San Francisco and the Nicaragua Canal

by William L. Merry

SAN FRANCISCO
AND
THE NICARAGUA CANAL.

Legation of the United States of America,
San Jose, Costa Rica, Central America,
September 15, 1900.

Hon. George C. Perkins,
United States Senator,
San Francisco, California.

My Dear Sir:

Your valued favor of August 23d requests me to contest the argument of a mutual friend entitled to our personal esteem, in regard to the Nicaragua Canal, to the construction of which he objects. The admission made by him that his argument is not made on very broad lines would indispose me to reply, as the Nicaragua Canal is a national undertaking, not to be considered from a narrow standpoint. But, confident that even his narrow premises will not stand impartial investigation, I shall contest his arguments first from his restricted platform, and subsequently in the brief manner necessitated by the limits of this paper, on a broader and more patriotic basis.

In examining his statement of navigable distances I note some serious errors, consequently you will find herewith a statement thereof for which I can vouch as emanating from the United States Hydrographic office. During my Central American residence I have visited various United States naval ships on this station and have found one naval lieutenant opposed to the canal. On urging him to candidly state his reason for this opposition, he at first stated that his reason was a personal one and like our friend's not made on very broad lines. He finally admitted that he opposed a canal because if we do not have one we shall need two navies, one on each side of the Continent; more naval officers would be necessary and his promotion would ensue much more rapidly! Although at first surprised at this view of the case I thanked him for his friendly candor, and replied that his argument as a personal one was on a sound basis, much more so than the railway magnates who oppose the Canal on the erroneous ground that their overland railways will be injured thereby when I challenge anyone to cite an instance where any canal has not benefited the railways nearest thereto: notably the St. Mary's and Erie Canals in our own country.

Our friend starts with the assumption that the canal is to be constructed for the purpose of making money. This I deny in toto. The United States Government will build a canal on a broader and more beneficent basis, for the political and military safety of our country, for the development of its commerce and industries and to secure a short cheap water route to and from our Pacific Ocean possessions. The Suez Canal which cost ninety-four millions was built to make money and earns 17 to 20 per cent. annually on a toll of about $1.85 per ton, whereas our Government should not charge over one dollar per ton when the Nicaragua Canal is opened and when its traffic increases, probably half a dollar per ton will pay cost of maintenance and leave a small percentage for a sinking fund.

Secondly, he states "the Canal will have no business when first opened." Why not? Will freight continue to prefer ten thousand miles greater distance around Cape Horn or higher Panama Railway Route and overland railway charges? The business of the Canal will come from new interests which it will develop and from other routes which cannot compete with it in rates. Third. He asserts that it will cost no less than $150,000,000.00. How much the Canal will cost depends upon its capacity and its honest construction. Since the Maritime Canal Company figured on $80,084,176.00 for a 28-feet canal, the majority report of the United States Commission has increased the possible cost, including a 20 per cent. contingency to $118,113,790 for a canal two feet deeper and much wider, with duplicate locks of increased size. But experts who have investigated the question have no fear of financial results even at the cost of one hundred and fifty millions.

Fourth. I deny that it will be much more expensive to operate than the Suez Canal, which needs constant dredging to keep it from filling with desert sands, as against the nominal cost of operating modern locks at Nicaragua, proof of which we have in the cost of lockage at the Saint Mary's Canal, which now passes through its locks nearly three times the tonnage that uses the Suez Canal. Neither is there apprehension of difficulty in water control at Nicaragua. Nature has provided against this as any canal engineer who has examined the route can prove. An abundance of fresh water under absolute control is the striking advantage developed at Nicaragua, as against the Suez Canal built through an irreclaimable sand desert, constantly encroaching upon it and necessitating constant dredging. But I may remark that the Suez canal with an expensive staff expends only 8-1/2 per cent. of gross receipts for management while the cheapest and most efficient railway in the United States uses 47 per cent. of gross receipts for operating expenses, and many of our railways between 50 and 60 per cent. This is one of several reasons why a canal can afford to carry cheaper than any railway; it has practically no wear and tear, and no depreciation to contend with.