The Nicaragua Canal (1900)

BY THE ISTHMIAN CANAL COMMISSION

THE use that would be made of an isthmian canal by the United States and other nations, and the effects of that use upon the development of our resources and the extension of our domestic and foreign trade have been carefully investigated, and the commercial advantages derivable from the Nicaragua and Panama routes have been compared in order that every factor having a bearing upon the location of the canal might be considered. . . .

The statistics of entrances and clearances show that the net register tonnage of the American and foreign shipping that would have passed through a canal had it existed during the year 1898–99 was 4,582,128 tons, in addition to a part of the commerce between Europe and the

Orient. The opening of the American Isthmian Canal will accentuate the present tendency of traffic to follow round-the-world lines, and not less than one-fourth of the present traffic of Europe with Eastern countries may be expected to use this route. One-fourth of the vessel tonnage employed in the European-Oriental commerce during the calendar year 1898 amounted to 1,154,328 tons net, and this added to 4,582,128 gives a total of 5,736,456, the number of tons of shipping that would have used a canal had it been in existence in 1898–99. . . .

The increase during the decade preceding 1899 in the tonnage of the vessels that would have used the canal was 22.55 per cent. Upon the safe assumption that this rate of increase per decade will continue . . . the basis of estimate . . . would make the figures for 1909, 7,030,027 tons, and for 1914, 7,782,240 tons net register.

. . . The unmistakable tendency of commerce is to employ steam instead of sails, not only in the transportation of general or mixed freight, but also for carrying full cargoes of bulky commodities. Moreover, the canal will so increase the competitive advantages of the steamer as to render practically certain its general substitution in place of the sailing vessel for all lines of trade through an isthmian waterway.

As compared with Europe, the United States will derive from the canal far greater benefits, both commercially and industrially. The commerce of Europe with the Pacific coast of North, Central, and South America, under existing conditions, is somewhat larger than the total volume of the present traffic of the United States that may be considered tributary to the canal; but this fact does not indicate the relative advantages which the canal will possess for the trade of Europe and that of the United States. As soon as it has been opened, our trade with the west coast of South America will rapidly increase, as will also the volume of our trade with the Orient. The amount of the American commerce through the canal will quickly surpass the total amount of Europe’s traffic.

An isthmian canal will strengthen the unity of the national and political interests of the United States, develop its Pacific territory, and promote the commerce and industries of the entire country. The benefits which Europe will derive from the canal will be commercial. In addition to this ours will be political and industrial. By bringing the eastern and western sections of our country into closer relations, by reducing the time and cost of transporting our western products to Europe, and by enabling the Eastern, Southern, and Central States to reach the raw materials and markets of Pacific countries cheaply and expeditiously, the canal will more fully identify political and social interests and quicken the industrial activity of every section of the United States. The iron and steel, the textiles, and the other manufactures of the Eastern and Southern States, the coal from the mining regions, the cotton from the South, and the grain and forest products from many sections will flow out to foreign countries in an increasing volume, and this larger trade will be shared generally by the ports of all our seaboards—the Atlantic, the Gulf, and the Pacific. The canal will cause the competition of the United States with Europe in the countries of Western South America and the Orient to be much keener, with the result that the trade of our country will increase more rapidly than will that of our rivals. The canal will aid the United States in securing and maintaining a position of primacy in the international trade of the world.

These are the considerations which justify the expenditure by the United States of the sum required to build the canal. They may involve a low tariff of charges and be at variance with the production of a large revenue from the canal. . . .

I. The estimated cost of building the Nicaragua Canal is about $58,000,000 more than that of completing the Panama Canal, leaving out the cost of acquiring the latter property. This measures the difference in the magnitude of the obstacles to be overcome in the actual construction of the two canals, and covers all physical considerations such as the greater or less height of dams, the greater or less depth of cuts, the presence or absence of natural harbors, the presence or absence of a railroad, the exemption from or liability to disease, and the amount of work remaining to be done.

The New Panama Canal Company has shown no disposition to sell its property to the United States. Should that company be able and willing to sell, there is reason to believe that the price would not be such as would make the total cost to the United States less than that of the Nicaragua Canal.

II. The Panama Canal, after completion, would be shorter, have fewer locks and less curvature than the Nicaragua Canal. The measure of these advantages is the time required for a vessel to pass through, which is estimated for an average ship at twelve hours for Panama and thirty-hours for Nicaragua.

On the other hand, the distance from San Francisco to New York is 377 miles, to New Orleans 579 miles, and to Liverpool 386 miles greater via Panama than via Nicaragua. The time required to pass over these distances being greater than the difference in the time of transit through the canals, the Nicaragua line, after completion, would be somewhat the more advantageous of the two to the United States, notwithstanding the greater cost of maintaining the longer canal.

III. The Government of Columbia, in which lies the Panama Canal, has granted an exclusive concession, which still has many years to run. It is not free to grant the necessary rights to the United States, except upon condition that an agreement be reached with the New Panama Canal Company. The Commission believes that such agreement is impracticable. So far as can be ascertained, the company is not willing to sell its franchise, but it will allow the United States to become the owner of part of its stock. The Commission considers such an arrangement inadmissible.

The Governments of Nicaragua and Costa Rica, on the other hand, are untrammeled by concessions and are flee to grant to the United States such privileges as may be mutually agreed upon.

In view of all the facts, and particularly in view of all the difficulties of obtaining the necessary rights, privileges, and franchises on the Panama route, and assuming that Nicaragua and Costa Rica recognize the value of the canal to themselves and are prepared to grant concessions on terms which are reasonable and acceptable to the United States, the Commission is of the opinion that "the most practicable and feasible route for" an isthmian canal to be "under the control, management, and ownership of the United States" is that known as the Nicaragua route.

, 56 Cong., 2 sess. (Washington 1900) No. 5, pp. 34–44 passim.