CHAPTER XV. The Panama Canal

While American troops were threading the mountain passes and the morasses of the Philippines, scaling the walls of Pekin, and sunning themselves in the delectable pleasances of the Forbidden City, and while American Secretaries of State were penning dispatches which determined the fate of countries on the opposite side of the globe, the old diplomatic problems nearer home still persisted. The Spanish War, however, had so thoroughly changed the relationship of the United States to the rest of the world that the conditions under which even these old problems were to be adjusted or solved gave them entirely new aspects. The American people gradually but effectually began to take foreign affairs more seriously. As time went on, the Government made improvements in the consular and diplomatic services. Politicians found that their irresponsible threatenings of other countries had ceased to be politically profitable when public opinion realized what was at stake. Other countries, moreover, began to take the United States more seriously. The open hostility which they had shown on the first entrance of this nation into world politics changed, on second thought, to a desire on their part to placate and perhaps to win the support of this new and formidable power.

The attitude of Germany in particular was conspicuous. The Kaiser sent his brother, Prince Henry, to visit the United States. He presented the nation with a statue of Frederick the Great and Harvard with a Germanic museum; he ordered a Herreshoff yacht, and asked the President's daughter, Alice Roosevelt, to christen it; he established exchange professorships in the universities; and he began a campaign aimed apparently at securing for Germany the support of the entire American people, or, failing that, at organizing for German purposes the German-born element within the United States. France sought to revive the memory of her friendship for the United States during the Revolution by presenting the nation with a statue of Rochambeau, and she also established exchange professorships. In England, Cecil Rhodes, with his great dream of drawing together all portions of the British race, devoted his fortune to making Oxford the mold where all its leaders of thought and action should be shaped; and Joseph Chamberlain and other English leaders talked freely and enthusiastically of an alliance between Great Britain and the United States as the surest foundation for world peace.

It need not be supposed, however, that these international amenities meant that the United States was to be allowed to have its own way in the world. The friendliness of Great Britain was indeed sincere. Engaged between 1899 and 1901 in the Boer War, she appreciated ever more strongly the need for the friendship of the United States, and she looked with cordial approbation upon the development of Secretary Hay's policy in China. The British, however, like the Americans, are legalistically inclined, and disputes between the two nations are likely to be maintained to the limit of the law. The advantage of this legal mindedness is that there has always been a disposition in both peoples to submit to judicial award when ordinary negotiations have reached a deadlock. But the real affection for each other which underlay the eternal bickerings of the two nations had as yet not revealed itself to the American consciousness. As most of the disputes of the United States had been with Great Britain, Americans were always on the alert to maintain all their claims and were suspicious of "British gold."

It was, therefore, in an atmosphere by no means conducive to yielding on the part of the United States, though it was one not antagonistic to good feeling, that the representatives of the two countries met. John Hay and Sir Julian Pauncefote, whose long quiet service in this country had made him the first popular British ambassador, now set about clearing up the problems confronting the two peoples. The first question which pressed for settlement was one of boundary. It had already taken ninety years to draw the line from the Atlantic to the Pacific, and now the purchase of Alaska by the United States had added new uncertainties to the international boundary. The claims of both nations were based on a treaty of 1825 between Great Britain and Russia. Like most attempts to define boundaries running through unexplored territories, the treaty terms admitted of two interpretations. The boundary line from Portland Channel to Mount St. Elias was stipulated to run everywhere a distance of ten marine leagues from the coast and to follow its sinuosities. This particular coast, however, is bitten into by long fiords stretching far into the country. Great Britain held that these were not part of the sea in the sense of the treaty and that the line should cut across them ten marine leagues from the outer coast line. On the other hand, the United States held that the line should be drawn ten marine leagues from the heads of these inlets.

The discovery of gold on the Yukon in 1897 made this boundary question of practical moment. Action now became an immediate necessity. In 1899 the two countries agreed upon a modus Vivendi and in 1903 arranged an arbitration. The arbitrating board consisted of three members from each of the two nations. The United States appointed Senator Henry Cabot Lodge, ex-Senator George Turner, and Elihu Root, then Secretary of War. Great Britain appointed two Canadians, Louis A. Jette and A. B. Aylesworth, and Lord Alverstone, Chief Justice of England. Their decision was in accordance with the principle for which the United States had contended, though not following the actual line which it had sketched. It gave the Americans, however, full control of the coast and its harbors, and the settlement provided a mutually accepted boundary on every frontier.

With the discovery of gold in the far North, Alaska began a period of development which is rapidly making that territory an important economic factor in American life. Today the time when this vast northern coast was valuable only as the breeding ground for the fur seal seems long past. Nevertheless the fur seal continued to be sought, and for years the international difficulty of protecting the fisheries remained. Finally, in 1911, the United States entered into a joint agreement with Great Britain, Japan, and Russia, which is actually serving as a sort of international game law. The problems of Alaska that remain are therefore those of internal development.

Diplomacy, however, is not concerned solely with sensational episodes. American ministers and the State Department are engaged for the most part in the humdrum adjustment of minor differences which never find their way into the newspapers. Probably more such cases arise with Great Britain, in behalf of Canada, than with any other section of the globe. On the American continent rivers flow from one country into the other; railroads carry goods across the border and back again; citizens labor now in one country, now in the other; corporations do business in both. All these ties not only bind but chafe and give rise to constant negotiation. More and more Great Britain has left the handling of such matters to the Canadian authorities, and, while there can be no interchange of ministers, there is an enormous transaction of business between Ottawa and Washington.

While there has of late years been little talk of annexation, there have been many in both countries who have desired to reduce the significance of the boundary to a minimum. This feeling led in 1911 to the formulation of a reciprocity agreement, which Canada, however, was unwilling to accept. Yet, if tariff restrictions were not removed, other international barriers were as far as possible done away with. In 1898 a commission was appointed to agree upon all points of difference. Working slowly but steadily, the commissioners settled one question after another, until practically all problems were put upon a permanent working basis. Perhaps the most interesting of the results of this activity was the appointment in 1908 of a permanent International Fisheries Commission, which still regulates that vexing question.

Another source of international complication arose out of the Atlantic fisheries off Newfoundland, which is not part of Canada. It is off these shores that the most important deep-sea fishing takes place. This fishery was one of the earliest American sources of wealth, and for nearly two centuries formed a sort of keystone of the whole commercial life of the United States. When in 1783 Great Britain recognized American independence, she recognized also that American fishermen had certain rights off these coasts. These rights, however, were not sufficient for the conduct of the fisheries, and so in addition certain "liberties" were granted, which allowed American fishers to land for the purpose of drying fish and of doing other things not generally permitted to foreigners. These concessions in fact amounted to a joint participation with the British. The rights were permanent, but the privileges were regarded as having lapsed after the War of 1812. In 1818 they were partially renewed, certain limited privileges being conceded. Ever since that date the problem of securing the additional privileges desired has been a subject for discussion between Great Britain and the United States. Between 1854 and 1866 the American Government secured them by reciprocity; between 1872 and 1884 it bought them; after 1888 it enjoyed them by a temporary modus vivendi arranged under President Cleveland.

In 1902 Hay arranged with Sir Robert Bond, Prime Minister of Newfoundland, a new reciprocity agreement. This, however, the Senate rejected, and the Cleveland agreement continued. Newfoundland, angry at the rejection of the proposed treaty, put every obstacle possible in the way of American fishermen and used methods which the Americans claimed to be contrary to the treaty terms. After long continued and rather acrimonious discussions, the matter was finally referred in 1909 to the Hague Court. As in the Bering Sea case, the court was asked not only to judge the facts but also to draw up an agreement for the future. Its decision, on the whole, favored Newfoundland, but this fact is of little moment compared with the likelihood that a dispute almost a century and a half old has at last been permanently settled.

None of these international disputes and settlements to the north, however, excited anything like the popular interest aroused by one which occurred in the south. The Spanish War made it abundantly evident that an isthmian canal between the Atlantic and the Pacific must be built. The arguments of naval strategy which Captain Mahan had long been urging had received striking demonstration in the long and roundabout voyage which the Oregon was obliged to take. The pressure of railroad rates on the trade of the country caused wide commercial support for a project expected to establish a water competition that would pull them down. The American people determined to dig a canal.

The first obstacle to such a project lay in the Clayton-Bulwer Treaty with Great Britain. That obstacle Blaine had attempted in vain to remove; in fact his bungling diplomacy had riveted it yet more closely by making Great Britain maintain it as a point of honor. To this subject Hay now devoted himself, and as he encountered no serious difficulties, a treaty was drawn up in 1900 practically as he wished it. It was not, however, popular in the United States. Hay preferred and arranged for a canal neutralized by international guarantee, on the same basis as the Suez Canal; but American public sentiment had come to insist on a canal controlled absolutely by the United States. The treaty was therefore rejected by the Senate, or rather was so amended as to prove unacceptable to Great Britain.

Hay believed that he had obtained what was most desirable as well as all that was possible, that the majority of the American people approved, and that he was beaten only because a treaty must be approved by two-thirds of the Senate. He therefore resigned. President McKinley, however, refused to accept his resignation, and he and Lord Pauncefote were soon at work again on the subject. In 1901 a new treaty was presented to the Senate. This began by abrogating the Clayton-Bulwer Treaty entirely and with it brushing away all restrictions upon the activity of the United States in Central America. It specifically permitted the United States to "maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder." By interpreting this clause as allowing complete fortification, the United States has made itself the guardian of the canal. In return for the release from former obligations which Great Britain thus allowed, the United States agreed that any canal constructed should be regulated by certain rules which were stated in the treaty and which made it "free and open to the vessels of commerce and of war of all nations observing these Rules, on terms of entire equality," in time of war as well as of peace. This time the treaty proved satisfactory and was accepted by the Senate. Thus one more source of trouble was done away with, and the first obstacle in the way of the canal was removed.

The Clayton-Bulwer Treaty was, however, only a bit of the tangled jungle which must be cleared before the first American shovel could begin its work. For over twenty years a contest had been waged between experts in the United States as to the relative merits of the Panama and the Nicaragua routes. The latter was the more popular, perhaps because it seemed at one time that Panama was preempted by De Lesseps' French company. This contest as to the better route led to the passage of a law, in 1902, which authorized the President to acquire the rights and property needed to construct a canal by the Panama route, on condition that he could make satisfactory arrangements "within a reasonable time and upon reasonable terms." Otherwise, Nicaragua was to be chosen. Theodore Roosevelt was now President and, though at one time not favoring Panama, he decided that there the canal should be constructed and with his accustomed vigor set himself to the task.

The first difficulty presented by this route was the prior right which the French company still retained, although it had little, if any, hope of carrying on the construction itself. It possessed not only rights but also much equipment on the spot, and it had actually begun excavation at certain points. The purchase of all its properties complete for $40,000,000 was, therefore, not a bad investment on the part of the Government. By this purchase the United States was brought directly into relation with Colombia, through one of whose federal states, Panama, the canal was to be cut.

While the French purchase had removed one obstacle, the De Lesseps charter alone would not suffice for the construction of the canal, for the American Government had definite ideas as to the conditions necessary for the success of the work. The Government required a zone which should be under its complete control, for not otherwise could satisfactory sanitary regulations be enforced. It insisted also on receiving the right to fortify the canal. It must have these and other privileges on a long time grant. For them, it was willing to pay generously. Negotiations would be affected, one could not say how, by the Treaty of 1846 with Colombia,* by which the United States had received the right of free use of the isthmus, with the right of maintaining the neutrality of the district and in return had guaranteed to Colombia sovereignty over the isthmus.

* Then known as the Republic of New Granada.

Hay took up the negotiations with the Colombian charge d'affaires, Dr. Herran, and arranged a treaty, which gave the United States a strip of land six miles wide across the isthmus, on a ninety-nine year lease, for which it should pay ten million dollars and, after a period of nine years for construction, a quarter of a million a year. This treaty, after months of debate in press and Congress, was rejected by the Colombian Senate on August 12, 1903, though the people of Panama, nervously anxious lest this opportunity to sit on the bank of the world's great highway should slip into the hands of their rivals of Nicaragua, had urged earnestly the acceptance of the terms. The majority of the Colombians probably expected to grant the American requests in time but were determined to force the last penny from the United States. As Hay wrote: "The Isthmus is looked upon as a financial cow to be milked for the benefit of the country at large. This difficulty might be overcome by diplomacy and money."

President Roosevelt at this point took the negotiations into his own hands. Knowing that the price offered was more than just, he decided to depend no longer on bartering. He ordered the American minister to leave Colombia, and he prepared a message to Congress proposing that the Americans proceed to dig the canal under authority which he claimed to find in the Treaty of 1846. It was, however, doubtful if Congress would find it there, particularly as so many Congressmen preferred the Nicaragua route. The President therefore listened with pleased attention to the rumors of a revolution planned to separate Panama from Colombia. Most picturesquely this information was brought by M. Philippe Bunau-Varilla, a former engineer of the De Lesseps company, who glowed with the excitement of coming events. Roosevelt, however, relied more upon the information furnished by two American officers, who reported "that various revolutionary movements were being inaugurated."

On October 10, 1903, the President wrote to Dr. Albert Shaw, of the "Review of Reviews":

"I enclose you, purely for your own information, a copy of a letter of September 5th, from our minister to Colombia. I think it might interest you to see that there was absolutely not the slightest chance of securing by treaty any more than we endeavored to secure. The alternatives were to go to Nicaragua against the advice of the great majority of competent engineers - some of the most competent saying that we had better have no canal at this time than go there - or else to take the territory by force without any attempt at getting a treaty. I cast aside the proposition made at the time to foment the secession of Panama. Whatever other governments can do, the United States cannot go into the securing, by such underhand means, the cession. Privately, I freely say to you that I should be delighted if Panama were an independent state; or if it made itself so at this moment; but for me to say so publicly would amount to an instigation of a revolt, and therefore I cannot say it."

Nothing, however, prevented the President from keeping an attentive eye on the situation. On the 16th of October he directed the Navy Department to send ships to the Isthmus to protect American interests in case of a revolutionary outbreak. On the 2d of November, he ordered the squadron to "maintain free and uninterrupted transit.... Prevent the landing of any armed force with hostile intent, either government or insurgent, at any point within fifty miles of Panama." At 3:40 P.M., on the 3d of November, the acting Secretary of State telegraphed to the Isthmus for confirmation of a report to the effect that an uprising was in progress. A reply dated 8:15 P.M. stated that there had been none as yet, but that it was rumored one would take place during the night. On the 4th of November independence was proclaimed. The only fatality was a Chinaman killed in the City of Panama by a shell from the Colombian gunboat Bogota. Its commander was warned not to fire again. On the 6th of November, Secretary Hay instructed our consul to recognize the new republic, and on the 13th of November, President Roosevelt received Bunau-Varilla as its representative at Washington.

This prompt recognition of a new state, without waiting to allow the parent Government time to assert itself, was contrary to American practice. The United States had regarded as a most unfriendly act Great Britain's mere recognition of the belligerency of the Southern Confederacy. The right of the United States to preserve the neutrality of the isthmus, as provided by the Treaty of 1846, certainly did not involve the right to intervene between the Government and revolutionists. On the other hand, the guarantee of possession which the United States had given to Colombia did involve supporting her Government to a reasonable extent; yet there could be little doubt that it was the presence of American ships which had made the revolution successful.

The possible implications of these glaring facts were cleverly met by President Roosevelt in his message to Congress and by the Secretary of State in the correspondence growing out of the affair. The Government really relied for its justification, however, not upon these technical pleas but upon the broad grounds of equity. America has learned in the last few years how important it is for its safety that "scraps of paper" be held sacred and how dangerous is the doctrine of necessity. Nevertheless it is well to observe that if the United States did, in the case of Panama, depart somewhat from that strict observance of obligations which it has been accustomed to maintain, it did not seek any object which was not just as useful to the world at large as to itself, that the situation had been created not by a conflict of opposing interests but by what the Government had good reason to believe was the bad faith of Colombia, and that the separation of Panama was the act of its own people, justly incensed at the disregard of their interests by their compatriots. This revolution created no tyrannized subject population but rather liberated from a galling bond a people who had, in fact, long desired separation.

With the new republic negotiation went on pleasantly and rapidly, and as early as November 18, 1903, a convention was drawn up, in which the United States guaranteed the independence of Panama and in return received in perpetuity a grant of a zone ten miles wide within which to construct a canal from ocean to ocean.