The Panama Canal

by Frederic J. Haskin

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.