CHAPTER VI
_Canal Projects: Old and New_
The transcendent egotist who declared that had he planned the universe he would have made health and not disease infectious, would also surely have included in his schemes the omission of the narrow neck of land which joins the two American continents. For ever since its discovery, the isthmus of Darien has been but an obstacle that men have wished to overcome by cutting through it a waterway to connect the two oceans which it divides. Whether Cortez ever penetrated so far south as Darien or no, certain it is that he searched diligently for a passage to the Pacific, declaring this to be the one thing above all others he was most desirous of meeting with.
For the best of all reasons, the persistent attempts to discover what was called the “The Secret of the Straits” proved unsuccessful, and it remained for human energy and ingenuity to create what nature had failed to provide.
As far back as the beginning of the sixteenth century, when the newly founded city of Panama was fast becoming a flourishing emporium for Pacific trade, a proposition was put forward by Angel Saavedra for a canal across the isthmus, and thirty years later Antonio Galvao was suggesting no fewer than four different canal routes.
Spain was, however, jealously guarding her new colonies and any information concerning them, fearing an awakened interest on the part of other powers. To such an extent did this policy prevail that, according to one authority, the mere proposal to open up navigation between the two oceans, or to explore the River Atrato with that object, was punishable with death. The Spaniards themselves possessed neither the skill nor the perseverance to carry out such a work as the excavation of a canal, and dreaded the undertaking of such a project by some more enterprising nation.
They relied upon ignorance as a means of prevention, and appealed to the superstition of the age by declaring that the disturbing of what was a design of nature would undoubtedly result in the vengeance of Heaven on anyone attempting such a work.
The reports of the gold to be found in this region attracted the buccaneers, and led to their exploring the country to no small extent.
It can readily be understood that the fame of their exploits and their success in acquiring rich treasure by no means accorded with the policy of His Majesty of Spain who, in 1685, closed down, by royal decree, the gold mines on account of their being such an attraction to the pirates, inducing them to undertake the transit from the sea of the north to the sea of the south, to the prejudice of the public cause.
When, however, the power of Spain began to decline and her hold over her colonies gradually relaxed, a quickened interest arose in the Panama trade route, whilst the ever-increasing wealth pouring across the isthmus on mules’ backs or men’s shoulders, continually emphasised the necessity for better facilities of transit. By the end of the eighteenth century it had come to be recognised on all sides that the interests of international commerce demanded the opening up of a line of communication across this strip of land; and the construction of other canals such as the Caledonian and the Forth and Clyde, gave an impetus to the idea of a waterway from the Atlantic to the Pacific at a favourable point.
The early years of the next century saw the first of a number of explorations with the object of determining the most favourable point, and in 1827 Bolivar, the liberator of Colombia, Ecuador, and Peru from the yoke of Spain, commissioned Captain Lloyd and M. Falmarc to survey the isthmus. It seems but natural that these two explorers should start from Panama and follow the old road to Cruces. From that point they worked their way down the River Chagres to within a few miles of where it empties itself into the Atlantic.
Their observations led them to the opinion that a canal scheme was premature, and for immediate purposes they recommended a combined rail and water route, by means of a short canal from Limon Bay to the Chagres River, and the use of its tributary the Trinidad, to a spot favourable for a junction whence a railway could be established to the Pacific coast either at Panama or Chorrera. It is curious how subsequent events have endorsed the ideas of these two men, and that developments have followed so closely upon the lines they suggested, by the construction, in the first instance, of a railway the whole distance from Limon Bay to Panama, and then by the present undertaking of a canal to follow almost the same route.
Whether Bolivar purposed carrying out the ideas of the pioneers he sent forth, or was merely calculating possibilities, was never known; for by one of those frequent internal rearrangements which afflict South American republics, New Granada separated from Colombia and formed itself into an independent state.
Thirty years before Bolivar had instigated a survey for canal purposes in the Central American isthmus, Napoleon I had ordered a survey of the Isthmus of Suez with the idea of connecting by canal the Red Sea and the Mediterranean. Possibly this was the origin of the fascination which canal building seems ever since to have exercised over certain minds in France.
The New Granada State had not been long in existence as a separate national entity, ere a French company succeeded in obtaining from its Government a concession for the construction of highways, railroads, or canals, from Panama to the Atlantic coast.
The surveys and plans made by this company during the following years were characteristically optimistic and included a claim to have discovered a route which at no point would reach a higher altitude than thirty-seven feet above the mean level of the Pacific Ocean. Such was the interest aroused in France by this alleged discovery, that M. Guizot, at that time Minister of Foreign Affairs, despatched Napoleon Garella to verify the company’s statements by an independent survey. His survey and report thereon were so much at variance with the statements of the Salomon Company, and his inability to discover the pass through the divide (which they asserted to exist) had such an effect on the prospects of the company as led to its dissolution.
Garella, however, agreed largely with Lloyd’s conclusions, particularly as to the desirability of making Limon Bay the Atlantic terminus of a canal; and his proposition was for a summit level waterway, reached on either side by a series of locks.
Lloyd’s observations had also been proved reliable by the confirmation of Mr. Wheelwright, whose survey was made on behalf of the Pacific Steam Navigation Company trading between Panama and the ports on the Pacific coast. At this time the Atlantic port of the isthmus was Chagres, at the mouth of the river of the same name, to and from which the trade was conducted by the vessels of the Royal Mail Steam Packet Company, who reopened a line of communication which had been practically abandoned since the Spanish occupation of the isthmus. Anxious to improve their route and add security to the transit of merchandise across the isthmus, this company instructed their colonial superintendent, Captain Liot, R.N., “to obtain such information as might be useful in guiding the directors to a sound opinion as to the practicability of influencing the transit of passengers, specie, etc., between Europe, North America, and the Pacific, making the same pass through the Isthmus of Panama instead of by the route round Cape Horn.”
Captain Liot spent a month in exploring the isthmus in company with Mr. McGeachy, the Crown Surveyor of Jamaica. On his return to England he was deputed by a number of commercial magnates in the City of London to ascertain whether the British Government of the day were willing to afford such guarantees and immunities as would secure a transit company against undue risk, should such a corporation decide to establish a macadamised carriage road, or railroad, from Porto Bello to Panama. The Government discouraged the idea, and the project was abandoned; but Captain Liot subsequently published his manuscript containing his impressions and views, and these are interesting reading, were it only for his striking prediction that, for at least half a century to come, a railway or carriage road were the only two propositions that would pay. The interest aroused at this time in the idea of inter-oceanic communication is evidenced by the Bulwer-Clayton Treaty of 1850, by which the Governments of Great Britain and the United States pledged themselves to do all in their power to facilitate the construction of a canal, and to maintain its neutrality when constructed. During the early fifties the attention of American engineers was more particularly directed to two canal routes farther north, one of which was across the Isthmus of Tehuantepec, by way of the Coatzacoalcas River.
Not unknown to Cortez, this route had been surveyed in 1842 by Moro, under the direction of José de Garay, whose scheme for a canal in this district involved a waterway of one hundred and fifty miles in length.
As the maximum altitude to be reached was estimated at 656 feet (De Lesseps says 975 feet) above sea-level, Garay’s plan necessitated the construction of from one hundred to one hundred and fifty locks, and it was calculated that the passage from sea to sea would occupy a period of twelve days to accomplish. Within the last few years the Tehuantepec Railway has been constructed, and is now open for traffic. Should this prove as successful as is anticipated, there is little likelihood that anything more will be heard of a canal scheme here to compete with the one approaching completion in Panama. The other route, in the northern part of the American isthmus, was by way of Lake Nicaragua, and had been investigated as early as 1779 by Manuel Galisteo, who passed an opinion unfavourable to a canal project in this locality. However, some British agents at Belize, who accompanied Galisteo’s expedition in a private capacity, sent home glowing accounts to their Government; creating such an impression that when, a year later, war broke out between England and Spain, Captain Horatio Nelson organised an expedition to acquire possession of the Nicaraguan territory.
Although he was successful as far as the Spaniards were concerned, the climate proved an irresistible enemy, and few of the expedition survived to return to Jamaica. Nelson himself only escaped with life, after a long and severe illness.
Forty years afterwards John Bailey, sent out by an English corporation, surveyed the Nicaragua route, and made an able report, in which he projected a canal by way of the San Juan River and Lake Nicaragua, to the River Lajas, and thence to San Juan del Sur on the Pacific coast.
The Americans have always looked with favour on a scheme for a canal here, owing to the fact that Lake Nicaragua, which is one hundred and ten miles long by thirty-five miles broad, offers navigation for a considerable portion of the route to be traversed. This lake, situated some hundred and twenty-five feet above the level of the sea, is fed by about forty different streams, and empties itself by means of the River San Juan into the Gulf of Mexico.
Difficulties, however, exist in the cataracts by which the course of this river is broken. Strangely enough one of these is the handiwork of those inhabitants of the country who, to block the river against incursions by the buccaneers, sank vessels in it and threw in fallen trees and masses of rock to form a barrier. To canalise the San Juan would involve the construction of seven or eight locks, and this was part of the proposal of Colonel Childs, who in 1852 surveyed the route for the purposes of a canal.
In addition to the utilisation of this river and the fifty-five miles of available navigation on the lake, he estimated that a cutting would have to be made for a distance of forty-seven miles, the total length of the route being one hundred and ninety-four miles, and the time occupied in traversing it being from four to six days. Further locks, to the number of twenty-eight, were embodied in his scheme, together with piers and embankments at each end of the lake, and finally the creation of harbours both on the Atlantic and Pacific coasts.
So little was realised of the extent to which shipbuilding would develop that this proposed canal was only to be of a depth of from seventeen to twenty feet, and capable of accommodating vessels of under 1999 tons burden.
At the same time that Colonel Childs was carrying on his survey in Nicaragua, an expedition under Mr. Lionel Gisborne was traversing the Darien in the neighbourhood of the Savana River, to verify, on behalf of an English syndicate, the observations and representations of Dr. Edward Cullen, an enthusiast who urged the construction of a canal from the Gulf of San Miguel, by way of the Savana River, to Caledonia Bay, the site of the ill-fated Scottish colony.
Between the undoubtedly excellent natural harbours, which exist both at the Pacific and Atlantic ends of this route, the distance across the isthmus is but thirty-nine miles, and only about thirty miles of actual cutting would be necessary.
According to Gisborne’s report, no engineering difficulties stood in the way of making a cut of sufficient capacity to form an uninterrupted navigation free from locks from sea to sea.
The course of the projected canal was a perfectly straight one, and the greatest depth of cutting required was estimated to be about 150 feet for a distance of two miles. It was claimed that no dredging or deepening of the River Savana would be required, or any other work, such as the construction of dams or locks, be necessary.
A concession from the Government of New Granada was obtained, and a company formed and provisionally registered. There was nothing to be done but to make a simple cut some twenty-five or thirty miles long, thirty feet deep and one hundred and forty feet wide at bottom, and all at an estimated cost of only £12,000,000; and yet the scheme fell through.
The glowing accounts of both Cullen and Gisborne as to the suitableness of the locality, and the absence of difficulty in the carrying out of the work, cause considerable wonder as to the reason for the abandonment of the scheme; for not till twenty years later did Commander Selfridge prove the statements of Cullen and Gisborne to be erroneous, when in the course of an able survey of this region, he showed that a canal through it would necessitate a tunnel of ten miles in length. At least there was no lack of public interest in the question of piercing the isthmus, for farther south in the Darien three particular routes were being investigated. The first of these, by the way of the rivers Atrato and San Juan, had aroused hope on account of a report common amongst the natives that there was in the divide, between these two rivers, a low depression which the Indians used as a portage for their canoes when travelling from sea to sea.
Indeed there was a tradition of a waterway having been cut through the short distance separating the higher reaches of these two rivers, but this was never verified. A second Atrato route was by using that river in conjunction with the River Bando, whilst still a third proposed to cross from the Bay of Cupica to the River Atrato.
A further contribution to the possibilities of the Darien region in respect of a canal was the discovery in 1865, by M. de Lacharme, of a passage from the Rio Paya, an affluent of the Tuyra, to the Rio Caquiri, which flows into the Atrato; and his consequent survey of the rivers Tuyra and Paya. But it would be difficult even to mention the numerous surveys, plans, and projects that evidenced the eager desire which existed to gain the immense advantages that would accrue to the commercial world by the opening of ship canal communication between the Atlantic and Pacific Oceans.
In a report by Admiral Davis of the U.S. Navy, made in 1867, he enumerates no fewer than nineteen separate canal projects, besides seven proposed railroads, in the isthmus between Tehuantepec and the Atrato River. But the question of the location for a canal was most naturally settled by the construction of the Panama Railway, which, in spite of extreme difficulties, was completed in 1855 and opened for goods and passenger traffic between Colon and Panama.
I have described elsewhere the construction of this line and the immediate causes which contributed thereto. The facilities for transit which it offers could not but render its route the most fitting one for the making of a canal across the isthmus; but the railway had been in operation for sixteen years before recent developments with regard to canal construction began with a series of international geographical congresses, the first of which was held in Antwerp in the year 1871.
The question of a ship canal across the American isthmus was discussed at this congress, and the project recommended to the attention of the great maritime powers and of the scientific societies throughout the world.
Four years later, at a second Congress in Paris, the question again came up for consideration. At the sittings of this Congress there was present Ferdinand de Lesseps, who was then at the height of his reputation, having a few years previously, in spite of difficulties and oppositions, fulfilled all his predictions and carried to a successful issue his scheme for a canal from Suez to Port Said. Little wonder that his eloquence had great weight! He told the Congress how all the authors of the various projects for connecting the Atlantic with the Pacific had, up to that time, made the mistake of committing themselves to a canal with locks of fresh water.
Arguing from his triumph at Suez, he declared that none but a sea-level canal should be attempted, and that such a canal was alone likely to meet the wants of international commerce.
Again a resolution was passed, urging that facilities should be given for the construction of a canal in this part of the world; but resolutions, being merely expressions of opinion, somewhat resemble good intentions in vagueness of destination. However, an active step forward was taken by the appointment of a committee to further the project.
As a result of the enthusiasm that had been aroused, a syndicate at once sprang into existence for the purpose of carrying on exploration in Central America, ostensibly with the view of discovering the most suitable route, but no doubt with the prime object of making as much profit as possible from any concessions it might acquire there.
Lieutenant Lucien Napoleon Bonaparte Wyse (whose name was surely enough to ruin any enterprise) was despatched to the isthmus, and landed there in 1876. He was brother-in-law to General Turr, who controlled the syndicate, and seems to have thoroughly understood the object of his mission, for he not only made a survey, but also an estimate of the cost of a canal.
Whether the survey was in any way a reliable one is open to question, but there can be no doubt that the estimate was very wide of the mark, although he confidently claimed that his figures would be found to be within ten per cent of the actual cost, which alas! has not yet been ascertained.
But most important of all doubtless from the syndicate’s standpoint, he succeeded in obtaining, from the Government of what had by this time become the United States of Colombia, a concession granting the exclusive privilege of constructing a canal between the two oceans through the territory of that republic; reserving always the neutrality of such canal and its terminal ports, and respecting the rights of the Panama Railroad Company.
Thus did the “giving of facilities,” urged by the resolution of the Congress of 1875, degenerate into the “granting of an exclusive monopoly” to a speculative syndicate three years later. In the following year the International Congress again met in Paris to consider proposals for an interoceanic canal.
M. de Lesseps presided at this Congress, and five different schemes were discussed; these being the proposals for canals at Tehuantepec, Nicaragua, Panama, San Blas and Atrato, already described.
The three last-named all fell within the scope of the “exclusive rights” granted to the Turr Syndicate, and from the first the Congress favoured the scheme of Lieutenant Wyse, which, at their request, he modified so as to substitute a cutting for the proposed tunnel at the divide. The Panama scheme was now the only one before the Congress which provided for a canal without a tunnel and without locks, and by a majority of seventy-eight votes against eight (twelve delegates abstaining from voting) it was affirmed that:
“The cutting of an interoceanic canal of uniform level, a work so desirable in the interest of commerce and navigation, is practicable, and the maritime canal, in order to meet the indispensable facilities of access and utilisation which ought to be offered by a passage of this kind, should be made from the Gulf of Limon to the Bay of Panama.”
As was most natural, De Lesseps was urged to undertake the direction of the work, and, although at his advanced age he might fairly have rested on his laurels won at Suez, this veteran agreed to conduct another enterprise, fraught with international advantage and blessings to posterity.
That he underestimated the difficulties attending the task has been abundantly demonstrated, but nothing should lessen our admiration for the courage and enthusiasm with which he assumed the responsibility, and the untiring energy he displayed. To whomsoever may ultimately belong the honour of completing the canal, to Ferdinand de Lesseps will always be due the credit of having initiated the work.
Following upon the report of the Congress, there was issued on 23 July, 1879, the prospectus of a company called “La Compagnie Universelle du Canal Interoceanique de Panama,” but more generally and conveniently known as the Panama Canal Company.
The suggested capital was 400,000,000 francs, or £16,000,000, to consist of 800,000 shares of 500 francs or £20 each. Of these 790,000 were to be issued to the public, whilst 10,000 were reserved for the original concessionaires. It was proposed to call up only 125 francs (£5) per share at first, and interest at the rate of 5 per cent per annum was to be paid during construction on the actual money received.
Even an estimated revenue of 90,000,000 francs annually from the canal when completed was not sufficient inducement to the public, and the issue failed; only about one-tenth of the capital offered being subscribed for.
M. de Lesseps, accompanied by a technical commission of engineers, one of whom was Heer J. Dircks, of the Amsterdam Canal, visited the isthmus; and their opinion was that the canal could be constructed for about thirty-four millions sterling and be completed in eight years. Subsequently De Lesseps undertook a tour through the United States, England, Holland, and Belgium, and a number of towns in France, lecturing on behalf of his scheme; and it is difficult to doubt the _bona fides_ of this indefatigable octogenarian, or his implicit faith in the achievement of his design, especially when it is remembered that he is said to have sunk 309,000 francs of private fortune in the venture.
The assistance of journalists and financial groups was called in, or perhaps it would be more correct to say bought in, and such enthusiasm was worked up that when next offered the capital asked for was subscribed more than twice over.
But a false step had been taken, and henceforth, instead of selfish and ambitious considerations being secondary to the grand ideal of cutting from ocean to ocean a highway of nations for the benefit of the commerce of the world at large, a sordid profit-grasping spirit seems to have possessed the promoters and the public to whom they so successfully appealed.
Early in January of the year 1881 a party of engineers left Paris, and by the end of February were at work on the scene of operations.
The canal planned by the De Lesseps company followed very closely the route of the existing railway between Colon and Panama, and was to be about fifty-four miles in length.
It was to be constructed on a sea-level plan, with the bottom 28 feet below the mean level of the oceans. At the bottom the width of the canal was to be 72 feet, and at the surface of the water 160 feet, except in the section through the divide at Culebra, where, although with depth of 29-1/2 feet and a width at bottom of nearly 79 feet, the surface width narrowed almost to one-half and would be only 92 feet. The two great difficulties of an engineering nature which confronted the undertaking were the excavation of the cut through the divide at Culebra and the control of the Chagres River with its tributaries, which during the rainy season are subject to extraordinary floods, the waters having been known to rise as much as 38 feet in as many hours.
For the control of this river the French company proposed to construct a huge reservoir at Gamboa, the dam being so designed as to retain the floods of the river and allow the water to escape gradually. From the start the management of the whole undertaking was characterised by unnecessary expenditure and extravagance. Not only does this apply to the financial operations in Paris, but also to the work carried on in the isthmus itself.
An artificial peninsula was constructed at Colon, on which were erected expensive residences. The Director-General maintained a state that was almost regal, receiving the handsome salary of £10,000 a year, with £10 per day for travelling expenses.
All the officials were highly paid, and lived in residences which were surrounded by spacious ornamental grounds laid out at superfluous expense.
But the labourers imported from Jamaica and other West Indian islands were, on the other hand, housed so badly and with such lack of all proper sanitary precautions that sickness and disease quickly devastated their ranks.
The Panama Railway had been acquired at almost three times its market price. The defence afterwards made for this was that an understanding with the railway company was essential, as the shares were held in few hands, and the proprietors of these were becoming exorbitant.
Losses occurred in September, 1882, when the railway and works were partly destroyed by earthquake, whilst three years later, in a rebellion which broke out, Colon suffered severe damage by fire.
At the end of 1884 little of the actual work of excavation had been accomplished, but the preliminary plans had been prepared and soundings taken. The line of route had also been cleared of tropical vegetation, dwellings and barracks erected for the employees, hospitals built, and large supplies of materials of all kinds were at command.
Twenty contracting firms had the work pieced out amongst them. At this time the Panama Canal Company had raised and received close upon £19,000,000, of which sum it had expended about £14,750,000, too heavy a proportion of which had gone in preliminary expenses. A further sum of £5,500,000 was raised by the issue of 4 per cent bonds, but a year later only about one-tenth of the actual work of excavation had been accomplished.
This state of affairs gave rise to a great deal of adverse criticism, and the adoption of a high-level canal with locks began to be thought of as a less costly and more expeditious scheme--for it had now become so extremely difficult for the company to raise money, that successive reductions had to be made in the amount of proposed excavation work. It was even seriously proposed to build a lock-level canal, with a summit-level of one hundred and ten feet above mean ocean-level; and it was only on the reorganisation of the enterprise and the extension of the time limit that a modification was made to a plan with a summit-level of sixty-one feet. But the slow progress of the work and the continual alteration of the plans and details, combined with the enormous sums of money already swallowed up, had shaken public confidence. Financial aid from at least two large banking institutions and from syndicates formed for the purpose was obtained at a ruinous price. By the end of 1887 the funds of the company had again sunk very low, and it was estimated that a further £12,000,000 would be required within a year.
De Lesseps, who had paid another visit to the isthmus and sailed three miles up the Chagres River, still declared that the work would be ultimately completed, and obtained the sanction of the French Parliament for the issue of lottery bonds. This sanction was not obtained without considerable expenditure; one Cabinet Minister stipulating for a million francs, half to be paid when he introduced the Bill, and the balance when the Bill passed.
The originator of the lottery idea received three million francs, chiefly because he was a big speculator on the Bourse and his hostility would have been mischievous. The necessary amount of subscriptions for the lottery bonds not being forthcoming, the company suspended payment on 14 December, 1888.
Although not unexpected, the news caused a severe shock in Paris, and the whole situation became so serious that a meeting of the French Cabinet was held to consider the best course to be adopted. In order to gain time and to prevent wild speculation it was proposed to permit the company to suspend for three months only, and a Bill for this purpose was introduced, but was rejected by 256 votes to 181.
M. de Lesseps immediately resigned and proposed liquidation. The excitement in Paris was intense, and strangely enough, in spite of the fact that millions of pounds had been lost and thousands of shareholders ruined, the anger of the crowds vented itself, not on De Lesseps, but on the Government of the day. The Boulangists seized upon the opportunity to attempt a political revolution, and the cheers of the populace were divided between De Lesseps and Boulanger.
At a great meeting of shareholders which was held it was agreed to forego the payments of coupons and annuities until the opening of the canal and the raising of more capital. A resolution professing continued confidence in the veteran De Lesseps was also passed.
But the attempt to form a new company for the completion of the canal failed, owing to the lack of subscriptions, and the Panama Canal Company went into liquidation, the work being gradually suspended.
The Panama Canal Bill, to promote the continuance of the work, was now passed by both chambers, and a Commission of Inquiry was appointed.
The Commission, which visited the isthmus with De Lesseps in 1880, had estimated that the canal could be completed at a cost of 843 millions of francs, whilst up to the time of the suspension of the company no less a sum than 1329 millions of francs was expended. The report of the Commission of Inquiry, when issued, stated that a further sum of 900 millions of francs would be required to complete the canal.
Meanwhile a great fire occurred at Colon, in which the railway buildings and a large part of the town were destroyed, and although an arrangement was come to with the Colombian Government for an extension by ten years of the time in which the canal might be completed, the scheme totally collapsed and a legal investigation was proposed.
In consequence of the official liquidator’s report and the painful disclosures which took place at the sittings of the Committee of Inquiry, a prosecution was commenced against M. Ferdinand de Lesseps, his son Charles de Lesseps and other directors, for bribery and corruption. After a trial lasting nearly a month, during which the speech of the counsel for the defence occupied four whole days, M. de Lesseps and his son were sentenced to five years’ imprisonment, whilst the other directors were fined and sentenced to two years’ imprisonment. The news of the sentence caused a great sensation, many thinking it savoured of harshness. Ferdinand de Lesseps was lying ill at his country house during the whole of the trial, and although the news of the verdict was telegraphed to Madame de Lesseps, it was carefully kept from the aged invalid. Two days afterwards Charles de Lesseps paid a visit to his father and had a most affecting interview with him. On his son’s departure the old man relapsed into a condition of unconscious stupor. He never regained vigour or recovered from the shock which the failure of his plans and the scandals attached to that failure occasioned. Great care had to be taken lest news from the outside world of the second trial of his son and his colleagues (resulting in fines and imprisonment) should reach the enfeebled intellect and shattered frame and snap life’s thread; and it is said that the papers of the previous years recounting the progress of the work on the isthmus were read to him as if of current issue. Through two years of careful nursing and watching his life was prolonged till on 7 December, 1894, in his ninetieth year, there passed away one who, in spite of the clouds that overshadowed the close of his career, remains one of the most illustrious of Frenchmen. He was neither an engineer nor a financier, but had such magnetic personality and persuasive eloquence as enabled him to enlist the co-operation of practical men whom he inspired with his own enthusiasm, and his reputation outlives the jealousy and intrigue that brought about his ruin, for his name is indelibly inscribed on the roll of fame.
The Official Receiver appointed to administer the affairs of the Panama Canal Company was faced with a grave responsibility. It was his paramount duty to safeguard, as far as possible, the interests of the shareholders by saving from the wreck anything that might remain of their investment. The principal asset, however, was the work already accomplished at so great a cost, and the value of this was necessarily contingent on the completion of the enterprise. On the other hand the experience of the company, with regard to health and labour difficulties, the ever-varying estimates as to cost and time for completion, the continual alterations as to the detail of the work, and the particular level at which it was best to construct the canal; and
above all the enormous amount of money absorbed for apparently so little return, all tended to prevent the public from further financial venture in the scheme. By the aid of special legislation, and by dint of dexterous compromise, most of the lawsuits which had been instigated against the company were settled, and the claims of a number of its creditors and bondholders successfully resisted. But none of the persons shown to have made large pickings out of Panama money evinced any inclination to refund, although an ex-Minister of the French Government is understood to have shed tears in confessing to a bribe of 375,000 francs.
The Republic of Colombia granted an extension of time for the purpose of the organisation of a new company and the completion of the canal, and, although on a very reduced scale, the work was still carried on.
Towards the close of the year 1894 a new company was formed upon entirely commercial lines and having no connection, alliance, or relation whatever with any Government except such as were established by the concession held from the Republic of Colombia. The board of directors was an entirely new one and was composed of gentlemen having no official relation with the old Panama Company.
Pursuant to judicial sale authorised by the French Court, the new company became the sole owner of all the canal works, plant, material, concessions and other property of the old company. Deciding not to be bound by the conclusions arrived at from the surveys of the old company, the new board of directors resolved to examine and study anew all the questions involved, the most recent improvements in material and the advances made in engineering.
They therefore appointed an International Technical Commission, composed of fourteen members, seven of whom were eminent French engineers, and of the other seven (experts of different nationalities) four had been particularly connected with well-known canal undertakings. The investigations of this Commission were carried on during many months, and the question was studied in all its details--technical, climatic, physical, geological and economic.
It was not till 1898 that their report was issued, and in it they suggested a canal of forty-six miles in length from ocean to ocean, with a system of locks, four on each slope of the divide. All the locks were to have a rock foundation and double lock-chambers, and the time of passage from ocean to ocean was to be less than a day. They maintained that nothing in the physical conditions on the isthmus would prevent a change to a sea-level canal should such be deemed desirable in the future.
They found that two-fifths of the work on the canal had been actually constructed, and that the remaining three-fifths was in a fair way to completion, as, during the last few years, three or four thousand workmen on an average had been employed in working on the canal.
The existence and operation of the railroad greatly facilitated the work of construction, and, whilst the two greatest difficulties were the control of the Chagres River and the excavation of the Culebra cut, nothing had been planned that was not fully justified by practical experience.
For the control of the floods of the Chagres River it was proposed to construct two great artificial lakes, one at Bohio and the other at Alhajuela, and not at Gamboa, the site selected for a dam by the old company. With regard to the cutting at Culebra, the difficulty lies principally in transporting the excavated material to the dumps, and in effecting the transportation as rapidly as will keep pace with the efficiency of the excavating machines.
About the time that the report of this Technical Commission made its appearance, public sentiment in America had been greatly aroused in favour of an interoceanic canal under American control, and general opinion favoured the Nicaragua route. In anxiety lest a rival scheme should be initiated just at the time when the New Panama Company was about to appeal to the great financiers of the world for monetary support, the board of directors sent to the President of the United States the report of their Commission and a letter drawing his attention to the state of the work and the prospects of the new company. It was fully realised that should the American Government decide to construct a waterway, investors would be deterred from backing a private enterprise which could not commercially compete with a national undertaking, and, further, should a Government undertaking be commenced, the Panama Canal would be greatly retarded if not prevented by the difficulty of securing the requisite labour.
The American Senate being engaged in considering the advisability of supporting the Maritime Canal Company in its Nicaragua project, the New Panama Canal Company managed to secure a hearing, at which its position was fully explained and an offer made to re-incorporate the company under American law.
The upshot was that the President was authorised to make a thorough investigation as to the best route for a canal which should be under the control of the United States and the absolute property of that nation.
This led to the appointment of the first Isthmian Canal Commission, who proceeded to ascertain upon what terms the property and rights of the New Panama Canal Company might be acquired by the United States. The company could hardly submit a definite figure to a body which had no authority either to accept or reject its offer, but submitted a tentative proposal to sell and transfer its canal property to the United States for $109,141,500. The Commission promptly assessed the value at $40,000,000 and submitted a report favouring the Nicaragua route. On this becoming known in Paris the directors of the company at once resigned, and at a general meeting of stockholders it was resolved to accept the Commission’s estimate.
This surrender was practically forced upon the company by the American Government, as the threat to construct a canal at Nicaragua meant death to any hopes of raising sufficient extra capital for the completion of the Panama Canal. A telegram was sent, offering to sell out all assets, rights, and interests to the only possible purchaser at that purchaser’s own figure of $40,000,000. At once the Commission issued a supplementary report, that under the altered conditions the most feasible and practical route for an isthmian canal under the control, management and ownership of the United States was the Panama route.
The scheme for beating down the New Panama Canal Company in its price having proved successful, Congress passed what is commonly known as the Spooner Act, which authorised the President to acquire the property of the Canal Company for a sum not exceeding forty millions of dollars, to acquire the necessary territory from the Republic of Colombia, and to proceed with the excavation, construction, and completion of the canal.
The same Act, however, authorised the President to proceed with the Nicaraguan scheme should he fail in acquiring the Panama property.
At the same time the Hay-Herran Treaty was negotiated with the Republic of Colombia, its object being to secure to the United States the privilege of constructing a canal through the Isthmus of Panama. The Colombian Government failed to ratify this treaty, and, at the instigation of some person or persons unknown, a bloodless revolution was accomplished whereby Panama became an independent republic. This having occurred, the United States immediately concluded with the new State the Hay-Varilla Treaty, by which the United States guaranteed to maintain the independence of the new Republic of Panama, receiving in return the concessions necessary for the construction, maintenance, operation, sanitation and protection of the canal, also a zone of territory ten miles in width, extending five miles on either side of the centre line of the canal, and a group of small islands in the Bay of Panama. The price of the concession was $10,000,000 gold to be paid down, and an annual payment of $250,000 gold beginning nine years after the date of the ratification of the treaty.
The way was now clear for the acquisition of the Canal Company’s property. Three-fourths of the purchase money was transmitted by gold shipments, and it took two months to accomplish this prudently and safely and without disturbing financial conditions. The other fourth was conveyed through the ordinary medium of exchange, but all the documents were delivered and possession given the moment the United States Government paid over the money to the bankers in New York who had undertaken to effect the transmission.
The canal is to be ready for traffic in 1915, although rumours are afloat that the official opening may take place at an earlier date. Much depends, however, upon causes over which even the resourcefulness of a great nation has no control. Slides in the Culebra Cut have worried both the French and American engineers, and have given much extra labour. There are twenty-seven in all, and an area of one hundred and fifty acres is affected. The Cucaracha slide has necessitated the removal of an extra two million cubic yards of “dirt,” and it is still active. Altogether over nine million yards of extra excavation have been caused by these natural movements.
The Isthmus of Panama lies in the earthquake zone, and within the last one hundred years many shocks have been experienced. It is always pointed out, however, by engineers that as the flat arch in the old church of Santo Dominic has stood for two hundred and fifty years without being affected, the severity of the earthquake shocks of the past could not have been serious, and no trouble is anticipated from seismic tremors. Industry, patience, and money have accomplished much, and there is no doubt that the canal is nearing completion. Great developments are expected when it is opened, and many that are quite unexpected are certain to take place. It is the intention of the Canal Commission to Americanise the Canal Zone. The majority of workers at present in the district will no longer be welcome when the work is completed. At present there seems to be an impression abroad that the authorities intend to repatriate labourers brought there under contract as soon as their task is done, and that foreigners will be deported as soon as their services can be dispensed with. These will be the preliminary steps towards the establishment of an American Colony. This strikes one as rather drastic treatment at first, but on second thoughts it is clear that the American Government cannot tolerate an idle lot of bush-squatters along their territory; for one thing, the expense of keeping the health conditions good would be too great. The undesired labourers will have to seek other quarters. It is probable that the West Indies will get a large number of them; others may find an opening for their services in Colombia and the other republics further south, who can all do with them. The Zone will be a military reservation, and the canal will be fortified. This was made clear by Mr. Roosevelt at Omaha in September, 1910, when he stated that in his opinion the canal would be opened in January, 1915, at latest, and perhaps by the end of 1913. With regard to the fortifications, he said that the United States Government were bound in honour to fortify their great work so as effectively to guarantee its neutrality and to prevent its being used against them. To refuse to fortify it he asserted would mean the abandonment of the Monroe doctrine. He also pointed out that one of the national advantages the United States gained by the waterway was the doubling of the strength of their navy. Forts are already in course of construction on the islands lying at the mouth of the Pacific entrance and on the shores of Limon Bay. When schemes of great magnitude are accomplished certain interests are bound to suffer. The greatest sufferer in the present instance is likely to be the Tehuantepec Railway. The railways of America may also “feel the draught,” and will no doubt actively oppose the raising of capital for steamship companies. The fixing of canal dues has yet to be done, and the shipping world is looking forward with keen interest to the arrangements that will be made. The passing by the Senate of the Panama Canal Bill in August, 1912, with its clauses giving favoured treatment to America coastal shipping has aroused a chorus of protest from foreign countries, and even in the States difficult points remain to be settled, and until they are the interests of different shipping and railway companies are naturally rather anxious. In nearly all maritime countries preparations are being advanced to take advantage of the new highway, and American shippers in particular are awaking to a sense of the importance of the markets made more accessible. The American Hawaiian Company, now using eighteen ships between Hawaii and New York, has ordered five large freight steamers to the island via Panama Canal. A new company, the “Atlantic and Pacific,” proposes fifteen vessels as a start. The Royal Mail steamers from Southampton to Colon and the Pacific Steam Navigation Company will be in a strong position for obtaining a large proportion of the South American trade. The Hamburg-American are reported to be looking for docks at San Francisco. The Ward and other American lines will become patrons of the canal, and it is estimated that one hundred new American vessels will soon be under construction in national yards, and that will make nearly one hundred and fifty of that nation ready for the canal. Other countries are not idle. Japan has boats in course of construction; Denmark contemplates a service between Copenhagen and San Francisco and other Pacific ports; the Holland-American line of Rotterdam and the French Transatlantic will also enter into the Pacific trade. The Hamburg-American line projects carrying emigrants to the Pacific coast (Peru, etc.) from Hamburg, Antwerp, Cherbourg, Plymouth, Genoa, and Naples at the same rate as to New York plus canal dues. That the whole course of commerce will be changed there can be no two opinions, and that the Pacific seaboard of South America will benefit is also a foregone conclusion. Guayaquil, Callao, Mollendo and Arica and Valparaiso will be brought nearer to their markets by direct steamship service, and the closer intercourse will undoubtedly bring about large increases in their commerce. Ships sailing from the Eastern and Western coasts of the United States will save a distance of from seven to eight thousand miles, and European shipping to Pacific ports will reduce their voyages by about the same number.