The United States and Latin America

by John Holladay Latané

The Diplomatic History of the Panama Canal

The cutting of the isthmus between North and South America was the dream of navigators and engineers from the time when the first discoverers ascertained that nature had neglected to provide a passage. Yet the new continent which so unexpectedly blocked the way of Columbus in his search for the Indies opposed for centuries an insurmountable barrier to the commerce of the East and the West. The piercing of the isthmus always seemed a perfectly feasible undertaking, but the difficulties in the way proved greater than at first sight appeared. There were (1) the physical or engineering problems to be solved, and (2) the diplomatic complications regarding the control of the canal in peace and its use in war. The weakness of the Spanish-American states, whose territories embraced the available routes, and their recognized inability either to construct or protect a canal made what might otherwise have been merely a question of domestic economy one of grave international import. In this respect, as in others, the problem presented the same features as the Suez canal. To meet these difficulties three plans were successively developed during the nineteenth century: (1) a canal constructed by a private corporation under international control, (2) a canal constructed by a private corporation under the exclusive control of the United States, and (3) a canal constructed, owned, operated, and controlled by the United States as a government enterprise. The Clayton-Bulwer treaty provided for the construction of a canal in accordance with the first plan; several unsuccessful attempts were made to raise the necessary capital under the second plan; while the third plan was the one under which the gigantic task was actually accomplished.

The comparative merits of the Nicaragua and Panama routes long divided the opinion of experts. American engineers generally favored that through Nicaragua. The length of the Nicaragua route, from Greytown on the Atlantic to Brito on the Pacific by way of the San Juan river and through Lake Nicaragua, is about 170 miles. The elevation of the lake above the sea is about 110 feet. Its western shore is only twelve miles from the Pacific, with an intervening divide 154 feet above the sea. From the southeast corner of the lake flows the San Juan river, 120 miles to the Atlantic, with an average fall of about 10 inches to the mile. The serious objections to this route are: (1) the lack of harbors at the terminals, Brito being a mere indentation on the coast, rendering the construction of immense breakwaters necessary, while at Greytown the San Juan broadens out into a delta that would require extensive dredging; and (2) the enormous rainfall at Greytown, exceeding that known anywhere else on the western continent—nearly 25 feet.

The Panama route from Colon on the Atlantic to Panama on the Pacific is about 50 miles in length, with a natural elevation nearly double that of Nicaragua. There are natural harbors at each end which are capacious and able to accommodate the heaviest shipping. The Panama Railroad, built along the line of the proposed canal, in 1850-55, gave this route an additional advantage. There were, however, certain disadvantages: (1) the unhealthfulness of the vicinity, rendering labor scarce and inefficient; (2) the heavy rainfall, 10 to 12 feet at Colon; and (3) the treacherous character of the geologic structure, due to its volcanic origin, through which the cut had to be made. The impossibility of making even approximate estimates of the cost of the work in such a deadly climate and through such an uncertain geologic formation was one of the greatest difficulties to be overcome. The De Lesseps plan provided for an open cut throughout at the sea-level, at an estimated cost of $170,000,000. The work was begun in 1884 and prosecuted until 1888, when the gigantic scheme collapsed, after the company had expended about $300,000,000 and accomplished less than one-third of the work.

Great as the engineering problems of the various canal schemes have been shown to be, the importance to the world's commerce of the object in view would, in all probability, have led to their solution and to the construction of a canal long before the United States undertook the Panama enterprise, had it not been for difficulties of an altogether different character, complications arising out of the question as to the status of the canal in international law. The diplomatic difficulties in the case of an interoceanic canal are very great. It cannot be regarded as a natural strait, like the Dardanelles, the Danish Belts, or the Straits of Magellan, which were for a long time held under exclusive jurisdiction, but are now free to all nations. Nor, on the other hand, could an isthmian canal be compared to the Kiel canal, which is within the territory of Germany, and which, although open to commerce, was specially designed to meet the needs of the German navy. Such canals as this are built by the capital of the country through which they pass, and are protected and controlled by its government.

No one of the republics to the south of us, through whose territory it was proposed to build a canal, could raise the capital for its construction or insure its protection when completed. No company chartered by one of these governments could have raised the necessary capital without some further guarantee. Hence it was that all companies organized for this purpose had to secure their charters from some more powerful nation, such as the United States or France, and their concessions from one of the Central American states. This rendered necessary a treaty between the state granting the concession or right to construct a canal through its territory and the state chartering the company. The claims of other states to equality of treatment in the use of such a canal constituted another element that had to be considered.

With the establishment of the independence of the Spanish-American republics the question of the construction of a ship canal across the isthmus became a matter of general interest, and it was one of the proposed subjects of discussion at the Congress of American Republics summoned by Bolivar to meet at Panama in 1826. In the instructions to the United States commissioners to that congress, Mr. Clay authorized them to enter into the consideration of that subject, suggesting that the best routes would likely be found in the territory of Mexico or of the Central Republic. As to the diplomatic status of the canal, he said:

If the work should ever be executed so as to admit of the passage of sea vessels from ocean to ocean, the benefits of it ought not to be exclusively appropriated to any one nation, but should be extended to all parts of the globe upon the payment of a just compensation or reasonable tolls.[140]

In 1835, and again in 1839, the United States Senate passed resolutions authorizing the President to enter into negotiations with other nations, particularly Central America and New Granada, for the purpose of protecting by treaty either individuals or companies who might undertake to open communication between the two oceans, and of insuring "the free and equal navigation of the canal by all nations." Presidents Jackson and Van Buren both commissioned agents with a view to carrying out these resolutions, but without success.

While a prisoner at Ham in 1845, Prince Louis Napoleon Bonaparte secured from the government of Nicaragua a concession granting him power to organize a company for the construction of a waterway to be known as "Le Canale Napoléon de Nicaragua." After his escape from Ham, he published in London a pamphlet entitled "The Canal of Nicaragua, or a Project for the Junction of the Atlantic and Pacific Oceans by means of a Canal."[141]