THE ISTHMIAN CANAL.

Dominion, Volume 6, Issue 1645, 11 January 1913, Page 3

THE ISTHMIAN CANAL.

PANAMA VISITED. SHIPPING AND TOLLS. By G. H. Scales. • (Concluded.) It is freely said in tho States, as well as elsewhere, that tho construction of the Panama Canal has been mainly undertaken owing to strategic reasons, the result of a lesson read, marked, and learned, by tho people' of tho United States through a period of many, weeks' anxiety during .the Spanish-American War, when tho.United States battleship Oregon was ploughing hor solitary way from the waters of tho North Pacific round South America, via Cape Horn, to the North Atlantic She aid it—and tho United States have not forgotten that she; had to do it. Tho '{Arbiter 'of Fate" was, porhap3, good to that great country, inasmuch as Spain chanced to be her. foe. Had it been otherwise, that great fighting ship ;might never havo reached her destination. There Is no doubt a considerable element of truth in what is said as to tho reason for construction, hut the enormously improved position the huge city that is tho chief centre of the largest population of white people on earth, will be placed in with all portion of the torld known as tho "East," should not o lost sight of, although drastic changes in> various directions must .first ensue before tho United States is ablo to reap the full benefit of tho teed sown in ■Panama.. To worry through the multitudinous 'details and ramifications of all that may havo to occur would neither be profitable nor interesting, but one suhject may be worth mentioning, inasmuch as this country has some interest in it, and it has .a most'important bearing on all matters which have been dealt with horo-

Tha U.S. "Mercantile Marine." / . Beyond the vessels employed' on the Great Lakes, and a fairly large fleet of sailing vessels, the United States in re-, lation to trado and population possesses practically no mercantile marine over which .the national, flag floats., The 1 vessel employed in the foreign-going passenger trade could . almost bo /numbered on the'fingers of the hand. Four or five large transaWantic liners, two or three boats between Colon and New York,, ; nnd some nine or ten running out of San Francisco to Honolulu and the East, are, if not all, at anyrnte the main portion, of tho foreign-going, fleet of this vast nation. The . existenco of. obstacles to , tho. Increase of their foreign-oarryinir trade has not been lost sight of by the Government •">f the States' when considering the question', of 'canal trade, and in the Canal Tolls Bill; which is now law, provision is made for allowing foreign-built shins to be registered in tho States, provided they are not omnloyod in the coastal trade, and tho Bill also provides that shipbuilding material shall be 'imported into the' States free of duty. Whilst it is probablethat the total tonnaue flying the United States flag employed in foreign .trade is considerably'',less than half a million, tho International Mercantile Marino (Morgan Combine) oiwn and control'ocean-' going, : steamers, flying the British flng, amounting in the aggregate 1 •to nearly 1,250,000 tons, the;whole of which, may, nt any:.moment, be transferred to the United States Register; Whilst it mav be'claimed'-.that nono'of these suggested possibilities are even assumed to be on the eve of taking place, and that, therefore, tbere' is no; cause for alarm, it'is a recognised fact that tho process of evolution _is slow,--so slow that noonojetepforward is in itself, and during its prooess, discernible, but what may take place may;, be discerned by dim?nosing various causes and their, likely Affects, : after that it is merely a retrospect, and—too lato. Canal Tolls Bill. (At the time the Cnnol Bill received the signature of President Taft, the- United' States was in the throes of. what has been probably the keenest' Presidential election ever .taking plhoo, and whilst the general-ly-expressed opinion, both: in- and. out of. 'the States is that the:election.had a lotto, do TOth .the.: passing and signing of the 'Bill;/ it is impossible to say "how much" The.chief points of> interest in the Bill are:—- ■■■''.-''■"

(a) The' abrogation of the existing navigation laws in'respect of'foreign trade vessels. ''. ■• ,

(b) The exemption from duty of shipbuilding material.,': ~ . ■ / (c) The exemption of coastal vessels from canal'dues..

The first of\these,has been already referred to. ' The third,is of material and very general, interest, perhaps more particularly- so because it is alleged to bo • a breach of tho conditions 'of tho HayPauncefoto Treaty, and. whilst the insertion of the clause exempting coastal vessels has'been very largely condemned within and, almost universally, ' outside tho States, as, being a violation of the Treaty, before it will-bo of any use discussing the merits or demerits of the ques-: Hon, it-may be of some interest to endeavour to see in what way the alleged violation might benefit.tho United States, and at what cost to other nations.

.The first, and possibly the principal, way lies in the fact that at any rate whilst the existing conditions relative to the States' foreign.trade are maintained, the coastwise exemptions will : entail foreign nations providing practically the whole revenue for the upkeep of an undertaking which it will not be denied'was entered upon solely in-the interests of the United' States. . Another way, though by no moans 60 patent, is that cargo from the Atlantic sea-board of. tho States may be transhipped from coastal boats at a port on the Pacific or in any. United States territory for a foreign country, provided that the coastal and foreigngoing steamers aro under the same ownership, thus avoiding the payment of canal dues on, say, a 12,000-ton liner (having 2000 tons of cargo aboard from Yokohama' for New York), by merely incurring tran-shipment-expenses on the,; 2000 tons of cargo at, say, Honolulu or' San Francisco. This procedure would, not bo open to a foreign ship, because her owners could not bo the registered owners of any steamer that could carry the cargo between San Francisco .and New-York, and transhipment into a steamer belonging to another owner is impracticable, because such an act would constitute tho two owners • a "combine" and tho United States law pecludes any "combine" steamers using tho canal. '- \ .

At the southern end of Mexico a railroad, built with British capital and known as the Tehuantepeo Railroad, is. being operated between Puerto Mexico on the Gulf of Mexico and Salina Cruz Dn tho Pacific 'Coast, a distance of 188 miles; about 75,000,000 dollars' worth of goods were conveyed between these two ports during the year 1911, whilst only about 25,000,000 dollars worth was carried by the Panama railroad. Of this total of 100,000,000 dollars, over nine-tenths would, had the Panama Canal been open, have been entitled to'.go through it in vessels freo of canal dues, whilst less than 10 per cent, represented the share of the foreign trade. As indicating tho enormous increase of traffic over, tho Tehuantepeo Railroad, it may be mentioned that in 1907 tho value of tho goods transported was only 11,000,000 dollars, ' that via Panama being about tho same. Whilst it is understood the owners of the Tehuantepeo Railway do not fear tho competition of tho Panama Canal, it can be readily seen what an advantage they would enjoy if steamers employed in the coastal trado of tho United States had to pay canal dues. Tho Tariff Wall. The clause, providing for tho freo importation of snip Wilding material is one, of course, no -other not/on can take feKitimato exooption to, any more, than to tho ohuse hy which foreign-owned tonnago may be registered in the States. It is, nevertheless, tho first stop taken towards a change in the economic conditions of Hie Stabs which, if persisted in, may oventually enable them to take advantage of the great change in the position their Atlautio sea-board will bo placed in with regard to the eastern half of tho world by tho opening of tho Panama Canal.

The Union .Taqfc flies at the mnst-head of about one-half tho total tonnage of the world and'whilst credit lies to tho enterprise of tho British in this fact, it would hardly ho justifiable to claim that such a condition of affairs was inevitable. In tho days of tho snilinff-sllip tho United States people were able to hold their own with tho British, but as steam superseded sail thor gradually, but surely, ceased to bo n faowr In too oooan-wrrylna trado of iht norld, md to-dty it pag„ J* Mifl

they can neither .build ships nor man thorn, and it would not bo unreasonable to assume that tho effect of tho former was tho cause of the latter. What-was the cause of tho former may be a question upon which opinion is divided, hut thero can bo little room for doubt that tho high coiit of construction was tno prime factor, and that this was tho result of tho high ecalo of wages, produced by an equally high protective Tho' navigation laws which precluded the registration of foreign-built ships m the States and the employment of them in the coastal trade, enabled a sufficiency' of tonnage for coastal requirements to bo built, though it undoubtedly has been a factor in compelling tho people of tho States to employ foreign tonnage for their foreign trade. Tho anomalous position that this vast nation is in may bei nioro readily understood when it is stated that under normal conditions tho Government employ foreign-owned colliers for the purposes of supplying the navy with coal. . Whilst the Canal Tolls Bill has mado a breach in the protective wall it will doubtless be some time before any very material advantage can be taken of it. Tinder tho Bill machinery and plates and other necessary material for the construction only of vessels will be allowed in free, no material or machinery for renewal or repairs will bo admitted under the provisions of tho Bill. . Unless delaved by some unfortuitous circumstances tiie opening of the one of the and most expensive undertakings by one of the greatest and wealthiest nations of tho world will shortly be "un fait accompli," and it is only reasonable to assume that those chiefly interested in its.construction will loso no time in taking the necessary steps to turn its existence to their advantage To some extent this may probably be done free of any material loss to any other nation, but. with the wealth and power the people of the United States possess arid the enormous advantages in ocean distances between tho Atlantic sea-board and the East they will enjoy as'the result of the Panama Canal, it surely behoves all the individual parts of the nation likely to be affected to watch carefully over that nation's interests.