584 TRANSACTIONS OF SECTION FT. 
WEDNESDAY, SEPTEMBER 17. 
The following Papers and Reports were read :— 
1. Some of the Economic Effects of the Panama Canal. 
By Professor A. W. Kirxaupy. 
In estimating the probable economic effects of the opening of the Panama 
Canal there must be noted :—A. Local effects; B. the effects on world trade. 
From the industrial point of view three questions arise :—(i) who shall 
supply certain markets: (ii) who shall perform the service of transport : 
(ili) what routes shall the shipping take? 
The following are among the principal factors on the balance of advantages 
of which the above questions will be decided :—1. distance; 2. tolls on the 
route; 3. freights, and the possibility of continuous freight-earning; 4. fuel 
stations; 5. insurance rates; 6. the political factor; 7. rates of exchange; 
8. investments of capital and banking facilities; 9. the human factor—manu- 
facturing and commercial ability, experience of trade and markets, present 
possession. 
A. Local Effects —The Canal will add enormously to the commercial 
facilities between the various regions of the American continent and the ad- 
jacent islands, hence important developments may be expected. The West 
India Islands will enter upon a new period of prosperity, especially when the 
internal-combustion engine takes the place of steam, and oil replaces coal. 
English business and fiscal methods will have a great effect on making the West 
Indies important to shipping, and thus assist the development of local indus- 
tries, especially the export of raw material. The comparatively unprogressive 
States of Central and South America will undergo remarkable developments 
owing to increased immigration of Europeans and increased trade. These local 
benefits will be the chief, and ample, justification for the construction of the 
Canal. 
B. The Effect on World Trade.—1. America realises the importance of the 
coal trade to the United Kingdom; there will be a strenuous attempt to displace 
British coal throughout the world in order to give American shipping the 
advantages at present enjoyed by British. If successful this will deal a mortal 
blow at our Mercantile Marine. Thus the British coal industry must realise 
the situation, and both the capital and labour interested resolve to hold the 
markets at all costs until the fuel question—coal or oil—is finally settled. 
2. The published scheme of tolls which frees American coasting ships raises an 
international question. If the Canal be worked on business principles, higher 
tolls will be exacted from other shipping; this will either cause a grievance, or 
decrease the tonnage using the Canal. The question might be made domestic 
instead of international if America charged equal tolls to all, and gave 
bounties to such shipping as it wishes to favour. 
Hactors.—1. Distance.—Kffects on Australasian and Far Eastern markets 
will be considerable. The mileage run by a steamer is a serious factor in cost 
of service. In this shipping offers a contrast to railways, for when trucks are 
loaded, length of haul has but little effect on cost of service. 
Taking London and New York as the typical European and American ports, 
the markets of the world fall into three classes :—(1) Countries in close 
proximity to the Canal: here the effect will be greatest and, in many cases, 
the use of the Canal a necessity. (2) Australasia and the Far East. At present 
there is a choice of routes to these markets; Panama will offer another alterna- 
tive. (3) Ports not directly affected. ’ 
Class 2 is receiving most attention from those estimating the effects on world 
trade. ‘There is a parallel equidistant from London via Suez, and from New 
York via Panama. On the South Coast of Australia this is Port Lincoln, 
Adelaide being the nearest great port. All Asiatic ports west of Japan will 
continue to be nearer to London; e.g., Manila will be 2,000 miles nearer. But 
all Japanese and New Zealand ports and all Australian ports east of Adelaide 
will be nearer New York. If it costs 2s. to transport one ton of goods 1,000 
miles, distance saved will give American manufacturers an advantage of from 
