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SPEECH

OF

HION. GEO. C. PERKINS.

The Senate, as in Committee of the Whole, had under consideration the bill (H. R. 14385) to amend section 5 of an act to provide for the opening, maintenance, protection, and operation of the Panama Canal and the sanitation of the Canal Zone, approved August 24, 1912.

Mr. PERKINS. Mr. President, as a member of the Interoceanic Canals Committee it seems proper that I should state the reasons as to why I can not consistently favor the passage of the pending bill for the repeal of the tolls on coastwise vessels passing through the Panama Canal.

I supported the bill which is now a law on the statute book providing for free tolls for ships of American register engaged in coastwise trade.

I also voted for the Hay-Pauncefote treaty, believing then as now that it could not in any way interfere with our domestic commerce or barter away any rights which have been imposed for more than a hundred years.

I have attended the hearings of this committee and patiently listened to the arguments of those advocating the repeal of a law which I believe is in the interest of American shipbuilding and American seamen, and up to the present time I fail to be convinced that the action of Congress in prohibiting the granting of free tolls to vessels engaged in domestic trade would be a good economic policy, and I know of no reason yet advanced which shows that we are morally or legally called upon to repeal a law which was duly enacted after a free discussion by Congress.

It seems that we have forgotten a well-known maxim to which we have paid reverence for a long time, "be sure you are right and then go ahead" and have adopted a new creed, go ahead, no matter whether you are right or wrong."

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From a nautical standpoint this would mean a very disastrous result to navigators, and the majority of ships now engaged in coastwise trade would be lying upon the rocks of the lee shore.

No prudent navigator would think of adopting such a new regulation, for it is an elementary law that the cautious mariner keeps well in mind the three L's-that is, a sharp lookout, attention to the log showing the distance run, and the lead line showing the depth of the water under the vessel's keel.

I know of no reason why our country should depart from such a prudent course and enter upon an uncharted sea, in which are sunken rocks, thereby escaping the Scylla only to fall prey to Charybdis.

COMMERCE OF THE CANAL.

The trade in the Panama Canal will fall into three grand divisions, each sharply defined by its nature and by principles 49046-13560

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of regulation which are well understood and of general appli cation among maritime nations.

It seems to me that an examination of these three divisions of trade will contribute to a clearer understanding of the duty of the Senate in the situation which is presented by the pending bill.

1. With the completion of the canal a new and better trade route will be opened between the nations of Europe and the nations of the west coast of North and South America; between the nations of Europe and Japan and part of the coasts of China, at least as far south as Shanghai; and particularly for Great Britain with the west coast of British North America, with New Zealand, and with British possessions scattered throughout the Pacific Ocean.

2. We confidently expect as a result of the canal a large increase in the trade between the Atlantic ports of the United States with ports of the west coast of Central and South America, of Asia, and with the islands of the Pacific, and also increased trade between our ports on the Pacific and all the countries of the Old World, with possibilities of commerce between these ports and the eastern coast of South America.

3. We are assured that the interchange of commodities between our own Pacific Coast States, our Gulf States, and the States of the Atlantic, and of the States which do not lie directly on the seaboard, will receive a great impetus from the reduction in rates of transportation made possible by the substitution of water routes for all-rail routes and the greater economies of water transportation.

COMMERCIAL ADVANTAGES TO FOREIGN NATIONS.

With the benefits to commerce which will accrue from the increased facilities for transportation between foreign nations we have no direct commercial concern.

We can contemplate with satisfaction the growth of trade between Chile and Peru, on the one side, and, on the other, England, Germany, and France, and the States of the Mediterranean, without envy and with the complacency with which all right-thinking men view the welfare and prosperity of others, in whatever part of the world it may be.

We certainly are not troubled by the fact that while nations are striving, each by all the means in its power, to develop its own foreign trade at the possible expense of other nations, we on our part have contributed to the growth of an international commerce in which we not only have no share ourselves but which possibly might have been diverted to our own shores had we been less generous and listened to the promptings of self-interest.

ESTIMATED TONNAGE.

The tonnage passing through the canal during the first or second year of its full operation has been roughly estimated at 10,000,000 net tons of shipping, and of this total it is estimated that practically 60 per cent will be of vessels going to and from foreign ports and never during the course of the voyage approaching nearer to the United States than the gateways of the canal.

I do not wish to be vainglorious or boasting, but I recall no instance in history where a nation has been so generous in its treatment of commercial rivals as has the United States in its

prosecution of the work of the Panama Canal and in its plans for the future operation of the canal.

We have spent, or shall before long have spent, in the construction and early years of operation of the canal the sum of about $400,000,000.

There can be no question of doubt that the canal would not have been built-certainly in our time-had not the Government of the United States assumed the burden.

The task has been colossal, and could have been carried to success only by a great power; and this fact is appreciated nowhere else, I venture to say, more thoroughly than at the great maritime centers of the Old World.

THE CANAL NOT A MONEY MAKER.

The canal, too, from its very nature, can not be a moneymaking enterprise, and in this respect it must be sharply distinguished from the other similar great trade route, the Suez Canal.

The acquisition of the majority of shares of the Suez Canal by the British Government was rightly considered one of the great triumphs of Lord Beaconsfield's diplomacy-not merely for the political interests which it gave England in the canal and in the future of Egypt, but also because it was a good investment. A sure return of about 20 per cent per annum with a necessary trade route between Europe and Asia as security, the neutrality of which is guaranteed by the great powers of Europe, I need scarcely say is a particularly sagacious investment.

All the conditions of our investment in the Panama Canal make it perfectly clear that long before we shall be able to meet running expenses and set apart even a modest 1 or 2 per cent as a sinking fund to liquidate the first cost of the canal, we shall be compelled to incur still further expenditures in lowering the level at the time we increase the length and width of the locks. The rate of tolls which has already been fixed is necessarily a competitive rate determined by the rate which obtains at the Suez Canal, and even the most sanguine do not anticipate that the receipts will soon meet the necessary expenses, including those of sanitation, the military garrison, and charges entailed by the free transit of our own warships. We have voluntarily placed ourselves in a position where we propose to tax our own people annually for years to come to promote the trade between the nations of Europe on the one hand and the west coast of South America, Asia, and the islands of the Pacific on the other. If there be another such instance of commercial altruism in history I do not recall it, and if in this instance there be any discrimination, surely our discrimination has not been in our favor. Bear in mind, too, that the division of trade of which I am now speaking-the trade through the canal strictly between foreign countries in which the United States is to have no share itself-comprises more than half of the anticipated canal traffic.

WHICH OF THE NATIONS PROTEST?

With these indisputable facts before them, which of the nations of the world protests that we have been unfair and are seeking for ourselves selfish gain from a project which from its very inception in the time of Henry Clay we have all proclaimed should be for the benefit of mankind? Certainly not the ally of our earlier years as a nation struggling for inde

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pendence, our old-time friend, France. The work which she undertook on the Isthmus and failed to carry through we have assumed and brought to the verge of successful completion.

Where Ferdinand De Lesseps-disheartened by lack of funds, by want of popular confidence, by the ravages of disease, and by stupendous engineering obstacles-was forced to surrender, there the work was taken up, backed by the unlimited resources of the Government of the United States, protected by sanitary conditions the best which modern medical science could devise, and directed by as fine a body of engineers as was ever assembled, and carried to completion by Col. George W. Goethals.

It seems to me that the French Republic should hesitate before protesting against our action, and if there be any such protest it certainly has not come to my knowledge, whatever may be the knowledge in the possession of other Members of the Senate.

Can it be possible that a protest has come from Germany, keen to push her commerce to all parts of the world and already a formidable competitor with England for the commercial mastery of the seas?

German maritime enterprise has already established its steamship lines all around the two Americas and the canal. To these German lines, by economy of time and coal and all the factors of expense dependent thereon, the canal offers the opportunity for a large expansion of trade that will add to the prestige of the German merchant flag. If there has been any protest from the German Government or from the German steamship lines against our legislation, it has not, so far as I am aware, come to the notice of the Senate.

GREAT BRITAIN PROTESTS.

The only protest from foreign Governments of which the Senate has knowledge is the protest of the British Government, and British ships do more than half of the world's ocean carrying trade.

It has been intimated during the discussions on the pending bill that the British protest and this measure had their origin in the notion that in some way or other our good neighbor to the north, the Dominion of Canada, and particularly the great Provinces of British Columbia and Alberta, and Saskatchewan, of the Pacific hinterland, would be adversely affected by free tolls for American ships in the coastwise trade.

ADVANTAGES OF THE CANAL TO CANADA.

Senators may be surprised at the statement that for last year the gain to the farmers of Alberta alone in diminished freight rates, had the Panama Canal been open to trade, would have amounted to $20,000,000, and that in the not remote future, for which harbor and dock facilities are already being completed by our northern friends, the canal will be a free gift to the Provinces of Alberta and Saskatchewan estimated at $200,000,000 a year. These estimates are not mine, nor do I envy the Dominion the great period of development which awaits her to the north of my home on the Pacific.

I mention these facts as a reason for my reluctance to believe that the people of Canada put forth any claim that in the construction of the Panama Canal and the legislation to provide for its administration the Congress of the United States has not acted fairly and with a liberality of which it is hard to find any parallel.

The figures I have given are from an address delivered in London less than a month ago before the members of the Royal Colonial Institute, in the formation of which the late Cecil Rhodes and other British Empire builders participated in order to create an agency for the promotion of imperial policies.

"In urging upon the institute the important work being carried out by the Vancouver Dock Extension Co., with its proposed 25 miles of docks and 14 square miles of area, connecting with every great railroad coming into Vancouver and every steamship sailing from that port, Mr. F. B. Vrooman, a wellknown authority on the commercial and industrial development of Canada, said that so profound was the change to be wrought in Canada that the Panama Canal was already throwing up across the Dominion a new economical divide. This meant that soon the movements on the new Pacific would draw two-thirds of the surplus resources of the Dominion toward it.

"Two-thirds of the future products of Canada were destined to be tributary to the western sea. The all-rail transcontinental haul for the products of western Canada would soon be a thing of the past. Were the capacity of the railroads equal to Canada's growing needs, the single element of cost would be enough to drive so much of Canada's traffic from eastward to westward that it would change the economic equilibrium of Canada itself. "It must be remembered that the actual cash value of the Panama Canal to the prairie farmer of Canada accrues not only to the export grain-indeed, not to grain alone-but to every commodity, export or import, of mine, factory, forest, and farm, whose cost of freight into or out of or within the country would be reduced by the Panama highway.

WEST CANADIAN GRAIN RATES LOWERED.

"Grain rates from Vancouver to Liverpool via Panama would be less than half the rate from Albertan points to Vancouver. 66 What did this mean? It meant that the Panama Canal would put an Alberta farmer in the summer about 7 cents a bushel nearer Liverpool, and in the winter 15 cents a bushel nearer Liverpool. Average this, and state it in round numbers, and it meant that the Panama Canal henceforth would add 10 cents a bushel to the value of every bushel of grain to be grown in Alberta. They could approximate the saving for the western half of Saskatchewan at 4 cents, and that for Alberta at 10 cents the year round. They had in all of Alberta and half of Saskatchewan something like 300,000,000 bushels of grain. Bring one train an hour into Vancouver and it would take two years to bring the grain crop of 1912 from all of Alberta and half of Saskatchewan to the docks of Vancouver.

"It was needless to say that it would take very different dock and harbor facilities in Vancouver from what they have there now to handle even 5 per cent of the grain traffic, to say nothing of the other export products and the volume of trade due from the new Pacific to the Canadian continent.

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"Let them look ahead to the time when 60 per cent instead of 6 per cent of Alberta and Saskatchewan was under crop. That time was not for distant. That time must be provided for by railway facilities through the continent and by dock and harbor facilities at the port of transshipment. If Alberta and Saskatchewan produced, at a round estimate, 130,000,000 bushels of wheat alone in 1913, all of which would lie well on the Pacific 49046-13560

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