History of Central America, Volume 3, 1801-1887 / The Works of Hubert Howe Bancroft, Volume 8

by Hubert Howe Bancroft

They also object to the proposed size, and suggest a canal twenty feet deep instead of seventeen, sixty feet wide at the bottom instead of fifty, and the locks 300 feet instead of 250, as being one 'more efficient for the general purposes of trade, by steam or sailing vessels.' This would, of course, be attended with great additional cost; but, as they truly observe, 'if the junction of the Pacific with the Atlantic be worth doing at all, it is worth doing well.' They conclude that, judging from the data, without presuming to vouch for their accuracy, the work is practicable, 'and would not be attended with engineering difficulties beyond what might naturally be expected in a work of this magnitude;' that the surveys have every appearance of accuracy, and they are satisfied of the perfect fairness and candor of Colonel Childs; that the works are generally sufficient for the purpose they are intended to answer; and 'that the estimates upon the present value of money are adequate, in a general way, so far as judgments can be formed from the documents produced and the explanations of Colonel Childs.'

Opinion of British Capitalists.—We come now to a point not indicated in the report of Colonel Childs, viz., the refusal of the leading capitalists of England to engage in the projected work.

It is well known that at least two expeditions or missions to England were undertaken by agents of the canal company. At their first visit in 1851, they were unable to present any specific data upon which to solicit the aid of capitalists; they, however, made out a hypothetical case, which they submitted, and received for answer, 'Substantiate your statements by facts, and no difficulty will be experienced in securing the financial aid which you desire; until then, we can return you no definite answer.' This reply was not made public in terms, but the agents, on their return, proclaimed that the 'great European capitalists had engaged to furnish half the capital for the enterprise.' A few, and it is believed only a few, persons, considering the precise source whence this vaunt came, attached the slightest importance to it.

REASONS FOR DECLINING.

The second expedition was made in 1852, and this time the agents took out with them both Colonel Childs and his surveys. The opinion of certain British engineers (as we have seen) was procured, and the whole matter resubmitted to the great capitalists, who now, for the first time, thought it sufficiently advanced to merit their serious attention. The result of their examination was communicated to the company in a letter from Mr Bates, head of the house of Baring Brothers, in August 1852, and consisted in a declension to embark in the enterprise, for a variety of reasons, chiefly, of course, financial.

1. The dimensions of the canal were not such as, in their opinion, to meet the requirements of commerce, and the work could not be used except by medium-sized steamers and small vessels.

2. That the proposed dimensions were not in conformity with those required by the charter of the company, and that it could not be built of the proposed dimensions without securing a modification of the charter, which, in the existing state of feeling in Nicaragua, it was not likely could be effected.

3. That, supposing the work not to exceed the estimated cost of $31,000,000, the returns, to meet the simple interest of the investment at six per cent, must be at least $1,860,000 over and above its current expenses; or, to meet this interest, and the percentage to be paid to Nicaragua, it must reach, over and above its expenses, $2,269,200. Estimating the expenses of repairs, superintendence, cost of transportation, etc., at $400,000 a year (a sum regarded as too small), then the gross returns to make the work pay must be $2,670,000.

4. But it is found, by inquiry and calculation, that little, if any, of the European trade with the Orient would pass through the canal, inasmuch as the passage by the way of Cape Good Hope is, on an average, 1,500 miles nearer than by way of the proposed work.

5. That even if the distance were in favor of the proposed canal, its small size would prevent nearly, if not quite, two thirds of the vessels engaged in the Indian trade from passing it; and this objection would equally lie against most of the vessels employed in the trade with western America, the only trade in which the canal would prove serviceable to Europe.