No. 138.
Mr. Dichman to Mr. Evarts.

No. 112.]

Sir: The information received from Paris relating to the so-called International Scientific Congress which has been in session in that city, [Page 291] discussing the merits of the different routes for an inter-oceanic canal, and which appears to have decided in favor of the Panama-Limon route, has been the cause of much self-congratulation at this capital, and the words of Mr. De Lesseps which may, perhaps, have been incorrectly reported, or only due to momentary enthusiasm, to the effect that he was assured of capital to the extent of one hundred millions of dollars to secure the execution of the great undertaking, have in the opinion of the Colombian statesmen, brought the great expectations which they have cherished so long and so ardently, almost to a point of fruition.

It has been my intention for some time to submit my views on the subject of an inter-oceanic canal for your consideration as soon as a fitting opportunity should present itself, this being one of the subjects to which I have reference in my No. 90, of May 19, 1879.

The present occasion makes it opportune to do so, confining myself to the political and economical aspect of the subject as far as this country is concerned the technical and scientific questions connected therewith must of course be left to the opinion of those gentlemen who have made a special study thereof.

It would also be a work of supererogation on my part and foreign to my purpose, as well as an undue demand upon your attention, if I should enter upon any statements which have reference to the importance of this great enterprise; for the project of uniting the Atlantic and Pacific Oceans by means of a canal has enlisted the attention and support of the most eminent men of the world from a period but little subsequent to the discovery of this continent, and it would therefore be impossible to express any opinion which has not, at some time or other, been made public.

The Republic of the United States of Colombia, having within her territory the choice of several routes for an inter-oceanic canal, many treaties and contracts have been made with this government for the purpose of undertaking this vast enterprise. An examination thereof seems to show they have been enacted by the Colombian Government in rather a narrow and selfish spirit, containing stipulations which would prevent a canal from attaining that degree of usefulness which the world would naturally expect from a work fraught with such vast consequences to the well being of mankind. The action of the Colombian Government in this matter shows a marked deviation from the liberal spirit displayed by the founders of this republic, as evidenced by the correspondence of Bolivar.

The Wyse contract (a copy and translation of which I forwarded from Aspinwall under date of August 14, 1878), being the last of these engagements with the Colombian Government for the construction pf an inter-oceanic canal, is well deserving the careful examination of the Department, for if it affords an assurance that under its provisions satisfactory results can be obtained, it would merit the support of the United States, but if upon examination the contract should not prove to be of such a nature as to assure to a canal the highest degree of usefulness, then it ought not to be permitted to be an impediment to a negotiation of a more satisfactory character.

It will readily be conceded that the nearer an inter-oceanic canal approaches to the character of a strait in freedom from obstructions of all kinds, both natural and artificial, the more’ it will be suited to the wants of commerce and be useful for all time.

As far as the natural obstructions are concerned, that is a question for engineering skill and scientific knowledge.

The artificial obstructions are created by the conditions of the contract [Page 292] under which, the canal is to be constructed. They are principally questions of a political and economic character, relating to the security of the enterprise and the amount of participation in its revenue required by the government in compensation for the privilege which has been granted. The consideration of these questions would naturally be of great influence in determining the conditions under which the necessary amount of capital for the execution of the enterprise can be obtained, and as a corollary the charges for the use of the canal would be low or high, or the usefulness of the canal would be greater or less according to the more or less favorable conditions of the contract under which it may be constructed, judged by any of these considerations. I am of the decided opinion that the Wyse contract is defective, and is not deserving of any encouragement; and while it would be difficult to indi+ cate any step which might or ought to be taken to prevent any individual or society from risking his or their money in its execution, I am sure that eventually its provisions will be found inadequate to allow a completion of so noble an enterprise.

Without going into an examination of all the details of the contract, sxich as the limit in time for the construction of the work, its political and neutrality articles, the rights reserved to the Colombian Government of the inspection of the accounts, the free passage of Colombian troops and ships, the participation in the gross income of the canal, the burden of having to maintain such troops, without limit as to number, which the government may deem necessary to insure its security, the absolute ownership of the entire property by Colombia in ninety-nine years, the various reasons for which a forfeiture of the entire property may be decreed by the supreme court of Colombia; it is a sufficient and insuperable objection to the contract as a whole that it is a mere undertaking between a private company and a government, which, whatever our wishes and hopes in that regard might be, does not possess that degree of stability and power to make its guarantees effective, and the history of which is not calculated to inspire confidence as far as the investment of large amounts of capital under its protection is concerned.

The question of the security of this enterprise has to be considered from the internal or domestic, and from the external or foreign standpoint. The conditions of peace and war, not only with and in Colombia, but throughout the world, enter into its consideration.

Without attaching an undue importance to the ever present danger from local, State, and national revolutions, they are a fact, the danger from which cannot be overlooked and must be taken into consideration. The history of the diplomatic relations between the United States and Colombia (New Grenada) relating to the present inter-oceanic route by means of the Panama Railroad, shows a series of difficulties which have taken place from time to time, such as the Panama riots, questions as to mail transportation, attempted exaction of tonnage dues, and attempts at exorbitant and war taxation, all of which constitute elements of insecurity, and which should be provided against in a careful manner and by means of a treaty with a powerful American government.

In making these statements I do not wish to be understood as assuming or even intimating intentional bad faith on the part of the government of this republic, for quite the contrary is true. But circumstances are stronger than the government; the vicious habit of resorting to arms for the settlement of political differences has become chronic if not constitutional, and in determining the basis upon which a work is to be inaugurated in which the whole world has a deep interest, care [Page 293] should be taken to remove it from the sphere of local polities, or from the influence of popular commotion.

In the consideration of the question of security from the foreign standpoint and the conditions of peace and war, it does not require any argument to show that a mere contract between Colombia and a private company does not afford that assurance of undisturbed use and enjoyment of the canal, which the commerce of the world has a right to expect. It is attempted to establish certain principles in article 6 of the contract, a translation of which article reads as follows:

Art. 6. The United States of Colombia reserve to themselves the right of passage through the canal for their vessels, troops, and munitions of war at all times without paying any tolls whatever. The passage through the canal remains rigorously closed to the vessels of war of the nations which may be at war with each other, and which by public treaties negotiated with the Colombian Government may not have acquired the right of transit through the canal at all times.

It is merely necessary to read the aforegoing article once, in order to notice its objectionable and impracticable features. Will a powerful belligerent nation allow the canal to be closed against its ships when it is open to the ships of the enemy? What nation will make the special treaty required?

As yet but one nation, the United States, has guaranteed to Colombia the sovereignty and neutrality as well as right of property in the isthmus, nor is it likely that any other of the great maritime powers will do so.

Is the isthmus canal, pre-eminently a work of peace, to be made the theater of war? How will Colombia cause her will and sovereignty to be respected in time of war?

It would be an easy matter to continue these reflections, any one of which shows the objectionable character of the article of the contract above quoted. The Government of the United States cannot view with indifference the effort made therein to establish a principle of distinction in, or exclusion from, the use of the canal.

It may also be argued, and with much propriety, that a work of such magnitude and involving consequences of such importance should not be made a matter of speculation, but should possess such government guarantees as will insure its security at all times, define its use clearly, whether in peace or in war, and which would enable the capital necessary for its construction to be obtained at the lowest possible rate of interest. In the various documents which have come under my notice having relation to the present scheme for a canal, the disinterestedness and enthusiasm of its authors or promoters are given great prominence. A reference to article 20 of the contract will show that there is much method in that enthusiasm. “The company remains authorized to reserve ten per cent. of the stock which it may issue to credit a beneficiary stock fund in favor of the founders and promoters of the enterprise,” &c. If in a paper of this nature the reference were admissible, I might say that in reading this part of article 20 just quoted, the language of Colonel Sellers would not be inapplicable: “Hurrah for the old flag and a little appropriation.” Who are the founders of the enterprise? In the explorations for an inter-oceanic canal route, the greatest talents and the ablest skill have been engaged for over half a century. Governments and individuals have vied with each other in furnishing the means to make these explorations, and able men have sacrificed their health and even their lives in the enthusiastic pursuit of trying to find a solution to this problem of nature. The literature which has been written on this subject alone would make a fair sized library. [Page 294] By what title do the promoters of the present scheme claim to be the heirs to all of these efforts? It does not seem to be in accordance with a sense of right, that all the sacrifices which have been made, all the hardships which have been endured, should only redound to the profit of the founders and promoters of the enterprise. No, it was founded when Columbus set sail from Palos, and has been promoted by a long list of names, including that of Strain and his ill-fated companions.

The world will have to pay for its construction by means of tolls on its commerce. Why then allow these tolls to be increased by paying again for that in which the world already has a vested interest? The proposition does not require any demonstration that the cheaper the canal can be constructed, the lower will be the tolls and the greater its usefulness.

In the light of the aforegoing statements, a gratuity or beneficial stock fund of its entire capital to the founders and promoters of the present scheme would certainly be a heavy tax on the commerce which is to make use of the canal. It would certainly be surprising if, upon a careful study of this contract, a sufficient amount of capital could be secured to carry this great work on successfully. A company may be organized, and subscriptions made to its stock, but it is very much to be apprehended that its existence will only prove an obstacle to the Ultimate realization of this great enterprise upon a sounder and more judicious basis.

In the case of an undertaking of such magnitude as the construction of an inter-oceanic canal in which the whole world is interested, and in which the interest of the government of the territory through which such canal may be located is a mere matter of deriving pecuniary advantages from, or compensation for the right of way, it is a part of wise statesmenship to weigh not only the probable, but also the possible effects of any steps which are to lead to its realization, and which may not only be for a temporary purpose, but which may affect important interests for all time.

In my opinion, considerations of reason and expediency concur in indicating the policy that any arrangement between the Colombian Government and a private company should be discouraged.

In speaking of expediency, I do not desire the word to be understood in a narrow or unworthy sense, but as relating to the practical effects of any policy prescribing the political and economic conditions under which this great work should be undertaken in order to make it productive of the greatest possible benefit to humanity and civilization.

Nor is the policy of indifference or non-intervention on the part of the Government of the United States to be recommended in any proceedings which have for their object the regulation of the conditions under which an inter-oceanic canal is to be constructed, for such a policy of inaction might be construed into a tacit consent to the inception of abuses, which, however slight at first, would grow with time and become burdensome in proportion. The history of the “Sound dues,” their origin, continuation for centuries and the efforts and capital necessary for their abolition, may be studied with advantage in this connection.

It appears that considerations of national and individual jealousy have been important factors in some of the previous negotiations of treaties and contracts with the Colombian Government for the right to construct an inter-oceanic canal. (See legation Nos. 115, February 22, 1869; 116, March 1, 1869; 12, March 16, 1870: 19, April 17, 1870, &c.)

In the treatment of the subject of this dispatch, which I fear has assumed an undue length, I have been influenced by the consideration that among the nations interested in the construction of an inter-oceanic [Page 295] canal the United States occupy the first rank. With a territory washed by both oceans, a water-way by means of such a canal between the Atlantic and Pacific States is pre-eminently to be desired, both on account of commerical as well as political reasons. It is therefore proper that the United States should not only be called upon to contribute materially to the successful execution of the enterprise, but also that the voice of their government should be potent in defining the conditions under which the same shall be undertaken and used.

I am &c.,