On the 1st of January, 1888, the amount of money at the disposal of the company was stated by M. de Lesseps to be 110 millions of francs (4½ millions sterling), and it was calculated that 300 million francs (12,000,000l.) would be required by the end of the year. M. de Lesseps, in asking permission to raise this sum by a lottery, placed at the disposal of the French Government all the contracts and documents in the hands of the company, “whereby the execution of the programme drawn up is guaranteed.”
During the first half of 1888, several discussions of a more or less stormy character took place in the French Parliament on the proposal to authorise on behalf of the Panama Canal Company an issue of lottery bonds. In the result M. de Lesseps got his own way, the Senate sanctioning a loan with 4 per cent. interest, and a deposit of rentes as a guarantee. Subscriptions were opened on the 23rd of June. The French people, backed by the most influential newspapers in the country, looked favourably on the lottery. There were a large number of prizes to be drawn, the chief being one of half a million francs (20,000l.), and there were to be six drawings a year. At the outset, with inducements that appealed so strongly to the French imagination, the loan seemed likely to be covered several times over. All at once, however, the flow of subscriptions stopped. It was then ascertained that the opponents of the canal had set afloat some sinister rumours with the object of frustrating the lottery scheme. One of these was the rumour that Lesseps was dead. The veteran projector, however, was never more entirely alive. Threatened with failure, he made almost heroic efforts to avert it. He arranged for attending and speaking at meetings in all the principal towns of France, beginning at Paris. The labours now undertaken by the octogenarian canal-builder are thus referred to by the Times correspondent at Paris:—
“I do not know what will be the fate of the millions of lottery bonds which still remain to be placed, but what is certain is that two men never gave themselves to a more laborious work of propagandism than M. de Lesseps and M. Charles de Lesseps, his son, have undertaken. If ever the Panama Canal is finished, if it ever yields the results promised—as to which I can make no assertion—it would not be too much to raise statues to these men, who have spared themselves no toil, but have made almost superhuman efforts to bring the work to a successful close. For a month M. de Lesseps and his son have been visiting the industrial and commercial centres, delivering addresses, taking part in banquets, organising committees, and endeavouring to create a national movement favourable to the realisation of this gigantic scheme. In all places where they have been speaking they have had crowded audiences, which have eagerly listened to them, and have shown sympathy with their efforts to make the completion of the Panama Canal a national question. Frenchmen feel that success in this work must avert a rebuff for the constructor of the Suez Canal, who will continue to be styled ‘Le Grand Français’ so long as the Panama Canal Scheme has not collapsed.”
On the 14th December, 1888, the Panama Canal Company suspended payment. Announcement was made in Paris that in consequence of the subscription not having extended to 400,000 obligations, the payment of all coupons and drawn bonds would be temporarily suspended. The intimation caused a severe shock in Paris, although it was not entirely unexpected. The French Cabinet deemed the matter one of such importance that they held a meeting to consider what should be done. It was decided to propose a suspension for three months only. This was proposed for a double reason—to gain time, and to prevent speculation on the Bourse. It was stated by M. Peytral, the Minister of Finance, that the Government wished to enable the old company, without going through the process of bankruptcy, to hand over the canal to a new concern.
There have been few warmer discussions, even in the French Chamber, than that which followed the proposal to interpose to this extent on behalf of the canal company. It was argued by the opponents of the Government that the canal should not be treated exceptionally; that the bankruptcy law should be allowed its ordinary course; that the Government had kept secret the report of its own engineer on the condition of the company when it was known to be in danger; that the Army Bill should not be delayed for the sake of a private company; and that if the company did come to grief, nearly a million bondholders would be ruined and a milliard of money would be lost.
On the 15th December the Chamber of Deputies, acting upon the Report of the Committee appointed to consider the Bill, resolved by 256 votes against 81 to throw out the Bill. This decision created intense excitement, not only in Paris, but throughout France—aye, and throughout Europe. The shareholders in the company, 870,000 in number, were threatened with disaster, many of them with ruin. The newspapers contained reports of the condition of panic that prevailed in the capital, which recalled the similar episodes of the South Sea Bubble and Law’s Mississippi Scheme. The canal company’s offices in Paris were besieged by eager and demonstrative crowds. They did not, however, vent their anger and disappointment on M. de Lesseps. It was the Government that was condemned. Lesseps was still the favourite of the people. “Vive Lesseps” and “Vive Boulanger” were the cries of the hour. There were not a few who regarded the occasion as one that justified the country in getting rid of so pusillanimous a Chamber. The opportunity of the Boulangists appeared to be at hand.[186] The greatest but one of European Powers seemed likely to be drawn into the vortex of revolution by the obscure problem of the cost of constructing a waterway in a territory over which it had no control, at thousands of leagues from its shores. The mutability of human affairs had surely never a more striking illustration!
According to a statement which appeared in the Standard of the 17th December, 1888, a Figaro reporter called on M. de Lesseps, and was received by him in a drawing-room, where seven of his younger children were having a romp with their mother. The following is a description of the scene that took place:—
“You know the vote of the Chamber?”
“No,” he replied very calmly, stretching out his hand.
“The Government Bill is rejected; your application is defeated; the majority against you is nearly a hundred.”