In 1888 the French company suspended payments and went into bankruptcy. The canal was completed to the extent of about two-fifths, and had already cost nearly £80,000,000. It was said at the time that about one-third of this sum was spent on the canal, one-third wasted, and one-third stolen. The original capital with the eight subscription lists between 1882 and 1888 produced nominally £78,701,020, but actually only £40,309,348, the loss in discounts, etc., amounting to £38,391,672. The collapse of the company was followed by investigations and trials in France. Ten senators and deputies, together with the directors, were brought to trial. Ferdinand and his son Charles de Lesseps were, among others, condemned to fines and imprisonment, but the sentences upon the Lesseps were never carried out. Neither the son nor the father was probably responsible for the iniquities which had marked the history of the company. The genius who had created the Suez Canal was indeed completely broken down by the tragical conclusion of his second venture, and died in 1894 in a condition of mental and physical collapse.
But financial profligacy was not the only cause of the French failure. Disease and death fought against the enterprise from the first. Yellow fever and malaria caused as much mortality among the French employees as would suffice for a great military campaign. Sir Ronald Ross, the great expert in tropical diseases, was told in 1904, when at the isthmus, that the French attempt cost at least 50,000 lives. This may have been an over-estimate, but there is no doubt that the mortality was terrible, and would probably have brought the French operations to an end even if greater economy and honesty had prevailed in the administration. It must not be supposed that the French made no provision for the victims of these endemic diseases. Excellent hospitals were built at Ancon, near Panama, at a cost of over a million of money; while those at Colon cost more than a quarter of a million—in both cases about three times a fair and honest price. At the time of the French occupation of the isthmus nothing was known of the real nature and cause of yellow fever and malaria, of the manner in which they are transmitted, and the only effective means of prevention. All the recent and marvellous advance in scientific knowledge of these diseases was available when the Americans began their work, and was applied with the greatest efficiency and success. Medical science, quite as much as engineering skill, made a Panama canal possible, and we shall have a good deal more to say on this subject when we come to describe the American operations.
Let us not forget, then, that despite their failure the French did a great deal of good work, which they passed on many years afterwards to their American successors. A quantity of the French machinery, tools, and hardware was also available. It is true that among this was included a large consignment of snow-shovels (for use at sea-level less than 10 degrees from the Equator!), and a quantity of petroleum torches for the festivities which were one day to celebrate the completion of the canal. But a great deal of the plant was in good condition. The extravagance and corruption which prevailed at the isthmus during the first French company were almost incredible. But it may be doubted whether any other nation could have succeeded in the 'eighties of last century where the French failed.
CHAPTER V.
THE HAY-PAUNCEFOTE TREATY.
In 1893 a new corporation, known as the New Panama Canal Company, took over all the assets of the De Lesseps Company, including the railway, and the work of construction was continued, or at least not wholly interrupted. Meanwhile the people of the United States were not greatly displeased at the collapse of the great French enterprise. They became more and more determined to construct an American canal under American control. The Nicaraguan route was still favoured by many as compared with that at Panama. In 1887 a surveying party was sent to Nicaragua, and the next year the Maritime Canal Company was established to promote the building of a canal there. It is important to notice this particular scheme, for under it work was actually begun. Wharves, warehouses, and a breakwater were constructed at Greytown, a railway was built, and some progress made with the canal itself. Outside the Panama route this was the only actual work of canal construction performed in Isthmian and Central America. The project failed owing to the great depression of trade which occurred in 1893 and the impossibility of getting more capital. It should be noticed that these projects of constructing an American canal at Nicaragua quite independently of Great Britain were right in the teeth of the Clayton-Bulwer Treaty of 1850, which still remained in force. Most sensible persons saw that the first preliminary to an American canal was to get this treaty abrogated or modified. But this purpose and canal schemes in general were delayed by the outbreak in 1898 of the Spanish-American War.
This was a naval war, and the United States were to feel the inconvenience and danger of having no sea communication between their eastern and western coasts except via the far southern extremity of the continent. United fleet action over the whole theatre of the war was rendered impossible. An event soon occurred which finally completed the conviction of the American people that, in the words of President Grant, "an American canal on American soil" was a national necessity. At the beginning of the war the battleship Oregon, one of the finest ships in the United States navy, lay off San Francisco. She was not wanted there, but she was very badly wanted at the West Indies, the main scene of the naval struggle. To get there the Oregon had to sail 13,400 miles round Cape Horn instead of 4,600 miles via a Panama canal, if there had been one. Everybody in the United States knew that the precious warship was making that perilous journey exposed all the way to the attack of the enemy. If she had been lost, the course of the war might have been very different, and even the delay of this long passage was a serious consideration at so critical a time. However, the vessel arrived safely and in a record time off Florida, and the suspense and anxiety of the American people were changed into jubilation. But "never again" was the moral they drew from this painful and exciting experience.
At the end of the war a fresh canal campaign broke out in Congress, the claims of Nicaragua and Panama being urged by their respective champions. The outcome of this rivalry was the appointment of a commission, the third of the kind, to go to the isthmus and investigate both Nicaragua and Panama. We shall have something to say about the report of this commission, which was issued in December 1900. But already, before that appeared, negotiations had been set on foot between the United States and Great Britain with regard to the Clayton-Bulwer Treaty. Allusions to the subject by Mr. M'Kinley in his second message to Congress had brought the question prominently before the people of both countries. The president had spoken thus:—