Los Angeles herald., 1910-03-11
PACIFIC MAIL
MAN TESTlFIES
SCHWERlN SAYS COMPANY Is
LOSING MONEY
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TESTIMONY OFFERED IN GOVERN
MENT LINE INQUIRY
Vice President Says Concern Is Now
Operated Purely for Sentimental
Reasons-Sees No Excuse
for Its Continuance
tAssoeiated Presg1

WASHINGTON, March 1O.-R. p.
Schwerin, vice president of the Pacific
Mail Steamship company, gave the SEN
ate committee on interoceanic canals
today his version of the demand made
upon the Panama Railroad company
for 20 per cent of the joint rate on
business from San Francisco to New
York by way of the canal route. The
testimony was given in connection with
hearings on the Flint bill providing for
the establishment of government line
on the Pacific coast similar to the gov
ernment ships operated on the At
lantlc coast.
Schwerin insisted that his company
had been losing business under the old
so per cent division and that 1t was
not satisfied even with the 20 per cent
division; that the line was being OPP
Grated now for sentimental reasons,
and that he could see no reason for its
continuance.
Commenting upon testimony by Mr..
Wheeler, manager of the traffic bureau
of the San Francisco Marchants ex-
change, condemning the Pacific Mail
as a monopoly and discrediting its ser
vice generally, Mr. Schwerin charged
that several statements made were alb
solutely false.
Rate UnremuneratiVe
The American Hawaiian route by
way of Tehuantepec, said Schwerin,
had taken a great deal of business
away from the Pacific Mail Steamship
company, and the latter company be-
cause of the insistence of the govern
ment that 1t have business with which
to ballast its own Atlantic ships north
bound, had been compelled to make
rate of IS a ton on all business between
San Francisco and New York This
rate he declared to be unremunerative.
What effect on this business will
the opening of the canal have?' was
asked.
TT will take the business away from
the Tehuantepec route, just the same
as that route in the past took the bust
ness away from Panama" said Schwe-
rim.
1t was also urged by the steamship
companies that inasmuch as they were
engaged in the transportation OF ex-
ports, the legislation imposing l per
cent tax on them was void under that
clause of the constitution providing
that no tax or. duty shall be laid on
articles exported from any state.
Passengers Not Exports
But, the attorney general argues,
the passengers carried by these ex-
press companies are not exports with
in the meaning of the clause of the
constitution referred to, and congress
has express power to tax imports,
Consequently, the revenues OF these
companies are derived from different
classes of business. the larger portion
of which is subject to taxation.
The act does not undertake in its
terms to make any distinction between
the different kinds of business in
which these or any other corporations
are engaged, but the tax is imposed
on all alike, not as exporters of mer-
chandise but as an incident to their
entire business. The attorney general
argues that if the owner of a foreign
vessel can be made to pay the tonnage
tax on account of the nationality of
the vessel there can be no reason
why he cannot be made to pay tax
on his business, when such business
consists entirely in the transportation
of passengers and merchandise in for
eign vessels.