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trails-Pacific steamship companies will avail themselves of the facilities offered for this purpose. Already one contract has been entered into with the American—Hawaiian Steamship Company for the carrying of sugar from Hawaii to New York.' From the commencement of the present year this company abandoned the route to the Far East via the Straits of Magellan, and began a regular service between New York, Hawaii, and the Far East, via the Mexican isthmus route. At first, it is stated, there will be a monthly service between Salina Cruz and the Far East, a ten-day service between Salina Cruz and Hawaii, calling at San Francisco on the way out, and a weekly service between Coatzacoalcos, New Orleans, Philadelphia, and New York. If the needs of the traffic require it, these services will be proportionately increased. As at present arranged, six 12,000-ton ships will be used on the Far East and Honolulu lines, and four 8,000-ton ships on the Atlantic line, while smaller vessels of 6,000 tons will be used for a coast service between Saliva Cruz, San Diego, San Francisco, Seattle, and Vancouver. The above arrangements are provisional, and I only give the information for what it is worth, and would beg that persons desiring to make practical use of this line would not place too much reliance on them, but would make inquiries at headquarters. At the present time the joint service established by the Leyland and Harrison Lines makes three calls a month at Coatzacoalcos. The Cuban Steamship Company (Cayo Line) calls every three weeks, and the Canadian Steamship Line once or twice a month. The Mexican Navigation Company already touches there, and it is probable that the Royal Mail Steamship Navigation Company and the German and French lines, which have a service between European and Mexican ports, may also find it profitable bo call at Coatzacoalcos. Besides this, no doubt, tramp steamers will touch there in increased numbers. At Salina Cruz, besides the ships of the American-Hawaiian Company, the following lines will have a regular service: The Pacific Steam Navigation Company, twice a month; the new Canadian Line from Vancouver, once a month; the German Kosmos Line, once a month. It is also understood that there will be a more regular service between Australian ports and Salina Cruz by the vessels which bring coal. The Pacific Mail Company is reported to have the intention of making regular callings at Salina Cruz in its San Francisco to Panama service, but as this Line is controlled by the interests governing the transcontinental service of the Southern Pacific Railroad, there is at present some doubt as to whether their ships will really make Salina Cruz a port of call. It is believed that other steamship companies now running vessels via the Cape Horn, Panama, and the Suez Canal routes will divert some of their ships to the Mexican isthmus route if the facilities for handling freight prove as efficient and expeditious as anticipated. How much of Asiatic commerce and how much of European shipments to Asia will go by this route still remains to be seen, but there is little doubt of the capacity of.the Tehuantepec Railway to command a sufficient share, at least, of what the other routes have been enjoying. At the beginning of my report I stated that the opening of the Tehuantepec National Railway to transcontinental traffic would be likely to influence the highways of the world's commerce, and I will now add a few words in explanation of this statement. The geographical effects of the line upon commerce are easily measurable. It will compete under advantageous conditions for traffic between European and American ports on the Atlantic on the one hand, and ports in the Far East and -Australasia and on the Pacific coast of the American Continent on the other. This traffic is now moving by vessels round Cape Horn, or through the Straits of Magellan, or by the Suez Canal, or by land over the transcontinental lines of North America. The officials of the company informed me that they were already assured of 600,000 tons of freight for the year 1907, and had over 1,000,000 tons in sight for 1908. In fact the prospects of freight were so large that they were afraid to properly advertise their route for fear of not being able to comply with the demands of the traffic. Mr. John F. Wallace, former chief engineer of the Panama Canal, in giving evidence before the United States Senate Committee of Interoceanic Canals, made the following statements as to the advantages of the Tehuantepec route over the Panama route: — " 1 do not think that you can overappreciate the importance of protecting our future trade by heading off the possible development of the route by way of Tehuantepec. It goes without saying (hill it is much easier to hold a line of traffic than to get it away from somebody else after they get it once. I do not think that there are very many people that appreciate what the Tehuantepec route means if they get it established once. " The Tehuantepec route to all Pacific ports of the United States, tile Orient and Australasia is much shorter than the Panama route. The distance from New York to Hong Kong, for instance, by way of the Tehuantepec Railway is 1,351 miles nearer than by way of Panama. Freights are worth'on an average $1 per ton for 1,000 miles. That means that the Tehuantepec route would be $1 3">c plus the rate over the railroad, which, say, might be $2 or $3 a ton—granting it is about $3 now—which would make it $4- 35c. a ton. Any less sum than that could be charged by the Tehuantepec Railroad, and make money out of it, and also save five days in time. " The distance from New York to San Francisco by that line is about 1,200 miles shorter than by way of Panama. There you have $1 20c, plus the toll across the isthmus of $3, or whatever i 1 will be and the saving in time of about four or five days. That holds good all through here—l mean in varying proportions—but they have the advantage. That is partly, of course, compensated by the fact that they have 175 miles to haul the stuff, and it will cost them the same to handle their stuff on the wharves that it does ai Panama and Colon, and it will cost them about three times as much to handle it over the railroad, providing, of course, the Panama road is rebuilt and re-equipped And there is a reverse advantage to us in that fact, which we can overcome by a low flat charge at Panama now, if we fix it up, and we can keep the business for a less cost than we can ever get it back again."