The purpose of that is to allow the charter party, where bills of lading remain only in the hands of the original charterer, to be unaffected by the rules. It is only when the bills of lading under charter parties have passed into other hands than those of the original charterer that the rules are to apply. We believe that that is the right thing to do. The Harter Act itself is not applicable to charters, but from the international point of view it was absolutely essential to agree upon this, because the Scandinavian countries were extremely anxious to preserve their rights of issuing their charter parties unrestricted by the rules.

Mr. BLAND. Would it be convenient for you to point out the changes in existing law as we go along the changes that are proposed to be made?

Mr. BEECHER. I will endeavor to do so; but I am afraid I will be rather imperfect, and must ask the indulgence of the committee as I have just gotten up from a sick bed and will have some difficulty.

I next call attention to paragraph e of section 1, lines 9 to 11, page 2, providing that these rules shall cover only the period while the goods are on board ship. It has been clarified from the language of the rules formerly under consideration. It has not, as was desired by many American shippers, been broadened so as to cover the entire period while the goods are in the possession of the carrier, as does the Harter Act. Mr. ROSENBLOOM. Does that change the present law?

Mr. BEECHER. It changes the present law with respect to the period while the goods are on board ship.

Mr. ROSENBLOOM. That is the only thing it could change. Does the present law provide that when it is delivered at the dock the carrier becomes responsible? Mr. BEECHER. Yes.

Mr. ROSENBLOOM. And this change relieves them from the responsibility?

Mr. BEECHER. No; it does not relieve them from that responsibility; it leaves them under the same responsibility as they are to-day, prior to the lading on board, but proposes an additional and higher responsibility or liability when the goods are actually placed on board. So that the law as it is to-day is amended only so as to make it more stringent upon the carrier than under the existing law. What many American shippers desired (and at the time I sympathized with them and sought to have it carried out), was that these rules should apply to the entire period while the goods were in the hands of the carrier; but I found that was impossible if we were to secure international uniformity and the reasons given have convinced me that the objections of the other nations are well founded.

The point is this, that if these rules are made applicable to the period after the goods have been discharged from the ship or before they are loaded upon the ship, the steamship company, the carrier, which may have and frequently does have a large and elaborate system of warehouses, is placed at an impossible competitive disadvantage with his neighbor warehouseman who is under no such restrictions. In other words, if the warehouseman who is not also a carrier is able to do what is commonly the case, issue a receipt at owner's risk and with a valuation, if you please, of 20 shillings per package, it is obvious he has a tremendous advantage over the steamship company if the steamship company is compelled to assume the obligations imposed by these rules the higher degree of responsibility and the higher limit of liability. It may be thought strange that the shippers or the owners of the goods would prefer the other system, but apparently they do, and I can see a good reason for it, because the contract or the receipt of a well-run, responsible, warehouse company "at owner's risk' and at no liability may often be far more valuable than a receipt with the most stringent provisions issued by a company of less responsible character. And obviously, of course, the company that issues the receipt at owner's risk, and so on, can charge a much lower rate for storage than the company that issues a receipt subject to these obligations. For those reasons it was found impossible to have the rules cover any period other than while on board ship.

Mr. BLAND. What liability is not covered by the phrase "at owner's risk"?

Mr. BEECHER. What liability is not?

Mr. BLAND. Is the liability entirely at the risk of the owner?

Mr. BEECHER. Perhaps Mr. Englar could tell you just how that is.

Mr. BLAND. I won't go into that then; I will withdraw that question.

Mr. BEECHER. In general, it would relieve the warehouseman of every liability. Of course in America we do not have that situation, because under the warehousing acts, I take it, "at owner's risk is not permissible; I mean, our warehouses are liable for the exercise of reasonable care.

Mr. BLAND. I suppose the warehouseman is relieved from everything except gross negligence.

Mr. BEECHER. I suppose that would at least be true under your suggestion. At the hearings of the Shipping Board, before we went abroad, realizing the difficulties

there would be in attempting to secure what we were asked to secure, namely, the application of the rules to the entire period while the goods were in the carrier's hands, I asked the gentlemen who were especially urging that whether they would be satisfied if it was entirely clear that the Harter Act remained in full force and effect as to all periods of time not covered by the rules, and they said they would. Apparently they had a fear, if the rules were adopted in the form they were, that it might be held to amount to a repeal of the Harter Act as to the period before and after the goods were on shipboard. Now, in this bill it has been attempted to insure that the provisions of the Harter Act are unaffected, because there has been omitted that section of the rules or that article of the rules, article 7, which in terms gave the carrier and the shipper permission to enter into any agreement they saw fit as to the period before or after the goods were on board ship. We therefore have left the Harter Act in full force and effect, except as to that period of time while the goods are on board ship, as to which period of time the rules, in so far as they are in conflict with the Harter Act, would necessarily modify the Harter Act, as being the latest expression of the will of Congress.

Mr. BLAND. The Harter Act limits the liability to the ship, does it not?

Mr. BEECHER. No; the Harter Act prohibits the carrier from inserting provisions relieving himself from liability for negligence. It is that particular portion that was important there.

I call attention next to the provisions of section 3, paragraph (F), line 12, on page 4, of the bill. This is the notice of claim clause and I think, as it has been modified at the meetings abroad, that it complies with every possible need or even desire of the shippers. From the viewpoint of the ship owner, I can see that it is subject to criticism as not affording the protection against fraudulent claims which perhaps he should have; but the modifications which have been made abroad only strike out, in the first line, the notice of claim of loss, so that it now reads "Unless notice of loss or damage," thereby making it not essential to give a formal notice of claim, and the change in lines 19 and 20, where the addition of the words, “If the loss or damage is not apparent, the notice must be given within three days of the delivery of the goods," allowing the shipper, in cases of nonapparent damage, to have three days after he has removed the goods within which to investigate and to notify the carrier, if he finds any damage.

Mr. ROSENBLOOM. After the consignee removes the goods from the custody of the carrier-suppose he does not ascertain his damage within three days, is it intended here to estop any recovery for the damage he might have?

Mr. BEECHER. Not at all. That is the point in which this notice of claim clause is so valuable from the point of view of the shipper. So far as I know, under all previous bills of lading and claim clauses of this sort, the effect of the failure of the shipper to give the notice required has been, as you say, to estop him from recovery. All of that has been wiped out now in this clause.

Mr. BLAND. Suppose it is a concealed loss and not discovered until after the expiration of the three days?

Mr. BEECHER. All right; in that case, what is the result? He can recover just the same from the carrier. Under previous bills of lading, commonly in use, he could not recover with such a claim clause if he had failed to give the notice required; but here the only effect of his failing to give the notice of the claim is that the carrier has the benefit of a prima facie presumption that he has delivered the goods in good order. All the shipper then has to do is to prove the fact they were in bad order when the carrier delivered to him and he recovers, notwithstanding his failure to give the notice of claim.

Mr. ROSENBLOOM. I do not see how you reconcile that with the language "If the loss or damage is not apparent, the notice must be given within three days of the delivery of the goods." Would not that word "must" estop him from setting up a claim after three days?

Mr. BEECHER. No; I think not, Congressman; because that simply means he must give it within three days, otherwise what will happen, what this provides, is that such removal will be prima facie evidence of the delivery by the carrier of the goods as described by the bill of lading. That is the penalty of not complying with the "must."

Mr. PERLMAN. That is not quite clear, Mr. Beecher. I think you are giving practically a statute of limitations of three days.

Mr. ROSENBLOOM. Yes; you fix a limitation of three days. In other words, here is a jobber who receives large consignments from abroad; he may have no occasion to open any of them for six months, until they are sent on to the ultimate consumer, out in Kansas City, for instance, and then it is discovered they are damaged. This language, in my opinion, would estop him from making claim.

Mr. BEECHER. If your construction is correct, it must be changed; but it is curious (and I can see the force of your point) that these learned delegates of the 24 nations engaged at Brussels never conceived of that point. That is something which I think could readily be changed by simply inserting this clause with the preceding clause. Mr. PERLMAN. Yes; that would help it.

Mr. CAMPBELL. Then you break away from the convention.

Mr. BEECHER. Mr. Campbell, it is not my understanding that the obligation of the several nations is to adopt the rules with absolute verbal literacy, but that they are under obligations to change none of the principles of the rules. If it is a mere question of putting one clause where it obviously belongs, so as to make it entirely clear under the laws and legal interpretations of a particular country that it means what the convention intended it to mean, I do not understand that there is any prohibition on any of the international committee that would interfere with it.

Mr. CAMPBELL. Then you break the uniformity, because you would not have the same interpretation by the courts of two clauses that are differently worded.

Mr. BEECHER. You can only do it to the best of your ability and of course you would not have uniformity with the clauses worded in precisely the same way, because the courts of the different nations may interpret them differently and undoubtedly they will to a certain extent. So that there will be and always has been a certain amount of nonuniformity and I think we are only liable to do what we can to carry out the spirit of the convention.

Mr. PERLMAN. And you say the spirit was, where damage was not apparent, that, instead of having to give the notice immediately upon removal, three days shall be allowed?

Mr. BEECHER. Quite right. It was a clause insisted on and asked for by the French in the interests of their shippers.

Mr. ROSENBLOOM. It is clearly not in the interest of the shippers.

Mr. BEECHER. Of course, as you interpret it, it will be tremendously in the interest of the shipowners; but it was not so assumed and it never occurred to anybody that it could have the other interpretation. That shows one of the benefits of hearings

like this.

Mr. PERLMAN. Would not that change be, after the word "carriage" in line 16, simply to say, "Notice shall be given within three days where the loss or damage is not apparent," and then to use the words "such removal or failure to give notice shall be prima facie evidence," and so on?

Mr. BEECHER. We know what we want and it is a matter, I think, for the billdrafting service, which does these things so well, to put that into shape. But I want to emphasize the fact that no longer can any shipper be barred of his recovery by his failure to make claim. It is true that if he does not bring suit within a year (and there is a change which was made at Brussels, and one of the few changes which are favorable to the shipowner), he can not recover. But even those who were most strongly advocating the shippers' interests were not inclined to press too strongly their original insistence upon a limitation of two years. It is recognized that in matters of the sea the difficulties of preserving evidence are infinitely greater and different from what they are on land, and it was almost unanimously felt that all honest claims could be presented and taken care of and, if not disposed of satisfactorily, that suit could be brought within a period of one year, and the two-year limitation would inure chiefly to the benefit of those who wanted to take advantage of the carrier, rather than of those who were really inured.

Mr. PERLMAN. Will you explain lines 20, 21, 22, and 23, beginning at the end of line 20, "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." Mr. BEECHER. I have a little difficulty in regard to that. I am sorry Judge Hough, who was chairman of the sous commission or, in other words, the subcommittee that had charge of these rules at the Brussels conference, which then reported to the plenary session, did not appear, because he could undoubtedly better explain that than I can.

Mr. ROSENBLOOM. Is he connected with the Shipping Board?

Mr. BEECHER. He is a United States circuit judge in New York.

Mr. ROSENBLOOм. He was appointed as a member of the commission?

Mr. BEECHER. He was appointed, as I say, by the President to represent the United States. The Shipping Board had no representation at Brussels; that was a diplomatic conference.

Mr. PERLMAN. What do you think that means, Mr. Beecher?

Mr. BEECHER. My understanding of this is that if the shipper, when he receives his goods, agrees by his receipt, or otherwise, that the goods are undamaged, he will not be permitted thereafter to serve a notice asserting that they are damaged and secure the benefit of that notice.

Mr. PERLMAN. If he served a notice, after he signed such a receipt knowingly, would not that be just the same in court as to bar him from recovery?

Mr. BEECHER. I don't think so. It is something which some of our foreign friends wanted, I imagine, because they may have some difficulties which we do not have. Mr. PERLMAN. Now, let us see our difficulties. Suppose some one calls for merchandise and does not examine the merchandise or has not the opportunity to examine it, and he is given a printed receipt, prepared by the steamship company, in which he acknowledges that the merchandise or the goods in question are in good shape, etc. What happens then? Is not that a bar to entering suit?

Mr. BEECHER. No; it is not. You must bear in mind that the only effect of the receipt, anyhow, is to make out a prima facie case of delivery in good order by the steamship company.

Mr. PERLMAN. As I read that, it is not as to whether it will not be prima facie evidence, but it puts an end to the case.

Mr. BEECHER. Oh, no. It simply 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." Now, for what purpose is the notice offered in evidence? It is in order to prevent the carrier from having a prima facie case of good delivery.

Mr. PERLMAN. Isn't it a part of your case that you must show notice?

Mr. BEECHER. Not at all.

Mr. PERLMAN. In other words, you can, without serving notice at all, if you sue within one year's time, recover for goods delivered in a damaged condition?

Mr. BEECHER. Absolutely. The effect is so trifling from the viewpoint of protecting the steamship owner, I am not surprised the gentlemen have difficulty in believing the notice of claim clause has no greater effect than I have stated. Probably it has no greater effect than the more common signing of a receipt for delivery in good order, which everyone knows is subject to rebuttal when you come to put in your proof.

If a

Mr. PERLMAN. I know; but it is rather difficult to rebut something of that sort. man signs a paper prepared by the steamship company, a carrier, without examining the merchandise, that hurts the shipper considerably. I do not think it is necessary, unless you think the convention insists upon that.

Mr. BEECHER. To have any notice of claim clause?

Mr. PERLMAN. No; to have the provision that the notice in writing shall not be admissible when a receipt is signed by the shipper that the merchandise is delivered in good condition.

Mr. BEECHER. I do not consider that of great importance, but I can not see that it does the slightest injustice to the shipper.

Mr. PERLMAN. It gives the carrier a certain advantage against the shipper.

Mr. BEECHER. But when you bear in mind the very large advantage the carrier has heretofore had against the shipper, in respect to notice of claim, advantages which Congress has said, over and over and over again, were only right and proper, have been taken away in toto, I do not see that it would give the carrier what you describe as a considerable advantage; but, in reality, as compared to the advantages the carriers has had in the past, it is only of minor importance and it does not seem to me there could be very serious criticism of the provision. And I do feel that we have got to consider whether we are prepared, for the sake of verbal perfection or perhaps perfection in details, to throw over the avdantages of the rules of a uniform law to be adopted by 24 maritime nations of the earth.

Mr. PERLMAN. That is really shifting the burden of proof from the defendant to the plaintiff in every instance here. The moment he signs a receipt, through his agent, that it is delivered in good condition, without having the merchandise to examine, and it has not been opened and has not been examined, the burden is on the plaintiff to rebut his own receipt all the time.

Mr. BEECHER. I think that is true under the existing law, and I do not think anybody would suggest that a man who signs a receipt ought not to have it create a prima facie case in favor of the other fellow.

Mr. PERLMAN. Not a prima facie case.

Mr. BEECHER. It is some evidence against his claim; that is all a prima facie case is. I may say, on that point, I do not profess to be a great authority on the law of evidence; but it is interesting to note that our foreign friends were more troubled by our expression "prima facie evidence' than would be imagined; they could not grasp it; they did not know what it meant, and we had more difficulty with that than over any other proposal. But as I understand, all it means is that, in the absence of any evidence to the contrary, the carrier wins in such a case.

Mr. PERLMAN. Not in the absence of any evidence; in the absence of any credible evidence.

Mr. BEECHER. Of course, I do not mean the absence of any evidence.

Mr. PERLMAN. In other words, in the absence of the evidence that the judge wants to believe.

Mr. BEECHER. No; I think it is almost as strong as I have put it. It really does not amount to anything, I really do not think.

Mr. PAUL. Under existing law, as it applies to rail transportation, the signing of a receipt by a consignee that the goods were received in good order, when he has not had a chance to examine them, is always a perpetual source of trouble when he discovers the goods are not in good condition.

Mr. BEECHER. Right.

Mr. PERLMAN. But not quite as much trouble as when he is barred by the law; that is, this goes further.

Mr. PAUL. Surely it does. It is bad enough under modern rail transportation. Mr. PERLMAN. Absolutely.

Mr. BLAND. Mr. Beecher, if a man has receipted for a piece of green cheese, he certainly can not assert thereafter that he did not get it.

Mr. BEECHER. I think not; he can not prima facie.

Mr. ROSENBLOOM. The receipt bars him.

Mr. BEECHER. No, Congressman; there is no bar; let me express that opinion that there is no bar.

Mr. ROSENBLOOM. It bars the introduction of the three-days notice.

Mr. BEECHER. Right, but what does that do; what is the effect of that? Absolutely nothing, except that he has actually to prove the facts.

Mr. ROSENBLOOM. He has to do that anyhow, doesn't he?

Mr. BEECHER. Quite right. The real effect of this, so far as the shipper is concerned, is nothing. I think the great objection to this clause is that it does not afford the shipowner reasonable protection. From the viewpoint of the shipper I think it is the most remarkable advance that the law of carriers has ever made for his benefit. Mr. ROSENBLOOM. Of the shipper?

Mr. BEECHER. The viewpoint of the shipper.

Mr. PERLMAN. How is it given to him, without giving this little advantage of prima facie evidence.

Mr. BEECHER. That means it has wiped out entirely any notice of claim. I say that is not desirable from the viewpoint of the shipper, because the shipper, the honest shipper, is interested in the notice of claim clause just as much as the carrier. The notice of claim clause protects the carrier against dishonest claims primarily. The honest shipper is vitally interested that the carrier be protected against dishonest claims, because, like the unpaid bills to your tailor, you know you are going to have to share in paying that dishonest claim.

Mr. ROSENBLOOM. It is extended over the 62-year period. [Laughter.]

Mr. PERLMAN. Under your point of view, under the present law, where the shipper signs a receipt, through an agent, or even signs it himself, without examining the merchandise, not having an opportunity, when he makes his claim for damage, the court naturally will take into consideration this receipt he signed. Suppose you were sitting as the court, would you consider that you needed more evidence to disprove that receipt, under this provision, than without it?

Mr. BEECHER. I do not think it alters existing law under the circumstances. Mr. EDMONDS. It is true to-day and the courts have had to construe that; is not that so?

Mr. BEECHER. Yes.

Mr. EDMONDS. It is true to-day, in the present bills of lading, and the court has had to construe that. This is simply a confirmation of the Harter Act, but possibly not quite as strong.

Mr. PERLMAN. They have not construed it as practically to bar his claim.

Mr. BEECHER. Of course not; neither does this.

Mr. PERLMAN. Not entirely; but that is the effect of it.

Mr. BEECHER. It does not bar his claim any more than the signing of a receipt to-day bars his claim. It is the same thing; it operates as a prima facie case for the carrier. But you say why have it in if it does not amount to anything? You will find throughout this bill a good deal to which that same criticism could be addressed. It is an attempt, to a certain extent, to codify existing American law, so that not only shall Americans have the benefit of a final, conclusive, statement of what the American law is, but also, obviously, if all the nations of the earth are going to have the same law it is necessary and desirable to tell them in the rules what that law is.

Mr. PERLMAN. This does not explain what the American law is to-day; this changes the American law.

Mr. BEECHER. Of course; I was only referring to your objection of why put it in. Mr. PERLMAN. But it changes the present American law.

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