coal obtainable in Japan will be to the advantage of the Panama, as compared with the Suez, route. The use of the Panama Canal by vessels engaged in the traffic between Europe and the Orient will depend very largely upon the cost of coal at Colon. The distance from Europe to China and Japan is less via Suez than via the Panama Canal, and if the American route is taken it will probably be chosen because of the cheaper coal costs. The price of coal at St. Lucia, St. Thomas, and other stations between Europe and the Panama Canal is slightly higher than at Algiers, Oran, and other Mediterranean ports on the way to the Suez Canal. Moreover, the cost of coal at San Franicsco and at Vancouver will probably range higher than at Colombo and Singapore. It thus seems evident that if the fuel expenses are less from Europe to the Orient via Panama than via Suez it will be largely because the cost of coal is lower than at Port Said. In voyages from the Atlantic seaboard of the United States to Australia and New Zealand the advantages of the Panama route as regards coal costs are not of great importance. If the Panama route is chosen, vessels will have good, cheap coal from the Atlantic seaboard of the United States to the canal, where they will fill their bunkers with enough coal to make the long run from the canal to New Zealand or to Australia, in both of which countries native coal is cheap. Vessels will probably not coal between the canal and New Zealand, because the prices at Tahiti and other mid-Pacific stations will unquestionably be high and the supply of coal will probably be uncertain. Vessels taking the Cape of Good Hope route instead of the route via Panama from the United States to Australia will doubtless use American coal for the long run to Cape Town or Durban, although this will require the sacrifice of some of the ship's cargo capacity to provide space for coal. At Durban, Natal coal can be gotten as low as 12s. to 14s. 6d. ($2.92 to $3.53) per ton. The advantage to the Cape of Good Hope route, resulting from the low price of Natal coal, will, however, probably be quite offset by the fact that the distance and time via the Panama route will be less and the amount of coal consumed will be smaller. For the same reasons the coal advantages are with the Panama route as compared with that via the Straits of Magellan to New Zealand. From Europe to New Zealand the Panama route is shorter and requires the consumption of less coal, but the Suez route is shorter from Europe to Australian ports. Since coal prices en route to Panama at St. Lucia, St. Thomas, or other stations are slightly above the prices at Gibraltar, Oran, Algiers, or other points en route to the Suez Canal, the saving, if any, in fuel costs via the Panama route will depend mainly upon the prices charged at Colon. If coal is sold at Colon for less than is charged at Port Said, some vessels will be drawn to the Panama Canal that would otherwise take another route from Europe to Australasia. The largest port in Australia, Sydney, being but 150 miles farther from Liverpool via Panama than via Suez, the Panama Canal ought to compete actively with the Suez route for the Australasian-European trade. The foregoing analysis of coaling facilities and coal prices along the various routes with which the Panama Canal must compete emphasizes the importance of maintaining at Colon and Panama large supplies of coal to be sold at prices as low as they can be made without loss to the canal administration, which obviously ought to be authorized to maintain coaling stations at both termini of the canal. The experience which the Panama Railroad Co., acting for the Isthmian Canal Commission, has had during the period of canal construction in purchasing and distributing coal at the Isthmus indicates the prices at which coal can probably be sold without loss or with small profit to the United States. Most of the coal used by the Panama Railroad Co. and the Isthmian Canal Commission has been Pocahontas and New River coal purchased at Norfolk. The prices paid at Norfolk from 1905 to the present time, the amounts purchased each year, and the freight rate from Norfolk to the Isthmus are stated in Table V. TABLE V.-Cost of coal to the Panama Railroad Co. at the Isthmus-Contract prices 1 paid at Norfolk, and contract rates for freight from Norfolk to the Isthmus, 1905–1912. Years. Cost of coal at Norfolk. Freight 1 Maximum quantity con- from Nortracted for (tons). folk to Isthmus. 1 Contracts have usually run for a year from Apr. 1. * Contracts run for two and a half years from Apr. 1, 1912; if, between Apr. 1 and June 1 of 1913 or 1914 the commercial price of coal declines below $2.70, the contract price for the remainder of the contract period shall be $2.65. The Government contract prices for coal delivered at the end of the ship's tackle at the Isthmus have varied somewhat year by year. In 1906-7 the cost of coal at the end of the ship's tackle at the Isthmus was from $4.30 to $4.40; in 1907-8 the cost was from $4.27 to $4.42; in 1908-9, $4.14 to $4.29; in 1909-10, $3.74 to $3.84; in 1910-11, $3.944; 1911-12, $3.804, and since the 4th of April, 1912, it has been $4.09. The prices now being paid by the Panama Railroad Co. for coal were fixed by contract made April 4, 1912, for a period of two and one-half years. Under this contract the price to be paid for coal at Norfolk is $2.70 per ton, and $1.39 is to be paid for the transportation of the coal from Norfolk to the Isthmus and the delivery of the coal at the end of the ship's tackle. The contract between the Panama Railroad Co. and the coal company, however, provides that if the commercial price of coal declines between April 1 and June 1 of 1913 or 1914 the price paid for coal by the Panama Railroad Co. is to be reduced to $2.65 per ton. If the price of $2.70 at Norfolk prevails through the two and one-half year period, the cost of coal this there be added 50 cents per ton to cover overhead charges, storage, and depreciation, the price at which the Panama Railroad Co., or the Isthmian Canal Commission, or the canal administration can sell coal without loss, or possibly with a slight profit at Colon up to October 4, 1914, will be $4.59; or if the price at Norfolk should be reduced 5 cents a ton, $4.54. If the colliers carrying coal through the Panama Canal for delivery at the station at Balboa are required to pay a toll of $1 per ton net register, the cost of coal delivered at Balboa will be 42 cents per ton higher than at Colon or Cristobal. It will thus be possible for the Panama Railroad or the canal authorities to sell coal at Balboa without loss, or with slight profit, for $5.01 or (if the Norfolk price is $2.65) $4.961. The above details concerning the actual cost of coal delivered at the Isthmus of Panama show that coal can be sold from a Government station in Cristobal at from $4.50 to $4.60 per ton and from a station in Balboa for about $5 per ton. These prices compare favorably with the current cost of coal at the Suez Canal. The 1912 contract price of Welsh coal at Port Said is 26s. ($6.33) per ton, the price at which coal is sold to companies that renewed previous contracts is 25s. 6d. ($6.21). It seems certain that coal can be profitably sold by the United States Government at Cristobal for about $1.75 and at Balboa for $1.25 less than the price charged at the Suez Canal. This, however, can be brought about only by the maintenance of Government coaling stations at the canal termini and by selling coal at cost, or with but slight profit. If the price of coal is kept low at Cristobal and Balboa the Panama Canal will have a decided advantage over the Suez Canal as regards fuel costs, especially for vessels engaged in the commerce between the eastern seaboard of the United States and the Orient. The relative expenses for coal via the Panama route and via the Suez Canal for vessels making round-trip voyages between New York and Manila (which is equally distant from New York by the two alternative routes) may be indicated by a concrete illustration. It was stated above that a steamer of 4,640 tons gross and 2,927 tons net register, British measurement, operated at a speed of 101 knots on a round trip, made in 1911, between New York and Manila, by way of the Suez Canal, consumed 4,475 tons of coal, the cost of which was $20,868.75. Maj. Eugene T. Wilson, Subsistence Officer for the Isthmian Canal Commission, has calculated what the fuel expenses would have been for this vessel had it made the trip during 1911 between New York and Manila by way of the Panama route and paid $4.50 per ton for such coal as was purchased at Colon. Maj. Wilson explains his calculation as follows: It is assumed that the ship loads at New York and takes on only enough coal to run to Newport News, where she can get the best coal and get it cheaper. I assume, further, that it is not desirable to put into this ship more than 1,050 tons of coal at one time. I assume, also, that her coal consumption is such as to give the ship the usual 20 per cent margin of safety as far as Yokohama. The quantities and costs of coal would be as follows: The ship takes on 50 tons at New York at $3.25; proceeds to Newport News and loads 1,050 tons at $3; thence to Colon, burning en route 370 tons, leaving 730 tons in her bunkers, and at Colon purchases 320 tons at $4.50, thus filling her bunkers up again to 1,050 tons. The ship steams thence to San Francisco, burning 610 tons of coal en route, and arriving there with 440 tons in the bunkers. Eight hundred and fifteen tons are required for the run to Yokohama; accordingly, the ship takes on at San Francisco 375 tons of Comox (British Columbia) run-of-mine coal at $6.90 per ton. At a Japanese port she buys 900 tons of Japanese coal at $3.40, or 14 shillings per ton. With the 900 tons, she travels down as far as Manila and comes back empty, coaling back for the return voyage at, say, Nagasaki or Moji, filling up her bunkers with 1,050 tons at $3.40 per ton. She requires 815 tons from Yokohama to San Francisco, where she arrives with 235 tons. As 610 tons are required from San Francisco to Colon, she buys 375 tons in San Francisco at $6.90, and at Colon 370 tons more at $4.50 to take her home. The amounts paid for coal for the supposed round trip would have been as follows: Cost of coal for round-trip voyage, via Panama, from New York to Manila, 1911 contract prices. The above calculation shows that the vessel would have required 4,490 tons for the round-trip voyage between New York and Manila by way of Panama as compared with 4,475 tons that were used on the round trip by way of the Suez Canal. The total fuel expenses for the round trip via Panama would have been $18,222.50, whereas the actual expenses by way of Suez were $20,868.75, the difference in favor of Panama being $2,646.25. The lower cost by way of Panama was due (1) to the price of coal at Colon as compared with prices at Port Said and Algiers, and (2) to the lower cost of coal at Japanese ports than at Sabang on the Malacca Straits. In the above comparison of the fuel expenses by way of the Panama and Suez routes the prices paid for the coal were the contract rates prevailing during 1911, with an assumed price of $4.50 per ton at Colon. If the 1912 contract prices are substituted in place of the 1911 prices in the comparison and it be assumed that $4.75 per ton is paid for coal at Colon, the costs of coal by the two alternative routes become those shown in the table on page 94. The 1912 contract prices and the assumption that coal is sold at Colon at $4.75 per ton makes the fuel costs for a round trip between New York and Manila for the vessel in question $3,164.20 less by way of a Panama route than via the Suez Canal. The use of oil as fuel for ocean steamers has made little more than a beginning, and accurate comparisons of oil costs by different routes are hardly possible. Fuel oil is kept in stock at stations on the Suez route, for sale to such oil-burning steamers as are now run on that route. California oil is used by several vessels on the Atlantic and Pacific coasts of the United States, and some of these oil burners will use the Panama Canal. The large California, Texas, and mid conti route, and the substitution of oil for coal ought to be of more assistance to the Panama route than to those with which it has to compete. Presumably Russian oil can be sold at a relatively low price at Suez; but along the South African and Magellan routes there are no nearby oil fields of present importance from which stations could be supplied with cheap fuel oil. The surest method of keeping coal prices low at the Isthmus is for the Government, through the canal administration, to maintain commercial coaling stations at Cristobal and Balboa. The foregoing discussion has emphasized the assistance which cheap coal at the Isthmus will give the Panama Canal in competing for traffic free to move by other routes. Government coaling stations will give the Panama Canal greater traffic and larger revenues. Comparative costs of coal, via Panama and via Suez, for round-trip voyage from New York to Manila, 1912 contract prices. FOR THE ROUND-TRIP VOYAGE BETWEEN NEW YORK AND MANILA VIA The industrial effects of the canal, moreover, can be made greater by keeping coal prices low at the Isthmus. The countries bordering on the Pacific north and south of Panama are industrially undeveloped. Cheap coal at Panama may be of great assistance to those countries in building up their industries. The development of the countries whose trade will be handled through the canal will increase the canal's traffic and revenues. Cheap coal at Panama will accomplish as much as low tolls might in building up the industries of the countries whose trade will be tributary to the canal. The fact need not be pointed out that the sale of coal at cost will impose no burden upon the United States Government, while low tolls or a reduction in tolls will necessarily lessen the revenues obtained from the operation of the canal. It will be desirable for the United States Government to maintain coaling facilities at the canal to supply the Navy. The sale of coal to merchant vessels will simply require larger storage accommodations. and more loading and unloading machinery. About 1,250,000 tons of coal are now annually sold at Port Said, and, in addition, a small |