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.
Acquirement of the Canal Zone
When this obstacle was removed the next step was to secure a canal zone, and the United States entered into negotiations with the Government of Colombia with that end in view. The result of the negotiations was that an agreement was reached by which the Republic of Colombia agreed to convey to the United States a strip of land thirty miles wide and extending a marine league into the waters on either side of the isthmus. The terms of the treaty were that the United States, in consideration of the zone proposed to be transferred, should pay to the Republic of Colombia ten million dollars in cash on the ratification of the treaty by the separate governments, and commencing nine years from the date of ratification, the sum of one hundred thousand dollars a year for all time. This tentative treaty found great favor in Washington, D. C., and was immediately ratified by the American Senate, and then sent back to Bogota for ratification by the Colombian authorities. But much to the astonishment and chagrin of the people of the United States, and to the extreme disappointment of the people and the authorities of Panama, this so-called Hay-Herran treaty was refused ratification by the Colombian Senate.