We are so accustomed to regard the United States as a fully developed and fully equipped country that we forget how slowly her population and industries advanced westward from the Atlantic coasts. Even now it cannot be said that the railroad communications between the east and the Pacific states beyond the great mountain-divide of the Rockies are fully equal to the carriage of the produce which is or should be exchanged between east and west. The transcontinental lines have scarcely yet furnished a cheap and satisfactory connection between the Pacific coast states and their largest and most natural markets. Hitherto the railways have had to compete with only three alternative routes: (1) the all-sea route round Cape Horn for sailers, and through Magellan Straits for steamers; (2) the route _via_ Panama, with railroad transit over the isthmus; (3) the route _via_ Tehuantepec, with railroad transit over that isthmus from Puerto Mexico on the Gulf to Salina Cruz on the Pacific. The new canal will be a much more formidable competitor. It is highly important that the industries of the United States should have the benefit of this healthy tug-of-war between railroad and canal, and the government is perfectly justified in keeping that competition open, even to the length of forbidding the use of the canal to ships owned, controlled, or operated by railway companies. There is no fear that the Panama Canal, even if it prospers exceedingly, will ruin the transcontinental railroads. The report of the Isthmian Canal Commission in 1901 made some interesting remarks on this subject, and they are as pertinent to-day:-- The competition of the canal will affect, first, the volume and rates of the through business of the Pacific railroads, and secondly, the amount of their local traffic. At the beginning of their existence these railways depended almost entirely upon their through traffic; but their chief aim throughout their history has been to increase the local business, which is always more profitable than the through traffic; and although the great stretch of country crossed by them is still in the infancy of its industrial development, the local traffic of some, if not all, of the Pacific roads has already become of chief importance. A vice-president of one of the railway systems states that since 1893 "the increase in business of the transcontinental lines has not come from the seaports, but from the development of the intermediate country." The canal can certainly in no wise check the growth of this local traffic, and the evidence strongly supports the belief entertained by many persons that the canal will assist largely in the industrial expansion of the territory served by the Pacific railways.