Passenger movement went to the Canadian lines. This
business was increasing prior to the war, so that by 1939
it is estimated that the Canadian lines together carried
over 40,000 passengers northbound and about 19,000 south-
bound excluding local passengers between southern British
Columbia points (between Vancouver and Ocean Falls).
This heavier passenger movement over the Canadian lines
is accounted for in part by the fact that the Canadian lines
handle more cruise business than do the United States lines,
largely developed through the Canadian lines continent-
wide organizations for passenger solicitation. Figures for
1938 are not at hand, but in 1939 the two Canadian lines
together had 38 cruise sailings to Alaska, with 6,242

passengers, compared with 32 cruises by the United States
lines with 2,608 passengers.

A good deal of the Canadian passenger business moves
between Vancouver and Prince Rupert as part of the
“Triangle Tour” of the West Coast and the Rockies offered
by the Canadian National. The tendency is for the general
tourist trafic to flow northward from or through Vancouver,
eastbound passengers and passengers on the “Triangle
Tour” debarking at Prince Rupert. This fact accounts,
in part, for the difference in volume between northbound
and southbound traffic on the Canadian ships.

While the Canadian steamship lines figure substantially
in the passenger business of the North Pacific, their freight
business, as shown above, is limited to Canadian domestic

traffic destined to or originating in northern British Columbia
and Yukon.

The present navigation laws of the United States contain
a provision that permits the transport of merchandise
between points within the continental United States over
throughroutes recognized by the Interstate Commerce
Commission “when such routes are in part over Canadian
rail lines and their own or other connecting water facilities.”
Alaska is, however, expressly excluded from this provision.
This means that goods shipped in bond to Prince Rupert
from points in the United States could not be delivered
from there to any Alaskan port in ships that are not of
United States registry.

This legislation has thus denied to Alaska the use of
the Canadian steamship lines to take advantage of favourable
transportation costs afforded by the existing rail connection
between United States interior points and Prince Rupert,
at Alaska’s front door. Established United States lines,
based on Seattle, have not chosen to develop the use of
this lower cost routing, and no new United States operation,
interested in providing this service, seems to have appeared.

The transportation cost advantage referred to lies in
the fact that rail rates from midwestern and eastern United
States points are the same via Canadian rail lines to Prince
Rupert as they are to United States Pacific Coast ports.
Steamship rates from Prince Rupert (640 miles north of
Seattle) to Alaskan ports reflect the saving in ocean haul,
comparing Prince Rupert with United States ports many

194 }

hundreds of miles to the south, and there is in most cases,
therefore, a considerable saving in the overall transportation
cost, in favour of the route through Prince Rupert, on goods

moving to Alaska from United States midwestern and
eastern points.

The magnitude of this differential is indicated by the
appended tabulation of rates which, for the 88 principal
commodities or lines of goods covered, shows the cost, in
carload lots, of transporting each item from its principal
or typical centre of production to southeastern Alaska
(Skagway), via Seattle and via Prince Rupert. Of the 88
items listed, 85 show a differential in favour of Prince
Rupert ranging, for 81 items, from 15 to 254 per cent
(only on 4 items is the differential less than 15 per cent).
On but 3 items, of the whole 88, is the transportation cost

lower for the longer ocean route, via the United States
Pacific Coast port.

In all this, there is no ground for complaint or criticism
by Canada. Both nations have for a long time adhered to
the principle that their respective “coasting trades” should
be reserved to ships of domestic registry, and any proposals
looking to adjustments that might affect this principle
would be regarded in some interested circles as an abandon-
ment of basic policy. Also, the policy of the United States in
the development of its Alaskan territory, although of high
interest to Canada, is no part of her direct national concern.
It may, however, be permissible to suggest that the result
of current policies, however effective and desirable they
may be in their support of the coasting trades, has been to
accentuate very considerably the prime handicap—the high
cost of transportation—under which, from the beginning of

its history, Alaska has laboured in the development of
its vast areas.

A major economic problem is the highly seasonal and
one-way character of the traffic, freight and passenger.
About 90 per cent of the southbound traffic moves in the
six-month period from the first part of May to the end of
October. In the remaining six months some ships are laid
up, but some semblance of regular service must be maintained
and ship after ship must be sent on unprofitable voyages.

Such unprofitable winter operation makes for high costs
and high overall rates.

The traffic problem is further aggravated by the limita-
tion on the service that can be performed by the ships of
the two countries. Some rational arrangement whereby
the minimum number of ships—Canadian and United
States—would be permitted to perform the maximum
possible service, during the six slack months at least, would
appear to be indicated.

There is perhaps no part of the world where two nations
have more closely identical problems, conditions, and
objectives than Canada and the United States have in their
lands in the North Pacific. The development of these lands,
necessary in the broad national interests of the two countries,
depends substantially, if not primarily, on transportation,