FROM ATLANTIC TO PACIFIC

New Zealand Mail, Issue 1523, 28 February 1901, Page 61

FROM ATLANTIC TO PACIFIC

THE HISTORICAL SCANDAL OF THE PAN Ail A CANAL. Now that the question of digging a canal from the Atlantic to the Pacific is again under consideration, it is not out or place to cast- a backward glance at the original project of carving a waterway through the Isthmus of Panama, a. project which ended in the financial ruin of thousands, and gave rise to scandal which has probably been unequalled in the history of the world. The Panama Canal was indeed a blow to the national dignity of France,- and even today the term “Pa-namaist” is used to express loathing and contempt. The idea of joining the two great oceans, and thereby abolishing once and for all the dangerous passage by Cape Horn, was an old one, how old it would be difficult to say. But it was first brought pr&cticallv before the French public m 1880 bv M. de Lesseps. the famous engineer of the Suez Canal. To carry out tins project the Universal Inter-Oceanic Canal Company was floated, with a capital of £12,000,000. In December, 1880, 590,000 twenty-pound shares were offered at- par to Europe and America, the five per cent, interest on which was to be paid out of the capital, while the work was under construction. The remaining 10,000 shares were to be allotted to” he original guarantees for the concessions and survey.

The public came forward eagerly to take up the shares. Altogether there were 102,230 shareholders, 80,889' of whom held £5 shares, 19,143 from £0 to £2O shares, and 23,208 from £2l to £SO shares. The total cost of the construction was estimated! at- £20,500,000 The first work on the Canal was actually begun on February Ist, and in October. the cutting of the Cullebra was taken in hand. Fcr five years the work proceeded slowly and unsatisfactorily. The public began to lose confidence. It. was soon discovered that the cost had been under-estimated. In 1886 it became known that 600 millions of francs were required for its completion. At the commencement of the following year twelve miles of the Canal, from Colon t-o Bohio. had been actually cut. In July a new .series of 500,000 bonds at 440 francs were issued, and M. de Lessens brought forward a bill by which the company might be authorised to issue lottery bonds. To the latter measure the Government refused to give its sanction, in suite of the fact that M. de Lesseps pointed out that the Canal was doomed unless the annual payment of 74,000,000 francs for interest out of the working capital was reduced to 50,000.000, as the physical difficulties of the project had been unci er-estim at e d.

The company at that time represented a great political factor in France, and it made its influence felt. In 1888 the Government which had refused the issue of lottery bonds fell, and a new party, under the Premiership of M. de Freycinet, a leading member of the Panama Company, was formed. Sanction was, of course, immediately given to the issue of'-the much-disputed lottery bonds. But just as the subscription list was closing a report was spread by interested speculators that M. de Lesseps was dead- As a consequence, only twothirds of the requisite sum was forthcoming, and the Government were forced to bring forward a bill to preserve the company from bankruptcy by proposing to temporarily suspend the payment of interest. This hill was thrown out, M. de Lesseps and his son resigned, and the company went into liquidation. It is almost impossible to realise the state of public excitement which existed about this time. Early in 1889 M. de Lesseps, who still had faith in his gigantic conception, proposed to float a new company, but the idea was not received favourably. Meanwhile, the old company passed into the hands of M. Brunet, who, although a Minister, L&d been chosen as liquidator. M. Brunet was not long in setting to work. A Commission of fifteen was appointed, consisting of twelve Frenchmen, one Englishman, one Dutchman, and one Belgian. Five'members of this Commission were to go to Panama and make a report. Meanwhile, it was known that, the Canal Concession, which lapsed in three years, would not be renewed uiress the works were in an advanced state. The efforts which were made to gain a renewal of this concession were slow in hearing fruit, but in December, 1890, an extension was granted by the Columbian Government, on condition that the company paid for all laud expropriations {on the Isthmus and the cost of lseeping up the necessary military garrisons. At the same time a, limit of twenty-six months was named. before the end of which period the company would have to be reorganised and the work started afresh. In July, 1891. M. Wevse made an attempt to form a new company, which* should carry on the work on new lines. It was proposed to form a huge inland lake, which should he reached by three locks on either side.. For this project 600 millions of francs were required, together with the machinery of the old company. But feeling ran very high against M. de Lesseps and the other directors of the old company. Fiftythree million pounds had been already sunk in the project, £33,000,000 only

of which had been expended on the Isthmus, the rest being wasted in France. On November 19 an interpellation took place in the Chamber regarding: the statements in the papers that AL. Flcquet, when Prime Minister, had obtained 300,000 francs from the Panama Company for subvention to several journals during the Bou-langist crisis, and that three million francs had been distributed among one hundred members in order to obtain the passing of the Bill in 1888, authorising the issue of lottery bonds. A committee of thirty-three was appointed to investigate these charges. Soon- after the formation of this committee, Baron (le Reinac-h, a leading member of Panama Company, died under suspicious circumstances. The committee claimed to exercise judicial powers, and M. Henri Brisson, the chairman, insisted that the body siioum be exhumed in order to ascertain the cause of death. To this the Ministry declined to assent, and in reply for a vote of confidence were defeated by 293 to 115. The Cabinet resigned, and a new Ministry was formed. Popular feeling was at boiling point, and the Government were forced to take action against the old company. All the directors were arrested, and, with the exception of the aged M. de Lesseps, were imprisoned at Mazas, where they were joined by the celebrated M. Eiffel. Early in 1893 the great case came up for trial. Among the accused there was one touching and pathetic figure, M. de Lesseps. He was so old and so senile that he was unable even to understand the nature of the proceedings, or even to realise the position in. which he.was placed. It was a sad finale to the lengthy public career of a man of genius, who had carried out

one of the greatest and one of the mostimportant engineering feats of the century. The Court of Appeal, in pronouncing judgment, found the directors of the Company guilty of misappropriating public funds, and of violating the laws governing public companies. M. F. de Lesseps and M. C. de Lesseps were condemned to five years’ imprisonment and fined 3000 francs each. The other directors received two years, and were heavily fined. So ended the great Panama scheme, which had draggd on its corrupt course for thirteen years. It is to be hoped that the Nicaraguan Canal project will end under different circumstances Echo.’’