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8 MARINE REVIEW. COMMERCE OF THE GREAT LAKES.* OHARLES BE. WHEELER, FOUNDER OF THE OLEVELAND STEEL CANAL BOAT EN- TERPRISE, PRESENTS IN INTERESTING FORM TO NEW YORK ENGINEERS SOME FACTS ABOUT THE LAKE TRADE.--A COMPOUND GAS ENGINE FROM WHICH MUOH IS EXPECTED. It was the intention, in the preparation of this paper, to spare you the infliction always attending an array of figures and statistics, and this for two reasons. First, the data relating to the commerce of the lakes are easily accessible in the innumerable pamphlets, reference books, and other literature whose figures and comparisons are complete; secondly, and principally, because it seemed possible to treat the subject along general lines and perhaps interest you in what I believe to be legitimate effects of commerce on the lakes--effects fraught with great significance to the in- dustrial world, and, it is not too much to say, involving the commercial supremacy of America. But I soon discovered that the plan was imprac- ticable; that without frequent appeals to the figures which government bureaus, painstaking students of economics and journalists have compiled, there was an entire lack of perspective, a sense of incompleteness, a loss of proportions. Reluctantly I was compelled to amend, in part at least, my original plan, and thus it happens that if facts familiar to a degree of triteness are recited, necessity must plead their use. The disastrous panic of 1893 was not without its benefits. It not only revealed the necessity of a reform in our monetary system, a lesson as yet blindly unheeded by the nation, but taught as well the need of industrial economics, and along this line most commendable progress has been made. During the past three years every manufacturer's office has been a school- room, whose instructor has been Necessity, and the lesson that of applied economics and cheaper production. Mr. Carnegie, for instance, was an apt student and learned the lesson quickly. He built a railroad from the south shore of Lake Erie to his furnaces on the Monongahela and cut the rail-carrying charge in two. He went beyond that--availing himself of the dilemma of Mr. Rockefeller, possessed. accidentally of several large deposits of ore on the south shore of Lake Superior, he was able to place himself in a position, as regards ore supply, to compete with the world, at the same time lowering the transit cost of the ore from the mine to his railroad. Mr. 'Rockefeller in turn saw meagre profits, unless, availing himself of the deeper channels furnished in recent years by the govern- ment, he had larger boats to carry his ores than have been running in the trade. He built a dozen of them, and thus it happened that more than half of all the steel tonnage in the merchant marine of the United States, built in 1896, was the product of our lake ship yards; and surely our pride, in that we now own more than half of the merchant marine of the United States, as regards boats of 1,000 tons burthen and over, is quite pardonable. Everywhere, less noticeable because on a lesser scale, the same trend towards the same end is to be found. It has not received the attention it deserves--the constant, determined, intelligent effort of the American manufacturer, during the years of financial trial, to open new markets, stop wasteful expenditures, cheapen production. With returning pros- perity, he is rash who will set limitations on American trade abroad or at home, a result of the discipline of 1893-94-95. The growth of our export trade in the iron list is unmistakably genuine, recognized and frankly acknowledged by English competitors. The Duke of Devonshire, at the meeting of the Barrow company directors, spoke of it as "alarming." The London Times, commenting on his declaration, marvels at the magnifi- cent scale of operations at Homestead, where it finds furnaces each pro- ducing 200,000 tons of pig iron per annum, the average capacity of the English furnaces being less than 24,000 tons per annum. 'During the last month or two rails for Liverpool have been coming to tide-water all rail from the Cleveland district. Nails and iron rods have been going abroad in generous quantities. The future is full of hope if unwise legislation does not create more artificial barriers than the ingenuity of the American manufacturer can overcome. Contributing to this happy condition of affairs, the cheap transporta- tion on the lakes has been a factor of prime importance. The transporting interests on the inland watets have not failed to meet the new situation with intelligent effort and splendid courage. It was inevitable that cheaper transportation should come: The 20-foot channel from Duluth to Buffalo is practically completed, and the invitation to larger boats and cheaper rates could not be denied. Besides, the traffic itself is of such magnitude as to compel a minimum rate. Over that course of commerce must come the nation's breadstuffs, its lumber, its iron and copper ores, in quantities that pass comprehension. The figures for 1897 are, of course, not yet complete, but there is little doubt, if any, that the most prosperous year will be equalled, even surpassed. If this proves true, over 38,000,000 tons of freight will have passed through the Detroit river in 1897. Load that freight in cars, twenty tons to the car, place the locomotive at New York and the caboose will be in New York as well, but between the two nearly 2,000,000 cars will be found, extending across the continent to San Fran- cisco, back again to New York, again across the continent, again back to New York. It is a greater commerce than that of Liverpool or London, foreign and coastwise, greater than both combined. It exceeds the total entries and clearances in the foreign trade at New York, exceeds the total _ of like entries and clearances at all the seaports of the United States. Iam speaking of quantities, of course, not values. Imagine, if you can, the uses to which the freight is put, the industries it nourishes. Sixty-six per cent. of all the ores used in the United States comes through the Sault, and, notwithstanding the bright outlook and flattering showing made by the Alabama-and Tennessee districts, the percentage of the total amount of ores used is not only markedly in favor of the Superior ores, but the percentage increases year by year. Two-thirds, then, of all the ores used in this country come from the south shore of Lake Superior and are the -sole source of supply.of such mills as those of the Carnegie company, the Illinois Steel Co., the Johnson company, the Cleveland Rolling Mill Co., and others that are now confessedly equipped to compete for foreign trade. If our hope in the future supremacy of the American iron and steel maker is well-grounded, surely we may look for its justification in the furnaces between Cleveland and Pittsburgh. There, if anywhere, must be found *Read at the fifth general meeting of the Society of Naval Architects and Marine Engineers, held in New York, November 11 and 12, 1897, the means by which in an iron age this country may assume a command- ing position in the iron markets of the world. C And the whole matter depends on cheap transportation.. Remove the chain of lakes and no railroad or system of railroads,could hope for a moment to place the 140 different iron and steel manufacturers in the central «states district in a position to compete with foreign mills, and in the catastrophe thousands of allied industries must inevitably be abandoned. For the coal, for the coke, is in western Pennsylvania and the ores over 900 miles away. No railroad in America is better equipped to transport freight cheaply than the Lake Shore & Michigan Southern. Its grades are light, its tracks and roadbed unsurpassed. The cost per ton mile in 1896 on that railroad was 3.81 mills; the cost on the lakes .99 mills. We have this year reduced the latter figure fully one-third in the operation of the larger boats. We have been bringing ore from the south shore of Lake Superior to Cleveland at a rate of but 15 cents per ton .over the ordinary railroad switching charge in any of our large cities. We have been taking coal back at one-third the New York lighterage rate. To reach such results has demanded the most rigid regard for economies in every direction. It has worked a revolution in loading and unloading cargoes. It became necessary that appliances should be such that 6,000 tons of ore could be loaded into a boat, the boat trimmed and ready to depart for her eastern terminus within four hours after tying up to the dock. It became necessary that at this end of the line those 6,000 tons should be unloaded in ten hours. It became necessary that forty cars an hour, each car containing twenty-five tons of coal, should be lifted up bodily one at a time, and the contents discharged into the boat as easily as a laborer flips his shovel. 'When Mr. Carnegie amazed the world last spring with his low quo- tations and other mills followed, let it not be forgotten that it had been impossible but for our ship yards, the genius of the mechanical engineer, and our steamship organizations, which have availed themselves of every known appliance for the economical conduct of their business. Had it not been for them and the lakes, Mr. Carnegie had sought in vain for his foreign market, Mr. Moxham had returned from Liverpool empty-handed, and the Cleveland rod and nail mills had never dreamed of Japan and England for profitable sales. The commercial supremacy of America in iron and steel manufacture is impossible but for the great lakes. And now let it not be thought that the greater part of that traffic is the carry- ing of iron ores. It is nearly a half of the tonnage, it is true, but in value occupies but fourth position. The total value of freight passing through St. Mary's Falls canals in 1896 was over $195,000,000. Of this amount wheat must be credited over $47,000,000; flour, $34,000,000; unclassified freight, $31,000,000. Iron ore, with $25,000,000, comes next, closely pushed by copper with $23,000,000 to its credit. If the grain shipments out of Chicago and the lumber shipments from Lake Huron be added, and again there be added the value of the coal and merchandise shipments from Lake Erie to Detroit and Lake Michigan ports, the importance of iron ore in the list is not so readily recognized, and it will be seen that what I have said of the lakes and its relation to the iron industry applies quite as well to wheat, corn, oats, flour and possibly copper. It is almost certain that the indirect effects of lake transportation are of greater importance than the direct. Mr. Blanchard, in his argument of March, 1894, before the committee of the United States senate on inter- state commerce, made a significant and, as I believe, absolutely truthful statement in these words: "I contend," he said, "that after rivers, lakes, oceans and economic forces have spent their combined nattiral and national powers in determining rates which are reasonable, such rates cannot be made excessive by combination." . Mr. Blanchard was. defending railroad pools, a question alive today and destined to command careful public consideration in the years to come. 'As a representative of the railroad interests, his plea may be that of an advocate, yet the fact is he was entirely correct. No railroad or combination of railroads can dissociate itself from the traffic means we are considering. It is a controlling factor, and if Duluth can ship her flour from that port to Liverpool for 14% cents per hundred--a privilege she enjoyed for a brief time the past summer-- its effect is instant upon every railroad that has flour mills to protect or- grain to haul to them. And then, too, it is not iron ore, flour and wheat that alone monopolize the low rate. The class freight annually carried over the lakes between the great commercial centers, Chicago, Milwaukee, Detroit, Toledo, Cleveland and Buffalo, and beyond in connection with the rail lines and the Erie canal, is an item concerning which, unfortu- nately, no accurate data are at hand, thanks to a law which does not exact reports of any considerable statistical value; but the fact that all your trunk lines whose western terminus is Buffalo own and operate their own boats, and the fact before cited that the unclassified freight in the Lake Superior trade amounts in value to over $30,000,000 per year, hint at the enormous value of the total class business transacted in the lake trade. None of the trunk lines may ignore it and its influence is far felt. If it became a traffic necessity for the Lake Shore & Michigan Southern and the New York Central & Hudson River railroads to approximate the lake and rail or lake and canal rate on any commodity from Chicago to New York, be sure the other trunk lines will meet it, and give their tide-water terminals 'the same rate, not omitting the differentials. As was the case this summer, even the north and south lines, such as:the Illinois Central, must, of neces- sity, take a hand, protecting their gulf termini against the competition thus forced on them. Now, while its effects are of little consequence, perhaps, in regard to higher class freight, there can be no question but all the 6,000 railroad stations east of the Mississippi and north of the Ohio river, reap a decided benefit in the carrying cost of the lower class freight and commodities; for when through rail rates are reduced between Chicago and New York, for instance, because of lake competition, they are simul- taneously reduced between intermediate points because of the long and short haul clause of the interstate commerce act. The effect is wide- spread, often disastrous to the carrier, but at least yields this comfort-- that the present unmistakable tendency towards concentration of railroad interests, or the enactment by congress of a law permitting railroads to pool, is a menace of academic rather than real interest. So long as our water highways are open, the railroads have a competition that cannot be overcome. There is another reason why this competition is irresistible. In the building of boats and their machinery, the naval architect and marine engineer may hope reasonably to keep in advance of the maintenance of