“I stand for the economic verities; I stand for the logfc of conditions.”— Page 36. The Return this book on or before the Latest Date stamped below. Theft, mutilation, and underlining of books ■ 4 m are masons for disciplinary action and may I nVfiSTI resu,t ' n dismissal from the University. Ill V VWbM University of Illinois Library An Earnest Official mercial, Nicaragi ial >m- the L161 — 0-1096 The NlUoi uyuo wdrdS. / y • / / 7j •’•fc'iJU * < - ■/ ,< ■ /% / / HHm|| X Investigate before Investing. By JOSEPH NIMMO, Jr. j | An Earnest Plea for a Thorough and Impartial Official Investigation of the Economic, Com- mercial, nilitary and Political Aspects of the Nicaragua Canal. PRICE 10 CENTS. Published by Rufus H. Darby, 1308 Pennsylvania Avenue, Washington, D. C. Ill Synopsis of the Argument in Favor of the Investigation of the Nicaragua Canal Project by Order of Congress. The considerations which indicate the necessity of thorough and im- partial investigation of the economic, commercial, military and political aspects of the Nicaragua Canal project by a commission or commissions to be created by Congress are summarily stated as follows : I. — No such investigation has ever been instituted by Congress. II. — The proponents of the Nicaragua Canal have from the begin- ning opposed such investigation and now oppose it. III. — The Maritime Canal Company of Nicaragua attempted to con- struct the canal as a commercial enterprise but failed in the attempt and is now bankrupt. IV. — Three of the most enlightened nations of Europe have, for reasons which apply to the Nicaragua Canal, blundered egregiously in the construction of ship canals, viz : The Liverpool and Manchester Canal of England, the Kiel Canal of Germany, and the Corinth Canal of Greece. V. — The economic and commercial considerations which indicate the necessity for such investigation are as follows: 1. The conditions of distance, coaling facilities and lockage are so largely in favor of the Suez Canal route as against the Nicaragua Canal route that the former will for all time command the commerce of Asia and Australasia with Europe and ports on the eastern seaboard of the United States. 2. Rates and facilities for transportation afforded by transconti- nental railroads preclude any considerable commerce between Atlantic and Pacific Coast ports of the United States by the Nicaragua Canal route, and absolutely prevent commerce between the Pacific Slope and the great interior, west of the Appalachian range. 3. The idea that water lines always determine the rates on competing railroads is fallacious. On the other hand, railroads as a rule regulate and greatly reduce rates on competing water lines, change the character of their traffic, and in many instances have utterly ruined water lines for commercial purposes. 4. The Nicaragua Canal would not exert any effective ^regulating in- fluence over transcontinental rail rates ; on the other hand the trans- continental railroads would not only determine rates by the Nicaragua Canal route but prevent the carriage of passengers, mails, express goods and general merchandise by that route and greatly limit the P 3 IV magnitude of its traffic even as to the lowest classes of freights. A sin- gle railroad, competing with the Suez Canal as sharply as would each one of the six transcontinental railroads of the United States with the Nicaragua Canal, would so deplete the traffic of the former as to ruin it financially and render it of small commercial value. 5. The commerce of San Francisco and other Pacific Coast ports with China, Japan, Australia, the Philippine Islands and the Hawaiian Islands will never become tributary to the Nicaragua Canal route for the rea- sons just stated in regard to transcontinental traffic. 6. The Nicaragua Canal route will not be able to compete for the transportation of coal, cotton or lumber for reasons presented in this statement. 7. The foreign commerce of the western coast of the American Con- tinent, south of California, is limited by the fact that the dividing ridge of this continent is near its western seacoast. Besides a considerable part of that coast is arid and uninhabited. 8. The possible traffic of the Nicaragua Canal from the commerce of the western seacoast of the entire American Continent with ports on the eastern side of that continent and with Europe is greatly limited by the fact that the Nicaragua Canal will not be available for sailing vessels on account of lack of wind and other climatic conditions. For a similar reason no sailing tonnage ever passes through the Suez Canal. 9. The Nicaragua Canal will never be available for steam navigation between ports on the western coast of South America, south of Peru, and the eastern seaboard of the United States, or with Europe for the reason that the conduct of such navigation embraces intermediary trade at the principal ports on the Atlantic Coast of South America. 10. The Nicaragua Canal route will not compete successfully with the Panama Railroad route for the trade of ports between Callao and Panama with respect to the carriage of passengers, the mails, express goods and general merchandise. 11. The total amount of tonnage which could be secured for the Nica- ragua Canal would not exceed 300,000 tons annually. This traffic would not at any obtainable rate of tolls pay even the cost of maintain- ing the canal. 12. The Nicaragua Canal is not on the line of any important com- mercial movement. VI. — MILITARY CONSIDERATIONS WHICH DEMAND IN- VESTIGATION. Assuming that the United States will be able to acquire full military control of the Nicaragua Canal the considerations which demand a. V thorough and impartial investigation of the Nicaragua Canal project are as follows : 1. The military control of the Nicaragua Canal by the Government of the United States would involve expensive fortifications at both ends and the constant military protection of many important points along the line of the canal, viz: Locks, embankments, sluice-ways, dams and culverts. This would involve a large expenditure of money and of military power. 2. The adequate protection of the Nicaragua Canal in time of war would involve the protection of each end of the canal by naval vessels. 3. If the Nicaragua Canal had been completed on the first of March, 1898, the passage of the war* ship Oreg 07 i through it would have required the protection of so large a military force, including detachments from the Army and the Navy, as to have necessitated the voyage which that ship actually made by the Cape Horn route. 4. Eight hundred thousand troops with all their accoutrements of war, can now be transported across the continent by rail within twenty days. This affords to the United States a most important military ad- vantage over any other nation. 5. It will cost the Government much less to construct and maintain an adequate naval force on both sides of the continent than to construct and maintain the Nicaragua Canal, especially in view of the fact that it would be of inconsiderable commercial value. 6. The maintenance of an adequate naval force on both the Atlantic and Pacific Coasts of the United States would, from the military point of view, be preferable to shifting great war-ships from one side of the con- tinent to the other in time of war, either by the way of Nicaragua or Cape Horn. VII.— POLITICAL CONSIDERATIONS WHICH DEMAND IN- VESTIGATION. 1. The Clayton- Bulwer Treaty interposes an absolute barrier to the acquisition of military control of the Nicaragua Canal by the Govern- ment of the United States. That treaty provides that neither Great Britain nor the United States shall in peace or in war ever acquire “any exclusive control over the said ship canal,” that “neither will erect or maintain any fortifications commanding the same,” and that the two governments will guarantee the neutrality of the canal and invite other nations to enter into similar agreements with them. 2. The Clayton-Bulwer Treaty is still in force. This is maintained by the ablest statesmen and publicists of this country and by every statesman of Great Britain. VI 3. Secretary Blaine held that the Clayton- Bui wer Treaty affords to Great Britain greater commercial and military advantages than it affords to the United States. 4. Under the provisions of the Clay ton- Bui wer Treaty the exclusive military advantage held by the United States of being able to transport men and munitions of war across the continent would disappear, as the neutrality of the canal would enable any foreign nation to transport its troops and munitions of war through it. 5. The government of Nicaragua has granted to a British company the exclusive right of steam navigation on the San Juan River, and certain exclusive rights to build railroads in that country. The govern- ment of Nicaragua has also recently granted the right to construct the Nicaragua Canal to an American company, thus terminating the rights which have been held by the Maritime Canal Company of Nicaragua. 6. The manifest duty of the Government of the United States is to investigate before investing. The fact of chief importance presented in this document is that the proponents of the Nicaragua Canal estimate its traffic at 5,281,748 tons annually. This is a sort of average of several unauthentic estimates or guesses by persons interested in the subject of an American isthmian canal, none of which estimates are of any governmental authority. The only governmental report issued in this country upon the probable ton- nage of such a canal is the one which I submitted as chief of the Bureau of Statistics, August 7, 1880, at the request of the American Society of Civic Engineers. In that report I stated the probable tonnage of any American interoceanic canal at about 1,625,000 tons annually. This statement was carefully revised in the year 1895, when I found that as the result of changed conditions, the proposed canal could not secure over 300,000 tons annually. The estimates of proponents of the Nicaragua Canal in recent years are about twenty times that amount. I ask for a thorough and impartial governmental investigation in order to deter- mine the question thus raised. JOSEPH NIMMO, Jr. THE NICARAGUA CANAL. INVESTIGATE BEFORE INVESTING. By JOSEPH NIMMO, Jr. The article in the Forum for November, 1898, by ex- Senator Warner Miller, presents oft-repeated specula- tions and predictions in regard to the enormous advan- tages which it is assumed will be realized from the construction of the Nicaragua Canal. Mr. Miller, how- ever, carefully refrains from any recognition of the fact that Congress has never yet ordered any investigation of the commercial and military aspects of the project. Nor does he allude to the fact that the proponents of the scheme have been repeatedly and earnestly re- quested to join in a petition to Congress to submit all questions in regard to its practicability to thorough and impartial official inquiry. They have persistently op- posed such inquiries. The governmental duty of thor- oughly investigating the proposed scheme before invest- ing in it is so manifest as to need no argument to prove its necessity. It would be discreditable to this nation and to the intelligence of the age for the Government of the United States to embark in this or in any other costly enterprise without first instituting a full and impartial investigation as to its probable value. There are many weighty reasons in favor of such investigation, one of which is suggested by the fact that the Maritime Canal Company of Nicaragua has made 2 vigorous efforts both in this country and in Europe to raise the necessary funds to construct the canal, but has failed in all such efforts, while thousands of millions of dollars are seeking investment in profitable under- takings. The cause of this failure is that it is impos- sible to adduce evidence that the canal would pay even its operating expenses. In a word the Maritime Canal Company of Nicaragua is bankrupt, its franchise and property are of doubtful value, and its practicability as a commercial enterprise is discredited. The assertion that the Government must furnish the money to build the Nicaragua Canal because it is too large an undertaking for private capital is one of the shallowest of all the stories with which Nica- ragua Canal proponents have misled the people of this country. The truth is that the Canal Com- pany engaged in the construction of the canal as a commercial enterprise and utterly failed. A vigorous effort was made to induce the late Colonel North — the famous “ Nitrate King” — to undertake the work. He was at first pleased with the enterprise and said some- thing in its favor, but upon careful examination found it to be a worthless scheme and abandoned all thought of investing in it. GEOGRAPHIC, ECONOMIC AND COMMERCIAL REASONS IN FAVOR OF INVESTIGATION. The geographic, economic and commercial reasons in favor of such an investigation as I have suggested are also cogent and unquestionable. These I presented somewhat in detail in an article which appeared in the Engineering Magazine for August, 1898. A brief allu- sion to such reasons must therefore suffice in this con- nection. The superintendent of the United States Coast and 3 Geodetic Survey has informed me that the distance from New York to Manila is 181 miles less by the way of the Suez Canal than by the way of the Nicaragua Canal, and that the distance from London to Manila is 5,080 miles less by the way of the Suez Canal than by the way of the Nicaragua Canal. There are other considerations in proof of the fact that the Suez Canal has completely eliminated any as- sumed necessity for the construction of the Nicaragua Canal in so far as relates to the commerce of Asia and Australasia with Europe and the Atlantic ports of the United States. The first of these is that the coaling facilities of the Suez route are greatly superior to those of the Nicaragua route. Coal has become a vital con- dition of oceanic commerce. A second consideration is that the Suez Canal is a sea-level canal, whereas the Nicaragua Canal involves 220 feet of lockage. A third consideration, not the least important, is that the route from Asiatic ports to both London and New York via Suez Canal offers the important advantages of trade at intermediary commercial ports, whereas such advan- tages attach in an inconsiderable degree to the Nicara- gua route. A thorough and impartial economic and commercial investigation such as I have repeatedly rec- ommended and now urge, would reveal approximately the value of each one of these points of superiority in terms of nautical miles. I estimate that in the aggre- gate they amount to at least two thousand miles in favor of the Suez route for trade between Manila and New York, and to seven thousand miles in favor of the Suez route between Manila and London. A glance at the terrestrial globe clearly indicates that for the rea- sons thus stated the Nicaragua route could never be- come a competitor of the Suez Canal route for the trade of Europe and the eastern side of North America with Asia and Australasia. I 4 Iq this connection I would allude to the fact that the commerce of Asia with the United States constitutes only 7i per cent of our total foreign commerce, and that the commerce of Australia with the United States constitutes only about one per cent of our total foreign commerce. Our commerce with Asia and with Austral- asia are also quite small in comparison with our com- merce with Europe and even with Great Britain. This fact is exhibited in Appendix B. The question as to whether under existing conditions our commerce with Asia or with Australia is likely to increase largely is one of the inquiries which should be submitted to thorough and impartial official investiga- tion. Any such increase will not in any degree be due to the construction of the Nicaragua Canal for reasons already stated. The commerce of the Pacific Coast ports of the United States with Asia and Australasia will not of course in- volve the use of any canal. Our commerce with the Hawaiian Islands will for all time be carried on through Pacific Coast ports, and the entire transcontinental traf- fic of the United States will move almost exclusively by rail. This is inevitable from the force of overpowering geographical, economic and commercial conditions which I will explain. The center of population in the United States is a little east of the meridian of Indianapolis. Two-thirds of the people of this country reside west of the Appalachian range. Evidently therefore the com- merce of the Pacific Coast States with the great interior of the country will never move from interior points in the Pacific Coast States to Pacific Coast ports, thence by sea through the Nicaragua Canal to Atlantic and Gulf ports and thence west by rail to points of destina- tion, or vice versa. It is also an economic fact beyond all question that the transcontinental railroads and their 5 eastern connections will for all time secure the entire transcontinental carriage of passengers, the mails, bul- lion, express goods, commodities of great value, perish- able articles, and goods which demand quick transit. This would leave to the Nicaragua Canal route only a residuum of low-priced freights, for which also the rail lines would contest vigorously. If the Suez Canal route were paralleled even by one railroad competing with it as sharply as would each one of the six transcontinental railroads of the United States with the Nicaragua Canal, the former route would at once lose three-fourths of its income from traffic. There are now thirteen transcon- tinental railroads completed, in course of construction or projected between Chili and Canada. Each one of these railroads would become an active competitor of the Nicaragua Canal upon its completion. The economic fact of governing force in this whole matter is that to-day the locomotive engine with its train of cars on a steel rail is the most efficient instru- ment of commerce on the globe, having in view the conditions of speed, cost of transportation and facilities for the collection and distribution of freights. Practi- cal illustrations of this fact are abundant. The year before the Union and Central Pacific railroads line was completed the value of the freights transported between New York and San Francisco via Panama was $70,202,- 029. The next year it fell to $18,594,255, and during the year 1894 it had fallen to only $3,517,582. Commerce between New York and San Francisco via Panama and via Cape Horn has almost disappeared in the face of railroad competition. The results of such competition are summarily stated in the following carefully compiled statement of tonnage of strictly transcontinental rail- road freight and of freights carried between California 6 and the Atlantic Seaboard by the Panama Railroad route and the Cape Horn route during the year 1897. Tons. Transcontinental railroad traffic . . . , 1,931,850 Traffic via Panama and Cape Horn . . . 160,391 For the general purposes of commerce to-day one transcontinental railroad is worth a dozen isthmian ca- nals. Disregard of this indisputable economic fact will surely bring discredit upon this nation in the eyes of all the world. Mr. Miller repeats the oft-asserted declaration that the Nicaragua Canal would save 10,753 miles of dis- tance over the Cape Horn route. But the above state- ment proves that there is very little left out of the for- mer Cape Horn traffic between the Atlantic and Pacific Coasts of the United States to be saved. The traffic between the two coasts by the Panama Railroad route has also become practically a thing of the historic past. The great bulk of such traffic has been captured by the transcontinental railroads. What remains of the Cape Horn traffic of the Pacific Coast is carried in sailing vessels, and for reasons hereinafter stated would not be available for the Nicaragua Canal. There is no commerce on the Pacific Coast which would contribute materially to the traffic of the Nica- ragua Canal from San Diego, California, to Callao, Peru. The western is the non-commercial side of the Ameri- can continent, owing to the fact that the dividing ridge of the continent is adjacent to its western coast and to the additional fact that a large part of that coast is arid. The commerce of ports of South America south of Cal- lao consists largely of sailing vessel cargoes, and, as already stated, the Nicaragua Canal will never be avail- able for the passage of sailing vessels. The steam nav- igation of the western coast of South America south of 7 Peru with Europe and the Atlantic seaboard of the United States will continue to pursue the -route through the Straits of Magellan for the reason that it is largely- sustained by intermediary trade at ports on the eastern coast of South America. The facts of importance which distinguish the Suez Canal from the Nicaragua Canal are that the former con- nects great commercial nations by a direct line without railroad competition, whereas the latter connects two vast, unproductive oceans, is not on the direct line of any important commercial movement, and has already seven powerful transcontinental railroad competitors. In his article in the Forum for November Mr. Miller reiterates the oft-repeated assertion that the Nicaragua Canal would secure an enormous traffic from coal shipped from the Atlantic seaboard to the Pacific Coast, from cotton and cotton goods exported from our Atlan- tic and Gulf States to China and Japan, and from lum- ber shipped from the Pacific Coast States to the eastern side of the continent, but he makes no attempt what- ever to sustain his views by data as to the relative cost of transportation by rival routes or the effect of the competition of industries and markets in different parts of the globe upon such predicted commercial move- ments. I have reliable data absolutely disproving these assumptions. Coal is now supplied to the Pacific Coast under conditions involving many related trade movements which render it altogether improbable that it could be shipped at a profit through the Nicaragua Canal except as return cargo, inconsiderable in amount. If cotton shall in the future be shipped in large quanti- ties to China and Japan it will undoubtedly be shipped from Texas and other Southern States to Pacific Coast ports by rail and thence to destination by steamer at lower rates than can be afforded by the Nicaragua Canal 8 route. Under existing conditions it would be imprac- ticable fo ship lumber from the Pacific Coast States by Nicaragua Canal to the Atlantic seaboard in competi- tion with the lumber supply of the Atlantic and Gulf States and of Canada. Nor does it require any figuring to prove that lumber shipped from the Pacific Coast States to the States and parts of States west of the me- ridian of Indianapolis will in the future as now move over direct rail lines from points of production to points of consumption instead of being shipped from points of production to Pacific Coast ports, thence by vessel via Nicaragua route to Atlantic or Gulf ports, and thence by rail to points of consumption. At the present time there are about 300,000 tons of lumber and shingles shipped east of the Rocky Mountains annually from the Pacific Coast. This is a growing traffic. In view of all these facts my careful studies of the economic and commercial aspects of the Nicaragua Canal project have convinced me that it would be impotent as a competitor of the transcontinental railroads, and that on the other hand the transcontinental railroads by their efficiency as carriers would wipe the Nicaragua Canal out of existence as a highway of commerce. All questioning about the future course of the com- mercial movements just mentioned would disappear as the result of a thorough and impartial official investiga- tion, such as that herein recommended. THE ASSUMED REGULATING INFLUENCE OF THE NICARAGUA CANAL. One of the reasons advanced in favor of the con- struction of the Nicaragua Canal is that it would regulate transcontinental rail rates, even if it secured no traffic. This is asserted as an economic dogma of general application regarding competition between rail 9 lines and water lines. But no such rule obtains. It is true that in many instances water lines regulate rail lines, and it is also true that in many, and important instances no effective regulating influence is exerted over railroads by water lines, even by the ocean. The competition of railroads on the other hand has in innu- merable instances not only regulated rates on water lines but has greatly reduced and in many instances destroyed the traffic of water lines. Many canals in this country have been completely wiped out of existence by com- peting railroads. In all parts of the country the traffic of rivers has been greatly reduced and radically changed in character by the competition of railroads. In this connection I would mention an exceedingly important inquiry which demands the special attention of Congress, viz : How far is the Government justified in building a competing line for the purpose of regu- lating the cost of transportation on other lines built either by public or private capital ? The question is one of limitations and not of principle. Evidently if such a competing line would not pay enough, at a very moderate rate of tolls, to meet even its operating expenses exclusive of any interest whatever upon the cost of the line, it would be in the nature of an unjustifiable bounty or subvention in favor of particular shippers. Its construction in such case would constitute the taking of money out of the pockets of certain citizens in order to confer a benefit of much less value upon others. This is anti-American, it is imperialistic, it is impolitic and it is unjust. I believe that a thorough and impartial official investigation, such as I propose, will clearly reveal the fact that the Nicaragua Canal will not pay its operating expenses. Under such cir- cumstances its construction by the Government would be a reprehensible form of paternalism. It would also 10 be an outrageous raid upon the public treasury. I ask for these propositions a thorough and impartial investi- gation. THE NICARAGUA CANAL UNAVAILABLE FOR SAILING VESSELS. Like the Suez Canal, the Nicaragua Canal would be totally unavailable for the passage of sailing vessels on account of lack of wind. Upon this subject that re- nowned authority on physical geography, Lieutenant Maury, of the United States Navy, wrote as follows : “If nature, by one of her convulsions, should rend the continent of America in twain and make a channel across the Isthmus of Panama or Darien, as deep, as wide and as free as the Straits of Dover, it would never become a commercial thoroughfare for sailing vessels, saving the outward bound and those which could reach it with leading winds.” The cost of towing sailing vessels to and from the Nicaragua Canal and through it, in connection with canal tolls, would greatly exceed the cost of navigating vessels around Cape Horn. That the Nicaragua Canal would be unavailable for sailing vessels is also proved by the fact stated by the Board of Engineers of 1895 that the rainfall on the eastern coast of Nicaragua amounts to nearly twenty-five feet a year. The proponents of the Nicaragua Canal base their arguments largely upon the assumption that sailing vessels are going out of use. This is a mistake. The sailing tonnage of the United States on June 30, 1897, was greater than at the end of the previous fiscal year. Besides, the sailing tonnage built in the United States has exhibited an increase during the last four years. A few months ago a prominent shipbuilder of the State of Maine stated to me that he had recently built a steel sailing vessel of about 3,000 tons, and declared his 11 belief that this ship will, barring accidents, last fifty years, and be one of the best paying pieces of property which he shall leave to his children. There is an element in the cost of transportation upon the sea which is lost sight of by persons who would relegate sailing vessels to the dead past, and that is the element of storage. From time immemorial there has been a tendency on the part of shippers to use vehicles of commerce as warehouses. This is strongly mani- fested not only in the use of sea-going vessels but even on railroads. This privilege is of value to shippers and the granting of it becomes a subject for compensation to the owners of vehicles of commerce under the designation of demurrage. It frequently happens in ocean commerce that the slow ship is a more desirable vehicle of transportation than the fast ship. This is particularly the case with respect to commodities which come to maturity and are marketable within the space of a few weeks but are required for the world’s con- sumption during the entire year. Wheat becomes marketable within the space of about six weeks, but a large part of it must be held in store somewhere during the entire year in order to meet the continuing demand for bread. Therefore the slow sailing vessel is fre- quently a more desirable vehicle of commerce than the swift steamer. The commodities which seek transpor- tation on sailing vessels are those which are moved in large quantities and in shiploads. They are principally the cereals, cotton, coffee, coal, ice, ores and other minerals. In the investigation which is to determine the com- mercial value of the Nicaragua route, the question as to how much of the commerce of the western coast of North America and of South America will continue to move in sailing vessels constitutes an important inquiry. 12 From the foregoing it appears that the Nicaragua Canal is a project based upon conditions which pre- vailed fifty years ago but have long since been remitted to the mouldy past. I bespeak for this whole subject a thorough and im- partial investigation. The proponents of the Nicaragua Canal oppose such inquiry. NICARAGUA CANAL LOBBYING. Mr. Miller declares in his Forum article that a pow- erful lobby in the interest of transcontinental railroads has for years been maintained in Washington for the purpose of opposing the Nicaragua Canal project. I believe this to be incorrect. For thirty-three years I have spent a large part of each year at my place of residence in Washington. If any such lobby influence had ex- isted there it would probably have come to my notice through the ordinary channels of public information. I have no knowledge of its existence. But how has it been on the other side ? Mr. Miller’s oft-repeated declaration about a powerful railroad lobby at Washington clearly implies that there must have been some powerful counter-influence to oppose before Congress. This, however, is not left to implication. It is a fact known to every Senator and Member of Con- gress and to all the representatives of the public press in Washington that for nearly ten years a persist- ent and importunate Nicaragua Canal lobby has besieged the committee rooms and the corridors of the Capitol at Washington. Lobbying at Washington has, however, been only one phase of the efforts of the proponents of the Nica- ragua Canal project. During the last twenty years, and particularly during the last ten years proponents of the Maritime Canal Company of Nicaragua have 13 conducted a propaganda throughout this country, in- volving the object of drawing an enormous amount of money out of the national treasury. The main object in the conduct of this propaganda has been to secure popu- lar belief in the importance of the enterprise, at the same time avoiding any governmental investigation as to the correctness of their statements. Another feature of the Nicaragua Canal propaganda has been that of influencing State and national political conventions. Mr. Warner Miller declared before the Conference on Territorial Expansion, which assembled at Saratoga Springs on the 17th of August last, that in the advocacy of the Nicaragua Canal enterprise he has twice traversed the entire country. An impartial governmental investigation as to the manner in which and the expedients by which the Nicaragua Canal propaganda has been conducted would tend to throw much light upon the present status of the project as a public question. The fact that proponents of the Nicaragua Canal shun all attempts to institute official investigation was clearly manifested by an inci- dent which occurred in the year 1890. After certain of the principal Nicaragua Canal propagandists had traversed the entire country for the purpose of securing the endorsement of boards of trade and chambers of commerce they sent a solicitous request to the influential Chamber of Commerce of New York, for such endorse- ment. This request was accompanied by an elaborate statistical statement, which was submitted to me for criticism. I found it to be a mere statistical juggle apparently gotten up by one not informed as to the philosophical use of statistical data, and over-anxious to prove the great value of a chimera with which he was in love. In presenting my criticism I earnestly requested 14 that it might be submitted to the chief officer of the canal company for revision, in order to avoid the possibility of giving that company any occasion to complain of unfair treatment. My statement was, however, returned to the Chamber of Commerce without comment, and that body has never yet endorsed the Maritime Canal of Nicaragua. In their entire propaganda and lobbying work proponents of the Nicaragua Canal scheme seem to have proceeded upon the theory of Aaron Burr’s defini- tion of sound law, “ whatever is boldly asserted and plausibly maintained.” THE ORIGIN AND GROWTH OF THE NICARAGUA CANAL CHIMERA. The degree of public favor which the Nicaragua Canal project has secured in advance of any thorough and im- partial official investigation as to its merits is astounding. We live in an age of economic inquiry. The question “ will it pay” is the touchstone of commercial and in- dustrial enterprise. Nevertheless, the public discussions of the Nicaragua Canal project have related almost ex- clusively to its historical, political, geographical and engineering aspects, omitting any careful consideration of the commercial and economic conditions involved. Consequently, the popular view of the Nicaragua Canal enterprise has become picturesque rather than practical. The degree of success which has attended the scheme seems to be due to the fact that it was conceived by certain distinguished gentlemen whose first ideas upon the subject were formed exclusively upon the basis of historical and geographical considerations. Thus they formed a picture of the enterprise in their own minds. Everything which threw light upon this picture was 15 then pleasing to them and everything which cast a shadow upon it was offensive. In this state of mind they were in no condition to subject their scheme to the hard tests of economic and commercial inquiry, and they had sufficient political and official influence to lead the general public and legislators to accept their con- clusions without investigation. THE HISTORY OF ESTIMATES AS TO THE COMMERCIAL VALUE OF AMERICAN ISTH- MIAN CANALS. When de Lesseps came to this country in the year 1880, he submitted his estimate of the cost of the Panama Canal and his estimates of tonnage which would pass through it to the American Society of Civil Engineers. That organization found his estimate of cost to be grossly in error. Certain of its members also found that his estimate of six million tons of shipping annually was made up by including vessels which would have to go from three to five thousand miles out of the shortest route in order to pass through the Panama Canal. The society then asked me, in my official capacity as Chief of the Bureau of Statistics of the Treasury Department at Washington, to compute the amount of tonnage likely to pass through it. This I did with great care and as the result of my inquiry found that the extreme limit of its commercial possibili- ties was about 1,625,000 tons annually. In a word, I found the de Lesseps estimate of tonnage to be as false as those financial statements, which ultimately caused some of the chief proponents of the Panama Canal scheme to find their way to the inside of French prisons. My official report of Panama tonnage made in 1880 was regarded as a practical condemnation of any and all American isthmian canal projects from Tehuantepec 16 to Darien. It was based upon the same economic and commercial considerations which I entertain to-day. The Maritime Canal Company of Nicaragua was organ- ized nine years later by Act of Congress approved Feb- ruary 20, 1889. Instead of first testing the accuracy of my report by reference to official data — a thing which the Nicaragua Canal proponents have studiously avoided — they adopted the exploded de Lesseps estimate of tonnage.* One and another of them has, however, put forth estimates of tonnage, mere guesses widely differ- ing, but producing an average which the Maritime Canal Company has adopted as the true estimate to be accepted by the Congress and the people of the United States without question or official inquiry of any sort. Three years ago I carefully revised my official report of 1880 and found that instead of 1,625,000 tons, as therein stated, the possible annual tonnage of any American isthmian canal must be reduced to about 800,000 tons annually in consequence of the great re- duction in transcontinental rates and other changed conditions. The Secretary of Agriculture has recently reported that the average rail rate between New York and San Francisco in 1897 was less than one-third the rate in 1870. Surely it is high time for the Congress of the United States to institute a thorough and impartial investiga- tion as to the commercial merits of the Nicaragua Canal and to postpone any consideration as to appro- priating money for its construction in advance of such investigation. I plead for such investigation, confident that it will verify my conclusions of 1880 and 1895. The proponents of the Nicaragua Canal oppose such in- vestigation and, as I believe, from fear that it would be fatal to their scheme. * This varied from six to nine million tons. 17 CHANGE OF PUBLIC SENTIMENT IN REGARD TO THE NICARAGUA CANAL PROJECT. During the last six months the tone of the public press has changed in regard to the proposition that the Government of the United States shall construct the Nicaragua Canal in advance of any thorough and im- partial official investigation as to its commercial and military aspects I infer this somewhat from my per- sonal experiences in regard to the subject. In the July number of the Engineering Magazine , published simul- taneously in New York and in London, Professor Haupt, a member of the present Nicaragua Canal Board, pub- lished an article on the importance of constructing the Nicaragua Canal from the commercial point of view. This was aside from his official duty of investigating the engineering features of the scheme and seemed to constitute a distinct departure from the function of judge to that of propagandist. Ignoring present con- ditions, he based his reasoning entirely upon the unofficial and unauthenticated statements of a certain Mr. F. W. Kelly, of New York, which statements were founded upon statistics for the years 1856-’57. This was long before the Suez Canal or any one of the transcontinental railroads had been constructed. At the request of the editor of the Engineering Magazine I replied to the article of Professor Haupt in the issue of that magazine of August last. In this article I. showed, from present conditions, that the Nicaragua Canal is devoid of any considerable commercial merits and that its assumed military importance is conjectural. In the October number of the Engineering Magazine the professor has a fanciful and inconsequential reply to my article, in which he indulges in such poetic expressions as “the desires of centuries to unravel the secret of the Straits,” without stating to what particular desires or centuries 18 or secret or straits he has reference. Besides, the professor has utterly failed before the forum to which he has appealed, for in introducing his rejoinder the editor of the Engineering Magazine states that “the attitude of the magazine’’ is “one of dissatisfaction with the evidence so far offered as to the engineering feasibility of the scheme advanced, skepticism as to the commercial advantages of the canal and strong opposi- tion to the governmental espousal of the undertaking.” I believe this voices the prevailing sentiment of the engineering profession in regard to the Nicaragua Canal scheme both in this country and in Great Britain. The Conference on Territorial Expansion, held at Saratoga Springs, N. Y., on August 19 last, consid- ered the Nicaragua Canal question. Hon. Warner Miller spoke in favor of the project. I followed, being also a member of the conference, directing my argu- ment particularly to the importance of a thorough and impartial investigation of the commercial and military aspects of the Nicaragua Canal project. The commit- tee on resolutions, composed of twenty-four men distin- guished for ability, did not present any resolution in favor of the canal project, as had been expected and hoped for by the canal proponents. The Committee on Platform and Resolutions of the Republican State Convention, held at Saratoga Springs, September 27, 1898, considered the Nicaragua Canal project, and for the first time, I think, in ten years, omitted any reference to it in its report to the conven- tion. I was a member of that committee and conven- tion and did what I could to expose the unworthiness of the scheme. 19 The idea that the Government of the United States ought to investigate before investing in the Nicaragua Canal scheme seems to be slowly but surely securing conviction in the public mind. INVESTIGATIONS AS TO THE ENGINEERING ASPECTS OF THE SCHEME. The proponents of the Nicaragua Canal were as much opposed to any governmental investigation of the engi- neering features of their scheme as they are now op- posed to any investigation as to its commercial and military aspects. But after awhile public suspicion was aroused as to the estimates of cost put forth by the Canal Company. Accordingly certain Senators and Members of Congress resolved to institute a govern- mental investigation. This was accomplished by a pro- vision of law approved January 28, 1895. The engi- neering commission of 1895 was composed of three emi- nent engineers, viz : General William Ludlow, of the United States Corps of Engineers, who lately distin- guished himself at Santiago; Commodore M. T. Endi- cott, a civil engineer of the Navy, now Chief of the Bureau of Yards and Docks in the Navy Department, and Alfred Noble, a civil engineer of Chicago. The canal company had no voice in the selection of these men. The report of the commission was that the canal would cost $183,472,893, as against an estimated cost of $69,893,660 made by the chief engineer of the canal company. The proponents of the Nicaragua Canal op- posed the resolution creating this commission and de- clared that it was framed by the enemies of the canal company. When the report of the commission of emi- nent engineers was submitted, it was vigorously at- tacked by representatives of the Maritime Canal Com- pany of Nicaragua before the Committee on Interstate 20 and Foreign Commerce of the House of Representatives. These men not only challenged the professional work of the commissioners, but, as already stated, went so far as to impeach their integrity. Although unsuccessful in these efforts, the canal propagandists, have been suc- cessful in having created another engineering com- mission composed of three men believed to be entirely acceptable to the wildest advocate of the Nicaragua Canal. The chairman of this engineering commission, is not an engineer. All three of the commissioners are understood to be advocates of the canal. They have al- ready appeared before the Senate Committee on the Nicaragua Canal and there expressed their full faith in the project several months in advance of the completion of their report. As before stated, one member of this commission came before the public in an article pub- lished in the Engineering Magazine of July, 1898, in which article he expressed his abiding faith in the canal project, basing his opinion upon certain unofficial, un- authorized and absurd commercial data for the years 1856 and 1857, since which time the whole course and conditions of oceanic commerce have been radically changed. Mr. Warner Miller has also mentioned in his Forum article another evidence of the previousness of this com- mission. After stating the fact that the commission have at their disposal about $300,000 appropriated by Congress, that it has fifty engineers engaged on the surveys and computations to be completed in December next, he also states that last June — six months in advance of the completion of their technical work — the three commissioners appeared before a Senate com- 21 mittee made guesses as to the cost of the work as follows : Professor Haupt $90,000,000 Admiral Walker 125,000,000 General Haines 140,000,000 The highest of these guesses is forty five per cent above the lowest. This is a manifest absurdity. The commission seems to have been unable to withstand the exigencies of a popular chimera. I plead for a thorough and impartial official investi- gation of the commercial and military aspects of the Nicaragua Canal, under order of Congress, a legislative duty already too loDg delayed. LESSONS OF MODERN FAILURES IN THE CON- STRUCTION OF SHIP CANALS. Three stupendous blunders have been made by en- lightened nations during the last twenty years in the construction of ship canals. I refer to the Manchester Canal of England, the Kiel Canal of Germany, and the Corinth Canal of Greece. The main facts in regard to the Manchester Canal are clearly set forth by Hon. Wm. F. Grinnell, United States Consul at Manchester, in the admirable volume published by the Department of State, entitled “ Canals and Irrigation in Foreign Countries.” Mr. GrinnelPs dispatch, which is dated March 16, 1897, clearly expose^ the lamentable financial results of the construction of the Manchester Canal. The estimated cost of this work was $47,750,098, but the actual cost was $73,818,940. The ship tonnage which would pass through the canal annually was estimated at 9,649,316 tons, but it 22 amounted to only 1,826,237 tons during the year 1896, or less than one-fourth the amount estimated. The es- timated receipts of the canal, before its construction, was $8,174,659, but the revenue from tolls in 1896 amounted to only $884,218, or less than one-ninth the amount estimated. It is also stated that “ the ex- penditure on ship canal revenue account during the half-year ending June 30, 1896, was 7,429 pounds ster- ling ($35,956) in excess of the receipts/’ So it appears that in England, the country most highly distinguished in modern times for economic and commercial sagacity, the enormous sum of nearly $74,000,000 was wasted in the construction of a canal which does not pay its run- ning expenses. This gigantic blunder was due, first, to a failure to correctly estimate the cost of construc- tion, and, second, to the failure to compute even ap- proximately the amount of traffic which the canal would be able to secure. The latter, which is by far the most serious error, as shown by Consul Grinnell, was due mainly to the failure to estimate the effect of the com- petition of rival railroads. A far more appalling result confronts the United States through the failure to make any careful computation as to the effect of the compe- tition of thirteen rival railroads upon the traffic of the Nicaragua Canal. Such neglect would now be inexcus- able for the reason that the computation can be made, not with precision but approximately. Nor has there been any effort to ascertain the amount of traffic tribu- tary to the canal or to ascertain the attractive force of rival lines. Let not the Government of this great and enlightened nation commit itself to the stupendous folly of failing to make a proper investigation as to the com- mercial and economic conditions which environ the Nicaragua Canal before entering upon its construc- tion. In a word, let it investigate before investing. 23 CERTAIN OTHER FALLACIES. There are other fallacies which have heretofore been used with great effect in the promotion of public senti- ment in favor of the Nicaragua Canal scheme. Certain of these may be mentioned: 1. The assumption that the success of the Suez Canal proves that the Nicaragua Canal would necessarily be successful is negatived by the single fact that the Suez Canal has no railroad competitor, whereas the Nicaragua Canal, as already shown, would at the beginning be overwhelmed by the competition of six rival railroad lines. One railroad competing with the Suez Canal as sharply as would the transcontinental railroads of the United States with any possible American isthmian canal would at once take from it (the Suez Canal) the entire passenger traffic and the carriage of all the mails, bullion, express goods and the higher classed freights and perishable goods. The result of such competition would be to bankrupt the Suez Canal Company. The most striking difference between the Suez Canal and the Nicaragua Canal is that the former connects great commercial countries while the latter connects vast un- productive oceans. 2. The assumption that the commerce of the Sault Ste. Marie Canal proves that the Nicaragua Canal would be successful is utterly fallacious. The lake commerce via Sault Ste. Marie is in the nature of barge transfer between railroad termini, from seven to nine hundred miles apart in the carriage of enormous quantities of natural products, chiefly grain, ores and coal. It is a traffic which has no parallel on the globe. 3. The assumption that the Nicaragua Canal would be of benefit to Chicago and other cities of the West is fallacious. If constructed the chief function of the Nicaragua Canal would be to divert the commerce of 24 our Pacific Coast from the railroads which bring such trade direct to the distributing centers of the West, assuming that it would have the power thus to divert traffic, an assumption which I strenuously deny. Trade which would pass through the Nicaragua Canal to the cities on the Atlantic seaboard would there find distributing markets which would supersede Chicago as such. Let the great cities of the West think again upon this subject, and think reflectively. 4. The assumption that the Nicaragua Canal may be of benefit to the people of the Pacific coast with respect to the large trade expected to be developed with Hawaii, the Philippine Islands, Japan and China is fallacious. All of that trade which should move by the Nicaragua Canal route would be in the nature of a diversion from San Francisco and other Pacific coasts of this country. This is indicated by the fact that Honolulu, the chief coaling station between Asia and North America, is 986 nautical or 1,142 statute miles south of the latitude of San Francisco. Every time a railroad car moves it exerts an influence toward the development of the country through which it passes, and toward the pros- perity of the commercial towns and cities whose inter- ests it subserves. But a ship leaves behind it no evi- dence of its passage upon the pathless sea. It would seem that one foreign transportation line at the north of San Francisco drawing from that city a large amount of Asiatic commerce ought to suffice. Let the people of the Pacific coast think again upon this subject, and think reflectively. THE MILITARY ASPECTS OF THE PROPOSED NICARAGUA CANAL. Much has been said in regard to the importance of the Nicaragua Canal as a passageway for the war-ships 26 of the American Navy, both in time of peace and of war. This assumption does not bear the test of scrutiny. It is negatived already by official reports of officers of the Army and the Navy who have given to the subject careful investigation and mature reflection. For ex- ample : 1. In an official “ Report on the Nicaragua Canal in its Military Aspects/' made by Capt. George P. Scriven of the U. S. Army to Brig. Gen. A. W. Greely, Chief Signal Officer, in the year 1894, only four years ago, it is declared that “ actual defenses must be provided by the United States both for external and internal protec- tion. ” and that ‘‘the canal must be guarded at every vital point and carefully watched throughout. ” Capt. Scriven also explains the necessity for forts and naval vessels at either end. Upon this subject he quotes approvingly from Lieut. L. D. Green, of the U. S. Army, as follows : “To practically defend the canal we would require heavy sea batteries at its ocean extremities armed with guns of equal power to those carried by first-class battleships. “In the seacoast batteries will be habitually kept sufficient garrisons to guard and cave for the property and guns, while the main military force can be massed at one or two central points upon the healthful and breezy uplands, wuence the seacoast garrisons could be changed by periodical details, the whole or any part of the command ready to move to either the east or west coast, as required, at a day’s notice.’’ Gen Greely adds to Capt. Scriven’s report a valuable appendix in which he cites authorities in regard to the difficulties of military operations in Nicaragua from climatic causes, mentioning particularly the experi- ences of Lord Nelson in the year 1741, then a captain in the British Navy. In conclusion Gen. Greely says : “It is thus apparent that the establishment of a military post in Nica- ragua or the occupation of the country by a body of troops is a problem which demands, in all its details, unusual sagacity as regards the supply of food, the stock of clothing, the means of transportation and the hous- ing of troops.” 26 (Senate Ex. Doc. No. 74, 53d Cong., 2d Session, pp. 42-44.) 2. The impolicy of attempting to use the Nicaragua Canal as a channel for the passage of navy vessels in time of war is indicated by the following extract from the report of the Nicaragua Canal Board of 1895, of which Lieut. Col. (now Brig. Gen.) William Ludlow, of the Corps of Engineers, U. S. Army, was chairman: ‘‘It is proper to note the multiplied points at which the canal would be exposed to injury after construction, and the comparative facility with which a breach could be made at any point on the long line of embankments, if for any reason, military or malicious, it should be intended to destroy the canal navigation until the breach could be closed.” (H. R. Doc. No. 279, 54th Cong., 1st Session.) 3. At a hearing before the Committee on Interstate and Foreign Commerce of the House of Representatives, held April 17, 1896, Commodore Mordecai T. Endicott, a civil engineer of the United States Navy, then a mem- ber of the Nicaragua Canal Board, and now Chief of the Bureau of Yards and Docks in the Navy Depart- ment, was asked the question whether, in his opinion, “ it would be a feature of weakness in our military and naval status if we build the Nicaragua Canal.” Com- modore Endicott replied as follows : “I think in case of war with a country like Great Britain we might have to blow up the locks and abandon it. I do not think we could hold it against Great Britain.” (Hearings on House Bill 35, page 105, April 17, 1898.) This answer implies that the Nicaragua Canal would be “ a feature of weakness in our military and naval status ” in the event of war with any considerable naval power. This point might well be submitted for investi- 27 gation to a commission of military officers fully compe- tent to pass upon it. From the foregoing and other reliable evidence it appears to be beyond all question that the availability of the Nicaragua Canal for the passage of war vessels would involve the construction of expensive fortifica- tions at either end and defenses at all exposed points along its line. It would also be necessary, in time of war, to provide in a foreign country an adequate mili- tary guard along the entire line, and to station an ade- quate force at either end in order to prevent the destruc- tion of the canal at a hundred vulnerable points by means of torpedoes and mines, in order to prevent the destruction of vessels by the same means along the en- tire line of the canal, and in order to prevent the sinking of obstructions at the entrance to the narrow artificial harbors at either end of the canal, which obstructions might require months for their removal, and for the de- fense of the canal against formidable naval and military assault. The vulnerable points alluded to are locks, dams, culverts and embankments. The Suez Canal being a sea-level canal through Arabian sands is not subject to these particular infirmities. But a war-ship in a canal is, under any circumstances, a helpless and a harmless thing. In a word, judged by the single test of military pro- tection, the adequate defense of the Nicaragua Canal would be a source of weakness rather than of power. The idea sought to be inculcated by advocates of the Nicaragua Canal that the U. S. war-ship Oregon would have passed through the Nicaragua Canal if it had been constructed, instead of making her famous voyage around Cape Horn, is absolutely negatived by these statements. The Government of the United States 28 was not then in condition to afford the proper protec- tion of the canal either by the Army or the Navy. If such protection had been afforded it would have been at an expenditure of military power and of money greatly exceeding that involved in the voyage of the Oregon around Cape Horn. That such protection would have been necessary is also evident from the fact that the line of the canal passes through the territory of a people belonging to the Spanish race and in sympathy with Spain in the issue of war then impending. The barrier to navigation interposed by the American isthmus from Mexico to South America affords vastly greater military advantage to the United States than would any artificial channel through it having a width of only about 250 feet at the surface, especially in view of the fact that men and materials of war can be trans- ported across the continent by rail — a privilege denied to other naval powers. An army of eight hundred thousand men with all their munitions of war can be transported across the continent by rail within the space of twenty days. In case the Nicaragua Canal should be constructed, and neutralized so as to admit the free and unmolested pas- sage of war-ships of other nations, ‘both in peace and in war, as provided in the Clayton-Bulwer treaty, and as has been established in regard to the Suez Canal, this particular military advantage now en j oyed by the U nited States would be absolutely annulled, as an enemy would be enabled to pass not only his war-ships but also his troopships and other transports through the canal un- molested. The assumed need of an isthmian canal for military purposes is obviated by the fact that an adequate force of naval vessels can be constructed for the perfect de- fense of our Pacific Coast ports at one-tenth the cost of 29 the Nicaragua Canal. Such naval force would be ever present and therefore much more reliable as a means of defense than the shifting of great naval vessels from one side of the continent to the other in time of war. In the light of current events and of an awakened public sentiment there can be no doubt that such additional naval force will be provided within the next three years. And yet in the face of all the facts and reasons which go to make up a just estimate as to the military value of the Nicaragua Canal, proponents of the scheme per- sist in the declaration that it is of inestimable military importance. The whole question is evidently one which should be submitted to thorough and impartial official investiga- tion by a commission composed of army and navy officers of proven ability and knowledge. I earnestly plead for such investigation. The proponents of the Nicaragua Canal are making vigorous effort to prevent such investigation. Aside from the assumed merits of the Nicaragua Canal from the military point of view the case is hope- lessly complicated by the blundering and most unfor- tunate Clayton-Bulwer treaty. This feature of the case demands particular attention. THE CLAYTON-BULWER TREATY AND THE NICARAGUA CANAL. The famous Clayton-Bulwer treaty was concluded at Washington, D. C., April 19, 1850, between John M. Clayton, Secretary of State of the United States, and Sir Henry Lytton Bulwer, Envoy Extraordinary and Minister Plenipotentiary of Great Britain. Zachary Taylor was then President of the United States. (See Appendix A.) 30 The terms of this treaty which have ever since hope- lessly compromised the military possibilities of any trans-isthmian canal are as follows : 1. The treaty provides that neither Great Britain nor the United States shall ever obtain or maintain any ex- clusive control over the Nicaragua Canal for either mil- itary or commercial purposes nor “ ever erect or main- tain any fortifications commanding the same or in the vicinity thereof. ” 2. It stipulates that the two contracting nations shall invite other nations to join them in this “ neutraliza- tion” of the proposed canal both in time of peace and of war. 3. It stipulates that both nations shall endeavor to extend the terms of the treaty to every interoceanic canal or railroad project from Tehuantepec to Panama, and declares that the intention of the two governments in entering into the convention was not only “ to ac- complish a particular object but also to establish a gen- eral principle ” Undoubtedly the main object had in view by the British negotiators was to break down the “ Monroe Doctrine,” a purpose which escaped the notice of the American negotiators until too late. The enormous blunders involved in this treaty were soon discovered. It not only contravenes the cherished Monroe Doctrine, but it denies to the United States any peculiar commercial or military advantages which it might possibly enjoy from a canal under its exclusive control. An attempt was made to modify the Clayton-Bul- wer treaty by Secretary Marcy, in the year 1853, dur- ing the administration of President Pierce. In his first annual message to Congress, December 8, 1857, Presi- dent Buchanan recommended the abrogation of the treaty. But these efforts came to naught. 31 By joint resolution adopted April 16, 1880, Congress requested President Hayes to “ take immediate steps for the formal and final abrogation of the Clayton- Bulwer treaty.” Before anything had been accom- plished in that direction President Garfield was installed and Secretary Blaine took the matter vigorously in hand. On November 19, 1881, he addressed a dispatch to Mr. Lowell, our Minister in London, stating the indis- putable fact that the treaty “concedes to Great Britain the control of whatever canal may be constructed.” But the diplomatic efforts of Secretary Blaine for the abrogation of the Clayton-Bulwer treaty were ineffect- ual, as were also those of his successor, Mr. Freling- huysen, under President Arthur. In referring to these failures, Professor Keasbey says : * “There can be little doubt that Great Britain will continue for the present to oppose our claim, and her objections will moreover be perfectly well justified by the terms of the Clayton-Bulwer treaty still extant. Our diplomatic demands will therefore scarcely be al- lowed by our rival, and peremptory notice on our part of immediate abrogation of the convention might pre- cipitate a conflict in other directions for which we are by no means prepared.” This was written two years ago. Presumably the ab- rogation of the blundering and compromising Clayton- Bulwer treaty would be more difficult to-day than it was then. Certain advocates and proponents of the Nicaragua Canal maintain, however, that the Clayton-Bulwer treaty is void or voidable from the fact that the Nica- ragua Canal, to which it relates, has not been con- structed. The more logical view, which seems to be * The Nicaragua Canal and the Monroe Doctrine, by Professor Lindley Miller Keasbey, page 596. 32 quite generally accepted by American statesmen and by all British statesmen, is that the main purpose and spirit of the treaty was the neutralization of any isth- mian canal which may be constructed and that this purpose is persistent, and not dependent upon the con- struction of any particular canal. This view is sus- tained by the fact that the Clayton-Bulwer treaty does not require either the government of the United States or of Great Britain to furnish ‘‘the necessary capital” for the construction of the Nicaragua Canal, or any other canal, thus indicating that the main object of the treaty was in its own language “to establish a general principle,” namely, to secure the neutrality of any isthmian canal which might be constructed. As minister to Great Britain, Mr. Buchanan declared in January, 1854, that “ The main feature of the policy which dictated the Clayton- Bulwer CONVENTION WAS TO PREVENT EITHER GREAT BRITAIN OR THE United States from being placed in a position to exercise exclu- sive CONTROL, IN PEACE OR WAR, OVER ANY OF THE GRAND THOROUGH- FARES BETWEEN THE TWO OCEANS.” Again, as President, Mr. Buchanan said, in his mes- sage to Congress, December 8, 1857: “In the United States we believe that this treaty would place both powers upon an exact equality by the stipulation that neither will ever ‘ occupy, or fortify, or colonize, or as- sume or exercise any dominion’ over any part of Cen- tral America.” Lewis Cass, Secretary of State under President Buchanan, in a communication to Lord Napier, British minister to the United States, under date of November 8, 1858, said : “What the United States want in Central America, next to THE HAPPINESS OF ITS PEOPLE, IS THE SECURITY AND NEUTRALITY OF THE INTEROCEANIC ROUTES WHICH LEAD THROUGH IT.” Secretary Seward strongly inclined to this view. It would seem that the foregoing, including the opinion 33 of Mr. Blaine, ought to be regarded as conclusive upon the point that the Clayton-Bulwer treaty does “ neutral- ise ” the Nicaragua Canal, thus debarring the United States from any exclusive control of it until that treaty is abrogated. There were economic and commercial blunders in- volved in the Clayton-Bulwer treaty even more glaring than that described. With the exception of a few sub- sidized trans-Atlantic steamers, and ocean steamers engaged on a few other important passenger routes, the vessels engaged in international commerce in 1850 were all sailing vessels. But, as already shown, the Nica- ragua Canal would not have been, and would not now be, available for the passage of sailing vessels. Hence it would have been absolutely worthless as an avenue of commerce if it had been constructed in the year 1850. The Clayton-Bulwer treaty of 1850 encountered an- other economic and commercial obstacle fatal to its purpose of constructing a Nicaragua canal. It was impossible for the framers of that treaty to forecast the effect upon the Nicaragua route of the competition of rival lines, not then in existence. In this respect the march of time has radically changed the conditions and consequently the course of the world’s commercial movements. Some of the principal of these rival lines of transportation may be noticed. a. When the Clayton-Bulwer treaty was concluded in 1850 the construction of the Panama Railroad was in its incipient stage. It was opened for traffic Janu- ary 26, 1855. It proved to be an exceedingly valuable highway of commerce, until in a great degree eclipsed by the transcontinental railroads of the United States. b. In the year 1850 the Suez Canal had not even been 34 projected. Its construction was begun August 25, 1859, and it was opened for traffic November 17, 1869. It is now one of the chief avenues of interoceanic commerce, and, as already shown, it forever precludes the idea of commerce between the United States and Asia, or be- tween Europe and Asia by any American isthmian canal route. c. When the blundering Nicaragua Canal treaty of 1850 was signed, the idea of constructing a railroad across this continent was chimerical. Two thousand miles of territory, the Rocky Mountains, arid deserts, hostile Indian tribes and economic conditions affecting the possibilities of the railroad itself then forbade the serious consideration of such a scheme. But we have lived in an age of economic and commercial wonders. The construction of the first transcontinental railroad was begun in the year 1862, and the line was opened for traffic May 10, 1869. Seven other lines and parts of lines have since been constructed in the United States. Transcontinental traffic has enormously increased and rates have greatly fallen. Thus the need of a Nicara- gua Canal has been absolutely eliminated. And yet it is hard to dispel from the public mind the visions of nearly half a century ago, visions which found expression in the absurd Clayton-Bulwer treaty and in the Nica- ragua Canal project. The present demand for the con- struction of that canal is a mere echo of conditions erroneously supposed to have prevailed in the year 1850, and it is an echo which answers — where ? I be- speak for this subject a thorough and impartial investi- gation by Congress. That the proponents of the Nica- ragua Canal will oppose such investigation seems to go without saying. 35 THE ATTITUDE OF THE CENTRAL AMERICAN STATES TOWARD THE MARITIME CANAL OF NICARAGUA. There is another political aspect of the Nicaragua Canal project which demands careful investigation by the Government of the United States before embarking in its construction. I refer to the attitude of Nicara- gua, Costa Rica and the new republic styled “the United States of Central America,” which came into existence November 1, 1898. In December, 1897, the government of Nicaragua granted to the Atlas Steamship Company of London a thirty-year franchise for the exclusive steam navigation on Lake Nicaragua and the San Juan River, together with ample rights for the construction of railroads. This privilege will unquestionably divert almost all of the commerce of Nicaragua — internal as well as for- eign — from the Nicaragua Canal in case it shall be built. Such procedure on the part of Nicaragua clearly manifests net only lack of confidence in' the Maritime Canal Company of Nicaragua, but also a spirit of hostility toward it. Recent events more clearly in- dicate that disposition. On October 28, 1898, it was announced that Nicaragua had contracted with certain New York and Chicago parties for the construction of the Nicaragua Canal, such concession to take effect next October when tb& concession to the Maritime Canal Company of Nicaragua will lapse. This not only discredits the latter company but manifests a spirit of enmity toward it. It likewise compromises the rela- tions of the United States to that company and to Nica- ragua. Another matter of great' significance is contained in the announcement that on November 1, 1898, Nicaragua, 36 Salvador and Honduras had united in forming a new republic styled “The United States of Central America.” It is provided that the Nicaragua Canal shall, as a na- tional project, pass under the control of the new nation. At the present writing the announcement is made in the public press that the President of Costa Rica has arrived in New York and that he denies the conclusive- ness of the new contract entered into on October 28th by Nicaragua, for the reason that the canal, if con- structed upon the route decided upon, would trench upon Costa Rican territory. It is impossible to arrive at any definite conclusion as to what course the Government of the United States is likely to pursue in regard to the changed conditions which have thus been introduced by Nicaragua or what will be the political effect of the creation of the new republic upon the attitude which the United States can or ought to assume in regard to the Nicaragua Canal. Unquestionably the subject should be thoroughly in- vestigated by Congress before committing our Govern- ment to any financial obligations for the construction of the canal. CONCLUSION. In the face of all the facts thus presented, one of the chief proponents of the Nicaragua Canal scheme has recently declared that the Nicaragua Canal bill is to be forced through Congress at itsjiext session, which ends March 4, 1899. This means that an attempt will be made to forestall any investigation of the economic, commercial, military or political aspects of the project, or in regard to the propaganda by which the people of this country have been deluded as to the true character of the scheme. I stand for the economic verities ; I stand for the logic of conditions, and in so doing 1 plead for a 37 thorough aud impartial official investigation of the economic, commercial, military and political aspects of the Nicaragua Canal project by a competent com- mission, upon which there shall be placed no advocate of the Nicaragua Canal or person recommended by any proponent of the canal or in its interest, and no person known to be an opponent of the canal, or in any manner interested in or employed by any railroad or other corporation assumed to be at rivalry with the canal. The country demands the truth, the whole truth, and nothing but the truth in regard to the prac- ticability of the Nicaragua Canal project. Investigate ' before investing. JOSEPH NIMMO, Jr. . Huntington, Long Island, N. Y., Nov. 25, 1898.. APPENDIX A. CONVENTION RELATIVE TO A SHIP CANAL BY WAY OF NICARAGUA, COSTA RICA, THE MOSQUITO COAST, OR ANY PART OF CENTRAL AMERICA. Concluded April 19, 1850 ; ratifications exchanged at Washington July 4, 1850 ; proclaimed July 5, 1850. The United States of America and Her Britannic Majesty, being desirous of consolidating the relations of amity which so happily subsist between them by setting forth and fixing in a convention their views and intentions with reference to any means of communica- tion by ship-canal which may be constructed between the Atlantic and Pacific Oceans by way of the river San Juan de Nicaragua, and either or both of the lakes of Nicaragua or Managua, to any port or place on the Pacific Ocean, the President of the United States has conferred full powers on John M. Clayton, Nego tiators Secretary of State of the United States, and Her Britannic Majesty on the Right Honourable Sir Henry Lytton Bulwer, a member of Her Majesty’s Most Honourable Privy Council, Knight Commander of the Most Honourable Order of the Bath, and Envoy Extraordinary and Minister Plenipotentiary of Her Britannic Majesty to the United States, for the aforesaid purpose; and the said Plenipotentiaries, having ex- changed their full powers, which were found to be in proper form, have agreed to the following articles : Article I. The Governments of the United States and Great Britain hereby declare that neither the Control ove r the one nor the other will ever obtain or main- proposed canal, tain for itself any exclusive control over the said ship- canal ; agreeing that neither will ever erect or maintain any fortifications commanding the same, or in the 40 vicinity thereof, or occupy, or fortify, or colonize, or assume or exercise any dominion over Nicaragua, Costa Rica, the Mosquito coast, or any part of Central America ; nor will either make use of any protection which either affords or may afford, or any alliance which either has or may have to or with any State or people for the purpose of erecting or maintaining any such fortifications, or of occupying, fortifying or col- onizing Nicaragua, Costa Rica, the Mosquito coast, or any part of Central America, or of assuming or exer- cising dominion over the same ; nor will the United States or Great Britain take advantage of any intimacy, j or use any alliance, connection or influence thateither may possess, with any State or Government through whose territory the said canal may pass, for the pur- pose of acquiring or holding, directly or indirectly, for the citizens or subjects of the one any rights or advant- ages in regard to commerce or navigation through the said canal which shall not be offered on the same terms to the citizens or subjects of the other. Article II. Vessels of the United States or Great Britain trav- ersing the said canal shall, in case of war between the contracting parties, be ex- sei^traversing the empted from blockade, detention, or cap- ture by either of the belligerents ; and this provision shall extend to such a distance from the two ends of the said canal as may hereafter be found expedient to establish. Article III. In order to secure the construction of the said canal, the contracting parties engagethat, if any Pr9 perty of the such canal shall be undertaken upon fair ^o^truct^gthe and equitable terms by any parties having canaL the authority of the local government or governments through whose territory the same may pass, then the persons employed in making the said canal, and their property used or to be used for that object, shall be protected, from the commencement of the said canal to its completion, by the Governments of the United States 41 md Great Britain, from unjust detention, confiscation, seizure or any violence whatsoever. Article IV. The contracting parties will use whatever influence they respectively exercise with any State, w C o 0 rk st to c b 0 e n f 0 acm e States or Governments possessing, or tated - claiming to possess, any jurisdiction or right over the territory which the said canal shall traverse or which shall be near the waters applicable thereto, in order to induce such States or Governments to facilitate the construction of the said canal by every means in their power ; and, furthermore, the United States and Great Britain agree to use their good offices, wherever or however it may be most expedient, m order to procure the establishment of two Free ports. f ree ports one a t each end of the said canal. Article V. The contracting parties further engage that when the said canal shall have been completed Neutrality of canal. they win pro tect it from interruption, seizure or unjust confiscation, and that they will guar- antee the neutrality thereof, so that the said canal may forever be open and free, and the capital invested therein secure. Nevertheless,, the Governments of the United States and Great Britain, in according their pro- tection to the construction of the said canal, and gnar- anteeing its neutrality and security when completed, always understand that this protection and guarantee are granted conditionally, and may be withdrawn by both Governments, or either Government, if both Gov- ernments or either Government should deem that the persons or company undertaking or managing the same adopt or establish such regulations concerning the traffic thereupon as are contrary to the spirit and inten- tion of this convention, either by making unfair dis- criminations in favor of the commerce of one of the contracting parties over the commerce of the other, or by imposing oppressive exactions or unreasonable tolls upon passengers, vessels, goods, wares, merchandise or other articles. Neither party, however, shall withdraw 4 2 the aforesaid protection and guarantee without first giving six months’ notice to the other. Article VI. The contracting parties in this convention engage to invite every State with which both or either have friendly intercourse to enter into stipulations with them similar to those which they have entered into with each other, to the end that all other States may share in the honor and advantage of having contributed to a work of such general interest and importance as the canal herein contemplated. And the contracting parties like- wise agree that each shall enter into treaty to be made with Cen- stipulations with such of the Central trai American states. American States as they may deem advis- able for the purpose of more effectually carrying out the great design of this convention, namely, that of constructing and maintaining the said canal as a ship communication between the two oceans for the benefit of mankind, on equal terms to all and of protecting the same ; and they also agree that the good offices of either shall be employed, when requested by the other, in aid- Differences as to in g and assisting the negotiation of such right over territory, treaty stipulations ; and should any differ- ences arise as to the right of property over the territory through which the said canal shall pass, between the States or Governments of Central America, and such differences should in any way impede or obstruct the execution of the said canal, the Governments of the United States and Great Britain will use their good offices to settle such differences in the manner best suited to promote the interests of the said canal, and to strengthen the bonds of friendship and alliance which exist between the contracting parties. Article VII. It being desirable that no time should be unneces- sarily lost in commencing and constructing the said canal, the Governments of the United te5ed l into Without States and Great Britain determine to give their support and encouragement to such 43 persons or company as may first offer to commence the same, with the necessary capital, the consent of the local authorities, and on such principles as accord with the spirit and intention of this convention ; and if any persons or company should already have, with any State through which the proposed ship-canal may pass, a con- tract for the construction of such canal as that speci- fied in this convention, to the stipulations of which contract neither of the contracting parties in this con- vention have any just cause to object, and the said persons or company shall, moreover, have made prepa- rations and expended time, money and trouble on the faith of such contract, it is hereby agreed that such persons or company shall have a priority of claim over every other person, persons or company to contractors already the protection of the Governments of the United States and Great Britain, and be allowed a year from the date of the exchange of the ratifications of this convention for concluding their arrangements and presenting evidence of sufficient capital subscribed to accomplish the contemplated un- dertaking ; it being understood that if, at the expiration of the aforesaid period, such persons or company be not able to commence and carry out the proposed enterprise, then the Governments of the United States and Great Britain shall be free to afford their protection to any other persons or company that shall be prepared to commence and proceed with the construction of the canal in question.. Article VIII. The Governments of the United States and Great Britain having not only desired, in entering into this con- protection to be vention, to accomplish a particular object* st1pl n iation b sVother but also to establish a general principle, communications, they hereby agree to extend their protec- tion, by treaty stipulations, to any other practicable communications, whether by canal or railway, across the isthmus which connects North and South America, and especially to the interoceanic communications, should the same prove to be practicable, whether by 44 canal or railway, which are now proposed to be estab- lished by the way of Tehuantepec or Panama. In granting, however, their joint protection to any such canals or railways as are by this article specified, it is always understood by the United States and Great Britain that the parties constructing or owning the same shall impose no other charges or conditions of traffic thereupon than the aforesaid Governments shall approve of as just and equitable ; and that the same canals or railways, being open to the citi- zej£of°o p t e her c ni : zens and subjects of the United States and Great Britain on equal terms, shall also be open on like terms to the citizens and subjects of every other State which is willing to grant thereto such pro- tection as the United States and Great Britain engage to afford. Article IX. The ratifications of this convention shall be exchanged at Washington within six months from this day or sooner if possible. In faith whereof we, the respective Plenipotentiaries, have signed this convention and have hereunto affixed our seals. Done at Washington the nineteenth day of April, anno Domini one thousand eight hundred and fifty. Ratifications. [SEAL.] [SEAL.] John M. Clayton. Henry Lytton Bulwer. APPENDIX B. Value of the commerce of the United States (imports and exports combined) with Europe, the United King- dom, Germany, France, Asia, China, Japan and Austra- lasia during the year ended June 30, 1898: (Prepared by the Chief of the Bureau of Statistics of the Treasury Department, Washington, D. C., Nov. 3, 1898.) Value of Commerce with the United States. Total, Europe $1,279,739,936 The United Kingdom 649,885,790 Germany 224,737,350 France 148,190,138 Total, Asia 137,302,384 China, including Hong Kong .... 37,331,047 Japan 45,609,151 Total, Australasia 21,188,761 Total foreign commerce of the United States (all nations) $1,847,531,984 JOSEPH NIMMO, Jr., Statistician and Economist. Huntington, Long Island, N. Y. 1831 F Street N. W., Washington, D. C. SPECIAL ATTENTION GIVEN TO QUE8TION8 IN REGARD TO COMMERCE, TRANSPORTATION, NAVI- GATION AND INDUSTRY.