East of Suez / Ceylon, India, China and Japan

by Frederic Courtland Penfield

The reason for the startling disparity in the statistics of trade intercourse with our adjoining neighbors, Canada and Mexico, and oversea South America, is obviously the lack of transportation facilities under the American flag; and the adage that "trade follows the flag" has earned more significance than attaches to a mere figure of speech. We pay South America yearly, let it be known, about $120,000,000 for coffee, wool, hides and other raw products; and the major share of this money is expended in Europe for the necessities and luxuries of life. This is inequitable, to say the least, and should be remedied. Uncle Sam must look to the Orient, as well, and seek to make China his best customer. Every nation in Europe whose foreign trade is worth considering exploits foreign countries in the thorough manner of a great commercial house—getting business by the most productive, not the easiest, methods. In frequent magazine articles I have insisted that the isthmian canal, "destined to make the United States the trade arbiter of the world," could never be expected to "pay" directly. The artificial waterway is to cost a vast deal of money; with the payments to the French company and to the republic of Panama, added to the sum necessary to the completion of the work. Uncle Sam's expenditure cannot be less than $225,000,000! It will probably be more. A private incorporation embarked in the enterprise would hold that the investment was entitled to five per cent. interest, say, and in time be funded. The money of the nation, embarked in a project distinctly commercial, merits a reasonable rate of income or benefit—four per cent. certainly. To operate the canal with the expensive up-keep essential to a region of torrential rains, cannot be less than $4,000,000 annually; if the Chagres River refuses to be confined in bounds, the cost will be greater. The items of yearly expense figured here total $13,000,000—a sum to be regarded as the very minimum of the cost of maintaining and operating the canal.

CARGO STEAMER IN THE CANAL AT KILOMETER 133

Optimistic students of ocean transportation statistics say the canal will draw 10,000,000 tons of shipping a year; others, conservative of opinion, say half this volume. Taking the mean of these estimates, I hazard the statement that six years after the canal is opened, the tonnage will be 7,500,000. The Suez Canal was operated more than thirty years before its business aggregated 10,000,000 tons; and to attract this volume, several reductions in tolls were necessary. The American government cannot properly levy a heavier tribute at Panama than is demanded at Suez, for the fact is, our canal will not be as essential as that uniting Europe and the East. A like tariff would produce for Uncle Sam, on the hypothesis of a business of 7,500,000 tons, only $12,750,000 a year; a higher tariff would probably produce less. And here is an unpalatable truthlet—Panama's earnings from passengers can never be considerable, compared with that constant ebbing and flowing of humanity between the home countries of Europe and their dependencies in Asia, Africa and Australasia. As a highway of travel, Panama can never have a quarter of the income from passengers as that yearly accruing to the Suez company. It may be unpopular to here record the opinion that the direct increment of the American canal cannot for many years yield

what in a commercial enterprise could be called a profit.

The way to compel the canal to pay indirectly is to make it incidental to the development of a mighty commercial marine, that will carry American products to present foreign markets, and to new markets, under the Stars and Stripes. This accomplished, the United States will indisputably be the trade arbiter of the universe. With operations under way on the isthmus, is not the time propitious for popular discussion throughout the nation, and in official Washington, how best to create the commerce that will make the Panama Canal a success from its opening?

We have populated the country, developed resources of field, forest and mine, and devised matchless ways of translating natural products into finished articles appealing to all mankind. Now, let us cease sending these products of soil and workshop to market in British ships; let us forward them in vessels constructed in American shipyards, thereby making the transaction independently American. Already have we produced ocean carriers equal to the best; while American war-ships, native from keel to topmast truck, are the envy of the world.

Not for a decade has a commercial vessel under the American flag passed the Suez Canal, I have stated. But the time was when Uncle Sam's ensign was the emblem oftenest seen in foreign harbors.

In but one department of natural growth is the United States backward—shipping, in its broad and commercial acceptance. To promote it should now be the plan of both political parties.