations she hns placed upon het·self in the tr~aties with Great Britain and tlle

1914. CONGRESS! ON AL RECORD-SEN ATE. 9359'

Republic of Panama; th.at the exemption of her owu shipping dent. I realize 'that the su0ject is not free 'froin controversy. from the payment of tolls is in no way a violation of either I have been deeply impressed w·itb the arguments presented of t110sc treaties, es}Jecially in -riew of the fact that the tolls by. Senators who ha,;e so ably spoken on the other side of the which \-re propose to charge to yessels of other nations are question. If by our t reaty we have precluded ourselves fTom so low that if we add to the revenues derived from them' tbe passing our own ships free through the canal, which I do not amounts we would recei,·e if we charged tolls for our own believe, we ought to stand by our bargain. Inasmuch as the shipping the total sum would be se-reral million dollars s'Cort Go•ernment of Great Britain, · which in the note of 1\lr. Innes of the amount nec'essary to operate the canal, to say nothing conceded our right to exempt our own shipping, now insists on of a return on the im·estment. · another interpretation of the treaty, and as this view is taken

Now, a few \vords as to the policy of doing this. In the by m~\ny of our own people, I think it is a fair case for arbitra­years that are pas l the United States bas spent many millions tion, and I will vote for any amendment which provides for upon her waterways and her harbors. Not a dollar of tolls is submitting the question to any impartial tribunal. I firmly charged upon any of them. Why should we make an exceptiou believe that any such tribunal will decide that the United of. this, the greatest _an? most i~portant of_ all~ Senators upon I Stat~s has a ~ tlll right _to do as she pie~ ·es w~th her own. If the other side say It Is a subsidy. Subsidy IS a great scare the JUdgment Is otherwise, -we should abide by 1t. word for our Democratic friends. but only when it is coupled 1\lr. DO PONT. Mr. President, to those \vho-have not given with the word "ship." Other subsidies do not frighten them. the subject special attention it might seem, nt the first blush, If the subsidy takes the shnpe of an appropriation of $678,240 that, despite the differences of opinion, the proposed repeal of for the extermination of the cotton-boll weevil, or of $400,000 the exemption from the payment of tolls of our xessels engaged for the eradication of the southern cattle tick. or of :my in coastwise trade is not a complex proposition. As a mutter other of the multiform ways of spending Government money, of fact, however, the whole question is a very intricate ·one; of whi ch latter-day statesmen are so foud, they do not run invol•ing a number of highly important considerations, includ­·away from it. I will frankly say that I am not afraid of subsi- ing the controversy between the British Government and our dies, called even by that opprobrious name and applied to own tq regard to the proper interpretation of the Hay-Paunce· American shipping. If Congress would spend for the encourage- fote treaty. ment of American shippiug a tithe of the money it annually Under date of the 8th- of July, 1912, prior to the passage w~lstes in subsidizing certain favored localities and classes, the of the Panama Canal act on the 24th of the following month, country wou.d fare infinitely better. I wonder if we rea lize the which exempted our coastwise tr~de from tolls, the British tribute we are yearly paying to other counh·ies for carrying our Government made a general protest against any exemption foreign commerce. For the fiscal year of 1913 the total value of from tolls in favoi· of American shipping passing through the our exports and imports was $3,773.030,864. Of this we car- canal, followed, November 14, 1912, by a much fuller note on ried in our own. ships only $381,032,4!:>5, or almost exactly the the same. subject, special exception being taken to the Panama same T"alue as we carried away back in the year 1861. In 1861 Canal act as nn infraction of the treaty. This note stated that we carried 6u.2 per cent of our foreign commerce in our own the British Go•ernment-bottoms. In 1913 we carried just 11.2 per cent. The amount recognizes that many persons or note In the Unit~:>d Stntes, whosol of toll we pay to the people of other nations, and particularly to opinions are entitled to great weight, hold that the provisions of tile

· f · f · 1 net do not Infringe the conventional obligations by which the United Gre;lt Brit:un, or ·carrymg our oreign commerce is n most be- States is bound, and under these circumstances tbey desire to state yond computation. and a comparatiYely small sum paid annually theil· perfect readiness to submit the question to at·bitratlon If tl.te for the encouragement of American· shipping would return us Government of the United States would prefer to take this course-twenty, sixty, or a hundred fold. And that-. .:f. this toll exemption is a subsidy, then practically every a reference to nrbltt·atlon would be rendered unnecessary I! the Gov­Ullpropriation we make,- except for actual running expenses, ernment of the United States should be prepared to take such steps can be called by that name. !:m~~~~dhi~r:os~it~~ objections to the act which His Majesty's Gov-

For nearly 50 y,ears a priT"ate corporation maintained a se- The steps referred to being, apparently, the repeal of the ries of locks and dams upon the Monongahela Rh·er in my Panama Canal act. State. This company. charged tolls up<;>n eYery vessel passing In its reply to the preceding notes, on the 17th of January, tit> and down the riYer. 'l'he tonnage was, and still is. -rery 1913, Mr. Kno;x, our Secretary of State, a'fter dissenting from grent, consisting largely of coal, and the company reaped large the interpretation placed UilOU the treaty by the British Gov­pJ:ofits. About 20 years ago the Government bought out this ernment, expressed the opinion that arbitration- would not be in company · and freed the commerce of the ri,·er, relieving the order until the completion of the Panama Canal, as the prO.: coal-mining industry of what had been rather a henxy burden. \isions of the treaty in regard to its use would not becurue Now, .in doing this ~ the Go-rernment subsidized somebody. If operative until the canal was opened; and added that the arbF the freeing of the rher from tolls reduced the price of coal, the steel manufacturers and the people down the Ohio and"l\fissis- tration proposal might be carried out either under special agree-sippi who used it were subsidized. If, as I believe. it made ruent or nuder a proposed arbitration treat.v which was being

negotiated between the two powers. little or no impression upon the price,· the .coal operators were Thif:? was follo"·ed by another note from the British Govern-the direct beneficiaries of the subsidy. ment, dated February 27, 1913, suggesting that-. The Agricultural bill, which passed the Sem1te last week, the difference which exists between the two Governments is clearly

~~l'll~·i:U~t:ie~r~~ri~~~p~r~~io!50~h t~h:m~~~~o~~~ie~ec;-fet~~~ ~retOV~~ falls within the meaning of article 1 of the arbitration tre~ty States concerned or with individuals, to make im·estigations And that the- · and demonstrations in connectiQn with the de-relo11ment of live­stock production in the cane-suga r and cotton districts of the United StRtes. The SenHte, in its wisdom and liberality, voted by a majority of two to one to increHse this appropriation to $100;000. What else is this but a subsidy intended, I pre­sume. to reconcile the heretofore sugar growers of Loujsiana to the cruel stab they recei\ed in the house of their friends by the e.nnctment of the tariff bill? This exemption of tolls, t.Ir. President, is no more-in fact, it is eYen less-of a subsidy than this and many other grants like those I have referred to which pass Congress almost daily. It surely is no ru9re of a subsidy to-day than it was on the 7th of August, 1912; when e\ery Democrat in the Senate •oted in its favor.

I o.elieYe that under the treaty we ha\e this right. I belieYe we ha-re it not only· as applied to our coastwise shipping, but to that engaged in forei~n trade. I belie-re that the right ought to· be exercised, for I do not ' think thnt so fnr as the ships flying our flag are concerned they should be subjected to any other rule than that which goyerns our other waterways. I will therefot·e Yote ngainst -the repeal. I will go further-I will ,·ote for any proposition which seel{S to amend the e:x<isting .J.aw GO as to exempt our foreign as. well as our coastwise ship­ping· fl'Om the payment of tolls. At the s·ame time, 1\11:. Presi-

LI--590

interest of both countries requires that Issue to be settled promptly before the opening of the canal, and by means which will l~:>a.ve .. no ~round for regre t or complaint. The avoidance of possible friction h~s oeen one of the main objects of those methods of arbitration o:: which th(' United States has been for so long a foremost and consistent advocate. ·

l\Ir. President, the various questions involved ln the discus­sion of the pending bill may be summed up undeJ.· three heads:

First. As to whether the coastwise exemption provided for in the Panama act was in violation of the Hay-Pauncefote treaty o.t 1901, as asserted by the British Government. and by President Wilson. - · ·

Second. As to the economic questions involved in the repeal o.t the coastwise e_...:emption.

Third. As to the precedents which might thereby be cre~ted. and as to our moral and patriotic obligations to the people of the United States. ·

~o far ns the first head is concerned, I do not propose to trace the diplomatic history of the Hay-Pauncefote treaty, nor to discuss the question as to whether the words "all nations" in­clude. or do not illcludc, the United States. this ha·dng been done most fully and most ably by others, and I shall merely refer to a few points in connection with the bill which h ave made a certniri impression lJPOn my · mind.

9360 CONGRESSIONAL RECORD-SENATE. l\fAY 2B,

Under the third article of the Hay-Pnuncefote treaty the United '3 tates adopted six rules in regard to the neutr:.1lization and u:;;e of the P anama CanaL The first of these rules reads ~ follows:

T he canal sbnll be fre'e and open to the ve!'1Sl'ls of commerce and of w:n· of all nations observing tb e?~e rules, on terms of entire equality, so that there s ~1all be no discrimination a:;alnst any such nation, or it:t etozens or subjt>cts, in n ·SJ H'Ct of the conditions o r· ch :ngt·~ of tt-atlic or otherwise. Such conditions and charges of tramc shall be just and equita!Jie.

The Panama Canal act of August 24, 1912. declared that ¥es­sels engaged in our coast'\\ise trade were exempted from the payment of tolls passing through the canal. It is claimed not only by the BI1tish Government, but by the President of the United States and a nuruller of our prominent statesmen and jurists. that this legislation was in contra ,·eution of the rule just quoted. On the other bnnd. many of our distingni~hed • international la·wyers and statesmen, induding ex-Presiuent Taft. ex-Secretary of State Knox, the Speaker of the House of Representatives, and numerous others. take a wholly diffPre:tt view, which, it may be observed, has the support of several English authorities ns well.

When the Hay-Panncefote treaty -was concluded in 1001, the ves els engaged exclusiYely in our coastwise trade. or, as it is entitled in the Re\'il:'ed Statutes, our domestic commerc~ con­sisted of those enrolled under our navigation laws and which paid ~n annual license to the Go,·ernruent. These ,·essels plietl between the different ports of the United States, including, by virtue of speciHJ acts of Congress, the ports in Porto Hico. Hawaii. and Al:-~ska, and were at all times. except when on the high seas, in territory under the jurisdiction of the Unitetl States. As the Hay-Pauncefote treaty referred to a canal which WtlS to be construrted on the soil of a foreign power, it is ft serious question whether tne treaty could ba,·e referred to our coastwise vessels, inasmuch as such ,·essels sailing from an Atlantic port to a Pacific port, or the re,·erse. and which to reach their destinntion would bnve bad to pass for some 40 miles through the territory of a foreign nation, were e,·ideutly differ­entiated from our vessels engaged in domestic commerce which -sailed directly from one port to another port of this country and were never beyond its jmisdiction except when on the high seas.

I never have been able to bring myself to belieYe, .Mr. Presi­dent, thHt when the treaty of 1901 was negotiated the British GoYernruent bad our coastwise vessels specifically in mind. I belie,·e that these vessels were excluded from consideration not only because they were engaged exclush' ely in our domestic commerce with which British shir>s could not compete, but be­cause domestic cowmerce in general, or •• cabotage," as it is called in continental Europe, refers e~clusively to commerce carried on nuder domestic jurisdiction. A pr·eclsely analogous case. with wWcb the Bl·itisb Go,·eroruent must necessarily have been fumiliar, is to be found in Europe. The commerce of Russia between its ports on the Baltic Sea and its ports on the Black Sea. which only reaches its destinHtlon by pHssing for many miles through the Dardanelles in Turkish territory, can not be considered as cnbotD~e. or coastwlse trade.

The nsRertion bas been mnde that it was clearly understood between the contrnctlng powers that the abo,·e rule did · cover specifically our coastwise ves els, and that therefore we are bound ln good fHitb not to discrimin:lte in their fHvor. A.tlmitting. for the sake of Hrgument. thnt the above assertion wns correct. it could only hnve referred to the unrler!'taurlin~ between the British GO\·ernment and the representat!Yes of the Executive branch of our own Government who conducterl the negotiations: but, Mr. Pt-e.·ident. under the Constitution the President of thE> United Stntes does not possess the exclusive trenty-mnking powet-. but sb11res it with the Senate. In f~lirness. therefore. when we consider thl point. the intent of the Senate when it ratified tbe tre11tv should be tnken into account. and it is the practic»!ly unnniruons testimony of those who were then mem­ben~ of that body that it wlls the clenr and definite understand· ing of the ~eua te that the Cnited 8tates bad the full right to exempt its coastwise ves~els from the imposition of tolls with­out incurring any impnt<ltiou of thereby viobttin~ the trenty .

Some two yenrs Inter. the situntion wns entirely cb;mgerl when the Republic of PHna mn ceded to our. country a trnct of tert'itory <".Xtending from the Atlnutic to the Pacific Oc~:>an . known as the Canal Zone, 0\·er which the United States enjoys full and COilll llete sovereignty. as is n ffi r metl by a dccisiou of the Supreme Court. Under· these conditions it is evideut that our co~lstwi::;e ,·es els p:ying between the Atlantic and Pncdic anu not touching nt ;my forei gn ports would be nlways wltWn American territory except when on the bigb ens, and that their stntns. therefore. would be identicnl with those ve~els which sail from one .-\ tl antic port to :mother. ot· from one P arifk port to another. It is to be observed that the change of conditions

incident to our newly acquired so¥ereignty wns recognized by Great Britain in her second note. which concedes that-

Now that the United States hns become the practical sovereign ot the canal. His Majesty's Uovcrnml'nt do not question its title to exer­cise belliget·ent rights for Its protection.

Taking up now. 1\Ir. President. the second branch of my sub­ject-as to tlle economic questions inYolYed-1 will say thut I hnve always been a strong advocate of a wise ;md well­considered system of subsidies for American commerce. be­lieving this to be the only way in which our almost nonexist­ent merchant marine can be restored. Two years n~o I \'Oted aga inst the conference report on tile " act to pro,· i<l~:> for the OFening, maintenance. protection. anu operation of tbt~ Panama Canal." and when the vote W ll S taken on the motion to stl'ike out the clnuse exemr1ting American const_wi e vessels frorn the payment of tolls. I stnted that bnd I not been paired I would bave voted "yea." . l\ly action Ht that time w::~s btts~:>d on the belief that if subsidies were to be granted to ollr con~twi::;e shipping it was far wiser and better to gr:mt them directly and openly by refunding their canal tolls thnn to do so in the indirect way provided for in the act just mentioned. pHr­ticularly as by the former method we would not blH"e in,·oJ\·ed oursei,·es in a controversy HS to the obsernmce or nonob­serv~mce of our treaty ol>ligntions. Hnd the interests of unr coastwise shipping been thus treated. the Rriti~b Oover'1m1ent would haYe bad no vnlid grounds for objection. as. lil\e all the other great powers. it bas always granted subsicties to its own merchant mHrine, these subsidie..;; being one of the fHctors which have brought about the practical extinction of our merchant mnrine.

Now, Mr. President, I am aware of the f::~ct that it is alleged thnt an exemption from tolls is not a subsidy, and the junior Senator from New York, in his \'ery nble speech on the bill now before tllC Senate. hHs defined a subsitly ns "n gift of tmblic funds from the GO\·ernment to a prin.lte person or corporation to aid In the establishment or support of nn euterprh•e deemed udvanb.:geous to the public"; which defiuitinn. iu m.v jn«lg­ruent, is far too narrow. A sul>sl:!y is detiuert in Webster's International Dictionary to be "a grant frorn the Go,·ernment, from a municipal corporation, or the like. to n prinate pe1·son or company to assist in the estnl>lisllment or SUJitlort of Hn entet·prise deemed advnnta,geous to the public; n sub,·ention ·•; and a sub,·ention is defined by the s:1me authority to be "the act of relienng, as of a burden; support: nirl: n •. istance: help. A Government aid or bounty." lf the d~tinit1ous of the International Dictionary be accepted. it is e\irtent thnt a :-ub­sidy is not confined to a gift in the shape of money. hut to Hid, assistance, or help In nny form. As instanceR, \Ye mfly cite the extensive gr~m ts of land made by the Go,·erumeut to our t rn n • contin~ntul rnilronds and the don:ltions of l:1nt1 or exemptions from local blXHtion so often· mnde by ruunicit>nllties to eneunr­a~e the location of new enterprises within their corporute limits. Going a step further. let us tnl~e the c:~~e of a ri\·er which is of sufficient depth for orrlinnry ,·es~els of <>omm.,rce, but wbicll bas a bar nt its mouth which renderR it in11Cce~sillle. Now, the Government could mnke a grunt of money to the communities interested for the purpo~e of ennhling them to dredge the bnr and m:-~ke the stre:am acce~.·ible, Hlld it ct.nl•l not be disputerl thnt this would be a ubsidy; hut sboultl the Go,·ernment say " Ko; we will not gh·e the money dir<C'<'t ly, but will dredge the bRr at our own cost and in our o"·n wHy," it seems to rue thnt such fln expenditure of pnb :ic fu111ls W•lllld nmouut prHctical1y to the snme thing. In ~;hort. l\lr. Presitlent, to my mind any nid extended for tha establishment or !'npport

· of eutP.rprises deemed ~:~dve~ntageons to the puhlic-whether in the form of direct grants of money. lund. or other Ynlnnhle considerntions, or by the expendHure of funds to hupro,·e our rh·ers and bnrbors-is a subsidy, in n direct or lndirec·t ff)rm.

Another argument preseuted in support of the peu1\ing bill is bnsed UliOn the prediction that if the exeu1ption frow tors· be retained it would not be of cllly Rvail to the ~enernl pnbl ic hy the reduction of freight rlltes. but would simply permit t lle ve ~sel owners to reap larger profit nt tbe expense of the t:ax­payers. Econom.lc predictions. l\Ir. PreRident. when tiJey refer to specinl and pnrticnlar ca es, are somewhat hHzardous. A great many unsound ones b:ne been made in the pust. l\l:tny ~·e~1rs ago it wns insisted that the r~:>moval of the duty on coffee by the so-cal!ed "free brenkfast t n ble" act would be of great benefit to the consnmer: but the sequel IH'o\·ed thnt nil thut ensued was that the Tren sury of the United St11tes WllS the loser without nny benefit to the consumer. A simil il r instnnce wns the forecast mnrle as to the loss to the ca ttle owners tbron~hout the land when hides were pnt OJ' the free li~ . the fnct being that after this action was tnken the pri~e of hides advanced. Confident and reiterated predictions, as we all know,

1914. CONGRESSIONAL RECORD-SENATE. 9361 have been made that the reduction of the tariff would greatly reduce the cost of living, but up to the present moment these have not been fulfilled. All such economic considerations, how­e•er, Mr. President, are relatively unimportant, in my judgment, the chief points at issue being whether the exemption from tolls of our coastwise traffic was 01 was not a violation of the treaty, and as to our responsibilities to the people of this country in any action which may be taken.

Passing now, Mr. President, to the last branch of my sub­ject, in a much more able way than I could have done the junior Senator from Utah has anticipated much of what I had intended to say in regard to the precedent which would be established by the repeal of the exemption. Should the ques­tion in dispute be arbitrated in the future, it is very plain, Mr. President, that a repeal of the act exempting our coastwise vessels from the payment of. tolls would be treated as a confes­sion that in enacting the legislation of August 24, 1912, we had exceeded our rights and powers under the treaty. Should this act be repealed, we will have needlessly sacrificed our liberty of action, and will be compelled to depend upon direct money subsidies if it be found necessary hereafter to help our merchant marine.

Mr. President, the past and especially the present administra­tion has taken such strong ground in regard to the arbitration of all differences which may arise between ourselves and other nations that it was a matter of very great surprise to me that the message of the President of the United States did not recommend that the question in regard to the exemption of tolls should be settled in this way, as proposed by the British Gov­ernment. I for one would be glad to see it referred for adjust­ment to a proper tribunal. The question is difficult as well as delicate, and it seems to me that arbitration would be an emi­nently proper method of bringing about a settlement, but the message, while not making .the slightest reference to socii a course, simply urges the absolute and unconditional repeal of the exemption of tolls so far as our coastwise 1essels are con­cerned.

In making his recommendation, which involves the legal inter­pretation of the Hay-Pauucefote treaty, the President thereby absolutely· reverses the judgment of the previous administra­tion, which, it is to be observed, was especially equipped for the proper interpretation of questions of this character in view of the eminent legal attainments of the former President and former Secretary of State, both of whom have presented very full and complete arguments in explanation of their conclu­sions. While not disputing the right of President Wilson to take such action as he may think proper and to ignore the atti­tude of the previous administration, we may well consider for ,the moment the grounds upon which he demands the repeal o:t the act. He states that in his "own judgment," after mature consideration, the act of August 24, 1012, is "in plain contra­vention of the treaty with Great Britain concerning the canal concluded on November 18, 1901,'' but does not give us the legal reasons upon which his conclusions are based. He next states that his interpretation of the treaty is in accord with that of foreigners in general, and that everywhere, except in the United States, tlte "language of the treaty is given but one interpre­tation, and that interpretation precludes the exemption I am asking you to repeal." He also refers to the effect of the repeal upon the foreign policy of the administration, but his reference is so rague that it is impossible to draw any specific conclu­sions. In brief, the message pressingly urges Congress to abso­lutely re1erse the position it took two years ago in regard to the exemption of our coastwise trade from the payment of tolls in deference to public opinion abroad and upon the "judgment" of President Wilson. Further, the message in qne::;tion is misleading and unsatisfactory, first, because it fail s to make any mention of the notes of the British Govern­ment asserting tha t the Panama Canal Act of 1912 violated the Hay-Pauncefote treaty, which was the origin of the whole con­tro,·ersy, and, second, because it absolutely ignores the Brit­ish proposals to settle the matters in dispute by arbitration.

To conclude, l\Ir. President, I should much prefer to see the differences of opinion in regard to the interpretation of the treaty settled by arbitration, but if this be not possible, after a very careful consideration of the whole question, I feel that I would not be justified in agreeing to unconditionally sur­render, as is so strongly urged by President Wilson, any legal or equital)le rights which the United States may possess in the premises, nor to take a step which, in my judgment, im­pinges upon the dignity of our country and upon the self­respect of every American citizen. I shall, therefore, vote against the bill.

Mr. WEST. 1\Ir. President, after. so much has been said in tlle matter of free tolls, touching almost e1ery feature of this

great question of such vital and serious consequence to this Nation, I fear I shall not be able to follow other than a beaten track in my efforts to offer anything new, il1uminating, or cal­culated in any way to cause anyone to look at this difficult problem in a light different to that in which it has hitherto been presented. Yet in some respects-not commercial or ma­terial in their nature-in my judgment, it is th~ gravest prob­lem, save one, that has been presented for solution by this Gov­ernment since the great question that preceded and followed in the wake of the War between the States. How important, then, is it that we should make no mistake in considering well this great question before it is finally determined?

We have a country of wonderful resources, of splen<lid possi­bilities in the long line of development that still lies before us, and, in my judgment, of the greatest population-sustaining po­tentiality of any country on earth of the same territorial extent. It is not worth while in this discussion, as serious ns the mat­ter is, not only to this bot other civilized nations of the earth, for us to become unduly alarmed, fearing that we will part with some of our sovereign or inalienable rights under the Constitu­tion. When the united States was in its infancy, isolated as it is, no other nation dared to attempt to land on our shores since the treaty of Ghent, nearly a hundred years ago, to invade any portion of our territory. .

Now, with a hundred million people, matchless in ad•ance­ment and civilization, all united in a common cause, with im­measurable resources, the greatest factor in the world to make a nation puissant and all-conquering, why should we fear and tremble lest our rights should be invaded or be unduly filched from us by any power meditating our overthrow? ·

I fear some of the Senators are resorting to an extreme posi­tion in becoming unduly apprehensive for fear we yield our rights under the Hay-Panncefote treaty to England and other nations using the canal on terms of entire equality. A great Nation like the United States can afford to be broad and liberal in the construction of treaties and treaty rights. If there is even a reasonable doubt as to the proper construction of the Hay-Pauncefote treaty, this Government, with strong argument to support her contention in favor of passing our coastwi e yes­sels through the canal free, should yield in the face of the fact that England and nearly every other civilized nation Of the world are considerately opposing our contention for free tolls.

As the question has been so ably argued both for and ugainst free tolls for our coastwise vessels, exhausting every possible source of information, I shall content myself with onl:- a brief argument in my effort to demonstrate that under the Hay­Pauncefote treaty we have no right to pass our merchant marine plying the seas from the Atlantic to the Pacific coastwise ex­cept on terms of entire equality.

When we pass to an economic consideration of this vitally important subject, it is not by any means because I deem the economic side of the question· of more serious consequence to the United States or to the interests of the great industrial force of our Nation.

My purpose to leave alone any extended discussion of the Hay-Pauncefote treaty or the Clayton-Bulwer convention is be­cause many 9f the distinguished Senators, with more accurate knowledge of treaties, treaty making, and treaty obligations, have been, it seems to me, convincing in their arguments that the United States were included in "all nations," the ' vessels of whose citizens were to use this canal on terms of enotire equal­ity. The senior Senator from New York [1\lr. RooT], whose argument last week seemed to be so conclu~i1e, was intimately identified with Mr. Hay, our great diplomat and one of the con­trolling spirits in directing and framing the Hay-Pauncefote treaty, and he says that it was their intention, and there was no other understanding with 1\fr. Choate, Lord Pauncefote, and Lord Lansdowne in all the writings leading up to the signing of the Hay-Pauncefote treaty, that not only the United Sta tes but all other countries observing these rules should use the canal on terms of entire equality.

Mr. Joseph H. Choate, then ambassador to Great Britain from the United States, assisted in the negotiation of the treaty. l\fr. Choate-and what he says was vouched for in the very able argument by the distinguished senior Senator from New York [Mr. RooT] delivered in this body a few days ago-speaking for l\Ir. Hay and Lord Pauncefote, whose lips are now sealed in death, says that there was no suggestion at any stage of the negotiations leading up to the signing of this treaty that there should be toll exemption for any nation or any of its citizens or subjects. Not only Mr. Hay, Mr. Root, 1\Ir. Choate, and l\fr. Andrew D. White, but Lords Pauncefote and Lansdowne and a host of other distinguished men like Senator Lodge, Senator Burton, Charles W. Eliot, Oscar S. Strauss, George F. Edmunds, Col. George W. Goethals, and others corroborate the men who

I I

I !

9362 CONGRESSIONAL RECORD-- SENATE. l\IAY 28,

were actively engaged in t'be negotiations leading up to the sign- n 6. The -plnnt, e~tal:i11sbments, butldings, s.nd all works neccssarv to · f th" i t t the construction, maintt>nance, and op~.>ration of the cunni shnli ~1e mg 0 IS mportan reaty. ·d~cmf:'d to be pnrt thereof. for the purposE's of this tr·eatv, and in time

It seems to me that all this 3ITay of indisputable testimony of ~ar. as in time of peuce, shall enjoy complete immunity from uttnck should establish beyond any sort of peradventure that free tolls ' ·or m:Jory by benlgercnts, and from acts calculated to impuh· their through the Panc1ma Canal were never contemplated or men- r usefulness as part of the cana'l. tioned by either of the signatories to the treaty. It is true some a ARTICLE 4. ot tbe Senc1tors in their arguments in favor of free tolls have "_It ts n~rreed tbnt no change of tetTitorial sovcrei~nty or of inter-nnhona I rei a tions of the country or countrie t.-a versed by the hefore:!-advanced quite a number of German authorities in the endeavor mentioned cnnal shall afl'ect the ~Pneral principle of neutralization or to establish their contention. While Germ<tny is noted for her the obligation of the high contracting pa.rties under th~ present treaty. men of erudition and broad cholarship--her great lawyers and ''ARTICLEl 5. publicists-her position, when it comes to passin;; upon the •• The pr£>sent tr-eaty shall be ratified by tbe President of the Unite-d · hl f th B ·tl· h G t h ld b 'd ed · States, by and with the advice and con~ent of the Srnate then•-of and ng s o e r1 s o:vernmen • s ou e consl er m con- by Lils Bt·ltannic Majesty: and the ratification shall L>e excbang~d at

nection with the attitude she has sustained toward Englund Washington or at Lontlon at the eru·liest possible time within six for many years. months from the date hereof.

Doth of these great nations would feel easier were they fur- "h1 faith whl:'rE.'of tbe respecth·e plenipotentiaries have signed this treaty and hcrPunto affixed their seals.

ther remoYed from each other, and it is mther naturHl that. "Done in duplicate nt Washington, the 18th day of November, in ancient enemies as they are, Germany does not want England, the year of our Lord 1901. with her great merchant marine, to occupy any vantage ground, oo a jealous, selfi ·h interest may have something to do in shaping the legal diplomatic opinions that emanate from her great

"JOUN HAY. [SEA.I .. ]

writers on trenties and international law. It hardly seems necessary for me to go into the discussion­

any more than to merely mention it--of the Hay-Pauncetote treaty with such weight of authority establishing conclusiYely to my mind its entire equality to all nations-preferring none. Admitting, howe-rer, my limi~ed knowledge as to the construc­tion of the treaties and treaty rights. I shall be brief in consider­ing our rights and obligations under the llay-Pauneefote trenty.

I ask to hn-re inserted in the REcoRD the Hay-Pauncefote treaty at this time.

The PRESIDI~G OFFICER {l\Ir. PAGE in the chair). In the absence of objection, permission to do so is granted.

The treaty referred to is as foil ows : The United States of America and His Majesty Edward Vli, of the

United Kingdom of Great Britain and Ireland, and of the British Do­minions l>eyoud the Seas. King, and Emperar of lndla, being desir~us to facilitate the constructi-on of a ship canal to connect tile Atlantic and Pacific Oceans. by whatever route may be consldt>red expedient, and to that end to remove any objection which may at·ise out of tbe con­vention of the 19th AJ?l'il, 18(;0, commonly called the Clayton-Bulwer treaty, to the const1·uct10n of such canal undN' ~ auspices of the Gov­ernment of the Unitl>d States. without impaklng tile ·• general principle" of neutralization established In article of that convention, have for that purpose appointed as their plenlpotentiat·ies:

The !'resident of the United States, John Hay, Secretary of. .>tate of the United States of Ame!'ica;

And His Majesty Edward VII, of the United Kingdom of Great Bt·itnin and IrP!and, and of the B1·ltlsh Dominions beyond the Seas, King, and Emperor of India, the Itigbt llon. L.ord Pauncefote. U. C. B., R C. M G., llis Majesty's ambassador extraordinary and plenipotenti­ary to the United States;

Who, llaving communicated to each other their fun p-owers, which wet·e found to be 1n due and proper fox:m, have agreed upon the fol­lowing articles :

"ARTICLE :l.

"The high contracting parties agree tba.t the present treaty shall supersede the aforementioned co.nventlon of the 19th April. 1850.

"ARTICLFl 2.

" It is agreed that the canal may be constrllCted under the aospiees of the ~overnment of the Unitt:d States either directly at tts own cost. or by gift or loan of money to tndlvlduals or corporations, or through sub­scription to or purchase of stock or sh:ues, and that, subject to the pt·o­visions of the pmsent tt·raty, th~ said Gove1"llment shnU have and enjoy all the l'ights incide:!nt to snch construction, as well as the e.r.clnsive right of providlng for the regulation and management of the canaL

"ARTICLE 3.

"The United States ndopts, as the basis of the neutralization of such ship canal, the following rules, .substantially as embodied to the conven­tion of Constantinople, signed the 28th October, U~88 for the free navi-gation of the Suez Canal, that is to say : '

" 1. The canal shall be free and open to the vessels of <'Ommerce ano of war of all nations obse1 ing these rules, on terms of entire equality so that there sha.ll be no ctlscrimin.ation against any such nation or its citizens ot· subjects, in respect of the condltlons or charf"'es or' traffic Ol' otherwise. Such conuitions and charges of traffic shal be just and equitallle.

"!:!. 'l'he cannl shall never be blockaded. nor shall any right of war be exercised nor any act of hostility be committed within it. The United States. ho"Yever, shall be at liberty to maintain such military pollee along the canal as may be necessary to protect it against lawl~ness and disorder.

... 3. ,Vessels of war of a bellhrerent shall not revlctuaJ nor take any stor~ m the canal ~xcept o far as may be strictly necessary; and the transit of snch vessels through the canal shall be effected with the leust possible delay in acco1·danee with the I'E:gulations in force and witb. only such intermission as .may result from the necessities of the sernce.

'' l'rizes shall he In all respects subject to the same rules as vessels of wa.r of the belli~erents.

"4. No bel.llg-erent s?nll embal'k or dlst>mba1·k troops, munitions of war. or wariJIIe mate1·iaJs In the canal. except in case of acctdentnl

1 ~~~gr~f{~g:si~~: ~~j~g:~~·b~d in such case the transit shall be resumed " 5. The provisions of this article shall apply to waters adjacent to

the canal, within ~{ marine mil•!S of either end. Vessels of war of a , bolllgerent shall not remain in such waters longer than 24 hours a.t

any one tlme, except in casP of dil'tress. und in such case shall depart as soon as possible; but a vessel of war o! one belligerent sllall not depart wit m 24 ho1l.l"B trom. the departure of a v:e.ssel or war of the other belligerent.

"PAUNCEFOTEl. (SEAL.)"

Ur. WEST. In transmitting to the President the Hay­Pnuncefote treaty, Mr. Hay said: THE PRESIDENT :

I submit for your consideration and for transmission to the Senate, llhould ynu det>m it p1·oper to do so. with a view to ohtuinlng tbe Rdvtce. and C<'nsl'nt of that body to Its ratification, a convention signc>d Novt>m­ber 18. 1 fl01. by the respective plenipotentiaries of the United States and Great Britain to facilitate the construction of a ship canal to con­ne<"t the Atlantic and Pacific Oceans by whatever route may be con id­ered expedient, and to that end to 1·emove any objPcl ion which may aril'le o11t of the convention of April HI, 1850, commonly called the Clayton-llulwt>r treaty. to the construction of Sl.lCh canal undei' the auspices of the Government of tbe United States, with-out impairing the "genet·al p.rinciple" of neutra.llzation establh>hed in article 8 oJ: that convention.

Respectfully submitted. JOHN HAY,

DEPABTMEl~'l' OF STA'l"El, Washington, December !, 1901.

Now, in his letter to the President, Mr. Hfly snid: Without impairing the "general principle" of neutralization estab­

lished in article 8 of that convention. '!'o show the ternpe1· of the Senate, when the treaty carne up

for ratification in that body, Senator Bacon, of Georgia, pro­posed the following amendments:

In the preamble strike out all after the words "United States," In the tenlh line, down to and including tb·e word" convention," ln Line 11.

Strilre out from article 2. 1::1 line 10, .the following words: "Sub-ject to tile provisions of the present treaty."

Strike out all of articles 3 and 4.

The pre..'lmble reads as follows: The United States of America and His Majesty Edward VII, ot

the United Kingdom of Great Bt·itnin and Irehmd and of the 13rltish Dominions beyond tbe Seas, King. and Empt.>I'Ot' of India. being dt·~ir­ous to facilitate the construction of a shJp canal to connect the Atlantic and l'acifie Oeeans, by whatever route may be considered expedi<!nt, an.d to that end to remove any objection which may arise out of the convention or the l!>th April, 1~50, commonly called the Clayton­BuJwer tr.eaty, to the construction of such canal unde1· the auspices of tbe Government of the United States, without impait•ing tbe •· genPJ'al principle" of neutt·alization established in article 8 of thnt conven· tion, have for that put-pose appointed as their plenipotentiaries:

The President of the Unitl'd States, John Hay, Secretary of State of the Unit.ed States of Amel'ica;

And His Majesty Edwa.rd the Seventh. of the United Kin~dom ot Great Britain and Ireland, and of the British Dominions beyond the Seas, King, and Empet·or of India, the Rlgbt Honot·able Lord l'aum:e· tote, G. C. B., U. C. M. G~ His Majesty's Ambassador Extraordinary n.nd Plenipotentiai'Y to the United States;

Who, ha vlng communicated to each other their full powers, which were found to be in due n.nd proper fonn, have agreed upon the fol· lowing articles.

And the amendments of Senator Bacon proposed to strike out "without im{mirin:g the 'general principle' of neutralization estnblished in article 8 of that convention."

Referring to the Clayton-Bulwer treaty, we find article 8 in that conventinn. which .Senator Bacon was desirous of getting rid of. reads as follows :

The Governments of the United Stat<~s and Great Britnin, having not only deSired In entering into this eonvention to accomplish a pa.t·­ticular object but aiRO to establish a general principle, they he1·eby agree to extend their protection by treaty stipulations to any other practicnble co'mmunicntiOns, whether by canal or railway, llCI'oss the Isthmus whie.h eonni"Cts Not·th and South .\.me1·1ca, and especially to the interoceanic communications, should the same prove to be prac­ticable, whether by canal or railway. which a1·e now proposrd to be established by 'the way of Tehuantepec or l'anama. In granting, how­eve:!r, their joint protection to any such canals or· railways aA at·e by this article specified It is always understood by the UnJted States and Great Britain that the pat·tles constructing ot· owning the same shall impo e no other cbnrges or condltions of tt·affic thereupon than tbe aforesaJd Governments shall approve of as just and equitable; and that the same canals or· railwa~s. bein~ opt>n to the citizens uod sub­jects of the United States and Great Britain on equal tet·ms, shall ulso be open on like terms to the citizens and subjects of every other state which ls willing to grant thereto such protection as the United States and G1·ent Bt·itain engage to aft'ot·d.

If this article meant nothing to the Hay-Pauncefote trenty, what object could Senator Bacon ha\·e had iu mo\'ing to strike out the words above referred to in the preamble? The dis tin·

1914. CONGRESSIONAL RECORD-· SENATE. 9363 .

gnished Senn.tor was too wen versed in matters of foreign rela­tions :Jnd international law not to know the full force and elfect of this clause in the prenmble of the present treaty. But let us go a step further in the ruattet of amendments offered by s~na· tor Bacon. lie proposed to strike out in article 11 in the Hay~ Pa uncefote treaty the words '' subject to the provisions of the present treaty," and then the article would read:

It is agrPed that the canal may be constructed under the auspices of ~be Government ol tba Unltert StatPs, eltbt>r directly at Its own cost or by gift or loan of money to Individuals or cot·poratlons or throu~h subscription to or purchase of Rtock or shares. and that the said Gov­ernment shall have and en joy all the right· incident to such construc­tion. as well as the er~lusive right of providing for the regulation and management of the canal.

To go still further, the Senator proposed to strike out articles 3 and 4, leaving. as amended, only three articles-1, 2, and 5, in the entire treaty, which would read as follows:

A.UTICLE 1.

The high contracting parties agree that the present treaty shall supersede the aforementioned convention of tbe 19th .April, 1850.

ARTICLE 2.

It is agt·ee<l that tbe cnnal may be construetl'd under the auspices of the Gov rnment of the United States. either direetly at its own cost or by gift or loan of money to Individuals or corporations or through subsCI·iptlon to or purchase of stock or shares. and that the said Gov­ernment shall have and enjoy all the rights Incident to such construc­tion. as well as the exclusive right of providing for the regulation u.nd management of the canal.

ARTICLE 5.

The present treaty shall be l'atffiPd by the President of the United States, by and wttb the advice and consent of the Senate thereof, and by His Britannic MaJI' ty; and the ratifications shall be exchanged at Washington or at London at the earliest possible time within six months from the date bet·Pof.

in faith whereof tbt> respective plenipotentiaries have signed this treaty and bNPunto nffixl'd thPir sPals.

Done in duplicate at Washington the 18th day of November, in the year of our Lord one thousand nine hundred and one.

JOHN HAY. [SEAL.] PAUNCEFO'fE. [SEAL.]

Now, if the distinguished Senator had succeeded in passing tbese amendments. only one of which means anything. and thnt as amended has reference to construction and pro\·iding for- the re~ulation and management of the canal by the United StHtes­article 1 merely states that the present treaty supersedes the Clayton-Bulwer convention, and article 5 has reference only to the ratification of the signatory powers-had these amend­ments been agreed to the opposition to the pending bill might ha\·e bad good ground for their contention, for the whole matter of construction and regulation of the Panama Canal would have been left to the United States.

Bot how did the Senate view the amendments offered by Sen­ator Bacon?

They were defeated by a vote of 18 yeas to 60 nays. Senator McLaurin, of Mississippi, proposed to strike out of

article 3 the following: Substantially as aml'nded in the convPntion of Constantinople, signed

the 28th October, 1888, for the free navigation of the Suez Canal. . And this amendment was likewise disagreed to. Had the amendment proposed by the Senator from 1\Iississippi

prevailed, then the remainder of the paragraph would read as follows:

The United States adopts, as the basis of the neutralization of such ship canal, the following rules-that is to say:

1. The canal shaJI be ft·ee and open to the vessels of commerce and of war of all nations observing these t•ule.s on tet·ms of entire equality, so that tbet·e shall be no discrimination again~t any sucb nation or its citizens or subjects in t·esrJect of the conditions ot· charges of traffic or othenvise. Sucb conditions and charges of traffic shall be just and equitable.

If this part of the section, " substantially as embodied in this com·ention of Constantinople, signed tbe 28th of October, 1888, for the free navigation of this canal," meant nothing, why was it put into the section? It meant, just as the Suez Canal is operated to-day. that, including England, all nations must be on entire equality. It meant, as the conYention of Constanti­nople included England, so this Hay-Pauncefote treaty includes the United States.

Now, it seems to me the only escape for the United States from the terms of this section is to say that the pa.rt England took in mnkiug the treaty was merely pro forma, and it was, so con 'truing it, clearly nn edict. declaration, propaganda. or pro­nuncianaento, and England was not in anywise considered a party thereto. But how two parties can enter iuto a cornpal!t and one is bound and the other is not is entirely beyond ruy comprehension. ·

How you can include the one nnd exclnde the other without in e..~press terms so declaring in the instrument is to my mind · the knotty problem.

Besides, as the Sen.'ltor from Ohio [Mr. BUllTON] has with the most painstaking diligence and careful research· shown that

this great Nation in all her treaties bns for more than a hnn­dred years placed herself, her citizens, and subjects on entire equality with the other signutory powers. Then. with all the language 1n the llity-Ptl nncefote treaty tending to establish beyond uny sort of cavil the entire equnlity of not only the two signatory powers, but all nations observing the rules, I can not see how anyone can escape the conclusion that the United States are included nmong "all UHtions."

.As to the acquisition of the belt of land stretchlng across the Isthmus of Panama. it is made clear in the treaty that it in nowise would change the terms of the con'fention. In the purchase of this strip of J::md from Panama, it seems to be clear that the United States were to use it in accordance with the terms of the Hny-PctUncefote treaty; and should this Govern­ment at any time abandon it or conn~rt it to uses other than for canal purposes. it would re·rert to Pnnnma. In other word • it is my candid judgment thnt this Government could not, on the terms the purchase was made, establish there a tuber­culnr hospital or a leprotarium~ or anything of like character.

Much hns been said in the disc-ussion in reference to the Wellnnd and other cnnnls in the Dominion of Canada, and re-

·bates that were allowed to Yessets discharging their car~oeR in the CRnadian ports. This was done. and a rebate of 18 cents out of 20 cents was aJlowed to all Yessel.s going e:tst to ~Iontreal and points beyond. While the terms of the treaty regulnting the traffic upon this canal were not nenr so clear and.Aefinite in meaning, the United StMes declared it was a patent dis­crimination against the citizens and subjects of this Go'fern­ment, and that this gross injustice under the treaty stipulation had to cense.

.After congres:sionnl protests and long diplomatic correspond­ence the troubles arising out of the discrimination favoring Canadian citizens were settled. yet the Dominion of Canada was unceasing in protesting thnt she was transgressing no rights under the treaty that belong to citizens of the United . States.

She finally yielded to the demands made by this Governm~nt, .and all discrimination against our citizens ceased.

Some who hnYe taken a posHion fa,·oring free tolls through the Panama Cnnal have sought to justify the contention so assumed, because in the face of treaty rights Canada persisted in giYing rebates to all vessels going east discharging cargoes at Montreal and points beyond.

Should the tran~re-ssion of C:mada of a trenty and treaty rights, especially after sbe hns censed to do what is inhibited under the treaty, furnish a pretext years after the wrongdoing for thi!'l GoYermnent to enter the field with o view of J•etaliHting after the incident is closed and almost forgotten? To pursue such a course would be ill-becoming a greHt nation: besides we would leaYe ourseh·es open to the critici:-m and anirnad,·ersion of the civilized nations of the earth.. Rut let not this great Go-rernment appear in the role of ,ndministering retributive justice to such nations as failed in the past to observe their treaty obligations. The United States surely could not justify herself in pursuing such a course.

This is the charitable view of the strong toward the weak, and should be the guiding principle of our GoYernment that has been the foremo t among the nations of the earth in advo­cating uniYersnl peace and internationnl brotherhood.

To those who do not think the United Stntes are included in the term "all nations" I desire now flS briefly ns possible to call their attention to th~ economic and commercial ,·iew of the question, and determine the rights of our citizens from an eco­nomic standpoint.

I shall first consider briefly the Suez Cannl, thnt is giving sen·ice on terms of entire equality to all nntions observing tbe rules under the con\'ention of Constantinople. October 28. 1888, for the free navigation of this canal. The cutting of this canal at this time by De Lesseps was regarded ns a wonderful piece of engin"'ering skill. and cost the stockholders about $127.000,000.

This great wuter highway that floats the Yessels of almost e•ery ciYiliz.ed nntion of the globe is 103 miles long. 2S feet deep, and 17 hours are required for Yessels to pass through it. This cannl is opernterl under a stock company, and the total number of shares is 379.24~

It is snid the British Go"fernment owns 176,602 of these shares. and the Jnst dh·idend declared showed a net income of

.31 per cent. Tbe charges per net ton for Yessels with cargo were $1.30, and 82 cents per ton for vessels in bnllnst. and $1.03 for each passenger 12 yenrs of age or o,·er. It can be· seen that

·this is a mn~nificent property, nnd if it were owned by share­holders under our GoYernment, being a public-utility corpora­tion, the stockholders would not long draw 31 per cent, for the

. Government would step in and demand that the charges be · reduced. ·

f

ll

·9364 CONGRESSIONAL RECORD-SEN ATE. 1\{Ay 28,

- The Panama Canal before it is ready for service ·win cost the United States more than three times as much as the Suez Canal cost its stockholders; so, with equal tonnage, which we will not likely have, and the same e1t..'"-pense of operating, this GoveJ;lliDent would have to charge three times as much. But even on a much smaller tonnage estimate, according to the report of traffic

1

experts, the Panama Canal would pass through its locks 10,­. 500,000 net tons, whereas the Suez Canal passed in round num­bers 16,582.000. Now. this Government proposes to charge only $1.20 per net registered ton. It takes no financier, when con­sidering the cost of construction and uph:eep, to determine that the rates fixed by this Government are extremely reasonable; besides, there is no charge for passengers passing through the canal.

It has even been contended in this Chamber that as we will be unable to pay for maintenance and upkeep ($6.000.000) arid the guarding and policing the fortifications ($10.000 000), we should not only allow free tolls to our ships but subsidize the ships of all nations to the extent of the tolls that the United States would collect. As Proctor Knott once said in a notable speech-commonly known as his "Duluth speech "-delivered in the House of Representatives in 1871, where the bill sought· that the Government donate large tracts of land to build a rail­road to Duluth, that his relation was only a "trustee to an express trust." That is the relation we sustain to this canal, and

' we ha?e no right, in order to save to our coastwise shipping in­! terests about $1000.000 annually, to donate about $10,000,000

I out of the hard earnings of the masses of the United States to the nations of the world. Yet, as a matter of right, I hope to be able to show that we are not in a much better position when

1 we undertake to extort from all the people tn order to give the j few in the trade constituting, if I am to believe what has been stated in this Chamber, a great monopoly-a trust, if you

I p~ease; that more familiar word in legislation and political parlance.

I expect to show that the coastwise trade has in a sense been a legalized subsidy for nearly a hundred years-worse than a

·subsidy, for, without regulation under the Interstate Commerce

I Commission, they have charged everything the commodity car­ried would bear without let or hindrance, or without fear on the high seas of any competition, for no nation on earth save the United States can engage in our coastwise trade, and who can

! this prohibition hurt. and I ask this question for the benefit of

1·those who have said on this floor it was not for the people en-gaged in coastwise shipping they were concerned. but for the dear people--the masses who consume these products that were shipped in under free tolls. But I will illustrate with a con-

, crete example and let those contending for free tolls answer my contention.

For the sake of this illustration I will take a coastwise vessel passing from New York to New Orleans, and will say the charges on this vessel ar& $3 per ton, but if our coastwise ship­ping was open to all nations the same commodity could be hauled at $2 per ton. Now, according to the arguments made on this floor for free tolls, the people generally would receive in the reduced price this difference of $1 per ton. But the people do not get it, and in a form it is a clear subsidy to our coast­wise vessels; and neither would the people get the other sub­sidy, the $1, I will say for the sake of this argument, allowed for free tolls through the Panama Canal. This, I claim, is worse than a subsidy, for the United States clearly discrimi­nates between coastwise vessels passing through the canal and those not going through. Let me illustrate by taking the ves­sels sailing under the United States flag and all bound for New Orleans. · One, I will say, is a coastwise vessel from New York, the

second a coastwise vessel from San Francisco, and the third a vessel from the Orient flying the American flag.

It is quite clear to the minds of all that the coastwise vessel from San Francisco enjoying free tons bas $1 per ton differen­tial over the vessel flying the American flag from the Orient, and as all vessels passing through the canal except coastwise vessels pay tolls, it necessmily gives the vessel from San Fran­cisco adnmtnge over the New York vessel, for the $1 per ton is a clear subsidy, as no Yessel is allowed it e."{cept the one from San Francisco. The Government is not only subsidizing coast­wise vessels passing through the canal-amounting, as I have already shown, to a double subsidy-but she, in allowing coast­wise ships to pass· free through the canal, is accomplishing what we hrn·e tried to prevent so long, driving ships that float the Americnn flag from the high seas.

I want those who arlYocate free tolls, and are as a consequence so deeply moved in their efforts to advance the interests of the peOple suffering for the want of free tolls, to turn their atten­tion to another thing that might really help the people in the

United States. The vessels from any land may bring the prod­ucts of their countries into our ports, and having landed them here, it may be, free, if there be no tariff, they can pass through free on the subsidized vessels. These foreign products come into the United States, and if they should be transferred in any of I our ports they go through the canal free, yet our American vessel, flying the American flag--or any other vessel, as to that, 1

from any other country on earth-must pay the tolls. But I must pass to the consideration of another branch of the

question of free tolls. Failing in cutting a canal through the Isthmus of Panama, it was once the dream of the people that a great railroad on the leviathan order might be constructed over the Isthmus so that a ship and cargo might be transported without breaking bulk. Suppose this beautiful dream bad been realized, would the advocates of free tolls be here asking for free passage across the Isthmus of Panama on this titanic railroad? The railroad would not have cost as much as the canal, and the request made of the United States would have been just as reasonable. And, furthermore, it would be just as reasonable for the Government to own all the transcontinental railroads and give free passage, and to give free passage on the railroad in Alaska the Senate recently voted $35,000.000 to con­struct. Oh, when and where will this paternal doctrine find

1

its limit! It will, perhaps, come when there is a higher order 1

of created human intelligences, when the millennia! dawn shall break upon the world, peace and good will reign forever, and, I under the benign and beneficent influence of good government, : the ethereal state of man will come when there is no more work. ' Considering the way this Government is drifting, that would be the result, if the money should only hold out.

Now, I wish briefly to refer to the transcontinental railroads, which, if we are to believe much that is said about them, if blotted from the map, the country would be better off.

I think, after all, there is some good in them. They may have · done wrong, and, as long as they are owned, controlled, and run I by men, they will do some wrong in the future. But they are not entirely engines of oppression. They may have extorted from the people when they should have let the people keep ' something of what they took. We are all too prone to look at the business of others through glasses other than our own.

Now, let us consider what the United States would be with­out railroads. Along the Pacific and Atlantic Oceans, the Gult I of Mexico, and the navigable streams, lined with green-fringed borders in a high state of cultivation, there would be beautiful and attractive homes and lovely cottages; but back of all these 1

beauties and charms that contribute so much to man's happi­ness and comfort would be the wilds for the Indians and the deer. i

We have an Interstate Commerce Commission, whose duty is to see that all these railroads are run in accordance with the 1

laws made and provided for their control. They were taxed to build the Panama Canal, and naturally they would be unwilling for competitive vessels to be allowed to pass free through the locks. The law is such that they can not own vesse::.S to work in conjunction with their lines and pass through the canal.

Raill·oads are great deYelopers in a country, and sometimes, I think, they are too much abused. The public is tOQ apt to get the impression that only the wealthy are the stockholders. This is a grievous mistake, and I will illustrate by taking the Penn­sylvania Railroad, which on April 1 of this year had 89.602 stockhold.ers; 43,158 of the number were women, and the aver­age holdings of all the stockholders were 111 shares each. This shows conclusively that the stock was pretty well dis­tributed, many people, no doubt, of moderate means holding it purely as an investment. Let them be controlled but not op­pressed, and the country will fare better. Do not take from them and give to an already ·subsidized coastwise shipping monopoly.

It has been pretty well settled in the discussion thflt, taking the Isthmus before the construction of the canal, vessels land­ing at either side with freight must di charge the cargo, load it on cars. cross the Isthmus, and load into the waiting vessel. This requires an average of 12 days and costs $3 per ton, and all nations, including the United States, are on terms of entire equality. It is snid by the experts the average toll per ton will be 60 cents. Now, the vessel has · saved an average of $2.40 per ton and 12 dnys consumed in this transfer, and will make the trip from New York to Sfln Francisco in less time than freight oYer the transcontinental lines. They will not be com­petiti"e in the way of terminal freights, but, as they must live, the cities not on navigable streams will have higher rntes.

It should be well understood that unless the Government in regulating rates permits a margin for profits there will be no more railro:;td building in this country unless the Government enters the business.

1914. CONGRESS! ON AL RECORD--BEN ATE. 9365' Now, I wish to show we are- not deaUng with our neighbor,

Canada, on terms of entire equality. Take two vessels, one leaving Seattle· and the other a Cana­

dian Te. selleaving Vancou~er, both ·bound through the Pannma Canal for point on Lake Erie. Our coastwise vessel passes through the canal free and the Canndian vessel pays the tolls. They both pass through the WeHand Canal in Canadian terri­tory on terms of· entire equality and clischar~e their cn·rgoes at Buffalo, or some other point on Lake Erie. Thus it would seem to an unbiased mind that the Canadian vessel was di-scriminated against to the amount of the toUs through the Panama Canal. It is wo obvious that Ca;.:adian transcontinentnl railroads are <liscriminated against for 'ine to pursue the matter further.

I wish to say, further, when the United States decides she must, in order to promote the welfare an<l upbuilding of this great country, take over all public-utility corporations. she but adds another to the threatened dangers now menacing this Republic.

That was rather a sad view the Senator of New Hampshire [Mr. GALLINGER] took of the situation a few days ago when he had incorporated in the RECORD the declaration of another that in order to mnintnin the tights of the people of a certain class they would burn, murder) and commit other violence to secure their rights. They seem to forget that the courts of justice in this country are open for the trial of causes where the law has been violated. Yet I wish to say in passing-and I trust I do not tnke a too pessimistic view of the situation­unless this Government does something to keep from our shores by more ri~d immigrntion laws to exclude the vile, unbridled. and uneducated people, wbo subsi t on from 5 to 10 cents per day, then the pictures now painted in the newspapers of tile horrors, desolation, :md suffering in the coal mines are mild in comparison with the lurid con<litions the future holds in store for us. Let us hope by wise legislation there are bet­ter conditions awniting this country; but we can not properly assimilate such numbers so much unfitted for the lnws of our land, and we shoul<l hol<l in mind th.nt unrestricted immigra­tion is the Iliad of many of the woes of this country, and there should be some check by legislation to it.

In conclusion, l\Ir. President. I desire to say this great Nation should not be eharacterized by illiberality in arrogating unto itself the right to decide in favor of free tolls for the coastwise vessels of this country against the views of so many of her own eminent state-smen and diplomats, as well as almost e,·ery civi­lized nation of the earth. The high purpose in the life of a grent nation, as well ns that of an individual,. slloul<l be to do right; and thus established the UnHed States would still re­main in the forefront for international peace and the universal brotherhood of nations. But take the other course, and the furies of the commercial world may be turned a~ninst us in onr onward and upward march to a still highet· destiny, and God grant we- may neYer realize the ominous picture of Story. Amer­ica's grent pubHcist and e~pounder of the Constitution, when he snys of this great Republic:

The fabric may fall at last, for the work of man is perishable and must· for·ever posse-ss inherent elements of decay.

She could wei: afford to adopt what the great Senator, Ben IDll, of Georgia, said o:-- the floor of this Senate:

Sir, there is but one patriotic course for men to pursue in the hi~h position of this country. CaJI back, if you can, tbe people to an honest, renewed recognition of the oblll!ation of contracts and of covenants-. 'l'each the pt·esent ~enet·ation, teuch all genrrations, that implicit fidPlity to oblig-ntions, trdellt:v to constitutional obligations, and fidelity to con­tract obligations, through all trials at any cost, Is the pures-t religion the wisest sta tesmanRhir~. and the highest patriotism. '

We should on this occasion, when our national rerutation for fidelity and obligation to contracts is at stake, ponder fittingly tilese lofty utter<mces.

1\lr. W AHREN. .Mr. President, I suggest the absence of a quorum.

'Ihe PRESIDING OFFICER. The Secretary will call the roll.

The Secretary ca1led the roll, and. the following Senators an. swered to their names : As burst Brady Brandegee Bristow Bryan Burton Catron €haml>erla1n Chilton Clapp Cummins Gnllin:.,rer Gore Gronna Hitchcock IT{) I !is

Hu:mes James Johnson Jonf'S Kenyon Kern La l•'olletta Lanp Lee. M:d. Lewis Lod~e N!cCumber l\Iartin:. Va. 1\lar·t·ine, N.J. 1\Iyers Norris

o·Gorman Oliver Overman PaJ:e Pet·kins Pittman Pom!lrene Ransdell Rollinson Sau!Rbury· Sbafr·oth Sheppard ShiYely Simmons Smith, Ga. Smith, s. c.

Smoot Stephenson Sutherland Swanson Thomas Thompson Thomton Tillman Walsh Warren Weeks West White Williams Works

1\Ir. MARTINE of' New .Jersey. F was r equested to announ ce the absence of the Senator from Arizona [M1·. SMITH] on official business.

Mr. WHITE. I wish to announce the absence of my colleague [l\1r. BANKHEAD] and to state tlutt he is paired with the junior ' Senator from West Virginia [Mr. GoFF]. This announcement will a-pply to· any roll calls throughout the day.

The· VICE PRESIDE:NT. Sixty-three Senators have answered to the roll call. There is a quorum present.

N-AVAL APPROPRIATIONS.

1\Ir. THORNTON. I ask the Senate· to proceed to the con­sideration of House bill 14034, the naval appropriation bill .

There· being no objection, the Senate, as in Committee of the Wbole, resumed the consideration of the bill (H. R. 14034)· mak­ing appropriations for the naY:tl service for the fiscal year end'­ing June 30, 1915. and for other purposes.

M:v. THORNTON. _lr. President. at the· time the- considera­tion of the bill was l'eft off yesterday afternoon all tile com-mittee- amendments reported to the bil1 itself had been passed L---­on, except two. The first of those, passed over by request of the Senator from New Jersey [l\11•. HUGHES], is on line 14, page 26:

Naval proving ground, Ind:innbead, Md. : Toward extension of powder factory, S500,000.

I understood tilat possibly tile Senator fl·om New .Jersey would· move to strllie out that amendment on a point of order. I wish to say in a{t'vance, before the point of order is made, while I do not h.'llow the exact ground on which it is to be made I do not believe there is anything under the Senate rules which would ju tify the exclusion of the amendment on a point of order, because it is not new legislation. it is not gen­eral legislation, and it is not arr amendment offered on the floor without ha ing been passed on by the committee or without having been recommen<led by the department. All those factors have been complied with. It is sin1ply, as stated an extemdon of nn existing powder fnctory. which lms been in operntion since t 9 , and from time to time additional. appropriations have been made so as to in<!rease its utility.

The department is very urgent in its insistence that thiS provision should be inserted in the bill, bec:m e it considers it to be vitally necessary from the standpoint of economy and from the standvoint of efficiency, and particularly at this time, when there may be occasion; for a speedy demand for smokeless powder.

I think for the rensons I have stated the point of order would not lie, if it is made by the Senntor from New Jersey.

I now ask th:tt the amendment b~ taken up. The VICE PRESIDENT. The question is on agreeing to the

amendment proposed by the committee. Mr. HUGHES. Has the point of order been decided? The VICE PRESIDENT. None has been :mnde, the Chair

understands. 1\lr. HUGHES. The point of oroer was· made on the amend­

ment. The VICE PRESIDENT. Whnt is the point of order? 1\lr. HUGHES. The point of order is that it is general legis­

lation. The VICE PRESIDENT. What general legislation?· Mr. HUGHES. General legislation proposed on an nppro­

pria tion bill. The VICE PRESIDENT. But what is general about pro-rid-

ing for the extension of a powder factory? 1\lr. HUGHES. Thnt is general. The VICE PRESIDENT. The Chair makes the inquiry. Mr. HUGHES. That. in my opinion, is general legisla tion.

It is not private. snecial legjslation. U.r. President, I will say that my object in making the

point of order is to elicit information in reference to what is desired to be done in this connection. For a number of years I llave been a proponent of the proposition that the GoYerument should enter into competition with pri...-ate powder manufacturers. so as to protect i tself in the mntter of fixing prices for powd'er. I was prominent in the legisla tion which brought thnt condition nbout. At one time there was a mo­nopoly in existence in this country, and' the GoYernrnent had to pay any price the manufacturers chose to exact; but that situation has now chnngecl. The Gove111ment has nppropriated from time to time $1.300,000. as I remember, for tile construc­tion of powder worl\S. so thnt we nre now engaged in making something like 3,000.000 pounds of 11owder a year. Tile pro­posed new construction provided for in tbi s amendment would result L'1 the Government making all the powder it needs.

I was of the opinion, and I am still inclined to the 011iniou, that" it: would be nearly as bnd for the Goyernmen! to lwve a

I

I I

9366 CONG·RESSION AL RECORD-SEN ATE. }fAY 28,

~nopoly of the manufacture of_ powder and sJ;mt off private ompeting manufacturers fr()m competition with it as it would e for private individuals to have a monopoly of making ~w~~ .

I have a peculiar interest in this matter, inasmuch as the owder which is furnished to the Goyernment is manufactured

in my hoine county. Six or seven rrtillion dollars' worth of property is located in that county ~ factories owned by the

· v·nu Pont ·po\vder 9o., which is us~ ~xc;lusively in manufac­turing smokele~ powder for the Government.

As I aid, despite that fact I have been one of those interested in the movement to have the Government come · into competi­tion with the private manufacturers of powder. But this pro­,Qosa1 means that we are to extend Government manufacture to .the absolute exclusion of private manufacturer . I am firmly conv'inced that in the manufacture of powder, which is a progressive art or science, it would not be a good· thing for the . Go"temment alone to be interested in its manufacture. I think th-e competition of pr~vate individuals would be as good ·for the Government as the competition of the .Government would be good for private individuals.

Mr. O'GORMAN. 1\fr. President--. The YiCE PRESIDEN'.r: boes the Senator from New Jersey yield to the Senator from New York?

1\fr. HTTGHES. Certainly. ' Mr. O'GORl\IAN. I wish to ask the Senator a question. Is

it not a fact that it has been claimed and is claimed now that the Government is paying from 33 to 40 per cent more for the powder which it purchases than it would cost the Government to produce it? .. Mr. HUGHES. I will say to the Senator that something like that is claimed, and it may be true. . 1\fr. O'GOR:\iAN. If that be true, is not that the all-sufficient reason why the Government should make its own powder rather

- than patronize e'en an American manufacturer who 'charges .the Government from 33 to 40 per cent more than the price at which the GoYernment itself can produce the powder?

1\fr. HUGHES. I will say to the Senator, and I might as well say it now as at some time later, because I have no doubt that :I will be charged with inconsistency before we get .through with this and one or two other bills, that this is my notion as to what should be done in all these matters: I think, and I have t.qought for years, that the Government should be engaged in

l.,Alie manufacture of armor plate and ~hould make its ·own armor plate. I have thought for years that the Government should ha\e a foundry for the casting of big guns. The Gov­m·nment does not cast :my guns, although it is a matter of rec­ord--- Mr. SWA.i~SON. The Senator is mistaken. The Government does cast big guns.

Mr. HUGHES. They have not the pr<tper foundry faci-lities. . Mr. SWANSON. The Government casts a 14-inch gun at a

J OSt to the Go\ernment of $60,000 and private individuals -charge the Gol'ernment $79,000 for such a gun.

Mr. HUGHES. Where is this? Mr. SWANSON. Here at the navy yard. Mr. HUGHES. How long has that foundry been in use? Mr. SWANSON. For some time. Mr. HUGHES. Not for .some time. Mr. SWANSON. It has cast 10 guns there. 1\Ir. HUGHES. I will not question the Senator's informa­

tion, but I will say that for a number of years the Government did not nave a foundry, and there are cases in the record from which it can be demonstrated that the Government was habitJ ually charged more for castings than it would ha'Ve been com­·pelled to pay for the finished guns. In other words, while the Government wns maintaining an expensive plant and equip­ment for the purpose of finishing guns from the rongh cast­jugs the priYate concerns that made the rough castings charged ·them more for those castings than they would have asked for 'fui·nishing the finisned guns. ·

1\Iy notion about nil these things I will state as briefly as I can for the information of the Senate. I think the Go\ern­ment ought, and I have done my best to put the Government ·in a position where it could, build battleships, not that I de­sire the, GoYernrnent to build all its own battleships. I would be ngninst ' that pro11osition, because the people of this country would not stand for the vast expenditure _necessary to equip

·yards nnd ::ippropriate money sufficient to handle the new con­·structiou calleu for by the naval 11rogram eacli year. And if it were done. naturally eYery l1l'i\ate concern engaged or "iri­·terested in the lmilcHug of battleships would go out of business, nnd while the GoYermnent would be able ·to build the shi]1S

·needed in ordinary times, when an en1ergency aro~e and it was

necessary to prepare for war the Gover-nment would find itself with no private yards in which to have thein built.

I think that would be a bad -situation. · I think the Govern­ment should have \Yell-equipped yards to enable it to compete. The result of that policy has been fuat· where private parties took seYen or eight years to build battlesilips the "Government has demonstrated at its own navy yards that they can be built in three years. The Government also demonstrated, although la.bori~g tmder the handicap of shorter ·hours and a · leave sys- . tern, that ships can be built at much less cost in Government yards tllan private manufacturers were charging, and · we checked the extortions of the combined ·private ·builders of bat­t1esilips in this country by this Government competition. ·

Mr. OLIVER. Mr. President--The VICE PRESIDENT. Will the Senator from New Jer ey

yield to the Senator from Pennsylvania? · Mr. HUGHES. Certainly .

Mr. OLIVER. The Senator stated that th Government Ilad demonstrated that it could build battle hips cheaper in a navy yard than they could be built in private ·yards .

.Mr. HUGHES. I cUd not say that. Mr. OLn ER. Then· I misunderstood the Senator. · . .Mr. HUGHES. I did not say that, but I think it comes very

nearly being · true. However, that is another question which will probably come up later. ·

Mr. OLIVER. I thought the Senator said that the Govern­ment had demonstrated it could build battleships more cheaply in navy yards than in · pri~ate yards, and I was just going to ask--

1\Ir. SWANSON. :\Jr. Pre ident I should like to give the Senator some information. The Go•ernment ·is now btHiding a 14-inch gun. Admiral Strauss, who has charge of it, says that they are now building a 14-inch gun at the '\Yashington ·Navy Yard and that they are going to build 20. ·

1\Ir. HUGHES. Tiley have done that for years. I am not talking abOut building guns. I flm talking about the rough castings · made in a foundry. ·

Mr. ·swANSON. The Governm(mt ' can construc·t the gun for $60,000 and it buys them for $7D;ooo. ' ·

Mr. HUGHES. The Government buys these rough. castings from private individuals, and unfess the ·situation has changed recently it paid more for the rough castings than it probably would have had to pay for the finished gun. I have contended that we should haYe a foundry, and I think I am justified in saying that the Senator from Virginia is mistaken when he says that they haye a foundry at the Washington Navy Yaru. It does not seem possible that ·that can l>e o or I would have known of it. ·

Mr. SWANSON. I will read what Admiral Strau. s says. Mr. HUGHES. Tile Senator has read it, and I agree' with

it, bul that has nothing to do witli this case. 1\fr. SWANSON. It is stated here by Admiral Strauss: It costs us to manufacture a 14-inch gun at the Washington Navy

Yard 60,145. The last bids from the Bethlehem and .Midvale steel companies for the same work were $79,800 for the first-named com­pany and $79,200 for the second, but these bids were not accepted. The cost at the Watervliet Arsenal is $~1,000. ,

1\Ir. HUGHES. The rough castings the Senator is speah.'ing about were probuiJly purchased from 11rivate individuals. 1 I do not say that· in every case the charge for the rough castings--

Ur. SWANSON. I am not ·discussing where they get the materials from, but what I insist--

Mr. HUGHES. That is all I am discussing. ~ Mr. SWANSON. It costs the Government $60,000 for every gun it manufactures in its own navy yard.

Mr. HUGHES. That is all I am discussing. I am not dis­cussing anything else. I said that ' there are instances on record where the GoYernment has pnid more for rough castings than·it would have had to pay for the finished gun. They haYe taken the rough castings o>er to the nm·y yard and put skHled mechanics on that work for months and then they have figured the cost.

Mr. SMITII ·of Georgia. Will the Senator state what those instances are, so that we can know them, because if the Gov­ernment has been paying more for rough castings than for finished guns it ought to b~ stopped. If that is going on now, the stntement by Admiral Strau~s seems to be very misleading.

Mr. HUGHES. If the Senator will permit me to make my statement and do me tile courtesy to address the Chair and ask me to yield, I will be obliged to him. I

· I will say to ·the Senator that that statement has been made over and over again. I do not know whether it is true now or not, but: there- ·are individualt instances thnt cnn be c-ited, and it can beyond question be demonstrated that t11c GoYernment

1914. __ -. .OONGRESSION AL RECORD-SE_._ TATE. 9367

-bas paid more for rough . castings than it would be necessary Mr. HUGHES. The board of offiqers fix the price. to pay in order to obtain the finished product. Mr. SW J\.NSON. The board of officers do not fix the price.

We have now at the Washington Navy Yard, as I said awhile The statute· says· that tlley can not pay ·in exc·es of 53 cents ago, skilled mechanics, working fair houi·s, getting lea-ve anp a pound . . reasonably fair wages, and we are called upon to stand back 1\fr. HUGHES. Exactly, and as much le s as it can be pur-·in admiration of the cost at which the work is being done. I chased for. · Nobody tells us what the basic raw material. has cost us and 1\fr. SWANSO~. But one person can furni sh the Govern­b,ow much private individuals have overcharged us -on the ment the Du Pont powder. This appropriation of $500,000 will :rough castings for a gun which we can not make, and which enable the Government to equip the Government factory, and no attempt is made to make, for the Government itself. when the Government comes to · buy the one million and a half

There is no reason on earth _why there sho-uld not be a or two million pounds of powder. if the private manufacturer foundry .over at that yard. -'l'bere is no reason on earth why charges too much for it we can proceed in the Government fac­tll:ere should not . be foundries enough to enable the Government tory to mnke it. to check combinations of private gun manufacturers. In the testimony before the com·mittee it is stated that with

The same thing is true with reference to armor plate. I am this appropriation of $500.000 we would not then be at the not criticizing the committee. Of course, I understand the com- mercy of the Du Pont Co. for the amount of powder needed for mittee is doing the best it can. I understand that the proposi- the Government. . tion to establish a plant was looked on with favor in another I should like to say in this connection that the GoYernment body but that it was regarded as inadvisable to go into it at makes this ·p-owder at 40 cents. That includes overhead charges, this time. Something like $7,000.000 was needed to start an and 3 per cent interest on the investment; and it pays 53 cents, armor-plate plant, and the reasons for not attempting it now which is 13 cents lost to the Government. were probably sufficient. I .am not quaneling with the com- l\!r. WILLIAMS. Mr. President, with the consent of the Sen­mittee. I am simply pointing out the situation that exists here. ator from New Jersey, ·I should like to ask the Senator from Here we have competition. We have the GoYernment making Virginia [Mr. SwANSON] a question. If I understood the Sen­one-third, at least, of the smokeless powder that it uses, and ator, be said that the limitation in the bill was 53 cents and now- this . proposition contemplates making it all. · At the same that the Governp:tept made powder :;tt 40 cents. Then, why do time the committee looks with equanimity upon this other situ- you not change the limita_tion and provide in this bill thaf the ation under which the Government is absolutely held up by .Government sb~l_l not pay over 43 cents? gun casters or molders and the armor-plate makers. Mr. SWANSON. The only reason is that you are absolutely

I n.m indifferent as to what the Chair does with reference to at the mercy of the Du Pont Co. ~point of order. As I have said, I have a sort ·of selfish in- Mr. WILLIAMS. Then you would not be at their mercy. 1-erest in the proposition. Nearly all the smokeless powder that Mr. SWANSON. They would not sep it; you won:d be at is sold.to the United States Government is made in the county their mercy. You must baYe powder to arm your ships, in the of Pas aic. · first place. _As soon as a bat~le~hip is constructed it is armed

Mr. WILLIAMS. Will the Senator pardon me just a moment and its munitions a.re furnished. The law requires it. That is ,for a ·question for information? What page of the bill !s it fixed. If · yo9 have not- some way to get powder, the ship is tha t the Senator thinks gives the monopoly to the Government? ab .. ;olutely useless. So the_ only way you can compel them to

l\lr. HUGHES. It is on page 26, line 12. I have contended sell for a reasonable price is for the Governme:1t to be able always that the Go-rernment should engt!-ge in certain industrial to make a·ll the powder that · it wants. · activities in order to protect itself against combinations and Mr. W AHREN. Does the Senator from Viro-inia think with :monOJ10Jies. It should engage _in tb~ construction of battleships, this proposed addition, that in case of war with a foreign conn­and it bas engaged in the construction of battleships. It should try the ppwder mills would be able to furnish the amount of .engage in _the manufacture of armor plate, and I hope it will powder needed? engnge in the manufacture. of armor plate. It should institute Mr. SW .ANSON. They think so. foundries in order to help the Qoyernment escape the exactions Mr: WARREN. Who ·thiuks so? of the combinations of men who cast these guns. I have voted Mr. SWANSON. The Secretary of the Na,·y thinks so. every time I had the opportunity to enabJe the Government to Mr: WA!lREN. - The ordnance officers here think right to enter into the manufacture of powder, and the Goverpment the confrary. - -did engage in the manufacture of powder, and is now making l\Ir. SWANSON. They think that in case of au emergency, about one-third of the smokeless powder that is consumed. . a -great war for a prolonged time, the Government should· have

In addition to that, time after time Congress ·has limited the the power to manufacture all the powder it needs; but the Sec­price of powder, and the Senate can now, by way of limitation, retary of the NnYy states that be does not. purpose to do so: be fix the price that the Government can pay. Not only that, but thinks the powder plant of the Du Ponts should continue, anu there is a board of officers of the United States Government that the Government should be able to manufacture all the

·who cnn fix to a penny the price that the Government will pay powder it needs annually on a peace basis so that it could com-for this powder. pel the powder manufacturers to make contracts at a reasonable .

So I regard the policy of the Go>ernment in going into the price. business .of making powder .to. such an extent as will necessarily 1\lr. 'VARREN. Mr. President, would tlle Senator desire to drive. every private individual out of it as being a policy of have the Du Pouts and others continue their concerns, so that

·doubtful expediency. in case of wnr we would be able to purchase powder? As I . aiel. the mnendment may not be subject to a point of l\Ir. SWANSON. The Secretary of the Navy states that be

order. I am inclined to think it is, and I am sure that if it desires them to continue ; that he has no purpose of putting ot I can ba-re a lot of amusement in the future on general them out of business; thnt the only· contention he hns is as to

appropriation bills. the price paid. It is utterly impossible for the GoYernment to I merely• wanted to state to the Sennte bow I feel about this get powder at a reduced price unless the Government is in a

general proposition. The Secretary of the Navy snys he" does position so as to make the powder. In his testimony, as stated not desire to acquire a monopoly of powder making but that be by the Senator from New J ersey, the Secretary of the Navy wnnts . to have the whip hand in this. controversy. For the says this is the only way in which we can obtain powder at a

·life of me. I am unable to see why he bas not got the whip reduced price. brmcl now, making. n third of tbe powder, lmowi.ng preci£ely 1\Ir. WARREN. I am quite familiar with all that bas here­what it costs, and, under the law, having the right to fix the tofore passed as to the Du Pouts. In the time of the S11anisb-

-price. . American War we bad many contracts with them. and the GoY-l\Ir. SWANSON. If the Senator will permit me, I will ex- ernment redueed the price 3~ cents a pound without even a

p1ain it. The bill appropriates for the purchase of :3.811.000 requirement of law at all. I bold no brief for the Du Pont •pounds of powder. It .is estimated thnt . the Government will people; bufi do want to see some vortiori of this powder made ·make · by hnilding its own powrler factory 2.500.000 pounds. by somebody else besides the Government, so that the mac-hinery which 'vould lenve about 1,300,000 pounds to be bought of the may be in existence when we get iri.to . a war in order thnt we

·Du Pont Co. . mny be able to purchase some portion of' the powder; for. as the Now. there is no otber buyer. for the powder . . The Govern- Senator knows, powder is contraband. We could · not· buy a _

meat is compelled to have it, .nnd cnn not ~et along without .it. ' dollar's worth of powder from another country as soon as we Suppose the Go,·ernment, !laving no one else to buy it from, is are at war with any foreign power. Whatever may be neces­cornpelled to pay the price of the mnnufactnrers, subject . to the sary for a powder plant we may provide, but I think the Senator limitations fixetl l>y Congre!":s, which is 53 cents a pou~d? should not take the ground ·that the· Go~ernment is going - to

l\Ir. HUGHES. The Senator is mistaken .about that. -qndertake to make all of its pow_der, because, first, it would ' •. Mr .. RWANSON. Wlw el&e buys H? . : require _a pla!lt costing many millions of dol~ars to _do it, and,

9368 CONGRESSIONAL RECORD-SEN ATE, ]fAY 28,./ secondly, it would be utterly unable ro furnish powder enough in time of war. .

Mr. SWANSON. If the Senator will permit me. to mr.!:e this clear, I will say the Government proposes to make an e:x:p~ndl­ture of $500.000 for the addition to the present plan.t, which will be equipped so that it can ·manufacture enough powder to supply what the Government may need each year.

Mr. WARREN. No; it would require $800.000, according to the testimony here. to be able to make more powder.

Mr. SWANSO~. That is in time of peace? Mr. W A.RREN. Yes. 1\lr. SWAN SOX Three per cent on the $500,000 is $15,000 a

year. . Mr. HUGHES. I should like to continue my statement and

get through with it. I did not yield to the Senator to make a speech.

1\lr. W ARREX I beg the Senator's pardon. I will wait until he hns concluded.

1\Ir. HUGHES. The Senator had better reserve his argument until the point is made.

Mr. Pre. ident, with reference to the point made by the Sen­ator from Virginia [:\Ir. SWANSON], I want to say to the Senator, once and for all, that I do not care wh::tt te says, a certain board of officers-the title of which I do not now call to mind­officers of the UnHed States Government absolutely fix the price of this po"·der; tba t is all there is to that. The Secretary of the Navy. throug-h his cont.rol of that board of officers. or Con­gress, if it so chooses, can, as it has done time and time again, fix the price at which this powder shall be purchased. The only question _ to be decided here is whether the Sem1te thinks it is a proper policy for the Government to engage in the ex­clusive manufacture of its own smokeless powder under con­ditions which would render it impossible- for private manufac­turers to exist. That is all there is to this question.

1\Ir. LEE of Maryl and. .Mr. President--The VICE PRESIDENT. Does the Senator from New Jersey

yield to the Senator from Maryland? 1\Ir. HUGHES. Ye~. 1\Ir. LEE of l\laryland. I ask the Senator from New Jersey

if he does not know that the position of the Secretary of the Navy is tba t the Go-vernment, with this increase, will be able to make all the powder neC'eRRnry for the Navy; but it will not necessarily make it all. depending, of course, upon the price that the powder concerns fix for powder?- But the Government must have the whip hand. That is the position of the Secretary of the Navy; and I believe the Senator from New Jersey knows it.

1\Ir. HUGHES. And the Senator from New Jersey knows more than that.

l\Ir. SWA!'\SOX Will the Senator from New Jersey permit me ·to make a suggestion?

Mr. HT GHES. Gladly. 1\Ir. SWAKSON. This is the proposition of the Secretary of

the Na-vy, and I do not want him to be misunderstood here: He says that for an expenditure of $500.000 we can develop the capacity of the powder plant we now have. The interest on the im·estment at 3 per cent is $15.000 a year. Now. if you give him the power to expend that amount of money, with interest at a per cent-$15.000-it will be possible to compel the Du Pont Powder Co. to furnish its half of the powder, and to furnish the Gm·ernment at a L"easonable price each year; becnuse. if thnt company does not do so, the Go,·ernment may make its own pow­der. It will ha ,-e to do so. Until it bns that power as to half the powder that the GoYernment purchases, it will be completely at the mercy of the Du Pont Powder Co.

Mr. HlJ GHES. I decline to yie~d further to ennble the Sena­tor from Virginin to rilnke a stntement which absolutely contra­dicts the statement th:lt I make, and for which I, myself, stand us authority. I will sny now that I will leave the disposition of this whole contron~rsy by the Senate upon that nnked proposition; and I wil1 lea ,.e it to any other member of the committee except the Sena tor from Virginia, if it be not true that a bonrd of officers hns the right to fix the prices at which the GoYernment shall purchase powder?

1\lr. SWAXSON. The board can fix the price. but--1\Ir. H UGHES. I said I would leave it to any other member

of the committee except the Senator from Virginia, who has stated m·er and m·er again that that is not so, and that the

. prke is to be fixed by the Powder Trust--Mr. SWA.~. ·so .... o. I did not make that statement. Mr. HUGHES. I understood the Senator to make that

statement. 1\Ir. SW .ANSO~. .I said that the price could not exceed the

53 eents; that the bonrd fixed it; but th~ board has no place to g& pewde.r exeept from the Du Pont. Powder Co. If it should

oft'er 48 cents a pound and have the· offer accepted, the Govern· ment would get the powder.

1\Ir. HUGHES. Then the Senator does admit that thP price is fixed by the board of otfi<;ers.

Mr. SWANSON. The price is fixed by the , board of officers, ' but the board c::an not fix the price, because there is but one I powder company.

Mr. REED. Mr. President--The VICE PRESIDENT. Does the Senator from New Jersey 1

yield to the Senator from Missouri 1 1

.Mr. HUGHES. Yes. Mr. REED. The Senator from New Jersey made a statement

with reference to the price of powder. and as he makes the statement, broadly, it is that the Government ean fix the price. Of course I understand, as we all understand. that the Gov· ernment can by law stipulate that it .will not pay above a cer· tain amount, and through any of these boards that it sees fit to appoint it m~y declare that it will not go beyond a certain amount. That is the Government's side of the contract. But does the Senator mean to say that, if by law or by the action of a board a price shall be fixed that is unsatisfactory to the private producers· of powder, we could in any way compel them to deliver that powder at our price?

Mr. HUGHES. Of course the Senator from New Jersey 1 knows that that would be impossible, and I do not think the ' Senator from "Missouri is justified in taking up my time to ask me a question of that sort.

I can only say that the power and authority of the bon.rd ot officers to fix the price of powder has no connection with the limitation of 53 cents. A. limitation upon the price of powder is occasionally put on by Congress; it bas been put on two or three times in my memory; but whether that is doue or not, the authority of the board of officers continues; and this board of officers is charged with the duty of .saying what . price the Governm-ent shall pay for this powder; and it has never yet happened that the powder manufacturers have failed to furnish ' powder at the price fixed.

.Mr. SWANSON. If the Senator will permit me there, the Government fixes the price at 53 cents; that is what they do now.

Mr. HUGHES. But Congress put the limitation on the naval appropriation bill.

Mr. SWANSON. If the Senator will allow me, I have just said tlwt Congress fixed the price at 53 cents.

l\Ir. HUGHES. Well, 1\Ir. President, I should like to be given an opportunity to make my statement.

Mr. SWANSON. That is the price paid. The VICE PRESIDE:NT. The Senator from . New Jersey

refuses to yield further. Mr. HUGHES. Within my recollection Congress has, by

way of limitation on an appropriation bill, provided thnt no part of the money appropriated therein Rhould IJe expended for powder in excess of the price of 50 cents a pound, or whatever the price was. The b"oard of officers could under that legisla· tion sny that a fair price between the Government and a prh·ate manufacturer would be 30 cents a pound. Their authority uoes not depend upon that appropriation bill. That board wns in existence and was doing its work year after year when there w::ts no legislation limiting the price which the Government could finally pay. So we find ourselves in tha position that the Government is in active competition with private individuals, fs making about one-third of its own powder supply, bas the t•ight to fix the price, has always fixed the price, and bas brought the price down a I most every time it has fixed it, and yet powder has always been furnished. So th..'lt so far as we know it can go on indefinitely snying precisaly at what price this private concern should furnish powder to the Government.

Now we are asked te engage in. new construction involving half a million dollars. In the hearings those who are asking for this appropriation fo1· new construction say that with it they will be able to manufacture an the smokeless powder that the Go,·ernment can use. I want the Senate to decide the ques~ tion; l! should like to have it submitted to the Senate~ I do not want to take any advantage; and if the Senate thinks that it is the proper policy and the proper thing to do I want it to have an opportunity to say so, and therefore, so far as I am concerned. I will not insist upon the point of order. I should prefel' to have the question submitted to a vote of this body for them to say whether or not they think it is a wise governmental policy to engage in an industry of this kind to such an extent that it means the exclusion of private individuals.

That is fill there is to it. I have been on the other side of this proposition. All my life 'I have been insisting that the GoYernment should go into Yarious lines of business with the object of furnishing competition· against private manufacturers

1914. CONGRESSIONAL RECORD-SENATE. 9369· who enter into ·combinations and force ·up prices to fh"e· Govern-· ment, but I have never contemplated such a policy being carried so far as to make the Government the sole manufacturer or the sole entity carrying on any particular line of industry.

Mr.- S::\HTH ·of Maryland. Mr. President--The VICE PRESIDENT. Does the Senator from Xew Jer­

sey yield to the senior Senator from Maryland? Mr. HUGHES. With plea ure. . l\fr. SMITH of Maryland. If the Senator will allow me, I

should like to say that prior to the Go>ernment entering into the manufacture of powder the price paid by the Go>ernment was fixed by the parties who manufactured it, and was only reduced by the fact that the Government did go into the manu­facture of powder.

Mr . . HUGHES. The Senator is absolutely mistaken. I thought be wanted to ask rile a question--

Mr. SMITH of Maryland. I am not mistaken; it is the abso­lute fact. So far as I am concerned, I do not think that the Governm~nt ought to manufacture all the powder which it may require, but there ought also to be private manufacturers, 01 .. corporations, if you please. At the same time, however, I do say that it is necessary to have some comPetition in order to get the powder at a proper price. That is the object of the pro­vision here. The amendment does not provide for a new build­ing, but only for an extension of the present plant in order to increase' its capacity.

1\Ir. llUGHES. I decline to yield further. I thought the Senator wanted to nsk me a question, and not to argue the matter in my speech.

Ir. LEE of Maryland. Mr. Presid"ent--The VICE PRESIDENT. Does the Senator from New Jersey

yield to the junior Senator from Maryland? Mr. HUGHES. For a question; yes. l\ir. LEE of Maryland. Do I understand the Senator from

New Jersey to have withdrawn his point of order and to be arguing upon the merits of the amendment?

The VICE PRESIDENT. The Chair does not understand whether or not the Senator from New Jersey has withdrawn the point of order.

Mr. HUGHES. I will say, Mr. PreNident, as I said a while ago, that I have no desire to ha>e this question decided on a echnicality. I think the Senate has a right to pass upon the

merits of it; and, for that reason, I withdraw the point of oruer, in order that the matter may be submitted on its merits to the Senate.

Mr. V ARDAl\IAN. Mr. President--The VICE PRESIDENT. Does the Senator from New Jersey

yield to the Senator from Mississippi? Mr. HUGHES. I yield to the Senator from Mississippi. 1\fr. VAUD.A.MAN. I want to ask the Senator from New

Jersey if he has the data by which he could give me the differ­ence in the cost to the Government of manufacturing its powder and buying it from an independent manufacturer? ·

Mr. HUGHES. I will say, yes. I can give the Senator the figurE's furnished by the Secretary of the Navy. The Secretary of the Navy says that, wages and materials alone computed, the cost of making powder is 38 cents a pound. I repeat, that is the estimate for wages and materials alone. I confess that I am unable to say to what extent the overhead charges of mak­ing powder will add to the cost. My experience-and I li're in a powder-making district--

l\lr. SWANSON. Mr. President--1\fr. HUGHES. I decline to yield. Mr. SWANSON. The Senator is making a mistake-1\Ir. HUGHES. Well, let me finish my statement. I have not

been able to finish a sentence since I started. I will say that I come from a powder-making district, and I know that a great part of the charges in powder-making plants are overhead charges. The cost of occasional explosions does not, as I under­stand the Secretary of the Nary, figure in the cost at which he arri-res for making powder. That you would call insurance, I presume, and it must be an extr~mely large item. Coming, as I ha-re said, from a powder-making district and knowing the frequency with which explosions occur, it seems to me that the cost of insurance alone must be a tremendous item; but the Secretary of the Na-ry, as I understand him. says that he makes no allowance for the value of the land. that he makes no allow­ance for the value of the buildings and for various other charges which private individuals have to pay, those items in the case of the Government being pnid for out of other funds. Conse­quently, it is extremely difficult to arrive at a proper basis of comparison as to the cost of making anything that the Govern­ment makes, with reference to a private individual engaged in the same line. It can be done; but no honest effort has ever

been made, so fai· as I know, until a few weeks ngo. to find out what should properly be included in the cost. The Secretnry of the Na-vy has made an attempt to learn what should properl~r be charged against battleship construction as o-rerher.d charges-

Mr. VARDAl\lAN. 1\Ir. President, I desired to ask the SE'na­tor-he has partially answered the question-if the Secreta ry of the Nary, in his investigations, bas made any statement as to the saving to the Government by manufacturing powder for itself? •

1\Ir. HUGHES. The figures of the Secretary of the Navy show that he can make powder for 38 cents, but he admits, r.t least he said to me, that the charges to which I ha>e referred were not included. I asked him the question, because I am as much interested in it as he is, and I hnve been interested in it a good deal longer than he has; but it sometimes happens that a new convert is more zealous than an old believer, and I fear that perhaps he has been carried beyond the point of safety in his zeal. I said, in answer to the Senator's question, that the Secretary states that powder is made by the Government for 38 cents, figuring only wages and material. Of course, nobody else can make it on that basis; but suppose he comes to th~ conclu­sion by the use of t ~e intelligence of men expert along account-· ing lines that because he makes it at 38 cents, figuring the things that be does figure, a Jlri>ate individual ought to make it at 40 or 45 cents, figuring the things thnt should be figured in his case. He can fix the price at that point; he can make a reasonable allowance for profit; and he can keep these men in business, which is something I regard as vital.

I feel that way with reference to the construction of battle­ships; I feel that way with reference to the construction and manufacture of armor plate and all the other things the manu­facture of which is in the hands of a few corporations, where it is easy for them to combine and where they make a product which the Government must have. ·

Nobody seems to be worrying much about the fact that we are mulcted millions of dollars each year on the price paid for armor plate. That is a matter of common knowledge; every­body knows it; hardly anybody can be found who will .deny it. I know it myself to be so with reference to gun casting. It was formerly so to a greater extent than it is now with reference to battleships. Nobody is worrying about all these things, but there seems to be a whole lot of solicitude at this time with reference to this one particular item, although the Government is better equipped to protect itself in this case than in any one of the others.

Mr. VARDAMAN. 1\fr. President, does the Senato1• think that the addition to this Government plant would drive private enterprise out of the business?

Mr. HUGHES. I do; and .that is what I want to lay before the Senate. That is the only object of this discussion. Ad­miral Strauss said that this money would enable him to bui1ll new construction enough to manufacture all the srnokeleRs powder that the Government could use each year ; but he ad­mitted that if an emergenGy arose he could not meet it; and then, he said, he would rely upon pri..-ate manufacturers. But a private manufacturer who has established a plant for the purpose each year of supplying powder to the Government, if he sees the Go>ernment consh·ucting a plant big enough to make all of its own powder is likely to turn his attention in the direction of mah"ing some other kind of powder. The logical and natural result of this policy is the extinction of the manu­facturer, so far as the making of smokeless powder is con· cerned.

That is the naked question that is presented to the Senate, whether we should rush heedlessly into a position in>olving an expenditure of half a million dollars in order to carry a policy beyond the point it was ever dreamed it would be carried-­beyond the point of furnishing fair competition, beyond the point of defending the Government against the exactions of combina­tions of private individuals, and to the point of giving the Gov­ernment itself a monopoly. .

I am not going to contend, of course, that a Go>ernment monopoly is as offensive as a privately controlled monopoly. I do not believe it is. I do not see any particular wrong, as a matter of public policy, in a governmental monopoly. But I do believe-and I think the obsenation of e•ery 1\Iember of the Senate will bear me out-that there are certain faults attaching to a private monopoly which will follow in the case of a public monopoly. I believe it will stifle enterprise; that there will IJe no rivalry, no competition. Government servants wbo are paid fixed salaries will be in charge of the manufact ure of smokeless powder. As I said awhile ago, powder manufacturing is a de­veloping science or process. The price of powder has gone down from eighty-odd cents a few years ago to 53 cents now.

9370 CONGRESS! ON AL RECO.RD-:-SEN ATE. MAY ~8,.1

1\fr. S:\HTH of l\1nrylnnd. 1\fr. President, I should like to ask the Senntor whnt put t! .e priee down? It was the Government going into the ·business. I believe.

Ur. HUGHES. The Senator has asked me a question and then bas Tery kindly ,answered it.

.l\11·. S::\HTH of Mni-yland. Is not thnt the case? Mr. HUGHES. The Senator has >.ery kindly answered the

question; so I will let it stRnd as it is in the RmcoRD. l\ir. MARTINE of New Jersey. Mr. President, I should like

te nsk my colleague if he beHe\·es the price would have gone down bnct 1t not been for Go1ernment competition?

1\Ir. HUGHES. I do not think it would have gone down nearly as much if it had not been for Government competition.

l\lr. l\iARTL'\E of New Jersey. It would not have gone down a bH.

Mr. HUGHES. I have :r:.ever objected to Government compe- · tition; I helped to establish Government -competition: but I should not like to see the policy c:uried on until it discredits the men who originated it ::md defeRts its own purpose. ·

I was a Member of Congress in another body some years ago when an amendment wns offered which provided that no part of the money appropriated for the purchase of powder should be used to purchase powder from a trust. and in the same brenth it wns argued that all the powder was controlled by a. trust. I hnd been doing some "trust busting" of my own a-nd was at thnt time engaged in thnt popular pnstime; but I .saw and pointed out thnt the result of that limitntio-n upon the appro­priation meant thnt for a year the Secretary of the Naoy. if he obeyed the lnw, could not buy a pound of powder: but that lim­itation went on the bill. it carne .oYer to the Senate, the Senate aceepted it, :md it became a part of the law.

It was argued then that the Du Pont Powder Co. was a trust. Thnt wns the common belief: I belie;ved it; and I think there is not the ·slightest doubt about it. From watching the operntions of thnt company in my own tenitory I -t:new it had gotten into the combinntion all the little fellows who were engaged in the various b:ran.cbes of the powder-making and explosive industry~ such as ca pma kers, and so forth.

They all came under common control .about that time. I knew that. becnuse they were writing me lettet'S protesting agninst the limitation being placed upon the appropriation bill; anrl nil the letters, although they came from men whom I llad known af; being connected with sepHrate and competing com­panies. this time came upon the stationery .of the Du Pont de· Nemours Co .. showing that they bad passed under a common control. I exhibited the correspondence Yery frank:y and can­di<lly to gentiE'men who were seeking to put this limitation in the hlw, showed them that there wns a trust, and ,that every eoncern in the country engaged in_ the manufacture of powder wus in it nt that particular time; and that with the HmitHtion the American Government would be nbsolutely proh.ibired from purchasing a pound of smoke1ess powder during the life of that appropriation b~ll. Notwitllstanding that, the provis:ion went on the bilL Somebody bild the curiosHy .the next year to ask the Secretary of the Navy how he got 11round it, .ano he said he regnrded it as his duty to buy powder, and he bought powder, although be vio1nted the law in so doing.

There were a lot of well-meaning gentlemen who thought it was a good thing to prevent the Gove1·nment from doing busi­neRs with a trust. As an 11bstraet proposition I agree with that; but it is carrying it beyond reason. it seems to me, to legi . late in such a way as to inflict a slight injury upon the trust nnd a great injury upon the Gm·ernment. Suppose the Secretnry of the Navy hfld . be..en a stickler for law and .an ex­tremely ensitiYe and conscientious man .and had held that he could not buy powder that ye.ar, and some great emergency had ariRen, how pleasant it would haYe been for those gentlemen who hfld ealTied. their "trust-busting" nctitities to the .e:."{tent of pre~enting the United States Government from purchasing powder!

I am indifferent as to what happens to this proposition, so long as the Senate understands it. The naked q-uestion in­vol,ed is whether or not we ought to go so far in ~my par­ticular line-in the mnking of m·mor plnte, the building of battleships. the casting of guns. the making of small arms, or any of the other activities in which the Government engllges­whether we should go so .far in any one of those Jines of human endeaYor as to shut out and extinguish private mamlf<tcture. particularly when it is admitted thRt the Government will be helpless in an emergency without the private manufacturer. Tbnt i~ admitted.

The admiral snys that with the construction which he e:m put up with the money appropriated in this ·bill he cnn mann­facture ull the smokel.c-ss powder that the Government needs to buy under ordinary circumstances, and then in an emer-

geney ~1e wiH be .compelled to resort to the private manu fa c-. turers. Suppose, however, there 1s no private manufacturer · to resort to?

Mr. N(}RRIS. 1\fr. President--The VICE PRESIDENT. Does the Senator from New .Jer­

sey yield to the Senator from Nebraska? Mr. HUGHES. I do. Mr. NORRIS. Does the Senator think that if this amend- I

ment is agreed to the Go,ernment will saYe money by manu- · facturing aJI the powder that it '\Iill use under ordinary cir­cumstances?

1\lr. HUGHES~ I think if it continues its present practice it will; yes. For the life of me I ean not see why the Secre-- ' tary of the Navy approYes--

Mr. NORRIR Then. as I understand. the only possible objection the Senator can haYe to this amendment is that in case of war or some emergency of that kind when we wanted a 1arge amount of powder the Government would not be able to mantrfacture 1t, and in the meantime the primte parties manufacturing powder w.ould have gone out of business? Is that the idea ~

Mr. HUGHES. Not altogether. Perhaps I should qualify my last answer to the Senator and say thnt I do not believe, j and l have never conten.ded that the Government does any­thlBg more cbea]lly than a prhrate corporation. I have often ' contended, howe' er, that the Government should do · certain things, e>en though 1t cost a little more to do those particular things. because of the generai benefit that , will result.

For instance. I ha\e never contended that Jt costs less money . / to build a battleship in a navy yard than it costs to get the._/ same battleship from a private shipyard. Manifestly it can not be so, because the conditions under which the Government labo1·ers are now employed ai'e infinitely superior to the con­ditions under which the men in the 11rivate yard.s work. I want it to :be that way, and everybody w~mts it to be tbHt way, and we will not cavil about the little additional eost: that ~oes to the welfare And the remuneration of Go,·ernment employees. I know the Senator from Nebra-skn. at least. will not quarrel with that view. We will get that b::tck, and more, too. in find-ing out. as we ought to be able to find ou-t. and as any intelli-gent a-dministration can find out, just what those br~ttleships cost and just what they ought to be built fot· by private corpo­ratiens.

· 1\lr, NORRIS, I am trying to get some information from the Senator, because I know be is well posted on the matter, in regard to this particular argument about the powder propo­sition.

1\lr. HUGHES. I do rwt think they can make powder at Indianhead as cheaply as it it can be made in my own home coonty.

l\lr. NORRIS. That is not exactly the question I wanted the Senator to answer. Let me ask him another one leading up to it. How are these pri,..rate parties equipped who are now E'n­ga,ged in the manufacture of powder? Are they equipped for an emergency'?

l\lr. HUGHES. Ob, yes. Mr. NOHRIS. So if we did not do anything of this kind, and

an emergency arose, they would be able tD supply all that we could possibly use?

l\fr. HUGHES. Yes. I am g1ad the Senator asked me that question. I want to sny, though it m~y not be ub ··olutely re­sponsive to what he asks me, that their plants are scMtered all o,·er the country. I h:we said (JUCe or twice in this debate that all this -smokeless powder is made in my county. I do not think that statement is strictly accurate. I know that for some time I thought lt was. but I understand some of it is lllilde elsewhere. Anywny, they have plants all o'\·er the country, and they cun shift their orders .and ehange Rbout, and they are watching and ready to make the necessary expnnsion at any tlwe.

l\f.r. NORRIS. That being tl·ue. as I uu£1e1·stand. th~ pur­pose of this amendment is to enable the Government to get its powder at a cbeaper rate. In <>ther words, it iR generu lly con­ceded, I think, that -we have been paying too murh for our pow­der. Now, if it is pm:fitable--and it seems to me it is-for the Government to manufacture powder for the ordinn ry run of business in tiire of peace. if there is 11ny danger of onr not being abLe to supJlly ourseh·es in time of emergency. why would not a sufficient noswer to thnt be thnt the Go,·erument should extend Hs operations so that It will be able to meet Its own demands in time of emergency? If we can mnke tbe powder in time of peace lor a Jower price tl.la.n we are compellerl to pay to this so-('jllJed trust, why can we not do the same thing in time of war?

Mt·. HUGHES. The SenatQt''S questi.on answers itself. If the G~Jvernment were going into the powder business on a basis

1914. CONGRESSIONAL RECORD-SENATE. 9371~

that contemplatea. supplying itself with powder 'in emergenCies, and would there -not necessarily be a loss resulting from the it-would render necessary a plant and an equipment which would ; fact that the plant probably would not be run constantly? be of such a character and such a cost that the Government Mr. HDGHES. I think the manufacture of powder is a would not be able to make its powder in time of peace as continuous process. I think, however, the Go•ernment has cbenply as it could purchase it. relied in the past very, •ery much upon the privnte manu-

Mr. NORRIS. Thar is the point I want to raise. Are we not facturers, and I do not think the Go,·ernment is going to have paying too much now, in the judgment of the Senator? Have the joyous time it anticipates when the private manufacturers we not been pnying too much in the past? go out of business.

:6Ir. HUGHES. I can not say as to that. I do not set myself As I say, I think the making of powder is a continuous up as an expert. I know that the Congress has fixed a limit of process, and 1 think that with the proposed new construction 53 cents, beyond which they can not go; and there is a board and a steady customer like the Go•ernment this piant will be of officers whicll goes into the question thoroughly and which manufacturing ·powder about as advantageously as any gov­bas the Go•ernment costs before it. You see, the Government i-~ ernmental agency -engaged in manufcturing. very happily situated in this controversy. 'rhat is the reason I Mr. GALLIXGER. As I suggested to the .Senator, I am not do not see the necessity for all this leO'islation on this particular well informed on this question. 1\ly only tnougbt was that the matter, when there are so many other things crying for atten- Go•ernment, of course. could not sell its -product; it could only tion. manufacture it for itself; and as a consequence it seems to me

l\fr. NORRIS. I think there are a good many other things rwe would be wise to limit our productive capacity. Th1-1t was crying for attention. I agree with the Senator; -but, of course, the only thought I had in mind. I do not know whether this we are not considering tbem now. , proposition goes to that extent or not.

Mr. HUGHES. They should be in this bilL Mt. HUGHES. I do not think so. l\1r. NORRIS. I should like to have tllem in this bill. 1\fr. CLARK of Wyoming. Mr. President--1\Ir. HUGHES. They are not .here, however. They went out ''l'he VICE PRESIDENT. Does the Senator from New Jersey

on points of order and in various other ways. yield to the Senator from Wyoming? Mr. 1'\0RIUS. Yes. l\fr. HUGHES. I yield. Mr. HUGHES. So they are not here; but, at that, I think Mr. CLAnK of Wyoming. It was suggested in -a question by

the committee is doing the best it can. I think the Secretary the Senator from Nebraska that possibly it might be well to of the Nnvy is doing tlle best he can. I think he is addressing ' build a plant sufficient to supply all our needs in time of emer­bimself to 1-1ll these questions and getting himself informed on gency or in time of war. If the Senator has con idered thrit them; but this proposition was tempting to him; it was easy to matter ilt all, I will ask him whether, if a plant of that sort do; it did not require much money, and that is probably the should be established sufficient to meet -all emergencies iu time re<lson why it was put in. . of war., it would not be of such great capacity that the cost of

Mr. NORRIS. It seems to me it is altogether '3. question of making powder in time of peace would very""much exceed that fact whether or not in the past we have been paying an exorbi- spoken of by the Senator from Virginia? tant price for powder, and whether we can obviate that difficulty Mr. _HU~ES. It would be absolutely proWbitive. I tried by making it in some Government institution. If we can not do t~ say that 1n answer to the Senator from Nebraska, but I thnt, it would be foolish to go into it. If we can, we Dught to , did not sta~e it so clearly nor nearly so well as the Senator do it. from Wyommg has stated it.

Mr. HUGHES. In .my judgment, ·this js 'the s:ituation a.s it 1\Ir. NORRIS. I did not understand what ~e Senator said. confronts us to-day: There is ·a ·board of officers which .:fixes the .Mr. HUGHES. The Senator from W:;vommg had Just asked price of :powder, and which can :fix the price of powder to be me if the Go•ernmen~ went into the busmess of makmg smoke­purchased under this bill at 30 cents a pound. if it chooses . .less powder so extensn·ely as to be ready to meet any emergency, There is no limitation upon it. That board of officers has access what the effect on the price would be, and w~mt effect the to the c.ost figures of the 'Secretary of the Navy ,at the Indian- ~pkeel? of th~t plant woul? have upon the makmg of powder bead factory. That board of officers can :find 10ut exactly wha.:t lin q,~dina-ry times. Jn my ~udgme11t, it would make the co~t bf tt costs the Go•ernment to make powder, and it can fix that ~a~I.ng powder nuder ordmary circumstances absolutely pro-price. The first time a private individual refuses to sell his ihibitlve. . powder to the Government at the price fixed by that board it . 1\!r. NORRIS_. I should hke to ask the Senator a~other ques­migbt be well for the Congress to take notice of it, and to go tion. That. bemg true-~nd 'I ha•e no doubt, 1 w1ll say: but into the business of making powder e•en much more extensively .that ~e J!rice of powder m ~ase of emergency would be higher than is proposed here; but 'it see~s to me that this is one ;than I~ t_he ca:se of the ordinary use of powdey from year to brunch of governmental and private activity in which the year-1f lt is wise. fOO:: the Government to go mto t?e m;mu­Go•ernment has more advantnge than it has in any 'Other. facture of powder m t1me of peace to supply our ordmary and

Mr. WILLIAMS. ·Mr. President, I wish to ask tthe Senator c-nrrent demnnds because ·we have been held up and compered a ·question. Ito _pay to a Powder Trust 1:lD exorbitant price for powder. why

'I'he VICE PRESIDE?\rrr. Does the Senator from New "Jersey would not the sam; re~soning. apply to powoer manu~~ctured in yield to the Senator from Mississippi? ca~e of emergency· Would 1t not b~ m?re expensn e for the

1\Ir. ffiTGHES. I do. pr1va~e pnrty ~o manufa~ture powder m time of e~ergency and l\fr. WILLIAMS. The Senator bas just .said that the first get h:s matenal and .his employ('es nnd ev-erythmg rendy ~o

time the bolud fixed a price at -which these people refused to opera_e, th~ smne as it would for the ~o.ernment, so thnt m sell it would be well to take up this matter. Now, I do not any event, m case of emergency, the pr1ce of powder would be know the fact, and I am asking for information; but I under- increased? . stand that at one time the board fixed 48 cents, and the com- . If the theory of hanng powder made by tbe Go'lernment. in p1my refused to sen at that figure, and the Government, being time of peace is good, I can not s~e '!by the theory of hnnng compelled either to buy the powder nt 53 cents or to do with- powder made by the Go•errrment m trn1P of war for the same aut H. boug-lrt it at G3 cents, notwithstanding the fact that the reason would not ·be ~ood. Let us suppose that th~ G_oTern­bonrd hnd fixe(l 48 cents as the proper and fair price. ment does not enga~e m the mnnnfactn~·e of powder m time of.

1\lr. H"CGHES. I ·dO not think that is true, but I will not peace. The ~eopl_e w~o nr~ mnm1~neturmg the powder that !Jle challenge the stntement. Government 1s usmg m ·ordmnry times. and who are n_ot making

.Mr. WILLIAMS. Some member of the committee, perhaps. m??h ~or~ than ~e Governme~t uses .. wonld have 1_n cnse of has the information and -can give it later but 1 have .heard w,u to mcrense thmr output._ their machmery, and thetr nnmb~r that. ' ?f employees. and the resulting expense would have to be pmd

JUSt the snme. Mr. HUGHES. If th::tt ha~ e-ver hRppened, it is very likely Mr. HUGHES. The Senator must unde-rstnnd, of conrse. that

th?-t I would have heard of It, because I have l;>een active in the making of powder for the GoYernment is a ,ery smnll pnrt this matter. of the acti,·1t1es of the concern which is furnishing the powder

Mr. G.A L LINGER. Mr. President-- to the Gm·ernment. The VICE PllESIDE1\~. Does the Senator from New 1\I-r. 'NORRIS. If that be true, then certninly the making of

Jersey yi~ld to the S~nntor from New Hampshire? powder by the Government would not seritmsly interfere with 1\Ir. H"LGHES. I yield to the Senator. the privl'lte pnrties who are mnking powder. l\Ir. OALLL"'\IGER. I should like to ask the Senator a ques- .Mr. HUGHES. Oh. yes; it would. One of the plants i·s de-

tion . Tbis is n matter upon which I am not -wel1 informed. voted exclusively to mnking sm'Okeless powder for the Govern­Suppose the Governmen~ builds a •ery large plnnt for the manu- meut. ·but in case of emergency tbey would ·not have nenrly the facture of powder. ·Is 1t probable that the demRDd would keep difficulty that the Government would ha ''e in adapting to this that plant in operation all the time, or what portion ·of the time, purpose other plants which they have, -scattered all over the

9372 CONGRESSIONAL RECOl{D-SEN AlE:

country. - Is the Senator aware that this plant on which it is ·proposed to Iea•e the Government of the United States abso­lutely dE-pendent for powder, consisting of 30 or 40 buildings, is situated in one spot, near the coast, and an explosion in any one of the buildings would absolutely destroy the plant?

1\lr. NORRIS. I think if the Government was going into the manufacture of powder. nnd particulnrly if it was going into it i:o thE' extent · of manufacturing it for cnses of emergency like war, it would be very foolish to have only one plant and in one location. For business reasons, the same as private parties do, it would probnbly have several powder factories. Even though we were only going to manufacture powder for the ordinary consumption of the Government, I should think there might be good. reasons why it might be well to manufacture it in more than one plRce. Wey should we not pursue the same business methods that private parties pursue, if we are going into the business at llll? ·

Ur. HUGHES. Of course, I agree with the Senator, abso­lutely; but the discussion that is going on between the Senator and myself is academic. This is not a theory 'that confronts us now; it is a conditi_on. I agree with the Senator that if we do this thing we ought to go further, and that instead of an appropriation of $500.000 for new construction there ought to be an appropriation, perhaps, of $5,000,000 to put up plants in various parts of the country; to put up plants dependent upon each other, perhaps, but located in different localities, and lo­cated in the interior; but thRt is not what is proposed here.

It is proposed to extend the plant that already exists to such an extent that it will at least discourage, and in my opinion absolutely destroy, pri•ate competition. I would feel so if I owned that plant. If my best customer was getting ready to make the stuff that I was selling him, and was going to be able to make it in such..quantities that he could make all that I was selling him, I would begin to think that my chances of doing business with him were very small. - 1\Ir. · l\1ARTIN:t!:J of New Jersey. 1\Ir. President, will the Sena­

tor yield to me? · 1\Ir. HUGHES. In· just a minute; as soon as I finish ~s

stRtement I will. It is proposed to put this new construction down here at

Indianhead, where all the rest of the construction is; and it is not propo ed to go on and manufacture enough powder to provide for emergencies. We are still going to rely upon the private manufacturer for emergencies; but nobody can tell­the Secretary of the Navy can not tell. and I do not know how any man in this body can tell-that the private manufactul'er will be there when the emergency occurs.

1\Ir. MARTINE of New Jersey. 1\Ir. President--. ~lr. HUGHES. Now I yield to my colleague. Mr. 1\IA.RTINE of New Jersey. If the Senator will permit

a question. I desire to know if it is not reasonable for us to assume that the Government of the United States, having at hand experienced and expert engineers and powder makers, will be as circumspect as to the location and constructio:::J. of build-ings as wil1 the private powder concerns? .

The Senator says it is the purpose to locate this new plant at Indianhead. where, if an explosion takes place, it will annihilate all the buildings.

Mr. HUGHES. I did not. say that. Mr. l\L<\RTINE of New Jersey. Did I not understand that

from the Senator? 1\lr. HUGHES. I do not know what the Senator understood,

but I did not say it. Mr. l\IAR'riNE of New Jersey. I thought my ears were not

at fault: but I take back that statement, then. I say we are safe with our engineers. experienced and expert in the location of powder plants, as a private individual would be; and I under­stand from that which I have seen in my State-and my travels m·ound there have been about as extensive as those of my co1league-that these are very inexpensive buildings. as a rule. anyway. You find little hut's up through New Jersey, up in Pompton and Hopatcong and up around in that region, very inexpensive ones; a little hut nestled in here and a drying house nestled over yonder; so that the matter of the upkeep of a plant would not be a very great burden anyway.

It seems to me the whole of this controversy is--1'1Ir. HUGHES. I have not finished, Mr. President. Mr. MARTINE of New. Jersey. I am not going to interfere

with the Senntor; but just let me sfly--Ur. HUGHES. I will be through \n a very few minutes. Mr. l\l.ARTINE of New Jersey. I will ask the Senator to let

me proceed for just a minute, and say that the whole of this seems to me to be just defending a private monopoly. I believe the Government can manufacture powder a good deal cheaper than these pri\ate firms are w_illing to sell it to us, and in case

of an ex~reme emergency ~e will be amply capable of taking care of It. These men Will come begging us to buy their powder.

1\fr. HUGHES. I thank the Senator for a very lucid exposi­tion of the other side of this controversy· but I am compelled to say, in all frankness and candor, that ~hat he says does not relate in any way to the proposition I am discussing. For fear the Senator's flight of oratory has driven it out of the minds of my colleagues, I will spend a minute or two in restatincr it.

The proposition is to extend this plant at Indianhead. The powder is made there in a chain of buildings, and an ex­plosion in nny one of the chain of buildings at Indianhead · would stop the operations of the plant. Of course that is not true in the case of a private powder manufactory with plants scattered all over the country.

Mr. LEE of Maryland. 1\Ir. President--The VICE PRESIDENT. Does the Senator from New Jersey

yield to the Senator from Maryland? 1\Ir. HUGHES. I do. Mr. LEE of Maryland. I should like to advise the Senator

that in conversation this morning over the telephone with Admiral Strauss, who is in charge of this matter, he stated that the drying houses, and so forth, were so situated that an ex­plosion in one would not endanger the others.

1\lr. HUGHES. 1\Ir. President, the Senator is advising me of something of which I was thoroughly advised. He has misun­derstood what I said. He does not understand what I am try­ing to say. I am not talking about an explosion in one (lrying house blowing up all the other drying houses. I say the powder is made in a chain of houses. Different operations and processes are carried on in the different buildings, and the powder is car­r:.ed from house to house. A process in each house is necessary before the product is finally finished.. An explosion in any one of the houses breaks the <'hain, and it is impossible to com11Iete the process and ·manufacture powder until that house is re­stored.

I am not talking about an explosion affecting the other houses. Of course, common sense would dictate to anybody-an officer of the United States Navy or whatever he may be-that in making powder it is necessary to erect the different buildings at such a distance from each other that an explosion in one is not going to blow up the others; but when an explosion occurs in one of that chain of plants, until that damage is repaired, until that building is restored, until arrangements are mncle to carry on the process that is being carried on there, the making of powder absolutely stops. Therefore an explosion of one of these essential buildings at Indianhead will stop the Go•ern­ment from making powder. If the private individuals have been driven from the business at that time the Government will not get a pound of powder until the destruction created by that explosion has been repaired, until order has been restored, and the process has been installed once more.

Gentlemen, patriotic men, men charged with the responsibility of representing their States and their constituencies ought to be careful that misguided zeal in the chase of trusts and monopolies does not carry them into a position where they will be doing affirmative injury to the Government they are repre­senting

As I said before, I am indifferent as to wbat the Senate does about this proposition; but I wanted to lay fairly before it the fact that it is now proposed, and it is the object of this amendment, to lla ve the Government make all its own smokeless powder, and make it all in one place; that if we look for the logical consequences of our actions and conduct to follow, there will be nobody making smokeless powder but the United States GoYernment; and then, when an emergency arises, we will haYe no place to turn. If an explosion occurs in one of tllat chain of buildings the manufacture of powder ceases until repairs have been made and the building has been reconstructed, and in the meantime the Government gets no powder.

So much for the mechanics of it; so much for the details. The other objection I make is on the broad principle that while I insist upon the Government going into the manufacture of anything that is vita1Iy necessary to it, especially things the manufacture of which is genera1ly confined to a few people who can readily combine, I do not want the Government to go beyond the point of proper competition to protect itself. I do not want the Government to become a monopoly itself, as I said before, not because I believe a Goyernment mono;>oly is bad, but because a monopoly of any kind tends to produce cer­tain bad results.

Just conceive of the manufacture of powder being in the hands of Government servants who are paid a fixed amount each year, regardless of what they do. -Where is the incentive for Government servants to burn the midnight oil for the pur-

1D14. CON·GRESSION.AL IREOD.RD-"SE:NATE. 9373 poe::e of dtl"co>erin~ new prore!':~es 1n the mnnnfn<"'tnre of powdt'r? 'l'rf>fil{"ndons pro~rf>~S bas been m:rde a long those lines in re<'ent yearR. and it iR qnite v.itbin the bonnds of possibility tl':lt the powder tbnt will l>e mnn11fnct11rPd nuder this app1·o­pri.ation will be pl'nctically worthiN~s bpfore it is delivered. bec;HlSe of n~w diRco•eries hn>ing been mnde. These gentlemen aJ'P tnldn~ the ebnnce of lea,·iu..g the Go,·ernment behind in the pro~·f>~S nf thi:s art or science.

Pri\·:tte tndid1lnnl will rPWnrd mE'n who ·mnke disco\·eries. Can am·body co•wein~ of nn officer ·of tbe rnited RtntE's ·Go•ern-. IDE'nt. wtw in the cmrr:::e of his im·egti~at1ons stnrubled upon ra proceRs \Yhich reRultert in n reduction of the cost of ·smok~l~s powdE'l' by 50 per cent. being rewnrded by a snm of money curriE'd in nn nppropr intion b.ill? Why. points of orrter would come from e,·e:rv direction: but the fact is thnt it would not be attempted. Pri.vate indiddu.als can do those things, and do do them.

r ha>e ne>er contenderl thnt the Go\'ernment does the~e things more c·heaply than rn·iTUte indi\iduals. It does not. The Gov­ernment. in the fac·<> of vrivnte competition. keeps tup and often for~eg ahead: but I should be >ery loath 'in-deed to ·See the mannfnNnrE' of 110wder placed alto~ether in the bnnds of a Go>ernment monopoly. nd h1n e the pnid servnnts of the Govern­ment the only ones interested in carrying on its production.

1\lr. IU~J·~]). Befor-e tbe ~enator re~umes his sent I want to aRk him if it is n 'fact lhat the ·so-cnlled P<fMler T'rtTst ·hasrfor many years hec:>n engng-erl in the manuf»cttrre of powder -nnd sell­ing it to fnrei:gn gu,·ernments. nnd if that uue item would not prob :l bly keep the bu. iness ali ,-e even if the Gove1TI1Ilent of the United Rt: t tel" withdrew its patronage?

Mr. nr G HES. I do not know · a nytbing about thn t. l will sny to the ~enntor. -e'XceT't that I do know this: This knowledge has been forced ·on me by the fact that I Jiye in Pnsl'<ilic Connty, WhPre there is made much oi' t:'b'e smokeless powder that is manufactlH'ed for and sold to the GoYernruent. ~early all this powder is made in this pnrticuhrr plant, if thnt answers thP 8enntor's question. 1 do not know anything about the foreign sales.

Mr. UEED. l wi11 nsk the Senator the "frtrfher question. if ·as ·a nw tter of fact " ·bil-e tile t-ioYeruruent pm·chases. of powder do not run abo,·e rn·obnhly.:3:000,000 ·a pounds a year--

Mr. lll: <nll~.:. Ahout 4.0110.060 pounds. Mr. HEED. While tlley do not run above 4,000,000 pounds ·a

year, there is a C:Jfl<lcity to-day in the _printte plants controlled by the trnRt o'f o,·er lO.OOU.OOU pounds.

1\lr. Hl'GHES. Smokeless powder, .noes the Senator mean? l\11·. n E gn. Yes. 1.\lr. nrGHE8. I conld not -say. I had 'better not sa)' ·.any­

tbiug about that. bec:tuse I do not 'know. 1\lr. HEED. I shoulcl like to ·ask the "Senator a ·furtl1er ques­

tjou. Is it not a fnct that. iustead of keeping ·up With tbe ad­vance of science when "·e \\·ere a b. olutely in the hands of this powuer combination }tnd bad no factory of our c1wn, they fniled to manufacture up-ro-rlate surol\eless powder, und if we did not go into tbe Spanish War with tbat handicap?

l\Ir. I1l'GHES. Thel'e was not any smokeless pdwder during the S}mnisb-Amerkan \Yar. The Senator is making an nbso­lntely bn~eiP.!':s st<ttPment. which bas been made a ·hundred times. TI1ere was not su<'h a tbing as smokeles."> powde-r in ex­istence in this country during the f:?panish-American War. lt was not in use in either the .Army ol' Xavy. They did not know wbllt it wns.

l\lr. HEKO. I will ask the Senntor if :::molteless pc1wder did not exist flt thn t time: nnd I will add the question ·if tbe armies anrt n:wies of fnrei~n countries did not h;n·e it.

:\Jr. Hl'<iHES. I do not know. I know tb:lt we did not bnYe it, and I do not cat•e unytlling about whut other ·countries di<l.

!\Ir. REED. I a~ked the question Qf the Senator in n per­"fectly conrteonR way. without the f:Jigbt'E:>st idea of :offerrrtirrg bim. If <t!'kin~ him n qnestion when be is -ndi!Te!':Shl~ tile Ren­ate upon a Rnhject tlt :• t he cl nims to be familiar n·itb is offen­sh·e, I npologize for ha\·ing <'lone so. I WllS seeldng li~ht. :md if it offpncl~ the ~enntor to giYe it to me, I am yery soiTy that -I trespn~!':E'fl on his time.

l\fr. Hr<iHER. Tl1e Renntor mnnngen not to di~clo~e the fn('t that he wns ~eel\in~ infot·mntion: nt lenst l rtirl not dis­cm·~r it. I b~n·e ne,·pr cl:tlmetl to be fflrnitiar witlt tb<> 11d·q1net> of :,;mokPiel"f': powdt>r iP the A1·my or "!'I<HY of the Unltetl ~t:ttes or in tlie other nntions of the \\'Ol'lfl. I dirt not sny nnytbillg about thE' con rlnct of tbil" or :my otlter ··combinntinn of men rtnr­ing tlw Rpnnil"h ·Antel·icnn War. Tbnt. wns nen•r mentioned in ' the cont•·o,·Pt'l"Y by nnybody <·n either sitle. I :pretended to no . special Jmow:.etlge in connection with it.

'1\fr . . IIUGRES ·subsequently snit1: Mr . . President. 1 ask permission to insert 'in my rernnrlrs two

· stntements on this subject that appear in the printed hearings bt.fore the Hou~e committee.

Tlla ··viCE PRESID.E...~T. Without objection, that ma_y ·be done.

The matter refe1·red to is ·as follows: · rstntPment submitted by Mr. Browning.]

REAsoNs WnY -'l:HE P.nEsE~'r Gonm:"MEN'r SMOKEt.Ess P.oWDEil SlTUA.· 'l'ION SHOUI.D BE LEFT UNDISTURBIW.

First. Because w1th ·· two plants of tts own ,and tbr<'e commPTcial plants tbe Govrrnml''llt ·not only hns abuoaa·nt capacity but ·the sout·ce of s-upply · fs so :diRtributed as to pt•otect "the Govet'nment in any l'mer­gPncy. As the Hov£'rnment ·prepares the specifications for making the smokeless 'JloWdPt', sup<:<rvisPs Its manufoctut·e. flxrs the pt·icp to be paid 'for the ftn~shed product, and Is ablt:' to kPep close tracl( of the cost of manufacture by reason of the opet·atlon of its own r.uctot·ies, 1t bas absolute control of "the powder ·situation at the present time.

Srcond. Rt>ca11se when the Go,·et·nmPnt, after ·expt>riments at New­pot·t. decided upon the · prespnt type of smokeless power It called in manufactur£'rs and turned the propm;ition ovct· to them to perfect and mnke practical. As a result the Du l'onts 1nvested seveml million dollars In plants. 1n·o.::esst-s. and machint>ry, having faith and aonfi­dence that tl •t- buRtness would ·be a continuing one. The tal<lng over of tbe manufacturP of smokeless powder b-y the Governmt>nt would greatly impair this investment. ThPSe plants can not be used in the mn nufactm·e of othet kinds of explosives.

Thtrd. Beca:use, ncco.Tdin~ to the tnhles ~ubmlttPd by Admiral l'wtn­lng. Clflef Of Bureau of Ordnnace.. Na-v.y DeprrrtmPnt. ~nd Gen. Crozier, Chief of Ordrr:.rrrcc, n·a'l' Depaffment, at ('('CE'nt ht>UI-ing beld by Subcom­mittl'e on Fortifications ·H6Use of R~>presPlH.:l'tives. It was shown that the cost of the manufacture .of smokeless powdPr -to the Du Ponts is app•·oxtmately 49 cents per ·pound Gn a l'i.OOO.UOO-pound output. The Uovf>t·nme'llt bllys this powder for 5~ cPnts per pound. This gives a pt•ofit .or .about 8 per cent, <.ertainly nol extravagant -when the hazard :tsl'lOciated with tbe manufacttrre of explosl'ves 1-s considered.

-Fom·th. 'Beeaust- the <·oncentration of 'tbe manufactut·e of smokeless powde1· for tbe Nary at one point ·would be taking an undue hazard. Sboul~ the Government plant blow up or be othenvlse destroyed In ttme of •wn'r, the country would be betpless. New plants could not be built in ·a 'few days. It would require mo·nths to build and equip a smol.eless:powfler pl::mt.

Fifth. Reo-.use the taking over of thTs manufacture by the Govern-­ment woold tmpatr presPnt ·reserve manufacturing ca:pacity. The Du Ponts 'could mannfactm·e a II th-e .powdPt' t hey supply to t-he Uov(")·nment at one · plant. :Jn order to ·meet all possible demands tn the event -of war. they maintain t hTee plants. Thus tile Oo et·nment ·tJas five splen­did. np-t~date .smokeless-fluw~er-p.t.ants upon which ·to rely In the event of war. It 'ls 'no e~aggeration to state that this featm-e of national defense ts the -<lnly one that is completP and ·sntlsfactory and can be depended o-po-n ·to meet cany demand •at any moment.

Sixth. 'Because u pproxilnU tely $:·WO.OOO.tl00 ·Is expended ·annually on the At•my and Navy, and less tba-n 1 pe1· cent. ·or about $R.OOO,OOO, of this -vast sum .goes ·ror powder. Strange that all this sensational con· tentlon Is made over the expenditure of ·thi.s 1 per cent. willie no ·ques­tion involving the expenditure of tbe !l9 pet· cent is t>ver beard.

Seventh. Because lit'tle, if ·any, of tire m11ney appt·opria tt>d by the Go"V· ·et•nment for the purcbnse of smokell'ss powder ls expended at the Uov· ernment plants ·on expet·lments looking to 'tbe bettet·ment of the quality. Tbls work has been left to the Du Ponts. In lhelr laborato•·lcs tbey ~:Jxpend appt·oximately $~0H,OUO annually. and a .gt-eat deal of attention Is .given smokeless po-w·der. 'l'bis acconnt1:'1 for the fact that the United Sttltes leuds the ·world in tbe .general exceUence ·.of Its powde-r

Eighth. Because. taking into considet·atlon the savings wrought by thp system for tbe rec<w~r·y of alcohol. for the l'eWol'king of powdl•t·. fL'r the manufacture ·Of small nrms. etc .. tbP aetonl value of the sen·ices the Du l'onts have pet·formed for the Government far exceeds the profits they have obtained ft·om the Go-vernment.

Ninth. Because tbt> Government looks to outside manufacturers for much else than smokeless powder in the wny .of explosiv~>s used for natio-nal defense. In marry instunces these ex:plosives at·e pef·fected aft-er much trouble and expense, and turned over t.o tbe Government 1l.t actual loss.

Tenth. Beca:use this Gover-nment ls buying Its smokeless powder 25 PPr ce"t per ponnd lowet· than any nntion on ent·th hn.vs a silnlla'r pow­der. 'The Du Pont Co. is selltng powder In the mat•kets of the WO'rld on this l.lasls. It is not one of those companies that "sells abmad cbeap~r than ~t bo-rne."'

Eleventh. Because Government monopoly :Is nevel' advisable. France monopoli7.Ps the manufactut·e of smokeless powder, matches, and clgors. Admittedly It hfls the ·m.ost infet·lor smokeless powder, matches, and ci .c, at'S tn the wol'ld.

'J'wplfth. P.eenuSP tlle Du Pont Powder Co. probably enjoys the ·unique distinction of being the only coneem selling the G.overnml'nt dur·lng the Spanish-American "ar that 'l'educed the price o-r its commodity ln the midst of the conlHct.

INDICATING FAIR TREAT~TEl:-JT.

rAs •evtdpnce tbat the Du Pont Co. has not only -bPPn promptt>d by a spirit of fairness bot a sentimtrnt of patriotism In d1!allng wltb tbe Government, your attention to the ·f{)l!owing specific pet·formances ia 'called:

1. CondUct 1n ·war: It ts 11 matter of blstory -that the SpaniRb-Amer· 1cnn ~Yar was postponed seve1-al .month!'; becanse tbp novt>rnmt>nt did not havp powdpr with which to fight that war. It ml~-tht be SSiid that In this emergency tile Govet·nment wa:s at the mPrr·:v of tbl' powder maket·. The Ilu Ponts In thiR cr·isls did nnt advance tht> pnee. A contnrct for 5.000.HOO pounds of brown prismatic 'powrler, at ::\21. cents per pound, was made with tbl' nu Pont Co., nod l'Vt>r.v for·r'e wiiR con­<'l'Dtl·nted to fill the ot·df't'. Commercial plants · were rohiJed to equip and strength~n tbe pl-ants hastily constructed to make Government ·powder.

Aff'er many thonsand ponnds of powdl'r had hl'en dl'livprr>d on tbis •contract an advnnbrge fn the mnnufartut·e pt·esented Itself by the ex· plration of a t'O~·nlty, nod the cost of manufacture was r·t>dtH'Ni :n C(•nts pPr pound, the1·eby rl'ducin~or. in the midst of tbP conflict, tbe price of po-wdPr to 29 cents pet· pound.

The ;va1· cnmp to an end sooner ttran w.as anticlpnted. nod but 2.~00,000 ~ponnds of powder had been dPllver·ed on this !j,OOO.OOO-pound COlltl'&Ct. -TJl,e Go\"'.ernment communica~d with the Du -P{}nt Co., in-

J

I

9374 CONGRESSIONAL RECORD-SENATE. ~fAY 28, qiiiring upon what basis it would cancel the remainder of the contract involving 2,800.000 pounds. The Du Pont Co. answered that it would gladly cancel the contract without compensation, as it was anxiou!l -to concentrate its forces in supplyin~ the demands of the industrial world. .. · , Other concerns dealing with the Government during that war not only -inci·eased the price of tile product furnished to . the highest limit, but demanded extravagant sums in lieu of the cancellation of contracts. On the basis of other settlements · made,' the Du Pont Co. could have held the Government up for more than one-quarter of a million dollars on the canceilation of this contract.

2. Dehydration by alcohol : This process for the replacement of water in guncotton by alcohol by use of ·a hydraulic press was invented and patented by Mr. Francis G. du Pont. It affords not only by far the most efficient and economical method for accomplishing this important step in the manufacture of smokeless powder, but, what is more impor­tant, invests the entire operation with an element of safety. that is beyond estimate in value. The use _of · this process was given to the Government without charge and the presses now in use by the Navy were made from our patterns.

3. Recovery of alcohol: For a number of years the Government fur­nished the Du Pont Co. the alcohol entering into the manufacture of Government powder. Under the originaL process once used this alcohol was destroyed or escaped by evaporation. At its expense and risk, solely in the interest of economy to the Government, the Du Pont Co. perfected a process by which the alcohol was recovered and returned to the Government. The Du Pont Co. had the assurance that if it suc­ceeded In perfecting a system for recovering this alcohol, the expense thus Incurred would be made good by the Government. The Auditor for the Navy Department declared this agreement not binding, and an itemized statement showing an expenditure of $75,000 was turned down. This process was given for use in both Government plants, not­withstanding, without a cent's compensation, and has already resulted in saving the Government hundreds of thousands of dollars. This sav­ing will continue as long as smokeless powder is manufactured.

4. Reworking powder: Smokeless powder deterior:ates with age and in time becomes unsuitable for use, resulting in large loss to the Gov­ernment. The Du Pont Co. invented a pt·ocess of reworking powder and handed this process over to the Government for use In both its plants without a cent's compensation. Hundreds of. thousands of dol­lars have been saved to the Government by this process.

5. A stabilizing material: Comparatively recently the Du Pont Co. brought to the attention of the Government the results of its inquiries and investigations with respect to a suitable stabilizing material for smokeless powder. This was adopted by the Government and more than doubles the life of this powder. This has not increased the price of powder to the Government, but has resulted in an enormous saving.

6. Powder for small arms: Several years ago the Du Pont Co. per­fec ted a powder for small arms by the use of which the life of the rifles used by the Government has been extended from 1,500 rounds to 15,000 rounds and the accuracy llfe of the rifle not yet reached. 'l'bls powder which was sold to the Government without any Increase in price, gave to the. 800,000 Government rifles an increased money value of approxi­mately $20,000,000. The Du Pouts also gave the Government the right to manufacture this powdet· in its plants for a mere nominal royalty.

7. Nitration of cotton: This company has invented new and valu­able improvements in the methods of ~itration of cotton. Ingenious mecl;lanlcal devices have reduced greatly the cost of manipulation and improved the quality of the product. These improvements have been offet·ed to the Government for a nominal consideration.

8. Stability: The Du Pont Co. several years ago expended over $400,000 to obtain for the Government a new powder which they and the officials of the Government thought of great value. They might have gone into the markets of the world and sold this powder at an enormous profit, but at the request of the Government the company kept this a secret without the Government bearing any portion of the burden. Gen. Crozier and Admiral Mason are familiar with this mat­ter. By reason of improvements made in our smokeless powder the new powder mentioned is now useless and the investment to the com­pany was a total loss.

9. The Army powder plant: After Congress appropriated money to build a powder plant at Dover, following its policy of giving to the Govemment the free and unrestricted use of all it bas and all it knows bearing upon the manufacture of powder, the Du Pont Co. invited the Government officials to their engineering department and gave them the use of every drawing it bad. The company sent its engineers out to assist in laying out the Government plant. It is impossible to place an estimate on the value of the service rendered, the Du Pont Co. having spent hundreds of thousands of dollars in developing plans and economies that were freely given away . .

10. The pyro incident: As indicating the disposition of the Du Pont Co. to be fair and honest and " on the square " with the Government, I will relate an incident that occurred a few years ago: One morning the gentleman at the head of our operating department came to me and told me that he was greatly distressed and disturbed over . some­thin~ be had just discovered in our smokeless-powder plant at Haskell. He said tha t an employee, without intending to defraud the Govern­ment. bad been detected switching samples of pyro sent to the Gov­ernment for testing purposes-substituting former samples shown to be perfect. He did this in order that he might make a good showing in comparisc_n with other factories. This man had been with us six years, and during that time there had been manufactured 3,000,000 pounds of powder with which he bad come in contact. A meeting of om· board of directors was called and the matter was submitted. I explain,ed bow, if we were forced to take this powder back, it would cost us well on to $2,000,000. On the other hand, if the Government should US~:! the powder and it should prove defective It might cost the Government ships and the lives of many men. There was no hesita­tion on th'! part cf the board of directors. They instructed me ·to take the train at once for Washington and make a complete showing of what had been discovered. I got Admiral Mason and Gen. Ct·ozler tog<>ther and told them the story. Gen. Crozier said to me at the time that he bad known many concerns to attempt to swindle the Government, hut that this was the first instance in which he had known the principal to voluntarily confess a shortcoming. I requested that thev should send officers to our plant to be present at an in­vestigation. The committee appointed by the Government reported that they believed the powder to be of satisfactory quality, but since the Government had not been furnished with samples of each lot of pyrocelluiQse. used in the manufacture they required the Du Pont Co. to give them a guaranty ·of six YE:ars on life of the powder. No greater percentage of the powder went wrong through these years at this plant than went wx·ong at the other plants, includin~ the

Government plants; but this confession and guarantv cost the Du Pont Co. about $50,000. (Col. Buckner's testimony at House hearing.)

. [Statement submitted by Admiral Strauss.] . Referring to the sta,tements contained in the hearings entitled " Rea­sons why the present Government smokeless-powder situation Rhould be left undisturbed " : These reasons are discussed seriatim, under the same beadings, as follows :

First. Heretofore no difficulty has been experienced in controlling the price of powder, and possibly such control under the existing ar­rangement might continue indefinitely. It is possible, however, that a d.Uference of opinion might arise as to the proper price to be paid to the Du Pont Co., in which case the Government would not be in a position to dictate terms. The Government does prepare the specifica­tions, supervise the manufacture, and has, for several years past, fixed the price to be paid for the finished product.

Second. The Du Pont Co. has made large Investments with the ex­pectation of getting a large amount of Government business, and but a small portion of its smokeless-powder plants could be used for ot her purposes. Since the beginning of the manufacture of smokeless powder, however, the Navy has placed orders in excess of $26,000,000 for smoke­less powder, and the total profit on this sum would undoubtedly reim­burse them for their investment should the plants now bPcome valueless, and besides, yield them a very fair interest on the capital.

Third. The question of the cost to manufacture smokeless powder is discussed at length in this and previous bearings. What constitutes a. fair profit is a matter which I do not feel competent to discuss. The hazard in manufacturing smokeless powder is negligible.

Fourth. I do not believe that there would be serious danger of the Government plant being destroyed, even in time of war.

Fifth. 'l'be large capacity of the Du Pont plants is a valuable asset for the Government.

Sixth. No discussion. Seventh. I am not able to state what amount the Du Pont Co.

spends for experiments, but they undoubtedly do spend large sums for experimental work and they have given the Government the advantage of it, either free or for a nominal consideration. The excellence of our smokeless powder can hardly be ascribed altogether to the experimental work done by the Du Ponts. The rigid specifications exacted by the Government as based on our own expel"ience have contributed largely to that result.

Eighth. The Du Pont Co. has been very liberal in allowing the Gov­ernment to use economical methods of manufacturing, such as recovery of solvent, reworking of powder, nitrating, etc., but I can not state whether or not the saving to the Government has "far exceeded the profits they have obtained from the Government."

Ninth. The Government does look to outside manufacturers for ex­plosives other than smokeless powder, but I am not prepared to state that the manufacture in any considerable quantities bas been at an " actual loss."

Tenth. I have reason to belJeve that the Government is buying powder from the Du Pont Co. about 25 cents cheaper than the com­pany is selling It abroad.

·EJeventh. I agree with the statement that a Govemment monopoly is not advisable in respect to the manufact;ure of powder. I believe that the Government needs tompetition as well as the private manu­facturers need it.

Twelfth. The reason for th1s Is discussed later. In regard to the statements " indicating fair treatment" : 1. Conduct in war: On March 17, 1898, the Bureau of Ordnance

made two requisitions for brown prismatic powder. One was for 2,278,-000 pounds and was placed with the California Powder Works; the other was for 2,308,000 pounds and was placed with the Du Pont Co. The price was to be $0.32175 per pound. In June, 1808, when the rle­livenes were not qu1te one-quarter completed, the pt1ce for the rest of the powder was reduced to 29 cents per pound. In the latter part of 1889, the Du Pont Co. entered into an agt·eement with cet·t a in foreign powder makers, by which the company learned certain trade secrets for making brown powder. In consideration of these the Du Pont Co. was to pay a t•oyalty until a certain total amount of royalty had been paid. I can find no written agreement between the Du Pont Co. and the Bureau of Ordnance stating that the price of powder would be reduced by the amount of the royalty as soon as the total royalty had been paid, but references in letters Indicate that at teast a verbal agreement to this etl'ect existed. Referrin0 to " Extract from bearings " on the "fortifications appropriation bill ' before the subcommittee of the Committee on Appropriations, Sixty-second Congress, third se sion, "Cost of powder," on page 327, there is a letter from the Chief of Bureau of Ordnance dated December 13, 1890, asking the Du Pont Co. for a statement of how much In royalties had been paid . . On . page 350 a letter from the Du Pont Co. to M:r. B. Peyton, of the Callfornia Powder Works, dated July 22, 1898, contains this statement : " We therefore suggested that July 1 should be the date at which the new price took effect, but unfortunately the Government was entitled to have received the 29-cent price sometime previous to July 1." !~'rom the above it seems that at least a verbal at:rreement to reduce the price of powder by the amount of the royalty existed In June but there Is no record to show whether this agreement existed prior 'to March 17 1898, when the requlsHions were placed, or was volunteered by the company when their payment of royalties ceased. ·

In addition to the 4,586,000 pounds of powder ord<'rPd on March 17 1898, the bureau later agreed to order another 1,000.000 poundR of powder if the Du Pont Co. would install additional mncbinery and thus increase their output. Of this total of 5.586,000 pounds the company agreed to cancel tbe contract for 2,375,000 pound of this powder, the manufacture of which bad not been completed when the war closed. The company made no charge for canceling this contract.

2. Dehydration by alcohol : The Du Pont Co. Invented and designed the present hydraulic press for dehydrating pyrocellulose. The Govern­ment Is using this method with presses of the same design. Prior to that time, in France dehydrating was accomplished by praying with alcohol. -The process invented by the Du ·ronts made the manufacture of smokeless powder practically a safe industry.

3. Recovery of alcohol : When the manufacture of smokell:'fis powder was first started for the Government, the Government furnished the alcohol used. The. company did at Its own expense develop a method for recovering a large percentage of this solvent. A description of this method was furnished the Government without cost, and the system was installed at Indlanhead beginning with the manufacture of powder at that place.

4. Reworking powder : The metho.d of reworking powder now in use at Indianhead was designed by the Du Pont Co., but the snccPssful dehydration of this reground powder was first worked out at lndianhead.

1914. CONGRESSIONAL RECORD-· SEN .AT·E. 9375 5. Stabilizer'!' The statements in regard to the Du Porit Co.'s bringing engagement, and that will continue there until it is engaged in

to the attention of the Governrqent the results that could be ac.c?m· war. Powder very frequently requires to be reworked. They plished by using diphenylamine as a stabilizer .are correct; the stabihza- fourid ·that ·powder to a certain e.~tent loses its strength. At tion of the powder has probably doubled its life and resulted in a very .llreat saving to the Government. . . . Indianbead we rework · the po.wder and it saves thousands and

6. Powder for small arms: The Navy ~urchases 1t~ s~all-arms am- thousands of dollars each year. They have now discovered a munition from the War Department. This powder was mvented and ked h developed by the Du Pont co. and greatly increased the life of t~e .30 . process by which it does not require to be wor ~ so muc . caliber rifle . . · Half the powder is at present manufactured by the Govern-

7 Nitration of cotton: The statements in regard to the new mechan- ment. The other half is purchased. There is but one concern ical· nitrato"rs are correct. The Du Pont Co. has recently given ~e d Navy Department the plans, specifications, and the r.ight to u~e t}?Is that can furnish smokeless powder in the United States an process for a nominal considerat~on, • and the system. IS now bemg m- that is the Du· Pont Co. For that half we are completely at stalled at Indianhead where it Will result in a matenal economy. the mercy of the Du Pont Manufacturing Co. We recently

8. Stabilite: '£he statements in r~q-ard to stabilite are con:ect, but I passed· a law proVJ'di'ng that the Govei·nment shall not pay in have no information in regard to me amount expended by the com-pany in developing this powder. . · excess of 53 cents per pound. Before 1903 the price wns 80

9. Army powder plant: The statements m regard to :tJie Army cents a pound; in 1903 it became 70 cents a pound, and lnst Powder plant are believed to be correct. . t 53 t th lt' t th t uld b 'd lO The pyro incident: The statements in regard to the pyro mel- year we pu cen s as e u Imate amoun a co e Pal . dent· are correct. Tne official.s of the ~ompany reported the fraud to That rate was fixed in the appropriation act. the bur~au as soon as they discovered It. Now, what does the Secretary of the Navy ask Congress to

Mr SWANSON obtained the floor. do? An investigation, thorough and complete, has been made Mr: REED. But, if the Senator from Vir~inia will P_ard~n by Admiral Strauss, the finest expert I think on this question

me one word, the Senator from New Jer~ey had u~·ged m. hls in the United States, who was for years at Indianhead. They argument repeatedly, as I understood him, that 1t reqlli:ed have made an estimate as to what smokeless powder costs the infinite pains and care and industry to keep abreast .of the liD- Government. We have never been able to get from the Da provements in the manufacture, and that that could only be Ponts · what their smokeless powder costs them. They refuse done or would only be done in private institutions. It seemed to furnish the Government any information on that subject. to me therefore a pertinent inquiry as to whether or not the In estimating this cost the Government divides it into three pri'mte institutions of this country had kept abreast of the heads. First, there is the invoice price. In that is included advanced science of other nations, and that was the reason for the purchase of the cotton, the purchase of the alcohol, the my interrogatory. sodium nitrate, the production labor, handling material, leave

1\fr. W .ARREN. May I answer that question? . . . and holidays, superintendence and clerical force, repairs, labor The VICE PRESIDENT. Does the Senator from VIrgima and material, power expense, and other material. On that basis

yield to the Senator from Wyoming? it costs the Government 29.9 cents a pound. Yet, to go further Mr. W .A.RREN. Just a word on account of the inquiry made and include all the cost, there is another item of expense, and

by the Senator from Missouri. . . that is overhead charges. At Indianhead' plant, where the Mr. SWANSON. If it is a short statement I Will yield, but powder is made, they have made a complete estimate of what

not for a speech. . all those overhead charges are. Those overhead charges include Mr. W.AHRE.l'l. _ If I may have the attention of the Senator powder boxes, administration (officers' pay and allown.nces),

from Missouri for a moment, the Spanish War developed ~hat pensions (disability pay), and all other items of overhead there was increasing use of smokeless powder. The Ur;nted charges. That amounts to 8 cents a pound. Next they include States Government took the matter up with the powder manu- interest. That is interest on what it costs for the plant and facturers of this country, cooperating with them, anq. started the money invested in it. After adding up all of these the Gov­into the work of perfecting a process · for making high-grade ernment estimates the cost at 40.1 cents per pound to make smokeless powder. ' powder. These items are all &'lt could be included. They are

Soon afterwards, and I speak with some co~fidence, because I accurate, they are full . and complete. think I was about the first one to propose It, the .Army pro- The Government paid last year for half the powder-the pow­vided for building a small powder-making plant. The ·Navy der it bought-53 cents a pound, the ultimate limit fixed by law. followed with its plant afterwards. The .Army put its in- The plant now produces more powder each year. From the ventors and expert ordnance officers to work not in competi- appropriation of 1913 and 1914 the Government purchased four tion so much as in collaboration, if you please, with the makers million and a half pounds of powder, paying 53 cents, at a loss to perfect smokeless powder, and ever since with the contracts to the Government of $585.000 in excess of what it would have that have been made between Du Ponts and the Government for cost if it had manufactured the powder in its own plant. Next .Army and Navy there has been competition of mind ag?-in~t year,. if .you pay 53 cents, the half that you purchase from the mind that has perfected powder to a great exte~t; an~ Withm Du· Ponts will cost between two and three hundred thousand the last five or six years there has been the greatest Improve- dollars more than the half manufactured by the Government. ment of all, and that is in the durability of it. Now, what is the proposition submitted by the Navy ·nepart-

l\lr. REED. The fact then remains that when we were de- ment? The department says we are completely at the mercy of pendent altogether for our supply upon our private manufac- the trust for one-half our powder. For $500,000 yon can take turers they had fallen so far behind in the science o~ manufac- the Indianhead plant and increase the capacity sufficiently to turing powder that even Spain or other European nations had ·manufacture all the powder needed by the United States Gov­smokeless powder before they apparently knew anything ernment, so far as its Navy is concerned: For $500,000 .in two about it. years, if you manufacture it all, it would save the entire ex-

Mr. w .A.RREN. No; perhaps I misstated the case. They penses ·0r the plant.

were already making smokeless powder, but not of the character Secretary Daniels says it is not his purpose to destroy the Du that the Government was buying. In fact, they had no orders Pont factory entirely if they will come down to a reasonable from the Government to do so. · h th f t th t th

Mr. REED. 'l'hey were making smokeless powder for shot- price in selling their powder; but e says e ac a e Government has the power to manufacture all the powder needed will compel that trust to sell the po~der to the Govern­ment :tt a reasonable price. He states in his testimony before the committees that if they do not come to a reasonable price and reduce the price from 53 cents, with that leverage he will pro­ceed to make powder in the Navy factory.

guns. 1\Ir. WARREN. It was new in the country. .Mr. HEED. Tiley were making smokeless powder for use in

small firearms, a thing which had been done, of course, for many years. I understand further from the Senator now-and I am obliged to him for his statement; it is very enlightening­that the GoYernment began to make powder itself, competition began to spring up, and that we began to get really a first­class powder.

1\fr. W .A.RREN. l\Ir. President--l\1r. SW .ANSON. I can not yield any further. I am not

going to speak over 10 minutes and the Senator from Wyoming can take the floor.

It seems to me that this matter is in a very small, narrow compass. I want to state in a very few minutes what is the purpose of the department. We consume about 4,000.000 pounds of powder a year. That is the yearly use of powder in the Navy. .As soon as a battleship is constructed · and completed it is furnished with ammunition and arms necessary for an

J..-I--591

Now that is the issue before Congress. There is talk about the da'nger of the factory blowing up. The manufacture of cotton smokeless powder is practically a safe enterprise. It is not like black powder. It is comparatively safe, and the acci­dents do not occur that occur to other explosives.

In addition to that, we occupy this position in reference to our smokeless powder: The Du Pont Co. makes the powder ac­cording -to the specifications, according to the plans, the in'festi­gation, and the direction of the department entirely, and we pay them this profit. We furnish the specifications and everything in reference to it.

Mr. President, it seems to me that the contention of the de­partment is right and that we should be able to manufacture

"9376 ·coNGRESSIONAL RECORD-_ SENATE. ~fA~ 28,

all the powder neerled each year, so as to compel those who ftirnish us h<llf to sell it nt a rensonable price.

- Now, th~ Du Pont Manufncturiug Co .. I wil1 say, in jul:l­tfce to them. the f'vidence shows, do not sell powder abrond for more thnn they furnish it to us. They have dealt with this Government iu n very liberal spirit considering that it was a trust. a monopoly. The eddence shows thllt. Bnt be­cause they have upon certain occ11sions denlt fairly with the GoYernment there is no reason why the Government should pay two or three hundred thousand dollars a year in excess of whnt we ought to pay for the powder.

Mr. S:\I ITH of .Maryla nrl. May I ask the Senator a question? 1\Ir. 8\\' A:'\80:'\. Certainly. Mr. S)fiTH of .Maryland. I understand It is not the policy

of the Go\-ernrnent to furnish a 11 the srnol.::eless powder, but it is proposed thnt part of it shall be manufactured by private corporutions. That is my underRtanding.

1\lr. SWAXSO~. Secretnry Daniels stnted distinctly in the hearings that be wants this appropriation so as to compel these people. if uecessnry. to reduce the price on the half the Go•ernment now buyR from them.

Mr. REED. 1\Ir. P1·e. ident, I desire very briefly to call attention to !':orne statements · .. ·hich have been made during the progre s of this argument.

One Rt~lteruent is thnt we must hnve competition in order to be protecterl ngaiust extoi·tioruttc prices anll thllt we acquired thnt competition when tbe c;o,ermuent a few ye:us since e:;;tab­lished a fac-tory of limited capacity. And yet it is adruitte<l that if the Governmf>nt factory were running at its full capac­ity it c-ould not supply more than about one-half of the powder we consurue.

Thnt leads me to inquire whnt is competition. If I llbsolutely mnRt hn,·e a thon. and barrels of wHter to-ruorrow nnd one indi­vidual c-ontrols the only w11ter supply, I nrn at his mercy. There is no competition. If I create a supply for 100 bnrrels of W<lter there is competition ns to 100 bnrrels. but there is no competi­tion as to the 900 other bHrrels of water which [ must ha,·e. If the Go,·ernmeut of tlle l nited Stntes is ohliJ!ed to have for its Navy 4.500.000 ponnds of powiiPr nnnnally and hns e:::;tHbli::-berl a fnctory with n cflpadty of 2.:!~fi.OOO pounds and the other 2.225,-000 }lounds can only be rmr<'hasoo from one c-oncern, ~1s to the one-hnlf which tlle GoYernment is unnble to produce there is no corupetition. To the extent the Gm·ernment is unable to rueet it. own demnnds for powder it is :1s cowpletely nt the mercy of the trust or combination ns it was with reference to tile whole before it f"l'=-tahli~bPd a plant.

It follow , tllerefore, as night follows the day. thflt competi­tion- does not exiRt SO th:lt it C:m be thoroughly potential Unless there are two source from which you can drnw yonr supplies and enc-b is suhstantinlly able to furnish the entire SUJillly. Therefore. if we are to ha•e a competition which will relieve tlle Government from the exnetions of a monopoly and mHke it independent of the L..~onopoly. we mnst run·e a source of supply which is independent of tlle monopoly and which is equivalent to the demands we must meet.

In other word·. when the Government of the United States builds a fac-tory lnrge enongb to make all its own powder. then, and not until thE-n, ,..-iH it be in a IJOSition to dictate terms to. the Powder Tru.·t and he independent of the Powder Trust.

HnYing once acquired tlwt cnpncity. tile Governmf>ut may then ruu it. ruillR to their limit or it may run the mills at one­half CH(Inc-ity arul bny the amount of powder whif'h is net·e,&try to supply the •lE>ficiency. It tllen has potential competition HS

to all the l'owch-'r it desires to use. It cnn pr-otect itself and exnct fair treatment. Short of that it is at the mercy of the trust.

l\Ir. Pre irlent. it is stnted here that if the Government were to build <1 plant witb sutticient c~pacity to supply Its own needs, .iwwedi:~tel.'' the pri\':lte manufnctUI·ers wonl1l go out of busi­ness and the UoYet·ument would be in a hopeless condition in time of war. be<:au:e its plant would not ha,·e a sufficient ca­pu<:ity to UJeet tJJe increased dem<.mds incideut to a war.

Let us nnal\ze that statement. Before tlle Gm·ernment ever built a factory, what wns our position? We wPre buying our powder from whnt is here denomin•lted a powder trust. I.f tllnt compnny ~·as mnnufacturing only for the United StHtes, it is fnir to helie\·e thllt it did not hnild a plant witll a surplus capacitY sufficient to meet the demands of a gre;lt war. The trust is not so inspired by pntriotiRru ns to lead it to so vast an expenditure. Therefore ~-e were dependent upon one rae­tory, lH'esumnbly running fairly near its capacity. It follows that when we built a Gm·ermuent fac-tory \'i"e simply snfe­gunrded ourseh·es by adrung another source of supply. We took over to ourselves ·an additional protection in time of war.

If we now should make our Government factory. equal to tbe entire demnnds of our Go•ernment. would we not be ns well off with that fnctory under go\·ernmentnl control as we were before we built any factory at all and wm·e obliged to rely absolutPly upon a prin1tely owned fuctory? The que. tion :lllswers itself.

If we want to ha,·e a real surplus of manufacturing ability suflicient for a war emergency. the thing to do is to build a Gov­ernment factory capuble of making all of our powder n ed in ordinary times. Then. ha>in~ erented that govemmental com­lletith'e un~t. we will ha,·e two sources of supply, each with a surplus cnpacity. each capnble of coming to our I'e cue in time of wur. In timf" of peace each factory e;m be gi\en a fair amount of work. the Go•ernment being all the time in a po!'!ition to de­mnnd fnir prices beeause it is in a pos.ition to runke nil the JlOWder it needs :md is not, therefore. forced to bny on tbe te1·ms offered by the trn~t. The ~ugument, therefore, that if the Go,·ernment dnres build an addition to its factory it will be helpless in time of war seems to me to be somewhat weak, if not ridiculous. '

I offer another observation. I understand that the total con­sumption of powder in the United States to-day is about 4,500.000 pounds.

Mr. W .ARUEN. That merely applies to the Navy. It does not co,·er the Army.

1\lr. REED. I nm speaking of the Nayy; this bill applies to the Na,·y. and I hope tbnt all my figureS~ will be taken as apply­ing to that cnse. Of that commmption our own factory pro­duces o,·er half. Therefore the totnl denmnrls by the. ·~wy upon the Powder Trust are probably in the neighborhood of 2,500,000 pounds.

1\Ir. O'GORMAN. 1\fr. President--The YICE PRESIDE~T. Does the Senator from Missouri

yield to the Senator from New York? Mr. REED. I do. 1\Ir. O'G(.)IL\1AX. I fear the Senator from 1\Iissouri is slightly

in error with re!'ipect to his last statement. I know he will be glad to ha ,.e it cntTf"cted.

l\:lr:. REED. I !':ball be glad to have it corrected. 1\Ir. O'GOIU1AX. A year ago an order wns given to the Dn

Pont Co., which was the only bidder. for 4.500.000 potruds ot Rmokeless powder. Tbnt qunntity was furBished by the Du Pont Co. to tbe Government at an estimated lo s to the Goveru­ruent of $585 000. baRt>d upon what it would cost the Goverll.lllent to furnish that identica I quantity.

Mr. REED. I tl.lflnl\ the Sem1tor from New York. The figures I had in mind were derh·ed from the consumption itew inste:1d of tbe item of purcbnse. which include the nrtrtitiouul itew of powder stored for w-ar emergencies. I will accept 4.500.000 p(•unds ns the amonnt we mnst buy. Tb~:: c-apacity of the mills of the trust, accord! ng to the best information I en o get. is 10.000.000 pounds. They do not mnintain that udclitional ca­pacity, as I snid a few woments ago, out of a11.v patriotic reason. Tllere is some other occ-asion than thnt surplns. The reason is found in tlle fact thnt this tru ·t, combination. or company, or by wbatsoe,·er ne~me you Sf"e fit to designate it, is engaged in nnlking smol\eless powder and selling it to otller nations. That being the fc1ct. it is idle to say that the tr·nst will clo ·e Its fac­tory, dismnntle its \VOrks. and go out of busine s simply becam;l} the Go\·ernment of rile United States sees fit to build an addi­tion to its powder mill.

l\lr. LA. Ji'OLLI<~TTI~. ]\lr. President--The \·IcE PHESIDEXT. Does Lhe Senator from Missouri

yield to tbe Sen;ttor from \Viscn11siu? Mr. HEED. I )'if'ld to the Seuator. Mr. LA FOLI~ETTE. Is the Renator from l\fissouri awnre of

the fact that the sruol{eless powder rnnnufactmed by the Du Pont Powper Co. Is manufactured upon the formula furuished by the Go,·ernment?

Mr. HEED. I so nnderstnnd the fnct. Mr. LA FOLLETTE. Tl..wt formula the Government guards

very cnrefully from publicity. I n~k tbe Sen<ttor frow :\Ii~Hourl if he is also awe~re of the fact that the Du Pont Powder Co. manufactures upon the GoYernment's formula the powder tllat it sells to the otber Go,·eruments of the world?

~Ir. REED. I would bH \·e to nn~wl?r tlwt. if I were entirely frank. aml I wish to be, by saying tllat I do not know that to be the fa~t. hut I ha ,.e Lien. J tbe charge made. If tlle 8eu­a tor from \Visconsin does lmow the fHcts I shonld be Yery glad to hH•e tberu put into the REcoRD now or at such time as suits the Sf>nator's convenience.

~Ir. LA I<'OLLE..'TTE. My Httention bas heen directed to nn nrtirle recently publi~>herl in Harpt:-r's Weekly. entitled "The _ Powder Trust." The writer of tbnt article quotes the sworn testimony of an investigation of the Powder ·rrrust, conducted,

1914. CONGRESS! ON AL RECORD-SEN ATE. 9377 · I assume, by Congr2ss, though I have not been able to discover just when or by what c'lmmittee the inquiry was made. In tb.::.t investigation Gen. Crozier testified as follows:

I would like to s~ate that some parts of these specifications­Referring to the specifications upon which the powder is man­

ufactured-Are regarded in a measure as confidential. We are very careful as

to whose hands they should fall into. In that same investigation the -vice president of the powder

company testified-! can read it without delaying the Senator more than a moment--

Mr. REED. Take your time. .Mr. LA FOLLETTE. He testified that the! Powder Trust

also sells powder of the same kind and grade as that used by our Government to any foreign Gpvernment which cares to

. purchase it. Edmund G. Buckner, vice president of the Du Pont Powder

Co., made the following statement on the stand: · I can see no reason why the merchants of this country should not

ue permitted to do a business of that kind. Smokeless powder is not a secret. It is a question of ability to make it, and because we have reached a superior position in the art · of manufacturing smokeless powder we are taking nothing, I should say, from the defense of this country by selling in times of peace this article to any other Govern-ment that might want it. _

He testified, further, on being questioned: Does your company furnish any other Governments with ordnance

powder? Vice President BuCKNER. Yes, sir. Is it similar to that furnished the United States? Vice President BUCP.:NER. Yes, sir; it is similar. It is the same kind of powder'/ Vice President BucKNER. Yes, sir. It is exactly similar? Vice President BuCKNER. Yes, sir; I would say that it is the same

powder. Has that been the custom of -your company at all times? Vice President BUCKNER. Yes, sir. Is the character of the powder you furnish the American Govern­

ment the result of particular requirements of the Army and Navy? Vice President BuCKNER. Yes, sir; they give us specifications that

they want us to fulfill. And is that same compliance with these specifications bad in regard

to powder furnished other Governments? Vice President BUCKNER. We think that is the best powder and we

make it that way. The result of that t>eing that any other Government in making pur­

chases from you obtains the benefit of the furtherance that has been made in the development of that powder by the United States Govern-ment? ·

Vice President BUCKNER. Yes, sir; that is true. The American Government, thenb obtains no advantage in the char-

acter of the powder manufactured y you? , Vice President BucKNEll. l should say not. On the other hand, the information that they (i. e., the Army and

Navy) give you in regard to the making of powder of good quality is used by you in making the powder for other Governments?

Vice President BucKNER. We make powder for them; yes, sir; we have never, however, given the information; we have simply sold the product.

Now, just a word, if I am not overtaxing the patience of the Senator from Missouri. It seems that this Government would do well to make an appropriation large enough to enable it to manufacture all of its powder, so that it would not be com­pelled to surrender to any private corporation the secret proc­esses which it has developed. The superiority of this powder has been worked out in the Government's own factory -and then the formula turned over to the .Powder Trust because the Gov­ernment in its own factory could not manufacture enough of the powder to supply itself. I believe that we would do well and act wisely if we invest enough money to enable the Govern­ment to manufacture enough powder to supply all of its needs and to be absolutely independent of the Powder Trust.

1\Ir. REED. Mr. President, I am obliged to the Senator for his interruption. I had heard of these matters, but I had not 'Seen the. article of May 2 in Harper's 'Veekly. I must assume when a publication of the standing of Harper's 'Yeekly pro­fesses to set forth in brec verba evidence given upon official hearings that the matter is correctly presented. I would not always make tbe same statement with reference to comments or expressiqns of opinion, but when a statement is made purport­ing -to be from the records I must accept it as correct.

l\Ir. W AHREN. Mr. President- -1\lr. REED. I yield to the Senator from Wyoming. 1\Ir. W .AllREN. I think the statement made is correct, so

far as it goes; but it will be noticed in 1\lr. Buckner's reply that be does not admit or claim that the Government bas fur­nished him any secret information. In fact, all of the evidence before the committee heretofore has been that all of the secrets and matters pertaining to the making of powder have come from the Du Pouts to the Government, rather than from the Government to the Du Pouts, except a~ they have cooperated, and I think they have cooperated all of the time since the. Gov-

ernment has gone into the making of powder. It is true, as stat~d, tJ;at the Government has its specifications, but those specifications are largely made up from the information origi­nal~y obtai~ed from the people who make the powder, and from tryrng out m the Government's various projectiles the powder thus made.

l\Ir. SWANSON. .Mr. Presidenj:, if the Senator will permit me right there-

The VICE PRESIDE.i"\TT. Does the Senator from :Missouri yield to the Senator from Virginia?

Mr. REED. I do. Mr. SWANSON. I understand that the present specifications

for smokeless powder made for the Government have been ~ollect~ after ~overnmental tests, which are very expensive, mel uding shootmg at long distance, piercing armor and so forth, which it is impossible for private enterprises to' conduct.

M.r. WARREN. The Senator is right as to that. . l\Ir. SW A.i~SON. I think this character of powder was

selected after tests conducted at Newport; and, as I have stated, it is impossible for pri-vate enterprises to conuuct such tests. I think nearly all the experiments in connection with this powder as to its efficiency, carrying 110wer, and destructive power must necessarily be conducted by the Government.

Mr. WARREN. That is very true. l\Ir. SWANSON. So far as some of the chemical processes

are concerned, I know the Du Pont Co. recently disco-vered a method of preserving the efficiency of powder, or making it last longer, and they gave that to the Government; but as to the specifications of real efficiency, the destructive power of the powder, and so forth, they must come from experiments conducted by the Government, in which private enterprise can not engage.

l\Ir. WARREN. If the Senator from Missouri will allow me to make an observation, the Senator from Virginia is right. As a. ma~ter of fact, the information as to chemical processes, combmatwns, and so forth, come to the Government largely from the Du Pouts. The Government, on the other hand has !Xied out this . powder under all circumstances. and. wo;king m harmony With the Du Pouts, the degree of excellence has been attained which the Government demands in the making up of powder. The Du Pouts have charged little or nothin(J' to the Government for their secrets and have retained none. o On the other hand, the Government has not denied the privilege, as I understand, to the Du Pouts to manufacture powder for whoever they may choose on any required specifications.

Mr. REED. Mr. President, the scope which this discussion is now assuming ought to have required some careful preparation. I rose here merely to reply to some observations which had been made and which I thought were unsound; but, Mr. President, it is charged in this article under quotation marks that Gen. Crozier, whose. standing is not challenged by any man, stated upon this hearing : ·

I. w-ould like to state that some parts of these specifications are re­garded in a measure as confidential. We are very careful as to whose hands they should fall into. .

The article further states: So vital did Gen. Crozier regard the mere specifications of the smoke­

less powder that he objected to certain specifications being shown. And they were not shown.

That is, they were not even shown to the committee. If it be true-and it must be taken as true, because the repre­

sentative of the Powder Trust so states-that this powder, the manufacture of which has been worked out in part by Go-vern­ment experts, the tests of which have been made by the Govern­ment, and the secrets with reference to which are of great importance--if it be true that all of the benefits of this knowl­edge ha-ve been by the trust turned over to foreign Governments, then I say the time has come to stop the manufacture of Gov­ernment powder in any private plant.

It is said by this powder merchant that the trust only sells powder to foreign Governments in time of peace. Of course it has so far only sold it in time of peace, because we have had no foreign war since the trust found out how to make smokeless powder for ordnance.

A concern, however, that sells this powder to-day, when we are at peace, sells it with full knowledge that it can now be pre­ser-ved tor many years; that every Government is laying up stores of it; that we are seeking to put aside vast quantities of it ourselves, to keep for emergencies. Th,e trust is therefore putting into the hands of foreign powers the improved powder which has been wrought out in part by the genius of the em­ployees of the Federal Government. The powder may at any time be used to hurl shot and shell against our own ships aml fortifications.

9378 CONGRESSIONAL RECORD-- SENATE. MAY 28,

Mr. WEEKS and 1\Ir. PAGE addressed the Chair. The VICE PRESIDENT. Does the Senator from .Missomi

yie-ld, and to whom? Mr. REED. I wm y1eid in a mom~nt. The trust is giving to

foreign Governments the full benefit. of all the knowledge which luis been obtained through Government tests and through Gov­ernment assistance, except that the trust preserves the secr€ts of the manufacture in order that it may enjoy a monopoly of the Bltle to foreign Governments.

Mr. WEEKS. l\lr. President--The VICE PRESIDENT. Does the Senator from Missouri

7]eld to the Sen a tor from Massachusetts? Mr. REED. I do. 1\Ir. WEEKS. I thlnk the SenatoT from Missouri has been

led into error- in the remarks which be has just made about for­eign governments buying vast quantities of powder and storing it for future use.

In tlJ.e first place, powder deterioTates to a considerable de­gree, so that no nation would keep on hand a very large supply ol it. In the second place, foreign gonrrnments are in the habit of purctlasing only their surplus supply in this country; and it is not true that we manufacture a better powder than do many plants that are located in Europe.

What I rose particularly to call to the attention of the Sena­tor from Missouri, howe¥er, was the reflection which he made on the possibility that the Du Pont Powder Co. might sell pow­der to other governments wtth which we might be at war. I bave seen it stated in the public press in several instances lately that the Du Pont Powder Co. had a contract with one ot the contesting parties in l\Iex:ico to sell powder to it, and that the company referred the matter either to the Navy Department or to the War Department and asked if it would be inimical to the interests of this country if it carried out the contract, stat­ing that it would cancel the contract if that were the case.

I do not know that that is true, but I think in justice to th(> company it should be said that it was generally reported in the public press. ·

Mr. REED. M:r. President, if that be the fact, then the Du Pont Powder Co. should be given due credit. But the Senator to some extent misapprehends my remarks.

In the fi1·st place, it is true that powder is now preserved for considerable periods. One of the items contained in the reports :filed in connection with this bill is a statement with reference to the capacity of our own Government factory to work over the powder .in order that it may be kept in proper condition.

.A.s to foreign countries buying only their surplus supply in this country. if-as the representath·e of the trust says-this is tile best powder in the world~ then you may be sure the foreign governments will acquire it whenever they can get it.

Mr. P .AGE. Mr. President--Tile VICE PRESID~T. Does the Senator from Missouri

yield to the Senator from Vermont? Mr. REED. In just one moment. The fact that when actual

war was impending in Mexico the Powder Trust came to our Government and asked its opinion as to whether or not it ought to furnish somebody powder does not at all meet the provosition that other nations may be accumulating this powder and laying it by before any cloud of war has arisen.

I should hesitate to charge any American citizen, whether be was a violator of our trust laws or not, with so base a thing as the sale of powder to a nation actually at war with us. Oue reason I would ha¥e confidence that he would not do it is because if be did he would be guilty of treason to this coun­try, and would be likely to be executed for making profits in that way. He would be ghing aid and comfort to the enemy in time of actual war, and it would be an overt act.

Mr. PAGE. 1\lr. President--The VICE PRESIDENT. Does the Senator from Missouri

yield to the Senator from Vermont? Mr. REED. I do; yes. Mr. PAGE. What I am particularly interested to know

is whether the sale of powder to a foreign country is m.'lde over the protest of the United States. or wh~ther it is not absolutely true that the United States controls the entire rna tter, and con­sents only when it wishes to consent that the powder company shall sell to foreign nations?

If the powder company is doing a dishonorable tblng, I should like to know it; but if it is af'ting entirely in aceordance with the wishes of the Federal GovP.mment in regard to powder. it seems to me the charge the Senator makes is wrong, and ought not to be mnde.

Mr. REED. Mr. President, I have not made a charge. I listened to the reading of this evidence by the Senator from Wiscowin. I read a paragraph or two myself, and then I ven­tured the obseryation that if it be true that this is the best

powder in the world, that it was worked out, in part, through ' the genius of the Government experts, and lf its secrets are by the Government carefully guarded-if all tho~e things are true, and if, bt:!ing true, a private company is selling this powder to foreign powers, we ought to build our own fa<'fories and guard our own secrets. I have charged nothing against any person. I am simply discussing the evidence.

Mr. President, I do not want to indulge in any vituperntion; but there is a sentence or two here, in the statement attributed to Mr. Buckner, of the trust, whic-h deserves attention:

I can see no reason why the merchants of tbls country should not be permitted to do a bu~inE>ss of that kind. SmokE>lE>ss powder is not a secret. It is a Q1]estlon af ability to make it. and because we hnvc reached a superior position in the art of manufacturing smokeless powder we are taking nothing, I should say, from the defense of this country by selling in times of peace this article to any other Govern­ment that might want it.

If we have achieved a superior position by reason of the possession of a superior powder and furnish the same powder to foreign countries, we de troy our ad,·antage. We nre no longer superior. We have traded our nd¥antnge for dollnrs. Every man knows thnt other Governments guard carefully mnny of their military secrets. The character of certain of their ordnance, the nature of their fortifications, the power of their explosi¥es-all these and many more secrets are gunrded as ­careful1y as possible. If, in order to m::~intain a copartnership with a powder trust, we must expose the secrets of this Nntion and have the results of all our efforts nullified by the snle of powder to foreign countries for profit to thnt trust. then we ought to abolish the partnership. Furthermore. we should en­force the criminal laws of the land and abolish the tJ.·ust, root and branch.

This concern is, or recently was, a trust. It wns held to be a trust or combination in the case of the United StRtes ngainst E. I. Du Pont de Nemours & Co., decided in the Circuit Court of the United States for the District of Delawnre, on June 21, 1911. I do not know what it has done to purge itself. hut I understand another ca!!le is pending. As to the lcltter stntem(>nt I do not speak with definiteness. I hnve sent for the record. I do s:~y to the Senate of the United States. bowe¥er, thnt in my humble judgment when we stand here with a lnw prohibit­ing trnsts and combinations in one hnnd and a contrnct with a convicted trust in the other, under which we pny it enormous profits, we are in an absurd and a pitiable condition before the world. We certify to all mnnldnd that our denunrh1tlon of

1 trusts and combinations is not in good fnith. We furnish to , the world evidence that we are pretending an enmity which does not exist. We feed the serpent that we have declared shall be destroyed. We pay it profits at the same moment we a"~ert it to be an ontlaw and a criminnf. Nay, more. we pay a special tribute upon its monopolistic powers, for, having no other plnce to purchase. we purchase from it and pay it the profits that monopoly sees fit to extort.

I shall not close what I have to say without referring to one other statement. It bas been argued here that the Government can fix the price of powder; that a Go,ernruent board or Con­gress by law can fix the price. The inferenee was left very plain by the Senator from New Jersey [~lr. HuGHES] that as the- Government could do this, we could compel the· powder company to sell to us at our price. It is true that upon interro­gation he repudiated that intent.

Mr. President, it must be plain to everyone that at present the Government can not fix the price of powder. The Go¥ern­ment can say that it will pay a certain price and no more. hnt it can not compel the manufacturer of powder to aceept the price offered. It takes two to make a l.w rg;iin, and until the two . agree there is no bargain. If there were 10 or 20 or e,·eu 2 independent powder companies in nctunl rintlry. netn:llly competing in the market, the Government then. by saying "We will pay this much and no more." migll.t find sowe one of the ·e sources of supply willing to furnish powder to the Gowruruent at the Government's price. When, however. the trust is the only place where the Go,·ernment cnn buy powder, the trn~t is as powerful as the GoYernment. The ('..overnment, foreed on by . its necessities, must ba 'e powder; and there ueing but one place from which it can obtain it, the proprietor of that place is in a position as powerful as is the position of the Gm·ern­ment. He can say that be will close his mill and not furnish it at that price with as little lo s to himself as the Gon•r1llllent can sny th;rt it will sacrifice its interests by failing to bny 11t all.

The truth is that thP.re is nothing mo.re intoler11ble than thnt a government revre:;;enting 90,000,000 people is at tile mercy of an illegal and criminal cowbinntion, HQ outlaw of the com­mercial world. It is an intolerable thought that our supplies in time of war can be shnt off by the mandute of one board of directors or by the decree of the proprietor of one concern, and

1914. CONGRESSIONAL RECORD-SENATE. 9379 thnt we mny be obliged. In t he fnce of an enemy, to stand with­out me.1 ns of dP.fP.n. e or to P<lY the tt·ibute that one man holding a complete mouopoly sees fit to exnct.

Mr. President. I do not know whether- tills Republic will ever be engaged In a great war. I do know thnt although every ID0l'ning we liberate at Washington a flock of peace do,es. yet at the same time the harpies o1 war are nesting in the capi­tals of every nation of the enrth. I do not know whether the newspa per account of this morning is trne, bot if true then the

ery arms we sought to pre\ent enterin~ the port of Vera Crnz bnve been umdetl. nut a few days have passed since the at­tempt to land these SJlme arms was regarded as so serious an

L.---e'mergency that th e President without waiting the nction of Con­gress landed marines from our vessels. Then the emergency was regnrded as sufficient to warrant the baptism of Mexican soil by the blood of tile sons of the United States. Those arms ha\'e been now lnnrted in :mother port of Mexico, while we

V stood SUJiinely by without potency or protest. Mt·. LODGE. If the Senator will allow me, Admiral Badger's

(lisJ>atch. which was sent down by the department, states that they were landed. ·

Alr. HEED. I do not know whether it be true thnt that ~ssel was com·oyed by a German man-of-war, but since the

statement from the Senator from 1\lassachusetts I can not donbt the fact that the arms are now in the hands of .Mexican soldiers. But. sir, if it be true that while in the interest of humanity we were engaged in negotiations to bring about pence and order in Mexico an armed ,-essel of a foreign eountry wns sent to convoy into a port a \es. el wden with the l'ery arms and munitions w~ our men djed to keep out, then I sny, instead of spending

~r_,~Ime in dreaming that the sun of the millennium is about to rise, tllat the lion nnd the lamb will lie down together. and that peace and tranquillity are here foreYer to remain, we might as well awaken to the ugly truth that tll:-~t country will hold its place among tbe nations o-f the earth which bns the l'essels of war and the armaments and the men to defend its rights. Confronted by conditions of this kind we ought not to hesitate a o the wisdom of building powder factories big enough so

v-that we are not at the mercy of a trust that sells th£> finished product to nations that may be at war with us some day.

I do not believe war is coming; I do not thlnk it will come; but the sight of a German man-of-war following the lteels of a "Vessel laden to the guards with munitions of war about to be urned o,·er to a man who bas defied our Government, who has

broken tbe rules of ci"f'ilized warfare, and who has made himself so much an outcast he can not be recognized by our President. is not a pleasing one for the eyes of my imagination. The fnct that the United States Government has not a na\y yard big enough to bniTd more than one ship in a yeur, and that the at­tempt is being made to starve that yard to death, and the :f.lct that the superior powder wrougbt out by the genjus not only of the Du Pont Co. IJnt by tha~ of our own Army and Navy officers and experts is being shipped to foreign countries does not set well upon my stomach. I believe in pe.1ce, I hope we

:lrtil't always live in peace, but if we are to ha \e peace. then in my opinion we must be prepared to demand and enforce our peace.

Mr. LODGE. Mr. Pr~ident, when I interrupted the Sena­tor I did not wish to be misunderstood in what I said. I read a dispatch, an official dispatch, frvm Admiral Badger, saying tbnt the Ypiranga, the ,-esse! wWch had been shut out from

era Cruz, hnd landed ber cargo of arms nt Puerto Mexico, the port at the eastern terminus of the Tehuantepec road. I do not recall that anything was said in that dispatch about

e Gern.u:m cruiser, though I heard the story that the Ger­man cruiser was there. I do not think t~e admiral said any­thing about the ship ~eing convoyed by the German cruiser. There was absolutely no need of a con,·oy. The port of Puerto Mexico is just as open to the vessels of trade of other couu­tries as the port of New York. We are not at war witl! 'Mexico. We are not blockn ding her ports. Those ports that we do not hold m·e, of course, open. I do not belie\"e that any German cruiser wns needed to get that ,-essel in. I am very sorry that she got in. The only way to ha.ve prevented it would have been to have taken thE' port.

Mr. BORAH. 1\lr. President--~· REED. If the Senator will pardon me just one sen-

~ce--the statement in regard to the German vessel of wnr is contained in great detail in the morning p£Ipers. I qualified my statement clearly to show thnt I was basing what 1 had to say upon the assumed truth of that statement. The Senator from Massachusetts is \ery correct in limiting tbe su1tement with reference to the dispatch from the admiral. as he has stated.

Mr. LODGE. I quoted the official dispatch which I have. ,We ean accept it as correct..

lr. BORAH. Do I understand the Senator to say thnt the admiraJ in his dispatch made mention of a German •essel?

Mr. LODGE. I do not reca ll whether he did or not. I thin· it was merely a statement that this vessel had landed her cargo of arms at Puerto 1\lexico.

1.\lr. BORAH. I see no renson why she could not land her cargo of arms there if she desired to do so.

Mr. LODGE. None in the world. Mr. LEE of Maryland. Mr. President, recurring to the

amendment which is before the Senate, it reads as follows: Naval pt·oving ground, lndlanbe::td, Md.: Toward extension of powder

fac tory, $;)00.000.

There is an old snying in our language that is entitled to great respect and reflects the sentiment of our people: "Trust ln Ood and keep your powder dry." That is a ren~rent saying, because it recognizes the o\·erruling power of Pro,·ideuce; but at tb~ same time it recognizes the self-protecting necessity un­der the Laws of nature that is upon us mor·t~1l men.

One great point which seems to ha,·e escaped attentJon in this debnte is the fact that in case of war there would be the utmost need for an expansion of the powder supply of this country far beyond the capacity of the present prin1te mannfactLlrers and of the present Go,ernment plant. This alone would justify the amendment. bnt the exJ1erience of the Gm·ernment with the so-called Powder Trust has been an instructi\e one. Before the manufacture of powder by the Navy was commenced at Indi:m- -head, on the Potouwc, not far from the Nntional ~Lpital, the //,.. trust was charging the Go...-ernment 83 cents a pound for smoke- !.../" Jess powder. After that manufacture begun and w:1s c-onducted by the Government the charge was reduced by the trust to the present price of 53 cents a pound. The Secretary of the Navy advised me this morning thflt the manufacture can be conducted by the Na '"Y of the best possible smokeJess {lowder in the world at 38 cents a pound. The Senator from Vir·ginia [.Mr. SWANSON]

1 __.,~

says that with the overhead charges it is slightly over 41 cents c......-'

a tJound. Mr. THO~IAS. Mr. President--Mr. LODGE. Would It interrupt the Senntor? I have now

the official dispatch, and I see there is no.thlng said about the German eruiser. It is from Admiral Badger, and be reports thnt the Tacoma, now cruising off Puerto l\le.'<.ico. bas reported \ .-;:::­to him tlli'lt the l'piranga dischnrged carJ!;o ~II yesterday after-noon at the dock at Puerto Mexico. Admiral Radger adds:

No specific Information 1·egardlng character cargo discharged, but the~·e Is every lndic::ttlon that the l ' piranya has landed her entire cargo of w::tr material.

The VICE PRESIDENT. Does the Senator from Maryland yield to the Sen~' tor from Colorado?

Mr. LEE of l\laryland. Certainly. Mr. THOMAS. My purpose in interrupting the Senator is

to inquire what is the capacity ot the Government factory at Indianhead?

Mr. LEE of Maryland. I was just going on to state what that would amount to if this nppropriation is passed.

1\lr. POI~DEXTER. Mr. President--The \'ICE P}{ESIDEN'£. Does the Senator from Maryland

yield to the Senator from Washington? Mr. LEE of Maryland. I yield. Mr. POINDEXTER. Before the matter is passed by I

should like to ask u question of the Senator from Massachusetts who has just read an official dispatch from Admiral Badger.

Mr. LODGE. That is Hli I had .seen. Mr. POI~DEXTER. The Sen:ltor has given a great deal of

attention to foreign matters genemlJy, and I suppuse to tWs question also. I shouJd like to ask him if there was any occasion for a cruiser on the part of Germany or any otller foreign nation to be used in the landing of arms autl -munitions at Puerto Mexico, in ,·iew of tile fact. as publisued {__..,...­at least in the newspupe1·s generally througllout the country, that not only h<:1d the Hdministration taken no precaution to · prevent the landing of all kinds of merch11ndise there. but hnd expressly instructed our military representnth·es there tllitt trade with Tampico was to be free. A dispatcl. or a st<ttement purporting to be a dispatch h::ts been printed verbatim in the newspapers from our administration to our representath·es there expressly instructing them that they were not to interfere with the. trade of that port.

Mr. LODGE. If the Senator from Maryland will allow me. it will onJy take a moment. There wns no occnsion for a ct·uiser of any foreign nRtion to be pre·ent to help a ship .of thnt nation to land, and there would have been no right to pre,·ent its landing. Puerto Mexico, in contem)Jlation of law, is a peaceful port, open to the trade of alJ the wo1·ltl. There is no blockade, because a pacific b:oclutde, if declared by us. would apply only to American and Mexican ships. It has been an-

9380 CONGRESS! ON AL RECORD-SEN ATE. MAY 28,

nounced officially that we are not at war with Mexico. There­/ fore we can have no fleet blockade, which is an act of war.

'J Therefore Puerto Mexico, like many other ports-like Salina Cruz, when ships landed · arms the other day-is open to the peaceful commerce of all nations.

Mr. POINDEXTER. What I say is not in criticism of the administration, but I am simply discussing the -actual status of affairs therP. The Senator's remark that we could not prevent the landing of munitions of war there because we are not at war recalls the fact that we did prevent the landing of muni­tions of war at Vera Cruz, and we have the same power to do it at any other port.

Mr. LODGE. We could not do it unless we declared a blockade or took the town, as we did Vera Cruz.

Mr. POINDEXTER Yes. We did not declare the blockade before proceeding.

rMr. LODGE. No; we took Vera Cruz; and if the arms hacl ~en landed we shou1d have seized them in the customhouse.

That is why it was done. It was to prevent the landing of the arms.

· Mr. POINDEXTER Would the Senator point out the distinc­tion, from the standpoint of the Government interests, between landing 15,000,000 rounds of cartridges at Puerto l\fexico and landing them at Vera Cruz, to be used as effectively in the one case as in the other?

· l\Ir. LODGE. Absolutely none. Mr. POINDEXTER. We have the same right in one case as

the other. Mr. LODGE. Precisely. Mr. LEE of Maryland. Responding to the inquiry of the

Senator from Colorado [l\!r. THOMAS], there is about $1,300,000 invested in the powder plant at Indianhead; and the statement of Admiral Strauss, in his testimony, is to the effect that this additional expenditure of $500.000 will more than double the out­put of that establishment and will make enough powder for the entire purposes of the United States Navy.

It is not the purpose of the Federal Government to make all its powder there. I read a memorandum early in the debate, direct from the Sec1;etary of the Navy, to the effect that the Government, with the increase to this powder plant, will be able to make all the powder necessary for the Navy, but -will not necessarily make it all, depending, of course, upon the prices of the powder concerns. The Government must have the whip hand in this matter. ·

Now, l\Ir. President, that is a simple statement of the whole story. There is no intention on the part of the Government for an exclusive Government m::mufacture of smokeless powder. There is no intention to drive out of this business the present men or firms who are engaged in the business, but the intention is to protect the interest and rights of the ultimate consumer­the Government of the United States.

The Senator from New Jersey [l\fr. HUGHES] has stated that he was in favor of vast expenditure ·for the protection of the GoYernment in the manufacture of ironclad battleships, armor plate, guns, and so forth. but that the greatness of the expense prevented the experiment to a large extent. In this case the size of the investment--

l\1r. HUGHES. I would not interrupt the Senator except for the fact that he attributes to me a statement I did not make.

1\lr. LEE of Maryland. That is what I understood the Sena­tor to say. I will be glad to have the Senator correct what I say if I misrepresent him in any way.

l\Ir. HUGHES. I said that the Government of the United States could manufacture its armor plate. I was not saying anything about the largeness of the expenditure of money. I said I believed the Government should enter into the construction of battleships. I did not say anything about tile largeness of the expenditure.

Mr. LEE of Maryland. The point I bore especially in mem­ory in reference to the remark of the Senator from New Jersey was that he objected to the necessary vastness of any effective expenditure for the protection of the Government by the owner­ship of defensive plants.

Now, in this case I should like to call the attention of the Senator particularly to that fact-that we have an opportunity without a Yast expenditure, namely, with the very small expendi­ture of $500.()00, to protect our Government from the monopoly of the powder concerns, a Yery small expenditure protecting our GoYernment. developing the power of powder production iu this country, and providing for the ultimate expression to the great investment that this country has in its naval forces, that ultimate expression being the powder, the firing force of the fleet.

Mr. President, we can not overestimate the importance of the powder question. We can not disregard in this particular case

the comparatively small expenditure that will be necessary fot• the protection of the public. There is, furthermore, in this amendment an illustration that may excite some interest among those who are concerned about the trusts and monopolies in this country, because after a long governmental suit for an in­junction, the suit of the United States v. E. I. Du Pont de Ne· mours Powder Co. (163 Fed. Rep., 127), referred to by the Sen­ator from Missouri [Mr. · REED], and a private :::uit between the companies that were . engaged in this business on behalf of one alleged to have been injured by the powder combine, there comes this Government proposition, from . one of the departments of the Government, of an enlarged protective experimental plant fer the benefit of the Government itself. Now, here is a new economic proposition-a protective manufacturing plant, not necessarily to be used. but to be held in the hand of the Federal Government as a protecting agency for the Government itself as the ultimate consumer. It is, of course, a "horrible example" of power on the part of the Federal Government; no person interested in the "special interests" can tell where this "hor­rible example" will lead to and what it will ultimately re~ult in, but it is highly significant that the experiment has thus far been successfully made and that it only requires $GOO,OOO to make it apparently complete.

I trust that this honorable body will agree to adopt this amen<lment as an illustration of its own sentiment and its recog­nition of the sentiment of the country on this subject.

!lfr. MARTINE oi New Jersey. ~Ii'. President, I have in my hand a most startling statement ·regarding this Gunpowder Trust between the Du Ponts and United Rheinisch Westphalia!\~ Qun Powder .\\fills, which, I think, it will be illuminating at thi¥ time to present. Amongst ether things, I find this: '-

The great German powder makers agreed not to " directly or indi­rectly sell or cause to be sold in any portion of the United States of Amel'ica or in any othet• territory now or hereafter belong-ing to the United States of America any brown powder or nitrate of ammonia powder; and will not sell any brown powder or nitrate of ammonia powder with the intent that the same shall be used by the United States of America or in the United States of America or such tr _­ritory."

I find, further, here that there is a complete compact between the Du Pont Co., the Powder Trust, which my coll€agne [:\Ir. HuGHES] stood here in such glorious form seemingly defending, and the German Government. The Du Ponts, however, had more. They also agreed that any irr.provements that n:.!ght be made in formulas or in the manufacture of powder would be immediately imparted to the Germans. The United States working out the problem of smokeless powder at its torpedo stations had turned the information over to the Du Pouts; nnd the E. I. Du Pont de Nemours Powder Co. had privately agreed to reYeal all those improvements to the Gennan powder makers. Here, mind you, is the absolute wording. of the contract, be it said to the eternal shame of anyone who would ally himself with any organization which would supply a foreign Govern-, ment and constitute a menace to our rights and pretend to be ---------... an American. I can not understand it. The tenth article o~ this agreement is :

Tenth. That any and every improvement upon said processes or either of them made by either of the parties hereto nt an;y- time here­after shall forthwith be imparted to the other of the parties hereto.

The Du Ponts had paid still more for their monopoly. They had agreed to keep their German friends informed at all times of all powder furnished to the Ur;tited States Government, stat­ing in detail its quality and characteristics.

The thirteenth article declares: Thirteenth. That the parties of the second part (the Du Ponts) will,

as soon as possible, inform the party of the first part (the Germans) of each and every contract for brown powder or nitrate of ammonia powdE'i" received by the parties of the second part from the Government of the United States or any other contracting party or parties, stntlng in detail quantity, price, time of delivery, and all of the requirements that the powder called for in such contract has to fulfill.

So the Ger)llan Government are every hour of the day and every day of the yea r in possession of the quality of powder and the nnmber of pounds of powder which we have in every maga-zine furnished by this harmless little trust, bowered up in the~ hilltops of my Commonwealth, be it said to our shame. I wan~ to do· aU I can to strip it from power, m·en though there was not an ounce of powder to be used for other purposes. Let the Du Ponts and the trust go out Ulld let the Government prevuiJ." I shall vote for thls amendment, and I would like to double the sum. Instead of half a million dollars, I would make it two millions and a half, annihilate them, and drive out this con~ . tem}Jtible monopoly, which prospers under our shelter and om~"' laws and the laws of the Commonwealth in which I liYe.

l\1r. THORNTON. Mr. President, if no other Senator. desi,res to discuss the amendment-and I hope that no one does-- ·

1914. CONGRESSIONAL RECORD-SENATE. 9381 1\Ir. WARREN. 1\fr. President, the Senator from Louisiana is

-very modest about it; but. ·although I shall only take a few moments. I hardly think I should be tnken from· the floor even by the appenl of the Senator from Louishma.

Mr. THORXT0:\1. I recognize the right of the Senator from Wyoming and of every other Senator to speak on this subject a.s long as he plenses.

1\lr. WAHREN. I only wish to say a few words. The matter has been discussed too long already. I admit.

Mr. President. this is an economic question and one relating directly to the safety of our country in time of war, and it is one. as will be observed from the remarks which have been made, of wide sweep. Some would spend three or four mill ion dollars for erection of powder manufactories; some would spend $500.000; some would spend enough to make all the powder we might need in case of war, which would be not three or four million dollars. but se>erlll times that sum.

Allusion bas been made to the ships of other countries lately _,supplying one of the alleged peaceful nations, a nation with

v which it is claimed we are on a peace basis-Mexico-with powder and arms. Of course, so long as we maintain and insist that we are at peace with Mexico there is no legal t·eason why a foreign country should refrain from selling guns or powder or any other munitions or necessities of war to the Mexicans, although I may say to the credit of this Du Pont Co., or trust, that on simply the mere hint from the Secretary of the Na\'y that tile department hoped they would not furnish powder to the Mexican GoYernment, they refrained from entering into a. large and profitable contract within the last few months.

It has been said here to-day o>er and o,·er again that tht~ Secretary of the Navy states that it will take only $500.000 t...> complete this plant, which will enable it to make all tb~ pow­der required for the Navy. Of course. yielding to question8 when asked, they admit that m~ans only in time of peace. The testimony here of Admiral Strauss, who is the bead of the Ordnance Bureau, and who speaks for the Na'\'y, is that it will take $785,920 to put in the rmpron~-ruents which they require at this powder plant. lt seems to me that this amenrlment. while prob:.bly not subject to a point of order, is an awkward one, because it states:

I was perhaps the first-in fnct, 1! know I was the first in t:::is body-to propose that we build a powder ·factory for the Arr:ny, so that we might be certain as to the quality of the powder furnished the Government and its cost and that we might have trained men in order, if we wanted to improv-e. and enlarge the works. that we might be able to do so. The propo­sition was put before the Du Pont people. and om Government was furnished by them with all the info-rmation it needed~ and with their cooperation rather thau antagonism the plant was started.

As has been stated on the floor the price of powder has re­ceded from 83 cents to 53 cents per pound. r do not Jmow bow much more it may recede. I know that a boa rd. consist­ing of Gen. Crozier, perhaps Admiral Strans , and other officers, decicted that it cost the GoYernment something .>ver 40 cents a pound, as has been stated. to manufactnre powder; but in figuring that. of course, they included nothing for tnxes; they included nothing for extra compensation for the ctentific work and the extraordinary sen-ices furnished by officers of tl'l:e Army and :Navy. nothing for advertisement or selling expensesl and so forth. Under all tbe circumstances they figured that a reasonable cost price for the Du Ponts would be about 49 cents. There has been a change since. The Du Ponts have brought out an improvement by wllich the alcohol whieb is employed as a sol\·ent ls made a second use of, and there is a probnbility that tllere will be a. slight further recession ot actual cost.

My idea of what should be done is that there slwuld be a certain amount of powder made for the Army at its factory, a certain amount made for the Na"y at the na\'al factory. and that we should enter into a contract each yem· sufficiently lnrge to retain the works of the private producers. because. as :E have said before, powder is eontrntmnd and we could not buy it from any nation on earth if we were at war.

Tremendous quantities of powder are used- in war. What we use now in a year is hardly a flyspeck upon the wall compared to what would be used in time of aetnnl w~1r. A charge for a 14-inch gun consists of sacks of pewder larger than a grain sack. Of course in time- of peace we can buy powder from any nation, bnt if we should become· involved in war no nation would sell us any.

Naval proving ground, Indian head, Md. : Toward extension of pow- It may be the- better policy is, as has- been stated here, to der factory, $.500,000. f

build the proposed addition to the actory at Indianhead as a Unde-r that provision the department might contract for club, and oot for use; but if that club- resuFts in closing the

$20,000,000, and i1 thE>y need only $500,000 or $785,920, I sug- private plants instead of reducing prices :t may not seem so gest to the Senator in charge of the bill, while I urn not cluim- funny. If it is the jurlgment of the Senate that that is the ing that the amendment is or is not in o.rder. it is certainly in better course--the·· club" threat-I mu-st be content; but even !f bad shape when it provides "Toward extension of powder fac- it is now designed to buHd this· addition to the· Indinnhetld powder tory, $500,000." without placing any limit as to what that ex- factory for .. club" use only, and if we· are to spend $300.000 on tension shall be. Under the evidence that is before us it will it. I am pretty sure that it will not be kevt idle merely to serve require $785.000. I would suggest to the Senator from Louis- the purposes of a club. It will be sajd, "So long as we have iana that before taking a vote on the amenrtment he amend it built the factory, we can manufacture powder more ch~lply in some form so. as to bring it within the ordinary terms of ap- than can priVllte indh•id'uals," and ~t win be used to mannfac­propriations. ture powder. If it is used to its highest cHpacity, and the Army

Mr. THORNTON. I will ask the Senator to state again the mill is used in the snme way, and w~ will have no patronage amendment which he would like to have inserted. to give to prin1te powder manufacturing concerns in our o.wn

Mr. WARRE.~.~. The provision on page· 26, in lines: 14 and 15, country, then, of eom·se, we must do one of two things: We reads: must build a factory large enough so- that It can carry us

Toward extension crt powder factory, $500,000. through in time of war. or we must calculate ta keep out of war-Mr. THORNTON. How would the Senator like to have that like entanglements and, w11it for powder~ as we had to do In the

amended? little miniature war we had' with Spain OTer Cuba. Mr. w ..\RRE~. It is not for me to. say how 1 should like to It is an open story that as time went o~. day. after day. and

have it amended. day after day, and Congress was deruandmg of the President Mr. THORNTON. Well, what would the Senator suggest?--.. that. we should inter•ene and throw our arrus around a~d help Mr. w AllREN. That pro>ision is open at both ends, and h:mor Cuba, we bad n~ powder, and one ~f the m~n who IS very

there might be mi!lions expended under it. It seems to rue m~ch befo~~ the publlc now, and. who w,ts then m a somewhat there should be some statement that it shall not exceed r- mm<?r position, used the. autb~r~ty, or rather _the lack of au-tain sum a ce tbonty but power of hrs pos1t10n, to bny $nO.OOO worth of

• • T • vowder, as it is recorded. without law, appropriation, or order .Mr. THO!lN:r'ON. 1\Ir. Pr~Sident •. there won!~ not b~" the from his superiors. But war was soon on, and be was praised

slighte~ obJectwn .to pnr:tting It;t, after the word factory the rather than criticized) Finally, after we h<Jd bought sufficient words not exceedmg $u00.000. powder for a start and were in such a position tba t we would . Mr. WAll~ EX M.r~ Presi~ent, without stopping there at this undertake this engagement, we made a contract with the Du

time. but gomg on with the htUe I ha\"e to say, the Uovernment Ponts for 5.000.000 pounds of the old-style powder at thirty­has built two powder factories in the United States. one for the three and a fraction cents. 'l'be war did n{)t Last very long, Army and one for the Navy. The Du Pouts ba>e built three and we found we were going to ha>e more powder than \Ve institutions for making smokeless powder, in order to. furnish wanted. In the menntime the Du Ponts had. witiJout any re­powder to the United Sta~es .. They were f~rnishing all of it quest from us, reduced the price 3i cents. because one of the before tbe Government bmlt Its two factories. We therefore disco,·eries made had rendered it pos i.ble for them to make now have five different smokeless-powder plants. l\1y idea would the powder much more cheaply. We then asked them what be whether we en~arg~ t_ge factory at Indianhead, as pro- we shonld do about the- two milUon and odd pounds of powcter posed, or not, to Illlllntam these five different plants. separated that we were about to have left. Our conttact was bindin .... but suffici~ntly in !?cation so that if one should be desh·oyeit: by the company said, "1'\e\'er mind; we will cancel it''; a~d so e~p~oswn we. m1ght have the use of the others-this, of course, t.bey did. SO' that, with all tile blackness you may paint against agamst the time of need, the time of war. · . . that company, its relations with the United States in connee-

9382 CONGRESSIONAL ·REeORD-· HOUSE;·' MAY 28-;

tion with f.nrnisbing powder for the Army and Navy. have been; evidently, if to ·the benefit of the Du Pont Co., certainly to the benefit of the Nation ns well.

I believe there is but one way to handle this matter, whatever may be done with the amendment, and that is, if you can secure powder at a rensonabl~ price-it may be at a little higher price than it will cost the Government to manufacture it-in some way to maintain the works that are now erected to make this particwar smokeless powder of large grain to be used for the Navy. I take no stock in the plan to spend money enough to erect a plant sufficiently large to make all our own powder, whether in time of peace or in time of war. That may p~

. economy from a narrow, immediate viewpoint, but it is not my idea of safe or final economy. It would be dangerous aJ?.d fool­hardy, and especially so at this particular time.

The VICE PRESIDENT. The question is on agreeing to the amendment. . .

Mr. THORNTON. Mr. President, if the Senator from Wyo­ming wishes to know what result is expected to be ac<;m;nplished by the expenditure of this $500,000, I will . say that the infor­mation will be found at page 473 of the hearings.

Mr. WARREN . . I will say, to the Senator that I am perfectly familiar with that; and I will say an9~er thing-I ~ obliged to the Senator for calling me to my feet-Gen. Crozier, who is at the head of the Ordnance Bureau of the Army, and Admiru~ Strauss. who is at the head of the Ordnance Bureau of the Nary, have always maintained, and maintain now, that we should .oLdestroy.: competition by a Government ,monopoly. ~rhe House committee asked Admiral Strauss question after question a11 through the bearings about this; and while ' be be­lieves we should enlarge the works, he has made it plain that we ought to buy some of our powder continuously out~de of our own works. That is the safety of the matter. It was the plan when these works were started. The Na\y works were started after the Army works. · The plan under which the scheme was worked out was that with plants of our own we could get more fayorable prices· we could mnintain the quality of the powder; we could rewoi·k powder; but that safety required at all times that we should buy a certain quantity of powder from those who would manufa...:ture it in this country in order to prevent the closing of private works or chang:ng private smokeless-pow.-­der works into commeJ •ial powder works only.

1\Ir. THORNTON. Mr. President, I think the discussion of this amendment has demonstrated to all . that it is a plain busi­ness proposition. and that great public good wil1 come from carrying it into effect. I trust the Senate wi1l readily come to that 'conclusion and signify it by agreeing to the amendment.

The VICE PRESIDENT. The question is on agreeing to the amendment of tht> committee:

, V The amendment was agreed to. :Mr. THORNTO~. I asl{ that the naval appropriation bill

be now temporarily laid aside. . The VICE PRESIDENT. In the absence of objection, that

will be done. EXEOUTIVE SESSION.

1\Ir. KERN. I move that the Senate proceed to the considera: tion of executive business.

The motion was agreed to, and the Senate proceeded to the consideration of executive business. After 12 minutes spent in executive session the doors were reopened, and (at 5 o'clock anrt 54 minutes p. m.) the Senate adjourned until to-morrow, Fri­day, 1\lay 20, 1914, at 11 o'clock a. m.

NOMINATIONS.

E:cecutive nominations received by . the Senate May 28, 1~14.

APPOINTMENT IN THE NAVY.

William E. Lawhead, a citizen of Ohio, to be an assistant sur­geon in the Me<f.ical Reserve Corps of the :i.~avy from the 21st day of 1\Iay, 1914.

PosTMASTER.

NORTH CAROLINA.

S. W. Smith to be postmaster at Wilson, N. o., in place of Benjamin T. Person. Incumbent's commission expired March 24, 1914.

CONFIRMATIONS.

"' · PosTMASTERs. ILLINOIS.

Herbert 1: Baldwin, Tonica. James J. Dougherty, Ottawa. Ralph L Dunlap, Jacksonvi11e. Howard F. Dyson, Rushville. Joseph Kramer, West Chicago. John McCann, Arcola. Charles G. McClary, Edinburg. El!>y Ozment, Carriers Mills. Alonzo E. Werts, Abingdon. Benjamin F. Wineland, Flora .

KANSAS. A. B. Hoffman, Harper.

KENTUCKY.

R. A. Field, Catlettsburg. OHIO.

Crayton V. Calvin, Columbiana. Marshall E. Foucht, Upper Sandusky. WiHiam A. Turnbull, Cedarville.

VIRGINIA.

'C. H. Willoughby, Jonesville.

HOUSE OF .REPRESENTATIVES. THURSDAY, i1J ay 28, 1911,..

The House met at 11 o'clock a. m. 'l'he Chaplain, Rev. Henry N. Couden, D. D., offered the fol­

lowing prayer: Father Almighty, out of whose substance we have our being

and through whose providence we may pass from life unto life, toward that perfection for which we long as individuals and as a nation, may peace, joy, and happiness fill our cup to-day, and inspire us with brighter hopes for the morrow under the divine leadership of the world's great Exemplar. Amen.

The Journal of the proceedings of yesterday was read and ap­proved.

ELECTION OF. UNITED STATES SENATORS.

Mr. RUCKER. 1\Ir. Speaker, I call up the bill S. 2860, rela­tive to election of United States Senators, and move that the House do further insist upon its amendments and agree to the conference asked by the Senate.

The SPEAKER. The gentleman from Missouri calls up the bill relative to the nomination and election of United States Senators and moves that the House do further insist upon its disagreement to the Senate amendments and agree to the con­ference asked for by the Senate.

Mr. BARTLETT. 1\Ir. SpeHker, a parliamentary inquiry. The SPEAKER. The gentleman will state it. . Mr. BARTLETT. Mr. Speaker, as I understand it, the con-

ference report already made by the conferees was agreed to by the House.

The SPEAKER. And the Senate rejected the conference, so it failed. · :

Mr. BARTLETT. Does not the acceptance of the conference report by the House discharge the conferees?

The SPEAKER. That is t1ue. The Chair is about to appoint the conferees, if the motion is agreed to. , Mr. BARTLETT. What is the action of the Senate? They

disagreed to the action of the House and asked for a further conference?

The SPEAKER. That is the status of it. Mr. BARTLETT. · 1\Ir. Speaker, reserving the right to object,

I would like to ask the gentleman from -Missouri a question. The SPEAKER. Does the gent eman from Missouri yield? · Mr. RUCKER. I will be glad to yield. . Mr. BARTLETT. As I understand it, the House, by amend­

ment, provided that this bill should be operative only for three years, and both Senate and House conferees agreed to it. The Senate now disagrees to · the conference report and asks for a. conference. To what part of the conference report did they dis­agree?

Mr. RUCKER. The reason tor the disagreement was on account of amendment No. 3, inserted in the bill by the .House, and _ that amendment · limited the life : of the entire ·act.., to not exceeding three years. The fact of it is that the first section

E:cccttti.ve nominations confirmed by the Senate May · ~s. 1914. of the act ought to be permanent· law; and the purpose of this conference now is to amend the amendment of the House, so as to exclude from that limitation section .1 of the bill. · UNITED STATES MARSHAL.

Harry A. Bishop to be United States marshal, fii!St division of , 1\~r. BARTLETT. Mr: Speilker-, resc1·ving the right to ob the Distl'ict of Alaska. . , ject--

1914. CONGRESSIONAL ·RECORD--·HOUSE.' · 9383 Mr. MA~TN. But this is a privileged motion. The SPEAKER It is privileged i that is true. .Mr. RUCKER. It does not require unanimous consent. . Ir. BARTLETT. I do not know about that. · Mr. Speaker, I

raise the question of order, that the House having agreed to the conference report that was a disposition of it, so far as the House was concerned, and that all matters that come after that in the House arise de novo, just as though the conferen<;e had not been had and as if there had been no conference committee appointed.

Mr. RUCKER. That is my idea, exactly. 1\lr. BARTLE'l"'T. And therefore that bill is in the same posi­

tion as if no conference had been had and the bill had not been sent to conference, so that it gains no position of privilege by reason of the fact of having a conference report here, been use, so far as the status of the .case now is concerned, there has ne,·er been any conference on this particular bill, and the bill stands simply as being reported to the House by the CommitteP. on the Election of President, Vice President, and Representatives in Congress, ready for such action .as the House sees fit to take:

1\!r. MANN. Mr. Speaker, will the gentleman from Georgia yield for n question?

Mr. BARTLETT. Surely. I am not absolutely certain about the ground that I take.

Mr. 1\IANN. I do not think the gentleman is right; but irre­specti...-e of that, this ·is a House Calendar bill with Senate amendments.

Mr. BARTLETT. No; it is a Senate bilL · Mr . .MANN. It is a House Calendar bill. It was not a Union Calendar bill.

Mr. BARTLETT. In that sense the gentleman is, of course, correct. ·

1\Ir. 1\IANN. When it came over here from the Senate with the disagreement it did not have to go to the Committee on the Election of President and Vice President. It is privileged.

1\Ir. BARTLETT. :t\o; it was a Senate bill. Mr. 1\IANN. That is very true. · "lr. BARTLETT. It came over here and went to the Com­

mittee on the Election of President, Vice President, and Rep­reseutatives in Congress and was reported by that CQ.,_mmittee.

1\lr. M.ANN. That is true. Mr. BARTLETT.- And was reported by that committee and

placed on the House Calendar as a Senate bill. A rule was obtained and the bill was considered under that rule. The House p~t certain amendments on the bill, and it went to the Senate, and the Senate disagreed to the House amendments and asked for a conference.

.Mr. 1\IANN. But as soon as the House put amendments on the bill it came into a privileged status. There is nothing else to do with it except to take it off the Speaker's table. It can not be referred to a committee except by a vote of the House.

The SPEAKER. · '!here is no doubt in the mind of the Chair about Hs being privileged. 'Ihe only thing that might militate against its being privileged would be this special rule, and after reading the rule the Chair does not think that interferes with its privilege.

Mr. BARTLETT. Mr. Speaker, I desire to have five minutes, if the gentleman will grant it.

Mr. RUCKER. I have no objection on earth, if other gen­tlemen are willing to grant the gentleman the time. I yield the gentleman five minutes.

The SPEAKER. The gentleman from Georgia is recognized for five minutes.

1\fr. BARTLETT. Mr. Speaker, the gentleman from Missouri [1\fr. RucKEB] now states this first section of the bill ought to be permanent law. As I understand it the Committee on Rules when it reported the bill to· the ·House reported it with the understanding that · ah amendment was to go upon the· bill pro¥iding it should only continue for three years. Now it is proposed by the gentleman from Missouri in the conference to yield to the Senate in its disagreement to this House amend· ment, and it is fair to state, Mr. Speaker, that many of those who hnd serious objections to this bill here did not press them bPCnuse it was a report from the Committee on .Rules giving it privilege with the understanding ·that this was to be a tem­pornry mensure.

1\Ir. ·HENRY. W111 the gentleman 1yield ?. 1\Ir. BARTLETT. Yes. · Mr. HE:l\TRY. I would like to say the gentleman is entirely

coiTect, and I concur in his statement that that was one of "the essential things agreed to before the rule was to be reported.

Mr. BARTLETT. That is my understanding. Mr. 1\iA~N. Does my friend from- Georgia think a private

understanding of the Committee on Rules is binding upon the House of Representatives?

·Mr. rB.ARTLETT. No; I do not; but, as I remember. when the rule was reported it was stated upon the floor of the House that certain amendments had been agreed to be put UJlOn this bill before it was agreed to be reported. I do not underst:md there was any pri>ate understanding, and in pursmmce of that agreement the House accepted that and the House is bound, or ought to be bound, by its action in the matter of putting this amendment on.

Mr. HE~"RY. Will the gentleman yield for a moment? Mr. BARTLETT. Yes. -Mr. HE~"'RY. I want to say the gentleman has stated the

agreement just as it was. The understanding was this bill was to be a temporary expedient. and that an amendment was to be written into the bill before the Committee on Rules would report such a rule. It may not have been a written--

Mr. MAN~. I will say to the gentleman I never heard of it. Mr. HENRY. If so, thnt is the only thing the gentleman has

overlooked during this session. ·Mr. 1\IA.....~N. I may overlook many private understandings. 1\Ir. BARTLETT. Now, the action ~of the House ought to be

binding upon the conferees. Here we have now my distinguished friend from Missouri coming to the House before the conferees are appointed saying that the chairman of the conferees believes that he will have to yield to the Senate, and this bill was gotten through the House with the vote of the House-l am not re­ferring to an agreement, but I would be justified in referring to it-with that understanding, and the gentleman from .1\Hssourl now proposing to do this regardless of tlre action of the House. Mr. Speaker, so far as I am concerned, I do not believe that Con­gress should now enter upon the making ·of laws for the election of United States Senators in the States. When the resolution to provide _for the dir"ect election of Senators was considered, the Democratic caucus refused to in any way take awny from the States the right to regulate these elections; and three times the House voted down that proposition which proposed to take away from. the States this right. Then the Bristow alll:endment was had in the Senate; and when it came to a determination of whether or not we should accept that amendment on the resolu­tion for election of Senators by direct vote of the people, whether we should support a proposition which gave to Congress the absolute power to regulate and control the elections in the various States of United States Senators, as Congress had none from 1872 to 1894 the election of Congre~smen, I saw my duty was plain, and in obedience to my convictions and duty to my people, I voted not again to restore to Congress the power . to regulate elections, as had been done and attempted to be done by the Federal elections laws and the Lodge force bill, which were repealed by the first Democratic administration we had after 1860.

The CHAIR~IAN. The time of the gentleman has expired. Mr. BARTLETT. I would like a little more time. Mr. RUCKER. Mr. Speaker, I am not privileged to give any

more time, because I am now being chasti::::ed for violating ari agreement I made with my friend the gentleman from North Carolina [Mr. WEBB].

Mr. BARTLETT. Very well. Mr. RUCKER. I will not give the gentleman any more time

to abuse me. Mr. B~illTLETT. Mr. Speaker, I make the point there is no

quorum present. Mr. WEBB. 'I desire to say to the gentleman I do not con­

trol the time. I understand this bill is taken up under a privi­leged motion. I have no objection, so far as the committee is concerned, to the gentleman having five minutes more.

1\Ir. FOSTER rose. Mr. RUCKER. Just a moment; I want to take care of this. The SPEAKER. For what purpose does the gentleman from

Illinois rise? 1\Ir. FOSTER. I want to ask that the gentleman be given

five minutes more. The SPEAKER. The gentleman from Illinois asks unanimous

consent that the gentleman from Georgia be allowed to proceed for five minutes. . .

Mr. DOXOV AN. Mr. Speaker, make it 10 minutes at least; it is a great question. · ·

The SPEAKER. But the gentleman from Illinois only re­quested five minutes.

Mr. 1\I.A.l~N. 'l'he time at present is in the control of the gen· tleman from Missouri.

Mr. RUCKER. It seems . like the gentleman from Illinois, the Speaker, and the gentleman· from Georgia have taken it away. · How much time does the gentle'man desire? · · · ·

Mr. BARTLETT. I would like to have about seven m!nutes.

t

I

,

9384 CONGRESSIONAL -RECORD-HOUSE. MAY 28,

Mr. RUCKER. I yield the gentleman seven and a half min­utes.

The SPEAKER. Tbe gentleman from Georgia is recognized for se,en nno il half minutes.

l\'fr. RA RTLETT. :Mr. Speaker. it may be that it is old-fash­ioned rlemocrney not now ~o n:uch reveTed and respected to st11nd up for Stilte r·ights, especially in a matter of regulation anrt controf of eleC'tions. It may be. l\lr. SpeHker. that we have· arri>ed nt tbnt ern when the members of a gre.at party which stood for tho~e rights in the ,.a rions States from 1868 to 18!l4 anrl denounced in ~their State and national platforms control of elections hy Federal authority may accept such doctrine. It mfly sound strnnge to new ears in this House. There was a day when great Democrnts lil~e Snmuel J. Tilden. 'l'homas A. Hen­dricks. ''est, Voorhees, and a line of ~reat men and Democrats,_ who will li\·e in history as ~reat statesmen and ~rcat Democrats, and \vbo stood for this grE.>at right of the people, who will live as illustrious ilnd distin~uiRhed statesmen :md Democrats when tl10se who now seek to destroy thut for which they contended are justly forgotten. Mr. Spen kc::r, I feel deep:y about rna tters of this kind. I d<t not propose u .. vote for a bill or a measure that is the enterin~ wedge to confer upon tha Congress the right t~nd the power to go into the States an(] not only regulate the time, pluces. and mnnner of holding elections. but finally to regnlate the qualifications of voters. registration. and all sorts of things that were embraced in the infamous Lodge e:ection bill of 1894, which wus lost in the SenHte by the heroism and the patriotic demtion of two or three Republicans like Stewart, of Nevada, Teller, of Colorado. and others.

Mr. WEBB. WUJ the gentleman yield? Mr. BARTLETT. Certuinly. Mr. WEBB. I doubt if the !\!embers of the House understand

the difference between yourself and the ~entlemnn from Missouri [l\lr. HucKER]. Will you state succinctly what it is, so that we will know bow to >ote intelligently on the question?

Mr. BA.UTLETT. Yes; if I have time. Mr. WE.RB. I think that is iruportlmt. Mr. BARTLETT. The point of difference is that I am op­

pos-ed to Federal authority hnnng fmything to do with election of Senators Rnd pronding bow they should be elected. except by the c·onstitutional amendment that has been adopted. And while this is a mere inn<teent thing npparently, nnd simply pro­vides for the time when Senators shall be elected, wben you concede to Congress the policy of saying how we shall elect Senators. the next stt!p will be to say--

Mr. WEBB. The point is made that it passed tbe House as a temporary measure, while the Senate bas made it permanent.

1\lr. BAHTLETT. I understand tile gentleman. The point is this;.. When this bill was considered in committee and came out of the Committee on Rules, there was carried out an express agreement that that bHI should be considered as privileged, aud lb~tt an amendment should be offered in this Hou~ e limit­ing the existence of the law to three years. I was informed no rule would have been obtained unless the bill was to be amended. The House agreed to it. Now, the Sennte dis:1greed tv this rP.port. Thut is the point upon which they dis:tgreed. They desire to ha,·e it pet·manent, bnt I desire, if we are to have an im·asion of the t•igbts of the States, to have it for only three yec! rs. and not forever.

Gentlemen may think that this is a mere bogie man. But you are building. as did those men of old, a mquster, calling it something in the interest of present necessity aud emergency. When the time comes, and it will come shortly i1 Democrats for­get · their duty, thnt same monster will trample the life out of State so,ereignty and State and local self-gon~Tnruent, and It will be no time to cry aloud then upon the monutains to hide you, by pretending that you simply intended it to be tempo­rary. It is but the advance step, and when you ha>e taken it others will come in your place who will not consider it tem­porary. I do not know what the views of others are. but be­fore I consent to do this, e\·en at the dictation of anybody ot· at the request of anybody, I will surrender back to my con­stituents my commission and t-ender them an account of the position I baYe always occupied upon this question without fear of their disnppro,·al. Good faith, Mr. Spe<tker, good f:1ith to this House requires that the conferees should not in advance go into the conference with the umlerstanding that they are to agree with the Senate in the matter of voting out this most vita I n mendruent put in by the un<mimous voice of the House.

Mr. RUCKER. Will the gentleman yield? 1\lr. BARTLETT. Yes. Mr. RUCKER. In what respect is this first section vital to

anybody in the world? 1\lr. BARTLETT. Wen. tile gentleman bas become so obsessed

with the idea of having Congress do something, to take charge

of the elections of Congressmen and Senators. tbilt be does not see any harm in anything. though it be something that points directly to the heart of the existence of the State go\'ernments themsel ,·es.

1\lr. MURDOCK. The gentleman is talking to this amend­ment that this act shall expire by limitation within three years of the dn te of fts approval. Have the House conferees receded from that amenrtment?

Mr. BARTLET'r. No. Tbe House conferees agreed to it, tbe House adopted that amendment, find when the conference report came up in the Senate the Senate disagreed to it and sent it bnck. The gentleman from Missouri [l\1r. RucKER] says it ought not to be in there so far as the first section is con­cerned.

Mr. MURDOCK. And the gentleman from Missouri [Mr. RucKER], when he reaches conference, will agree to the elim­ination of that amendment?

1\Ir. BARTLET'r. :r~ot all. of it. I will not say thr.t. Mr .. MURDOCK. I ba >e been following the gentleman from

Georgin and want to be clear on the point. 1\fr. B.AIITLETT. I do not want to misstnte the gentleman

from Missouri. Now, Mr. Speaker, I have said all I desire to say now. If I had time I could say a great deal more. I feel deeply on the matter, and I submit that to agree to this thing as it is is but a stell in the direction o:: concentrating all powers In Congress in matters of election, and we will see them fast arproaching the point where we will have no StHtes. but will have one great confedern ted republic here, controlled by Con­gress, and the States sinking to the plane of mere provinces. For one, I propose to stand where I have ::tlways stood, in opposi­tion to mectsures of the kind. (Appla.use.]

The SPEAKER. The time of the gentleman from Georgia Las expired.

Mr. RUCKER. Mr. Speaker, it seems that I am the most un­fortunate of men. I ba>e not been able in yenrs to attempt the discharge of a public duty in response to o,·erwbelming senti­ment all o>er this land. even in the great State of Georgia--. Mr. BARTLETT. The ~entleman is mistaken about that.

Mr. RUCKER (continuing). That I did not arouse the gen­tleman's. recollection of the past, cause hjm to have horrible nightmares and dreams and visions of Federal usUI·pation. Prudence admonishes me to stop here.

Mr. BARTLETT. Sny what you please. Ur. RUCKER. Ch, Mr. Speaker, I recognize the fact that I

can say what I please, here or elsewhere, but l do not please to E.lY anything to which the gentleman can take exception.

Mr. BAUTLE'l'T. I did not mean it that way. Mr. RUCKER. I hope th<; gentleman will not interrupt me. Mr. BARTLETT. lf I can not address the Chair or the gen-

tleman either--1\lr. RUCKER. I yield. Mr. BARTLETT. I did not desire you to yield. Mr. RCCKER. I beg the gentleman's pardon. Tbe gentle­

man knows bow I love him and how highly I re~ard his patri­otic sentiments.

Mr. BARTLETT. I understand that. l\Ir. RUCKER. But, l\Jr. Speaker, it is the most man·elous

thing in the world to me that a great statesman, the leading statesman from the S<totb, tbe one man upon whom the welfare of this whole country devolves, the one man who alone must protect this great country from Federal-controrled elections and all their attendant e\·ils, that this one gentlemt.n should always be on the alert to oppose thut which the people of his own StRte demand, and which I, in the discharge of a public duty, present to this House. It is true that In the Committee on Rules objection was made to the effect that the bill was not clear enou~b and did not de1initely fix a period when this act should eX}Jire by limitation of law nnd no part of it tecorue per­manent law. I read the title and I rend the bill, and I heard its pronsions discussed, and I frankly admit I understood it was intended to be a temporary measure only, and when that question arose I did say I would offer an amendment in definite t.mguage. but I was not driYen to it; I did it voluntarily. I did say that whE.'n the bill came before the House an amend­ment would be offered fixing a definite limitation of three years, so that at the end of thnt time the act would become a dead letter. I did that. I kept the faith. I have not deceived the gentleman or anybody else.

1\lr. BARTLETT. I did not sny tbe gentleman had. Mr. RUCKER. But the gentleman spenks about bnving

yielded-dei1ending upon what I said here before the House and: what he understO<td occurred in the committee room.

Mr. BAUTLETT. May I interrupt the gentleman? . Mr. RUCKER. Yes; certainly.

....

1914. CONGRESSIONAL RECORD-HOUSE. '9385

l\Ir. BARTLETT. I did not say the gentleman had yielded. I said the gentleman had not yielded; but the gentleman had statetl on the floor of the House--

1\fr. RUCKER. Yes; but the gentleman said, as I understood him, that I had agreed to offer an amendment to the bill, put­ting a limitation to its life, in order to get the rule, and that now I am going back on it.

1\fr. BARTLETT. I did not say the gentleman had gone back on it. I said this, if the gentleman will permit--

Mr. RUCKER. I want to say--1\fr. BARTLETT. Will the gentleman permit me to interrupt

him? Mr. RUCKER. Certainly. Mr. BARTLETT. I said the gentleman bad stated a few

minutes ago that the first section ought to be permanent law. 1\fr. RUCKER. Yes; I said that because, after reflection,

that is my best judgment. Mr. BARTLETT. And presuming from that statement that

the gentleman would agree with the conferees of the Senate on that--

1\Ir. RUCKER It is my purpose to agree, I will Say to the gentleman frankly.

1\fr. BARTLETI'. That is all I stated. Mr. RUCKER. But the gentleman stated-! think I caught

him correctly, because he always uses choice English, and I can . always uuderstand plain English such as he always uses-he did state that the House was induced to permit the first con­ference report to be agreed to by unanimous vote, relying on the promise I made. Let me say it may be that the gentleman is right and that everybody else is wrong, but within 24 hours of this time a distinguished gentleman elsewhere in this Capitol told me that the gentleman, with some display of feeling and passion, had said that they had slipped one over on him when he was not present and did not know anything about it, and that he did not intend to let them slip anything else over on him.

1\Ir. BARTLETT. I deny that I said that. 1\Ir. HOWARD. 1\Ir. Speaker--The SPEAKER. To whom does the gentleman from Missouri

yield? Mr. RUCKER. I yield to both gentlemen. Mr. HOWARD. I should ·just like to ask the gentleman,

because I want to understand. I understand we passed this measure as :m emergency or temporary measure.

1\lr. Rr'CKER. Yes. ' Mr. HOWARD. That at the expiration of three years this

law would be of no force or effect. Mr. RUCKER. I am going to discuss that in a few minutes. 1\lr. HOWARD. Now, the Senate has seen proper to strike

out that provision. I should like to ask the gentleman why they should rnuke it a permanent act, when we intended to make it a temporary act?

Mr. RU~KER. I will try to make that clear to the gentle-man.

Mr. BARTLETT. Will the gentleman from Missouri yield? Mr. RUCKER. Certainly . . Mr. BARTLETT. I want to deny the statement that I said

that they had slipped over anything on me. I never made any snch :::tatement as that. That imputes something to the gentle­man from Missouri that I never have said, nor have I enter­tained any such view.

Mr. RUCKER. The gentleman can not impute it to the gentle­man from Missouri, because I did not say the gentleman said it to me.

Mr. BARTLETT. I know. I say that would be imputing something to the gentleman from Missouri--

Mr. RUCKER. I accept the gentleman's statement without the least hesitation.

1\Ir. BARTLETT. That is all I want to say. Mr. RUCKER. I repeat, I accept the gentleman's statement.

I have found him always courageous, but most of the time wrong.

Mr. BARTLETT. I will let the RECORD speak as to that. Mr. RUCKER. Mr. Speaker, if I am not right the gentleman

from Georgia will correct me. My recollection is that the great State of Georgia was the very first State in the Union to ratify the seventeenth amendment.

Mr. BARTLETT. It never ratified it, but refused to con-sider it. ·

1\Ir. RUCKER. Is that so? Mr. BARTLETT. Yes. . . Mr. RUCKER. The State of Georgia was the first State to

elect a Senn tor by the people. Mr. BARTLETT. Yes. . . . Mr. RUCKER. The State is doing ·that?

Mr. BARTLETT. Yes; but the Yote of the Legislature of Georgia was never cast for that amendment; never.

Mr. RUCKER. It was the first State to elect a Senator by the people under the recent amendment.

Mr. BARTLETT. I believe so; yes. Mr. RUCKER. Now, Mr. Speaker, why all this controversy 1

It is true, as stated by the gentleman from Georgia [Mr. BART­LETT], that when the conferees met we agreed practically to the bill as it passed the House, agreed to this particular section that we are now discussing, which is the limitation section. Sena­tors of the United States, including the learned lawyer who drew the bill, accepted it without quibble or question; but when the Senate was asked to agree to the conference report, which contained section 3 in full just as the House passed it, the ques­tion was raised, "What are you going to do about electing United States Senators by the people hereafter?"

If this bill becomes a law as reported by the conference committee, it will make the entire law with reference to the election of Senators by the people a temporary law, and will compel Congress within three years, either now or later, to pass another law exactly like section 1 here; and who objects to it? Why, every time the gentleman from Georgia [Mr. BARTLETT] has been elected and given a seat upon this floor, he has been elected in pursuance of a statute identically like this. The Constitution was held not to be self-enforcing, and in order to give it force and vitality in order to enable the States to elect their Representatives, Congress passed a law that Representatives should be elected every two years in all the States. Now, having adopted an amendment to the Constitu- ­tion providing for popular election of Senators, it becomes ab­solutely imperative, unless we are going to abolish that other House of Congress, to enact the first section of this bill in order to put the Constitution which the people have ratified into force and give it effect, and that is all that this does or seeks to do.

The amendment of the House, section 3 of the bill, applied to the entire act; and when Senators discovered that that would put us in the no-nsensical position of making this entire act temporary and therefore necessitating a bilJ hereafter to enact these very provisions into permanent law, they asked that we vacate ·proceedings under a former conference report and , meet the Senate in conference agnin and modify section 3 so as to confine the limitation as to time to section 2 only. That is the section which authorizes temporarily the nomination and election of Senators, and it will become absolutely nugatory the very minute a State acts, and I believe the State of Georgia has acted, so this act can never become effective there.

No provision of this bill will ever be effective in Georgia. except those of section 1, which merely put the constitutional amendment in force and authorizes the people there to elect their Senators. But there are States, many of them, where Senators are to be elected in the near future and where the legislatures will not convene until after the time fixed for election. This law should be passed in order to save the people of those States the great expense of convening their legislatures -in extra session .

.Mr. HOWARD. Will the gentleman yield? Mr. RUCKER. . Certainly. Mr. HOWARD. Does this particular act carry with it the

effect of giving to Congress the power of fixing the time of holding elections for United States Senators if it should pass in the present form? .

1\Ir. RUCKER. It does fix the time. It says Senators shall be elected at the general election at which · Members of Con­gress are elected next before the senatorial term expires. It fixes the time ill- that way, and in that way only.

Mr. HOWARD. Was not the purpose of the act to pass some legislation giving power to hold an election and to fill a vacancy that might occur before the legislature could meet and puss a law?

Mr. RUCKER. Mr. Speaker, it seems that I have been un­fortunate in my language. It is the judgment of gentlemen that until we pass a law putting the Constitution into effect it will not go into effect.

Mr. BURKE of South Dakota. Did not the State of Georgia elect a Senator under the seventeenth amendment without tho statute being enforced?

Mr. BARTLETT. Yes; and so did the State of Maryland. I apologize to the gentleman from Missouri for interrupting him without his permission.

Mr. RUCKER. The gentleman from Georgia can do anything with or without my permiss1on and not offend me. I know his genial nature--always in a happy mood-and anything that he might say I would accept as friendly advice and assistance. His .criticisms I know are always friendly, because I know the

9386 CONGRESSIONAL-RECOJID:-=-HOUSE. lfAY 28,

gentleman reciprocates the great depth of love that I bea-r for him; hence I take no offense. [Laughter and: applause.}

Mr. Speaker. I h!n·e no feeling about this ml'ttter nt all. but it does seem illogienl to hn>e on t.1.le statute· books a law authoriz­ing the election of l\Iernbe.rs of this House and oppo e ba Mng on the statute a lnw authorizing Sta·tes to elect Aembe1·s of the other H0u e. The Constitution ~bonld be pot in fm-ee; and thnt is nil thi bill seeks to do. It does not iute-rfere with the sa~ren right'3 of any State. I will snrnd with the gentleman from Georgia or any other man to the limit of my capacity t-o pre er•e the States from Federal inv::rsion; but I do not regnr·d compliance with public will as a license for Federnl inn1. ion or as permitting snch im·asion. When the gren t body of the American people demand a reform. as it bas for marry ye:.n· dl·mHnded the election of SenatoTs by the people. the wiLl of tlie JIE>Ople is more sacred to mJ:C> than tile· dogma crf Sb1te rights n.s ad•oeated by some ge!ltlem€n whom I know. [Applnuse.)

But I believe th.'lt both State rights- and Federal ri,-gbts can be presen·ed. I believe the enjoyment of every right a Stnte ha!'l enrr be secured; i-tnd r beHeve the rights of the JO"ent bocly of Ameriean people cnn be J!;h·en voice in this country throngh a:p'{:}roprinte legiS'Intion without sacrificing the tenets for wbicll the lenrued gentleman so ably speaks aud wbic-b has developed iu our eountrv the immorta I cha-racters he nn med.

Mr. Speaker. I hope, regardless of the attitirde of my friend from Geot·b>in-and r say it with feeling of the greate t kind­ness-th<tt this House will do the right thing and send this ' bill back to eonfereuce. It is apparent-a'Ild everybody knows It-that we are going to pass a lnw Iike this. 'Iheu why not do so at this opportune time?- Soill€ gentleman on this side a!'ll\:P.d a que~iou which I have not n ·n~ered, and as I wa..nt to mnke mysetf cJe.ar, if I ha,·e not nlready done so. I will say that fhe· proposition is to put the bill in conference again. so as to agr&. to an amendment of sectiorr 3 of the bill, wbte-h wns put in by the House, so as to confine the limitations as to time to section 2 and Jea>e f'eetion 1 as permanent law. r repeat thnt. in my judgment. this wm not invade any fai.r theory or doctrine of State rights th<'lt can be imagined.

Mr . .urnnocK. Wi 11 the gentleman yield? Mr. RUCKER. Certninly. . Mr. 1\ll:JRDOCK. I! the law stands in section 1 as permanent .

law, wfTI it a.ffect the time er manner o! the election. of United Stutes Senators in any State?

Mr. RUCKER. The section does fix tile time. ~L. ]).fli.RDOCK~ Will that affect the existing custom in any

State? !lr. R"GCKER. No: not in the lea.st. :Ur. 1\lL'RDOCK. In Mississippi and Loulsinna Senators are

chosen some years previous to tbeir taking their sents. · l\1r. RUCKER. This bill will affect those conditions. because ·

section 1 proYides t:lll1t Senators sfiJlll be erected at "the· re}.,'"ltlar eJection heJd In any SWte next precedlng the expiration of the , term for which asy Senntor wns elected." So that hereafter the election of Senators will b~ lte-ld at tlle general election next preceding the expiration of the senatorial term.

Mr. MUHDOCK. As it ought to be. Mr. l\L\X~. Will the gentleman yield? Mr. RUCKER. Yes. Mr. MANN. The cases. refeJTred to by the gentleman from

Kansas are States :where they have· quadrennial .e1ecti<ms. Mr. RCCKEH.. I thank the gentleman. Ur. Speaker, one

more word and I am done. I htt\'e no feeling in tltis mntter. I h-a•e kept f:.tith with the Committee on Rules and with the · House. If the House does not Wllnt to. pass a reasoo;1ble me11sure. IE>t the House tnke the respo,nsibility :md turn it clown. I have preserued It to the Ronse as best I could1, not in passt.on. b-ut deliberntely, belie,ing it ough.1i to l>ecome law_ If the House sgrees with rue and will send t11P bill back to conference. we will bring in a report as soon ns possible and bell; mnke it law~

Mr. MANX. WiU the gentleman yieid me three- minutes? 1\Ir. RUCKER. Mr. Spenker~ li will yield thr:ee minutes tG the 1

gentlemctn from fllinois [:\Ir. MANN]. 1\Ir. l\lANX 1\lr. Spe;ll{er, two years :~go, after quite a con- :

te.t in the Hott e and in the country, the Uouse adopted what was called n reform in the rules. and pro:vid.e.d for the· selection and afterwards for the electjon of the Committee on Rules wholly disconrwcted from the Spenker.

It wns said in th old days. though not very truthftliJy, that in order to get a bill up before the Honse it was nece sary to go hat in hand to the Speaker to obtaJn reco~nition; llut under this reform symem we now Iurve a eondi:tion here- one rrot only has to go hnt in: band and 0n bis knees to' the geutleman from Texas. [:Ur. HENRY], but one must agree· iru a.dvan~e what he will pu.t in his bilL. In the oid days., after the· bill came- before .t.be

Hause. it was lett for the: House to determine what it would enact into JegiR!ation: but now you hm·e to pr·etmre your amend­ments and submit them tg the gentleman from Texas [1Lr. HENRY) nnd see whether .he will'Iet: you h;n·e the bill considered in the House tmder an acrreeme::tt t:hnt you will insi t, according to tlle gentleman from Georgia [:\1r. RARTLE.TT}, not only that the House will agree to the amendment but that you ·will wake the Senate agree to tht>m also. lLau~hter and applnuse.] We are lia,·ing a come t here nnw Letween two gentlemen as to whether fu ith is being kept, the· Committee on nuJes baYing held up. juRt a a highwayman does. the gentleman from di ouri [:\Ir. HucKER] nnrt in. isted that he should offer nnd adYocnte an :~mendment to the bill before the Committee on Rule.· would aUow hj.m to ha"Ve it ccmsidered' in the HouRe. and wben the gentlema..n from MisRouri offered the amendment and seC'UI"fld i.ts ndoption tt is now .chnrged that he is 11cting in ill faith becnuse he does not bold up the Sen:1te. We ha•e ne,·er h.ad such a pror•ol'lition before the House at any time previously.

l\lr. HEXRY_ l\Ir. Speaker. vd.Il the gentleman yield.? Mr. MA~:"l. Yes. Mr. HE~llY. Does the gerr.tlemnn not think the fnct thn.t the

Hom~e bas always RnF;ta ined the Committee on Itu:Jes pro\es its patriotism and wisdom?

Mr. :\f.A :~-x. I do not. I never ha~ known the -committee on llnlt"R in my ~enric·e in the H use to be defe tE>d en a vote. Tbe pnTty u. tl:l ny stnnds beb1 nd the Committee on RuleR, whE>ther the pnrty ngrees with it or dlRngrP.es with it. bl'l-t that fs- the '\ery rea on why the Commfttee on Ru1e . wllen It bas prese11ted to it a proposition ns t-6 the con iderntion of a bill in the Honse~ shou1d net D!lcfertake to say u-llnt • hall go in the bill a n C'Ondition precedent to letting the hill he consid­ered in tile Hou e. ~rhe Cbmmittee on Rule . . under the existing ciTcnmRt~mees in the House, now eontrols what will tnke place in the Home. There is no wa'Y of getting n bill up before the Hou e unless It is privlleg'ed. except by nn;mimouR eom;ent or !Jy a rule from the Committee on nuleR, and the Committee on Hules will not re1rort a rule. arrpnrently. unless one' wifl agree with the C:OUlllittee in udnmce whnt tbe bi'Il shn·J1 contuin. The HouRe might as well adjourn and go· home and lea-ve only the geutlemnn from Texas here. [Applnnse.l

l\lr. ~1URDOCK. 1\fr. Spenker, will the gentleman yield.? l!Ir. l\1.A..'\X If I ha ,.e the time. Mr. ll"GRDOCK. Tbe gentleman did not say it. but be ought

to hr.Ye said it. that there jg no way by which the House can discharge the Committee on Rules.

The SPEAKEfL Tbe time of the gentlemnn from Illinois has expired. The question fs on the motion of the Jrentleruan from l\Ii.ssot1I4 tllat the Honse do further im;ist upoa its amend­mPHts and ;.~gr·ee to the conference asked b~ the Senate.

The que~tion wns taken; nnd on a division (demanded by 1\!r. BARTLETT) thE>re were--nyes 81, noes U.

So the motion \'i'as ngreed to. The Chair announced the fol'lowing conferees: :Mr. RucKER,

Mr. BROUSSAc&D. nnd Mr. AINI:>..Y. Mr. BA-RTLETT. , l\1r. Speaker. I desire to submit the fol­

lowing prh·ileged .resolution, which 1 send to the de k and ask to ha \e rend.

The Clerk read as follows: Re11olt:ed, That the conferees on the rart of tbe IIom~e be ln.structed

to lnsist upon the amendrnenls of the House to Senate bill 2860.

Mr. ~'-X Mr. Spea &er. I make the point ot order tlmt the regtllotion is not in order. the conferees h<n-ing been n,p(lf'linted.

Mr. BA.RTLETT. They can be instructed only after they m·e a-pvointed.

l\lr. ~lA~;.I. OQ.. no; they can be instrneted only before they axe aPfJointed. arul aftev the confe1·ence is agreed to.

Mr. R.-\llTLETT. If I nm wrong Hhout it. \'ery well. 1\Ir. MA~X Oh. the ge11tleman is wrong. The SPEAKER. What is the statewent of the g~ntleman

from lllinttis? 1\lr. MA.~X Instructions to the conferees cnn only be made .

a fte-"L" the conference is oxdered or agreed to, and befoo.-e the con­ferees are a ppointedJ.

Mr. R..:\RTLETT. 1\.lr. Speaker, this is exactly what wns done in. the deficiency hill, in reference tv cer~ :rmendments that the Senate put upon that bill.

Mr. :\.LA...~.X. Oh. the gentleman' tsc m ·error. The motion wns mHde to In ·trnct tbe conferees Hfter the conference was ngreed to and before tbe conferee-: were appointed. \Ve lu1ve agreed to the conference with the Senate, rtn(l w£ ha,·e named the con­ferees, and U hns gone beyonrl the nouse.

The RPEAKEH. The truth nhnut the mntte.r is thnt tbe Chair misled the gentleman from Georgi~ and informed him the other way.

1.914. U0NGRESSIO~l\..L t&ECO~D-EOIIS.E. 9387 -~'l"r. 1l\IANN. If ·that is the ·case, I will wUhdraw1the point --of{ : ~~mple

11 order, for I have no desire to take advantage in any statement: ' To~:~n, I. Treadway Tuttle Underhill Volstead

Walters· -White Williams Winslow

Woodruff Woods Young, N . . Dak.

made by the Chair. . 'Townsend The SPEAKER. That ·is the status. The ·gentleman tfrom ) ANSWERED " •PRESENT "-lll.

Georgia asked the Chair and the Chair informed .him that now Adamson was the time to mnke the motion. I ' Carew

Guernsey McKenzie Rucker ·Sims Binds lthldden

'Mr. BAR'.rLETT. Of course, Mr. S'peaker, '1 LOUght to .ha-vei 1 Glass Hobson Mann ..NOT VOTING-151. known what the rule is. 1

' Th~ SPEAKER. The ·gentleman D'om '"Illinois >withdraws · tlret point of order. The question-is on agreeing-to ·the resolution. I

The question was taken; and . on a diYision (demanded by1 Mr. BARTLETT) tthere were-ayes 37, .noes 81. '

Mr. BARTLETcr. Mr. ·Speaker, .. on that ~ :demand 'the yea-s and nays.

The :SP.EAKER. 'The gentleman ··from iGeorgia tlemands the yeas and nays. Those in favor of orde-ring the yeas -ana na-ys will rise and stand until countetl. [After counting.] Seven Members have risen, not a ,sufficient number.

Mr. BAllTLETT. l.\Ir. Speaker, '1 ·make the point •Of order that there is no quorum present.

The SPEAKER The gentleman from Georgia makes the point of order that there ' is •no quorum present. 'Evidently there is no quorum present. The Doorkeeper will lock the doors, the Sergeant at Arms will notify ' the absentees, and the Clerk will cull ·the roll.

Mr. AIAl\"N. Mr . . Speaker, before ·the roll is called, I ask unnnimons consent i:hat ·the resolution be again Teported.

The SPEJAKER. Without objection, the Clerk will again report the resolution.

'l'here was no objection, and the Clerk :again reported the resolution.

The question was taken; and there were-yeas 80, nays 191, answered " present" 1~, not voting 151, as follows:

Abercrombie AikE'n A swell Bailey B:ukley BartiE'tt Beall, Tex. Blackmon BL'Ockson Brnml.Jaugh Buchanan, Tex .. BUI·gess BUI·nett ByrnE's, S. C. Byrns, TE.'nn. Candler, Miss. Caraway Carlin Carter Collier

Adair Alexander Allen Anderson Anthony Ashbrook Avis Baker Baltz Barnhart Barton B<lthrick Beakes Bell, Cal, Booher B01·chers Bowdle B1·itten Brodbeck Brown, N.Y. B1·owne, Wis. Bryan Buc hanan, Ill. Burke, S. Dak. Burke, Wis. Butler Camobell Can for eantrill Ca1·y Casey Chandler, N.Y. Claypool Cline Connelly, Kans. CODI'Y Cox Crosser Cullop Curry Decker Deitrick Dershem Dickinson

'YEA.B-80. Davenport Dent Dupre .Eagle Elder

·Fergusson Fen· is F1tzHenry Flo_vd, Ark. FostE'!" Gnt rE.'tt, 'Tex. Godwin, N.C. Goodwin, dt"k. Hammond Hardy Harrison Hetlin

.Henry

.Holland Howard

Hughes, Ga. Jacoway Keating Lazaro Lee, Ga. L~ver McAndrews 1\.lclJermott MahE.'r Montague Moon Murray, Okla. "Neeley, Kans. O'Brien Oldfield Park Pou

·Quin -Rag-sdale Rayburn

Sa bath ·Seldo-mridge

.Sisson Strirtg'er Sumners Taylor, Ark. Taylor, Colo. Taylor, N. ·Y. Thomas 'Thompson, Okla. 'Tribble ·vaughan Walker Watkins -Watson Weaver !Webb ·Wilson, Fla.~. Wingo Witherspoon

NAYS-191. Dillon Dixon Donohoe Donovan Doolittle Do1·emus Dou:rhton Drukker Dunn Eagan Esch Evans 'Falconer .Fan· Fess Fie lds Fowler J~rancis F1·ear F1·ench Gallagher Ga1·d Gardner Gnrner GHry GillE'tt Gilmore Gittins GoPke Good Go1·don Gorman Graham, Pa. Gray Gl'PE'n, Iowa GrePne;l\lass. GJ·pene, Vt. GrPgg Hamlin Han·is · Ha1·t nnugen Hawley ' Hay

Hayden Peters, Mass. Helgesen Peters. Me. .Hinebaugh Peterson "Houston Phelan Howell Plumley ·Hulings Porter

'; llumph.rey, Wash. Post lgoe l'owers Johnson, Utah l'routy Johnson, Wash. :Rainey Kelly, l'a. !taker Kennedy, Iowa "Hauch Kennedy, H. I. Heilly, Conn.

' Kent RE'illy, Wis. Key, Ohio Roberts. l\1a~s. Kindel Roberts, Nev. Kinkaid, Nebr. Rothermel

. mtcbin Rupley l{onop Russell Korbly , Scott La Follette Shackleford Lee, Pa. Sb.arp Leshe1· Sherwood Lewis, 1\fd. Sbt·eve Lieb Sinnott LinthiCUlll Slonn Lloyd Smith, J. M. C. Lobeck Smith. Md. J,onE>rgan Smith. Minn. McCoy Smith. N.Y. MacDouaTd Stafford 1\J::tgulre, Nebr. Stf'dman AlltchE'll StPener~on MondelJ 8tepbE.'ns. Cal. Moore Stephens, 'Tex. 1\lorgan. Okla. -.Stevens, N.H. Moss. Ind. · Stone 1\Jurdock Stout ·Nolan, ·J. I. Sutherland Norton ·SwltzPr Page. N. C.· Ta~!!:J rt

.Patten, N . .Y. '"'T::~lhott •. l\I'd. Patton, Pa. "'Talcott,'N. Y. 'Payne Tavenner

Ainey 'Faison Know land, J. R. Ansberry Finley KrE'idet· Austin Fitzgerald Lafferty Barchfeld Flood, Va. Langham Bartholdt Fordney _Langley Bell, Ga. Gallivan L"Engle Borland Gan·ett, Tenn. Lenroot Rronssard George tLevy Brown, W. Va. Goldfogle Lewi-s. Pa. Browning GouldE'n 'Lindbet·gh Bruckner Graham, Ill. Lindquist H1llkley .Grtest Loft Bu l'ke, Pa. Griffin Logue Calder Gudger 'McC"IE'Ilan Callaway Hamill McGillicuddy Carr lliamilton, Mich. McGnirE'. Okla. Church Hamilton, N.Y. 'McKellar Clancy .Hardwick McLaughlin Clark.,"Fla. 1Hayes 111aban Coady Helm . Manahan Connolly, Iowa Helvering Mapes Cooper Hensle_y Martin Copley -Hlll ' Merritt Covington Hoxworth 'Ail:'tz Cramton Hughes, W . • Va. Miller Crisp -Hull ' Morgan, La. Dale Humphreys, Miss. Morin Danforth Johnson, Ky. Morrison Havis :Johnson, S.-.C. JI.JHss. W.Va. Dies JonE.'s Mott Difenderfer Kahn 'Munay, :Uass. Dooling !Keister ;Neely, W.Va. Driscoll KellE>y, Mich. Nelson Dyer . .Kennedy, Conn. Oglt>sby Edmonds ·Kettner O'Hair Edwards lKiess, Pa. ·o·Leary Estopinal Kinkead. N.J. O'Shaunessy Fairchild KirkpatJ·ick Padgett

So the resolution was rejected. The Clerk announced the following _pairs: .Until further notice: ~1\lr. JoHNSON of K-entucky ·with Mr. MAnnEN. ,1\fr. ·· GLASS with ·Mr. SLEMP. 1\fr. CALLAWAY •with . .l\lr. MERRITT. :Mr. GUDGER 'with l\ir. GUERNSEY.

Paige, .Mass • . Palmer Park-er Platt Reed 'Ri01·dan iRoget·s ,R-ouse Rubey Sauni.lers Scully Sells Sherley Sla.vden

~!!~W Smith, Idaho Smitb, Saml. W. Sm1th, TE.'x..

-Sparkman ·St:mle:v Stephens, l\.Ifss. Stephens. Xebr. ~tE.'vens. 1\Iinn. 'l'a.vlor. Ala. TenEyck Tha<'her Underwood ·\are Vollmer Wa!lin Walsh Whaley Whitacre Willis Willian, 'N. Y. Young, lrex.

1\fr. CLANCY with l\Ir. HAMILTON of New York. '1\fr. fGARRETT -of Tennessee with :\fr. FoRDNEY. "l\lr. SMITH .of Texns with l\ir. BABCHFELD. Mr. TAYLOR of Alabama with Mr. HUGHES of West ,Virginia. Mr. 1DALE with i\fr. l\1A.RTIN. Mr. -SL'AYDEN with 1\fr. BURKE of .Pennsylvania. Mr. SHERLEY with l\1r. WILLIS. 1\lr. BELL of Georgia with :\lr. ArnEY. l\lr. BoRLAND with 1\lr. BARTHOLDT.

.1\Ir. DIES with Mr. GRIEST. Mr. FLOOD of Virginia with l\Ir. KIESS of .Pennsylvania. ·Mr. HA.1mwrcx with Mr. McLAuoHLlN. 'l\1r . ..HELVKRINO with Mr. MANAHAN. 1\fr. rHm;r . . with .Mr. MILLER. 'Mr. L'ENGLE with :~fr. lUOTT. Mr. 'YOUNO of Texas •With Mr. HAMILTON of Michigan. '1t1r. ~1URRAY of .Massachusetts with Mr. tRooE:as. J\1:r. CAREW .with :\Jr. DANFORTH. 1\Ir. McKENZIE wi tb Mr. HELM. 1\lr. GRAHAM of Illinois with :\lr. SAMUEL W. ,S.MITH • 1\lr. CLARK of Florida with l\lr. AUSTIN. l\lr. COVINGTON with l\lr. CALDER. Mr. DIFENDERFER with 'Mr. CooPER. fl\1r. DooLING with l\!r . . CRAMTON. Mr. ESTOPTNAL with Mr. DAVIS. Mr. Enw ARDS with Mr. DYER. Mr. ·FAISON with 'l\lr. EDMONDS. 1\lr. FINLEY with .1\lr. :HAYES. ·Mr. FITZGERALD with Mr. KAHN. Mr. GoLDFOOLE with Mr. KEISTER. 1\lr. HUMPHREYS of MissisSiiJpi with :M'r. KELLEY of-Michigan •. Mr . . JoHNSON of South Carolina with 1\l.r. J. R. KNOWLAND. 1\Ir. LEVY with M1". LAFFFZI'Y. Mr. lUcKxuAR with Mr. KREIDER. Mr. 1\IoBRJSON with Mr. LANGHAM. l\fr. Q }HAIR with l\lr. LANGLEY. 1\Ir. O'SHAUNESSY with l\lr. LEWIS of Pennsylvania. Mr. PADGETT with Mr. !.rNDQUIST. Mr. PALMER with Mr. V ABE.

~Mr. :REED with ·Mr. 1\lcGm:ru: of Oklahoma.

9388 CONGRESSIONAL RECORD-HOUSE. ~fAY 28,.

Mr. lliORDAN with Mr. MAPES. Mr. ROUSE with Mr. SMITH of Idaho. 1\Ir. RUBEY with Mr. SELLS. Mr. SAUNDERS with Mr. PARKER. , Mr. SMALL with 1\Ir. MORIN. Mr. SPARKMAN with 1\Ir. Moss of West Virginia. Mr. STEPHENS of Mississippi with 1\Ir. NELSON. Mr. STEPHENS of Nebraska with 1\Ir. PAIGE of l\Iassachu etts. Fo1• 10 days : 1\fr. HILL with Mr. CoPLEY. For the session : 1\Ir. ADAMSON with Mr. STEVENS of ~Iinnesota. Mr. HOBSON with 1\Ir. FAIRCHILD. 1\Ir. UNDERWOOD with 1\Ir. MANN. 1\Ir. SCULLY with 1\Ir. BROWNING. ~.Ir. l\1ETz with Mr. WALLIN. Mr. CAREW. Mr. Speaker, I am paired with Mr. DAN­

FORTH, and I desire to withdraw my yote of "no" and to answer " present."

The name of Mr. CAREW was called, and he answered "Present."

Mr. GLASS. Mr. Speaker, I desire to ask if my colleague, Mr. SLEMP, of Virginia, has voted?

The SPEAKER. He did not. 1\Ir. GLASS. Mr. Speaker, I desire to withdraw my \ote of

" aye" and to answer " present." The name of 1\Ir. GLAss was called, and he answered

" Present." . Mr. MANN. Mr. Speaker, I am paired with the gentleman

frow Alabama, Mr. UNDERWOOD. I desire to withdraw my vote of "no " and be recorded " present."

The name of 1\Ir. 1\IANN was called, and he answered " Present."

The 1·esuJt of the vote was announced as above recorded. The SPEAKER pro tempore (Mr. HAY). A quorum is pres­

ent, and the Doorkeeper will open the doors. AGRICULTURAL APPROPRIATION BILL,

Mr. LEVEll. 1\Ir. Speaker, I ask unanimous consent that the House agree to the reqne t of the Senate for a conference on the disagreeing votes of the two Houses on the bill H. R. 13679, a bill making appropriations for the Department of Agriculture for the fi cal year ending June 30, 191.5.

The SPEAKER pro tempore. The gentleman from South Carolina asks unanimous consent to take from the Speaker's table the bill H . R. 13679, the Agricultural appropriation bill, and agree to the request of the Senate for a conference. Is there objection?

Ir. MANN. 1\Ir. Speaker, reserving the right to object, did the Speaker state the request was to ask for a conference or to agree to a conference?

The SPEAKER pro tempore. To agree to a conference. ~fr. 1\IA.NN. It is an unusual thing, and I think a rather

improper thing, for the Senate when it passes one of the annual appropFiation bills to ask for a conference upon the passage of the bill. Sometimes when there is great urgency of some bills it might be quite proper to ask for a conference on the part of the House which last passes the bill, but it never was in conformity with parliamentary usage, and, so far as I recall, this is the first time where one of the annual appropriation bills having passed the House and then hadng passed the Sen­ate the Senate has sent the bill back to the House at once in­si ting upon its amendments and asking for a conference.

Mr. LEVEll and .Mr. GARNER rose. The SPEAKER pro tempore. To whom does the gentleman

yield? 1\Ir. MANN. To either fair charmer. Mr. GA..Rl\'ER. Under the rules governing a conference the

liouse asking for the conference has charge of the papers, and must act on the conference re11ort, or it is usual to act on the conference committee report first. I say, under the rules gov­erning conferences of the two Houses, the House asking for the conference has charge of the papers, as I understand it, and it is usual for them to act first on the report as it is made.

Mr. MANN. The gentleman is mistaken. The House that agrees to the conference a cts first on the conference report.

Mr. PAGE of North Ca rolina . 1\Ir. Speaker--The SPEAKER pro tempore. Does the gentleman yield? Mr. 1\IANN. Yes. l\Ir. PAGE of North Carolina. The gentleman lets very little

escape him--1\Ir. MANN. I know this session of Congress they have done

this same thing before. Mr. PAGE of North Carolina. At this session of Congress

the District Ullpropriation bill pns ed the House, and the Sennte

passed that bill, .appointed conferees, and sent the bill to this House.

1\Ir. MANN. I think they did on ene other bill at this session of Congress, but it is not a good custom.

Mr. LEVER. Mr. Speaker, in answer to the observation of the gentleman f rom Illinois [l\Ir. MANN], I confe s that when I saw the Sen..'lte had asked for a conference on this bill I was greatly surprised, although, being no parliamentarinn my elf, I did not know but that they had the right to do it. But I under­stand, while it is not the custom, it is not beyond their right to do so, and I agree with the _gentleman from Illinois that it is a bad practice. However, they have asked for the conference, and there seemed to be nothing else to do except for us to agree to it.

Mr . MANN. I am not going to object. I think it i beyond their r ight, but we can not raise that question in this Ilou e.

Mr. LEVER. That is very true. 'l'he SPEAKER pro tempore. Is there objection? l\Ir. CANDLER of Mississippi. Mr. Spea ker, reser,ing the

right to object, may I ask the gentleman from Routh Carolina what his request is? Is it to disagree to all the arneudments of the Senate and agree to the conference a sked by the Senate?

Mr. LEVER. No. The request is that the H onse ngree to the conference asked for by the Senate on the Agricultural np­propriation bill. The Senate passed the bill, sent it back to the House with its amendments, and asked for a conference. It is now the duty, I presume, of the House to agree to the conference, in order that we may get the bill into conference on the \arious amendments that have been offered.

Mr. CANDLER of Mississippi. Then, there is no request lhat we agree or disagree to their amendm~nts?

Mr. LEVER. None whatever. The request i that we a~rec to the conference in order to have the opportunity to consider in conference all amendments as soon as po sible. .

.Mr. CAJ\'DLER of Mississippi. That cour ~ will expedite the consideration and the final passage of the bi1l, and therefore I have no objection. I realize the importance of enacting this great bill into law at the earliest date practicable.

The SPEAKER pi·o tempore. Is there objection? (After a pause.] The Chair hears none. The question is on agreeiug to the conference asked for by the Senate.

The motion was agreed to. The SPEAKER pro tempore appointed the following confer

1\Ir. LEVER, Mr. LEE of Georgia, and Mr. HAUGEN. ANTITRUST LEGISLATION.

The SPEAKER pro tempore. Under the rule the Hou e re­solves itself automatically into the Committee of the Wltole House on the state of the Union for the further conf':ideration of the antitrust bill, and the gentleman from Tenne see [.:Ur. BYRNs] will take the chair.

The CHAIRMAN. The House is in Committee of the Whole Honse on the state of the Union for the further consideration of the bill H. R. 15G57, of which the Clerk will report the title.

The Clerk read as follows: A bill (H. n. 15657) to supplement existing laws against unlawful

restraints and monopolies, and for other purposes. The CHAIR~IAl~. When the committee rose on Tue day the

Clerk had read section 1. If there are no ameudments-Mr. MORGAN of Oklahoma. Mr. Chairman, I wish to offer

an amendment as a new section following section 1. '.rhe CHAIRMAN. The gentleman from Oklahoma offers an

amendment, which the Clerk will report. The Clerk read as follows : Amend by adding a new section, to be numbered section la, to follow

immediately after section 1, page 20, as follows: " SEC. la. '.rbat no firm, association, or corporation shall be subject to

the provisions of sections 2, 4, and 8 of this act, unless by it elf, or with one or more other corporations owned, operated, contl'oll d. or organized in conjunction with it so as to constitute subs tantially a business unit, has an aggregate capital, including stocks an<l bonds issued and surplus owned, of not less than 5.000,000."

The CHAIRMAN. The question is on agreeing to the ameud­ment.

1\Ir. MORGAN of Oklahoma. !fr. Chairman, one of the Jlroper criticisms to sections 2, 4, and 8 is that it includes all small business concerns in its provisions. It is the contention of some of us on this side of the House that we should go to the full length and extent of our control over the large coneerus, but should eliminate so far as we can any effort to anuoy and burden and resh·ain the small concerns which possess no monop­olistic power, and which, from a nntional viewpoint, do not affect the general interests of the country.

Now, that very proposition came up before the Collllllittee on the J udiciary and it came up before the Interstate Commerce Committee as to what corporat ions should be brought under the control and regulation of the interstate trade commission.

1914. CQNG~ESSIONA:L ·RECORD-HOUSE. 9389 I think when the bill was first drawn and introduced .by the chairman of the Judiciary Committee, the interstate trade bill, all concerns were brought under the control and regulation of tlwt connuission. And I ·for one, in speaking before the Inter­stu te Oomwerce Committee, :1d Yoca ted that it sbou ld be amended sons not to include nil concerns engaged in jnterstate commerce, and others ad\·ocated the same thing. And so when that bill was finally drawn it did not include all concerns or corporations eugaget.l iu interstate business. Therefore I have drawn this se<:Lion. which iu langunge vructically correspouds with the IU.ll­guage used tn the Covington interstute trade bill. . I think it i~ wise that if we are entering upon a new J10licy

in two directions. with two arms. interstate trade commission, ant.l then the enactruent of additional la ws to bring these con­cems under {)roper control. th nt they should go togetller. th11t these two sections should correspond in their jurisdiction over concerns exactly with those concerns that are brought under the iuterstllte trade comfllis..<::ion.

Aud so, ha,·ing this conviction, having this conception, believ­ing that es{)eci<llly nt tbe start we ought to limit our restric­tions of the larger concerns thllt possess monovolistic power, ·I hHve in good faith presented tllis nmendruent. bringing within these sections onl~· the concei·ns tb::tt shall be brought under the interstute trade cunnui. sion. I think it is a wise amendment and I llope tl.ie COllilllittee will adopt it.

The CHAHC\IAN. The question is on the adoption of the amendment of the gentleruau from Okl<1homa [:\lr. MoRGAN].

Mr. ~'LOYD of Arkuusas. l\lr. Chairwan, I desire to oppose the ameut.lruc>nt offered by the geutlelllan froru Oklahoma. for the reusou thut we do uot think tlu.lt snch l:lruendruent ought to be ndo}Jted. Tlle fact is that our friend from Oklahollla hlls gotten tlle trade-eoruruission it.lea in his bead, aud be seeks ut e,·ery OlJ!JOrtuuity, aud did in the coruwittee, aud I presnrue he will here. to inject some provision relating to the trat.le coru­rui sion into this bill.

1\ow, in the first place, we do not think that there should be any liruitntion us to capitaiizution or· surplus whate,·er as to sectious 2, 3. or 8. We h11\·e pru,·ided liruit;Jtlons of this char­acter in another section of tl.ie bill ()ertllfuing to interlockiug diredorntes. Here he proposes to raise the limit<ttion we llave plaeed in that section and put a limitatiou of $5.000.000 in these particulnr sectious. ·we lul\·e been endeuvuriug by these sec­tions referred to to forbid certain wrongs tl.iat exi ·t in our sys­teru, and we belie,·e that any such aweudrueut HS that pro(Jrn>ed by the geutlewan from Okl<1horna would tend largely to de­feat the pur(Joses of each of tlle~e sections. Aud tllerefore we oppose tlle amendment and hove the committee will vote it down.

Tbe CHATRl\fAN. The question is on the amendment offered · by the gentlelllan from Oklal.Jown [~lr. 1\JoRGAN ]:

The question w<~s tal{en, and the nmeudruent was rejected. The CH.A UD1AN.- The Clerk will re·ud. The Cieri• read as follows: SEC. 2. That any pe1·son engaged in commerce who shall, either dl·

rectly or lndirectl,v, clist:rimin<~te in price uetween dilfe1·ent purchasers of commodities In the sawe or ditl'et·ent sections or communilies which commodities are sold fur use. cou,;nmptioo, or t·esale within the' UniTed States or any Territory thereof or the lli!:>trict of Columbia or a.ny Insular pusse;;sion or other place under the jurisdiction of 1 he United States, with the purpose or mtent to tbeJ"t>by destro.v or wmngfully in· jure tbe h•IHiness of a competitor of either sueb pu1·cha!'<er or seller shall ue deemed guilty of <1 misdemPaooJ·, and upon convktion t hereof shall be punished by a tine not exeeedlng $5.0110. or l.Jy imprisonment not excet•ding one .vear. or by both. In tbe discretion of the <:ourt : Pro­'V11tetl, Thut Do tblng he1·ein contained shall prevent dlsct·lmination In prlt-e between purcbas~1·s of c.:.mwuditiE's on ac('ount of dilft·t·enl<eS in the grade. quality, or quantity of the comm.odi1y SQ!d, or that makes only due alluwunce fot· difl'ereoce In the cu,;t of transportation: dntl prurided further. That nothing he1·eln cont.;lined shall p1·event persons e11ga~ed in ,;~!ling goods. wa1·es. or merchandise in eomm~rce ft ·om se· lect log tht>l1· own cu}ltomers. except as provided in sec1ion 3 of this act.

1\lr. \VEHB. l\lr. Cl.Jai.rman. I should lil'e to ask my friend frow :\liu11esota [:\Jr. \'oLSTEAD 1 if \\' e may came to some aj,!ree­rueut as to the time to be consumed in discussing this section auLl ameurlmeuts tllereto.

l\lr. YOL~TEAD. I think it would be better to let the debate proc:eed for a little while.

1\lr. l\IAXX It is a little e.arly yet to shut off debate. There are a nnmher of amendments which gentlemen on this side d"~:>ire to propose.

Mr. WEHH. There is no desire to shut off ameadment. 1\Ir. MA~N. I unrlerRtand that. There are a number of

amendments to he offered to this section. We will try to help the gentlemnn expedite the bill.

l\1r. WEHR I thauk the gentleman. I wil1 make no request at this time.· ~Jr. Cbairm:m, ns to limiting debnte.

.1\lr. LEVY. :\Ir. Chairman, I have an nmeudment. :Mr. GRAHA:\J of -Pennsylvania. .Mr. Chairman, ! -desire to

offer an amendment.

The CHAIRMAN. The -Chair recognizes the gentleman from Penn~yh·ania [ ~Ir. GRAHAM], a member of the committee The CJet·k will report the amendment proposed .by the gentlemu~ from Pennsylvnllia.

The Clerk read as follows: Page 20, lin.e 20, after the word "shall, .. insert the words "except in

lawfully meetmg competition."

1\fr. BARTLETT. Mr. Chairman, I ask to have the amend· ment reud agnin. We could not hear it.

The CH.Allt:\l.AN. The committee will be in order. If there be no objection. the Clerk will again report the amendment .

The amendment was Hgain re:td. l\1r. GRAHA)I of Peunsylmnia. Mr. Chairman, on day be­

fore yesterday the gentlemen upon the other side invited us to p:e.sent our ':iew~ toward improving any of the terms or pro­nswns of tbts bill. It is with that end in ,·iew that I offer this am~ndment, whlch, if adopted, would largely remo,·e the ob.i~ctions to which this section of the proposed bill is now subJect.

· The great scope and purpose of our antitrust laws is to put down monop?ly and restraint of trade and to foster and pro· teet _corupetHJOn. ~s is pointed out in the minority refJort, this sectiOn as n:1.1rued IS calculuted to limit :mu destroy competition. There certainly can be no objection, therefore. to writing the words of this amendment into this paragraph. so that no fetter or restraint wilJ be put upon lawful comvetition.

It hns been held in some of tbe cases that ha~e been tried that wherever prices are cut below cost that is unfair trade practice: but where a mnn meets another's price in protecting his business in a district witb a price ·it is his Ia wful right and privilege. and it is the object of competition that be shonld meet his price. The benefit of com{leti tion is supposed to flow to the public. That is the only way in wbich it can reacb t11e consumer or the public. Now. if this cht use is limited in tllis respect. it obriates nwny of these objections.

There is another ditliculty. bowever. to which another amend· ment ruay he applied. and I will not spe •1{ of tha t at this time.

l\lr. WEBB. l\lr. Chairman, we ho11e this amendment will not be adopted, because in our opinion it adds nothing to the sec­tion. We think under the provisions of the section any man who honestly meets competHion is not thei·eby "intending to destroy or wrongfully injure any other persou." If that is his object, meeting bouest competition, this section will uot hurt him, and we consider it u eless to write into this seetion the nmendment of my friend f.-om Pcnnsylvallia [Mr. GRAHAA!]. Therefore I hope it will be voted down.

l.\lr. GILULL\1 of Pennsylvania. \Vill the gentleman permit an interrog:t tion?

Mr. \VERB. Yes. .Mr. GHAH..dl\1 of Pennsylvama. Is not one of our objects to

avoid subjecting business men to the possibiJN;y of law u its aud litigatiou? ~f you say t.bnt rual:ing u tniee to ·rueet lawful corn· petition is not withln the prohibition of the bill, then why uot write it into the body of the bill·)

l\lr. WEBB. My friend is a good lawyer, and be would not ndvise any client be has or e\"er will llnve that thi:; seetion would reilch the cases th~Lt he wishes to exempt. because any person wbo honestly rueNs competition for that purvuse is uot thereby intending to destroy or wrongfully injure any othe.r person.

l\11·. GRAH~f of Pennsylvania. Will the gentleman permit one word further?

Mr. WERB. Certninly. Mr. GRA.HA.:\1 of Pennsylvania. I simply desire to bring out

my exnct purpose in offering Lhis nmendweut. There is nothing httent or bidden in it. I <lW simply eudeaYoring to illliH"oYe tl.ie language of the bill, so fiS to carry out its purpose. I would certaiuly adYi~e any client or bm;iness man wi.Jo t·ousultet.l we about the present hmguage of the hill that it is fraugllt with great peril to llim if he in n partic~·Jar district is met by c-orn­petition nnd cuts his prices there. nnd does not cut his pr ices in every other district where,·er he trad~. I shouhl ad\:ise l.Jim that if be fails to do that be is committing an offense under this section.

Now. again, if a mnn cuts the price to meet a competitor. is he not open to prosecution under this section. becHuse e,·ery mnn is presumed 'to intend the natur~1l cou.;;equences of his nets? That is a legal axiom. Now, the natural eonsequence of my <tct in cutting a price to retain ruy business is either to tnk:e husiness from a competitor or to hold my own business. nnd unrler this lnnguage the que!'ltion is left to the jury to ~ay whether it was wron~fully done. Now. why should the bmli­ness community be subjected to h·ial upon that issue, whether or nat the -act is ;wrongfully .done?

1

9390 CONGRESSIONAL RECORD-HOUSE. MAY 28,

Mr. WEBB. The case which my friend cites will never arise under this section. E\erybody is given the right of self-defense, nnd if a man cuts his price to meet competWon, and without nny intent or purpose · to destroy or wrongfully injure a com­petitor somewhere else, my friend knows there is no tribunal that would tmdertake to indict him under this section, because he is not acting with a wrongful intent.

Mr. STAFFORD. Will the gentleman yield? Mr. WEBB. Yes. Mr. STAFFORD. When a jobber cuts his price, or gives a

dating; for instance, or a discount which he does not give to the general public, in order to get business, does he not thereby intend to injure ~orne other jobber, or some other dealer to whoin he is not giving that preferential price?

Mr. WEBB. Oh, no; not necessarily. :Mr: STAFFORD. Why, necessarily. He is doing it for the

purpose of not giving the same favor to the trade generally. 1\lr. WEBB. If he gives that advantage to one jobber and

not to another jobber under the same general conditions and thereby discriminates with intent to destroy, and so forth, he is liable to indictment under this act, and ought to be. · Mr. STAFFORD. That is the very purpose with which busi­ness is to-day carried on, and your view would make it a crimi­nal offense, and every large wholesaler would be subjected to a criminal prosecution under this present phraseology.

1\Ir. WEBB. He ought to be indicted if he cuts prices and discriminates therein for the purpose of destroying or wrong­fully injuring a competitor.

Mr. STAFFORD. That is not the morale of the business public genernlly.

l\Ir. WEBB, It is good business morals to-day, and ought to be enforced by law.

Mr. KE~T. Will the gentleman yield? Mr. WEBB. Certainly. Mr. KENT. I would like to ask the gentleman if competition

itself may not inherently be an injury? · Mr. WEBB. That depends upon the standpoint from which you view the matter. Some argue that. it is and some argue to the contrary. Economists ha\e not agreed on thnt question.

Mr. KE~'T. You intend to control a man's business, if you can, in order to prevent his injuring you.

Mr. WEBB. No; but this practice has been a favorite bludg­eon used by the trusts-to go to a town and say I will sell these goods 20 or 30 per cent lower than our competitor . sells them, and in that way put independents out of business in that com­munity. I say if they do that they ought to be indicted.

Mr. BARTON. Will the gentleman yield? l\fr. WEBB. I will. Mr. BARTON. We had an illustration recently where a big

fire insurance company came into the State where local insur­ance companies have been doing business, not confined to the border of the State, and cut prices in that immediate locality until we bad in three States 40 or 50 local companies put out of business, and then the price was put back where it was profitable to the company. Might not this same condition exist where we started a wholesale house in a State where their territory was confined to the State-might it not be a reduction of prices for putting that institution out of business?

Mr. WEBB. If the purpose is to wrongfully injure or destroy a competitor, this section will cover such practice; but insur­ance companies are not reached, as the Supreme Court has held that their contracts or policies are not interstate commerce.

Mr. BARTON. Is it not right that they should come within the law?

1\Ir. WEBB. Yes. Mr. l\IOORE. 1\Ir. Chairman, I wish to ask the chairman of

the committee whether it is intended to reach mail-order houses by this paragraph. ·

Mr. WEBB. It means to embrace everybody who operates in interstate commerce and discriminates in price for the purpose of destroying or wantonly injuring a competitor.

Mr. MOORE. Suppose a large mail-order house in Chicago was circularizing the country and should enter into competition with the crossroads store in the gentleman's county, would the department store. the mail-order house in Chicago, be liable to prosecution under this act?

Mr. WEBB. If it discriminated in prices for the purpose of destroying or wrongfully injuring such crossroad store, it would be guilty.

Mr. MOORE. And that is the purpose of the act? Mr. WEBB. Yes: 1\fr. MOOUE. Suppose one large department store in Wash­

ington in the ordinary competition with smaller stores should on certain days of the week advertise that shoes would be sold at a reduced price, a price far below that at which shoes were

sold in. hundreds of smaller stores. would the passage of this act enable the smaller stores to prosecute the department store?

l\fr. WEBB. I think it would be very hard in thl:lt case to pro~ecute the department store under the terms of the law. It would sell the same shoes to everybody at the same price, and it would be difficult to prove that it was being done to put the small competitor out of business.

Mr. MOORE. In the case of the department store advertis­ing that on a certain day it wUl reduce the price of certain articles which would put several competitors out of business, this act would not apply in the interest of the small business man. would it?

Mr. WEBB. Thnt would be wholly within the · State and would not be affected by this act. It would not affect the Phila­delphia or the New York department store if they sold within the confines of their State.

Mr. MOORE. The effect of the act, then, would not be to relim-e the sman dealer •. but to permit the large concern, with its great capital and its fine ~dvertising facilities,. to invite and attract the public in large numbers. and thus put out of busine s the small competitor in a perfectly natural way. .

Mr. WEBB. The gentleman knows that the evil he is speak­ing of is within the State control. · We can only handle trans­actions which affect interstate business.

Mr. 1\IOORE. I grant that, if the business is wholly within the State, but you think your act would apply to the mail-order house that is circularizing the country and doing business in other States.

Mr. WEBB. It would. Mr. MOORE. And houses in other States undertaking to do

business in the gentleman's county. Mr. WEBB. If it intended to destroy or wrongfully injure

a competitor, it would. Mr. MOORE. There would be no relief to the small dealer in

the State jurisdiction, but there would be to the eros ronds dealer in the gentleman's State, providing there was an inter­state business. That is the gentleman's opinion?

l\!r. WEBB. Certninly; and you would have to go to the States for relief in the other case.

.Mr. GARDNER. Will the gentleman from Pennsylvania al­low me to ask a question of the gentleman from North Carolina?

Mr. MOORE. I yield to the gentleman. l\fr. GARDNER. Would the adoption of the amendment of­

fered by the gentleman from Pennsylvania [Mr. GRAHAM] open the door to the practices which you seek to prevent by sec­tion 2'!

Mr. WEBB. It might be a suggestion to the parties that that could be done.

Mr. GARDNER. Is not the real reason for the gentleman's opposition to the amendment that you do not wish to have one line of the bill changed if you can help it?

Mr. WEBB. No, sir; that is not the case at all. We invite helpful amendments. I oppose this amendment because, as I said, I think the amendment of the gentleman from Pennsyl\ania is useless and unnece sary.

Mr. MANN. Will the gentleman yield for a suggestion? Mr. WEBB. Certainly. · Mr. l\1A1\"'N. There are five amendments to be offered on this

side, and, so far as I know, that is all that will be offered from this side to that section. Can we reach an agreement about debate?

Mr. WEBB. I hope that we may. I suggest a half an hour. Mr. MANN. We want 25 minutes on this side. l\lr. MURDOCK. The gentleman had better take some time

for himself, for he will need it. Mr. WEBB. Then, .Mr. Chairman, I ask unanimous consent

that all debate on this section and amendments thereto be closed in 50 minutes, one half of -the time to be controlled by the gentleman from .Minnesota [.Mr. VoLSTEAD] and the other half by myself.

The CHAIRMAN. The gentleman from North Carolin:1 asks unanimous consent that debate on this section :md all ameucl­ments thereto close in 50 minutes: one half of the time to be controlled IJy the gentleman from Minnesota [ .Mr. VoLSTEAD] and the other half by himself. Is there objection?

There was no objection. Mr. LEVY. 1\Ir. Chairman, I have an amendment which I

desire to offer. Is it proper now? The CHAIRMAN. There is an amendment pending.- The

question is on the amendment offered by the gentleman from Pennsylvania [l\1r. GRAHAM]. .

The question was taken, and the amendment wa.s rejected. Mr. GRAHAM of Pennsylvania. Mr. Speaker, I offer the

fo11owing amendment which I send to the desk and ask to have read.

1914. 939l Mr. LEVY. But, . Mr.- Oha!~an, the Ohair said that be we· have made here .thct we ·have . gone far enough. We are

would recognize me. - . . .. 'striking at monopoly, at these powe1:ful corporations th:tt make The ,CHAIRMAN . . But the. gentleman 'from Pennsylva.nin is , a practice of, rnscriminating in prices. :md in underselling in

a member · of the committee. The Chair -tmderstnnds the rule -to _particular localities, and thereby absolutely destroying and put­be thnt members of the committee are entitled to preference I ting out· of business independent manufacturers all over the The Chair will recognize the gentleman froin New York later. country. "The. object is to give opporturuty to build up manufnc­The Clerk will report the amendment of the gentleman from -~ng ·industries in every_ sec:tion of the country and to enable Pennsylvania. · · · men in different sectiDns to build up new enterprises, and thus

The C'~erk read as fol1ows: -save communities and States . and sections of the country the Pa~re 21 Une 11 after tbe word "for,'' insert tbe words "difference ·cost of tia~sporting the same commodities from some centrt~:l

in cost of 'production in di1ferent localities il.nd for." · _point-in the United States to every part of the country. The CHAIRMAN. The question is on agreeing to the amend- Mr. GRAHAl\I of Pennsylvania. Will the· gentleman answe~

ment. . · me how the adoption of this amendment-would- prevent the pur-1\ir. VOLSTEAD. Mr. ChAirmail I yield the gentleman from pose that the gentleman has in mind, that of preventing monon-

Pennsyln\nia [Mr: GRA.RAirr thre~ minutes. oly? Why has the committee recognized difference in cost ot Mr. GRAHAM of Penn. ylYania. l\Ir. Chairman, I ask the transportation and yet refused to recogn:iz.e difference in cost o~

very' serious and impartial consideration of this amendment -by production in differe,!lt localities? · the committee which has this bill in chaTg~. This amen_dment l\Ir. FLOYD of .Arka_nsas. I will e~lRh~. to the gent~eman covers one of tbe conditions that perhaps inadvertently has been that in drafting this bill we think we lk'tve ·placed in it all ot left out of the bill, -rind I really think ought to be inserted In the exceptions that are . essential. Tllis. is· a criminal s~atute.. it as a matter of fairness and justice. Everyone in this House Certain elements must be proYed and established beyond It knows that the cost of production varies in different localities, rem;oJ?able doubt before any man can be convicted under its so that n price based on a single cost of production can not IJe provisions.~ ·We nre striking at a known stupendous evil. from maintained as a universal price. I have simply asked he1·e that which the people of every sectio~ of tqis country have suffered, in line 11 after the words "allowance ·for," the words "differ- and we do not desire to wealien the bi1l by p1acing additional ence in c~st of production in different localities and for" be exceptions into the -pro>isions of · the bill, _ and in: that c:;onnec­inserted. To allow for that difference is just as fair and reason- tion I desire to answer furtlier suggestions made. by the gentle­able as to allow for the difference in transportation, and I have mnn from Pennsylvania in the outset. There. might be a thou­received communications from business men calling attention to sand things, a hundred things, or twenty things not mentioned fu this fact and showing how it would work injuriously to them these exceptions ·that would be a complete defense to a charge and their business if they were obliged to charge a uniform uud_er .this section, because in order to convict any man ·under price. They can not do it; and yet the language of the: section the provisions of this section you must show two things: Yo~

. compels them to. Unless the committee is wedded, as the gen- must show that )1e is selling at discriminating prices in on.e

. tleman from Massachusetts [Mr. 04-RDNER] suggested, to putting loca1Hy, different from the prices at which he i~selling in other · this bill through the House line for line and word for word, localities, and you n;mst show further that he is doing it with ·a . without change, then I appeal to the reason and fairness ot gen- wrongful purpose and intent to p.estroy or- injure- a competitor, tlemen of the committee to insert this amendment in this section either -of the seller or o:t-the purchu.ser. of the bill. Mr. GRAHAM of Pennsylvan.;a. _ .Will the· gentleman _ yield

I yield .back the remainder of my time. _ further? Mr. WEBB. Mr. Chairman, I yield five minutes t.o the gentle- Mr. FLOYD ·of Arkansas. And there may be mnny things no,t ·

· man from Arkansas [Mr. FLoYD]. mentioned in these exceptions that would comp,etely -exonerate 1\Ir. FLOYD of Ark'lnsas. , Mr. Chairman, I do not care .to the person chatged wifh unlawful rnscriminalion. In other

take up the five minutes yielded to me on this amendment J wo:rds, no m_an could -be convicted unlesS the crirnlnal acts made desire to say only a word. The e~ceptions in this ·[tatnte are nece~ry to ,c·onstitute a crime in this provision-are established. the usual exceptions in the statutes of the several States that · ThErCHAIRM.A: . · Thetilne of the gentleman ·from Arkansa·s have enacted legislation on this question. .has expired. J' •• • • .. _ • -

Mr. GRAHAM of Pennsylvania. Mr .. Chairman, will the gen- Mr. GRA.Ii.AM of Pennsylvania. I _would . li1."B to say, Mr. tleman yield? 'Ch.a.irniau-- - - · .

l\fr. FLOYD of Arkansas. Cert&.inly. . 1\Ir. WEBB. I yield one minute more to the gentleman from l\1r. GRAHAM of Pennsylvania. Does the gentleman mean 'Arkansas. .

to say to this body that because certain language has been l\Ir. GRAHAM of Pennsylva_nia (C(!nti!luin.g). Simply to adopted in some State legislatures it is therefore binding upon bring the matter- out clearly-- . us when a question of an amendment appeals to our reasoning · Mr. FLOYD of Arkansus. I yieid to the gentleman from and seqse of justice? ..Pennsylvania.

Mr. FLOYD of Arkansas. Why, not at all. l\Ir. ·GRAHAM of Pennsylvania. There is no ·device in the Mr. GRAH.Al\1 of Pennsylvania. Then why refer to State amendment; it is apparept upon its_ face .that ·'it is perfectly

legislation? · fair. I would ask my -learned · colleague on the committee it Mr. FLOYD of Arkans~s. And I am ~Qrprised at the gentle- this bill does not require from the producer to maintain a uni­

man asking sucli a question. I object to the ame.o.dment of the form ·price th.roughout .the .whole 'countcy ·where\"er h'e ' operates? , gentleman from Pennsylvania- beca,use there is no necessity for Now, is it faiT, in relation to a commodity of such a kind; that it :md there is no good r~son tor. it. The _place of production -.u · must ' be produc~d- at different -places and .sold in the com­will be th~ point from which .th~ cost of transportation would munity adjacent thereto, and forming its environment, to ptit be reckoned. - . the burden oii •him of maintaiiling a uniform price everywhere

_ Mr. GR.A.H.A.M of PennsylTania. ·Will the gentleman yield . when the cost" Of production in different localities varies? Now, 1 for another questiop.? . _ - you have alto~ed for the different cost of trnnsportation, why

l\Ir. FLOYD of .Arkansas. Not · at this ooint. do you not in equity and justice allow for this difference also~! _ l\Ir. GR.AHf\.1\I of PennsrlvanilJ.. l!ut it is pertinent to that l\Ir. ·FLOYD of -Arkansas. I do not admit· the gentleman·~ .statement. · · · - premise. · T.!le man .might lower the price for any lawful pur-

1\Ir. FLOYD of Arkan8a~. Ve;j )Yell. pose. It might b·e proper to meet the cost ·of trlinsportatiou or · Mr. GR.A.HAM: -of. Pennsylvf!_~ia. , Does not the gentleman . any. other PJ..lrpose provirnng he did not have · in his mind an : know that a great many producers have plants located in dif- . evil Dllrpose ~and intent of lowering the price to put out ot ferent . localities andJ that at . e~e_!l ..:-one of tho~e p_lants, owi~g to -b.uSiness ·a competitor. . That is my answer to the proposition. local and other causes, th_e <;.ost of produ_ction _is .different, an~ Mr . .MQORID: '"l\Ir. Chairman, wm the gentleman yield? that each of those plants -is for the purpq_se_ of ~upplying its -The :CHA IRM.A.N. ·The tin:ie of the gentleman has expired. own section of the country? Is not that a reason for ·this Mr. MOORE. A parJiamentary inquiry. amendment? • - .- - · - . · __ Th~ CHAIRMAN. · The· gentleman will state it.

Mr. FLOYD of Arliaiisas. I underStand that there is a dif- Mr. MOORE. Is there any· more time to discuss the amend-terence ln cost of production In different sections of the .coun- m~nt ·on· thi-s-importaht matterT

· try, but we do uot tlilnk that; fu striking at the evil we are . · Th~ CHAIRMAN. The Chair stntes that the time to be de­strikjng nt, thnt element -is serious enough, to -warrant us in-put- voted to th.is section and all amennments thereto is und~r the ting in this ex.ception: TliliS provision. is striking at -a known control of the gentleman from North Carolina and the gentle­evil, one of the worsLevill=J that-has-ever been practiced in this m.an. :t:r.om 1\finnesotn by agreement in the committee. country, to the de.trimenl: of m)lil.'b.frlcturers' in different sections 1\fJ:".- AIOORID. And we are restricted to such time as has beeP

·of the country, and .we tb.!tlk -when '.Ye !ia:ve made the e.x:ceptio~s ·designated? ........ -

/ }

9392 CONGRESSIONAL RECORD-HOUsE. 1\IA.Y 28,

Tile CHAIRMAN. Those gentlemen have control of the time. Mr. MOORE. I shall not consent to any further unanimous

consents if there is to be such a limitation of time for debate on questions of this great importance to the people of this country.

Mr. LEVY. l\Ir. Chnirman. a parliamentary inquiry. ThP CH..'l!Rl\JAN. The gentleman will state it. Mr. LEVY. Do I understand that on my amendment which

has been read I have no time? The CHA.IR:\1AN. The Chair will state to the gentleman

that the amendment has not been offered and read. Mr. LEVY. Am I to be precluded from offering it and speak­

ing on it? The CHAIR:\IAN. The gentleman will ha-v-e opportunity to

offer his amendment, but with reference to the time for discus­sion the gentleman will ha>e to obtain that from gentlemen who ba>e control of the time.

Mr. LE"'lY. But they will not grant it. 1\Ir. l\IURDOCK. Mt·. Chairman--The CHAIRMAN. For what purpose does the gentleman rlse? Mr. MURDOCK. I think it ought to be sugge ted to the

ge!ltleman from New York that he ought to get ~ime.- from one or the other of the men who have the time to, y1eld. The ~ntleman w~s on his feet asking recognition, and I P.oint out _to the Chnir that he wns refused recognition because he w.as not a member of the committee.

The CHAIR~1AN. The Chair hns made that suggestion to the gentleman. The time is under the control of the _gentleman from 1\'orth Carolina and the gentleman from Minnesota.

Mr. WEBB. The gentleman bas not asked for time. l\Ir. LEYY. I ha•e. M1.·. WEBB. I beg the gentleman's pardon, he spoke to my

colleague. After this amendment is voted on. or before this amendment is ,·oted on, if the gentleman from Minnesota prr. VoLSTEAD] wishes to yield to 1\Ir. MooRE time. be can still dis­cuss this amendment, but we have finished with it on _our side.

l\fr. l\IANX The gentleman from Pennsylvania has already bad five minutes.

Mr. LEVY. How about my amendment? The CHAIR~IAN. The question Is upon the amendment

offered py the gentleman from Pennsylvania. The question was taken, and the Chairman announced the

noes seemed to ha ,.e it. 1\Ir. GRAHA.l\1 of Pennsylvania. Division, Mr. Chairman. l\Ir. HULINGS. Air. Chairman, I rise to a parliamentary

inquiry. The CHAIR:\IAN. The gentleman will state it. Mr. HULL ·as. I desire to know just what this amendment

is, nn<l I ask that it be again reported. The CHAIR~lAN. Without objection, the amendment will be

:Jgn in reported. The amendment was again reported. The committee djvided; and there were-ayes 29, noes 46. So the nmendment was rejected. 1\Ir. LEVY. l\lr. Chairman. I have two amendments which I .

desire to offer. The- CHAIRMAN. The Clerk will report the first amendment. The Clerk read as follows: On p'tge 20, Une 20, between the words " indirectly" and " discrimi­

nate," insert the. word " unreasonably."

Ml". WEBB. I yield two minutes to the gentleman from New Yorlt.

Mr. LE\Y. l\1r. Chairman, the amendment offered by me is no more than fair and just. It has been decided by the Su­preme Court of the United States, and if the ~upreme Court of the United Stntes had not put in the word "reasonable" in the Sherman law about one-half of the business of the United States would h.'l\e been compelled to close up. I say, again, it is no more than fair that the word ''unreasonably·~ should be put in the bill. That is my dew of it, as well as the people's. I thi::k it is a great mistake to rush this question to such rapid conclu­sion. It is a question thnt ought to oe seriously considered, as I conceive it is one of the most important bills that has been before the House of Repre entatl•es this session, and will re­qui re many years for its construction by the courts.

The CILUR~IA r. The question is on the amendment oft'ered by the gentleman from New York.

The question was taken, and the amendment was rejected. The CHAIRMA.J.~. The Clerk will report the second amend­

ment. The Clerk read as follows: On page 21, strike out lines 5 and 6 and the word "court," in line 7

nnd insert in lieu thereof the following: "by a fine not exceeding $l,OOd for the first offense, and for the second and each succeeding olrense by imprisonment not exceeding one year, or by both fine and imprisonment, in the discretion of the court."

Mr. WEBB. Ur. Chairma:a, I yield one min,ute to the gentle­man from New York.

Mr. LEVY. 1\Ir. Chairman, we do not want to decl:ne an our citizens criminals before they are given an opportunity to have the law construed. If it is decided that they have violated the law, they should be punished by a fine for the first offense, and for- a second and each succeeding offenEc it should be impriso.l­ment.

The question was taken, and the amendment was rejected. Mr. GREEN of Iowa. 1\lr. Chairman, I offer the following

amendment. The CHAIRMAN. The Clerk will report the amendment. The Clerk rend as follows: Page 21, lines 1, 2, and 3, after the word · "thereby," strike out

" destroy or wrongfully injure the business of a competitor of either such purchaser or seller " and in:::ert fn lieu thereof the following : "create a monopoly, binder competition, or restrain trade."

Mr. VOLSTEA.D. Mr. Chairman, I yield five minutes to the gentleman from Iowa [l\Ir. GREEN].

l\Ir. GREEN of Iowa. l\!r. Cbairman, the gentlemen in charge of the bill ha"e stated in the report that in preparing this section they had simply followed the pro·d ions of laws which nad already been enacted in some 19 States. This state­ment, howe>er, is an error. The laws of the States to which reference is made in this connection in the report, with the ex~ ception .of two or three, are not drawn upon similar 1 ines to this section. In fact, the o~y ones that correspond substan­tially are those of Louisiana and Nebraska. l\lichigan b as a somewhat similar statute with reference to petroleum products. T-he statutes of the other States are aimed imply at the e•i1 of destroying or preventing competition or restraining trade. 'The restliction which is made in this section will apply whether there is any attempt at monopoly, whether there is any attempt to restrain trade, or whether there is any attempt to preYent competition. In order to so frame the section that business might not be prevented, framers of the bill have inserted a number of provisos which would not be neces ary if the section was in proper form.

:Kow, let me illustrate how this section will apply in actual business. There is in my own town a small canning factory. I ha\e no interest in it whate•er myself. It manufactures probably a couple of million of cans of corn a year. It sells some of the product in my own State, in my owu town, but the larger portion of it in States farther west, princip'llly Colorl,l.do, Utah, and California. Necessaiily it must make a different price in my own State than that which it makes in the States of Utah and California. The bill says it mny do this provided this discrimination is based simply and solely on the cost of transportation. But they can not regulate the price in - that manner, for the grade of corn they make there is a fairly uni­form price in the States of Utah and California, and they must compete there with canners from the State of my friend from Nebraska rl\lr. BARTON], who have a less rate of freight than this canning factory in my town would be able to obtain. Then, according to the proviso in the bill, if we change the price at all in_ Utah and California we would be obliged to fix it strictly in accordance with the rates of freight. If this is done, the canning company could not sell its products at all in those States.

The -distinguished gentleman from North Cnrolina and also the distinguished gentleman from Arkansas, defining the ·acts to which this section applies, have said it was cases where ther·~ was an attempt to drive out a co~petitor by means of fixing a lower price in some particular locality than was fixed in an­other State. If that is correct, why not so provide in thD.t section instead of using words to which nobody can give a definition? What do the words "wrongfully injure" mean? One gentle­man says one thing, and another says another thing. Nobody has undertaken to define the term beyond this mere statement that has been mnde by the gentleman from South Carolina [.Mr. WEBB] and the gentleman from Arkansas [~!r. FLOYD]. If they use the terms I ha Ye provided for in this amendment, " to creato a monopoly, to hinder competition, or restrain trade," then they will have words that have been passed upon judicially and which business men are ready to· act under, and which will re­quire no provisos which will permit of loopholes and evasions by which the whole act can be rendered nugatory.

Mr. Chairman, I think this amendment ought to be accepted and adopted.

Mr. WEBB. Mr. Chairman, I yield five minutes to the gen-tleman from Arkansas [ !r. FLoYD].

Mr. FLOYD of Arkansas. Mr. Chairman, in reply to the gen­tleman from Iowa [Mr. GREEN], I desire to state it is not con­tendad that the verbiage of this section is the same as that in­cluded in all of the different State statutes; but our contention

._

~ \

" ~

;

~ -

1914. CONGRESSIONAL _ RECORD-HOUSE. 9393 is that the principle, the wrong -that we-are attempting to cor­rect by the provisions in section 2 of this · bfll, has become so notorious and so well known that 21 States have passed stat­utes preventing discrimination, following the same principle. Now, the gentleman proposes to waaken the effect of what we have written here by requiring it to apply only when the effort is made to create a monopoly. '

We are dealing with interstate trade and commerce. If the purpose is to create a monopoly, the persons offending are violat­ing the Sherman law; and at the risk of giving the court some trouble in construing tha statute, and at the risk of giving a wrongdoer some trouble in construing the statute, we have pro­posed a statute here which we believe, if enacted into law, will be more effective than all the provisions of the Sherman law have ever been in suppressing one of the grossest and greatest wrongs in the business methods of the great and powerful cor­porations of this country; For that reason we hope that the House will not weaken this provision by adopting the amendment offered by the gentleman from Iowa, which has th~ exact word~ ing of the pro>isions of some of the State statutes.

MJ'. GREEN of Iowa. Will the gentleman yield? Mr. FLOYD of Arkansas. Certainly. l\Ir. GREEN of Iowa. Surely the gentleman did not want to

misstate my amendment. It covers not merely an attempt to create a monopoly, but anything that had the purpose ~o injure competHion or restrain trade. Now, can the gentleman state anything that will be c-overed by this section as it is worded now that is not covered by my amendment?

Mr. FLOYD of Arkansas. I think so. I think it is more spe­cific and more definite. Gentlemen complain of the difficulties of the business world on account of these provisions. I believe that in drafting statutes, and especially in drafting a criminal statute, we should make them so plain and specific that any man who reads can understand.

:Mr. MURDOCK. Will the gentleman yield on that point? Mr. FLOYD of Arkansas. Yes. Mr. 1\IURDOCK. I would like to ask the gentleman, in con­

nection with what he has said, in line 11, page 21, what does the language of the bill mean by '' difference in cost of trans}10r­tation "? Do you mean the published rates, the rates filed with the Interstate Commerce Commission, or not? What do you mean by "transportation" there?

Mr. FLOYD of Arkansas. We mean the actual cost of trans­portation.

Mr. MURDOCK. Take the Standard Oil Co., and, as the gen­tleman knows, it owns great tank-line steamers and pipe lines which -other people do not have the use of, and all manner of special means of transportation-are those included in this or not· or only the rates filed with the Interstate Commerce Com­mis~ion and no other rates, included in this line?

l\fr. FLOYD of Arkansas. The rates of transportation, the cost of transportation, whatever it may be or by whatever means it may be incurred.

Mr. 1\IURDOCK. The gentleman said he wanted to be specific in the statute, and I was trying to find out.

l\fr. FLOYD of Arkansas. Well, that is the way I understand it. Of course. if a company has a pipe line of its own, the situ­ation might be different.

Now, since the gentleman bas mentioned the Standard Oil Co., the testimony in the great trial against the Standard Oil Co. bas developed the fact that one of the very worst offenders that has e>er existed in this country in this evil practice of unfair discrimination is that same Standard Oil Co.

1\Ir. MURDOCK. Does the gentleman think be bas reached them in that phrase?

Mr. FLOYD of Arkansas. We certainly do. We have reached the Standard Oil Co., and we have reached every other concern that comes within the purview of this particular provision.

l\fr. HULINGS. Will the gentleman permit a question? 1\fr. FLOYD of Arkansas. I wilL 1\Ir. HULINGS. I see, in line 10, page 21, that one of the

exceptions is that discrimination can be made when there is a difference in the cost of the commodity. Now, does not that proYision specifically provide that the big man will always have that c~lscrimination in his fn:ror, and if you allow that do not you make just an open road for big business to avoid the law?

The CHA IR\IAN. The time of the gentleman bas expired. 1\Ir. FLOYD of Arkansas. I am sorry my time bas expired;

I would like to answer the gentleman. The CHAIRMAN. The que:;;tion is on the amendment offered

by the gentlem:m from I_owa [l\Ir. GREEN]. The question was ta~en, and the Ohair annoup<;ed tlwt the

noes seemed to have it. . 1\Ir. VOLSTEAD. Division! Mt·. Chairman.

The committee di>ided, and there were-nyes 34, noes 42. Accordingly the amendment was r.ejected. 1\Ir. GARDNER. Mr. Chairman, I desire to offer au amend­

ment. The CHAIRMAN. The ger1t1emnn from l\Iassachusetts offers

an amendment, which the Clerk will report. · The Clerk read as follows; fage 21, line 1, t~·ansposc the word " the1·eby " and the word " to." The CHAIRMAN. The gentleman from Minnesota [Mr. VoL-

STEAD]. ·

Mr. VOLSTEAD. I yield to the gentleman from l\Inssn­cbusetts a qmt rter of a minute.

The CHAIRMAN. The gentleman from Massachusetts is recognized for 15 seconds. ·

Mr. GARDNER. 1\Ir. Chairman, this is in order to asoid a split infinitive. The gentleman from Vermont [i\Ir. GRREN]. who is much more of a rhetorician thnn I am, tells me that we could never be reJected in New England if we allowed--

The CHAIRMAN. The time of the gentleman bas exl)ired. Mr. WEBB. The gentleman is from Massachusetts, a State

of scholars, and we owe a great deal to its scholars. orators, and statesmen. Therefore, in order to avoid the calnmity of a split infinitive, which the gentleman seeks to prevent, we will accept the gentleman's amendment. [Applause and laughter.] Th~ amendment was agreed to. Mr. TOWNER. Mr. CbairJJJan. I offer an amendmeut. The CHAIRMA.i'J": The gentleman from Iowa offers nu

amendment, which tile Clerk will rel)ort. The Olerk read as follows: Page 21, line 2, strike out the words "or wrongfully injure the

bm:iness of a competitor, of either such purchaser or sel!C<r " and insert in lieu thereof the word -"competition."

1\Ir. VOLSTEAD. I yield to the gentleman from Iowa [1\Ir. 'l'oWNERl one minute.

The CHAIRMAN. The gentleman from Iowa is recognized for one minute.

Mr. TOWNER. l\Ir. Chairman; this is quite similar to the amendment offered by the gentleman from Iowa, my collengue, Mr. GREE ~. However, I trunk it is more clearly evident that this will be an extension of the rule rather than a limitation. Certainly the evident purpose of the section is to prevent the destruction of competition. If this amendment is adopted, the statute will read:

That any person engaged in commerce who shall, either directly or indirectly, discriminate in price • * * with the purpose or intent thereby to destroy competition, shall be deemed guilty of a misde­meanor.

I submit to the genfleman from Arkansas that this language is much more comprehensi>e than the" language in the bill, and very much less liable to meet with adverse construction by the courts.

The amendment was rejected.. l\Ir. A VIS. 1\fr. Chairman, I offer an amendment. The OIIAIUMA..""'f. The ~entleman from West Virginia offers

an amendment, whlch the Clerk will report. The Clerk read as follows: Page 21. lines 13 to 15. inclusive, after the word "customers,"

in line 14,· strike out the comma, and in lines 14 and 15 strike out the words " except as provided in section 3 of this act " and insert in lieu thereof the following: In line 13, after the word "wares," the words " bituminous or semibituminous coal," and insert a period after the word " customers," in line 14.

Mr. VOLSTEAD. I yield to the gentleman from West Vir­ginia [1\fr. AVIS] five minutes.

The CHAIRMAN. The gentleman from West Virginia is rec­ognized for five minutes.

l\fr. AVIS. Mr. Chairman and gentlemen, I appeal par­ticularly to the gentlemen who come from bituminous and semi­bituminous coal-producing States to consider carefully the amendment that I have just offered. The committee has stnted that it is the purpose of section 2 to prevent one competitor from destroying or injuring another competitor. It has also been stated that its purpose is to control or prevent monopoly. I say to you gentlemen that, in my humble opinion, coming from a coal-producing State and knowing conditions in the bituminous coal fields, if this bill becomes a law as it is to-day, instead of destroying monopoly it will clestroy competition and create monopoly.

You will notice that section 2 permits eYery man to prefer and select _his own customers, except as provided in the last four lines:

That nothing herein contained shall prevent persons engaged in selling !!OOds wares, or merchandise in commerce from selecting their own customers, except as provided in section 3 of this act.

And in section 3 of this act it is provided that no operator or owner of a coal mine can "refuse arbitrarily" to :;?ell, and

l

J /~

9394 CONGRESSIONAL RECORD-HOUSE. 1\IAY 28,

so forth. and those words are limited by the words of section seetlon ·8. yoU' would have two sections apparently conflicting. 2. which prE-vent bim from selecting his own customers. And Yon would ba'Ve one section excepting bituminous coal, And then I wnnt to sny to ·you gentlemen who come· from the great coal- you would b:ave another providing that nothing herein con­producing States of the Union-! ~m not referring to ant~ra- tained shaH pre,rent a pe·rson seleeting his own customers, ex­cite coal. but to bituminous coal-that there is no monopoly of cept as pro'Vided in section 3. the coal business; that the production now is greater than the Mr. FLOYD of Arkansns. I think I can make it clear that the demnnd therefor; and that, notwithstanding the fact that gentleman's stntement is not correct. It snys that nothing freight rates. lnbor. and mine supplies have doubled in pr'ce, herein contained shall prevent persong eng-aged in selling goods, bituininous coal is selling as cheaply to-day, if not more wa1-es. and mercbandjse in commerce from selecting their own chea ply. th::~n it sold 8 or 10 years ago. and we in West Vir- customers .. except as provided in section 3 of this act. Now ginia are putting coal into New Enghmd and payin~ $2.10 a if section 3 of the act dlil not exist, and if reference to that ton freight on it and !E'elling it more cheaply than it lS sold at section is stricken out of the Jangunge in section 2. there wonld the pit mouth at Cardiff. Wales. be nothing to prevent bituminous-coal operntors from sele~ting

1\fr. FLOYD of Arkansas. Will the gentleman yield? their customers in section 2. The limitations nre in section 3, Mr. AVI~. Yes. · and I insist in perfect good faith that the gentleman ought Mr. FLO'fD of Arlumsas. Will the gentleman read the para- to offer Ws amendment to section 3, which den.ls with the

graph ns it wi11 read if amended'? products of mines and contnins the provisions complained of. l\fr. AVIS. Will the gentleman give me time for that? Mr. AVIS. I Rppreciate th.e courtesy of the gentleman fl·om 1\Ir. FT.OYD of Arkansas. Yes. Arlmnl"'as. but what is confusing to me is thnt if you pnt my :Mr. A YIS. As it is now the languBge is- amendment into section 3 it will apparently conflict with this '.rhat nothing herein contained shall prevent pt>rsons engaged in ·sell- language, that-

lng goods, wares. or me1·chandise in commer<.e from selecting their own nothing herein contained shaH prev-ent persons • • • from select-customers, except as provided in section 3 of this act. ing tbelr own customet·s, except as provided in section S of tllis act.

As amended it will rend: Mr. FLOYD of Arkansas. If the gentleman's amendment is Tbut nothing herein contained shall prevent persons engaged in sel1- iJlcorporated in section 3, it will relate back to section 2, and

tng goods, warl's, bitum 'nou10 or semibituminous coal, or merchandise modify its provisions accordingly. in commerce from selecting their awn ·customers. Mr. A VIS. The gentleman may be right, but I am afrnid the

Gentlemen. there is no monopoly of the coal business, not meaning will be obscure. Will the gentleman accept my pro­neariy so much as there is of the timber and cotton businesR. posed amendment to section 3? As I say, competition i~ so great that in my State the mines Mr. FLOYD of Arkansas. No; I could not afford. to accept are not running more thnn two and one-half dnys a week. the amendment; but I think if the gentleman offers it in section

1\lr. FLOYD of Arkansas. What does the gentleman do with 3. as I su~gest. be will accomplish his purpose without in nny the last clnuse?- way affecting or ilisplacing the purpose of section 3 as to other

Except as provided 1n section 3 of this act. products of mines. It is unnecessnry to make :::my amendment Mr. A VIS. I propose to strike out th.e words- to section 2. providing yon can secure an nmendment in· section Except as provided in section 3 of this act. 3 excepting bituminous-coal products from the provisions of

th::~t section. In other words, tO>-day the competition is so great in the bitu- Mr. AVIS. The gentleman may be right-and I am inclined

ruinous-coal industry-- t thi 1 th t b · b ~ t th · MI

.. FLOYD of Arkansas. Will the 2:ent1eman permit a sug- 0 n c · a e lS- u"' a e same ttme, I think that the ~ language might be obscure and cause confusion.

gestion there? l\Ir. FLOYD of Arkansas. Well, 1\Ir. Chairman, we oppose

~~: 1ri.~YDY~~- Arkansas. That relates to section 3. The g~s ~:~::ent, because we do not think it has any place in

language the gentleman complains of is in section .3. Mr. VOLSTEAD. 1\Ir. Chairman, I yield three minutes to the 1\fr. AVIS. Yes; in set'tions 2 and 3. gentlemnn from Ohio [.Mr. SWITZER). 1\Ir. FLOYD of Arkansas. It seems to me that the gentleman's Mr. SWITZER. Mr. Chairman, I desire to ask the chairman

exception ought to be in section 3. of the Jndici:n-y Committee n question. Does the word " com-.Mr. AVIS. Except for th.is purpose, if the gentleman will modities" in this section include everything that can be shipped

permit me and gi,·e me a little further time to answer-- like li\·e stock, li-re tJoultry, horses, mules, nnd so forth? ' 1\Ir. AL.E..."'l{ANDER. Will the gentleman yteld? 1\lr. WEBB. I think so; why should it not? 1\Ir. A VIS. I desire to ariswer the gentleman from Arkansas. 1\Ir. SWITZER. There has been some query about it on this

The trouble . with section 3 is that its purpose is to co,·er all side. minerals. even oil and gas. Now, by section 2 you prevent, or 1\Ir. MADDEN. Does it include coal? rather you limit or define the meaning of the wot~ds ... refuse 1\Ir. WEBB. It would include coal except for the provision arbitrarily," in section 3. by saying, in effect. in section 2, that in section 3. it is an arbitrary refusal to select on.e's own customers by a Mr. SWITZER. Mr. Chairman, I desire tn support of the cnaJ operator or a mine owner. Either that exception ought to amendment offe_red by the gentleman from West Virginia [~lr. be in section 2 or the words stricken out of that section that Avis] to read a few lines from n coal operator in my district­would canse any confusion if a question should be taken before Mr. Edwin Jones, of Jackson, Ohio-relative to section 3. It the courts to decide what was intended. I hope that gentlemen is as follows: who come from the great States of Illinois, Ohio, Pennsylvania, nr v·· · · v· · · AI b U h I find the bl11 states that an operator can not arbitrarily refuse to Jndiana, Kentucky, nest trg1ma, Irgmla, u ama, ·ta • sell Ruch product to persons, firms, or corporations. As you quite well Washington, and 'Vyoming and the otLer States engaged in the undet·stand, occurrence~ are common wherein bus 'ncss firms are respon­.bituminous-<:oal industry will hesit.:'tte before they decline to sible financially, but oftentimes tbeh· business methods are sucb that you

would not be desli'OUS of doing busim•ss witb them. Oftentimes mine adopt this amendment. . owners bave at·rangements that bave been in force for years, where in

.Mr. WEBB. Mr. Chairman, I yield five minutes to the gen- they have given Pxclusive sale to certain jobbers of coal. and frequPntly tleman from Arkansas [l\lr. FLOYD). we find ca~>es wbPre a man. firm. or corporation will be ju~tly at tbat

,. II·. FLOYD of Arkansas. Mr. Chairman, aside from what- time entitled to credit, but that you had good t·ea.son on account of the .u habits of the man or Individual in charge to believe that he could not ever merits may be embodied in the amendment offered by the continue to tre successful. O'entleman from West Virginia, I desire to call his attention to the fact that there is nothing in the section be proposes to Mr. Chairman, I think the criticism of this bill respecting this amend that in any way deals with the subject mntter about industry is well timed and should be considered before voting

on section 2. which be complains. That is in section 3, and the effect of his The CHAIRMAN. The question is on the amendment offered amendment incorporated in section 2 would completely destroy section 3, and it seems to me that in order to reach the pur- by the gentleman from Wes t Virginia. pose desired by the gentleman this language which be proposes The quegtion was taken, and the amendment was rejected. to strilre out should remain intact in section 2, and whHtever 1\Ir. MOUGAN of Oklahoma. .Mr. Chairman, I offer the fol-

. lowing 11 mendment . . amendment be desires to incorporate m regard to mine products The Clerk read as follows: ought to be offered to section 3.

Mr. A VIS. 1 will say ·to the gentleman that if I thought Amend by striking out section 2 on page 20 and inserting in lieu thet·eof the following:

that was a fact I would not ask to have it adopted here, or .. SEc. 2. That any person engaged In commerce who shall dlscrlml-if you put the exception in section 3 it might co,·er the point. nate in price, terms, o1· otherwise as between pe1·sons, sections. or com­but bow do yon know that the House is going to do so? If munities, with lntmt thereby ~o destt·oy or wrcngfully Injure a com-

d . . .

3 petitor or to establish a monopoly or destroy or lessen competition in

you leave tbe wor s "exC"ept as provided m section of this the production. manufacture, distribution, or sale of any snell article1 act" in section 2, and incorporate the amendment I propose in product, or commodity, shall be deemed guilty of a misdemeanor, ana

:"J \

I /

I

.

\

..

1914. CONGRESSIONAL RECORD-HOUSE. 9395 upon conviction thereof shall be punished by a fine not exceedJng $5,000 or imprisonment not exceeding one year, or both."

1\Ir. VOLSTEAD. Mr. Chnirman, 1 yield the balance of my ' time to the gentleman from Ok_ahoma.

The CILHRl\lA.N. The gentleman :l:rom Okla.homa is rec­ognized for 10 minutes.

Mr. MORGAN of Oklahoma. Mr. Chairman, I would li~e the attention of the other side to the provisions of this amendmE>nt. I want to call attention to the fact that section 2 prohibits but one thing-it prohibits simply discrimi~ntion in. price. So far ns this section is concerned, a man may be gmlty ?f any other discrimination -thnt would ha:ve the snm_e ~ff~ct. m destroying competition, in injuring. a competitor, or m lDJUrmg the public in any . way, but yet it is not made unlawful under this section.

1\lr. MURDOCK. 1\Ir. Chairman, will the gentleman yield? 1\lr. 1\JOUGA.l~ ot Oklnhoma. For a question. 1\Ir. MURDOCK. The gentleman knows that one of the

great cereal fo.od manufactnrers of this country, when he sells . a large amount of that cereal to one man, gives a cert~in number of box.es in additiQn a:s a premium. Is that pract1ce reached in tllis ection?

1\lr. MORGAN of Oklaboma. Certainly IJlat, ·nnd that is -one fact I wish to -impress en that sjde of the Honse. In my first amendment the distinguislled gentleman from Arkansas [:\fr. Ft.oYD J complained because 1 wanted to Testrict the applica­tion of this section to the large concerns, and now I wonder what answer :be will make to this amendment, which I have offered. bec<mse here I want to enlarge tbe language .. and en­large it so that it -will comprehend and include practtca_lly all unfair discriminntion. He will vote one down because It nar­row-s and '\"Ote tbe otller down because it brondens. In the end . we get the snme result. 'l'he language which I have inserted ts so as to add to the words "discrimination in prices" the words "in terms or otherwise,'' £0 that it wi'll include all un­fair disc-rimination. Are you pn rtial to one discriminHtion?

Mr. WEBB. Mr. Chairman, will the -gentleman yield? 1\lr. l\IORGAN of Oklahoma. Yes. 1\lr. WEBB. Does not the gentleman think his amendment is

covered if this is done direetly or indirectly? Does not that cover the ,·ery ground that the gentleman seeks ·to cover now?

l\Ir. MORGAN of •Oklahoma. No; because •• directly or indi­rectly" apply only to discrimination in price. Why should not 1t be unlawful for one to discriminate in terms? I hold here the report of the Conuniss.1oner .uf Corporations for 1913 upon the International Harvester Co. Whnt does he show there? He shows that ·one of the most effective methods used in acquir­ing a monopolistic control in t.hat _great indus try was by dis­elimination ·in terms. .Notice what he says on page 35 of that revort:

In this cormection there is large complaint that the company ·grants unusually lon"' 1.erm af credit to purchasers of some of these newer lines One of the competito1·s of a company .said, " The International Har.;ester Co. sells terms, not harrows. ••

One of the most effectiYe methods of the International Har­vester Co. was to gi Ye better terms than the independent and smaller concern could gi:ve, and the report of the Commissioner of Corvorations shows that these dealers complain that the Inter­national Harvester Co. sold "terms .and not harrows," and yet when you are legislating for the purpose of controlling and ma kinu unlawful the methods of the great concerns of the coun­try, y;u say to them, " ·Go ahead and use all kind of discrim­ination in terms, use all kinds of unfair practices, use all kinds of d isreputable methods in the interest of the big corporations. and so loug as you do not discriminate dit·ectly or indirectly in price, you shull be free and untrammeled to go and devour the small concern and exact undue profils from the people by yow· excessive prices." 1 want to know whether the ~lemoers of thu t side of the Hause will vote against enlarging this section, so that you shall make other things unlawful. ·

Take the second proviso. It pro'\"ides thnt only discrimina­tion in price "for the purpose or intent of destroying or wrong­fully injuring a competitor'' shall be unlawful. You cau dis­criminate for alJ other purposes. so long as yau do not discrillli­nate with the purf10Se of destroying or injurin_g a competitor.

Mr. GARD~En. 1\Ir. Chairman, will the gentleman yield? Mr. MOnGAN of Oklnhoma. Yes. :Mr. GARDXER. I wnnt to ask the gentleman whether 1lis

nmendu!ent does anything further, substantially, than to £trike out the words "in price," because, as I lleard it read, it strikes out the hu•t two proYisos of that section as well?

Mr. MORGAN of Oklahoma. Yes. Mr. GARD~ ·En. I am in sympathy ·with the gentleman strik­

ing .out the words "in price."

•

1\fr. MORGAN of Oklahoma. 'I do not stl'ike out " in price," but I add " in terms or otherwise."

l\1l·. GARDNER. I am in sympathy with that, .but what about striking out the two proYisos?

Mr. 1\IORGAN of Oklahoma. I bad an object in that. I en­larged the section in this, because I ma ke it unlawful not only to discriminate with the purpose of destroying a competito!", but with the purpose of establishing a monopoly or lessening or destroying competition. Why should you not enlarge it? 1t does not weaken the section if I leave the language which you u e :md add this other language. It does enlarge it. It may enHble you to prosecute some large concern that you could not prosecute under this section as it is.

When I want to narrow one of tllese sections. you vote it down, because you do not want It nnrrowerl: anrl wben I wnnt to broaden one so as to make it more comprehensive, you vote that down on that account.

I have left out that first proviso and also the sero.nd provisO, because when in one part of the ·section you prohibit the great concerns of this coul!try from discriminating in price Hnd then add a proviso that this shall not apply to any discrimination on account of grade. quality, or quantity. what han~ you done? You ha'\"e opened the gates-not the eye of a needle. but the gates of a great highway-into which the trusts cnn enter. Why? Take the International Harvester Co. They hm·e many brands of machinery, mnny kinrls of harvesters, vnrions classes of farm implements. The great concern mny ha,·e one brand of goods to sell in Oklahoma and another to sell in NebraRka. They have the capital, they hnve the orgnnization. and they have the financial bHcking. They can ha,·e all kinds of quali­ties ::~nd graoE's of goons. The small concern can not.

The CHAilli'\IAN. The time of the gentleman from Okla­homa has expired. The queRtion is on the amendment offered by the gentleman from Oklahoma.

The question was tnken; and on a division (demnnded by Mr. MoRGAN of Oklnhoma) there were-ayes 30, noes 47.

So the amendment wns rejected. Mr . .BRYA.l~. l\fr. Cb~drman, I offer the following amend­

ment which I send to the desk and ask to have read. The Clerk read as follows : Pa~e 21, line 11, after the word "transportation," strike out the

remamder of the paragraph. l\Ir. BRYAN. l\fr. Chairman, can 'I have a minute on that?

Is the time in such state that I can not explnin my amendment? Mr. MURDOCK. Or has all the time been exhausted? The CHAIRMAN. The Chair will state to the gentlemnn-­l\Ir. WEBB. I will yield three minutes to the gentleman. Mr. BRYAN. I will only take up a minute or so, probably

not the enUre three minutes. The present law Pi'OVides, or at least the act--

1\Ir. MOORE. 1\Ir. Chairman, a parliamentary inquiry. The CHAIR IAN. The gentleman will state it. Does the

gentleman from Washington yield? ·Mr. MOORE. But I make a parliamentary inquiry. Mr. BRYAN. Not unless it rloes not come out of the time

yielded to me by the gentleman from Nm·th Carolina. Mr. MOORE. It is a question as to whether the gentlema.n

has any time. Mr. BRY.A.N. Mr. Chni·rman, I refuse to ·yield to the gentle­

man if thnt is the question. Mr. MOORE. Mr. Cha irmnn, I make the ·point of order the

gentleman has no time under the agreement made some time ago.

The · CHAIR~IAN. The Chnir will state that •the gentleman from North Carolina [Mr. WEBB] yielded three minutes.

Mr. MOORE. 1: make the point of order the .gentleman from North Carolina has no time to yield. 'There was an agreement that all discussion should cease at the end of a certain time.

The CHAIR:\IA.N. But the gentleman from North Carolina has seYen minutes at ills disposnl.

Mr. MOOUK I beg pardon, if that is true. 1\!r. 1\!URDOCK. I think the ~entleman ought to beg the

pardon of the gentleman from Washington. Mr. l\100HK I do, most profoundly. . :Mr. BRYAN. It is granted. Mr. Chairman, the present

terms of the Sherman antitrust law are such that the seller of goods making an attempt to select his customers nnd refusing to sell to all others, if such selection or discrimination be in re­straint of trafte. it is a >iolntion of the law. But under this provision the seller ean select his cu tomer to the e.."'{clusion of all others, and it is legal whether it is in restrnint of trade or not. 1 think that ·the only effect of this proYiso in th~ bill is to give all pa-rties an opportunity to nam~ their Ctl!":tomers where they .are ,prohibited :from -doi.Q.g .so under the present law. For instance, this ,says-

9396 CONGRESSIONAL RECORD-HOUSE. ~fAY 28,

That nothing herein contained shall prevent persons engaged hi' sell­ing goods, wares, or merchandise in commerce from selecting their own customers. ·

What would prevent the paper manufacturers of this country from refusing to sell the Democratic Party publications paper? Suppose they would sell paper only to the Progressive and Re­publican papers. Suppose the shoe manufacturers of a . par­ticular locality would say they would not sell shoes to anybody except a certain set of people, the bakers refuse to sell bread to strikers, the butchers refuse to sell meat to members of the union. Uuder the present law that is absolutely prohibited if it is a selection or discrimination in restraint of trade, and in this bill such transactions are unconditionally protected.

l\lr. FLOYD of Arkansas. Will the gentleman yield? - :Mr. BRYAN. I yield.

l\Ir. FLOYD of Arkansas. Now, as we understand the propo­sition, under the present law things that the law prohibited are not authorized by_ any proviso. We leave the present Jaw as It is, and this proviso simply d~es not undertake to make it an offense or fix a penalty under this particylar provision of the statute.

l)Ir. BRYAN. Is the gentleman quite sure the court, in inter­preting this provision as a substitute for the former statute, will not take this proviso--

l\lr. FLOYD of Arkansas. Absolutely sure. l\lr. BRYAN (continuing). And say that this proviso governs

in that pnrticular matter? That the proviso is a pnrt of the whole section, and where the main provisions of the section apply the proviso must follow?

Mr. FLOYD of Arkansas. The proviso does not authorize anything. When we insert a proviso applying to certain things we leave the law as to those things exactly as it is. If it is a violation of the law now, it will be a violation of the Jaw afte1•

' the enactment of the provision into law. · l\fr. BRYAl~. Then, why not agree to my amendment and

strike out the proviso and let the law stand as it is if we are going to depend upon the law as it is?

l\Ir. FLOYD of Arkansas. This provision if made a statute would then make them unlawful, and we would prohibit many things we do not desire to prohibit. We do not desire to disturb customs -that are not wrong within themselves. We have said that throuo-hout this debate. We are seeking to correct real wrongs; and wh~re customs and practices appear to be proper and right. we do not propose to djsturb them ; and the effect of the gentleman's proviso would make the things mentioned in the exception unlawful that are not now unlawful under the

_ Sherman law; and if any one of these things mentioned in the proviso are unlawful under the -Sherman law, this does not repeal the Sherman law.

l\Ir. BRYAN. Yes; but you prohibit certain things provided the seller may select his own customers, and so fortll. Now, it seems to me you can not enforce your prohibition except under the ta ted terms of your proviso. .

The CHAIRMAN (Mr. HARRISON). The time of the gentle­man bas expired. The question is on the amendment offered by the gentleman f-rom Washington.

The question was taken, and the amendment was rejected. 1\fr. BRYAN. Mr. Chairman, I offer this amenedment. The CHAIRMAN. The Clerk will report the amendment. The Clerk read as follows: Page 21, line 14, after the word "custQmers," insert "except when

such :Jet tends to create monopoly, destroy competition, restrain trade, or." -

Mr. BRYAN. Mr. Chairman, I do not care to debate the amendment.

The CHAIRMAN. The question is on the amendment offered by the gentleman from Washington. ,

The question was taken, and the amendment was rejected. , 1\ir. GOOD. 1\Ir. Chairman, I offer an amendment on page 20, line 20, to strike out the words "in price."

The CHAIRMAN. The Clerk will report the amendment. The Clerk read as follows: Amend, page 20, in line 20, by striking out the words " in price." The CHAIRMAN. The question is on the amendment. The question was taken, and the Chairman announced the

noes seemed-to have it. M1·. MURDOCK. l\Ir. Chairman, let us ha.ve a division on

that. The committee divided; and there were-ayes 35, noes 46. So the amendment was rejected. The Clerk read as follows: SE<'. 3. That it shall be unlawful for the owner or operator of any

mine or for any person controlling the product of any mine engaged in sellin!; its product in commerce to refuse arbitrarily to sell such product to a responsible person, firm, or corporation who applies to purchase such product for use, consumption, or resale within the United States

or ·any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and any person violating this section shall be deemed ;ruilty of a mis­demeanor and shall be puni~hed as provided in the preceding section.

Mr. WEBB. Mr. Chairman, it was suggested the gentle­man from West Virginia [Mr. AVIs] is very much interested in this section, and he desires to leave, and if there is no ob­jection I will ask that this section be passed until to-morrow.

Mr. A VIS. And that it will be taken up the first thing to-morrow, or some time to-morrow.

l\Ir. WEBB. The request is that we pass it over until to­morrow.

l\Ir. BATHRICK. Mr. Chairman, I have got to go awHy to­morrow myself, and I desire very much to present an amend­ment to this section.

l\Ir. DECKER. Offer it and let it be pending. The CHAIRl\IAN. The gentleman from North Carolina asks

unanimous consent to pass over this section until to-morrow. Is there objection?

Mr. BATHRICK. Now, Mr. Chairman, reserving the right to object, what disposition will you make affecting my amend­ment because of my being obliged to be absent to-morrow?

Mr. WEBB. So far as the committee can say, I will be glad to have you offer it now and haYe it pending.

Mr. l\fANN. Let me suggest. to the gentleman that the sec­tion be read, and then the gentleman from Ohio offer his amendment, and let that be disposed of, and then the sectiou be passed over.

Mr. BATHRICK. That is agreeable to me, 1\fr. Chairrua.n. I offer the amendment.

:Mr. WEBB. Mr. Chairman, I ask that all amendments be offered now.

Mr. :MANN. I do not think it is desirable to haYe a half a · dozen amendments offered at once.

'rhe CHAIRl\Ik~. Does the gentleman from North. Caro­lina withdraw his request for unanimous consent?

Mr. WEBB. No, sir; but I postpone the request until the gentleman from Ohio [1\fr. BATHRICK] offers his amendment nnd speaks on it.

The CHAIRMAN. The Clerk will report the ameu<lment offered by the gentleman from Ohio [l\Ir. BATHRICK].

The Cle1·k read as follows : After the word " mine." In lines 17 and 18, page 21, insert the

words "or natural mineral deposit."

1\Ir. BATHRICK. Now. l\Ir. Chairman, as near a I cnn gather by any definition which I am able to find, the · word "mine" does not cover an oil well. One of the most vowerful means which the Standard Oil Co. has to cnrry on theil· monopoly is their power to refuse to se1l the products of oil wells to inde],Y'ndent refiners. Another means which they han-' to accomplish monopoly is to go into those oil sectlous where independent oil wells are located and temporarily, by very sma 11 sums on different occasions, overbid the price which independent r-efineries will pay for this oil. The result is that tbe iude ­pendent oil companies ~re often thus encouraged to refuse to sell their oil to independent refineries. In this connection, re­verting to section 2, I have thought that a discrimination in tbcJ price offered for a raw material could as well carry out nn in­tent to desh·oy _and wrongfully injure the business of a competi­tor as the discrimination in the price asked of purchasers. nnt that thought is aside from my amendment.

Now, this section as it is drawn. in my opinion, a.nd with all respect to the committee for their careful and intelligent lnbor;;. to the purpose of preventing monopoly, leaves the door wit.lo open fOJ; the Stanclard Oil Co. and others who own oil wells, which are not mines, to be exempt from this provision. AuLl I say to the gentlemen of this House that if you intend to strike at the capsheaf monopoly of this country, the one which has formed the basis for most of the condemnation which bas been directed toward monopoly, this section must be amended in scme such respect as I have indicated.

As the Clerk has read, I propose to insert the words " or natural mineral deposit" after the word " mine." in lines 17 and 18 of section 3. Oil is a mineral, but an oil well is not a mine; and if we use the words "or nahu·al mineral deposit" in the place that I have indicated I think there is no question what­eYer that we will cover the subject of oil.

1\fr. FERRIS. Will the gentleman yield right there? The CHAIRMAN. Will the gentleman from Ohio yield to

the gentleman from Oklahoma? Mr. BATHRICK. Yes. Mr. FERRIS. I am inclined to think that there is something

to what the gentleman says, and I am wondering whether it will be better to also insert the word "placer" or "lode." · X ow, there is a question of whether washing · salid on th~ - surfac·c is

1914._ '- CONGEESSIONAL RECORD-HOUSE. 9397 not mmmg. Then~ is also a question as to whether prouucing 1 1\lr. MlJitDOCI{. Reserring the right to object, why not put oil fr m <.~n oir wei! is mining. Iu either· event. it ougllt to be those requests separately? made clear. ::~nd tlle clnuse ought to have the word "trans- ! Mr. G.AltD~ER. Why should not the gentleman move to porter·· in- there. as well as the. word .. owner" and the word ' close debate in 1h·.e minutes on tbe amendment? "operator." · 1\Ir. WEBB. Mr. Chaii:ruan, I ask unanimous consent to close'

1\Ir. BATHRICK. I wish to say further that I offered this debate in th·e· minutes. amenrtment as it stands. with the knowlerlge that whut th1• The CHAIR~L\X The. gentleman from North Carolirut rtsks gentleumn from Oklnhoma says about pincer mi nes is correct. unanimous· consent th::~t the debnte on this amendment offered I will ~:~lso <lirect tbe attention of the committee to the f;lct by the gentleman from Ohio [~r. BATHRICK} close in five, tha t there is a strunge sameness of prices asl<ed of consumers· minutes. Is there objection? of fertilizer. This product relies h1rgely upon phosphate ruineg, 1\Ir. MOORE. Reserving the right to object, the gentleman but there is a lHrge supply of phosphnte rock dreuged fi·om from Ohio bas adr-eady spoken and taken up the time. I pre­rh·ers. and I doubt thut these deposits woulrl come un1ler the sume, be desired to tnke up in support of his :1mendment. It. de.finition of the word "mine," nlthougb pbos1•hate, I think. is e\iflent that a number of gentlemen want to spe:1 k on this is <1 derinlth·e of phosphorus. which is nn inorganic substlln<>e proposition. as other gentlemen bave risen. It is· not f:lir to· coming from the earth, and would be construed as a "mineral" other gentlemen who desire to speak to close debate in five as well e1s oil. minutes.

TheRe matters I ask the committee to take into consideration. 1\Ir. 1\fA:NN. I suggest to the gentleman that he move ta I expect to be absent to-morrow, and r trust some of the ~en- cloRe debate in fh·e minutes. tJemen on the floor of thjs House will tnke the m:ltter up nnd The CHA lR:\fAN. Does the ~entlemnn object? see that thnt section is taken care of in these respects. if it Mr. WEBR. I hope the g-entleman will not object. shonl rl rrnppen thHt I cnn not be here and· no Yote under the Mr. l\fOORE. I resened the ri~ht to object, in the interest agreement can be had to-day. of other gentlemPn who might desire time. but if the arrange-

:\Ir. WERH. l\fr. Chairumn, I yield to the gentlem:m from me.nt is snUsfactory to them and the gentleman from O.hio I Mi~sonri I :\lr. DEcKER] to ofi'er an amendment. l believe that will not obje<>t. was agreerl to. The CHAIRMAN. 1s there objection?

Mr. ~u·unOCK. Is not there nn nmendment pending? TberP WllS no objection. The CHAII01A:"J'. There is ~m nmendment penrling. the Chair 1\!r. FEillRIR-. l\Jr. Chn-irman. if I could lHtve my preference,

unc'lerst:mds, offered by the gentleman from Ohio [llr. BA:TH- I would willingly let this mntter go over until to-monow: but RICK] . as that course is not desired, I mny as well s'ly what I hiive to

.Mr. GARD:\"ER. I demand the regular order. sny now. 1:' will offer the amendments I have in mind to· The CHAIIU\lA~. The regular order is to dispose of th·~ morrow.

amenrlment pending, offered by the gentleman from Ohio [:\lr. This sef'tfon o:( tbe bill should undoubterlly be amended. On BATHRICK J, page 21, line JG. after the word "owner~" there ~houlfl be ·in•

1\lr. FEHRIS. Mr. Chnirmnn if a vote ts to be hnd on the serted n (lom:ma nnd the words·" tT~nsporter, transportation com­an~enrtmeut. 1 wnnt to be he}l~d on· it. If this is to be laid pnnies, includlng pipe lines." so tbat you will catch the' pipe aside. to be voted on to-morrow-- lines. That is; ron~rhly, amendment Xo. 1. .

:\Ir. WERn. 1 umlerstood the ngreement was thnt the vote . The serond: amenflment th·1 t Rhould be offered IS nlong t~e thereon f':hould go over until to-morrow. 1m: of the amendment. of!ered by the gentleman. from OhlOi

The CHA IR:\fA~. The Chnir oesires to ask the gentleman which I rtm peJ'fertly wrllmg to ~upport: but r thmk a hetter from North Carol in::~ if tbnt motion w::~s put? am.endment would b~ •. in lin~ 18. page 21. after tbe w.ord "any,"

.1\lr. WlffiB. The motion W}ts not put. to. ms~;t the words I?cludmg the products from plaeer or lode 1\lr. FEHRIS. You were ::IRking for unanimous consent to nun~s. so that yon w11l be sure to tnke in the sanrt.s of the sea

pass that oYer until' to-morrow? ?r rn·e~s that ~re w::~sbed on the surfnce. ~om which mine~al 1\Ir. WEBR. I did 11 sk unanimous com:ent to withdraw nnd IS obtnmed. wh1ch mny or mny not be a mme. nnrle.r the str1ct

. I renew it, thnt amendments nwy be offered now and spoken construction. of the t:rm. One thing i~ ce~tain. it is newr ?n to, and then ~:~llow the nwtter to go over tmtil to-morrftw. effort lu vam to mal~e certain that wh ·ch 1s nt best uncertam,

l\fr. ~IA.:'\~. The gentlemnn from Ohio Plr. BATHRICK] I am not at all sure thnt placer mining. under ~vhiC'b oil is . wants to go Hwny. aud so \Yhy not dispo~e of his amendment rem?'·ed from the surface of th.e ~1rth. can be ronFnd~red to be

anrl then. unless other gentlemen insist put the section over a mme at all. It mn.y be. but It Is doubtful: There 1s n que.<.~­until to-morrow? ' tion whetlie.r or not unrler the commodity clnu. e the pipe lines

l\Ir. WERB. It would be more agreeable to let this section thut carry. It can be re11cheU. . The Commerce Co~1rt held tlle go oTer until to-morrow. h1w .declarmg them cmTiers v01d. and the matter 1s now ~~d-

l\Ir. 1\l.AN~. 'l'he gentlem~m has no objection to disposing, of ing m the S~preme Court; Hnd so f;Ir we c11n not ~r~t a ~et'ISlon this purtiC'UlHr amendment now. has be? out o~ the "UJ?reme Court. ~e have been e.xtlecting tt for a

1\fr. WERR. There is 00 dE>b<lte. We ar . d t te !ong t1me. Th.ls Is the mo~t l.mportnnt matter to. the great oil . . e r~:1 Y .0 vo o.n mdnstry of tll1s country w1tl1m my knowledge.

this nmeunment now 1f the gentlemnn from OhiO des1res-. Tb ho ld b n th n ~ t t th' ti "': "' I 1\lr. FERHIS. 1 am not reRdy to vote 00 it. · . ere s u e a o er n len,tmen o 1s ser o.~·· ':ill~.~. l\Ir. 1\lA~N. How much more time is wanted th" d- ~111 offer as ~oon ns .r ~et a cllimce. after tlle wm;d r~nne.. m

ment? on IS amen hne 18. pflge 21, to msert the words "or hydroelectric. water l\Ir.' FEnRIS. Ur. Chairman. I Iiope the gentleman from power or prodnc.t~ produced hy sue~ powe~." . . .

North Carolina will cnrry out the thought th:t t he and the W~e~ ~.e ('hanrnan of t~e committee ex11lamed this sectiOn gentlenwn from Illinois llild a moment ago. which was to let In b1s LmtHll speech he saul that the ~·ell-~ro~mded an? c~m­tbe gentleman from Ohio [:\fr. BaTHRICK} ol'fer his :uliendment petent reason f?r the adoption of n section SllllllHr t~ this w1th nnrl uwl•e a speech on it,' and then let the whole matter 0 0

,·er refere.n:e t~ mmes wns bec:1use the )lroducts of mmes a1:e a until to-morrow. g God-gn en t1easure for all of us that should not te monopolized

• 1

by a uy of us. 1\lr . .l\lA~~- He h<ts ofi'ered hi~ amendment and mnde his I thought his explnnntion, interpretntion, nnd definition of it

speech. \\ hy does not the gen~le.nwn from Ok1ahoma. answer wns a full. com11lete. and mngnitlcent one: hut can any u,·in~ tlre · pe~e~ ,Hnd Jet US \'Ote on tbiS Hnlendme.nt'l lWID OU e:lr.th say that anything is·· SO SUbject to monopo:y flS

l\~r. I• EI.I~.I~. Rec:ruse I have a lot of other amendments fnlling wnter? Cnn nnybmly sny thllt nne commoclity n•er I \\ant ~o offet to the s~rtlon. . another is more God-gh·en than falling wnter, which. dependent

Mr. "EHB. l\Jr. Clllllnunn, I nsk nnnmmou.s com~e~t thnt upon the topogrn phy of the country nt a gh·en point. is high and all dE>ha,te on the ~me~dmE>~t of. the gentleman. from Ohio [llr. low nt Hnother point; and ran nnyone here or els~wtie1·e justify BATHRICK l he clo, ed m ~' e mmutes. the omission of water power from this section? No question is

ll!r. ~lOOHE.:\ ~~~· ChnJru~nn-- , more irnport;mt, · few questions are more unh·ersal. It affe<>tS 'Ihe CHAIH.IA:'· Is. tliat .tu"' gentlemans motion? Has nil of us. Wnter power lights Americnn homes. !';t'reets. nnd

th~f;ei~!~.~~an fim~be~ hls motion? citieg, It runs our sewing mnchines. our automobiles. our · ' R. Yes. Sir. _ vehicles. cooks our food. warms our homes, and eYery conreiv-

'I'he CHA IR:\I~~· The gentlemnn from Nortii Carolina [3fr. ahle thing thnt elech·icity hlls been nppllecl to In the last ·wEBB 1 ask~ nnnnu.nons co11~ent that the amendment of t:tbe gener:ltion. Remember. geneemen. th:H eleetrki-ty Is f.1irly in gentlernnn from Ob10 I ~Ir. BATHllJCKl be voted on in five min- its infancy. Nobody knows whilt 50 yem·s will bring to n~ in ute1• and that tile section tllen go over for amendment until hydroelectric de•elopment, nnd no one cnn snfegunrd tou well to-wurrow. t11e· water power of' tHe country and pre,·ent its getting into the

Mr. MOORE. Mr. Chalrman-- hands of selfish monopoly that may tortp.re all mankind as

1

J ~-

9398 CONGRESSIONAL ~ECORD-·HOUSE. MAY 28 ' '

long as the human ·race exists. ·we ought to put in that restric­tion, and we ought to pass some other bills in relation to water. power in this country. · Approximate y 12 per cent only of the w ater-power possibilities on the public lands of this country h ave been utilized so far. This House ought to make it possible to utilize the rest of that water power and put statutes onto the books which will enable- us not only to lease wa ter power for a short time but contain sufticient recapture clauses, so thnt we cnn bring it back and utilize it by the Government, or utilize it by local municipalities if they elect to take it over. Nothing is needed worf:e than cheap power and cheap n:umination. This bill ought not to omit it. I hope the committee will be glad to accept it. ·

The committee has accomplished much good here, but this is too important to omit. It is not sufficient to leave out oil and water power. They are the two large questions of this day.

1\fr. C.A..!.\!PBELL. Hn s the gentleman from Oklahoma any plan whereby the remaining portion of this water vower may be utilized?

l\fr. FERRIS. I have. We have a bill on the calendar now, It is not reported yet, but it is authorized to be reported. The gentleman from illinois [~Ir. · GRAHAM], of the Public Lands Committee, has been de ignated to write the report. It was introduced by me. It has the support of the conserYative people of this country.

l\Ir. CAl\'IPBELL. I take it some one will have to harness the water before it can be made use of.

l\Ir. 'FERRIS. Very true; · and we have furnished ample provision for that. I hope the amendmenf of the gentleman from Ohio will be adopted

Mr: WEBB. I want to say that when we drafted this section we intended that it should apply to oil. As there seems to be some ·doubt about it, the committee thinks the amendment of the gentleman from Ohio makes it more certain, and I am per­fectly willing to accept the amendment, because it is our inten­tion to include oil as one of the products of mines.

The CHAIRMAN. The time of the gentleman has expired. .A.IJ time has expired. The question is on the adoption of the amendment of the gentleman from Ohio [Mr. BATHRICK].

Mr. BARKLEY. I ask unanimous consent to have the amend­ment again reported.

The Clerk read the amendment a gail_?., as follows: After the word "mine," in line 17, and in 18, on page 21, insert the

words "or natural mineral deposit."

The amendment was agreed to. Mr. MURDOCK. Now get in your request for unanimous

consent. Mr. WEBB. 1\.Ir. Chairman, I renew my request. The CHAIRMAN. The gentleman from North Carolina asks

unanimous consent that this section be passed for amendment to-morrow.

Mr. A VIS. Reserving the right to object, may I ask the gentleman from North Carolina a question?

Mr. FLOYD of Arkansas. Were those words also inserted after the word "mine," in line 18?

The CHAIRMAN. Both amendments were rend and adopted. Ur. DECKER. l\Ir. Chairman, I should like to have the

amendment read which I send to the Clerk's desk. The CHAIRMAN. The request of the gentleman from North

Carolina [1\Ir. \VEB.B] for unaninious consent is pending. Mr. WEBB. I withdraw that request in view of the fact that

the gentleman from Missouri [1\Ir. DECKER] says he can not be here to-morrow and would like to have his amendment offered and to speak five minutes on it. .

The CHAIRMAN. The Clerk will report the amendment offered by the gentleman from Missouri [Mr. DECKER]. . The Clerk read as follows:

On page 21, in line 19, a!ter the word " arbitrarily," insert the following:

" Witl:l the purpose or intent thereby to destroy or wrongfully injure the business of any person."

[Mr. DEOKER addressed the committee. See Appendix.]

Mr. WEBB. Mr. Chairman, I think this amen1ment is · use­less. What ,.-e really aim to punish under this section is the big operator who has millions of tons of coal and who arbi­ti·arily refuses to sell to ::my but those he favors. AJthough I may go to him or you may go to him with tbe rr.oney and ask him to sell to us, he arbitrarily, capriciously, without any good reason whatever, refuses to sell his product, and we think he ought to be punished if he so refuses. ·

Mr. MADDEN. Will the gentleman yield? lir. WEBB. Yes.

·Mr. llADDEN. Does the gentleman know or a case ·Of that kind in the United States? · .

· Mr. WEBB. I do not recall one at present. · 1\-Ir. MADDEN. Neither does anybOdy else. It is mere non-sense and ought to be stricken out. .

l\Ir. WEBB. If the gentleman from Illinois knew the high authority and tl.e great men who favor this provision he per­haps would not make that stntement.

Mr. MANN. Will the gentleman yield? . l\Ir. WEBB. Yes.

:Mr. 1\fA.NN. Whnt does it mean when it s1ys ,, refu ses arbi­trarily to sell"? What does the word "arbitrarily" mean?

Mr. WEBB. It means without reason, without cause, ca­priciously.

lllr. MANN. The gentleman says " without cause." A man sells to . one end he does no~ sell to another, because he does not like him, perhaps. and th1t is cause. •

Mr. WEBB. That would be arbitrarily, I ·should say. Mr. ~1A.~X Does it mean sufficient cause. an if ~o. what is

sgtficient cause? Does .the gentleman think that the courts would be nb le in 20 or HO year~ to determine wb:1t this meam~?

l\Ir. WEBB. Yes; if they applied everyday common sense to it they would reach a conclusion very soon.

Mr. MANN. It would require more common sense than I possess or than is possessed by the gentleman from North Caro­lina, be:cnuse be is not able to define it. "\\TI!at does " .;ubi­trarily" n;t,ean? The definition the gentleman gave was "with­out cause.

Mr. WEBB. Yes; without reason or cause-capriciously. · Mr. BRY.AX Will the gentleman yield? Mr. WEBB. Yes. 1Hr. BRY.AN. The gentleman S::lYS that they are after the

big opera tors; but suppose a man comes from Alaska with a big bng of gold dust or nuggets and some one offers to purchase it from him, by what right could he refuse to sell? He has it for sale for uo other purpose whatever. This statute would. compel l1im to sell it at the first proposition.

Mr. WEBB. If he got his price for it, he would be glad to be relieved of it, and if he did not get his price be · ueed not sell, though I ha rdly think this section would apply to the case stated by the gentleman.

Mr. BRYA..i~. The statute does not say anything about big operators; it says "all operators."

Mr. WEBB; It is intended to apply to the monopolistic operators.

Mr. LEVY. Does this apply to the coal lnnds in Alaska? Mr. WEBB. No; they are owned by the Government and nre

held for all the people. I hope that the amendment offered by the gentleman from Missouri will not be adopted.

The CHAIRl.\!AN. The question is on the amendment offered by the gentleman from Missouri [:!\Ir. DECKER].

The question was taken, and the amendment was rejected. Mr. WEBB. Mr. Chairman, I ask unanimous consent that all

discussion on this section and amendments thereto go over until tO·mOrrow morning. .

The CHAIRMAX The gentleman from North Carolina asks unanimous consent thut the remaining discussion on thJs sec­tion and amendments thereto go over until to-morrow morning. Is there objection?

Mr. FERRIS. Is it the arrangement to take this up the first thing in the morning?

Mr. WEBB: We probably will. Mr. MANX Unless something is pending. l\Ir. FERRIS. The first thing yon do on this bill will be to

take up this section? l\Ir. WEBB. Unless something is pending. Mr. GARDNER. Mr. Chairman, I would like to ask the gen­

tleman from North Carolina whether this unanimous consent implies that no new am.endments will be offered?

l\fr. WEBB. Oh, no; it d9es not. l\Ir. GARD:~"'ER. I have no objection. The CHAIRMAN. Is there objection to the request of the

gentleman from North Carolina? There was no objection. The Clerk read as follows: SEC. 4. That any person engaged ' in commerce who s nll lease or

make a sale of goods, wares,. merchandise, machinery, supplies, or other commodities for use, consumption, or r~sale wltllin the nited States, or any Territory thereof or the District of Columbia or any insular pos­Sf'Ssion ·or otber place ·under the jurisdiction of the United Stntes. or fix a price charged therefor. or discount from, or rebat~:> upon such price, on the cond1tion or understanding t hat tbe lc.>sse or ,PUrc'· asc.>r t ereo! shall ~~t o~!r o~o~e!IoJPtt!~e o~o~d~oX::;t~~~rm~~c~~~':!![ito~c};Jn~~!· ~~rJ>~i~sr seller ISball be deemed guilty ot a misdemf'nnor, nnd upon conviction thereof sball be punished hy a fine not exceedln~ $~.000. or by imprison­ment not exceeding one year, or by botlt. in tbe discretion of the court.

1\Ir. l\IcCOY. Mr. Ch-airman, t offer the following amendme;at, which I send to the desk an!'l ask to have read.

-~

!

1914.-_. CONGRESSIONAL_ RECORD-HOUSE. 9399~

The Clerk read as :(ollo1Vs: . ra:re 22, line 14, insert, after the word "seller," the following: "With the intent of obtaining or· estaoUshing a monopoly or of de-

stroying the business of a competitor." · ·. · · Mr . .McCOY. l\Ir. Chairman, I ask unanimous consent to pro-

ceed for 10 minutes. -The CHA.IR~N. · The genUeman from ·New Jersey asks

unanimous consent to proceed for 10 minutes. Is there objec­tion?

There 'was no objection.: :Mr. McCOY. Mr. ·Chairman, I notice in the report of the

committee on this 'bill, ori page 11, the following: Section 4 of this bill has apparently be~n much misunderstood, and

grent confusion seems to have arisen in regard to its provisions. Whether designedly or from a misunderstanding of its purport we know not, but it has been contended very earnestly that its provisions _pre- . vent exclusive or sole agencies.

• "" • •• I J •

I do not ·know in whose mind any confusion has or ought to have existed in regard to the question uf exactly what this sec~ · tion does mean. Before proceeding with what I have -to say I · want to ask .the .m~mbers of the committee, when those -who are in opposition to this amendment are heard, not .to allow any red herring to be drawn across the _ scent and . not to permit the matter to become mixed with this question of leases, because if they do, then they will have argued before the committee not the amendment whic-h I propose, but they will have to go all over the question of the United Shoe Machinery Co.'s tying leases. I am just as much opposed to:those as anybody can be. I do not propose by this amendment. to permit that thing to be done, and I ask the committee to keep their minds on just the on_e proposition.

Nobody has maintained in support of this section that it had for its 'purpose the prohibition of what is known as ·an agency; that is, a straightaway agency, where there is simply the question of principal on one side and agent on the other. The committee itself says that it is not intended to do away with that . sort of thing, and the absurdity of their position in that respect I. hope to be able to demonstrn te. In other words, the committee says that anybody, any manufacturer or producer, no matter who he is, can have just as many strict agencies as he wants to have. They can be agents who have roofs ·over their heads, or they can be commercial travelers, traveling through­out the country-that they do not seek to _prevent that in any way, but that what they do seek to prevent is the making of contracts to create what are known as sole selling agencies. I do not know how much explnnation is necessary in order to show what a so-called sole selling agency is. It has come _ to have a sort of technical meaning. Of _course the number of contracts which can be executed, and by which sole sel1rng

. agencies, so called, are created, can be infinite in their variety, but the main gist of a sole selling agency contract-and that is the thing which the committee seeks to hit-is a contract by which the man who has a thing to sell undertakes to , give an exclusive territory to an agent, and on the other hand under­takes to bind that agent not to sell in . that tetritory any of the goods of a competitor. I want to call the attention of the committee to this fact. I presume they h'llow this much of it, that the Committee on the Judiciary did have hearings in regard· to these trust bills. tentative and otherwise. I do · not know how many pages of testimony were taken, but a great many pages. I do not claim to have read all ·or th~ testimony. I have not, in fact, .read it all, nor have I heard it all, but I have; ·so far as I have had the time, gone through-the hearings, and have had in mind what was said when I was present at the hearings, and I believe; ·although I may be to some ·degree mis­taken; that ~ no member of the committee can point out any objection made by any man who appeared before our committee to these technical sole selling -agencies. So far as I have been able to discover anything in the hearings, it will be found at page 140, and I call attention to the fact that it is the testimony of·Mr. J. B~ M-oorehead, of ·Lexington, Mo., who was the national secretary of the Retail Merchants' Association of the United States.

It is obvious that if there is any harm to be remedied,- if any harm has been done to the retail merchants of the country .by permitting these sole selling a·gencies, the secretary of this association would h~ve pointed it out. Let us- take it up from the :point ·of .view of these retail merchants. I desire to call attention to· the fact • that the witness is now testifying about one of these so-called tentative bi.).ls, ahd I read from his testi-mony: ·

· Mr, CARLIN; Do ·you not 'tbhllf that section 10 of bill' No. 1 would gin yon some relief? · - •

Mr. MoonEHEAD. I am riof prepared to say. Mr. c ..... nLI~. I will rel')d the language of that section to you: "'fhaf it ·snall be deemea ·an· :itt'empt to · monopolize trade or commeree

among the seve1.·al St-ates ·or with foreigD nations or a part · the reo!' fel'

any pe~sons in lnte~state· or foreign commerce to make a sale of goods, wares, or merchandise, or fix a price charged therefor or discount· from or rebate upon such price, on the condition or understanding that the pur<:.haser thereof shall not deal in goods, wares, or merchandise of a competitor or competitors of the seller." . Mr. MOOREHEAD. I a.m not up on forms of law. I do not know

whether that would cover the case or not. · Mr. CARLIN. The intention is to liberate the retailer and ,give him a

rig~t to sell anyb9dy's goods be wants .to sell ana to prevent a contmct which would reqmre him to sell exclusively a particular line of goods.

Mr. MoonEHEAD. That may be the difficulty of some lines of retailing, but that i~ only incidental to the great problem. . . ,

The busmess that is big enough, the agg1·egation of capital that is bi"' enough to say to the manufacturer: " You sell us your product at such a price. If you do not dQ. it, we- will manufacture that product our­selves." That is the main thing. .And what is the result?

Mr. CARLIN. You do not catch the idea oi this section . The idea is that the manufacturer· shall not say to any one man that he shall sell the _particular line of goods of that particular manufacturer exclusive ly. It liberates the retailer. It libemtes the retailer from that situation and :£~~-:_s him to buy goods of anybody he wants to and sell them in hi~_

Mr. MoonEHEAD. I th-ink that may be all right, but whet·e that might be .relevant to one case, there would be hundreds of cases that would not be on that line. ·

Mr. CARLIN. I am calling your attention to that one thing now, and ask- you whether you do not think that would be helpful?

Mr. MOOREHEAD. I see no objection to it now . . That is not to be coxp.pared . to the big question. II ere is the proposi­

ti.oil: .As I started to say, the manufacturer may be intimidated to sen· hiS goods to a large distributor by having it said ·to him, "):ou must sell us these goods at such a pl"ice, or we wi.ll make them ourselves." · What i_s the result? The big buyer gets the goods at cost, and that gives him a tremendous advantage over the little fellow. .

That is -all my collel'lgue on the committee could get out of the retailer. . So apparently the retailer is not damaged in any way by the making of these sole selling agency contracts. .

Mr. GARDNER. 1\Ir. Chairman, will the gentleman yield for a question?

Mr. McCOY. Certainly. 1\Ir . . GARDNER. In the report Mr. Clayton .says in his re­

port that this_ section ".not only does not prohibit 01.· forbid ex­clusive agencies," and so forth, and the gentleman uses the. term " sole selling agenci~s." :Many of us do not understand the difference. ~r .. McCOY. Mr. Chairman, as I stated . in the beginning,

this bill does not undertake to forbid contracts creatiiJg a strict agency, where the agent is a strict agent, and the man on the other side is a strict principal, and I see that. I have failed to make the question of a sole selling agency clear. ·

The CHAIRMAN. The time of the · gentleman from New Jersey has expired. .

Mr. STAFFORD. Mr. Chairman, I ask unanimous conclent that the gentleman may be permitted to proceed for 10 minntes further. - . · .

Mr. GARDNER. Mr. Ch:::irman, I hope that he will be granted this time, because there l.s a great deal that will need elucidation.

The CHAIRMAN. Is there objection? There was no objection. Mr. McCOY. Mr. Chairman, the gentleman from Massachu­

setts, by his suggestion, reminds me that I did not complete the explanation of what a sole selling agency is. It involYes not only this creation of an exclush·e territory, in which the principal wi11 sell only to one person and in which the so-called agent will deal only in the goods of that person, but the so-called agent buys the goods from the principal. That is what is technically known as a sole selling agency.

·Mr. M~DDEl~. Mr. Chairman, will the gentleman yield? Mr. McCOY. Yes. .

- 1\fr. MADDEN. It would not prevent the sole selling agent from -having a sole selling agency for another class of goods that were not in competition? · .

Mr. McCOY. N~t at all; but simply the one particular kind of ~oods that the principal is making.

Mr. MADDEN. He could have as many sole selling agencies as he could handle without any conflict with the other in com­petition.

Mr. McCOY. As many as he could possibly hand!e. It only relates to one _thing or perhaps two or three other things that the principal is making.

l\Ir. GARDNER. Even yet I d.o not understand. Now. ap­parently section 4 forbids any person to make a sale of goods on condition that the lessee or purchaser thereof shall not use or· deal in the ~oods of a competitor. ·

Mr. McCOY. Yes. , Mr. GARDNER. Now, the report says that this provision is

not intended to prevent exclusive agencies. The gentleman, I take it, is contending, however, that the provision does, us a mat~ ter of fact, prevent sole selling agencies.

Mr. McCOY. Where tbe so-called agent bnys the goods? Mr. GARDNER. Where the so,.called ngeut buyR the ~oods;

and the ~:entleman's amendment is intende4 to perrpit, them--

9400 CONGRESSIONAL RECORD-. HOUSE. l\fAY 28,

Mr. McCOY. No: my amendment is aimed simply at-I will :Mr. STAFFORD .. Can the gentleman inform the committee re. d the amendment. It is to le;ne the section as it stands and whether these many bmdhess houses who have the exclusiv~ forbids that kind of thing. It is to amend the. section so as to sel:irig contracts lll'e- protesting against the· character of tha.t permit tbnt sort of contract to be made where it is riot ronde form of business ·dealings? · with the intent to obtain or establish a monopoly or to destroy llrr. McCOY. I have rnJotests from e"erywhere about lt. the business of a competitor. · Mr. STAFFORD. Are they protesting against the character

l\lr. GARDl'\Ell.. 'That is what I understand. What I was of the contracts? • going to ·say wns that the gentleman's amendment is designed , Mr. McCOY. You mean · the people who make the contracts? to verrnit soie selling agencies where the agent buys the goods, 1\lr. STAFFORD. The persons who mnke them and the busi­proYided the tr<:~mmction is not engaged in ·for the purpose of ness houses who are the recipients of the eontracts. restraining trade or creating a monopoly. Is that correct? Mr. McCOY. ~ot at all. I understanrt that all the auto-

1\fr. ~IcCOY. That is correct. mobile people carry on their business in that way. Let us sup-1\fr. GARD~F.ll.. l\Iny I ask the gentleman bow be interprets , pose. for the sake of:--, · · .

these words: "or fix n price charged therefor, or discount from, Ur. STAifFORD. And there i.s the office-furniture business-­or rebate upon such price"? What is the need of those words the Yawruan & Erhe, the Shaw-Walker coneerns, antl any number i1 you forbid the sale of goods. of other mnnufacturers that have exClusive contracts for dis-

l\lr . .l\lcCOY. I uo not think they add anything; but the pens!hg their wares. committee itself says. at pllge 11 of the report, that the words The CHAIR:\i.d.X Tbe tfme of the gentleman from New Jer-•· or fix a price charged therefor, or discount therefrom, or re- sey [l\fr. 1\lcCoY] has expired. bnte upon such price." are merely descriptl•e of the different Mr. STAil'FORD. Mr. CbairmHn, I ask Qnanimous consent methocls used by the mHnuf·~ cturers to induce t"'le dealer or that the gentleman ha•e 10 minutes more. locnl merchant to enter into this exclusive or tyirig contJ:act. The CHAIIUI....\1r. Is there objection? [After a pause.] Th~

Mr. GARD:\"ER. That is all very well; but the report goes Chair bears none. on and explains that "the first inducement in eTery case mnst l\.fr. McCOY. The gentlem:m aslis whether the~e ag-ents, for of necessity relate to price." Now, suppose it was fonnd that whom the committee rather tries to· arouse our symr1athies, nre one of these e.xclnsh·e agents or exclusiYe purchasers hnd ere- taking these contracts by ba\'ing them forced onto them by the ated a restrnint of trade by some device other thab the fix::Jtion manufacturers.. I thinlt a little ima~ination sliould answer tbnt of prices or rebntes; might not a court bold that the n'l'Y inclu- question. Ail the automobile coneerns. I bel ie\e, ha \'e these sion of those words, which the committe~ says ate descrJpti•e, sole selling agency contracts. Now. let ns snppose tbnt every bHrt by implication legalized the use of other methods of dis- one of these agents in, the city of Washington should die to­crimination? morrow. Do you belie,·e t.bn t the automobile mnnufacturers

l\Ir. ~lcCOY. I would say to the gentleman from :Massacbu- wotrld have to chase to Wnshington to get agents? Detroit setts r would rather not discuss that {lroposition now. The would be filled wlth Washingtonians wanting to get these con­gentleman may be right llbout it. but I would like simply to tracts. take up this qne~tion of my amendment. · The argument made by on~ of the members of the committee, · 1\.fr. GAHD~ER I want to get it clear in my mind in con- who principnlly supports this proposltion. is tblR, tbnt it is un­nection with the other. fair ~hat rr m:m should first sell his goocts and then exact from

1\Ir. McCOY. ·I rti> not know but that the gentleman is right: the man to whom lle hns sold them a contrnct that he will not but . I baYe not conRirterert that end of it. Now, the committee sell anybody else's goorts. Now, the proposition eats Itself. in its report says thnt the provision of section 4 •• is designed One does not first sell the goods and then exact something from merely to pren~nt .tllis unfHir trarte practice, now so <'ommon that man. He <'OUld n()t do it. If be solrt tbe goods without thron~hout the country, and which is genernJly re~nrded by :my form of contract except a~ to sale and delivery, tbnt would e,-eryone wbo bas gh·en the subject any serious considerntion be the end of it. But the ('ontract on the one hand to sell aud as nnjust to the lorn I dealer and to the commtlnity and as tbe contract on the other hHnd not to sell Is a mutual agreement monopolistie in its effect." . . which both of them are pei·fecly willlng to enter into.

::'\ow, I will cnll the attention of the committee to whnt are the !\;ow, the geutleruau froru Illinois f:\Jr. MADDI!."N] has !;;Ug-fflets in regard to tbe community ::tt lar~e. anrt who fail to say gested something about somebooy going Into !Justness. Let us nt nnr t•ate in re:rnrd to these benrinJZS where_ they h~1rt an oppor- t<tke a couple of young tnen who bnve some article for Bllle t.unitv to do. Now, then. let us see what this doe~. For inst:mce. which they think is a pretty ~od nrticle. They think thHt tt lt we bn,·e a great many mnnufncturers of machine tools. 'l'bm~e could.be properly placed it would b;n-e n big snle. They bnve a BT'e theRe big tools wa see in the vnrfous machine shops In the suwll capital. What are they going to do? They cnn not hire country, nnd I flo not need to rlescribe them; I d·o· not need to ngents, cornmerdnl trn,·eters. llnd send them all over tbe conn­tell you how bulky they are. They look expensive nnd they nre try. They can not estnbllsh agencies nil o,·er the country. The expensh·e. Now. tbel"ie manufncturers of machine tools all mnli:e only thing they can do, and r beUeve e•ery lnwyer here bas these exC'Insive gelling ngencies. They do it for this reHson: known plenty of cfl!'es of thiH klnd. is to get soruebotty who will Tbey are not n tru~t; they nre not combined together in any way take one- of these sole seJUng agencies. and who will give his to sti tJe com pet! tion. ~orne of them H re not big. There is one attention to their bos~ne.ss ·and build up a trade for the little fn my district. a \el-y snmll concern. comparati,·ely. Now, if It man. b11d to cHrTy a stock of these e.xpensiYa mncbine tools all_ over Mr. MURDOCK. Now, r-ight there, win the gentleman yield? the l'nitert States. where,·er they nuturally would be in the Mr. l\lcCOY. surely. bnncls of the orrtinary ngent-th~tt is. the principal~ retaining Mr. MURDOCK. Does not the argument the gentleman is the title ::mrt ffiHIJ)Iy turning them oYer to the ap-ent for s11~e- making put upon the new corporation or new company the do not yon see. can not an)-body see, that unless they hnYe enor- necessity of establishing a finely articulnted · r·etJtil business mons resouree. tbPy CHfl not nfford to do that sort of thing, and all ol·er tbe United States.. wblcb is the very trouble the com-thnt is the Yery cau.:;e le;trting to these sole selling_ agents. mittee is trying to teach, thereby shutting out the new man

1\Ir. l\IAODEX Will the gentleman yield? from the retail trade by exclusive contracts? 1\Ir. 1\IcCOY. Yes. _ Mr. l\lcCOY. I do not quite understand the gentleman. Do 1\Ir·. ~lADDE~. The >ery thing the gentleman complnins of you me:m the eomruirtee is endeavoring to remedy by this pro-

Wollld pre,·ent anyborly Stllrting any new btisines~. · vision the cessntion of retail business? 1\Ir. :.\IcCOY. Surely; and I llln eoruing to that. Now, what Mr-. .MURDOCK. No. The committee is trying to give the

fs the consider~ltion which moves the so-en lied agent to go ,into new man n chance to get his wnr-es out to the public through this mntter and put up his money? Why .it is, of course, that existing retail }lgencies. And does not the gentleman's propo­he would ga~ a better price for th~ mnchines thnn he could get sition cut the new firm out of tbnt opportunity? . othenvi!:;e, and it is perfectly nntural. because- b~ puts up the l\lr. McCOY. No. It does n&t cut them out of the opportunity. money. and be sbnnld hn>e a bett~r price tharr if the machines The bill cuts them ont of the opportunity. It provides. that the were sohl outrigllt. to somebody who did not wnnt to put up the nwn who bas. for instHnce, a smnll invention f!Ud wants to ruuney to cm·ry these goods but wanted them for actual use. In market it-it prevents a man who wants to get into any kind other words. the mnnufncturer \Yith a small capital . goes sub- of business, without a great amonnt of cnpiwl. from being ltble st:rnti;~lly into a rmrtnership with the agent who is to bannle to do that. Now, here is one thing the committee does clnh:J, these goods. The manufnctnrers sny. "I will not sell or allow and it is along the line of a snggeRtion of tho gentleinnn from anybody elsa to sell in tbnt territory." .The :1gent says. '• On Jiansas. Tbey claim thflt by creating an 11gency in a siD.flll place acrount of these prices which you have given to me, I will not and making the so-called agent agree not to sell the goods it sell the goods to nnybodr else." · throws the community over into the hands of the mnil-ordct•

1\Ir. STAFFORD. Will the gentleman yield? houses. On the other band. they nrgue thnt people go to the · 1\fr. McCOY. Yes. mail-order stores because of. this sole selling agency there, ancl . ..

1914. CONGRESSIONAL RECORD-HOUSE. 9401 the result of their going is to destroy this retai1er who takes this sole order agency. Again, one argument eats the other.

1\Ir. MADDEN. · How can you stop a mail-order man doing that, except by taking his postal privileges away from him?

Mr. 1\fcCOY. You can not. But here is what you can do : If a manufacturer has one of these sole selling agencies, he will not permit the mail-order house to sell in that district in competition with that dealer. As this provision stands, it simply means that concerns like the Standard Oil Co., the 'Iobacco •rrust, and all other big concerns that have enough capital to enable them to establish strict agencies all over the United States, will proceed to do business in that way.

1\Ir. 1\!ADDEN._ What- the gentleman means by ".strict a~ency" is the runn who represents the concern and handles the commodity under contract?

Mr. 1\IcCOY. They go there and put in a store, and hire the agent, and have the money to do it. But the little fel~ow, the man you and I know in our dish·icts, is in all kinds Qf bu~i­ness. He will not be able to compete with people in his line of business simply· because he can not have these agencies. · He can not carry the goods in these agencies.

l\1r. GARDNER 1\Iay I see once more if I get the gentle­man's idea correctly. Supposing a small manUfacturer of auto­mobiles up in Massachusetts, with limited capital, desires to

· sell his automobiles throughout the Union. If he desires to s~ll his wares through the kind of agency which this bill permits to exist, then he is obliged to supply all the capital and own all those automobiles? · l\1r. 1\IcCOY. Absolutely.

1\lr. GA.UDNER. Whereas if he can go to a smart young man in wa~hington, for instance, and say, "You have got a little capital; I am ready to sell you my autorpobiles at a low price, but I want to have somebody to hustle my automobiles on the market in preference to , other automobiles." As I un­derstand it, this bill says to that manufacturer who has not the capital to own the business himself, "You can not make any such trade in order to have your automobile boosted instead of the Packard automobile."

1\lr. 1\fcCOY. Absolutely. l\Ir. GARDNER You say that the manufacturer who has a

small capital ought to be able to sell his wares to some smart young man on an exclusive contract, so that he may compete with the manufacturer with large capital, provided that his a,~;reement with the smart young man is not designed to create a monopoly in restraint of trade?

1\Ir. McCOY. Absolutely. 1\Ir. GARDNER. If I get the gentleman's idea--1\Ir. McCOY. Absolutely. 1\Iy amendment is in the interest

of the small man, and the committee proposition is in the inter-est of the big man. -

Mr. GARDNER Precisely, if I understand th~ gentleman correctly.

Mr. l\IcCOY. That is the exact situation. Mr. STAFFORD. As I understand these contracts in the

business world, they are for a limited period, and they do not place any hardship upon the conh·actee, the one who has the exclusive agency. He can terminate it under certain stipula­tions or at the termination of the contract, which is usually for one year or two years.

1\Ir. 1\IcCOY, The contract runs. for a. short period, and if an article is worth selling you can get hundreds of people who will seek these contracts.

Now, I want to say to the members of the committee that I would ask those who oppose my amendment to point out where in the hearings that sort o~ thing was complained of. And if they can not find it in the hearings then I ask proof from somewhere or other, except from mere statements that these things may happen, to justify this section without my amend­ment.

I yield the balance of my time. Mr. l\IADDEX l\Ir. Chairman. if section 4 of the bill is not

amended along the line suggested by the gentleman from New Jersey [~!r. McCoY] it will restrict the opportunity of men who have never been in business before from going into any busi­ness at all. The bill purports to protect the small business man in his right to do business; but the tn1th is that it protects the -man who needs ~ protection, and discriminates against the man who ought to be encouraged. A man can not go into busi­ness originally, under this proyision of the bill, without taking

··somebocly's customer a way ; and if he takes a man's customer away, under this section of the bill he commits a crime. because he does the man an injury. If we are not ~o permit men to go 1nto business beca·use they take the business of somebody else -away .. from- them, thereby injuring them in their business, and

as a result of that commit a crime, we are not opening up com­petition in business ; we are establishing a monopoly by this bill.

The agencies that must, as a matter of course, be permitted to be established in order to de\elop the growing business of the men engaged in the industrial affairs of America can not be restricted; We must have the right to establish these agencies or we can not expand. We ha\e a con\ention being held in this city to-day, gathered from every quarter of America, for the purpose of devising means by which we can expand our foreign trade, and the men who are here are men who are versed in the commercial life of the \70r1d. · You can not restrict the advance of commerce by any law. You can not change the trend of eYents by any language that you can write into any section of any bill. The development of the world can not be stopped by an attempt to limit monopoly and to extend the right of competition. It becomes apparent at once that the wise men who ha\e tried for more than 2,000 years to regulate trade by law and to surrounu that trade with protection in every way, and to fix vunishments for violations of the law, have not been improved upon much by the gentlemen who sit at the table of the Judiciary Committee of this House, and who haYe had the honor to prepare this bill. The business of the world will be done because of the activity of the men of the world--

1\fr. DONOHOE. Will the gentleman yield? Mr. 1\IADDEN. In just a moment, please. To say that you

can not establish an r:gency to put on the market the goods of the man who is starting in business for the first time, is to say that you resh·ict the opportunity for men to engage in busine·ss. A man with $10,000 capital, making a specialty, may have suf­ficient money to manufacture a small quantity .of the specialty; but he has not a sufficient amount of money to expand the sale of this commodity throughout the country; and so he must, as a matter of com·se, engage some man who is willing to take an exclusive agency, and to that man he will sell his aoods for de­livery and sale within a giTen territory. The cont~·act between those two men will provide that in consideration of the sale of a ·certain quantity of this specialty, a certain percentage will be delivered to the agent who has the contract, at a fixeu price be­low. the price at the factory. Automobile manufacturers en­gage agents eyerywhere to sell their automobiles exclusively, and they allow them 20 per cent, an.d out of that 20 per cent the agent pays his own expenses, his rent, his salesmen's salaries, and everything connected with the operation of the agency.

The CHAIRMA.~. The time of the gentleman has expired. 1\Ir. MADDEN. I ask for five minutes more. The CHAIRl\I.AJ.~. The gentleman from Illinois asks unani-

mous consent to proceed for five minutes. Is there objection? There was no objection. Mr. McCOY. Will the gentleman yield? Mr. MADDEN. Yes. 1\Ir. McCOY. Is it not frequently a term of these contracts

that the continuance of the contract devends upon the agent selling a certain number or a certain quantity of the goods?

Mr. UADDEN. Certainly. 1\Ir. 1\IcCOY. So that he is pushed in the competition. Mr. ~.Lt'l.DDEN. I was just coming to that. The terms of the

contracts themselves provide that the agency will not be allowed ~o remain in the man who has the contract unless he produces certain results, unless he is able to pay for a certain quantity of the commodity placed on the market. _And so by the establish­ment of these agencies, by encouraging men of small means to enter business and push their trade into every section of the Nation, you not only encourage competition but you actually create the competition; whereas if you say to a man that he can not establish an agency, you immediately prevent competition and establish a monopoly.

In connection with this legislation I have heard a good deal said to the effect that a man ought not to be allowed to select his own customer, or that he may be permitted under certain circumstances to select his own customer. Anybody would im­agine, from the reading of the bill, permitting a man to select his own customers, that the people of the United States are clamoring to buy the goods of the various manufacturei·.J of the country. The fact is there is not a manufacturer anywhere in the United States, unless it be the Standard Oil Co. and· the American Tobacco Co., that have not men all ove · the country ransacking every nook and corner in order to find customers to whom they may sell their .goods.

1\Ir. STEENERSON. Will the gentleman yield? 1\Ir. MADDEN. Yes. 1\Ir. STEENERSON. The gentleman stated that the usual

commission was 20 per cent on automobiles. Is it not a fact that the system here referred to permits an exorbitant charge to the ultimate consumer, and is not there a. large-r commission

r

9402 CONGRESSIONAL. RECORD-HOUSE. l\IAY 28,

provided for the middleman than there is on the ordinary arti­cles. like wagons, buggies, and so forth?

1\Ir. l\iADDEN. I do not know how much commission ought to be allowed for the sale of automobiles.

1\lr. STEENERSON. Is it not a fact that automobiles are un­reasonably high?

1\Ir. l\IADDEN. I do not know; I do not know what they cost.

l\1r. STEENERSON. Do they not allow an exorbitant com­mission?

1\Ir. l\IADDEN. I do not think it is an exorbitant commission to a man who runs an agency, who has to sell exclusive mn.­<;hines, who bas rent and taxes to pay, who pays in advance for the machines, invests his money, has to pay for advertising, employs salesmen, bookkeepers, and all those things that ~nter into the conduct of a busineffi I maintain thfl t there IS no business in the United States conducted by anybody, unless it is a business of a fabulous amount, that can IJe conducted for less than 15 per cent for the a>erage business done. If that be true. it can not be said th11 t 20 per cent is a high commission to pay, because out of the 20 per cent he must pny 15 per cent for expenses, and if he can retain 5 per cent he is not overpaid.

1\Ir. STEENERSON. But the cost of production--1\Ir. MADDEN. I do not know anything about the cost of

production. It may be thnt the m:mufacturer can build a ma­chine for $1,000 th;Jt he sells for $2.000.

l\1r. STEENERSON. Does not this system enHble the manu­faeturer as well as the agent to dispose of his goods for three or four times the price that it costs to produce them?

Mr. 1\IADD-EN. Any argument th~t we might hAve on the :floor would not settle that question. It ta-kes scientific informa­tion, scientific organization properly assembled, properly con­ducted, to run a great business. and if anybody on this floor can tell me how a great business enterprise can be conducted successfully, :md tell me what it ought to cost to conduct that enterprise. I would li1'e to get his picture. [Laughter.]

1\fr. FLOYD of Arkansas.. Mr. Chairman, section 4 of this blll is intended for the benefit of the consumer. I ::~m not going to controvert the contention that the tying or exclusive contrnct forbidden in this se.ction is for the benefit of the manufnctur~r. I am not going to contro>.ert th:1t this system may be ·so used as to be bene1lcial to the retailer, but our friends who 11re oppo~ed to this pro•ision never look beyond the manufacturer or locil l dealer, never look to the interests :md the rights of the consumers 'of this country. I desire to spenk for the consumer, and to show you how this provision will be beneficial not only to the congum·er ·but to every independent small manufacturer in this country.

The coutention that under this system and by this kind of eontract the small dealer can build up a trade is an nbsurdity. Here is the proposition. One of these big manufacturers car­ries a line of manufnctured goods into your town and makes a contract to the effert that be wm place the goods· with a local dealer on condition that the merchant will not hllndle the goods. wares, or merchandise of his competit<>r in that line. What is the effect of it? 'l'bey ha-ve commodities that are absolutely essential to the business of the merchant or small dealer, and in order that no other manufacturer may sell anything thnt that merchant uses to that merchant. he makes this exclusive or tying contrnet. If be is a manufacturer of shoes, be must be supplied with eTery implement. or otherwise the big manu­facturer of shoe mncbine.ry w<>uld withdraw ~v:erything ::md cut off his supplies. The best illustration you can find of this evil practice is the leasing system of the United Shoe l\Iachinery Co. They le.'1se on condition that the man who tf1kes their goods under the lease shall not deal in the commodities of any competitor.

Mr. McCOY. · Will the gentleman yield? 1\Ir. FLOYD of Arknnsns. Yes. Mr. 1\IcCOY. Do they lease on condition that he will not

deal in any other goods; is it not on condition that he will not use :my other goods? .

:M:r. FLOYD of Arkansas. Well, wil1 not use; because the shoe-machinery company will not sell, but lease their machines. Tbe mnnufnct11rers of shoes do not own the machines, and yet the gentlemag. from New Jersey stands for that kind of a sys­tem in this <'Ountry.

1\'Ir. 1\IoCOY. I know the gentleman wants to be fair. He knows thnt I do not stand for the system of the United Shoe l\1a chinery Co., does not he?

Mr. FLOYD of Arkansns. I have heard the gentleman from New Jersey repeatedly sny that he did not; but he stands for a principle that bas ronde the shoe mnchinery company a gigantic monopoly in this counh·y, nnd if he stands for the system he stands for encouraging the building up of other like monopolies.

. What co·unts it to tlie American people for the gentleman to oppose the shoe machinery company if he stands for the pl'in· ciple that enables them to build up and enables them to main· tain a grent monopoly?

1\fr. McCOY. Is not my amendment aimed at monopoly? l\fr. FLOYD of Arknnsas. The gentleman's ame:1dment is

practically in the lnnguage of the Sherman law so fa r as monopoly is concernE>d, :md yet the circuit court of appeals hns held that this particular contract is not within the provls"ons of the Sherman lnw, and hence we insist thnt a cllimge of tlle language shall be made so that it will be within the law.

What is the effect of it? 'Ihe gentleman from 1\finnesotn. struck at the vitrtl point of this whole contro>ersy. It is the consumer. The gentlemAn from New Jersey seems not to under· stand that there is any testimony in the henrings benring upon this question. If he will read the bearings, be will find an abundance of testimony condemning this system.

.The CHAIRl\!fu"f. The time of the gertleman from Arkansas has expired.

Mr. FLOYD of Arkansas. Mr. Chairm~, I ask to proceed for 10 minutes.

The CHAIRMAN. 'Ihe gentleman from Arkamms nsl's unani­mous consent to proceed for 10 mmutes. Is there obje~tion?

There was no objection. Ur. FLOYD of Arkansas. One manufacturer of rim glaRses

was before our committee and be was a grent ndYocate of this ~ystem. He mnde frames for $1.25. sold them to the cte'ller for $2, and required the dealer to sell them to the consumer for $5. The whole effect of this system and p1·nctice is to driYe out com­petition locnlly and to enable 'the immufacturer to ·J?;et higher p1·ices. That is not the only evi.l of it. It discommodes the American peo111e everywhere. Wbene>er a mannfact11rer comes along and makes one of these exclusive or tying contracts and gets the local merchant bound down to the proposition or ngree­ment that be will handle this particular commodity .• md ·will not handle any other commortity of like kind, manufactured or produced by a competitor. aud then cuts out all other like eom· modities. the consumers must take that commodity or nothing, if they deal with that merchant.

l\Ir. ALLEN. Mr. Chnirmnn, will the gentleman yield? l\Ir. FLOYD of Arkansas. Yes. Mr. ALLE~. Is not the case that the F:entleman cited just

now, the eyeglnss case. one that involv-es the principle of resnle, fixing tbe resale price. wbil~ the one thnt we have under con· sideration is one where the manufacturer has simply sold his machine or whatever it may be to the merchant or factor who represents him in the community?

1\fr. FLOYD of Arknnsas. True, and these same men who were before the committee opposing this provision spent days asking the committee to bring in a proYision to annul the effect of the Supreme Court decision, which denies them the right to fix the ret:-~ il price.

l\fr. McCOY. M:r. Chairman, will the gentleman yield? 1\Ir. FLOYD of Arkansas. Yes. Mr. 1\lcCOY. Do I un:lerstand the gentleman to contend that

the people who were opposing section 4 were there advocating the right to fix the retail price?

Mr. FLOYD of Arkansns. Not necessarily all of them. 1\lr. 1\lcC'OY. Were any of them? Mr. FLOYD <>f Arkansas. I think so. 1\fr. l\1cCOY. I disagree with the gentleman. There was not

anybody there who wns advocating th::tt . .1\Ir. FLOYD of Arknnsas. The gentleman from New J ersey

insists that under this system the small man can promote his business. Let us see. The ·rery rever~e is true. The big. the powerful manufncturer makes it impossible for the smnll mnn to get in; but suppose one does get in and gets Hn exclusiYe con· tn1ct of some kind, then you have two monopolies, and you ne>er get beyond monopoly. lf you had three or four, they would all result in restricted monopolies. and in the meantime the American public nre denied many conveniences. nnrl denied them by menus wbicb are tending all the time to build up mo­nopoly and to create higher prices.

1\lr. GARD'~ER. Mr. Chairmnn, will the gentleman yield? 1\lr. FLOYD of A.rknnsns. Yes. 1\lr. GARD~ER. Does not the gentleman think thnt the fact

that an of these automobile compRnies have been able to build themselves up from small orgnnizntions by this very system has resulted in n benefit to the consumer?

1\Ir. FLOYD of Arkansns. The gentleman takes an illustra­tion in which I am not particuhlrJy concerned-the nutomobile.

l\lr. GARDNER. But the gentleman bas been using the United Shoe Machinery Co. as an illustrntion.

Mr. FLOYD of Arkansas. It is the American consumer. file I man who buys bread and meat and medicine, the man who

1914. CONGRESSIONAL RECORD-HOUSE. 9403 labors in the sweat of bts brow and who toils in season and out in order to eke out an exi~tence tbnt I am referring to: and to a flow a system that will perllli t these powerful monopolies to

\...:, 1 deny them the comforts of life and extort high prices from them

I under exclush'e contracts is what I object to. Mr. MADDEX l\lr. Chairman, will the gentleman yteld 1 1\lr. FLOYD of Arkansas. Not at this time. I want to deal

with the automobile proposition. 1 1\fr. OARDNEit. But the gentleman did not let me finish my question.

1\Ir. DOXOV A...~. Mr. Chairman, a point of order. The gen­tleman from Massacbu~etts bas no right to interrupt the gen­tlemnn from Arkansas in that way.

The CHA IR~IAN. Does the gentleman from Arkansas yield to the gentleman from Massachusetts?

Mr. FLOYD of Arkansas. Not until I answer his question. Mr. GAHDXER. But the gentleman did not allow me to ask

the q ueRtion. 'l'he CHAIRMAN. The gentleman declines to yield. Mr. FLOYD of Arkansas. The gentleman from Massachu­

setts has mentioned tbe automobile business. I am very glad that be did. Under this system, this favored system, this sys­tem that is going to build up the small man. it is in testimo.ny before our committee thnt these contrflcts. exclusive contracts. have enabled one automobile company. with a capital of .$2.000.000. to make a [lrofit of $25.000.000 in one year. and they .or their representative gave the testimony before your com­mittee.

Mr. GARD~'ER. Has the gentleman answered me? Mr. FLOYD of Arkansas. I do not stand for this kind of a

system. Mr. GARDNER rose.

. Mr. FLOYD of ArkansRs. Oh, I am not through answering the gentleman's first question yet.

1\Ir. GARDXER. But the gentleman never gave me a chance to ask it.

The CHAIRMAN. Tbe gentleman dec11nes to yield. Mr. FLOYD of Arkansas. How did they do it? How d1d

they make it? Do you think that any business man in America with a capitnl of $2.000.000 cnn earn a profit ·of $25,000,000 in one year on that $2.000.000 alone? Not at all.

.Mr. GARD:XER. HRs anybody--:Mr. DO:XOVA~. 1\Ir. Chairman, a point of order. The gen­

tleman from Massachusetts is a parliamentarian, and he knows that be violMes the rules.

Mr. FLOYD of Arkansas. I d~Ilne to yield at this time. Mr. GARD:XER. Mr. Chairman, a point of order. The CHAIR~lAN. The gentlemnn will state it. Mr. GARD:\~R. I make the point of order that the gentle­

man from Connecticut P1r. DoNovAN], when he asks for recog­nition, must await it before he makes the point of order.

l\lr. FLOYD of Arkan~as. I d(>Cline to yield at this time. I want to get through with this automobile businesR I am not criticizing this automobile company, but I am deRcribing the method they use. which I thin!{ is wrong and detrimental to the American public, one that mnkes automobiles higher thRn they should be and g;,·es the manufacturers unusual and unjustifiable profit'3. not on their own im·estrnent. but npon the in>estment of men who deal with them. whose hands are tied and whose money is invested in property bound by An exclusiYe contrn<'t.

l\1r. l\JcCOY. Mr. Chairman. will the gentleman yield? Mr. FLOYD of Ark:msas. Not at this time. I am not through

with the antomobile business. The CRA UU1AX. The gentleman declines to yield. Mr. FLOYD of Arlumsas. I decline to yield until I get

through answering the question of the gentleman from Masstl­chnsetts. How did they do it? They made contracts with agents throughout the country-exclusive a~ents-and they did not turn over their machines to these exclushre agents on their

. own mone_y, but they made each agent take six m::~chines nnd pay for them: and after he hao tnken six mflchines :md pai<l the ful1 price therefor they called him a sole selling agent and made him enter into a contract that he would not buy or handle or use the automobiles of any competitor.

1\Ir. 1\lcCOY. Mr. Chairman, wil1 the gentleman yield? Mr. FLOYD of Ar·kansHs. Not at this time. I am not

through with the automobile business. They nwde these local agents. so called, buy their machines and vay for six mncbines, and then they gave them enormous profits to sell them to the general public, to mnke them acth·e. and the re~ult wHs th:~t they sold ruany of these automobiles at high prices and made enormous profits. and at the end of the year this automobile company in footing up its accounts found thnt with an invest­ment of $2,000,000 they had earned $25,000,000 profit in one

year, speculating on other men's money, and the consumer paid the bills and paid the profits.

The dealer's bands were tied The man who dealt with that particular dealer ru1d to purcbnse -thnt .particular class of automobiles nnd could not bny any other.

1\Ir. McCOY. Will the gentleman permit an interruption? The CHAIIUIAJ.'\l. Does the gentleman yield? Mr. Fl,OYD of Arkansas. I yield to the gentleman from

New Jersey. Mr. 1\lcCOY. Is not the net result of the Ford operatious that

the Ford machines are now cheaper than baby carriages used to be?

Mr. FLOYD of Arkansas. I do not know bow high baby carriages used to be [laughter]. but thE> price of the Ford ma­chine, if they are making a profit of $25.000.000 a yeHr on a $2.000,000 inYestment. is certainly high enough for American customers and purchasers.

The CHAIRMAN. The time of the gentleman has expired. Mr. McCOY. I ask unanimous consent that the gentleman

may_ haYe five minutps more. Mr. GARDXER. 1\lr. Cbflirman, reserving the ri~ht to ohject,

I would like to ask whether the gentleman proposes to try to silence discus.-;ion--

The CHAIR.)lA.N. The gentleman from New Jersey asks unanimous consent that the gentlemnn from Arkansas may pro­ceed for five minutes. Is there objection?

Mr. FLOYD of Arkansas. I am not attempting to silence discussion.

Mr. GARD:\"ER. I am reserving the right to object--Mr. FLOYD of .Arkansns. It the gentlemnn means that if I

flo not see proper to yi(>Jd to the gentleml'ln or any other Mem­ber of the House in . the midst of a discussion before I finish my argumenl be can object.

The CHA JR~IA:\. Is there objection? Mr. GARDXER. Mr. Chairmnn. I object. The CHAIRMA.l"'l. The gentleman from Massachusetts ob­

jects. 1\Ir. WEBB. 1\Ir. Cb::tirmnn, I want to see if we can not

close debHte on this question in. say. 15 minutes. · · 1\Ir. 1\JcCOY. I ask the gentlemnn to yield to me then. 1\lr. MANN. We haYe wHsted about one hour on one amend­

ment. and there nre other amendments to be offered. and 'r notice the committee has taken up a large share of the time that bAs been wnsted. ·

Mr. WERR. Tba t was on requests from the other ~ide. 1\lr. 1\lcCOY. l\lr. Chairman. I ask unanimous consent thnt

the gentleman from Arkansas have leave to proceed for five minntes. .

The CHAIRMAN. Is there objection? l\Ir. 1\lAN~. l\Jr. Chairman, resen·ing the right to object. I

would like to ask the gentleman from North Carolina bow . much time has alreRdy been tR ken up in this copnection?

Mr. WEBB. I am sorry to say I can not answer, but I think 30 minutes has been taken up--

1\Ir. MAXN. It h~1s been o>er an hour. l\1r. WEBB. Thirty minutes hn\"e b-een occupied by the gen­

tleman favoring the amendment and 10 or 15 minutes by those who are opposed to it.

1\Ir. MANN. It has been an hour since the amendment w~s offered.

Mr. BAR~Tff~<\RT. Wby not hAve aU the nmendments which are preiJared t'~1d from the desk and then determine which are of the most importance and which will require the longest dis­cussion?

Mr. TOW~ER. I snggest to the gentleman that we ought to be allowed to determine tbnt ourselves.

l\Ir. WEBB. Can the gentleman suggest how much time gentlemen require on that side?

l\lr. TOWXER. I have three amendments I desire to offer, and I only ask for fi,·e minutes on each one.

1\fr. ALLEX I w~mt fi,·e minutes on the amendment. l\Ir. STEEXERRO~. I want fi,·e minutes. 1\fr. MORGAX of Oklnhoma. I would like to haYe 10 minutes. l\lr. MAX~. Forty minutes are required on this side. 1\lr. WERB. We would like to have 30 minutes o:a this side,

so sny 70 minutes. Tbe CHAilDlAN. Does the gentleman from New Jersey

withdraw his request for unnnimous consent. 1\Jr. MANX Ha ,.e it included in this nnd yield time. How

much time does the gent1emnn want on thnt side? 1\Ir. WEnB. Out of nhundauce of cnutlon we will take 35

minutes on this side, and the other side cnn bave 45 minutes. I ask unanimous consent that debate on this section and amend­ments thereto be limited to 75 minutes--

OONGRESSION AL -RECORD-HOUSE. MA_Y 28,

1\Ir. 1\IANN. The understanding being_ that the amendments may be disposed of as they come along?

Mr. WEBB. Yes; that can be done. Forty minutes · to be controlled by the gentleman from Minnesota and 35 minutes by myself.

The CHAIRMAN. The gentleman from North Carolina usks unanimous consent that all debate upon section 4 and ull amendments thereto be closed· in 75 minutes, 40 minutes of which time to be controlled by the gentleman from Minnesota and 35 minutes by the gentleman from North Carolina. · Is there objection?

Mr. DONOV Al"'l. l\Ir. Chairman, reserving the right to object, there certainly ought to be 1wme proper way of conducting mat­ters here. Parliamentarians ought not to be allowed to intel'­rupt the gentleman speaking without addressing the Ohair. It is a grave breach of the rules for a man to interrupt without first addressing the Ohair and obtaining that privilege. Now, that great purliarnenta rian, as he claims to be, from the ~tate of Massachusetts willfully violated the rule time after time; and this great lawyer from New Jersey, who is not courteous

·enough--Mr. GARDNER. Mr. Chairman, I call for the regular order. Mr. DOXOV AN. I withdraw the objection, Mr. Chairman. Mr. MANN. '.rhe gentleman from Massachusetts ought to be

glad that the gentleman from Connecticut was awake. When I went to the ball .game yesterday be was asleep. [Laughter and applause.)

Tho CHAIRMAN. The question is on agreeing to the amend­ment offered by the gentleman from New Jersey.

Mr. WEBB. I yield to the gentleman from Ohio if he is against the ameudment--

Mr. ALLEN. I am for the amendment. Mr. WEBB. Then I can ·not yield the gentleman time. Mr. McCOY. A parliamentary inquiry, 1\Ir. Chairman. The CHAIRMAN. The gentleman will state it. Mr. McCOY. By the agt·eement which was entered into, who

controls the time with reference to this amendment which I have proposed?

The CHAIRMAN. There was no agreement with reference to the particular amendment offered by the gentleman from New Jersey. The agreement was that the time upon this section and ­amendments thereto should be limited to 75 minutes-35 minutes of which time to be controlled by the gentleman from North Carolina and 40 minutes by the gentleman from Minnesota.

Mr. McCOY. Now, unother parliamentary inquiry, Mr. Chair­. man.

-The CHAIR~IAN. The gentleman will state it. Mr. McCOY. Is there any violation of the rules if one Mem­

ber carries on a private conversation with another Member? The CHAIRMAN. As the Chair understands, there is not

unless it disturbs the business of the committee. 1\fr. 1\IcCOY. It remains 'for the other 1\Iember to object if he

is being disturbed. I just wimted to kn~w how far one could go. 1\Ir. DO :NOV AN. 1\Ir. Chai1:man, a parliamentary inquiry. The CHAIRMAN. The gentleman will state it. Mr. DO .:NOV AN. Does the Ohair hold a man can take the

floor at any time without addressing the Chair? 1\Ir. MANN. I make the point of order that the gentleman

from Connecticut [Mr. DoNOVAN] can not do that, although he is doing it.

Mr. DONOVAN. Mr. Chairman, a parliamentary inquiry. The CHAIRMAN. The gentleman will state it. Mr. DONOVAN. The gentleman from Tilinois, the leader of

the minority, always violates the rules more than any other Member of this House, and no other Member uses the personal pronoun to equal him, 1.mder any circumstances. And I have no further inquiry to make.

MESSAGE FROM THE SENATE.

A message from the Senate, by Mr. Tulley, one of its clerks, announced that the Senate had passed joint resolutions of the following titles, in which the concurrence of the House of Rep­resentati-.;-es wns requested: ·

S. J. Res. 152. Joint resolution authorizing the Preffident to accept an im·itation to participate in the International Congress on Occupational Diseases;

S. 'J. Res. 151. Joint resolution authorizing the President to accept nn inYitntion to participate in an International Exposi­tion of Sea Fishery Industries; . · S. J. Res. 105. Joint resolution authorizing the President to accept ~u inYitation to participate in the Sixth International Dental Congress; and

S. J. Res. 153. Joint resolution authorizing the President to ac­cept an invitation to participate in an International Congress on Neurology, Psychiatry, and Psychology.

ANTITRUST LEGISLATION.

The committee resumed its session. Mr. WEBB. 1\Ir. Chairman, I yield five minutes to the gen­

tleman from Ohio [1\fr. ALLEN) . Mr . .AJ_.~LEN. 1\fr. Chairman, I have read this amendment

carefully, and it seems to me that the gentleman in charge of the bill ought not to object to it, because I think it is reason­able, and should be adqpted for· the same reasons that !mpelled the committee to incorporate substantially the same langmu~e in section 2 of the bill, relating to price discrimination. While it is ' stated in the report that there is no objection to the establishment of exclusive agencies and no intention to prohibit same,- yet, if the language is not amended as proposed by the gentleman from New Jersey [l\Ir. l\IcCoY); an that a concern that wanted to evade the law would have to do would be to say to its agent, " If, after instructing you in the use of our machine, advertising it, and so forth, you se11 the similar goods of some other concern we will decline to renew our eontract with you," and thus evade the law. Now, we do not want to wiite the law in that way. What we want to do is to write a law that will promote competition by enabling the small manufacturer to maintain agencies throughout the country, where otherwise he could not do so .• The great corporations are able to mnintnin their own selling organizations. Therefore this amendment ap­peals to me as being in the interest of the small mHnufR.cturers.

Now, I want to have read in my time a letter from the Busi­ness Men's Club of Cincinnati, Ohio, where this matter was thoroughly discussed, and also a letter and resolutions from the Chamber of Commerce of Cincinnati in reference to the same subject.

The CHAIRMAN. The Olerk will read. The Clerk read as follows:

Hon. ALFRED G. ALLEN,

TH.E BUSINESS MEN'S CLUB CO., Oinctnn.ati, May 16, t9.q,

Hottse of Representatives, Washington, D. 0. MY DEAR 1\IB. ALLE:-<: At the regular monthly meeting of the board

of directors of the. Buslnes.s Men's Club held last night a resolution was passed protesting against the passage of section 4 of H. R. 15657, and directing me to convey to you the protest of the Business lien's Club's directors and to ask you to see that it receives proper attention and is presented as soon as possible to the proper committee consideting the bill.

The resolution passed is as follows: "Resolved That the board of directors of the Business Men's Club

Co., of Cincinnati, strongly protests against the passage of section 4 ot House bill 15657 because-

"This section as it stands is in the interest of the large combines and monopolies. They do not need the middleman as do their smaller competltot·s. They can afford to establish their own selling organiza­tion in the various market centers-in fact, most of them now have their own selling organizations-and this section, prohibiting exclusive selling agreements, takes away the only means by which the smaller competitors of these big combines are enabled to compete with them in selling. The smaller concerns, as a rule, can not af'rord to establish their own selling organizations, and therefore must have the aid of the middleman.

·• This section would prohibit smaller concerns from selecting an ex­clusive middleman representative under an exclusive arrangement. They would have to sel to all middlemen, which would mean indifferent> and inefficient representation in competition with the bigger concern1

with its direct selling organization. When all middlemen may handle identical products, then no middleman takes an;v special interest in it.

"Under the present method of exclusive selhng arrangements there is ample competition between the various middlemen for the benefit of the consumer. Each middleman is fighting every other middleman in the interest of his exclusive line. It the exclusive agency anangement is abolished and the manufacturer must sell all middlemen, who in turn .must sell all competing makes of the same article, then economy and efficiency in sellin~ are destroyed and selling expenses greatly in­creased; for this woula mean that the middleman must maintnin largel' stocks, larger wnrehouses, greater number of salesmen, etc. These increased expenses must ultimately be paid by the consumet·.

" The • exclusive agency agreement ' method of sale is very widely employed to-day in all the various channels of business. Certain makes of shoes, bats, clothes, tobaccos, foods, manufacturing supplies, automo­biles, etc., are handled exclusively by certain middlemen. A provision, therefore which makes this arrangement a misdemeanor under the Sherman' Act, if enacted in the Jaw. would bring about a very wide disturbance of existing business method!.'. All of this seems unneces-: sary and unwise, inasmuch as the • exclusive agency' method of sale as practiced to-day does not in any way act in restraint of trade or of full competition for the benefit of the consumer.

"Be it further resoh:ed, Tb,at a copy of this resolution be sent to Con­gressmen ALFRED G. ALLEN and STANLEY BOWDLE, With tbe requ0.st that it be presented as soon as possible to the proper committee consid­ering the bill."

Thanking you for the interest you may take in the matter, I am, Respectfully, yours, ·

. RUTH.ERFORD H. Cox, Oivio Secretary! Business Men's Club.

CINCINNATI CHAMBER OF Co fMERCE, Cincinnati, May !0, 1911, .

Ron. ALFRED G. ALLEN, House of Rept·escntatit•es, Washington, D. 0.

MY DEAR l\in. ALLEN: Inclosed please find copy of resolution adopted by the board of dire::tors of the Cincinnati Chamber of Commerce at a meeting held May 10. 1914.

lf consistent, the chamber of commerce would appreciate your sup­port of this amendment, and believes you will find, upon investigation,,

i---

I i

I

1914. CONGRESSIONAL ·RECORD-HOUSE. 9405. that this feature was Included In the htrl undel' a misapprehension of business conditions and that its adoption would tend to stitle rather than promote competition.

Very truly, yours, · W. C. CuLKINS, lila:ectetiu Seet·etary.

Whereas the Clayton bill, No. 15657, now pending in the House of RE-pre­sentatives, fot·bids the e tabllshment of exclusive sellin~ agreements between the manufacturer and the " middleman " and maKes the same a misdemeanor under the Sherman law; and

Whereas the present method of establishing exclusive selling agreements is widespread and a common pt·actice In bu~iness ; and

Whereafl it tends to promote competition by enabling the smaller pro­ducer to maintain agencies at many places where be would be unable to provide a selling organiz;ation, thereby leaving that territory under the ex::Insive control of the lare:er organizations, who maintain their own individual selling force: Therefore be it Resolved by the bocrrd of di1·ectors of the chamber of contme-rce, That

we a1·e opposed to the inclusion in the Clayton bill of tbe provisions pro­hihiting such selling agreements and urge 'that they be stricken from the bill : and be it furth<:W:

ResoZr;ed, That copies be sent to the Representatives of this county and to the Senators from Ohio.

The CHAIRMAN. The time of the gentleman has expired. The question is on agreeiug to the amendment.

Mr. WEBB. Mr. Chairman, I yield two minutes to the gen­tleman from Missouri [Mr. IGOE].

Mr. IGOE. 1\lr. Chairman, I desire to have read in my time a letter, which I seoo to the Clerk's desk. This letter is from probably the largest shoe mnnufacturing company in the world and is in fnvor of section 4 of the bill.

The CHAIR~1AN. The Clerk will read the letter. The Clerk read as follows:

ST. Louis, Mo., May fO, 1914. Hon. WILLIAM L. !GOE,

House of Represer~tati1:es, Washingto", D. 0. MY DEAR Sm : The Clayton bill (H. R. 15657), introduced in the

House on May 2, is of deep interest to shoe manufactut·ers. Particularly is this true with regard to section 4 of said bill. 1? shoe manu~actu.ring there prevails to-day mot·e keen, active com­

p<>tition than exists m any othet· great industry, but progress and de­velopment in shoe manufacturing is being retarded by the lack of com­petition in shoe machinery.

The present system of leasing shoe machinery, with stipulations that the machines so leased shall Pxclude the use of similar machines of another make, bas reached a high de~rree of monopoly in shoe machinery.

It appPars to the t->hoe manufacturer that more time bas been spent in developing and perfecting th<' various and numel'Ous clauses in the leases by the Shoe Machinery Co. than has been given to development and improvement of machines.

nder the lea!'e system when a factory is once equipped with machines which pay a constant and hi~h royalty to the machinery company, thPre is no incentive to the machinery company to put new and improved machines Into such a factory. for by so doing the p1·ofit-paying machines then In opPration will be mad~ useless by the later models.

- This strong incentive tP stifle improvement In shoe machinery is one r: ~~r~~:P~e greatest evil of "exclusive use " at which the Clayton bill

Respectfully, yours, I~TER~ATTONAL SHOE Co., By F. C. RA~m.

The CHAIRMAN. The question is on agreeing to the amend­ment offered by the gentlemnn from New Jersey [l\Ir. McCoY].

Mr. VOLSTEAD. l\1r. Chairman, I yield five minutes to the gentlenum from Minnesota [)1r. STEENERsoN].

:Mr. STEEl\"'ERSON. l\1r. Chairman. I am opposed to the amendment and I favor the provision as it stands. While the gentleman from Illinois [~Jr. MADDEN] was discussing this amendme1;1t be referred pnrticularly to the price of automo­biles. and be admitted that the result of this system was to maintain the retnil price-the price to the consumer of that article-no matter bow much competition there might be in the actual supply. Anu that is the result of the operation of this system, namely. that it destroys competition in price. Y:ou might ha>e a billion automobiles for sale. of one hundred thousand different varieties, and yet you would have to pay fh·e or six or ten times more for them than it costs to produce them.

1\lr. McCOY. Now, will the gentleman yield 1 The CHAIRl\IAN. Will the gentleman from Minnesota yield

to the gentleman from New Jersey? l\lr. STEEXERSON. Not now. I will yield Jater.

· Now, tnke this system, and it may be said as to certain lines 1t is alJ right. Now, I will illustrate it in a mntter that affects the actual liYing expenses. Some years ago my attention was c~lled to the fact that on a liue of railroad running out of St. P aul, Minn .. we had a number of towns located in a rich farming country where they raised live stock, and one of these farmers aske~ rue why they could not sell a fat steer or e,·en a corn-fed steer to the local butcher, but that the local butc.l:!er bad to buy his ment from a refrigerntor car sent out by the Beef Trust from St. PauL I went to the butcher shops in several of those towns and was informed that in order to get fresh beef they had to buy it from that trust. If they bought from the farmer. then they could not get these other staple articles that e,·ery butcher shop has got to keep or get out of business. for instance, lard, ham. bacon, cheese, salt fish, pickles, and various other of these side lines.

Now, 1:1' they could not buy those articles they could not l{eep shop, and they would not sell them to them because they did not buy their fresh meat from them. If they bought one steer from a farmer, either dres ed or lrilled it themselves, they could not buy these other articles, and the result was, that although a laboring man in one of those towns could have bought his meat for 10 or 15 cents a pound and still give the butcher a reasonable profit, if the butcher had been able to buy from the farmers, as a matter of fact be had to pay 25 to 30 cents a pound, an enormou profit to the Beef Trust. . ~ow, this proposition co~tained in this bill is the only propo­

SI~Ion I ba>e seen yet commg from the Democratic P arty that will actually tend to reduce the cost of living. I haYe criti­cized their tariff bill as failng to reduce the cost of living, and I st~nd by every word I have said, but they have, either in­ten~wnally o: accidentally, in .th~s section bit upon a way by whtch the ultimate consumer w1ll m a certain degree receive the benefit and have a little chance to get a lower cost of living. [Applause.] .

.1\lr. McCOY. Will the gentleman yield? Mr. STEE~lm.SON. Yes; I ~ilJ yield. l\fr. l\lcCOY. Now, I would like to have the gentleman point

out how section 4 of this bill meets that particular situation which be bas described up in his State.

Mr. STERNERSO~. I say that the man could not be sup-plied with these other articles unless be bought the e articles.

Mr. 1\IcCOY. That has nothing to do with this section. l\1r. STEE:r-.TERSON. Oh, yes; it has. Mr. 1\lcCOY. Not with my amendment. 1\lr. STEE..~ERSOX The prBctice in some of those places

bas been destroyed by the State law, but, for instance there are arUcles such as was read from the desk, in the lett~r pre­sented by .the gentleman from Ohio [Mr. ALLEN], articles of food, for mstance, cereal food, that cost 1 cent a pound to procluce, u1~d they sell tl1em for 15 cents a pound, and you ex­clude the nght to sell any other competing m·ticle.

l\Ir. 1\fcCOY. There is no testimony before the com.m1ttee to tba t effect.

llr. STEE~ERSON. I know there is not, but we ha\e got to go by our experience throughout the country. There is the article of stock food, for instance. It is a matter of common knowledge that one manufacturer of stock fovd in Minneapolis who gets his screenings and his bark from the sawmill for only a frnction of a cent a pound, through this tying system excludes all other articles from his e:x:clush·e ::-.gencies and is enabled to charge an exorbitant price. Of course. he spends a very large part of it for fraudulent advertising, such as is described in the report on this b-ill, and the result is that people pay three or four times as much for the article as it co ts. There is the test It is a system that does not tend to supply the public goods at a reasonable price or t.l;lat tolerates competition in price. It does not tend to efficiency. The te t of efficiency is cheapness to the consumer. Price is ordinarily governed by supply and demand, but this system nullifies that law and enables the manufacturer and middleman to exploit the con­sumer at wilL It is a sy tern that is indefensible from the public poiut of view.

The CHAIRMAN. The time of the gentleman has expired. Mr. WEBB. I yield to the gentleman two minutes more. Mr. STEENERSOX. There is the test of the system: Will it

produce a more economical distribution of the necessities of life? Will the abolition of this system tend to give to the con­sumer cheaper clothing, cheaper food, and che;lper vehicles? I asked the gentleman from Illinois about the comparative profit there was in selling other vehicles, like sleighs, wagons, and buggies. Does anybody suppose that the manufacturer of bob­sleighs or of lumber wagons or of buggies would expect to give his agent 20 per cent commission, or that he could sell his buggy to his agent for two or three times what it cost to pro~ duce it? No. They are articles which enter into ordinary commerce, and the tendency is to produce them as cheaply as pos ible and to give the benefit of thnt cheaper production to the man who buys them, whereas no matter if you live in a land of plenty. no matter if the automobile is a vehicle that is as plentiful as the air you breathe, under this 8ystem you would have to pay three or four or five times more than it costs to produce them.

I am opposed to this amendment and am in fa\or of the pro­vision of the bill.

Mr. MURDOCK. :Mr. Chairman, I want to ~peak on this amendment.

The CHAIR~1AN. The Chair will state to the gentleman that t1l'e time. is controlled by . the gentleman from Minnesota [l\Ir. VOLSTEAD].

9_406 .CONGRESSIONAL_ RECORD-_ HQUSE.

Mr. VOLSTEAD. I yield five minutes to the gentleman from Kansas. •

1\Ir. MURDOOK. Mr. Chairi:nan, my in ten !:ion is to go with · the committee on this proposition, although I _ tpink anyone who bas sat here-for -the last hour and listened to this-discus­sion must in honesty confess that it is completely confusing. It bas been proved here that a sales agency is, under certain · circumstances, a good thing, and it undoubtedly has been proved

_b_ere, on the .contrary, that a sales agency can be a very. ~ad thing, and . both propositions are true. A monopoly, exerc1smg the power which comes through a sales agency, can crush _the retail trade down, and has crushed it down; can prey upon the ultimate consumer. and does prey upon him. Yet at the same time the instrument of a sales · agency -can be used, as in the beginning of a new business, for the benefit of the retail trade and for the benefit of the consumer.

This situation, which is so plainly exemplified in the contra­dictions of this discussion, is a natural result of trying to write into law statutory prohibitions against business forms by adopting definitions of changing business practice~. Ta~~~ for instance, the actual practical app]jcation of this section 4. We are simply turning the matter over to the courts. For· after Congress shall have passed it, made it law, the· Attorney Gen­eral will, with timidity and hesitation, attempt to enforce it. It will finally reach the courts for interpretation. "and after the lapse of 8. 10, or 12 years the business world will r~acb some, sort of a definite understanding about the actual meamng of the section.' What will happen to business in the meantime? Ad­vantage to the power~u1 and monopolistic, and harm and ·disad-vantage to smaller bnsiness. .

r-- The Democratic · Party bad· its chance· this year to create an interstate trade commission with real power to differentiate between big business which· is monopoly and big business which . is not monopoly. between monopoly which is harmful and big business which is ·not. You did not embrace that opportunity, and you are going to pay your penalty in a good many different ways. You stand before the country to-day timid and _hesitat­ing. You have against you ·the· great predatory power_s, a~d they are using your very hesitant ~course of action here m thiS trust program to terrorize small business. I want to read to the -gentleman from Arkansas [Mr. FLoYD] ~.letter whi~~ I have recehed. By ·the way, I am not antagomzmg the posttion of the gentleman from Arkan·sas on this · particular section in so doing. - A merchant in my district has received a letter from the president of the Pictorial Review, a fashion publication in the city ·ofoNew York. This letter, sent to me by William All_en White, of Emporia, Kans., is as follows : '

• - NinV YORK, Mny 1, 19_Lf. DEAR SIB: We take th.e privilege of wl'lting you on a subject of vital

Importance to yau1·seJf and the countt·y at la1·ge. It is no doubt evident to you that prosperity bas been lost somewhere in this country. owing to the mischievous actiyit1~s or the politicians, as recogn.ized by all men.

We inclose herewith .dt·aft of a letter which embraces the views of a majority of the thinking business people of our section of ~he country and which should be · addressed to the President of the United States, the Congrecs, ;Jnd members of the Interstate. Commerce Commission, respectively. Might we suggest, ·if you ao-ree with us, that yon take the trouble of writing .letters of -a similar ~aracter to the President, the Members of the United States Senate and the House of Representatives from your State 7 If you prefer to use copies of ·the inclosed letter we will mail you as many copies as you can conveniently use. Just send us a postal card. It will be -more effective; howeve~, it you write-them on yom· own letterheads. 'fhe sooner this appeal 1s made the greater1 effect it will have on the politicians who have caused the loss of pros-

pe~~~iosed find a list of names and addresses to whom the letter· should• be sent, but we omit the names of the Representatives and Senators from your State, with whom you are no do~bt familiar.

Yours, respectfully, THE .PICTORIAL REVIEW co.

. W. P. ALMELT, President.

With this letter is a draft of another letter to be addressed to l\iembers of Congress, the President of the United States. the Interstate Commerce Commissioners, the · Speaker of the House, and ot'hers. This draft of a proposed lett~r is as follows: Ho:-<onEo SIR : - .

We respectfully appeal to your sense of justice and ask I.n the name_ of the suffet·ing American people,· in the name of ~ommon sense w~y wantonly harass business at this juncture w)len it 1s struggling for Its very existence? . · . , . - .

Wby throw more thousands of men idle when so many famllles are already starving? . .

Why subject business to any experimental legislation now, when It i.s not prosperous? Postpone it. Drastic action on . your part is u peril at this time. What we do need- Is a little building up-no tnore tearing down. We have had a sufficiency of exper~mental legislation

fo~~~e f;;e~f~tg of the etltlon of the eastern railroads for a 5 per cent freight increase wnf do more for tbe prosperity and development or the country than all -legislation against unlawful restraint and monopolies. Such a determination will 1·esult in a move)llent forward, not backwa1·d. and any contrary determinatio-n by the Interstate Com­Itii'1'Ce Commission will emphasize the fact that washington hostility_ is balking pt•osperity. The merchants of this country a1·e vitally hrter­('Stecl. Business must not be retarded, otherwise commercial fatlures wlll increase. The continual senseless attacks by governmental bodies

upon merchants, by- impendin~ assaults upon railroad, industrial and mercantile corporations, revision or the tat·iti, and currency reform have resulted in sinking business to such an extent that it bas throw~ hundreds of thousands out of employment, .reduced wages, and de­cr.eased va:lues ·tn railroad industties -and mercantile corporations to the extent of at least $3,000,000,000. · -

The most seriou~:~ situation that confronts the country to-day Is the fact that 'unemploymeiJt is growing more acute. We need relief. We ask~ the· Congress of the United .States to halt Qefore it is too late. Postpone all antibusiness legislation. Give the country a rest, and last but not least permit Congt·ess to earn a well-deserved early rest.

Yours, respectfully, -------.

This letter from this New York concern is apparently sent to dry goods men all over the lan.d, asking them to write to all these various officials in Washington to cease what the letter designates antibusiness legislation. It is· part, apparently, of the plan of the great powers in New YorJ-c _City to terrorize small business and the effort is not fruitless, for that terror bas reached the hearts of the Democra-tic leaders. You are putting

-. through this -body -and exi>ect to pass through- the Senate half­way patch-work -legislation that will not reach the sore spot in this . countr;y, but -.whlch will add to already deplorable busi· ness confusion. When you do that you are playing into the hahds ·of: th"e big ·interests -who want -no legislation at all, who want merely further confusion and delay. That is the trnth of .the matter. You had a chance on the Democratic side this year, and I was hoping . that you would take advantnge of it, to give to .an iriterstate trade ·commission -power to make the differentiations, which would clarify instead of befogging -the business world. ·You ·dfd fiot take it. You passed the problem up to the courts, and we will _wait .8 or 10 ·or'-12 years for them to tell us what section '4 means. The counh·y can not afford to wait: -The larger interests are aU the time growing larger and more powerful, and little business is growing more desperate. And all the time the monopoly pirates, -fattening upon inade­quate statutes or delay, are working to induce the smaller men out over the country to write to ·congressmen pi·otesting again~t any legislation at all. -The· country needs- legislation, but it needs legislation. that will bring quick remedies to business ills, and not put the matter over into the overcrowded courts, ill adapted for this work, while the honest business of the country is made to wait helplessly and hopelessly on through the years. [Applause.] - ·

Mr. _WEBB. Mr. Chairman, there- may be some of the 23 sections of_ this bill thfit are open to criticism along the 'line the gentleman has just made_, that they are of _doubtful mean­ing, for- it is sometimes very ~ard to .make words in the Engllsh language express just exactly what you mean; but I believe this section 4 is the least open to that objection of any section in the bill. anq I am. rather surprised that my friend from Kansas [1\Ir. MURDOCK] should make that criticism of this par· ticular ·section. Stripped of some of ita verbiage, that section rea~ as follows:

SEc. 4. That any person • • • who shall lease or make a sale of goods~ • • • or fix a price charged therefor, or discount from, ot· rebate upon such price, on the condition or understanding that the lessee or purchaser thereof shall not use or deal In the goods • • • of a competitor • • • shall be deemed guilty of a misdemeanor.

It means simply this, ·that if I am a manufacturer or a wholesaler, and go to a small town and pick out the most popu­lar merchant in tliat towri-I have advertised my goods well­and, of course, naturally he is anxious to buy them.' ·I go _to this most popular merchant 'and tell him that I \vill let him buy -my goods, proviaed be will not ~ell or ca~·ry in stock any of my competitor's goods. Now, I do not know bow other gentlemen may look at such a contract, but that contract, in my opinion, is in and of-itself a contract in restraint of trade. Enough of those particular restraining contracts combined would make such manUfacturer or wholesaler guilty of violat· ing . the Sherman antitrust law. One act, one contract, wonl!} not come within the meaning of the Sherman antitrust law, -but a series of acts, each one of which we condemn in this section, would bring them within the terms · of the Sherman -antitrust law, and what we are trying to do is to forbid the various indi­vidual -acts which ·itresistibly lead to monopoly.

l\1r. SELD0~1RIDGE-. Will the gen Plan yield? Mr~ WEBB. I will. Mr. SELDOMRIDGE. This 'provision, as I read it, seep1s to

affect the seller of the goods and not the purchaser. · ~uppose there is a merchant in · town who desires to purchase a line of goods handled by anoth~r--dealer, m'ade: by so_me_ manufacturing concern under this bill he couid not com1lel the m~nufactnrer to se1l the~e goods to hirp.~ _ _ ~.. . · . · .

1\Ir.-WEBB: I do not quite underst!!nd the g~ntlemnn. Mr.' SELDO~IRIDGE. I have in. mind a manufacturer of a

line· of stock food. - I ' am engaged in'" selling stock food. ·It is sold ·by-my competitor, and I can not · buy it because it is being handled by my competito-r. Is there anything _in the bill which

J;: ~9.14. - CONGRESSIONAL RECORD-HOUSE_. 9407 would allow me to -compel· the manufacturer or _pPOducer to sell has stated "it shall be done with intent to estab1ish a monopoly to me? As I read the bill I am prevented from buying it. . or destroy the business of a competitor." . . · Mr. WEBB. Oh, no; not at all. You could not compel him l\lr. WEBB. Yes; . and there you have two things necessary to .sell to you. He can choose his customers. All this section to be proven. The amendment which my friend from New-Jer­forbius is that when I sell ·goods ·to a pur~haser and get my sey has offered sends us back to the Sherman law. You have money for · them I can not at the same time contract with h)m got to prove Qoth the illegal contract and the intent, and so that he s)lall not sell anybody's goods which compete with mine. forth. In the section as written you have only to prove the

l\Ir. ·MOORE. Will the gentleman yield? illegal contract. If the manufacturer makes a monopolistic con-1\Ir. WEBB. Yes. . tr~~t, ·he ought to be -puni~ed for it without having to prove 1\fr .. l\fOORE. Suppose I am the .manufacturer of a soap and also that be intended to hurt some one thereby. He should not

I make· a specialty of it. · I have advertised it extensively, and I be allowed to make such contract,--whether he actually intends go into the . town .which the gentleman has referred to and. try to to injl,l_re or not. make an ·arrangement with the local merchant that. he will ·sell · Mr . . STAFFORD . . Will the gentleman yield? my _soap. I have .gone to great expense in .advertising, but ·I do - .Mr. · WEBB. Certa_inly. · · . not say to him that I want him not to use the goods of my com· 1\Ir. STAFFORD. Would not the logic of · the gentleman's petitor. Am I violating the law? I?o~ition be that ~ny jobber w.ol!ld _not be permjtted to sel~ct an

1\lr. WEBB. Not at all. agent or drummer to ·seu exclusively his .wares? 1\;;[r. MOORE. If I build up a trade and establish a reputa- · 1\fr; WELB . . No; there he is the agent or the drummer, and

he 'does · not buy the goods from the manufacturer, but simply_ tion for my goods, I can go into the. gentleman's town and ~ake . an arrangement with the ·local de.:'ller to sell my goods, provided represents the jobber as agent. I do not sny that he must not sell the goods of my competitor? 1\Ir. STAFFORD. But he might sell them on certain c;om~ · 1\Ir. WEBB. Yes; so" long as you do not bind him not to sell missions.

Mr. WEBB. lle represents the manufacturer, and is the your competitor's goods. . , agent. 1\lr. MOORE. · Suppose I am the inventor and the manufac- 1\fr. HUMPHREY of Washington. Will the· gentleman yield?

turer of a phonograph and I have devised certain records that 1\Ir:WI:BB. Yes. _ _ _ produce sound more '<'!learly than ·other phonographs, and I ·go 1\Ir. HUMPHREY of Washington. I want to ask the gentle-into the g·entleman's town and offer the local dealer my busi- man this question: Suppose a dealer comes into a city, goes to ne s, the exclusive right to -sell my particular records, and an- the manufacturer and says to him, "I will handle your goods if other and inferior article is offered to that dealer, am I to be you will not permit anyone else in town to do it," would that be punished because by_ reason of_ my inventive genius,· superior legal? . __ . -knowledge, and the superiority of my article, I say t-;> the loc~ -Mr. WEBB. I think it would come within the spirit of the dealer that I will give him my exclusive trade and that he IS section if the manufacturer accepted such condition, and I not to put on the shelves something that will be advertised ·as think it ought-to. . . "just ns good," thus faking the public? · ~ 1\fr. HUMPHREY of washington. I think it _ ought to also;

Mr. WEBB. Yes; you are to be punished if you make a con- but it does ·not seem to nie that it would. It seems .:> me that trnct with him that will prevent him from selling a competitive you cover · it only in one way. Suppose the retailer says to the article. He should be left free to sell such articles as he chooses man, " I will handle your goods if you will not make a contract to keep 'in· stock. with anyone else to handle them."

l\Ir. MOORE. Suppose I have a proprietary medicine, a 1\lr. WEBB. That might be done, but we are trying to unfet-cough cure, selling at ?5 cents n bottle, and so~e one has some- ter the little business man and protect him and his customers thin" not so good, but which can be produced a little cheaper, from~monopolistic contra"cts' imposed by the big dealer. and

0

1 make an nrrangement with the ,dealer as again~t the in- Mr . . HUMPHREY of Washington. _If you do not stop that ferior article. Can I still be punished? · sort of procedure. will not the ·other be useless?

1\Ir. WEBB. If you make n contract with the merchant that Mr. WEBB. Not at all. · he shall not sell any ~ompeting goods but yours, you are to be Mr. HUMPHREY of ".,.ashington. Will they not simply punished, and you ought to be punished. Let the public' find change the manner of doing business? - · out the inferior quality of the goods, but give the merchant free· 1\lr. WEBB. We want the litt:e merchnnt to be able to buy dom in his business. The public is more interested in prevent~ all kinds of goods, keep a variety, and sell them to his cus­in17 monopoly thrm in . the quality of the goods. If we can pre- tomers, instead of being confined to one partictilar man's line. ve~t monopoly, the public will soon discover the fake or inferior Mr. HUMPHREY of washington. Under the statement the goods. g~.ptleman has made, would it not still be a monopoly in any

Mr. HELGESEN. Will the gentleman yield? particular village, because they would se:ect one particular man? · 1\Ir. WEBB. I wiil. - · Mr. WEBB. It would be a monopolistic contract if the buyer

1\Ir. HELGESEN. Take the illustration used by the gentle: and the seller agreed to such condition. man from - Pennsylvania, where a .manufacturer_ goes into the :Mr. ADAIR. 1\Ir. Chairman, will the gentleman yield? town and offers business to the dealer, but does not say to him Mr. WEBB. Yes. - · -thnt he must not handle the goods of any ~ompetitor, -but says, ~ Mr. AD.A.IR. There is nothing in this bill, as I understand it, "If you wm handle mine I will give you 5 or 10 per cent extra that prevents a manufacturer from establisning an agency f~r discount." would he be punishable? his goods in any town, and giving that .agent the ex'clusiTe_ right

1\Ir. WEBB. Yes; ' he would be; . he would come within the to sell the goods, p1;ovided he does not tie him up with a intent and meaning _of this sect!on if such agreement is to pre- contract not to sell anybody else's goods? · Tent the sal_e of competitive goods! ' .Mr. WEBB. That is true . . -

Mr. TOWNER. · Will the gentleman yield? 1\Ir. ADAIR. I would not vote for this bill if it prevented a 1\Ir. WEBB. Certainly. manufacturer from establishing an agency. 1\Ir. TOWNER. Does not -the gentleman think that this will Mr. WEBB. , It prevents tlie manufacturer from going to a

result in n decrease of competition rather than ah increase of little ·or big merchant and . selling · goods to him on condition competition, ·which o'f course we all desire? ·For instance, three that that merchant shall sell only his goods -and not se!l the dealers handling phonographs may each handle them all; would goods of any competitor, nnd I ask both ·Republicans and Demo­not th-ere be more competition if each handled one than if all crats on the floor of this House to give their support. to that three deniers handled all ·of the phonographs? Is not there proposition; because it is good business morals, and it is a long likely to be a decrease of · competition? step toward unfettering the little business man all ove'i' the

Mr. WEBB. In · ar1swer to thilt I will say that it is barely country, and it will make the little country merchnnt feel that possible,. but not probable. Business should ·be left to take care he can furnish supplies of all sorts and varieties to his ens­of itself -if not bt1ilt ·on immoral or illegal contracts.- I do not tomers instead of forCing them to go to : the big mail-order believe there is a man· on either side of the H_ouse_ who will say houses to get what they want because they can not find tho that it ·is -right or fair business for a manufacturer to make a · goods on the· shelves of their local merchant. contract with the merchant to sell only his goods and that be 1\Ir. MOORE. J\Ir. C:hairman, is there anything to prevent a shall not sell goods that compete with his. It ought not to be competitor froin going into a country - town and making the allowed. · same deal that the person sought to be affected by this bill

l\Ir. ALLEN. ·wni ' the gentleman yield? made? Why could not a competitor go into the country _ tow_n l\fr. WEBB: I will. . . and set up his busine~s in his own ·way· with another dealer? Mr. ALLEN. This amendment offered by the gentleman from - "~i\fr. :ADAIR. He does~ and he should.

New Jersey ·does not ;affect: the proposition, 'for tlie gentleman Mr. MOORE. Is not that his ret'necly? •' -

LI-593

9408 CONGRESSIONAL RECORD-HOUSE. 1\fAY 28,

Mr. ADAm. Tbnt is his reinedy. Will the gentleman yield for one more question?

Ur. WEBB. Yes; just for one question. Mr. ADAIR. I am engaged in the manufacturing business.

We go out into the markets and establish agencies. We sell our line of goods to one man in a county, and to nobody else, bot we do not bind him up in a contract to buy the goods of no one else.

Mr. WEBB. Tben the gentleman is exempt from tllis sec­tion. and ought to be. If there are a dozen kinds of knh-es and razors, every m#i!rchant who buys them ought to have the right to buy all of thP.m and sell the:-"' to anyone he pleases. and no one m:mnfacturer ought to have the right to exclude him from the prh·ilege of buying any mzor or knife in competition with the one thnt he is selling him .

.Mr. ADAIR. It is no part of mono_poly for a manufacturer to establish an agency.

1\lr. WEBB. No. Certainly not under this section. What we are strildng at is the monopolistic contract.

1\Ir. McCOY. Does not the Standard Oil Co. have agencies all oTer the United States?

1\lr. WEBB. Yes, I understand so. 1\fr. l\IcCOY. Is not that the biggest monoply there is? Mr. WEBB. Yes. But we are not aiming at monopoly per

se in this section, but at :i contract or contracts which lend to monopoly. Monopoly is covered by the Shermrm law, and we are trying to prevent those contracts which build up and lead to suc:b monopoly.

Mr. ::\lAX~. Mr. Chairman, will the gentleman yield? 1\lr. "\"\-"EBB. Yes. l\Ir. l\IAi"N. It being a common practice for people who in­

vent something or who manufacture a specialty to plnce it in the bands of a rocnl merch;mt nnd ad,·ertise it at the expensf> of the manufacturer or the seller. under this provision. if thnt should be done so as to build up a trade in this specialty in this store, the storekeeper would have a right to take in a competing. article and get the benefit of the advertisement, as I understand it.

1\lr. WEBB. Yes. Mr. l\1A:NN. That looks moral, also. 1\Ir. WEBB. Be has that right now, and exercises it every

clay under a decision of the Supreme Court. Mr. ADAIR. You walk into a drug store down here in the

city and as!{ for a bottle of Hood's sat·saparilla. and the druggist says, .. Yes; I can gi~e you that, if you want it. but here is one that is just as good," and he sells it to the customer at a cheaper price.

1\fr. JUA."\;N. Not to me, not sarsaparilla. [Laughter.] Mr. ADAIR. Since when did. the gentleman quit drinking

sarsaparilla ? l\lr . .MA..!.'\N. I never quit, for I never commenced. Mr. ADAIR. Oh, I beg the g~ntleman's pardon. I believe his

beYerage is Peruna? Mr. MANN. Oh, that is the gentleman's specialty, not mine.

[Ln ughter.] Mr. WEBB. Briefly, Mr. Chairman, this section does not pro­

hibit any manufacturer from establishing agencies.- for when be establiches ngencies be furnishes the goods to the agents, and the title to the property usually remains in the manufacturer, and the agent acts for him and sells his goods and returns the money when he sells them.

It does not forbid the manufacturer to go into a town and sell to one customer alone, prodded he does not add to that sale the condition that that customer shall not sell competitive articles. It does not preYent that kind of sale, provided the illegal condition is not added to it. Now, I want to say this. Uns~rupulous big business and the trusts are not in favor of this section, for it destroys one of their fa>orite weapons. They are trying to l)Ut forth the small business fellow to· oppose this ·section, to make it appear thnt the- little fellows are agninst this proYision; but, as a mntter of fact, those who are destroy­ir.g competition in this country are the real opponents of this section_

Mr. McCOY. ·wm the gentleman yield? Mr. WEBB. Yes. Mr. McCOY. Did one of these little fellows who were

crowded ont come before the committee? Mr. WEBR E•ery independent, as I remember, who spoke

before the committE-e ~nts in fayor of section 4. Mr. McCOY. I would lili:e to have one name.

· 1\Ir. WERtl. If tlte gentleman will give me time to look the matter up in the Yolnmes of hem·ings, I could find it, and my col­leagues will bear out my stntement.

Mr. McCOY. Will Jjle gentleman yield again?

Mr. WEBB: Ncr; I can not. My friend had 30 minutes. an!l I have only 12. This illegal, monopolistic contrac;t system is what hns built up the big mail-order houses Hnd practically destroyed the little merchants aU over this country, becnnse the little merchant is ordinarily an honest man, and when an ngent of a tru::;t walks into his little store and says. " I will sell you these articles that have been splendidly advertised if you :rgree never to sell any of our competitors' articles." The little merchant agrees, and he feels bound to stand by it. His customers see that they can buy but one line of articles trom him and turn to the mail-order house, where a variety of ar­ticles is found. and his customer sits down and orders from the mail-order bouse and soon the little merchant is destroyed, because he is fettered by the trust's exclusive contract. [Ap­plause.]

Ur. 1\IADDEN. Will the gentleman tell the Bouse what gives the mail-order house a monopoly if it is not the Go>ern­ment of the United States by giving it the use of the mails?

Mr. WEBB. I am not tal1..-ing about the monopoly given by the United States, but I am talking about the small merchant whose business we are trying to unfetter by this bill.

l\Ir. l\IADDEN. The gentleman said the mnil-order house had a monopoly. What gives it a monopoly if it is not the GoYernment of the United States. which gives it the use of its mails!

Mr. WEBB. I did not say the mail-order house was a monopoly; tmt that the exclusive contract we forbid bas driven farmers to the mail~order house. We can destroy that condi­tion somewhat with the unfettering of the little merchant from these exclusive contracts which compel him not to sell competing goods.

Mr. 1\IADDEN. Can we take away the right of the people to use the mans if they want to send a letter to a mail-order house?

1\lr. WEBB. No; but when the small merchant is permitted to handle all the .articles he pleases the mail-order house will cease to get the buRinE>ss. because the small man will be per­mitted to carTy all kinds of goods on his shelves and not be con­fined to one single line of goods.

l\lr. DOXOBOE. Does this measure propose to interfere with the relation between the manufacturer and his salesman who sells on commission?

Mr. WEBB. Not at all. l\lr. GARD~'ER. Do the mail-order houses urrdersell the local

merchant? 1\fr_ WEBB. I do not know. They sometimes do by selling

an inferior quality of goods, by attractive ad,·ertising. and they gull a good many people; but: they find it out sooner or later, and will go ba<'k to their honest 1ocn1 mer<'hant if be carries a variety of articles from which they can select what they want.

Mr. KI~DEL. Wlll the gentleman permit one question 1 Mr. WEBB. Yes. 1\Ir. KINDEL. Is it not a fact the parcel-post rates [laughter]

haY~ more to do with th&t than any other thing? l\Ir. WEBB. That DUly have something to do with it. Now,

if gentlemen of the House wish to de8troy this section 4 they will vote fol' the amendment of my friend l\lr. McCoY. If they want to retain the tooth in it, then vote that amendment down, and we will force the United Shoo Machinery Co .. which is one of the completest monopolies in shoe- machinery in the world, to abolish theii~ monopolistic contracts and give the shoe manufacturers of this country a chance to liYe and maintain their existence by buy­ing and using or lea,sing such machine1·y as they choose. [Ap­plause.]

l\Ir. VOLSTEAD. I yield five minutes to the gentleman from l\Iassaehusetfs. [Mr. GARDNER}.

Mr. STAFFORD. Mr. Chairman, may we have the amend­ment again reported 'f

The CRAIRMAN. The Clerk will again report the amend-ment.

The nmendment wns again reported. :Mr. VOLSTEAD. Mr. Chairman, I yield to the gentleman

from Massncbusetts [Mr. GARDNER} the balance of my time. The CHAIR~IAN. The gentleman from Massachusetts [Mr.

GARDNER} is recognized for three minutes. Mr. GARDXER. l\lr. Chairman. the gentleman from Arkan­

sas [Ur. FLOYD] tells us: that in the interest of the con umer be is against the amendment offered by the geutlemnn from New Jersey, and the gentleman from North Cnrolina [:\Ir. WEnB] tells us that in the interest of the couutry mm·chant be is against the amendment of the gentlemnn fr9m New Jer­sey because the country merchnnt is being put out of business by the mail-order house. Now,_. if the mail-order house puts out of business the country merchant, the mail-order house

1914. CONGRESSIONAL RECORD-HOUSE. 9409 puts him out of business by underselling him, which many people hold to be in the interest of the consumer.

In answer to an inquiry from the gentleman from Indiana [Mr. ADAIR], 'the gentleman from North Carolina ·says that sec­tion 4, as it stands-and I, for one, believe in section 4, although I favor the amendment of Mr. McCoY-does not prohibit ex­clusive agencies. It does not prohibit exclusive agencies for the man or corporation who has capital enough; but it does prohibit the kind of exclusive agency which the man with small capital is forced to contract with. For instance, if I were an automo­bile manufacturer with a small capital, I could not all o-ver the country establish agencies such as would be permitted in sec­tion 4 as it is drawn at present. I could not afford to carry the enormous stock of automobiles which would be necessary in order to break into the market. If, however, the amendment offered by 1\fr. McCoY is adopted, I could pursue the present practice of the automobile trade, a practice by which a small man can avail himself of the capital of other small men. That is the way the automobile business has been built up. A man who bas a new make of automobiles comes to some bright young man in Washington and says, "I can not afford to make you my agent, but I will sell this machine to you if you agree to sell my machines and my machines only. If you sell other ma­chines, I can never establish a demand for mine, because of these great automobile concerns which are already competing for the market."

This amendment is distinctly in the interest of the small manufacturer. It is the men who began as small manufacturers who have built up the nutomobile trade. One of them is the person who made those vast amounts of money which the gentleman from Arkansas [Mr. FLoYD] bas been telling us about. He did it by cutting down the cost and the price of an automobile, cutting it down and down. Apparently he can manufacture at half the cost of his competitors. Now, the gentleman from Arkansas says, "Yes; he has made such an enormous amount of money that we will build a wall around him and prevent him from having any competitor." That is what you are doing if you leave section 4 unamended. You are building a wall around these gigantically successful people, so that the next 1\lr. Fo-rd who comes along will not be able to break into the business, because he will not have at his com­'mand enough capital to own automobiles all over the United States.

Keither the gentleman from Arkansas nor the gentleman from North Carolina has answered one word of what the gentle­man from New Jersey [Mr. McCoY] has said. They have told you about practices, very reprehensible ones, in restraint of trade. practices which, as a matter of fact, do produce monopolies and which are intended to produce monopolies. TP,ey have cited those practices for the purpose of defeating the amend­ment of the gentleman from New Jersey, just as if his amend­ment were designed to permit those practices, or would permit them. On the contrary, the gentleman's amendment forbid~ those practices, inasmuch as it. provi~es that these exclusive agencies shall not be permitted if they are to be used for the purpose of buildiug up monopolies or for the purpose of re­sh·aint of trade.

The CHAIRl\IA...l\1. The time of the gentleman has expired. 1\Ir. VOLSTEAD. 1\.Ir. Chairman, I yield five minutes to the

gentleman from Pennsyl>ania [Mr. GRAHAM]. 1\lr. GRAHAM of Pennsyl>ania. Mr. Chairman, there is an

old story that illustrates a good deal the present situation. It tells of a man passing along the street and noticing another man working with a crowbar at the side of a cellar wall that projected abo>e the sidewalk. He said, "My fri~nd, what are you trying to do?" "Well," he says, "that cellar is yery dark, and I am trying to let some light into it." The first man went about his business for a couple of hours, and coming back he saw the other man still working and the aperture not very much larger than when he first saw it. He said to him, "Well, my frienu, how have you succeeded?" The man replled, "I ha>en't let much light into it, but I have let a power of dark out." [Laughter.] ·

And it seems to me that in much of the discussion we are in­dulging in here we are letting a · power of dark out about this question. But, all boiled down, it is a simple proposition, as I yiew it. Now, I may be letting more dark out.

There are two classes of transactions aimed at in this section 4. One is a lease and the other is a sale. It is quite true that there is nothing in this ·section which forbids the creation of agencies. That is to say, the manufacture1; may have an agent who exclush·ely sells· his goods, because employing an agent does riot involve either il lease Qr a sale. Indeed, the manufacturer rilight go to . a retail dealer in soine village or city or town and say, " I wish to introduce my goods here; I want to hiwe you as

my special agent, and I want you not to handle the goods of any competitor of mine "; and so long as there is not a transaction in the nature of a lease or a purchase there, then that retailer can transact that business and do it lawfully, and there is no prohibition in section 4 against such a piece of conduct ns that.

Now, so far as selling is concerned, a system or practi('e has grown up in the business world where a man has a limited capital, or where for the protection of the manufacturer con­tracts are made in the nature of an agency contract, but the goods are invoiced to the man that has to do the handling of the goods, and the price is paid to the manufacturer and the transaction amounts, perhaps, to a sale. That is the kind of thing that this ·section 4 does forbid. I know of nothing im­moral in such a transaction as that. A man can not sene twry masters. He must be loyal to one or the other when their in­terests conflict. Wherefore, if you make such an arrangemenr as that, and to conserve your capital or for your own protec­tion make a conditional sale of the goods and engage this man to handle those goods exclusively for you, there is no element of immorality involved in such a transaction. And yet that is forbidden. •

The amendment of the gentleman from New Jersey would cure the evil that is in this proposition created by the language of this section. You would lea-ve business free to make any transaction that it .pleases so long as it does not amount to what this amendment would cover, namely, a restriction of trade or the creation of a monopoly.

Now, let me ask in relation to the leasing question, whether ft would not also cure that. In the minority report we have said:

.Again, the manufacturer sells no machines at all, but only leases them, and because they are delicate and any injury to them is his own loss, he leases them only to lessees who agree not to use imperfectly adapted parts, supplies, or appliances of other manufacture. Ot• be leases them at a special rental, upon the lmderstanding that the lessees shall not use imperfectly adapted partsi supplies, or appliances of any other manufacture. Or be agrees to sel to the lesst>e perfectly adapted parts, supplies, or appliances, upon the understanding that the less~ shall not use imperfectly adapted ones of other manufactm·e. Each o! these transactions-which good morals and honorable business conduct from time immemorial have always sanctioned-is forbidden by the bill.

~'he amendment of the gentleman from New Jersey [1\Ir. Mc­CoY] would cure that evil, because unless these practices amount to a restriction of trade or creation of a mopopoly, they ought not to be forbidden, and would not be forbidden. Therefore I favor the adoption of the amendment.

1\Ir. VOLSTEAD. Mr. Chairman, I yield five minutes to the gentleman from Oklahoma [Mr. MoRGAN]. •

Mr. 1\IANN. Mr. Chairman, among the gentlemen who were to have time a while ago was the gentleman from Iowa [Mr. GREEN]. who at that time yielded to some one else. Can tha gentleman consent to let him ha-ve five minutes?

.Mr. WEBB. Under unanimous consent; yes. 1\.Ir. MANN. Mr. Chairman. I ask unanimous consent that

the gentleman from Iowa have five minutes in addition to the time already allotted. ·

Mr. WEBB. May I incorporate in that a request for five minutes for the gentleman from Massachusetts [l\Ir. MITCHELL]?

The CHAIR~fA...l\1. The gentleman from North Carolina and the gentleman from Illinois ask unanimous consent that the gentleman from Iowa [1\fr. GREEN] and the gentleman from Massachusetts [:Mr. MITCHELL] be allowed five minutes apiece, in addition to the time already agreed upon. Is there objection? [After a pause.] The Chair hears none.

Mr. GREEi~ of Iowa. Mr. Chairman, this section of the bill is like the rest of this proposed statute. It lays burdens upou the small manufacturer and the small dealer, but leaves lhe whole matter wide open for the large concern. It is perfectly ('asy for any large institution to evade the provisions of thil' section. AU they have to do in the world to except themseh·es from its provisions is simply to establish a selling agency of their own, to have their own agent, to hire him in accordance with any terms that they see fit, and exempt themselves entirely from the provisions of this bill. On the other hand, burdens are laid upon the small manufacturer and dealer, as has been shown here.

The amendment offered by the gentleman from New Jersey [l\fr. McCoY]. instead of taking away anything from the section actually adds to it by depriving the large manufacturer of the power to set ·up a monopoly through his selling agency in de­fiance or disregard of this section. It brings us back, really, to the Sherman law, it is true, but what harm is there in any of these trade agreements unless there is a monopoly or a restraint of trade oP a hindrance of competition in some way? Who has been injured thereby? What e>il is there that needs to be remedied, except something of that nature? Why should we undertake to hamper trade when that which is sought to be

9410 CONGRESSIONAL RECORD-HOUSE.' MAY 28,

restricted or stopped is injuring no one and doing no damage to the business world?

The gentleman from Arkansas bas said that this section waR based upon a decision of the United States Circu1t Court of Appeals rendered by Judge Sanborn; but that case. ln my judgment, is no authority for the position which the gentlem:m from Arkansas has taken. The suit was one for damages under tbe Sherman law.

It is true that Judge Sanborn did state in that case thnt contracts of sale which provided that the lessee or purctaser of the article sold should not use or de:tl in goods furnished by other parties was not no act inhibited by the Sherm:m law. for the reason that he considered it was not an act done in hindrance or suppression of competition or in creation of a monopoly. But this has nothing to do with the point upon wnicb the cnse actuniJy turned and upon which the decision was based. That point was that the plaintiff was not harmed in the least by the transaction which be complained of.

The Department of Justice has never taken the position that contracts of this character, made for the purpose of promoting a monopoly or for the purpose of hindering or restraining trade. was legal. but, on the contrary, has commenced several cnse!'; and prosecuted many individuals because of their entering upon just such transactions ' as this. No Attorney General that I know of under any administration has eYer taken the posi­tion which is now taken by the majority of the committee as a reason for bringing forward this section. The real fact is that it adds nothing In proper form to the proYisions of the Sherman Jaw. but. as I have said. simply gives additional Hd­vantages to the large concerns nod throws additional restri~­tions upon the small dealer. [Applause on the Republican side.} ·

1\fr. MITCHELL. Mr. Chairman, I do not think there should be any mistake among the Members of the House with reference to the extreme importance of this section of this bill. There- are some important provisions in this bill, but I do not believe that there is a more vital or more important provision in it thnn section 4. One of the evils that this section seeks to cure is the evil lVith reference to the "tying contracts," and I want to call attention to one specific condition which exists in this coun­try wlilcb has been created by this system of tying contracts. A gentleman appeared before the Judiciary Committee. an inde­pendent shoe-machinery manufacturer, who stated th<lt from 05 to 98 per cent of all of the machinery used in the manufacture of shoes in this country was manufnctured by one compsmy. He said that they absolutely controlled and dominated the field by this system of tying ('On tracts. They have in the manufac­ture of shoes some of the best machines, essential machines, machines that it is absolutely necessary for every manufacturer to haYe in order to do business. Manufacturers who furnish some of the minor machines and who are in the field trying to get a foothold and a market for their machines can not com­mercialize their business, can not get the machines into these factories because this gigantic monopoly-and there is no monopoly more powerful-has tllis system of tying contracts \Vith tlle manufacturers. The manufacturers. in order to get the essential mHchines. must sign a contract that they will also take these other minor machines where there is some competi­tion. If they do not do that. then. according to the provisions of their contract, the shoe-machinery company is able to remove all the machinery from the factory. As a result of that system, they have practically the field to themselves.

Kow, Mr. Chclirman, the States of this Union have recognized that e\il. In Massachusetts this corporation was org:mized by the cou~olidation of a number of independent machine com­panies in ubont 1800. The manufacturers began to protest in a feeble kind of wny ngainst the continuation of this trust. The shoe journals protested agninst its organization and its system of doing business. The protest becnrue so strong that in 1!l07 tlle Uassacbusetts Legislature passed a law seeking to remedy this e>il ::md to open the door to the inYentive genius of the thousands of men who are engnged in the shoe-machine bnsi.­nes..c;: and who wHnt to put shoe machines on the market. Tbe legislature passed a law in 1007. but the effect of it bas been circumvented. We haYe hnd investigation . and the Attorney General is proceeding ngninst the shoe machinery company. he­lieYing thnt it is in >iolatioo of the Sherman antitrust law. I do not believe thnt this Congress ought to speilk: in !IllY uo­cert.'lin terms. I think the "·embers on both sides of the House ought to gi•e this proYision of the bil1 their support. I nm not quite as familiar as are some other Llembers with the cxclu~i ,.e contracts. but I know that they form one of the great­est instruments. one of the greatest means of creating a mo­nvpoly in this country, and we have an opportunity in this bill

to stop that system and break it up where it ts at the present time. · What is the inducement that is offered the small denier or the

small grocery mHn or small business man or the dealer in any' commnnity to take one of these exclusive Hgenc1es;? .

Mr. GREE~ of Iowa. Will the gentleman yield? 1\Ir. 1\IITCHELL. Yes. Ur. GREEi'l of Iowa. Was I not correct In snying that these

acts were in violation of the Sherman antitrust lnw? l\lr. WEBB. I will :m .. o:::wer that. The Department of Jus­

tice hns held that one indi,·idURl net is not. but that a sm·ies of acts wlll brjog him within the Sherman antitru t law.

1\lr. MITCHELL. We want to make sure of our ground In this act. We want to gh·e everyone n fair field and no ra,·or~ We want to gin~ opportunity to the little fellow. We wnnt the shoe workers, shoe manufacturers. machine maoufacturen;, and the great body of con.c;;umers to he freed from the grip and fetters of monopoly anrt specinl privilege. fA pplaul'le.]

The CHAIRUAN. The tin1e of the gentleman has expired. All time h.'ls eJrpired. The question is on the nmendment offered by the gentleman from New Jersey [:\lr. 1\fcCoyJ.

The question was tnken: and on a division (demanded by Mr. McCoY) there were 28 ayes and 71 noes.

So the amendment wns rejected. Air. MORGAN of Oklahoma. .Mr. Chairman. I offer the :!ol­

lc.wing amendment. · The Clerk re.~d as follows:

Amend, sPctlon 4, pa~re 22. by ln~erting. tn lfne 4 after tbe word "of," the words "or appoint an agent to sell," so tllat the seetion v.ill read:

" SEC. 4. It ~hall be unlawful for any person engaged In commerce to lease or make a ~are of. or appoint an agent to sell, goods wares merchandise. machin-ery, supplies. or otbe1· commoditY on condh!on oi: with any understandin'{, a~r!*'ment. or contract that· the lessee o1· pur· c.hnser thereof shall not use or deal in the goods. wares. merchandise machinet·y. !'Uppltes, or other commodltf('S or a c·ompetitot· or competi: tors or the lessot· or seller; and any person violating the provi:;;lon of this S('Ction shall ~ d('creed guilty of a ml~demeanor. and on conviction thereof shall be fined not to exceed $5,000 or b;r Imprisonment not ex­ceeding one year, or by both.

Ur. WEBB. The effect of that amendment would be that nobody coulq sell his goods except he sold them in person; he could not establish an agency; he could not send out men ·to sell goods for him.

1\Ir. VOLSTEAD. Mr. Chairmnn. I yield five minutes to the gentleman from Oklahoma Plr. MoRGAN]. Mr~ 1\IORGAN of Oklahoma. Mr. Chairman, gE>ntlemen will

obser>e that in discussing the amendments to this section that the section applies only to the leasing and sale of goods. r voted against the amendment offered by the gentlellliln from New Jersey because I think there is some renl merit in this section as it now stands. But. gentlemen. if we really desire t\,) . destroy monopoly, if we really desire to protect the people agaill£ot monopoly, then we ought to bronden this section sa that one who sells through agencies cfln not prohibit the Hgeut from dealing in the goods of a competitor, because a corpora­tion through agents can establish and marnutin a monopoly with the same degree of success that it cnn by the selling Ol' leasing of goods with the understanding thnt the purchaser will not deal in the goods of a competitor. Now. a large number of my constituents are farmers. They deal largely with the Inter­natioonl Hnrvester Co., an institution or a corporation with $120,000,000 capital.

Unless you accept my amendment. this gigantic corporation not only has a monopoly in the sale. largely, of fnrm m:1cbinery tbrougb agents in Oklahoma, but throughout this gre:~t Nation­to all of the 6,500.000 farmers. Are you going to lenve section 4 so that it will not protect the farmers of this country against this monopoly? It seems that you fire. I am in fa,·or of re­ducing the flower of the shoe machinery company to maintain <:t monopoly by leasing mnchines. but I am nlso in fn,·or of extend­ing the section so thHt it will reach the Internationnl Hnn-ester Co., that sells the farmers of this country perhaps two-thirds. if not three-fourths, of all of thefr hanesting machinery. Yet, again, the mHjority in this House Is going bc~ck on the farmers of this Nation. You nre still leaYing in the bands of that gigan­tic corporation the power •to establish exclusive agencies. with an agreement or contr}1ct that they shn 1l not act as the agents of any other firm. How is an independent manufncturer to get his goods on sale throughout the Nation? He is handi­capped by the fact thnt the great bnrYester compnny has monop­olized the acth·e. able agents throughout this grent Nation. In the report of the Corporations Commissioner upon the methods u~ed by the International Hun·ester Co. he cites thnt thnt is one of the method8 they use to ~tablisb and mnintain their ·monopoly. It bas been said here frequently in this debate that the section as it stands, in a. measure, controls the small concern '

1914. ~ CONGRESSIONAL RECORD- ROUSE·. 94lf tfutt must sell its goods direct because it bas not got' the power to establish agencies, but the mammoth concern may establish local and exclusive agencies, and this law will not touch it.

The CHA.Ill.l\11\.N. The time of the gentleman from Oklahoma has expired. The question is on the amendment offered by the gentleman from Oklahoma.

The question was taken, and the amendment was rejected. Mr TOWNER. Mr. Chairman. I offer the following amend­

ment, which I send to the desk and ask to have read. I will state that the amandments which I shall offer are merely to perfect the text, and I will ask careful attention of the commit­tee to the amendments.

The CHAinMAN. The Clerk will report the amendment. The Clerk read as follows: Page 22, line 3, strike out the words "engaged in commerce," and in

line 4, after tbe word "sale," insert the words "in commerce."

Mr. VOLSTEAD. Mr. Chairman, r yield five minutes to the gentleman from Iowa [l\Ir. ToWNER].

· Mr. TO\VNER. Mr. Chairman, that amendment, I will say, is more important, perhaps, than will appear at first blush. By the language used in the text you limit the prosecution of any person to persons who are engaged in commerce, which, under the definition of commerce, means those who are engaged in interstate commerce. That is not what you mean, certainly, been use you do not mean that it shall be required to prove that any person who violates this act shall be engaged in interstate commerce. The language of all of these bills is that any person who violates or does the thing which the law prohibits shall be punished. The language, for instance, of the Federal anti­trust law is that •· e''ery person who shall make any such con­tract or engage," and so forth. In section 2 of this bill the language is " every person who shall monopolize," and so forth. In section 3 the language is " every person who shall make any illegal contract," and so forth.

This is the difficulty with the · language used. It is not as descriptive of the person that the phrase "fu ·commerce" should be applied, but it is as descriptive of the act, and there­fore the words " in commerce " should follow the word " sale " in section 4, so that it will read: ·

That any person-

No matter whom he may be, engaged in commerce or not­That any person who shall lease or make a sale in commerce of goods,

wares, merchandise-And so forth . Otherwise this section would be inoperative and perhaps un­

constitutional, because it would apply in the form in which it is to sales mnde in intrastate commerce, which would be abso­lutely unconstitutional, as the gentleman knows, for Congress has not that power, so that the limitation placed · her.e being upon the person is a limitation that ought not to exist, and the lack of that limitntion on the sales would make it apply to all sales, even in intrastate commerce. and, therefore, for both reasons, the section ought to be amended, as I have suggested.

The CHAIRI\IAN. The question is on the amendment offered by the gentleman from Iowa.

The amendment was rejected. Mr. TOWNER. Mr. Chairman, I yield back the balance of my

time on that amendment and offer another amendment, which I send to the desk and ask to have read.

The CRAJ;it~IAN. The gentleman yields back two minutes and offers an amendment, which the Clerk will report.

The Clerk read as follows: Pa~e 22., line 9, after the word "states," strike out the word "or"

and insert ln lieu thereof the words " and shall." l\1r. VOLSTEAD. l\1r. Chairman, I yield five minutes to the

gentleman from Iowa. Mr. TOWNER. Mr. Chairman, it would appear that that

amendment ought to be adopted without any question what­ever. The other amendment ought to have been adopted, but it is a hnbit that it is the requirement of gentlemen on the other side to vote down all amendments no matter whether the amendment affects the text and makes the bill stronger or not. The word " or " has no business here. It means nothing. What the gentleman means is:

Or any Territory thereof or tbe District o! Columbia or any insular possession or other plac~ nuder the jurisdiction of the United States, and shall fix a price charged therefor-

And so forth. The word " or " certainly must have been unintentionally or

carelessly used, or else it was used for the purpose of making the prodsion of the statute inoperative and of no effect.

The CHAIRMAN. The question is on the amendment offered by th~ gentleman from Iowa. ·

The question was taken, and the amendment was rejected.

Mr. TOWNER. Mr. Chairman~ I yield back the balance of · my time.

The CHAIRl\IAN~ The gentleman yields. back two minutes. Mr. TOWNER. Mr. Chairman, I offer a third amendment. The· CHAIRUAN. The Clerk will report the amendment. The Clerk read as follows:

. Page 22, llne· lO, after the word "condition," insert a comma and the word " agreement."

l'lfr. VOLSTEAD. M1:. Chairman, I yield five minutes to the gentleman.

Mr. TOWNER. 1\Ir. Chairman, it would seem also to the ordinary man--

Mr. WEBB. Does this amendment come after the word " understanding "?

1\fr. TOWNER. No; after the word " condition." Of course it is better there--

1\fr. WEBB. Mr. Chainnan, I think the amendment is good; and, as far as the committee are C{)ncerned, we will accept it. [Applause.]

The CHAIRMAN. The question is on the adoption of the amendment.

The question was taken, and the amendment was agreed to. l'lfr. TOWNER. I yield back the balance of my time. Mr. VOLSTEAD. Mr. Chairman, I yield five minutes to the

gentleman from Pennsyl\ania [Mr. 1\IooRE]. The CHAIRMAN. The Chair will state there is no amend­

ment pending. 1\fr. MOORE. Mr. Chairman. I move to strike out the last

word. A little while ago I asked the gentleman from North Carolina [Mr. WEBB] as to the effect of this section upon those who undertake after advertising to place their wares by a · special arrangement with a local dealer, and his answer was that unless the merchant or manufacturer who made the deal with the local dealer insisted that the exclush·e right to E=ell should be granted ap:ut from the question of competition· thnt he would not be punished, but that if he in any wny insisted. that the competitor's goods should be eliminated, then he would be subject to the fine and imprisonment imposed by the section. · And all this new and drastic legislation in the interest of the local dealer or the country merchant.

Kow, Mr. Chairman. I have been looking at this mntter from the viewpoint of the man who is struggling to build up a bnsi- . ness in this local way. Say there are two merchants in the gentleman's town, ench striving for busine s, and the manufac­turer of a certain brand of soap or soup, it makes no differ­ence. comes along and says to one of them, the one who is more energetic than the other. perhaps, that he may have the ex­clusive right to sell the product, a specialty that he h::ts adYer­tised well, and that is so popular that even "the children cry

,tor it," as some advertisements read. The goods are salable, ,and have been made so by the genius of the inventor or manu­facturer and beeause of the heavy promotion expenditure made upon them.

l'llr. TA..GGART.· Will the gentleman yield? Mr. MOORE. I can not in five minutes, although I would

like to do so. Now, after all this labor and energy and expense of· advertising it appears that if the manufacturer or jobber un­dertakes to say to the local merchant, "I will give you the ex­clusive plivilege and authority of selling my popular soup or soap," he has to go to jaiL That is not a very great inducement either to the manufacturer, the inventor, or the loc;1l business man. It does not aid the local business and. so far as the question of morals is concerned, it seems to punish the indus­trious and progressive business man in favor of the faker or the mnnufacturer of spurious or inferior articles, who mny thus derive advantage from the legitimate advertising and the scientific energy of those who created the business and paid dearly to advance it. In other words, Dr. Cook reaps the gnte receipts while the real explorer, the real patentee, the real in­ventor, the real manufacturer, who did the work and filled · the house, would suffel'" the penalty of fine and imprisonment. If this be the effect of the enactment,. the mnn who has not expended any energy, time, or money in promoting or advanc­ing trade could always play a waiting game and then come in and take advantnge of all the facilities of the trnde est.'lb­lisbed by the man who had the enterprise and courage to spend his money to acquire it. This does not seem fair or moral.

And there is another side to it. I make the stntement now, and I challenge anybody to contradict it, that the Government of the United States itself-that is to say, the present ndministra­tion of the Go>ernment-is now encouraging the very kind of business that the gentleman from North Carolina assumes by this measure to stop.

It is advertising for supplies to be used in the 1\Iexican emergency, particularly in the Navy Department, many of which

I 9412 - CONGRESSIONAL- RECORD-HOUSE. ~fAY 28, -

al'e specified, so that the manufacturer only who has IDade his goods popular can sell them to the Government. It is so in tile case of soup, it is so in the case of soap, it is so in the case of tobacco, and a good IDany other articles. Specifications issued by this very administration, which is advancing and insisting upon this so-called antitrust legislation, cali for _supplies for our Mexican necessities which even specify certain brands of tobacco made by the 'l'obacco Trust; certain brands of soup; made exclusively by certain manufacturers; certain brands of soap, made exclush·ely by certain manufacturers of soap. This is what a trust-busting administration demands for itself.

The CHAIRMAN. The time of the gentleman from Pennsyl­vania has expired.

Mr. :MOORE. 1\fr. Chairman, I shall therefore avail myself of leave to extend, so that I may place in the RECORD several communications which relate to this bill. I believe they should have consideration, because they represent the sober judgment of some of the leading citizens of Philadelphia-citizens who have been deeply concerned over the recent trend of legislation ~md who know what they are talking about.

I submit letters from representatiYes of two of the oldest of our banks, presenting the views of experienced and consen·ative men with respect to section 9 (interlocking directors), and a IDemorial from the Philadelphia Board of Trade in general oppo­sition to tile bill :

lion. J. HAMPTO::-< MoonE,

THE CENTRAL NATIO~AL BA~K, Philadelphia, March 25, 191J,.

House of Rerwesentatir:es, Washington, D. 0. DEAR Sm : An act has been introduced into the House with the iD;tent

of prohibiting interlocking directorates between certain corporatiOns. 'rhis act bas been drafted to correct certain abus~s which it is alleged have crept into banking and the e~tension of cred1t on the part of cer-tain groups of banks, presumably m New York. . _ .

In seeking to correct that which is claimed as an evil existing I? the metropolis of the country far gi·eater harm in the sum total w_Jll be clone to the mass of our banking institutions and to the commumty at large by the enactment of this new law. . . . .

We can not recall a single instance here.m Philadelphi_a 10 wh~c!I the interlocl<in"' directorate feature bas prevented competitiOn or mih­tated unjustifiably in any way against a smgle individual in the commer· clal community. In the history of thJs bunk, through its Ion~ and .honor­able record of a half century, we do not know of an instance m which the members of its board of directors have been influenced in the extension of cr·edit in any manner which has unduly favored or has diSfavored any portion of the commercial community entitled to credit from this bank.

The bill as lined up will affect probably 10 of our directors1 and in the end \Ve may lose half of them-possibly more-men whose mfiuen~e stands paramount whose integrity bas always stood for the best in this community and ~hose influence will not unlikely go to some State trust company hei·e, and thus this bank will thereby be materially weakened in the personnel of its. manag~inent. These. men ~ill- be bard to replace owing to their tramed mmds, their dtscrimmatmg and analytical 'judgment. We cite our own bank as ~ concret~ case; the same conditions olJtain among many others here m this city, as well as among a majority of the national banks in the larger towns and cities throughout the country.

It seems to us that Congress should very carefully balance this prob­lem and in tryin"' to remedy one evil not create a condition which will be even more ha~mfuL You are seeking to build up a great banking system for us, yet th1s act, if it shall become a law, will weaken many of the inte"'ral " parts (its leading memlJer banks) and strengthen the State banki'Dg systems as against the regional system. Can you afford to do this particularly when we are trying to help you in every way possible? 'Do you think i_t the ~art of wtsd~J? to force. large ~roups of the most desirable and mfiuentml men in cities like Philadelphia out of the national system into State bank or trust company director.ates, and thus build up the State system at the expense of the regwnal system? Is it fair to harass and unjustly punish the clean, straight bankers of this country, who are in tbe great maj~rity, a~?-~ who hav_e through all these yeat·s transacted a strict!Y upllftmgl legttUJ?.ate busi­ness in order to correct an alleged abuse 10 one part. cular. c1ty?

We respectfully submit the foregoing for. your constde~atwn, !tnd we feel it our duty in the interest of our stockholders and m the mterest of the new regional system which you are see~ing to bui_ld up _to enter our protest against the enactment of a law whlch.we believe Will proye not only harmful to the member l)anks of the regiOnal system, but Will weaken the system as a whole.

Ve1·y truly, yours,

Hon . .T. ILDIPTO::-< MOORE,

WM. T. ELLIOTT, Pt·csidellt.

THE GIRATID NATIONAL BANK, Philadelphia, Jiay 18, 1911,.

House of Represeutatires, lVashi.ttgton, D. 0. MY DEAR 1\fn.. MOORE: You have requested me to write you concern­

Ing the intcl"lo~king director&te feature of the trust bill now -before Congress for consideration.

'l'her~ is no real demand on the part of intelligent people for the enactment of any such legislation as is contemplated in the bill as it affects the dir~ctorships in national banl{s. Such unwise legislation will be of disastrous consequence to the banks really affected by its provisions, and as the bill is now constituted it grossly discrim.inat~s against national banks that are unfortunate enough to be operatmg -m cities of over 100,000 population.

Interlocking directors of national banks in cities or towns of under 100,000 popnlation could be of much more detriment to their respective communities than similar directors in larger cities, as the number and scope of the banks in smaller cities are much more concentrated, and as a consequence the possibility of a director's power greater than in tlle larger cities where there are a number of strong competing insti~ tutions. If so-called interlocking directors are permissible in and help­ful to smaller communities, there Js no line of logical reasoning that

will show they are not ot increasing usefulness to the cities of over 100,000 population.

We national banks in the larger cities are now to operate under the l!'ederal reserve act, which will of necessity make a gt·eat change In the conduct of our business ; in the reserve cities the banks are facing a large sb1·inkage of deposits on account of the reserve of other banks being transferred to tbe Federal reserve banks, and it is the banks in the reserve cities that will be vitally affected by the provisions of the new trust bill, and yet before we have had any opportunity to adjust ourselves to the changed conditions along comes more legislation that ·wlll deprtvc our banks of the servtces of the directors that al'e r eally the backbone of our institutions, not only on account of the value of their wide experience and the ·business they have been able to bring to us, but the feeling of confidence in the institution that is engen­dered by tbelr association with us. What will be the effect?

The State banks and trnst companies that are already getting a lion's share of the really desirable business will corral all the men of affairs and their business and their influence to the great detriment of the national banks, and the national banks will be greatly weakened by their loss, with no possible benefit to the very people the proposed legis­lation is supposed to benefit.

A bank can not prosper unless it gives its customers as good, if not better, treatment than its immediate competitors, and the bank with the strongest board, comprisea of men of atfah·s interested In numerous enterprise·, is usually the most alert, most aggressive, and accommo­dating and most useful to any community. It is against such a bank with a board that is of real benefit to its customers that this bill will discriminate; and to what good end?

Another thing that must not be overlooked-these very men that are being legislated out of directorships have in the majority of cases been invited to become associated with our financial institutions with which they arc identified and have not bought their way in to control its affairs, as is so generally mist·epresented, and have been, as a rule, the big f!lctor in the succes ot the institution under consideration.

Take the banks in Philadelphia, for example-the imp01·tant trust compani~s are large holders of th~ stoclrs of all the older national banks tllrough the administration of trusts, not as actual owners, and are large deposJtors with our national lJanks. What exception can be taken to the fact that the officers of these trust companies are diL·ectors in our national banks? It is of importance to the trust com­panies that they are so represented, important to the trusts thev i-epresent, and of great value to the customers of the bank with which thev may be identified, and of nc possible harm to any interests.

Some of the most useful and conscientious national-bank directors are members of private banking firms. Why should they be eliminated by law !rom a directorship in a city bank? I can assure you they are of more use to any bank than the bank is to them.

You can go aU along the line and take the men interested in million­dollar companies engaged in commerce and eliminate them from the directorships in national banks as provided in the act and you will take away the very men that are of the most imfortance, directly and indirectly, to the. customers, large and small, o our national banks, and I ask who is to be benefited by their forced withdrawal? Abso­lutely no one, and a great business-that of national banking-disar­ran~ed and damaged.

In other words, don't drive (lUt of national banking the very class of men that collectively are of inestimable value to the national banks, and through them to the multitude of bank customers and shareholders, and force these men into a position where they will naturally gravitate toward State banks and trust companies-with them will go theii· busi­ness and their influence. Instead of strengthening the national banking system you will impair its usefulness. The national banks have diffi­culty enough now holding their own with what are known as State banks and trust companies; the recent enormous increases in the tatters' number and resources prove thil".

The nation!ll banks have welcomed constructive legislation ; . destruc· tive legislation along the lines contemplated is unwarranted and will be only a detriment to the country's development.

Yours, very truly, J. WAYNE, Jr., Vice President ancl CaslliCI-.

PHILADELPHIA BOARD OF TRADE, Philadelphia.

To the honorable t1te Senate and House of Representatives of the Uni t ed States in Congress assemiJlecl: Your memorialist, the Philadelphia Board of Trade, respectfully rep-

resents: -That there ilas been introduced into the House of Representatives a

bill (H. R. 15657) entitled "A bill to supplement existing laws against unlawful restraints, monopolies, and for other purposes"

Your memorialist submits the following reasons for-.its opposition to this proposed measure :

PRICE DISCRLUINATIOX.

In section 2 of the act it is declared to be a crime to discriminate in price between purchasers of commodities with the purpo'>~ or intent to injure the business of a competitor.

With the general mot·al purpose ascertainable in this provision no one would disagree. There is such a thing as an el'fort to wan!.l)nly destroy the business of a competitor by means other than those rec:og­nized as fair competition. The act, however, as drawn is, we helil!Vt.>, unsound and likely to do substantial harm.

Discriminations in price are essential to any freedom in trad -~. 'The manufacturer or dealer in goods who bas a large supply in the West with a small demand must be at liberty to sell in the West at a lower pl"ice than he would in the East, if he bad there a small supply and an active demand. lle must sell at an advancing or declining scale of prices and on such market as may exist in different localities. Dis· ct·imination in price pet· se is a part of the life of trade, and contains

-no element of immorali-ty_ :Moreover, discrimination in price is an essential to competition.

Competition means obtaining business f01·medy done by others, and this is accomplished by price cutting in the market where the com­petitor is operating. It would be mere hypocrisy to pretend that com­petition does not injure or destroy the business of the competitor. The avowed purpose of the competition is to take the competitor's business fi·om him, as he is attempting to take your business from you. Com­petition is the settled policy of the law, and it would be manifest folly to pass an act requiring that the effects of competition must not exist. The direct el'fect of competition is "to i11jure or destroy." ,

It follows therefore that every person in a competitive buslne s wllo cuts prices in order to obtain the busines.s formerly held by some other

CONGRESSIONAL RECORD-HOUSE~ 9413 competitor would come within the terms of the proposed act, since the direct efi'ect of his p1·ice cutting Is to Injure the business of his -oppo­nent, and be Is presumed to know the etrect of bls acts. 'fhe act as dt·awn should not therefore be passed. It would place everyone · doing business in the United States in jeopardy of Hoe and imprisonment.

If we assume that the1·e Is such a thing as a w1llful and malicious attempt to injure or de"ltroy the business of a competitor outside the s.cope of legitimate competition, legislation should be directed against such willful nnd mallcwus attempt, whether accomplished by price cutting, the sp1·eading of false "reports, or any other dishonest means or practiees. What is a willful and malicious attempt should be left to the courts. The act ought not to be open to the construction that cutting prices In order to take away the compPtltor's business is a crime.

The Sup1·eme Court has interpreted the Sherman Act to mean that where ruthless and destructive methods are employed with the "prl· ma1·y" Intent to Injure or destroy the business of a · competitor, such acts bring the offender within the purview of the present law. Under these cil·cumstanc.es we do not believe that additional legislation is needed.

THE niGII'l' TO SFlLL.

Your memorialist respectfully submits that no public necessity just!· fies the denial to the owners of mines or mining properties the right to sell or to withhold from sale th£' productA of mines developed at their own 1·isk and with their own capital. There can be no freedom unless the inherent rights of the Individual are interfered with only when overpowering public necessity demands.

INTERLOCKING DIRECTORATES.

- Your memorialist believes that It will be conceded by all that the achievements and proApertty of a nation are dependent upon the pro­ductivity of the individual. Unless the man of brains. resource, and energy bas scope for the use of these gifts and qualities tbe whole country is the lospr, at home ancl abroad. The provision agninst inter· locking dirRctoratPs prohibits the individual with the capacity which fs most needed from doing his best sel'vice for tbe country. For sucll n restriction upon individual liberty and such a hQ.ndicap placed upon the energy of the Nation It should be shown that there ensts a great public nPCP$_c;ity, to be met by this means and no other. Your memori· alist believes that neither pre1·equisite for this enactment exists.

The reasons which have been advanced for an interference by Gov· ernment with existing conditions are three in number:

1. That interlocking directorates, so called, may be uAed to create a combination in I"PAt1·aint of trade. Granting this possibility, there Is nothing In It to justify curtailing the usefulness of tb~ best abilities of the country. If several directors of one corporatiOn are actfng on the board of a competing c01·pora tion in such a way as to effect n combination in restraint of tTade, the arranJrement can be set aside bv the courts under existing law. It Is not the p1·esence of the same individual on two boar·ds of directors that is the evil; why, then, cut down our national e1feetl vPness 7

2. That tbey ( lnterloeking dii·ectorates) may sometimes be made use of to eff~>ct c'lishonest schemes for ind ividual profit. Here. again, it Is entirely feasible to legis Ia te a~ainst making secret or dishonest profits from officht 1 position without aeprtving the business of the country of Its most efficient f'eJ·vants. ·

3 . That sometiml's a pcr!'on of large means or abilities ls elected to a number cf directorntes and thus may become too powerful in the world of business or finance.

This ground is nntenable. No ·country can prosper unless tbe In· e£>n tiv£>-A for· individu~ I el"fort are grpat, unless the prizes for usefulness and success are poAitlon and power. To be afraid that position and power may be misused, to take away tbe Incentive for a nation's efforts, becaust> some one will r1er·haps ahnse them, Is cowardice and folly.

We respPrtfully submit, tbPrefore, first, that there is no overp.owering public neces..c;ity for thP pr·opos£>d act. and, second, that other means are available for mPeting any w1·ong-s in ex!Attng cr nditions without £>mas· culating the £>nergy of the pPople or curtailing the productivity of the genius of tbe connt1·y. Le!!lslatP against fraud, conspiracies to do unlawful acts, or abuse of official positions; do not legislate against the proper liberty of the individual.

STOCK OW!\TERSHIP.

Tbe provisions of the pt·opo~ed act rPiating to stock ownership are, in the opinion of your m£>mulallst, unnece..~ary and unwise. It Is bard to believe tbat anyone famtliar wltb buAlnrss eonditlons can honestly aAsert that competition without limit is for th£> best good of t~e pPople; the dl'Stl"llctiveness of comj:wtition Is too evident. The degree of com­petition which will work thP bPst result for all can not be detet·mined by le~islatton-it mu.~t be worked out by the slow process of Pvolution. The great period of consolidation th1·ough which the country bas passed was due partly to the I·e3lization that unresta·ained competition was wasteful and unP~onomlc: partly because the w·OJ·Id trade bas grown to a point wbr1e thP conntrlPS which would lead must operate through lat·gei· and mor·p powe1·ful units of business. Tbe result bas bepn on the whole good. No one familiar with conditions at the bec:inning of the pe1·iod of consolidation and pxpanslon would return to tbPm. The law as it stands p1·oblbits consolioationA which unduly t·estrain trade or crente monopoly. .-\ssuminq that this restriction Is nec~>ssary. upon what mi~ht ppJ·haps othea·wise develop Into too great a degree of con· solidation. It il' evident that tbc growth of the units of business mnst go .on. and if two ot· mon• weak£>1" units find It of advantal{e to unite it would. he b:ld pr> licy tc p1·event the worktn~ out of their salvation In thf'lr own way. We havr le~iAiatpd fully agaiDst th<.> danger of monop· oly, we. should not b<.> afraid of the natural working out of economic Jaws lest we kill our own advancemrnt.

PICKETING.

Your memorialist most E-arnestly objects to the provision of the bill relating to "picketing.'' Tbls p1·actice means In plain terms the sur­rounding of a place of Pmployment by those who desi1·e to stop work in snrh a way tflat those wbo d••sire to work may be p1·event£'d by perRua­_slon if possible. or by fot·ee If necessary, from working. The individual who desires to work ought in a fr~>e country to be protected in that ri)!ht. Th£> ownpr of the factory who desires to run his fac·tory ought to bP protected from willful lnterfeJ·ence. Fer tbe Government to givl' itP. official anetion to a practice which would not have to be legalized, lf it were not immot·al and used for purposes of intimidation,. would be altogether abborn•nt to fair" play and stable government.

CONCLCSIO~.

'Your memonatlst bt"lleveA that the consensus of opinion of the bllSI· ness men of this country is agatnst the passage of this or any other so-called antitrust bill, and that to pas& such an act aa is now pro-

posed would do violence to the judgment of that portion of the com­munity perhaps best able to judge of its effect upon the welfare of the country. -

The fact that the act ln question is dQscribed as an antitrust btU, when In reality It deals with the Law of business relations gene1:ally, Is persuasive proof that th£> time ls not ripe for th£> passage of addi­tional legislation of this charact!'r. It is evidence that the fJ·ame1-s of the hill are thinking in terms of an attack upon some more or less mythical embodim~>nt of evil called a trust. It is certain that the cotm­try must suffer, nnless the laws affecting busin£>ss are framed wltb a scientific accuracy to prohibit only the thing_ that Is wrong. without hHPrfering with the convPnient machinery of business or limiting the initiative and effective energy cf the people.

For which rpasons, among others. we respectfully submit that thiS blll should not receive your favorable consideration.

And yonr memorialist will ever pray. True copy.

AttPSt: WM. R. TUCKiilR, Secretary.

WM. M. COATES, President.

MALCOLM LLOYD, Jr., Ohait·man, SAMUEL T. KERR, S. B. VROO~t.AN, -CHAS. S. WALTON, S. PEMBERTON HUTCTIINSON, NATHAN HAYWARD, JosEPH A .• JANNEY, Jr.,

Oonunittee on Legislation.

Mr. WEBB. Mr. Chairman, I yield two minutes to the gen­tleman from Kansas [Mr. TAGGART].

1\lr. TAGGART. Mr. Chairman, I am wholly unable to under­stand why the distinguished gentleman from Pennsylvania [:\1r. :\Ioo&E] would seem to favor the first man thnt comes to town with a thoroughly advertised article and would cbtim the right to the exclush·e market because he was the first one that came along. He grants no rights whatever to a man that might come the next day and who might h.Hve an article that be had pat­ented, that be had thoroughly adY"ertised. and th<lt finally might become such a well-accepted article by the American public that even the United Stntes Government would make choice of it for supplies for the Nary o~ Army. Why do you hal'e a choice? Who is entitled to the American market? The mnn who simply has advertised? The wan who appears first? Do yon grant no right whatever . to the man who comes in second or third or fourth? Suppose your favorite arrived after the mercbnnts had been tied up with exclush·e selling contracts? Would you be satisfied? Now, the first man · thl'lt you seem to favor would never have gotten a start in the world, be ne,·er would have bad an article . thoroughly ~td\·ertised and acceptable to the pnblic if exclusive· agencies were In complete operation when be begnu to put it on the market, because under your theory when he would come to town the merchants would all ha,·e been tied up by exclusive contracts, and perhaps the very one who is now your favorite would not have any chance at all. The idea is not only to liberate the man who has the right to purcbnse :md sell anything and every lawful thing that be ple<lses to sell any­where, but to liberate the second man or the third mnn or the fourth man who comes to visit the merchant, and who offers his wHreR to the merchants of the town and places thew on the market. Gi\·e them all the same eve-.1 chance. [Applause J

The CHAUL\IAN. The time pf the gentleman has expired. 1\lr. GAllO:\"ER. Mr. Chnirmnn. I should like to nsk the

gentlemHn rrom North Cnr:>lina [Mr. WERB), the chnirman of the committee, if it would detract anything from his bill. pnge 2~. lines 9 and 10. if we strike out the words "or fix a price charged therefor, or discount from, or rebate upon. such price"?

1\Ir. WEBR. Well. I will say to the gentlemnn I think it would. It would hmt the dfect of the hill considernbly and might license the doing of those very things to which we object.

1\Ir. GARD~ER. But you ha•e only specified three of the devices which are customary in the case of p..xclush·e-snle con­tracts. Are yon not afrnid that a court might hold that you intended to permit the deYices which you left ont?

Mr. WEBR. To what de,·ices does the gentlemnn refer? 1\Ir. GARD~ER. Now. I call your attention to your report. in

which you use the expression, "the first indu<'ement in en•ry cnse must of necessity rt>lnte to price." T~1ke t11e cnse nf the l:nited Rhoe l\Jachine1·y Co_, which is situAted in my district. The United Shoe l\Inc~inery Co. obviously might make a con­tract under whic-h they would sny to the shoe mnnufacturers, " If you will u~e our machines exclusiYely. tl1en we will J;:eep .:111 your ruachines in order." Now. as n matter of fnct. onE> nf the reasons why the United Shoe :\Inchinery Co. hHs so many snpporters nmong the sm_nll manufacturers in my distr~ct is because of the fact th:H they keep all their machinery in orrter. I hAve not any sympHthy with their system of "tying" lea~es nt all. but their system for promptly repairing machinery is remarkable.

Mr. WEBB. I think tbe words " discount from~~ or " rebate upon" would coYer what the gentleman desires.

1\1r. GARDNER. I doubt it.

9414 CONGRESSIONAL RECORD-HOUSE. 1\{AY 28,

Mr. -WEBB. If there is any doubt, and the gentleman will offer an amendment to cure it, the committee will accept it.

Mr. GARD~'ER. 1 should prefer to have the gentleman. from North Carolina do that. It is a rather embarrassing thing for me to do. seeing that the United Shoe Machinery Co. is situated in my district. The gentleman from Massachusetts [1\fr. PHE­LAN] can give the gentleman from . North Carolina [1\Ir. WEBB] full information as to the facts.

The CHAIRl\'.lAN. The time of the gentleman has expired. Without objection, the pro forma amendment will be withdrawn, and the Clerk wiU . read.

1\fr. DICKINSON. 1\Ir. Chairman, I offer an amendment. The CHAIRMAN. The gentleman from Missouri offers an

amendment which the Clerk will report. The Qlerk read as _ follows : rage 22, in line" 22, after the word " found " strike out the comma

and insert the words " doing business and the cause of action may accrue.''

Mr. DICKINSON. Mr. Chairman, I have prepared this amendment to be inserted after the word "found" in section 6-the words " doing business and the cause of action may accrue; " and I have also prepm;ed. an amend:r;nent to be ins~rted in section ' 10 after the word "found," using the same language.

Mr. CULLOP. Mr. Chairman--The CHAIRMAN. Does the gentleman from Missouri yield

to the gentleman from Indiana? Mr. DICKINSON. As I have only five minutes, I prefer to

proceed for a few minute~, and then when I have made. ~Y statement I will ask fo.r additional time, for the purpose of responding to any questions, if consent is given. : On last Saturday, during the general debate, I made some suggestions with reference to adding some language after the word " found " in section 10, which reads as fo1lows:

SEc. 10. That any suit, action, or proceeding under the antitrust laws against ·a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found. ·

Upon considering the bill, it seemed to me that the same amendment ought to be offered on page 22, in section 5, after the word "found," which says: ·

. That any person who sball be injured in his business or property by reason of anything forbidden in the antitrust laws, may sue therefor In any district c-:>urt of the United States in the district in which the defendant resides or is found. · . ·

You will note that on page 20, at the end of section 1, the fol-lowing languagg is used : '

The word " person " or "persons " wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territot·ies, the laws of any State, or the laws of any foreign country. -

I have been told that the language used in these sections is the same language as that nsed in the Sherman antitrust law. I am informed that tile same suggestion I now offer has been made by a distinguished judge who is dealing with this class of legislation and prosecutions under the antitrust law.

Mr. FLOYD of Arkansas. Wlll the gentleman yield, with l'e­gard to -the }fl.St suggestion?

Ur. DICKINSON. I yield to the gentleman from Arkansas. Mr. FLOYD of Arkansas.. That last suggestion follows the

words of the Sherman law, and I never heard any complaint about it:

Tbe word " person " or " persons " wherever used in this act shall be deemed to include corporations and associations existing under or au­

. thorized by tbe laws of either the United States, the laws of any of the Territories. the laws of any State, or the laws of any foreign country.

Mr. DICKINSON. Yes. Mr. FLOYD of Arkansas. We simply copied the language of

the Sherman law. .Mr. · DICKINSON. I understand that; but let me proceed

:further for a moment. I want to call the attention of members of the committee to the fact that this law seeks to provide for an· action, suit, proceeding, or trial in the judicial district where the corporation, as mentioned. specifically in section 10, is an inhabitant. I want to call attention to · the fact that a corpora­tion is an inhabitant of the State where it gets its incorpora­tion, and which it selects as its place of residence. Speaking for a moment with reference to the corporatiofio as · distinguished from the person, in section 10, when you use the language-

And also in any district wherein it may be found-Bow are you going to find a corporation for the purposes of

jurisdiction, not for the purposes of mere service? Of course you can find . it by serving certain processes -upon its agents, officers, or employees.

Mr. CULLOP. 1\lr. Chairman, will the gentleman permit an · interruption right there?

l\.Ir. DICKINSON. Yes.

.. l\.Ir. CULLOP. I would suggest that to correct the very mat­ter y9u are driving at-because this is an ~ttempt to give jurisdiction wherever the cause of action arises-you strike out

. the words "is found" and in::;ert the words "has an agent." Th.at will give service wherever the cause of action arises. Otherwise, if you leave it in this way, you will have to go to the home of the corporation.

. Mr. DICKINSON. .Mr. Chairman, I do not agree with the gentleman from Indiana [Mr. CuLLOP] in that suggestion. I have before me the amendment suggested by an eminent judge, using somewhat similar language; but I believe that these suits,' actions, and proceedings ought to be .brought, in the case of a conJoratiou, not only where it is an inhabitant by virtue of its incorporation, and not only against a person who is an inhabit­ant of a certain State, not only where that corporation or that person may haye "soine agent in a remote district, but it ought to be brought where the .corporation or the person is doing business and where the cause of action accrues.

The CHAIRMAN. The time of the gentleman from Missouri :has expir·ed.

1\fr. DICKINSON .. l\Ir. Chair)l)an, I ask for five minutes more. .The CEJAI~MAN. The g~ntleman from Missouri asks that

his time be extended five minutes. Is there objection? There was no objection. . 1\Ir. DICKINSON. For instance, take a corporation or a

person, inhabitant of New Jersey. They may be doing a small business in the State wherein they are incorporated, or where the individual is .a citizen, and the principal business may be done in West :Virginia or Colorado or in 1\fissomi. Wherever the cause of action accrues, wherever the damage is done, wher­ever the witnesses are, there is the place where it ought to be at least permitted to be sued and trial to be had.

A New Jersey corporation or a West Virginia corporation may transact business in Missouri or in Colorado or . in fnr-awny California. 1:here is where the wrongs may be done, where the violations of the law may be committed, and thet;e is the evi­dence of these things; and they should not be compelled for the purposes of a trial to have suit brought in some far~away State or district, of which they are the inhabitant by virtue of the incorporation therein or selection of a residence therein. I thiuk, after the word "found," there ought to be additional lnn· guage such as I have offered in this section. I will ask the Clerk to rend the amendment.

The Clerk read as follows: On page 22, line 22, after the word " found," strike out tbe comma

and insert the words " doing business and the cause of action may accrue."

Mr. DICKINSON. Now, one more suggestion. The same amendment, it seems to me, ought to follow the word " found " in section 5 and in section 10. The same language ougllt to fol­low where it provides for the prosecution of a corporatio)l and the prosecution of the person taking into consideration the defi­nition of the word "person." I do not ask to strike out any language of the committee, but sii:nply to add to it; to make clear and definite and certain so that any pe1·son and any cor­poration may be sued not only where it has its residence as a corporation or individual, but that it can be sued wherever it is found doing business and the cause of action may arise. .

1\Ir. STEPHENS of Texas. I desire to ask the gentleman if he will not change the point at which he bas offered his amend­ment. I thoroughly agree with him, but I twnk it ought tq come in after the word "resides," line 22, page 22, so that it will read, " in which the defendant resides, does business, or is found." l

1\fr. DICKINSON. Mr. Chairman, I much prefer that the amendment finally agreed upon should come from the commit­tee. I have no disposition to inject any amendment of my own or my personality into this bill, but I want such appropriate language as will make it certain and definite. ·

The CHAIRl\IAN. The time of the gentleman has again ex­pired.

Ur. DICKINSON. l\lr. Chairman, I ask for five minutes more. The CHAIRMAN. The gentleman from Missouri asks that

his time be extended five minutes. Is there objection? · 1\fr. STAFFORD. Reserving the right to object, I would like

to ask the chairman of the committee how long he intends to run to-night. This is a bot day and we have been in session since 11 o'clock, and 1\Iembers are getting tired. · · · ·

1\Ir. WEBB. I hoped that we would get through with sec- · tions 5 and 6. I do not think there will be much opposition, and we think we can do it in 15 or 20 minutes. -- '

Mr. STAFFORD. I have no objection. The CHAIRMAN. Is there objection to the requ~st of the

gentleman from Missouri? · There was no objection, " · ~ 1-

1914. '. -CONGRESStONAL RECORD-HOUSE. 9415 Mr. DICKINSON,. Mr. Chairman, I have before n:ie a sug­

e:stion of an amendment which came from a distinguirC:ed rep­resentative of the Government, a distinguished judge, ·formerly a high official, in which he suggests the following words : It is to insert the words "in the district wherein tbe defe.ndHnt m&.y be doing ·business or have an agent, representative, or director.'.' 'l'hllt does not seem to me to cover the situation entirely. The suit ought to be authorized to be brought against the ~orpora­tion or person in the district of which he is an inliabitmit or where the cause of ac:tion accrues· and not merelv where sowe agent or representative may be located remote fi.om the point where the damage is done. ·

Mr. SCOTT. Will the gentleman yield? 1\fr. DICKINS0~. I will. Mr. SCOTT. What is the gentleman's understanding of the

wotJ "found"; what is Hs import as used in this section? l\lr. DICKINSON. I understand thnt there is come decision

by some court that I am not very familiar wit!l that may pos­sibly co'"er the very though-:: suggested by my proposed amend­ment. I do not believe that it meets the situation, and if there be any doubt about it, in order that the Government may prose­cute successfully and institute suits and actions and have trials the language ought to be clear and definite, and so plain that he who runs runy read, so that there can not be two constructions.

Mr. FLOYD of Arkansas. 1\Ir. Chairman, will the gentleman yield?

l\lr. DICKINSON. Yes. 1\Ir. FLOYD of Arkansas. I desire to make an explanation of

this provision. It is one of the administrative features of the bill which bas the approval of the Attorney General, who has been connected with some of these great trust suits, and this language was used to ma~e this section con.form to the existing law and enable him to have greater liberty in bringing th~se suits. I want to call the gentleman's attention to the fact that that lal'lguage has the approval of the Attorney General, and while of course that does not bind us, I think if we adopt any amendments to it, it should be after mature consideration.

l\Ir. DICKINSON. 1\Ir. Chairman, in response to that, I want to say again. as I said before, that I have no disposition to press nny amendment suggestro by me, and I want to repeat that I prefer that the amendment come from the committee in appro­priate language. For that re~son I do not care to further press the amendment at this time.

l\Ir. CULLOP. Mr. Chairman, I desire to offer an amend­ment to the amendment, in line 22, after , the word "or," to strike out the words " is found," and insert the words " has an agency."

The CHAIR~IAN. The Clerk will report the amendment to the amendment.

The Clerk read as follows: Page 22, line 22, su·ike out the words " is :round " and insert in lieu

thereof the words "has an agency."

Mr. CULLOP. Mr. Chairman, that will make it read: In which the defendant resides or has an agency doing business, and

the cause of action may accrue. ~Ir. FLOYD of Arkansas. Why strike ·out the words ~· is

found"? Mr. CULLOP. Because the words "is found" will not avail

anything in serving a process or getting jurisdiction of the defendant, except at the place where the corporation resides. The word " .found" as used there .is vague and indefinite, and means nothing, so far as acquiring jurisdiction is concerned. But I can see that it will do no harm to leave them, and I shall Qt the proper. time ask to modify the amendment in this respect.

Ur. FLOYD of Arkansas. Mr. Chairman, will the gentleman yield for a suggestion?

Mr. CULLOP. Certainly. Mr. FLOYD of Arkansas. This act applies to' pei·sons as well

as to corporations? Mr. CULLOP. Certainly. 1\Ir. FLOYD of Arkansas. And the words " is found " . would

certainly give you advantage in dealing with a person. Mr. OULLOP. It may in such instance. But suppose a per­

son lives in New Jersey, doing business there, how can jurisdic­tion ot him be acquired in any Federal co_urt in Colorado or Nevada? Suppose process is served on him, he wiU enter his appearance and move to quash the process, and answer that he was called into that jurisdiction by the process of some court. 'J:hat .defendant will never go into Colorado in such a way that he will be subject to a valid service, and if he was called there upon some public business he can quash the service, . if it ·be made upon him because when a man is competled · to go into a jurisdiction upon public business, you can not serve a process of the court on him and bring him into court and require him

to answer a cause of action; but if he has an agency doing business there, then jurisdiction can be obtained over the corpo. ration or the individual in the territory where the cause of action arises. But why insert the language "is found" in this without he has· an agent? · It may result, and more than likely will result, in a failure to acquire jurisdiction other than at the p~ace where the corporation or individual resides.

Mr. J. M. C. S.~HTH. 1\Ir. Chairman, will the gentleman yield for a suggestion? ·

Mr. CULLOP. Certainly. Mr. J. l\I. C. S:\IITH. Is it not true that in all the States

foreign corporations are compelled to appoint a person at the capital for the very purpose of receiving service?

Mr. CULLOP. All that I know of. I thank the gentleman for the suggestion that he has made. In nearly every State there is a law, as the gentleman from Michigan suggests, re­quiring the corporation to appoint an agent for the purpo!';e ,of serving process upon him, and if the corporation has no agent in my State the auditor of state is made the agent for that purpose; but now, if we undertake to limit the service of process upon the defendant to wherever it is found, we will never in all probability get jurisdiction in these cases exce11t at the place of the home of the individual or the corporation. What objection could there be to inserting the language "or has an agent"? It will clarify the matter and make certain that which is now uncertain. The defendant can then be found to serye the process upon him; but if you do not do that, when and where will we find the defendant? In many instances only certain persons are delegated by the corporate acts or by-laws upon whom the legal service can be had. That person in such a case would never go into the territory where a cause of action ari es, but he would send somebody else there, upon whom legal service could· not be made.

The CHAIRMAN. The time of the gentleman from Indiana ha& expired.

Mr. CULLOP. Mr. Chairman, I ask unanimous consent to proceed for .two minutes more.

The CIU..IRUAl~. Is there objection? There was no objection. Mr. CULLOP. In such cases the defendant would always

avoid sending the person in the territory upon whom process could be served, and get the defendant into court to answer any cause of action which might be brought, and the can e would go out of court on a plea in abatement. I am trying to have this made so jurisdiction can be secured by a service of process upon the agent, and when there is service upon the agent it will compel the corporation or individual to answer in court the cause of action, but by the amendment of the gentle­man from Missouri I fear no one will ever get one of them into court to answer a cause of action or respond to one. He will never be found, he will a void being found, he will be in hiding, and the injured party will never get servic~ upon him. If he does find him, he will be in a position to quash service for some reason known to some statute in that jurisdiction. Hence I ask the gentleman from Missouri to let the amendnent that I have offered be inserted, so it will be of som..: real purpose to the people who may have occasion to bring suit under this statute, and not be, as it is now, that they will have to travel probably from California to New Jersey or New York to bring suit.

.Mr. DICKINSON. I would like to make the inquiry would not the same objection the gentleman makes now ~pply to the statute where the corporation is an inhabitant by virtue of it having been incorporated there?

Mr. CULLOP. No; clearly not. Let us make this so there will be no avenue for escape. .

1\fr. DICKINSON. I want to say I have uo objection to any . additional language. I want to add additional words after the word "found," but I care not whether it be the language I have suggested or the additional language suggested by the gentleman from Indiana, but I really prefer that the committee in charge of this bill offer its own amendment complete a1;1d perfect it for consideration.

The CHA.IRMAN. The time of the gentleman from Indiana has again expired. . .

1\fr. FLOYD of Arkansas. 1\Ir. Chairman, I desire to state that the provision written into the bill has the approval of the Attorney General, who is engaged in prosecuting these suits, and the purpose of it is to broaden the language so as to give. the Government the widest latitude in securing service, and the amendments suggested are limitations upon that authority. The very broadest language that can be used in a statute of this kind conferring jurisdiction is to give the jurisdiction where the corporation resides or is found.

Mr. ALEXANDER. Will the gentleman yield?

9416 CONGRESSIONAL RECQRl)-HOUSE.

1\Ir. DICKINSON. Yes. gested by a: cUstin.guished representative of the Government 1\fr . .A:LEXA.~DER. This is not new l:mgunge. I think this now engaged in prosecution under the Shennan antitrust law,.

1!:;, language,_ irr brec.. verba.,.. of ooction 1 of the Sherman anti- extending the- language, after the word "foun~" so as to make trust law. it clear and certain?

1\fr. WEBB. This is absolutely taken from section 7 of the Mr. FLqYD of Arkansas. There has been such a suggestion Sherman antit1·ust law. made by Mr .. Dickinson, who is nvw engllged in prosecntiug the

l\1r. C'CLLOP. Will the gentleman permit a question: right Steel Trust for the Government. But this language is broader there? than the language you contend for. I contend when you lea\"e

Mr. FLOYD of Arkansas. Let me read the language of sec- the words "is found" in the law you can get service on an in­tion 7. It says "in the district in which the defendant resides dividuaJ, anywhere- within the jurisdiction in which he llitl'veus or is found," and, this being supplemental, it was intended to to be found and upon a corporation in any place where it is make it re:td and give it the same effect as· in the Sherman law. doing business or has an officer or agent upl)n whom service

.Mr. CULLOP. But "is found." A corporation does not may be had; and the words of the proposed amendment are move around; it is a stntionary affair, and its residence is some w<.•rds of limitation. p'lace fixed in its articles of incorporation. Now, then. it is As· this is supplementary legislation to the Sherman law, I stationary. It is the agent who moves around, nnd tben ~ither would ask some of these distinguished gentlemen to explain to the law or the by-laws of the corporation provide who are the· me what reason or what policy would require or justify thnt per ons upon whom service can be- made to bring them into we should provide one rule as to service uuder tlle original law court; but if you fix it "any agent," as I hava suggested, then 1 whi.ch we do not reJ,Jeal nor modify in thnt -regard, and a di:t­you hnve it that where,er there is an agency in any State or ferent rule for bringjng snits miller this supplementary law. District in the Union you can get a valid service if they have· , The suggestion was made by the Attorney General, as I under­any such agent. and then you get it by the law, as most of the stand, so as to harmonize the pro\"isions of the proposed law Str~tes h~we n statute. =with those of the existing law and to give the Go,·ernlllent the

Mr. FLOYD of Ark:msas. If the gentleman will permit, I widest possible scope in gettilll:; senice in the e case.s, nnd the desire- agnin to call his nttention to the fnct that individual'i

1

provision is right a.:; it is written and ought not to be changed. ntay be guilty of violating this provision the same as COl'J)ora- 1\Ir. GARXER. Will the gentleman yield for .. cuestion? tions. and tbnt individuals do not necessnrily hHve nge~ts. and it l\1r. FLOYD of Arkansas. Yes. is necessnry that we retain this provision in the bill as it is 1\Ir. GAR~ER.. The gentlenutn snys this. gi,es the brondest written, in order to gh·e serYice apon in-dividuals, and eorporn- ·scope possible for the bringing of suits ngainst agents :.nd others. tlons nre found wherever they are engaged in business and Can the gentleman point out t1nder the She.rm.nn antitrust lnw wherever they ha-re r~gents. any suit that has been brought against a corporation outside

1\lr. CULLOP. But individuals doing an interstate- busi- of the jurisdiction of its horne? ness. Mr. FL~YD of Ar ansas. I cnn not.

l\Ir. FLOYD of Arkansas. We have- here a provision in ref- 1\lr. GAR~ 'F..R. If tber.e hu.s bet>-n no suit in nese 20 years-erence to seniee that is incorporated in the original nc.t which Mr. FLOYD of Arkansns. I do not say there has not. I say we are propo ing to supj')lement. so why not follow the Language thnt I ha'e not investigated thnt point. of the 8he1·man Act in that regnrd. for that is all we do. 1\fr. GAR. 'ER. I was going to assume thnt there were no

1\lr. GAR~ER. Will the gentleman yield for a question? suits brought ag.ainst a coi<porution exce;Jt in the jurhu1irtron 1\fr. FLOYD of Arkansas. Yes. of its borne, and the pro eeuting officers mnst have assumed 1\fr. GAR);ER. Has the SuprPme Court ever passed on that that was the only place they had jurisdiction or else tllere

language of the She-rman Act " is found "? would have been some suit somewhere brought outside of· the l\lr. FLOYD of Arkansas. I do not think so. It is the- lan- 1 jurisdiction of the home of that corporation.

guage- of the statute in my State and I think in many others. ' 1\lr. FLOYD of Ark<tnsas. I do not denJ! or affirm that. I Mr. GARXER. Does the gentleman know ·in invPstiga ling · have not investigated thut question.

this mHtter or has be run ncross any d'ecision of the Supreme 1\lr. GAR...~ER. The very fact that there have. not been any Court construing thnt language in the Sherman antitrm~t utw?· suits brought in these 20 yea.rs--

Mr. FLOYD of Arkansns. I never did. I ne-ver beard of nny Mr. FLOYD of Arkunsas. I do not admit there nave not. I complaint in re;n~rd to it. and in this bill the provisions with do not concede the fact stnten. r eference to service foll ow the original Sllerman h1w. It bus .Mr. GAR~ER. I was n ~ ldng the gentlemnn thnt queRtion. the ::tpp.roval of the Attorney General's office. and there ne>er .Mr. ALEXAXDEll. If the gentleman will yield. I think tbnt has been nny difficulty about the intPrpretation of the Sb.elr- there are two suits pending in New York ngninst foreign ship­mnn law ns- to sen·ice. ~Wrl so in pnssjng supplementnry legh:;"' ping lines for -riolation of the Sbermnn nntitru 't law. lation we should. I think, content ourselves in that regard with l\lr. CULLOP. Now, will the gentleman yield to me for a the terms of the Sherman law. question?

Ur. CULLOP. !\Iny r suggest to the gentlem:m from Ar- l\lr. FLOYD of Arkansas. You ee in this--kansas thnt every suit which has arisen under the Sllerman The CHAIR:\IAX. The time of the gentleman from Arknnsaa antitrust law bns been brought at the borne of the <>orporlltion [.M:r. FLoYDJ has again expired. itself. or at its principnl place of busines..«. and therefore there Mr. CULLOP. 1\Ir. Chairman, I ask unanimous consent that was no occasion to construe this langunge. "is- found." which he have five minutes more. is nmbhmous and uncertain. If you ::tre to con~true "is found." The CHAIR.MAX The gentlemnn. from Indinnn [Mr. CUL­you will have to construe that as the place of the residence of LOP] asks unanimous consent that the gentl eman from Ark11nsas the corporation. becam~e it is not migratory. You can no~ ~t have fiye minutes- more. Is there obj ection? sen·iee upon some person trave-ling throughout the country and · Mr. DO~OVAN. 1\Ir. Chairm:tn, resening the right to ob· hold your jurisdiction throughout that territory. ject, we have given the gentleman from Arlwns11s fire mlnntPS

1\lr. CARLI~. Why should not the suit he brou~ht in the once or twice, and whnt do we find? He di.d not bn,·e fhe ~<"C­h::tbitM of the corporation? We have been successful so far in onds- of the tlme. Now. what a f<lrce it is to give the gentle­thnt mntter. mnn from Arkansas fi\' e minutes and let some one e~s use. the

1\Ir. ClJLLOP. In this case for the >ery best renson. I think. five minutes. Probnbly there is not another :\lemhe.r of tbis The gentlemnn from Yirginia [:\Ir. CAB.LiNl now bas discloHed llouse- who- can explain or illuminnte this. question as tile gen­the pnrpo~e of this langnnge, and that is why I am corubnting tlenwn from Arkansns [Mr. FLOYD]. anrl ~\Iewtler who lmmv it; and for the best of ren ~ons, I think. I do not want to make nothing whatever of the subject can. DDt get the l>enetit of what a resident of CHlifornin come to Tre-nton. N. J· .. to bring a sujt he bas to say. for \'iolntion of this lHw. but I wnnt him t~ sue. at horne in the I withdraw my objection. jurisdiction where the cau~f' of nctfon arose. The- CH...·UR~1.A~. Is there. objection? [After a ' pause.]

The CHAIR:\lAX The time of the gentleman from Arkansas The Chair bears none. [lUr. Fr:oYDl bas expired. .Mr. CL'LLOP. D'ow, 1\Ir. Chairman, I de~1re· to ask this:

l\1r. FLOYD of Arlmnsas. M:r. Chairman, other gentlemen You · say it is provided in this. that where~ the defendant i::1 lwYe taken my time, and I ask. unanimous consent f.or· fi.v.~ found--minutes more. ~f'r. FLOYD of Arknnsus. Resides. or is found..

The C:KAlll:\IAN. Tbe gentleman from Arkansns nsks unani- Mr: CULLOP. Resides or is fonnti?· mous consent for five minutes more. Is there objection 1 1\Ir. FT.OYD of Arkansas. Yes

Tllere wHs no objection. 1\fr.. CULLOP. Now. under tllat lnnguage you could not get Mr. DICKIXSOX. 1\Ir Cha:il~man, merely for fbe purpose' of jurisdiction of the defendHnt by se-rvi-ng process on an ageut,

a question. I want to ask the distinguished: gentleman from unless' you hfl ve fixed in the law th1rt servi.ce upon the- agellt Arkansas whether some- similar amendment has: not· been. sug- will· gi-ve. jurisdiction. of: the corporation. So that you add

1914. CONGRESSIONAL R.ECORD-HOUSE. 9417

nothing whatever to this in any respect, except, as I take it, to fix the place of the residence of the corporation. I ask the gentleman, is it legal to serve process on an agent, and is · jurisdiction obtained by such service, unless the law makes him an agent upon whom service of prucess will confer juris­diction against the corporation?

Mr. DONOVAN. Mr. Chairman, a parliamentary inquiry. The CHAIRMAN. The gentleman will state it. . Mr. DONOVAN. When does the time of the gentleman from

Arkansas [Mr. FLOYD] begin? When did the gentleman take the floor?

The CHAIRMAN. The Chair will state that his time is running now.

Mr. FLOYD of Arkansas. Mr. Chairman, in answer to the gentleman from Indiana, I think it would be a very dangerous practice for us here, in the heat of debate, with differing opin­ions, to amend a provision relating to service of process, when .the very language that is incorporated in this bill has been written in the existing law for 24 years, and there has never been any complaint from any source concerning it, nor any .confusion about it; and when the Attorney General of the United States, who was heretofore connected with one of the most notable trust suits that has ever been brought and is now in control of all trust suits now pending, asks us to fix the service in this supplementary legislation in the exact words in which it is found in the existing law.

We followed his judgment. We believe we did right in fol­lowing it, and we think this House will be wise in following his judgment, because we are not amending the Sherman law. We are merely supplementing it by additional legislation; and there it stands, just as it is written. We are proposing new and sup­plementary legislation, and in doing so you are proposing by these amendments offered to fix a different rule for service of process in this bill from that provided in the original act. Gentlemen talk about confusion. This would bring confusion. A person in bringing suit under the original Sherman law would obtain service wherever the person or corporation resides or is found, but in bringing suit under the supplementary legislation he would have to follow this new statute and the new rule re­lating to service injected into it. · In the interest of harmony, and especially when there is no objection. to the Sherman law in that regard, especially when the highest legal officer in this Government, charged with the enforcement of the law, has rec­ommended it, we feel that we ought to bow to his judgment and reject the amendments proposed. We believe this House would do well to follow recommendations of your committee and leave the provisions relating to service as they are in the bill. The same language used here occurs in other sections further on in the bill . Why have two rules for service in the enforce­ment of the antitrust laws of this country? Why have one rule in the original Sherman law as it is written and another rule in the supplemental provisions thereto proposed in this bill, which are intended to broaden and extend the provisions of the Sherman Act, without attempting to curtail or cut short in any t·espect the virtue, power, and efficacy of that law as it is written?

Mr. GARNER. Will the gentleman yield? Mr. FLOYD of Arkansas. Yes. l\1r. GAR~ER. Would the gentleman favor n statute which

would permit service on an agent? Mr. FLOYD of Arkansas. I think you can get service on an

agent under this provision. I do not know how you can sue a railroad corporation unless you get your service on an agent.

Mr. GARNER. If the gentleman finds, upon further investi­gation, that this provision would not permit it, then ·would the gentleman object to an amendment?

1\Ir. FLOYD of Arkansas. If, on mature investigation, we find that any provision of this bill is defective in any way and will not carry out the purpose for which it is intended, I assure the gentleman tllat nobody will be more willing to accept such an arnendment than your comrnittee; but I appeal to yon not to change these provisions hastily, in the heat of debate. I think the pro vi ions relating to service properly drafted as they appear in the bill, and tllat the proposed amendment and others suggested in the debate would narrow the scope of the provisions as drawn. I hope that tile amendment will be rejected and that section 5 will not be amended, as the words objected to are n verbatim copy of language used in section 7 of the Sherman Act, proposed for reenactment here so as to make this supplementary legislation harmonize with the existing law.

Mr. SCOTT. Mr. Chairman, I believe the language both in the Shermnn law and in this particular section was advigedly

. used. I think some of the gentlemen on the other side have forgotten some of the occasions when they found it necessary to look up the decisions on this question. It is not a new or un-

settled question. The expression " found " as used in connec­tion with Federal jurisdiction of corporations means where the corporation is doing business. A corporation must submit the jurisdiction of the Federal court either in the home of the corporation, which is the State that creates it, or in some -other district or State where it is found doing business. And that does not mean merely where it has an agent or an ngency, because many times corporations have an agent or an agency in a State and is not doing business within the jurisdiction clauses of the statutes.

1\fr. SUMNERS. Will the gentleman yield? 1\Ir. SCOTT. Yes. 1\Ir. SU~INERS. Does it not occur to the gentleman that

since this bill contemplates suits may be brought by private individuals,· that they be permitted to bring suit where the wrong is done and follow the old rule of procedure? ·

1\fr. SCOTT. You could not adopt any method that would introduce more confusion into the law than that, because the question as to where the cause of action accrued is very often one of great difficulty to decide. It is a matter over which State statutes have no control.

The stah1te, as suggested by the gentleman from Indiana, of his State could have no effect of conferring jurisdiction on the Federal courts. While I do not think it would harm the section to say "found doing business," because that is what the expression means, it would introduce confusion to use the expression "agent or agency," because that has no limitations in the Federal decisions up to the present time. The expression "found doing business" has become fairly well defined.

The gentleman from Indiana is again mistaken when he says that there have been no suits brought to enforce the Sherman antitrust law except at the home of the corporation. I hope he has not forgotten the great Beef Trust prosecutions-a New Jersey corporation was a defendant-which were tried out in Chicago.

1\Ir. SUMNERS. Will the gentleman yield? 1\Ir. SCO'l"T. Yes. 1\Ir. SUMNERS. Does the gentleman believe that if a private

individual in California, wronged by a corporation that has its domicile in New York, was forced to resort to the courts in New York you would practically deprive that man of an oppor­tunity, if he was an ordinary citizen, of pursuing the remedy which the law provided?

1\Ir. SCOTT. You do not do that, because he could always bring suit in California if he can find anyone upon whom to serve process. He brings it in the State court, and the corpora­tion at once takes it to the Federal court. That has been the history and procedure. ·

1\.lr. DICKINSON. Will the gentleman yield? 1\Ir. SCOTT. Yes. 1\Ir. DICKINSON. Take a New Jersey corporation doing

business in Texas and doing business in Illinois. It may com­mit no Yiolation of the law, no wrong, no damage in 'l'exas; and if so, a suit ought not to be brought there. If this same corporation does some oue an injury, does do damage in Illi­nois, ougllt not the suit to be brought there? I give the widest liberty of bringing suits where the damage is done and where the action arose. My amendment seeks to be fair both to the corporation and to the person and to the plaintiff.

Mr. SCOTT. I could not coucei'fe that anything would deprive the plaintiff of his right to choose the place of trial if he so de ired, either in the district where found or where the corporation resides.

1\lr. LEVY. 1\lr. Chairman, this bill is full of ambiguities. The trouble with it is that it will take 20 years to decide what it menus, as it did the Sherman antitrust law. The discussion of this bi!l here has proYed conclusively how dangerous it is to intarfere with the business relations and rights of citizens all oyer the country. I claim that these provisions in this bill at the present time are disastrous to the business of the United States. Let me read to you a resolution or petition made by three of the largest manufacturing associations in the world :

we; the undersigned, representing the National Implement and Vehicle Association, the Ohio Manufacturers' Association, and the Illinois Manufacturers' Association, in which Stutes the manufacturing indus· try represents 33,164 factories, employing 1,084,000 employees, with an annual pay t•oll of $782i365,000, desire to cooperate with the Congress in legislation which wil eliminate business abuses. ·

We favor an interstate trade commission properly regulated, but we are opposed to all legislation which is discriminatory, and we ask that all other business legislation be deferred . until the business men of the United States can become acquainted with the proposed laws, of which they are now entirely ignorant.

l\fr. WEBB. Mr. Chairman, I move that the committee do now rise. .

The motion was agreed to.

9418 CONGRESSIONAL "RECORD--HOUSE. ~fAY ~8,

Accordingly tne committee rose; and 1\Ir HAY having taken the chair as Speaker pro tempore, Mr. BYRNS of Tennessee, Chair­man of the Committee of the Whole House on tl'le state of the Union, reported that that comrrrlttee had had under consideration the bill H. R. 15657, relating to unlawful restraints and mo­nopolies, and had come to no resolution thereon.

SENATE JOINT RESOLUTIONS REFERRED.

Under clause 2, Rule XXIV, Senate joint resolutions of the following titles were taken from the Speaker's table and re­ferred to their appropriate committees as indicated below:

s. J. Res. 152. Joint resolution authorizing the President to accept an invitation to participate in the International Con­gre~s on Occupational Diseases; to the Committee on Foreign Affairs. •

S. J . Res. 151. Joint re::;;olution authorizing the President to accept an invitation to participate in an IntemHtional Exposi­tion of Sea Fishery Industries; to the Committee on Foreign Affairs.

S. J. Res. 105. Joint resolution authorizing the President to accept an invitation to participate in the Sixth International Dental Congress;. to the Committee on Foreign Affairs.

S. J. Res. 153. Joint resolution authorizing the President to accept an imitation to participate in an International Congress on Neurology, Psychiatry, and Psychology; to the Committee on Foreign Affairs. JOINT RESOLUTION PRESENTED TO THE PRESIDENT FOB HIS APPROVAL.

1\lr. ASHBROOK, from the Committee on Enrolled Bills, reported that this day they had presented to the President of the United States, for his approval, the following joint resolu­tion:

H. J. Res. 264. Joint resolution authorizing the President to accept an invitation to participate in the Sixth International Congress of Chambers of Commerce and Commercial and In­dustrial Associations.

WITHDRAWAL OF PAPERS.

Mr. ANDERSON, by unanimous consent, was given leave to withdraw from the files of the House pension papers in the case of Bridget Thomas, H. R. 7313, no adverse report having been made thereon.

LEAVE OF ABSENCE.

By unanimous consent, leaves of absence were granted as follows:

To Mr. NEELY of West Virginia, for five days, on account of illness.

To Mr. GRAHAM of Illinois, for one week, on account of im­portant business.

To l\Ir. BELL of Georgia, for two days, on account of illness. To Mr. RoaEBs, further leave, on account of illness in his

family. ADJOURNMENT.

And then, on motion of Mr. WEBB {at 6 o'clock and 6 minutes p. m.) the House, under the special rule, adjourned until to­morrow, Friday, .May 29, 1914. at 11 o'clock a. m.

EXECUTIVE CO~fMUNICATION. Under ·clause 2 of Rule L~IV, a letter fi·om the Secretary of

the Treasury, submitting an item of appropriation for remodel­ing, repair, or improvement of the old customhouse and post­office building at New Orleans, La. (H. Doc. No. 1002) ; to the Committee on Appropriations and ordered to be printed. ·

REPORTS OF COMMITTEES ON PUBLIC BILLS AND RESOLUTIONS.

Under clause 2 of Rnle XliL bills and resolutions were sev­erally reported from committees, delivered to the Clerk, and referred to the se•eral calendars therein named, as follows:

l\1r. FERGUSSON. from the Committee on th~ Public Lands, te which was referred the bill (H. R. 12050) reserYing from entry, location, or sale lots 1 and 2, in section 33, township 13 south, range 4 west, New l\Iexico prime meridian. in Sierra County, N. 1\Iex., and for other purposes, reported the same without amendment, accompanied by a report (No. 721), which said" bill and report were referred to the Committee of the Whole House on the state of the Union.

Mr. FERRIS. from the Committee on the Public Lands, to whlch was referred ~e bill (H. R. 15983) to restore homestead rights in certain cases, reported the same with amendment. ac­companied by a report (No. 722), which snid bill and report were referred to the Committee of the Whole House on the state of the Union.

l\Ir. CHURCH, from the Committee on the Public Lands. to which was referred the bill {H. R. 92) to extend the general

Jand laws to the former Fort Bridger l\IiHtnry Rec::ervation. in Wyoming, reported the same with amendment, a ccompanied by a report (No. 723), which aid bil1 and report were referred to the Committee of the Whole House on the state of the Union.

Mr. SAUNDERS, from the Committee on the Merchant Marine and Fisheries, to which was referred the bil1 (H. R. 16269) to regulate the taking or catching of spong€'s in the waters of the Gulf of Mexico and the Strnits of Florida out­side of State jurisdiction; the landing, delh·ering, curing. sen-· ing, or possession of the same; providing means of enforcement of the same, and for other purposes. reported the same with amendment. accompanied by a report {No. 724). which said bill and report were referred to the House Cnlendnr.

Mr. PROUTY, from the Committee on the District of Colum­bia, to which was referred the bill (H. R. 16783) providing for the taxation of and fixing the rate of tax ntion on inheritances, devises, bequests, legacies, and gifts in the District of Colum- · bia, and providing for the manner of payment as well as the manner of enforcing payment thereof, reported the se~rue with­out amendment, accompHnied by a report (No. 725), which !:laid bill and report were referred to the Committee of the Whole House on the state of the Union.

PUBLIC BILLS, RESOLUTIONS, A1\"'D MEMORIALS. Under clause 3 of Rule XXII. bills, resolutions, and memorials

were introduced and severally referred as follows: By 1\Ir. A SWELL: A bill (II. R. 16 D7) to tax the privilege

of dealing on exchanges, boards of trade, and similar places in contracts of sale of cotton for future delivery, and for other purposes; to the Committee on Agriculture.

By Mr. ALLEN: A bill (H. R 168!) ) authorizing the Secre­tary of War to donate to the Union Veteran Legion, No. 12, of Cincinnati. Ohio, one mortar or cannon; to the Committee on Military Affairs.

By Mr. FRANCIS: A bill (H. R. 16809) providing an adili­tional appropriation for the Federn1 building at Bellaire, Ohio; to the Committee on Public Buildings and Grounds.

By Mr. ASWELL: A bill (H. R. 16000) to ref.,rulate traqing in cotton futures and provide for the standardizntion of "upland" and "gulf" cottons separately; to the Committee on Agric:ultnre.

By l\lr. RAKER: A bill (H. R. 16001) to authoriz·e the Sec­retary of Agriculture to locate and construct a public higbw:•y in the Trinity National Forest, in Trinity County, Cal., and for other purposes; to the Committee on Agriculture.

By Mr. KAHN: A bill (H. R. 16002) for the coinage of cer­tain gold and silver coins in commemoration of the Pnnnma­Pacific International Exposition, and for other purposes; to the Committee on Coinage, Weights, and l\Iensures.

By Mr. BURKE of South Dakota: A bill (H. R. 16003) to increase the limit of cost for the construction of a public buiJdjng at Aberdeen, S. Dak.; to the Committee on Public Buildings and Grounds.

By Mr. MONTAGUE: A bill (H. R. 16004) to facilitate the use of square No. 673, in the city of Washington. for storage warehouse purposes; to the Committee on the Dish·ict of Co­lumbia.

By Mr. SHERWOOD: A bill (IT. R. 16!)05) providing for the purchase of a site and the erection thereon of a public building at Port Clinton, in the State of Ohio; to the Com­mittee on Public Buildings and Grounds.

Also (by request), a bill (H. R. 16006) providing for is­suance of noninterest-bearing bonds by State . Territories, counties, townships, mnnicipnlitie , or incorporated towns or villages for public improvement purposes. and issuance of Treasury notes secured by sHrne, and for other purposes; to the Committee on Banking and Currency.

By l\lr. MITCHELL: A bill (II. H.. 16907) nuthorizing the Secretary of War to donate to the city of Waltham, Mass.. two bronze or brass cannon or fieldpieces with their carriages; to the Committee on Military Affairs.

By l\Ir. TUEAOWAY: Hesolntlon (H. Res. 52R) directing the Secretary of the Navy to furnish information relative to certain appropriations under the act of March 4, 1!)11; to the Commit­tee on Naval Affairs.

PRIVATE BILLS AND RESOLUTIONS. Under clause 1 of Rule XXII, private bills and resolutions

were introduced and severnlly referred ns follows: . By 1\lr. BURl\"ETT: A till (H. n. 16003) g_<mting an increase

of pension to William P. Gwin; to the Committee on Pensions. By Mr. BYRNES of South Carolina: A bill (II. R. 16UOD)

granting a pension to Dora Dee Walker; to the Committee on Pensions.

1914. CONGRESSIONAL RECORD-HOUSE. 9419 By l\Ir. CLAYPOOL: A bill (H. R. 16910) granting an in­

crease of pension to Thomas C. Rodgers; to the Committee on Invalid Pensions.

Also,"n bill (H. R. 16911) granting an increase of pension to Ferduand HeriPmm: to the Committee on Invalid Pen~ions.

By 1\Ir. DOOLITTLE· A bill (H. R. 16912) granting a pen­sion to l\Iaria C. Haney: to the Committee on Invalid Pensions.

By 1\Ir. KtNDEL: A bill (H. R. 16!>13) granting a pension to Almira Graham: to the Committee on Invalid Pensions.

Also, a !Jill (H."R. 16914) gr~mtlng a pension to Lucy J. Lind· sey; to the Committee on Pensions.

Also, a bil1 (H. R. 16915) granting an increase of pension to Jacob S. Fritz: to the Committee on Im·aJid Pensions. ·

By Mr. LEWIS of Maryland: A bill (H. R. 16916) granting an inc1·ease of pension to Frederick Weber; to the Committee on Invalid Pensions.

By Mr. LOGUE: A bill (H. R. 16917) granting a pension to Sarah C. Daisey; to the Committee on Invalid Pensions.

Also, a bill (H. R. 16918) granting a pension to Margaret Lauber; to the Committee on Invalid Pensions.

Also. a bill C H. R. 16919) granting a pension to Ellwood I. BPatty; to the Committee on Pensions.

Also, a bill (H. R. 16920) · for the relief of the legal repre­sentatives of Donnelly & Egan, decea.sed; to the Committee on War Clnims.

By l\1r. l\llDDEN: A bill (H. R. 16921) granting an increase of pension to James Cleveland; to the Committee on Invalid Pensions.

By Mr. MOON: A bill (H. R. 16922) for the relief of the legal representatives of John F. And~son; to the Committee on War Claims. .

By 1\Ir. 1\ffiRDOCK: A bill (H. R. 16n23) granting an increase of pension to William L. Chalk; to the Committee on Invalid Pensions.

Also, a bill (H. R. 16924) granting an increase of pension to James Kinzer; to the Committee on Invalid Pensions.

Also, a bill (H. R. 16925) granting an incrense of penston to Henry W. Morgan; to the Committee on Invalid Pensions.

Also, a bill (H. R. 16926) granting an increase of pension to Amos Poe; to the Committee on Invalid Pensions.

By Mr. SMITH of New York: A bill (H. R. 16927) granting a pension to Mary A. Keller; to the Committee on Pensions.

PETITIONS, ETC.

Under clause 1 of Rule XXII, petitions and papers were laid on the Clerk's desk and referred as follows:

By tlie SPEAKER (by request) : Memorial of the General Society of the CincinnatL favoring official participation by this Government in celebration of "One hundred years of peace be­tween English-speaking peoples " ; to the Committee on Foreign Affairs.

Also (by request), petition of 118 citizens of Eolia, Mo., favoring national prohibition; to the Committee on Rules.

Also (by request), resolutions from certain citizens of St. Charles County, 1\lo., protesting against the adoption of a na­tional prohibition amendment; to the Committee on Rules.

Also (by request), resolutions of certairr citizens of Eboyn, Pa.; Wichita. Kans. ; Milan, Minn. : Los Angeles, Cal.; Horner City, Pa.: Broomall. Pa.; and SpringfielcL Mass., protesting against the practice of polygamy in the United States; to the Committee on the Judiciary.

By Mr. ALLEN: Memorial of the American Association of Title Men, protesting ag-ainst the registration of land titles; to the Committee on Banking and Currency.

By 1\Ir. A.r-..TIERSO~: Petition of the Presbytery of Winona. Minn .• consisting of 33 churches, 18 pastors, and 2.322 members, fayoring national prohibition; to the Committee on Rules.

By Mr. BARCHFELD: Petitions of 235 citizens of Pittsburgh and sundry citizens of 1\Ionnt Lebanon and Castle Shannon, all 1n the State of Pennsylvania, against national prohibition; to the Comnlittee on Rules.

Also, petitions of the First Presbyterian Church of Home­stead, Pa., and the Woman's Christian Temperance Union of Coraopolis, Pa., favoring national prohibition; to the Committee on Rules. ·

By l\1r. BATHRICK: Petitions of 49 citizens of GarrettsYille, Ohio, f1n-oring national prohibition; to the Committee on Rules.

By l\lr. BUTLER: Petitions of sundry citizens of Spring City, Coatesville, Rnttledge, Morton, Chester County, Wayne, East Lansdowne, the Woman's Christian Temperance Union of Lans­downe. Clifton, Collingswood, West Chester, Chester, and the Middletown Woman's Christian Temperance Union, all in the State of Pennsylvania, favorlng nationnl prohibition; to the Committee on Rules.

Also, petition of the Business Men's Association of Coates­ville, Pa., fa,-oring retirement of the aged civil-service em· ployees; to the Committee on Reform in the Civil Service.

Also, petition of sundry citizens of Pennsylvania, favoring the eighteenth amendment to the United States Constitution; to the Committee on the Judiciary.

Also (by request), memorial of the Board of Trade of Chester, Pa., favoring Government ownership of the telephone systems of the United States; to the Committee on the Judiciary.

By Mr. CURRY: Petition of the Methodist Episcopal Church of Calistoga, Cal., in favor of national prohibition; to the Com· mittee on Rules.

Also, petitions of 3 citizens and residents of Sacramento, Cal., protesting against national prohibition; to the Committee on Rules.

Also, petition of Mrs. John Stark and 12 other citizens and residents of Vallejo. Cal., in favor of national prohibition; to the Committee on Rules.

By l\lr. DALE: Petition of Mr. E. Kern, of Brooklyn, N. Y., protesting against national prohibition; to the Committee on Rules.

Also, petition of the United States customs inspectors. port of New York, favoring the passage of House bill 15764. relative to salaries of inspectors of customs; to the Committee on '\V"flYS and Means.

Also, petition of the Corby Commission Co., of New York. on behalf of the Columbia ruver Packers' As..;;ociation. of Astoria, Oreg., protesting against prevention of fishermen using gill nets in the Columbia River; to the Committee on the Merchant l\la­rine and Fisheries.

By .1\fr. DERSHEM: Petition of various voting citizens of Payne Creek, Pa., favoring national prohibition; to the Com­mittee on Rules.

By Mr. DO~OVAN: Petition of various business men of Dan­bury, Conn., favoring House bill 5308. to tax mail-order houses; to the Committee on Ways and L\Ieans.

By Mr. FA.LCOXER: l\leruoriRI of the United Drmghters of the Confederacy, relative to matter of cotton tax collected from 1862 to 1868; to the Committee on War Claims.

By Mr. FITZGERALD: Petitions of 146 citizens of the sev­enth congressional district of 1\ew York, against national pro­hibition; to the Committee on Rules.

By l\Ir. GILLETT: Petition of 52 citizens of the second con­gressional district of Massachusetts and 30 citizens of Montngo, Mass., protesting against national prohibition; to the Com­mittee on Rules.

Also, petition of 161 citizens of the second congressional district of Massachusetts, fa\"Oling passage of Honse bill 5308, relative to taxing mail-order houses; to the Committee on Ways and 1\leans.

By 1\lr. GRIEST: Petition of the Pennsylvania Retail Jewel­ers' Association, favoring Owen-Goeke bill to eliminate time guaranty on gold filled wutchcases; to the Committee on Inter­state and Foreign Commerce.

By 1\Ir. H.A~IILTON of New York: Petition of sundry citi­zens of Cattaraugus County, N. Y., and Franklim·ille, N. Y., favoring national prohibition; to the Committee on Rules.

By 1\Ir. HUMPHHEY of Washington: Petitions of sundry citizens of Washington State, against national prohibition; to the Committee on Rules.

By 1\lr. JOH::\SON of Washington: Petitions of sundry citi­zens of Tacoma, Elmn, Itaymond, Yacolt. Chehalis town and county, and South ~end, all in the State of Washington, pro­testing against national prohibition; to the Committee on Rules.

Also, memorial of snndry citizens of Roslin. Wash., urging settlement of . industrial disputes; to the Committee on the Judiciary.

Also, petition of sundry citizens of Ridgefield. Wash., pro­testing against the passage of tbe Sundny-observance bill; to the Committee on the District of Columbia.

Also, petition of sunCi"Y citizens of Itidgefield, Wash., favor­ing passage of a bill to amend the postal and ci,·il-service laws; to the Committee on the Post Office and PoRt Ronds. .

Also, petition of sundry citizens of Algona, Auburn, and Pacific, all in the State of Washington, favoring national pro­hibition ; to the Committee on Rules.

By .Mr. KELLY of Pennsylvania: Petition of 427 citizens of Turtle Creek, 450 citizens of Pittsburgh, and 250 citizens of East Pittsburgh. nil in the State of Pennsylvania, favoring national prohibition; to the Committee on Rules:

By J\lr. KENNEDY of Rhode Island: Petition of the Cham­ber of Commerce of Providence, R. I., against enactment of bill to create an interstate trade commission until ample time has been giYen for consideration of the same; to the Committee on Interstate and Foreign Commerce.

9420 QONGRESSI.ONAL RECORD-SENATE. MAY 29,

By Mr. KINDEL: Papers to accompany a bill granting pension to AJruira Graham; to the Committee on Pensions.

By Mr. LA FOLLETTE : Petitions of sundry citizens of North Yakima, Walla Walla, Grandview, Waverly, Opportunity, and Spokane, all in the State of \Vashington, favoring national pro­hibition; to the Committee on Rules.

.Also, petitions of sundry citizens of the. third congressional district of Washington, against national prohibition; to the Committee on Rules.

By Mr. LANGHAM: Petition of the Pennsylvania Retail· Jew­elers' .Association, favoring Owen-Goeke bill to eliminate time guaranty on gold fil1ed watchcases; to the Committee on Inter­state nnd Foreign Commerce.

Also. petition of the Pennsylvania Manufacturers' Association, favor ing House bill 1933, the convict-labor bill; to the Commit-tee on Labor. ·

By 1\fr. LESHER: Petitions of 3,532 citizens of Shamokin, Pa., .favoring national prohibition; to the Committee on Rules. . By Mr. J,EVY: Petitions of sundry citizens of New York, against national prohibition; to the Committee on Rules.

Also, petitions of the Waldorf Astoria Importation Co; the Fritzsche Bros., of New York; and sundry citizens of New York. protesting against national prohibition; to the Committee on Rules.

By Mr. LOBECK: Petitions of the Fort Worth (Tex.) Cham­ber of Commerce and the East St. Louis (Ill.) Commercial Club, favoring House bill 9292, to classify the employees in the Bureau of Animal Industry, Department of Agriculture; to the Committee on Agriculture.

Also, petition of 43 citizens of Douglas County, Nebr., against national prohibition; to the Committee on Rules.

By Mr. LONERGAN: Petition of Karl Wo~gerbauer, of Hart­ford, Conn .• protesting against national prohibition; to the Com­mittee on Rules.

·ny Mr. McCLELLAN: Petition of sundry citizens of Wind­ham, N. Y., favo1ing national prohibition; ·to the Committee on Rules. · By Mr. MITCHELL: Petition of various business men of Massachusetts, fayoring House bill 5308, to tax mail-order .l:louses; to the Committee on Ways and Means.

Also. petition of 210 citizens of Franklin, Mas~ .• and 88 citi­zens of Brookline, Mass., favoring national prohibition; to the .Committee on Rules.

By Mr. MOON: Papers to accompany bill for the relief of the legal representatives of John V. Anderson; to the Committee on War Claims. ·

By Mr. J. I. NOLAN: Memorial of the San Francisco (Cal.) Retail Cigar Dealers' Association, favoring passage of House bill 13305; to the Committee on Interstate and Foreign Com­merce.

By Mr. O'LEARY: Memorial of Branch No. 16, Glass Bottle Blowers' Association, of Ravenswood, Long Island City, N. Y., protesting against national prohibition; to the Committee on Rules. _ By Mr. O'SHAUJ\TESSY: Petition of sundry citizens of Provi­dence, R. I., favming national prohibition; to the Committee on Rules.

Also, petition of the Chamber of Commerce of Providence, · R. I., against present passage of bill creating an interstate trades commission; to the Committee on Interstate and For-eign Commerce. .

Also, petition of the American Thread Co., of Westerly, R. I., against Edwards bill, prohibiting importation of Egyptian cot­ton; to the Committee on Ways and Means. . Also. petitions ·of the D. & W. Fuse Co. and H. N. Tenner, of Providence, n. I., against House bill 15657, the Clayton anti­trust bill ; to the Committee on the Judiciary.

1 Also, petition of sundry citizens of Providence, R. I., against nationa l prohibition; to the Committee on Rules.

I By Mr. P.aiGE of ::\fassachusetts: Papers to accompany House 1 bill 16 90, for relief of Martha A. Knapp; to the Committee on ' Pensions. 1 Also, papers to accompany House bill 16892, to place on the 1 muster-in rolls the name of John 0. Kinney; to the Committee on Military Affairs. .

1 Also. papers to accompany House bill 16891. to correct mili­: tary record of Albion P. Dyer; to the Committee on Military lU!aira ,

By Mr. SCULLY: Petitions of various business men of Asbury Park, Freehold, · South RiYer, · and Jamesburg, all in

1 the State of New Jersey, favoring House bill 5308. to tax mail­-order houses; to the Committee on Ways and .1\ieans.

I By Mr. J. M. C. Sl\IITH: Petitions of 65 ·citizens of Charlotte, l Mich~ and 30 citizens of Marshall, Mich., favoring national con­

stitutional prohibition; to ~he Committee on Rules.

,

~--

By Mr. Sl\IITH of New York: Petition of sundry citizens o.f Buffalo, N. Y., protesting against national prohibition; to the Committee on Rules.

By .Mr. TAYLOR . of Colorado: Petition of the Christian En­dea \'or Soclety and sundry citizens of Longmont, Colo., and various voters of Durango, Colo., fa.voring national prohibition; to the Committee on Rules.

. By 1\!r. VOLLMER: Petitions signed by F. B. Lodge and 18 other citizens of Iowa, and petitions signed by William S. Miller and 10 other citizens of Iowa, protesting against House joint resolution 168, Senate joint resolutions 88 and 50, .md all prohi­bition measures introduced in Congress; to the Committee on Rules.

5! SENATE. FRIDAY, May 139, 1914. ·

The Senate met at 11 o'clock a. m. The Chaplain, Rev. Forrest J. Prettyman, D. D., oft'ered the

following prayer: Almighty God, we make mention of Thy name with reverence

and godly fear. We would not degrade our own nature and cor­rupt our own mind by taking Thy name vainly upon our lips. We come to Thee, the author of all our freedom, the sphere in which we have our largest life, the center and source of all our blessing, and at the mention of Thy name we bow our body and mincl and heart before Thy throne. We acknowledge the sovereignty of no man over our intellectual life, but our largest freedom is in the surrender of our minds and hearts to God. Grant us this day that perfect liberty which is found in con­formity to the. will of our Maker and our Father. For Christ's sake. Amen.

The Journal of yesterday's proceedings was read and approved. SURVEY OF FLORIDA W ATEBS.

The VICE PRESIDENT laid before the Senate a communica­tion from the Secretary of War, traru;mitting, in response to a resolution of the 19th instant, certain information and data relating to the survey of Kissimmee and Caloosahatchee Rivers and Lake Okechobee and tributaries, and the improvement of navigation between Caloosahatchee River and Lake Okechobee, Fla., which, with the accompanying papers, was referred to the Committee on Commerce.

MESSAGE FROM THE HOUSE.

A message from the House of Representatives, by D. K. Hempstead, its enrolling clerk, announced that the House agrees to the report of the committee of conference on the disagreeing votes of the two Houses on the amendments of the House to the bill ( S. 2860) providing a temporary method of conducting the nomination and election of United States Senators.

PETITIONS AND MEMORIALS.

The VICE PRESIDENT presented a cablegram in the nature of a memorial from the Board of Trade of Hilo, Hawaii, which was read and referred to the Committee on Pacific Islands and Port'? Rico, as follows :

[Cablegram.]

PRESIDENT SENATE AND SPEAKER HOUSE, Washingtoll:

HILO, HAWAII, May U.

Board of Trade of Hilo earnestly remonstrate proposed reduction sal­aries governor and secretary. Present salaries inadequate. Should be increased. Reduction means only rich men can afford hold these offices.

METZGER, President. DEYO, Secretary.

The VICE PRESIDENT presented petitions of sundry citizens of Newton, Edgewood, and Cascade, in the State of Iowa; ·of Wheeling, W. Va.; of Kirkwood. lll.; of Tonawanda, N. Y.; of Bellevue, Pa.; of Wichita, Knns.; of Fort Morgan, ·colo.; ' and of Fort Sumner, N. Mex:, praying for the adoption of an amend­ment to the· Constitution to prohibit polygamy, which were re­ferred to the Committee on the Judiciary. . Mr. NELSON presented memorials of sundry citizens of

St. Paul, M:inn·eapolis, Chesj10lm. and Red Wing. all in the State of Minnesota, remonstrating against nn.tionnl prohibition, which were referred to the Committee on the Judiciary.

He also presented . petitions of sundry ci tizans of Mnnkn to, ]!.,armington, Faribault, Wheaton, Frazee. Glem·ille, :Minneapolis, and St. Paul, all in· the State of Minnesotn , praying for na­tional prohibition, which were referred to the Committe<> ou the Judiciary. · He also presented a petition of the Woman's Christian Tem­perance· Union, of Alexandria, Minn., praying for the adoption !)f an · ·amendment to the Constitution granting tbe right of suffrage to womeri, which was · 01'dered to lie on the table.

He also presented 'a petition of the congregation of the ~ethodist Episcopal Church of _Northfield, Minn., praying for