Mr. HAIGHT. I do not believe there will be the slightest change. My belief is this added responsibility will mean greater safety for the goods; you will have an economic saving, and they will save money instead of spending it as they are now.

Mr. EDMONDS. The $500 valuation on the package, of course, would make the shipper secure to the extent of $500; and, of course, the man owning the ship would insure up to $500 against that. Mr. HAIGHT. He will.

Mr. EDMONDS. That will affect materially not the ultimate cost to the shipper, but it would perhaps change the situation by which the shipping man would require more insurance. That would be

about the situation?

Mr. HAIGHT. Yes; but if the greater responsibility means the steamship owners will watch over the goods more carefully, you will have fewer claims and less loss.

Mr. EDMONDS. There will be an economic saving?

Mr. HAIGHT. There will be an economic saving. The bankers are tremendously interested in seeing this international reform brought about, because it means greater security for them while they hold the bill of lading as security against drafts. You gentlemen, of course, know that practically all of our export and import cargo moves under drafts, and the financing is done by the bankers here and abroad. While they hold the bill of lading as security for their advances, they have often little but the bill of lading to protect them; and, if a man gets into financial trouble, they have nothing else to protect them.

Mr. CAMPBELL. What about the insurance policy?

Mr. HAIGHT. They have the insurance policy too quite right; but if your bill of lading has a clause which I have seen, reading this way, "The carrier shall have a lien upon the goods shipped hereunder for all freight due on this shipment, and on any past shipments," your insurance policy does not do you any good, and it might turn out that a particular shipper had not paid his freight on the last three or four shipments and the shipowner says, "I claim all those goods for unpaid freight," and where would the banker be protected?

Mr. LARSEN. Is that situation obviated in this?

Mr. HAIGHT. I should say they could not possibly work that scheme under these rules; I do not think so.

Mr. WHITE. Does a shipowner have a lien on goods he carries, for the freight

Mr. HAIGHT. Always.

Mr. WHITE (continuing). On goods which have passed out of his possession?

Mr. HAIGHT. No.

Mr. WHITE. In other words, he can not assert, as against a particular shipment, a lien for unpaid freights on past shipments?

Mr. HAIGHT. He can if he contracts for it; but, of course, the purpose of these rules has not been to cover the freight end quite so much. That is a question by itself.

Mr. LARSEN. He could not so contract as to endanger the liens of other persons, could he, not a party to the contract?

Mr. HAIGHT. If he gets a prior lien by his contract I think he can

hold it.

Mr. LARSEN. But would he, if another party already had a lien?

Mr. HAIGHT. The carrier's lien, contracted for in the bill of lading, I would say would be a prior claim to that of the lighterman at the other end. I do not know; I would not want to speak offhand on those interests.

Mr. BLAND. It would probably be prior to the bank lending money on the faith of that bill of lading as security?

Mr. HAIGHT. Yes; prior to the bank.

Mr. LARSEN. Of course, if the bank had notice of the bill of lading, they would have notice of what the contract was.

Mr. HAIGHT. They would have constructive notice; but, if you think the banks stop and read the bills of lading, they could not, because they could do nothing else.

Mr. LARSEN. He probably does not know what is in it.

Mr. HAIGHT. He does not know what is in it until a claim arises and he sends down a lawyer, and the lawyer tells them they have no recovery, because of this, that, and the other thing in the bill of lading.

Mr. EDMONDS. Doctor Huebner and myself had a bill of lading, about this long [indicating] and we had to get a magnifying glass to read it, and we sat up in my room and it took an hour to read it and, account of there being no penalty in the bill of lading, there were lots of things that were absolutely illegal against the shipper, which would not hurt the large shipper but mostly would hurt the small shipper, because the large shippers knew they could not collect them. But there was everything you could think of covered in that bill of lading.

Mr. LARSEN. My impression, from dealing with railroads--I have had a little experience with them-is that transportation companies usually have different forms, and the people dealing with the transportation companies, bankers and otherwise, usually know what the different forms provide. Of course, there may be a specific case in which they do not know; but, as a rule, I think it is safe to say they do know.

Mr. HAIGHT. On land transportation, where the Interstate Commerce Commission is in control, there is uniformity; in ocean transportation, it is safe to say that up to two or three years ago every nation in the world had a different law and every steamship company in the world had a different form of bill of lading, and some steamship companies had 8 or 10 different forms. They did not themselves know what was in them. When the war broke out, one company consulted me on the question of war risk. I said "send me your bill of lading. They sent me 12 forms, and every one of those forms was different in the war clauses, and they did not know it themselves. The reason for that was, that when they started a new trade out to Australia they took Barber's bill of lading, because he had been long in the trade to Australia for a great many years and they just copied it; when they took on another trade, they did the same thing. And you will be surprised to know how common that practice has been. But, to-day, I am sure I am right in saying the bankers the world over want us to come to these rules, which is the American law and which will give them greater security. The underwriters practically unanimously in Great Britain, and the rest of the Continent absolutely unanimously, back the rules, because they want some uniformity on the risk. An insurance man can write

you a policy on any risk if he knows what the risk is and, under these rules, the risks will be definite. Also the underwriter stands in the shoes of the shipper and greater security for the goods means greater security for the underwriter and, in the end, will mean a lower rate of insurance and less loss, in my judgment.

Even the steamship owners have reluctantly agreed to swallow this bitter pill. To them it is bitter because it means an increased responsibility. But, as far back as 1921, the steamshipowners of the entire world assembled in London, agreed to accept these rules if the shippers really wanted them; and, at that conference, America was fully represented, and our leading representative was Mr. Kirlin (of the firm then of Kirlin, Woods & Hawks), one of our most distinguished admiralty lawyers in New York.

Mr. CAMPBELL. Those are not the rules you have before you today?

Mr. HAIGHT. They were not changed in substance a half of 1 per cent. The changes made since that time are, as I view them, entirely verbal, as a practical statement.

Mr. BRAND. Do shipowners usually protect themselves by insurance?

Mr. HAIGHT. The shipowner has the P. & I. insurance, protection and indemnity insurance; he enters his vessel in the P. & I. Club and protects himself against cargo claims and, of course, when you get down to a real analysis, just where you draw the line, if the responsibility is put a little over on the carrier, he insures himself; if the responsibility is laid on the shipper, he insures; but the important thing is to know where the responsibility really rests, so that somebody can insure.

Mr. BRAND. Under this bill of lading, would you consider it safe not to insure cargo if you were a shipper?

Mr. HAIGHT. Ŏh, no shipper would ever go without insurance, because the perils of the sea are real things and, if a ship becomes a total loss in a hurricane, no bill of lading clause can protect you.

Mr. WHITE. Can you tell us who was representing the Shipping Board, or rather the shipowners of America, at this international conference of which you have spoken?

Mr. HAIGHT. At the international shipping conference in November, 1921, the American Steamship Owners' Association, which includes practically all of the private owners of America, was represented by a delegation composed of Mr. Kirlin, as the leader, Mr. Franklin, I think, Mr. Dearborn, of the American Hawaiian Steamship Co., Mr. Russell Loines, representing the American Steamship Underwriters, and I think a fifth man, whose name I do not recall. Mr. WHITE. Was any man there representing the shipping interests of the Government?

Mr. EDMONDS. Mr. Beecher was there.

Mr. HAIGHT. At the first shipping conference, Mr. Beecher did not attend; at the next conference, in November, 1922, as I say, Judge Hough, Mr. Beecher, and I, were all present.

Mr. WHITE. Was Mr. Beecher then representing the Shipping Board?

Mr. HAIGHT. Mr. Beecher was then admiralty counsel of the Shipping Board and attended that conference, and the next one,

the diplomatic conference, at the request of Secretary Hughes, as the formal and official representative of this Government.

Mr. BARNES. May I say that Judge Hough and Mr. Beecher both had commissions from the President and their report was addressed to the President.

Mr. HAIGHT. I thank you.

Mr. BARNES. They had all the authority the Government could give.

Mr. HAIGHT. I thought it stopped at Secretary Hughes.

Mr. BLAND. I did not hear an answer to Mr. White's inquiry as to who represented the shippers. I think he inquired to know if there were representatives of the shipping interests there, and I thought he meant the people back home who were shipping the goods. Mr. WHITE. I do not think my inquiry comprehended that, but I did intend to ask that.

Mr. HAIGHT. The actual shippers of cargo were not represented except that Judge Hough and Mr. Beecher and I thought we were acting for all interests, and I was instructed by the United States Chamber of Commerce to act for all interests.

Mr. WHITE. I feel sure your purpose was to represent all interests, but you were not specially commissioned by any shippers to appear for them?

Mr. HAIGHT. No; the shipping interests have been heard; the United States Chamber of Commerce will speak for itself in a few

moments.

Mr. WHITE. I just wanted to get it in the record; that is all. I do not think it is important.

Mr. HAIGHT. I will say I went to London in the first instance at the urgent request of the United States Chamber of Commerce, and they speak for nobody but shippers.

Mr. WHITE. I understood that was so.

Mr. HAIGHT. From the standpoint of the International Chamber of Commerce, I would like to add that we have acted for no country and for no special interests; in so far as it humanly lies within our power, we have tried to further a fair, practical bargain between all interests, equally beneficial, as we saw it, to all countries. The International Chamber had seen for years the pendulum swing from one extreme to another. During the war, a man who wanted to ship any goods would pay $100 per ton and would take a bill of lading in any form that ingenuity could devise. After the war, the situation was precisely reversed; the steamship owner could not get any cargo to carry at all at any price, speaking broadly. Under those conditions, the shipper could dictate any form of bill of lading. A steamship company would have signed a bill of lading drawn in the form of a paragraph from the Declaration of Independence, or Alice in Wonderland, if only the shipper would give him a profitable freight rate. Now those great extremes do no one any good. When it is a carrier's market, he can dictate the most indecent terms and the shipper has to accept them. When it is a hopeless shipper's market, he can do the same. What the International Chamber has been trying to do is to draw the line clearly, without regard to who is in the saddle and has the whip hand-to draw the line somewhere, for uniformity. I am perfectly convinced that is the most important thing of all in international transportation-to draw the line with

reasonable honesty, trying to do reasonable justice to all sides, but drawing the line at some place for all countries, so you could make some system possible. If the underwriter can insure, the banker knows his rights, the carrier knows his risks and can cover himself, you have a system. But when you have every nation with a different law and every carrier with a different bill of lading, you have absolute chaos, and that is what we are trying to avoid.

Mr. LARSEN. Might I call your attention as a question to this very language on page 3, line 6

After receiving the goods into his charge, the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things

Why should that be on the demand of the shipper? Does that mean the carrier does not issue a bill of lading unless he demands it? What does that mean?

Mr. HAIGHT. You see, there are a great many-I do not know whether we followed there the phraseology of the Harter Act; perhaps that is the reason for it.

Mr. LARSEN. It rather indicated to my mind that he had to demand a bill of lading before he received it.

Mr. HAIGHT. The regular practice is for the shipper to make out the form of bill of lading himself on a blank furnished by the carrier. You never have the bill of lading in practice made out by the steamship agent in the steamship office; he simply gives his customers blank forms and they make them out and bring them in for signature. This is a situation which can not make any practical trouble, because the whipper who must have a bill of lading always tenders a bill of lading and asks to have it signed. You might have some cases in the coastwise trade, or short trades, where bills of lading are, as a matter of fact, not used, and an ordinary shipping receipt is all they' have on very short hauls in some trades. Even in those trades where bills of lading are not customary, a shipper could demand a bill of lading and get it if he wanted to; but there would be no penalty attached to a carrier for failure to issue a bill of lading in this instance where the shipper does not want it.

Mr. LARSEN. In actual practice, is it not frequently the case they do get a bill of lading and attach the bill of lading to a draft drawn on some third party, and receive money on that draft?

Mr. HAIGHT. Right; in fact, in ocean transportation, I might say always.

Mr. LARSEN. Now I have in mind a case which happened with a transportation company, not a ship but a railway company, in which they had the bill of lading issued before the car was actually loaded, signed a draft on themselves and drew money on it, and the goods were never delivered. Now what are the rights of the parties in case conditions of that kind arise in the shipment of goods?

Mr. HAIGHT. It so happens that I was chairman of the special committee appointed by the United States Chamber of Commerce to pass the Pomerene bill, a uniform bill of lading act known as the Pomerene bill, which now provides that any carrier who issues a bill of lading for goods not received makes himself thereby responsible for the full value of the goods. But until that Pomerene bill was passed our Supreme Court had held, when an agent of a carrier issued a bill of lading for goods not received, he acted beyond the scope of