Whether the earlier spirit of world conquest will again spring up in the American mind so long content with the profits of its own national preserves is yet to be demonstrated. To what extent it has vanished any thoughtful traveler in foreign lands observes with a sigh. One sees evidences of its weakness at every foreign international exhibition, for the American section is generally the least impressive there. The opinion of our manufacturers is often that to show their products abroad is folly because foreign manufacturers will imitate them with cheaper materials and labor. In most foreign markets, in the cities of Europe, South America and the Orient the chief American products you see displayed are those manufactured by one of those combinations of capital we call a trust, and they are usually sold abroad at lower prices than at home. Typewriters, adding machines, sewing machines, shoes and the divers products of the protean Standard Oil Company seem to be the most vigorous representatives of American industrial activity abroad. Nevertheless the recent statistics show that our experts are on the up-grade, and evidences of growing interest in our export trade multiply daily.

That the Canal of itself will not make amends for indifference or lethargy on the part of our manufacturers goes without saying. The nation may supply them with the waterway, but it cannot compel them to use it, or even teach them how. Every American traveler in South America has groaned over the reports that come from every side concerning the fatuity with which our manufacturers permit themselves to be distanced in the race for the trade of those republics. Our consular reports are filled with suggestions from consuls, but the various associations of exporters are so busy passing platitudinous resolutions about the need of taking the consular service out of politics that they have no time to heed the really valuable suggestions offered. Our methods of packing goods, and our systems of credits, are repugnant to the South American needs and customs and the fact has been set forth in detail in innumerable consular reports without any response on the part of our exporters. The American attitude is “what is good enough at home is good enough abroad”—which is patriotic but not a good rule on which to attempt building up foreign trade. Incidentally sometimes what is good enough for a home market is often too good for a Latin-American one. The English and the Germans recognize this and govern themselves accordingly.

It is a far cry from digging a canal to the system of educating young men to represent a firm in foreign lands. Yet one finds in visiting South America, or for that matter Oriental cities, that a great deal of the rapid expansion of German trade is due to the systematic education of boys for business in foreign lands. The weakest part of the educational system of the United States is its indifference to foreign tongues, an indifference possibly quite natural because but few Americans have really any need for any language except their own. But the German representatives sent to South America are at home in the Spanish tongue, and carefully schooled in the commercial needs and customs of the Latin-American countries before they reach them. They are backed, too, by a strong semi-official organization in their own country. They have in most of the principal South American towns German banks quite as interested as the salesmen themselves in the extension of German trade. It is reported that whenever paper involved in an American transaction with a South American buyer passes through a German bank in South America a report of the transaction is sent to some central German agency which tries to divert the next business of the same sort into German hands. I have no personal knowledge of such transactions, but the story is current in South America and it is quite in accord with the German’s infinite capacity for taking pains with little things.

Foreign ships, no less than foreign banks and the excellence of foreign commercial schools, are and will continue to be a factor in the building up of foreign trade via the Canal. Just as the German banks report to their home commercial organizations the transactions of other countries in lands whose trade is sought, so foreign ships naturally work for the advantage of the country whose flag they fly. Surprising as it may seem to many, and disappointing as it must be to all, it is the unfortunate fact that within a year of the time set for opening the Panama Canal to commerce there is not the slightest evidence that that great work is going to have any influence whatsoever toward the creation of a United States fleet in foreign trade. England, Germany, Italy and Japan are all establishing new lines, the last three with the aid of heavy subsidies. But in April, 1913, a recognized authority on the American merchant marine published this statement: “So far as international commerce via Panama is concerned not one new keel is being laid in the United States and not one new ship has even been projected. The Panama Canal act of last August reversed our former policy and granted free American registry to foreign-built ships for international commerce through the Panama Canal or elsewhere. But this ‘free-ship’ policy has utterly failed. Not one foreign ship has hoisted the American flag, not one request for the flag has reached the Bureau of Navigation”.

The reason for this is the archaic condition of our navigation laws. The first cost of a ship, even though somewhat greater when built in American yards, becomes a negligible factor in comparison with a law which makes every expense incurred in operating it 10 to 20 per cent higher than like charges on foreign vessels. James J. Hill, the great railroad builder, who planned a line of steamships to the Orient and built the two greatest ships that ever came from an American yard, said once to the writer, “I can build ships in the United States as advantageously as on the Clyde and operate them without a subsidy. But neither I nor any other man can maintain a line of American ships at a profit while the navigation laws put us at a disadvantage in competition with those of every other nation”. Those mainly responsible for the enactment and maintenance of the navigation laws declare them to be essential to secure proper wages and treatment of the American sailor, but the effect has been to deprive the sailor of the ships necessary to earn his livelihood.

However, coastwise shipping will be greatly stimulated by the Canal. In the midst of the lamentation about the disappearance of the American flag from the high seas it is gratifying to reflect that the merchant marine of the United States is really the second in the world, though our share in international shipping is almost negligible. That we rank second as a whole is due to the phenomenal development of our shipping on the great lakes where with a season barely eight months long a shipping business is done that dwarfs the Mediterranean or the German Ocean into insignificance. This has built up a great shipbuilding business on the lakes, and steel ships are even now being built on the Detroit River to engage in Panama trade. There are not wanting those who hold that if the money which has been spent at Panama for the good of the whole world, had been expended in making a thirty-foot ship canal from Lake Erie to tide-water on the Hudson, the benefit to the people of the United States, and to American shipping would have been vastly greater.

Indeed one of the pathetic things in the history of commerce is the persistence with which enterprising Chicagoans, and other mid-westerners, have tried to establish all-water routes to the European markets. All such endeavors have failed, costing their projectors heavily. It will aid, however, if the success of the Panama Canal shall not reanimate the effort to secure deep-water channels from the Lakes to the Gulf and from the Lakes to the Atlantic. After Panama the nation is unlikely to be daunted by any canal-digging project. Having improved the ocean highway, the people will demand easier access to it. Already there is discussion of whether the railroads will help or hamstring the Canal. Cargoes for the ships have to be gathered in the interior. When delivered at the seaport of their destination they have to be distributed to interior markets. It is in the power of the railroads to make such charges for this service as would seriously impede the economic use of the Canal.

Among the great canals of the world that at Panama ranks easily first in point of cost, though in length it is outdone by many, and its place as a carrier of traffic is yet to be determined. There are now in operation nine artificial waterways which may properly be called ship canals, namely:

1.—The Suez Canal, begun in 1859 and completed in 1869.

2.—The Cronstadt and St. Petersburg Canal, begun in 1877 and completed in 1890.

3.—The Corinth Canal, begun in 1884 and completed in 1893.

4.—The Manchester Ship Canal, completed in 1893.

5.—The Kaiser Wilhelm Canal, connecting the Baltic and North Seas, completed in 1895.

6.—The Elbe and Trave Canal, connecting the North Sea and Baltic, opened in 1900.

7.—The Welland Canal, connecting Lake Erie with Lake Ontario.

8 and 9.—The two canals, United States and Canadian, respectively, connecting Lake Superior with Lake Huron.

The Suez Canal naturally suggests itself for comparison, though it falls far short in volume of traffic of either of the two canals at Sault Ste. Marie, between Lake Superior and Lake Huron. It is ninety miles long, or just about twice the length of the Panama, and about two-thirds of its length is dredged through shallow lakes. It is 31 feet deep as against Panama’s 45, with a surface width of 420 feet, while the Panama Canal is from 300 to 1000 feet. The Suez Canal cost slightly under $100,000,000 and pays dividends at the rate of 12 per cent. Lord Beaconsfield, who bought control of it for England in face of fierce opposition and was savagely denounced for wild-cat financiering, secured for the Empire not merely its strongest bond, but a highly profitable investment as well. The tolls now charged are about $2 a ton according to the United States net measurement.

Of the other canals enumerated some, like the Manchester and the Elbe and Trave Canals, are of purely local importance, while others, like the Kaiser Wilhelm (better known as the Kiel) Canal, are mainly for naval and military purposes. In volume of traffic the first of all canals in the world is the American canal at the “Soo”, with the Canadian canal paralleling it a fair second. The volume of traffic passing through these waterways during the eight or nine months they are free from ice is incredible. In 1911 it approximated 40,000,000 tons and exceeded in volume Suez and all the other ship canals heretofore enumerated together. To the facilities for water carriage afforded by this and the neighboring Canadian canal is due much of the rapid growth and development of the country about the western end of Lake Superior. What countries will profit in the same way by the work at Panama? The Pacific coast, both of North and South America. Perhaps South America even more than our own land, for its present state admits of such development.

One problem opened by the Panama Canal which seldom suggests itself to the merely casual mind is the one involved in keeping it clear of the infectious and epidemic diseases for which Asiatic and tropical ports have a sinister reputation. The opening of the Suez Canal was followed by new danger from plague, cholera and yellow fever in Mediterranean countries. A like situation may arise at Panama. It is proposed, though I think not yet officially, to have passing vessels from infected ports inspected at the entrance to the Canal. If infection exists the ship can be fumigated during the passage through the Canal, which will take from ten to twelve hours, while the subsequent voyage to her home port, whether on our Atlantic coast or in Europe, will make any subsequent delay in quarantine needless. The plague is the disease most dreaded in civilized communities, which it only enters by being brought by ship from some Asiatic port in which it is prevalent. Its germs can be carried by rats as well as by human beings, and for this reason in some ports vessels from suspected ports are not allowed to come up to a dock lest the rodents slip ashore carrying the pestilence. Sometimes in such ports you will see a vessel’s hawsers obstructed by large metal disks, past which no rat may slip if he tries the tight-rope route to the shore. The new contracts for wharves, docks and piers at all our Zone ports prescribe that they shall be rat-proof. Indeed the rodents are very much under the ban in Panama, and the annual slaughter by the Sanitary Department exceeds 12,000.

Preparations are being made to make Balboa a quarantine station of world-wide importance. The mere proximity of the date for opening the Canal has caused discussion of its effect upon the health of civilized nations. At Suez an International Board exists for the purpose of so guarding that gateway from the East that none of the pestilences for which the Orient has an ill-fame can slip through. No suggestion has been made of international control at Panama. In fact such of the foreign articles as have come under my eye have been flattering to us as a nation, asserting, as they all do, that in sanitary science the United States is so far ahead that the quarantine service may be safely entrusted to this nation alone. Despite this cheerful optimism of Europe, there has not yet been a very prompt acquiescence by Congress in the estimates presented by Col. Gorgas for the permanent housing and maintenance of the quarantine service. Since the United States is to give the Canal to the world, it should so equip the gift that it will not be a menace to the world’s health.

CHAPTER XX
DIPLOMACY AND POLITICS OF THE CANAL

Having built the Panama Canal at a heavy cost of treasure and no light cost of life, having subdued to our will the greatest forces of nature and put a curb upon the malevolent powers of tropical miasma and infection, we are about to give the completed result to the whole world. It stands as a free gift, for never can any tolls that will be imposed make of it a commercial success. It was the failure to recognize this inevitable fact that made it impossible for the French to complete the task. It will be a national asset, not because of the income gathered at its two entrances, but because of the cheapening of freight rates between our two coasts and the consequent reduction of prices to our citizens. But this advantage will accrue to peoples who have not paid a dollar of taxation toward the construction of the Canal. There is absolutely no advantage which the Canal may present to the people of New England that will not be shared equally by the people of the Canadian provinces of Quebec and Ontario if they desire to avail themselves of the opportunity. Our gulf ports of Mobile, New Orleans and Galveston expect, and reasonably so, that the volume of their traffic will be greatly increased by the opening of the Canal. But if Rio de Janeiro, Buenos Ayres and Montevideo have products they desire to ship to the Orient or to the western coast of their own continent of South America the Canal is open to them as freely as to our ships.

Having given to the world so great a benefaction, it will be the part of the international statesmen of the United States, the diplomatists, to see to it that the gift is not distorted, nor, through any act of ours, divided unequally among those sharing in it. Upon the diplomacy of the United States the opening of the Canal will impose many new burdens and responsibilities.

Scarcely any general European war involved more intricate and delicate questions of the reciprocal rights of nations than did the acquisition of the Suez Canal by Great Britain. Volumes have been written on the subject of the diplomacy of Suez. The Constantinople conference called for the discussion of that topic, and the specific delimitation of the authority of Great Britain and the rights of other maritime nations was one of the most notable gatherings in the history of diplomacy. The Panama waterway will bring new problems and intensify old ones for the consideration of our statesmen. The Monroe Doctrine is likely to come in for a very, thorough testing and perhaps a new formulation. The precise scope of that doctrine has of late years become somewhat ill defined. Foreign nations say that the tendency of the United States is to extend its powers and ignore its responsibilities under this theory. In Latin America, where that doctrine should be hailed as a bulwark of protection, it is looked upon askance. That feeling is largely due to the attitude of this country toward the Republic of Colombia at the time of the secession of Panama.

A problem of the highest importance to the credit of the United States in Latin America, which should be settled in accordance with principles of national honor and international equity, is the determination of what reparation we owe the Republic of Colombia for our part in the revolution which made Panama an independent state and gave us the Canal Zone.

In an earlier chapter I have tried to tell, without bias, the story of that revolution and to leave to the readers’ own judgment the question whether our part in it was that merely of an innocent bystander, a neutral looker-on, or whether we did not, by methods of indirection at least, make it impossible for Colombia to employ her own troops for the suppression of rebellion in her own territory. As President, and later as private citizen, Mr. Roosevelt was always exceedingly insistent that he had adhered to the strictest letter of the neutrality law—always that is except in that one impetuous speech in San Francisco, in which he blurted out the boast, “I took Panama and left Congress to debate about it afterward”.

Mr. Roosevelt’s protestations of innocence had, however, little effect upon his own friends and party associates, for early in the Taft administration the conviction became general among men in high station that reparation of some sort was due to Colombia for what was—to express it guardedly—our connivance at a conspiracy that cost that republic its richest province—cost it further a lump payment of $10,000,000 and an annual sum of $250,000 to eternity. The records of diplomacy are enmeshed in many concealing veils, but enough is known of the progress of the negotiations to reflect credit upon the diplomacy of Colombia. That country has neither threatened nor blustered—and the undeniable fact that the comparative power of Colombia and the United States would make threats and bluster ridiculous would not ordinarily deter a Latin-American President from shrieking shrill defiance at least for the benefit of his compatriots. Colombia has been persistent but not petulant. It has stated its case to two administrations and has wrung from both the confession that the United States in that revolution acted the part of an international bandit. Out of the recesses of the Department of State has leaked the information that the United States has made to Colombia a tentative offer of $10,000,000, but that it had been refused. But the offer itself was a complete confession on the part of the United States of its guilt in the transaction complained of. Naturally, Colombia declined the proffered conscience money. Panama received from the United States not merely $10,000,000, but will get $250,000 a year for an indefinite period. All this Colombia lost and her valuable province as well because the captain of a United States man-of-war would not let the Colombian colonels on that day of revolution use force to compel a railroad manager to carry their troops across the Isthmus. The grievance of the Colombians is a very real and seemingly just one.

We hear much of the national honor in reference to canal tolls but less of it in relation to this controversy with Colombia. Yet that controversy ought to be settled and settled justly. It is inconceivable, of course, that it should be determined by restoring the status as it existed before that day of opera-bouffe revolution. Our investment in the Canal Zone, our duty to the world which awaits the opening of the Canal, and our loyalty to our partner, Panama, alike make that impossible. The Republic of Panama is an accomplished fact not to be obliterated even in the interest of precise justice. As the Persian poet put it:

President Roosevelt wrote the word Panama on the list of nations and moved on vastly pleased with the record.

The situation at the same time is one not to be lightly dealt with. The United States is none too popular at any point south of its own borders. It is at the one time hated and feared. The very Panamanians whom we invested with independence have no liking for us and the hatred of the Colombians for the nation that despoiled them is so general and extreme that their rulers are entitled to the utmost credit for having observed all the courtesies of diplomacy in their efforts to secure some measure of reparation. The question presents itself, is it wise to leave such a hot-bed of hatred, of resentment perhaps justifiable, in the very midst of Latin America, just when we are hoping by our new Canal to extend and cement our commercial relations with them? Among the Latin Americans there is a very general feeling that our devotion to the Monroe Doctrine is indicative only of our purpose to protect our neighbors against any selfish aggressions except our own. It is of the very highest importance that this feeling be dissipated, and there is perhaps no more immediate way of beginning that task than by reaching such an agreement with Colombia as shall indicate to other South American governments our purpose of doing exact justice among our neighbors, be they great and powerful or small and weak.

With all the South American countries the commerce of the Canal will tend to bring us into closer relations and to multiply the possibility of international dissension. Moreover, the growing interests of United States business men in those countries form national outposts on which we must ever keep a friendly eye. It is ridiculous to urge upon individuals the task of stimulating and extending our foreign trade if the government is to be wholly indifferent to their efforts. It is known that the great beef packers of Chicago have considerable plants in the Argentine; that a famous iron manufacturer of Pittsburgh has in Chile what is believed to be the largest iron mine in the world; that the Standard Oil Company has its agencies throughout the continent; and the Du Pont Powder Company besides maintaining two nitrate plants in Chile does a prodigious business in explosives with the various states—and not mainly for military purposes only. The United States Steel Company has a vanadium mine in Peru where 3000 Americans are working. The equipment of street railways and electric-lighting plants in South American cities is almost wholly of American manufacture. Even without the systematic encouragement of their home government, American business men have begun to make inroads upon German and English commercial power in South America, and the opening of the Canal will increase their activities. Today our Pacific coast is practically shut off from any interchange of commodities with Brazil and the Argentine; with the Canal open a direct waterway will undoubtedly stimulate a considerable trade. The more trade is stimulated, the more general travel becomes between nations, the less becomes the danger of war. There is no inconsistency in the statement that the Canal will become a powerful factor in the world’s peace, even though it does necessitate the maintenance of a bigger navy and the erection of powerful forts for its defense in the improbable event of war.

This is but one phase of the influence the Canal will exercise upon countries other than the United States. What it will do for the Latin-American countries immediately adjacent to Panama in the direction of leading them to establish improved sanitation systems, or to perfect those they now maintain, is beyond present estimate. Many such governments have had their representatives on the Zone to study the methods there in force, and while the present writer was there Col. Gorgas was besought to visit Guayaquil to give its rulers expert advice on the correction of the unsanitary state of that city. Members of the staff of Col. Gorgas are in demand as experts in all parts of the world. I know of one who in the last days of the Canal construction was sent by the German government to establish in some of the German South African provinces the methods that brought health to the Isthmus after the days of the futile French struggle with fever and malaria.

It is because of this influence upon foreign peoples, already apparent, that far-sighted people find intolerable the proposition to let the Canal Zone grow up into jungle and return to its original state of savagery. It can and should be made an object lesson to the world. From every ship that makes the ten-hour passage of the Canal some passengers will go ashore for rest from the long voyage and to see what the Zone may have to show them. Are we content to have them see only the hovels of Colon and the languid streets of Panama—exhibits that give no idea of the force, the imagination, the idealism that gave being to the Canal? Today the Zone is a little bit of typical United States life set down in the tropics. So it might remain if due encouragement were given to industrious settlers. There is not so much land in the world that this need be wasted, nor have there been so many examples of the successful creation and continuance of such a community as the Zone has been as to justify its obliteration before the world has grasped its greatest significance.

There are not lacking those philosophers who hold that the first political effect of the Canal will be to force us to abandon that attitude of national isolation and aloofness prescribed in Washington’s deprecation of “entangling alliances abroad”. They hold that this latest and greatest addition to our reasons for solicitude about the control of the Pacific will compel us to seek the coöperation of other powers—or another power—to make that control complete. Perhaps the proposition is most frankly stated in this paragraph from Mr. Frank Fox’s “Problems of the Pacific”.

“The friendly coöperation between the United States and Great Britain would give to the Anglo-Saxon race the mastery of the world’s greatest ocean, laying forever the fear of the Yellow Peril, securing for the world that its greatest readjustment of the balance of power shall be effected in peace, while rivalry between these two kindred nations may cause the gravest evils and possibly irreparable disasters”.

This is no place to discuss this thesis, but even the most casual consideration shows how great a mutual interest the United States and Great Britain have in the Panama Canal and its safeguarding from any disturbing conditions in the Pacific. Until conditions change and the United States regains its place among the maritime nations of the world the bulk of the trade passing through the Canal will be in British ships. For New Zealand and all of the eastern part of British Australia the Panama route offers the most expeditious connection with Liverpool. Canada, too, is vitally interested in the Canal. By the employment of the system of Georgian Bay and St. Lawrence Canals, which the Dominion government has created, with a foresight far greater than our own, the wheat, even of the Winnipeg region, may be sent by water to Montreal and thence in sea-going ships to the further shore of the Pacific. Even though owned by the United States, the Canal will be a powerful tie to bind closer together the widely separated parts of the British Empire.

That being true it will further cement the spirit of friendliness between the United States and Great Britain. It will accomplish this without formal treaties or proclaimed alliance. The alliance will be tacit, resulting from the very logic of the situation. Great Britain cannot afford to be otherwise than friendly with the owner of the Canal—the little passing tiff over the question of tolls on coastwise shipping notwithstanding. It is idle to ask that the control of the Pacific be assured by an Anglo-American compact. More intelligent is it to assume that any effort to break down that control, which now virtually exists, would be met by action on the part of the two English-speaking nations quite as effective as though a treaty existed. This, too, despite the present Anglo-Japanese treaty which so disquiets our California citizens, but quite needlessly, in fact, because of that convention for it promises no support to Japan in the event of the latter being the aggressor.

Any formal convention, however, any international agreement for the control of the Pacific which should leave Germany out, would be an incentive to trouble rather than a bright harbinger of peace. For no nation is making more active and intelligent preparations to reap to the fullest the advantages of the Canal than are the Germans. Their nation’s great interests in Brazil, Argentine, and Chile, her colonizing activities in Asia, her Chinese port of Kiau-Chou, forcibly wrested from China, all impel her to take a lively interest in the Canal and the Pacific. The Kaiser would not look with any placid indifference upon such an Anglo-American agreement as has been urged, and as its ends can be, and probably will be attained without formal pronouncement, any open diplomatic negotiations for such a convention would probably be unwise. Enough to say that while speculation concerning such an agreement is quite general among publicists today, no discussion of it has yet engaged the attention of any statesmen.

After considering the problem of what the Canal will be worth, let us reverse the ordinary process and figure out what it will cost. Exact statement is still impossible, for as this book is being printed the Canal is months away from being usable and probably two years short of completion if we reckon terminals and fortifications as part of the completed work.

In an earlier chapter I have set forth some of the estimates of its cost from the figure of $131,000,000 set by the volatile De Lesseps to the $375,000,000 of the better informed and more judicious Goethals. In June, 1913, however, we had at hand the official report of all expenditures to March, 1913, duly classified as follows:

CLASSIFIED EXPENDITURES—ISTHMIAN CANAL COMMISSION

A statement of classified expenditures of the Isthmian Canal Commission to March 31, 1913, follows:

It will be observed that since the beginning of the fiscal year 1913, expenditures have averaged a trifle over $3,000,000 a month. This rate of expenditure may be expected to decrease somewhat during the eighteen months likely to elapse before the Canal, terminals and forts are completed. Probably if we allow $250,000 a month for this decrease we will be near the mark making the future expenditures average $2,750,000 monthly until January, 1915, making in all $57,750,000. Adding this to the Commission expenditures up to March 31, 1913, and adding further the $50,000,000 paid to the French stockholders and the Republic of Panama we reach the sum of $396,863,593—a reasonable estimate of the final cost of the great world enterprise; the measure in dollars and cents of the greatest gift ever made by a single nation to the world.

It is worth noting that all this colossal expenditure of money has been made without any evidence of graft, and practically without charge of that all-pervading canker in American public work. During a long stay on the Isthmus, associating constantly with men in every grade of the Commission’s service, I never heard a definite charge of illegal profits being taken by anyone concerned in the work. In certain publications dealing with the undertaking in its earlier days one will find assertions of underhanded collusion with contractors and of official raids upon the more select importations of the Commissary without due payment therefore. But even these charges were vague, resting only on hearsay, and had to do with an administration which vanished six or more years ago. Today that chronic libeler “the man in the street” has nothing to say about graft in connection with Canal contracts, and “common notoriety”, which usually upholds all sorts of scandalous imputations, and is cited to maintain various vague allegations, is decidedly on the side of official integrity at Panama.

This is not to say that the work has been conducted with an eye single to economy. It has not. That is to say it has not been conducted in accordance with the common idea of economy. All over the land contractors, apprehensive of the effect of the Panama example of government efficiency in public work, are telling how much more cheaply they could have dug the Panama Canal. Probably they could if they could have dug it at all. But the sort of economy they are talking about was definitely abandoned when Col. Gorgas convinced the Commission that it was reckless extravagance to save $50,000 or so on wire screens and lose forty or fifty lives in a yellow-fever epidemic. The contractor’s idea of economy was emphatically set aside when Col. Goethals determined that it was cheaper to pay engineers one-third more than the current rate at home, and make such arrangements for their comfort on the Zone that they would stay on the job, rather than to pay ordinary prices and have them leave in haste after a month or two of dissatisfied and half-hearted work.

From which it appears that a new definition of “economy” is needed in the application of the word to the Canal work.

Whatever may be the influence of the Canal on the position of the United States as a world power, its influence on the industrial life at home is likely to be all pervasive and revolutionary. The government is the largest employer of labor in the land. It ought to be the best employer. On the Zone it has been the best employer, and has secured the best results. When government work is to be done hereafter it will not be let out to private contractors without hesitation and discussion. A consideration of the results obtained by the State of New York in its latest expenditure, by the methods of private contract, of the Erie Canal appropriation of $101,000,000, will go far to show the superiority of the Panama system. In a recent interview the Secretary of the Navy, Josephus Daniels, declared it to be the policy of the Department to build battleships in navy yards so far as possible—a policy which the shipbuilding interests have steadily resisted in the past. It is not too much to infer that the success of the army in digging a canal encouraged the Secretary to show what the navy could do in building its own ships.