All the Great Prizes

by John Taliaferro

  WHILE ALASKA SMOLDERED, THE canal caught fire. Admiral Walker’s canal commission had chosen the Nicaraguan route because the French canal company had balked at setting a firm price for the sale of its concession in Panama. But in December 1901, after the Hay-Paunceforte Treaty was signed and with the Hepburn bill heading for a vote in the House, the French awoke to the likelihood that their stock was about to become worthless and announced that they were willing to part with their concession for the bargain price of $40 million—exactly the figure needed to put Panama back in the running against Nicaragua. Informed of the lower, competitive figure, Roosevelt said nothing until the vote on the Hepburn bill on January 9, 1902. Immediately afterward, however, he intervened.

  Like the vast majority of Americans and nearly every member of Congress, Roosevelt initially had assumed that Nicaragua was “the American route.” Yet he also recognized that, from the standpoint of engineering, Panama had a great deal going for it: the route was shorter, straighter, required fewer locks, and had better harbors at either end. All of these advantages had been underscored in a minority report submitted by a determined engineer named George Morison. Even after being outvoted, Morison did not give up, and on December 10, he had stubbornly restated his pro-Panama argument in a letter to the president. Impressed by Morison’s gumption, Roosevelt directed Admiral Walker to reconsider Panama and to take into account the $40 million offer from the French. On January 18, the commission reversed its decision, under Roosevelt’s stern gaze, and voted unanimously in favor of Panama.

  Although the Hepburn bill, which called for a Nicaraguan canal, had passed easily in the House, it now had to get through the Senate. On January 28, Wisconsin senator John Spooner, a solid Roosevelt man, introduced an amendment to the Senate version of the bill, calling for the government to buy the French concession and secure a six-mile-wide canal zone within the Colombian department of Panama. The amendment also stipulated that if a satisfactory agreement with Colombia could not be struck within “a reasonable time,” then America would begin digging in Nicaragua.

  GEORGE MORISON’S PLUCK AND Roosevelt’s intervention changed the course of history; but they were by no means the Panama route’s only friends. Three men—a French engineer, a New York lawyer, and a U.S. senator—had been working for more than a year to turn the tide from Nicaragua to Panama. All knew from the start that the odds were slim, but success promised a terrific payoff—in honor, prestige, and treasure.

  Two of the three had direct ties to the French canal company. Philippe Bunau-Varilla had been an engineer under Ferdinand de Lesseps during the first attempt to construct a Panama canal. After the first French company went broke, Bunau-Varilla, along with his brother (and Gustave Eiffel), floated the Compagnie Nouvelle du Canal de Panama (“the new company”), becoming major stockholders. When Bunau-Varilla failed in exhorting his countrymen to finish the canal, he then applied himself to persuading the U.S. government to buy out the French concession and whatever assets were salvageable from the first years of work in Panama. It went without saying that, if the sale could be consummated, his rusty dross would turn to gold.

  Yet Bunau-Varilla’s impulses were not entirely mercenary. Prim and trim, with a flamboyant red mustache and the bravura of a bantam rooster, he portrayed himself as a high-principled crusader. Panama was his “Great Adventure,” his “Great Idea.” To have the canal brought to completion, even if not by Frenchmen, would be a tremendous accomplishment that could not be measured in mere dollars or francs.

  Bunau-Varilla was unabashed in his proselytizing of the benefits of Panama over Nicaragua. He lavishly entertained members of the American canal commission when they came to Paris in 1899 to examine the French canal records. In 1901, he toured the United States, pitching the Panama route to business groups and politicians. Besides being shorter, straighter, and cheaper, the route was not endangered by a single volcano—something that could not be said for Nicaragua, Bunau-Varilla pointed out. A pamphlet he distributed by the thousand deliberately ignored Panama’s malaria, yellow fever, and floods but snidely exploited Nicaragua’s national emblem. “Youthful nations like to put on their coats of arms what best symbolises their moral domain or characterises their native soil,” he suggested. “What have the Nicaraguans chosen to characterise their country on their coat of arms, on their postage stamps? Volcanoes.” Never mind that none of Nicaragua’s volcanoes had been judged a threat by the American engineers who examined the Nicaraguan route.

  As it turned out, his propaganda had no evident effect on the canal commission’s initial decision; after giving Panama a careful look, it chose Nicaragua anyway. Yet Bunau-Varilla did make one crucial acquaintance on his American junket in 1901: Senator Mark Hanna.

  Hanna, who had made a fortune in shipping before masterminding the political ascendance of William McKinley, had recognized the virtues of Panama well before the canal commission completed its preliminary report in 1900. Bunau-Varilla told a slightly different story of Hanna’s enlightenment, asserting that he had chanced upon the senator outside the Waldorf-Astoria Hotel in New York and not let go until he had transformed him into a zealot for his cause. More likely, Hanna had already been leaning toward Panama, acting as a counterweight to the Nicaraguan route’s most fervid advocate, Democratic senator John Tyler Morgan. Regardless, Bunau-Varilla now had his man in Washington.

  Hanna was also subject to the persuasions of the New York attorney, William Nelson Cromwell, who had grown very wealthy carrying water for men like Collis Huntington, William Vanderbilt, and J. Pierpont Morgan. Cromwell was silver-haired and silver-tongued, with “a rather theatrical look,” according to a profile in the New York World. “[B]ut there is nothing theatrical about his methods. He can dig deeper and do big things more quietly than almost anyone downtown.” As counsel to the Compagnie Nouvelle since 1894, Cromwell had been charged with the task of finding a buyer for the moribund corporation. Toward this end, he had reincorporated the Compagnie Nouvelle in the United States and done everything he could to derail the pro-Nicaragua Hepburn bill. Unlike Bunau-Varilla, whose avowed client was “Humanity,” Cromwell worked for a fee. His final bill to the Compagnie Nouvelle would be $800,000.

  Cromwell and Hanna had run in the same circles for years; now their mutual interest in a Panama canal brought them into even closer association. The World would later allege that Cromwell had paid for Hanna’s favor, although, as a man in possession of a large checkbook himself, Hanna was not so easily bought. Still, it was perhaps not entirely coincidental that after Cromwell sent Hanna’s Republican National Committee a $60,000 check for McKinley’s reelection, the party platform was edited to call for an “isthmian” canal—not Nicaraguan, as first specified.

  In January 1902, when the canal commission changed its endorsement from Nicaragua to Panama, Hanna was still in his first term in the Senate and far from its most loquacious member, preferring to wield his considerable influence behind the scenes. Since the death of McKinley, he and Roosevelt had cobbled a fragile peace. One of their common causes was a canal—across Panama. And so, backed by Roosevelt and the tireless lobbying of Cromwell and Bunau-Varilla, Mark Hanna undertook passage of the Spooner amendment to the Senate canal bill as the hallmark of his public career.

  The initial battle took place within the Interoceanic Canals Committee, chaired by Senator Morgan. Hanna, also a member, knew he did not have the votes to keep the committee from reporting the Hepburn bill favorably, but he succeeded in dragging out the hearings by insisting that no report be issued until all the members of the Walker commission had been questioned one more time. On March 13, despite Hanna’s obstructionist tactics, the Senate committee rejected the pro-Panama Spooner amendment and gave its blessing to the pro-Nicaragua Hepburn bill. But at least Hanna had bought time in which to prepare the minority report that he would need to turn the vote of the full Senate back toward Panama.

  Before he could proceed any further, however, he first needed some assurance that
Colombia would sign a treaty allowing the French to sell their concession and permitting the United States to build a canal in Panama.

  THERE SEEMS NEVER TO have been a time when Colombia was not struggling to hold itself together. Ever since the 1830s, when Colombia, then known as New Granada, broke off from Venezuela and Ecuador, Conservatives had been at odds with Liberals, the former desiring a stronger nationalist government, the latter more decentralized rule. The Department of Panama, many long days and hundreds of miles by mule and boat from the capital at Bogotá, was frequently either the object or the origin of violent conflict between the two factions. Hardly a year passed without a riot or an insurrection of some sort on the isthmus. Twice Panama had declared independence and formed a provisional government, without success. In October 1899, when Liberals in Santander, northeast of Bogotá, rebelled against the ruling Conservatives and ignited what would be known as the Thousand Days War, Panamanians again talked openly of breaking away or, at the very least, gaining greater autonomy over their own affairs and future—which they surely hoped would include a Panamanian canal.

  Conservatives had their own designs on Panama. Virtually bankrupt and struggling to provision their armies, they viewed a canal across Panama not just as an expression of Colombian sovereignty but also as a means to feed their troops and keep their beleaguered government afloat. As one measure of the canal’s importance to the regime, in July 1900 Vice President José Manuel Marroquín ousted President Manuel Antonio Sanclemente after the aging Sanclemente committed the egregious gaffe of selling the Compagnie Nouvelle a six-year extension on its concession for 5 million francs—regarded by Marroquín and his adherents to be a fraction of what it was worth.

  In early 1901, Marroquín sent Carlos Martínez Silva, an ally in the recent coup, to Washington to strike a harder bargain. In Martínez Silva’s first months in the United States, he convinced himself that a canal across Nicaragua was not a serious threat, and accordingly he gave Marroquín the impression that their negotiating position was quite strong. Colombia, he wrote to his superiors, “held the trump cards.”

  Soon, though, Martínez Silva’s certainty eroded. After passage of the Hay-Paunceforte Treaty and the completion of the first canal commission report—the one favoring Nicaragua—the Colombian minister grew nervous, realizing that if he did not make an attractive pitch, and make it promptly, there would be no hope for a Panama canal and no payday for his government. Repeatedly he pressed Marroquín for guidance on the terms of a treaty but heard nothing or, after long silences, received only broad instructions to bide his time and refrain from making firm commitments. Finally, after the canal commission changed its mind, choosing Panama, and the proposed Spooner amendment called for striking a bargain with Colombia within a “reasonable time,” Martínez Silva took it upon himself to draft a treaty that he thought would encourage the United States to pass a Panama bill.

  His draft treaty granted a one-hundred-year lease on a six-mile-wide canal zone. Colombia would retain sovereignty over the zone and the ports at either end: Colón on the Caribbean and Panama City on the Pacific. Colombia would also take responsibility for defending the zone—although the United States would have the right to intervene at the invitation of Colombia or, in cases of emergency, on its own volition. Last, Colombia would allow the Compagnie Nouvelle to transfer—which was to say, sell—its concession to the United States; for permitting this transfer, Colombia expected the United States to pay an annuity of $600,000.

  But then, before Martínez Silva had a chance to present his proposal to Hay, he was called back to Colombia. Fortunately, William Cromwell, seemingly always in the right place at the right time, had a copy of the draft treaty in his possession and was kind enough to forward it to the State Department. Indeed, Cromwell had helped Martínez Silva to write the proposal, which explained why the terms were so accommodating to American interests—and those of the Compagnie Nouvelle as well.

  To replace Martínez Silva, Vice President Marroquín sent his tough-minded war secretary, José Vicente Concha, whom he counted on to stand up to the Americans. Concha arrived in the United States prepared to demand $20 million for the rights to build the canal, a drastically steeper fee than what Martínez Silva had proposed to Hay.

  Soon enough, with communication from Bogotá as erratic and as vague as ever, Concha too fell into the clutches of William Nelson Cromwell. Unlike his predecessor, Concha had never traveled outside his own country before, and because he spoke no English, he allowed Cromwell to help him write a letter to the Senate canal committee, restating Colombia’s desire to allow transfer of the canal concession and construction of the canal through Panama.

  The letter did not alter the Interoceanic Canals Committee’s March vote on the Hepburn bill and Spooner amendment, but that decision—in favor of Hepburn and Nicaragua—lit a fire under Concha, who wrote to Bogotá warning that, without a firm and reasonable offer by Colombia, the Nicaragua route would win out and, more than likely, a revolution in Panama would follow. “[I]t is not convenient, opportune or practical,” the formerly immovable minister advised his government, “to assume . . . an attitude of open resistance to the pretensions of the United States, under penalty of involving the Republic [of Colombia] in a most serious conflict, in which it would certainly not preserve its integrity.” Doubtless, Cromwell’s fingerprints were on this letter as well.

  Concha was assured by his government that new instructions were on the way, but as usual, they were a long time in getting from Bogotá to Washington. In the meantime, he and Cromwell worked up a new treaty, quite similar to Martínez Silva’s earlier proposal. Bunau-Varilla was also influential, persuading Concha to reduce his initial demand of $20 million to $7 million. Concha presented the draft to Hay on March 31, and over the next two weeks, with Cromwell serving as intermediary, the Colombian minister and the secretary of state refined the treaty’s terms, adding a $100,000 annuity to the $7 million up-front payment.

  By mid-April, Concha still had not received his instructions, but quite advantageously, a copy of these instructions came into the possession of the American minister in Bogotá, Charles Hart, who wired a summary to Hay with a promptitude that Colombia’s own telegraph agents, for reasons elusive, were unable to match. The most worrisome of the new instructions was a strict order for Concha to hold off negotiating with the United States until after Colombia had reached an understanding with the Compagnie Nouvelle on the transfer of the concession.

  Knowing what Concha did not yet know, Hay proceeded genially but with as much haste as he dared. Concha signed off on the final draft of the canal treaty on April 18—eight days before he received the belated instructions from Bogotá that probably would have foiled the entire arrangement. By then it was too late to renege. A chagrinned Concha informed Bogotá that to do so would deliver an insult to the Americans that surely would drive them away from Panama.

  Hay had been both lucky and more than a little bit shrewd. He chose to treat Charles Hart’s summary of Bogotá’s instructions as an internal State Department communiqué and, as such, felt under no obligation to share the information with Concha—although he was well aware that Concha was anxiously awaiting his own copy. Hay had not acted deceitfully; nor had he been guilty of peeking at his neighbor’s hand; rather, he had merely elected to hold his own cards close to his vest. Besides, from where he sat, he sincerely believed that the deal on the table, bearing the fingerprints of Concha, Cromwell, Bunau-Varilla—and one or two of his own—was plenty fair to all parties.

  OF COURSE THE HAY-CONCHA treaty would not be final and official until ratified by the congresses of both countries. In the meantime, Hay endeavored in good faith to negotiate a separate parallel treaty with Nicaragua. Progress was slow on this front as well. “[B]oth in Colombia and in Nicaragua,” he explained to Senator Morgan, “great ignorance exists as to the attitude of the United States. In both countries it is believed that their route is the only one possible or practicable, and
that the Government of the United States, in the last resort, will accept any terms they choose to demand.”

  He was careful to maintain a posture of chaste impartiality. His president and his party leader favored Panama; most of Congress still favored Nicaragua. Hay had learned the hard way that to put himself in the middle of a senatorial debate over a treaty brought only damnation for him and too often for the treaty as well. He had already done yeoman’s work for the canal by abrogating Clayton-Bulwer and passing Hay-Paunceforte. Now he would let Hanna and Morgan wrestle over the route. “I conceive my duty to be to try to ascertain the exact purposes and intentions of both [Nicaragua and Colombia], and, when I have done so, to inform your Committee of the result of my investigation,” he stiffly informed Morgan, who was trying to expose the secretary’s bias toward Panama and tip him toward Nicaragua. “I do not consider myself justified in advocating either route, as this matter rests with the discretion of Congress. When Congress has spoken, it will be the duty of the State Department to make the best arrangement possible for whichever route Congress may decide upon.”

  Although Hay expressed reluctance to help Congress make up its mind, Cromwell and Bunau-Varilla continued to work more energetically than ever on behalf of Panama and the Compagnie Nouvelle. In May, Cromwell drafted a minority report for Hanna, summarizing the technical, geological, economic, legal, and political reasons favoring Panama. He distributed copies to every member of Congress. Bunau-Varilla was equally diligent and in many respects more creative. To enhance Hanna’s minority report, he prepared a series of graphs that compared everything from the length of navigation (fifty miles for Panama, three times that for Nicaragua) to the number of locks required (Panama three, Nicaragua eight) and the estimated cost of annual maintenance (Panama $2 million, Nicaragua $3 million). “These simple and lucid diagrams,” Bunau-Varilla asserted, “crushingly demonstrated the great superiority of Panama.”