The Panama Canal Part 8

Some interesting little details of Panamanian manners have been reported. For example, Chinese immigration is forbidden by law, yet, strange to say, most of the retail trade of the isthmus is in Celestial hands. This is because the law against immigration gave the opportunity for the formation of a syndicate with the collusion of the authorities, by which Chinese were introduced at a rate of $200 entrance fee. The judicial standards which prevail in this little b.u.mbledom may be gathered from another story. The mate of a British ship was recently sentenced to twelve years' hard labour for manslaughter, because he was held responsible on no evidence whatever for the loss of a ship and the lives of several relatives of _those serving on the jury_.

It is scarcely to be expected that a people for whom ideals and standards of this kind are good enough will take much trouble to develop their country. An efficient and responsible administration might make a good deal of these narrow lands between the two oceans, a territory of 33,000 square miles, larger, that is, than Scotland or Ireland. It is perhaps as well that the construction of the ca.n.a.l has not made many Panamanian fortunes or produced any great boom in trade. Otherwise the withdrawal of the industrial army from the zone might have had the effect produced when the French ca.n.a.l works were shut down. A grievous famine desolated the whole country. This is not likely to happen again.

The zone has been largely an independent and detached enclave, such as never existed during the French occupation, when the Panamanians became dependent for work and wage on the industrial invaders. The American ca.n.a.l employees have done very little shopping in Panama and Colon, because they could buy every necessity and luxury duty-free in the United States government stores. Some trade may be lost owing to the departure of the workers, but it is hoped that this will be more than replaced by the growing stream of tourists who will come to visit the "big ditch," and increased business brought by the shipping which will pa.s.s through the ca.n.a.l.

With a little thrift and enterprise the Panamanians might have profited much more from the long period of construction. They might have supplied the zone with a good many more articles. As it was, the only contribution the country made to the zone or to the towns was about 28,000 head of cattle killed annually. The country is almost entirely dependent on imported supplies, only a small fraction of which it pays for by exports. Here is a little instructive table of the Panamanian commerce:--

Imports. Exports.

1908 1,561,362 365,410 1909 1,751,261 300,495 1910 2,008,679 353,866 1911 1,980,488 179,941[18]

The excess of imports over exports looks rather alarming, but it is adequately explained by the British Consul at Colon as "a measure of the commercial value to Panama of its transit trade and of the trade with ca.n.a.l employees and tourists." The great bulk of the imports is consumed in the two towns of Panama and Colon, for, as in most of the South American republics, the interior is undeveloped and therefore self-supporting, being still in the "pack-mule" stage of civilization.

In 1911 the imports into Panama from the United States amounted to 1,024,589, from the United Kingdom to 454,541, and from Germany to 223,845. France, Italy, and Spain exported to Panama smaller quant.i.ties. The exports from Panama to the United States amounted in 1910 to 301,684 (1911, first six months, 150,990); to the United Kingdom, to 33,055 (1911, first six months, 15,921), with smaller values to Germany and France. The reader will be interested to learn what sort of things Panama exports. Here, then, is a list of the princ.i.p.al exports for 1910, the last full year available:--

1910.

Bananas Bunches 3,643,900 184,257 Cacao Kilos 18,021 940 Cocoanuts " 6,305,238 31,534 Cocobolo " 1,203,522 7,132 Gold " 2,748 26,995 Hides " 567,454 16,973 Horns " 6,893 1,410 Ivory Nuts " 2,102,743 26,527 Mother-of-pearl sh.e.l.l " 625,008 10,183 Rubber " 6,305,238 31,534 Sarsaparilla " 32,553 2,099 Skins " 257,740 4,750 Tortoise sh.e.l.l " 3,829 3,334

The United Fruit Company has now, in the province of Bocas del Toro, 32,000 acres of bananas under cultivation and 1,000 acres planted in cacao, with about 165,000 trees; the bananas being exported to the United States, and the chocolate to the United States and Europe. There should be a considerable increase in rubber production during the next few years, as 150,000 rubber trees have been recently planted in this province, and these will soon be ready for tapping. Nearly all the rubber exported at present is taken from the wild trees growing in the virgin forests of this province. A curious article of exportation is the ivory nut, or _tagua_, which in value now comes next after bananas.

These nuts are collected by Indians on the Caribbean coast, brought to Colon, and there bought by merchants and shipped to New York and Hamburg. They are used to make the big b.u.t.tons which are now so fashionable, and probably a good many English girls who are wearing coats "made in Germany," are carrying about a number of these ivory nuts which not long ago were lying on the tropical sh.o.r.es of the Caribbean.

The timber exports from Panama would grow rapidly with proper exploitation. Exports of mahogany, cedar, and cocobolo have already begun.

The gold exports come mainly from the mines of the Darien Company, a French company which has been working for years. The whole isthmus is strongly under suspicion of gold. All the streams show evidence of it, and prospectors are always searching the Darien country and the provinces of Los Santos and Veraguas for the saint-seducing metal. No other minerals are worked in the isthmus. There are "coal-deposits" of a sort in the ca.n.a.l zone, but the coal is of no commercial value.

The only railway at present existing in the republic is that between Colon and Panama, the entire stock of which is owned by the United States government, and is worked as a company under the laws of the state of New York. This line, which has had to be largely reconstructed owing to the course of the new ca.n.a.l, was opened in 1855. It is rather surprising that it should not have been more extensively employed for traffic between the Atlantic and Pacific coasts of America. As a matter of fact, it was the main highway of transcontinental traffic until 1869, when the Missouri River was first linked up with the Pacific coast by the Union and Central Pacific Railroads, and the first continuous line across the States came into existence. After that date the traffic fell off very rapidly. The causes of this decline are various. To begin with, the great trunk-lines across the States competed ruthlessly with the old isthmian route, getting control of the Pacific Mail Steamship Company, which was for long the only regular line between the west coasts of the United States and Panama. Then the French and American construction work has seriously interfered with the route by limiting the amount of commercial freight that could be handled across the isthmus.

Another cause of depression has been the opening of the Tehuantepec route in South Mexico. In 1906 the American-Hawaiian Steamship Company made an agreement with the Tehuantepec National Railway, which runs across the isthmus, and withdrew its vessels from the old Magellan route, establishing regular services between New York and Puerto Mexico on the Atlantic side, and on the Pacific between Salina Cruz, the Pacific terminal of the ca.n.a.l, and the west coast ports of the United States and Hawaii. The route so organized was opened in 1907, and has proved very successful, chiefly owing to the enormous increase in the sugar exports from Hawaii. The intercoastal traffic by Tehuantepec from New York to Pacific ports advanced from 114,900 tons in 1906 to 295,800 tons in 1911, and from Pacific ports to New York from 32,000 tons in 1906 to 162,500 in 1911.

All this compet.i.tion hit the Panama route very badly. The Atlantic to Pacific traffic by that railroad rose from 25,914 tons in 1906 to 46,394 tons in 1910, and the Pacific to Atlantic from 24,937 tons to 32,482 tons between the same years. But in 1911 there came a sudden expansion to 96,420 tons (Atlantic to Pacific), and to 115,508 tons (Pacific to Atlantic), owing largely to the development of shipping services on both isthmian terminals. In fact, the commercial freight has had to be seriously held up and restricted in the interests of ca.n.a.l construction and the shipment of ca.n.a.l material.

The reader will perhaps ask whether the Tehuantepec route is likely to compete seriously in the future with the Panama Ca.n.a.l. The distance from New York to San Francisco is 1,016 nautical miles less _via_ Tehuantepec than _via_ Panama, and from New Orleans 1,573 miles less. The difference to Honolulu in favour of the Tehuantepec transit is almost exactly the same. But the difference in time will be a good deal less than these figures indicate. The cargo has to be transferred from shipboard to railroad on one side of the isthmus of Tehuantepec and retransferred on the other. This means on the average about four days' delay. At Panama, a vessel can pa.s.s through the ca.n.a.l in half a day, or, reckoning other causes of detention, coaling, etc., the total isthmian transit should not take more than one day. Then there is the question of expense. The cost of transferring freight at Tehuantepec could not be less than $2.50 per cargo ton. A Panama toll of $1.20 per vessel ton, net register, would be equivalent to about $0.60 per cargo ton, giving Panama an advantage of $2 over Tehuantepec. And the inconvenience and damage resulting from transhipment, from which a through service through the ca.n.a.l is free, will also be a considerable point in favour of the waterway. It is not likely, however, that Tehuantepec will be ruined by the opening of the ca.n.a.l. Considerable short-distance coasting trade is sure to continue along that route, and it will share in the general benefit of the developments which await Isthmian and Central America.

Has Panama any danger to fear from its old rival the Nicaraguan ca.n.a.l project? The United States seems to have forestalled this possible challenge of Panama's monopoly of water transit over the isthmus. Just as I write comes the news of a new treaty between the United States and Nicaragua, securing to the former, for the payment of $3,000,000, the exclusive rights to construct a ca.n.a.l through Nicaraguan territory. The United States are reported also to have obtained under the treaty possession of Fonseca Bay, one of the few places on the west coast of Central America affording ample deep water facilities.

Moreover, the Colombian Charge d'Affaires in London recently made the following communication to the press:--

I have received from my government the following information respecting certain propositions made to Colombia by the government of the United States, which the government of Colombia has not accepted. The American propositions were as follows:

1. That Colombia should grant the United States an option for the construction of an interoceanic ca.n.a.l, starting from the Gulf of Uraba on the Atlantic to the Pacific Ocean, through the region of the Atrato River.

2. That Colombia should give to the American government the right to establish coaling stations in the islands of San Andres and Providencia, which are located in the Caribbean Sea.

3. In consideration of the above, the United States to pay to Colombia $10,000,000 and to use their good influence for the settlement of pending differences between Colombia and Panama. Also to grant Colombia preferential rights for the use of the ca.n.a.l and the settlement by arbitration of the claims of Colombia against the Panama Railroad Company.

The government of Colombia declined to accept the above proposals, insisting, at the same time, that all questions pending between Colombia and the United States should be settled by arbitration.

It is evident that the United States are not going to permit any compet.i.tive ca.n.a.l scheme in Central America if they can help it.

What will be the effect of the opening of the ca.n.a.l on Panamanian prosperity? The local merchants fear that the system of state-supply, which has prevailed in the zone during the constructional period, will be continued after completion and extended to the shipping which will pa.s.s through the ca.n.a.l, and that coal and ship-chandlery will become American government monopolies. Much depends on whether the Panamanian merchant will be allowed to import freely through Colon and compete in the supplying of the ships in transit.

No serious development can be expected in Panama until the country is better provided with railways. The only other line in contemplation is one from Empire, on the Culebra Cut, to David, a town close to the Pacific near the far western frontier, in the province of Chiriqui. This line would be 289 miles in length, and branches from it are proposed to Anton, 5 miles, and to Los Santos, about 67 miles.

It is pretty safe to prophesy that the blue streak through the isthmus of Panama will have a gradual but sure effect on the politics of Central America. The need to protect the ca.n.a.l, and to surround it with orderly conditions, social and political, will compel a good many states to put themselves to amendment or force the big republic responsible for the ca.n.a.l to provide them with good government whether they like it or not.

If the United States had to intervene in Cuba in order to put down anarchy or misrule, they may be persuaded by an even stronger necessity to intervene in the affairs of Central America in the defence of the Panama Ca.n.a.l. It would be no surprise, especially after recent events in Mexico, if the south-western frontier of the States gradually advanced down the broad and narrow isthmus until it reached and pa.s.sed the line of the ca.n.a.l. This would be quite in accordance with the law which makes it almost inevitable that a great and well-governed Power should absorb weaker states along its borders, especially when these are unable to keep their houses in order.

There is always the danger that foreign Powers will intervene in the affairs of these republics in the interests of their bondholders, and this would compel in turn the intervention of the United States in order to make good the Monroe doctrine, which is directed against any such foreign interference in American affairs. In order to avoid these complications Mr. Taft actually proposed not long ago to refund the debts of Honduras and Nicaragua, placing the custom-houses under the control of American officials. The object was partly to secure loans advanced by American bankers, but partly also to satisfy European bondholders and to make the politics of these republics more stable.

Nothing came of this significant project. But I should not care to ensure, except at a very high premium, the permanence of the political arrangements now existing in these regions when the Panama Ca.n.a.l is in working order and becomes more and more essential to the safety and prosperity of the great republic. The ca.n.a.l may in the long run be not "virtually" but actually "a part of the coastline of the United States."

FOOTNOTES:

[18] Six months.

CHAPTER XVI.

THE NEW OCEAN HIGHWAYS.

I have already mentioned that England and Europe gained much more from the opening of the Suez Ca.n.a.l than the United States. Before the Suez Ca.n.a.l was opened, the voyage both from Liverpool and from New York to Asia and Australia was made _via_ the Cape of Good Hope. Liverpool had then an advantage over New York of 480 miles in the journey to all Asiatic and Australian as well as East African ports. When the Suez Ca.n.a.l was opened the route to Asia was _via_ the Mediterranean and Red Seas for both Liverpool and New York. But New York is 3,207 miles from Gibraltar, while Liverpool is only 1,283, so that Liverpool has had an advantage of 1,924 miles instead of 480, as formerly, on the voyage to Asiatic ports. In other words, Liverpool gained a compet.i.tive benefit of 1,444 miles from the opening of the Suez Ca.n.a.l.

Now let us take the voyage to Australia from New York and Liverpool.

From New York the journey is still made _via_ the Cape of Good Hope, but from Liverpool chiefly _via_ Suez. Liverpool is 1,622 miles nearer than New York to Australia _via_ Suez, but only 480 miles nearer round the Cape. Liverpool therefore has owed a compet.i.tive "pull" of 1,142 miles over New York to the Suez Ca.n.a.l.

Let us remember, therefore, that the Suez Ca.n.a.l has largely diminished the advantage which the western route sought by Columbus and his successors would once have conferred upon England and Europe in the voyage to the Far East. The opening of the Panama Ca.n.a.l will readjust the balance which was tilted against the United States when the Suez Ca.n.a.l was opened in 1869. The United States will gain far more than the western ports of Europe from the new highway through the American isthmus. Speaking broadly, Suez was a British, Panama is an American proposition.

There are so many facts and figures in connection with the changes in distances and sea-routes as the result of the construction of the Panama Ca.n.a.l that it may save the reader's attention to lay down a few more obvious effects in succession. We can then go on to look at the subject in closer detail.

1. The ca.n.a.l reduces the distance between New York on the eastern and all ports on the western seaboard of America _north of Panama_ by 8,415 geographical miles. The saving from New Orleans is much greater.

2. Liverpool is brought 6,046 miles nearer to all ports on the western seaboard of America (of course including Canada) north of Panama.

3. The saving between New York and the Pacific ports of America _south of Panama_ depends how far south those ports are. But on the average the shortening of distance is 4,709 miles. The saving varies from 8,415 miles at Panama to about 1,004 miles at Punta Arenas, the strange little town on the Straits of Magellan. New Orleans and the Gulf ports benefit still more.

[Ill.u.s.tration: OCEAN ROUTES]

4. Liverpool is brought on an average about 2,600 miles nearer to Pacific ports of America _south of Panama_. The shortening of distance varies from 6,046 miles at Panama itself down to zero at a point between Punta Arenas and Coronel (the most southerly commercial port of Chile).

5. All the Pacific ports of the Americas are, _via_ Panama, 2,759 miles nearer to New York than to Liverpool.

6. The Panama Ca.n.a.l will not bring any port in Australia or the East Indies, nor any ice-free port in Asia or Asiatic islands, nearer to any European port. Of all ports on the western Pacific coasts, only those of New Zealand and a few very chilly ones in Siberia will be brought nearer to Liverpool.

7. All of Asia and all of Australia, with the exception of New Zealand, will be nearer Europe by way of the Suez Ca.n.a.l than by way of the Panama route.

8. Nearly all j.a.pan, Shanghai, Hong-kong, the Philippines, New Guinea, all Australia (save a far western strip), and all New Zealand are brought nearer the Atlantic and Gulf ports of the United States and the Atlantic ports of Canada.

9. The relative distances from New York and Liverpool to the Atlantic coast of South America (nearly all way down), to Africa, and to Asiatic ports south of Hong-kong are unchanged.

10. It is New York and not Liverpool which is now nearer to Yokohama, Sydney, and Melbourne. Wellington, in New Zealand, formerly equidistant between the two great ports, is now 2,739 miles nearer to New York than to Liverpool. Sydney, which was formerly over 1,500 miles nearer Liverpool (_via_ Suez) than New York (_via_ Cape of Good Hope), now becomes 2,424 miles nearer New York (_via_ Panama) than Liverpool (_via_ Suez).