The Isthmus of PanamaTHE ISTHMUSofPANAMA
THE ISTHMUSofPANAMA
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 competitions 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 Canals 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 Canal a little more closely. On pages 252, 253 are two tables transcribed from the official report of 1912 on Panama Canal Traffic and Tolls, by Mr. Emory R. Johnson.
The following tables are given by Dr. Vaughan Cornish:—
New York to—Reduction miles (geog.).Yokohamaby Suez13,564by Panama9,8353,729Shanghaiby Suez12,514by Panama10,8551,629Sydneyby Cape of Good Hope13,658by Panama (viaTahiti)9,8523,806Melbourneby Cape of Good Hope13,083by Panama (viaTahiti)10,4272,656Wellington, N.Z.by Straits of Magellan11,414by Panama8,8722,542Hong-kongby Suez11,655by Panama11,744Manilaby Suez11,601(Philippines)by PanamaviaSan Francisco and Yokohama11,58516Manilaby Panama, Honolulu and Guam11,729
Comparative distances (in nautical miles) from New York and Liverpool to New Zealand, Australia, Philippines, China and Japan,viaSuez and Panama Canals.
ToNew YorkviaPanama Canal.LiverpoolviaSuez Canal.Difference in favour of Suez -, Panama +Ports of Call.Distance.Ports of Call.Distance.WellingtonPanama and Tahiti8,851Aden, Colombo, King George Sound, and Melbourne12,889+4,138SydneyPanama and Tahiti9,811Aden, Colombo, King George Sound, Adelaide, and Melbourne12,235+2,424AdelaidePanama, Tahiti, Sydney, and Melbourne10,904Aden, Colombo, and King George Sound11,142+238ManilaPanama, San Francisco, and Yokohama11,548Aden, Colombo, and Singapore9,701-1,847Hong-kongPanama, San Francisco, and Yokohama11,383Aden, Colombo, and Singapore9,785-1,598ShanghaiPanama, San Francisco, and Yokohama10,839Aden, Colombo, Singapore, and Hong-kong10,637-202TientsinPanama, San Francisco, and Yokohama11,248Aden, Colombo, Singapore, Hong-kong, and Shanghai11,377+129YokohamaPanama and San Francisco9,798Aden, Colombo, Singapore, Hong-kong, and Shanghai11,678+1,880
Distances (in nautical miles) from Liverpoolviathe Panama and Suez routes to Australia, New Zealand, the Philippine Islands, China, and Japan.
ToSuez Route.Distance.Panama Route.Distance.In favour of Suez -, Panama +.AdelaideAden, Colombo, and King George Sound11,142Panama, Tahiti, Sydney, and Melbourne13,478-2,336MelbourneAden, Colombo, King George Sound, and Adelaide11,654Panama, Tahiti, and Sydney12,966-1,312SydneyAden, Colombo, King George Sound, Adelaide, and Melbourne12,235Panama and Tahiti12,385-150WellingtonAden, Colombo, King George Sound, and Melbourne12,989Panama and Tahiti11,425+1,564ManilaAden, Colombo, and Singapore9,701Panama, San Francisco, and Yokohama14,122-4,421Hong-kongAden, Colombo, and Singapore9,785Panama, San Francisco, and Yokohama13,957-4,172TientsinAden, Colombo, Singapore, Hong-kong, and Shanghai11,377Panama, San Francisco, and Yokohama13,822-2,445YokohamaAden, Colombo, Singapore, Hong-kong, and Shanghai11,678Panama and San Francisco12,372-694
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 canal and commerce is likely to take place in the future. Let us mark out a block of sea and land between the lines of latitude 40° north and 40° south and the lines of longitude 120° east and 160° east of Greenwich. This zone includes Japan 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 Japan and Australia (notNew 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 thisnew 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 canal is almost certain to secure; secondly, that for which it will have to fight with competitive 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 Canal 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 canal tolls, could possibly lure any of this traffic from itsdetermination to Suez; the competitive region of the two canals lies all east of Singapore, and the greater part of the commerce of that region with Western Europe will still continue to moveviaSuez.
The question of tolls at Panama is, of course, very important in its bearing upon the future popularity of the canal. 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 passenger tolls are 10 francs a passenger 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 assured 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 identicalwith the Suez toll. There are, however, to be no passenger tolls at Panama. It must not be forgotten that the Suez Canal could very well afford to lower its charges to meet the new competition. A dividend of 30 per cent. leaves a considerable margin for this purpose.
Map of Panama Canal
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 Japan to the eastern coasts of North America will beviaPanama. 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 Canal 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 space as possible. I cannot go into this question at anygreat length, but in the competition 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 Canal 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 blessingsof 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 ratesviaPanama are likely to be lower than those round the far south of the American continent.
There is good reason to believe that the Panama Canal 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 Canal. 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 passing through the canal in 1911 was 18,324,794, and the total passengers were 275,651. All forecasts of the trafficviaPanama must, of course, be speculative, but it may be mentioned that the net register tonnage of vessels that might have advantageously used a Panama Canal 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 canal, there are one or two subsidiary questions we may consider. Is the Panama Canal 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 Canal. Winds, tides, and currents have much more to say to the sailing vessel than to the steamer, and the terminals of the canal, especially on the Pacific end, are not always easy of approach to wind-driven ships. One effect of the opening of the Panama Canal 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 hasgradually 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 assume that the Panama Canal will be confined exclusively to "steam circles." Steamers will be substituted for the "limejuicers" in every canal-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 Canal is "no road" for sailing vessels.
Another interesting question is the probable effect of the canal on the American mercantile marine. The ocean-going merchantmen of the United States engaged in the foreign trade arepractically 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 Japan. 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,viaEurope, 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 marineare 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 Japanese steamers. It is scarcely to be wondered at, therefore, that some people in the United States regard the Panama Canal as a very disinterested gift from the United States to humanity at large, especially perhaps to Great Britain and Japan—as an example of altruism run mad. But while the United States may not be ready to reap the full advantage of the canal 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 classes 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 Canal 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 Japan have done. England will have to consider seriously this and many other probable effects of the canal 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 Canal 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 circumnavigator along the all-northern trail?
[19]Many persons may have expected these countries to be much nearer New York. They do not realize thatnearly all South America lies east of North America. Washington is on the same meridian as Callao on the coast of Peru. Antofagasta 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 isequidistant from New York Bay and the English Channel.
[19]Many persons may have expected these countries to be much nearer New York. They do not realize thatnearly all South America lies east of North America. Washington is on the same meridian as Callao on the coast of Peru. Antofagasta 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 isequidistant from New York Bay and the English Channel.
The likely effects of the Panama Canal 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 canal 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 canal'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 canal was military rather than commercial. It was rendered necessary by painfulexperience 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 canal-builders. It is pretty clear that what we may call the main developmental effect of the canal 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 mostnatural 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 routeviaPanama, with railroad transit over the isthmus; (3) the routeviaTehuantepec, with railroad transit over that isthmus from Puerto Mexico on the Gulf to Salina Cruz on the Pacific. The new canal will be a much more formidable competitor. It is highly important that the industries of the United States should have the benefit of this healthy tug-of-war between railroad and canal, and the government is perfectly justified in keeping that competition open, even to the length of forbidding the use of the canal to ships owned, controlled, or operated by railway companies.
There is no fear that the Panama Canal, even if it prospers exceedingly, will ruin the transcontinental railroads. The report of the Isthmian Canal Commission in 1901 made some interesting remarks on this subject, and they are as pertinent to-day:—
The competition of the canal will affect, first, the volumeand 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 canal 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 canal will assist largely in the industrial expansion of the territory served by the Pacific railways.If this be true, the proximate effect of the isthmian canal in compelling a reduction and readjustment of the rates on the share of the transcontinental railway business that will be subject to the competition 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 canal and the railways.
The competition of the canal will affect, first, the volumeand 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 canal 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 canal will assist largely in the industrial expansion of the territory served by the Pacific railways.
If this be true, the proximate effect of the isthmian canal in compelling a reduction and readjustment of the rates on the share of the transcontinental railway business that will be subject to the competition 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 canal and the railways.
The reduction of freight through the use of the canal 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 theopening of the Panama Canal 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 competitive 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 Japan, or else eastward by the Suez Canal, sometimes evenviaEngland or Germany. We may imagine what a boon the Panama Canal 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 competition with those of England and Europe in the markets of China, Japan, 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 United States appears, indeed, to be on the verge of tremendous developments. In a paper read before the Royal Colonial Institute,[20]that well-known physical geographer and economist, Dr. F. B. Vrooman, gave us a hint of further American enterprises in civil engineering, after the Panama Canal is opened:—
The isthmian canal is but a part of the greater American waterways project. As soon as this is finished it is possible that the United States will start in a large way with the project of the artificial canalization of the Mississippi with its 16,000 miles of already navigable waters and a drainage basis of 1,280,000 square miles. The cutting-through of an ocean-ship canal to the Great Lakeswill make seaport towns of the Canadian cities on the Lakes Ontario, Erie, and Superior. The Saskatchewan and the Red River can be canalized for 1,000 miles, and a short haul from Winnipeg will open the whole Saskatchewan valley from near the foot-hills of the Rocky Mountains—downstream, but for this short portage—all the way to the Gulf of Mexico, and thence to Panama and the Pacific ports. Every transcontinental freight-rate in Canada and the United States will be reduced, and perhaps some in the middle interior. As this great southern movement starts up the industries of the southern states will receive a new impulse. The Gulf of Mexico and the Caribbean Sea will spring into a new life, together with the West Indies and Central America and the vast and fertile interior drained by the Orinoco and the Amazon.
The isthmian canal is but a part of the greater American waterways project. As soon as this is finished it is possible that the United States will start in a large way with the project of the artificial canalization of the Mississippi with its 16,000 miles of already navigable waters and a drainage basis of 1,280,000 square miles. The cutting-through of an ocean-ship canal to the Great Lakeswill make seaport towns of the Canadian cities on the Lakes Ontario, Erie, and Superior. The Saskatchewan and the Red River can be canalized for 1,000 miles, and a short haul from Winnipeg will open the whole Saskatchewan valley from near the foot-hills of the Rocky Mountains—downstream, but for this short portage—all the way to the Gulf of Mexico, and thence to Panama and the Pacific ports. Every transcontinental freight-rate in Canada and the United States will be reduced, and perhaps some in the middle interior. As this great southern movement starts up the industries of the southern states will receive a new impulse. The Gulf of Mexico and the Caribbean Sea will spring into a new life, together with the West Indies and Central America and the vast and fertile interior drained by the Orinoco and the Amazon.
CENTRAL AND SOUTHERN AMERICA.
But there are no countries which will hear the call of the canal so nearly and clearly as those of Central and Southern America. It is astonishinghow that forty-mile wide land barrier between the two oceans has isolated all the western shore of the continent. The Panama Canal Railroad has done very little to modify the situation. The Pacific coast of America has looked westwards over its waste of waters, and has scarcely been reached by the industrial and economic forces at work behind it in the Old and New Worlds. Its trade has been carried on mostly with Europe, and especially England, in sailing vessels that have plodded round the distant Horn. An interesting example of this geographical and commercial detachment of the west coast of Central and South America is furnished by the port of Mazatlan in Western Mexico. From this place there are considerable exports of logwood and mahogany. But thirty times as much of this lumber has gone to Europe as to the east of the American continent. On the opposite or eastern side of Mexico is Tampico, where the returns of trade are just the reverse, the United States being the largest customer for its exports. Despite the old Spanish paved roads across the isthmus at Panama, by which the silver and pearls of Peru and the Pacific were conveyed toNombre de Dios and Porto Bello, for shipment to Spain, despite the sixty years of the little Panama Railway, the American continent even in its narrowest parts has been something like an impenetrable screen between east and west. Four centuries of continued agitation and effort to get the water through show how seriously this physical divorce has been felt, and give an earnest of the large results which are sure to follow the completion of the task.
There have been other reasons for the backward development of western South America. To begin with, the Spanish, not a progressive and pioneering race, laid their hands on these countries four hundred years ago, and have held them politically or racially ever since. This would not in itself have kept out the Anglo-Saxon or the German. But these countries have not yet been greatly needed as an outlet of the surplus populations of Europe. Even the United States is very far from being filled up, and Canada is likely to be giving away farms for many years to come. The Teutonic race, to which above all others the trusteeship of Western civilization is committed, has left these Spanish Americas,with their revolutions coming almost as frequently and regularly as the seasons, comparatively unvisited. As yet the North European emigration to the southern continent has been mainly confined to Argentina and Southern Brazil.
In one respect the isthmian breakwater has been profitable to these states of the Pacific coast. It has sheltered them largely from the negro element which has spread so widely over the West Indies and the southern United States. But Japan and China are already there, and the yellow will be laid on more and more thickly unless these countries are brought quickly within the zone of Western ideas and enterprise. And that process is likely to begin with the opening of the canal.
The backwardness of these regions is indeed almost unbelievable. Most people think of them as producing mainly nitrates and revolutions. But their possible resources and products are illimitable, and are only awaiting the organized capital of the West to be made available for human service. As yet these Latin republics are in their middle ages of development. There are few railways, only one continuoustranscontinental line having been completed between Valparaiso, through Mendoza, to Buenos Aires. Their internal communications are carried on mainly by the pack mule, as they have been since the days of Pizarro and Valdivia. Each country, of course, has a foreign trade, but the people of the interior, the Indians or mixed breeds, live in isolated communities which are self-sufficing, raise their own food and make their own simple manufactures, knowing little or nothing of the products of foreign countries.
The whole coast and its hinterland is engaged almost solely in what are known as "extractive" industries—that is, in mining or agriculture. The exports consist mainly of foodstuffs and raw materials, nitrate, ores of copper, silver, and gold, grain, sugar, cotton, cocoa, coffee, wool, hides, rubber, and woods. With these the people pay for their manufactured goods, and these come mainly from Europe, and chiefly also from the United Kingdom. The mineral wealth of the northern parts, especially the Andean plateau, is still enormous, though vast quantities have been extracted. For centuries the Andes furnished the civilized world withmost of the bullion used for its current coinage. Between 1630 and 1803 Peru alone sent out £250,000,000 worth of silver. Bolivia has contributed £800,000,000 worth; the famous mines of Potosi alone accounted for £600,000,000 worth of this metal. The nitrate works of Chile are in the hands of Englishmen and Germans, and American and other foreigners hold the sugar plantations of Peru. But, as I have said, the range of production is enormous and only awaits the stimulus of imported capital. To give one example of the variety of products, it is said that the Aconcagua valley in Chile would alone furnish annually from its vineyards 1,000,000 gallons of claret, if the grapes were not used to produce a local drink named "chica." There is no sign of the exhaustion of any of the natural products of these regions. Even the nitrate of soda, that most valuable of fertilizers, though it is being shovelled out at a great rate, covers about 220,000 acres, or about 400 miles from north to south, and is sufficient to last for a very long time to come.
Nitrate, minerals, wheat, barley, wool, hides—these are the main exports of the Pacific west, the returning imports being cotton goods,machinery, steel rails, woollens, coal, and all sorts of miscellaneous manufactures and supplies. But, as I said, the trade has been almost wholly with Europe, England enjoying a very predominant position. The United States have competed with Europe at great disadvantages. The trade has been mostly carried on in sailing vessels. Now such craft, to get from New York to South America, have been obliged to sail eastwards almost as far as the Canaries in order to catch the trade winds and weather Cape St. Roque on the coast of Brazil. The sailing vessel from Europe, on the other hand, sails right past the Canaries, and can give the American ship ten days' start in the journey to any part of South America south or west of the most easterly point of Brazil. If the reader will turn back to the chapter on the new distances he will see how the little streak of blue water at Panama will alter all this. Take one little fact to illustrate the change. Callao, on the coast of Peru, is, before the opening of the canal, farther by steam from New York than is the South Pole, but the Panama Canal will bring the city 1,000 miles nearer to New York by steam than San Francisco will then be. The canalwill reduce the distance from New York to the Chilean nitrate port of Iquique by 5,139 miles (nautical), to Valparaiso by 3,747, to Coronel (farther south) by 3,296, to Valdivia (about 1,000 miles north of Magellan's Straits, nearly at the farthest southern limit of the commercially important part of western South America) by 2,900. Take Iquique, an important North Chilean nitrate port. By Panama this place is 4,004 miles from New York, but 6,578 from Liverpool. Their respective distancesviaMagellan were 9,143 and 9,510.
It looks, therefore, as though the United States, with its new advantages, which begin when the first vessel is passed through the Panama locks, would have a good chance of securing for the future the main share of the South American trade. Its cotton, iron and steel goods, electrical machinery, etc., will be able to compete on very different terms with those of England and Germany. Cotton manufactures have reached Chile and the other countries of Pacific South America by a rather absurdly roundabout route. The raw cotton has been grown in the southern parts of the United States, carried to Europefor manufacture, and brought back to South Americaviathe Straits of Magellan. These goods will, we may be sure, tend in future to go direct from the American factoriesviaNew York, Charleston, or New Orleans, without trans-shipment, thus saving about 7,000 miles of transportation. A very small part of the American trade with these countries has passed by the Panama railroad. The rates charged by the steamers which have picked up the goods for the west coast at Panama have been kept so high as to be practically prohibitive. It has actually been cheaper to send goods from the United States by way of England or Germany—that is, a journey of 14,000 miles—than by way of Panama, a journey of three or four thousand. One of the surest results, then, of the Panama Canal opening will be a rapid development of the Pacific coasts of America, especially of South America, and a great expansion of trade between these countries and the United States.
The effect of the canal on the Atlantic coasts and hinterland of South America will naturally be less striking. There has never been much interchange of trade between the two coastsof the southern continent, for the simple reason that their products are not complementary but mostly identical. Most of the trade of the eastern coast states is with the countries of the North Atlantic. But some trade to the more northerly and tropical parts of this coast is certain to flow through the canal. Lumber from the Pacific coasts of North America is used in Atlantic South America, and a part of this trade, which is likely to grow in extent, will be passed through the canal. It should be noticed, however, that the temperate reaches of the eastern coast of South America farther to the south will be nearer the Pacific coasts of the United States and Canadaviathe Horn and the Straits of Magellan owing to the big easterly projection of Brazil.
We must leave the probable effects of the Panama Canal on the British possessions in America to another chapter. It has not been possible to deal with prospective commercial developments in great detail. Only some general idea could be given of the vast changes and developments in progress. On the day on which I am writing the Washington correspondent ofThe Timessummarizes the meaning andeffect of the Panama Canal in three rather formidable words. He says it "symbolizes commercial Pan-Americanism." The canal is going to help America to keep its trade more to itself. It represents in commerce and economics what the Monroe doctrine represents in politics. It will immensely assist the United States to become the chief industrial supplier of the great continent, with the other states mainly as agricultural or mining annexes. One incident in the furthering of this ambition was the attempt to conclude a treaty of reciprocity with Canada, the effect of which, as Mr. Taft admitted, would have been to make Canada such an "annexe" of the republic. The Canadian people, however, realizing the ulterior political and commercial effects of such a treaty, refused to ratify it. Canada, in fact, belongs to another political and economic system. She gives valuable trade-preference to the manufactures of the mother-country in the Old World, and there is happily no reason to believe that she will abandon the Imperial ideals for the objects of continental Pan-Americanism. After all, the citizens of Canada and the United States are mostly of thesame stock, speaking the same language and cherishing the same great traditions. The two branches of the Anglo-Saxon family ought to be able, while each maintaining its own life and growth, to remain happily side by side, sharing in the new prosperity which the world owes to this latest achievement of the great republic.
[20]March 19, 1912.
[20]March 19, 1912.
One of the most important results of the Panama Canal, one which is likely to have the largest influence on future political history, seems scarcely to have been noticed by writers on this subject. I have shown how much nearer Australia and New Zealand are brought to New York than to Liverpool, owing to the isthmian passage. They are brought of course proportionately nearer to the eastern provinces, which are also the governmental headquarters of Canada. But the moving away, so to speak, of these great countries from England, and their closer approximation to the great and growing branches of the Anglo-Saxon stock in America, has the effect of locating the centre of gravity of the English-speaking races more firmly and permanently than ever in the New World. When Canada,Australia, and New Zealand have grown for another quarter of a century, and the United States have reaped for so long the advantage in wealth and power of the new waterway, the little islands of the United Kingdom may begin to appear as a detached and distant fragment, rather than as the "heart and hearth," of the British Empire and the English-speaking world. In the eighteenth century, when the English plantations in America began to develop their manufactures and had increased rapidly in population, the question was discussed in England how long she could continue to control an oversea empire, likely to be in time more populous and prosperous than the home-country itself, from these far-away islands of the Old World. It was actually suggested at that time that the King of England should carry his crown and throne where the most part of his subjects were congregated. That suggestion is not likely to be repeated. We have found a way of harmonizing local self-government with imperial unity. But the position of England in her empire is sure to be greatly modified as time goes on, and the Panama Canal, by bringing these vast andundeveloped continents and isles of the far south-west so much nearer to North America than to the imperial centre, cannot fail to have some influence in this direction. From a commercial point of view, its effect will be to increase the value and importance of those trade preferences which Australia gives the home country in her markets.
Probably no single country in the world, certainly no portion of the British Empire, stands to gain so tremendously from the opening of the canal as British Columbia. England has not yet realized what enormous resources are locked up in this province of the furthest west, which looks out from a hundred harbours to the Pacific and across to the awakening East. The long haul across the continent, the interminable sea-trail round the Horn, twice crossing the equator, kept British Columbia, until lately, outside the thought and interest, not only of Englishmen, but even of the Canadians of the administrative East. Even with the gradual filling of the empty middle and west, geography would have continued to be against British Columbia. But the Panama Canal makes all the difference. This province will no longer look vaguely and dreamily to thewestern sea-spaces and a still half-slumbering Orient. She will suddenly find herself at one end of a sea-route which will shorten her distance from New York by 8,415 miles and from Liverpool by 6,046 miles.
Her timber and other produce will no longer toil wearily in the holds of the "windjammer" down the whole length of Northern, Central, and Southern America. There at Balboa, less than halfway down, is the entrance of the long-desired short-cut to the world-centres of progress and enterprise. The electric thrill of this new circuit will be felt not only along the havens and fjords of the British Columbian coast, but nearly a thousand miles inland. We may say that almost the whole western half of Canada, where the golden wheat frontiers are ever advancing, will face about and henceforth look west instead of east. All the corn and produce of Alberta and Western Saskatchewan will flow, not eastwards as heretofore, but to the Pacific shores, there to be shipped for transitviathe canal to the southern and eastern United States, to the north and east of South America, and to the Old World over the Atlantic. Even theeastern and western fronts of the Dominion will feel the grip of a new link, which may serve important naval and defensive interests for Canada.
The new Pacific outlet will have many advantages over the eastern. For one thing, it is always ice-free, whereas the eastern route is icebound for five months in the year. Even now, I understand, it is appreciably cheaper in winter to send wheat from Calgary to Liverpool by Vancouver than by St. John's, New Brunswick. The freight-rate between British Columbian and United Kingdom ports should be at least halved when the canal is in operation. Of all cities in any clime or hemisphere, Vancouver seems to stand most surely on the threshold of a new and mighty future. She will have "greatness thrust upon her." Her citizens are preparing for the spacious days that are about to set in. A "Great Vancouver" will probably arise from the nine local municipalities, to provide an area and administration worthy of the dawning era. Dr. F. B. Vrooman eloquently voiced the sentiment of the great port and of British Columbia at a recent luncheon of the Progress Club at Vancouver. He said:—