CHAPTER XVI._The Panama Canal: A history and description of the enterprise

THE NEW OCEAN HIGHWAYS.

I have already mentioned that England and Europe gained much more from

the opening of the Suez Canal than the United States. Before the Suez

Canal 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

Canal 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 competitive benefit

of 1,444 miles from the opening of the Suez Canal.

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 competitive "pull" of 1,142 miles

over New York to the Suez Canal.

Let us remember, therefore, that the Suez Canal 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 Canal will readjust

the balance which was tilted against the United States when the Suez

Canal 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

Canal 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 canal 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.

[Illustration: 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 Canal 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 Canal than by way of the Panama

route.

8. Nearly all Japan, 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).

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 Canal 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 competitive region of the two canals lies east of

Singapore.

[Illustration: 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

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:--

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 Japan, _via_ Suez and

Panama Canals.

----------+--------------------------+-------------------------+----------

| New York _via_ | Liverpool _via_ |Difference

| Panama Canal. | Suez Canal. |in favour

To +----------------+---------+---------------+---------+of Suez -,

----------+----------------+---------+---------------+---------+----------

| | | Melbourne | 12,889 | +4,138

Sydney | " | 9,811 |Aden, Colombo, | |

| | | Melbourne | 12,235 | +2,424

| Melbourne | | George Sound | 11,142 | +238

| Francisco, and| | and Singapore| 9,701 | -1,847

Hong-kong | " | 11,383 | " | 9,785 | -1,598

Shanghai | " | 10,839 |Aden, Colombo, | |

| | | and Hong-kong| 10,637 | -202

Tientsin | " | 11,248 |Aden, Colombo, | |

| | | and Shanghai | 11,377 | +129

Yokohama |Panama and San | 9,798 | " | |

| Francisco | | | 11,678 | +1,880

----------+----------------+---------+---------------+---------+----------

Distances (in nautical miles) from Liverpool _via_ the Panama and Suez

routes to Australia, New Zealand, the Philippine Islands, China, and

Japan.

----------+---------------+---------+---------------+---------+----------

----------+---------------+---------+---------------+---------+----------

| George Sound | 11,142 | Melbourne | 13,478 | -2,336

| King George | | and Sydney | 12,966 | -1,312

| Adelaide | 11,654 | | |

| King George | | Tahiti | 12,385 | -150

| Melbourne | 12,235 | | |

Wellington|Aden, Colombo, | | " | 11,425 | +1,564

| Melbourne | 12,989 | | |

| | | and Yokohama | 14,122 | -4,421

Hong-kong | " | 9,785 | " | 13,957 | -4,172

Tientsin |Aden, Colombo, | | " | 13,822 | -2,445

| and Shanghai | 11,377 | | |

| | 11,678 | Francisco | 12,372 | -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 deg. north and 40 deg. south and the lines of longitude

120 deg. east and 160 deg. 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 (_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 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

its determination 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 move _via_ Suez.

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

identical with 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.

[Illustration]

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 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 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 any great 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 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 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 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 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 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 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 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 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, _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 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?

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. 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 is _equidistant from New York Bay and

the English Channel_.

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