CHAPTER IV.

THE CANAL AS A GOVERNMENT ENTERPRISE

The state of tranquillity or comparative stagnation in the policy of the United States as regards the canal question that came after the administration of President Arthur could not possibly last for long. The gradual development of the desires of the North American Republic to exert a kind of moral supremacy over the other nations of the New World could not be relegated to oblivion. The construction of the canal in itself, without obtaining its political control, would place great economic advantages in the hands of the United States citizens. But now they would not even obtain this, for its was evident that the Panama Canal would not be constructed by the French company. By the year 1888 the finances of the company became seriously embarrassed. Capitalists in the United States saw in this fact an opening for a new undertaking, and gradually they once more brought the question under the consideration of the government.

Moreover, subsequent events, quite apart from the influence brought to bear on public opinion by the commercial classes, forced the question into the field of governmental activity, and the construction of an interoceanic communication no longer appear as a subject for private enterprise, but as a work that should be taken up by the State itself. In spite of the supreme endeavours of the

French company, the works at Panana had to be discontinued on account of the want of capital. The experience resulting from this fact tended to show that the canal could never be constructed unless vast resouces were to be put at the disposal of the persons engaged in the operation. It was necessary, therefore, that a rich state should be ready to undertake the work. And there was nothing more natural than that the United States should consider themselves the most adequate nation for the completion of the enterprise.

About the time of the Panama Canal failure, an American company had been incorporated to start the construction of another canal by the Nicaragua route. This company, however, could not raise the capital necessary for the projected work. Early in 1891 a Bill was presented to Congress, under which the government was to guarantee an issue of bonds of this company to the amount of $100,000,000; and President Harrison went as far as saying:

"I am quite willing to recommend government promotion in the prosecution of a work which, if no other means offered for securing its completion, is of such transcendent interest that the government should, in my opinion, secure it by direct appropriations from its treasury."

On August 15, 1893, another Bill was introduced having the same object in view, but, like its predecessor, it never became law.

During his second Presidency (1893 to 1897) Cleveland held the same liberal policy in connection with the canal as he had before, in spite of the change of opinion of the nation. And with regard to the Clayton-Bulwer treaty he

1 President Harrison, annual message, December 9, 1891.

could not but show satisfaction rather than displeasure. But at the Presidential Elections of 1896 the Republican party inserted in its programme a resolution to the effect that the canal should be "constructed, owned, and exploited by the United States." The candidate of this party was elected, but the new President, Mr. McKinley, made no mention of the subject in his inaugural address or in his first annual message (December 1897).'

But the war with Spain fully demonstrated to the people of the United States and to the administration the urgent need of a rapid communication between the Atlantic and the Pacific. At the commencement of the hostilities the Oregon had to make a long voyage round Cape Horn in order to come from San Francisco to the theatre of war. The annexation of Hawaii, and the enlargement of the possessions of the United States resulting from the war, brought even more importance to the question of maritime communications. Strategic, political, and economic reasons forced the problem, not so much as a convenience, but, to the mind of the United States statesmen, as a real necessity. Hence we find that Mr. McKinley expresses himself in his second message thus: "That the construction of such a maritime highway is now more than ever indispensable to that intimate and ready intercommunication between our eastern and western seaboards demanded by the annexation of the Hawaiian Islands and the prospective expansion of our influence and commerce in the Pacific, and that our national policy now more imperatively than ever calls for its control by this government, are propositions which I doubt not the Congress will duly appreciate and wisely act upon.