The Path Between the Seas

by David McCullough

The purchase of the French holdings at Panama was the largest real-estate transaction in history until then. The Treasury warrant for $40,000,000 made out to “J. Pierpont Morgan & Company, New York City, Special Dispensing Agent,” was the largest yet issued by the government of the United States, the largest previous warrant having been for the $7,200,000 paid to Russia for Alaska in 1867. Participation by the house of Morgan had been agreed to by both the buyer and the seller and in late April, prior to receipt of the Treasury warrant, J. P. Morgan sailed for France to oversee the transaction personally. His bank shipped $18,000,000 in gold bullion to Paris, bought exchange on Paris for the balance, and paid the full sum into the Banque de France for the account of the Compagnie Nouvelle and the liquidator of the Compagnie Universelle. On May 2, at the offices of the Compagnie Nouvelle on the narrow, little Rue Louis-le-Grand, the deeds and bills of the sale were executed. On May 9 in New York the United States repaid the $40,000,000 to the house of Morgan. Morgan’s fee for services, charged to the Compagnie Nouvelle, was $35,000. With the $10,000,000 paid to Panama and the $40,000,000 to the Compagnie Nouvelle, the United States had spent more for the rights, privileges, and properties that went with the Canal Zone—an area roughly a third the size of Long Island—than for any actual territorial acquisition in its history, more than for the Louisiana Territory ($15,000,000...