The Panama Canal Part 2

In November 1901 a new treaty made its appearance. This was ratified by the Senate without amendment, and was ultimately concluded between the two Powers, being known as the Hay-Pauncefote Treaty.[3]

It is very important to note the provisions of this treaty, because it establishes what is known as the political "status" of the new ca.n.a.l.

The Hay-Pauncefote expressly supersedes the Clayton-Bulwer Treaty and provides for the construction of a ca.n.a.l (mentioning no particular route) "under the auspices of the government of the United States,"

which country is "to have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the ca.n.a.l." It adopts the principles of "neutralization" which were embodied in the Treaty of Constantinople of 1888 in connection with the Suez Ca.n.a.l. Both treaties provide for:--

1. Freedom of transit in time of peace or war for the vessels of all nations.

2. Freedom of the ca.n.a.l and its terminals from blockade.

3. A code of procedure for war-vessels entering or leaving the ca.n.a.l.

No special reference is made to the question of fortification, but the United States are to be at liberty to maintain such military police along the ca.n.a.l as may be necessary to protect it against lawlessness and disorder. A treaty, however, subsequently concluded between the United States and the Republic of Panama (known as the Hay-Bunau-Varilla Treaty) contains the following provision:--

If it should become necessary at any time to employ armed forces for the safety and protection of the ca.n.a.l, or of the s.h.i.+ps that make use of the same, or the railways and auxiliary works, the United States shall have the right, at all times and in its discretion, to use its police and its land and naval forces or to establish fortifications for these purposes.

But the most important provision of all related to the question of the charges and other conditions of traffic through the ca.n.a.l. The meaning of the section seems plain enough, though it became a subject of rather acute controversy:--

The ca.n.a.l shall be free and open to the vessels of commerce and war of all nations observing these rules, on terms of entire equality; so that there shall be no discrimination against any such nation, or its citizens or subjects, in respect of the conditions and charges of traffic, or otherwise. Such conditions and charges of traffic shall be just and equitable.

This provision is reaffirmed in Article XVIII. of the Hay-Bunau-Varilla Treaty. There is no doubt that the British government regarded this promise of equal treatment as some compensation for the surrender of those rights of joint construction and control which Great Britain enjoyed under the Clayton-Bulwer Treaty. In fact, Mr. Hay, in a memorandum he sent to the Senate Committee on Foreign Relations, described the treaty as a sort of contract between Great Britain and the United States by which the former gave up those rights just mentioned in return for the "rules and principles" included in the new treaty, the chief among these being, of course, the provision about equality of treatment for all nations.

It was, therefore, a surprise when the United States government decided that the expression "all nations" did not include the United States themselves, and that it was quite open to them to give preferential treatment to their "coastwise" traffic. Under the term "coastwise" the United States include the sea-traffic not only between ports along a continuous coast, but between such points as San Francisco or Was.h.i.+ngton and the Philippine Islands. As a matter of fact, an amendment proposed by Mr. Burd in the Senate, reserving to the United States the right of favouring its "coastwise" traffic, had been defeated, when the new treaty was under discussion.

But, leaving these controversial questions, the most important thing for us to notice is that the Panama Ca.n.a.l has what is known as an "international status." It is not quite the sole and absolute property of the United States in the sense in which the Kiel Ca.n.a.l belongs to Germany, the Corinth Ca.n.a.l to Greece, and the Amsterdam or North Sea Ca.n.a.l to the Netherlands. Its status is governed by treaties which impose certain obligations and restrictions upon the United States and lay down certain rules of administration. It was intended at first to make the status of the Panama and the Suez Ca.n.a.l identical. But there are considerable differences. The "neutrality" of the Suez Ca.n.a.l is guaranteed by all the Powers of Europe, that of the Panama Ca.n.a.l by two only, England and the United States, and it is safeguarded and maintained by the United States alone. Then the Suez Ca.n.a.l is and must remain unfortified, while the Panama Ca.n.a.l will be strongly fortified by the United States.

The reader may wonder what precisely is meant by the word "neutral" as applied to the new waterway. The position will be as nearly as possible that indicated by Dr. Vaughan Cornish in the following pa.s.sage:--

If there be a war in which the United States is not a party, the ca.n.a.l will be used by belligerents in exactly the same way as was the Suez Ca.n.a.l--for example, in the Russo-j.a.panese War--and the government of the United States has pledged itself to see that such neutrality is preserved.

But if there be a war in which the United States is a party, the circ.u.mstances of fortification and operation by the United States in fact render it impossible for the other belligerent to use the ca.n.a.l, and are intended to have that effect. This being so, the United States is preparing to defend the ca.n.a.l from attack. Thus it is important to the proper understanding of the undertaking on which the United States government has embarked that we should clearly realize that the ca.n.a.l is only neutral in a restricted sense.[4]

As a matter of fact the status of the Panama Ca.n.a.l lies somewhere between neutralization and American control. The Hay-Pauncefote Treaty also lays down the rules which are to be observed by the s.h.i.+ps of war of a belligerent using the ca.n.a.l and the waters adjacent to the ca.n.a.l--that is, within three marine miles of either end. They are similar to those in force at Suez, and need not be repeated here.

FOOTNOTES:

[3] Appendix i.

[4] "The Panama Ca.n.a.l and its Makers," pp. 42, 43.

CHAPTER VI.

THE UNITED STATES AND COLOMBIA.

Those citizens of the United States who thought that with the disappearance of the Clayton-Bulwer Treaty all the difficulties in the way of obtaining a ca.n.a.l of their own had also disappeared were doomed to a severe disappointment. They had not reckoned with a South American republic on the verge of bankruptcy and suddenly presented with a glorious opportunity to fill its empty treasury. Two preliminaries were necessary before the United States could settle down at the isthmus of Panama to the work of ca.n.a.l construction. They had to purchase the concession, the unfinished works and the other a.s.sets of the New Panama Company, at as reasonable a price as they could obtain; and, secondly, it was necessary to conclude a treaty with Colombia, securing to the United States on satisfactory terms the perpetual control of a strip of territory on the isthmus from sea to sea within which the ca.n.a.l could be constructed.

The first of these undertakings presented, as it turned out, no great difficulty. The New Panama Company had begun to despair of its own ability to get a ca.n.a.l finished across the isthmus, and to realize that their best course was to transfer the whole business to the United States. This disposition had been greatly strengthened by the Report of the Third Ca.n.a.l Commission, issued in December 1900. Probably the members of the commission were convinced of the advantages of the Panama route and the desirability of continuing the work of the French engineers. But they were shrewd people. They dwelt in their report on the improbability that the New Panama Company would sell its property to the United States, and on the difficulty of getting the Colombian concession transferred. They decided, therefore, that "the most practicable and feasible route for an isthmian ca.n.a.l to be under the control, management, and owners.h.i.+p of the United States is that known as the Nicaraguan route."

The commission probably foresaw the effect such a decision was likely to have on the directors and shareholders of the New Panama Company. If an American ca.n.a.l were constructed at Nicaragua, all the property and work of the company at Panama would be thrown on the sc.r.a.p-heap. The company estimated the value of its property at $109,141,500, a price which the commission, representing the American government, declined to look at.

The commission thought $40,000,000 quite enough for the property, and so completely were the Americans master of the situation that that price was agreed upon in January 1902. The commission thereupon issued a supplementary report, which reversed the former decision and recommended the Panama route and the purchase of the French property.

Then arose in the Congress of the United States a tremendous conflict between the Nicaraguans and the Panamanians, the champions of the two routes which had so long been in rivalry. The former party insisted that Panama was farther from the United States than Nicaragua, and therefore the journey from the eastern to the western seaboard of the States would be longer. They argued that Panama was unfavourable to sailing vessels on account of the prevailing calms on that coast; that it would be easier to deal with Costa Rica and Nicaragua than with Colombia; and that Nicaragua was "the traditional American route" as compared with the Frenchified Panama. The claims of the old Darien route were also advanced. This was probably done by American railway people who were against any ca.n.a.l, for the Darien route would have involved a rock tunnel five miles long and three hundred feet broad, the attempt to achieve which would probably have ended all ca.n.a.l adventures at the isthmus.

From these discussions emerged the celebrated "Spooner Bill," under which the Panama Ca.n.a.l has been constructed. It empowered the American government to secure the rights and property of the Panama Company for not more than $40,000,000; to obtain from Colombia the perpetual control of a strip of land, not less than six miles wide, in which the ca.n.a.l should run; and then to proceed with the work. But if it should prove impossible to come to terms with Colombia and the New Panama Company, then the Nicaraguan project was to be revived. We shall see how, in the sequel, this latter proviso came very near fulfilment. But, as a matter of fact, the Spooner Bill marks the end of the great battle of the routes which had lasted for four centuries.

The purchase price of the New Panama Company's property was happily settled, but the purchase was of course conditional on the conclusion of a satisfactory agreement between the United States and Colombia. It was no use for the United States to acquire unfinished ca.n.a.l-works if they were to be prevented from continuing and completing them. The situation was interesting. The Republic of Colombia was extremely "hard up." Its currency was debased, its treasury empty, its debt rapidly increasing through a large annual deficit. The government, if one may so express it, of the Colombian Republic was therefore not likely to overlook the chance of "making a bit" out of the necessities of the bigger and richer republic farther north. The United States wished to get their concession as cheaply as possible; Colombia wished to sell as dearly as possible.

This is not infrequently the case with buyers and sellers; but Colombia pushed her haggling a little too far, and in the end very badly overreached herself.

The United States began by proposing terms on which they might obtain the desired strip of territory. The conditions were carefully laid down.

The territory was to remain under Colombian sovereignty, but to be administered by the United States. Sanitary and police services were to be maintained by both governments jointly. Colombia was to police the zone, with the help of the United States if necessary. But the business terms were chiefly interesting to Colombia. The United States were to pay Colombia a bonus of $7,000,000 in cash, and after fourteen years an annuity of $250,000. These terms, which were not ungenerous, the Colombian minister at Was.h.i.+ngton declined to accept.

A brilliant idea had, indeed, struck the statesmen of the Colombian Republic. They had remembered that the concession to the Panama Company lapsed in October 1904, and that all its property that could not be carried away would revert to the Colombian government. Only defer any agreement with the United States till then, and the $40,000,000 to be paid to the New Panama Ca.n.a.l Company by the United States would drop like a golden nest-egg into the empty exchequer of the Colombian Republic. It was a brilliant idea, but the Colombian method of pursuing it was rather too crude and obvious.

In order to meet the Colombian government the United States improved their offer, considerably increasing the bonus and making other changes.

An agreement, known as the Hay-Herran Treaty, was actually arranged between the United States and Colombia, the latter represented by her minister at Was.h.i.+ngton, Dr. Tomas Herran. This treaty, before it became operative, had to be ratified by the Congress of Colombia, and the president of that state took care that a congress should be elected which would do no such thing. Meantime all kinds of influences, secret and open, were at work. The German "colonial party" had become interested in the question, and had conceived the possibility of Germany, rather than the United States, succeeding to the French concession. It is quite certain that the United States would have resisted any such proceeding, if necessary by actual war. There is little doubt, also, that the party in the United States which had supported the Nicaraguan scheme were throwing every obstruction in the way of a satisfactory agreement between the big and the little republic.

The reader may guess what was the anxiety of the New Panama Ca.n.a.l Company during all this diplomacy and intrigue. They knew that the completion of the sale of its property to the United States depended on an agreement being concluded between that country and Colombia; and they also knew that unless they sold before October 1904, they would have practically nothing to sell, because the franchise and possessions of the company would be forfeited to the Colombian government at that date.

It would be better to sell on the best terms they could obtain to Germany or anybody else before the fatal day arrived. Meantime the United States brought every force of argument and menace to bear on the Colombian government. Secretary Hay sent urgent dispatches to the American minister at Bogota. He reminded Colombia that the decision to adopt the Panama route was not irrevocable. The Spooner law authorized the American president to await only "a reasonable time" for an agreement with Colombia. Having waited so long, he was able and indeed bound to resume the Nicaraguan project.

When the Colombian Congress duly rejected the Hay-Herran Treaty in August 1903, the New Panama Company became very seriously alarmed. Other offers of purchase were renewed, and the situation became critical for the United States. The American counsel for the company, Mr. William Nelson Cromwell, who had done his utmost to promote the agreement, had the utmost difficulty in keeping his clients to their compact with the United States. He made a hurried trip to Paris, where he said something which had the desired effect. There is no reason to believe that Mr.

Cromwell took any part in the surprising events which were soon to alter the entire situation. But he had heard the proverbial "little bird," and the tidings he pa.s.sed on brought the New Panama directors to the desired mood of patience and expectancy.

Colombia meanwhile kept on marking time. She suggested that a new treaty should be negotiated between the United States and Colombia, to be ratified by the Colombian Senate some time in 1904. That would have put the clock forward splendidly, but the device was duly understood at Was.h.i.+ngton. In October a committee of the Colombian Senate reported to the Senate a recommendation that no agreement should be concluded with the United States until the French concession had lapsed. This recommendation was not acted upon by the Colombian Senate, nor yet were any steps taken towards the negotiation of a new treaty. The American government gave a generous interpretation to the "reasonable time"

specified in the Spooner Bill, and kept on waiting in the hope that the Colombian Congress would still change its mind and ratify the Hay-Herran Treaty, whose terms, as we have seen, were liberal to the Colombian Republic. But when the congressional session at Bogota came to an end on October 31, 1903, without any further action over the Hay-Herran Treaty, the Americans concluded that the whole business was over so far as negotiations with Colombia on the Panama question were concerned.

Obviously the only course was to turn to the Nicaraguan alternative.

And the Colombian government no doubt thought it had won the day by sheer force of astute statesmans.h.i.+p.

Then came a coincidence more astonis.h.i.+ng than any since the day when Mr.

Weller, senior, upset the Eatanswill outvoters (purely by accident) into another ca.n.a.l. The Panama revolution broke out, and the United States suddenly and without further difficulty obtained all they wanted of the isthmus. And Colombia? She lost every stick and stone of the ca.n.a.l which was to have been hers in October 1904, never made a farthing on a Panama deal, got no thanks from Germany or anybody else, and lost a whole province into the bargain. Such were the results of very astute statesmans.h.i.+p at Bogota.

CHAPTER VII.

A MINIATURE REVOLUTION.

It was not to be expected that Panama, one of the const.i.tuent provinces of the United States of Colombia, would be very enthusiastic about all this haggling and intriguing at Bogota. Panama asked for nothing better than that a rich and powerful country like the United States should continue the French enterprise and carry it through. The ca.n.a.l would run right through the province, and would bring it into the main stream of the world's traffic and commerce. No doubt the central government at Bogota would skim off as much as possible of this new wealth and prosperity at the isthmus; but even so, Panama would reap a great advantage from the running of this new and much-frequented highway of communication between east and west through its territory. The dealings of the central government with the United States had roused a growing disgust and resentment at the isthmus.

The relations between the province of Panama with New Granada and its successor Colombia had been very chequered ever since the revolt of the Spanish colonies in Central and South America in the early years of last century. Panama declared her independence in 1821, and allied herself at once with New Granada. But troubles began forthwith. Again and again the isthmian province seceded from New Granada or Colombia, and was induced to return by promises of more favourable terms of union, these always remaining unfulfilled. In his annual message to Congress in 1903, President Roosevelt enumerated some fifty-three "revolutions, rebellions, insurrections, riots, and other outbreaks" that had occurred at the isthmus in fifty-seven years. Not long before these difficulties between the United States and Colombia, Panama had received a new const.i.tution which was far from satisfactory to the people of the province. There was in truth little to be gained by a continued allegiance to the government at Bogota. Some idea of the depths to which Colombia had sunk through a long course of bad administration and corruption may be gathered from a pa.s.sage in the official address of Dr.

Marroquin on his becoming vice-president of Colombia in 1898. He said:--

Hatred, envy, and ambition are elements of discord; in the political arena the battle rages fiercely, not so much with the idea of securing the triumph of principles as with that of humbling, and elevating persons and parties; public tranquillity, indispensable to every citizen for the free enjoyment of what he possesses either by luck or as the fruit of his labour, is gradually getting unknown; we live in a sickly atmosphere; crisis is our normal state; commerce and all other industries are in urgent need of perfect calmness for their development and progress; poverty invades every home. The notion of mother country is mistaken or obliterated, owing to our political disturbances. The conception of mother country is so intimately a.s.sociated with that of political disorders, and with the afflictions and distrust which they engender, that it is not unusual to hear from one of our countrymen what could not be heard from a native of any other country: "I wish I had been born somewhere else." Could many be found among us who would feel proud when exclaiming, "I am a Colombian," in the same way as a Frenchman does when exclaiming, "I am a Frenchman"?

This was a cheerful p.r.o.nouncement for a people to hear from the lips of a man who was just a.s.suming high office in their midst. It suggests some further reasons why the Panamanians should have so readily a.s.serted their independence once more when the negotiations between Colombia and the United States fell through.