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11. Nearly the whole of the Atlantic seaboard in the Old World and the New is brought nearer to the Pacific ports of the United States and Canada.

12. The Panama Ca.n.a.l cannot invade the main traffic field of the Suez route--the countries of Southern Asia, East Africa, the Red Sea, and the Persian Gulf. The compet.i.tive region of the two ca.n.a.ls lies east of Singapore.

[Ill.u.s.tration: THE ISTHMUS OF PANAMA]

The reader will gather from the last proposition that the scene of the new battle of the routes will lie in the Western Pacific, and this probably will also be the scene of the main industrial and commercial compet.i.tions of the future. It is in these regions, Australasia and the countries along the Pacific Asiatic coasts, that the traffic zones of the Suez and Panama Ca.n.a.ls touch or overlap. The positive effect on relative distances from American and European ports is of great importance to commercial developments in these regions. Let us look at the geographical results of the Panama Ca.n.a.l a little more closely. On pages 252, 253 are two tables transcribed from the official report of 1912 on Panama Ca.n.a.l Traffic and Tolls, by Mr. Emory R. Johnson.

The following tables are given by Dr. Vaughan Cornish:--

Reduction miles New York to-- (geog.).

Yokohama { by Suez 13,564 } { by Panama 9,835 } 3,729

Shanghai { by Suez 12,514 } { by Panama 10,855 } 1,629

Sydney { by Cape of Good Hope 13,658 } { by Panama (_via_ Tahiti) 9,852 } 3,806

Melbourne { by Cape of Good Hope 13,083 } { by Panama (_via_ Tahiti) 10,427 } 2,656

Wellington, { by Straits of Magellan 11,414 } N.Z. { by Panama 8,872 } 2,542

Hong-kong { by Suez 11,655 { by Panama 11,744

Manila { by Suez 11,601 } (Philippines) { by Panama _via_ San Francisco } 16 { and Yokohama 11,585 } { by Panama, Honolulu and Guam 11,729

Comparative distances (in nautical miles) from New York and Liverpool to New Zealand, Australia, Philippines, China and j.a.pan, _via_ Suez and Panama Ca.n.a.ls.

Distances (in nautical miles) from Liverpool _via_ the Panama and Suez routes to Australia, New Zealand, the Philippine Islands, China, and j.a.pan.

As figures are rather confusing and difficult to retain in the memory, let us find a more graphic way of indicating this zone in the Western Pacific where the chief conflict of ca.n.a.l and commerce is likely to take place in the future. Let us mark out a block of sea and land between the lines of lat.i.tude 40 north and 40 south and the lines of longitude 120 east and 160 east of Greenwich. This zone includes j.a.pan and Korea, Shanghai and the Philippines, New Guinea, and all Australia except the farthest western coastline. New Zealand lies outside it. Now along its western margin, the Suez and Panama routes to New York are equal in length. Along its eastern margin, which lies outside j.a.pan and Australia (_not_ New Zealand), and only traverses the scattered islets of the Pacific, the Suez and Panama routes to Liverpool are equal in length. Now look down an imaginary line near the centre of the zone but running rather west of north and east of south. Along this line all places are the same distance from New York and Liverpool by Panama and Suez respectively.

Can we, then, roughly forecast the changes in ocean trade-routes which will result from this new channel of communication between East and West? For this purpose we may divide the world traffic into three parts--firstly, that part of it which the ca.n.a.l is almost certain to secure; secondly, that for which it will have to fight with compet.i.tive routes; thirdly, that which it will have no chance of securing.

As regards the first, Panama will almost certainly attract most, if not all, the traffic which flows from the eastern American and Gulf ports to Hawaii and the west coast of North and South America, and of the traffic from the United Kingdom and the west of Europe to the whole western seaboard of America. We have already seen the regions where the Panama Ca.n.a.l will have to compete with the existing routes. Roughly, they comprise Pacific Asia, a part of the East Indies, and Australasia. These regions represent an enormous volume of traffic from which Panama will have to try to detach as large a share as possible. The third part is the main traffic-field of Suez--that is, Southern Asia, East Africa, the Red Sea, and the Persian Gulf. No efforts on the part of Panama, no reductions of ca.n.a.l tolls, could possibly lure any of this traffic from its determination to Suez; the compet.i.tive region of the two ca.n.a.ls lies all east of Singapore, and the greater part of the commerce of that region with Western Europe will still continue to move _via_ Suez.

The question of tolls at Panama is, of course, very important in its bearing upon the future popularity of the ca.n.a.l. It would certainly not have done to make the Panama charges higher than those at Suez. These latter have been reduced as from January 1, 1912. They are now 6.25 francs ($1.206) per net ton for loaded vessels. The pa.s.senger tolls are 10 francs a pa.s.senger above twelve years of age, and 5 francs for each child from three to twelve years old. If these figures had been exceeded at Panama the traffic there would have suffered. On the other hand, the attempt to attract traffic by a great reduction on tolls would have involved a loss on the a.s.sured traffic between the eastern and western coasts of America which would have more than counterbalanced the probable gain.

Mr. Taft's proclamation fixing the Panama tolls will be found at the end of the book. It will be seen that the charge of $1.20 is almost identical with the Suez toll. There are, however, to be no pa.s.senger tolls at Panama. It must not be forgotten that the Suez Ca.n.a.l could very well afford to lower its charges to meet the new compet.i.tion. A dividend of 30 per cent. leaves a considerable margin for this purpose.

[Ill.u.s.tration]

And we must remember that tolls, however important, are not by any means the only determinants of traffic-routes. All sorts of commercial and freight considerations come into play. For example, the shortest way from j.a.pan to the eastern coasts of North America will be _via_ Panama.

Fully loaded vessels will certainly go that way. But the ship that leaves the land of the cherry blossom only partly loaded and wanting to make up a full freight may choose the route past Asia and through the Suez Ca.n.a.l as being more likely to serve that object.

Then the cost of coal is an important point. Other things being equal, shipowners will select the routes by which coal is cheapest and the coaling stations nearest each other. With plenty of cargo coming along and good freight rates it is desirable to reserve as little bunker s.p.a.ce as possible. I cannot go into this question at any great length, but in the compet.i.tion with the Suez route it will be quite as important to have abundant and cheap coal at Colon (the pun is accidental!) and Panama as to keep the transit dues moderate.

But we have not yet exhausted the motives which may help to prompt the choice of one route rather than another. There is the question of climatic conditions--storms and winds and currents. In this respect Panama should have a decided advantage over Suez. The Red Sea, as everybody knows, is red hot. This is not good for some sorts of cargo, and so terrible is the heat at times that the stokers are said to be unable to maintain the steam at full pressure. This may involve an appreciable delay in the 1,310-mile run from Suez to Aden. Moreover, from a temper and character point of view, the North Pacific and Caribbean are distinctly superior to the Indian Ocean and the North Atlantic. The deliverance which the Panama Ca.n.a.l will afford to many vessels and steamship lines from the perils and savageries of "Cape Stiff," as the sailors call the Horn, or the reefs and currents of Magellan's Straits, is in itself one of the blessings of the new route.

Travellers tell us that the biggest ocean rollers in the world are found on the Pacific coast of America just a little north of the southern straits. For these reasons insurance rates _via_ Panama are likely to be lower than those round the far south of the American continent.

There is good reason to believe that the Panama Ca.n.a.l will pay its way without imposing any new burden on the taxpayers of the United States.

It will probably not produce the dividends of the Suez Ca.n.a.l. It will have cost four times as much, and is unlikely for many years to command quite as large a volume of traffic. The increase in the traffic at Suez has been enormous during the last fifteen years, owing largely to the development of the resources of the Far East with the help of western capital. The net tonnage of vessels pa.s.sing through the ca.n.a.l in 1911 was 18,324,794, and the total pa.s.sengers were 275,651. All forecasts of the traffic _via_ Panama must, of course, be speculative, but it may be mentioned that the net register tonnage of vessels that might have advantageously used a Panama Ca.n.a.l in 1910 is officially estimated at 8,328,029.

Before discussing the more economic and commercial results likely to follow from the opening of the ca.n.a.l, there are one or two subsidiary questions we may consider. Is the Panama Ca.n.a.l likely to be used by sailing vessels? The prevailing idea is that it will be no more practicable a route for such craft than the Suez Ca.n.a.l. Winds, tides, and currents have much more to say to the sailing vessel than to the steamer, and the terminals of the ca.n.a.l, especially on the Pacific end, are not always easy of approach to wind-driven ships. One effect of the opening of the Panama Ca.n.a.l will be to hasten the decline of these old-fashioned and more beautiful craft. It must not be imagined that the "windjammer" or "limejuicer," in the sea-going vernacular, has already nearly disappeared from the seven seas. A great deal of the world's commerce is still carried on in such vessels. They still battle their way round the Horn laden with the timber of Oregon or British Columbia and the nitrates of Chile. But the unsuitability of the Panama transit for sailing vessels will unquestionably lead to their quicker decline.

It is interesting to see how steam has gradually ousted sail in the world's shipping. In 1873-4 the sea-going sail tonnage of the world was 14,185,836 tons. This declined to 11,636,289 in 1888-9; to 8,693,769 in 1898-9; and to 6,412,211 in 1910-11; while steam tonnage increased from 4,328,193 in 1873-4 to 41,061,077 in 1910-11. For many reasons, climatic and economic, we may safely a.s.sume that the Panama Ca.n.a.l will be confined exclusively to "steam circles." Steamers will be subst.i.tuted for the "limejuicers" in every ca.n.a.l-using line, and the snowy canvas will be banished to other regions. Hitherto, such freights as coal, lumber, grain, nitrate of soda, and sugar have been considered specially suited for sail transportation, because they are shipped as full vessel cargoes and do not require rapid transportation or delivery. But even such cargoes are certain to be largely transferred to the steamship when it is realized that the Panama Ca.n.a.l is "no road" for sailing vessels.

Another interesting question is the probable effect of the ca.n.a.l on the American mercantile marine. The ocean-going merchantmen of the United States engaged in the foreign trade are practically non-existent, though the "coasting" trade, which includes the trade of Hawaii and the Philippines with the United States, is strictly reserved to American vessels, ships flying foreign flags being entirely excluded. But these latter, which are in the main British, carry on all the foreign trade of the United States with South America, New Zealand, Australia, Northern China and j.a.pan. It is almost unbelievable that in 1908 there was not a single steamship flying the flag of the United States between the United States ports and those of Brazil, the Argentine, Chile, or Peru. The mails from New York and the other Atlantic ports of the American republic go, or went until quite recently, _via_ Europe, though New York is 370 miles nearer Brazil, etc., than the Old World coasts.[19] The reasons for this want of a foreign-trade mercantile marine are chiefly the greater cost of shipbuilding in the United States and the requisitions with regard to wages and food of the American trade-unions.

The result of the high standards of comfort thus imposed has been that the cost in wages and food to run American ships under American conditions across the Pacific is double that in European or j.a.panese steamers. It is scarcely to be wondered at, therefore, that some people in the United States regard the Panama Ca.n.a.l as a very disinterested gift from the United States to humanity at large, especially perhaps to Great Britain and j.a.pan--as an example of altruism run mad. But while the United States may not be ready to reap the full advantage of the ca.n.a.l at the start, it is highly probable that its opening will lead to a rapid growth in the United States merchant service. A larger coasting fleet will be required with larger vessels, and this will lead to a general development of the larger cla.s.ses of shipbuilding.

At present no vessels are permitted to fly the American flag unless American-built. A large number of American-owned vessels are therefore registered under the flags of some foreign nation. As the United States begins to compete in cheapness and efficiency of shipbuilding with other countries, the chief motive for this foreign registration will be removed. Great Britain cannot expect to be the chief carrier of United States trade for ever. This is indeed one of many directions in which the opening of the Panama Ca.n.a.l may tend rather to the disadvantage than to the benefit of the United Kingdom. There is no reason why the United States should not build up a mercantile marine as swiftly as Germany and j.a.pan have done. England will have to consider seriously this and many other probable effects of the ca.n.a.l closely touching her most important interests.

I will conclude this chapter with an interesting little fact which may already have occurred to the reader. From the moment the Panama Ca.n.a.l is opened it will be possible for the first time to sail all round the world from England wholly in the northern hemisphere and without crossing the Equator. Who will be the first circ.u.mnavigator along the all-northern trail?

FOOTNOTES:

[19] Many persons may have expected these countries to be much nearer New York. They do not realize that _nearly all South America lies east of North America_. Washington is on the same meridian as Callao on the coast of Peru. Antof.a.gasta and Iquique, the chief nitrate ports of Chile, have the longitude of Boston. The eastern point of Brazil lies 2,600 miles east of New York, and is _equidistant from New York Bay and the English Channel_.

CHAPTER XVII.

THE Ca.n.a.l AND THE AMERICAS.

The likely effects of the Panama Ca.n.a.l on international commerce and the development of the world's resources is so big a subject that one can do little more than indicate the larger probabilities. The influence of the ca.n.a.l on the British Empire must be left to another chapter. Here we shall have to consider mainly the case of the United States, the country which stands to gain far more than any other from this new link between East and West.

The most obvious result of the new event, as it was the main object of the ca.n.a.l's construction, must be the immensely quickened all-sea communication between the eastern and western coasts of North America.

The motive for the building of the ca.n.a.l was military rather than commercial. It was rendered necessary by painful experience during the Spanish-American War of the effects of the 14,000-mile sea journey between the two seaboards of the republic. But the commercial results will not be the less important because they were not foremost in the object and motive of the ca.n.a.l-builders. It is pretty clear that what we may call the main developmental effect of the ca.n.a.l will be felt along that Pacific coast of the Americas which has been so long shut out from the great centres of industrial enterprise in the New World and the Old.

We are so accustomed to regard the United States as a fully developed and fully equipped country that we forget how slowly her population and industries advanced westward from the Atlantic coasts. Even now it cannot be said that the railroad communications between the east and the Pacific states beyond the great mountain-divide of the Rockies are fully equal to the carriage of the produce which is or should be exchanged between east and west. The transcontinental lines have scarcely yet furnished a cheap and satisfactory connection between the Pacific coast states and their largest and most natural markets. Hitherto the railways have had to compete with only three alternative routes: (1) the all-sea route round Cape Horn for sailers, and through Magellan Straits for steamers; (2) the route _via_ Panama, with railroad transit over the isthmus; (3) the route _via_ Tehuantepec, with railroad transit over that isthmus from Puerto Mexico on the Gulf to Salina Cruz on the Pacific. The new ca.n.a.l will be a much more formidable compet.i.tor. It is highly important that the industries of the United States should have the benefit of this healthy tug-of-war between railroad and ca.n.a.l, and the government is perfectly justified in keeping that compet.i.tion open, even to the length of forbidding the use of the ca.n.a.l to ships owned, controlled, or operated by railway companies.

There is no fear that the Panama Ca.n.a.l, even if it prospers exceedingly, will ruin the transcontinental railroads. The report of the Isthmian Ca.n.a.l Commission in 1901 made some interesting remarks on this subject, and they are as pertinent to-day:--

The compet.i.tion of the ca.n.a.l will affect, first, the volume and rates of the through business of the Pacific railroads, and secondly, the amount of their local traffic. At the beginning of their existence these railways depended almost entirely upon their through traffic; but their chief aim throughout their history has been to increase the local business, which is always more profitable than the through traffic; and although the great stretch of country crossed by them is still in the infancy of its industrial development, the local traffic of some, if not all, of the Pacific roads has already become of chief importance. A vice-president of one of the railway systems states that since 1893 "the increase in business of the transcontinental lines has not come from the seaports, but from the development of the intermediate country." The ca.n.a.l can certainly in no wise check the growth of this local traffic, and the evidence strongly supports the belief entertained by many persons that the ca.n.a.l will a.s.sist largely in the industrial expansion of the territory served by the Pacific railways.

If this be true, the proximate effect of the isthmian ca.n.a.l in compelling a reduction and readjustment of the rates on the share of the transcontinental railway business that will be subject to the compet.i.tion of the new water route, will be more than offset by the ultimate and not distant expansion of the through and local traffic, that must necessarily be handled by rail. It seems probable that the increase in the population of the country, and the growth in our home and foreign trade, will early demonstrate the need of the transportation service of both the ca.n.a.l and the railways.

The reduction of freight through the use of the ca.n.a.l is sure to give a big stimulus to many leading industries of the Pacific states. One of the most important is the lumber industry. California and Oregon are very rich in forests of pine, spruce, cedar, and redwood, the last being much in demand in Atlantic countries. A good deal of this timber is exported to Europe and the eastern states, and it has all to be carried in sailing ships round Cape Horn. It is calculated that the opening of the Panama Ca.n.a.l will reduce the freight by 50 per cent., which means that all this Pacific coast timber will be correspondingly increased in value. The exports eastwards are sure to advance rapidly with the new means of transport. Grain, wine, and fruit will benefit, and the manufactured goods from the industrial states of the east will flow through the same channel to the western states in an ever-increasing volume.

Every staple industry of the United States will feel the new stimulus, and England and Europe generally are certain to feel the pressure of this new compet.i.tive power of the American republic. In cotton and iron goods especially the exports from the eastern and southern states are bound to forge ahead. Manufactured cotton goods exported from the southern states have had to be carried by rail to the western ports, and thence by steamer to China and j.a.pan, or else eastward by the Suez Ca.n.a.l, sometimes even _via_ England or Germany. We may imagine what a boon the Panama Ca.n.a.l will be to this trade, and how conveniently it will lie for the Gulf ports and all their raw and manufactured exports.

American iron and steel will also be immensely strengthened for compet.i.tion with those of England and Europe in the markets of China, j.a.pan, British Australasia, and along the coast of South America. We need not describe in detail effects which are likely to be felt over the entire range of American industry.

The Panama Canal Part 9

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