The traffic between the Atlantic-Gulf coast of the United States and Australia is now carried by way of the Cape of Good Hope. The short route from New York to Wellington is by way of the Straits of Magellan. It is certain that practically all, if not all, shipping engaged in the trade of the eastern seaboard of the United States with Australia will use the Panama route. If vessels went out from New York to Adelaide and from there directly back to New York without going on to Melbourne or Sydney, it is probable that the present route by way of the Cape of Good Hope might continue to be used; but, as a matter of fact, the great port of Australia is Sydney and most vessels outbound to Australia make the port of Sydney, which not only has the largest tonnage of traffic but which, also, being situated near Newcastle, has cheap coal. Moreover, as will be pointed out later, the fuel expenses of steamers will be less via Panama than via the Cape of Good Hope. The trade between the Atlantic coast of the United States and New Zealand will use the Panama route, both because of the shorter distance and the lower fuel costs.

Australia, as is shown by Table IV, is nearer Europe by way of Suez than via Panama; but it will be observed that Sydney, the principal port of Australia, is less than a day's run for an ordinary steamer farther from Liverpool via Panama than via Suez, with calls at the intermediate ports at which vessels usually find it advantageous to stop for coal or traffic. New Zealand is 6 days nearer to Liverpool for a 10-knot freight steamer via Panama than by way of Suez; but the

distance from Wellington to Liverpool by way of the Straits of Magellan is only 550 miles greater than by way of Panama. Thus, the Panama route will have to compete for the European-New Zealand traffic not only with the Suez Canal but with the Straits of Magellan route. The high cost of coal by way of the Straits of Magellan will probably prevent that route from being used to much extent for this traffic. The division of the traffic between the Suez and Panama routes will depend largely upon the extent to which the New Zealand commerce is handled by vessels engaged only in that trade or by vessels which are engaged in both Australian and New Zealand commerce.

Under present conditions the eastern part of the United States, where most of the exported goods are manufactured, competes with Europe for the trade of Japan and China at a great disadvantage. The Suez route is used for the Oriental trade both by Europe and by the producers and traders located in the eastern part of the United States. The opening of the Panama Canal, as is shown by Table V, will remove the present handicap which America has in trading with the Orient.

A 10-knot freight steamer can make the voyage to Yokohama from New York in 15 days less than it now takes to make the run by way of Suez. For New Orleans the Panama Canal will save 23 days. The distance from New York to Shanghai is much less by way of Panama than by Suez. Hongkong and Manila, however, are equally distant from New York via Panama and Suez. The choice of routes taken by

vessels outbound from New York to Hongkong or Manila will depend partly upon whether vessels wish to trade at intermediate ports and partly upon the relative costs of coal via Panama and Suez.

The Panama Canal will evidently not be used to much extent by the commerce of Europe with the Orient. Table VI shows that the entire Orient, including Japan, is nearer Europe by way of Suez than via Panama.

If relative distances alone determined the choice of routes, none of Europe's trade with the Orient, not even any of that with Japan, would use the Panama Canal; but it is a well-known fact that distance is only one of the forces that determine the routes taken by vessels engaged in trade between widely separated parts of the world. Even under pre-canal conditions, an appreciable tonnage of shipping moved from the Far East by way of America to Europe. After the opening of the Panama Canal, the shipping making the trip from the Orient to Europe by way of America will increase; and, as will be shown in a later connection, the lower fuel costs by way of Panama, as well as the possibilities of engaging en route in the commerce between the United States and Europe, may be expected to cause a considerable tonnage of shipping to move both eastward and westward via the Panama Canal between the Orient and Europe.

II. PANAMA TRAFFIC, AMERICAN AND FOREIGN The most concrete measure of the commercial importance of the Panama Canal will be the volume of

TABLE VI. - DISTANCES AND DAYS SAVED VIA THE SUEZ CANAL, AS COMPARED WITH THE PANAMA
ROUTE, BETWEEN LIVERPOOL AND SINGAPORE, MANILA, HONGKONG, SHANGHAI, AND YOKOHAMA

Panama route via San Francisco and Yokohama.
Suez route via Colombo.

J Panama route via San Francisco and Yokohama.
Suez route via Colombo and Singapore.

Panama route via San Francisco and Yokohama.
Suez route via Colombo and Singapore.

Panama route via San Francisco and Yokohama.
{Suez route via Colombo, Singapore and Hongkong.

Panama route via San Francisco.

{Suez route via Colombo, Singapore, Hongkong and Shanghai.