the Comprehensive Plan of the Port Authority for the City of New York. So that it is perfectly feasible under the law for that tunnel to be put into the Comprehensive Plan at such time as the Port Authority and the City of New York come to an understanding or agreement."

When the Comprehensive Plan was adopted by the legislatures it became the law, said Mr. Cohen, "and the Port Authority became the agency to effectuate that law," he added. Persuasion was tried in order to bring the carriers into cooperation among themselves in the effectuation of the plan, said Mr. Cohen, and the law also was resorted to, and means of cooperating have at last been utilized, meaning, he explained, the practical plan arrived at for unifying the several railroad interests that own the sections that at present compose Belt Line 13, and making that line continuous, and under the control of a railroad official. The railroads, he said, had agreed to cut out circuitous routings. Mr. Cohen made eulogistic references to the late President A. H. Smith, of the New York Central Railroad, declaring him to have been "the kind of an adversary that it is worth while doing business with."

Mr. Cohen explained that a committee of representative bankers had conferred with the Port Authority, advising the latter "as to the extent to which the bonds which may be issued will be marketable; and we are satisfied from their opinion that when these belt lines and tunnels and bridges are designed economically and the revenue can be shown to support them, the bonds of the Port Authority will have no difficulty in finding a market." He referred, too, to the possible taking over of existing tunnel construction, a controversy, he said, in which the Port Authority plays no part. "If the legislatures of the two states decide that that agency should be selected to function in the additional field," said Mr. Cohen, “perhaps in the solution of the commuter problem, that is not for the agency to say."

In closing Mr. Cohen spoke highly of Mr. Cary, who was to follow him, as one animated "by a desire to serve as a public officer, and while always protecting. and safeguarding the special interests that are committed to him to remember that it is the function of the lawyer to help in moving forward the progress of civilization."

Summary of Mr. Cary's Statement

Mr. Cary started out by making some pleasant references to the legal battles he has had with Mr. Cohen, in respect to the scope of the powers of the Port of New York Authority, and to the ban laid upon controversial matters in the discussion then under way, in connection with which he said:

"So here I am tremendously handicapped, and yet as a lawyer compelled to talk to engineers on a supposedly engineering subject. I must therefore take refuge in this respect that I want to get before you-and this is no reflection upon your profession-the suggestion that perhaps the primary and the fundamental propositions and problems in this tremenously interesting subject matter are not engineering."

He declared that it is "essential to reconcile commercial law, economic law and physical law, to eventually get what will be the final solution of the problem." These are matters, he said, which there is a tendency to forget. He pointed out that if the railroads were operated by the Government, bureaucratically, and if defaults were made good by taxes, and administration autocratic and paternalistic, the problem would simplify itself very much. But the American people have decided to treat the railroads from the standpoint of the benefits the public are to receive from them,

exactly on the same basis as every other industry is treated, that is, to continu private ownership, as a result of which the public gets the benefit of rivalry between these privately owned organizations; and he thinks that when individual initiative is killed, through doing away with competition, it will be bad for all concerned. And then he said:

"We have in Port Authority territory twelve carriers. They are operating, as Mr. Cohen pointed out, not in homogeneous territory from the standpoint of making rates, but they are operating in what the traffic people call differential territory; in other words, Manhattan Island is a competitor in a certain respect with the New Jersey part of the Port Authority territory. It costs money to carry freight across the river to Manhattan Island. It costs located in Manhattan Island theoretically more money to ship commodities to and from territory beyond the Hudson River than it costs the industries located on the New Jersey shore. The rate scheme developed and the controversies that have been developed before the Interstate Commerce Commission have required the equalization of those territories, and they must be equalized economically, if this whole territory is to be given its opportunity to develop to the greatest degree industrially and for the benefit of all the members.

"Now the object of this Port Authority territory-I presume the chief problem and the object-is to develop economic fluidity of traffic. Theoretically, that is what you want. You want to make all traffic as fluid as possible, on as economical a basis as possible. The problem is to determine how that can be done and to impress 12 carriers that it wil be to their interest to engage in competitive ennterprises to serve all the community to the best of their ability, and also so that all the shippers in that community shall have all avenues of traffic open to them."

From this Mr. Cary developed the theory that the railroads each desire to build up a business and at the same time properly serve shippers. But the public has a right, "irrespective of that carrier's wish to build up its own business, to have open, complete equality of opportunity for all avenues of traffic to any destination the shipper wishes to reach." The tendency has been, he said, to build up a rate structure at each terminal property, and then for each carrier to protect his business with respect to industries contiguous to that terminal property. He then explained:

"The term traffic, as we use it, means not the physical movement of freight, but it means the traffic movement. Under the laws, State and Federal, regulating the operation of railroads today, there is no possibility of a physical movement of a shipment from point A to point B unless there is a published tariff rate filed with the State authorities or filed with the Federal authorities, as prescribed by law."

Mr. Cary then explained that, until by law the Interstate Commerce Commission obtained control over tariffs, railroads could paralyze freight movement by the rate structure they created with respect to all freight that had a tendency to move anywhere except over its own lines," and this was considered legitimate enterprise, so that an industry on the line of one road could not use it as a switching line for a short distance and then go over to another road for the haul to final destination. Then, said he:

"Now, there is a legitimate argument, a very legitimate argument, which can be made in favor of protecting that private enterprise engaged in business for the purpose of earning the money on the capital invested in that scheme. But here is the difficulty, and here is what the carriers must recognize, and here is what they are beginning to recognize, that while that attitude is justifiable to a certain extent, if carried to the point where the industries located upon that terminal property are deprived of a better or a more favorable route to each final destination by that tariff rate built up, why that railroad is acting against the public interest."

This was developed at the hearings before the Interstate Commerce Commission and Port Authority last fall, Mr. Cary said: a community is undeveloped; a

railroad spends millions to establish a terminal there; the community is benefited; industries come there; property improves in value; the community as a whole. becomes prosperous by reason of the location of those terminals, wherefore it was appropriate that the railroad company should be entitled to protect its capital, otherwise it would be benefiting the public without regard to economic and commercial laws. Then, said Mr. Cary:

"But he also admitted that if by reason of the peculiar location of that railroad's trunk line, the circuity of routes, the difference in grades, or any other situation, which made the route that was offered to the industries located at that terminal less desirable than those which might be availed of, by using his terminal only as a switching line, and moving over another railroad, why to that extent his company would not be entitled to hold the traffic."

The difficulty that would there develop would be as to who should be the judge, but the law has now made the Interstate Commerce Commission the judge, so that now they have in all our big cities "regulations in respect to rate structures, concrete in character as a

rule from the standpoint of the problem, but working it out with the object of creating the greatest good to the greatest number."

Then Mr. Cary adverted to the proceeding instituted before the Interstate Commerce Commission and the Port Authority, which he explained like this:

"

. . . The issue was as we saw it whether the railroad carriers could be compelled in Port Authority territory to pool physically all their terminal properties, to abandon all their vast investments so far as the right to any return on the same was concerned, and to permit them to be turned over to what you might call a terminal monopoly to operate with the understanding that we should all approach the lines of that terminal monopoly without connections, and take what traffic was tendered to us."

This was thought to be revolutionary, and something to oppose. At that time, said Mr. Cary, he held that the Interstate Commerce Commission had no authority to compel physical unification of terminals; all it could look into was the rate structure and regulate those avenues of traffic; "that, on the other hand, the Port Authority within itself was a corporation with the widest powers; it could engage as a common carrier; it could do everything pretty nearly but levy taxes. . . . Within itself it had unlimited powers; outside of itself it has been my contention that it has no regulatory or administrative powers . . .'

And this finally led to a compromise. And so, for the time being, contentions were laid aside, and then each began to see the situation more clearly and to learn that each was fairer in intent than had been thought; and so, finally, the Port Authority was induced to make clear to the railroads what its own plans were and when that was accomplished "fundamental controversies disappeared as we got down to the concrete details of the problem." And nothing revolutionary has taken place, and a plan of operating Belt Line 13 as a unity has been worked out, which shows that unified service, not physically, but traffically-that is the rate structure-can be had in a territory of this character, "so that every shipper will have pooled traffically all of the terminals, and yet at the same time you might have completely diversified and segmentary operation." This obtains in Chicago, but it has been found more difficult to establish it in the east. But still, the different sides are getting together; the physical movement of trains on Belt Line 13 gives no bother. But, said Mr. Cary:

"But when you come to the question of regulating in Port Authority territory the traffic problem-I mean the rate struc

ture, protecting from the standpoint of its reaction throughout, all these separate carriers as far as they ramify, and protecting them all so they can engage in business, can make money and serve the public, and give them the right kind of service, you have one of the most tremendously difficult problems that we have to solve."

And that, he declares, is where they are today. The Traffic Committee is working with the Port Authority, He and compromises will undoubtedly be necessary. thinks they are working in a public-spirited way. He read part of a resolution adopted by the Chicago Shippers Conference, applicable to the situation there, where a plan was advocated for "the unification both as to control and operation of the railroad terminals ... the very foundation of" which would be "a complete monopoly of the railroad service in the Chicago district," which would end all competition between carriers. Wherefore, the resolution declared: "Your committee can conceive of no greater catastrophe to the industrial welfare of the Chicago district than the elimination of competitive service within the terminals." And this, plainly, is what Mr. Cary seeks to avoid at New York. And so, he thinks the railroads and the Port Authority will cooperate from now on. Then, said Mr. Cary:

"In conclusion may I say this: after all the railroad, as I said at the beginning, is no different from any other industry from the stand of the application of economic law. If you wish them to continue in private business, for the purpose of getting the benefit of their initiative and enterprise, it is essential that you must recognize that they are entitled to the same rights industrially as any other business, or else you will destroy them completely.

"The human unit in the last analysis is the thing that counts. Individualism in this country is the thing that we believe has created its greatest prosperity. If we depart from the conception with respect to any of our industries and destroy it, the desire for individual initiative, why it seems to me that we will be throwing overboard all that plan of that fundamental scheme which has made our country so prosperous; and in all these great industrial problems, in these great communities, if we keep that attitude in mind and attempt to solve our problems along that line why I cannot but see that we will be on our way to success.

"We hear it said that capital ought to be so and so. Capital is wholly impersonal and material. It renders service only on determining the ratio between risk and return. The word 'ought' has nothing to do with it. Capital is found chiefly from the millions of streams that flow from the little investors. It has no relation to any individual, to ar great coterie, to any syndicate. It comes so far as it is available for use in this territory or in any other territory purely through the application of economic law. To carry out this plan in this privately owned industrial territory, private in industries, private in railroads, so far as economic law is concerned, we must recognize that principle and apply it, and we must direct the force so that it will work in the common interest of all.

"If we keep that concept in our minds and are open-minded and fair, and have imagination, I believe we will go a long way toward the solution of this tremendous problem in this territory-the Port Authority problem."

Panama Canal's Record-Breaking Year Traffic through the Panama Canal in the calendar year ending December 31, 1923, exceeded that in any previous year. The number of commercial vessels making the transit during the year was 5,037. Their aggregate net tonnage, Panama Canal measurement, was 24,737,437 tons. They carried 25,160,545 tons of cargo, and paid $22,966,838.19 in tolls. As compared with the year 1922, the traffic in 1923 increased as follows: Number of ships, 68.07 percent.; Panama Canal net tonnage, 90.38 percent.; tons of cargo, 83.51; tolls collected, 82.65 percent.

The Shipping Board seems to be up against it in devising a practicable, more efficient and economical method of operating its ships.

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Grace, too, adds important information, well worth reading, as does the committee of the Jamaica Board of Trade. To read them all is to broaden one's vision and conception of a future greater Port of New York. We well remember the extremely valuable report of the Jamaica Bay Commission of fifteen or more years ago, which laid a broad foundation for Jamaica Bay's development, prepared by extremely competent men after careful survey and study. At that time it was estimated that, properly to develop Jamaica Bay, the city would have to expend $75,000,000. In time we have no doubt that this sum will be expended by the city, but most of it will come to the city in increased taxes from land now under water, composed of marshes, and quite undeveloped. The City of New York is playing altogether too safe, in expenditures, in connection with the development of Jamaica Bay, and the loss therefrom falls upon the people who are deprived of a segment of port development of immense immediate value and of potential future value quite indescribable.

As Mr. Hager so well says, in our Jamaica Bay symposium, the rapidity of the development of Jamaica Bay depends upon the energy and determination with which the people themselves push it along to full fruition.

In this issue we have a series of valuable and interesting articles on the development and importance of Jamaica Bay, an integral and priceless part of the great Port of New York, which is slowly emerging from the neglect of the past into future usefulness and importance. No one can read about the location, area and surroundings of Jamaica Bay without being impressed with its magnitude and its future as a maritime, commercial, industrial and residential center, so close to the ocean and at the same time so near to the center of the development of Greater New York.

Mr. Hager has given us a complete review of the past and present of Jamaica Bay, but he has not attempted to describe its future, to do which with justice might seem to some as fantastical, but the reality of which in sober truth will be far greater than any now dare to predict. Mr. Myer, who is the veritable genius of Jamaica Bay Development, tireless in his long and unrequited work for it, but whose vision of its future dazzles even him, adds his views to the subject with his usual clear-headed optimism. Mr.

The Port of New York Authority is on the eve of much larger things than it has yet achieved, in connection with bridge and tunnel construction, successful issuance of bonds, establishment of belt lines, all having as their main objective the systematic coordination of the great Port of New York into a more attractive and less expensive place for ships, commerce and industries, to the end that we shall retain the commerce we now enjoy and add to it as our improved facilities justify. In this particular work Mr. Outerbridge's experience and knowledge would be invaluable to the Port of New York in general and the Port of New York Authority in particular.

We particularly ask our readers to read the resolu

tions published elsewhere in this issue, adopted by the Port of New York Authority in connection with Mr. Outerbridge's retirement from membership in it and chairmanship of it, because all that is said better emphasizes what we here say as to what the public is losing thereby.

For Mr. Outerbridge, personally, we have the very highest respect and esteem, and, while deeply regretting his retirement from the Port of New York Authority, we are sure that his thought and we trust his voice will not be missing when important matters of Port of New York development from time to time come up for settlement.

Tragic Death of Alfred H. Smith

While horseback riding in Central Park on March 8, President Alfred H. Smith, of the New York Central System, in avoiding collision with a lady rider who suddenly crossed his pathway, was thrown from his horse, sustaining injuries from which he died almost instantly. Thus suddenly and tragically passed one who probably, in an all-round sense, was the greatest railroad executive in the counntry-for that matter, in the world. Mr. Smith was 62 years of age, and in the very prime of health and vigor, with the probability ahead of him of many years of constructive usefulness in guiding the destinies of one of the greatest of railroads, and its myriad subsidiaries. It will be difficult, if not impossble, to find a man to succeed him who possesses the detailed grasp of railroad affairs in general and the New York Central in particular in any degree equal to that possessed by Mr. Smith. His loss is a national one, but it is peculiarly a great loss to the Port of New York, in which his railroad is the most conspicuous of pioneers.

Only recently the officials of the New York Central Railroad have been more engrossed in Port of New York problems than they have been at any previous time, notably in respect to Port of New York Authority jurisdiction and in respect to the imperative need of removing its west side tracks from grade and electrifying them. In these matters, as in all others affecting the New York Central, Mr. Smith possessed a grasp of essentials not exceeded by any of his colleagues, which makes his loss all the more difficult for the railroad to overcome.

President Smith began his career with a subsidiary of the New York Central in Cleveland, Ohio, the city of his birth. He began at the lowest rounds, as a lad, finally working up to a clerkship from which he resigned to turn his attention to construction work, which he began as a common laborer, and from which he successively rose step by step to the position of President, through the display of indomitable energy, unusual ability and ready grasp and assimilation of details. Personally he was highly respected by all with whom he came in contact and was deeply beloved by his closer associates.

The world at large, the railroad world particularly, and the Port of New York, suffer an irreparable loss in the death of Mr. Smith.

Section 28 Raises Cain

The Interstate Commerce Commission, trunk line railroads, importers and exporters, petroleum and flour men, civic organizations, and many newspapers have joined the chorus of protest against the enforcement of Section 28, of the Merchant Marine Act of 1920, which, taking advantage of lower rates voluntarily extended by the railroads to imports and exports, than are charged domestic goods, provides that such lower rates shall only apply to such as are carried in American vessels.

The enforcement of the section has been held in abeyance nearly four years, it providing that it shall not be enforced until the Shipping Board certifies to the Interstate Commerce Commission that there is adequate American tonnage to permit of its enforcement, but such enforcement will not apply to grain, nor to ports of the Mediterranean, Africa, West Indies, Mexico, and some other ports, the Shipping Board having recently certified to the I.C.C. that there is adequate tonnage where it is intended to put the section into operation, and the I.C.C. has fixed May 20 for the date of initiating its enforcement.

So great have the protests been, however, that a bill has been introduced in the House intended to give the I.C.C. power to nullify the purposes of the section, and it is said that the Senate Interstate Commerce Commission is eager to "do something" to prevent the section's enforcement.

W. L. Marvin, Vice President of the American Steamship Owners' Association, who presents an amazing array of discriminations now practiced against American ships by owners of foreign ships-not by laws of foreign nations—but which are just as effective against American ships as if practiced under the sanction of law-declares that the enforcement of Section 28 will have a tendency to put a stop to these existing discriminations so injurious to American ships. Is that the reason the opposition to Section 28 is so widespread and so determined?

The purpose of the section is to divert freight to American ships. There is wholesale evidence that this is what would be accomplished, otherwise there never would be so many protests. Those favoring the section's enforcement favor the diversion of American imports and exports into American ships. Those opposing it, whatever their alleged objection, will help foreign ships, whose owners and whose governments are wholly satisfied with conditions as they are, which favor foreign vessels.

Whoever tells you that the enforcement of Section 28 will not help American ships, we are convinced, seeks to mislead you. If its enforcement would not help American ships, and very substantially at that, there would be no opposition to its enforcement.