And what we are trying to do here is exactly what we did in the international rules of the road, to get the practical men, who know what are the best rules, to agree to them and then to make them effective. Legislation is necessary, because the State Department does not pretend that our convention, when it gets here and is accepted by the Senate, will be self-executing. You can not make it self-executing. And now that 24 nations have accepted these rules, I hope, with all my heart, the work that the International Chamber has been doing and many other bodies have been doing, can mature into what I believe will be the best constructive piece of work in transportation that has been done in generations. I do not know of any possible way in which we can get uniformity unless it is done by this kind of an agreement and, when the agreement has been reached, making it effective by legislation.

There are a few little minor things in the bill, as drawn, that I would like to see altered if it is possible. If it is not too much of a departure, I would like to see the sections numbered as they are in the agreed code, so that when you look at Article III, subsection (a), you do not find that it is section 3, subsection (a) 1 or something else. In other words, I would like to see it so that the foreigner who has passed this law can turn to our American law and find it in approximately the same place and under the same section headings as he has got them. And there are one or two other points, but I am not going to talk details here now.

So far as I am concerned, that finishes at least the presentation of the case for the International Chamber of Commerce.

STATEMENT OF MR. ROBERT H. BEAN, ON BEHALF OF THE BANKING INTERESTS.

The CHAIRMAN. Give the stenographer your full name and address, and state in what capacity you appear.

Mr. BEAN. Robert H. Bean, 120 Broadway, New York.

Mr. Chairman and gentlemen of the committee, the association which I represent is composed of bankers and business men, principally the banks of the country that are engaged, to a greater or lesser extent, in foreign trade-financing foreign tradewith large foreign departments. Associations such as these, the Foreign Trade Council, and the National Association of Credit Men, their foreign departments, we are all affiliated and work for one cause.

The particular interest of this organization is in the interests of uniformity. We have had quite a detailed statement of the various parts of this bill, of the Hague rules, and the discussion would seem to be, or my portion of the discussion would seem to be, the banker's interest in having a uniform document. It is only within the past few years that we have really found a necessity for unification and some sort of standard system of documents used in financing trade between this country and our foreign neighbors. Our experience has been, during the last five years that this association has investigated and worked for uniform credit documents, that there are as many different forms as there are days in the year and as many different shades of opinion as to interpretation of these various forms.

That has been shown particularly in letters of credit. Our banks advancing money for foreign trade, through letters of credit, were using, in almost every case, some form that they had had drawn for their own particular use by their counsel, and counsel do not always agree. The result was that when we assembled the several hundred forms from the largest banks in the United States it was found that no two forms agreed. For five years we have been laboring to bring about a standard set of commercial letters of credit, with the result that many of the largest banks have now undertaken to agree to one form that will be known the world over as an American standard letter of credit. It was especially vital that we have uniform warehouse receipts, that the bankers insist upon standard and uniform documents of every kind having to do with the financing of foreign trade. That is our interest in this particular proposal. It should be clear to every gentleman having anything to do with banking or knowing anything about banking that the banker should not be asked to advance funds on drafts secured or supported by documents which would include, as one of the very necessary documents, the ocean-carrier bill of lading, unless he could be assured that that bill of lading was, to all intents and purposes, just what it purported to be. Now, such has not been the case. The experience of the American bankers has been that they have never known what was behind the bill of lading; just what all the steps were between the shipper and the shipowner; whether or not there was some private agreement or arrangement as to receipt of goods, or delivery, or care, or custody; and as to the rates and charges. In other words, there has never been anything that would lead the banker to believe, when a particular document came to him supported by a bill of

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take a considerable gamble and, in many, many cases that gamble has resulted in heavy losses to the banks, because of suits arising between the shipper and the consignee or between the shipper and the steamship company, if damage has occurred to the goods being transported.

What we want to see is a uniform international document, granting, of course, that there may be, as in every transaction, slight changes that will have to be made to fit particular cases, which can readily be stated in or attached to the bill. But if the bill of lading itself is, from beginning to end, a standard form, adopted and approved by and used by the carrier, by the shipper, and agreed to by the consignee, it is going to make a very much easier proposition for the banker, who has, you will agree, some slight interest in this whole transaction.

We have talked a great deal in the past months about the shipper and the cargo underwriter and the steamship agent, but the fourth party to this transaction is the very necessary banker. Now, the banker, heretofore, has had to go to considerable trouble and, even after the most careful inquiry, has not been assured and could not be assured that he was protected in case there was some difficulty came up between the shipper and the steamship company. As to very many provisions of this bill which appear to be vital to the shipper and the carrier, the banker is not primarily interested. What he wants to see is an agreement between these various parties in interest that this particular bill, or whatever is worked out, will be the standard form and in view of the fact that so many of the foreign countries have agreed to this or a very similar bill, it would seem as though we were reaching a point that could almost be called the millennium when we consider the variety of conflicting and not easily understood documents that have been used heretofore.

The American Bankers' Association, through its various committees, has made a study of this for years. Its commerce and marine commission has given a great deal of attention and has urged the principle of uniformity. The Credit Men's Association, through their department of foreign trade, because it affects them-what affects the finances of the country affects the credit of the country as well-are interested. The Foreign Trade Council, because they want to avoid litigation, because they want to have a smoothly conducted foreign trade, are interested. And so it is with the associations, whether financial or commercial; they are all pleading for this standard form.

We are going to have, within a few years, a standard form of bill of lading, of warehouse receipt, of commercial letter of credit, of bill of exchange, that will be recognized all over the world and in every port and by every shipper and by every carrier. When we get to that point, it should be clear to the gentlemen representing the legal profession that we are going to have a great deal less litigation and a greatly reduced loss to the bankers. We are going to make it possible for the bank in New York to nogotiate a draft secured by an ocean carrier's bill of lading that will be recognized in London or in Rome or in Yokohama as a standard form. And when all nations say to their shippers and to their underwriters, "You must use this form; no variations of this form will be allowed," it is going to put the business of financing foreign trade through letters of credit, through drafts secured by ocean carrier bills of lading, on a very much more sound and more profitable basis.

Mr. EDMONDS. One of the advantages I can see in a thing like this is the bill of lading can be very much simplified. A few words can carry out the meaning of the bill, and the extra terms that we put in would have to be noted on the bill of lading only. Mr. BEAN. Exactly, sir.

Mr. EDMONDS. That would give you the opportunity of knowing, immediately, what conditions are made to the terms in the bill of lading?

Mr. BEAN. Exactly.

Mr. EDMONDS. Have you ever read one of the present bills of lading?

Mr. BEAN. Unfortunately, I have.

Mr. EDMONDS. You used a magnifying glass; I had to use a magnifying glass to read

one.

Mr. BEAN. Many times. That is true of many documents used in standard letters of credit. One of the forms proposed in the commercial letter of credit agreement has on one sheet as many words as you can ordinarily put on 10, and when a banker was asked if his customer signed it, he said, "We were very much opposed to this thing; but now we notice when the customer is asked to sign that, he merely takes a glance at it and puts his name on the dotted line. And that is the thing that should be worked out in these forms, that they will be as simple as possible, that they will be as devoid of conflicting phrases as possible and state the fact and, if there is any necessity for any provisions between the carrier and the steamship agent, that those provisions can be noted in such a way that they will be absolutely clear to the banker. It is a matter of great risk to the banker to-day when he is called upon to advance funds on a draft secured by the present existing form of ocean-carrier bill of lading.

lading, that that bill, of lading was 99 per cent uniform and standard. He has had to They really do not know what they are about; they trust to the Almighty that they are making the right step. Sometimes they come out all right and at other times. they have to pay a lawyer.

I think that is all, Mr. Chairman.

The CHAIRMAN. Is there any one who desires to ask any questions of Mr. Bean? Mr. HEINEMANN. I would like to ask a question, Mr. Chairman.

The CHAIRMAN. Proceed.

Mr. HEINEMANN. One of your arguments in favor of these rules, or this law, is the simplification of your bill of lading conditions?

Mr. BEAN. Yes.

Mr. HEINEMANN. Have you had an opportunity to observe the bills of lading issued abroad, in which The Hague rules have been promulgated or adopted? Mr. BEAN. No; I have not.

Mr. HEINEMANN. Assuming it to be the case that those forms not only incorporate the present conditions, but add The Hague rules, would that be a simplification? Mr. BEAN. It at least would put the banker in the position of knowing that he was dealing with a uniform bill. I am pleading, first, for uniformity; second, for simplification of whatever form is adopted.

Mr. HEINEMANN. But assuming, as I say, they include not only all of the present manifold conditions, but, in addition, the wording of this law or this bill, do you think that would act as a simplification or secure uniformity?

Mr. BEAN. Well, it would certainly tend toward uniformity.

Mr. HEINEMANN. As a banker, are you particularly concerned with the conditions of the contract between the shipper and the steamship company?

Mr. BEAN. I think it is fair to say that my position would be more in favor of putting it this way, that I believe the debate between the carrier and the shipper (those are the two parties you mentioned) should be worked out among themselves. The banker wants, first, to know that he is negotiating a bill that has been agreed to, not by one shipper but by all shippers, and not by one steamship company but by all steamship companies.

Mr. HEINEMANN. But if by chance the bill of lading I deposit with you returns back to you, you are going to look to me, if I am a responsible shipper, are you not? Mr. BEAN. That would depend somewhat on the conditions of the controversy. Mr. HEINEMANN. Assuming it arose as a result of these conditions.

Mr. BEAN. Probably I will.

Mr. HEINEMANN. That is all, Mr. Chairman. Thank you.

Mr. LAWS. Supposing the nations that are now using bills of lading used the same 365 different forms and merely added "subject to The Hague rules," would you consider that an advance, especially in the line of uniformity or simplicity?

Mr. BEAN. Well, I hardly think I would.

Mr. Laws. Well, that is the condition.

Mr. EDMONDS. I do not see how that would work out, though, Mr. Laws. If the man puts on the bill of lading "subject to the Hague rules," or whatever name you may give it, he can not put any terms on there that would lessen the potency of the Hague rules, and, no matter if he had them on there, they would not affect the situation. The man who would print his present bill of lading and then put on it "subject to the Hague rules," would be trying to use up paper uselessly, as I see it. Mr. HAIGHT. He has a fine of $2,000, Mr. Edmonds, if he does it.

Mr. EDMONDS. If there is no objection, I will put in a letter at this point which I have received from Mr. Ward, in which he states that the commercial credit committee of the American Acceptance Council and a few other associations, are represented by Mr. Robert H. Bean. The letter reads:

66

As I find it impossible to attend the hearing on the Hague rules which is scheduled for next Tuesday, I am taking the libetty of again pointing out to you, as I did on May 15, 1922, that the adoption of a uniform ocean contract of carriage appears to be of vital importance to the two organizations which I represent, the commercial credit committee of the American Acceptance Council (which will be represented in person by Mr. Robert H. Bean, its executive secretary), and the subcommittee on pilferage and uniform bill of lading of the foreign credit executive committee, National Asso-ciation of Credit Men.

'The situation which I previously pointed out to you continues to exist and in fact recent decisions have tended to heighten the utter confusion which has existed with reference to so many phases of ocean contracts of carriage, that is, banks simply can not regard a documentary foreign draft as affording them absolute security so far as the merchandise is concerned. They also encounter this problem in the extensive commercial credit business they now do by making payments against delivery of documents for account of foreign banks. The net result of this situation is to deprive

American shippers of the facility of utilizing merchandise in transit to foreign ports as a basis for bank accommodation. This is, of course, a very severe handicap on the future of American foreign trade and if there are those who have objections to the Hague rules in their present form they would do well to count whether these objections are, after all, as serious as the situation which would be ended if only some measure of uniformity were an accomplished fact.

"Very truly yours,

"WILBERT WARD."

The CHAIRMAN. We will now hear from Mr. Ira A. Campbell, representing the steam ship owners.

Mr. CAMPBELL. In calling me now, I hope you are not classing me as a proponent of this bill.

The CHAIRMAN. If you are not a supporter of this bill, we will take you later, then. Mr. CAMPBELL. I am not a supporter of this bill as it is drawn.

Mr. EDMONDS. Would you rather come in later?

Mr. CAMPBELL. It is immaterial to me.

The CHAIRMAN. We have arranged to hear the supporters of the bill first, and you were put on the list handed to me as being a supporter of the bill.

Mr. CAMPBELL. I say I am not a supporter of this particular bill.

The CHAIRMAN. Very well; we will take the shippers and let you come on later. We will hear now from Mr. Redpath, representing the United States Chamber of Com

merce.

STATEMENT OF MR. J. M. REDPATH, REPRESENTING THE UNITED STATES CHMABER OF COMMERCE.

Mr. REDPATH. My statement is very short, Mr. Chairman. Our organization, from a very early time in its history, has attempted to deal with questions regarding bills of lading. Our organization being made up of organizations of all kinds-organizations such as the chambers of commerce and trade associations has in its membership, necessarily, diverse interests when a question regarding bills of lading arises. Those diverse interests have always appeared when questions bills of lading have been taken under consideration and that was the case upon a very early occasion, when the chamber after considerable discussion, supported legislation which was eventually enacted regarding bills of lading in interstate commerce.

When the Hague rules were formulated, they at once led to a great deal of discussion. That discussion headed up at our last annual meeting, a meeting of the delegates from the organization's members, held last May. A good part of the program was devoted to a discussion of the Hague rules, from all points of view. Opponents were present, as well as supporters. Eventually, at the end of the meeting, a declaration upon the subject was adopted and the important part of that declaration, for present purposes, is as follows:

The chamber indorses these rules as representing a step in advance and asks Congress to enact legislation for the Hague rules, with such interpretations as may be deemed necessary.

At the time, much emphasis was laid upon the necessity for interpretations in legislation. This action was taken, as I said, last May. There has been no opportunity for action by our organization upon the modified Hague rules as they come from the Brussels conference.

That is the extent of my statement, Mr. Chairman.

The CHAIRMAN. Are there any questions that are desired to be asked of Mr. Redpath?

Mr. HEINEMANN. I would like to bring out, Mr. Chairman, the fact that the chamber of commerce has not, to-day, either indorsed or condemned this present form; is that true?

Mr. REDPATH. As to the form; yes. As to the principle, that would not be a correct

statement.

Mr. HEINEMANN. I said as to the present form.

Mr. REDPATH. As to the form; yes.

Mr. HEINEMANN. You say they have?

Mr. REDPATH. Oh, no; pardon me. As to form, no; they have not indorsed it. As to the principle, yes.

The declaration made by the Chamber of Commerce of the United States May, 1922, reads as follows:

66 OCEAN BILLS OF LADING.

"The chamber's interest in bills of lading upon which American commerce moves has been continuous since the chamber's organization. The chamber had a successful part

in advocating Federal legislation which deals with rights and liabilities with respect to bills of lading for goods moving in interstate and foreign commerce. Delegates from the United States participated in the first general meeting of the International Chamber of Commerce, and were active in securing acceptance of the method of voluntary action among vessel owners and shippers in arriving at a clear codification of the rights and liabilities which should arise upon bills of lading used for ocean shipments. The need of such a codification has been generally recognized, if there is to be escape from confusion caused by multiplicity in forms of ocean bills of lading, with consequent losses sustained by all classes of business interested. This method of voluntary action has now been used in formulation of the Hague rules, 1921. The chamber indorses these rules as representing a step in advance and asks Congress to enact legislation for the Hague rules with such interpretations as may be deemed necessary."

The CHAIRMAN. The next name I have on the list is Mr. Lincoln, of the New York Merchants Association. You are a supporter of the bill, are you?

Mr. LINCOLN. Yes, sir.

The CHAIRMAN. Give the stenographer your name and address, and state for whom you appear.

STATEMENT OF MR. JAMES C. LINCOLN, MANAGER OF THE TRAFFIC BUREAU OF THE MERCHANTS ASSOCIATION OF NEW YORK.

Mr. LINCOLN. The Merchants Association of New York is an incorporated organization looking after the trade and welfare of the city of New York, and made up of a membership of over 8,000 members, and embraces all walks of life, particularly the shipping interests.

I might state in this connection that the Hague rules were considered on different occasions by two committees before which those rules would come-the transportation committtee and the foreign trade committee-and that at a joint conference of the two committees the Hague rules were gone into very fully and considered at considerable length from all the various angles and a recommendation was adopted by them and subsequently adopted by the board of directors of the Merchants Association of New York approving the Hague rules, subject to certain American interpretations which were embraced in a bill then pending. So that the Merchants Association of New York, while it had not given consideration to the particular bill that is now before your committee H. R. 14166-has indorsed the principles contained in that bill and considers that that bill is a marked improvement over the previous bill which we had under consideration.

The traffic bureau of the Merchants Association of New York is the medium through which shipping matters, involving transportation on behalf of its members and public matters involving transportation questions are handled. As manager of the traffic bureau, I am in receipt of many complaints from our members with reference to the bill of lading conditions in ocean traffic, and I have had occasion to handle a great many claims against ocean carriers involving matters of principle. We do not handle claims for adjustment and settlement, but in the nature of giving advice. Great objections are offered to the present conditions which prevail through the fact that there is no uniformity in bills of lading. Practically every line has a different bill of lading and the same line has different bills of lading, dependent upon the country to which it goes or the lines with which it is competing. The conditions printed in these existing bills of lading as to limitation of liability are not uniform nor consistent; so that the shipper engaging in foreign commerce has to examine each particular bill of lading in order to ascertain the liability of the ocean carrier. And you gentlemen must know that that examination is not being made any more than it was being made in the old railroad bills of lading, when it would require a microscope to be able to discipher the conditions contained upon the bill of lading.

The limitations of liability, as I say, vary quite extensively, depending upon the carrier, the country of origin or destination, and the competition the carriers have to meet with. But one of the great difficulties we have been contending with in the last four or five years in ocean bills of lading is not entirely as to the printed conditions contained in the bill of lading; it is the addition of the rubber-stamp conditions which are placed upon the bill of lading. And these conditions frequently are placed upon the bill of lading and the shipper has no knowledge of them, and the goods are on the high seas before the shipper is aware of the conditions contained in the bill of lading that has been issued for a dock receipt.

Mr. CHINDBLOM. That is, he does not get the bill of lading until the ship is at sea? Mr. LINCOLN. Until the ship is at sea; yes, sir. I have had occasion to make inquiry in regard to conditions stamped upon a bill of lading to the effect that the package is insecure, and when we would ask, "Why, we were not notified; there is nothing upon