_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.
[Illustration: AN OLD CHURCH AND BUILDINGS, PANAMA.]
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.
[Illustration: A STRETCH OF THE CHAGRES RIVER.]
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.
[Illustration: INTERIOR OF A SHACK ON THE ISTHMUS.]
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.
[Illustration: THE OLD PANAMA RAILWAY TRACK.]
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.
[Illustration: JAMAICAN LABOURER ON THE ZONE]
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.
[Illustration: BARBADIAN LABOURER ON THE ZONE]
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
[Illustration: MAP OF THE REPUBLIC OF PANAMA]
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.
[Illustration: THE CHURCH AT CHAGRES.]
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.