proof would always fall upon the person who advocated any duty of less than one hundred per cent. In the end the manufacturers, seeing that the battle was going against themselves, withdrew their opposition to the demands of the miners, in consideration of a substantial increase of the duty upon steel. Thus, after a number of minor industries had received similar inducements, the legislature raised the duties upon all iron ores to a flat rate of three dollars per ton.

The rest of the story is quickly told. Events proved that the steel industry could not be developed upon any large scale without an abundant supply of the Lake Superior ores. This fact was perceived by the people of Ohio, who immediately repealed all duties upon these valuable raw materials. Happily for that State, the domestic production of iron ore had always been so small that the miners were unable to make any effective opposition. If Ohio had been unlucky enough to possess large deposits of ordinary ores, her industrial development might have been seriously checked, because her people had always favored the general policy of protection. But in this case it did not seem worth while to cripple the steel manufacture for the sake of an industry that employed less than two thousand men. Thus it came about that the ores which Pennsylvania rejected contributed to the rapid development of the steel industry of her neighbor. Ohio levied no duties upon the coke which her manufacturers brought, under very favorable conditions, from Pennsylvania and West Virginia, since here again there was no local interest strong enough to stand in the way. Pennsylvania was able, by means of heavy duties, to preserve the local market for her iron and steel manufactures; but in all neutral territory Ohio's ironmasters established their complete supremacy. In the course of time, Mr. Carnegie, abandoning an unequal contest, built enormous plants at some of the Lake ports of Ohio, and reduced the capacity of his Pittsburg mills to the demands of the "home market." Pennsylvania had protected her iron mines, but had lost the magnificent steel industry that might have been hers for less than the mere asking.

IV.

We have left the domain of history to dwell for a time in the realm of hypothesis, for the purpose of enforcing the principle that freedom of exchange is favorable to the highest development

of the industries of a community. Granting, for present purposes, that there may be exceptions to the rule, the general truth of the proposition finds striking confirmation in the example which Pennsylvania affords.

Usually, when an appeal is made to the experience of the United States under the policy of unrestricted domestic trade, the protectionist argues that with foreign commerce the situation is radically different. If the iron miners of Pennsylvania were injured by the introduction of Lake ores, Minnesota and Michigan received great benefits, so that the country, as a whole, lost nothing. But he contends that the importation of cheaper foreign products throws domestic labor and capital out of employment, and reduces to that extent the opportunities open to home industry.

It is precisely at this point that the experience of Pennsylvania will enable us to detect the fallacy of the protectionist's argument. He assumes that the field of investment is limited to the opportunities that are utilized at any given time, and that, if producers are driven out of any existing industry, they cannot find employment elsewhere. In this respect, his theory is precisely like that of the trade-unionist who would prevent a laborer from doing all the work he can reasonably perform, or would oppose the introduction of a new machine, in order to avert a possible reduction in the demand for labor. Both perceive nothing but the immediate injury done to a certain number of persons by the introduction of a cheaper commodity or a labor-saving appliance; yet their argument is not wanting in plausibility, since they can point to something that is seen and tangible.

Most of us are convinced that machinery does not permanently reduce the demand for labor, even though it may effect a temporary displacement; and the same thing is true with the importation of a cheap commodity. Pennsylvania has imported Lake Superior iron, and this ore has been largely substituted for the product of her own mines. The census of 1880 showed that the State produced at that time 2,185,000 tons of iron ore; while the statistics gathered by the Geological Survey place the product for 1900 at 877,000 tons. Free trade has destroyed the larger part of what was formerly a great industry, mine after mine has been closed, and labor and capital have been thrown out of employment. So far as Pennsylvania is concerned, the iron from

Michigan and Minnesota was precisely like an import from a foreign country; and the protectionist's theory would compel him to affirm that the industries of the State were decreased by the introduction of these ores. Yet we know that the development of the Lake Superior mines has been of the greatest benefit to Pennsylvania, as well as to other States.

The explanation of the problem is found in the fact that the field for the investment of labor and capital in Pennsylvania was not limited to the opportunities that were utilized in 1880. Cheap iron made it possible to develop the manufacture of steel at an astonishing rate; while cheap steel benefited almost every other industry in the State. The loss occasioned by the closing of certain mines was insignificant, when compared with the advantages derived from the trade in Lake Superior ores; and Pennsylvania would be poorer to-day if she had been able to place a prohibitory tariff upon iron twenty years ago.

Our conclusion is, therefore, that the introduction of a new import simply forces labor and capital into other branches of industry, and does not permanently narrow the field of investment. If some initial loss is occasioned by the displacement of certain domestic enterprises, this is more than counterbalanced by the saving which the consumers are able to effect, because the consumers of any article will generally outnumber the producers. When the imported commodity is a raw material, the advantage may accrue in the first instance to those who use the article for industrial purposes; but, in the end, the benefits will be diffused among the masses of the people. Until we can foresee some limit to the growth and diversification of human wants the result can never be otherwise.

By an appeal to the actual experience of one of our leading industries, we have endeavored to show that freedom of exchange involves nothing that is essentially different from the conditions that have always governed the internal trade of the United States. If we are soon to enter upon a more liberal policy in respect to external commerce, it may be reassuring to realize that we are not embarking upon a voyage in unknown seas. Students of our economic history may safely indulge in the belief that at the end of the journey lies no wholly unfamiliar land.

CHARLES J. BULLOCK.

THE PANAMA CANAL FROM A CONTRACTOR'S

STANDPOINT.

BY GEORGE W. CRICHFIELD.

In his very interesting discussion of the Labor Problem on the Panama Canal, in the July number of the REVIEW, BrigadierGeneral Hains overlooked certain important considerations affecting the number and character of employees required for that work. But before proceeding to consider his suggestions with reference to the best methods of doing the work, let us examine briefly the nature of the undertaking itself.

From Colon to Bas Obispo, a distance of twenty-nine miles, the territory is practically one vast manglare; that is, low marshy land, covered with the densest tropical growth of trees, vines and underbrush, so as to be entirely impenetrable in most parts, except for a man with heavy boots and a machete. During the rainy season, or about nine months in each year, the larger part of this territory is covered with water, which, as the wet season draws to a close, in places becomes stagnant. The ground is of the softest, richest loam, the product of the decay of thousands of years of dense tropical forests, and this, under water, becomes mud of the worst nature, filled with rotten logs, stumps, poisonous vines, thorns, dangerous prickly plants, and many trees of poisonous sap. The mosquitoes in these unending swamps are terrible, not alone in their number, but in the amount of poison which they convey in their stings. In these dense undergrowths, where the sun cannot penetrate, they are as numerous and vicious by day as by night; and it will be utterly impossible for workmen on this section of the Canal to protect themselves against their bites. I have stood behind a transit in just such a jungle, when, even at midday, I would be so thoroughly covered with mosquitoes that it would be difficult to tell the texture of my clothing, while from

the same cause the blood would be oozing in drops from all parts of the bodies of our horses, which were in camp. This mosquito poison produces the gravest consequences. Malaria in its most malignant form, frequently resulting in death, is due principally to the poison from mosquitoes, while a large percentage of the nervous derangements, which so seriously affect the heart and are so prevalent in tropical countries, are due to the same cause.

The horrors of the manglare are not yet fully described, nor indeed can they be. Snakes, of the most venomous type, are to be found without number. Strange to say, the most dangerous snakes are small, so that among the leaves it is almost impossible to see them.

For an ordinary white man, without experience, to attempt to penetrate these jungles alone means death, and nothing but death. Only natives, accustomed to the forests, and masters of the machete, are at all competent for the task. The climate in this section of the Canal zone is intolerable. Amateurs who take ship from New York to Colon in January, the best month of the dry season, and spend their time mostly under the shade trees on the beach in front of the Panama Railway Company's hotel, enjoying the sea-breezes, may return and report that the climate of Colon is all right, and that there need be no great mortality in digging the Canal. But the sea-breeze scarcely moves a leaf in these mighty jungles, and for nine months there is rain, rain, nothing but rain; while, at intervals, in the sticky, humid, suffocating atmosphere, the sun breaks through the clouds with a broiling, overpowering heat. The dry season is not long enough to enable the water to dry up, and even during that season there are showers and drizzling rains nearly every day.

These, then, are the unfortunate topographical and climatic conditions over more than half the territory through which will run the Canal. On the Pacific side, from Panama to Pedro Miguel, a distance of nine miles, a somewhat similar condition exists, but by no means so bad. The Canal there passes through extensive marshes, and great hardships and loss of life will inevitably be sustained in this section, but nothing in comparison with what will be experienced on the Atlantic side.

The intermediate section comprises what is known as "Culebra Cut," about eight miles in length, extending from Pedro Miguel to Bas Obispo. The ground here rises with considerable abrupt