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THE AMERICAN TRIUMPH

CHAPTER FOURTEEN

HEROES AND VILLAINS—THE “BATTLE OF THE ROUTES”

The skepticism of the American leadership in late 1898 had nothing to do with the principle of a U.S. government–owned and controlled canal in Central America, nor with the “entangling alliances” that it would inevitably involve. In fact, the 1890s had seen the United States become more outward looking and expansionist than ever before. Important thinkers like Alfred Mahan, whose The Influence of Sea Power Upon History was published in Boston in 1890, were arguing that a canal, guarded by an expanded navy, was necessary not only as a means of commercial expansion for the now preeminent U.S. economy, but as a conduit for sea power (what Mahan saw as the truest judge of a nation's greatness). Above all, the canal presented itself as a way of spreading “superior Anglo-Saxon civilisation” across the region.

The war with Spain in 1898, motivated in part by fears of German ambitions in the region (Admiral Tirpitz had declared an interest in German control of a Panama Canal), had seen the acquisition by the United States of the Philippines, Puerto Rico, Hawaii, and, effectively, Cuba, and the need for a short sea route to link these new possessions, as well as the two coasts of the mainland United States, seemed more urgent than ever. Before the war, McKinley had set up the Isthmian Canal Commission under Rear Admiral John G. Walker to study the canal question, but it was an incident during the fighting that effectively ended the long-standing objection of Congress to taking on the work as a government-funded project. At the beginning of the conflict, the United States’ most powerful battleship, the Oregon, stationed in San Francisco, found herself marooned far from the action. The vessel was ordered to proceed at once to the Atlantic, a 15,000-mile course around the Horn. Sixty-seven days later, its heroic progress followed daily by the press, the warship arrived to join the decisive Battle of Santiago Bay. The demonstration of the military significance of a shortcut through an isthmian canal could have been made to order.

“The construction of such a maritime highway,” proclaimed McKinley at the end of 1898, “is now more than ever indispensable.” The president also instructed his secretary of state, John Hay, to restart negotiations with Britain to rid the United States of the restrictions of the Clayton-Bulwer Treaty.

Already, there was legislation for an American canal progressing through Congress. In June 1898, when it became known that the Isthmian Canal Commission under Admiral Walker intended to recommend the construction of a waterway at Nicaragua, Alabama senator John Tyler Morgan introduced a bill allowing for the building of a fortified Nicaragua canal by the U.S. government. Morgan, who chaired the Senate Committee on Interoceanic Canals, had been a colonel in the Confederate Army during the Civil War, and believed that a canal through Nicaragua would return to the South the prominence it had lost since the war and make the ports of Mobile and Galveston thriving hubs of trade. By the late 1880s the construction of a Nicaragua canal had become an obsession, and he had many times argued unsuccessfully for congressional support for the private company that actually started work on a Nicaragua canal for a short time in late 1889 before going bust. Like de Lesseps, Selfridge, Menocal, and Ammen, Morgan was gripped not only by the Great Idea of an Isthmian canal, but by a clear view of a waterway of a particular type, in this case a lock canal at Nicaragua. His obduracy would have serious consequences. Morgan's bill came up for debate in January 1899, when the ink on the Treaty of Paris with Spain was barely dry. It passed through the Senate with ease, and was presented to the House of Representatives.

Although Walker's commission had visited the French works at Panama, such as they were in early 1898, at no point had the Panama route been considered a serious option. The scandals in Paris, the well-publicized attrition from disease, and the seemingly insuperable engineering and political problems had given Panama a distinct odor of failure. There were a scattering of voices raised for Panama, including that of John Bigelow Despite his largely pessimistic report in 1886, Bigelow had become infected by the project. But supporters were few and far between and had no representation in either house in Washington. Nicaragua, on the other hand, was seen as a clean slate—free of the taint of poisonous European influence. As the New York Herald wrote, “The Nicaragua canal is a purely national affair, conceived by Americans, sustained by Americans, and if later on constructed, operated by Americans according to American ideas, and for American needs. In one word, it is a national enterprise.” All seemed set fair for the Nicaragua route, which would make the New Company's property worthless. It appeared it would take a mighty battle and a miracle of persuasion to change the nation's preference.

William Nelson Cromwell and Philippe Bunau-Varilla were two of the most skillful lobbyists ever to work the corridors of power in Washington. It was largely as a result of their efforts that American engineers would, in 1904, arrive to restart work on a canal not, as everyone expected, in Nicaragua, but in a newly independent and U.S.-controlled Panama. Their contribution would also see the Panama Canal at its rebirth mired, as before, in controversy, scandal, and recriminations.

Cromwell was one of history's great fixers. From a modest Brooklyn family, he was, like Bunau-Varilla, short of stature and fatherless, and he shared the Frenchman's aggression and determination. By the age of thirty-three he had risen to become the guiding light of one of Wall Street's preeminent corporate law firms. Sullivan and Cromwell, as it became known, was a new type of company, born out of the railroad boom, offering all sorts of services from finance and accounting to press relations and political lobbying. Above all, the firm was ferociously well connected. Its clients included the huge railroad companies and the nation's most trusted banks, including JP Morgan; and, starting in 1896, to represent their interests in the United States, the Compagnie Nouvelle du Canal de Panama.

It was a good choice by the directors in Paris. Cromwell knew the Isthmus, having been general counsel, a director, and a shareholder in the Panama Railroad for three years. But, above all, he was a superb operator. Affable, with disarming manners, he was known as “The Fox” because of his extraordinary cunning. “He is one of the readiest talkers in town. No life insurance agent could beat him,” wrote the New York World, which would lead the investigations into the “Scandal of Panama.” “[He] has an intellect that works like a flash of lightning, and … swings about with the agility of an acrobat…He talks fast, and when he wishes to, never to the point.” As well as his contacts and his lawyer's talent for obfuscation, Cromwell had the crucial ability to master such a complicated brief as that presented by the French. He did not come cheap: he would bill the New Company some $800,000 for his services. But when the fee came up for arbitration in 1907, Cromwell was able to argue with justification that his services had “involved almost every branch of professional activity—engineering, law, legislation, finance, diplomacy, administration and direction.”

As a “penalty” shareholder in the New Company, Philippe Banau-Varilla was barred from direct involvement with the running of the venture, but he had far from given up on his canal dream and the final accomplishment of “the Great Idea of Panama.” Apart from anything else, he had over a million francs of his own money forcibly invested in the New Company. After the collapse of the de Lesseps setup, Bunau-Varilla had unsuccessfully stood for office in France, and then with his brother taken over a newspaper, Le Matin, as an alternative outlet for his campaigning for the completion of the French canal. In addition, on the prompting of his friend John Bigelow in New York, in 1892 Bunau-Varilla published a book outlining his plans for finishing the canal at Panama. Bigelow saw that it was distributed widely among opinion formers in Washington.

John Bigelow also provided introductions to influential Americans living in or passing through Paris. Even if Bigelow could not provide a link, Bunau-Varilla made himself the master of “chance encounters” and thereby managed to pitch for Panama to many U.S. citizens who, once converted, would be vital to his later efforts. Frank Pavey an influential New York lawyer who would soon be working for Bunau-Varilla, described (for the benefit of a later congressional investigation into the whole “Panama Scandal”) meeting the Frenchman in Paris. Pavey's attitude prior to the encounter was typical of his countrymen—that “There was a hole in Panama into which a lot of French money had been sunk, and that no canal would ever be possible there.” But Bunau-Varilla gave him the full evangelical treatment. “He never let go of an American victim when he got one in that library until he thought he had converted him,” said Pavey, “and the first time I dined in his house I stayed until 2 o'clock the next morning, listening to his picturesque and fascinating argument in favor of Panama and against Nicaragua …[he] made a special effort to convert me to the cause of Panama, which I am frank to confess he did.”

A desire to claim credit for the great achievement of the canal was a weakness that Cromwell and Bunau-Varilla cleverly exploited among their enemies. But it also dominates their own accounts of their involvement in the events that led to the start of the American Panama Canal. In the Frenchman's published writings there is one hero of the story, namely himself, a new, hyperpatriotic Grand Français who steps into the breach to steer events and protagonists toward the saving of “the noble conception of French Genius through its adoption by America.” Cromwell's version emerged when his 65,000-word justification for his enormous fees at the arbitration court in 1907 was handed to the press. The leak caused a sensation, for Cromwell, naturally putting the best shine on services rendered, claimed to have decisively influenced U.S. government decisions in favor of the Panama Canal to a breathtaking extent.

But Bunau-Varilla, like de Lesseps before him, was not one to share the limelight, calling the claims of the man he disparagingly called “the lawyer Cromwell” “a tissue of erroneous and misleading assertions.” Cromwell, in turn, would play down the contribution of Bunau-Varilla and sought to discredit his motives for campaigning for a Panama Canal. Both men talked down their mutual cooperation. Each wanted to be, and subsequently saw himself as, uniquely, the hero who made the waterway a reality. They also shared an obsession with the canal. Bunau-Varilla's was well established, but for Cromwell, too, the longer he was involved, the more it became greater than just another lucrative job. As an American journalist would later write: “Once you have touched Panama, you never lose the infection. Some call it canalitis.”

But to others, one or both of the men were the villains, rather than the heroes, of the piece. To his enemies, such as the Nicaragua lobby led by Senator Morgan, and those who objected to the United States’ shady involvement in the Panama Revolution, Cromwell's undoubted influence and interest, combined with the taint of a new, runaway Wall Street, made him a perfect scapegoat. He was portrayed as a corrupter of American public life. A congressional investigation was told that Cromwell was “the revolutionist who promoted and made possible the revolution on the Isthmus of Panama.” He was, the investigation's leader suggested, one of the most dangerous men the United States had spawned for a long time. Almost worst of all, he was “one of the most accomplished lobbyists this country had ever produced.” The New York World concurred, writing that Cromwell's “masterful mind, whetted on the grindstone of corporation cunning, conceived and carried out the rape of the Isthmus.”

However, to Panamanians the “rapist” was the “traitor” Bunau-Varilla, who, as shall be seen, blackmailed the infant Republic into acceding to a deal with the United States that was patently unfair. The Frenchman, the self-anointed heir of Ferdinand de Lesseps, would stop at nothing to see the Panama Canal built.

It is Cromwell, however, who takes center stage in the early parts of the story. When he was contracted by the New Company in 1896, he told his employers that “no one in the United States doubted that the Panama Canal in itself was an impossibility … Public opinion demanded the Nicaragua Canal.” In turn, the directors in Paris for the moment kept Cromwell on a tight leash, still hoping that the last resort of selling out to the Americans might be avoided. When, by 1898, this looked impossible, they acceded to Cromwell's pleas to allow him to press energetically the case for a sale to the United States government.

Cromwell straightaway set up a special press bureau for the production and dissemination of anti-Nicaragua and pro-Panama propaganda, at the same time lobbying engineering societies, shipping interests, and influential politicians. “We must make our plans with Napoleonic strategy,” he told his French clients. For Cromwell this meant being “ubiquitous and ever present” on Capitol Hill, as one of his enemies would later complain. It was Cromwell, naturally, who set up and presided over the meeting of the New Company directors with President McKinley in early December of that year.

But the president was not impressed, in part because of the clause in the Wyse concession that forbade the sale of the canal works to a foreign government. On December 5, 1898, he sent his message to Congress supporting Morgan's Nicaragua bill.

When this measure sailed through the Senate, Cromwell had to concentrate all his resources on the House of Representatives to prevent Morgan's legislation from becoming law. If the bill passed, then all his client's assets would be worthless. The job of getting the Nicaragua bill through the House of Representatives fell to Iowa's William P. Hepburn. Both the Republican Hepburn and the Democrat Morgan considered the Nicaragua option inevitable and were maneuvering to secure the honor of the legislation for their party and themselves. Someone—what a later investigator called “mysterious influences”—played upon Hepburn's vanity by getting him to introduce a bill of his own, rather than just sponsoring Senator Morgan's in the House of Representatives. This complicated the passage of the bill, and Hepburn was persuaded to accept an amendment that called for a new study to look at all the feasible routes for a canal. Effectively, the bill was killed, and a new commission was ordered, again under the direction of Admiral Walker, to look once more at the best route for a canal “under the control, management and ownership of the United States.” To the fury of Morgan, who saw the powerful transcontinental railroad interests behind the “delaying measure,” it was the first crack in the Nicaragua edifice, and a great victory for the Panama lobby.

Characteristically, Bunau-Varilla claimed the credit, saying that the field had been reopened through the efforts of his carefully cultivated American friends. But in this instance, the “mysterious influences” were almost certainly Cromwell, who somehow got himself invited before the committee studying the bill and argued “for hours on the most profound study of the technical sides of the question.”

Cromwell did not rest on his laurels, however, immediately doing his utmost to influence the selection of the new Walker Commission. In this he was only partly successful, failing to block the appointment of several experts who had already pronounced for Nicaragua on the previous commission. But he did manage to arrange that the commission's first port of call would be Paris, where all the talk would be of Panama, rather than Nicaragua. Cromwell left ahead of the Walker party, sailing for France on August 9, 1899, “to prepare and direct the presentation of the case.”

In Paris, the nine eminent engineers and military bigwigs of the Walker Commission were subjected to a barrage of plans, maps, and figures by the New Company, but also, because of Cromwell's efforts, elaborately wined and dined. One lunch included six courses and four different wines. Bunau-Varilla popped up, too (that Cromwell did not meet and consult with him at this time if not before is impossible to believe). Supposedly thanks to another introduction from John Bigelow, now eighty years old, Bunau-Varilla had dinner with three of the Commission engineers, including the eminent George S. Morison, whom he subjected to the full Panama treatment. All were converted, or, as Bunau-Varilla puts it, “the scales had fallen from their eyes.”

While Bunau-Varilla provided the high notes, Cromwell got down to business on his return to Washington. The key man to get on side, Cromwell decided, was Mark Alonzo Hanna, who had been the chairman of the Republican National Committe during the 1896 election. Hanna was very close to McKinley and was considered the most powerful man in Washington. He also had a long interest in canals, had recently been tasked by the president with getting on top of the Isthmian canal question, and had therefore joined Morgan's Senate Committee on Interoceanic Canals. Cromwell got an introduction from Hanna's banker, who was a client of Sullivan and Cromwell. The meeting opened with Cromwell slapping down on Hanna's desk a $60,000 donation to the party, compliments of the Compagnie Nouvelle. It was an outrageous move—not only was it a vast amount of money, but also no one in Paris had authorized such a payment on the New Company's behalf.

Cromwell's efforts seemed to be paying off when the Republican Party Convention in June 1900 changed its call for a “Nicaraguan” canal to an “Isthmian” one, but on other fronts Panama was stalling. In spite of the lavish hospitality, the Walker Commission had returned from their Paris trip disappointed by the New Company's inability to state either a firm price for their venture, or that they had the legal right to sell to the United States government. Maurice Hutin, who had briefly been Directeur Général of the de Lesseps Company back in 1885 before being invalided off the Isthmus with yellow fever, was now in charge of the New Company. In April, Walker had again asked him to name a price. Hutin did not reply for ten weeks, but on April 26 he took the precaution of buying for 5 million francs in gold an extension to the Colombian concession up to 1910. But he still stalled on Walker's demands. Hutin's long-standing and traumatic involvement with the French canal project led him to hope that the United States would somehow be taken on as a partner, rather than simply buying the French out. The result was that Walker, in a preliminary report issued in November 1900, indicated that because of “all the difficulties of obtaining the necessary rights … on the Panama route” Nicaragua presented “the most practicable and feasible route.” The Panama lobby was in crisis.

A few days later, according to his own account, Bunau-Varilla received an invitation to speak to the Cincinnati Chamber of Commerce, from a U.S. businessman he had met and converted to the Great Idea in Paris earlier in the year. “The bugle-note had been heard,” Bunau-Varilla wrote, and set sail straightaway for the United States, arriving at the beginning of January 1901. By a coincidence or not, it was exactly the time it would have taken for Cromwell to summon him after the preliminary report by the Walker Commission.

Bunau-Varilla's whirlwind three-month tour of the United States, reminiscent of those undertaken by Ferdinand de Lesseps in the 1880s, began in Cincinnati on the evening of January 16, 1901, in a large hall decked with the flags of France and the United States. It was an unqualified success. The Frenchman seemed a strange, exotic creature, with his theatrically impeccable manners, grandiloquent gestures, large head, and moustache waxed to two fine points, but his passion for Panama was plain. It was the “intensity of conviction which inspired all your utterances,” one of the guests wrote to him, that gave what he said so much impact. “I love a man,” the American went on, “who loves a great cause.”

In his own account of the tour, Bunau-Varilla maintains that it was “Fate” that ensured he met the key U.S. decision makers. “Every time I was in need of a man he appeared,” he writes. In truth, Bunau-Varilla left little to chance. Several of his converted American friends were working for him at his expense, setting up meetings and opening doors. After Cincinnati, he headed to a business club in Cleveland, supposedly thanks to a “chance encounter” with a friend of a businessman there he had met on the boat over. Again he spoke about the advantages of the Panama over the Nicaragua route—the railroad, the superior harbors, the shorter length and lower cost. He also warmed to a new theme that had made a considerable impact during his first speech, the suggestion that, unlike Panama, the Nicaragua route was bestridden by volcanoes. The Cleveland audience was particularly important as it included key friends of McKinley and Hanna.

At every meeting, Bunau-Varilla, or his friends working behind the scenes, came away with a new invitation. After Cleveland, he headed for Boston, then Chicago. In New York, he dined again with the Walker Commission's George Morison, and then addressed the city's chamber of commerce, thanks to the influence of his old friend John Bigelow Those present included J. P. Morgan, John D. Rockefeller, and Andrew Carnegie. All the time, Bunau-Varilla was liberally spraying around gifts of cigars, flowers, and theater tickets, giving dinners and writing countless letters seeking introductions or just pushing the case for Panama.

Now Bunau-Varilla considered heading for home, but there then occurred another of the “chance encounters” that he had made his specialty. Reading between the lines of his own account, it was a setup. Bunau-Varilla was staying in the Waldorf-Astoria, as were several key Washington politicians. “Towards midnight,” Bunau-Varilla wrote, “as I was about to go out for a breath of fresh air before retiring, I met a party of people in evening dress entering the Waldorf-Astoria. My surprise was great when I saw at the head of them Colonel Herrick [a contact from Cleveland] with a lady on his arm, and behind them a short, stout gentleman who limped slightly. His characteristic face, so frequently reproduced in the newspapers, was familiar to me.”

It was Mark Hanna, identified by Cromwell as the key man to get on side. Herrick feigned surprise as he made the introductions, and Bunau-Varilla came away with a pressing invitation to call on the senator in Washington. Not content with this priceless coup, Bunau-Varilla continued to loiter in the lobby of the hotel until another friend, this time one of the “converted” Cincinnati businessmen, happened to come past in the company of the U.S. comptroller of currency. Through him, the Frenchman secured an interview with McKinley himself.

In no time, Bunau-Varilla was in Washington, to “attack the political fortress.” He had a number of meetings with Hanna, which, apparently, culminated in the senator from Ohio pronouncing, “Mr. Bunau-Varilla, you have convinced me.” The interview with the president was briefer. Bunau-Varilla did not wish to “inflict” a lecture on him. Besides, he knew “that the opinion of Senator Hanna would be his [McKinley's] own.” On April n, Bunau-Varilla sailed for Paris, confident that he had made a significant dent in U.S. public and official opinion in favor of Panama.

How Bunau-Varilla came to be summoned to the United States, and who paid for the lavish trip, remains a mystery. But certainly Cromwell had not been idle in the meantime. On the news that the provisional Walker report would favor Nicaragua, he was on to the Colombians, warning them that the future of their canal was in jeopardy Bogotá responded by sending a senior politician and close friend of the Colombian president to Washington to press the case for Panama. The envoy met U.S. secretary of state John Hay on March 13, 1901, and early exploratory negotiations between the Colombian envoy, Walker, and Cromwell representing the New Company, went well. Apart from anything else, the Colombian's presence in Washington indicated to Cromwell and his clients that Bogotá was happy for the New Company to sell out to the United States, despite the terms of the Wyse concession forbidding its handing over to a foreign government.

But there were potentially fatal problems and distractions. The Colombians were convinced that the Nicaragua option was a red herring designed to get better terms for the United States, and that Panama was the only serious option from a technical point of view. The United States, for its part, was still involved with the complicated negotiations, initiated in 1898, to change or abrogate the Clayton-Bulwer Treaty with Great Britain, which continued to stand in the way of any unilateral action by the United States on the canal issue. Worst of all was that the New Company still refused to set a price for its assets—demanding instead independent arbitration to settle the issue—or to confirm that it had the right to sell. Utterly frustrated, Walker went to Cromwell in July 1901 to demand that the directors in Paris name a price. Cromwell, equally annoyed, pressed Hutin for an answer in the most direct terms.

For the New Company directors, enough was enough. Not only had Cromwell made free and easy with their money, often in questionable ways, but now he was adopting an unacceptably aggressive tone. In July 1901, he was sacked.

So while the other distractions continued through the summer, the New Company now had no representation in the United States. Naturally, Walker's Commission had to consider the political aspects of the choice of canal location as well as the purely engineering issues, and it did not look good for Panama. On the Isthmus itself, hopeful rumors swirled about, but to those in the know it was clear that the preliminary verdict in favor of Nicaragua was not about to be reversed when the Commission submitted its final report in November 1901.

Then, on September 6, there happened a combination of two of the recurring events of the end of the nineteenth century—expositions and anarchist violence. President McKinley was attending the Pan-American Exposition in Buffalo, New York, when a lone anarchist called Leon Czolgosz fired two shots from a .32-caliber revolver into the president's upper body. McKinley died eight nights later.

On the same day, September 14, 1901, a new chief executive was inaugurated, the former vice president, Theodore Roosevelt. And with his arrival, everything would change for the canal.

n his first address to Congress, the new president promised an American-built and controlled trans-Isthmian canal. “No single great material work which remains to be undertaken on this continent,” he declared, “is of such consequence to the American people.”

Roosevelt, who was actually descended on his mother's side from one of the survivors of the Scottish “Darién Disaster,” had already, while New York State governor, intervened in the canal debate, or, more specifically, the negotiations with Britain for the abrogation or alteration of the Clayton-Bulwer Treaty. Hay's discussions with the British had been slow and laborious, but in February 1900 he had at last signed an agreement with British ambassador Sir Julian Pauncefote that abrogated the restraining treaty that had prevented the United States from building a canal on its own. But its replacement, which forbade fortification, stipulated that the waterway should be “free and open in time of war as in time of peace, to vessels of commerce and of war of all nations,” and looked to an international guarantee, found no favor among the Roosevelt circle. While some press commentators applauded the lack of aggression inherent in the neutrality clause, which gave the United States’ neighbors less “cause for suspicion,” Roosevelt, a great admirer of Mahan's theory of the importance of naval power, wrote directly to Hay complaining that the “international guarantee” would flout the Monroe Doctrine and took direct issue with the ban on fortification. “If that canal is open to the warships of an enemy,” he wrote, “it is a menace to us in time of war; it is an added burden, an additional strategic point to be guarded by our fleet. If fortified by us, it becomes one of the most potent sources of our possible sea strength.”

Hay was shocked by these criticisms and sniffily told Roosevelt that such matters of Great Power diplomacy were outside the remit of a mere state governor. But opposition in the Senate, led by Morgan and Roosevelt's friend Henry Cabot Lodge, forced Hay back to the negotiating table. Happily, he found Great Britain in an obliging mood. Embroiled in a costly and internationally unpopular struggle with the South African Boers, and worried about Russian expansionism toward India and the German naval program, the British were keen to nurture an informal détente with the United States. Senior British politicians believed, like Arthur Balfour, that a U.S.-controlled canal would “strengthen our position enormously and… with England at Suez and the U.S. at Panama we should hold the world in a pretty strong grip.” Soon after the revised treaty was signed, Britain started reducing her costly garrisons and naval squadrons in the Caribbean. The British were beginning to learn how to use American power to their advantage.

With the signing of the second Hay-Pauncefote Treaty on November 18, 1901, which implicitly allowed the fortification of an American canal, the long rise of the United States to local preeminence was complete. As the president of Colombia noted, the treaty “ruptured the dikes placed against so-called American imperialism … It changed the face of the question and made the situation for the [Colombian] Government obscure, delicate and complex: action and inaction equally presented great problems and reason for anxiety.” Just how “delicate and complex” would soon be illustrated.

The signing of the treaty cleared a significant obstacle from the path toward an American canal. Its location, however, still looked like Nicaragua. The Panama lobby was heading in the wrong direction after the death of McKinley—Roosevelt had not even been considered as a target for their propaganda—and it was believed that the new president would be far less influenced by the carefully “converted” Mark Hanna. In October, Hutin in Paris at last gave Walker an estimate of the value of the New Company's property, set at just over $109 million, albeit open to arbitration. The next month Walker's Commission reported.

Bunau-Varilla and Cromwell had done their work well—the engineers clearly preferred Panama from a technical point of view: the route was much shorter, would need fewer locks, and was hindered by less curvature; a ship could pass through in twelve hours rather than thirty-three; it would also be cheaper to build and maintain. Walker estimated a Panama canal would cost just over $144 million, compared to $190 million for Nicaragua. But when the price of the New Company was factored in, Panama became much more expensive. Therefore the Commission, to the particular dismay of engineer George Morison, plumped for Nicaragua.

The following month the United States signed a canal convention with the Nicaraguan government, and on January 9, 1902, the House of Representatives overwhelmingly backed a new bill from Congressman Hepburn appropriating $180 million for the construction of a Nicaraguan canal and sent it on to the Senate. In Washington the Panama venture was now being described as “a worthless ditch.”

In Paris, these developments caused a panic. In December there had been angry scenes at a shareholders’ meeting, leading to the police being summoned. Attacks on the board of directors were led by Philippe Bunau-Varilla, who urged the shareholders to sell to the United States at whatever price they could get or see their investment become entirely lost. Hutin was forced to resign and was replaced by Maurice Bô, president of the Crédit Lyonnais bank, who, as a penalized shareholder was not strictly allowed direct involvement with the Company. But he was a friend of Bunau-Varilla and Cromwell, and was happy to take the drastic step now required. On January 4, Bô wired Walker a revised price of $40 million, the Commission's own valuation of the New Company's property.

This news changed everything and set the scene for a decisive intervention by the new president. On December 10, Roosevelt had received a letter from his fellow Harvard graduate George Morison, outlining the engineer's reasons for disagreeing with the majority of the Walker Commission's preference for Nicaragua. Roosevelt may have also been influenced by Mark Hanna, who remained a senior figure in the Republican Party, or by the fear that the unfinished Panama Canal would be completed by a European power if the United States pressed on in Nicaragua. Whatever the reason, Roosevelt now had a fixed idea: he wanted the Panama route. As soon as the news of the revised price came in from Paris, the president summoned the Walker Commission and interviewed them one by one to persuade them to change their verdict. Several protested, but as the price had been the sticking point for Panama, on January 18 they complied with Roosevelt and Morison's wishes and published a revised report recommending Panama. An amendment was drafted that authorized the president to purchase the French Company's Panama property and concessions for $40 million; to acquire from Colombia perpetual control of a Canal Zone at least six miles wide; and to build a Panama canal. If a clear title or a satisfactory agreement with Colombia could not be reached “within a reasonable time,” then the president was authorized to proceed with the Nicaragua route. John Coit Spooner, a past master at steering difficult legislation through the Senate, was chosen to introduce the amendment, and thus to face the full fury of Morgan and the Nicaragua party.

But the Panama lobby would be on hand to help. On January 27, Maurice Bô reinstated Cromwell as the New Company's U.S. representative, albeit with an order to stick to “legitimate means.” The same day Cromwell met with Bunau-Varilla (they both claim this is the first time they worked together), who had rushed to Washington to prepare for what would be the climax in the Senate of the long “Battle of the Routes.”

The astonishing, Roosevelt-led turnaround caused great confusion in the United States press, long accustomed to the American preference for a Nicaragua canal. Much of the concern about Panama was the prospect of dealing with Bogotá. “The Colombians … have negro blood enough to make them lazy, and Spanish blood sufficient to make them mean,” declared Harpers Weekly. Somewhat prophetically, the New York World commented, “Talk about buying a lawsuit—the purchase of the Panama Canal would be buying a revolution.”

ince the beginning of the year, the Hepburn Bill had been in the hands of Morgan's Senate Committee on Interoceanic Canals. After extensive cross-examining of all available experts, the Committee, in spite of the Walker Commission's decision, voted seven to four in favor of Nicaragua. But Hanna, with Cromwell's help, produced a minority report in favor of Panama. The date of June 4 was set for the start of the debate in the Senate over which of these would be adopted.

In the meantime, Bunau-Varilla was as busy as ever, writing to newspapers and politicians, producing pamphlets, and pouring pro-Panama rhetoric into the ears of anyone who would listen. Then the Panama lobby had a stroke of luck. On May 8, the volcano Mount Pelée on the Caribbean island of Martinique exploded with devastating effect. The town of Saint-Pierre in its shadow was utterly destroyed, and more than thirty thousand people were killed. Although Martinique was nowhere near either route, volcanoes were suddenly on everyone's mind. Then, just a week later, the news came in that a volcano in Nicaragua itself had erupted. Friends of Panama in the press had a field day.

Senator Morgan opened the debate in the Senate with a spirited counterattack on the “volcano scare,” brandishing a letter from the foreign minister of Nicaragua (who had somehow been persuaded to deny the eruption had taken place), and pointing out that Panama had itself recently experienced an earthquake. But the main thrust of his argument against Panama was political. Its people were “mixed and turbulent;” it was chronically unstable; to build a canal there, the United States would have to take the country by force, an action, predicted the Alabama senator, that would “poison the minds of people against us in every Spanish-American republic in the Western Hemisphere, and set their teeth on edge against us.”

The next day, Senator Mark Hanna replied in favor of his minority report. It was to be the greatest speech of his career. Shunning rhetorical flourishes, he spoke in a slow, businesslike way, illustrating his points with an impressive array of visual tools, including a huge map showing active volcanoes in Nicaragua. All this had been prepared for him by Cromwell and Bunau-Varilla. The Panama route was shorter, he pointed out, had less curvature, better ports, a railway, fewer locks, and “was a beaten track in civilization.” Furthermore, the engineers wanted Panama, and “there are now done a great many things which fifty years ago were unheard of, never dreamed of, never thought possible, as a product of human intelligence and ingenuity in engineering. It has become a byword today that in the hands of a skillful engineer nothing is impossible.”

The speech, over two days, certainly changed votes, although the Panama lobby was not home yet. Pro-Nicaragua senators suggested that the whole effort of the Hanna party was to delay any canal in order to serve the interests of the transcontinental railroads. There still persisted, too, a feeling that Panama was irrevocably stained by corruption and what was seen as the vice of the French years. “It is the certainty of moral defilement,” declared Senator John H. Mitchell of Oregon. “Panama cannot be touched with safety by American people.”

The volcano argument was also foundering. The Nicaraguans were sticking by their story that there had been no recent eruption in their country, and the whole scare was starting to be seen as an invention of the Panama lobby. On June 6, a cartoon appeared in the influential Washington Star, showing Hanna slapping imaginary volcanoes on to a map of Nicaragua aided by a comical Frenchman, Bunau-Varilla, and James J. Hill, head of the Great Northern Railroad. As Bunau-Varilla wrote, “If the vote were to be taken under this impression Panama was done for ever…Fortunately I had a sudden inspiration.”

Over the next few days Bunau-Varilla scoured the philatelists of the capital looking for a certain 1900 one-centavo Nicaraguan stamp, which he had come across the year before. In the foreground of the stamp is pictured a busy wharf while in the background rises the magnificent bulk of Mount Momotombo. In an artistic flourish the illustrator had added smoke to the top of the volcano, which was actually more than a hundred miles from the proposed Nicaragua canal. Just before the vote, every senator was sent this “evidence” of the dangers of the Nicaragua route.

It was almost the last shot, but this went to Senator Morgan, who used his final speech before the vote on the minority report to launch a bitter attack against his enemy Cromwell. The “direct, constant, and offensive intrusion of the Panama Canal Company” into the workings of the U.S. government was, he said, “humiliating” and “repulsive.” “I can not neglect Mr. Cromwell,” he said. “I trace this man back … to the beginning of this whole business. He has not failed to appear anywhere in this whole affair.” The contagion of Panama, “death's nursery,” had through its agent Cromwell poisoned everything it touched.

Everyone knew that the vote on June 19 would be close, and the press and the country, which had followed the fourteen-day debate closely, waited with bated breath. When the result came, it could hardly have been narrower, with Hanna's minority report in favor of Panama winning by just eight votes. “The battle was won,” wrote Bunau-Varilla. “Truth at last triumphed.”

After this, the passage of the Spooner amendment was a formality, and the House of Representatives was persuaded to back the act as well. In part, the pro-Nicaragua faction assumed that either the French title would prove defective or an agreement with Colombia would not be forthcoming and they would get their preferred option after all. If they had lost a battle, they had not yet lost the war.

panish conquistador Vasco Núñez de Balboa discovers the South Sea and that Panama is a tantalizingly narrow isthmus.

illiam Paterson, the Scottish promoter who declared that with possession of the Isthmus “trade will increase trade and money will beget money.”

pping the route for the Panama railroad through thick jungle and swamp.

embers of the American Selfridge expedition in the Darién jungle, 1870.

rmand Reclus, the young French naval lieutenant who mapped the route of the French canal and led the de Lesseps effort in its early years.

he hero of the Suez Canal, Ferdinand de Lesseps, depicted as Hercules pushing apart the continents of Africa and Asia.

erdinand de Lesseps with his second wife and some of his many offspring.

 triumphal arch, part of the lavish welcome given to de Lesseps when he descended on Panama at the beginning of 1880, fêted as the “Presiding Genius of the Nineteenth Century.”

harles de Lesseps, who urged his father not to take on the challenge of Panama but, seeing that the old man had made up his mind, gave him his unconditional backing.

olón Harbor in 1884. The steamer was king, but much nonperishable freight was still carried by sailing vessel. The following year the town was destroyed by fire after a revolution on the Isthmus.

he beginning of the “big ditch.” In spite of the hopes of the leadership, much of the French canal was dug by men rather than machines.

ules Dingler, Directeur Général of the canal, 1883–85, who would pay a terrible price for his devotion to the endeavor in Panama.

he execution of Pedro Prestan in Colón on August 18, 1885.

 French ladder excavator. The machines that had triumphed at Suez proved unable to cope with the heavy clays of the Chagres valley. Philippe Bunau-Varilla, French engineer, lobbyist, and plotter extraordinaire.

ottle Alley in Colón. The small town had nearly 150 bars, with 40 in this one street alone.

uerne, Slaven & Co. dredges at work. Visitors were hugely impressed by these monster machines, but the American contractors were among the most corrupt of all those working for the French Company.

he works in the Culebra Cut in 1888, with Gold Hill on the left.

ith the press running for cover, the directors of the Canal Company, led by Ferdinand de Lesseps, are brought to trial. Eiffel brings up the rear.

N the Isthmus, wreckage from the French effort was everywhere, with the jungle quickly returning.

a cartoon published six days afterward, the New York World gives its impression of the “Panama Revolution.”

illiam Nelson Cromwell on one of his frequent journeys between Panama, New York, and Paris.

eneral Esteban Huertas in the regalia of the Commander-in-Chief of the Panama Army. Declared a “Hero of the Republic” for his part in the “revolution,” he was quickly seen as a threat by the Conservative junta.

 steamer carrying laborers from Barbados arrives at Colón. The tiny island provided the bulk of the thousands of workers for the American Panama Canal effort.

N ICC-run mess kitchen for the West Indian workers. No chairs or tables were provided, and the food was often inedible. After a short time, most workers made their own arrangements.

A fumigation squad, carrying ladders, paper, and paste, assembles in Panama City, 1905.

Doctor William Gorgas near Miraflores.

 cemetery on the western slope of Ancón Hill photographed shortly after the completion of the canal.

he energetic and resourceful chief engineer John Stevens, in boater, surveying work along the line.

Emptying spoil cars by means of dragging a metal plow along its surface. Such ingenious devices saved countless man-hours for the American canal effort.

heodore Roosevelt, in white suit, making “a Strenuous Exhibition” on the Isthmus.

A West Indian wedding party at Culebra in 1913.

 commissary store in Balboa, with its separate sections for “Silver” and “Gold.”

laude Mallet, with his Panamanian wife, Matilde de Obarrio. Mallet's official reports and private letters give an illuminating view of Panama during the construction period.

panish track workers taking a break in the Culebra Cut. Antonio Sanchez is second from right.

Steam shovels at work on the bottom of the canal.

Blasting rock on Contractors’ Hill, January 1912.

Loading holes with dynamite to blast the west bank of the Culebra Cut, February 1912.

t 4:30 p.m. on May 20, 1913, working at the final depth of the canal, shovels No. 222 and No. 230 meet “nose to nose” at the center of the Cut.

 slide of 300,000 cubic yards in the Culebra Cut near Empire, August 21, 1912.

atún Locks under construction, showing the overhead cableway and the huge, rail-mounted structures holding the steel shutters.

Workers at the base of the lower Gate of Gatún Locks.

he final joining of the oceans being accomplished by pick-and-shovel men digging a channel through the Cucaracha slide.

he opening of the canal: S.S. Ancon passes the remnants of the Cucaracha slide on August 15, 1914.

he U.S.S. Texas in Gatún Locks in July 1919, a sight that would have pleased Roosevelt enormously. The military requirements of the United States were instrumental in getting the canal built.

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