PANAMA CANAL

Evening Post, Volume CIX, Issue 113, 16 May 1925, Page 9

PANAMA CANAL

PAST HISTORY AND COST

JOINING UP TWO OCEANS.

It has been the dream of navigators and explorers ever since the American continent was discovered to construct a canal at the narrow neck at Panama, thus bisecting the two great continents and joining the Pacific and Atlantic Oceans At last the stubborn 35 miles of land yielded to the engineer, but the realisation of the project revived controversies which had lain dormant for years, and throwing a strange light upon the cherished belief that treaties between civilised Powers are inviolable.

Chronicled at some time ov other in tho history .of almost every European country are the vague aspirations which havo stirred different nations to conquer the problem of the Isthmus of Panama.) says an English writer. It is said that the project of a canal figured in the imagination of the ill-fated Scottish adventurers in their effort to, colonise Darion. The latest instance^ and at the same time the first serious effort of modern times, was commenced in the lifetime of the present generation. In 1879 an International Congress was convened in Paris, with Count Ferdinand de Lesseps —of world-wide renown as the builder of tho Suez Canal —as moving spirit. The outcome of the movement was the incorporation, on 3rd March, 1831, of the "Compagnie Universelle <lv Canal Interoceanique"—such being the official title of the company organised to carry out the work with an authorised share capital of 300 million francs. The concession granted to tho company by the Colombian Government ran for 99 years, and included rights to exploit minerals, and later the company purchased the Panama Railroad.

As it turned out in the end, the subsidiary objects provided considerable assets when, the property was in liquidation. Lesseps's company suffered periodically from lack of cash; in other words, the scheme proved more costly than originally anticipated. The modest 500 million francs of the company's capitalisation was multiplied several times by the issue of bonds, and it was the difficulty of placing an issue of 1,151,671 francs which brought the company's career to an end. The company was unable to meet bond interest, and the civil tribunal made a. winding-up order on 14th February, 1889. According to Burdett, the par value of bonds and shares issued at the suspension of operations amounted to 995,C09,590 francs, though this reference work states-that owing to the difficulty in obtaining information no reliance could be placed on the figures. Other authorities categorically state that the par value was 2.245,151,200 -.f ran as, lield by abo-.it 200,----000''persons, and that when the property was-sold to a:ne'.f company in 1894 the stocks and bonds: realised 1,271,682,637 francs. The reconstructed company—the New Panama Canal Company—continued to livo somewhat spasmodically. Its capital was 65,O0!),0OO francs, and it resumed excavating on the course, spending to the end of June, 1899, it is said, 55,000,000 francs. •

But the fear of competition by the Government of the United States of America, who, to conciliate ■ the amour propre_of_ the American nation, favoured the building of a canal either at Panama or at Nicaragua, acted as a deterrent. America, was naturally interested in a '. problem > lying practically at her own door, and a Canal Commission was ap.pointed. In 190f> the commission's report was presented to-. Congress,, and this influenced the ■Nijvv, Panama Canal Company in negotiate r;-f on the offer of 40,----000,000 dollars for the purchase of the property, including 68,889 shares in the Panama Railroad. The Americans realised their ambition; but one point in the history is worth remembering, as indicating the position occupied by the United States of America in the isthmus to-da-y.

Negotiations had at first to be opened the Colombian Government, which refused in the Senate to ratify the treaty conceding perpetual control of a strip of land six miles wide. There was then a deadlock, but the whole position was changed by tha revolt of Panama from Colombia. The Panama Republic then granted to the United States of America —in return for a guarantee of independence—a zone of land' in perpetuity for the construction and operation of the canal of a width of ten miles, with all the lights, powers, and authority within the zone which it would exercise, as if it were th e sovereign Power. In 1904, the United States of America commenced operations, though problems faced it which caused tho inevitable delay. Before touching upon these points of construction and route, it wiil be interesting to frame some estimate of the cost of tho canal.

Lesseps s company apparently spent 2\ milliards of francs. The second company expended at least 55,000,000 francs. Exclusive of the amount of 50,000j0G0 dollars paid to the Canal Comp.iny the U.S.A. reckoned to spend 325,0C3,0C0 dollars. It is difficult to say precisely what the American Government has exexpended. We know that it has issued bonds for the purpose, and on 31st December last there were outstanding 134,----000,000 dollars of these 2 per cent, and 3 per cent, loans. Taking all these items into account the minimum amount expended on the undertaking cannot be less than £100,000,000, and it will be very surprising if from start to finish £150,000,000 has not been sunk in the canal, beside which. Lssseps's original estimate of 658,000,000 francs, or £26,300,000, shrinks into insignificance. Whether an inland waterway through the isthmus is worth this cost is a matter which will be proved when it is seen wh other the earnings will show a 1 profit on the capital expended tv the American Government. Of its value to trade there is no doubt.

The vital point in the problem of construction was whether the plan should be for a sea-level canal or a canal rising to an elevation with locks.' "• Lesseps favoured a sea-level canal; and the work in his day was so carried out. The same point gave rise to controversy when the United State 3 came to take the work in hand. Opinion was very much divided then, but finally it was decided to con' strnct the canal with locks. The length from deep water to deep water is just under SO milc3, and at the highest point navigation is 87 feet above sea-level.