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?