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 3 1924 022 883 650 
 
 
 DATE DUE 
 
 
 
 
 
 
 
 
 
 
 R-R-i 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 GAYLORD 
 
 
 
 PRINTEDINU.S.A. 
 
The original of tiiis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924022883650 
 
NICARAGUA SHIP-CANAL. 
 
 Report 
 
 t)F THE 
 
 EXECUTIVE COMMITTEE 
 
 ■to 
 
 THE M E M BE RS 
 
 Provisional Society. 
 
 to^^^ 
 
 ^■-^ 
 
 WASHINGTON, D. C. 
 GIBSON BROTHERS, PRINTERS. 
 l88p. . 
 
 b 
 
—QiSI&n- 
 
 C& 
 
New York, Oct. 15, 1880. 
 To the Members of the 
 
 J^rovisional Tnteroeeanic Canal So ' njy : 
 
 Gentlemen : The Executive Committee think this a proper 
 time to report the present condition of the interests with which 
 they are charged, and, in the same connection, to present views 
 respecting the future of our Canal enterprise, what measures 
 for the organization of the final company present themselves, 
 and the policy that now appears advisable ; and also to briefly 
 review the interests which the people of this country have in 
 the enterprise, and the degree of control it is thought the Gov- 
 ernment should acquire over it. 
 
 It is appropriate to enter upon such subjects at some length, 
 because measures are now necessary for incorporation and or- 
 ganization. 
 
 CONCESSION AND SUEVEYS. 
 
 On the 22d of May last, the Nicaragnan Congress, called in 
 special session, confirmed in favor of our Society the concession 
 which Mr. A. G. Menocal, civil engineer, U. S. Navy, had nego- 
 tiated with the Executive of that State. 
 
 A copy of this concession will now be forwarded to each 
 member of the Society, and it will be seen that it embraces 
 everything necessary to the complete and successful construc- 
 tion of a ship-canal across that country. The fullest latitude 
 and powers are given, and the land grants, extending along 
 the line of the Canal, will become very valuable possessions. 
 
 While awaiting the assembling of Congress and its action 
 upon the concession, Mr. Menocal, under orders of the Secre- 
 tary of the U. S. Navy, conducted a resurvey of part of the so- 
 called Rio Lajas route, between Lake Nicaragua and the Pacific 
 Ocean, in order to ascertain whether the headwaters of Rio 
 Grande could not be diverted so as to admit of the construc- 
 tion of the Canal for a short distance in the narrow valley of 
 that stream and in the vicinity of the divide between the lake 
 and ocean, the summit at the highest point there being but 
 forty-one feet above high water in the lake. From that point 
 the land slopes on either side to the level of the Canal in a dis- 
 tance of about three miles. 
 
This route had been abandoned in the original survey because 
 of the floods of the Eio Grande in the rainy season, its bed being 
 dry at other times. Mr. Menocal ascertained that the stream 
 could be turned by a short dam 39.67 feet in height above the 
 river's bottom, and a cut 3.88 miles in length carrying its 
 ■waters to a tributary of the Rio Lajas, and thus into the lake. 
 The estimated cost of this work and of diverting the mouth of 
 the Rio Lajas is $1,689,913. 
 
 The reduction in the depth of cut gained in consequence of 
 this change is 93 feet, and the estimated cost of the Canal is 
 decreased about $7,000,000. 
 
 A further reduction in cost and other advantages are secured 
 by maintaining water in the lake at the high-water mark shown 
 in the floods of 1878, it being about two feet higher than the 
 one before fixed upon, and substituting one dam in the San 
 Juan river in lieu of four, as projected by the United States 
 survey. This dam Mr. Menocal found could be admirably 
 located above the mouth of the San Carlos, thus obviating the 
 need to turn that stream, as before projected, and doing away 
 with three lateral canals and locks around the several dams. 
 The dam will be 49 feet above low-water level, and is estimated 
 to cost, if done in masonry, $1,543,526 ; that is to say, it is 
 assumed to cost as much as was before estimated for the four 
 dams. 
 
 It may be well to recall the fact that above the San Carlos 
 no drainage of moment reaches tbe San Juan river, and in con- 
 sequence its variations in flow are measured by the gradual 
 fluctuations in water-level of the lake itself, of which it is the 
 outlet. The floods of the San Carlos, it is estimated, will back 
 up behind the dam even to 25 feet in height. 
 
 Great saving in cost and important advantages are gained 
 from the change to a higher level in the lake, reducing, as it 
 does, the dredging and rock-cutting in the river and lake, and 
 widening the river channel. These measures give an uninter- 
 rupted navigation for a distance of 130 miles at the summit or 
 lake level, of which 120 miles will be in a wide and free chan- 
 nel, or open lake, where steamers can proceed at full speed. 
 
 By connecting a line of examination with surveys formerly 
 made by him, Mr. Menocal ascertained that the valley of the 
 San Juan river could be abandoned above the mouth of the lit- 
 tle tributary called the San Francisco, and a straight course be 
 
run thence to Greytown, shortening the hne of canalization 
 from that before proposed in following the the San Juan valley 
 to a lower point by about six miles, and reducing the cost of 
 that section some $2,000,000. The total length of actual canal, 
 ocean to ocean, under this change, becomes 53.17 miles, and 
 the whole distance across 173.57 miles, the navigation being 
 wholly in fresh water. The length of the Panama canal as pro- 
 jected is 45.3 miles, and the navigation in sea water. The ad- 
 vantage of fresh water in the former, over the salt water in the 
 latter, will be appreciated by all navigators. 
 
 Besides these improvements upon the former location of the 
 ■canal line, found to be entirely feasible, Mr. Menocal further 
 determined that the topography of the locality admits of sinking 
 the canal cuts and adopting higher lifts in the locks, thus re- 
 ducing the number of locks, and doing away almost wholly 
 with embankments which it had been thought, might prove 
 sources of weakness; The drainage of the north declivity of 
 the San Juan river is avoided, the disposition of which had be- 
 fore offered some difficulties. 
 
 It will thus be seen that Mr. Menocal's resurveys and exam- 
 inations — details of which, with maps, etc., will be published by 
 the Navy Department — in connection with other surveys made 
 by him since the date of those heretofore published by the 
 United States, have resulted in relocations and changes other- 
 wise, some of which were supposed to be practicable at the 
 time of the first surveys, that reduce the estimated cost of the 
 canal construction from $52,577,718 to $41,193,839. Where 
 no changes occur, the original estimates are retained, and the 
 basis for estimates of work in the new locations are the same 
 as before used. Thus no reductions arise from changes in the 
 assumed cost for work or material. That the rates are relia- 
 ble may be credited, since a well-known New York firm offers 
 to contract, giving all required security, to perform the dredging 
 and rock excavations under water (the most uncertain items on 
 which to estimate) for the amount fixed in the estimates. 
 
 These relocations, as were the original locations made by the 
 United States survey, are lines ascertained to be absolutely 
 practicable, and involving measured and determined amounts 
 of work and material. It is highly probable that final loca- 
 tions for construction along the entire route may disclose other 
 changes which can be made with advantage to the Canal itself 
 
and with large reductions in its cost. Hence it is believed 
 that the present estimated cost is excessive. In other words,, 
 the volume of work which, at certain rates of cost, give that, 
 amount, will be subject to reduction. 
 
 For purposes connected with the organization of a construc- 
 tion company the surveys have now been carried to a sufficient- 
 degree of accuracy in location, for they exhibit what is known 
 to be practicable, and represent a maximum of work in- 
 volved. Any changes will be in the way of reductions. The 
 committee wish to press this point upon your attention. The 
 worst is known. What advantages may be gained are yet to 
 be discovered in that precision in surveys required for a final 
 location. It should also be remembered that the excavations 
 are upon the surface, without difficulties of drainage, and where 
 the obstacles to be overcome can be seen, measured, and esti- 
 mated. 
 
 FINANCIAL. 
 
 So soon as a copy of the concession had been received and. 
 telegraphic notice had of its confirmation, this Committee sent 
 one of its members to London and Paris to inform financial 
 firms of the fact, and to give information as to its provisions- 
 and scope and the purposes and objects of this Society ; also, 
 to place before them evidence of the policy of our Government- 
 and the views existing in this country in respect to the building 
 of a ship-canal across the American Isthmus — views which create 
 a wide-spread feeling of opposition to any scheme for the con- 
 struction of a Canal by an organization which would look for 
 protection and support to an European power, or which might 
 give occasion for such power to interfere with any of the States 
 of the continent, or with their local authorities. 
 
 Satisfactory interviews were had with many of the leading 
 financial men of the world, and it was found, with authorities 
 of such character, little faith was shown in the success of the 
 scheme of M. de Lesseps for the construction of the Panama 
 Canal. The opinion seemed to be generally entertained that 
 no canal project could be successful without the approval of 
 our Government and its guarantee of protection. 
 
 While it appears unlikely that M. de Lesseps can succeed in 
 obtaining money for his project, the influence he can and will 
 exert to deter investors from engaging in another canal enter- 
 
prise, so long as he is urgir 5- the Panama one in the hope of 
 finding some way out of his difFculties and of securing subscrip- 
 tions, must not be underrated. In this particular he is a pow- 
 •erful opponent; but it is gene? Uj conceded that subscriptions 
 in this country of, say, $15,000,000 to the Nicaragua-Canal 
 stock, and a guarantee of protection by the United States — 
 ^fvhich, indeed, is fully provided for in treaty stipulations with 
 Nicaragua — would secure in Europe any amount necessary for 
 ihe completion of the Canal. The Society was not then in con- 
 dition to present definite propositions; 
 
 THE INTERESTS INVOLVED AND THE RELATIONS Or THE CANAL TO 
 THE NATION AT LARGE. 
 
 It is not proposed to discuss at length the complicated in- 
 ierests that would be affected by a canal. They are many, and 
 as wide-spread as the abodes of men on earth, involving mate- 
 rial changes in the course of trade, especially that of the west 
 coast of the two Americas. It would open direct and cheap 
 transportation for many thousands of emigrants to the Pacific 
 coasts ; give rapid and cheap carriage for the products of ex- 
 tensive and fertile regions ; cause a quickened development of 
 ■our Pacific Empire, and would prevent combinations designed 
 to maintain high freight and passenger charges. 
 
 It is possible a short-sighted policy might object to the open- 
 ing of the Canal because oif apprehended injury to particular 
 interests ; but no one who gives careful thought to the subject 
 can doubt that the general good will be advanced, and that 
 railway interests would be subserved by such a highway, rather 
 than injured, as some suppose. 
 
 Opening a line of economical water transportation to markets 
 beyond the seas for those bulky and cheap products that cannot 
 bear extended railway carriage must rapidly develop agricul- 
 ture — the basis of all solid prosperity — induce emigration, give 
 rise to new industries and occupations, develop new resources, 
 urge to activity in all walks in life, and create a business for 
 railways far in excess of anything before enjoyed. The pros- 
 perity of our railway lines in their competition with an active 
 river, lake, and canal traffic illustrates the possibilities of such 
 competing means of transportation. The wonderful growth of 
 wealth and population in the' Mississippi Valley region, and 
 consequent expansion of railway interests, is the result of that 
 
continued cheapening of carriage arising from improvements 
 in land transportation and the competition by water ; but trans- 
 continental railways can hardly become economical in the sense 
 that the great trunk lines are to that valley. They have mada 
 valuable for agricultural purposes those fertile plains of the 
 Great West which otherwise had remained pasture lands, pop- 
 ulated only by scattered herdsmen, and have reaped in return 
 the active railway business we to-day witness. 
 
 An emigration of large proportion, induced by whatever 
 cause, will give to the Pacific side that needed population, in 
 the train of which will follow all the beneficial consequences to 
 the carrying interests experienced on the Atlantic side, varied 
 only by differences in the character of the country and in 
 the consequent pursuits of men. The great railways reaching 
 across the continent will then find it necessary to stretch out 
 numerous arms and feeders, such as have given colossal pro- 
 portions to the lines from the Atlantic coast to the interior. 
 
 To people and develop the Pacific States is of great national 
 importance, and the general views entertained in this regard 
 have been exhibited by the liberal aid extended by our Gov- 
 ernment to lines of communication. 
 
 The enterprising people of that coast are realizing now the 
 need for facilities of carriage by more economical routes. 
 One million tons of surplus wheat are there to be transported 
 to the world's markets, and the means are not only inadequate, 
 but the markets are reached by vessels passing around Cape 
 Horn. The farmer is crippled in his efforts to compete with 
 those more favored, and with depressing influences bearing 
 upon that industry, follows depression in all others. 
 
 Considerations respecting rates of toll and other canal charges 
 have special interest for the people of this country, not only be- 
 cause the Canal should afford economical transportation for our 
 Pacific coast possessions, but also because it will be the water 
 highway of an inter-State commerce between two great coast- 
 lines extending for thousands of miles 6n both the Atlantic 
 and Pacific Oceans. In this trade no other nation has, or can 
 have, a direct interest. It is one to be conducted exclusively 
 by American shipping. If we regard the near future, when 
 many millions of industrious people will inhabit the Pacific 
 States and the coast trade shall have grown to great propor- 
 tions, we perceive the importance of canal dues in their bearing- 
 
upon this exclusive national interest. It is a question differing 
 entirely from that relating to exactions imposed upon our for- 
 eign commerce and borne in the same degree by the shipping 
 of all nations. 
 
 While the concession secured from Nicaragua might give 
 rise to needlessly large charges upon the Pacific caiTying trade, 
 it does not give nearly the opportunity for onerous exactions 
 found in the grant to the promoters of the Panama Canal, in 
 which a ship's measurement is to be determined by the product 
 of the multiplication of its extreme length by its extreme 
 breadth, and this sum by the draft of water, each measured in 
 metres, and each cubic metre displacement so ascertained to 
 be liable to a charge of 10 francs, and to towage, light, anchor- 
 age, and other dues in addition. In other words, a ship is to 
 be measured as if it were a submerged box, and the result, in 
 the case of steamers especially, would be at least 50 per cent, 
 more than the actual displacement. It contemplates a charge 
 that is much in excess of the weight of vessel and cargo com- 
 bined, for a cubic metre of water weighs about one ton. 
 
 The degree of oppressive chp,rge such a grant would give rise 
 to can only be measured by the forbearance of the Canal Com- 
 pany and the ability of shipping to pay ; while the great cost 
 of the proposed sea-level Canal, even if it be practicable to con- 
 struct it as projected, would make it necessary to impose the 
 highest possible charges to pay any dividend whatever on the 
 capital invested. In this respect the Nicaragua project presents 
 marked advantages, as it does in its greater proximity to our 
 possessions. 
 
 Its comparative small cost will enable the Company to earn 
 paying dividends upon rates of toll that would be ruinous to 
 the Panama enterprise. This will appear more fully from the 
 following statement of cost of the former, made up from M. de 
 Lessep's report, as published by him in New York on his return 
 from the Isthmus. The figures are prepared in exactly the 
 same manner as the estimates of cost for the Nicaragua Canal 
 given further on in this paper. 
 
 It should be remarked that a contingent allowance of 25 per 
 cent, in engineer's estimates for a sea-level canal, to be con- 
 structed under the extreme difficulties to be met with at Pan- 
 ama, is very much smaller in proportion than for a surface 
 canal. Also, that the valley of the Chagres, and the mountain 
 
8 
 
 pass where M. de Lesseps locates his canal, are well kDown, so 
 that no reduction in the volume of excavation can be hoped for. 
 
 M. de Leseeps' estimated cost of excavation and other engi- 
 neering work was 767,000,000 francs, say $147,264,000 
 
 25 per cent, contingencies on same 36,816,000 
 
 Payment for purchase of concession 2,000,000 
 
 Condemnation of lands 1,000,000 
 
 Contingencies other than for construction work, in propor- 
 tion to outlay much less than is allowed for the Nicaragua 
 
 Canal 3,145,000 
 
 Commissions and expenses for placing $253,500,000 shares, 
 
 5 per cent 12,67.5,000 
 
 Interest for amounts called in on subscription during eight 
 
 years' construction, 5 per cent 50,700,000 
 
 Amount to be paid Panama Railroad Co. , for which no Inter- 
 est is computed 20,000,000 
 
 Founders' shares, as per provision of the concession, 10 per 
 
 cent, of total shares — no interest included 30,400,000 
 
 Total cost $304,000,000 
 
 Should part of the expenses be met by raising money upon 
 bond and mortgage, at least 5 per cent, interest must be paid, 
 leaving the showing even worse for shareholders than that 
 above given. 
 
 A transit business amounting to 3,000,000 tons, at $2.50 per 
 ton for all charges, would net, after deducting $1,500,000 for 
 expenses and $375,000 to be paid the Colombian Government, 
 only one and one-half per cent, on the cost ; 6,000,000 tons at 
 the same charge would net four per cent, on cost ; while the 
 same tonnage for the Nicaragua Canal would 7iet ten per cent, 
 with a charge of only $1.50 ^er ton. 
 
 The distance between the Atlantic and Pacific States by the 
 Nicaragua route is about 500 miles less than by way of Panama. 
 
 This saving in distance, and the still greater advantage over 
 the Panama route of those favoring winds for the approach to 
 either Canal entrance by sailing-vessels, when superadded to the 
 much smaller Canal charges necessary to its financial success, 
 offer to the American people substantial and positive reasons 
 for an active and effective support of the Nicaragua project. 
 Engineering questions that have arisen as to the possibility of 
 constructing the Panama Canal, as projected, even at an outlay 
 of several hundred millions of dollars, are left out of view in 
 considerations such as these here presented, ill which the aim 
 is to show that our national interests, and more especially 
 those of the Pacific coast, and of our coast trade, require that the 
 canal should be located upon the nearest practicable route, 
 
combining small cost in construction with accessibility to all 
 kinds of commercial craft found upon the ocean . 
 
 It is perhaps needless to remark that a highway for our coast 
 trade should be under the shadow, in some fo'm, of our na- 
 tional power. 
 
 From considerations such as the foregoing, it is thought that, 
 as a measure of public importance, the Government should, if 
 practicable, acquire the right to impose conditions looking to 
 limitations of tolls and charges in the Canal to the smallest 
 amount consistent with reasonable returns upon the capital in- • 
 Tested. It should be remembered that this power of limitation 
 would extend throughout the entire 200 years embraced in our 
 Canal concession. Who can estimate the magnitude of our in- 
 ter-State commerce, to pass through it 25, 50, 100 years hence, 
 and the importance of low rates of Canal charges ? 
 
 BUSINESS AND COST OP THE CANAL. 
 
 What has been stated leads to considerations as to the net 
 earnings on the cost of the Canal likely to be realized at the 
 beginning of the enterprise. 
 
 The tonnage to pass through it has been variously estimated 
 by the Paris Canal Congress, the San Francisco Board of 
 Trade, M. de Lesseps, the Chief of the Bureau of Statistics of 
 the United States Treasury Department, and by others ; these 
 estimates varying in amount from 1,625,000 tons to 6,000,000 
 tons annually, the mean of all being over 4,000,000 tons. 
 The smaller amount is that fixed upon by the Treasury officer, 
 whose tables are as valuable as his conclusions are erroneous. 
 The figures before him did not tell of subsidies paid by rival 
 interests to maintain high rates for freight and passengers by 
 steamer ; nor of a Central American trade (paying better than 
 the more remote one of California) that absorbs the carrying 
 capacity of steamships to the Isthmus ; these two combined cir- 
 cumstances effectually doing away with competition by steam- 
 ships for the North Pacific trade and passenger carriage. They 
 did not explain the history of the Southwest Pacific coast car- 
 rying-trade which was forced through the Straits of Magellan 
 by the exactions of the Panama Eailway Company, at a time 
 when that concern held absolute control of a mine of wealth in 
 its California business ; nor did they explain how, to this day, 
 
10 
 
 a great steamship company in absolute control of the foreign 
 and way trade of that southwest coast, omitting guano and 
 nitrates, not desirable for the company's interests, is now able 
 to conduct the trade via the Straits of Magellan. 
 
 The main line ships of that Company reach the Pacific from 
 England via the Straits, and last from the La Plata river on the 
 Atlantic side. They proceed up the west coast to Valparaiso 
 and Callao, at which last point they are three thousand miles 
 from the Straits of Magellan, while, via Panama, the entire dis- 
 tance to Liverpool is ahouifiue thousand nine hundred miles. 
 
 Numerous and active coasting steamers, themselves paying 
 handsomely in their local business, collect and carry to the 
 large steamers at Callao and Valparaiso, and take from them 
 for distribution, the foreign business of the coast. 
 
 The cacao of Ecuador and the products of Colombia, grown, 
 as it may be said, within sight of Panamg,, are thus carried 
 3,500 to 4,000 miles in a direction opposite from the port of 
 destination. 
 
 The distance from Valparaiso to Liverpool, via the Straits, is 
 8,725 miles ; via Nicaragua, 7,550 miles. Prom Callao, via the 
 Straits, the distance is 10,162 miles, and via Nicaragua, 6,100 
 miles. Thus, a steamer leaving Valparaiso for Liverpool by 
 way of the Canal would have less distance to make by about 
 1,200 miles, and throughout the entire route to the North 
 Atlantic the run would be on a sea wonderfully propitious for 
 steamship navigation, and the reverse of that via the Straits of 
 Magellan. Leaving Callao for Liverpool by way of Nicaragua, 
 the distance is 4,000 miles less than via the Straits. While 
 proceeding to deliver or gather cargo, the ship from or to 
 Nicaragua, bound to or leaving Valparaiso, would make no 
 needless detour of thousands of miles, as happens to the one 
 leaving the La Plata for the southwest coast. 
 
 This unnatural diversion of a carrying trade from what was 
 its natural course, with proper railway charges and facilities at 
 Panama, and which would become much more its rightful one 
 on the opening of the Canal, would be simply impossible. The 
 steamship lines now centring on this side of Panama would 
 pass into the Pacific in quest of their legitimate connecting 
 business, as well as would sea-rovers, thus soon ending the ex- 
 isting state of things by turning the business of all that coast 
 from Valparaiso north to the Canal. This would be an inevita- 
 ble result. 
 
11 
 
 It is also quite certain that favoring conditions of tempera- 
 ture and navigation would attract a large and growing tea trade 
 by way of the Canal, and effectually stop any carriage of it, to 
 this country at least, via Suez. The development of the Cen- 
 tral American States, under the impetus of the Canal, would also 
 become an important factor in the increase of business to be 
 expected, and this is another advantage this route has as com- 
 pared with that by Panama. Nicaragua and the adjoining States 
 have a soil of unsurpassed richness for all tropical products, 
 and coffee cultivation has already become a very important 
 industry. 
 
 Allowing for changes above indicated, and for the vast sur- 
 plus cereal crops of the North Pacific coast, amounting this 
 year, as reported by San Francisco commercial authorities, to 
 about 1,000,000 tons of wheat alone, all of which practically 
 would pass the Canal, Mr. Nimmo's statistics show a large and 
 very gratifying result for the enterprise. 
 
 The tables found on pages 6, 8, and 9 of his report, which 
 are here numbered, respectively, 1, 2, and 3, are as follows : 
 
 Table 1. 
 
 Number of iiessels and amount of tonnage which might home passed through 
 the proposed canal if it had been constructed. 
 
 [N. B.- 
 
 -This table is based upon statistics of the latest year for which the requisite data 
 can be obtained.] 
 
 No. of 
 vessels. 
 
 Tons. 
 
 Average number of vessels and amount of tonnage entered at 
 and cleared from either side of the Isthmus of Panama, an- 
 nually, in trade with all nations,"^ (Appendix 2 and 3) 
 
 Vessels entered at and cleared from Pacific ports of the Uni- 
 ted States in tiade aronnd Cape Horn with Atlantic ports of 
 the United States, during the year ended June 30, i87gjt 
 (Appendix 4) 
 
 Vessels entered at and cleared from Atlantic ports of the Uni- 
 ted States in trade with foreign countries west of Cape Horn, 
 during the year ended June 30, 1879, ^Appendix sj , 
 
 Vessels entered at and cleared from Pacific ports of the Uni- 
 ted States in trade with foreign countries east of Cape Horn, 
 during the year ended June 30 1879, (Appendix 6) 
 
 Vessels entered at and cleared from ports of the several coun- 
 tries of Europe in trade around Cape Horn with foreign 
 countries other than the United States, during the latest 
 year for which the data can be stated with respect to each 
 country, (Appendix 7) 
 
 Vessels entered at and cleared from ports of British Columbia in 
 trade with countries of Europe, during the year ended June 
 30, 1879 
 
 Total 
 
 338 
 
 75 
 
 120,662 
 
 273 
 
 =471567 
 
 455 
 
 551,929 
 
 1,644 
 
 1,462,897 
 
 33 
 
 22,331 
 
 2,938,386 
 
 '^ An estimate from the report of the United States Consul at Panama (Appendix 2) and 
 from a statement compiled from British consular returns, (Appendix 3.) * 
 
 f Compiled from special reports by collectors of customs. 
 
12 
 
 Table 2, 
 
 Showing the tonnage engaged in guano and nitre carrying, via Ca/pe Horn, 
 a business conducted by sailing-vessels : 
 
 Vessels. Tons. 
 
 Westward passages, vt'a Cape Horn 314 3^A<°°° 
 
 Eastward passages, vta Cape Horn 496 496,000 
 
 Total 810 810,000 
 
 Table 3, 
 
 Showing the deductions Mr. Ninvmo estimates should be made from the gross 
 amount of trade which might have pa,s8ed through a canal, as shown per 
 table, vaae 6, amounting to 2,938,386 tons: 
 
 "^^ " ' Vessels. Tows, 
 
 (a) Vessels employed in trade between Atlantic ports of the United 
 
 States and Australia -, ...- 79 53*^85 
 
 {b) Vessels employed in trade between Atlantic ports of the United 
 
 States and Chili =4 17,120 
 
 {c) Vessels employed in trade between Europe and Chili 37a 368,193 
 
 {d) One-half the tonnage employed between Atlantic :ports of the 
 
 United States and China and Japan — (estimated) 52 64,604 
 
 {e) Vessels engaged in guano and nitrate of soda trade between 
 Atlantic ports of the United States and ports of Europe, with 
 the western coast of South America, 8ro 810,000 
 
 Total 1,337 1,313,^2 
 
 Deducting the above amount he arrives at 1,624,784 tons as 
 representing the probable business of the Canal. 
 
 The first error to be corrected is an estimate based on regis- 
 tered and not actual tonnage capacity, which, with steamships, 
 makes a large difference in favor of the Canal, for tolls deal 
 with carrying capacity. 
 
 Item 1, Table 1, representing a trade mostly conducted by 
 steamships, may be increased for tonnage by, say, 40 per cent., 
 giving 746,200 tons for Canal charges. 
 
 Item 2 does not involve grain carrying, and, referring to what 
 has already been said about the entire absence of freight com- 
 petition via Panama, may be safely increased to 250,000 tons 
 as a Canal traffic. 
 
 Item 3 is reduced, as per amount b, Table 3, leaving it 230,- 
 447 tons. - 
 
 Item 5. It appears by Table 2 that 810,000 tons of shipping 
 are engaged in carrying guano and nitre, of which 814,000, Mr. 
 Nimmo estimates, finds its way around the Horn seeking these 
 freights. 
 
 The distance from the guano and nitre fields via Nicaragua 
 to New York is half, and to England two-thirds, of that via 
 Cape Horn. 
 
 It is thought by reason of distance, favoring winds in home 
 voyages, the influences of other traffic of that coast, and the 
 boisterous character of the Cape seas, that at least half the 
 
13 
 
 shipping engaged in these two lines of freight canying would 
 pass the Canal, say 405,000 tons. Deducting, then, SIO.COO 
 tons from 1,462,897 tons leaves 662,897, representing other 
 traffic, of which, as per Item c, Table 3, 368,193 tons are set 
 down as the business of the ports of Chili with Europe. Of 
 this amount at least one-half is a steamship trade, which, as 
 has already been shown, would take the course of the Canal, or 
 say 184,096 tons ; add 40 per cent, for diflference of tonnage, 
 gives a total of 257,734 tons to pass the Canal. 
 
 Deducting from 662,897 the above 368,193 tons Chili trade, 
 we have still remaining 294,704 tons. As one-half of all the 
 Chili trade, supposed to be conducted in sailing vessels, has 
 been set down as passing via Cape Horn, we may safely credit 
 this last item to the Canal. 
 
 For Item 4 of Table 1, representing the grain trade, we must 
 now substitute what actually exists to-day. There are 1,000,- 
 000 tons surplus grain seekirg carriage from the Pacific States 
 and Territories. It is a safe estimate that half the shipping 
 carrying it would pass the Canal to the "West, making an ag- 
 gregate of 1,500,000 tons shipping to pass through it on 
 account of this transportation. 
 
 Referring to Mr. Nimmo's table, and substituting the figures 
 herein found, we obtain for a probable Canal trade for the year 
 1880: 
 
 Item J 746,200 tons. 
 
 " 2 250,000 
 
 " 3 230,447 
 
 " i 1,500,000 
 
 " 5 957,448 
 
 " 6 22,331 
 
 Total 3,706,426 tons. 
 
 This is a little less than the mean of estimates before referred 
 to as being something over 4,000,000 tons. A charge for this 
 amount of business of $1.50 per ton for Canal tolls, and of 50 
 cts. per ton for all other items of expense for the Canal transit, 
 after deducting §1,500,000 for Canal maintenance, etc., would 
 give almost 8 per cent, net on the capital, as will be shown 
 further on. 
 
 The above takes no account of passenger traffic, which would 
 become an immediate source of revenue upon a very moderate 
 charge. The voyage between New York and San Francisco 
 
14 
 
 could be made via the Canal, by a steamer of fair speed, in 
 fifteen or sixteen days, and might be made by such ships as 
 form the lines across the Atlantic in less time, the route being 
 ©xceptionably favorable for steamships. Between European 
 ports and San Francisco the voyages would be nine to twelve 
 days longer, or twenty-five to twenty-seven days. In the same 
 manner, steamship voyages between this country or Europe 
 and the ports of the west coast of South America would be 
 made in much less time than is now required, and by a route 
 far more desirable. Hence, all that travel would pass through 
 the Canal. 
 
 The emigration to the Pacific slope during the past ten 
 years is reported by the Bureau of Statistics to have reached 
 only 14,500 annually. What number will it attain to when 
 direct steamships can carry, without transfer, in greater com- 
 fort, far less exposure, and at a small fraction of the present 
 cost ? "What revenue may we not set down for this business 
 at $5 per passenger for the Canal transit ? 
 
 It appears to this Committee that one of the most important 
 advantages the nation at large is to reap from the Canal would 
 be a vastly enlarged European emigration to the Pacific States ; 
 but the length of voyage and character of the coast trade would 
 also become powerful influences in re-establishing our mercan- 
 tile shipping interest. 
 
 Without crediting any amount for passenger business, and 
 without an allowance for the growth of business and popula- 
 tion of the Pacific States in the interval of Canal construction, 
 we have above found a traffic, actually awaiting its opening, 
 amounting to 3,706,426 tons, about most of which there is little 
 room for dispute or doubt ; but the Committee in the following 
 showing, prefers to adopt 3,000,000 tons as a basis of estimates, 
 while still omitting all passenger traffic and not making refer- 
 ence to the valuable land grants. 
 
 What- charge upon this amount of tonnage will secure finan- 
 cial success for the enterprise ? 
 
 This question involves the cost of the Canal when opened, 
 complete in all respects. While reviewing this part of the sub- 
 ject it is important to bear in mind the permanency of the in- 
 vestment, the concession being for 200 years, and the vast 
 growth of business certain to be secured. 
 
15 
 
 The cosb of the Canal, upon an estimated capital of $75,000,- 
 000, may be stated thus : 
 
 Engineer's estimated cost $41,193,839 
 
 Add for engineer's contingencies 25 per cent 10,298,460 
 
 Interest for amounts paid in as called for during construction, 
 
 at 5 percent 10,013, ,500 
 
 Commissions and costs for placing shares, 5 per cent 3,337, "lOO 
 
 Nicaragua shares, 5 per cent, of capital 3,750,000 
 
 Land condemnations 1,000,000 
 
 Expense of surveys and organization of Company, etc., in- 
 cluding Nicaragua's portion : 4,500,000 
 
 For contingencies, not engineering 909,701 
 
 Total estimated cost $75,000,000 
 
 It is estimated that $1,500,000 per year will pay all costs of 
 Toainteimnce and operating the Canal upon a basis of business 
 much larger than that adopted herein. 
 
 A charge of $2.00 per ton for Canal tolls and of 50 cents for 
 all other charges would give for a business of 3,000,000 tons 
 gross receipts of $7,500,000, and, deducting $1,500,000 for ex- 
 penses, $6,000,000 net gain, or 8 per cent, upon $75,000,000. 
 A business of only 2,000,000 tons would, after deducting for 
 expenses, net very nearly five per cent, on the capital invested. 
 
 While the estimated tonnage is probably too small, the esti- 
 mated cost of the Canal, with $11,000,000 for contingencies, is 
 probably too large, as has been already shown. 
 
 TOLLS AND CANAL CHAEGES. 
 
 The tolls and charges of the Suez Canal average $2.70 per 
 ton, while $2.50 has been assumed to be the maximum charges 
 for the Nicaragua Canal. An enlightened policy, and a true 
 regard for the best interests of the enterprise, would lead to the 
 adoption of as low charges as are consistent with fair earnings. 
 Whenever the business of the Canal reaches 6,000,000 tons a 
 maximum of $1.50 per ton for toll and all other charges would 
 give gross receipts of $9,000,000. Deducting $1,500,000 for 
 expenses, leaves 10 per cent, net for capital invested, while the 
 passenger tolls are left to meet contingencies. 
 
 It is thought, as already stated, that the United States should 
 acquire sufficient control over the enterprise to impress upon 
 it their policy in respect to this prospective highway of a great 
 coasting trade, and to secure the public and private interests 
 involved. How this is to be accomplished is a matter for 
 thoughtful study by all conceroed. 
 
16 
 
 It will be seen from the foregoing statements and figures, the 
 reliability of which cannot be questioned, that the prospects 
 for a successful and paying enterprise are very promising, and 
 this report has been prepared for your information and careful 
 consideration. 
 
 The Society has a most valuable concession, one that should 
 be availed of to advance, not only the individual interests of the 
 promoters of the enterprise and of investors in it, but, as well, 
 to further those of the nation. 
 
 An act of incorporation will be introduced as soon as Con- 
 gress has assembled, and other preparations made for the final 
 organization of the Company. 
 
 When surveys for final location are completed it will be ad- 
 vantageous for the Society to secure the services of engineers 
 of eminence in this country and in England and France to 
 make personal examination of the route and report thereon. 
 For the Committee : 
 
 S. L. PHELPS, 
 
 Chairman. 
 

 
 V'^