Daily capital journal. (Salem, Oregon) 1903-1919, 1912-12-13
Talks on
the Canal
at Panama

The president has fixed Panama ca
nal tolls in accordance with the advice
Of Prof. Johnson, who has been guild
ed in his judgment by commercial
consideration. The rate is almost the
same as that via Suez, but that is
largely accidental. The competition
between the two routes Is one OF
freight rates, rather than OF canal
tolls, and the tolls is only one factor
OF the rate. The rate fixed is not a
cut-throat rate, for the purpose OF di-
verting traffic from the Suez route,
for the professor finds that policy un-
just. The rate adopted is proportioned
to the cost Of building and operating
the canal, and with the intent to pro
vide for economy in movement by that
route, rather than by transcontinen-
tai route. Even according to these
reasonable principles the professor
says that the result rests mainly upon
conjecture Nobody really knows
what commerce will prefer the canal,
and therefore nobody really knows
what the tolls will amount to. The eX-
pectation is that after 10 or 20 years
they will provide something toward
repaying the cost OF the canal, In
that case just 80 much Of the national
investment will be released either for
a similar use or for the reduction Of
taxation. That is good business eth
er way, 1t is plain that there is linn
1t to the extent to which even the
United States can use taxation for the
construction Of such public works, but
there is no limit If the works are ad-
ministered in a method not to burden
the taxpayers, and to recover the cap
ital sunk.
There are two important variations
from the practice on the Suez canal.
No toll will be collected from passen-
gres via Panama, The professors ar
gument is that the passenger tolls are
included in the tonnage toll, and that
a separate passenger toll is a double
toll Also warships are charged diff
ferently from the tonnage toll on mer-
chant vessels. The professor say that
they are fighting machine, and have
no tonnage for profit Therefore war
ships are charged for their displace-
ment, at a rate nominally lower than
merchant vessels, but totaling higher
and regardless Of commercial con-
siderations. In the professors words,
"the United States is not called upon to
make the Panama canal tolls low for
the purpose Of tightening the naval
burdens of foreign countries" All that
the United States is required to do is
to deal equally with all users OF the
canal for like purposes, All warships
pay via Suez, because that Is a private
enterprise, and there is no excuse for
eXempting any. The discrimination
would be too flagrant In some re-
spects there is cause for regret that
the Panama canal was not built by the
United States through a corporation,
in the manner in which capitalists
keep their interests distinct, and keep
track of their financial operations.
The steel trust, for example, although
owning its subsidiaries, would not al
low them to take freely from anything
the steel trust owned. Strict account
is kept of all intercompany operations,
but the United States keeps no ac-
count Of interdepartment operations.
Thus II happens that nobody really
knows what the franking privilege
costs, or the real deficit in the post
office, which claims surplus.
There would he no real discrimina-
tion If the United States should fail
to collect tolls on It's warships, or even
| If It should rebate them, But there
would be ground for a suggestion Of
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