CHOOSING THE PANAMA ROUTE
Proud as Americans now are of the success of their venture at Panama,
in the beginning there was by no means a general agreement that the
United States would succeed where France had failed. Indeed, the
French disaster had much influence in strengthening the position of
those who favored building the American canal through Nicaragua.
Prior to the year 1900 little thought was given by the American people
to any project for building an Isthmian Canal anywhere else than
through Nicaragua. It is true that in 1897 the New Panama Canal
Company became active in its efforts to induce the United States to
adopt the Panama route, but these activities made little impression
upon public sentiment before the outbreak of the Spanish American War.
During that war interest in the question of an Isthmian Canal waned in
America, and immediately after it the sympathy which France had given
to Spain made it advisable for the Canal Company to postpone its
propaganda.
In his annual message to Congress in December, 1898, President
McKinley recommended the building of the Nicaragua Canal. Two days
later Senator John T. Morgan, of Alabama, made a vigorous speech in
the Senate, in which he charged that the transcontinental railroads of
the United States were making efforts to defeat the canal project.
This charge was made repeatedly thereafter, and it was asserted that
the railroads espoused the cause of the Panama Canal upon the ground
of choosing the lesser of two evils, judged from their standpoint.
Prior to 1900 both Republican and Democratic parties had repeatedly
favored the construction of the Nicaragua Canal in their national
platforms, and both branches of Congress had voted for the canal at
different times.
In the early part of 1899 the Senate passed a bill authorizing the
construction of a Nicaraguan Canal. The House refused to act on the
bill, and, at the instance of Senator Morgan, the Senate attached a
rider to the rivers and harbors bill, appropriating $10,000,000 to
begin the building of the canal. This passed the Senate by a vote of
54 to 3. The amendment was defeated in the House and the matter went
to conference. If the House conferees stood pat in their opposition to
the Senate amendment, the whole rivers and harbors bill would be
defeated unless the Senate conferees yielded. The House conferees
remained unshaken in their opposition to the Nicaragua Canal
provision, and were willing to wreck the whole rivers and harbors bill
rather than to authorize the beginning of operations in the
construction of the Nicaragua Canal under the plan framed by the
Senate.
According to Philippe Bunau-Varilla, the real secret of the defeat of
the Nicaragua Canal project at this juncture lay in a dispute between
the House and Senate as to the manner of building the canal. The
Senate wanted to do it by the reorganization of the Maritime Canal
Company, with the majority of its board of directors appointed by the
President, using that corporation as the agent of the Government for
constructing and operating the canal. Representative William P.
Hepburn, of Iowa, at that time Chairman of the Committee on Interstate
and Foreign Commerce, contended that such a plan proposed that the
United States should masquerade as a corporation, instead of doing the
work in its own proper person, as it was in every sense capable of
doing. He asked for what purpose the Government should thus convert
itself into a corporation, making of itself an artificial person and
taking a position of equality with a citizen? He further pointed out
that as a corporation the Government might be sued in its own courts,
and fined for contempt by its own judicial servants.
A compromise was adopted in the form of an appropriation of $1,000,000
to defray the expenses of an investigation into all of the various
routes for an Isthmian Canal. This investigation was to have reference
particularly to the relative merits of the Nicaragua and Panama
routes, together with an estimate of the cost of constructing each.
The investigators were to ascertain what rights, privileges, and
franchises were held, and what work had been done in the construction
of the proposed canals. They were also to ascertain the cost of
acquiring the interests of any organizations holding franchises on
these routes. The President was directed to employ engineers of the
United States Army and engineers from civil life, together with such
other persons as were necessary to carry out the purposes of the
investigation. A few months later he appointed the first Isthmian
Canal Commission, consisting of Rear Admiral John G. Walker, Senator
Samuel Pasco, Alfred Noble, George S. Morison, Peter C. Hains, William
H. Burr, O. H. Ernst, Louis M. Haupt, and Emory R. Johnson.
Thus it came about that the House and Senate, divided only upon the
issue of the proper method of building the Nicaragua Canal, reopened
the whole question, and gave to the Panama Canal advocates a chance to
make a fight in favor of that route. The advocates of the Nicaragua
Canal were not satisfied, however, to await the discoveries of the
commission Congress had created. On May 2, 1900, before the commission
made its report, the House voted 234 to 36 in favor of the Nicaragua
route. The bill went to the Senate, where it was favorably reported by
the Committee on Interoceanic Canals. Senator Morgan made a formal
motion for the immediate consideration of the measure, but it was lost
by a vote of 28 to 21. He then had the 2nd day of December following
fixed as the date for again taking up the matter. His committee made a
report roundly scoring the representatives of the New Panama Canal
Company for their activities in favor of the Panama route.
In December, 1900, Secretary Hay signed protocols with the ministers
of Nicaragua and Costa Rica, by which those Governments undertook to
negotiate treaties as soon as the President of the United States
should be authorized by Congress to acquire the Nicaragua route. In
the following February, Senator Morgan offered an amendment to the
sundry civil appropriation bill authorizing the President to go ahead
with the construction of the canal. When Theodore Roosevelt became
President in September, 1901, he recommended the building of the
Nicaragua Canal in his official statement of policy.
In the meantime the Isthmian Canal Commission had been repeatedly
attempting to get the New Panama Canal Company to state for what sum
it would sell its holdings to the United States. The figures finally
presented placed a value of $109,000,000 upon the property. After
this, the Isthmian Canal Commission unanimously recommended the
adoption of the Nicaragua route. Congress again took up the matter,
upon a bill introduced by Representative Hepburn, making an
appropriation of $180,000,000 for the construction of the canal. This
measure was favorably reported by the House Committee on Interstate
and Foreign Commerce, and also secured the approval of the Senate
Committee on Interoceanic Canals.
A few days later a formal convention was signed in Nicaragua by the
minister of foreign affairs and the American minister, looking to the
construction of the canal through Nicaraguan territory. A week later
the Senate ratified the Hay-Pauncefote treaty with Great Britain. On
January 7 the House of Representatives again took up the matter and,
in spite of the fact that the New Panama Canal Company had decided to
accept $40,000,000 for its property, this offer was rejected by the
House of Representatives, which passed the bill authorizing the
construction of the Nicaragua Canal by the overwhelming vote of 309 to
2.
After the rejection of the offer of the New Panama Canal Company by
the House, President Roosevelt again called the members of the
Isthmian Canal Commission together, and asked them to make a
supplementary report in view of the offer in question. On a motion of
Commissioner Morison the commission decided that, in consideration of
the change of conditions brought about by the offer of the company to
sell its property for $40,000,000, the Panama route was preferable. It
has been stated that Professor Haupt, Senator Pasco, and two other
members of the commission were reluctant to abandon the Nicaragua
project; that President Roosevelt had made it quite clear to Admiral
Walker that he expected the commission to accept the Panama Canal
Company's offer; that Commissioners Noble and Pasco had given in, but
that Professor Haupt stood out; and that he was induced to sign the
report only after Admiral Walker had called him out of the committee
room and pleaded with him to do so, stating that the President
demanded a unanimous report. Professor Haupt afterwards publicly
admitted the truth of this story in a signed article in a magazine.
About this time the Senate Committee on Interoceanic Canals appointed
a subcommittee of six members to study and report on the legal
questions involved in the transfer of the New Panama Canal Company's
title, and a majority reported that the company's title was defective
and that it had no power to transfer. It was finally decided that the
Senate Committee on Interoceanic Canals should make no report until
all of the members of the Isthmian Canal Commission had appeared
before it and testified. This delay permitted negotiations between the
United States, the New Panama Canal Company, and the Republic of
Colombia looking to a settlement of the question of title.
The New Panama Canal Company was now thoroughly in earnest in its
desire to dispose of its holdings to the United States, but the
Republic of Colombia, desiring to drive a good bargain, held aloof.
The hope of the situation as far as the Panama route was concerned,
lay in Senator Marcus A. Hanna, of Ohio, who had come to espouse the
Panama route. He declared he would not recommend the acceptance of the
proposals of the New Panama Canal Company unless a satisfactory treaty
could be obtained, and unless the shareholders of the company would
ratify the action of the board of directors in making the offer. A
meeting of the shareholders was called in February, 1902, at which the
Republic of Colombia, holding a million dollars' worth of stock in the
company, was represented by a Government delegate. He served formal
notice on the company that it was forbidden, on pain of forfeiture of
its concession, to sell its rights to the United States before that
action was approved by the Colombian Government, there being a clause
in the concession providing that in the event of such a sale to any
foreign Government all rights, titles, and property should revert to
Colombia.
When the Colombian Government took up the matter it showed a
disposition to grasp the lion's share. Its minister was instructed to
exact no less than $20,000,000 from the New Panama Canal Company for
Colombia's permission to transfer its concessions. This demand was
based on the following reasons: First, because Colombia's consent was
essential; second, because Colombia would lose its expectation of
acquiring the Panama Railroad at the expiration of its concession--a
road that was then valued at $18,000,000; third, because under the
proposed contract with the United States, Colombia was to renounce its
share in the prospective earnings of the canal, which might amount to
a million dollars a year.
Another proposition was drawn by the Colombian minister, proposing to
lease a zone across the Isthmus of the United States for a period of
200 years at an annual rental of $600,000. At another time the
Colombian minister declared that, inasmuch as the New Panama Canal
Company had taken advantage of the straitened circumstances of the
Colombian Government to obtain a six-year extension of its concession,
which was really what the canal company was about to sell for
$40,000,000, he thought Colombia ought to require the New Panama Canal
Company to pay $3,000,000 of the $40,000,000, for what the company
gained by the extension of its concession.
On January 30, 1902, Senator John C. Spooner, of Wisconsin, introduced
a bill in the Senate, authorizing the President of the United States
to build an Isthmian Canal at Panama, if the necessary rights could be
obtained. If those rights could not be obtained the President was
required to build the canal on the Nicaraguan route. The Spooner bill
provided the machinery for the construction of the canal, created the
Isthmian Canal Commission, and authorized the expenditures necessary
for undertaking the project. Some six weeks later the Senate Committee
on Interoceanic Canals rejected the Spooner bill and presented a
favorable report on the Hepburn bill, which authorized the Nicaragua
Canal.
The final struggle in the Senate lasted from June 4 to June 19, 1902.
Senators Morgan and Harris led the fight for the Hepburn bill, while
Senators Hanna and Spooner championed the Spooner measure. The fight
resulted in the passage of the Spooner bill by a vote of 32 to 24. The
disagreeing votes of the two Houses were then sent to conference, and
the House finally receded from its position in favor of the Nicaragua
route, and the Spooner bill became a law. The situation as it now
stood was that the Panama route was chosen on the conditions that the
title of the company be proved and that a satisfactory treaty with
Colombia be negotiated; with the alternative of the adoption of the
Nicaragua route in default of one or the other of these conditions.
Whatever may have been his motives--in the light of events which have
followed it would seem unjust to question them--Senator Hanna was
undoubtedly responsible for the revolution in Congress and in public
sentiment which resulted in the selection of the Panama route. M.
Bunau-Varilla declares that he met Myron T. Herrick in Paris,
converted him, and through him met Senator Hanna, whom he also
convinced. In Crowley's "Life and Work of Marcus Alonzo Hanna," it is
declared that a series of interviews between M. Bunau-Varilla and
Senator Hanna had much to do with Mr. Hanna's decision to make a fight
in behalf of Panama. It was claimed by William Nelson Cromwell, in his
suit for fees against the New Panama Canal Company, that he was
responsible for converting Senator Hanna to the Panama project, and it
was asserted, also, that he furnished the data from which Senator
Hanna made his speech which converted the Senate, and the House, and
the country, and led to the adoption of the Panama route.
At this juncture Providence seemed to lend support to the Panama
route, for one of the many volcanoes in Nicaragua became active and
did considerable damage. Occurrences since then have borne out the
wisdom of avoiding the Nicaragua route. A few years ago the city of
Cartago, only about a hundred miles distant from the site of the works
that would have been installed to control the waters of Lake
Nicaragua, was entirely destroyed by an earthquake.
With the Spooner bill enacted into law, the next proposition which
confronted the United States Government was that of reaching an
understanding with Colombia, which would permit the building of the
canal at Panama. That country was reminded on every hand and in divers
ways that unless an acceptable treaty were forthcoming the President
of the United States would be forced to adopt the Nicaragua route.
But, notwithstanding these reminders, Colombia still moved slowly in
the matter. After being repeatedly urged to come to terms, and after
one Colombian minister to the United States had been recalled and
another resigned, the Hay-Herran treaty finally was negotiated.
Before Colombia reached the stage, however, where it would agree to
enter into negotiations with the United States, it had been reminded
by its minister in Washington that it was dangerous not to enter into
an agreement. He had declared that if Colombia should refuse to hear
the American proposal that a new treaty be entered into, the United
States would, in retaliation, denounce the treaty of 1846, and
thereafter view with complacency any events which might take place in
Panama inimical to Colombia's interests. He had reported further that
the United States would, at the first interruption of the railroad
service, occupy at once Colombia's territory on the Isthmus and
embrace whatever tendency there might be toward separation, in the
hope of bringing about the independence of Panama. This, he had
concluded, would be a catastrophe of far greater consequence to
Colombia than any damage the Republic might suffer by the ratification
of a treaty with the United States permitting the building of the
canal.
His views in the matter were strengthened by a suggestion of Senator
Shelby M. Cullom, of Illinois, that if Colombia should continue to
refuse to allow the United States to build the canal, which the United
States claimed was its right to do under the treaty of 1846, the
American Government might invoke a sort of universal right of eminent
domain, take the Isthmian territory, and pay Colombia its value in
accordance with an appraisement by experts.
About this time President Roosevelt wrote a letter to his friend, Dr.
Albert D. Shaw, of the Review of Reviews, in which he said that he had
been appealed to for aid and encouragement to a revolution at Panama,
but that as much as he would like to see such a revolution, he could
not lend any encouragement to it. The Republic of Colombia was
repeatedly reminded by Secretary Hay that if it did not act promptly
the President would take up negotiations with Nicaragua and proceed to
construct the canal there. Under these conditions Colombia finally
agreed to negotiate the Hay-Herran treaty, which was afterwards
rejected by the Colombian Congress.
It has been asserted that President Roosevelt took the view all along
that under the treaty of 1846, Colombia had no right to prevent the
United States from building the canal, and that, in spite of the
provision of the Spooner Act requiring him to proceed with the
construction of the Nicaragua Canal in the event of the failure of
negotiations at Panama, he was determined to exhaust every possible
effort before giving up the Panama route.