Mr. BLAND. Why not strike out that other language; that could be done just as easily.

Mr. CHANDLER. That could be done. This is conjecture on my part, but I think you will find where there is a transition from one bill of lading to another, in almost every instance some such notation is made on the old bill of lading, to prevent the loss of getting rid of the old supply.

Mr. SCOTT. This is in entirely different type than the original bill of lading

Mr. CHANDLER. It was printed afterwards.

Mr. Scorr (continuing). Which would indicate at least, or raise a doubt, whether or not it was printed at the same time as the original bill of lading. One is in black type and the other in red type.

Mr. BOAL. I think I can throw a little light on that because, speaking now for the Shipping Board as an operator of ships, we have the same problem. We had drawn up a bill of lading to comply with the British act, and our operators said they had a large stock on hand which they did not want to scrap, and we put on a stamped clause similar to the clause which Mr. Draper has read there. Now, it is a settled rule of law that a stamped clause will override any printed clause which is inconsistent with the stamped clause. The British courts have been construing clauses in their bills of lading incorporating statutes; a great many cases have arisen where the Harter Act has been incorporated by reference in bills of lading, and they have uniformly held, where there is an inconsistency between the Harter Act and the clauses in the bill of lading, that the Harter Act prevailed, and they apply that as a matter of contract and not as a matter of law.

There is one other feature of that clause which I would like to call your attention to now. It provides that in case of deviation all exceptions in the bill of lading shall continue in effect. Now, when a ship once deviates, the courts have said that the bill of lading is out of existence; there is no longer any contract of carriage between the shipper and the shipowner; and then, later one, they have gone on and allowed the ship to recover the freight stipulated in the bill of lading. So that you have a situation where in the one case the court says there is no contract, and in another case, they say there is. The law on that is quite unsettled. But what that clause does, it provides if a vessel deviates, the shipowner is entitled to the exceptions he would have if the ship had not deviated; in other words, the ship is not an insurer.

That can be illustrated in this way: There was an English case of a cargo shipped from India to London. The vessel deviated in the course of her voyage. The cargo was damaged while being discharged at London. There was an exception in the bill of lading relieving the ship and owner from liability for damage due to negligence of stevedores in discharging. The court held if there had been no deviation there would have been no liability; but, since the ship deviated, the shipowner could not rely upon the exceptions in the bill of lading, because there was no longer any contract, no longer any bill of lading in effect, and the shipowner was held liable for the damage. Now, the clause which Mr. Draper has read, if I understand it correctly, is aimed to give the shipowner that protection.

Mr. DRAPER. That may all be true. However, even if that clause I read there is to be construed as being an over-stamp on the bill of lading, we never have found that the British steamship companies were indulging in any charitable undertakings in any way, or that they were even inclined to be fair, unless you pushed them into it in a lawsuit, and we have not any assurance, even if it is an overstamp, they won't continue for the next 50 years to be issued in just that same way, and there is no penalty in the British act to prevent their being issued in just that same way.

Mr. BLAND. There is a penalty in our act.

Mr. DRAPER. There is a penalty in your act, but not in the British act.

Mr. BLAND. But not in the British act?

Mr. DRAPER. No.

Mr. EDMONDS. Let me say that here is a circular that Furness, Withy & Co. sent out to the shippers in this country, and it says

here:

We have previously referred to the fact that the adoption of The Hague rules enabled us to issue a new and simple form of bill of lading, in clear type, with easy reference headings, and with very many of the usual conditions deleted.

Our chairman, Sir Frederick Lewis, giving evidence on the 26th June, 1923, before the joint select committee of both houses of Parliament, on the proposed carriage of goods by sea act (which has now been passed), made the following statement:

"The Hague rules, 1921, have been accepted in practice by many liner companies, including my own, and so far have been found to work satisfactorily. We ourselves must have issued at least 50,000 bills of lading under the rules, without a single case of litigation or even dispute as to the meaning and construction of the terms of the rules."

Since then, the extension of the use of our new form of bill of lading has resulted in our having by now issued considerably over 100,000 copies of this form, and we may say that our chairman's statement still holds good that we have had no case of litigation, nor have we had any dispute in regard to the construction of the terms of The Hague rules, 1921.

That is signed by Furness, Withy & Co. (Ltd.).

Mr. DRAPER. I would like to call the chairman's attention to the thing we have contended right along, and that is, these Hague rules were devised by British steamship companies; that that document is part of a persistent propaganda that has gone on in this country among shippers and others in an effort to have them swallow these Hague rules. We have been fighting them for five years. When they were first offered to us, they contained innumerable passages that were objectionable to the American shippers.

Mr. EDMONDS. And you got the support of this committee in getting them changed and having a new conference called.

Mr. DRAPER. Yes, sir; we certainly did, and I think it has realized that, and there were other conferences, and each time there was a conference, they cut out something more that was objectionable to the American shippers, and they have gotten them down so now that, with about four changes in there, we think they would be fair to the American shipper.

I started to say awhile ago that with our larger companies they are perfectly able to take care of themselves, but what happens is this: Some little packing concern out in Iowa somewhere, for instance, wants to get into the export business. It has been buying

a large quantity of pigs and has no outlet for the resultant product in this country. It has some agent or makes some connection with some agent in Liverpool, or some place else, and they ship this stuff out of the country. They get a freight contract; they get back a bill of lading some time later on, when the goods are on the vessel, and if anything happens to those goods, if the ship goes sailing around the seven seas, the first time they know they have not a thing on earth to go back to the steamship company with is when they get into court and they find out the steamship company has handed them something where they have nobody to hold. I know personally of a dozen smaller packing companies in this country who have gone and tried to get into the export business and had one or two sad experiences like that, and out they went; they would rather stay out of the business than have the steamship companies treat them in that fashion, and this business of deviation, in my opinion, has done more to hurt the export business in this country than any other one single thing, because it has kept people out of the export business.

Mr. EDMONDS. Let me ask you a question: Do you think it would be an advantage if these rules were passed as a general thing? Whether the British adopt them or have them now or not, I do not think is of very much interest.

Mr. DRAPER. No, sir. We believe that a uniform bill of lading all over the world, if it was uniform everywhere, would be an advantage to every one.

Mr. EDMONDS. But you do not believe in surrendering one iota of your own rights, for your own benefit, to bring that about?

Mr. DRAPER. We feel this bill of lading, without that clause, or without two or three other changes in there-it would provide a bill of lading in this country that would be uniformly bad from the point of view of the shipper. It would be uniform, but not the kind of uniformity we would like.

Mr. EDMONDS. No, but it would be an improvement, even if you can not get what you would like to have.

Mr. DRAPER. No one but the steamship company would like to have it.

Mr. EDMONDS. It would be an improvement, even though the steamship company would like to have it?

Mr. DRAPER. As it is?

Mr. EDMONDS. Yes.

Mr. DRAPER. No, sir; we would rather have the conditions as they are, as shippers, than to have this bill adopted without that paragraph 4 in your bill and one or two other little changes I will mention in a moment that we feel are absolutely essential.

Mr. EDMONDS. Suppose you finish up on the deviation and then let us get those other difficulties, too. Let Mr. Draper give us his views on deviation, and then we have some New York people and others who want to be heard.

Mr. NICOLSON. Would you allow just this single insert, namely, if Mr. Haight could make some comment upon what has been here pointed out, that the British act contains no penalty clause and it would seem, therefore, that any British shipowner, at any time, without even the assistance of the British Board of Trade, which was referred to yesterday, could or could not use this bill of lading.

Mr. HAIGHT. I can explain easily why the penalty clause was omitted, 'because it so happened that I personally attended the session of the joint committee of the House of Lords and House of Commons when they were hearing the evidence with reference to The Hague rules, and everybody in the British Empire, pretty nearly, attended-steamship owners, all the big cargo shippers through the chambers of commerce, the bankers, underwriters, and all.

The question was taken up, Should they insert a penalty clause in the British act? and some people said, "The addition of a penal provision to a shipping act is wholly outside of our practices. If you want to penalize a man for something, it is odd to put it into this kind of a bill. What you have done is to say any provision in any bill of lading which is contradicted by the rules becomes absolutely void." That, they thought, was enough.

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Then the question came up as to the American Harter Act, and it was pointed out that our Harter Act, enacted in 1893, had contained a provision under which the carrier was liable to a fine of $2,000 for each offense against the act, and the specific question was put, "In the 31 years that the Harter Act has been in effect has any carrier ever been penalized?" and the answer had to be no.' There have been three cases brought against carriers where it was claimed that their bill of lading violated the Harter Act. In two of those cases my office was interested, and in each instance the judge said, "Since you have this general overriding clause which says that the bill of lading is governed by the act, then any condition in the bill of lading which contradicts the act is void and when a carrier prints the overriding clause it is his purpose to obey the law and, if there is any clause that can be construed as disobeying it, it is automatically eliminated." And when the British joint committee found, in 31 years, our penalty has never been enforced once, they said, "Oh, well, as a practical matter, it does not make any difference, anyway."

Mr. BLAND. Why put it in our bill then?

Mr. HAIGHT. For my part, I believe a penalty is helpful, but I can not contradict the argument it has never been enforced. I think it does have a certain amount of restriction. It is at least threat

ening.

Mr. BLAND. I think so, too; I think that is why the British do not want it.

Mr. EDMONDS. Under the circumstances, I will agree either to take the penalty out or to leave it in.

Mr. WHITE. This witness has been on the stand for a long time. I suggest that this witness conclude with his statement. Mr. EDMONDS. Go ahead, Mr. Draper.

Mr. DRAPER. I would like, in connection with this deviation matter, if the committee will permit me, to read a brief extract from the report of the National Industrial Traffic League, which represents the bulk of the shippers in this country, on The Hague rules, and it deals a little bit with the historical side of it. I think it will be beneficial to the committee to have the benefit of this report. I will only read an extract from it. It says:

There is nothing sacred about The Hague rules and if we shippers permit the perpetuation of a lot of the antiquated contractual conditions in lieu of

a modern revision thereof, we will get exactly what we deserve a first-class lot of high-priced litigation with the prospect of even less relief in the future. Since the issue is raised and is definitely before us we must settle it right or not at all.

This is a report that was made to a convention of the National Industrial Traffic League and was unanimously adopted by that organization.

Ocean carriers have preserved throughout all the centuries of water carriage a lot of old-fashioned ideas as to why they should be exempt from liability on one cause and another. There may have been justice in their contentions in the days of long ago when a ship departed on a long journey during which the owner had no means of communication with the master. That, however, is a thing of the past, and to-day the owner is in daily and instant touch with the ship which is as completely under control as is the railroad train.

From the viewpoint of the modern shipper dealing with the ocean carrier of to-day it seems absurd to urge the continuation of these obsolete conditions. It would appear that the majority of the committee

That is, a majority of the committee brought in a report favoring these Hague rules. The minority committee came in and made its report, and the association voted down the majority committee report and adopted the minority committee report unanimously, which is this report.

* * * It would appear that the majority of the committee had failed to read some of the more recent developments in the fight of our Government to control ocean carriers who persisted in violating the dry laws.

Now before we can readily sense the importance of The Hague rules and understand the reason for their promulgation, we must go behind the scenes and study the causes leading up to their sudden adoption at The Hague. Let us, therefore, see what the conditions were that inspired this sudden desire to "endow" the commercial world with this important code.

Let us inquire of the members to learn if there is a single one who has ever known of a case where ocean carriers conceded improved conditions to the shippers except under force of competition, threatened loss of tonnage, or the force of governmental control, actual or potential. It has never been done before, and we have no reason to suspect The Hague rules to be an exception. Until America started the ball rolling with the enactment of the Harter Act in 1893, the whole world remained at the mercy of the ocean carriers. That act, however it may be criticized for incompleteness, pointed the way, and other nations, one after the other, took up the battle and enacted legislation which has gradually closed in on the ocean carriers' right to dictate terms to shippers. In some respects these laws are more rigorous, and others less so, than the Harter Act. In all respects they mark the progressive steps of bringing the ocean carriers under more control than was ever thought possible. When the Interstate Commerce Commission sought to inject itself into the task of improving conditions in the through export bill of lading it was pretty generally understood (by the carriers) that it could not be done. It was done, however, and all things considered, it was well done. This merely proves what can be done.

Mention is made of the movement which started among the shippers of the British Empire to seek a curb on ocean carriers.

That was referred to in the majority report.

* * *

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Reference is also made to the maritime law committee deeming the time opportune to work out The Hague rules.

The fact of the matter was, the shippers in Great Britain had been so badly treated by the British steamship companies that they descended upon Parliament with a demand that legislation somewhat similar to our Harter Act be enacted for their protection, and immediately the British steamship companies got together and devised these rules as a means of protecting themselves from legisla