No. 140.
Mr. Dichman to Mr. Evarts.

No. 151.]

Sir: In continuation of my previous dispatches on the subject of an interoceanic canal, and in compliance with the instructions contained in your [Page 298] No. 57, of July 9, 1879, I beg to inclose a copy and translation of the grant for the construction of such a canal from the Colombian Government to a French company. The grant or contract is known here as the “Wyse contract,” and I shall refer to it by that name in this dispatch. The translation thereof which accompanies this dispatch having been made with great care, I would respectfully request that it be substituted for the translation which was forwarded with my unnumbered dispatch from Aspinwall under date of August 14, 1878, and reported in my No. 4, of October 8, 1878, from this legation. I also beg to state that there exists no treaty or convention between the Government of the United States of Colombia and any other government relating to the subject of an interoceanic canal.

Before proceeding to give an account of the history of the Wyse contract it may not be uninteresting to note as briefly as possible, the successive steps taken by the different governments of this country with a view of inducing foreign capital, skill, and labor to open a communication between the Atlantic and Pacific Oceans. The following statement is taken from the archives and records of the Colombian Government, which I have searched from the independence of the country down to the present time, and embraces, I believe, an enumeration of all the grants, contracts, and treaties relating to the opening of interoceanic communication across Colombian territory which have been executed. A few general observations are applicable to all these legislative contributions of Colombia toward the realization of a canal between the Atlantic and Pacific Oceans. Exceedingly great care appears to have been taken in the execution of all of these instruments to secure as large a share as possible of the gross income of any road or canal which might possibly be constructed; and notwithstanding the many noble sentiments with which they abound, testifying to the readiness of this country to contribute its share towards advancing such a work, fraught with incalculable advantages to the commerce and civilization of the world, they all seem to have been based upon the principle of benefiting the national treasury by exacting as large an equivalent as could be obtained for the concession of the right of way.

The first mention of anything relating to the construction of an interoceanic canal across the Isthmus of Panama which I can find in an official document of this government, occurs in a letter from Mr. F. A. Zea, under date of September 6, 1820. At that time Mr. Zea was the minister of Colombia at London, seeking the recognition of the independence of his country from the British Government. In the letter just mentioned he informs the President—Bolivar—that he has subscriptions from many of the first commercial houses of Europe for a loan of $80,000,000 for the purpose of constructing a canal between the two oceans. But as no canal was constructed, it is reasonable to suppose that the subscriptions to the loan were reconsidered.

The independence of the former Republic of Colombia had hardly been established before President Bolivar addressed a message to the Colombian Congress, in 1823, recommending that steps be taken to provide for the construction of a canal or road across the fothmus of Darien or Panama. The next mc occurs in connection with the Panama congress (see instructions of the Hon. Henry Clay to Mr. Anderson and Mr. Sergeant, the representatives of the United States to that body. The instructions are not on file at this legation).

In 1828 and 1829, President Boliver directed that explorations of the isthmus should be made; but the political troubles of the country and its [Page 299] subsequent division in 1831 into the three republics of New Granada, Ecuador, and Venezuela frustrated his intentions in that direction.

Upon the dissolution of the former Republic of Colombia, the sovereignty of the territory in which a canal could be constructed remained with New Granada, the government of which made a contract in 1831 with the French Baron Charles de Thierry for the opening of a canal on the line of the Rio Grande, Chagres, and Bay Limon. Nothing was done under this contract; and on the 22d of June, 1836, a new concession was made to Mr. Charles Biddle and associates. Pursuant to a resolution of the United States Senate, in 1835, offered by the Hon. Henry Clay, Mr. Biddie had been appointed by President Andrew Jackson a commissioner of the United States to examine the different routes best adapted to interoceanic communication. Mr. Biddle was also instructed to obtain information at Bogota concerning the Thierry contract of May 22, 1834. His visit to Bogota resulted in the contract made in 1836 above mentioned, which shared the fate of its predecessor and remained without tangible results of any kind. (See Department’s dispatches No. 24, of May 1, 1835; No. 33, of September 23, 1836, and No. 35, of February 18,1837.)

On the 1st of June, 1842, the Congress of New Granada passed a law, offering the concession for the construction of a canal or railroad, and inviting proposals for the same. This led in 1847 to a contract made with a French company, comprising among others, prominent officials of the French Government, and tipon their failure to carry out the concession to the contract made with Mr. John Lloyd Stephens, in 1850, under which the Panama Railroad has been constructed. This was the first of the many grants or contracts which was faithfully executed, and from which New Granada and the United States of Colombia have derived, and are deriving large revenues.

On the 7th of June, 1850, three days after the signing of the Panama Railroad contract, a law was passed authorizing the Executive of New Granada to permit the transit of closed mails of friendly governments over that road, instructing the Executive by the same law to prescribe rules under which the transit of such mails is to be permitted and to “exact the greatest possible advantages in favor of the republic.” * * *

In 1851 two concessions for canals were granted, one on the Atrato-Napipi route, and the other on the line of the Atrato and San Juan. And, lest two canals might not suffice, a third grant was executed in the following year (1852) for a canal to be located between the Gulf of San Miguel and Caledonia Bay.

In 1854, the Government of New Granada, stimulated into activity by the explorations made by the lamented Strain and others, decided to make explorations on its own account; but no work was ever done under this laudable resolution beyond the printing of the law authorizing and directing that such explorations should be undertaken.

It was perhaps feared here in 1855 that some possible canal route had been overlooked in the three grants made in 1851 and 1852: and, in order to supply such a defect, a contract for a fourth canal was executed in 1855, to be located anywhere between the 4th and 8th degrees of latitude.

* * * * * * *

With peace in the republic came a new canal project in January, 1866, but not appearing to meet the views of the Colombian Congress, it failed to meet with the approval of that body.

On the 27th of June of the same year (1866) Congress enacted a law laying down certain bases for the construction of a canal, and prescribing conditions upon which a concession would be granted. By the same law the Executive was requested to make all due exertions with a view of promoting the execution of another canal contract either within the [Page 300] country or abroad. The desire of the Colombian Government to enter into a new contract for the construction of a canal was advertised in Europe; and in 1867 a French company offered to construct a canal with only two locks, but the proposal not being in conformity with the law of 1866, referred to above, it could not be accepted. Proposals were also made about the same time by several associations formed in England. One of the associations counted among others the name of Count Gleichen, which appears to have attracted considerable attention on account of the support given to him Lord Clarendon. But their proposals, also, did not reach any satisfactory result. So far no government had made any proposals; but in the spring of 1869 the Peruvian minister at this capital offered, in the name of and under instructions from his government, to contribute a large sum of money towards the construction of an interoceanic canal, on the ground that the governments of the American continent should be directly and largely interested in such an undertaking.

The treaties negotiated in 1869 and 1870 between the plenipotentiaries of the United States and of Colombia, and the objectionable changes in them proposed by the Colombian Congress, are too well known at the Department to need any further explanation.

No contracts were executed between the years 1870 and 1876, owing probably to the absence of contractors; for the records of the Colombia Congress show that the matter received a due share of attention in the discussions of that body. (See also No. 74, of November, 1874, from this legation, and Department’s No. 60, of December 15, 1874.)

The aforegoing brings the history of the efforts made by the successive governments of this country to enlist foreign enterprise in the construction of an interoceanic canal across Colombian territory down to the inception of the Wyse contract.

It might have been supposed that this record of a series of failures to accomplish the desired object would have taught the public men of this country that a work of such magnitude, and involving considerations of a political and commercial nature of the greatest importance, could not be realized by the mere granting of a concession or the execution of a contract, and that the indiscriminate manner in which such concessions had been sought and granted could only prejudice, if not the ultimate construction of the canal, at least any efforts which might be made in good faith with this government to negotiate in relation to the matter upon such a basis as would inspire confidence and assure the support of the large amount of capital required.

But such was not the view of the subject which was entertained here; and when, in the spring of 1876, a Mr. A. de Gorgoza arrived at Bogota for the purpose of obtaining a new canal contract, he readily procured the passage of a law, known as law 33 of 1876, authorizing the Executive to negotiate for the opening of a canal between the Atlantic and Pacific Oceans.

On the 28th day of May of the same year (1876), being two days after the passage of this la law contract for the opening of a canal was executed between the Colombian Government and A. de Gorgoza, the latter signing the contract for himself and for General Stephen Türr, of France. For a copy of this law and contract, I beg to refer you to the inclosures, with the contemporaneous dispatches Nos. 163, of May 7, 1876, and 170, of June 5, 1876, from this legation.

It appears that this contract was transferred to a French company, known as the “Civil International Society of the Interoceanic Canal.” For the sake of brevity this society will be mentioned hereafter as the [Page 301] “Türr Society.” It is reasonable to suppose that A. de Gorgoza was sent here as its agent in the procuring of the canal contract, and that his signature to the contract in his individual name, and that of General Türr, was undoubtedly made in that manner for the purpose of avoiding much prominence being attracted to the scheme in which he was engaged. For it does not seem from all that I can learn that in the passage of the law of 1876, and the subsequent execution of the contract with A. de Gorgoza, any expectation was entertained here at the time that the contract would ever amount to anything serious. The statesmen of Colombia were otherwise occupied then, in making provisions for the conduct of a war which surpassed in magnitude any of the previous civil wars of this republic, and which taxed its resources to the utmost. The law was passed, and the contract made after the usual stereotyped formula, with the expectation that in a few years at the most they would both drop out of sight, as had done their many predecessors.

Under the auspices of the “Türr Society,” Lieut. K. B. Wyse, of the French Navy, one of its members, spent about five months, from December, 1876, to April, 1877, on the Isthmus of Panama in the examination of various canal routes. In February, 1878, he presented himself at Bogota for the purpose of obtaining some modifications of the canal contract then held by the “Türr Society.” The result of his efforts was a new contract, in the name of the “Türr Society,” a copy of which, with translation, are inclosed.

The next step in the programme was the convocation of the so-called “International Scientific Congress,” in May, 1879, with the result of which you are familiar. As belonging to the history of this congress, the proceedings of the so-called “Geographical Congresses,” which met at Paris in 1875 and 1878, perhaps merit a passing remark. In view of the especial importance given at these reunions to the project of an inter-ocean canal, and the prominent part taken in the discussion of this subject by the promoters of the present scheme, the suspicion is perhaps not wanting in reason that the meetings of the geographical congresses were only the preliminary machinery placed in operation for the purpose of attracting greater public attention to the “International Scientific Congress,” and to give an air of impartiality and scientific merit to its decision, which might otherwise appear to have been the result of a previous arrangement.

After the dissolution of the “Scientific Congress,” the promoter of the present scheme lost comparatively little time before attempting to to convert the indorsement given to it by their congress into a tangible pecuniary result. Accordingly, in pursuance of this object, the “Türr Society” transferred, by an instrument dated July 11, 1879, all the rights which it had acquired under the contract with the Colombian Government to Mr. de Lesseps, to be transferred by him to a canal company to be organized in such manner as he should see fit. The considerations for the transfer to Mr. de Lesseps were to be 1,000,000 francs to be paid fifteen days after the organization of the canal company, 4,000,000 francs to be paid one month after one-half of the stock subscriptions shall have been paid, and 5,000,000 francs in the fully paid-up stock of the company, in all amounting to the sum of 10,000,000 francs.

The disappointment experienced by some of the Colombian statesmen, when the news of this transfer reached Bogotá, at not having made a provision in the Wyse contract that at least one-half of the consideration to be paid upon the transfer of the contract to another company, should belong to the Colombian government, may be readily imagined. But these gentlemen evidently overlooked the important fact that the [Page 302] payment of the 10,000,000 francs as well as the construction of the canal itself would depend entirely upon the very improbable contingency that a considerable amount of the subscriptions for the stock of the canal company would be received by Mr. de Lesseps in answer to his invitation.

In a previous dispatch on this subject, No. 112, I have already made mention of the state of feeling in this country on account of the nattering prospect of the construction of the canal through the territory of Colombia. Mail after mail brought the most glowing account from Europe of the assured success of Mr. de Lesseps, extracts from his speeches were published, and when it was officially announced by the Colombian minister at London that the caution money of seven hundred and fifty thousand francs had been deposited, and that on the first of next January Mr. de Lesseps would visit the Isthmus of Panama for the purpose of inaugurating the beginning of the construction of the canal in person, the climax of enthusiasm was reached, and on the 8th of September, 1879, a decree was published by the President of Colombia, providing for a brilliant official reception of the illustrious visitor upon his arrival at Aspinwall. * * *

I have also taken occasion in my previous dispatches on the subject to bring to your notice the reasons why, in my opinion, the construction of a canal under the contract now held by Mr. de Lesseps should be discouraged by the United States. In addition to these reasons, permit me to state that the organization of the company to be formed by Mr. de Lesseps, although advertised as international, will be French in everything that affects any question, except the contribution of money, for the company must have a domicile somewhere, and must be subject to the jurisdiction of some government. A canal constructed by such a company will be nothing less than the planting of a French colony on the isthmus. To show the local influence which an enterprise of such magnitude is able to exert, it is only necessary to examine the history of the Panama Railroad. It is owing to the construction of that road that the English language has become common at Aspinwall and Panama, and if it were not for the fact that every management of that corporation attends solely to its legitimate business without interfering in local politics, and that the protection afforded to the road by the Government of the United States is confined to the narrow limits of preventing; any interference with its operations arising from the frequent local political disturbance, the population of the State of Panama would have long ago looked for a political connection with the United States. If the construction of a canal under the present contract should be proceeded with serious differences must necessarily arise between the company and the Colombian Government, and notwithstanding the provision as to the submission of such differences to the Supreme Court of the United States of Colombia, supposing the decision of that tribunal to be unjust or only against the company, does anybody at all familiar with the course of the relations of European governments with this and the other Spanish-American republics, suppose for one moment that the intervention of the government of the company would not be invoked, and that it would not be freely exercised. Nor is it an answer to this statement that the contract provides against such intervention. Reasons could easily be found why it should take place, and, as against the pressure of a foreign government Colombia is powerless and helpless at the Isthmus of Panama; it is more than probable that the good offices of the Government of the United States would have to be invoked by the Government of Colombia, and we should thus be in a fair way of having [Page 303] an Egyptian question on this continent, while every consideration of reason and policy would dictate that it should be avoided, by making the construction of a canal under the present contract impossible.

The foregoing observations apply perhaps with equal force to any attempt at constructing the canal by a company organized under the jurisdiction of a European government. Notwithstanding the great advance in the civilization of the world made in this country, the time has not yet come when, in the consideration of great undertakings like an interoceanic canal, the future can be regarded without taking into account the jealousies and frictions between nations which have always existed and probably always will exist. Industry is being organized nationally throughout the entire world, tariffs are being established, and treaties are being concluded for the purpose of securing to one or the other nation an advantage over its competitors, and irrespective of the merits of the political questions involved, the proposition does not need much argument that the commerce of the United States would be at a disadvantage if the management of an interoceanic canal should be in the hands of a European company. This principle appears to have been recognized in England in connection with the Suez Canal, and the purchase of the shares of the Khedive of Egypt by the British Government was an act of policy for the purpose of securing a voice in the management of that canal.

In the consideration of this subject another question ought not to be lost sight of by the Government of the United States, and that relates to the differences which will undoubtedly arise between the canal company and the shipping using the canal. As it is probable that the larger part of the shipping which will avail itself of the canal will belong to the United States, it is a matter of the greatest importance that no doubt should prevail as to the courts which are to take cognizance of such differences. Is the American shipper, owner, or master to apply to the courts at Bogota for a remedy, or is he to go to Europe to seek redress from the courts, of the country where the company has its legal domicile? In either case the difficulties arising from distances alone would work a practical denial of justice. Can the Government of the United States permit their shipping to be placed at this disadvantage?

The more this subject of the construction of an interoceanic canal is examined the more it becomes apparent that the Government of the United States cannot view with indifference the construction and management thereof by a European government, or by a company subject to the jurisdiction of such government.

I am, sir, your obedient servant,