I sent a copy of it to Mr. Edmonds with my letter of the 22d of January, and I should like to have that put into the record.

"That while these rules do not meet all the points we would like to have embodied in them, we feel that as they stand they deserve the support of the institute."

I want to say in that connection, however, that I do not think there is any real - difference between the Insurance Co. of North America and the rest of the companies, excepting that the Insurance Co. of North America has much greater confidence than the rest of the companies have in the ability of this committee, or of the Congress, or of the State Department, to bring the rest of the world around to our point of view. We all agree with Mr. Laws that we would like to rewrite these rules and there are a number of minor changes we should like to make in them if we were rewriting them now. There are a number of errors of translation which will no doubt be corrected by the State Department in agreement with England. There are a number of minor verbal changes which I think could be made and would undoubtedly improve the rules.

But the rest of the insurance companies feel that we can not, probably, change these rules even in minor particulars without losing the benefit of this entire movement that has gone so far. We feel, as was remarked by one member of the committee few minutes ago, that, if this fails, we will be right back to where we started; but the Insurance Co. of North America may be quite right (they very often are right; have been right in many cases, and may be right now) in believing we can force the issue here and that any bill which is agreed on by the American interests will be adopted abroad. That is a matter for the committee to determine when they consider the weight of the objections that have been made--whether they are important enough to justify our departing from this movement, withdrawing from it, and getting up a movement of our own in a hope that the other countries interested will follow us. Personally, I do not feel at all confident they will and that is the feeling of most of the underwriters.

Mr. McGee has just informed me that the actual membership of the institute number 34.

Mr. HAIGHT. And 27 present?

Mr. ENGLAR. I have not counted those present.

Mr. LAWS. I have not counted them, but I understood there were 150 members and only 27 present.

Mr. ENGLAR. The minutes will show the list.

Mr. Laws. I do not think 34 insurance companies are all the insurance companies of the United States.

Mr. ENGLAR. I do not know, Mr. Laws, whether they are or not, but that is the membership of the institute.

Now, as I have listened to the criticisms that have been made of the rules, my imimpression has been that most of them would not justify this committee in declining to adopt these rules because of any point that has been raised here.

Mr. Laws made a number of points that I agree with in principle. I think the language of subsection (f), on page 4, which he read is perhaps unfortunate. It says the notice in writing will not be admissible if the state of the goods has at the time of their receipt been agreed to be otherwise than as stated in the notice. If we were rewriting the rules, I should join with Mr. Laws in asking that that be deleted or changed, because it does, unfortunately, raise the possibility that the truckman may sign for the goods as sound and that may prevent the consignee from later giving notice that they are damaged. But I say that we have our remedy. We never have had it before; we have been absolutely barred; if we did not put our claim in before removal of the goods, we were out of court. Now that we have our remedy, we can tell our truckman he must not sign for damaged goods without putting a notice on the receipt that they are damaged; we must tell him if the goods are in apparent good order and condition, he must only say on the receipt they are in apparent good order and condition; he must not say they are in good condition. But, over and above all that, even if the truckman does not comply with his instructions, if he is unable to read and write, we still have a right to come in court and prove, if we can, that our goods were not in good condition when delivered. That saving clause is what we rely on. Now, there have been two suggestions

Mr. CAMPBELL. You say if they were damaged when delivered; delivered to you? Mr. ENGLAR. Yes.

Mr. CAMPBELL. Then who has the burden when they are damaged in the customhouse?

Mr. ENGLAR. On that point, I do not see how there can be any fair room for a difference of opinion as to the measure of your liability-as to the extent of it, rather, the time it extends over. The fact we can give a notice does not fix any liability on you.

It is true our time to give you notice will extend it beyond the period for which you are liable. It is extended for three days, in which time we can take the goods into our warehouse and examine them. You are not liable for any damage occurring in that three days and we have three days within which to give notice but the time in which we can give notice has nothing to do with the period for which you are liable. Mr. CAMPBELL. You just said if you can prove they were damaged when they were delivered to you?

Mr. ENGLAR. Yes.

Mr. CAMPBELL. Is that a customhouse delivery, or delivery in his warehouse? Mr. ENGLAR. We have to prove they were damaged when you delivered to the customhouse, or to anyone to whom you had a right to deliver them. That has always been so and always must be so, because no law could be passed that you would be responsible for damage after you parted with possession of them. All this law does is to say our time is extended for giving the notice, and that is natural and logical; but, after we have given notice, we will have the burden of proving they were damaged when you parted with the possession of them, and these rules, the Harter Act nor any other law could not have any different meaning, because neither Congress, the State Department, nor anybody else can agree to a regulation that after you had parted with the goods you were liable for what happened in the meantime. You are only liable. for what happens while they are in your custody.

A good deal has been said about the Harter Act. It has always been my understanding and I understand it is the understanding of the committee, that before and after these rules apply that is, before the commencement of loading and after the completion of discharging-the transaction is governed by the law as it exists now, notwithstanding the passage of these rules. The rules go into effect in so far as they apply; that is, from the beginning of loading until the end of discharging, during which time they are controlling; but, before and after that period the law remains as it is to-day. Now, our most important law in that connection is the Harter Act, and I want to point out that the Harter Act does not impose ary burden on any particular class of ships, because the Harter Act has nothing to do with the nationality of the ship. The Harter Act applies to all vessels sailing to or from American ports; it does not matter whether they are British, Dutch, or what not. But when the transportation is not to or from an American port, it does not apply to any ship, not even to an American ship. In other words, if an American ship transports goods from Brazil to any one of the European ports, it would not be subject to the Harter Act; so that there is an absolute equality in the position of all ships of all nationalities under the Harter Act. If British ships ply to American ports, they are subject to the Harter Act just as American ships, in the same trade, or any other ships, are subject to it; but neither ship is subject to it in any other trade. It regulates a certain trade and not a certain nationality of ships, or a certain class of ships.

Now, I have no doubt whatever that the wording of these rules, even with Article VII left in, has that effect. I find nothing in Article VII which tends to repeal the Harter Act before loading or after discharging, and for that reason I think it may prove wise to reinstate Article VII—to put it in there in order to preserve the uniformity which is so important. Article VII simply says that

"Nothing herein contained shall prevent a carrier or a shipper from entering into any agreement

*

*

Nothing in here does prevent them, but the Harter Act prevents them, or some other act may prevent them, but I find nothing in that article which is contrary to that understanding, and for that reason, while I do not advocate putting Article VII back in, I simply want to go on record as saying if it is found inadvisable or impracticable, to leave it out, that I think it does absolutely no harm. Some of us before this meeting and in preparation for it discussed the possibility of adding a clause to the rules to clarify that issue. I think that can be done without any interference with the rules or with the convention, because the convention, by its terms, provides that it does not apply before loading and after discharging; that means that every nation is left free to pass its own laws during that period. Therefore if you pass the rules as they stand, if you pass this convention as it stands, we are left perfectly free to regulate our own affairs as to what happens before loading and after discharging. While I have no doubt that the Harter Act will remain in full force and effect with the Article VII in there, it seems to me it would be more in conformity with this desire for uniformity, in which we all concur, to put Article VII in, so that we pass the rules in their entirety, and then to add an explanatory or supplemental clause, which might be, in form, a part of these rules, although it could just as well be a separate act. And I have drafted a suggested additional article, which I should like to read into the record, although I do not advocate it; I do not think it is necessary. I simply suggest the addition of this clause as an alternative to the omission of Article

VII, because it seems to me that that would be a more scientific way to approach it and would be less likely to interfere with the general adoption of these rules by other nations. I suggest adding, at the end of Article VII as it stands now in the convention, substantially the following provision:

"Provided, however, That the validity of any agreement, stipulation, condition, reservation, or exemption entered into pursuant to this article, so far as it relates to the responsibility or liability of the ship or carrier prior to commencement of the loading or after the completion of the discharge, shall be subject to the provisions of the act of February 13, 1893, commonly known as the Harter Act. and to any other law which would be applicable in the absence of this act."

That can either be added as a proviso to Article VII, or it can be added as a separate article at the end of the act.

I have already explained personally that I do not think it is necessary; but, on the other hand, I do not think that the addition of such an article would in any way constitute a departure by the United States from the recommendations of this Brussels convention, because, as far as the cargo interests are concerned, their position has always been and is that they would like to make these rules apply from beginning to end-from the time the carrier received the goods until he gives up possession of them. The shipowners are unwilling to do that. The result is, it leaves each government free to regulate as it sees fit that part of the transit not covered by the rules, and by our own extension of the rules to the entire possession and custody of the carrier I see no departure from the rules in adding a provision of that kind.

I want to make another suggestion, again simply trying to meet, without departing from the principle of uniformity, an objection that has been raised. The point was made this morning by, I think, two members of the committee that in subdivision (f), on page 4, there was an ambiguity about the three-day provision; that it might be construed as giving an absolute defense to the carrier if the notice were not given within three days. I do not think that is so. I think it is clear, from the reading of the whole paragraph, that the three-day provision, like the provision for giving notice before removal of the goods, relates only to the question of the prima facie evidence. I do not think it is an absolute bar at all. But I suggest, in view of the fact that this is a translation from a foreign language and we have to do something more than to put down the literal equivalent of the French words as they stand (what we have to do is to put into English the meaning of the French document), I do not see that it would be a fatal departure from the rules to insert at the end of line 16, in parentheses, the following words:

(or, if the loss or damage is not apparent, within three days after such delivery)" Then the sentence at the bottom of page 4, line 17, could be omitted. It seems to me that is not an unreasonable liberty to take in a translation.

Mr. HAIGHT. Then you omit lines 19 and 20 also? Mr. ENGLAR. Yes; strike out that last sentence. That again I think is unnecessary, but I do not see it is any departure from the rules. Now anything beyond thatalthough I agree with some of Mr. Laws's criticisms, I am strongly opposed to adopting them in so far as they involve any departure from the substance of these rules; not because I do not think he is right, but because I think it is far more important for us to get these rules as they stand than it is for us to produce, as we might in time, a perfect set of rules which no one could criticise but which no one would adopt.

Mr. Laws made another suggestion which I think requires consideration and some action. Mr. Laws points out, on page 6, line 21 (the clause relating to fire), that the provision as to fire, which is "unless caused by the actual fault or privity of the carrier”—that the language there is different from our fire statute and, therefore, that provision is inconsistent with the section 7 at the top of page 11, which provides that the sections 4281 to 4289 of the Revised Statutes shall not be ineffective. We could not leave the fire statute in force and still put into effect this clause 2, on page 6, and I think the remedy for that is fairly simple. I do not think there is any difference, any material difference, between the words "fault or privity" and the words of the fire statute, which are "design or neglect." The words "fault or privity" are taken from the English Statute of Limitations, which is slightly different from ours. Our statute, which otherwise is practically identical, uses the words "knowledge or privity," and the English statute says "fault or privity," and in this convention they have adopted the English words "fault or privity.'

Mr. EDMONDS. I do not believe, Mr. Englar, there would be any objection on the part of the other parties to this if we wanted to put the word "knowledge" in there. Mr. ENGLAR. I do not suppose there would be, sir.

Mr. EDMONDS. I do not think of necessity we have to take it word for word. I understand if we want to put anything better in our bill, we can do it; that this is only a basis and what you want to better you can do; so that when the treaty gets over in

the Senate, if we desire to change a word or two, or to put in a word there, I do not think anybody would object to it at all.

Mr. ENGLAR. If they do not, very well. I do not know whether they will or not. Mr. HAIGHT. Isn't it inane to talk about fires caused by knowledge? How is it caused by knowledge?

Mr. ENGLAR. I was just coming to that. I do not want to appear here as taking the position, because this convention has been issued from Brussels, that we have to take it; because if there are any changes necessary we will make them, of course. I am simply trying to point out that I do not think any change in substance is necessary and, in this connection, I do not think the words "fault or privity" put any less burden or any greater burden on the carrier than the words "design or neglect.' Personally, I should be just as well satisfied to represent a cargo claim with the words "fault or privity" as I would with the words "design or neglect." I have never been able to find any authority for the proposition there was any difference in the effect between the English language "fault or privity" and our language "knowledge or privity.' Therefore, my suggestion would be, in section 7, at the top of page 11, that we omit the reference to the particular section which deals with fire. That will leave our statute of limitations in full force and effect and we will have the provision with respect to fire governed by the provisions of this convention, which I think are perfectly equivalent, if not stronger in favor of the cargo owner, but there is that inconsistency which must be corrected, of course.

I have not very much more to say. On page 8, the £100 clause, I simply want to point out I suppose it is obvious, anyway, and it is perfectly clear-that the shipowner in no event will have to pay anybody £100 when it is more than the actual value of the goods. In other words, he does not have to pay £100 because that is the limitation in the bill of lading. That is simply the maximum of liability. The contrary is perhaps true of the agreed value. In the succeeding paragraph, in the declaration of value, I rather think that does make out a prima facie case for the amount of the declared value, and I think the criticism of that paragraph has some foundation; but as to the £100 clause, that does not apply. I do not think that agreed value, though, that declared value, will be very important, because the shipowner would have the same protection that the underwriter has-namely, that the shipper has no control over his goods while they are in the carrier's possession and he is not in a position to bring about a loss, and he can not bring about with a given package, because he has overvalued it, that it will be lost; it is something beyond his control.

Mr. EDMONDS. It would be more likely to loss, though, if they put too high a valuation on it, would it not?

Mr. ENGLAR. I do not think so, because if they put a very high value on it the carrier would ordinarily give it greater protection. That is the theory of puttting a higher valuation on it.

Mr. EDMONDS. Would not the sailor be more apt to take a package with a very high value on it than he would a package with a low value on it?

Mr. ENGLAR. The sailor does not have anything to do with the very valuable packages. If it be a very valuable package, it goes in the strong room, and if it is a fairly valuable package it goes in the hold.

Mr. EDMONDS. From all we have had told us about theft and pilferage, I thought the sailor had a good deal to do with it.

Mr. ENGLAR. Of course; but he does not have an opportunity to compare the manifest with the declaration of value. That is entirely without his province. Sometimes the mates do.

Mr. EDMONDS. Sometimes they get into the game, too, and the captains, also?

Mr. ENGLAR. Yes; that is unfortunately true, and there is no doubt some injustice might result from that; but I think it is a very remote cause if anything of that sort would happen and, beside which, they probably would not take it away if they found it was not as valuable as it was represented to be.

I do not care to take up your time with anything further, except I want to make it clear that my interest in the rules is not to argue that they are perfect. They are not perhaps the best rules that could be gotten up, but I am not at all sure, if you do not decide that we are to have a complete new deal, that these rules are not going through, if we sat down and went into the whole thing de novo, that anybody would be any better off when we got through; because this thing is a compromise, we have all given up a little something, but nobody has yet pointed out anything in these rules that is inherently bad. Various minor changes have been made and various minor changes have been suggested and no doubt if you were to open up the whole subject again the cargo interests would have some changes they wanted to make. We can all make changes, but nobody has pointed out anything in here which is really bad and I am not at all sure we would ever get any better off even though we were to ignore the

other nations completely and there was nobody to consult but the American interests and you were to take a week here I am not at all sure you would get any better result than this and then we would not have any uniformity.

Now, this represents the first compromise of its kind, I think, in the history of the shipping business. We have our lion and lambs sitting down together. Mr. Campbell represents the lion and I am representing some of the lambs and we are all here together and most of us have agreed.

A VOICE. And don't forget the goats are present, also. [Laughter.]

Mr. CAMPBELL. Don't you think the British interests were the lion and our delegates over there were the lambs?

Mr. ENGLAR. No; I do not. I do not think that at all, because the British shipowners were being hounded by the British shippers a whole lot harder than we have ever been able to hound the American shipowner; they had the British shipowner on the run. That is how this came about. It was not because the British shipowners were putting anything over, but the British shippers were trying to get justice from the British shipowners. That is what started this. The question of nationality was merely incidental; it merely served to start the conflict between two conflicting interests, and it did not matter whether it was the British cargo interests against the shipping interests, with the bankers and insurance companies sitting in between, or not. As a result of that real struggle this compromise came about, and there has never been anything like it before. It is not unaninous, but the great majority of the different interests that have been heard here, I think, are agreed on this compromise, and it was gotten up-none of us here had anything to do with it, except Mr. Beecher; he is the only man here who had anything to do with getting it up. They simply began with the Hague rules and changes have been made; they have been modified here and there as was suggested by the different interests, and in the main it represents the final compromise between all the interested parties, and it seems to me a compromise of that sort has far more chance of being finally and definitely satisfactory than any set of rules which may be gotten up and enforced by Congress or by any other legislative body, because if it is done in that way some interest is bound to be upset and bound to be coming back for relief and trying to get it changed. I say, if Congress can see its way clear to adopt this set of rules, gotten up as a compromise, they hold out a great deal of hope for real satisfaction all around and for a permanent settlement of these issues.

Mr. CAMPBELL. You do not think they will be satisfied?

Mr. ENGLAR. Certainly they would.

Mr. CAMPBELL. Everybody be satisfied?

Mr. ENGLAR. Sure.

Mr. EDMONDS. I thought you were going to propose the abolishment of general average. [Laughter.]

Mr. ENGLAR. The only reason I did not, Mr. Edmonds, is I have not been able to figure out anything to put in its place.

Mr. CAMPBELL. May I ask if you consider it a practical proposition to give notice of your claim before removal of the goods?

Mr. ENGLAR. As conditions are now, Mr. Campbell, it has not been practical as a rule. Some people have been able to do it and it can be done theoretically, but practically let us assume it can not be. I am not prepared to say it can not be done. Mr. CAMPBELL. Then you do not exactly approve of that part of the section with reference to that notice?"

Mr. ENGLAR. No. Representing the interests I do, I would be very glad to dispense with a notice; I would be glad to say we did not have to give any notice, but I recognize there are two sides to this thing and, from the standpoint of the shipowner, I think he has a certain moral right to be given some notice. If the goods are damaged when removed, I think he can fairly claim he ought to have some notice of that; but if the damage does not appear until they are opened up I think he can fairly ask that he be given direct notice. And while that is contrarty to my interests, in so far as I am interested in it, I think it is better to accept a compromise like this than to argue for something which I am confident will never be permanently obtained. Even though we got a law which provides that the shipowner should never get any notice until he was sued, I do not think they would retain that, but that sooner or later there would be propaganda started to change it and eventually it would be changed. And, therefore, while I do not see in here everything I would like to have, I think it is a fairly good trade. That is the way I feel about it.

Mr. CAMPBELL. In 1921, in discussing a similar rule, I believe you said it was wholly impracticable under such regulations to preserve your rights unless you had a lawyer at each pier?

Mr. ENGLAR. That is true, but you see what has happened since then. The reason I take a different position now is because the failure to give notice under this act is