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Columbia in an advantageous position. You are giving them an advantage that we can not possibly meet.

Now, regardless of the wisdom of the coastwise laws, is it a fair proposition, because we are so geographically situated, to permit them to take advantage of us in that way. The courts have decided—and I will not take the time to read from the book I have here, having brought it along fearing some question might arise—that it is a clear evasion of the coast wise laws, and all we ask is that we be treated upon the Pacific Northwest just the same as the other portions of the United States are treated.

Mr. PETERS. What about the effect of canal tolls upon the situation?

Mr. HUMPHREY. That helps us to that extent, but the canal tolls will not begin to equal the difference in the freight rates. We still have a little protection in the way of the tariff; we have always had that protection in the way of some little tariff on lumber, but if that is taken off then all that is left will be the canal tolls, and they are much smaller than the difference in the rates would be.

The CHAIRMAN. Mr. Humphrey, what you are asking this committee to do is, when American goods go into Vancouver or Canada, to amend our laws so that, notwithstanding the fact that they are American goods coming back into America, they shall pay a tariff duty ?

Mir. HUMPHREY. Yes. The CHAIRMAN. That is what you are asking? Mr. HUMPHREY. That is the proposition. The CHAIRMAN. Of course, you recognize the fact that any law which we may pass involving taxation must be uniform? We must make it apply to everybody and everything, whereas you want us to make a law that will apply to Tacoma and Seattle ?

Mr. HUMPHREY. No; I am not asking that.

The CHAIRMAN. If we should pass the law that you ask, that when American goods leave American territory, go into Canada, and are returned into America they pay a duty, we would have to apply it all along the Canadian line, and in that case when a cargo of goods left New England and had the privilege of going to Detroit, say, by the New York Central or by the connecting lines through the Grand Trunk into Canada, we would eliminate any competition by rail, if we passed this law, between the people of New England, Detroit, and the West, and between the Grand Trunk Railroad and the New York Central, or other American conipeting lines, because if we passed your law, the minute a cargo of goods crossed the Canadian line they would have to pay this tariff before they could come back into America, whereas now they go through in bond.

Mr. FORDNEY. Would that be a parallel case, because the goods now shipped over the railroads go through in bond?

The CHAIRMAN. I know.

Mr. FORDNEY. And would it not be the case with goods shipped in a ship from an American port, going into a Canadian port, that they would go out of bond from the ship to the railroad car?

The CHAIRMAN. Not necessarily. However, you have got to make a law for taxation uniform,

SECTION 15. Mr. HUMPHREY. I do not think the chairman quite understands my proposition. I recognize the fact that there are two ways of reaching this proposition, one by the amendment of the navigation laws, which is an absolute prohibition, and the other is to make some discrimination. Now, my reason for asking that it be done in this way-or, at least, I have several reasons for it. In the first place, I recognized the fact that if it was put on to a great tarifl bill that there could be some action taken, and my experience has been-and I beg the gentleman's pardon for making the statement—that while matters allecting the Canadian Pacific Railroad have been able to go through the House, so far as I have ever known, when they have gotten over to the Senate they have stuck there, and this is a Canadian Pacific Railroad fight, some of it. Another one is that there is a prejudice-although I do not say the chairman is prejudiced—but I think there is a feeling in this country among some of the members of Congress that as the coastwise trade is an absolute monopoly it ought not to be protected any further. I think the chairman is one who holds that view.

The CHAIRMAN. In many respects I think it is one of the most iniquitous laws we have on the statute books.

Mr. HUMPHREY. I thought it would be unobjectionable if this were put in a bill which would enable the Government to get some revenue, and to not make it an absolute prohibition. Now, replying to the chairman's question directly, what I ask is this: That where American products are carried from an American port by a foreign ship to a foreign port, and there placed upon a foreign railroad, or by any other means by land brought into this country, that they pay a duty. Under the present law if they do that, the goods are absolutely confiscated; they are prohibited from doing that, and I am simply asking that instead of confiscation they pay a duty.

The CHAIRMAN. I am satisfied that the gentleman from Washington will

agree with me that, under the Constitution, we can not pass any taris law that is not uniform, and any law we might pass which would apply to Seattle would have to extend the entire length of the coast line.

Mr. HUMPHREY. I agree with the chairman entirely. The CHAIRMAN. Therefore Mr. HUMPHREY (interposing). But I do not think this would be a discrimination.

The CHAIRMAN. Well, it is not a question of discrimination. The taxation laws must be uniform, and whatever law we passed relating to Seattle and Vancouver would have to apply to Maine and Newfoundland, and would have to apply all along the line.

Mr. HUMPHREY. If the situation were reversed, and the trade was not all one way-that is, manufactured products came into our country and came back this way—they would have the same situation in Portland and St. Johns, and would have it on the southern border. But I do not ask that it be made specific as to this portion of the country. I simply ask that where a foreign ship is used for practically evading our coastwise laws, takes goods into a foreign port and then ships those goods back into this country, where it is perfectly apparent that it is for the purpose of evading the coastwise laws, that those goods pay the duty, and that law should apply to the east coast as well as to the west coast.

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The CHAIRMAN. I think that if we applied it on the east coast we would get into very much more serious trouble there, and in a larger way, than we would out in Seattle. But I will state to you candidly, Mr. Humphrey, that some years ago we passed a law allowing foreign ships the right of our coastwise trade between this country, and Hawaii

, and I believe that is the law to-day in reference to the Philippines, by reason of the suspension of the coastwise trade laws, but if we were to allow a foreign ship the advantage of the coastwise trade laws between the Pacific and the Atlantic, just like we do between the Philippine Islands now, I believe your people would get more competition in the way of freight rates, and the whole question would be obviated, would it not?

Mr. FORDNEY. But our American ships would have to go out of business right away.

The CHAIRMAN. I do not think they would go out of business. As a matter of fact, very few American ships are engaged in the coastwise trade around the Horn now.

Mr. HUMPHREY. There are not very many; but I will say, for the information of the chairman, that there is a large number now being constructed for the trade through the canal. But there is just this one thing about it, gentlemen, that if this loophole in our coastwise law remains as it is to-day and the Panama Canal is opened it would be a great deal better for the Pacific Northwest if we had never constructed that canal, because you are going to throw the trade and the commerce of this country open to other countries; you are going to leave a loophole there and take the trade from this country and give it over to British Columbia. And regardless, as I said, of the coastwise laws--and I believe in their wisdom, although I will not take your time to argue about that, because you gentlemen do not want to go into it-I think we have a right to come here before this committee and ask that in the Pacific Northwest we be treated in the same way as the other portions of the country, and that simply because of our geographical situation Congress ought not to permit this condition to remain in our tariff law-a condition which, I think, very few men on the committee realized would arise when they allowed the law to pass.

The CHAIRMAN. I do not think you have any standing in court with this committee. You are complaining against the condition in the coastwise trade laws, and I do not agree at all with what you are trying to do in making those coastwise trade laws still more prohibitive and more of a monopoly than they are now, but if you want that done it seems to me you have a clear case that is within the jurisdiction of the Committee on Merchant Marine and Fisheries. You can go and ask that committee to amend the law so that it may apply to your case, but if we were to attempt to do it by legislation in a taxation bill I think we would work a great deal more injury to other people than we would benefit you.

Mr. HUMPHREY. I do not want to argue that particular point, but I do insist that this would not be a discrimination and that any amendment of section 15 of the present tariff act is a proper amendment, and the bill which I have drawn would not discriminate, because it provides “that there shall be levied upon the goods, wares,


or merchandise manufactured, produced, or grown in the United States that is transported from any port or place in the United States by any vessel not of the United States to any foreign port or place, and from such foreign port or place transported to any port or place in the United States by rail, or otherwise, the same duty as if said goods, wares, or merchandise were the product, manufacture, or growth of of foreign country.”

You see it is simply, in this particular case, as we did in the early years of the Government, making a discrimination against goods carried in foreign ships. That is the only way we ever did do any good for our merchant marine; we never built it up and never had a law, as I recall, but for two years upon the statute books but what was a discrimination against the foreign ships, and that is what I ask here. It is simply a discrimination. If a man wants to send his goods around to Spokane by the way of Vancouver in a foreign ship, let us make the duty heavy enough so he will not want to do it.

The CHAIRMAN. I do not think there is any question but that if you want to change these coastwise trade laws it should be done by the committee that has jurisdiction over it. While I do not agree with you, I think you have your court there, and I do not think a question of this kind could be put in a tariff law without bringing about all kinds of complications along the Canadian border north of the New England States.

Mr. HUMPHREY. Well, I do not want to insist on arguing with the chairman as to the policy, because I know that would be quite a job, but as to the right to amend this section of the law and as to the fact that it would not be a discrimination against other sections, I insist the chairman is wrong. I gave that considerable study, and I consulted yesterday, or, rather, the parliamentarian consulted with me, as to where this bill should go, and he thought as I did that it should come here, and I think you could make this change, if you want to make it. But, as I said before, I do not want to argue with you about the matter of policy.

Mr. KITCHIN. How long has this condition existed ?
Mr. HUMPHREY. It has always existed.
Mr. Kitchin. Did you go before the committee in 1909 ?

Mr. HUMPHREY. No; because as I said a moment ago, I do not presume anyone ever anticipated the situation would arise. It never occurred to me until I got to studying what would be the result when the Panama Canal was completed. I have no doubt in my own mind but that if the attention of the distinguished chairman, Mr. Payne, had been called to it he would have taken care of it, because he is not only familiar with the tariff laws but familiar with the navigation laws. But it is a situation that he did not discover; I did not discover it, and no one else, so far as I know, discovered it until recently, and I am coming here before this committee asking relief at a place where I know I can get it if the committee wants to do it.

The CHAIRMAN. I will say to the gentleman from Washington that if he cares to liberalize the coast wise trade laws, in order to remedy the trouble in that way, I will be very glad to act with him, but as far as I am personally concerned, I am not willing to lock the door tighter than we have it locked now.


Mr. HUMPHREY. When it comes to the question of this country against British Columbia, I am in favor of locking the door to the extent of putting us on the same footing with the rest of the American republic.

The CHAIRMAN. I am not talking about locking the door against British Columbia, but about locking the door in the case of coastwise trade. I think we ought to liberalize our coastwise trade laws, thereby giving us better chances of freer competition in our freight rates.

Mr. HUMPHREY. Until that is done we would like at least to have a fair chance as against British Columbia. I ask leave to insert in the hearing a letter received from the Treasury Department upon this same question.

The CHAIRMAN. Hand it to the stenographer, Mr. Humphrey, and it will be printed in the record.


Washington, January 22, 1913. Hon. William E. HUMPHREY,

House of Representatives, United States. Sir: I have the honor to acknowledge the receipt of your letter of the 11th instant, submitting the following hypothetical question:

“Suppose that merchant in Spokane, Wash., purchased a cargo of steel rails, or any other American-produced article, in New York City, and then used a foreign ship to transport such cargo to Vancouver, British Columbia, and there placed the cargo on the Great Northern Railroad and by that road carried his goods to Spokane, would such goods be subject to tariff duties; and if so, what amount?”

In reply I have to inform you that articles purchased and shipped in the manner described would be entitled to entry free of duty under the provisions of paragraph 500 of the tariff act as goods of American manufacture returned to the United States without having been advanced in value or improved in condition.

The case of the Southern Pacific Railroad, to which you refer, was decided by this department under date of September 24, 1909, the matter having first been submitted to the Secretary of Commerce and Labor for an expression of his views as to whether the provisions of section 4347 of the Revised Statutes would be violated by the transportation of railroad ties in the manner indicated. The collector at Nogales, Ariz., was advised by this department that the shipment of such merchandise in the manner stated was not prohibited by section 4347 of the Revised Statutes as amended by the act of February 17, 1898, and the rails in question were admitted to entry free of duty as American goods.

I desire to invite your attention also to an opinion of the Attorney General, dated January 5, 1913, addressed to the honorable the Secretary of Commerce and Labor, to the effect that the transportation of merchandise on through bills of lading from Seattle to Fairbanks, by way of Skagway. Alaska, and Whitehouse, Yukon Territory, is not a violation of section 1 of the act of February 17, 1898. Respectfully,




Mr. WICKERSHAM. Mr. Chairman, I am here to call the attention of the committee to a proposed amendment to the act of August 5, 1909. I think it is to section 15 of that act, which I very greatly fear will have a very serious effect upon conditions in Alaska. It was proposed by Mr. Humphrey, and is H. R. 28503, and, as I understood, Mr. Humphrey was here before the committee a day or two ago. The bill itself was introduced January 29, and I wish to read it to the committee and to call attention to

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