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

by Hubert Howe Bancroft

After the independence of the Central American states had been established, Manuel Antonio de la Cerda, afterward governor of Nicaragua, represented to the federal congress, in July 1823, the urgent necessity for opening the canal without delay. But no action was then taken in the matter. During the next year several propositions relative to the construction of the canal were made to the federal government by parties in Europe. Barclay & Co., of London, made a proposition, on the 18th of September, 1824, to open a canal, between the Atlantic and Pacific, by way of the San Juan River and Lake Nicaragua, at their own cost, if the government would assist them in certain particulars. On the 2d of February, 1825, Charles Bourke and Matthew Llanos addressed a communication to the government, stating that in the preceding December they had sent an armed brig with a party of engineers to Greytown, to survey the route, and praying that they might be granted: 1. An exclusive proprietorship and control of the canal; 2. An exclusive right to navigate the lakes and dependent waters by steam; 3. Free permission to use all natural products of the country necessary for the work; 4. Exemption from duty for the goods and materials introduced by the company during the pendency of the work. They offered to pay the government twenty per cent on the tolls received, and to surrender the work at the end of a certain number of years.

MR. CLAY'S ASSURANCE.

On the 8th of February, 1825, Don Antonio José Cañas, then minister from the federal government to the United States, addressed a communication to Henry Clay, then secretary of state, upon the subject of the canal, soliciting the coöperation of our government in the work, upon the ground that 'its noble example had been a model and protection to all the Americas,' and entitled it to a preference over any other nation in the 'merits and advantages of the proposed undertaking.' He proposed by means of a treaty to effectually secure its advantages to the two nations. Mr Clay instructed Colonel John Williams, U. S. chargé d'affaires in Central America, to assure that government of the great interest taken by the United States in an undertaking 'so highly calculated to diffuse a favorable influence on the affairs of mankind,' and to carefully investigate the facilities afforded by the route, and transmit the intelligence acquired to our government. Colonel Williams never made any report of his action under these instructions.

During the year 1825, many other propositions for the construction of the canal were received by the federal government from Europe. The attention of the government was thus strongly attracted to the importance and value of the proposed canal, both as affording a considerable revenue to the government, and aiding in the settlement of the country, and development of its resources. In June 1825, the federal congress passed a decree defining the terms and conditions upon which the canal might be constructed. Another decree, published at the same time, fixed the period of six months for receiving proposals for the work. The time was much too short, and but few offers were received. Among them was one from Mr Baily, the surveyor, as agent for the English house of Barclay, Herring, Richardson, & Co., which was conditional, and one from Charles Beninske for Aaron H. Palmer, of New York, which was accepted. The contractors, under the name of 'The Central American and United States Atlantic and Pacific Canal Company,' agreed to open a canal through Nicaragua, which should be navigable for large ships, and to deposit two hundred thousand dollars in the city of Granada, within six months, for the preliminary expenses of the work; to erect fortifications for its protection; and to commence work within one year. The contractors were to receive two thirds of the tolls from the canal until they had been reimbursed for the full cost of the work, with ten per cent interest; afterwards to have one half of the proceeds for seven years, with the right to introduce steam-vessels. The government agreed to place at their disposal all the documents in its possession relating to the canal; to furnish laborers at certain wages; and to permit the cutting and use of the timber in the country. If the canal was not completed, all the work done was to be forfeited to the government. This contract was dated June 14, 1826. The contractors had not sufficient capital for the construction of the canal, and failing to obtain it in New York, addressed a memorial to the United States congress, praying the assistance of the government in their work, which they represented to be of national importance. The memorial was referred to a committee, but never reported on. The enterprise excited considerable attention in New York, and the grant obtained from the federal government of Central America was believed to be valuable. Mr Palmer executed a deed of trust to De Witt Clinton, Stephen Van Renssalaer, C. D. Clinton, Phillip Hone, and Lynde Catlin, constituting them directors of the company which was being organized for the construction of the canal. Mr Palmer went to England in 1827, and endeavored, but without success, to obtain the coöperation of English capitalists. All his efforts were ineffectual, the necessary capital could not be raised, and the enterprise was abandoned. Mr Clay, then secretary of state, earnestly advocated the construction of the canal, believing it would be of great advantage to this country.

In 1828 an association of capitalists in the Netherlands, under the patronage of the king of Holland, undertook the construction of the canal. In 1829 the king sent General Verveer, as plenipotentiary to Guatemala, with special instructions relative to the canal. In October of the same year, commissioners were appointed by the federal government to confer with General Verveer, and on the 24th of July, 1830, they agreed upon a plan, which was to be laid before the federal congress for its approval. The conditions were much the same as in the contract with Mr Palmer. The revolution in Belgium, and the separation of Holland, terminated this enterprise. The federal congress had been stimulated to greater anxiety for the construction of the canal by these various proposals and contracts, and believing that there was more likelihood of its being made by the Dutch company than any other, in 1832 made ineffectual efforts to renew negotiations with Holland for reviving that company, and enabling it to complete its contract.

In the mean time, the efforts and representations of Mr Clay, De Witt Clinton, and other distinguished men had awakened public interest in the people and government of the United States in the proposed canal, and convinced them that it was important that our government should, if possible, control the work, and reap the benefits and advantages which it was believed would result to our commerce from it. On the 3d of March, 1835, the United States senate adopted a resolution, requesting the president to consider the expediency of opening negotiations with the Central American states and New Granada for protecting by treaty stipulations companies undertaking to open a canal across the Isthmus, connecting the two oceans, and of securing its free and equal navigation to all nations. By virtue of this resolution, President Jackson appointed Charles Biddle, and directed him to go to San Juan del Norte, and thence across the Isthmus to the Pacific, by the proposed route; to proceed to Guatemala, the capital, and with the aid of Mr De Witt Clinton, U. S. chargé d'affaires, obtain all public papers, and copies of the laws passed, and all papers and information relating to the canal. He was also to go to Panamá, and ascertain all about that route. Mr Biddle did not go to Nicaragua, and died soon after his return to the United States. His mission was a failure.

ACTION OF THE GOVERNMENT.

The government of Central America now determined to survey the route for the canal, and thus demonstrate to the world its practicability. In 1837 President Morazan employed Mr John Baily to survey the route, which he did, as already stated. In 1838 a convention between Nicaragua and Honduras authorized Peter Bouchard to make an agreement in France for the organization of a company to construct the canal. He did not succeed in accomplishing anything. Don Jorge Viteri, bishop of San Salvador, was sent as ambassador to Rome, and make like efforts, but without success. In the same year, a company of Americans in New York and New Orleans sent Mr George Holdship to Central America. He made a contract with Nicaragua, which had seceded from the federal republic, for the construction of a canal, the establishment of a bank, and the introduction of colonists. This scheme was extensive, but amounted to nothing, as the enterprise was soon abandoned.

In 1838, Aaron Clark, Herman Leroy, William A. Duer, Matthew Carey, and William Radcliff, citizens of New York and Philadelphia, addressed a memorial to congress, representing the necessity for the opening of the interoceanic canal. It was referred to a committee, of which Hon. Charles F. Mercer was chairman, who, upon the 2d of March, 1839, reported upon it, recommending the following resolution, which was adopted:

'Resolved, That the president of the United States be requested to consider the expediency of opening or continuing negotiations with the governments of other nations; and particularly with those the territorial jurisdiction of which comprehends the Isthmus of Panamá, and to which the United States have accredited ministers or agents, for the purpose of ascertaining or effecting a communication between the Atlantic and Pacific oceans, by the construction of a ship-canal; and of securing forever, by suitable treaty stipulations, the free and equal rights of navigating such canal to all nations, on the payment of reasonable tolls.' The president and senate, acting under this resolution, negotiated and made a treaty between the United States and New Granada, by which our government guaranteed the neutrality of the Isthmus, and New Granada conceded a free transit across it. The Panamá Railroad Company was organized by virtue of this treaty; and, as we all know, the existing railroad across the Isthmus was built by them; with what labor, and cost in money and human life, it is foreign to our purpose to inquire.