dimmW Wimvmxi^ Jitatg THE GIFT OF L, V: , .rJM-AoXwVQXOrV!. . A.-lM.OD.S'i .d..9/f/ /}j>6oS-& Cornell University Library TC 884.H94 The Nicaragua canal. Would it pay the Uni 3 1924 022 884 252 THE jgiCARAGUA GANAL. WouivD It Pay the United States to Construct It? REMARKS C. P. HUNTINGTON Seventh Annual Banquet of the Chamber of Commerce of Galveston, Texas, March i6, 1900. 'H Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924022884252 A^.\if o or<^ ADDRESS. I came here at your invitation, and am glad to be with you in this City of Galveston. From this time forward I am sure your city will be one of the great lines of commerce ; primarily on account of the natural advantages which you have always possessed, but immediately because of the advantages and facili- ties which you have created yourselves, from which you should and no doubt will get great returns. With this increase of advantages the circumstances have changed also. The great trade between Eastern Asia and Western Europe enriched both the East and the West and built up great cities along the line that it traversed. This last change has brought one of these great lines of trade and commerce your way. Your beautiful city has always been at the gate of the sea, but the gate has hitherto been closed. It is open now, and I hope, for all future time, to one of the most beautiful bodies of water in our world. The modes of transportation have changed. The time was when much of it was done by men carrying packs upon their backs. From man to brute the burden was shifted, and for many years commerce was handled in that way, and while transferred, no doubt, from one animal to another, yet it stayed longer with the camel than with any other medium ; and very likely those who used this brute power thought the best possible method of trans- portation for man and merchandise had been attained. Time was not much of a factor then. The man may be now living who was born before time and speed were counted as among the important factors of trade and travel. When that primitive railroad in Massachusetts was built from Quincy to the seashore, the presi- dent of the company in his annual report said they had used different kinds of power — oxen, mules and horses — and, while oxen had been found rather slow, still all were in the main satis- factory. Benjamin Franklin, in one of his letters when he was Post- master-General, wrote that he believed the time would come when the mail would be carried between Washington and Boston in ten days with considerable regularity. To-day, if it is not carried in about the same number of hours, there is sharp inquiry why the mail is so delayed. What would Franklin say to-day if he could be here to see the changes that time and genius have wrought ? If he could emerge from his crude laboratory to-day, step into a telephone office, and, while he watched with astonished eyes the rapid progress through the streets of loaded trolley cars drawn by no visible force, could hear a friend at Chicago describe to him, in a well-recognized voice, the electrical wonders of the nineteenth century, would he not have a right to say to himself with a thrill of justifiable pride : " Certainly, when I drew the lightning firom the clouds, I builded better than I knew. ' ' To cheapen, improve and quicken transportation, so as to make the old ten-day trips from Washington to Boston and the method of locomotion by means of oxen, horses and mules crude things of a primitive past, the canal was established, and this was found to be a great advance indeed, not only in the carrying capacity, but in the speed secured ; but the canal of to-day is as far behind the best methods of transportation as that was better than the man, the mule and the ox, and the canal, too, should be relegated to the old scrap heap of the past ; but the idea is dying slowly, and there are a few people even to-day who are looking forward from the canal to the ox, and thinking, perhaps, that it would be a good thing to let well enough alone, and that the canal can still compete with the locomotive, or, at least, be a check upon its encroachments ; and they look about them without fully realizing the inevitable trend of the new forces that are sure to make the canal impossible in modern life, as the canal uprooted the old notions which tended in the single direction of " getting there, ' ' without much regard to the time of arrival. Nearly all the canals which were built in the first half of the present century are used no more, and the waters have been let out of them, with perhaps two or three exceptions. The Erie Canal, in the great and enterprising State of New York, remains to vex the people with the problem of its continued existence, and it remains, I think, more because it was built by one of New York's greatest and best men, De Witt Clinton, than for any other reason. Many times has it paid for itself, and I think the old thing deserves now to be allowed to have its long-needed rest, and to die peacefully in its bed. Yet there are a number of people who are trying by all means in their power to call it back to life in the only way possible — by the transfusion of blood ; and blood in a case of this kind means an appropriation of the people's money. It is the old story over again, of the farmer who carried his wheat to mill on the back of his horse, balancing the bag by putting the wheat in at one end of it and a sixty- pound stone in the other. A stranger, meeting him on the road- way, asked why he did not put half the wheat in each end of the bag and throw away the stone. At this he seemed somewhat puzzled, but finally said : ' ' My father did it this way, and so did my grandfather, and I think they are wiser than you. ' ' A few weeks ago it looked as if the people of New York State were going to consent to spend sixty millions, or some other vast sum, out of their own pockets, to widen and deepen the Erie Canal ; but I understand that the attempt to pass that appropriation has been given up for this year. If the people of New York should ever do this they will certainly commit as great a blunder as it would have been a mistake not to have built the canal when they did, and when it was the best known means of transportation. There is no doubt the railroads now running between Buffalo and New York can, for the $2,400,000 which would represent 4 per cent, interest on the sixty millions pro- posed to be expended, move at an actual profit all the tonnage that would ever pass through the improved canal, to say nothing of the three to five millions of dollars a year which it would cost to keep the canal in order and pay the expense of its administration. Then, again, the difference in the time it would take by the two methods of transportation to get the goods and products to market would represent a very large sum, for a farmer living within the great watershed of the Mississippi River could send his grain to market by rail and have the money in his pocket before the canal could take the product to its destination. The world is moving on, however, and as time goes on it brings brighter lights to bear, and so I do not believe that the people of New York are going to vote that appropriation of $60,000,000 to resuscitate this thing of the past. The mistakes of recent years in the direction of canal building are being recog- nized. I am credibly informed that the celebrated Manchester Canal, in England, constructed within a very few years, as the history of commerce runs, at an enormous expenditure of money, has been found to be a practical failure. The Kiel and the Corinth Canals are similar commercial failures, and the abandon- ment of canals in all parts of our own country are cases in point, notably the recent abandonment of the Delaware and Hudson Canal. The president of this company stated in his last annual report that the canal belonging to that company was abandoned because " the cost of the transportation was too great as compared with other methods," and another officer of that company has said that the president's views "have been vindicated by subse- quent results. ' ' The enormous falling off in the tonnage of the Erie and Welland Canals, and the changes and astounding reductions in the traflSc of rivers in all sections of this country as a result of the competition of rival railroads, point in the same direction. Dur- ing the sixteen years from 1876 to 1892 the tonnage of freight transported on the lower Mississippi fell 415^ per cent. , the tonnage on competing railroads increased 350 per cent. , and the sea traffic of New Orleans increased 70 per cent. , and this deflection of com- merce from the Mississippi to competing railroads is still going on. I am going to say right here a few words about the Nicara- gua Canal. Maybe you are all in favor of it, as I am told it has a great "pull," as the politicians say, although just why I do not know. Perhaps I am going to make myself very unpopular with you on account of my ideas regarding the Nicaragua Canal, but you will, I know, give me the credit of doing a citizen's duty in daring to say what I think about this much-mooted project. I^am not one of those who like to put chucks under the wheels of progress ; nor do I believe in trying to defeat the aims of my Government after it has taken a decided step and is committed to a policy. I am not one of those who, while our soldiers are fighting under the American flag in the Philippines, would aid the enemy by denouncing the policy and denying the rights of the Government. I believe in upholding the President's hands in the march he is leading, and I am always for the flag, whether at home or abroad. This country has a great work to do. I will have little to say here as to whether the war with Spain was justified or not, but war came and went, and I believe it is better for the world that islands that came to us as the result of that war should be under the Stars and Stripes than that they should have remained under the flag of Spain ; as it ought to be, and I believe will be, better for the people of those islands to be with us ; and better for us, provided we should deal fairly and liberally with them, for they will surely pay us in kind. All the islands that we have taken we must keep, and deal with their people firmly but kindly, so that they will not only love but respect us. Let us give to the Filipinos a good government that will be an object lesson to all the people of Eastern Asia. In doing this we shall widen our sphere of influence, so that the millions of people in China will welcome our incoming, knowing we mean them no harm. Let us ask all the peoples of the world to join with us in giving to the Chinese such moral support, if nothing else, as will induce them to build up out of the material that they have a great homogeneous empire with all the doors of commerce open to all the nations of the earth. This will suit them, for they are a great people. I say this not only with belief, but with knowl- edge, as I have dealt with them for fifty years, and can say that, as a people, they have never deceived me. I^et us help them, if need be, and they will surely pay us in kind. We are legitimately there, and there to stay, and no one will say us nay, so long as we are doing what is right. Because of our so dealing with them there will be more high-grade goods passing through your city on their way from China to the eastern coast of America than ever passed the Euphrates when nearly all the trade between China and India and the Mediterranean and Western Europe passed across that river. ■As I have said, it is too late now to deprecate, even if we would, the action of our Government resulting from the recent war with Spain. Those who believe, as I do, in the wise and commendable policy which is being steadily developed and car- ried out in the East by the present Administration, and those who have doubts, should now, it seems to me, stand by the men who are at the helm of state, steering a difficult course toward the harbor of enduring peace and prosperity, doing it with honesty of purpose ; that is, holding to the Golden Rule. I Sailing Vessels— 1898. 1899. American ii490.505 Ii472fi63 Foreign 3,109,229 2,777,236 Steam Vessels — American 3,707,568 3,867,184 Foreign 17,232,214 17,985,641 CtEARED. , June 30 s Sailing Vessels— 189S. 1899. American 1,458,243 1,523. 749 Foreign 3,181,742 2i696,924 Steam Vessels — American 3,652,604 3>937i899 Foreign i7,355,o43 17,990.122 Cannot any intelligent man, after seeing the immense per- centage in favor of foreign vessels as shown in these tables, understand that the discrimination against foreign vessels is going to drive them to the Suez waterway, and that the tonnage through Nicaragua, confined almost exclusively to American vessels, would result in the Government's getting practically no income from the venture ? Some people, however, are in favor of disregarding entirely the question of commercial value — that is, of getting returns on the vast investment — and making it a free canal ; but why the American people should saddle themselves with an enormous bur- den of this kind, the chief benefits of which are to inure to foreign nations, which own 95 per cent, of the tonnage of the seas, is beyond my comprehension ; and, if you reflect upon it, I think it will be beyond yours. As between the Suez and the Nicaragua Canals, the busi- ness between Western Europe and Eastern Asia would naturally go the way of the Suez Canal, which is the shortest line. The Suez Canal ought not to have cost more than a tenth of what the II Nicaragua Canal will cost, as in the former case it was only the digging out between the Mediterranean and the Red Seas of what I have no doubt was the bed of an old seaway between those bodies of water ; the material being sand, it was easily dug and the waters of the two seas were allowed to unite again as they had no doubt united many years before. There is no railroad to compete with the Suez Canal, which connects great commercial and industrial nations ; whereas, an American isthmian canal would connect two vast unproductive oceans. The signs of the times are that some of the great schemes of railroad building in Asia will be carried through, and, if a single railroad as effective as any one of the transcontinental lines which connect the Atlan- tic and Pacific coasts of the United States should be built to com- pete with the Suez Canal, it would at once take from that water- way the entire carriage of passengers, mails, express and perish- able goods, and high-cost freights generally, leaving to it only the lower-class freights, the insurance on which is small, while the time is not important. Of course it would be somewhat different in handling the business eastward between Asia and the east coast of America, for it would have to be put into ships, and the ships not con- trolled by the American railroads would hold the tonnage as long as they could, which would, of course, send some ships through the Nicaragua Canal, as in following that route they would hold the business from start to finish ; but in doing this they would steer clear of our west-coast cities, and this would do much harm to those towns, and they would find when too late that they were on the shun pike and not on the main line. Neither the Panama nor the Nicaragua Canal is on the line of any great independent commercial movement. They are merely points at which certain ocean-steamer lines would touch. The total tonnage passing through the Suez Canal the first six months of 1898 was nearly 5,000,000 tons, and of this only some fifteen hundred odd tons, or 3-100 of i per cent, was American ! For 12 that same period the tonnage entered at ports of the United States from foreign countries amounted to nearly twenty-one and three- quarter millions, and only i6 per cent, of this was American. It would certainly seem that we, as a nation, could better afford to work up our merchant marine to respectable proportions by all the legitimate and liberal means in our power before we entered on the construction of a canal, 90 per cent, of the benefits of which, if any, would inure to ships of other nations. The Suez Canal has an advantage over the Nicaragua route for the trade between Western Europe and Manila. Then, again, the Suez Canal is a sea-level canal, whereas the Nicaragua Canal involves 220 feet of lockage. A great economic factor in all this traffic is the price of coal, and in this and in the location of coaling stations the Suez route is greatly superior to either Nicaragua or Panama. And there is a consideration with regard to the proposed Nicaragua Canal that I think is probably not given due weight. While the average rainfall at Suez is about two inches annually, the precipitation at the eastern end of the Nicaragua Canal has amounted to twenty-five feet in a single year. This vitally affects the question of the permanence of earthworks, and bears importantly on the question of navigation. They tell us that the Nicaragua Canal is a military necessity, but I think not, and, in fact, I think the arguments against it on military grounds ought to be convincing. With such a canal open to all the nations of the earth, in time of war none of them would have an advantage over the other. All the great nations of Western Europe could send their ships of war through it so as to reach our western coast, say, in twenty-five days. Without the canal they would have to send their battleships around Cape Horn or go through the Straits of Magellan, occupying, say, eighty, and the enemy could prevent our using the canal the same as we could prevent their using it, so that it would seem to me that the best thing to be done in time of war would be to 13 blow up the locks in order that no ships could use the canal. Our Government could contract with five railroads, or, for that matter, with any one of five, to transport all the men and mu- nitions of war that they would need in any six months across the continent to San Francisco in forty days, and could transport a million of men in ten days if the need should be great. Few people understand the difference between one railroad's competing with another, or its competing with sea commerce. All the fixed and current expenses of a railroad must be paid out of the business that, you may say, belongs to the rail. The fixed expenses of a railroad are the great expenses. Any of the through lines between New York and San Francisco probably represents in its total cost a billion or more of dollars, the interest on which, at 4 per cent. , is forty millions of dollars. The taxes are probably five millions. There are not less than 80, coo men employed, and all this belongs to the fixed expenses. Now, when we compare with the seas, the railroads figure that, if they can make, say, on running a train through from New York to San Francisco, f 100 of clear net money over the actual cost of the movement of the train, they will take the business on the theory — which I think is a true one^ — that it adds $100 in net money to their income, which helps out the local business to that extent. Perhaps I have occupied too much of your time on this question of an American isthmian canal, but my excuse for it is that I do not make many speeches in public, and when I am called upon to speak I like to talk about practical things that mean much for the welfare or else for the injury of our country. If I do not believe in the Nicaragua Canal it is because I have made a study of the question after an experience of sixty odd years in business life, and feel somewhat familiar with economic questions affecting the commercial interest of the United States. I believe that in advocating the enormous expenditture required to build the Nicaragua Canal the American people will be making a costly mistake, financially and commercially, and an enormous blunder in military policy. If this step should be taken, these remarks of mine, like other protests which have been made in the same line, may become historic. I sincerely hope that no action will be taken the future result of which will recall what I have said as words of prophecy. I,et me bring this matter nearer home — to Galveston, the city at the gate of the sea, with the gate wide open. Probably no other city in the United States contiguous to ocean waters has as many square miles of territory tributary to it, or is the natural embarkadero of such an immense area of country, as is your City of Galveston. A good deal of it is dry land, to be sure, but the cry of irrigation is in the air, and the Government is just com- mencing to store up the waters when they are not needed and let them out on the arid lands where they are essential. With irri- gation your State will blossom like the rose, and Galveston will be her chief jewel. The Southern Pacific Company is about to enter pretty largely into your life, I hope for the good of your- selves and of us. I believe I can say for my associates, and I know I can for myself, that our policy will continue to be what it always has been. I want to read to you figures from another table which I have had prepared. These are oflScial figures and not my own, and they show the fall of rates per ton per mile on the leading rail- roads of the various sections of the country from 1870 to 1898, and the figures are from the statistical abstract of the United States, page 387 : Cents per Ton per Mile. 1870. i8g8. Reduction. Group of lines — Cents. Cents. Cents. Lines east of Chicago 1.61 .55 1.06 West and northwest lines 2.61 .94 1.67 Southwestern lines 2.95 .94 2.01 Southern lines 2.39 .62 1.77 Transcontinental lines 4.50 .99 3.51 Average 1.99 .72 1.27 15 From this table you will see that the reduction on the great lines east of Chicago from 1870 to 1898 has been 1.6 cents per ton per mile. On the Western and Northwestern lines, roads running through fertile countries filled with a vast population, the reduction has been 1.67 cents ; on the Southwestern lines it has been 2 cents; on the Southern lines it has been 1.77 cents. On the transcontinental roads it has been 3^^ cents, or more than on any other class of roads in the United States, despite the disadvantage of a thinly-populated country, with long stretches of unproductive soil where the railroad line is practically nothing more than a bridge connecting the productive portions. In other words, the average rate on the transcontinental lines in 1898 was considerably less than one-fourth the average rate in 1870. I think this clearly illustrates the policy of development which has been pursued in the past, and which is building up your Southern and Western country. The railroad, therefore, is doing its part, and it only remains for you to do yours, in order to grow great and prosperous as a State. You ship vast amounts of the crude product of cotton. What I hope to see your State do is to make its raw material into something that is more valuable. Manufactures are the blood- life of an energetic State, as well as national progress. The level to which the arts, manual and otherwise, have attained in any country is, most other things being equal, the measure and criterion of their progress in all that makes a people enlightened, wealthy and prosperous. In the building of a great ship, for in- stance, a greater diversity of employments and talents is brought into play than in the manufacture of almost anything else; and I remember once saying, at the launching of a large vessel in Virginia, that the actual value of the materials in the ship — the timber in the forest, the coal in its bed, and the iron in the mine — probably amounted altogether to less than five thousand dollars. When worked up through art and manufacture into the completed vessel they represented a value of over five hundred i6 thousand dollars ; and all this vast increase had been paid for labor and gone into the pockets of American citizens who did the work. This was as it should be. I want to see your vast cotton product transformed into fabric right here within the borders of your own State. We have all heard the illustration of the ton of iron worth, say, twenty-five dollars, which, when worked into watch springs, increased in value to many hundreds of thousands of dollars. It is so with cotton and all other crude products. It is the manufacture of the fiber into the fabric which counts for wealth. I want to see looms and mills, and still more looms and mills, in the South, and I hope to see Galveston advance along these lines to a splendid future ; and I hope to see the State of Texas take full advantage of her geographical situation, her beautiful climate and her fruitful soil, and in time fulfill her right- ful destiny.