The Panama Canal

by Duncan E. McKinlay

The Canal Commission

Immediately thereafter President William McKinley was authorized by Congress to send a commission to Panama and Nicaragua to examine those two routes and to receive offers from the different companies as to the amounts the different projects could be purchased for.

The result of the investigations of the commission was that the Panamanian Company offered their uncompleted canal, their franchises, their plans and specifications, the Panama Railroad, which was worth about $12,000,000, and a line of steamships from Colon to New York, consisting of five medium-sized steel vessels of modern construction, for the sum of $110,000,000. The Nicaraguan Company offered their concessions from Costa Rica and Nicaragua, in addition to all their other property, for $6,000,000. They simply desired to be reimbursed for the amounts spent in securing their concessions and making their preliminary surveys.

After careful consideration the commission recommended the purchase of the Nicaraguan proposition. It was at this critical state of the negotiations that President McKinley was removed by the bloody hand of the assassin, and as a result Vice-President Roosevelt took his place as the head of the American Government. President Roosevelt decided on the Nicaraguan proposition; but before the matter was closed the French Panama Company came fully to the realization that if the United States purchased the concessions of the Maritime Canal Company and began the construction of a canal through the Nicaraguan territory, without any question that project would be completed in a reasonably short space of time, as it would have the power of the entire American Government behind it.

BONEYARD OF THE OLD FRENCH MACHINERY.

BONEYARD OF THE OLD FRENCH MACHINERY.

They also realized that if the Nicaragua Canal was constructed it would probably make their holdings in Panama of far less value; and as they were practically bankrupt then, they begged an opportunity to submit a lower price for their property. This opportunity was granted, and the result was that the French company offered their franchises and holdings, including the railroad and the steamship line, for the sum of $40,000,000.

This amount was so much lower than the amount originally demanded that it caused a reconsideration by the President and Congress, which terminated in the decision of the President and Congress to purchase the rights and the property of the French Company.

The next step was to ascertain whether or not the French company could convey a valid title to the United States, and Attorney-General Knox was instructed to go to France and consult with the proper French authorities and determine if such a legal conveyance could be made. As a result of his investigations, General Knox on October 30, 1902, decided that the French company could convey an absolute title to the American Government.

A great nation such as the United States could not contemplate becoming the tenant of any other country under the sun, much less a feeble republic of Central America. The dignity of the United States required absolute sovereignty over any territory through which the American Nation might decide to construct an isthmian canal. Absolute sovereignty over an isthmian canal, however, on the part of the United States had been waived by the terms of the Clayton-Bulwer treaty entered into with Great Britain a half century before. The terms of this treaty provided that in case either nation should construct an isthmian canal, such canal should not be fortified nor controlled by either power; and that should any other nation construct an isthmian canal, the United States and Great Britain should join in preserving its neutrality.

Before the United States could exercise absolute sovereignty over any strip of territory across the isthmus, the Clayton-Bulwer treaty would have to be abrogated, and to accomplish this Secretary of State Hay entered into negotiations with Great Britain. He found the representatives of that country very willing to meet every reasonable demand. After a short series of negotiations he succeeded in having passed and ratified by both countries the Hay-Pauncefote treaty. Under the terms of this treaty Great Britain waived all claims to sovereignty and control over an Isthmian Canal, and substantially agreed to the jurisdiction and control of the United States over any canal that might be constructed by that country.