Faithful to my past, when they try to stop me, I go on.
—FERDINAND DE LESSEPS
On April 23, 1885, three weeks after news of the Colón fire reached Paris, Ferdinand de Lesseps donned the green robe of the Académie Française. With all traditional solemnity, in the small ceremonial hall beneath the great dome of the venerable Institute, he achieved the ultimate honor in French life. He belonged now to the forty “Immortals,” the chosen of chosen.
We are told that “such a galaxy of celebrities had rarely gathered” and that de Lesseps spoke with the air of a conquering general. Great works were never easy, he affirmed. Nothing was easy in this world, especially the useful. Skeptics and doomsayers and character assassins were what one had to expect. The world was not without evil. “The Arab proverb says, ‘The dogs bark, the caravan passes.’ I passed on.”
Yet at this crowning moment the dogs had scarcely been heard. While talk of the sums being spent by Jules Dingler was commonplace in financial circles and Henri Maréchal’s diatribe had given rise to considerable gossip, no publication of influence within France, no individual of importance, had had a derogatory word to say as yet.
De Lesseps’ own popularity seemed as invulnerable as always. Though Panama shares had begun to slip quite noticeably on the Bourse, though the company’s credit was being questioned for the first time, virtually none of the small shareholders were selling out. At the annual stockholders’ meeting in July, he was cheered again and again; and like some figure from Shakespeare, he gave his audience visions of heroic contest waged against an exotic, distant wilderness. They were part of the crusade; they were one with him in this great and good and terribly difficult work. The triumphs of the engineers—their engineers—were real; the task was better than half finished—“the efforts actually put forth may be considered as more than half the total efforts necessary” was his exact claim and a total fiction. (Only about a tenth of the canal had been dug, as the American officer Kimball rightly judged.)
The completion date, he also said, was being deferred somewhat and the original cost estimate of 1,200,000,000 francs, as set by the Paris congress, was being adopted. But such announcements went unchallenged. Nobody questioned or protested anything he said. When a man called for a formal investigation of the company’s management, there was no one in the entire hall who would even second the motion.
Not until later that summer did the talk of failure begin to sound serious. Writing in the Économiste Français on August 8, the highly regarded financial editor Paul Leroy-Beaulieu, known to be an old friend of de Lesseps’, warned that unless the canal company was reorganized, “we shall see the most terrible financial disaster of the nineteenth century.” The New York Tribune, among other foreign papers, began calling the canal a “gigantic wild-cat speculation” and lamented that the poor innocent stockholders were unable to go out and see the truth for themselves.
The most blistering attack was a series of articles carried by the London Financial News, a series written by J. C. Rodrigues, the American reporter, who had had a tremendous change of heart since his tour of Panama five years before. Like de Lesseps, Rodrigues had not been back to the Isthmus in all that time. Nor had he bothered to talk to anyone connected with the canal, anyone whatsoever with firsthand knowledge of the situation there or inside the offices on the Rue Caumartin. The articles in fact contained no new information. But by combing through the published observations of other journalists, by looking through what de Lesseps and the French press had been saying from one year to another, by shrewdly noting all that had not been forthcoming from the canal company in the way of solid data on costs and the volume of excavation actually accomplished (rather than what was anticipated), he had come up with a picture of willful deception at every turn. The French newspapers were giving de Lesseps their unstinting support, he charged, because editors and reporters were being bought wholesale. This was perhaps the tenth time the same accusation had appeared in print in the past year, but like others who had made it, Rodrigues had no proof or testimony to back it.
His statistics were taken from the Bulletin, from de Lesseps’ letters to stockholders, from public pronouncements, and the like. It was shown that the projected completion date had been a fantasy from the beginning, as had every projected cost figure. No plan for the Chagres dam existed on paper as yet, after five years. The canal was doomed because the company was going to fail. The enterprise would be defeated in Paris, that is, not on the Isthmus, and it was only a matter of time. “The whole thing is a humbug, and has been so from the start.”
In October, as the articles were being published as a book in the United States, Panama stock hit a new low of 364 francs. Then in the first week of December a raging “norther” swept across the Caribbean and struck Colón, smashing eighteen ships onto the shore and destroying much of the waterfront. Fifty seamen were killed. Tremendous rains fell and the Chagres, rising thirty feet in a few hours, flooded miles of railroad and canal diggings. No trains could get through. To inspect the line after the storm, Philippe Bunau-Varilla had to go most of the way by canoe and wrote afterward of gliding past half-drowned trees the tops of which were black with millions of tarantulas.
The effect of such news on the skeptics at home may be imagined. Yet de Lesseps, sanguine as always, reminded everyone that there had never been a year at Suez without a crisis. The Suez venture had been called all the same names; as had he. The caravanwould pass on.
In May he had spoken for the first time of lottery bonds to guarantee the canal. And at the July stockholders’ meeting he had asked for and received a show of approval. Now he talked of little else. Canal bonds would be sold with numbered tickets attached, some of which, the winning tickets, would be worth large cash prizes. In the final year of the Suez Canal, when an issue of conventional bonds failed to provide funds sufficient to finish the work, just such a lottery issue had saved the canal. Moreover, those same bonds were now worth almost twice their original value. To finish “promptly” at Panama, he said, would take another 600,000,000 francs. The only thing needed was government authorization for a lottery issue. So as summer turned to autumn the Chamber of Deputies was swamped with petitions signed by thousands of Panama stockholders—a grand, spontaneous show of faith, said the Nyons banker, Ferdinand Martin, who started the campaign. And to ease any possible apprehensions over the situation on the Isthmus, de Lesseps declared he would go again to look things over.
Impressed by the flood of petitions, the Chamber appointed a committee of deputies to study the lottery proposal and a noted civil engineer, Armand Rousseau, was selected to go to Panama and report back to the committee. Rousseau departed before de Lesseps did. Whether he wished specifically to avoid the old man’s irradiating influence is not clear, but he did sail on the Lafayette at the same time as Charles, who was taking a new director general, thirty-five-year-old Léon Boyer, to relieve Philippe Bunau-Varilla.
Bunau-Varilla, meantime, had decided to resign from the canal company, but would stay on in Panama, in the employ of a private contractor, as head of the major excavation at Culebra.
When he departed for this, his second, tour of the Isthmus—for his first actual look at the Panama canal—Ferdinand de Lesseps was eighty years old. And in the minds of his thousands of shareholders this was the critical figure in the equation, more important than any stock prices or excavation statistics. It was not a company they believed in, or even a canal through Panama, so much as one exceptional human being. For them he was la grande entreprise. So, baldly put, the question was, How much longer could the mortal hull last and perform?
His large and much publicized retinue included technical advisers, company officials, and special guests (delegates from half a dozen French chambers of commerce, a German engineer, an Italian diplomat, an admiral in the Royal Navy, the Duke of Sutherland), and everyone went at company expense. His wife and children remained in Paris. Interestingly, there was no one along this time from the first expedition. Bionne and Blanchet were dead; he and Wyse had not spoken for years; Jacob Dirks, Colonel Totten, Trenor Park, they too were dead by now.
In the end, when everything was in ruin, few would regard him very kindly for such efforts as this. The dazzling faith would seem almost maniacal and pathetic in hindsight. It would be forgotten how magnificent he was in so many respects. The man of younger days, the Hero of Suez, would be the one eulogized. Yet of all the performances in that long, glittering career, there is nothing quite comparable to the final drive to succeed at Panama. The falling star blazed very bright indeed.
They reached Colón on February 17, only days after Armand Rousseau had completed his studies and departed. The stay on the Isthmus this time lasted just two weeks, and the intentions throughout, in all de Lesseps said and did, were fundamentally the same as six years earlier—to be inspirational, to foster courage, confidence, and to draw attention to himself. In this, once again, he succeeded grandly. In the army of laborers strung out across the Isthmus, he had crowds unlike anything since Egypt. For the thousands at work the mere sight of him was electrifying. “You are for us,” said one engineer in a welcoming speech, “the venerated chief around whom we rally, ready at all times to sacrifice even our very lives to assure your triumphant success in your present great and glorious work.”
“With hearts and minds like yours,” de Lesseps responded, “everything is possible.”
Again he had chosen the dry season. He would appear, as before, in brilliant sunshine. For one inspection tour he went on horseback. “M. de Lesseps,” reported one member of the party, “always indefatigable, rode at the head of the caravan. I saw him gallop up the hillside at Culebra, amid a roar of approval from blacks and whites, all astounded by so much ardor and youthfulness.” Years afterward young American engineers relaxing in comfortable new clubrooms would listen to old Panama hands tell how he wore a flowing robe of glorious colors, “like an Oriental monarch.”
There were parades and fireworks at Panama City. A triumphal arch in the plaza was emblazoned, “Glory to the Genius of the Nineteenth Century.” Little girls presented bouquets. He made speeches; he drank toasts. He sat through banquets that would have finished off most men his age. He danced all night at a grand ball in his honor.
His accommodations on the Atlantic side were in an imposing frame house facing the water at Christophe-Colomb, built especially for his use and known ever after as de Lesseps’ Palace. In Panama City he stayed at the palace of the bishop, where the guardian at his door was a dog called Bravo, a local phenomenon of unknown breed and origin which had first attached itself to Dingler some years before, then Hutin, then Bunau-Varilla, and most recently to Charles de Lesseps.
Through long, stifling mornings, as noisy crowds filled the plaza, he conferred with his engineers in the canal offices. He toured the hospital, machine shops, labor camps. Bunau-Varilla set off a tremendous charge of dynamite for his benefit, then made a little ceremonial presentation of one small bit of the rock—a “thousandth part of one-millionth of the little mountain which he had seen raised in the air . . .” De Lesseps, with somewhat less ceremony, would later give it to the Académie des Sciences.
Bunau-Varilla was kept close at hand to answer all technical questions. Charles likewise was never very far. Charles was “very clear headed and capable,” noted John Bigelow, an emissary from the New York Chamber of Commerce who had joined the party, and the friendship Bigelow struck up with Bunau-Varilla was to last a lifetime.
All in all, it was a brave show. Morale had been restored on the Isthmus to a degree no one there would have thought possible. Boyer, the new head, had been installed. The guests enjoyed themselves throughout, with the exception of Bigelow, who came down with something briefly and thought he was dying of yellow fever. Their host enjoyed himself supremely. When it came time to go, all parties (Bigelow also by then) were in perfect health.
The one dissatisfied individual seems to have been Philippe Bunau-Varilla, whose devotion to the work was no less for having been relieved of command, but who felt he had been slighted by Le Grand Français. In their private talks de Lesseps had expressed nothing but praise and gratitude for all the young man had done, yet said nothing to that effect publicly. “Any homage paid to any other personality but himself seemed to steal a ray from his crown of glory,” Bunau-Varilla would write years later, still resentful.
On reaching home the delegates from the French chambers of commerce expressed unqualified confidence. Unquestionably the canal could be built—provided de Lesseps had the funds needed (provided the government let him have his lottery). Bigelow, too, in a long, detailed, and entirely fair appraisal, concluded that the canal could and would be built, for the reason that “too large a proportion of its cost has already been incurred to make retreat as good a policy as advance.” He had been bothered by the heat; he remained deeply troubled by the great number of lives being lost, a subject scarcely mentioned during the tour. But like Lieutenant Kimball, he concluded that the critical, unanswerable question was cost, not the cost of construction simply—and any figure offered, even by the most experienced engineers, was pure conjecture—but the cost of the money itself. “Till the money is secured, and the cost of getting it is ascertained, it would be about as safe to predict the quarter in which the winds will be setting next Christmas day at St. Petersburg . . .”
Bigelow was a prominent figure, in addition to being highly intelligent and observant, a former part-owner (with William Cullen Bryant) of the New York Evening Post, a former American minister to France, lawyer, and scholar. He had taken the tour very seriously, preparing in advance long lists of questions for the French engineers. What impressed him beyond everything else was the magnitude of the effort, and this, like a certain foreboding, can be read between the lines throughout his report. The task had no parallel in history he said. Americans had far too little appreciation of what the French were attempting. Once, to his astonishment, Charles had told him that the United States would eventually have to take financial control, as England had done at Suez. It was a remark made in confidence—and with sadness, one would imagine—and Bigelow said nothing of it, other than in his diary. But in his report, published well before any of Captain Mahan’s theories, Bigelow did write that whenever or by whatever manner the canal was completed, the great beneficiary would be the United States, for the canal would “secure to the United States, forever, the incontestable advantage of position in the impending contest of nations for the supremacy of the seas.”
De Lesseps, as soon as he reached Paris, made a predictable declaration of faith in the speedy completion of the work. Yet in virtually the same breath, and as smoothly and cheerfully as if he had been announcing some favorable turn of events, he also conceded that Panama was a more difficult undertaking than Suez—ten times more difficult.
On March 29, in an interview with Emily Crawford, correspondent for the London Daily News, he further claimed that the baffling issue of the Chagres was at last resolved: “ . . . we have changed the whole course of the river and made it run on the other side of the mountains altogether.” Undoubtedly he meant that the river had been rerouted on paper, which it had, and actual excavation for a vast diversion channel had begun. That, however, was not the impression given by Mrs. Crawford’s article, which, as she noted in conclusion, he read and vouched for prior to publication. The distinct impression was that the river no longer intervened, that it had been neatly placed somewhere safely out of the way, and thus success was assured.
Meantime, as the government, indeed, as the whole of France, waited for the other prognosis—the one from Armand Rousseau—the canal company was having trouble paying its bills, despite another issue of conventional bonds.
The Rousseau Report was released in May, and to the French public, accustomed to unwavering support for the canal in the press, to the shareholders, long fortified by the Bulletin and de Lesseps, its impact was considerable. Rousseau, a former chef des Ponts et Chaussées, was a man of the highest repute and his views were taken as entirely forthright, which indeed they were.
To abandon the canal now would be unthinkable, he had concluded. It would spell disaster not merely for thousands of shareholders, but for French prestige. If the present company were to drop the work, a foreign one—unnamed—would surely take it up. The canal company therefore ought to be given some kind of moral assistance by the government. He favored the lottery. But then came the crucial passages. Completion of the canal was possible; however, completion with the resources anticipated or within the time announced appeared extremely doubtful unless the company would agree at once to radical modifications of its plans. He did not specify what ought to be done, because he believed his charter did not authorize him to do so. But there was little doubt as to what he had in mind. The one radical modification possible was to abandon the sea-level plan while there was still time.
In sum, he was saying that the hopes entertained by Ferdinand de Lesseps were without foundation—in terms of time, money, and, most important, the canal he had been selling the French people all these years. A canal à niveau had been the axiom of de Lesseps’ conception since before the Paris congress. It had been his reason for picking Panama in the first place. So it was easy enough to draw from the report the dark and unsettling conclusion that the whole plan had been a stupendous mistake from the beginning.
In quick succession came two more opinions, both filed at the request of the canal company. The first was from another respected engineer, a man named Jacquet, whose candor was courageous in view of the situation and the mood among those paying for his services. Having toured the work, he declared that a sea-level passage was unattainable and urged the building of a canal with locks along the same path.
The second opinion, sent from Colón, was written by Director General Boyer, whom Bunau-Varilla would recall as one of France’s most gifted sons. Boyer had brought sixty engineers out from France. Within a few months they had nearly all fallen by the wayside, sick, demoralized, or dead. Then, only a week or two after his report reached Paris, came the news that Boyer too was dead, another victim of yellow fever.
His was the most disquieting judgment of all, in that he spoke as the company’s ranking technical authority. Like Rousseau and Jacquet, he regarded the sea-level canal as impossible within the limitations of available time and money. It had taken him but a short time on the scene to reach this view.
Charles knew that his father must give way, but if his father saw this, he never let on publicly. Rather, he now insisted that it must be a canal at sea level—a great new “Ocean Bosporus” was his favorite expression—saying that it could be achieved in just three more years. His will was iron. All critics were enemies. What secret, unspeakable dread he may have felt—if any—what premonitions of disaster haunted his private hours, will never be known. But he certainly had all the facts at his disposal and the truth of the situation was plain as day: with the excavation in its fifth year, the contractors had managed to extract little more than a quarter of the total excavation anticipated by Dingler’s reckoning.
The Minister of Public Works, Charles Baïhaut, moved that a lottery bill be acted upon without delay, but with the cloud of the Rousseau Report hanging over them, the deputies on yet another special lottery committee now voted to postpone further discussion and called for an audit of the canal company’s accounts. Outraged, de Lesseps refused to comply. Further, he wanted his application for a lottery withdrawn. “I am postponed, I do not accept the postponement,” he exclaimed in a letter to his stockholders. “Faithful to my past, when they try to stop me, I go on . . . . I am confident that together we will overcome all obstacles and that you will march with me . . .”
But by no means had he dismissed the lottery from his plans, the defiant words notwithstanding. His immediate next move was another conventional bond issue, and although the results appeared perfectly respectable—some 90 percent of the offering was taken—the company was paying too much for too little. It was becoming a dangerous, costly trend. In total the company was presently paying out a staggering 750,000,000 francs, or $15,000,000, just for annual interest on its borrowed money.
Paris was filled with conflicting claims and rumors emanating from the Bourse or from the offices on the Rue Caumartin, or from around the corner at the Suez offices, where de Lesseps still spent much of his regular day. Philippe Bunau-Varilla, home since spring, was telling visiting Americans of the money he had behind him, claiming he had a new concept that would revolutionize the work and save the canal. He had returned from Panama after barely surviving an attack of yellow fever, resigned his position with the company, and was currently the guiding spirit of the reorganized Artigue, Sonderegger et Compagnie, now the Culebra contractor.
But others were talking of the resignation of the secretary general of the canal company, Étienne Martin, because he regarded the contract with Artigue, Sonderegger as so outrageously advantageous to Antigue, Sonderegger. His replacement was Marius Fontane, the company’s publicity agent. For every rumor of collapse and bankruptcy, there was another story, always on good authority, that the government was prepared to rescue the canal come what might, that the company’s great hidden strength was its political influence. It was noted, for example, that the Minister of Public Works, Baïhaut, who had set the lottery bill in motion, had declared his support for the lottery, irrespective of what Rousseau might conclude. Baïhaut, known as “the man with the beautiful wife,” was an outspoken moralist (an officer of the Society for the Promotion of Good) and a popular topic, since until recently the beautiful wife had been married to his best friend.
Management of the company’s financial affairs, moreover, had fallen to new hands. Marc Lévy-Crémieux, the banker who directed de Lesseps’ initial stock successes, had died. Serving now as the canal’s chief financial agent was Baron Jacques de Reinach, of the original Türr Syndicate. The ebullient little baron had friends in high places—Adrien Hebrard, publisher of Le Temps; Jules Grévy; General Boulanger, the glamorous new Minister of War; the Radical leader Georges Clemenceau; Premier de Freycinet.
Émile de Girardin’s Petit Journal, the most popular paper in France, remained conspicuously loyal to the “cause of Panama.” As Emily Crawford was to note, the paper’s chief editorial writer “puffed Panama” to such a degree that he was “carried above the concert pitch of the paper by the heat of his enthusiasm.” Mrs. Crawford, the widow of an English newspaperman, was among the ablest foreign correspondents of the day, a handsome middle-aged Irishwoman who knew just about everyone in power and “did not worry about being conventional.”
De Lesseps remained as active as ever, a familiar figure on the boulevards, still fathering children, still to be seen riding in the Bois with a troupe of the older ones. He appeared to be without a problem. According to one story, a group of salesmen struck up a conversation with him on a train somewhere outside Paris and failing to recognize him asked what his line might be. “Isthmuses!” he said. He was introducing ship canals and after Panama he would build the Kra Canal across the Malay Peninsula.
In October, largely in response to a malicious rumor that he was terminally ill, he crossed the Atlantic still one more time—his last—to participate in the unveiling of the Statue of Liberty. At a rollicking celebration in New York Harbor, October 28, 1886, with cannon booming and tug whistles screaming on every side, he stood with President Grover Cleveland on a flag-draped platform set at the foot of the colossal statue.
“Soon, gentlemen, we shall meet again,” he said, “to celebrate a peaceful conquest. Good-bye until we meet at Panama . . .”
The facade of an Ocean Bosporus was maintained for another year. In January of 1887 de Lesseps’ Advisory Commission formally convened to consider the possibility of a lock canal, with the net result that a subcommission was appointed to look into the matter. The subcommission would not meet until the fall.
Charles de Lesseps returned to Panama in March, taking still another delegation of experts to give still another appraisal, and the delegation returned with the unanimous opinion that the sea-level plan must be dropped at once if disaster was to be averted. The company quietly put this report into safe storage.
Every day the decision was postponed was a day of enormously expensive wasted effort on the Isthmus. Cash reserves in Paris were shrinking rapidly. And not until the sea-level plan was scrapped could there be any hope of government action in support of the lottery.
Had de Lesseps decided on a lock canal in the fall of 1886, had he gone to his stockholders then with a new plan, instead of sailing off to New York, the outcome of la grande entreprise might have been quite different. Possibly the dream could have had a different ending had he but spent the first part of 1887 preparing his public for the change in plans. This he did not do, however. Apparently he kept thinking that somehow, some way, the crisis could be resolved, that some miraculous turn of fate would save the sea-level canal. It is hard to imagine what turn of fate he possibly had in mind, but then he remained, as before, one who saw his own existence and all that he did as part of a glorious cosmic pattern.
Meantime, consideration was being given to a temporary solution devised by Bunau-Varilla. He wanted to make one kind of canal in order to dig another kind. It had been the accepted engineering wisdom that dredges were pretty nearly useless against rock. At Suez, for instance, when the dredges struck underlying rock between the Bitter Lakes and the Red Sea, the engineers had put earth dams across the cut and drained that section so it could be excavated “in the dry.” Consequently at Panama the assumption had been that only soft strata could be removed by dredging. But when the Slaven machines hit rock at a point called Mindi, near Colón, Bunau-Varilla conceived a technique whereby the rock could be blasted into pieces of an exact size for the dredges to cope with. The system rested on a particular mathematical placement of underwater charges, and once perfected, it was no more expensive than conventional dry excavation, or such was his claim. Later on, at Culebra he had taken the idea another step. Artificial lagoons were built at either side of the saddle. Earth dams were thrown up and water was piped in. The dredges were then brought up and floated on these lagoons and the excavation proceeded.
His proposal now was to carry the idea to its ultimate conclusion: Subdivide the whole line of the canal into a series of such artificial pools and unite these with locks; in other words, build a lock canal upon which to float the dredges and let the dredges eventually transform that canal into an uninterrupted passage at sea level. He would use water, rather than railroad track, to transport his excavation machinery, and to carry the spoil away. Such a system would be little affected by rains or landslides. The cut at Culebra need only be made half as deep for the time being. The locks could be removed two by two as the dredging progressed. And since the locks would be built to accommodate conventional ships, regular canal traffic could begin as soon as the locks were ready. So ships could be passing to and fro as the work proceeded, the tolls going far to meet the cost of the work.
Bunau-Varilla was an extremely high-powered, persuasive individual, as future events would bear out; and he appears to have convinced most of the engineers and technical advisers that the scheme could actually work. The genius of the proposal, however, its enormous value at the moment, was not in its technical ingenuity. It was the fundamental precept that a lock canal need be only a transitional step toward the old ultimate goal of a channel à niveau. It represented no betrayal of the dream. It offered de Lesseps anhonorable alternative. There need be no promises broken, no semblance of retreat or failure.
Another bond issue was tried, the third in little more than a year. It produced a sum de Lesseps quickly pronounced sufficient to carry on for another two years. But again the company had paid dearly for the money and by autumn its financial position was desperate.
It was only then, with his back to the wall, that de Lesseps at last did what had to be done.
The subcommission of his Advisory Commission met and endorsed the temporary lock canal; a new set of plans was rushed into presentable form. At the end of October he used an invitation to speak at the Académie des Sciences as opportunity to prepare the public for the momentous change. Saying nothing of the plan itself, he announced that the canal would be far enough along by 1890 to permit the passage of twenty ships a day. Annual receipts, he said, would be 100,000,000 francs.
Panama stock, in steady decline since late summer, now fell to a new low of 282 francs.
On November 15, de Lesseps sent off two letters. One was to the Minister of Finance asking once again for authority to sell lottery bonds. The other, addressed to his shareholders, contained the dramatic announcement that “as of this morning” Alexandre Gustave Eiffel had been engaged to design and build the locks that would open Panama to the ships of the world.
The new canal was to follow the same line. There were to be two huge flights of locks, with five locks to each flight, at Bohío Soldado on the Atlantic side and between La Boca and Paraíso on the Pacific side. They would be single locks—that is, locks capable of handling ship traffic in one direction at a time—and the dimensions of each were to be 180 by 18 meters (590 by 59 feet). Passing through the full flight, a ship would be lifted to, or brought back down from, a summit level of 49 meters (roughly 161 feet), which would be well above the level of the Chagres at flood stage. So instead of a canal with a bottom 29½ feet below the level of the sea, it was to be one 161 feet above. The total excavation required was reckoned to be only 80,000,000 cubic meters (instead of 120,000,000, as Dingler had figured), which, it was said, left only about 34,000,000 cubic meters still to go (instead of 74,000,000, using Dingler’s estimate as the base figure).
The official cost of the completed canal was also revised, making this the fourth time since the Paris congress. The estimate arrived at by the congress, it will be recalled, was 1,200,000,000 francs; at Panama in 1880 the Technical Commission had cut that to 843,000,000 francs; next, on reaching New York, de Lesseps had announced that it would be 658,600,000 francs. In July of 1885 it was back to what it had been to begin with—1,200,000,000 francs. Now, for a lock canal 161 feet above sea level, the price was declared to be 1,654,000,000 ($331,200,000).
To build a Panama canal the French public to date had supplied something over 1,000,000,000 francs. Now de Lesseps was declaring in the same old positive, confident tones that another 600,000,000 francs were needed to open a canal of a kind he had long since educated them to regard as inferior and therefore unacceptable.
Recruiting Eiffel had involved some fast footwork on both sides and a contract that Eiffel and company officials alike thought best kept confidential. De Lesseps considered Eiffel’s name a golden touch. It was as though, or it could appear as though, that “man of genius” was making his entrance in the final thrilling act, just as he, de Lesseps, had foretold so many years before: Eiffel, the most brilliant engineer in France, suddenly famous as progenitor of the gigantic iron tower being started on the Champ de Mars. Conceived as the centerpiece for another Paris exposition scheduled for 1889, the tower was to be the tallest structure on earth. The plan had caused an uproar—many Parisians foresaw their city disfigured by an iron monstrosity—but to the vast majority of the public, the tower, like the canal at Panama, was a bold affirmation of French genius, French supremacy in the art of civilization. So for Eiffel to step forth now and join forces with Ferdinand de Lesseps seemed the perfect, brilliant stroke, and the announcement had an especially energizing effect on de Lesseps, whose response to such dramatic turns, even when self-contrived, was invariably infectious.
Eiffel’s locks, the gates and operating apparatus for which were to be manufactured in France, were in fact modified versions of the locks he had designed for his Nicaragua plan ten years earlier, prior to the Paris congress. Also, construction of the lock basins was to be delegated to another contractor, a new firm organized by Philippe Bunau-Varilla. Still, Eiffel believed in action and decisiveness. He did move quickly. By January his engineers were on the Isthmus. In another month, excavation for the lock basins was under way.
For all this, however, Panama stock kept falling.
Months slipped by as a new premier, Pierre Tirard, refused even to submit the lottery request to the Chamber of Deputies. “From all information received through other channels than the Company,” reported Économiste Français, “it is clearly shown that the situation of the undertaking is getting more and more hopeless . . . . The year 1888 will certainly see the liquidation of the Company. The lottery bonds can do nothing towards meeting such necessities.”
On March 4, 1888, several deputies introduced a bill permitting the company to go ahead with the lottery. How quickly the Chamber might act on the bill or what its chances were remained open questions. De Lesseps, however, was in the midst of offering still another issue of bonds—this made eight times in eight years that he had gone to the public for money—but with a proviso that they could be converted into lottery bonds should such a bill be passed into law. It appeared that he had been given a saving boost, and as always with every chance bit of good news, he made as much of it as possible.
Even so the sale was a fiasco. Not a third of the bonds were sold. The lottery was no longer the best hope for salvation, it was the last hope. There was no money to be had by conventional means.
The parliamentary process that followed was painfully slow. The Chamber had to vote first on whether to consider the bill, then the bill had to be appraised by a committee of eleven duly appointed deputies. Weeks passed. All signs were that the committee would defeat the bill by a vote of six to five, until one member, a hero of the Franco-Prussian War, Charles Francois Sans-Leroy, switched his vote at the last minute and the bill was approved by a margin of one. By now it was mid-April. The debate in the Chamber began, with loyal Panama supporters packing the public galleries. Every speaker for the bill was vigorously cheered; anyone who attacked it, or even questioned the idea, was roundly jeered or interrupted, which caused several of the bill’s more vocal opponents to grow even more impassioned and bitter. “The ruin is getting on fine!” declared one irate member from the tribune. “Scarcely more than fifty per cent remains to be lost.”
On April 28, the Chamber approved the lottery by a wide margin and instantly the company’s stock soared. In the Senate, on June 5, the bill was again approved. On June 8, three years after de Lesseps first proposed the lottery, the new law went into effect.
It was none too soon. So desperate had the company’s situation grown that Charles de Lesseps had been forced to negotiate a hurried loan of 30,000,000 francs from two of the largest commercial banks, the Crédit Lyonnais and the Société Générale. As security he had been required to put up the Panama Railroad stock. Moreover, the banks had insisted that they handle the sale of a large block of the lottery bonds, in the event the bill passed, for which they were to receive extremely handsome commissions.
It is conceivable that what happened next could have been avoided. Many of those involved would always think so.
By the new law the company was authorized to borrow a total of 720,000,000 francs. Six hundred million francs were to be used to finish the canal according to the lock plan, while the remainder was to go into government securities to guarantee payment on the bonds, as well as the cash prizes.
There was nothing in the law stipulating how the issue should be staged, and at the canal company and the two banks, opinions were sharply divided. Baron Jacques de Reinach argued for scheduling the sales in successive installments, rather than going for everything in one blow. Until then, his position was, the public had supplied the canal company with some 150,000,000 francs a year on the average. If the lure of cash prizes proved strong enough even to double that, then the most that could be expected was 300,000,000 francs, or less than half the amount that was wanted. The safest plan therefore was to try for smaller parts spread out over a year or more.
The banks thought otherwise. Primarily it was Henri Germain, the august founder and chairman of the board of the Crédit Lyonnais, who thought otherwise. The strength of the whole lottery concept, he insisted, was in the size of the cash prizes. Since subdividing the issue would proportionately reduce the prizes, he was against it. “The prudence, the maturity of judgment of the man who endowed France with one of its greatest banking concerns, seemed to exclude the possibility of any error of judgment,” Bunau-Varilla would write. That Germain also had the railroad stock in hand, that he had the company by the throat, as a matter of fact, was doubtless of great importance. And it was Charles de Lesseps, not de Reinach, who had responsibility for the final decision.
So the bonds were to go on sale in one gigantic issue—2,000,000 bonds redeemable in 1897 at 400 francs ($80) and priced at 360 francs ($72). The sale would start June 20, run six days, and there were to be lottery drawings every two months thereafter, year after year. Prizes in one year would range from as high as 500,000 francs ($100,000) down to 1,000 francs ($200).
A stupendous publicity campaign was launched at a cost of more than 7,000,000 francs, a figure, like many others, that was not to be divulged until long afterward. The intensity of feeling for and against the company was enormous. Throughout France people talked of little else.
On the morning the bonds went on sale, somebody—his identity remains a mystery—put a telegram on the wire in Paris to every major provincial city, to London and to New York, announcing the death of Ferdinand de Lesseps. There was no truth to it and the company issued an immediate denial, but the damage was done. Two days later, bear raiders dumped Panama shares on the market, driving the stock into sharp decline. Company securities could now be bought on the open market for nearly 100 francs less than the bonds being offered.
Defeat appeared inevitable and it was. Of the 2,000,000 bonds offered, less than half—800,000—were sold. Receipts for the company amounted to 255,000,000 francs, or considerably less than half of what was wanted. The cost of the issue had been enormous—31,000,000 francs—and since the law required that 120,000,000 francs be set aside for interest and for the prize fund, that left the company with little more than 100,000,000 francs.
By all rights, by every established rule of the game, that should have been the end of the Compagnie Universelle. The bubble should have burst then and there and certainly it would have had de Lesseps conceded defeat. His faith, however, was in people. He saw the arithmetic differently. (Édouard Drumont, who was to be his most vicious critic, asserted that the whole problem all along was that de Lesseps never learned how to add and subtract.) While it was true that only 800,000 bonds had been sold, they had been subscribed for by 350,000 persons. That was 350,000 men and women who still believed, who were still behind him and the honor of France. That was also three times the number of people who had subscribed to the 1880 stock issue, which had been such an unprecedented demonstration of the “people’s capitalism.” The bond sale had shown that after eight years, after all the setbacks, the expenditures, the loss of life, his popular following was greater than ever!
In the words of one contemporary English writer, “M. Lesseps soon showed he was not dead, and he was speedily laboring with great energy to repair the effects of the blow. . . .” A less admiring editor of the New York Tribune wrote of his “unscrupulous audacity.”
He would launch a campaign to sell the remainder of the lottery issue. Again he would take his case to the people of France. Striding onto the platform at a mass meeting of shareholders in August, he was cheered as never before in his career. His mere presence was a magnetic charge; he was inspiring, heartrending, commanding, all these at once; he was the voice of authority, the ageless living emblem of French verve and grandeur. The Suez Canal had brought 2,000,000,000 francs to France, he told them; the Panama Canal would bring 3,000,000,000. “All France, it may be said, is joined in the completion of the Panama canal. Actually more than six hundred thousand of our compatriots are directly interested in the rapid success of the enterprise. If each of them will take two lottery bonds or get them sold, the canal is made!”
His call was for one all-out, climactic assault. The proposition was like that of a chain letter: a bonanza only if everyone participates, only so long as no one breaks the spell. To line up new investors, security holders throughout France were organized into hundreds of committees, these supposedly an expression of a huge ground swell of popular support. He and Charles set off on a grueling cross-country tour to Lyon, Nîmes, Marseilles, Bordeaux, to Nantes (where the Eiffel locks were being built), to Lorient, to twenty-six cities in October and November, spending long nights on trains, listening to advice, shaking hands, sitting for photographers, answering questions, exhorting local committee heads, enduring endless formal banquets. It was billed as a lecture tour, but de Lesseps, who turned eighty-three on November 19, was unable any longer to sustain the old exuberance. It was Charles who gave most of the speeches this time, while his father sat on the stage like some national monument. On cue he would rise and add a few words.
The price of the unsold bonds was cut once, twice, three times, to a bargain price of 320 francs. A buyer need only put down 90 francs ($18) and could pay the balance in eight monthly installments.
Only once does the strain of the ordeal seem to have affected the old hero. He and Charles had taken their campaign across to England, for an appearance before the British Association at Bath. Afterward came reports of personal bitterness, reports ignored by the French press but picked up in Panama by the Star & Herald. In London he implied that there had been more to his labors than met the eye. He threatened “to publish an account of every step he had been forced to take in the Panama Crusade,” steps that had involved certain high-placed figures in the French government.
If it was an attempt to frighten the government at home into saving the company at the last minute, it did not work.
The remaining lottery bonds went on sale November 29. The closing of the issue was set for December 12. The condition of the sale was that unless 400,000 of the bonds were taken, the subscription would be annulled. “I appeal to all Frenchmen,” wrote de Lesseps in a final stirring call. “I appeal to all my colleagues whose fortunes are threatened . . . . Your fates are in your own hands. Decide!”
The offices on the Rue Caumartin became the focus of a tremendous emotional tension that reached to every part of France. For hundreds of thousands of people the fate of the company meant the difference between a chance of real security for once in their lives and absolute financial disaster. If the company were to fail, it would indeed be, as Paul Leroy-Beaulieu had said, the largest, most terrible financial collapse on record, a stupendous event historically; but for the vast majority of those who had stood behind Ferdinand de Lesseps all these years, investing their life’s savings, often borrowing heavily, mortgaging land, selling off family treasures—jewelry, pictures—to invest more, it would very simply mean a personal disaster of almost unimaginable proportions.
Again bear raiders made an all-out attack and Panama stock plummeted more than 100 points in less than two weeks, from 270 francs to 165 francs. By December 8, lottery bonds on the Bourse were selling for 260 francs, 40 francs less than what de Lesseps was asking.
December 11, the next to the last day of the sale, the large public hall on the ground floor of the company’s offices was filled with investors, “flushed and excited,” as Emily Crawford wrote, “but willing to stake their last penny on the hope of retrieving their fortunes.” They were, she said, like desperate gamblers, their hopes highest at the point when their losses had become greatest. “Strangers met and mutually strengthened their faith with words of comfort. A man who ventured to express doubts as to the possibility of the canal found the place too hot for him.” That same day Panama shares on the Bourse closed at 145, down another 115 points in three days.
The next day, the final day of the sale, the scene at the canal offices was even more frenzied, as a still larger, more excited crowd packed into the public hall. At about four in the afternoon, de Lesseps appeared, causing a sensation. A way was cleared and he climbed onto a table at one end of the room. He motioned for silence.
“My friends,” he cried out, “the subscription is safe! Our adversaries are confounded! We have no need for the help of financiers! You have saved yourselves by your own exertion! The canal is made!”
Tears were streaming down his face. Then he was being helped from the table and the crowd seemed delirious. People were crying, cheering, embracing one another. He began reaching out for hands. Several women tried to kiss his clothing.
No details were available on the success of the sale. But by nightfall reports swept through the city that more than the required 400,000 bonds had been sold in Paris alone, that Marseilles had taken another 86,000.
The throngs that pressed into the Rue Caumartin the next morning, December 13, had come for a victory celebration. Orders were still pouring in, it was announced when the company opened its doors. The subscription had reached an astounding 800,000. There were repeated shouts for de Lesseps to appear; everyone was pressing toward the table where he had stood the day before. Perhaps an hour went by. Then the figure that entered, moved through the crowd, and climbed onto the table was seen to be Charles de Lesseps.
“Do you wish to see Monsieur de Lesseps?” he called, and there was a roar of approval. (“Yes! We want to see that good Monsieur de Lesseps,” said an elderly woman standing beside Mrs. Crawford.)
“My father will always be happy to see you, but I suppose you all wish for some information.”
He waited for the cheering to stop.
“We are sitting at an important meeting of directors which I have left for a moment to come here. I do not know what decision may be taken by this meeting, but I am willing to tell you whatever I know.”
The crowd was suddenly still. He had barely to raise his voice to be heard.
“I will be perfectly open with you, only do not hold me responsible if you learn anything else tomorrow. If you would like to wait for another hour, I will let you know the full result of our deliberations, but would you rather know at once what I can tell you?”
According to Mrs. Crawford, whose account of the scene is the most vivid available, everybody assented to this. He asked what sort of information they wanted, she wrote, “and being told in reply that they wished to know the result of the subscription, he went on in a deliberate tone.”
The subscription, he said, had thus far reached a total of 180,000 bonds. “This being below the minimum fixed by Monsieur de Lesseps, we will commence returning the deposits tomorrow. You see, I am telling you exactly how things are.”
People began muttering that . . . yes, this was the best thing; yes, there must be another subscription. It was as if they did not yet understand the meaning of what he had said. Many people were so dazed they stood frozen, saying nothing at all, little expression on their faces. When someone finally asked how the picture could possibly have changed so drastically overnight, Charles answered: “My father is younger in spirit than I. His remarks were made on the strength of a hopeful report that I made to him. The result is bankruptcy or the winding up of the company.”
The morning after, December 14, the company suspended payments and petitioned the government for a three-month moratorium on bills and interest, so that a new company could be organized to continue the work. The news was immediately put on the wires and within hours newspapers around the world carried the story of “The Great Canal Crash.” At the Palais Bourbon, on the other side of the Seine, the Chamber of Deputies convened at once and the following day, December 15, 1888, turned down the proposal by a vote of 256 to 181. Within hours the appropriate court, the Tribunal Civil of the Department of the Seine, appointed three temporary receivers to administer the company’s affairs.
It was a reporter for Le Figaro, arriving at de Lesseps’ home just ten minutes after the vote in the Chamber, who told him how the vote had gone. De Lesseps turned dreadfully pale, the man wrote afterward, and could only whisper, “It is impossible! It is shameful!”
The pallor and the loss of words were but momentary, however. Instinctively the old reflexes responded. He was in motion again, issuing statements, talking of new schemes. The company was in wreckage, the government had turned its back; the long battle was ended and he had been crushed. It was Sedan again for France, yet he refused to accept that—he was incapable of accepting that.
For his family and friends the next weeks were an agony, as he drove himself and others in a final, hopeless attempt to pick up the pieces and rally his forces. Demonstrations of popular support were staged throughout the country. At one in Paris, in the Palais d’Hiver, a huge ice-skating rink, five thousand of the faithful turned out. “Shall we pledge ourselves, each according to his means, to aid this great enterprise by purchasing new shares of Panama stock?” one speaker had cried and the response was thundering,“Oui! Oui!”
H. B. Slaven arrived in Paris and there were daily conferences on the Rue Caumartin. It was announced that the major contractors would continue all essential operations for the time being, working on credit, since any abrupt cessation of the effort would mean the certain ruin of machinery worth millions of francs (machinery all belonging to the company), as well as tremendous damage to the unfinished excavation.
A new company would be launched, de Lesseps said, and in late January new stock actually went on sale. The idea never had a chance, of course; of 60,000 shares, all of 9,000 were sold.
The official end came on February 4, 1889. In accordance with a desire formally expressed by shareholders in the original company, the Tribunal Civil appointed a liquidator. The Compagnie Universelle du Canal Interocéanique was no more.