The Panama Canal: A history and description of the enterprise

CHAPTER XVI.

Chapter 163,614 wordsPublic domain

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.

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.

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.

Distances (in nautical miles) from Liverpool _via_ the Panama and Suez routes to Australia, New Zealand, the Philippine Islands, China, and Japan.

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.

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_.