THE PANAMA CANAL.

Dominion, Volume 6, Issue 1738, 1 May 1913, Page 5

THE PANAMA CANAL.

NEW ERA IN INTERNATIONAL TRADE. AMERICAN FORECAST. W hen the first ship passes through the Panama Canal there will bo tho beginning of a new era in international trade. That is the prediction of Mr. Lincoln Hutchinson, a commercial agent of the Department of Commerce and Labour, who, after an exhaustive' study of the subject, has just inado a report to his Department. Tho completion of the canal, Mr. Hutchinson believes, will lead to new trade conditions, and there will be fierce competition among the nations ol tho world for this trade. 'The great rivals will be the United States, Great Britain, and Germany. Discnssmg the position of Great. Britain, he says: "England occupies, in a way, the position of vantage and defence. a century or more that country has been the greatest manufacturer and exporter the world lias known. Generations of experience have given its traders a skill that is hard to match; the sending of their merchandise to all corners of the earth has caused the excellent quality of their goods to 1» widely known and appreciated. England's commanding position_ in commerce and manufactures has led inevitably to control of the carrying trade and tho financial markets of tho world; British ships go everywhere, and international financial transactions aro settled through London. The country's policy of Free Trade, with the absence of a tariff barrier, has made possible tho building up of an enormous 'assembling' and 'improvement' trade, finished 'parts' being gathered from all quarters where they can bo purchased cheapest and 'assembled' into completed articles for export, and paitly-iinMisd manufactures being .imported for the puiviose of reexport after packing or further manufacturing. England's labour is skilled and it is cheap, although this advantage is probably not so great as is sometimes thought, if wages aro measured not by the amount of money paid the labourer but in terms of what the labourer can buy with that monoy." Mr. Hutchinson draws attention to a tendency that has long been apparent to Englishmen themselves. Ho states:

"This very success has in recent years led to something of a disadvantage. Longcontinued control has developed, inevitably, a conservatism of method which is little in aOcord with (ho progressivencss and versatility demanded in modern trade. This unwillingness to change rapidly probably goes further than, any other one thing to explain the relative decline which wo shall notice presently in same lines of English trade." Great Britain's Rivals. Turning to the other rivals, Mr. Hutchinson says: "Germany and the United States represent the attacking forces in this struggle for markets. Both are nowcoincrs in the field, and are trying liro get from England something of the trade tho latter lias held so long, as well as to keep it from getting so large a sharo as formerly of the new business which is developing year by year. Tho United States, it is true, has long been a great exporter, but Amerinn exports have been chiefly of raw materials and foodstuffs, which have been sent to feed tho factorios and 'the labourers of England and Europe. It is only about fifteen years since a point was reached where growing manufactures and population demanded so large a sharo of homo produced raw materials and foodstuffs that tho country was forced to enter seriously in'to the, attempt to market manufactures abroad instead." Mr. Hutchinson explains that the methods employed to market finished products aro different from those required to market) agricultural, and that time and experience are necessary to learn them. Americans should not Ims discouraged because their success thus far lias> been small; rather- they should be encouraged, in Mr. Hutchinson's opinion, as indicating that they aro apt pupils. He points out that tho incentivo to engage in the export trade is ,far less in the United States than in cither Great Britain or Germany. Estimates of tho home trade of tho United States, Mr. Hutchinson says, vary, but the lowest reliable ono puts it at two and ono-half times as great as all tho foreign itrado of all the- nations of the woyld combined, and some estimates put it at twenty times as great. Considering tho position of Germany, he states that "not only has Germany, in common with England, this greater incentive i.o activo pursuit of foreign markets, but partly as a result of it Germany has been forced 'to build up a largo mercantile marine. Whatever advantage may como to a nation through the ownership of the vessels which carry its goods to all parts of the world (it can easily bo exaggerated) must bo credited to Germany as well as to England, as compared with the United States, whose deficiency iu this respect is notorious." Germany, similar to England, Mr. Hutchinson says, lias built up banking, connections throughout tho world which lielp in securing customers. Tho possession by England of Australia and New Zealand, and the preference they give to British goods, is noted as an advantage, while the United States is iu a somewhat similar position iu regard to the Philippines, but Philippine trade is to-day ouly one-tenth as valuablo as tho Australasian, and the difference is likely to Ijcconio greater. Mr. Hutchinson sums up the advantages England possesses in these words;

"On the whole, it is probably safe to Bay that in tho competition, as it exists to-day, England holds a certain considerable advantago over its rivals. In its immense preponderance, financially and commercially, in most of tho markets with which wo are concerned, its long experience as a great trader, tho widespread knowledge of the excellence of British products, 1 and (ho universal reputation oi British merchants for snuaro dealing, England possesses a lino of defences very difficult ior commcrcial enemies to conquer."

Trade With South Amorica. Mr. Hutchinson discusses the trade - ot tho United States and the rest of tho worhl with Ihe countries on the west coast of South America, Bolivia, Chile, Ecuador, and Peru, and the effect the opening of the canal will have on this commerce: "In respect to tho bulk of this trndo (he writes) tho United Stales has held no great advantage in tho matter of distance. Somo goods, it is true, go to tho west coast ports, via Panama, if the saving in time is sufiicient to overcomo tho disadvantage of transhipment across the Isthmus. In Ecuador and the extremo northern part of Peru tile proportion of freight preferring this route is large. It decreases rapidly us we go south to Peru, and becomes practically nil in Chile; and, as the imports of Ecuador aiul Northern l'eru form but an insignificant part ot the -totals stated above, the relative proximity of Panama to New Orleans or New York plays but a small part in determining the sources'of supply of these west countries as a whole. Most'of tho freight from tho United States, as from Europe, chooses tho route through the Straits of Magellan. The distance to theso west coast ports via this l'outo is from New York only 307 miles less, while from New Orleans it is 19 miles more than from Liverpool. The trade of both England and Gernuinv with these countries is declining. That of England has dropped h' o "' to 40.G per cent., and of Germany from 25.7 to 24.1, while the United Stales has increased its share from 11.5 to 19.3 per cent. Of nil tho other countries doing business with the West Coast, only Belgium shows a slight gain. Hie trade of the West Coast is constantly increasing. Between 1897 and 1901 tho average annual importations of Chile were 27.120,000 dollars: between 1907 and 1911 tlioy rose to Kl, 105,000 dollars; in the sanic period Peru increased her imports from 9,300,000 dollars to 18,995,000 dollars. With the opening of the canal, Mr. Hutchinson sees "a profound change in the relations of the competitors with these coast countries. With it tho United Stales will have an all-sea route which will be from 2500 to 3000 miles shorter tlian routes from Europe. If the canal toll does not'exceed 1 dollar per net registered ton, the saving in freights and the ■expediting of commercial ■ transactions will be so great that, practically all American goods going to Uicse countries will probably clioii'-:' the Panama and abandon the Magellan route. liven willi a toll of 1.'.!5 dollars per lon, oul.v the trade willi southern Chile, from Vnlpnrniso southward. will bra likelv to continuo to ueo

the Magellan route. The volume of trade will unquestionably increase rapidly. and the growth of the American share o'f it will be even more marked. It cannot Ikj more than a few years before it will have passed both England's and Germany's." In closing his report, Mr. Hutchinson says:—"The general conclusion whichmust be drawn from this analysis of American and European exports to the countries which will be affected by the opening of the Panama Canal is that the position of the United States is a peculiarly strong one. Even without the canal, without a Mercantile Marino, without extensile direct banking connections, and in spito of inexperience, on tho whole, as an exporter of manufactured goods, America is move Hum holding its own in most of the groups of countries considered. In Central America, Colombia, Mexico, and the Philippine 'Islands the ■ulvantages are such that the canal will merely hasten and malic more complete a condition ol' commercial supremacy which is already an established fact. • hi Bolivia, Chile, Ecuador, l'eru, Australia, New Zealand, japan, and, to a certain extent, in China, the canal will do much to remove a handicap of distance under which American ports on the Atlantic have laboured in competition with Liverpool or Hamburg. In the most unfavourable of these markets, in spite of the handicap, tho United States lias in tho last fifteen years nearly held its own, and in several of them its position has been considerably strengthened. If when the caml is opened American merchants and manufacturers are roady to seize tho opportunity presented to them, wo may expect to see a great expansion of American trade in the directions indicated."