Even in the midst of the American Revolution, Benjamin Franklin, then the United Colonies’ representative in Paris, became gripped by the idea of a trans-Isthmian canal. In 1781 he printed on his own press a pamphlet written by a French peasant called Pierre-André Gargaz, which advocated the cutting of canals at Panama and Suez. This, Gargaz proposed, would bring about world peace through enhanced commerce and communication. When Thomas Jefferson became the U.S. ambassador to France, he, too, became interested in a canal at Panama. Jefferson saw expansion southward as the natural destiny of the United States and was intrigued by rumors, in fact untrue, that there had been recent Spanish surveys of a canal route at Panama. “I am assured… a canal appeared very practicable,” he wrote in 1788 to a fellow U.S. diplomat in Madrid, “and that the idea was suppressed for political reasons.”
Before independence from Spain, revolutionaries in Latin America had looked to the United States and Britain as their natural allies. When freedom from Spanish rule, having been achieved, was subse-quently threatened by the French-led Holy Alliance, British foreign secretary George Canning contacted the leadership of the United States to ask them to make a joint declaration warning of their shared opposition to the reconquest plans. But President Monroe was persuaded to make a statement purely on behalf of the United States. His famous doctrine, delivered in a message to Congress on December 2, 1823, is of huge importance to the Panama Canal story: “The American continents,” he announced, “are henceforth not to be considered as subjects for future colonization by any European Powers.”
In the meantime, impetus for a trans-Isthmian canal had received a major boost with the publication of “A Political Essay on the Kingdom of New Spain” in 1811. Its author, the German Alexander von Humboldt, had recently explored the regions of South and Central America on an epic journey that thrilled readers all over the world. Although he never actually visited any of the sites, he identified five possible Central American routes for a trans-Isthmian canal. Going from north to south, they were the narrowing of Mexico at Tehuan-tepec; in Nicaragua, using the giant inland lake; at Panama; and two using the Atrato River in modern-day northern Colombia. Hum-boldt's book was widely read and admired, and can be seen as the inspiration for all the many subsequent surveys of the Isthmus looking for the best route for a canal. The account was full of errors—he calculated the height of the Continental Divide in Panama at three times its correct elevation—but it was a hugely exciting work nonetheless. Humboldt reckoned a canal was possible and, furthermore, “would immortalise a government occupied with the interests of humanity.”
One of those inspired by the book was the poet Goethe, who in 1827 predicted the “incalculable results” of a “crosscut” through the South American Isthmus. With remarkable prescience he also foretold how intimately interwoven would be the destinies of Panama, the United States, and the canal. “I, however, would be surprised if the United States would miss the chance to get such a work into her hands,” he wrote. “It is entirely indispensable for the United States to make a passage from the Gulf of Mexico to the Pacific Ocean, and I am certain that she will accomplish it.”
It was also the climax of the “canal age” in Europe and the United States. The 1820s saw the opening of the Erie Canal, joining the Hudson River and the Great Lakes, as well as Telford's monumental achievement in linking the Atlantic and the North Sea across Scotland, which included twenty-eight locks of a size big enough for most of the oceangoing vessels of the time. All across Europe and North America, canals transformed communication, slashing journey times and transport costs for raw materials and finished goods. Crucially, steam power had arrived, and with it the possibility of vessels transiting canals without the need for towpaths. A steam tug was first used on the Forth and Clyde Canal in Scotland as early as 1802, and by the time of the independence of Gran Colombia in 1821, the prospect of a trans-Isthmian canal seemed much closer.
Simón Bolívar chose Panama City as the site for his Latin American Congress, which finally met on June 22, 1826. For Bolívar, Panama was the “veritable capital of the world, the centre of the globe, with one face turned toward Asia and the other toward Africa and Europe.” Britain and the United States were both invited to send delegates. Bolívar was passionately in favor of a canal, and soon after independence a stream of proposals were put to him, first by an American army officer (a relative of Benjamin Franklin), then by a British naval captain, then by a Jamaican merchant. All were focused on the narrow Isthmus at Panama. Each was rejected by his Congress, quite rightly, as unrealistic, and the Bogotá government tried unsuccessfully to get funding from London to build the canal itself. Then, in 1827, Bolívar granted permission for a survey to be carried out by a British army captain, John Augustus Lloyd, and Captain Maurice Falmarc, a Swedish officer in the Colombian military. Hampered by bad weather, they nonetheless produced the most reliable survey yet of the Isthmus, even though construction never started. Their plan was to use the Chagres River up to its junction with the Trinidad, then build a railway to the coast. In due course, this would be replaced by a ship canal. Labor would be supplied by British convicts, who would be accompanied by colonizing settlers. This body combined would, Lloyd suggested, “present a human barrier of such formidable power, as to limit…any attempts of the United States towards aggrandizement and increase of territory…” Lloyd had little time for the Panamanians, whom he described as “superstitious … Billiards, cockpits, gambling and smoking in low company, are their exclusive amusements… Their best quality is great liberality to the poor, and especially to the aged and infirm.”
In fact the Panamanians were almost all desperately poor. The long economic decline that started in the mid-eighteenth century had continued unabated since independence. A visitor from Bogotá in the 1830s was shocked by what he found at Panama City: buildings in ruins, vagrants everywhere, and prices fallen to unbelievable levels. The population of the Isthmus had shrunk, with many who had the will or the means leaving to find prosperity elsewhere. Those remaining knew they had to reestablish the transit route that had always been the reason for Panama's existence. In 1829 Bolívar was petitioned by the Panamanians to do what he could to facilitate the construction of a “clear route or canal.”
There was also a real fear that Panama would lose out to Nicaragua or some other site on the Isthmus as the beneficiary of a future canal. Like Panama, Nicaragua played host to a multitude of optimistic surveyors and explorers from the United States, Britain, France, Italy, Denmark, and Holland. Their backers were sometimes private companies, sometimes kings or emperors. The king of the Netherlands and Louis-Philippe of France were at various times interested in trans-Isthmian canals. Telford himself proposed a “grand scheme” for a canal at Darién, starting at the ill-fated Caledonia Bay. The Great Idea of the canal now attracted not only proven engineers such as Telford, but almost all the millionaires, dreamers, amateur engineers, and crackpots of the nineteenth century.
In Panama itself, concessions to build a canal or railroad were handed out freely after 1834. An eccentric, and probably insane Frenchman was the first concession holder, but his scheme came to nothing. In 1835, U.S. president Andrew Jackson, alarmed by Dutch efforts to secure a monopoly in Nicaragua, ordered Charles Biddle to visit Nicaragua and Panama and to document the possibilities of building a canal or railroad. Biddle's effort, too, ended in failure when he ignored Nicaragua and negotiated a concession for Panama on his own behalf, but from then on American policy toward an interoceanic canal was established: if such a waterway could be built, it would not be allowed to be under the sole control of any foreign power.
At the same time, New Granada still hoped to have any future canal under its sway, and petitioned the governments of the United States, France, and Britain to act as funders and international guarantors of its sovereignty over the Isthmus. In response to this, in 1843 the French government sent a senior civil engineer, Napoléon Garella, to map the Panama route. His survey was the most complete yet, although he failed to find the lowest pass over the Continental Divide, and his plan for a canal included nearly forty locks as well as a huge tunnel over three miles long. Humboldt himself was among those denouncing the scheme as “an absurdity.” The next concession was more modest—for a French syndicate to build a railroad over the Isthmus.
All this activity by the French had not gone unnoticed in London. In fact, British steamers had started operating out of Panama in the 1830s, and several reports were sent back to London detailing the possibilities of a canal or railway there. In 1836, however, an incident occurred that was to sour relations between New Granada and Great Britain. After getting involved in a fight with a local resident, Joseph Russell, Her Majesty's vice-consul in Panama City, was given a stiff prison sentence. This led, in true gunboat diplomacy style, to British warships blockading the mouth of the Chagres River and the harbor of Cartagena. War was averted only when the local authorities agreed to release Russell and pay an indemnity. It was all part and parcel, however, of an increasingly high-handed and interventionist approach on behalf of the British. Everyone in Panama and Washington feared that the British, using another excuse, might one day seize the Isthmus. There was also American concern about the railway concession given to the French syndicate, which might be operated as a monopoly. Thus, at the end of 1845, the United States sent a new chargé, Benjamin A. Bidlack, to Bogotá to ensure that “no other nation should obtain either an exclusive privilege or an advantage.” He did not have high hopes, such was Britain's regional dominance, but found that the new president, Tomás Cipriano de Mosquera, who had been minister to London, had also come to fear British aggression and presented a sympathetic ear.
Much of the subsequent treaty negotiated by Bidlack with the New Grenadan foreign minister, Manuel María Mallarino, was humdrum, concerning the removal of discriminatory tariffs on American products. The key article, which would shape relations between the two countries and decisively affect the story of the Panama Canal, was number thirty-five: this guaranteed “that the right of way or transit across the isthmus of Panama upon any modes of communication that now exist, or that may be hereafter constructed, shall be open and free to the Government and citizens of the United States …” In return, the United States guaranteed “the perfect neutrality of the before-mentioned Isthmus, with the view that the free transit from the one to the other sea may not be interrupted.” Mallarino declared that “to surround the isthmus with the vigorous will of a powerful and benign democracy … was to save the isthmus.”
It was clear that the treaty, by which the United States would protect the Isthmus from British seizure in return for transit rights and favorable customs rates, would come perilously close to an “entangling alliance,” something the United States Senate had set its face against. So the New Grenadans emphasized British aggression, warning that British ambitions would soon stretch from the Cape to California. The treaty was ratified by the U.S. Senate in 1848, and, at a stroke, Mosquera had reversed Bolívar's traditional policy of using Britain as a balance against the potentially more powerful United States. More than that, he had, in fact, effectively handed control of the Isthmus to a foreign power, as French diplomats and others in Bogotá warned at the time. From now on, the United States had the right to land troops on the Isthmus if “free transit” was threatened. For the United States it was a unique treaty, the only foreign alliance ratified throughout the nineteenth century, and for almost the first time, the country had a strategic interest outside its continental borders.
The treaty also further escalated tensions in the region between Britain and the United States. Seeing the Panama route now under U.S. control, the British moved to strengthen their hold over the Caribbean terminus of any potential Nicaraguan canal. They were also alarmed (as was the whole of South America) by the acquisition by the United States at the end of the war with Mexico of vast territories including California. The southward march of American power seemed unstoppable, even to the extent of taking over all of Central America and threatening British colonies and investments in the entire hemisphere. Nicaragua protested British incursions on their territory and asked for—and received—the backing of the United States, which then negotiated a treaty with Nicaragua that gave it exclusive control over a canal there.
On both sides the saber rattling increased ominously, and there was talk of war. In December 1849 British foreign secretary Lord Palmerston sent Sir Henry Lytton Bulwer to Washington to try to find a solution to the standoff. The result was the Clayton-Bulwer Treaty, at the heart of which lay the desire by both sides to avoid having a canal exclusively controlled by the other. In effect, the fear of a foreign-controlled canal—which would hand to its owner total dominance of the region—was greater than the benefits that such a waterway might provide. The treaty stipulated that neither the United States nor Great Britain would take exclusive control over any waterway in Central America or try to fortify any that might be built. The canal was now on hold, with the hands of the United States firmly tied.
But there were still other ways of improving the Isthmus transit route. Because of the upheavals in Europe in 1848, the French syndicate that had been granted a railway concession failed to raise the initial surety, and the contract was taken over by a syndicate headed by William Aspinwall, a New York businessman, who had been lobbying for permission to build a railway for some years, and who was running a new steamship service between Panama and San Francisco. His concession gave him exclusive transit rights across the Isthmus at Panama to a point ten miles south of Caledonia Bay, including the first option to build a canal within this zone.
The timing was, to put it mildly, fortunate. On January 24, gold was discovered near Colonel Sutter's sawmill in the vicinity of Sacramento, California. “The Eldorado of the Spaniards is discovered at last,” announced the New York Herald after President Polk himself confirmed that the rumors of huge deposits were true. With the transcontinental railroad still twenty years away, the quickest and safest way to get from the East Coast to California was by traveling to the Chagres River, taking a boat upriver to Gorgona, crossing overland to Panama City, then sailing up to San Francisco. Once more, in a different way, Panama was to become “the Golden Isthmus.”