THE UNITED STATES AND COLOMBIA.
Those citizens of the United States who thought that with the
disappearance of the Clayton-Bulwer Treaty all the difficulties in the
way of obtaining a canal of their own had also disappeared were doomed
to a severe disappointment. They had not reckoned with a South American
republic on the verge of bankruptcy and suddenly presented with a
glorious opportunity to fill its empty treasury. Two preliminaries were
necessary before the United States could settle down at the isthmus of
Panama to the work of canal construction. They had to purchase the
concession, the unfinished works and the other assets of the New Panama
Company, at as reasonable a price as they could obtain; and, secondly,
it was necessary to conclude a treaty with Colombia, securing to the
United States on satisfactory terms the perpetual control of a strip of
territory on the isthmus from sea to sea within which the canal could be
constructed.
The first of these undertakings presented, as it turned out, no great
difficulty. The New Panama Company had begun to despair of its own
ability to get a canal finished across the isthmus, and to realize that
their best course was to transfer the whole business to the United
States. This disposition had been greatly strengthened by the Report of
the Third Canal Commission, issued in December 1900. Probably the
members of the commission were convinced of the advantages of the Panama
route and the desirability of continuing the work of the French
engineers. But they were shrewd people. They dwelt in their report on
the improbability that the New Panama Company would sell its property to
the United States, and on the difficulty of getting the Colombian
concession transferred. They decided, therefore, that "the most
practicable and feasible route for an isthmian canal to be under the
control, management, and ownership of the United States is that known as
the Nicaraguan route."
The commission probably foresaw the effect such a decision was likely to
have on the directors and shareholders of the New Panama Company. If an
American canal were constructed at Nicaragua, all the property and work
of the company at Panama would be thrown on the scrap-heap. The company
estimated the value of its property at $109,141,500, a price which the
commission, representing the American government, declined to look at.
The commission thought $40,000,000 quite enough for the property, and so
completely were the Americans master of the situation that that price
was agreed upon in January 1902. The commission thereupon issued a
supplementary report, which reversed the former decision and recommended
the Panama route and the purchase of the French property.
Then arose in the Congress of the United States a tremendous conflict
between the Nicaraguans and the Panamanians, the champions of the two
routes which had so long been in rivalry. The former party insisted that
Panama was farther from the United States than Nicaragua, and therefore
the journey from the eastern to the western seaboard of the States
would be longer. They argued that Panama was unfavourable to sailing
vessels on account of the prevailing calms on that coast; that it would
be easier to deal with Costa Rica and Nicaragua than with Colombia; and
that Nicaragua was "the traditional American route" as compared with the
Frenchified Panama. The claims of the old Darien route were also
advanced. This was probably done by American railway people who were
against any canal, for the Darien route would have involved a rock
tunnel five miles long and three hundred feet broad, the attempt to
achieve which would probably have ended all canal adventures at the
isthmus.
From these discussions emerged the celebrated "Spooner Bill," under
which the Panama Canal has been constructed. It empowered the American
government to secure the rights and property of the Panama Company for
not more than $40,000,000; to obtain from Colombia the perpetual control
of a strip of land, not less than six miles wide, in which the canal
should run; and then to proceed with the work. But if it should prove
impossible to come to terms with Colombia and the New Panama Company,
then the Nicaraguan project was to be revived. We shall see how, in the
sequel, this latter proviso came very near fulfilment. But, as a matter
of fact, the Spooner Bill marks the end of the great battle of the
routes which had lasted for four centuries.
The purchase price of the New Panama Company's property was happily
settled, but the purchase was of course conditional on the conclusion of
a satisfactory agreement between the United States and Colombia. It was
no use for the United States to acquire unfinished canal-works if they
were to be prevented from continuing and completing them. The situation
was interesting. The Republic of Colombia was extremely "hard up." Its
currency was debased, its treasury empty, its debt rapidly increasing
through a large annual deficit. The government, if one may so express
it, of the Colombian Republic was therefore not likely to overlook the
chance of "making a bit" out of the necessities of the bigger and richer
republic farther north. The United States wished to get their concession
as cheaply as possible; Colombia wished to sell as dearly as possible.
This is not infrequently the case with buyers and sellers; but Colombia
pushed her haggling a little too far, and in the end very badly
overreached herself.
The United States began by proposing terms on which they might obtain
the desired strip of territory. The conditions were carefully laid down.
The territory was to remain under Colombian sovereignty, but to be
administered by the United States. Sanitary and police services were to
be maintained by both governments jointly. Colombia was to police the
zone, with the help of the United States if necessary. But the business
terms were chiefly interesting to Colombia. The United States were to
pay Colombia a bonus of $7,000,000 in cash, and after fourteen years an
annuity of $250,000. These terms, which were not ungenerous, the
Colombian minister at Washington declined to accept.
A brilliant idea had, indeed, struck the statesmen of the Colombian
Republic. They had remembered that the concession to the Panama Company
lapsed in October 1904, and that all its property that could not be
carried away would revert to the Colombian government. Only defer any
agreement with the United States till then, and the $40,000,000 to be
paid to the New Panama Canal Company by the United States would drop
like a golden nest-egg into the empty exchequer of the Colombian
Republic. It was a brilliant idea, but the Colombian method of pursuing
it was rather too crude and obvious.
In order to meet the Colombian government the United States improved
their offer, considerably increasing the bonus and making other changes.
An agreement, known as the Hay-Herran Treaty, was actually arranged
between the United States and Colombia, the latter represented by her
minister at Washington, Dr. Tomas Herran. This treaty, before it became
operative, had to be ratified by the Congress of Colombia, and the
president of that state took care that a congress should be elected
which would do no such thing. Meantime all kinds of influences, secret
and open, were at work. The German "colonial party" had become
interested in the question, and had conceived the possibility of
Germany, rather than the United States, succeeding to the French
concession. It is quite certain that the United States would have
resisted any such proceeding, if necessary by actual war. There is
little doubt, also, that the party in the United States which had
supported the Nicaraguan scheme were throwing every obstruction in the
way of a satisfactory agreement between the big and the little republic.
The reader may guess what was the anxiety of the New Panama Canal
Company during all this diplomacy and intrigue. They knew that the
completion of the sale of its property to the United States depended on
an agreement being concluded between that country and Colombia; and they
also knew that unless they sold before October 1904, they would have
practically nothing to sell, because the franchise and possessions of
the company would be forfeited to the Colombian government at that date.
It would be better to sell on the best terms they could obtain to
Germany or anybody else before the fatal day arrived. Meantime the
United States brought every force of argument and menace to bear on the
Colombian government. Secretary Hay sent urgent dispatches to the
American minister at Bogota. He reminded Colombia that the decision to
adopt the Panama route was not irrevocable. The Spooner law authorized
the American president to await only "a reasonable time" for an
agreement with Colombia. Having waited so long, he was able and indeed
bound to resume the Nicaraguan project.
When the Colombian Congress duly rejected the Hay-Herran Treaty in
August 1903, the New Panama Company became very seriously alarmed. Other
offers of purchase were renewed, and the situation became critical for
the United States. The American counsel for the company, Mr. William
Nelson Cromwell, who had done his utmost to promote the agreement, had
the utmost difficulty in keeping his clients to their compact with the
United States. He made a hurried trip to Paris, where he said something
which had the desired effect. There is no reason to believe that Mr.
Cromwell took any part in the surprising events which were soon to alter
the entire situation. But he had heard the proverbial "little bird," and
the tidings he passed on brought the New Panama directors to the desired
mood of patience and expectancy.
Colombia meanwhile kept on marking time. She suggested that a new treaty
should be negotiated between the United States and Colombia, to be
ratified by the Colombian Senate some time in 1904. That would have put
the clock forward splendidly, but the device was duly understood at
Washington. In October a committee of the Colombian Senate reported to
the Senate a recommendation that no agreement should be concluded with
the United States until the French concession had lapsed. This
recommendation was not acted upon by the Colombian Senate, nor yet were
any steps taken towards the negotiation of a new treaty. The American
government gave a generous interpretation to the "reasonable time"
specified in the Spooner Bill, and kept on waiting in the hope that the
Colombian Congress would still change its mind and ratify the Hay-Herran
Treaty, whose terms, as we have seen, were liberal to the Colombian
Republic. But when the congressional session at Bogota came to an end on
October 31, 1903, without any further action over the Hay-Herran Treaty,
the Americans concluded that the whole business was over so far as
negotiations with Colombia on the Panama question were concerned.
Obviously the only course was to turn to the Nicaraguan alternative.
And the Colombian government no doubt thought it had won the day by
sheer force of astute statesmanship.
Then came a coincidence more astonishing than any since the day when Mr.
Weller, senior, upset the Eatanswill outvoters (purely by accident) into
another canal. The Panama revolution broke out, and the United States
suddenly and without further difficulty obtained all they wanted of the
isthmus. And Colombia? She lost every stick and stone of the canal which
was to have been hers in October 1904, never made a farthing on a Panama
deal, got no thanks from Germany or anybody else, and lost a whole
province into the bargain. Such were the results of very astute
statesmanship at Bogota.