In the case of a commercial company undertaking such a work as the Panama Canal, the charge for compounded interest increases as the unremunerative years advance at an appalling rate, which would surprise anyone not versed in the cumulative capability of figures which increase in "geometrical progression."
Fortunately it is not necessary for the United States to reckon the cost of the Canal in this way, and the Government have been in a peculiarly advantageous position for financing the Canal.
The bonds bear interest at 2 per cent., and in December, 1907, were slightly above 103. As all American banks have to deposit gold with the United States Treasury it evidently pays to take up and deposit these bonds, which reckon as gold, receiving 2 per cent. interest.
Moreover, the small amount of securities with Government guarantee in America renders such issues convenient, so that the Government can raise money more cheaply than with us, although for industrial purposes the rates may be higher.
At the present time the payments of Government pensions in connection with the Civil War are yearly diminishing at a rapid rate. Finally, there has been in the Treasury a large surplus of cash. Thus from one cause and another the expenditure already incurred has not yet been felt.
As I write the last lines of the account in which I have endeavoured to state the salient facts relating to a great undertaking at only moderate length, I recall our departure from Colon harbour on the R.M.S. Orinoco homeward bound. I confess that after the Canal Zone most places seem only half alive, and I long to be back where one can watch human activities so great and so intelligent, while the spirit is soothed by the balmy air which blows warm and fragrant from the tropical forest.
May the arduous labours of the Isthmian Canal Commission be crowned with success!