Taught wisdom by these tactics—against which they had unavailingly employed all the expedients of law and of coöperative competition—the shippers of California appealed to Congress to act wisely lest the Panama Canal as a waterway for all and a regulator of transcontinental freight rates be throttled by the railroads. They pointed out that the roads might in combination maintain one line of ships between New York and San Francisco which would make rates so low that no other line could meet them and live. Doubtless such a line would lose money, but the loss, divided among the conspiring roads, would be but a flea bite to each, and would be more than recouped by the higher rail rates they might charge. In response to this appeal Congress enacted the law denying railroads the right to maintain lines of water carriage on what would be normally competitive routes. The statute though planned primarily for the maintenance of the highest usefulness of the Panama Canal affects other routes, notably Long Island Sound. It is denounced by the railroads and has doubtless checked to some extent American shipbuilding, but it is nevertheless the only apparent weapon against a very real and harmful device in the railroads’ efforts to maintain high rates.
PARK AT DAVID
The question of the tolls to be charged for passage through the Canal is one that has evoked a somewhat acrimonious discussion, the end of which is not yet. About the amount of the toll there was little dispute. It was determined by taking the cost of maintenance of the Canal, which is estimated at about $4,000,000 annually, and the interest on its cost, about $10,000,000 a year, and comparing the total with the amount of tonnage which might reasonably be expected to pass through annually. Prof. Emory R. Johnson, the government expert upon whose figures are based all estimates concerning canal revenues, fixed the probable tonnage of the Canal for the first year at 10,500,000 tons, with an increase at the end of the first decade of operation to 17,000,000, and at the end of the second decade to 27,000,000 tons. The annual expenses of the Canal, including interest, approximates $14,000,000, and Congress has accordingly fixed the tolls at $1.20 a ton for freight and $1.50 per passenger. It is anticipated that these figures will cause a deficit in the first two or three years of operation, but that the growth of commerce through the Canal will speedily make it up.
MAIN STREET, CHORRERA
A PLACID BACK WATER IN CHIRIQUI
In legislating upon the question of tolls Congress opened an international question which has been fiercely debated and which remains a subject of diplomatic negotiation between our State Department and the British Foreign Office. This was done by the section of the law which granted to American-built ships engaged in the coasting trade the right to use the Canal without the payment of any tolls whatsoever. At the time of its appearance in Congress this proposition attracted little attention and evoked no discussion. It seemed to be a perfectly obvious and entirely justifiable employment of the Canal for the encouragement of American shipping. The United States had bought the territory through which the Canal extended and was paying every dollar of the cost of the great work. What could be more natural than that it should concede to American shipping owners, who had borne their share of the taxation which the cost of the Canal necessitated, the right of free passage through it?
The concession seemed the more obvious and proper because the privilege of free passage was limited to vessels in the coastwise trade. Under our navigation laws maritime trade between ports in the United States is confined to ships built in American shipyards. This regulation is clearly intended to confer upon the United States a monopoly of the building of coastwise ships, and the subsequent exemption of coastwise ships from Panama Canal tolls was a further benefaction to this monopoly. As a matter of fact, our coastwise trade was at the moment passing into monopolistic control, and the wisdom of making so prodigious a gift to a monopolistic combination might have justly been questioned. But the strictly business features of the Canal have always been decorated with more or less sentimental declamation about reëstablishing the American flag on the high seas, and it was to contribute to the latter desirable end that the tolls were to be remitted. It seemed to occur to no one that the ships thus favored were either owned by railroad companies and used largely to stifle competition or by a somewhat notorious organizer of trusts whose ambition was to control water transportation from Maine to the Mexico border, and who was checked in the attainment of his aim by a sentence to the Federal penitentiary. It is not only in war time that the flag is waved most enthusiastically by men who only want the bounty that goes with it.