Mr. BRIGGS. I would be very glad to have it incorporated in the record here, if it is illuminating.

(After informal discussion:)

Mr. PARKER. Now, Mr. Abernethy, this is a pregnant sentence from the report of Messrs. Hough and Beecher on this very matter that you are discussing-that is, the question of negligence. It says this:

We also especially note article 4. (1):

That is the same number as in the present bill, article 4 (1). Section 4 (1) was formerly article 4 (1) in The Hague rules. They say this, on page 6:

We also especially note article 4 (1), which is plainly intended to modify the rule of absolute warranty of initial seaworthiness insisted upon by the Supreme Court of the United States after the passage of the Harter Act.

Now that is a very pregnant sentence, and also article 4 (4).
Mr. BRIGGS. Judge, even that does not tell us what it does.

Mr. PARKER. That is on page 8. It is intended to change the present legal rule in English-speaking countries that any deviation annuls the contract of carriage.

Mr. FREE. How long is that statement?

Mr. PARKER. This is a little report here, not more than six or seven pages. I called attention to those two sentences because they were apropos to the questions that have been asked here on the matter of negligence. The Harter Act is this:

The shipowner is absolved from any loss to cargo, as stated in this act, on account of the act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship: Provided, however, That if the owner of the vessel or the operator of the vessel has failed to exercise due diligence to make the ship seaworthy at the commencement of the voyage, these exemptions from loss on account of neglect or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship will not be allowed.

Do you get that?

Mr. ABERNETHY. Yes. I understand; but the point I am making is this regardless of the Harter Act. Now, let us get away from the Harter Act and, of course, there is great reason, since the Supreme Court of the United States decided as they did this is the reaction as it comes to me, that we are going rather far, particularly with reference to American vessels. We had quite a contest recently, only last week, in aid of American shipowners. We give them cheap money; we give them mail aid, and we sell them vessels from the Shipping Board, that you gentlemen have, at ridiculously low prices, almost unjustifiable. However, they are essential trade routes. Now this is my reaction. I have never heard this matter discussed before; I was not a member of the committee and that is the reason I am ignorant about it. We have given the shipowners all of these aids. and all of these benefits, now why should we write into the law the Harter Act or language of the Harter Act, or an absolute provision which changes the rule or is more than the privilege the carrier has on land-that he shall be exempted from the negligence or default of the master, mariner, pilot, or the servants? In other words, the only thing under this act he has to do is to make the ship seaworthy and then there is no further liability.

Mr. PARKER. That is the law of this country ever since the Harter Act.

Mr. ABERNETHY. Why should not we change the Harter Act? Mr. PARKER. Because the Harter Act was a great piece of remedial legislation.

Mr. ABERNETHY. I know it remedied to that extent.

Mr. PARKER. Well, everybody knows that the carriage of goods at sea is a very much more risky proposition than it is to carry goods on land.

Mr. ABERNETHY. That is true.

Mr. PARKER. Then, of course, the underlying practices of the commercial public in shipping at sea are entirely different from what they are in shipping on land. For instance, if you ship an article of goods on a railroad, and all that sort of thing, do you take out insurance against loss through carriage of the cargo on the land line? Mr. ABERNETHY. I do not know whether they do or not.

Mr. PARKER. You do not bother about it at all.

Mr. DAVIS. No, because the carrier is liable for negligence. You do not have to, because he is liable for negligence.

Mr. PARKER. He is more than that; he is a guarantor for safe delivery of the stuff. You do not need insurance at all.

Mr. DAVIS. Of course, it is predicated upon the theory that they accept goods for shipment and if those goods are damaged in transit, that is the fault of the railroad; either the fault of the servants, or fault of the implements of transportation. It is based upon that. And under no law of any State, so far as I know, can a domestic carrier escape liability by writing it into a bill of lading or an express receipt. Now the point that is bothering us and the point that bothered me when we had the hearings before upon a similar bill, at which time I was a member of this committee, is this: Why should a ship owner be relieved of liability for negligence? Now, it is suggested that that is covered by insurance. Yes. Yes. But the shipper has to pay insurance to guard against the negligence of the ship owner.

Mr. FREE. Let me put that a little stronger to you. If I get this correctly, the captian of a vessel could take an axe and chop up an automobile and, under this, the owner of the vessel was not liable. Mr. ABERNETHY. That is right.

Mr. HAIGHT. Oh, no; that is not an error of navigation.

Mr. PARKER. It says "in the navigation or in the management of the ship."

Mr. HAIGHT. May I try to answer the question of Mr. Abernethy? Mr. FREE. Let us get this first.

Mr. PARKER. Now if the goods are carried at sea, the shipper, from time immemorial, has two sources of expense; he has, first, the freight he pays and, secondly, he had his insurance. That has been the immemorial practice.

Mr. DAVIS. I know.

Mr. PARKER. And all laws are made so as to fit the customs of the commercial public and these laws have been made with that view, and that is the purpose of this particular convention, so as to meet the customs and the wishes and the desires of the commercial public. That means not only the operator, but also the shipper, and you have before you both shippers and operators and, of course, it is your duty to take into consideration the wishes and aims of both the operator and shipper and it seems to me that if they all combine in the passage of a law like this, that we ought not to withhold our

agreement to it, because it may appear that the practices in the carriage of goods at sea are so different indeed from what the practices are with reference to the carriage of goods on land.

Mr. DAVIS. Well, Judge, the customs and practices of shipping are the most archaic in the world. Everybody knows that who knows anything about it.

Mr. PARKER. Yes.

Mr. DAVIS. They are not abreast of the times with respect to any other industry on earth. Now if these customs and practices are wrong, it is up to the legislative bodies of the various countries to correct them and, as I see it, if the shipowner exercises due diligence in making the ship seaworthy and in manning the ship, the ship is not liable for damage to the goods.

Mr. PARKER. For damage to the goods.

Mr. DAVIS. And the courts would construe he had exercised due diligence if he exercises the same character of diligence that is ordinarily exercised by a shipowner. Now, the question is, Is that a sufficient protection to the public; is there a sufficient incentive to the shipowner to guard against negligence, such as obtains with respect to railroads, express companies, and telegraph and telephone companies, and to obviate this tremendous loss and waste which is paid by the underwriters who receive large fees for insuring against that sort of negligence?

Mr. BLAND. Now, Judge, if you put that in, is it not an added burden to your American merchant marine, unless you can get all of the other nations of the world to agree to assume a burden of that kind?

Mr. DAVIS. Well, as I understand, a very few of them have agreed to this, and Mr. Haight seems to think it is up to the United States to take the lead. If the United States enacts a law fair to everybody, why the probabilities are that the other countries will follow the lead. Of course I know this; I know that the Harter Act and, in fact, the various other laws and customs throughout the country grew up and were enacted on account of the interest and through the interest of the shipper, but that does not make it right. There is nothing sacred about the Harter Act, and wherever you exempt a common carrier from the negligence of his servants it is contrary to law with respect to any other industry on earth and, of course, you know that is true.

Mr. BRIGGS. Judge, let me ask you this question: I assume that the express companies and probably the railroad companies, to a very large extent if not altogether, insure against liability, do they not? Mr. HAIGHT. No.

Mr. BRIGGS. They certainly do in the transportation of baggage of passengers, because they make you get out a receipt, value your package, and then make you pay a certain amount for excess valuation over a certain amount. So that you are evidently paying an insurance rate and indemnifying the railroads against any loss. They are putting that burden upon the passenger who moves his baggage over the railroads, and I assume probably the express companies and others probably carry a certain amount of insurance on their liability against negligence. But, whether they do or not, what compensation is afforded to the public for releasing the ship operator or owner from negligence? When you say he is protected by taking out insurance, why of course he could take out insurance against any loss. That

puts the burden upon him, quite apart from any liability on the part of the other fellow. You take a man who is operating an automobile out here on the streets of Washington, he is not exempt from the acts of negligence and what does he do-he carries insurance. He has to carry it to protect himself. It is not a question that the passenger always has to carry an accident policy to move over the streets of Washington, or any other street; although it is very customary, probably, for pedestrians and others to carry accident policies. But why should that burden be thrust entirely upon the public and the shipperowners be entirely relieved of liability for negligence? Now if you have information that you could supply the committee on that matter, or the reason for those exemptions, I would like to have it.

Mr. PARKER. I have no doubt the people back of this bill will answer your questions. My own answer is very brief, indeed, that all these matters grow up through customs of trade and commerce, and the fact that trade and commerce have adopted the customs seems to indicate quite clearly they are reasonable and are what people want.

Mr. DAVIS. The shippers have adopted it because they have been forced to; in other words, they are required to ship upon bills of lading furnished them, whether they like it or not; that has been true. Mr. PARKER. Unquestionably they get cheaper rates to do it this way than the other.

Mr. DAVIS. Judge, I want to say this: I think we ought to enact legislation; I am in thorough accord with that, but we are considering legislation and the question is what sort of legislation to enact. Now with respect to the suggestion made by Mr. Bland, I want to suggest this, that if we pass a law regulating and specifying the character of bill of lading which shipowners are bound by in the carriage of commerce to and from the ports of the United States, that bill of lading will be equally binding on the ships of foreign countries and so, as compared with them, it could not hurt the American shipowner, because they would both be bound by exactly the same bill of lading.

Mr. BLAND. How about cargo coming into this country?

Mr. DAVIS. That is the same.

Mr. ABERNETHY. Suppose it is a joint bill of lading, rail and ship, then what would happen?

Mr. DAVIS. Of course the ship would be liable for damage that occurred under its custody, and the railroad under its. It is just like it is now, if there are connecting rail carriers, each is liable for the damage which occurs on his line.

Mr. PARKER. That is a very complicated problem.

Mr. BRIGGS. You said it has grown up by custom. Well, the Harter Act did not grow up by any custom; it grew up out of affirmative action on the part of the Congress of the United States, did it not?

Mr. PARKER. How many years ago was the Harter Act passed? Mr. HAIGHT. In 1893.

Mr. PARKER. Imagine there must have been a very strong movement behind the act; otherwise, it would not have passed.

Mr. BRIGGS. I am not questioning that for a minute. Naturally, in view of the fact there is such a limitation upon the law, there must have been a strong concerted movement; but what I am saying is

that it was not crystallizing into statutory law the custom which probably obtained for many, many years before; it was evidently a departure from the customs or existing law. Therefore, it became a very material and important change in that law and, in fact, the Harter Act to-day is probably one of the most important pieces of legislation in determining the liability of ship owners of any legislation that I know of, or any phase of the law with which I am acquainted. Mr. PARKER. I do not mean to intimate that when Congress passed that law it did not have the best interests of both the shipper and carrier in view.

Mr. BRIGGS. I do not know, Judge, one way or the other, as to what guided it in the passage of that law. I presume that Congress acted in the best interests of the people. But looking at a matter at one time and looking at it in retrospect, after that law has been in operation for a large number years, may indicate it may be necessary to make some changes, or it is desirable, or it may not be, in the light of experience on the subject. That is one reason why I am interested in having brought to this committee the fullest information and the fullest light that you gentlemen and other witnesses possess as to how the existing law has operated and what necessity exists for its change, either in limitation of it or the imposition of additional restrictions, or enlargement of the rights of the parties.

Mr. PARKER. I have only to say, so as to make it perfectly plain what this bill means, that I quote again what I read from the report of Messrs. Hough and Beecher, that:

Article 4 (1) is plainly intended to modify the rule of absolute warranty of the initial seaworthiness insisted upon by the Supreme Court of the United States after the passage of the Harter Act.

In other words, that this is going to be more liberal toward the ship operator than the Harter Act is.

Mr. DAVIS. That is the point exactly.

Mr. FREE. I think out of fairness to Mr. Haight, Judge Parker is here in the city and we had better cross-examine Mr. Haight.

Mr. ABERNETHY. That is all right. The reason I ask this is that I want to get it from Judge Parker to-morrow. Judge, you see what is running in our minds about the difficulties that confront us-we folks who have been in the active practice of the law. When you get away and do away with the law of negligence and do it by legislative enactment which will be binding, you can understand it is going rather far and we would like to have some good reasons for it. I can not see any reason for it. As I understand what you say, this act is more liberal to the operator of the ship than the Harter Act.

Mr. PARKER. In this respect, that this is according to the statement of Messrs. Hough and Beecher, and I believe is worthy

Mr. DAVIS. Judge, is it more liberal to the shipper in any particular than the Harter Act?

Mr. PARKER. Well, that is a big question. I am not appearing here as an advocate of the law, but in response to the request of the committee.

Mr. ABERNETHY. We understand, but you are a lawyer and general counsel of the Shipping Board and have been for a great many years and we have a great deal of confidence in your opinion. That is the reason we are asking you; we are not asking you to "razz" you, but we are asking you for information.