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CHAPTER EIGHT

THE RICHES OF FRANCE

Public subscriptions live or die on confidence. It did not take a promoter of the experience and skill of de Lesseps to realize that some urgent public relations were now needed to allay fears about the Panama project. To calm concerns about the technical and practical issues of the canal, de Lesseps announced that he would himself go to Panama together with a Technical Commission of international experts. He would even take his young wife and three of his children with him, showing that fears about disease were unfounded. To counter claims that the United States opposed the project, de Lesseps would tour that country reassuring officials and drumming up support.

The first move, however, was to set up a bimonthly journal, the Bulletin du Canal Interocéanique, which aimed to counter the “lies” of the press with stories alleging, among other things, that Panama was “an exceedingly healthy country.” The magazine, which included extracts from favorable press coverage in France and abroad, was first published on September 1, 1879.

The following month a young engineer, Gaston Blanchet, from Couvreux, Hersent, went to Panama to investigate the route for his bosses. Already the Franco-Belgian company was being lined up to be the contractor for Panama. Blanchet himself had made his name building for the firm a metal bridge over the Danube near Vienna. When he returned from Panama with a favorable report, additional engineers were sent out in November to take test borings. In December, de Lesseps himself boarded the Lafayette at Saint-Nazaire bound for the Isthmus. The expedition was funded by Couvreux, Hersent, and on board was Abel Couvreux's son as well as Blanchet, who was particularly keen to return to Panama as he had met and fallen in love with a local girl, Maria Georgette Loew, the daughter of the proprietor of the Grand Hotel. Also on the trip was Jacob Dirks, a Dutch engineer who had built the Amsterdam Canal; Henri Bionne, who had been secretary of the Paris Congress; and a number of other technicians.

Lieutenant Wyse had been promised by de Lesseps that he would head up the operation in Panama. But no such appointment had actually materialized, and he had not been invited along. In the end he paid for his own passage, and engaged during the voyage in several heated rows with de Lesseps. The latter was not one to share leadership responsibilities or glory; Wyse was effectively dropped.

The arrival of de Lesseps in Panama was one of the biggest news stories the local press had ever covered. “Mr. Lesseps’ enterprise,” the Star and Herald proclaimed, “will… take rank with Columbus’ discovery of America.”

The Lafayette entered the harbor of Colón a little after 3 :00 p.m. on December 30. The party could not have arrived at a more clement, or misleading, moment: the dismal rainy season had just ended, the skies were cloudless, and the northwest trades blew in pleasantly from the Caribbean. Coming alongside the wharf, the boat was met, the Star and Herald reported, by “the committee of reception appointed by the government, the delegation from the State Assembly, and a large number of invited citizens.” At a little after 4:00 p.m. the landing stage was put on board, and all repaired to the spacious saloon of the Lafayette for formal addresses of welcome. One of the reception committee was an American diplomat, businessman and journalist Tracy Robinson. He remembered de Lesseps, in perfect Spanish, responding “very pleasantly” to the welcome, “wearing the diplomatic smile for which he was noted. He was then over seventy years of age, but was still active and vigorous: a small man, French in detail, with winning manners, and what is called a magnetic presence. When he spoke the hearer would not fail to be convinced that whatever he said was true.” All the time, the “enthusiasm from every class knew no bounds,” the Star and Herald wrote. “The flags of all nations were displayed, with the notable exception of that of the United States, and the reception can be said to have been a decided success.”

The next morning, together with his entourage of “distinguished engineers,” de Lesseps “made an examination of the harbour,” all the time holding forth about his enthusiasm for the project. Tracy Robinson remembered him invariably concluding every phrase with the assertion, “The Canal will be made.” “‘There are only two great difficulties to be overcome,’” the Star and Herald reported de Lesseps as saying, “‘the Chagres River, and the deep cutting at the summit. The first can be surmounted by turning the headwaters of the river into another channel, and the second will disappear before the wells which will be sunk and charged with explosives of sufficient force to remove vast quantities at every discharge.’”

At ten o'clock that same morning, a party arrived from the United States. This included Trenor Park, the diminutive boss of the Panama Railroad. On his visit to the United States prior to the Paris Congress, Wyse had met Park to discuss the “amicable agreement” stipulated by the Wyse concession from Colombia. Park, a successful Wall Street speculator, knew he had Wyse over a barrel—if an arrangement was not forthcoming, the Wyse concession was worthless. Wyse had offered to buy the railroad, and Park, who personally owned fifteen hundred shares, was happy to sell—at $200 a share, twice the market value. Several other Railroad board members were on the trip, along with a journalist from the New York World, José Rodrigues, and two American engineers who had agreed to be part of the Technical Commission: an army engineer named W. W. Wright, and Colonel George Totten, who had been in charge of the construction of the railroad back in the 1850s.

An hour and a half later, the entire party left Colón for Panama on the railroad. Halfway across, the train was met by the presidentelect of the state, and “a fine lunch was provided on the train, with wines &c, &c, and everything gave great satisfaction.” Yet another reception committee of local dignitaries and generals was waiting at Panama station in a specially erected tent. Also in attendance, it seemed according to Rodrigues, was “every one of the [city's] 14,000 inhabitants … shouting, struggling to get a glimpse of the distinguished guest.” Following more speeches, the party was conveyed in carriages to the Grand Hotel. Houses along the route were decked in French and Colombian flags, and no expense had been spared in cleaning up the city in honor of the “Great Engineer.” According to an occasional correspondent for the New York Tribune, “Such an air of neatness and real cleanliness has not pervaded this city of pigs and smells within the memory of its oldest inhabitants.”

That night the hotel hosted a state banquet. The only woman present was Madame Louise-Hélène de Lesseps. She had been only twenty-one when she had married de Lesseps, then sixty-four, in 1869. She was as beautiful as the first Madame de Lesseps had been witty and brilliant. According to Tracy Robinson, she “gave éclat to the occasion …Her form was voluptuous, and her raven hair, without luster, contrasted well with the rich pallor of her Eastern features.” After the dinner, dancing and singing, spilling out into the plaza, went on for most of the night.

The next morning, the first of the New Year, de Lesseps was up early, in full regalia, for the inauguration of the new president, Damaso Cervara. After that, making good on his promise to dig the first spade of earth for the Panama Canal, de Lesseps organized a special ceremony at which his seven-year-old daughter, Ferdinande, would do the honors of turning the first sod. The symbolic act was to take place at the mouth of the Río Grande, scheduled to become the Pacific entrance to the future canal.

The steam tender Taboguilla took de Lesseps and a party of distinguished guests—which included the British consul Hugh Mallet and his twenty-year-old son, Claude—three miles to the site on the Río Grande where the ceremony would take place, following appropriate feasting and festivities on board. However, since late arrivals had delayed the Taboguilla, the Pacific tide had receded such that the vessel could not land at the designated site. Undaunted, de Lesseps was ready with a solution. He had brought a special shovel and pickax with him from France especially for the occasion. Now, declaring that the act was only symbolic anyway, he arranged for his daughter to strike the ceremonial pickax blow in an earth-filled champagne box. Each member of the Technical Commission then in turn took a swing at the box, and the whole work was blessed by the bishop of Panama. The passengers landed back at Panama City at 8:00 p.m., according to a local newspaper, “unanimous in their expressions of gratification with their delightful trip.”

The following day, it was down to business. The Technical Commission was run by Dirks and Totten, while the detailed work was parceled out among the more junior members. All the surveyors reported in to Dirks and Totten every three days. De Lesseps took a hands-off role, except for impressing on the men one vital factor. As the Tribune's correspondent reported, “His mind is unalterably made up on one point—he will have nothing to do with a canal with locks.”

As the surveys continued, de Lesseps threw himself into the coincident celebrations of the new president, the New Year, and the new canal venture. On January 3 there was horse racing: “Mr. Lesseps is an accomplished horseman, and joined in the pleasures of the day with all the zest and activity of youth,” reported the Star and Herald. On other days there were excursions with his children, two boys aged nine and ten, who, with their sister, seven, had also caught the eye of the locals. Robinson called them “as dark as Arabs and as wild.” On January 10, there was another ceremonial commencement of the canal work when a huge dynamite charge was exploded near the summit of the Continental Divide. Champagne flowed once more.

A great highlight of the trip was the wedding of Gaston Blanchet and Miss Maria Georgette Loew, the beautiful daughter of the owner of the Grand Hotel. For observers, it was the perfect embodiment of the new friendship and shared future between Panama and France. Held in the cathedral, “bright with myriad lights, and gay with the presence of a multitude of ladies and gentlemen of the best of our Panama society,” it was blessed with a performance at the piano by the French vice-consul and singing by Madame de Lesseps herself, “with great sweetness and expression.” The party afterward, inevitably held at the Grand Hotel, continued well beyond midnight.

There were balls and dinners most nights. All were resplendent with toasts and speeches. “You have seen the soldiers of Count de Lesseps,” one of the French party announced to a reception given by Colombian officials. “We have the faith to move mountains, or at least, in the present age, rend them asunder.” No one could believe the energy and enthusiasm of Ferdinand de Lesseps, now in his seventy-fifth year. He would dance “all night like a boy,” noted Tracy Robinson, and still be on the train at seven on some expedition “fresh as a daisy.”

In this atmosphere, optimism about the work of the Technical Commission abounded. De Lesseps proclaimed that the job at Panama would be easier than Suez, writing to his thirty-nine-year-old son Charles, in charge of affairs at home, that he couldn't believe that it hadn't been done already. The local press, too, reported that the new geological survey had shown the estimates of the Paris Congress to be pessimistic: “The engineering difficulties… are being solved one by one,” wrote one paper, “and when the present surveys are concluded the project will assume so positive and practical a shape that financial men in Paris and elsewhere will not hesitate to give it the attention and support it deserves.”

“Elsewhere” to all intents and purposes meant the United States, which remained the ghost at the banquet. Everyone knew that the United States was de Lesseps's next destination, and the Star and Herald anticipated a great welcome there for the builder of the Suez Canal. The publication of the Commission's report on Panama and de Lesseps's charm would, the paper concluded, gain “the moral, if not the material support of the people and Government of the United States.”

The same issue of the newspaper reported the provisional findings of the Technical Commission, which, it emphasized, were based on maximum costs. Further details were to be worked out during the trip to New York. With only a few minor modifications and improvements, the open-cut plan and route of Wyse and Reclus were approved. There would be a 40-meter-high dam at Gamboa to retain the Chagres, along with a channel running alongside the canal for the regulated flow of the river to the sea. Another smaller channel would keep river water from the canal on the opposite side. At Colón, a 2-kilometer breakwater would be constructed to protect the port, while at the other end of the canal a tidal lock would be required.

A study of the stability of rocks had led to the adoption of slope for the canal of 1:1, or 45 degrees, except on the summit division at Culebra, where a slope of a quarter to one was considered sufficient because of the hard rock. In the Culebra Cut, the canal would be 24 meters wide at the bottom, 28 meters at the waterline, with a water depth of 9 meters. Elsewhere, the canal would have a waterline width of 50 meters, but otherwise similar dimensions.

The cost of diverting the Chagres was increased substantially from the Congress estimate, as was the amount of spoil to be removed, now judged to be some 75 million cubic meters. Nonetheless, the overall increase in cost was slight, helped by the reduction of the contingency fund from 25 to 10 percent. Not including the expense of purchasing the railroad, interest on the capital, administrative outlay, and the sums due to the Türr syndicate and the Colombian government, the cost was now estimated at 843 million francs (US$168,600,000). The comparable figure from the Congress had been 765,375,000 francs (US$153,075,000). The time of construction was reduced from twelve years to eight. In Paris, the Bulletin du Canal Interocéanique crowed that in all, the work would be easier and quicker than had been previously believed.

This overall sum seemed eminently affordable. The Congress had estimated tonnage through the canal at six million a year. At 15 francs per ton, this would bring in 90 million francs annually, producing 10 percent a year on a capital of 900 million francs. If 15 francs a ton seemed high compared to Suez's 8 francs, the current cost of moving freight on the railway, including loading and unloading, was nearly 80 francs per ton.

However, there is no doubt that, overall, this was an optimistic estimate. With hindsight, the slopes deemed sufficient were wildly wrong; the plan for the Chagres would prove a minefield; furthermore, the reduction of the contingency fund to hold down the cost seems to be taking “putting a favorable gloss” to the point of dishonesty. In contrast, U.S. estimates under the Grant surveys had always included a contingency fund of 100 percent, a sensible move considering that the Suez Canal, for example, had gone over its original budget by some 128 percent.

The de Lesseps party left Panama on February 15. They depart, wrote the Star and Herald, “vastly to the regret of the people of the Isthmus of all nationalities … during their stay on the Isthmus they have taken possession of the public heart to an extent never before witnessed among us. The importance of Mr. de Lesseps’ mission, a preparatory step to one of the greatest undertakings the world has ever witnessed, did not prevent that courteous and affable gentleman from taking a vivid interest in our rather dull isthmus life, into which he and his amiable lady have infused new vigor and animation.” He headed for New York, “with heartiest best wishes.”

There were dissenting voices. Wyse, cast out from the project, wrote from Panama to Reclus on January 24: “Blanchet does nothing… the tachometers are broken. There is total disorder, waste, and disorganisation.” De Lesseps, Wyse alleged, was making a nuisance of himself by trying to grope “les tétons des femmes.” Tracy Robinson, who was so impressed with de Lesseps, and believed that “from first to last he was perfectly conscientious and honest,” pronounced him “too old, too eager, too vain of the glory it would add to his already great reputation.”

e Lesseps's expedition to Panama and his imminent arrival in the United States had created a great deal of comment in the newspapers of that country. In general, they were cynical about the realistic prospects for the sea-level canal, concerned about the repercussions for the favored Nicaragua option, and hostile to the perceived international weakness of the United States that the European-led project revealed. It was the United States, said the New York World, who had “proper predominance over the seas to be united by any Isthmian or Central American ship-canal.” What was needed was massive and accelerated naval expansion, along with naval stations near the future canal. The New York Times thought that the sea-level canal was practicable and desirable, but that its cost would make it uneconomic. Nevertheless, it praised the energy and determination of de Lesseps compared to his rivals in the States: “While they protest and discuss and reflect and hesitate, he goes ahead.” The New York Tribune agreed: “All this looks like business.” The paper interviewed the Panama Railroad boss, Trenor Park, on his return from Panama in late January. Park, who must have been rubbing his hands together at the killing he knew he could make by selling the railroad to the French, announced that he had gone to the Isthmus with “grave doubts of the success of the project,” but returned reassured by de Lesseps: “He is certainly a great man, and his enthusiasm is contagious.”

As the day of de Lesseps's arrival neared, the New York Tribune urged decisive action: “Now is the time for the Government to make up its mind what to do … If it merely continues to make no sign, foreign capital will get committed, and then foreign Governments will be drawn in to protect the capital of their citizens, and the Monroe Doctrine will have disappeared like a morning fog… We are unwilling that the successors of Napoleon III, should attempt another foothold on the soil of the continent, even in the seductive guise of a peaceful triumph of engineering skill.” The answer, according to the Tribune, was to get the Nicaragua project up and running as soon as possible, and thereby see off the interlopers’ Panama scheme.

e Lesseps arrived in New York on February 24. On the journey from Colón he had completed the report of the Technical Commission, cutting the estimate to 658,600,000 francs ($131,720,000). Half this amount, he announced, was reserved for American subscribers.

De Lesseps never expected to raise this money in the United States. Before his trip he wrote to an American friend, who was busy setting up meetings, that he expected the Americans, and, to a lesser extent, the British, to fall for “inaccurate objections.” The capital for the project, de Lesseps believed, would come from France, “where one is used to working for the civilization of the world.”

He had never visited the United States before, and, as in Panama, de Lesseps enjoyed himself enormously. He set up court in the Windsor Hotel, which flew a tricolor from its mast in his honor. There, he was waited on by a committee from the American Society of Civil Engineers, who took him to see Hell's Gate and the East River Bridge. Later he visited the uncompleted Brooklyn Bridge, the Erie Railroad Station, and the docks and grain elevator in Jersey City. In the evening, there were receptions given by the Geographical Society, the French expatriate community, and on March 2 there was a great dinner in his honor at Delmonico's, which had been decorated with elaborate confectionary symbolizing the achievement of the Suez Canal—sphinxes, dredges, elephants, and bales of goods. One of the welcoming speakers was John Bigelow, the publisher and diplomat. Everywhere De Lesseps was honored as the builder of Suez, and the press were fascinated by his energy and charm.

But as de Lesseps had predicted, there was little interest in investing in the Panama project, and even at dinners with handpicked guests there were dark mutterings about the Monroe Doctrine, and predictions that a foreign government might take over the canal. In fact, while de Lesseps had been in Panama, the French government had sent a clear message to Secretary of State Evarts, formally notifying him that “the enterprise of M. Lesseps is of an entirely private nature and has no political color or protection at all,” as the Panama Star and Herald reported of the news. “This dumfounds the speculators, adventurers, contractors and others,” said the paper, “who have spread…rumors of war within six months, and of a tremendous European alliance against the United States.”

At Delmonico's, de Lesseps tried to answer the fears of his audiences: “He spoke rapidly in a distinct but quiet tone,” reported a journalist onlooker. “Occasionally when criticizing or indirectly ridiculing theories opposed to his own, he dropped into a sort of chuckle.” It had to be at Panama, rather than Nicaragua, because it had to be a sea-level canal; his project had nothing to do with any government, so the Monroe Doctrine did not apply, de Lesseps argued. The outfit would be based in Paris only because it was there that company laws gave the best protection to shareholders. “I have offered America 300,000 of the shares. If she takes that much she will have a controlling voice in the enterprise,” he told a Tribune reporter the following day. “But even though no shares are sold here, I shall still build my canal…”

From New York, de Lesseps traveled to Washington. There he met President Rutherford Hayes and Secretary Evarts and appeared before the House Interoceanic Canal Committee. He was received politely enough, but it was plain that his scheme infuriated everyone from the president down. On March 8, Hayes declared in a special message to Congress: “The policy of this country is a canal under American control. The United States cannot consent to the surrender of this control to any European power or to any combination of European powers.” So what if the Clayton-Bulwer Treaty committed the United States to share control with Great Britain? This should “by just and liberal negotiations” be altered. “The capital invested by corporations or citizens of other countries in such an enterprise must, in a great degree, look for protection to one or more of the great powers of the world,” Hayes continued. “No European power can intervene for such protection without adopting measures on this continent which the United States would deem wholly inadmissible. If the protection of the United States is relied upon, the United States must exercise such control as will enable this country to protect its national interests.” The canal, he proclaimed, will be “virtually a part of the coast line of the United States.”

“When M. de Lesseps gets ready to leave Washington tomorrow,” said the New York Tribune the following day, “he will have no reason to complain that he has been left in the dark as to the attitude of the Government of the United States toward the inter-oceanic canal project.”

But, as ever, de Lesseps was undaunted. Ignoring the threat of takeover implicit in Hayes's statement, he welcomed the interest shown by the American leadership in his project. Of course, as he had said time and again, no European governments would be invited to become involved in the canal. But if the United States, clearly the major power in the region, wanted to offer protection to the capital he was planning to raise, then that was to be celebrated. The next day he expressed “his delight with the President's message,” “because it would certainly be advantageous to have the protection of the United States during the work, and after the opening of the canal.” He had just sent a message to his son, which would be printed in the Bulletin, saying that the “President's message assured the political stability of the canal.” It was just what his home audience wanted to hear.

From Washington, de Lesseps traveled to Boston, Chicago, and nearly twenty other U.S. cities. However, everywhere he went, although there were flattering attentions, there was still a marked paucity of financial backing.

Back in Europe, de Lesseps threw himself into a new round of speeches and lectures in France, Britain, Holland, and Belgium. Everywhere there were reassurances that the United States was on board. “In these provincial tours,” reported one infuriated American critic, “he everywhere gave the impression that the governments of France and the United States were equally favourable to the enterprise; the flags of the two nations were everywhere united over his head when he spoke.”

De Lesseps was in Liverpool on May 29, specially invited to be present at a banquet in honor of the Queen's birthday. The 150 guests included foreign consuls and numerous naval officers in full uniform, as well as all the principal merchants of the city. At the town hall, “loyal toasts [were] enthusiastically drunk [and] a glee choir was in attendance.” American opposition to the scheme, de Lesseps announced, was “a phantom and a bugbear.” As he had for the United States, de Lesseps offered to keep back some shares especially for British investors.

In Britain, however, he found a cautious response. There was certainly support for the idea of a canal. In a leading article written in response to Hayes's statement to Congress, The Times drew a picture of the “few miles of oozy quagmire and jungle” separating the Atlantic and Pacific at Panama as “a heavier tax on the industry of mankind than a war or a famine.” The paper also strongly criticized the U.S. president's statement: “an inter-oceanic canal,” it wrote, “would form as much or as little a part of the European coastline as of that of the US… All that Europe wants is that a block of earth which it is growing to regard as it might a sunken ship in the Medway…should be cleared away, whether in the manner proposed by M. de Lesseps or in some other manner.” Interestingly, the president's claim of local hegemony was both resented and acknowledged. “That the US, by furnishing the money, should obtain a special right to watch over the safety and peaceable use of the new channel is what Europe, and particularly Great Britain, would most of all desire.”

For British investors, if de Lesseps's claims that the United States was now on side were widely believed, he was less successful in persuading them that the climate of Panama was “salubrious.” “It is a region,” wrote the London Standard, “endemic with tropical diseases and notoriously more pestilential than any part of the desert of Suez.” Also “In Panama [de Lesseps] has no gangs of Fellaheen forced to work for scant wages, no enthusiastic Khedive willing to command the resources of the state for the benefit of the undertaking.”

In France, though, it was a different story. It was incorrectly rumored that Couvreux, Hersent had signed a contract to build the canal for even less than de Lesseps's most optimistic estimate. No one rushed to deny this. In August, a new subscription was announced, to be held at the beginning of December. On offer would be 600,000 shares of 500 francs each, a total of 300 million francs, which was all the French legislature would authorize. The shares were expensive when 500 francs was nearly a year's wages for about half the working population of France. But the terms were attractive—25 percent down with six years to pay off the difference. During the time of construction, shareholders were to receive 5 percent on their paid installments. Once the canal was completed, they were to get 80 percent of the net profits. A huge publicity campaign was launched: much was made of the fact that 500-franc shares in Suez were now worth more than 2,000 francs and paying a dividend of 17 percent; there were special picnics; de Lesseps was everywhere, staging conferences and banquets, urging the purchase of shares as a patriotic duty; there were advertisements trailed from hot-air balloons; handbills of various eye-catching colors were pasted on every highway; purchases from shops were sent home with advertisements attached; a silver medal was offered to every individual to whom five shares of stock were assigned.

Even more important, de Lesseps had now decided to play on the terms of those who had wrecked his first share offer in August the previous year. This time, the banks would handle the subscription. A syndicate of commerical and investment houses was formed by Marc Lévy-Crémieux, a vicious opponent of the first issue. For the price of a 4 percent commission, or 20 francs a share, the opposition of the financial community melted away. The press, too, was brought on board. One of the chief opponents the first time round, Emile de Girardin of Le Petit Journal, was offered and accepted a place on the Company's board of administrators. Elsewhere simple payments were made to editors and journalists, to a total, it emerged much later, of some one and a half million francs. Papers previously scathing about the project were now falling over themselves to find rhetoric sufficient to describe its attractions. “Capital and science have never had such an opportunity to make a happy marriage,” the Journal de Dé-bats announced. “Success … is certain,” said Le Gaulois. “One can see it, one can feel it.” La Liberté proclaimed: “The Panama canal has no more opponents …Oh, ye of little faith! Hear the words of Monsieur de Lesseps, and believe!”

The opening of the sale of the stock on December 7 marks one of the most extraordinary moments in the history of finance capitalism. Within three days more than 100,000 people had subscribed for 1,206,609 shares, more than twice the number available. Eighty thousand were small investors, buying one to five shares each. Sixteen thousand were women ordering shares in their own names. Mothers sent de Lesseps their children's savings wrapped in handkerchiefs. Whether or not they had actually met de Lesseps and been a victim of his overwhelming charisma, the fever of the Great Idea had clearly taken grip of the entire country as no great financial enterprise had ever done before. Together with the influence of the press, de Lesseps's trips to Panama and the United States, or more exactly, his version of them, had won over all doubters. The riches of the ordinary French family were now committed to the great project.

A French commentator later wrote: “At that time they realized the poetry of capitalism… This is private enterprise, this is the shareholders’ democracy which is gradually changing the face of the world and setting humanity free.” As it would turn out, as the share issue stoked the fires of speculation on the bourse and kept the whirlwind of dealing spinning along nicely, a massive time bomb had been laid under the financial structure of the Third Republic.

wo weeks later, Armand Reclus was offered the job of Agent Supérieur of the canal company to head up the operation in Panama. He left for the Isthmus on January 6, 1881, together with his deputy, a Franco-Colombian lawyer named Louis Verbrugghe, who had accompanied Wyse on his trip to Bogotá to secure the concession. In Paris, a sumptuous headquarters was purchased for a million francs. The first shareholders’ meeting was held on January 31 with more than five thousand people in attendance, and on March 3 the new company, the Compagnie Universelle du Canal Interocéanique, was officially incorporated. De Lesseps was president, Henri Bionne was secretary general. Charles de Lesseps, who had urged his father not to take on such a mammoth task but who had promised his support when he saw the old man was unmovable, was appointed a director. On the same day the second general meeting of the Company was held. Wasting no time, de Lesseps outlined the program for the year ahead: to clear the line of the canal of vegetation; to study the hydrography of Colón and Panama bays, their tides, currents, and winds; to build houses for the accommodation of the employees and hospitals for the sick; and to build work yards. All preliminary work was to be completed by October, when Culebra would be attacked, and in November and December dredges would start work on the soft soil on the lower parts of the line. De Lesseps announced that the canal would be open to traffic by 1888, predicting that the job would be far easier than what he had achieved at Suez. His comments were greeted with cheers and applause.

News of the incorporation of the Compagnie Universelle reached Panama about a week later. “The company now has a legal existence and a name,” wrote the Star and Herald. “It is no longer in the realm of inchoate projects like its rival institution the Nicaragua Canal project, but is a solid and substantial entity, commanding unequaled resources and unrivaled influence. The news is welcome, and we hasten to offer it to the public.”

In the United States, however, the success of the subscription fanned rising fears about an open ship lane through the Isthmus. “The worry is that it will weaken the United States strategically,” wrote the New York Tribune. The only option, the paper continued, would be “to exercise such control over it as will prevent the passage of the fleets of any Nation with which we may be at war.” What this would mean would be an abandonment of the long-held policy to avoid “such vast and costly naval armaments as are kept afloat by England, France, Germany and Spain … Otherwise we would find our Western coasts, from San Diego up to Sitka, exposed to attack within a few weeks after the breaking out of hostilities with any country that can keep a formidable squadron in the West Indies … Suppose the canal was open and a sudden quarrel were to arise between the United States and Spain,” the paper wondered prophetically. “What is to prevent Spain from sending a dozen ironclads through the Isthmus to bombard our California towns?”

Such was the success of de Lesseps's money raising that the specter of the canal had changed from being distant and uncertain to an almost done deed, and the dire strategic repercussions of an open waterway under the control of a hostile power were also debated in the House of Representatives, where it was suggested that the United States “insist on acquiring from Colombia the territory through which it runs, in order to be able to fortify its mouths and control its operations in time of war.” But, as the New York Tribune reported in mid-February, such was the new wealth of the Compagnie Universelle that it was surely only a matter of time before they controlled the bankrupt Colombian government. To its fury and frustration, the United States seemed powerless.

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