The Big Ditch: How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal

THREE: Preparing the Ditch

T h r e e P R E P A R I N G T H E D I T C H You succeeded at the Suez by a miracle. Be satisfied with accomplishing one miracle in a lifetime, and not hope for a second. —Charles de Lesseps to his father, Ferdinand, about a new canal venture in Panama From the perspective of the early twenty-first century , the Panama Canal stands as a singular accomplishment, a triumph of smokestack technology and muscular diplomacy. To its contemporaries, however, the Panama Canal as we know it was the sole survivor of a bewildering array of failed proposals, failed counterproposals, failed treaties, and one major failed attempt at construction. For economic historians, these failures are an invaluable source of data for understanding the institutional and economic constraints that had to be overcome to build a project that would primarily benefit the United States across territory controlled by independent Latin American republics. An isthmian canal might have been technologically feasible by the second half of the nineteenth century, but it was by no means inevitable. The same French entrepreneurs who had created the Suez Canal turned their attention to Panama in 1877. After a decade and hundreds of millions of dollars, their effort failed. A misguided attempt to dig a sea-level canal not only drove up costs, but the dirt piled up on the sides of the excavation created malarial swamps that sent death rates soaring. In 1888, the French canal 56 | ChapTer Three company went bankrupt, nearly dragging the French economy down with it. The United States did not remain inactive during the prolonged failure of the French effort. The U.S. government and American entrepreneurs made several attempts to build a canal across Nicaraguan territory, all of which also failed. Nicaragua’s geography was even less forgiving than Panama’s, and Nicaragua’s politics were far more precarious. Internal instability and external conflicts with Costa Rica turned a difficult mission into an impossible one. No isthmian canal might have been built at all had it not been for the geopolitical shock of the American victory in the SpanishAmerican War. The war convinced American politicians that the United States needed to be able to shift vessels quickly between the oceans. The resulting acquisitions of Hawaii and the Philippines only reinforced that conviction. The American government began serious study of various isthmian routes in 1899. Once it became clear to the Roosevelt administration that Nicaragua was not a feasible option, it redoubled its efforts to take control of the French assets in Panama and restart construction. Unfortunately for the United States, the Colombian government refused to cooperate . Colombian diplomats demanded at least as good a deal as the country had obtained from the French, or that the Americans had previously offered Nicaragua. Theodore Roosevelt, famously impatient, would not delay building a canal simply to aid the Colombian government. In addition, many prominent Republicans were financially vested in a Panama route through their ties to the French company that held title to the work already completed on the isthmus. Roosevelt therefore refused to entertain Colombian counteroffers. Instead, his administration engineered Panama’s secession from Colombia and used America’s military prowess to force the Panamanian government into signing a far better deal for the United States than Washington could have otherwise negotiated. The newly independent Republic of Panama agreed to the new terms with thousands of U.S. troops on Panamanian soil. The preparing The DiTCh | 57 agreement granted the United States a far higher share of the Panama Canal’s economic benefits than any previous agreement on the table. Not only did the United States reduce its payments for the use of Panama’s geographic assets, it succeeded in getting Panamanian taxpayers to subsidize some of the overhead costs of canal construction and operation. In other words, contrary to a large literature on the wages of empire, Theodore Roosevelt managed to make imperialism pay. a frenCh inTerConneCTion Ferdinand de Lesseps was not the person one might have expected to have created one of the world’s greatest works of civil engineering , the Suez Canal. He had not been trained as an engineer. Rather, he started out as a rising star in the French diplomatic service, serving in Tunisia, Egypt, Holland, Spain, and Italy. He resigned from the service in 1849, after the French government rejected the terms of a truce...