File No. 711.5914/16

Minister Egan to the Secretary of State

No. 464

Sir: Referring to my despatch No. 448, of August 23, 1911, I have the honor to enclose herewith an article published in Social-Demokraten on November 1, 1911, continuing a discussion of the same question; namely, the efforts of Germany to obtain a foothold in America and also the possibility of a canal to be built by Germany in competition with the Panama Canal. Furthermore, the effect on the value of the Danish West Indies is discussed at length.

I have [etc.]

Maurice Francis Egan
[Inclosure—Translation]

The Germans in the West India Islands, Central and South America—A Canal in competition to the Panama Canal?—The Hamburg people and St. Thomas

We have already at an earlier date called the attention of our readers to the momentous occurrences which are surreptitiously taking place in the West India Islands, South and Central America. The Germans, especially the Hamburg shipowners and merchants, are carrying on a persistent and, as far as we can see, determinate struggle with a view of getting such a strong foothold over there [Page 576] that the United States will not be able to oust them when the Panama Canal is opened.

This German contest is also of great interest to us, since St. Thomas has hitherto been the center for the Hamburg steamship lines in that part of the world. In the show window of the Hamburg-American Line on the street Unter den Linden, in Berlin, there is a large map of the world on which are indicated the different lines belonging to the company, and it is interesting to see St. Thomas, on this map, look like a spider, owing to the large number of Hamburg lines diverging in all directions from this little island of ours. We have also pointed out in this paper at an earlier date how it really was the Hamburg interests which in 1902 prevented the sale of our three islands. For the Hamburg-American Line it was a question of life or death for their great steamship lines running to Central and South America that Denmark should keep the islands, and especially St. Thomas,

We now have occasion to return to this subject, since the interest of the Hamburg people in our retaining the islands seems to have cooled off. At short intervals the Hamburger Fremdenblatt several times reiterated that St. Thomas would be sure to go to the United States, since Denmark was not able to make the harbor improvements which the situation of the island requires. We are at a loss to know what motive the Hamburg paper had in repeatedly bringing up the state of things on St. Thomas, but perhaps it has some connection with the rumors which have been circulated and which have even created considerable sensation on the stock exchange, namely, that foreign capitalists have applied to our Government for concessions on the island. It would be a very good thing if the Rigsdag could be informed of what really lies under all this, and to know if our Government, or the patriots who at one time offered to put up millions for this cause, really have any definite plan with respect to the future of these islands.

It looks as if the Hamburg people had given up St. Thomas. Not that they have given up their steamship traffic on the island, they have only directed their attentions in a different direction. The successful revolution last summer on the large West India island Haiti brought the ex-ambassador of Haiti at Berlin into power in one of the negro republics of the island, and it was said that the financial support given him by German capitalists was to be paid by a monopoly on the harbors of the island. At the same time, a Danish journalist, Mr. Johs. Hoeck, said that he had seen the beginning of an enormous harbor construction on the north coast of the South American Republic of Colombia, not far from the Panama Canal, a harbor construction which, as far as possible, is being kept secret. And now, the other day, we received new information in regard to the plans of the Germans. The news came from New York, where the movements of the Germans are very closely watched. According to this information the Germans have plans to build a canal in competition to the Panama Canal.

Close to Panama lies the Republic of Costa Rica, and a little higher up on the map the Republic of Nicaragua. As a boundary between these two States, the St. Juan River runs from the great Lake Nicaragua out to the Atlantic Ocean, and this river is navigable all the way up to the lake. To the west there is a strip of land to be cut through, but it is much narrower than the Isthmus of Panama. Ever since the sixteenth century the plan of cutting through this strip of land has been, from time to time, advanced in Europe, and ever since the latter part of the 19th century companies have been formed for doing this work. In the decade 1890–1900 much was done in this respect, but the canal did not become a reality. The Germans have planned to go up the navigable St. Juan River and across the great Nicaragua Lake and then up a river coming from the southwest, namely the Sapoa River, thus making the land-cut still shorter. The American paper was able to give the names of the principal men in the German consortium. It even asserts that the German Government is backing the enterprise, and it states that the United States Government has already made representations to the two Republics concerned and given them to understand that the granting of such a concession would be considered an unfriendly act towards the United States. Of course the statements of an American newspaper on such a subject cannot be accepted without reservations, but the New York correspondent of the Berliner Tageblatt has made investigations. He got a disavowal, as far as regarded an official action, but it was admitted that the plan of building the canal really existed.

Thus within a year we have seen the persistent struggles of the German capitalists exposed in three different places, Haiti, Colombia, Costa Rica, and it all speaks of Germany’s economical conquest of the lands east and west of the Panama Canal.

[Page 577]

But will all this still continue to proceed in secret? The Government of the United States distrustfully follows the movements of the Germans, and is it reasonable to suppose that this great Power will stand still and see a European Power, in spite of the Monroe Doctrine, actually annex American ground?

And what will be the consequences for St. Thomas? Will the United States purchase or take it in order to make it an American port? Deplorably enough, it is not probable that the United States any longer has use for it, for it has already built a great harbor on Cuba as a basis for its steamship traffic through the Panama Canal. When the time once comes when the Hamburg people get their new harbor constructions ready on Haiti and in Colombia and therefore no longer have any use for St. Thomas, America will perhaps not even buy the islands, and what will we then do with them? St. Thomas has its splendid natural presuppositions, but they are not sufficient in this capitalistic age, which requires enormous improvements of the natural resources.

And even if both natural and artificial presuppositions existed, there must be ships to make use of them.

In 1902 there were two States looking for a harbor in the West Indies, America and Germany. Germany won the victory, and Denmark retained the islands, only for the benefit of German navigation, but now when both Germans and Americans have good harbors elsewhere, who is going to make use of St. Thomas?