The Uncompleted French Canal

Panama Table of Contents

Throughout the nineteenth century, governments and private investors in the United States, Britain, and France intermittently displayed interest in building a canal across the Western Hemisphere. Several sites were considered, but from the start the ones in Nicaragua and Panama received the most serious attention. President Andrew Jackson sent Charles A. Biddle as his emissary in the 1830s to investigate both routes, but the project was aborted when Biddle abandoned his government mission and negotiated instead with Colombian capitalists for a private concession.

Nevertheless, Colombia continued to express interest in negotiating with the United States on building a canal. A treaty was signed in 1846 between the two countries. The treaty removed the existing restrictive tariffs and gave the United States and its citizens the right of free transit of persons and goods over any road or canal that might be constructed in the isthmus. In addition, the United States guaranteed the neutrality of the isthmus and Colombia's sovereignty over it, with a view to ensuring uninterrupted transit for the duration of the treaty, which was to be twenty years or as long thereafter as the parties gave no notice to revise it. Called the Bidlack-Mallarino Treaty of 1846, it was actually ratified and became effective in 1848.

Because the canal interests of Britain and the United States had continued to clash, particularly in Nicaragua, Britain and the United States sought to ease tensions by entering into the ClaytonBulwer Treaty of 1850. The governments agreed specifically that neither would acquire rights to or construct a Nicaraguan canal without the participation of the other. This general principle was extended to any canal or railroad across Central America, to include the Isthmus of Tehuantepec in Mexico and Panama. In effect, since neither government was then willing or able to begin a canal, the treaty was for the time an instrument of neutrality.

Colombia's attempt to attract canal interest finally brought French attention to bear on Panama. After several surveys, a concession of exclusive rights was obtained from Colombia, and a company was formed in 1879 to construct a sea-level canal generally along the railroad route. Ferdinand de Lesseps, of Suez Canal fame, headed the company. The terms of the concession required completion in twelve years, with the possibility of a six-year extension at Colombia's discretion. The lease was for ninety years and was transferable, but not to any foreign government. The company also purchased most of the stock of the Panama Railroad Company, which, however, continued to be managed by Americans.

A ceremonious commencement of work was staged by de Lesseps on January 1, 1880, but serious earth moving did not start until the next year. As work progressed, engineers judged that a sea-level canal was impracticable. De Lesseps, a promoter but not an engineer, could not be convinced until work had gone on for six years. Actual labor on a lock canal did not start until late in 1888, by which time the company was in serious financial difficulty. At the peak of its operations the company employed about 10,000 workers.

De Lesseps had to contend not only with enemies who hampered financing by spreading rumors of failure and dumping stocks and bonds on the market but also with venal French politicians and bureaucrats who demanded large bribes for approving the issue of securities. His efforts to get the French government to guarantee his bonds were blocked by the United States, on the grounds that such action would lead to government control in violation of the Monroe Doctrine. The end result in January 1889 was the appointment of a receiver to liquidate the company, whereupon all work stopped.

Despite the French company's disastrous financial experience, an estimated two-fifths of the excavation necessary for the eventual canal had been completed. Many headquarters and hospital buildings were finished. Some of the machinery left on the site was usable later, and the railroad had been maintained. Another legacy of the French company's bankruptcy was a large labor force, now unemployed, mostly Antillean blacks. More than half were repatriated, but thousands remained, many of whom eventually worked on the United States canal.

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Source: U.S. Library of Congress