The Panama Canal

If one can imagine a ship railway across the Allegheny Mountains between Lewiston Junction and Pittsburgh on the Pennsylvania Railroad, or between Washington and Goshen, Va., on the Chesapeake & Ohio Railroad, he will have a very good idea of the difficulties which would be encountered in building such a railway. The present Tehauntepec railroad is 188 miles long. When crossing the Cordilleras there are numerous places on this road where the rear car of the train and the engine are traveling in diametrically opposite directions. The road is well-built, and, as one crosses the backbone of the continent, and beholds the engineering difficulties that were encountered in building an ordinary American railroad, he can not help but marvel at the confidence of a man who would endeavor to build across those mountains a shipway large enough and straight enough to carry a 7,000-ton ship. Yet Captain Eads estimated that his shipway could be constructed in four years at one-half the cost of the Nicaraguan Canal; that vessels could be transported by rail much more quickly than by canal; that in case of accident the railway could be repaired more speedily; and that it could be enlarged to carry heavier ships as business demanded.

He declared that he did not think it would be as difficult to build a ship railway across the Isthmus of Tehauntepec as to build a harbor at the Atlantic entrance of the Nicaraguan Canal. His confidence in his project was such that he proposed to build a short section of the road to prove its practicability before asking the United States to commit itself to the project. Commodore T. D. Wilson, at that time Chief Constructor of the United States Navy, declared in a letter to Captain Eads that he did not believe the strains upon a ship hauled across the Isthmus, as Eads proposed, would be greater than those to which ocean steamers are constantly exposed. Gen. P. T. G. Beauregard, of Confederate Army fame, declared that a loaded ship would incur less danger in being transported on a smooth and well-built railway than it would encounter in bad weather on the ocean.

A prominent English firm offered to undertake the building and completion of the necessary works for placing ships with their cargo on the railway tracks of the trans-Isthmian line, declaring that they had no hesitation in guaranteeing the lifting of a fully loaded ship of 8,000 or 10,000 tons on a railway car to the level of the railroad in 30 minutes, if the distance to be lifted was not over 50 feet. The death of Captain Eads ended this picturesque project.

A proposition once was made to build a canal across the Isthmus of Tehauntepec. This would have required 30 locks on each side of the Isthmus of 25 feet each, and these locks alone would have cost, on the basis of the locks at Panama, perhaps as much as the whole Panama Canal.

One of the narrowest parts of the Isthmus is that lying between the present Panama Canal route and the South American border. Three routes were proposed in this section, known as the Atrato River route, the Caledonia route, and the San Blas route. It was found that a canal built along any one of these routes would require a tunnel. The estimated cost of building a tunnel 35 feet deep, 100 feet wide at the bottom, and 117 feet on the waterline, with a height of 115 feet from the water surface, the entire tunnel being lined with concrete 5 feet thick, would approximate $22,500,000 a mile. The cost of building a canal along one of these routes would have been greater than that of building either the Nicaragua Canal or the Panama Canal.

The question of an Isthmian Canal will probably be forever set at rest at no distant date. In an effort to forestall for all time any competition in the canal business across the American Isthmus, negotiations are now under way whereby the United States seeks to acquire the exclusive rights for a canal through Nicaragua, just as it now possesses exclusive rights for a canal through the Republic of Panama. The conclusion of the work at Panama will end the efforts of four centuries to open up a shipway from the Atlantic to the Pacific across the American Isthmus.

CHAPTER XVII

The next factor in the failure was corruption. Extravagance such as never was known wasted the sous and francs that came from the thrifty homes of that beautiful France. Corruption, graft, waste—there was never such a carnival of bad business.

And then the French had to fight the diseases of the tropic jungles without being armed with that knowledge that gave the Americans the victory over yellow fever and malaria. It was hardly to be expected that the French ever would discover the necessity of substituting the Y. M. C. A. and the soda fountain for the dance hall and the vintner's shop, if the canal were to be completed.

But the engineers did their work well, as far as they were permitted to go. It may have cost too much—but it was well done. The failure of the French Panama Canal project was due, therefore, to moral as much as to material reasons.

Long years after the French had retired defeated from the field, one could behold a thousand mute but eloquent reminders of their failure to duplicate their triumph at Suez. From one side of the Isthmus to the other stretched an almost unbroken train of gloomy specters of the disappointed hopes of the French people.

Here a half-mile string of engines and cars; there a long row of steam cranes; at this place a mass of nondescript machinery; and at that place a big dredge left high and dry on the banks of the mighty Chagres at its flood stage, all spoke to the visitor of the French defeat. Exposed to the ravages of 20 tropical summers, decay ran riot, and but for the scenes of life and industry being enacted by the Americans, one might have felt himself stalking amid the tombs of thousands of dead hopes.

Almost as much money was raised by the French for their failure as was appropriated by the Americans for their success. From the gilded palace and from the peasant's humble cottage came the stream of gold with which it was hoped to lay low the barrier that divided the Atlantic and the Pacific. At first the French estimated that in seven or eight years they could dig a 29-foot sea-level canal for $114,000,000. After eight years they calculated that it would cost $351,000,000 to make it a 15-foot lock canal and require 20 years to build it.

Never was money spent so recklessly. For a time it flowed in faster than it could be paid out—even by the Panama Canal Company. When the company started it asked for $60,000,000. Double that amount was offered. The seeming inexhaustibility of the funds led to unparalleled extravagance; of the some $260,000,000 raised only a little more than a third was spent in actual engineering work. Someone has said that a third of the money was spent on the canal, a third was wasted, and a third was stolen.

The director general at the expense of the stockholders built himself a house costing $100,000. His summer home at La Boca cost $150,000. It came to be known as "Dingler's Folly," for Dingler lost his wife and children of yellow fever and never was able to live in his sumptuous summer home. He drew $50,000 a year salary, and $50 a day for each day he traveled a mile over the line in his splendid $42,000 Pullman. The hospitals at Ancon and Colon cost $7,000,000, and the office buildings over $5,000,000. Where a $50,000 building was needed, a $100,000 building was erected, and the canal stockholders were charged $200,000 for it.

Supplies were bought almost wholly without reference to actual needs. Ten thousand snow shovels were brought to the Isthmus where no snow ever has fallen. Some 15,000 torchlights were carried there to be used in the great celebration upon the completion of the canal. Steam-boats, dredges, launches, and whatnot were brought to the Isthmus, knocked down, and taken into the interior to await the opening of the waterway. The stationery bill of the canal company with one firm alone amounted to $180,000 a year. When the Americans took possession they found among other things a ton of rusty and useless pen points, not one of which had ever been used.

Two years' service entitled employees to five months' leave of absence and traveling expenses both ways. There was no adequate system of accounting and any employee could have his requisition for household articles honored almost as often as he liked. In a multitude of cases this laxity was taken advantage of and quite a business was carried on secretly in buying and selling furniture belonging to the company. One official built a bath house costing $40,000. A son of de Lesseps became a silent partner of nearly every large contractor on the Isthmus, getting a large "rake-off" from every contract let.

Near the summit of the Great Divide the Americans who took possession in 1904 found a small iron steamer. It is said to have been the purpose of the canal promoters to put this little steamer on a small pond in Culebra Cut, and by the aid of a skillful photographer to get a picture showing navigation across the Isthmus. This steamer was hauled by the Americans to Panama, where during the years of the American construction work it did service in carrying the sick to the sanitarium at Taboga.

The different uses to which this steamer was put during the French and American régimes illustrates the different aims of the Americans and the French in connection with the Panama Canal. There was little concern about the health of the canal workers under the French, in spite of great liberality in the construction of hospitals. The construction work was let out to contractors, who were charged a dollar a day by the French Company for maintaining the sick members of their force in the hospital. Of course, the contractors were not over anxious to put their employees into the hospitals. The result was that the death rate at Panama reached almost unprecedented proportions.

This was aided to a very large degree by the manner of living obtaining there at that time. In 1887 Lieutenant Rogers, of the United States Navy, inspected the canal work and reported that the laborers were paid every Saturday, that they spent Sunday in drinking and Monday in recuperating, returning to work on Tuesday. A prominent English writer declared after a visit to Panama that in all the world there was not, perhaps, concentrated in any single spot so much swindling and villainy, so much vile disease, and such a hideous mass of moral and physical abominations.

Add to these things the fact that no one then knew of the responsibility of the stegomyia mosquito for the existence of yellow fever, nor that the anopheles mosquito was the disseminator of malaria, and it is little wonder that the French failed. The hospitals, instead of aiding in the elimination of yellow fever, became its greatest allies. The bedposts were set in cups of water, and here the yellow-fever mosquitoes could breed uninterruptedly and carry infection to every patient. Wards were shut up tight at night to keep out the "terrible miasma," and the nurses went to their own quarters. When morning came there were among those thus left alone always some ready for the tomb.

The history of the French attempt to construct the Panama Canal begins, in reality, with the Suez Canal. In 1854 Ferdinand de Lesseps, a Frenchman connected with the diplomatic service, saw an opportunity to revive the plans for a Suez Canal that had been urged by Napoleon in 1798. His friend, Said Pasha, had just succeeded to the khediviate of Egypt, and his proposals were warmly received. The building of the canal, which presented no serious engineering problems, was begun in 1859 and completed 10 years later. There was a sordid side to its story, too; but as the losses were borne chiefly by the Egyptians, Europe ignored them and looked only to the great success of the canal itself.

As a result, de Lesseps became a national hero in France, and when it became known that he contemplated piercing another isthmus, the whole country rose to his support. In 1875, six years after the Suez Canal had been opened, and as soon as France had recovered her breath from the shock of the war with Prussia, a company was organized by de Lesseps to procure a concession for the building of a Panama Canal.

Already the world, as well as France, had come to regard de Lesseps as an engineer, rather than as a promoter of stock companies, and in this lay the germ of the disaster that was to overtake the whole scheme.

In 1876, Lucien Napoleon Bonaparte Wyse, a lieutenant of engineers in the French Army, was sent to Panama to determine the most feasible route and to conclude negotiations for the construction of a canal there. He made a perfunctory survey, commencing at Panama and extending only two-thirds of the way to the Atlantic coast; nevertheless, he calculated the cost in detail and claimed that his estimates might be depended upon to come within 10 per cent of the actual figures. However weak in engineering he may have been, he was strong in international negotiations, returning to France with a concession which gave him the right to form a company to build the canal, and which gave to that company all the rights it needed, subject only to the prior rights of the Panama Railroad Company under its concession. The concession was to run for 99 years, beginning from the date when the collection of tolls on transit and navigation should begin. The promoters were allowed 2 years to form the company and 12 years to build the canal. The Government of Colombia was entitled to a share in the gross income of the canal after the seventy-fifth year from its opening. Four-fifths of this was to be paid to the National Government and one-fifth to the State of Panama. The canal company was to guarantee that these annual payments should on no account be less than $250,000.

When Wyse returned to Paris he got de Lesseps to head the project. The hero of Suez summoned an international commission of individuals and engineers, known as the International Scientific Congress, which met in Paris, May 15, 1879. There were 135 delegates in attendance, most of whom were Frenchmen, although nearly every European nation was represented. The United States had 11 representatives at this congress. After two weeks' conference the decision was reached that a sea-level canal should be constructed from Colon to Panama. Only 42 of the 135 men who met were engineers, and it has been stated that those who knew most about the subject found their opinions least in demand. M. de Lesseps dominated the conference. Several members who were radically opposed to its conclusions, rather than declare their difference from the opinions of a man of such great distinction and high reputation as de Lesseps enjoyed at that time, absented themselves when the final vote was taken.

After it was determined to build a sea-level canal, the canal concession owned by Wyse and his associates was transferred to the Compagnie Universelle du Canal Interoceanique (The Universal Interoceanic Canal Company) of which de Lesseps was given control. The canal company was capitalized at $60,000,000. The preliminary budget of expenses amounted to $9,000,000, of which $2,000,000 went to Wyse and his associates for the concession. The organizers were entitled to certain cash payments and 15 per cent of the net profits.

The canal company soon found it necessary to acquire a controlling interest in the Panama Railroad. That corporation insisted on charging regular rates on all canal business. In addition, it possessed such prior rights as made the Wyse concession worthless except there be agreement on all matters between the railroad company and the canal company. The result was that the canal company bought the railroad, and its rights, for the sum of about $18,000,000.

The first visit of de Lesseps to the Isthmus was made in the early weeks of 1880. He arrived on the 30th day of December, 1879, and was met by a delegation appointed by the Government, and one nominated by the State Assembly. There was the usual reception, with its attendant champagne and conviviality, and a fine display of fire-works at night. The next day, with a chart before him, de Lesseps promptly decided where the breakwater to protect the mouth of the canal from the "northers" sweeping into Limon Bay should be located. He declared that in the construction of the canal there were only two great difficulties—the Chagres River and Culebra Cut. The first he proposed to overcome by sending its waters to the Pacific Ocean by another route—a project which it has since been estimated would have cost almost as much as building the canal. The second difficulty he thought would disappear with the use of explosives of sufficient force to remove vast quantities of material with each discharge. There was a great hurrah, and an international celebration during de Lesseps' stay. The flags of all nations were prominently displayed, with the single exception of that of the United States.

Count de Lesseps was over 70 years old when he first visited the Isthmus, though he was still active and vigorous. Mr. Tracy Robinson described him as "a small man, French in detail, with winning manners and a magnetic presence. He would conclude almost every statement with, 'The Canal will be made,' just as a famous Roman always exclaimed, 'Delende est Carthago.' He was accompanied to the Isthmus by his wife and three of his seven children. Being a fine horseman, he delighted in mounting the wildest steeds that Panama could furnish. Riding over the rough country in which the canal was being located all day long, he would dance all night like a boy and be ready for the next day's work 'as fresh as a daisy.'"

On New Year's Day, 1880, de Lesseps formally inaugurated the work of building the canal. A large party of ladies and gentlemen visited the mouth of the Rio Grande where the first shovelful of sod was to be turned. An address was made by Count de Lesseps, and a benediction upon the enterprise was bestowed by the Bishop of Panama. Champagne flowed like water, and it is said that the speechmaking continued so long that the party did not have time to go ashore to turn the sod, so it was brought on board and Miss Fernanda de Lesseps there made the initial stroke in the digging of the big waterway.

Some days later the work at Culebra Cut was inaugurated. Tracy Robinson thus described the scene: "The blessing had been pronounced by the Bishop of Panama and the champagne, duly iced, was waiting to quell the swelter of the tropical sun as soon as the explosion went off. There the crowd stood breathless, ears stopped, eyes blinking, half in terror lest this artificial earthquake might involve general destruction. But there was no explosion! It would not go! Then a humorous sense of relief stole upon the crowd. With one accord everybody exclaimed, 'Good Gracious!' and hurried away for fear that after all the dynamite should see fit to explode. That was Fiasco No. 1."

After de Lesseps left the Isthmus he toured the United States where he was everywhere welcomed although he did not find a market in this country for his stock.

The scientific congress estimated the cost of building the canal, whose construction de Lesseps had inaugurated, at $214,000,000. M. de Lesseps himself later arbitrarily cut this estimate to $131,000,000, and announced that he believed that vessels would be able to go from ocean to ocean after the expenditure of $120,000,000. He declared that if the committee had decided to build a lock canal, he would have put on his hat and gone home, since he believed it would be much more expensive to build a lock canal with twin chambers than to build a sea-level waterway. There were those who declared that six years was the utmost limit that would be required for building the big ditch. Others asserted with confidence that it could be done in four years.

During the first three years the company devoted its time to getting ready for the real work. By 1885 the profligate use of the money subscribed by the French people brought the funds of the canal company to a very low ebb. M. de Lesseps asked for permission to establish a lottery, by which he hoped to provide additional funds for carrying on the work. The French Government held up the matter and finally sent an eminent engineer to investigate. This engineer, Armand Rosseau, reported that the completion of a sea-level canal was not possible with the means in sight, and recommended a lock canal, plans for which he submitted. The summit level of this canal was to be 160 feet, reached by a series of seven or eight locks. After this plan was adopted, to which de Lesseps reluctantly consented, lottery bonds of a face value of $160,000,000 were issued which were to bear 4 per cent interest. But the people failed to subscribe.

At the outset of the work de Lesseps established a bulletin for the dissemination of information concerning the canal; during the entire period of his connection with the project this bulletin was filled with the most exaggerated reports, and the most reckless mis-statements in favor of a successful prosecution of the work. By 1888 the confidence of the French people in de Lesseps waned. Unable to raise more money, and now popularly dubbed the "Great Undertaker," he found himself in such straits that he saw the French Government take over the wrecked organization by appointing a receiver with the power to dispose of its assets. This proved a terrible blow to the people on the Isthmus. Untold hardships befell the small army of laborers and clerks. The Government of Jamaica repatriated over 6,000 negroes. The Chilean Government granted 40,000 free passages to Chile, open to all classes except negroes and Chinese, and for several months every mail steamer south took away from 600 to 800 stranded people from the canal region. Where good times and the utmost plenty had prevailed for years, the Isthmus was now face to face with a period of want and privation, its glory departed and its hope almost gone.

The receiver of the Panama Canal Company assisted in the organization of another company known as the New Panama Canal Company. With a working capital of $13,000,000, it excavated more than 12,000,000 cubic yards of material. In 1890 it found itself in danger of losing everything by reason of the expiration of its concession. The services of Lieutenant Wyse were again brought into play, and he secured a 10-year extension of the concession. In 1893 another concession was granted, with the provision that work should be begun on a permanent basis by October 31, 1894, and that the canal should be completed by October 31, 1904. Toward the end of the nineties, it was manifest that the concession would expire before the work could be finished, so, in April, 1900, another extension was arranged, which stipulated that the canal should be completed by October 31, 1910. The New Panama Canal Company, as a matter of fact, had no other aim in view than to keep the concession alive in the hope that it could be sold to the United States.

With all of their profligacy, however, the French left to their American successors a valuable heritage. What they did was done with the utmost thoroughness. The machinery which they bequeathed to the Americans was of immense value. There was enough of this to cover a 500-acre farm 3 feet deep, with enough more to build a 6-foot fence around it all. The French equipment was of the best. Dredges and locomotives that stood in the jungle for 20 years were rebuilt by the Americans at less than 10 per cent of their first cost, and did service during the entire period of construction.

Although the New Panama Canal Company at one time asked $150,000,000 for its assets, it finally accepted $40,000,000. An appraisement made by American engineers a few years ago showed that the actual worth of the property acquired, aside from the franchise itself, amounted to about $42,000,000.

Count de Lesseps lived to a great age. His last years were saddened and embittered by the volumes of denunciation that were written and spoken against him. Certain it is that no man ever went further than he to maintain confidence in a project that was destined to fail, and yet his partisans declared that his sin was the sin of overenthusiasm and not of dishonest purpose. Under the torrents of abuse that fell upon his head his mind weakened, and, fortunately, in his last days he realized little of the immeasurable injustice his misplaced zeal and overenthusiasm had wrought against the people of France.

CHAPTER XVIII

In his annual message to Congress in December, 1898, President McKinley recommended the building of the Nicaragua Canal. Two days later Senator John T. Morgan, of Alabama, made a vigorous speech in the Senate, in which he charged that the transcontinental railroads of the United States were making efforts to defeat the canal project. This charge was made repeatedly thereafter, and it was asserted that the railroads espoused the cause of the Panama Canal upon the ground of choosing the lesser of two evils, judged from their standpoint. Prior to 1900 both Republican and Democratic parties had repeatedly favored the construction of the Nicaragua Canal in their national platforms, and both branches of Congress had voted for the canal at different times.

In the early part of 1899 the Senate passed a bill authorizing the construction of a Nicaraguan Canal. The House refused to act on the bill, and, at the instance of Senator Morgan, the Senate attached a rider to the rivers and harbors bill, appropriating $10,000,000 to begin the building of the canal. This passed the Senate by a vote of 54 to 3. The amendment was defeated in the House and the matter went to conference. If the House conferees stood pat in their opposition to the Senate amendment, the whole rivers and harbors bill would be defeated unless the Senate conferees yielded. The House conferees remained unshaken in their opposition to the Nicaragua Canal provision, and were willing to wreck the whole rivers and harbors bill rather than to authorize the beginning of operations in the construction of the Nicaragua Canal under the plan framed by the Senate.

According to Philippe Bunau-Varilla, the real secret of the defeat of the Nicaragua Canal project at this juncture lay in a dispute between the House and Senate as to the manner of building the canal. The Senate wanted to do it by the reorganization of the Maritime Canal Company, with the majority of its board of directors appointed by the President, using that corporation as the agent of the Government for constructing and operating the canal. Representative William P. Hepburn, of Iowa, at that time Chairman of the Committee on Interstate and Foreign Commerce, contended that such a plan proposed that the United States should masquerade as a corporation, instead of doing the work in its own proper person, as it was in every sense capable of doing. He asked for what purpose the Government should thus convert itself into a corporation, making of itself an artificial person and taking a position of equality with a citizen? He further pointed out that as a corporation the Government might be sued in its own courts, and fined for contempt by its own judicial servants.

A compromise was adopted in the form of an appropriation of $1,000,000 to defray the expenses of an investigation into all of the various routes for an Isthmian Canal. This investigation was to have reference particularly to the relative merits of the Nicaragua and Panama routes, together with an estimate of the cost of constructing each. The investigators were to ascertain what rights, privileges, and franchises were held, and what work had been done in the construction of the proposed canals. They were also to ascertain the cost of acquiring the interests of any organizations holding franchises on these routes. The President was directed to employ engineers of the United States Army and engineers from civil life, together with such other persons as were necessary to carry out the purposes of the investigation. A few months later he appointed the first Isthmian Canal Commission, consisting of Rear Admiral John G. Walker, Senator Samuel Pasco, Alfred Noble, George S. Morison, Peter C. Hains, William H. Burr, O. H. Ernst, Louis M. Haupt, and Emory R. Johnson.

Thus it came about that the House and Senate, divided only upon the issue of the proper method of building the Nicaragua Canal, reopened the whole question, and gave to the Panama Canal advocates a chance to make a fight in favor of that route. The advocates of the Nicaragua Canal were not satisfied, however, to await the discoveries of the commission Congress had created. On May 2, 1900, before the commission made its report, the House voted 234 to 36 in favor of the Nicaragua route. The bill went to the Senate, where it was favorably reported by the Committee on Interoceanic Canals. Senator Morgan made a formal motion for the immediate consideration of the measure, but it was lost by a vote of 28 to 21. He then had the 2nd day of December following fixed as the date for again taking up the matter. His committee made a report roundly scoring the representatives of the New Panama Canal Company for their activities in favor of the Panama route.

In December, 1900, Secretary Hay signed protocols with the ministers of Nicaragua and Costa Rica, by which those Governments undertook to negotiate treaties as soon as the President of the United States should be authorized by Congress to acquire the Nicaragua route. In the following February, Senator Morgan offered an amendment to the sundry civil appropriation bill authorizing the President to go ahead with the construction of the canal. When Theodore Roosevelt became President in September, 1901, he recommended the building of the Nicaragua Canal in his official statement of policy.

In the meantime the Isthmian Canal Commission had been repeatedly attempting to get the New Panama Canal Company to state for what sum it would sell its holdings to the United States. The figures finally presented placed a value of $109,000,000 upon the property. After this, the Isthmian Canal Commission unanimously recommended the adoption of the Nicaragua route. Congress again took up the matter, upon a bill introduced by Representative Hepburn, making an appropriation of $180,000,000 for the construction of the canal. This measure was favorably reported by the House Committee on Interstate and Foreign Commerce, and also secured the approval of the Senate Committee on Interoceanic Canals.

A few days later a formal convention was signed in Nicaragua by the minister of foreign affairs and the American minister, looking to the construction of the canal through Nicaraguan territory. A week later the Senate ratified the Hay-Pauncefote treaty with Great Britain. On January 7 the House of Representatives again took up the matter and, in spite of the fact that the New Panama Canal Company had decided to accept $40,000,000 for its property, this offer was rejected by the House of Representatives, which passed the bill authorizing the construction of the Nicaragua Canal by the overwhelming vote of 309 to 2.

After the rejection of the offer of the New Panama Canal Company by the House, President Roosevelt again called the members of the Isthmian Canal Commission together, and asked them to make a supplementary report in view of the offer in question. On a motion of Commissioner Morison the commission decided that, in consideration of the change of conditions brought about by the offer of the company to sell its property for $40,000,000, the Panama route was preferable. It has been stated that Professor Haupt, Senator Pasco, and two other members of the commission were reluctant to abandon the Nicaragua project; that President Roosevelt had made it quite clear to Admiral Walker that he expected the commission to accept the Panama Canal Company's offer; that Commissioners Noble and Pasco had given in, but that Professor Haupt stood out; and that he was induced to sign the report only after Admiral Walker had called him out of the committee room and pleaded with him to do so, stating that the President demanded a unanimous report. Professor Haupt afterwards publicly admitted the truth of this story in a signed article in a magazine.

About this time the Senate Committee on Interoceanic Canals appointed a subcommittee of six members to study and report on the legal questions involved in the transfer of the New Panama Canal Company's title, and a majority reported that the company's title was defective and that it had no power to transfer. It was finally decided that the Senate Committee on Interoceanic Canals should make no report until all of the members of the Isthmian Canal Commission had appeared before it and testified. This delay permitted negotiations between the United States, the New Panama Canal Company, and the Republic of Colombia looking to a settlement of the question of title.

The New Panama Canal Company was now thoroughly in earnest in its desire to dispose of its holdings to the United States, but the Republic of Colombia, desiring to drive a good bargain, held aloof. The hope of the situation as far as the Panama route was concerned, lay in Senator Marcus A. Hanna, of Ohio, who had come to espouse the Panama route. He declared he would not recommend the acceptance of the proposals of the New Panama Canal Company unless a satisfactory treaty could be obtained, and unless the shareholders of the company would ratify the action of the board of directors in making the offer. A meeting of the shareholders was called in February, 1902, at which the Republic of Colombia, holding a million dollars' worth of stock in the company, was represented by a Government delegate. He served formal notice on the company that it was forbidden, on pain of forfeiture of its concession, to sell its rights to the United States before that action was approved by the Colombian Government, there being a clause in the concession providing that in the event of such a sale to any foreign Government all rights, titles, and property should revert to Colombia.

When the Colombian Government took up the matter it showed a disposition to grasp the lion's share. Its minister was instructed to exact no less than $20,000,000 from the New Panama Canal Company for Colombia's permission to transfer its concessions. This demand was based on the following reasons: First, because Colombia's consent was essential; second, because Colombia would lose its expectation of acquiring the Panama Railroad at the expiration of its concession—a road that was then valued at $18,000,000; third, because under the proposed contract with the United States, Colombia was to renounce its share in the prospective earnings of the canal, which might amount to a million dollars a year.

Another proposition was drawn by the Colombian minister, proposing to lease a zone across the Isthmus of the United States for a period of 200 years at an annual rental of $600,000. At another time the Colombian minister declared that, inasmuch as the New Panama Canal Company had taken advantage of the straitened circumstances of the Colombian Government to obtain a six-year extension of its concession, which was really what the canal company was about to sell for $40,000,000, he thought Colombia ought to require the New Panama Canal Company to pay $3,000,000 of the $40,000,000, for what the company gained by the extension of its concession.

On January 30, 1902, Senator John C. Spooner, of Wisconsin, introduced a bill in the Senate, authorizing the President of the United States to build an Isthmian Canal at Panama, if the necessary rights could be obtained. If those rights could not be obtained the President was required to build the canal on the Nicaraguan route. The Spooner bill provided the machinery for the construction of the canal, created the Isthmian Canal Commission, and authorized the expenditures necessary for undertaking the project. Some six weeks later the Senate Committee on Interoceanic Canals rejected the Spooner bill and presented a favorable report on the Hepburn bill, which authorized the Nicaragua Canal.

The final struggle in the Senate lasted from June 4 to June 19, 1902. Senators Morgan and Harris led the fight for the Hepburn bill, while Senators Hanna and Spooner championed the Spooner measure. The fight resulted in the passage of the Spooner bill by a vote of 32 to 24. The disagreeing votes of the two Houses were then sent to conference, and the House finally receded from its position in favor of the Nicaragua route, and the Spooner bill became a law. The situation as it now stood was that the Panama route was chosen on the conditions that the title of the company be proved and that a satisfactory treaty with Colombia be negotiated; with the alternative of the adoption of the Nicaragua route in default of one or the other of these conditions.

Whatever may have been his motives—in the light of events which have followed it would seem unjust to question them—Senator Hanna was undoubtedly responsible for the revolution in Congress and in public sentiment which resulted in the selection of the Panama route. M. Bunau-Varilla declares that he met Myron T. Herrick in Paris, converted him, and through him met Senator Hanna, whom he also convinced. In Crowley's "Life and Work of Marcus Alonzo Hanna," it is declared that a series of interviews between M. Bunau-Varilla and Senator Hanna had much to do with Mr. Hanna's decision to make a fight in behalf of Panama. It was claimed by William Nelson Cromwell, in his suit for fees against the New Panama Canal Company, that he was responsible for converting Senator Hanna to the Panama project, and it was asserted, also, that he furnished the data from which Senator Hanna made his speech which converted the Senate, and the House, and the country, and led to the adoption of the Panama route.

At this juncture Providence seemed to lend support to the Panama route, for one of the many volcanoes in Nicaragua became active and did considerable damage. Occurrences since then have borne out the wisdom of avoiding the Nicaragua route. A few years ago the city of Cartago, only about a hundred miles distant from the site of the works that would have been installed to control the waters of Lake Nicaragua, was entirely destroyed by an earthquake.

With the Spooner bill enacted into law, the next proposition which confronted the United States Government was that of reaching an understanding with Colombia, which would permit the building of the canal at Panama. That country was reminded on every hand and in divers ways that unless an acceptable treaty were forthcoming the President of the United States would be forced to adopt the Nicaragua route. But, notwithstanding these reminders, Colombia still moved slowly in the matter. After being repeatedly urged to come to terms, and after one Colombian minister to the United States had been recalled and another resigned, the Hay-Herran treaty finally was negotiated.

Before Colombia reached the stage, however, where it would agree to enter into negotiations with the United States, it had been reminded by its minister in Washington that it was dangerous not to enter into an agreement. He had declared that if Colombia should refuse to hear the American proposal that a new treaty be entered into, the United States would, in retaliation, denounce the treaty of 1846, and thereafter view with complacency any events which might take place in Panama inimical to Colombia's interests. He had reported further that the United States would, at the first interruption of the railroad service, occupy at once Colombia's territory on the Isthmus and embrace whatever tendency there might be toward separation, in the hope of bringing about the independence of Panama. This, he had concluded, would be a catastrophe of far greater consequence to Colombia than any damage the Republic might suffer by the ratification of a treaty with the United States permitting the building of the canal.

His views in the matter were strengthened by a suggestion of Senator Shelby M. Cullom, of Illinois, that if Colombia should continue to refuse to allow the United States to build the canal, which the United States claimed was its right to do under the treaty of 1846, the American Government might invoke a sort of universal right of eminent domain, take the Isthmian territory, and pay Colombia its value in accordance with an appraisement by experts.

About this time President Roosevelt wrote a letter to his friend, Dr. Albert D. Shaw, of the Review of Reviews, in which he said that he had been appealed to for aid and encouragement to a revolution at Panama, but that as much as he would like to see such a revolution, he could not lend any encouragement to it. The Republic of Colombia was repeatedly reminded by Secretary Hay that if it did not act promptly the President would take up negotiations with Nicaragua and proceed to construct the canal there. Under these conditions Colombia finally agreed to negotiate the Hay-Herran treaty, which was afterwards rejected by the Colombian Congress.

It has been asserted that President Roosevelt took the view all along that under the treaty of 1846, Colombia had no right to prevent the United States from building the canal, and that, in spite of the provision of the Spooner Act requiring him to proceed with the construction of the Nicaragua Canal in the event of the failure of negotiations at Panama, he was determined to exhaust every possible effort before giving up the Panama route.

CHAPTER XIX

At the time the treaty was pending in the Colombian Congress, the President of the Republic was a man who had been elected Vice President, but who had kidnapped the President with a troop of cavalry and shut him up in an insanitary dungeon where he soon died. The Vice President thus became the head of the Government. Anyone who knows conditions in such countries as Colombia, understands that a President has no use for a Congress except to have it register his own will. The President of Colombia at first advocated the negotiation of the treaty, but he repudiated it after it had been signed, and then declared that if the Colombian minister to Washington were to return to Colombia he would be hanged for signing it. The result of this change of front was that the treaty was rejected by the Colombian Congress. All sorts of stories were put abroad in Colombia to arouse opposition to it. One was that the United States would make $180,000,000 out of the canal deal the minute the treaty was ratified by Colombia. It was claimed by the Colombian Government that the constitutional prohibition of the cession of territory to a foreign state would have to be changed by amending the Constitution before the Congress could legally ratify the treaty.