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At least once a year U.S. naval officers would tour the canal works and then write lengthy and detailed reports back to Congress on the progress, or lack of it, of the French project. Sometimes these reports can read as if the authors had somehow become infected by the enthusiasm of their always generous hosts, or just by the sheer ambition of it all. But for the most part, with a crescendo as the years go past, the reports concluded that the current sea-level plan was running disastrously behind time and over budget. In the United States, de Lesseps's “friends”—many, officially or not, on the payroll of the Company—continued to defend the canal against its attackers. U.S. factories and workshops were kept busy supplying Panama's endless thirst for new and bigger equipment. But many shared the New York Times’ view that the chance of the project ending in failure was “not unlikely.” In the circumstances, commented the paper with not a little schadenfreude, “we can congratulate ourselves that it is chiefly foreign capital that will be swallowed up by it.”

Occasionally, a different voice was heard. “Americans would much prefer that the American canal should be the work of Americans,” wrote a Commander Gorringe in the New York Sun. “Evidently Americans had neither the courage nor the means to undertake it. The Frenchmen had; they have gone quietly to work; they ask us for nothing,” What's more, he continued, all their efforts would assist no country more than the United States, “quite as much as British commerce and the British commercial marine were benefited by their work at Suez.” Not that respect for the French travails should hamper strategic good sense. It did not matter who did the work, he argued, because, “When it is completed, if it becomes necessary or even important to our national welfare and safety that we should control it, there is no doubt that we shall take possession of the canal and the country through which it passes, with as little hesitation and trouble as the British recently took possession of Egypt and the Suez canal.”

The U.S. Navy, deterred from establishing naval bases on the Isthmus, was now sniffing around a bay on the north coast of the Dominican Republic, strategically placed to guard the passageways into the Caribbean basin and a canal wherever it was situated, “which might,” the British foreign secretary was warned by one of his diplomats in December 1884, “be so fortified as to become a second Gibraltar.”

The same month, not coincidentally, saw the climax of the early American efforts to build a canal, for and by themselves, in Nicaragua, which remained their favored location for a waterway. Soon after the decision of the Paris Congress to plump for Panama, Ancieto Menocal, along with Admiral Daniel Ammen, ex-president Ulysses Grant, and others had formed the Maritime Canal Company, to fulfill their vision of the breakthrough happening in Nicaragua, regardless of what the French were doing in Panama. In 1880 Menocal had negotiated a concession from the Nicaraguan government to build his canal. Late the following year, they succeeded in getting a bill introduced in the Senate for political and financial guarantees to be given to the company by the government. The bill was passed around interminable committees, until at last, in mid-1882, it was voted on, narrowly failing to win the necessary two-thirds margin, helped by lobbying from de Lesseps's men in Washington and a feeling, as the New York Times put it, that “the time for guarantees and subsidies of bonds has gone by.” The great railway boom had been underwritten by the federal government, but now the power of the railroad barons was a national bugbear. “Let them have protection and charters,” the paper went on, “but let them persuade the capitalists of this country or of the world that they have a good thing and obtain their funds in a legitimate and business-like way. Therein at least they may take a lesson from de Lesseps.”

Ammen was furious that support had been denied, telling the British ambassador that he was going to “abandon it as an enterprise backed by the United States’ Government, and to seek the necessary capital in English and German markets for carrying out the work.” Rather than being an American canal for Americans, it would be neutral and free to all, multilaterally guaranteed.

Blaine's successor as secretary of state, Frederick Frelinghuysen, was disappointed by the failure of the bill, for precisely this reason, muttering darkly to the British ambassador, “there is reason to believe that direct overtures were made to the German Government by parties interested in the Menocal Concession.” But these efforts failed and the concession lapsed.

Frelinghuysen kept up negotiations with the British Foreign Office over altering the Clayton-Bulwer Treaty, albeit at a less shrill pitch than that of Blaine. But the Americans had little to offer in return for a move that would clearly benefit the United States at the expense of Britain, and got nowhere. Nevertheless, at the end of 1884 Frelinghuysen started fresh negotiations with Nicaragua for a canal treaty. A deal was signed on December 1. Anticipating ratification, Ancieto Menocal prepared to depart once more for another survey in Nicaragua, this time not as an employee of a private company, but of the secretary of the navy.

On December 10, the president, Chester Arthur, sent the treaty to the Senate with a strong message of recommendation. The work was too important to be left to private capital, he said. The Nicaragua canal would unite the country without recourse to the railway corporations, he went on, and deliver great benefits to U.S. trade and shipping. European grain markets would be brought in reach of the Pacific Coast states, and China would be opened up to East Coast manufacturers, who would now find themselves “midway between Europe and Asia.” By building the canal, he argued, the United States would make itself the center of the world.

As the prospect loomed of two rival canals, the Mexican ambassador in Washington took the opportunity to pitch his homeland to the British ambassador there, Lionel Sackville-West. If the French and Americans were going to have their own canals, he told the ambassador, Britain should also have one, built at Tehuantepec. Sackville-West brushed this suggestion aside, but was keeping a close eye on the Frelinghuysen deal, which was in clear breach of the Clayton-Bulwer Treaty.

When it came to the vote, the “much divided” Senate found itself in a quandary, as Sackville-West reported back to London. If it was rejected, it would “be understood by European governments as a practical abandonment of the Isthmian policy, and entail humiliation. On the other hand its ratification would test the position of the British Ministry that the Clayton-Bulwer Treaty is still in force …but is the United States prepared for a controversy which might result in something more serious than diplomatic correspondence?” To overturn an international treaty was a very serious step, as was reflected by concerns in the country and press.

The treaty, which would have seen a U.S. government–funded Nicaragua canal, was rejected, with 32 in favor and 23 against, narrowly missing by five votes the two-thirds majority needed for ratification. Party jealousies contributed to the defeat, but the Senate was also swayed by another argument in favor of delay: the canal would be a liability, fortified or not, until the United States had a competent navy to police the strategically vital waterway. A motion to reconsider the vote was introduced, but the inauguration of Grover Cleveland in March 1885 saw a change in policy and outlook. In his inaugural address Cleveland signaled a return to the traditional aversion to “entangling alliances.” He was also opposed to government involvement in “big business.” Shortly afterward, he withdrew the treaty.

Thus America's canal effort passed back from government to be once again the responsibility of the “folly and gullibility of Capital.” As hopes faded for Nicaragua, attention returned to Panama, where, whatever the setbacks, there were more men and machines at work than ever before. Suspicions of the French were mounting, with many believing that they were on the road to declaring a protectorate over a Panama state grateful to be detached from Colombian rule. In March 1885, the British minister in Bogotá had a conversation with his United States opposite number, who had recently been in Panama, in which the American “described every Canal functionary as, in his opinion, a French Government Agent in disguise.” De Lesseps, he went on, was set on introducing French colonists to Panama, before annexing the whole of the Isthmus.

All the time, the political situation on the Isthmus was worsening. The scene was set for a show of military force by the United States.

he civil war in New Granada in the late 1850s had ended with the triumph of the Liberal faction, and the drawing up, in 1863, of a new constitution that enfranchised the lower classes, reined in the influence of the Church on national affairs, and gave considerable autonomy to provinces within the country, now to be called the United States of Colombia. This decentralization suited Panama, which had always been more racially and ecclesiastically mixed, liberal, and outward looking than distant Bogotá. But after a depression in the 1870s, caused in part by collapsing prices for Colombia's cash crops, there was a conservative backlash in 1884 led by the new President Doctor Rafael Núñez.

Núñez's efforts to reverse the Liberal reforms prompted civil war in mainland Colombia, which quickly spread to Panama, at a time when the French canal effort did not need new problems. In July 1884 an attempted Liberal coup in the province was suppressed with difficulty, and after further disturbances, martial law was declared and a military governor appointed.

Amid the growing anarchy, foreign consuls on the Isthmus hurriedly telegraphed for gunboats to be sent for their nationals’ protection and on January 18, 1885, the U.S. Navy's Alliance was brought up alongside Colón dock, trained her three-inch guns on the town, and stationed men on the wharf and around the Panama Railroad offices, with particular attention to safes and vaults. The demonstration of American power provoked the resignation of the mayor of the town in protest, but calmed the situation for a while.

Allegedly the landing of U.S. troops had been at the request of the military governor, General Vila, but in Washington the Colombian minister shared his grave concerns with the British ambassador. Apparently, he had received a telegram from the government in Panama reporting that “the sovereignty of the State was in jeopardy.” According to the Colombian, the danger “arose from the intrigues carried out by the United States’ Government to obtain control over the Isthmus.” The United States, he said, was “fearful of the establishment of a French colony … and would use the excuse of anarchy on the Isthmus to establish a filibustering colony.”

In Colombia, the revolutionary party was in the ascendant, with Cartagena on the Caribbean coast threatened by a powerful Liberal army. The Colombian president responded by requesting that Vila send a loyalist force from Panama for the defense of the city. The general raised taxes further in the province and introduced conscription, but this merely led to another series of demonstrations against his regime. So Vila instead proceeded to the mainland with five hundred soldiers from the regular garrison. As it turned out, his action saved the city, and may have turned the course of the civil war, but it left only 250 loyalist troops in the province, most of whom were stationed in Colón. So it was in Panama City that Núñez's opponents first seized their chance.

On March 23, acting British consul Mallet brought the Foreign Office up to date on events in Panama. “My Lord, I have the honour to inform you,” the letter begins, in the customary way, “that a Revolution broke out in this city on the morning of the 16th inst.,…” “At 2 a.m. on the 16th,” the Star and Herald reported a few days later, “General Aizpuru gathered his men, 247 in number, at the garden of Paraíso, where after receiving some drinks to fortify them for the dangerous enterprise on which they were about to embark, they proceeded to enter the city.” The barracks and police station were speedily captured, but fierce fighting, in which some twenty people were killed, continued around the town hall, where the depleted Colombian garrison had taken refuge.

As soon as the diminished garrison departed from Colón on the railway to deal with this emergency, another Liberal leader, Pedro Prestan, seized his opportunity. With 80 men, he overpowered the small police force left guarding the Atlantic port and took control of Colón. Prestan, a mulatto and fervently anti-American, had a strong following among the poor and nonwhite in the town.

The Americans responded by landing troops from a warship, the Galena, to guard the railway and the wharf. Meanwhile, Prestan did his utmost to secure arms for his growing band of followers for the inevitable confrontation with government troops. After an uneasy truce of a few days, while in Panama City the government forces ousted Aizpuru, the hastily purchased weapons arrived in Limón Bay on a steamer from the United States.

The steamship line's agent in Colón was John Dow, an American with little love for Prestan or his followers. Dow refused to land the arms. Prestan was furious, and immediately arrested him, another Pacific Mail employee, the American consul, and two officers from the Galena, who had been with their men at the railroad.

Prestan also threatened to fire on any of the crew of the U.S. warships who disembarked and warned the U.S. commander in the bay, “Any aggression against us on the part of the U.S. ships will imperil the lives not only of the hostages but also those of your fellow-countrymen living in Colón.” Prestan is quoted as saying to his staff, “I wanted to prove to these people that their nationality and race does not protect them from my revolutionary authority. For the first time in the history of America a mulatto has dared put his hands on white U.S. citizens, and this fills me with pride because I have vindicated by my act the dignity of the negro, outraged by the white man across the centuries.” The quote has the whiff of subsequent invention or embellishment, but the sentiment is accurate. The U.S. consul, in fear for his life, urged Dow to deliver the arms. Dow consented, and the hostages were released. However, at this moment the captain of the Galena took possession of the shipment of weapons in the name of the government of the United States, and the hostages were quickly rearrested and taken to the rebel's position on Monkey Hill.

Here, Prestan's men were awaiting the rumored return of government forces from Panama City. One hundred and sixty men were indeed on their way by train. They disembarked at Mindi and proceeded to attack the rebel positions at dawn on March 31. Hopelessly outgunned, Prestan's men were driven back to Colón, where fierce combat continued for the next eight hours. At one point the fighting reached the walls of the British vice-consulate, where “rebel bullets and cannon balls … completely riddled the building.” At four in the afternoon, with Prestan's forces on the brink of defeat, a fire broke out in the north of the city. Colón, almost entirely built of wood and lacking piped water or any sort of fire brigade, was soon an inferno, and in no time a rumor was circulating that it was Prestan himself who had ordered the fire to be started. Helped by a strong northeasterly wind, the fire burned for another twenty-four hours. Almost every building in the town was destroyed. Men were landed from the European warships in the bay to help save the foreign enclave of Cristóbal, happily separated from the main city by a shallow inlet, and soon the Americans and government troops were restoring order by shooting suspected looters. Within two days, the rebels had been destroyed or captured, although it seemed that Prestan himself had escaped.

In Panama City, Aizpuru had taken advantage of events at the other end of the railroad to launch a fresh attack. Fighting continued for eleven hours. “The firing was hot and reckless in the extreme,” Mallet later reported. “Thousands of cartridges were burned as the scarred and wrecked appearance of walls and interiors sufficiently prove.” By the end of the day, Aizpuru was victorious, and on April i declared himself the military and civil chief of the city.

The bloody fighting and the tragic events in Colón had, however, given everyone a moment of reflection. Neither the government forces, now in control of what remained of Colón, nor Aizpuru in Panama City had sufficient force to overwhelm the other, and they signed an agreement to suspend hostilities for a month, “to preserve the capital from criminal elements, and to give security to interoceanic traffic.” It seems it was an effort to prevent foreigners from having an excuse to intervene.

But U.S. naval forces, including marines, were arriving in strength. The USS Shenandoah anchored off Panama City on April 6. The Alliance returned on April 8. Two days later the USS Tennessee, with an admiral aboard, appeared off Colón, together with a steamer of the Pacific Mail line packed with marines. More vessels arrived and by April 15 an entire marine brigade, along with two or three support battalions of bluejackets, was in place. Together with four field pieces, 170 men were ordered ashore on April 8, and armored railway cars to protect the transit were improvised with weapons and boiler plate from the ships. By April 18, according to Mallet, there were some five hundred U.S. troops based around the railway station in Colón, armed with a battery of Hotchkiss and Gatling guns and Dahlgron howitzers. In Panama City were a further three hundred men, with another two hundred scattered along the railway line. Offshore at either end of the line were half a dozen U.S. warships with a further 1,800 men and thirty more field guns. It was the largest overseas military expedition to be mounted by the United States between the Mexican War of 1846 and the war with Spain in 1898.

In mainland Colombia, Núñez's party was gaining ground against the revolutionists, and a loyalist force was being assembled at Buenaventura to depose Aizpuru in Panama. The general started erecting barricades in the city and preparing for a siege.

To the Americans, this was unacceptable. To protect foreign property and interests, troops were ordered out of their barracks and off their ships to take control of the city. Barricades were removed, and key positions in the city secured. All the bars and saloons in the town were closed down, and Aizpuru, together with his senior officers, was arrested. “The entry of the American marines into the city was a complete surprise for everyone and occasioned great excitement,” Mallet reported. “The belief among natives was that the city was to be taken away from them; patriotic feelings were raised to a fever pitch, and threats were openly made that unless General Aizpuru was released and the American force withdrawn every foreigner would be assassinated, and the town reduced to ashes.” The U.S. commander reassured the Panamanians that “the presence [of the U.S. force] is only temporary and simply to restore law and order. The idea of occupation or annexation of the Isthmus is one that has never occurred to the American mind.” On the evening of April 25, Aizpuru was released, having promised to respect foreign nationals and not to fight within the city limits. The U.S. force, now 1,200 men with twelve howitzers, retreated back to the railway station and everyone waited for the arrival of the Colombian loyalist soldiers.

Two days later, their ships were seen anchoring off Taboga Island in the Bay of Panama. By now, Aizpuru had lost too many of his men to desertion to risk fighting, and he surrendered to Colonel Rafael Reyes, the loyalist leader, on April 29. The next day, the Colombians landed and over the following week the American troops retired to their ships.

Aizpuru was later fined and exiled, and a witch hunt was launched against his and Prestan's erstwhile supporters, with Jamaicans and Haitians singled out for special treatment. Many were shot out of hand, and others languished in jail without a trial for up to four months. Two were hanged on May 6 for starting the Colón fire, even though, while incarcerated on a U.S. warship, they had helpfully signed testimonies which pointed the finger of blame at Prestan.

Prestan himself had escaped to the state of Bolívar but after the fire found himself friendless and soon fell into the hands of government troops, who returned him to Colón to face trial for arson. Held on August 17, it was a military tribunal on which sat a motley collection of soldiers and locals, all enemies of the accused. Four witnesses were called for the prosecution, foreigners, none of whom actually saw the fire being started, although they testified that Prestan had threatened to burn the city at some point or other. In fact, it is unlikely that Prestan was responsible. He owned property in the town, had his wife and daughter living there, and had nothing to gain militarily from the act. But the verdict was never in doubt. None of the witnesses requested by Prestan in his own defense appeared, and the tribunal ordered that Prestan be hanged. The sentence was carried out the next day at noon, on a scaffold made out of railroad ties erected in one of Colón's main streets, a stone's throw from the entrance to the new canal. “I saw no sign of fear,” wrote Claude Mallet, who was a close witness to the execution. “As he was dying he made no struggle and kept moving his arms as a sign of farewell to the crowd.”

he whole dramatic episode had many important repercussions. It had now been firmly established that the real power on the Isthmus was the U.S. military, and with the defeat of the Liberals, control of the country had been, it seemed, irrevocably handed over to the Conservative elite. In the arrabals, the poor quarters of the cities, and among the Colombian workers on the canal, the U.S. intervention had fueled fear and hatred of the “Yankees.” Elsewhere, among the outward-looking elite and the foreign residents, the chaotic events had underlined the impotence and incompetence of the Colombian authorities as well as the malign influence of mainland politics. “The State will never be free from such revolutionary nonsense,” wrote the Star and Herald, “until it withdraws from the union and sets up a government of its own under the protection of the United States or the great nations of Europe …There is a strong and growing sentiment in favor of such a movement.”

The French man-of-war, with its accompanying marines, stationed in Colón Harbor had, with the exception of helping fight the fire, played no part in the tumultuous events. Instead, even though it was a French company whose works and property were principally under threat, the force continued to maintain a strictly neutral stance, fearful of upsetting the United States’ position, or doing anything that went against the sacrosanct Monroe Doctrine. But the brief war had a profound effect on the French canal effort. To carry out such a massive construction project in a stable political situation was difficult enough; to achieve it in a state of anarchy and war was another thing altogether. It was just the first part in what would become an annus horribilis for the French effort.

For the benefit of share- and bondholders, and the ever-important confidence, the Company maintained in the Bulletin that they had lost nothing during the disturbance, but anyone on the Isthmus could see that this was patently untrue. Although Cristóbal had been spared, the fire had wrecked many large and valuable Company warehouses in Colón. In addition, offices, machinery, private residences, and railroad machinery had been destroyed or damaged. At a modest estimate, the loss to the Company was in the region of a million dollars.

There was to be a further ramification for the canal effort, and a nasty coda to the whole affair. On May 3, the tensions simmering between the Jamaican and Colombian workers came to a grisly head. That night there was to be a circus performance near the work camp at Culebra. The men had just been paid. The local akalde (mayor) requested a picket of Colombian troops to keep order. Five men were sent, but these were, according to Mallet, part of Reyes's newly arrived force, who “were ignorant of Isthmian affairs, and knew nothing of Jamaicans … and were animated only by a blind prejudice against all people who did not speak their language.” The soldiers tried to go through the camp to reach the site of the entertainment, but there was a rule that no armed men were allowed in the camps. The Jamaican watchmen, not knowing for sure if the Colombian troops were government soldiers or rebels, who were still roaming the countryside in small parties, disarmed them, on the orders of the camp chief, who said he didn't want a guard for the entertainment. The men returned to their base at Emperador and reported what had happened. Their commanding officer was incensed and ordered out his whole force. On the way they were joined by a mob of Cartagenians armed with machetes and revolvers. The whole crowd seems to have been well oiled, and there were raucous cries of “Viva Colombia.”

It was about two in the morning when the troops reached the labor camp. The offending watchmen were tracked down first. Arthur Webb, a Jamaican who had been on the Isthmus since 1882 and was in No. 4 barracks, saw what happened: “I heard the watchman outside challenge some one who answered ‘Colombian.’ I opened the door, and saw four men around one of the watchmen chopping at him with machetes.” Webb took to his heels, was spotted, and fired at. The soldiers, some twenty-five in number, then attacked Webb's barracks, where it was believed another watchman had taken refuge.

At three in the morning, when volley after volley had crashed into the building or cut down the Jamaican workers as they tried to flee, the door was smashed down with machetes. Jamaican Samuel Anderson had taken shelter under his bunk. From there he saw “a number of Jamaicans killed and hacked to pieces, their boxes and trunks were then broken open and robbed of their contents. Some Colombians then came into the barracks with kerosene oil and tried to set light to it. When I saw they intended to burn the barracks I left my hiding place. Several Colombians then seized hold of me, tied my hands, and struck me all over the head and body with the flat side of their machetes. I didn't resist and I was then made to accompany them to Emperador.” Another Jamaican was also taken prisoner, but they turned out to be the lucky ones. Arthur Webb returned to his barracks early the next morning “and counted 23 Jamaicans lying killed, and hacked to pieces on the ground, and in their bunks. Some of them had their legs and arms chopped off, and many had their skulls split in pieces. Many of the dead appear to have been killed whilst attempting to dress.” He found that his possessions had been stolen, including $200 he had saved in the last three years. The floor of the barracks was awash with blood and the whole place scattered with the ransacked contents of the workers’ trunks and boxes. Isaiah Kerr, a Jamaican who lived at nearby Las Cascadas, came to Culebra that morning as usual and “on entering No. 4 Camp I saw my brother Augustus Kerr, who worked there, lying dead on the ground, his throat had been cut and one of his legs were gone. Many other Jamaicans were lying about dead and wounded.” He found that his brother's clothes and money had “been taken away, and I could find nothing belonging to him.”

The Colombian authorities suggested that the Jamaicans had started the aggression by firing on the Colombians, but the witness statements, carefully gathered by the British diplomats, contradict this story. “I have never before witnessed anything so horribly sickening as the scene of the butchery at the camp,” C. H. Burns, an American canal contractor, told Claude Mallet. “Some of these unfortunate labourers lay upon their beds with only a night shirt on.” He saw no weapons among the mutilated bodies. “It is not the first outrage upon Jamaicans, and all growing out of the prevailing hatred which the natives bear the ‘Chombo,’” he said.

Samuel Anderson, taken prisoner that night, was confined in jail at Emperador. “I remained in prison for nine days,” he said, “four days of which I was kept with my feet in the stocks, and I was without food or water for 48 hours. On Monday 12th of May the judge at Emperador told me if I gave him fifteen dollars he would let me go. I had a watch in my possession, which I pledged for seven dollars which I gave to the judge, and he released me. On my return to the camp at Culebra I found all my clothes, and money had been stolen, and I am left without anything.”

A shocked and furious Claude Mallet demanded an investigation, but met only delay and prevarication. Important papers had, it seemed, gone missing. Rafael Reyes, now promoted to general, wrote to the Star and Herald, trying to excuse his men, but the paper did not believe him: “In all these fights between Jamaicans and Colombians,” it said, “the former are invariably represented as the aggressors, and as invariably are they beaten, demoralized and cut to pieces … it was a massacre, pure and simple.” The Panamanian government assured the governor of Jamaica that his countrymen were safe, but Mallet told him that such promises were “worthless,” and are only made “with a view of inducing Jamaica negroes to leave their homes and come to the Isthmus.” In fact, the massacre was symptomatic of a wider disregard for the rights of the imported workers: “It must also be borne in mind,” Mallet wrote to the authorities in Kingston, “that British subjects have suffered as much from constitutional as from the Revolutionary authorities. Alcaldes, prefects, judges and all in authority have paid little attention to the rights of the negro from Jamaica. The poor negro has been the legitimate prey of Executive and Judicial outrage of the gravest and most serious character. The records of this Consulate are made up largely with the story of their wrongs. The powerful Companies that bring them have taken little interest in their welfare and make no active efforts in their favour when they fall into the hands of the authorities.”

The fallout was both immediate and long-lasting. The Jamaicans fled the camp at Culebra, and within days no one who had worked there was on the Isthmus any longer. All along the line, Jamaicans abandoned the works to return to the safety of Kingston. Nor did the shocking events of that night lead to any change in the attitude of the locals to the Jamaicans. Those who remained were increasingly forced to arm themselves, and tensions rose further. Although new laborers did continue to arrive from Jamaica, the appeal on the island of “Colón Man” was tarnished forever. Never again was the Company able to marshal such numbers of workers on the project as had been there at the beginning of 1885.

ven before the civil war, fire, and subsequent events, confidence in the success of the canal was seeming more and more far-fetched. In early March, Mallet had reported to London the visit of de Lesseps's second-oldest son, Victor, along with others high up in the Paris Canal Company. They had professed themselves pleased with what they had seen, “with the conviction,” Mallet wrote, “that the enterprise will be ready for the world's commerce at the end of 1888.I may remark in passing,” he added, “that there are few intelligent people outside of Canal circles, who share the sanguine expectations of these gentlemen…dissatisfaction and anxiety prevail.” Apart from anything else, the shock at the death of the last of Dingler's family was still being felt.

With the fire came a worsening of the bottleneck at Colón for the import of machinery and supplies, and the massacre at Culebra had led to labor shortages all along the line. April saw exceptionally heavy rains, which held up the work and exacerbated the problem of landslides. “The Panama canal is in such a state that its ultimate completion is beyond question,” wrote the New York Tribune in May, “but it appears equally certain that the present company can never complete it… In going over the canal route, one gets the impression that the work is practically stopped.”

But in some areas the sort of technical breakthroughs predicted by Ferdinand de Lesseps were occurring. Philippe Bunau-Varilla had been appointed chief engineer of the Pacific Division of the canal, even though he was only twenty-six. Through a study of the Bay of Panama he had accurately predicted that submarine trenches dredged there would stay free of mud and sand, thus dismissing a major worry in that sector. In recognition of this progress, in April 1885 he had been appointed head of the Atlantic Division as well. Here there was another breakthrough. The dredges of Huerne, Slaven & Company had been held up by hard rock at Mindi. When such material had been encountered at Suez, for instance between Bitter Lakes and the Red Sea, dams had been laboriously built, the area drained, and excavation had continued “in the dry.” But at Mindi, Bunau-Varilla, recalling an earlier experience in France, ordered a series of underwater holes to be drilled in the rock, a yard apart. In each was placed dynamite, which, when exploded, reduced the rock to paving-size slabs, which could then be dealt with by the dredges. Thus the cost of underwater excavation was reduced to that of cutting “in the dry,” and with even better methods and machines, Bunau-Varilla surmised, could be made yet cheaper. The realization would lead to a clever suggestion to save the French canal.

It is difficult to get a handle on the extraordinary figure of Bunau-Varilla. There is little doubt that he was an engineer of genius, as well as having other talents, as would emerge later. In his own writings, however, he has an egomania verging on madness. It is reported he spoke—and he certainly wrote—not in sentences but in proclamations. Nevertheless, he was adept at making friends. Short, only five feet four, he had perfect posture and a luxuriant dark red moustache. Many of those who met him found him an eccentric and slightly overwhelming figure. “Mr. Varilla's tremendous mental capacity becomes apparent when one looks at him,” wrote an American whom Bunau-Varilla would later befriend. “His brain rises from an active, rather square face, but, as if to contain it, the sides of his head are much larger than the face.” “His versatility was fantastic,” wrote another admirer. “He had the energy of ten horses.” No one who met him ever doubted his fanatical devotion to the achievement of the canal, at whatever cost and by whatever means.

But time was already running out for de Lesseps's sea-level plan. By summer 1885 the excavation was falling seriously behind schedule. Menocal visited in August and reckoned that only 8 million out of the 120 million cubic meters needed had been excavated since the very start of the project. Furthermore, much of the money raised had been spent. In spite of de Lesseps's assurances that all the problems were surmountable, the Panama shares began to fall a little on the bourse. The days of boom in the French financial markets had passed with the collapse of the Catholic Union Générale bank in late 1882. In place of the frantic speculation of the time of the launch of the Canal Company, traders on the bourse were just as likely to be bear raiders, seeking through a variety of schemes to lower the price of the shares in such an enormous company in order to profit on the change in market price. Criticism continued in the newspapers. In London and New York the financial press was loud in its condemnation. In response to the undeniable reports of deaths from illness, a cartoon appeared in Harper's Weekly asking: “Is Monsieur de Lesseps a Canal Digger, or a Grave Digger?” Even in France, doubts began to be aired.

At the opening of the Company's July 1885 annual general meeting, the reality of the situation was beginning to undermine the faith of even the strongest believers in de Lesseps's Great Idea. Worries were expressed about the financial state of the company, the falling rate of excavation, the sporadic labor troubles, and the terrible rate of attrition from disease. De Lesseps countered with an inspired bout of oratory, speaking, without notes, for an hour, announcing that he would launch a lottery to raise the extra 600 million francs more he now said were needed. Furthermore, he would personally visit the Isthmus to inaugurate the “final stage of construction.” It says much for his magnetism that he was still able to charm an overwhelming vote of confidence from his audience.

It was a lottery bond issue that had saved the Suez Canal. In 1867, after the failure of a bond issue, de Lesseps had issued 5 percent lottery bonds, with four prize draws a year, each offering a 250,000-franc top prize. It had been a huge success and ensured the opening of the canal two years later. But under French law such an issue was restricted to undertakings of national importance and required a specific act of Parliament. Straightaway, de Lesseps found the government of the republic less helpful than had been the Imperial Senate. Although the Company organized, at great expense, a flood of petitions in favor of the legislation, the minister of works took no action until December, when he ordered a senior and scrupulously honest government engineer, Armand Rousseau, to go to Panama to give judgment on the project. In Rousseau's hands, it seemed, was the future of the canal.

In the meantime, after a gap of two months after the departure of Dingler, a new Directeur Général, Maurice Hutin, had taken over in September. There had already been drift in the leadership of the project, but Hutin himself left Panama only a month later, struck down with yellow fever. He would survive and return to the canal story later, but again there was a vacuum at the top of the organization on the Isthmus. Into the breach stepped twenty-seven-year-old Philippe Bunau-Varilla, as acting chief engineer.

His duties at either end of the canal had already stretched the young engineer, leaving him time, he says, for only two or three hours’ sleep a night, but he took on the new role with enthusiasm. His first initiatives were to improve recruitment and labor relations and to set a monthly excavation target of 1 million cubic meters for the first few months of 1886. With patriotic rhetoric, he urged on his French engineers and technicians.

Before the end of the year, however, disaster struck again on the Isthmus. On December 2 a violent storm lashed the Atlantic seaboard, with winds of up to a hundred miles an hour. Vessels crowded into the exposed harbor of Colón tried to escape out to sea, but at least ten were driven onto the shore. Bunau-Varilla rushed to the port, concerned above all about the safety of the newly built embankment of Cristóbal. At the harbor he was met by a terrible scene. Boats were smashed on the rocks or overturned, with their crews clinging to them like “a human bunch of grapes.” The seawall at Cristóbal survived, but more than fifty sailors were drowned. Meanwhile “Rain poured in torrents,” the Star and Herald reported. “The Chagres River has risen over twenty feet above its level.” The river was soon in huge flood, discharging twenty-five times its normal volume of water. In a stroke, much of the work and equipment were submerged.

The next day, with the sky again clear, Bunau-Varilla inspected his sector. “The points where my locomotive passed on the previous day were now covered by fourteen feet of water,” he wrote, “so I requisitioned three Indian canoes … as we paddled along through a channel apparently cut out of virgin forest all the workings were submerged and the tops of the telegraph poles were scarcely visible above the water.” After one canoe was damaged, the party had to crowd into two boats. “The load was almost too much,” Bunau-Varilla continues, “and the freeboard was not more than an inch above water. One of the engineers, a M. Philippe, said that he couldn't swim. I told him jokingly, ‘There is no danger. I could easily swim with you to the nearest trees.’ It was only then that I noticed the strangest phenomenon: the tops of the trees were not their usual green, but a distinct and ever-shifting black; as we drew nearer I saw they were covered with the most enormous and deadly spiders: tarantulas.”

The damage from the floods was straightaway noticed by Lieutenant William Kimball, who toured the works soon after to write the latest U.S. Navy report on the construction. At Bohío Soldado he found 3 million cubic meters of sand deposited in the trench by the subsiding waters, with railtrack and spoil cars buried to the depth of 2 meters. Kimball's report provides a fascinating and evenhanded snapshot of both progress on the works, and also, more generally, of life on the project at the turn of 1885–86. In some places he noticed progress from the findings of a report twelve months earlier. Work on the repair of the wharves had proceeded quickly. In la grande tranchée between Bas Obispo and Culebra “some very good work has been done,” even if a lot of it was by “hand-drills, small blasts, and hand work.” At Matachín, the central machinery depot, almost entirely staffed by Americans from New Orleans, seemed efficient and well equipped, although it had cranes too light for the task. In general, the accommodation and infrastructure seemed to have improved, with the exception of the hospitals, which had proved inadequate for the number of sick.

Kimball noted with interest the construction of a dam on the Río Grande to enable dredges to be floated further upriver—testament to Bunau-Varilla's idea to excavate as much as possible “in the wet.” It was also hoped that the flooding of the marshes would “improve the sanitary conditions near La Boca, which are at present very bad.” The water, it was believed, would prevent the “miasma” disturbed by the excavation from affecting the workmen.

Elsewhere, the lack of overall progress from the year before was more evident. At the site of the crucial dam at Gamboa, work had hardly started, and in the Paraíso section at the Panama City end of la grande tranchée, he noticed severe problems with slides. “The slips are not earth slides from the top of the bank,” he wrote, “but rather movements of the whole hillside, which in some places carries one bank almost intact across the cut with the top surface unbroken, and with the vegetation undisturbed.” Looking up, Kimball could see both the railway line and a channel built to keep the Río Grande from the canal suspended on the hillside 30 and 50 meters respectively above the new ditch. “There is a substratum of greasy clay all along the line,” he reported. “It would seem as if both the deflection of the Río Grande and the deflection of the railroad must slide into the canal.”

All along the line there was the impression of spoil carelessly dumped, damaging the railroad embankment in one place, narrowing the Chagres in another, contributing to the flooding. The machinery he saw in action was “considerable,” but impressed him “as neither large enough nor of the right kind.” The American Osgood and Mc-Naughton steam shovels were doing a good job, as were the U.S. and Scottish dredges, but they were too few in number. There was a lack of power drills and the French and Belgian ladder excavators were “ineffective.” The miracle machines that had dug the sand out of the Suez Canal had come to grief. “When working in soft earth, free from stones and roots,” wrote Kimball, “there is no doubt that the chains-of-buckets machines have a greater capacity than those of the steam-shovel, American type; but these perfect conditions are not to be had.”

There was also a lot of idle machinery, testament to failed experiments and other factors. In one place five excavators were seen delayed for lack of spoil trains. This was due to an absence of proper switching arrangements to transport the earth to a dump only half a kilometer away. At Matachín a contractor had stopped work as he hoped to get a higher price for removing rock that had not shown up on borings. In general, the hundred or so small contractors seemed to be getting in each others’ way, particularly over spoil removal. Furthermore, some of the companies, Kimball said, were “irresponsible parties,” who gave up when the going got hard or less profitable. Others did not have the necessary financial resources for what they had taken on and, forced to borrow from Isthmian bankers at 2 percent per month, soon went under. Either way, the results were delays, machinery standing idle again, and the inevitable demands of new contractors for more favorable terms.

Stoppages were also caused by labor shortages, arising not just from fear of further political violence, but also from the “forethought of others, who decide to leave the Isthmus before they are killed by the climate … by the poor quality and high prices of provisions; by the exorbitant rates charged for small drafts by the small bankers, who control such business; [and] by the lack of sufficient guarantees for hospital attendance.” Furthermore, the “men are in the habit of returning to their homes to spend what they accumulate, often leaving the works at the very time when from conditions of weather or arrangement of plant they can least conveniently be spared.” All this contributed to a turnover of workers of some 80 percent a year.

Kimball also reported the tensions between the French and their U.S. colleagues on the project. Apparently, the Americans were being accused of sabotaging excavators in order to stop the work, so their government could take control of the canal, “and other wild statements.” Perhaps Bunau-Varilla's patriotic rhetoric had sharpened divisions. Certainly, Kimball noticed great dedication on the part of some of the French engineers. The acting chief engineer, who showed Kimball “unremitting and repeated courtesies,” explained it thus: “The contagion of my confidence in our success had taken hold of all my men,” said Bunau-Varilla. “One man who fell was immediately replaced by another, and the battle went on.” “It is an impressive fact that there is money value in the prestige of M. de Lesseps, the courage of the French and the determination to finish the canal,” noted Kimball, “for otherwise the company would already have become bankrupt under the showing of 500m francs practically spent and not more than one tenth of the work accomplished.”

In spite of this gloomy, and, as it turned out, accurate, assessment of progress, Kimball still believed the canal would be built. “That with sufficient expenditure of money, time, brains, energy, and human life, the canal can be finished is self-evident,” he concluded, although refusing to estimate “the necessary quantity of all or any of them.” If the money from the lottery was forthcoming “the canal will be so far advanced by the time the money for the new loan is expended that the necessity for finishing it will be apparent.” Put another way, the temptation to throw good money after bad would be irresistible. This new financing was the key factor. “The Company has doubtless made some grave mistakes, but I am confident it has at its disposition all the necessary brains and energy,” wrote Kimball. “As for human life, that is always cheap.”

It has been suggested that 1885 was the blackest year of all for deaths from fever. We only have the figures for mortalities in the hospitals. For 1885, there was a similar official death toll as the year before, running at nearly a hundred a month, in spite of a slight lessening of the workforce. Records of burials in, for example, the foreign cemetery (of which Claude Mallet was the treasurer) suggest that these figures do not tell the whole story. On several occasions during the year Mallet was again called out to collect from the streets of Colón or Panama City the bodies of dead British subjects whom no one had been found to bury. There was a pattern of men employed on the canal or the railroad falling sick, being hospitalized at the contractor's expense, but then being discharged before fully fit. While looking unemployably ill, the patient would fall sick again shortly afterward—basically have another malaria attack—and find himself unable to afford to go to the hospital. Claude Mallet fought an ongoing battle with the Foreign Hospital to lower its costs of $2 a day, which he was obliged to pay for such “distressed” Britons. Many of these were railway engineers and laborers displaced from Peru by the war there at the beginning of the decade. But the hospital now had more patients trying to get in than they had space. And, Mallet was told, “under no circumstances would negroes be admitted.”

The Company still had its fair share of shocks. In October 1885, Bunau-Varilla was sent two new engineers to be chiefs of division. Both, he reports, were dead from yellow fever within two weeks. “Many a man of them had been happy to enlist,” he wrote of the still steady stream of new arrivals at Colón, “but felt his heart sink at the sight of the warm, low and misty shores of the deadly Isthmus. Some bore on their faces the obvious mark of terror …” To Bunau-Varilla, and others, it was this very fear that made someone susceptible to fever.

The French consulate had a terrible year, losing three diplomats and two of their wives in the twelve months. Within five months of each other, two Italian consuls had died. Both the Spanish consul and his wife came down with yellow fever. The wife recovered from her delirium to find that her husband was already buried.

The British consulate saw their Colón vice-consul, the young Fred Leay, who had so meticulously taken the witness statements from the Culebra massacre, come down with “Bilious Remittent Fever” and be invalided off the Isthmus. In January 1886, even Claude Mallet's hardy constitution was worn down, and he, too, contracted fever. He remembered lying in bed and hearing one of the three doctors called for consultation say that he would not live to see daylight again. “I had reached a state of semi-coma and did not care what happened,” he later wrote.

Fortunately a new consul, Colonel James Sadler, had at last arrived to relieve him. Mallet was allowed to retire for a short while to the healthier climes of Jamaica where he would recover, but he would therefore miss the two vital visits—of the government inspectors and of Ferdinand de Lesseps—the following month. It did not take his replacement James Sadler long to look around and assess the importance to Panama of the forthcoming inspections. Writing to the foreign secretary the Marquis of Salisbury on January 27, he warned of the unpopularity of Núñez and the risk of further revolution on the Isthmus. Taxes and resentment were high. “Crime is frequent,” he wrote, “and remains unpunished from want of means to support the cost of imprisonment, though political offenders are treated severely.” Everything, he said, was riding on Rousseau's report. If it should be favorable and the lottery issue approved, “the condition of the country may improve.” Otherwise, “should the works cease, fresh misery and disturbance would certainly occur on the Isthmus.”

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