The Eureka sentinel. [volume] (Eureka, Nev.) 1902-current, 1911-12-16
Panama Canal And The Railroads

competition by way Of the Panama Canal, thereby SCATTERING the
countrys dream of lower freight rates? This question is raised by
the recent testimony of Bernard n. Baker before the Senate Com
mittee on Interstate Commerce, and it has given a fresh impulse to
those who think the Government should either itself own a line of
steamers for the Canal traffic, or regulate the rates Of the other
lines The whole question is the more acute in view of President
Tafts recent announcement that the Canal will probably be ready
for use by July 1, 1913, instead of by January 1, 1915-that is to
say, Is months ahead of schedule time.
Mr.. Baker, a capitalist experienced in the organization of success
full steamship companies, undertook to launch an independent sl5,
100000 company to operate Is fast steamers in connection with the
Panama Canal In order to obtain a mail subsidy of three quart
ers of a million a year from the Government, the charter of Mr.
Bakers company provided that "no person shall be eligible as a
director who shall be a director in. Or an officer or an agent of, any
corporation or association engaged in any competitive transporta-
ton business by rail-" He says that bankers who admitted the
splendid opportunity the opening of the Canal would afford such an
enterprise, nevertheless withheld their support because they be-
heved the proposed line would affect the securities of the transcon-
tinental railroads. In some cases bankng-houses, which at first
subscribed for stock, afterward withdrew. Further, we are told,
shipbuiding companies which eagerly discussed plans for building
ships, when the subject was first proposed to them, suddenly lost all
INTEREST," in the proposition and virtually declined to undertake the
construction of vessels. This means, says Angus McSween, Wash
ington correspondent of the Philadelphia North American, "that
It'll impossible to organize an Independent steamship company for
operation through the Panama Canal because of the opposition of
the money combination and the transcontlnental railroads which
are part of that combination" Mr. McSween goes on to say:
"Mr. Baker did not attempt to prove that there had been a
conspiracy to prevent the success of his Independent plans. He
admitted that he had no proof to show that the money combination
or the railroads had exerted themselves to prevent the success of
his enterprise; he merely presented to the committee his expert
ence, and left the committee to draw its own differences.
"He made it very clear, however, that he believes the Morgan
Rockefeller money combination, which controls the transcontinental
railroads as well as the sources of credit in the United States, has
absolutely blocked the way to the organization of an independent
steamship line in order to prevent effective competition with the
transcontnental railroads by way of the Canal Those possessing
knowledge of actual conditions in this country will have very little
doubt that Mr. Bakers convictions are warranted"
Mr.. Baker urges the establishment by the Government of a
line of steamships for interocean traffic through the Canal. and the
placing of coast to coast rates by water under the jurisdiction of
the Interstate Commerce Commission. In no other way, he declares,
can the Canal be made of benefit to the people of the United States,
for in no other way can the combination which controls the trans
continental railroads be prevented from controlling traffic through
the Canal Also In support of his suspicious he pointed out that
the only steamship company which is planning to enlarge its bust
ness when the Canal opens is the Pacific Mail, which is owned by
the Hartman line of railroads.
Commenting upon Mr.. Bakers testimony, Senator Newands of
Nevada, according to the Washington correspondent of the Balti-
more News, had this to say:
eff capital continues to hesitate to invest in an independent
steamship line to oparate through the Panama Canal, there is no
question in my mind that the United States Government should
step in and operate its own steamships through the Canal.
"With the Government offering a subsidy of 81, 500 900 to be
paid in ten years, it is clear to my mind that a s a business PROPOSE
ton the investment is a good one. If no money can be found for
it, there must be some strong influences working against it.
eff there is no conspiracy to defeat the Independent line of
steamers, some very strange things have happened, as indicated by
the Baker failure"
In the opinion of many of the leading fnanciers of New York,
on the other hand, Mr.. Bakers failure to finance his company was
due to the belief of capital that the proposed line would not be
~paoitable, rather than to opposition fostered by the transcontinental
railways. Certain bankers whom Mr.. Baker mentions by name in
his testimony fatty deny his Interpretation of the situation. One
of these, A. B. Hepburn. president of the Chase National Bank of
New York, of which James J. Hill is a director, is quoted as follows
in the New York Evening Post:
"Al this talk about interference by the transcontinental rail-
ways is stuff and nonsense. There are two good reasons why the
scheme for the Atlantic and Pacific Transport Company did not go
through, and both OF them are good business reasons. To begin
with, why should a lot of people invest money in a scheme that is
SO unguaranteed?
"We have great evidence to warrant the belief that the scheme