the investments in this company, but nearly every banking interest with whom I discussed it was naturally more or less interested, not only in the direct operation of the transcontinental service, but especially in stock and bond ownership and questions of that kind. The almost unanimous feeling I found when presenting it to them was that the restrictions, especially by the Postmaster General, would naturally prevent the banking interests from taking an interest in a company of this kind, especially if they had any affiliations or any stock interests or their clients were largely interested in transcontinental securities, that they possibly might put themselves in a position where they would lose on their investment on account of the restrictions, and especially by our charter. Then, too, when the form of plan, etc., was submitted to them, they would generally dismiss it without the customary procedure of going very fully into it and investigating all the opportunities of profit or what it really meant. Now, it is five days yet before any bids are to be filed. We have until next Saturday. I have not by any means lost hope that the bid is going to be made. In fact, I had some encouragement on Saturday morning that very possibly a bid would be made on strictly independent lines to try to comply with the conditions made by the Postmaster General. So as to what the result will be I hardly think it is fair to take that matter up to-day.

What I thought of in coming before you, more than anything else, was to try and comply with the request as made of me, and to submit any suggestions as to changes that were necessary or desirable in the laws of the United States. I would first amend the interstatecommerce act and I hope I am not presuming, gentlemen, in offering these suggestions; they are just the result of my experience_and knowledge of the water business. First, give the Interstate Commerce Commission absolute and complete control over all water lines as to rates in every way-of course, especially those engaged in interstate commerce from ports to ports. As I understand it now, if delivered to a railroad and delivered to the interior point, they have the jurisdiction, but not over the water lines.

I would then suggest the passage of another law-a new law-prohibiting the ownership of water lines from any ports to ports by any competive railroad, throwing the burden of proof on the companies themselves that they were not in the control of any such interests. If a bona fide bid is made next Saturday under the terms of this law as it exists the act of March 3, 1891-and it can be carried out successfully, there will be no objection to consider what I might say would be my third suggestion, and that is as to the present Panama Steamship Co. It is in the control of the Isthmian Canal Commission.

The president of the Panama Steamship Co. is Col. Goethals and the general manager is Mr. E. A. Drake. Four visits to Panama have shown me what splendid work the canal commission is doing, and the management of the steamship company is a part of the general record. It is a remarkable example of what the Government can do in a great constructive enterprise under men like Col. Goethals and Mr. Drake. The steamship company has been admirably managed; considering the class of equipment they have been working with they have done wonders, and with newer ships they could have

done even better. I would enlarge the powers of the Panama Steamship Co. and give it the authority to purchase a number of steamers to operate in this coast-to-coast traffic entirely independent of any interest. My reason for recommending this is that I believe it will give to the Interstate Commerce Commission a basis of rates from coast to coast that will assist very materially in reaching, in connection with the railroads, a basis of rates to all the interior points and all the intermountain business.

As I understand it, the basis of the coast-to-coast rate has always been made as a justification for the changes in the interior rate. This would settle it, under Government control, and while I am not in favor generally of Government control, the result of the Panama Steamship Co., it seems to me, would justify making the experiment unless some strictly independent interest bids under the act of March 3, 1891.

Those are all the recommendations that I would make, or suggestions, rather, as to the changing of the laws for the creation and control of corporations engaged in interstate commerce.

The ACTING CHAIRMAN (Senator Cummins). You have before you the proposition issued by the Post Office Department, have you? Mr. BAKER. Yes, sir.

The ACTING CHAIRMAN. While it is a public affair, yet I would be glad if you would put it into this record in connection with your statement.

Mr. BAKER. I will be very glad to do so.

The ACTING CHAIRMAN. So that we may know precisely what conditions the Postmaster General has exacted of the company about to engage in that business.

Mr. BAKER. Would you like to hear them read now?

The ACTING CHAIRMAN. I think it would be very well if you would read them.

Mr. BAKER. I will not trouble to read over the bids; that is rather a matter of detail, but will read the special instructions to bidders in clauses 15 and 16. They are as follows:

EXTRACTS FROM THE POSTMASTER GENERAL'S "INSTRUCTIONS TO BIDDERS."

15. No award of contract for the mail service on the routes herein described will be made to any bidder who shall be engaged in any competitive transportation business by rail, or who shall be engaged in the business of exporting or importing goods, wares, merchandise, or other property on his own account, or who shall bid for, on behalf of, or in the interest of any person or corporation engaged in such business, or either of them, or having the control thereof through stock ownership or otherwise.

16. The right is reserved to the Postmaster General to cancel without indemnity to the contractor any contract entered into under the advertisement if at any time the performance of the same shall rest within the control of any competitive railroad company, or of any person or persons in control of the same through stock ownership or otherwise, or if any party to any such contract shall make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic in any respect whatsoever, or subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage.

The ACTING CHAIRMAN. I would suggest also possibly, as I have alluded to that, that a copy of the charter of the company formed to carry this out had also better be filed, as it gives all the restrictions.

Mr. BAKER. I will be very glad to have it filed and will furnish it to the reporter, so that it may go into the record.

(The proposition of the Post Office Department and the charter are, respectively, as follows:)

OCEAN MAIL SERVICE.

The following is a copy of the general advertisement as it appears in newspapers in Boston, New York, Philadelphia, Baltimore, New Orleans, St. Louis, Charleston, Norfolk, Savannah, Galveston, Mobile, San Francisco, Los Angeles, Seattle, Tacoma, and Portland (Oreg.):

OCEAN MAIL LETTINGS-NOTICE TO BIDDERS.

POST OFFICE DEPARTMENT, July 20, 1911. Proposals will be received at the Post Office Department in the city of Washington until 4.30 p. m. November 25, 1911, for ocean mail service pursuant to the act of March 3, 1891, in vessels of the second class, on the routes hereinafter described, service on each route to commence not later than the 18th of October, 1914. The right is reserved to reject all bids.

SCHEDULE OF ROUTES.

No. 77, "O. M. S.," from Seattle-with right of call at Astoria-to Panama, once every two weeks, 26 trips a year, calling at San Francisco and alternately at San Pedro and or San Diego, Cal., and from San Francisco to Panama once every two weeks, 26 trips a year, calling alternately at San Pedro and or San Diego, Cal. Time from Seattle to Panama 16 days and from San Francisco to Panama 10 days. Contract for 10 years. Bond required with bid $200,000. Colon, calling at Charleston and or Time to Colon 6 days. Contract for

No. 78, "O. M. S.," from New York to Savannah once each week, 52 trips a year. 10 years. Bond required with bid $100,000. No. 79, "O. M. S.," from New Orleans to Colon, once each week, 52 trips a year. Time to Colon 4 days. Contract for 10 years. Bond required with bid $75,000.

The Postmaster General reserves the right to require the steamers on each of the above-mentioned routes, whenever they may continue their voyage to a port at the opposite end of the Panama Canal, to carry any portion of their mails to such port without additional compensation, whenever in his judgment that course is advantageous to the Post Office Department.

Circulars containing a description of the routes, instructions to bidders, and blank forms of proposals, with accompanying bonds, can be obtained of the Second Assistant Postmaster General, Post Office Department, on and after August 1, 1911.

FRANK H. HITCHCOCK,
Postmaster General.

CERTIFICATE OF INCORPORATION.

ATLANTIC & PACIFIC TRANSPORT CO.

This is to certify that the undersigned do hereby associate themselves into a corporation under and by virtue of the provisions of an act of the Legislature of the State of New Jersey entitled "An act concerning corporations" (revision of 1896), and the several supplements thereto and acts amendatory thereof. I. The name of the corporation is "Atlantic & Pacific Transport Co." II. The location of the principal office in this State is at No. 15 Exchange Place, in the city of Jersey City, county of Hudson.

The name of the agent therein and in charge thereof upon whom process against this corporation may be served is the Registrar & Transfer Co.

III. The objects for which this corporation is formed are

(a) To transport for hire passengers and mails, goods, wares, and merchandise, animals, and other property of all kinds and nature whatsoever to, from, and between the various ports, harbors, cities, and towns of the world by means of vessels, ships, barges, or boats driven, propelled, or maneuvered by sails, steam, or other form of power.

(b) To build, purchase, sell, lease, hire, charter, deal in, equip, operate, and own vessels, ships, boats, barges, and lighters of any and every character or description, and all apparel and tackle useful thereto or in connection therewith; also to purchase, sell, lease, deal in, work upon, and own lands, wharves, piers, water rights, warehouses, and terminal facilities in the States, Territories, possessions, and dependencies of the United States, and in such other places, either domestic or foreign, as the business of the company may seem to require or as may be convenient or desirable.

(c) The purchase of the business and assets of any existing firm or corporation engaged in the water transportation business and in connection therewith to assume or guarantee the payment of any or all of the obligations of such firm or corporation.

(d) To lease, purchase, or construct warehouses, terminals, or storage depots, and therein to receive, handle, store, keep, and forward goods, wares, merchandise, and all classes of freight by land or water, all on such terms as may be agreed upon or permitted by law.

(e) To lease, purchase, or construct wireless telegraph stations and any apparatus useful in connection therewith, and to maintain and operate the same on terms to be fixed by the company and permitted by law.

(f) To enter into, make, perform, and carry out contracts of every kind and for any lawful purpose with the Government of the United States or of any foreign nation, or with any person, firm, association, or corporation.

(9) To purchase, sell, acquire, own, hold, and deal in the shares of stock or other securities of corporations of this and other States, and of the United States and of other countries.

IV. The amount of the total authorized capital stock of the corporation is $15,000,000, divided into 150,000 shares of the par value of $100 for each share. V. The amount of capital stock with which the corporation will commence business shall be $6,000. All of the capital stock shall be common stock, and no property other than cash to the amount of the par value of the shares shall be received in payment therefor.

VI. The duration of the company shall be perpetual.

VII. The names and post-office addresses of the incorporators and the number of shares subscribed for by each are as follows:

VIII. The stockholders shall, at their first meeting, elect a board of directors of such number, not less than 10, as the by-laws may provide, one-fifth of the board to be elected for one year, one-fifth for two years, one-fifth for three years, one-fifth for four years, and one-fifth for five years. Thereafter directors shall be elected by the stockholders annually for a term of five years to take the places of those whose terms have expired. The board of directors may, however, fill vacancies in their number for the unexpired terms of any who may resign, die, or for any reason cease to act.

In order to protect the corporation from control by competitive interests and from a cancellation of any contract it may enter into with the Government of the United States for ocean mail service under the powers now or hereafter reserved to the Postmaster General in .the award of such contracts,

It is provided, in addition to the qualifications prescribed by law, that No person shall be eligible as a director who shall be a director in or an officer or agent of any corporation or association engaged in any competitive transportation business by rail or engaged in the business of exporting or importing goods, wares, merchandise, or other property on its own account, and no person elected a director shall be qualified to act until he shall have sub

scribed on oath that he is not the representative of or acting in the interest of any such corporation or association and will not so act during his term of office.

If at any time the Postmaster General of the United States shall notify this corporation that any one or more of its directors or officers represent a competitive railway interest or are guilty of acts which would, in his opinion, justify a cancellation of any contract of this corporation with the Government of the United States for ocean mail service, then immediately upon such notice the office of every such director or officer shall be vacant.

The power of any stockholder or director of the corporation to vote on any question shall cease upon notice from the Postmaster General of the United States that such stockholder or director represents a competitive railway interest or has voted for or in any way authorized any action by or policy of said corporation which would justify the cancellation of any contract for ocean mail service which the corporation may have with the Government of the United States.

The board of directors shall have power to hold their meetings outside of the State of New Jersey at such places as from time to time may be designated by the by-laws or by resolution of the board. The by-laws may prescribe the number of directors necessary to constitute a quorum, which number may be less than a majority of the whole number of directors.

Any officer elected or appointed by the board shall hold office only during the pleasure of the board and may be removed without cause at any time by affirmative vote of a majority of the whole board of directors.

The board of directors by the affirmative vote of a majority of the whole board may appoint from the directors an executive committee, of which a majority shall constitute a quorum, and to such extent as shall be provided in the by-laws such committee shall have and may exercise all or any of the powers of the board of directors.

At all meetings of the company each stockholder shall be entitled to one vote for each share of capital stock held or owned by him up to 5,000 shares and one vote for each 2 additional shares up to 10,000 shares, and thereafter he shall be entitled to one vote for each additional 10 shares he may hold or own. To avoid any evasion of the foregoing limitation of the voting power of large holdings, any stock held directly or indirectly for or for the benefit of any stockholder shall be considered for the foregoing purposes as if held outright by him.

In witness whereof we have hereunto set our hands and seals the 19th day of August, 1911.

BERNARD N. BAKER.

[SEAL.]

Be it remembered that on this 19th day of August, 1911, before me, the subscriber, a notary public of the State of Maryland, in and for the city of Baltimore aforesaid, personally appeared Bernard N. Baker, Adrian H. Boole, Thomas B. Harrison, James S. Whiteley, and Charles G. Heim, who I am satisfied are the persons named in and who executed the aforegoing certificate, and I having first made known to them the contents thereof, they did each acknowledge that they signed, sealed, and delivered the same as their voluntary act and deed. Witness my hand and notarial seal. [SEAL.]

HARRY E. MILES,
Notary Public.

Be it remembered that on this 29th day of August, 1911, before me, a master in chancery, personally appeared Henry T. Letts, who I am satisfied is the person named in and who executed the foregoing certificate, and I having first made known to him the contents thereof, he did acknowledge that he signed, sealed, and delivered the same as his voluntary act and deed.

WALTER L. MCDERMOTT, Master in Chancery of New Jersey.