The St. Lawrence Question A REPLY TO MR. DRURY

Being a statement of the case against the St. Lawrence deepening by one who believes that canals are obsolete

J. LAMBERT PAYNE May 15 1929

The St. Lawrence Question A REPLY TO MR. DRURY

Being a statement of the case against the St. Lawrence deepening by one who believes that canals are obsolete

J. LAMBERT PAYNE May 15 1929

The St. Lawrence Question A REPLY TO MR. DRURY

Being a statement of the case against the St. Lawrence deepening by one who believes that canals are obsolete


Editor’s Note—In the February i, 15, March 1, April 1 and April 15 issues of MacLean’s was published a series of articles by Honorable E. C. Drury concerning the St. Lawrence waterways development scheme. Mr Drury’s articles favored joint action by Canada and the United States in carrying out the plan for improved canalization of the Prescott to Montreal reaches of the St. Lawrence River. The series has aroused great interest. Naturally, there are opposing viewpoints. Herewith is presented the first of two articles by J. Lambert Payne, of Ottawa, an independent writer on transportation problems, who takes issue with Mr. Drury’s conclusions. Following Mr. Payne’s argument, Mr. Drury will submit his rebuttal. And then will follow a highly important summing up of Canada’s treaty rights in this connection, by B.K. Sandwell.

IS CANADA to be scared into becoming a partner in what may easily be a billion dollar navigation and power project, which she does not need, involving the loss of her sovereignty in the St. Lawrence, or will she be permitted to sit down calmly and say “yes” or “no” after considering the proposition and its merits in the cold light of her own economic interests?

The proposed St. Lawrence development is primarily a problem in transportation. It is also a proposition looking to the produc* tion of power. It must, therefore, seem little short of anomalous that it is not advocated by any of the common carriers, the steamship interests and the railways, or by shippers, but entirely by those who are concerned only in the power aspect and by laymen. In that fact is to be identified something which calls for examination.

It is said that the deepening of the present St. Lawrence channel and the use of larger vessels would greatly help the grain growers of the western states and the western provinces in Canada; but that argument comes wholly from men who are in no way associated with transportation or the shipping of grain. As a matter of fact, the men who are in the business of transporting grain— that is, the railways and ship operators—are a unit in disputing the assumption of reduced carrying tolls, while the farmers who are to be so greatly benefited are practically indifferent. Here again is something which calls for careful consideration.

Let me say at once that there are unanswerable economic reasons why the prediction of lowered transportation tolls could not be realized. I shall go into them in a broad and judicial spirit as an absolutely independent student of the problem in all its phases. It might be said, on the other hand, that even though freight rates should not be reduced, the pressure upon the existing inland waterway has become so serious as to demand new and larger facilities. I shall deal with that at once, because it is somewhat fundamental.

The Question of Need

TET it first be observed that very little has been said by Hon. Mr. Drury about the urgent need for a new and larger waterway in order that the grain growers of western Canada might be relieved of a positive disability in regard to an adequate outlet to the sea. He has preferred, rather, to emphasize the alleged desperate situation of the farmers of the western states; and, with all due respect to a man I sincerely admire, he must pardon me for suspecting he has got his data from the propaganda of the organized American power people. I shrink from using strong language; yet it is simply absurd to say the American grain grower is in any distress because of a lack of cheap and adequate transportation facilities by water.

The facts of the case are distinctly against Mr. Drury in that regard. Let it first be clearly realized that the American shipper is now, and always has been, on precisely the same footing as the Canadian shipper in his right to use the St. Lawrence route. He is, to be strictly accurate, on a little better footing; for, while the entire system, except the locks on the American side at Sault Ste. Marie, was in large degree, built, and is maintained by Canada, he neither contributes to the maintenance nor pays tolls on his shipments.

Let us frankly face the situation as it affects the grain growers of the western states, in whose behalf Mr. Drury has had so much to say. The grain growers have had access to the existing waterway system ever since it was put in operation, and the question may be fairly asked: What use have they made of it? In 1913, the year before the war, the total shipments of wheat through the American and Canadian locks at Sault Ste. Marie amounted to 204,821,507 bushels. Of this volume 141,726,879 bushels were of Canadian origin; so that only 63,094,608 bushels were American. In 1927, which is the last year for which official figures are available, the total quantity passed through that gateway was 330,898,158 bushels, of which 234,898,915 were Canadian and 95,999,243 American.

It would be well to pause and look at the plain teaching of these figures. It will be seen, in the first place, that the volume of American wheat was relatively small. In fact, when measured against the Canadian volume it loses every trace of impressiveness. In the second place, there is the fact that while the quantity of Canadian wheat was growing by 189,171,259 bushels between 1913 and 1927, the shipments of American wheat were growing by but 32,904,635 bushels. The case for the American wheat grower becomes rather weak when viewed in the light of cold official data of that nature.

Mr. Drury seems to have been deeply impressed by the volume of traffic which passes through the American and Canadian locks at Sault Ste. Marie. It runs into large figures. In 1927, it amounted to 83,354,064 tons, of which, however, 18,961,312 were westbound. It had been much larger than that in previous years. As far back as 1916 it totalled 91,888,219 tons. But 50,098,068 tons of the 1927 business consisted of iron ore, not a pound of which went farther east than Buffalo. Coal made up a further 17,107,500 tons; and when other commodities, such as stone, lumber, salt, merchandise and so on, which could not under any circumstances reach the St. Lawrence, are added to these two totals, there are not more than four million tons left as representing American commodities available for export by water. Only 1,803, 859 tons of American agricultural products reached the St. Lawrence in 1927.

This American business can now be taken care of by the St. Lawrence waterway without any pressure whatever. In fact, this inland channel is not being used to more than fifty per cent of its actual capacity, except at short periods. American traffic at the Soo is declining rather than increasing, although the grain trade has expanded slightly during recent years. Under such conditions, what sense is there in talking about the imperative need for a new and larger waterway in order that the farmers of the American west may be better served? While American engineers claim that 7,000,000 tons would be available, there is really little export traffic, and that little is likely to shrink rather than grow. They have the efficient and adequate St. Lawrence route open to them, and make but little use of it.

So I say, without qualification, that a case of need cannot be made out, certainly not for the American farmer. As for the farmers of our own west, are they not building the Hudson Bay Railway for the express purpose of getting away from the St. Lawrence route? That fact cannot be ignored on the outlook. Eventually in this discussion the indisputable facts of the case have got to be recognized. Why not now?

No Elements of Novelty

IT IS amazing to me that Mr. Drury should treat this project as though it had outstanding elements of novelty in it —as though, for example, it would introduce new and attractive factors into the transportation situation. “With the opening of the waterway,” he observes quite gravely, “it seems certain, not only that many commodities now carried by rail will be carried by water, but that new conditions will promote a new and larger commerce.” I cannot understand such reasoning. This waterway he speaks about as calculated to develop “new conditions” has been open for practically a century. The only change that is proposed is in the matter of depth, and that is not new. It has always moved commodities at considerably lower rates than those charged by the railways, and yet it has never been a serious competitor.

Speaking broadly, our inland waterway has for decades been almost wholly a grain route, and there is nothing to indicate it will not remain so for all time to come. It has been giving an efficient and satisfactory service in that regard, and yet the volume of traffic has not been raised to impressive figures. Last year the railways of this country hauled 140,000,000 tons of freight, while the St. Lawrence canals moved less than 8,000,000, of which 2,565,492 was American in origin. * The system was deepened by seventy-five per cent some thirty years ago; yet twenty years later traffic had but slightly increased. In fact, only during the past three years has there been a fairly substantial upward trend, although not sufficient to produce anything like serious pressure on capacity. What reason can be given, therefore, for the prediction that a further deepening would alter the modern disposition to seek speed rather than the cheapest possible hauling charges? Surely we would do well to pause and weigh the stern teachings of experience in respect of transportation through heavily canalized waters. The facts are to be found in the official records, and they point definitely toward an adverse judgment.

There are still people who drive around with horse and buggy; but they are not numerous. The hansom cab was immensely popular in London, England, twenty-five years ago, and deservedly so; yet today it is more or less of a curiosity. To suggest river canalization at this period in transportation development seems to me like trying to bring back into general use the horse and buggy and the hansom cab in displacement of the automobile. It wouldn’t work. It would jar against the temper and aims of a generation which insists on saving time; and nothing that may be said to the contrary will change that state of mind in the commercial world. It is founded on fixed principles.

Volume of Traffic

TT MIGHT be said, however, that the growth of Canadian business on the St. Lawrence route justifies the proposed

*Editor’s Note: The total traffic through the St. Lawrence canals during 1928 was 8,411,542 tons, an increase of 498,590 tons over the previous record. enlargement. Unfortunately, little support for that view can be found in the official figures relating to traffic on the canals of Canada taken as a group. It is true there has been a larger volume handled during the past two years than during the war years; but there has been no increase as against earlier periods. For example, the total volume of Canadian cargoes during the decade between 1908 and the end of 1917 was 78,061,085 tons. From 1918 to the close of 1927 the tonnage was 70,929,701. The average per annum for the first period was 7,806,108, and for the second 7,092,970. It will thus be seen that there was an annual falling off in traffic of 9.15 per cent in the last decade, f We are not concerned with American traffic on our canals. As for the St. Lawrence system, which taken in the entire section east of Lake Ontario, there has been some growth during recent years; but the highest volume of Canadian commerce moved in any year was in 1927, when it reached 5,347,460 tons. All the canals of Canada handled but 11,863,931 tons in that year. The point I am trying to accentuate is that canal traffic is small and relatively unimportant. While it was falling between 1908 and 1927, railway traffic rose from 63,071,167 tons to 125,967,439.

Claims Canals Are Obsolete

THERE is a reason for the small part played by canals in the general scheme of transportation, and those earnest men, like Mr. Drury, who are so urgently advocating the St. Lawrence project, seem either not to know about it or to ignore it. It is too vital to be ignored. It cuts into the very foundation of the proposition under review. I shall not give my own opinion. I shall quote the judgment of Professor Harold G. Moulton, of Chicago University, as given at page 456 of his authoritative book, “Waterways versus Railways,” published in 1912.

“While canals satisfactorily served the needs of an earlier period, their day, like that of the sickle, the hand-loom and the spinning-jenny, is now forever past. Precisely as the canal supplanted the horse in the carriage of through freight, so in turn has the railway, in the course of industrial progress, come to take the place of the canal in the field of transportation. To attempt now to return to the antiquated system of transportation of a half-century ago, or to make canals an integral part of a national transportation system, whether for the carriage of highclass or low-grade freight, it matters not, is to attempt to turn backward the clock of time.”

I unhesitatingly endorse every syllable of that judgment. Speaking quite broadly, canals are obsolete—an anachronism in the modern concept of transportation. They only justify their high cost when they connect large bodies of navigable water, as in the case of the Panama. Under that dictum, our inland system from Lake Superior to Prescott is sound; but from Prescott to Montreal it is indefensible on economic grounds. Between these points the railways can give a better service.

jEditor’s Note : In making this comparison, Mr. Payne neglects to point out the fact that traffic both American and Canadian, which formerly used the Canadian canal at Sault Ste. Marie, now uses the newer and larger United States canals. This explains the fact that whereas the total traffic through the Canadian Sault Ste. Marie canal was 42,699,000 tons in 1913, it was only 2,008,000 tons in 1928.

When all the factors are taken into account they provide a slow and unsatisfactory service at greater cost than by rail. Professor Moulton, after studying on the spot all the canal systems of this continent and of Europe, comes to precisely the same conclusion. So would a shrewd man like Mr. Drury if he had gone into the matter as a business man would be compelled to do.

The Diversion to Buffalo

THE American grain grower not only has a comparatively small volume of wheat to ship by water, but he has always shunned the St. Lawrence route. With an excellent and toll-free waterway to the Atlantic open to him, he has preferred to tranship at Buffalo rather than to take the all-water channel to the seaboard. At Buffalo he has for years had the finely equipped New York State Barge Canal available for the movement of his wheat to New York. But he has invariably taken the railway from that point. And, in large measure, the shipper of Canadian export wheat has done the same thing. Let us look again at the official statistics.

In 1927, which was a typical year, the total volume of Canadian and American wheat passed through the locks at Sault Ste. Marie was 330,898,158 bushels, and, as we have just seen, 234,898,915 were Canadian and 95,999,243 American in origin. Of the Canadian wheat, 132,518,338 bushels went out by way of BuffaloNew York, and of the American wheat 49,077,780 bushels. Thus 56.04 per cent of all Canadian export wheat took the American route at Buffalo, and 51.12 per cent of the American wheat.

And now I want to present several very grave facts in relation to this diversion of both Canadian and American export wheat from the St. Lawrence route to New York by rail from Buffalo. In the first place, the layman will be amazed when he is told that freight rates have absolutely nothing to do with the matter. The transfer from the vessels to the railway takes place invariably with the tolls in favor of Montreal. It has taken place over and over again with three cents per bushel against the American outlet. When Hon. Frank Cochrane was Minister of Railways and Canals he commissioned me to carry out a thorough investigation, and I found many instances in which a favorable, rate of five cents per bushel in favor of Montreal had been unavailing.

A Fundamental Factor

UNTIL well-intending laymen take the trouble to ascertain the reasons why more than half of all Canadian and American export wheat from the west goes out by way of Buffalo-New York every year, they will be utterly unable to pass an intelligent judgment on the transportation aspect of the proposed St. Lawrence development. I went to Buffalo several times, to New York twice, and interviewed many shippers and all the ship operators before I learned the truth in the matter. While thus carrying on my enquiries I was for fourteen years officially in charge of the statistical system under which all the facts as to the grain trade came directly before me for analysis. Those facts go to the very pith of the project under review.

The first obstacle to the St. Lawrence route is fear. Let no one forget that wheat does not flow to the seaboard by gravitation. It is always somebody’s property, and it takes the route to the foreign market which its owner chooses. He dreads the inland water, and in particular he dreads the canals. When he ships, say, 100,000 bushels of wheat to a buyer abroad, the very essence of his contract is delivery by a specified date. If he does not get his wheat there on time a basic law of the trade imposes a progressive fine on him. His entire profit could easily be changed to a loss by that process. So he takes the open-water route to Buffalo, and transfers at that point to the railway.

There are three reasons why he does this. The first is the greater probability of being able to deliver within the terms of the contract as to time. The railway is sure. The canals are uncertain. They have been the cause of delay scores of times. The second reason is the availability of ocean bottoms and low rates at New York; and the third is insurance. The insurance rates at New York are much lower than at Montreal, and are constant the year round. Montreal, on the other hand, is penalized by an upward grading of rates from November onward, until they become practically prohibitive in December. It would be difficult to say whether the uncertainty as to ocean tonnage at Montreal is a more serious disability than the high and rising rates of insurance. Combined, they are very adverse to the St. Lawrence waterway.

Would a New Waterway Help?

TT WILL be at once assumed by the uninformed layman, and quite naturally, that a deeper channel, fewer locks, and the use of larger vessels would correct these conditions. The judgment of navigators and all students of transportation on canalized waters is positively to the contrary. I lean myself to the conviction that matters would be worse. At that point the operation of an inexorable law comes into play. It is that the larger the vessel the slower her pace through canals and canalized waters. Back of that is another stern law; that rates by water are not governed by distance, but by time. The only thing, therefore, that could help the St. Lawrence route would be to lower the factor of time; and a deeper channel and larger vessels could not possibly do that. Large vessels do not move any faster in open water than do those of the smaller type. Laymen do not think of these things; but ship operators are compelled to. They cannot afford to merely guess at what would happen. They have got to know.

Let me say this; The proposed St. Lawrence development would not introduce a single new factor in favor of Montreal as against Buffalo. Only those who have not looked into the conditions which cause the present diversion think otherwise. All expert judgment will support what I have just said. There is a remedy, and I shall deal with it later. There is, in fact, a practical and perfect solution of the entire problem.

The Factor of Fear

IT HAS just been said that fear leads shippers to avoid the canals. Unhappily, it is not an imaginary factor in the situation. It is desperately real. Last summer a vessel crashed through a lock in the inland system at a time when the western crop was being moved, and everything from Lake Erie to Montreal was at a standstill for nearly a week. If that were a rare happening it would not count seriously; but it is all too common. Other causes come in, too, to delay vessels; and the pace is slow enough even under favorable conditions—so slow as to give emphasis to all Professor Moulton has said about canals belonging to the stage-coach period of transportation.

What happens every year at Buffalo further illustrates the working of the factor of fear. When a cargo of grain reaches the eastern end of Lake Erie the shipper has two routes open to him. He may take the New York State Barge Canal, one of the finest and most up-todate in the world, or he may take the railway. If he selects the canal, he may have his grain delivered in New York at less than half the cost by rail. Yet he invariably takes the railway. Not three per cent of all the export grain which reaches Buffalo goes to New York by water.

There must be a reason, or several reasons, why the shipper does this. He certainly is not a fool. On the contrary, he is a very shrewd man, anxious to make every fraction of a cent he can on his grain. Why then does he avoid the canal? Because, let me reiterate, he is afraid of it. He is afraid of its slowness and uncertainty. He has entered into a contract to make delivery in, say, Liverpool within a specified time, and he cannot take the risks which are inseparable from every canal system. Those risks are constant. He, therefore, pays a higher toll in exchange for certainty. Canada may spend a billion dollars in building a new St. Lawrence canal system; but she will not, and cannot, thereby overcome in the slightest degree, or even minimize, the forces which drive more than half of all Canadian and American export grain out by way of Buffalo-New York every year.

The Political Aspects

T_TON. MR. DRURY looks ahead and discusses certain hypotheses in the event of the St. Lawrence question “becoming a factor in the game of politics.” He has, in my humble judgment, gone astray in his tense. It is already a factor in the game of politics. It had its origin as a purely political proposition and it has not for a moment got beyond that status.

I have shown, quite truthfully and indisputably, that it was not put forward by either shippers or transportation interests; that the grain growers of western Canada have not only been silent respecting it, but are obviously indifferent. I have at least tried to prove that a new and very costly channel could not be justified on the ground of economic need. If I am right in these respects, then there could remain only two forces behind this movement — the politicians, and the American industrialists who have been described by the New York Times as “hungering for cheap power.”

That is why Canadian opinion in favor of the project has been manufactured in the United States; for it must be admitted that from that source has come all the propaganda with which Canada has been flooded. Yet I frankly confess that this is not a reproach against our neighbors. If they are convinced that a new waterway would help American business, and that the water power which would accompany a transportation scheme would strengthen the American industrial structure, they have a perfect right to try and induce us to see eye to eye with them.

One of the arguments most insistently and most frequently advanced by these American propagandists, as well as by Mr. Drury, is that the Canadian and American farmer would be given lower transportation tolls; and, of course, these agrarians are at the same time assured that every penny of the saving would go directly into their own pockets. That bait did not do any harm to the Hoover cause in November last. But I have neither the time nor the disposition to discuss the political aspect of the matter. The question which at once presses for an answer is as to whether or not the proposed development would bring about reduced freight rates in any degree.

In my judgment one of the most discreditable features of American propaganda has been the constantly reiterated assertion, as though it were self-evident, that as much as ten cents per bushel would be saved in the transportation charges on export wheat. How any sane man, with the facts of the case before him, could believe such a story rather staggers me. Yet, absurd as it is, it has got to be disproved. Happily, that is an easy task.

The average toll on wheat shipped in 1927 from the head of Lake Superior to Montreal, as officially recorded, was 8.53 cents per bushel. Including storage, it was 12.73 cents; but, of course, when storage has to take place for purely market reasons the extra charge has absolutely nothing to do with the freight rate. I need not say that ten cents could not be saved out of a total toll of 8.53 cents. Perhaps I should add that the rates from Duluth are identical with those from Fort William. It is unfortunate that transfer charges have been both exaggerated and misunderstood by Mr. Drury. They should never for a moment be confused with the freight rate, the reduction of which alone could benefit the grain grower, and I believe I have proved that there could not be any saving in that regard by the substitution of large for small vessels. Indeed, an increase in the tolls is much more probable.

There remains, however, the question as to whether or not any saving at all could be brought about by a deeper channel and the use of larger vessels. It is a fair question, and I shall give it a carefully considered answer. To do so demands a frank recognition of the factors which at all times govern transportation tolls on the St. Lawrence waterway. These are four in number, namely, the shortness of the season, one-way traffic, the time involved in making a round trip, and overhead. It is unnecessary to emphasize or even discuss the first. It is obvious.

One. Way Traffic

THE second factor calls for explanation.

There is practically no westbound business. What there is of it, say about seven per cent of the total, is picked up at very low rates during the dull months of the season for the sole purpose of cutting down operating loss. The distance from Fort William to Montreal is 1,228 miles; so that the direct effect of one-way traffic is to compel the shipowners to actually move their vessels 2,456 miles each time a cargo for Montreal is handled. This is a very serious matter, since it costs just about as much to move an empty vessel as a loaded one. It means that every time a cargo is carried eastward the vessel has got to return to her loading base without earning a penny.

While there is open navigation for seven months in the year, there are three and a half months in which the vessels are either idle or are carrying light and unprofitable cargoes. That refers to June, July, August and half of September. It is important to bear that fact in mind, since it has a direct and vital bearing on the operation of big vessels. All profits must be made in May and from the middle of September to the end of November. I frankly admit that large vessels operate at lower cost on the lakes than do small vessels; but the moment such vessels get into the canalized waters of the St. Lawrence the conditions are exceedingly adverse; so adverse as to make the lowering of tolls impracticable. In fact, all advantages attaching to a large vessel disappear.

The third factor grows out of these conditions; but it has an important place in the reckoning. In a season of seven months—or really only three and a half months—only so many round trips can be made, and at once the judicially minded observer must see why it is that time, rather than distance, is quite unavoidably the controlling consideration in the fixing of rates.

Large Vessel Versus Small

'T'HE assumption that large vessels could, under these conditions, operate more cheaply than the type of vessels now in use does not rest upon a good foundation. Only uninformed laymen hold it. The ship operators know better. Other things being equal, it could be done; but on the St. Lawrence route the other things are not equal. At once two inexorable laws come into destructive play. The first is that the larger the vessel the slower her pace through canalized waters, which is merely another way of saying that the controlling factor of time becomes more adverse. I am positively amazed to read Mr. Drury’s statement that large vessels could operate at onefourth the ton-mile cost of the smaller vessels now in use. He has been sadly misinformed. I have taken special care to get my information about speed and comparative cost of operation from authentic sources.

Mr. Drury has said, and correctly, that it takes eight or nine days for a vessel to move from Fort William to Montreal; but he does not show how the time is divided over the route. This steamer may, under normal conditions, reach the eastern end of Lake Erie in from three to three and a half days. She may even be at Prescott in four and a half days. It has often been done. But it may now take her as long to make the last 119 miles of the voyage as it took her to make the preceding 1,109, or longer. A big vessel would be at a disadvantage as against a small one in negotiating the canals. She might require five days for that 119 miles; and then she would have to make an equally slow return voyage, under the handicap of being empty. If a lateral wind were blowing, she might be held up for days at any of the locks. That has occurred many times; for an empty steamer cannot be given enough propelling power when entering a lock to counterbalance the side pressure. Again I say that a layman would not know about these typically adverse conditions; yet they are very real and bear vitally on the problem of rates.

The assumption that larger vessels might move faster than the relatively small steamers now in use is unsound. All cargo boats are slow. Speed means much space taken up for fuel. Heavy loads are the object; and that is particularly true in the grain trade. In fact, it is basic. When a large vessel is required to pass through locks, its pace is much slower than that of a small vessel, and quite unavoidably so.

The second stern law is that the larger the vessel the greater her capitalization. Out of that emerges the collateral law that the larger the capitalization the larger the overhead. Thus while two very vital factors have been increased in the case of large vessels, the operating season, oneway business, and the play of time, remain unaltered. Of course, a large vessel will earn more than a small one, because she can carry more; but she cannot earn enough more to countervail immensely swollen operating expenses and overhead. The season is too short. Increased operating expenses and overhead would be no more than balanced by earnings from larger cargoes during a seven months season, if balanced at all.

An Instructive Parallel

TT MIGHT be said that this is a purely

personal opinion and must be weighed accordingly. It is not. I have simplv quoted from the official reports of New York State, published twenty-four years ago, showing why the proposed turning of the old Erie into a ship canal was aban» doned. Those who are disposed to favor the projected St. Lawrence development would do well to read those highly instructive reports. They have a direct bearing on the Canadian situation. Geographically and economically, the parallel between the proposed ship canal of 1903 in New York State and the project now under review is exact in every single detail.

Everything that has been urged in favor of the present St. Lawrence scheme was said twenty-five years ago in favor of the New York State proposition. Ocean ships were to pass to and from the Great Lakes, and above all other advantages the transportation tolls were to be cut down to almost nothing. The legislature was overwhelmed by immense deputations from all the Boards of Trade in the state, and amid much enthusiasm the project was adopted and the money voted to carry it out.

Then came reconsideration, especially at the instance of Major Symons, the engineer appointed to carry out the work. He seems to have been an extraordinarily capable and honest man; for at the end of six months he sent in a report to headquarters which was a veritable bombshell. He proved, so conclusively that his arguments to this day remain unassailable, that the use of larger vessels would mean higher rather than lower rates. In a word, he completely disposed of every argument which had been advanced by the ship canal advocates; and he did so by proving the points I have just presented. The vital place of overhead, under the conditions which obtained, led Major Symons to say: “You may build this canal, and you may use larger vessels; but you cannot by such means eliminate the adverse forces of nature or bring about reduced freight rates. You are certain to increase them.” The New York State Ship Canal died under that authoritative indictment, and has remained dead. We are now con sidering, on this side of the line, under identical conditions, a parallel proposition.

If sincere men like Mr Drury would only get into touch with ship operators and transportation authorities, they would soon convince him that all these American stories about lower freight rates are utterly unsound. Cold economic truths are against them. They are Che dreams of the over-enthusiastic and uninformed.