The United States and Latin America

by John Holladay Latané

Upon every principle which governs the relations to each other, either of nations or of individuals, the United States is completely estopped from denying that the treaty is in full force and vigor. If changed conditions now make stipulations, which were once deemed advantageous, either inapplicable or injurious, the true remedy is not in ingenious attempts to deny the existence of the treaty or to explain away its provisions, but in a direct and straightforward application to Great Britain for a reconsideration of the whole matter.[181]

It was precisely in this spirit that Secretary Hay undertook in 1899 to negotiate a new treaty with England. The original draft of the Hay-Pauncefote treaty, signed February 5, 1900, provided for a neutralized canal and drafted for its control rules substantially in accord with the Constantinople convention of 1888, providing for the regulation of the Suez canal. The most important provision of the new treaty was that authorizing the United States to construct and to assume the management of an isthmian canal, either directly or through a company. The United States Senate, however, amended the treaty in three important particulars: (1) by declaring that the Clayton-Bulwer treaty was thereby superseded; (2) by providing that the restrictions in the regulations governing the use of the canal should not apply to measures which the United States might adopt for its own defense and for the maintenance of public order along the canal; and (3) by cutting out entirely the article providing for the adherence of other powers. The British government refused to accept these amendments, and a year elapsed before an agreement was finally reached.[182] The revised treaty which was ratified by the Senate December 16, 1901, was a compromise between the original draft and the Senate amendments. The new treaty abrogated in express terms the Clayton-Bulwer convention, and provided that the United States might construct a canal under its direct auspices, to be under its exclusive management. The principle of neutralization was nominally retained, but under the sole guarantee of the United States, with power to police the canal, and the clause of the first draft forbidding fortifications was omitted.[183]

This convention removed the principal diplomatic obstacles which stood in the way of constructing a canal through the isthmus. For several years the United States had been investigating the cost of constructing a canal through Nicaragua, that route being the one which had always been considered most feasible by the great majority of American engineers. Two commissions, one in 1895 and another in 1897, had reported favorably on the practicability of that route. A third commission, headed by Admiral John G. Walker, was appointed under act of March 3, 1899, which authorized an expenditure of $1,000,000 for the purpose of making a thorough investigation of all available routes. While the Walker commission was carrying on investigations in Nicaragua, at Panama, and along the Atrato river, the various financial interests concerned in the choice of routes were actively at work in Washington, each trying to influence Congress in favor of its particular project. The New Panama Canal Company had secured, at the time of the reorganization, an extension of its concession to October, 1904, and subsequently another concession to October, 1910, but the validity of the latter arrangement was in doubt. The company could not raise the necessary funds to continue the work at Panama and was therefore threatened with the forfeiture of its franchise and property. It concluded, therefore, that its only hope lay in transferring its concession and property to the American government. With this end in view, an active lobby was maintained at Washington for the purpose of influencing public opinion in favor of the Panama route.

But the Panama Company had a powerful rival in the Maritime Canal Company, which held a charter from Congress and had secured a concession from Nicaragua. This company had started work at Greytown in 1890, but having been forced from lack of funds to stop work in 1893, was now urging Congress to make its enterprise a national one. It found a ready champion in Senator Morgan of Alabama, who had for years taken a lively interest in the canal question and who had strong convictions as to the superiority of the Nicaragua route. In 1900 Nicaragua declared the concession of the Maritime Canal Company null and void, and granted a new concession to a group of New York capitalists known as the Grace-Eyre-Cragin Syndicate. The Maritime Canal Company, however, refused to abandon its claims, and a contest between the two concerns was carried to the lobbies of Congress. The opposition of the transcontinental railroads to a canal at either point brought into play another set of powerful interests, usually arrayed against the plan which appeared for the time being most likely to succeed.[184]

On November 16, 1901, the Walker commission after a thorough investigation of the Nicaragua and Panama routes made its report. It estimated the cost of construction of the Nicaragua canal at $189,864,062, and the cost of completing the Panama canal at $144,233,358. To this latter sum had to be added the cost of acquiring the rights and property of the French company, which had stated to the commission that it estimated its interests at $109,141,500, making the total cost of the Panama canal $253,374,858. The commission expressed the opinion that the interests of the French company were not worth over $40,000,000. In conclusion the report stated:

After considering all the facts developed by the investigations made by the commission and the actual situation as it now stands, and having in view the terms offered by the New Panama Company, this commission is of the opinion that the most practicable and feasible route for an isthmian canal, to be under the control, management, and ownership of the United States, is that known as the Nicaragua route.[185]

A bill was promptly introduced into the House of Representatives by Mr. Hepburn providing for the construction of the canal through Nicaragua, and on January 9, 1902, this bill passed the House by the almost unanimous vote of 308 to 2. The report of the commission had meanwhile created great consternation among the stockholders of the New Panama Canal Company, and on January 4, 1902, a definite offer to sell out to the United States at $40,000,000 was made to the commission by cable. On January 18, the commission filed a supplementary report which recommended the adoption of the Panama route instead of that through Nicaragua.

When the Hepburn bill came up for discussion in the Senate, the situation had thus been radically changed, and a long debate ensued as to the relative merits of the two routes. Senator Morgan continued to fight for Nicaragua as the traditional American route, declaring that the Panama Company could not give a valid transfer of its property and interests. But this objection was cleverly met by Senator Spooner, who offered an amendment, which was virtually a substitute, authorizing the President to acquire the rights and property of the French company at a cost not exceeding $40,000,000; to acquire from the Republic of Colombia, upon such terms as he might deem reasonable, perpetual control of a strip of land, not less than six miles in width, extending from the Caribbean Sea to the Pacific Ocean, with jurisdiction over said strip; and to proceed as soon as these rights were acquired, to construct a canal. But should the President be unable to obtain a satisfactory title to the property of the French company and the control of the necessary strip of land from the Republic of Colombia "within a reasonable time and upon reasonable terms," then he was instructed to secure control of the necessary strip through Nicaragua and to proceed to construct a canal there. The bill as amended passed the Senate June 19, 1902, by a vote of 67 to 6. The House at first refused to concur in the Spooner amendment, but after a conference it finally gave way and the measure was adopted by a vote of 260 to 8. The act was signed by President Roosevelt June 28.[186]

Attorney-General Knox was sent to Paris to make a thorough investigation of the affairs of the Panama Company. He reported that it could give a clear title. The next step was to secure a right of way through Colombia. After considerable delay Secretary Hay and Mr. Herran, the Colombian chargé d'affaires, signed, January 22, 1903, a canal convention, by the terms of which the United States agreed to pay Colombia $10,000,000 in cash and an annuity of $250,000 for the lease of a strip of land six miles wide across the isthmus. Objection was raised to this treaty because it failed to secure for the United States full governmental control over the canal zone, but it was considered the best that could be gotten and it was ratified by the United States Senate March 17, 1903.

The Colombian Senate, however, did not regard the treaty with favor. They felt that Panama was their greatest national asset, and they knew perfectly well that in spite of threats to the contrary President Roosevelt was determined not to adopt the alternative of the Spooner amendment and go to Nicaragua. After discussing the treaty for nearly two months, they finally rejected it August 12 by the unanimous vote of all the senators present.[187] They probably thought that they could get better terms from the United States and particularly that they might reserve a fuller measure of sovereignty over the isthmus. President Roosevelt declared that the action of the Colombian Senate was due to an "anti-social spirit" and to the cupidity of the government leaders, who merely wished to wait until they could confiscate the $40,000,000 worth of property belonging to the French company and then sell out to the United States. This view is not borne out by the dispatches of Mr. Beaupré, the American minister, who repeatedly warned Secretary Hay that there was a "tremendous tide of public opinion against the canal treaty," which even the Colombian government could not ignore. The charge of bad faith against Colombia does not come in good grace from a country whose constitution also requires the ratification of treaties by the Senate.