A.—B

of the canal is only 75 kilometres, or, in round numbers, fifty miles, more than half of which is completed, the completion of the whole is manifestly brought within a measurable distance of time. Of the six million tons of shipping which are expected to pass through the canal in its first year it may probably be assumed that four or five millions will be English ; and we shall have a repetition of the curious spectacle which has already been afforded by the Suez Canal, of an enormous undertaking, first put into practical shape by a French engineer, carried out by a company having a French domicile, and largely supported by French investors, which nevertheless must look for its profits almost wholly to the advantages which it will afford to English shipping, and which, but for the custom expected from this country, could never have obtained the funds necessary for its creation. For all traffic to the western side of the great American continent the canal will permit an enormous saving of time and of the various charges which loss of time implies; and it will probably prove a formidable competitor to the great lines of railway which now bring the products of the Western States to the Atlantic seaboard. All experience, however, shows that the tendency of traffic is always to outgrow the increasing facilities which enterprise affords for it, and that, however fast we may multiply railways or steamers or other means of communication, whether ocean or inland, the demands upon them will increase in a still greater proportion. Hypothetieally, of course, there must be a limit; but practically it seems never to be reached. We shall be quite prepared to see the actual tonnage conveyed through the Panama Canal exceed the present estimate as much as the original estimate has been exceeded at Suez ; and the greater the traffic, the greater will be the prosperity of all the regions which are brought nearer together by its means. We trust that the expectations of the illustrious founder of the work will be speedily and fully realized, and that he may live to witness a success which will raise him to a still higher pinnacle of engineering renown than that which he has already attained. His career is in many respects almost without parallel; and the completion of his second interoceanic canal will render it altogether unexampled,

No. 2. The Agent-Genebal to the Pbemiee. Sib, — 7, Westminster Chambers, London, S.W., 15th January, 1886. In continuation of previous advices, I now transmit herewith an extract from the Times relating to the Panama and Suez Canals. I have, &c, The Hon. the Premier, Wellington. F. D. Bels.

Enclosure. [Extract from the Times, Thursday, 7th January, 1886.] The Panama and Suez Canals. Paris, 6th January. In accordance with the announcement which I made a few days ago, M. Charles de Lesseps started last night for St. Nazaire, and M. Ferdinand de Lesseps will follow him in a few weeks. Their absence will last several months; and, after indicating the important matters which lead them to take this voyage, I will speak of an incident which connects that voyage with vital interests of the Suez Canal Company, and with English interests concerned therein. It is already known that some months ago unforeseen difficulties encountered by the Panama Company, and due, I believe, to the engineer then at the head of the works, caused a considerable reaction against the canal in French public opinion. This reaction was the more remarkable considering the immense and just popularity enjoyed by M. de Lesseps among his countrymen, and considering that he had taken the enterprise under his patronage, that he had vigorously commenced its execution, and that the French public had already embarked considerable capital in it. A general meeting of the shareholders was held about that time, when M. de Lesseps, with his. usual persuasiveness, explained the state of affairs in Panama. It was acknowledged that the enterprise presented difficulties which must be faced by fresh efforts ; and, there being a dislike to the policy of appealing again to French investors without holding out a special inducement, an issue of 600,000,0001'. in lottery bonds was decided upon. This, however, required the consent of the Government, which did not seem very ready to give it. It was alleged that one of the chief opponents of the issue was M. Christophle, the eminent Governor of the Credit Foncier, which has a kind of privilege of issuing lottery bonds, and he was said to object to that privilege being conceded to another enterprise, especially that of the Panama Canal. The truth is that M. Christophle (who has shown great ability in the management of the Credit Foncier, and who, having lost his seat in the Chamber, has just received the Legion of Honour— which would long ago have been conferred upon him had he not as a Deputy been ineligible—and whose absence from the Chamber, like that of M. Germain, will be greatly felt in financial discussions) did not positively object to the Panama Company being allowed to issue lottery bonds. He even felt' that so important and popular a man as M. de Lesseps, who reflects credit on France at home and abroad, could not be treated as an ordinary projector, but that the Government was bound to support him, and that an enterprise undertaken by him became thereby a national one. He therefore thought the Government bound to give M. de Lesseps all the encouragement and assistance in its power, but on condition of its being shown that the construction of the Panama Canal was not impracticable, and that the capital to be embarked in it through the proposed issue would not be hopelessly sunk. After these observations, and at the request of the company itself, the Government resolved on sending an engineer to Panama to examine the works, and see whether the enterprise could be pompleted. It made choice of M. Eousseau, one of the most distinguished French engineers, after