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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?
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
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It was nearly three years later when the Panama scandal broke wide open, rocking France to its foundations. Between times, the great Universal Exposition of 1889 had been staged beneath Gustave Eiffel’s gargantuan tower, and French political life went along little changed from year to year, one ministry succeeding another, despite the flaming oratory, despite the Boulanger crisis. General Boulanger, “the strong man,” having sat out his chance to seize power, having escaped to Brussels with his adored mistress, Madame de Bonnemains, had also, soon after her death, shot himself at her graveside.
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There were wild rumors concerning de Reinach, the evil genius of Delahaye’s speech, whose body had been taken from Paris and buried immediately after the required twenty-four-hour delay. It was said that he had taken poison. (Le Gaulois, the smart society paper, described his final agony in such exquisite detail that it was as if someone from the paper had actually been in the bedroom.) It was said that he had been poisoned by someone, that he had been murdered in his sleep. It was said that he was alive and out of the country. The coffin was empty, exclaimed one deputy in a speech. A family
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So it was then that the directors turned over to de Reinach the check for 3,390,000 francs, which de Reinach took to the bank and converted into the various checks to “Bearer,” the two largest of which went to Herz. From that point on Herz had been blackmailing de Reinach, and thereby the canal company, for everything he could get. What hold Herz had on de Reinach remained obscure, although there were innumerable theories concerning various dark secrets in de Reinach’s past, things so dreadful that he had been willing to go to any lengths to keep Herz silent. A favorite theory was that de
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The conference in Herz’s study had been brief. De Reinach had been extremely agitated, “his face crimson and his eyes popping out of his head.” Herz had said it was too late to silence the papers; he considered the subject closed. Herz was perfectly cool and controlled, Clemenceau recalled, and wholly unsympathetic. Later in the evening de Reinach went alone to see his nephew Joseph, then, still later, to see two young women whom he kept in respectable style in the Rue Marbeuf. Apparently he reached his own home about one in the morning and was found dead six hours later. The consensus in
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So by the year’s end, in the less than four months since Édouard Drumont commenced his disclosures in La Libre Parole, a government had fallen; three former premiers had been named in the plot, along with two former ministers and two prominent senators; more than a hundred deputies or former deputies stood accused of taking payoffs; there had been one probable suicide, a panic on the Bourse, a much-publicized duel. The sinister Herz had become a subject of worldwide fascination and there was the growing conviction that France had been the victim of a diabolic conspiracy. About the only missing
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“Panama” had become a universal term of abuse, and, for many, a battle cry. On the night of January 6, La Libre Parole had staged a large anti-Semitic rally at the Tivoli Vauxhall. Jews had created Panama, exclaimed the main speaker, the Marquis de Morès, and it was the Jews who were rejoicing now at the ruin of French honor. When several hundred spectators rose in angry protest (as the rest of the audience cheered wildly), a riot broke out. Chairs were smashed; people were beaten to the floor and trampled. This was not the “real France,” the still-incredulous Smalley cabled New York. “The
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Charles de Lesseps was probably telling the simple truth as he knew it through the length of this, “The Great Bribery Trial.” Yet neither Floquet, nor de Freycinet, nor Clemenceau, nor Rouvier, nor anyone of importance was ever prosecuted. No newspaper publishers or reporters were brought to judgment. Those deputies and the one senator on trial were acquitted, Sans-Leroy as well. The single political figure to be convicted was Baïhaut and that was only because he had confessed. The jury delivered its verdict March 21, 1893. Charles and Blondin, the intermediary in the arrangement with Baïhaut,
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That makes 12,500,000 francs—$2,500,000—that the company paid to Jacques de Reinach alone. Some of that was perfectly legitimate theoretically (for his part in the various security flotations); a good portion of it (according to the check stubs) went to fix various politicians; much of it, perhaps even all the rest of it, went to Cornelius Herz. But Herz is known to have received 600,000 francs directly from the company. Baïhaut got 375,000, Floquet obtained another 250,000, Sans-Leroy almost certainly got 300,000. And undoubtedly there were others. But how many? Perhaps there were more than a
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Of those convicted, Baihaut suffered the most. He was put in solitary confinement in a prison where inmates were made to wear a hood whenever they were taken from their cells. Only after three years of this did the courts and the public decide he had been punished enough. Gustave Eiffel, the only engineer to have been stained by the scandal, would be cleared later of having done any “dishonorable” act by a special committee of inquiry convened by the Grand Chancellor of the Legion of Honor. But his career as a builder was finished; he would thereafter apply himself to wholly different work in
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As for Cornelius Herz, he spent the rest of his life inside the hotel at Bournemouth. How much or how little truth there was to the things he told Emily Crawford cannot be determined. The secret cache of incriminating documents was never found. He died in 1898, taking his side of the story with him.
The extraordinary venture had lasted more than a decade. It had cost, according to the best estimates, 1,435,000,000 francs—about $287,000,000—which was 1,000,000,000 francs more than the cost of the Suez Canal, far more in fact than had ever before been spent on any one peaceful undertaking of any kind. The number of lives lost, a subject that had been strangely avoided throughout the Affair, had not been determined, nor was it ever to be with certainty. Dr. Gorgas, from his analysis of the French records, would conclude that at least twenty thousand, perhaps as many as twenty-two thousand,
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Monumental naïveté had been both his making and his unmaking. And destruction at the end for such a spirit thus became no less inevitable or blameworthy than it had been for, say, Joan of Arc, such being the real world’s reward for sainted madness. But as events receded farther into the distance, he became something rather different. He was seen more and more as the tragic victim of earthly forces beyond his control: of the satanic jungle; of ambitious technical advisers willing to say anything, conceal anything, to satisfy their own selfish ends; of unscrupulous financiers (who to many people
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The root sources of his downfall had been apparent since the Paris congress of 1879: the insistence on a sea-level passage through country he knew nothing about, the total disinterest in conceptions other than his own, the refusal to heed voices of experience, the disregard for all data that either conflicted with or that appeared to vitiate his own cherished vision; but none of these would have mattered greatly had it not been for that extraordinary ability to inspire the loyalty and affection of individual human beings at every social and intellectual level.
But had he and his technical advisers decided to make it a lock canal even as late as 1886, at the time of his second tour of the Isthmus, there probably would have been a French canal at Panama, death, disease, jungle, geology, costs, and de Lesseps’ advanced age all notwithstanding. The size of the locks being contemplated would have made the canal obsolete in relatively little time, but the canal would have been built. As for any possible complicity on his part in the less-than-noble practices that went on behind the scenes, there is no real mystery. He was neither innocent nor a simpleton.
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His was not “the faith that could move mountains,” as was written or said by so many who never troubled to look at what he had been saying repeatedly since the Paris congress. Not at all. His was the faith that the mountains could be moved by technology. He was as much bedazzled by the momentum of progress as by his own past triumph. “Science has declared that the canal is possible, and I am the servant of science,” he had remarked at the Delmonico’s dinner in 1880. Wondrous new machines would save the day, he told his stockholders again and again. Men of genius would come forth, by which he
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As it happens, the commission appointed by the liquidator to appraise the work had returned with an encouraging report: the amount accomplished was “very considerable”; the plant was “in a good state of preservation”; the lock canal could be completed in about eight years. With an eye to the future, the liquidator had also arranged an extension of the old Wyse Concession, by sending Wyse back to Bogotá. The concession was declared valid until 1903 on the condition that a new French company should be organized to carry on the work, and on October 20, 1894, just seven weeks before the death of
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In time to come, he wrote, when the Americans built the Nicaragua canal, Panama would remain one of the greatest ruins on earth, a relic of swindle and death and of the tragic old man who had been so misguided as to believe in a Panama passage.
Roosevelt, however, looked upon the canal quite differently than de Lesseps had, differently, in fact, than nearly everyone. It was very well for others to talk of it as the dream of Columbus, to call it a giant step in the march of civilization, or to picture as de Lesseps so often had its immeasurable value to world commerce. Roosevelt was promoting neither a commercial venture nor a universal utility. To him, first, last, and always, the canal was the vital—the indispensable—path to a global destiny for the United States of America. He had a vision of his country as the commanding power on
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Though the voyage was hailed as “unprecedented in battleship history,” a triumph of American technology and seamanship, it was the implicit lesson of the experience that would matter in the long run. “By that experience,” wrote Mark Sullivan, social historian of the era, “America’s vague ambition for an Isthmian canal became an imperative decision.” As a demonstration of the military importance of the canal, it had been made to order.
According to Hay’s proposal, the United States was to have the right to construct and operate the canal, which, like Suez, was to be “free and open in time of war as in time of peace, to vessels of commerce and of war of all nations, on terms of entire equality. . . .” The United States could keep order along the route with its own police, but there were to be no fortifications. The agreement was signed in Hay’s office on February 5, 1900.
second Hay-Pauncefote Treaty, the first important treaty of Roosevelt’s Presidency. This time the clause forbidding fortification had merely been omitted. The United States was to be free to do whatever was necessary to protect the canal “against lawlessness and disorder” and the unwritten understanding was that this in fact authorized fortification. Roosevelt, Lodge, and Morgan were quite satisfied and there was never any serious doubt about the fate of the document after that.
Morgan did not look like much. He was small and frail, a dry little stick beside a man like Hanna. His hair and mustache were as white as paper, his scrawny neck several sizes too small for the inevitable wing collar. He was known as one of the old-time characters on the Hill. A lawyer from Selma, Alabama, he had led a cavalry charge at Chickamauga and survived to become a brigadier general. He had been elected to the Senate first in 1876 and had been serving without interruption ever since. Friend and foe considered him the most intellectual of Democrats (as Hoar was the most intellectual of
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Morgan wanted an American canal under American control no less than did Roosevelt. Nor had he ever been the slightest bit tentative about that, which was among the chief reasons for Roosevelt’s admiration. Several of his strongest arguments for a Nicaragua canal were, nonetheless, avowedly provincial. An ocean passage at Nicaragua would mean a return of prosperity to the South. A Nicaragua canal would be closer to any American port than would a canal at Panama, but a Nicaragua canal would also be seven to eight hundred miles closer to the Gulf ports of Mobile, New Orleans, and Galveston than
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Morgan had called the Panama plan “a job which has disgusted France . . . until she had shuddered like a sick baby at the enormity of the villainies perpetrated by her own people.” The entire affair had been “gangrene with corruption.” The Compagnie Nouvelle du Canal de Panama was the so-called New Panama Canal Company, the words spoken as though they had an unpleasant smell. The company’s assets and franchises were held to be virtually worthless, its stockholders little better than common thieves. Its officers were paid schemers and to be trusted under no conditions. These people, Morgan
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For those few who bothered to read the commission’s report, however, it was obvious that the important news was not the concluding decision for Nicaragua—a decision that had been expected all along— but the exceedingly strong case being made for Panama. There was no need to read between the lines. All one had to do was to look at the technical arguments being presented, none of which was very technical or complicated. The deciding factor had been the price put by the French company on its Panama holdings. Nicaragua was the “most practicable and feasible” route “after considering all the facts
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To date, technically speaking, the French company had never really fixed a price for its holdings. Admiral Walker had been informed only as to what the company considered the Panama property, equipment, and franchises to be worth—which was $109,000,000. Having nothing else to go by, Walker and his commissioners had taken that to be the price and had based their decision on it. The new price, the first price actually quoted from Paris, was presented to Walker by representatives of the company early on January 4, 1902, the morning most of Washington was absorbed in accounts of Alice Roosevelt’s
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On January 28, Senator John Coit Spooner introduced an amendment to the Hepburn Bill. It authorized the President to acquire the French company’s Panama property and concessions at a cost not to exceed $40,000,000; to acquire from Colombia perpetual control of a canal zone at least six miles wide across the Isthmus of Panama; and to build a Panama canal. If a clear title or a satisfactory agreement with Colombia could not be reached within “a reasonable time,” then the President was authorized to proceed with a canal at Nicaragua. If passed, the proposal would obviously transform the House
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As things stood, there was every reason to assume that the commerce of the world, not to mention the white ships of the United States Navy, would one day be plying the waters of beautiful Lake Nicaragua. And this is doubtless what would have occurred had it not been for certain unexpected events and a mere handful of extremely determined individuals, two of whom comprised the main thrust of what the newspapers darkly referred to as the “Panama Lobby.” They were William Nelson Cromwell and Philippe Bunau-Varilla. Their activities to date require some explaining. • • Both Cromwell and his
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William Nelson Cromwell—he preferred the use of all three names—was the good, eager, poor diminutive boy from Brooklyn, the son of a Civil War widow, “a lad of delicate health,” who had once played the organ in the Church of the Pilgrims and went to work first as an accountant in a railroad office. He was the model of Ambition Rewarded who began each day at first light and advised others: “A successful man never forgets his work. He gets up in the morning with it, he works all day with it, he takes it home with him, he lives with it.” He had worked his way through Columbia Law School in his
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By 1901 he had reorganized the Northern Pacific Railroad and assisted J. P. Morgan in founding the United States Steel Corporation. (He was also among those privileged to participate in the stock syndicate that made the giant steel combine possible, along with such “Lords of Creation” as H. H. Rogers, W. K. Vanderbilt, and John “Bet-a-Million” Gates. Cromwell’s share was for $2,000,000, for which he had been required to put up a bare 121/2 percent.)
In 1894, the year the New Panama Canal Company was organized, Cromwell had become general counsel for the Panama Railroad, a stockholder, and a director. This had come about because he was at the time involved with C. P. Huntington and the Southern Pacific, which by then virtually controlled the Panama Railroad as the result of a traffic agreement. Presently he had started looking after the “interests” of the New Panama Canal Company, promising its officers an “open, audacious, aggressive” campaign of “publicity, enlightenment, and opposition” all planned with “Napoleonic strategy.” He was to
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For six years after the de Lesseps company failed, the canal had been idle, no digging, no work at all to speak of; but for the past four years, since 1895, things had begun to stir again on the Isthmus, since progress of a kind had to be shown by the new company in order to maintain the Colombian franchise. This was no mere token effort, Abbot assured them, however modest in scale. A long-needed railroad wharf had been built at Panama City; some excavation had been resumed at Culebra. The place was being tidied up, the jungle chopped back again, equipment looked after. This was phase one, he
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Philippe Bunau-Varilla was to be greatly misunderstood in another generation. The tendency among historians would be to see him as an almost comic figure, a sort of road-show French schemer who, though colorful enough in his fashion, should not be taken altogether seriously. Possibly the mustache had a bearing on that judgment. But primarily it was Bunau-Varilla’s own account of all that happened, his obsession with the first person singular in everything he wrote, which to even the most tolerant modern reader seems so absurdly one-sided, so inflated by self-interest, as to be ludicrous. In
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Moreover, there is ample evidence that the man himself bore little resemblance to the character he becomes in his books. In truth he was a hardheaded, practical, personable, exceptionally intelligent, almost unbelievably energetic individual who made an impression on people that they would remember all their days.
The situation was this. Years before, at Panama, when he resigned his position with the canal company and went to work as a private contractor at Culebra, he had been able to take only a government salary because of a rule requiring all French government engineers to remain in service, accepting no pay or fees from private sources, for a minimum of five years. However, he had seen to it that his brother, Maurice, was put into the Paris office of the contracting firm as its financial manager, and he and his brother had made a secret agreement. A salary would simply be put aside for him until
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So one theory is that Bunau-Varilla had come to the United States representing not only his own and his brother’s interests, but those of Eiffel and the other penalty stockholders, none of whom was permitted to have any say in the management of the company, and few of whom had much respect for the way in which the new company was being managed. Another intriguing theory is that Bunau-Varilla had been “discovered” and subsidized by the Seligmans, the great Jewish financiers of New York, whose reputation for the strictest integrity had been badly stained by their prior role in Ferdinand de
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Where, how had he acquired all the money? How could he afford the enormous house on the Avenue d’Iéna, a house in which there were “servants to wait on the servants,” as one member of the family would recall. No one knew, or at least no one said. The son of an unwed mother of no apparent wealth, a scholarship student at the École Polytechnique, he had gone to Panama, where theoretically he had earned only a modest government salary, then returned to Paris to dabble unsuccessfully in politics, buy a newspaper, and write books about the inherent Genius of the Idea of Panama. Yet somewhere along
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Founding fathers of the Republic of Panama. Seated (left to right): José Agustín Arango, Dr. Manuel Amador, Federico Boyd. Standing (left to right): Nicanor de Obarrio, Carlos C. Arosemena, Manuel Espinosa, Tomás Arias, Ricardo Arias
FROM PANAMA: THE CREATION, DESTRUCTION, AND RESURRECTION, PHILIPPE BUNAU-VARILLA, ROBERT M. MCBRIDE, 1920 Philippe Bunau-Varilla (left) and John Hay in Hay’s office at the State Department, November 13, 1903, just prior to the formal recognition of the Republic of Panama
NEW YORK EVENING MAIL “He’s Good Enough for Me!” Homer Davenport’s famous 1904 cartoon (from the New York Evening Mail) was more representative than any others of the country’s support for Roosevelt’s actions in office, including the steps taken at Panama.
1 As late as 1939, when Life magazine ran an article in which he was referred to as a lobbyist and an adventurer, Bunau-Varilla, at age eighty, responded that he had been no such thing: “Unless you call adventurer a man who sacrifices his time, his money and his scientific capacities to the glory of his nation and to the service of her great friend the United States . . . .”
The commission’s Panama scheme, the projected Panama canal upon which all cost estimates were based and against which all virtues or shortcomings in the Nicaragua plan were compared, had been based in large part on a plan devised by the Compagnie Nouvelle. The essential element in the plan, its key, was a giant dam that would check the Chagres River at Bohio and form a large inland lake reaching nearly two-thirds of the way across the Isthmus. The commission’s decision had been to abandon the sea-level concept, as de Lesseps’ engineers had finally done, and to build a lock canal much along the
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The dam was to be a man-made earthen hill a hundred feet high and it would create a lake some forty square miles in area, the largest artificial lake in the world. But the dam was also to have a masonry core that would extend farther below ground than the dam was high, and to achieve this, pneumatic caissons—for the foundations of the core—were to be sunk 128 feet below sea level, a depth far in excess of anything previously attempted. Did the commission’s entire Panama plan hang on the Bohio dam? Senator Harris asked. Yes, replied Walker. Everything depended on the Bohio dam, but the dam
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Morgan had a vivid picture in mind of the old admiral and his party breezing up and down the Panama Railroad in a private car, deciding the fate of the canal from the view from the window, attended by a swarm of hovering Frenchmen doing everything possible to put them at their ease. It was a grossly unfair picture, but it was one also shared by many in the room.
Morgan moved right along, taking up the geology of the Bohio valley, the design of the controversial dam, the intended use of levees, the silting up of the old French works. It was his characteristic approach, persistent and exasperatingly patient. The impression he seemed to be striving for was this: that Walker and his commission, by recommending Panama, were asking Congress and the country to risk everything on faith, faith in old John Grimes Walker, faith in the assumptions of one particular set of civil engineers, and, at root and worst of all, faith in the French.
“Young nations [he had written in his pamphlet of the previous year] like to put on their coats of arms what best symbolizes their moral domain or characterizes their native soil. What have the Nicaraguans chosen to characterize their country on their coat of arms, on their postage stamps? Volcanoes!” He knew the exact one, a pretty little one-centavo Nicaraguan stamp showing a railroad wharf in the foreground and, in the background, Momotombo “in magnificent eruption.” Rushing about to every stamp dealer in Washington he managed to purchase ninety altogether, one for each senator. He pasted
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The important fact is that Theodore Roosevelt had been convinced that Panama was the superior choice from the strictly objective technical standpoint. And to have a fair understanding of Roosevelt’s subsequent moves this must be kept in mind. “I took the Isthmus” was to be his arrogant, unfortunate claim, but in a very real and crucial sense, quietly, rationally, without fanfare, well before the Panama revolution, he “took the Isthmus” because the sort of men who would have to build the canal assured him that Panama was the place to put it. A momentous policy decision was determined by
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Although negotiations for the canal treaty with the Republic of Colombia had begun well before passage of the Spooner Act, it was not until January of the following year that the agreement was at last signed, and for those most directly involved, the negotiations had been the most difficult, tortuous experience of their professional lives.

