Mr. Escн. You stated that if vessels could get these supplies on the zone they would cable you in advance for rates? Col. WILSON. They might cable to me for prices and to know about the certainty of supply. Mr. Escн. Is it possible for you to have published a schedule of prices for commissary supplies that could be secured on the Isthmus that could be made public to the world? Col. WILSON. Yes, sir; I have one here which is published once a month. This is the Christmas edition of the Commissary Bulletin. This copy was published at Cristobal, Canal Zone, November 1, 1911. Mr. ESCH. Would it be possible for that bulletin to be issued by your department and sent to the various commercial ports of the world, so that the shipping interests could rely upon it? Col. WILSON. Yes, sir; that could be done. Mr. Escн. If it is issued monthly, it would be subject to change? Col. WILSON. It is not like a daily bulletin, but it would show the approximate price of these goods, subject to fluctuations taking place during the month. I could send them to the maritime exchanges throughout the world. Mr. EscH. So that they would have some stable data upon which they could base the cost of purchasing supplies for the transisthmian trip? Col. WILSON. Yes, sir; and they would know that we carried certain lines of goods in stock, because it would all be there. Mr. Escн. And having that information and knowing your price, they would know exactly how to victual their ships at the home ports? Col. WILSON. Yes, sir. Mr. Escн. How much advantage is that to a ship? Col. WILSON. In dollars and cents? Mr. Escн. No, sir; I would not bind you down to that. In other words, how much advantage would it afford as an inducement to select the Isthmian route? Col. WILSON. It would be a tremendous advantage. He would know to what extent he could cut down the size of the space for the refrigerating machines, coal for the refrigerating machines, etc. Suppose they were going from Liverpool to San Francisco carrying refrigerated products. If they could revictual here they would require but half the machinery to take it. That space would be worth to them at least $10 a ton of 40 cubic feet. It would be worth 25 cents per cubic foot. They could reduce the size of the cooler on board and turn it into cargo-carrying space. Mr. EscH. In the matter of coal, no bunker capacity is used for freight? Col. WILSON. No, sir. Mr. ESCH. Would there be any saving there? Col. WILSON. No, sir; not on the bunker capacity. Mr. Escн. My point is this: That if they knew they could get coal here, they would ship so much less at the home port? Col. WILSON. Yes, sir; that is true. For instance, a ship of the Leyland Line comes here from Liverpool. A merchant ship of their best type carries 989 tons of coal in her bunkers for use on the voyage to San Francisco. She burns 50 tons of coal per day, and she must put in eight or nine hundred tons more. We will be in a condition here to coal them at $4.50 per ton of 2,240 pounds. If we lay down Pocahontas coal here at $4.50, we can sell it as cheaply as they do in Liverpool. Mr. EscH. Is it a better grade of coal? Col. WILSON. Yes, sir; it is a first-class coal; better than Lancashire or Tyne coal. Mr. Escн. If our rate approximates the Suez tonnage rate, would these inducements in the way of commissary conveniences here, in your opinion, be a sufficient inducement to these ships to take the Panama route as against the Suez route? Col. WILSON. Yes, sir; everything else being equal. Mr. ESCH. Would they seek the Panama route for Asiatic trade? Col. WILSON. Yes, sir; as far west as Hongkong and Manila. I do not think we can compete with the Suez route beyond Hongkong and Manila. The CHAIRMAN. Would not the great number of contiguous markets on the Suez route reduce somewhat the force of that contrast? Mr. Escн. I submit that question to the Colonel. The CHAIRMAN. There are a great many markets on that route which furnish these things. Would not that reduce somewhat the force of the contrast or comparison Mr. Esch is making? Col. WILSON. You mean in the matter of coal and provisions? Col. WILSON. No, sir; I do not think it would. In the first place, we can furnish coal here cheaper. Coal at Colombo is worth $7.30 per ton. If we can lay down coal here at $4.50, we can make a reasonable profit to cover interest on the plant, and have a large advantage there. East of Colombo there is competition with Japanese coal, but that is a very much inferior coal. We have a line on the prices of coal at the various ports of the world-at Aden, Colombo, Port Said, Gibraltar, etc. Mr. EscH. Could you duplicate the commissary at Port Said that you contemplate putting here, or that you already have here? Col. WILSON. No, sir; it could not be duplicated. Mr. ESCH. Could they, for instance, duplicate the meat installation? Col. WILSON. No, sir. Mr. Escн. They would have to ship meat from America or Argentina? Col. WILSON. They would probably get Australian meats there. Mr. Escн. Could they compete with us here in meat products at Port Said? Col. WILSON. They could compete with us in Australian mutton, but in nothing else. Mr. ESCH. Would that be another inducement in favor of the Panama route? Col. WILSON. Yes, sir. Mr. Escн. Are there any disadvantages as against the Suez route and in favor of the Panama route other than this matter of the commissary? Col. WILSON. I do not recall any independent of the food and coal supply, distances being equal and destination the same. Mr. Escн. How about the question of labor there? Col. WILSON. Labor is pretty cheap there. I have a photograph showing the coaling of a ship there by hand labor. We can coal them cheaper than that. Mr. Escн. By mechanical means as against hand labor? Col. WILSON. Yes, sir. Mr. Escн. At a saving both in time and cost? Col. WILSON. Yes, sir. A steamship like the Memphian, of the Leyland line, which already comes here, and that company has a line to San Francisco via Magellan, can not be operated for less than $375 per day, so an hour's time is a big item for her to save. Mr. ESCH. One of our strong competitors will be the Tehuantepec route, will it not? Col. WILSON. Yes, sir. Mr. Escн. Have they not similar facilities there? Col. WILSON. No, sir. I understand they take supplies with them and take them back. Mr. Escн. Suppose we do establish this commissary department, do you anticipate that the Tehuantepec or Suez route would imitate us? Cal. WILSON. I do not think they would. I do not believe they would. Mr. Escн. If they would not, and the rates are approximately the same, the inducement to use this route would be almost irresistible? Col. WILSON. To reach certain parts of Asia; I think so. Mr. Escн. And Australia? Col. WILSON. Yes, sir; we have the advantage of distance to Australia. Mr. ESCH. And to the south Pacific? Col. WILSON. Unquestionably. The time element is such that we will push this freight business clear down to Valparaiso. South of that there are not a great many ports worth going to. Mr. STEVENS. Is it not a fact that it is not so much a matter of commissary supplies or a matter of rates as it is the matter of obtaining suitable cargoes that determines the course of traffic? Col. WILSON. That is a large element. Mr. STEVENS. Is not that the largest element? Col. WILSON. Yes, sir. Mr. STEVENS. So that the question of whether the rate is $1 or $1.10 per ton, or the fact that they can get meat a cent a pound cheaper here, would not change the course of the traffic? Col. WILSON. No, sir. Mr. STEVENS. It is the matter of cargo or freight that moves them from one course to another, and it is that consideration that determines the course of the world's traffic? Col. WILSON. Certainly. Mr. STEVENS. Are not the great markets of the world along the line of the Suez route; that is, from the British dominion in the northwest to the British dominion, China, and India in the East? Col. WILSON. That is true, but I have only discussed the matter as far west as Hongkong and Manila. I do not think we could compete beyond there. This discussion assumes that the cargo is assured. The only open question is the choice of routes. Mr. STEVENS. The Suez Canal authorities are promising to reduce their tolls to the same rate that is popularly understood will be the tolls on this canal; that is, to $1 per ton net register. Now, the Mexican Government is extremely anxious to retain the traffic over the Tehuantepec route. Now, don't you think the small matter of furnishing commissary supplies would be undertaken by the authorities controlling these other routes if they thought it would be much of a factor in directing traffic? Col. WILSON. They might do it, but the authorities of these routes have not been as progressive as we have been. Mr. STEVENS. Has there been any necessity for it? Col. WILSON. So far, no, sir; except that east of Colombo, the Suez Canal is in sharp competition with the Cape of Good Hope route for commodity traffic like coal, case oil, and heavy commodities. Mr. STEVENS. The Suez Canal has had a tremendous traffic and a tremendous profit without any competition that they cared for? Col. WILSON. Yes, sir. Mr. STEVENS. So we must look at the matter from the standpoint of one capable business concern meeting the competition of another equally capable business concern, if we lay our plans here with reference to competing with the Suez route? Col. WILSON. Yes, sir; that must be taken into consideration. That would be taken into consideration if we were investing money in an original plant, but if that plant is already paid for, as this has been, it would not be so important. Mr. STEVENS. Have you seen any estimate, or have you based any figures on any such estimate of the probable amount of traffic coming here after the canal is opened, through such traffic as you have outlined, for which the commissary department would be needed? Col. WILSON. I could not say as to that. Prof. Johnson, in his original commission report for 1901, estimated this traffic, as I recall it, at 7,000,000 tons. It was about that. He is revising that estimate, and estimates more now, but what the figures are I do not know. Mr. STEVENS. Well, I hold in my hand the report of Dr. Johnson, dated June, 1904, in which he makes some such estimate as you stated, and he states further on page 5 of that report, the following: The average number of persons employed in the foreign trade of Great Britain on steamers was about 24 per 100 tons. That would make about 23,000 persons per million tons? Col. WILSON. Yes, sir. Mr. STEVENS. And for 7,000,000 tons we would have 160,000 people employed on the merchant vessels, exclusive of passengers. What amount of commissary business coming here in the way these vessels would, taking into consideration the time they would consume on their voyage here and return, passing through the canal twice, with some of them transferring freight and receiving freight and passing along, and others merely going through as quickly as possible-what amout of commissary supplies do you think that traffic would bring, estimating the number of persons at 160,000? Col. WILSON. It would be 30 cents per day per man, at least. Col. WILSON. That would depend on where the vessels were going. If a vessel was going from here to Europe, it would take her 16 days. Mr. STEVENS. That would be about $50,000, if they all traded with you? Col. WILSON. Yes, sir. Mr. STEVENS. Do you think the chances are that all of them would trade with you? Col. WILSON. I think so, because they could cut down their bunker space for coal and cut down their refrigerating plant. It is a great thing for ships to be able to get ice and meat. The captains like to go where such supplies can be obtained, and it exerts a powerful influence on officers and crews to be able to go where they can get ice and meat. Mr. STEVENS. Do you think that half a voyage would be calculated as the basis of supplies from this point? Col. WILSON. On a voyage of 28 or 30 days from Liverpool to the Pacific coast ports there would be 7 days each side of the canal. Mr. STEVENS. That would be about $700,000 you would figure as the business which might be expected from that volume of traffic, from the operating force of the ship? Col. WILSON. Yes, sir; I know 30 cents is a conservative figure. Mr. STEVENS. Suppose this traffic moved this way, what would be the experience of the traffic if they had to deal with the local merchants at Colon and Panama? Col. WILSON. In the first place, if two or three ships came here at once with a limited ice supply the price of ice would go skyward. It has done that several times with us. If the meat supply were short, the price of meat would go skyward. In the next place, the ships would have to send the stewards all around here for supplies. They would have to haggle around to get supplies and possibly provide their own means of transportation to get them off. Mr. STEVENS. Do you anticipate that there would be any passenger traffic, to any great extent, from the various lines coming here from the various ports of the world when the canal is opened? Col. WILSON. I think there would be a heavy travel from the east coast of North America to the west coast of South America. I think there will be a very heavy immigration traffic via Gibraltar from south European ports to our Pacific coast ports, particularly by ships that go out of commission in the wintertime. There are a number of ships ordinarily engaged in the passenger business between the States which continues during the summer. The Hamburg, the North German, and Cunard Lines tie up a number of boats during the winter because they have nothing to do. I think they would put them in the immigration business, running out of Gibraltar to San Francisco. I think that traffic will be heavy. Mr. STEVENS. What effect would the operation of such a plant as you have described have on such traffic, both general passenger and immigration traffic, or what would be the effect of doing away with such a plant and depending on local supplies? Col. WILSON. It would kill it off, so far as the immigration traffic is concerned, because the margin of profit is small. Mr. STEVENS. So it is necessary to consider in this connection the question of immigration on the Pacific coast! |