WHAT PANAMA MEANS
I
It now becomes apparent why British Columbia was described as the
province where East meets West and works out Destiny.
On the other side of the Pacific lies Japan come to the manhood of
nationality, demanding recognition as the equal of the white race and
room to expand. Behind Japan lies China, an awakened giant, potent for
good or ill, of half a billion people, whose commerce under a few years
of modern science and mechanics is bound to equal the commerce of half
Europe. It may in a decade bring to the ports that have hitherto been
the back doors of America an aggregate yearly traffic exceeding the
four billion dollars' worth that yearly leave Atlantic ports for
Europe. Canada is now the shortest route to "Cathay"; the railroads
across Canada offer shorter route from China to Europe than Suez or
Horn, by from two to ten thousand miles. Then there is India, another
awakened giant, potent for good or ill, of three hundred million
people--two hundred to the square mile--clamoring for recognition as
British subjects, clamoring for room to expand.
The question is sometimes asked by Americans: Why does Canada concern
herself about foreign problems and dangers? Why does she not rest
secure under the aegis of the Monroe Doctrine, which forever forfends
foreign conquest of America by an alien power? And Canada
answers--because the Monroe Doctrine is not worth the ink in which it
was penned without the bayonet to enforce the pen. Belgium's
neutrality did not protect her. The peace that is not a victory is
only an armed truce--a let-live by some other nation's permission.
Without power to enforce the Monroe Doctrine, that doctrine is to
Canada but a tissue-paper rampart.
To add to the complication involving British Columbia comes the opening
of Panama, turning the Pacific Ocean into a parade ground for the
world's fleets both merchantmen and war. Commercially Panama simply
turns British Columbia into a front door, instead of a back door. What
does this mean?
The Atlantic has hitherto been the Dominion's front door, and the
Canadian section of the Atlantic has four harbors of first rank with an
aggregate population of nearly a million. Canada has, besides, three
lake harbors subsidiary to ocean traffic with an aggregate population
of half a million. One may infer when the Pacific becomes a front
door, that Vancouver and Victoria and Port Mann and Westminster and
Prince Rupert will soon have an aggregate population of a million.
Behind the Atlantic ports, supplied by them with traffic, supplying
them with traffic, is a provincial population of five millions. Behind
the Pacific ports in British Columbia and Alberta, one would be
justified in expecting to find--Strathcona said a hundred million
people, but for this generation put it at twelve million.
Through the Atlantic ports annually come two hundred and fifty thousand
or more immigrants, not counting the one hundred and fifty thousand
from the United States. What if something happened to bring as many to
the Pacific, as well as those now coming to the Atlantic?
Then a century of peace has a sleeping-powder effect on a nation. We
forget that the guns of four nations once boomed and roared round old
Quebec and down Bay of Fundy way. If the Pacific becomes a front door,
the guns of the great nations may yet boom there. In fact, if Canada
had not been a part of Greater Britain four or five years ago when the
trouble arose over Japanese immigration, guns might easily have boomed
round Vancouver long before the Pacific Coast had become a front door.
Front door status entails bolt and strong bar. Front door means navy.
Navy means shipbuilding plants, and the shipyards of the United States
on the Atlantic support fifty thousand skilled artisans, or what would
make a city of two hundred and fifty thousand people. The shipyards of
England support a population equal to Boston. In the United States
those shipyards exist almost wholly by virtue of government contracts
to build war vessels, and in Great Britain largely by virtue of
admiralty subsidies. Though they also do an enormous amount of work on
river and coastal steamers, the manager of the largest and oldest plant
in the United States told me personally that with the high price of
labor and material in America, his shipyard could not last a day
without government contracts for war vessels, torpedoes, dredges, etc.
Front door on the Pacific means that to Canada, and it means more; for
Canada belongs to an empire that has vaster dominions to defend in Asia
than in Europe.
But isn't all this stretching one's fancy a bit too far in the future?
How far is _too_ far? The Panama Canal is open for traffic, and there
is not a harbor of first rank in the United States, Atlantic, Pacific,
or Gulf of Mexico, that does not bank on, that is not spending millions
on, the expectation of Panama changing the Pacific from a back into a
front door. Either these harbors are all wrong or Canada is sound
asleep as a tombstone to the progress round her. Boston has spent nine
million dollars acquiring terminals and water-front, and is now
guaranteeing the bonds of steamships to the extent of twenty-five
million dollars. New York has built five new piers to take care of the
commerce coming--and the Federal government has spent fifty million
dollars improving the approaches to her harbor. Baltimore is so sure
that Panama is going to revive shore-front interests that she has
reclaimed almost two hundred acres of swamp land for manufacturing
sites, which she is leasing out at merely nominal figures to bring the
manufacturers from inland down to the sea. In both Baltimore and
Philadelphia, railroads are spending millions increasing their trackage
for the traffic they expect to feed down to the coast cities for Panama
steamers.
Among the Gulf ports, New Orleans has spent fifteen million dollars
putting in a belt line system of railroads and docks with steel and
cement sheds, purely to keep her harbor front free of corporate
control. This is not out of enmity to corporations, but because the
prosperity of a harbor depends on all steamers and all railroads
receiving the same treatment. This is not possible under private and
rival control. Yet more, New Orleans is putting on a line of her own
civic steamships to South America. Up at St. Louis and Kansas City,
they are putting on civic barge lines down the rivers to ocean front.
At Los Angeles twenty million dollars have been spent in making a
harbor out of a duck pond. San Francisco and Oakland have improved
docks to the extent of twenty-four million dollars. Seattle attests
her expectation of what Panama is going to do on the Pacific by
securing the expenditure of fifteen million dollars on her harbor for
her own traffic and all the traffic she can capture from Canada; and it
may be said here that the Grand Trunk Pacific of Canada--a national
road on which the Dominion is spending hundreds of millions--has the
finest docks in Seattle. Portland has gone farther than any of the
Pacific ports. Portland is Scotch--full of descendants of the old
Scotch folk who used to serve in the Hudson's Bay Company. If there is
a chance to capture world traffic, Portland is out with both hands and
both feet after that flying opportunity. Portland has not only
improved the entrance to the Columbia to the extent of fifteen million
dollars--this was done by the Federal government--but she has had a
canal cut past bad water in the Columbia, costing nearly seven
millions, and has put on the big river a system of civic boats to bring
the wheat down from an inland empire. There is no aim to make this
river line a dividend payer. The sole object is to bring the Pacific
grain trade to Portland. Portland is already a great wheat port. Will
she get a share of Canada's traffic in bond to Liverpool? Candidly,
she hopes to. How? By having Canadian barges bring Alberta wheat down
the Columbia.
II
And now, what is Canada doing? Canada is doing absolutely nothing.
Canada is saying, with a little note of belligerency in her
voice--What's Panama to us? Either every harbor in the United States
is Panama fool-mad; either every harbor in the United States is
spending money like water on fool-schemes; or Canada needs a wakening
blast of dynamite 'neath her dreams. If Panama brings the traffic
which every harbor in the United States expects, then Canada's share of
that traffic will go through Seattle and Portland. Either Canada must
wake up or miss the chance that is coming.
Two American transcontinentals have not come wooing traffic in
Vancouver for nothing. The Canadian Pacific is not double tracking its
roadbed to the Coast for nothing. The Grand Trunk has not bought
terminals in Seattle for nothing. Yet, having jockeyed for traffic in
Vancouver, the two American roads have recently evinced a cooling.
They are playing up interests In Seattle and marking time in Vancouver.
Grand Trunk terminals in Seattle don't help Vancouver; but if Canada
doesn't want the traffic from the world commerce of the seas, then
Portland and Seattle do.
One recalls how a person feels who is wakened a bit sooner than suits
his slumbers. He passes some crusty comments and asks some criss-cross
questions. The same with Canada regarding Panama. What's Panama to
us? How in the world can a cut through a neck of swamp and hills three
thousand miles from the back of beyond, have the slightest effect on
commerce in Canada? And if it has, won't it be to hurt our railroads?
And if Panama does divert traffic from land to water, won't that divert
a share of shipping away from Montreal and St. John and Halifax?
There is no use ever arguing with a cross questioner. Mr. Hill once
said there was no use ever going into frenzies about the rights of the
public. The public would just get exactly what was coming to it. If
it worked for prosperity, it would get it. If it were not sufficiently
alert to see opportunity, it certainly would not be sufficiently alert
to grasp opportunity after you had pointed it out. Your opinion or
mine does not count with the churlish questioner. You have to hurl
facts back so hard they waken your questioner up. Here are the facts.
How can Panama turn the Pacific Coast into a front door instead of a
back door?
Almost every big steamship line of England and Germany, also a great
many of the small lines from Norway and Belgium and Holland and Spain
and Italy, have announced their intention of putting on ships to go by
way of Panama to the Orient and to Pacific Coast ports. Three of those
lines have explicitly said that they would call at Pacific ports in
Canada if there were traffic and terminals for them.
The steamers coming from the Mediterranean have announced their
intention of charging for steerage only five to ten dollars more to the
Pacific Coast ports than to the Atlantic ports. It costs the immigrant
from sixteen to twenty-five dollars to go west from Atlantic ports. It
can hardly be doubted that a great many immigrants will save fare by
booking directly to Pacific ports. Of South-of-Europe immigrants,
almost seven hundred thousand a year come to United States Atlantic
ports, of whom two-thirds remain, one-third, owing to the rigor of
winter, going back. Of those who will come to Pacific ports, they will
not be driven back by the rigor of winter. They will find a region
almost similar in climate to their own land and very similar in
agriculture. Hitherto Canada has not made a bid for South-of-Europe
immigrants, but, with Panama open, they will come whether Canada bids
for them or not. They are the quickest, cheapest and most competent
fruit farmers in the world. They are also the most turbulent of all
European immigrants. We may like or dislike them. They are coming to
Canada's shores when the war is over, coming in leaderless hordes.
The East has awakened and is moving west. The West has always been
awake and is moving east. The East is sending her teas and her silks
to the West, and the West is sending her wheat and her lumber to the
East. When these two currents meet, what? If two currents meet and do
not blend, what? Exactly what has happened before in the world,
impact, collision, struggle; and the fittest survives. This was the
real reason for the building of the Panama Canal--to give the American
navy command of her own shores on the Pacific. Now that Panama is
built it means the war fleets of the whole world on the Pacific.
Canada can no more grow into a strong nation and keep out of the world
conclave assembling on the Pacific than a boy can grow into strong
manhood and keep out of the rough and tumble of life, or a girl grow to
efficient womanhood and play the hothouse parasite all her life.
Fleets, naval stations, coaling stations, dry docks, whole cities
supported by shipyards are bound to grow on the Pacific just as surely
as the years come and go. The growth has begun already. Nothing worth
having can be left undefended and be kept. Poor old China tried that.
So did Korea. We may talk ourselves black in the face over peace and
pass up enough platitudes to pave the way to a universal brotherhood of
heaven on earth, but in the past good intentions and platitudes have
paved the way to an altogether different sort of place. In the whole
world history of the past (however much we might wish this earth a
different place) the nation most secure against war has been the nation
most prepared against war. Canada can't dodge that fact. With Panama
open come the armaments of the world to the Pacific!
How about a merchant marine for Canada? This question was important to
the maritime provinces, but the maritime provinces are well served by
British liners. On the Pacific seventy-two per cent. of the carrying
trade is already controlled by Japan. Now Canada can buy her ships in
the cheapest market, Norway or England.
She can herself build ships as cheaply as any country in the world.
She can operate her ships as cheaply as any country in the world.
She has no restrictions as to the manning of her crews and, as far as I
know, has never had a case of abuse arising from this freedom which her
laws permit.
Except for the St. Lawrence after October, there is no foreign
discrimination in the insurance of her ships.
Canada can go into the race for world-carrying trade unhampered.
She has yet another advantage. With only two or three exceptions--a
fishing bounty, one or two mail contracts--the United States has not
given and may never give government aid to ships. The Canadian
government does and does wisely! Ocean traffic may be as requisite to
prosperity as rail traffic, and you can't give land subsidies to the
sea.
III
It is when one comes to consider Panama's influence on rail traffic
that it becomes apparent the Canal may divert half the Dominion's
traffic to seaboard by Pacific routes. Why do you suppose that the big
grain companies of the Northwest want to reverse their former policy?
Formerly the biggest elevators were built east, the medium-sized at the
big gathering centers, the smaller scattered out along the line
anywhere convenient to the grower. To-day, as far as Alberta is
concerned, the biggest elevators are going up farthest west. Why? Why
do you suppose that the big traction companies of Birmingham, Alabama,
the big wire companies of Cleveland and Pittsburgh are looking over the
Canadian West for sites? One Birmingham firm has just bought the site
for a big plant in Calgary. Why do you suppose that the Canadian
Pacific Railway is building big repair shops at Coquitlam, and the
Canada Northern at Port Mann? Why are both these roads also stationing
big repair plants at inland points, one at Calgary, the other supposed
to be for Kamloops? It is not to help along the townsite lot booms in
these places. No one deprecates these town lots running out the area
of Chicago more than the railroads do. "Wild oats" hurt trade more
than they advertise the legitimate opportunities of a new country.
Take a look at them!
From Fort William to Alberta is one thousand two hundred miles, to
Calgary one thousand two hundred eighty, to Edmonton one thousand four
hundred fifty-one miles. From Alberta to Vancouver is slightly over
six hundred miles. Port William navigation is open only half the year.
The Pacific harbors are open all the year. Manitoba and Saskatchewan
wheat may be rushed forward in time for shipment before the close of
navigation. Because Alberta is farther west and must wait longest for
cars, very little of her wheat can be rushed forward in time; so
Alberta wheat must go on down to St. John, another one thousand two
hundred miles. Look at the figures--six hundred and fifty miles from
Alberta to the seaboard at Vancouver, two thousand four hundred miles
from Alberta to sea-board at St. John! In other words, while a car is
making one trip to St. John and back with wheat, it could make four
trips to Vancouver.
One year the crop so far exceeded the rolling stock of all the
railroads in America that millions of dollars were lost in depreciation
and waste waiting for shipment. This state of affairs does not apply
to wheat alone nor to Canada alone. It was the condition with every
crop in every section of America. I saw twenty-nine miles of cotton
standing along the tracks of a southern port exposed to wet weather
because the southern railroads had neither steamers nor cars to rush
shipments forward for Liverpool. In New York State and the belt of
middle west states thousands of barrels of fruit lay and rotted on the
ground because the railroads could not handle it. In an orchard near
my own I saw two thousand barrels lie and go to waste because there
were no shipping facilities cheap enough to make it worth while to send
the apples to market. Hill has said that if all the fruit orchards set
out in western states come to maturity, it will require twenty times
the rolling stock that exists today to ship the fruit out in time to
reach the market in a salable condition. The same of wheat, especially
in the West, where wheat is raised in quantities too great for any
individual granary. A few years ago, when the northwestern states had
their banner crop, piles of wheat the size of a miniature town lay
exposed to weather for weeks on Washington and Idaho and Montana
railroads because the railroads had not sufficient cars to haul it away.
The same thing almost happened in Canada one fall, though conditions
were aggravated by the coal strike.
Now, then, where does Panama come into this story? What if the
railroads did not carry the crop two thousand four hundred miles to
seaboard in order to ship forward to Liverpool? What if they carried
some of the big crops only six hundred miles west to sea-board on the
Pacific? They would have four times as many cars available to handle
the crop, or they could make just four times as many trips to Vancouver
with the same cars as to the Atlantic seaboard after the close of
navigation in the East. It is apparent now why the Pacific ports have
gone mad over the possibilities from Panama and are preparing for
enormous traffic. Of course there are features of this diversion of
traffic to new channels which the lay mind will miss and only the
traffic specialist appreciate. For instance, there is the question of
grade over the mountains. The Canadian Pacific Railroad meets this
difficulty with its long tunnel through Mount Stephen. The Grand Trunk
declares that it has the lowest mountain grade of all the
transcontinentals. The Great Northern uses electric power for its
tunnels, and Los Angeles will tell you how its new diagonal San Pedro
road up through Nevada puts it in touch with the inland empire of the
mountain states by running up parallel with the mountains and not
crossing a divide at all.
IV
Take a look at the subject from another angle! At the present rate of
homesteading in the West, within twenty years the three prairie
provinces will be producing seven to nine hundred million bushels of
wheat a year. Possibly they will not do so well as that, but suppose
they do; the three grain provinces of Canada will be producing as much
as the wheat produced in all the United States. Now, the United States
to take care of its crop has practically seven transcontinentals and a
host of allied trunk lines like the Illinois Central, the New York
Central and the Pennsylvania; but when a big crop comes, the United
States roads are paralyzed from a shortage of cars. Canada has only
three big transcontinentals and no big trunk lines to take care of a
crop that may be as large as the whole United States crop. Panama
promises, not a menace, but the one possible avenue of relief to the
railroads.
Of course eastern cities may fight a diversion of traffic to the
seaboard of the West, but they can not stop it. Portland is already
one of the big grain shippers and will bid for a share of Canada's
west-bound grain, if Vancouver and Prince Rupert do not prepare for the
new conditions.
Not only terminals but elevators must be prepared on the Pacific.
Terminals mean more than railroad company tracks. They mean city-owned
trackage, so that the tramp steamer seeking cargo at cheap rates shall
have every inducement and facility for getting cargo. They mean free
sites for manufacturers, not sky-rocket boom prices that keep new
industries out of a city. Elevators and terminals have been announced
time and again for Vancouver, but up to the present the announcements
have not materialized. Regular grain steamers must be put on, steamers
good for cargo of three hundred thousand and four hundred thousand
bushels, as on the lakes, and with devices for such swift handling as
have made Montreal one of the best grain ports in the world, in spite
of high insurance rates and half-season. As long as there are no
elevators at Vancouver, grain must be sacked. Sacking costs from five
to six cents extra a bushel, and more extra in handling. The remedy
for this is for the Pacific ports to build elevators; and even when
they haven't elevators, the saving in rates over and above the extra
sacking has already been from eight to fourteen cents a bushel on grain
billed for Liverpool via the one hundred ninety miles of rail over
Tehuantepec, or via the Panama railroad, where bulk need not be broken
twice.
An objection is that in the humid Pacific Coast winter climate there is
danger of grain heating. This has been overcome at Portland, and
against this must be set the incalculable advantage that Pacific Coast
ports are open all the year round. One year, of 65,000,000 bushels of
grain from the prairie provinces that passed over the Great Lakes
forty-three per cent. went out by way of Buffalo to American ports.
Why? Because the glut was so great, the facilities so inadequate for
the enormous crop, the insurance so high, that the grain could not be
rushed seaward fast enough before close of navigation. Through
Vancouver during this very period there passed only 750,000 bushels of
wheat. Why not more? No facilities.
"We could have shipped millions of bushels of wheat to Liverpool by way
of Vancouver," said the head of one of the largest grain companies in
Calgary, "but there were simply no facilities to take care of it. On
16,000 bushels, which we shipped by way of Vancouver and Tehuantepec,
we saved eight cents a bushel, as against Atlantic rates. You know how
much handling the Tehuantepec route requires. Well, you can figure
what we should save the farmer when Panama opens and the cargo never
breaks bulk to Liverpool from our shore."
Rates, not heating nor sacking, are the real cloud in the Canadian mind
regarding Panama; and if Canada continues to stand twiddling her hands
over rates when she should be hustling preparations, the inevitable
will happen--Portland, which sends millions of bushels of her own wheat
to Liverpool, is ready to take care of Canada's traffic; so is Seattle.
There is nothing these cities hope more than that Canada will continue
to shun the question of rates.
V
Let us look at this question of rates!
Ordinarily the rate on wheat from Chicago to New York is about ten to
twelve cents a bushel; from New York to Liverpool about three to seven
cents. That is, for one thousand miles (roughly) the rate by rail is
ten cents. For three thousand miles the rate by water is three cents.
That is, one cent buys the shipper one hundred miles by rail. One cent
buys him one thousand miles by water. Get out a chart and figure out
for yourself what the saving means on wheat via Panama to Liverpool on
a crop--we'll say--of one hundred million bushels, Alberta's future
share alone, leaving Saskatchewan and Manitoba crops to continue going
to Liverpool by Fort William and Montreal. You can figure the distance
to Liverpool via Panama twice or even three times as far as via
Atlantic ports, long as water rates are to rail, as one to ten, the
saving on a one-hundred-million-bushel crop for a single year is enough
to buy terminals, build elevators and run civic ships as Boston and New
Orleans and St. Louis and Kansas City and Portland are doing. Via
Tehuantepec the saving was eight cents a bushel. At that rate your
saving in a year would be eight million dollars for Alberta wheat
alone, not counting dairy products, which are bound to become larger
each year, and coal, which will yet bring the same wealth to Alberta as
to Pennsylvania, and lumber, on which the saving is as one to four.
Please note one point! It is a point usually ignored in all
comparisons of water and rail rates. While sea and lake are the
cheapest method of transportation in the world, canals (unless some
other nation builds them as the United States built Panama) are not so
cheap as sea and lake. When you add to the cost of canals, the
interest on cost, the maintenance, and charge that up against
traffic--for it doesn't matter, though the government does maintain
canals; you pay the bill in the end--canal rates come higher than rail
rates. But in Canada's use of Panama, Canada is not paying for the
building of the canal; and the Lord pays the upkeep of the canal of the
sea.
Take this question of Vancouver rates, from which Canada is standing
back so inertly! Take the latest rates issued! These are subject to
change and correction, but that does not affect final conclusions. It
costs Manitoba and Saskatchewan from twelve to nineteen cents a hundred
weight to send grain to Fort William, then during open navigation from
four to five cents to reach seaboard at Montreal. It costs Alberta,
being farther west, twenty-five cents to reach Fort William; but, as a
matter of fact, her wheat can seldom reach Fort William before the
close of navigation; so she must pay twenty-five cents more to send her
wheat on down to St. John, and five to six cents from St. John to
Liverpool, or in all fifty-five cents. The Alberta rate is twenty-two
cents plus a fraction to Vancouver, or forty-five cents to Liverpool.
Now, Alberta wants to know: Why is she charged twenty-two and a
fraction cents for six hundred fifty miles west, and only twenty-five
cents for one thousand two hundred miles east?
There is the nub and the rub and the hub of the whole thing, and the
discrimination bears just as vitally on fruit and dairy products and
lumber and coal as on wheat. It is a question that has to be settled
in Canada within the next few years, or her west-bound traffic will
build up Portland and Seattle instead of Vancouver and Prince Rupert.
The whole problem of the effect of Panama is so new in Canada that data
do not exist to make comparisons; but details have been carefully
gathered by American ports, and the cases are a close enough parallel
to illustrate what Panama means in the world of traffic to-day.
Freight on a car of Washington lumber to New York is from three hundred
ninety-five to four hundred eleven dollars; by water, the freight is
from one hundred to one hundred and seventy-five dollars. To bring a
car of Washington fir diagonally across the continent to Norfolk costs
eighty-five cents a hundred weight. To bring it round by Panama costs
twenty cents, or to ship the very same cargo from Norfolk to
England--which many southern dealers are now doing--costs twelve to
fifteen cents, including the handling at both ends. Dry goods from New
York to Texas by water cost eighty-nine cents; by rail, one dollar and
eighty-two cents. Oranges by rail from the Pacific to the Atlantic
cost twenty-three dollars a ton; by water before the canal opened,
breaking bulk twice, ten dollars, and through the canal, when bulk is
not broken, will cost only five to eight dollars. On oranges alone
California will save twenty million dollars a year shipping via Panama.
The Balfour-Guthrie firm of Antwerp can ship a ton of groceries from
Europe to Los Angeles round the Horn for the same amount the Southern
Pacific ships that ton from Los Angeles to San Francisco--namely, six
dollars plus. The rail rate on salt in Washington is eight dollars
seventy cents for eighty-eight miles; the river rate one dollar fifty
cents. I could give instances in the South where cotton by rail costs
two dollars a bale; by water, twenty-five cents.
If Panama works this great reduction, this revolution, in freights,
will that not hurt the railroads? Ask the railroads whether they make
their profit on the long or the short haul. Ask them whether high
rates and sparse population or dense population and low rates pay the
better dividends! Compare New York Central traffic receipts and
Southern Pacific on the average per mile! Now ships that are to use
Panama plan pouring twenty million people into the Pacific Coast in
twenty years.
Will Canada share the coming tide of benefits? Only two things can
prevent her: first, lack of preparation--too much "hot air" and not
enough hustle; too much after-dinner aviating in the empyrean and not
enough muddy mess out on the harbor dredge with "sand hogs" and "shovel
stiffs"; then, second, lack of adequate labor to prepare. After-dinner
speeches don't make the dirt fly. Canada wants fewer platitudes and a
great deal more of good old-fashioned hard hoeing.