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.

CHAPTER VII
Panama

WHEN the present city of Panama was founded in 1673, its architects and builders in laying out the new town fixed its location up the rocky peninsula which juts out into the sea at the foot of Ancon hill. They had a vivid recollection of the fate that had overtaken the old city, and were determined that the new one should offer a more formidable front to any invading foe, and so strongly fortified was the new city that with the exception of Cartagena it was the most impregnable fortress in the whole of South America. Shortly after the city was founded it became the capital of Terra Firma, and it was hoped by the founders that the surrounding provinces of Panama, Darien, and Veragua would contribute largely to its importance and support. But the Indians of the Darien province, regaining their independence, became uncontrollable, and the gold mines in the other provinces proved, after extended trials, to be unremunerative, so that the new city was dependent chiefly upon the pearl fisheries, which are to this day of considerable importance to it. The pearls of Panama are of fine quality and remarkable size, and although the fashions of different ages have undergone changes with regard to jewels, the fisheries have, in spite of the increasing popularity of diamonds, been able to hold their own by opening up new markets in Peru and Southern America. The real reason, however, of the importance of the new city was the unique position it occupied. It rapidly became the market for the products of the rich countries on the Pacific coast, and fleets of small sailing craft were ever arriving at the port laden with valuable merchandise. Great stores were built for the reception of the goods until the mule trains were ready to convey them across the isthmus, en route for Spain. Many of the older buildings are now in ruins, but what

OUTSIDE A CHURCH ON CHRISTMAS EVE, PANAMA.

remains affords ample evidence of the city’s former splendour. With the decay of piracy the necessity of keeping up the earlier standards of resistance ceased and many of the older buildings were allowed to fall into decay. Even the old city wall has dwindled until only a portion about a quarter of a mile in length remains. This is a favourite playground of the children, and when the sun is setting, the older people of the poorer classes rest upon the worn-out benches that project from the stone parapets, enjoying the cooling breezes that evening brings. Legend has it that Philip V of Spain was observed by his courtiers gazing into the distance that lay in the direction of the new colonies, and when one of his ministers asked him what he strained his eyes to behold, the King, with a merry twinkle in his eye, replied that “he was trying to discern the walls of Panama, for they had cost so much, that surely they must be visible even from Spain.” The whole of the old town is built of stone quarried from the volcanic rocks in the vicinity; the walls of most of the buildings are from three to four feet in thickness, with the windows placed high up from the ground; the thick doors are plentifully studded with huge nails, and bound by stout iron bands. The cathedrals and churches are massive and liberally supplied with heavy buttresses; in fact, they look more like fortresses than places of worship; and there are so many of them that one might easily fall into the error of believing that the founders of the city and early inhabitants were a very religious community. There is one church in the Calle San José that I visited frequently during the heat of the day, the cool shade it afforded was a welcome contrast to the hot glare of the streets; and although I have been in it many times, I never saw more than two or, at the most, three persons in it at the same time. It has an earthy smell, and is damp, cool, and fusty. Round the edifice altars stand out in harsh relief from the austere whitewashed walls. Carved figures of saints draped in dusty raiment that was once brilliant gave the place an aspect of a cheap waxworks. The small windows high up in the walls let in a silvery light that diffused itself through the interior. The pews or forms arranged down the centre of the aisle were in the last stages of decay, so frail and rotten that they could not support any substantial weight. Occasionally a negress with a bright-coloured turban and long, trailing gown would sail into the gloom and glide noiselessly up to one of the many altars, in front of which she would kneel and stare about as if bewildered. But I was generally alone in the great building, sometimes catching glimpses of the aged priest, who, with robes tucked up, was occupied in sweeping the damp, stone floor, a pathetic reminder of the waning power of Holy Church in the city. At Christmas time there is created in this church a huge