1900–1914
End of an Era
The lamps are going out all over Europe; we shall not see them lit again in our lifetime.
Sir Edward Grey, British foreign secretary, to editor of the WestminsterGazette (3 August 1914)
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On 20 May 1910, London glittered with royalty. No fewer than nine kings and emperors, augmented by myriad princes, princesses and potentates, gathered to mourn a man to whom many of them were related. Edward VII was known as the ‘Uncle of Europe’. He had less flattering names, too, including ‘Tum Tum’, in reference to his colossal waistline, and ‘Edward the Caresser’, a tribute to his expertise in the art of adultery. His formal title, though, was all gravitas: ‘By the Grace of God, of the United Kingdom of Great Britain and Ireland and the British Dominions beyond the Seas, King, Defender of the Faith, Emperor of India.’ It was almost as expansive as the territories over which he had reigned for nine years: an empire whose lustre seemed to shine as brightly as ever.
First among equals at the funeral ceremonies was Edward’s only surviving son and successor, King George V. Apart from a shared love of shooting animals, the temperaments of father and son were very different. Disciplined, upright, obsessed with punctuality, George (picturedcentre,previouspages) would pick up where his grandparents Victoria and Albert had left off, resetting the constitutional monarchy along a trajectory of probity and duty.
By George’s side, pride of place as a chief mourner went to his first cousin, a man whose sense of duty that day probably outweighed personal sentiment. Prickly, complex and impetuous, Kaiser Wilhelm II of Germany can be seen in this photograph –taken as the procession neared London’s Paddington Station, from where it would travel by train to Windsor – gripping the reins of his horse with his ‘withered’ arm, the legacy of a difficult birth. He had little love left for his late Uncle Edward; now, in London, he found himself in the heart of an empire he envied, whose navy outclassed his own, and whose diplomatic relations with France seemed (to him) to be aimed at boxing in Germany.
The king these illustrious mourners came to bury had exceeded expectations. During his long tenure as Prince of Wales and heir to the throne, ‘Bertie’ (as he was then known) had indulged his appetites so freely that his mother, Victoria, had despaired. His reign as Edward, which began in 1901 when he was nearly sixty, was expected to be neither long nor glorious.
Yet Edward managed to surprise everyone. He played to his strengths: charm, an international outlook and some adroit diplomacy. These qualities came together when Edward’s personal efforts helped to secure the Anglo-French agreement of 1904 known as the Entente Cordiale. With this understanding, historic enmities and some more recent imperial frictions were put to one side in favour of a new spirit of cooperation.
The ‘Edwardian age’ (often extended by historians to the summer of 1914) would be the last time a British monarch’s name defined an era. In the backward-shining light that history throws, it is often presented as a time of optimism, promise and the casting off of Victorian primness. Yet it was also a time of turbulence in a not-soUnited Kingdom. Trade unionists flexed their muscles. The Labour Party made electoral advances. Women vociferously demanded the vote, and the suffragist and suffragette movements provided, respectively, outlets for those who wanted to pursue the campaign peacefully or militantly. The polarizing question of Home Rule in Ireland threatened to explode, as Irish nationalist and loyalist paramilitaries began arming themselves.
Edwardian Britain also had to engage with a continental Europe that, by the end of the nineteenth century, had slipped into confrontational blocs. Since the Battle of Waterloo in 1815, Britain had pursued imperial and economic expansion while avoiding European entanglements – a stratagem described by the contemporary cliché ‘splendid isolation’. Britain’s wars between 1815 and 1914 were, with the arguable exception of the Crimean War, colonial rather than European matters. Now things were changing.
Most palpable among the new European realities was the fact of a united, Prussian-dominated Germany at Europe’s heart, bitterly opposed by a France still all too aware of the prestige and territory lost during the Franco-Prussian War of 1870–71. By 1910, Germany’s industrial output pipped Britain’s and far exceeded France’s. (In a different sign of the times, the United States’ thrusting economy dwarfed any in Europe, though America was still a sleeping giant militarily.) Yet as the German economy expanded, German democratic institutions remained relatively weak – which meant the
Kaiser and his military still exerted disproportionate power over the state. Since his imperial accession in 1888, Wilhelm II had abandoned the strategic caution of his grandfather Wilhelm I, dispensed with the services of the elderly master-statesman Otto von Bismarck, and allowed a carefully calibrated German relationship with Russia to lapse in favour of consolidating relations with AustriaHungary.
In 1894, to counter the new German–Austrian partnership, a French–Russian entente was agreed. This was effectively a mutual defence pact, which Germany inevitably interpreted as a threatening encirclement. Britain’s Entente Cordiale with France fell short of this sort of defensive alliance. Nevertheless, Germany could see that Britain had chosen sides in the great geopolitical game. During Edward’s reign, the two countries embarked on a frantic race to build more powerful battleships. Hostility was out in the open.
As alliances shifted among the Western powers, further east lay the ‘sick man of Europe’: the Ottoman Empire. As it was steadily dispossessed of its European provinces, the retreating empire spat out newly independent nations – and new risks for the international system. In 1903, Serbians (fully independent from 1878) assassinated their pro-Austrian king and embarked on a pan-Slavic and pro-Russian course. Austro-Russian regional tensions grew ever more acute. ‘The Balkans’ became a byword for instability.
None of this should suggest that the rest of the world was a haven of calm. Bloody revolutions gripped Mexico and China in 1910 and 1911 respectively – and their effects on global stability would become grimly apparent in time. Still, the most immediate dangers plainly lay in Europe, where a system of formal alliances and competing imperial interests meant that one misstep could – and would – yield catastrophic consequences.
Against that background, as almost the entire monarchy of Europe gathered in London to pay their respects to Edward VII, they were unwittingly marking the end of an era. Within less than a decade, many of these kings would have no thrones to occupy. For millions of their subjects, an even worse fate was in store.
17 December 1903
The Wright brothers make the first machinepowered flight outside Kitty Hawk, North Carolina; within 8 years, aeroplanes are dropping bombs.
January–October 1905
Russia experiences a naval mutiny at Odessa, a revolution (in which Tsar Nicholas II is forced to permit a parliament, the Duma) and defeat in the Russo-Japanese War.
6 October 1908
The Austro-Hungarian Empire formally annexes the one-time Ottoman province of Bosnia-Herzegovina, angering Bosnia’s nationalists as well as neighbouring Serbia and Russia.
20 November 1910
Discontent spurs rebellion against ageing autocrat Porfirio Díaz in Mexico; the next year, China experiences revolution too, leading to the abdication of child-emperor Puyi.
April–May 1912
The prospect of Home Rule for Ireland (with a parliament in Dublin) threatens armed rebellion by Protestant paramilitaries and a counter-reaction from Irish nationalists.
8 April 1904
The signing of the Anglo-French Entente cordiale signals a new era of Franco-British co-operation after decades of intense imperial competition.
10 February 1906
King Edward VII launches the Royal Navy’s HMS Dreadnought, to the envy of Germany’s Kaiser Wilhelm II: a 6-year Anglo-German race to build battleships follows.
27 April 1909
Mehmed V replaces his brother as the Ottoman Empire’s sultan, although real power has passed to the ‘Young Turk’ nationalists in government, including Enver Pasha.
April–November 1911
In the Agadir Crisis (or Second Moroccan Crisis), French and German imperial ambitions clash dangerously over Morocco; tensions are defused, but Britain backs France.
10 August 1913
The Treaty of Bucharest formally ends the second of two Balkan Wars, fought over borders in these former Ottoman states; the region lives up to its reputation as a ‘tinderbox’.
The Belle Époque
As Edward VII discovered during his apprenticeship as Prince of Wales, Paris was Europe’s playground, full of the louche delights of the ‘Belle Époque’ – the near half-century of relative stability before 1914, when the arts, progressive thought and good living flourished in Europe’s leading cities. No corner of Paris exemplified joiedevivre as well as the Moulin Rouge in Montmartre – known for the highkicking, flesh-and-bloomers-revealing can-can. Depicted here is the Moulin’s rear ‘garden’, with dancers and tutus, assorted clientele –and an extraordinary hollow elephant; its recreational uses were said to have included a hideaway for opium-smoking. There was, however, another, darker side to these years of gaiety and pleasure. Fractures in French society were starkly exposed by the protracted Dreyfus affair (1894–1906), in which an innocent French-Jewish army officer was scapegoated for espionage by a conservative, Catholic, anti-Semitic establishment, while liberal
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voices – notably the writer Émile Zola – spoke up passionately in his defence.
The Dreyfus case began with accusations of military secrets revealed to Germany – which spoke volumes about French insecurities of the time. France had been humiliated by the Prussian Army in 1871, when a newly unified German Empire was proclaimed on French soil, at Versailles. With wings clipped, territory lost, a declining population – and now a large, industrially vibrant and militarily dynamic German power as a neighbour – the French, and especially their politicians and military chiefs, had plenty to worry about.
New Americans
A world away from Old Europe and its global empires lay the optimistic and energetic United States. During the nineteenth century, the USA had managed to feed its own imperial appetites through westward expansion, with native peoples cleared from the land in order to satisfy a continental conquest given the pious title ‘Manifest Destiny’.
Many of the new Americans fanning out towards the Pacific Ocean were poorer European migrants, tempted by the promise of land, absence of persecution and the opportunity to make (or remake) themselves. In the 1910 census, nearly 12 million Americans reported having been born in Europe; this photograph captures one small, wide-eyed group of recent arrivals, enjoying a first Christmas dinner in their adopted home.
The relationships these new Americans retained with their native countries were complex. Although immigrants brought their varied languages and heritages, the USA traditionally adhered to a policy of
separateness, avoiding Old World conflicts and preoccupations – one pillar of the so-called Monroe Doctrine (1823), articulating America’s military and diplomatic place in the world.
Yet America’s capacity to absorb and employ so many immigrants meant that it could not remain alone and aloof forever. By 1910, US industrial production was equivalent to that of Britain, Germany and France put together. This bald statistic, combined with the generations-old and constantly refreshed ties between the Old and New Worlds, meant that when Europe descended into war, the USA’s manifest destiny proved in fact to lie on battlefields across the Atlantic.
The Machine Age
In a rapidly industrializing world, few inventions symbolized the new, mechanized era better than the Ford Model T (pictured here) – not merely a car, but a phenomenon, which confirmed that the era of the automobile had truly arrived. The Model T was not at all glamorous, but it became an icon of modernity in a country that was perfectly primed for motor cars – with virgin land being everywhere transformed into neat, gridlined suburbs. By the First World War, four-fifths of the world’s cars were made in America.
Henry Ford’s genius as an industrialist lay less in pure innovation –the motor car was invented in Europe – but in adaptation and clever production techniques, which drove down costs. When his first Model Ts came to market in 1908, aimed at farmers on America’s rough-hewn roads (hence the distinctive high chassis), they cost a
sizeable $825. Within five years, the price had shrunk by nearly a third, as Ford’s new plant in Michigan mass-produced vehicles on an assembly line – a new concept. When the last of the 15 million Model Ts rolled off the assembly line in 1927, its price was a mere $290. It was the archetypal ‘people’s car’.
Mechanization of the sort that Ford embraced changed the lives of travellers, workers, businesspeople and consumers. Yet its contribution to human ease and economic efficiency soon had to be weighed against something much grimmer: a global conflict defined by the mass production of weapons and the spectre of mechanized killing.
The Era of Flight
While Henry Ford accelerated the era of the motor car, other entrepreneurs were looking to innovation in the skies. In 1903, the American brothers Orville and Wilbur Wright made the first major machine-powered flight. An ‘air race’ soon began, and in 1908 the DailyMail’s owner Lord Northcliffe put up a prize of £1,000 for a successful flight across the English Channel. An obsessive French aviator, Louis Blériot, eventually made this extraordinary journey on 25 July 1909, spending about 38 minutes aloft – and the public celebrated another feat of the modern age.
Aircraft manufacture now proliferated in Europe and the United States. Also in 1909, in the USA, Glenn Curtiss’s Manufacturing Company diversified into aircraft production, creating a classic design: the Curtiss ‘pusher’. In these fragile assemblages of metal, canvas, rope and wood – like a tricycle with wings – the pilot sat exposed, pushed along by the propeller to his rear.
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Military minds soon began co-opting the technology. In this photograph (1912), Thomas DeWitt Milling tests out a Curtiss pusher for the US Army at College Park, Maryland; by the time it was taken, Curtiss pushers had already made their first take-offs and landings on naval vessels. Far away, meanwhile, over the deserts of Libya, Italian airmen conducted the first operations in which bombs were dropped from an aircraft.
By 1917, Milling was supervising the training of US Army pilots for Europe’s war zone. Air power’s age of innocence had lasted little more than a decade.
A Naval Arms Race
The invention of aeroplanes suggested that Britain’s traditional line of defence against invasion – the sea – might not be the bulwark it once was. All the same, few doubted that the British Empire’s security still rested fundamentally with the Royal Navy, whose global pre-eminence seemed to be confirmed by the launch, in 1906, of HMS Dreadnought, pictured here. The most advanced warship in the world, she was powered by turbine engines, boasted a fearsome
array of guns with advanced targeting capabilities, and could speed through the seas at up to 21 knots. Dreadnoughtwas such an extraordinary vessel that she lent her name to an entire class of battleship.
Among those who took envious note was Kaiser Wilhelm II, a man drawn to all things naval as a means of projecting Germany’s influence well beyond her coastal waters, and thereby of enhancing her imperial grandeur and world-power status. To that end, the Kaiser had a willing accomplice in Admiral Alfred von Tirpitz, his naval chief, whom he tasked with expanding the strength of the German imperial navy, the Kaiserliche Marine.
When Germany sought to manufacture her own dreadnoughts, a full-blown Anglo-German naval arms race commenced. Between 1906 and 1912, both nations threw money and resources into shipbuilding, and soon even Dreadnought’s design was outclassed by successors. This competition proved to be a popular patriotic effort, and despite British anxieties, the Royal Navy retained its superiority. Fatefully, however, after accepting that they could not outmuscle the British in shipbuilding, German strategists began looking to a different sort of vessel to make up the difference: submarines.
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by the treaty of April 15, 1858, as were also the points relative to the canal, the two governments jointly granted a concession on May 1 of that same year to Mr. Felix Belly, a distinguished French writer, to whom the Emperor Napoleon gave his support to carry forward the undertaking. This failing of accomplishment, the two governments, in perfect accord, concluded the contract known as the Ayon-Chevalier, signed by Nicaragua on October 16, 1868, and by Costa Rica on June 18, 1869, which, it is unnecessary to say, also failed to produce any results whatever. Some years after the expiration of this last contract Nicaragua promoted a discussion as to the validity of the treaty and the meaning of some of its stipulations, which Costa Rica upheld in its original form, and the question was submitted to the decision of the President of the United States, Mr. Cleveland, who in his award of March 22, 1888, accepted by both parties, declared the treaty valid and binding upon each Republic and interpreted the points which in the opinion of Nicaragua were doubtful. According to the provisions of both of these documents, the treaty and award, even in the remote event that the natural rights of Costa Rica should not be injured, Nicaragua is bound not to make any grants for canal purposes across her territory without first asking the opinion of the Republic of Costa Rica. Three years prior, and while this question was still pending, Nicaragua concluded the treaty known as the Zavala-Frelinghuysen, signed in Washington on December 1, 1884, whereby the title to the canal was conveyed to the United States, and Costa Rica adhered to this treaty under date of February 23, 1885; but the negotiations remained without effect, because, ratification having been denied in the Senate, although a reconsideration of the subject had been agreed to, President Cleveland, on inaugurating his first administration, withdrew the document from the Senate. Things then returned to the status they formerly maintained, and Nicaragua in April, 1887, and Costa Rica in July, 1888, respectively granted the concessions pursuant to which the construction of the American waterway has been pending of late
years. The Congress of the United States has been giving special attention to this important matter since the year 1892, and commissions have been created charged with the survey and location of the route, as well as the study of the influence of the canal in its different aspects. Recently the investigation is not limited to the route by Nicaragua and Costa Rica alone, but extends to Panama."
Speech of Señor Calvo, Costa Rican Minister, at the International Commercial Congress, Philadelphia, October 24, 1899.
{66}
CANAL, Interoceanic, The Project of the: A. D. 1889-1899. The Maritime Canal Company. Investigation of Nicaragua routes.
"The failure of the Frelinghuysen-Zavala treaty [see above] was a severe disappointment to the friends of the canal project, but it did not discourage them. A company of private citizens, capitalists and promoters, was organized, which at length took the name of the Maritime Canal Company. Fair and full concessions were secured from the government of Nicaragua, while similar articles were also signed with the Republic of Costa Rica on account of imagined ownership of a portion of the territory through which the canal was to pass, though it has been shown subsequently, in the settlement of the boundary dispute between those two governments, that Costa Rica's rights in the matter were solely riparian. In due time Congress was called upon to grant a charter to the Maritime Company, which asked nothing more than this." The chartering act was passed by Congress in 1889, with an important amendment proposed by Judge Holman of Indiana, providing that "nothing in this act contained shall be so construed as to commit the United States to any pecuniary liability whatever for any account of said company, nor shall the United States
be held in any wise liable or responsible in any form or by any implication for any debt or, liability in any form which said company may incur, nor as guaranteeing any engagement or contract of said company." But two years afterwards, the company having failed to enlist the necessary capital for its undertaking, an attempt was made to set aside the above provision and to persuade Congress to guarantee $100,000,000 of bonds, taking $70,000,000 of stock and making the government a partner in the enterprise. The proposal was rejected. Congress "did not guarantee the company's bonds. The company, without such guarantee, was unable to raise the necessary capital, either in the United States or abroad, and the financial crisis of 1893 so overwhelmed it that all active operations on the isthmus were suspended, and they have never been resumed. The same issue, the guaranteeing of bonds, has come up from time to time in succeeding Congresses, but not until the second session of the Fifty-fourth [1897] did it appear to have much chance of being decided in favor of the company. The opposition in the Senate, where it was first considered, was strong, and the arguments advanced against the bill were clear, sound and forceful. The advocates of the measure were pressing for a vote, but almost at the supreme moment a note was received from the State Department, accompanied by a communication from Minister Rodriguez, the representative of the Greater Republic of Central America, setting forth several unassailable objections of his government to the methods of procedure. This final thrust determined the fate of the bill, and a vote on it was not taken. … The material points of Minister Rodriguez's criticism, which caused the Senate bill in 1897 to be withdrawn, were that some of the vital provisions of the cessions under which the Maritime Canal Company had the right to construct the canal were violated."
C. M. Stadden,
Latest Aspects of the Nicaragua Canal Project (North American Review, December, 1898).
Congress now (June 4, 1897) passed an Act which created a commission to examine all practicable routes for a canal through Nicaragua, and report its judgment as to the best, with an estimate of the cost of the work on such route. The commissioners appointed were Admiral Walker, Professor Haupt, and Colonel Hains. Their report, submitted to the President in May, 1899, unanimously recommended the route described as follows: "This line, leaving Brito, follows the left bank of the Rio Grande to near Bueno Retiro, and crosses the western divide to the valley of the Lajas, which it follows to Lake Nicaragua. Crossing the lake to the head of the San Juan river, it follows the upper river to near Boca San Carlos; thence, in excavation, by the left bank of the river to the San Juanillo and across the low country to Greytown, passing to the northward of Lake Silico." But while the commissioners agreed in finding this route preferable to any others in the Nicaragua region, they disagreed seriously in their estimates of cost, Colonel Hains, putting it at nearly $135,000,000, while Admiral Walker and Professor Haupt placed the cost at little more than $118,000,000. Before the report of this Nicaragua Canal Commission was made, however, Congress (March 3, 1899) had directed the appointment of another commission to examine and report upon all possible routes for an interoceanic canal, in the Panama region and elsewhere, as well as through Nicaragua and to determine the cost of constructing such a canal and "placing it under the control, management and ownership of the United States." This later commission, known as the Isthmian Canal Commission, was made up as follows: Rear-Admiral John G. Walker, U. S. N.; Samuel Pasco, of Florida; Alfred Noble, C. E. of Illinois; George S. Morrison, C. E., of New York; Colonel Peter C. Hains, U. S. A.; Professor William H. Burr, of Connecticut; Lieutenant-Colonel Oswald H. Ernst, U. S. A.;
Professor Lewis M. Haupt, C. E., of Pennsylvania; Professor Emory R. Johnston, of Pennsylvania.
In his Message to Congress the next December, President McKinley stated: "The contract of the Maritime Canal Company of Nicaragua was declared forfeited by the Nicaraguan Government on the 10th of October, on the ground of nonfulfillment within the ten years' term stipulated in the contract. The Maritime Canal Company has lodged a protest against this action, alleging rights in the premises which appear worthy of consideration. This Government expects that Nicaragua will afford the protestants a full and fair hearing upon the merits of the case." But another company had been put into the place of the Maritime Canal Company, by action of President Zelaya, of Nicaragua, who, in 1898, granted to Edward Eyre and E. F. Cragin, who represented an American Syndicate, the right to construct the canal when the contract with the Maritime should have lapsed. This transaction, however, lacked confirmation by Costa Rica and the United States.
CANAL, Interoceanic, A. D. 1893-1900.
The Panama Canal Concession twice extended. Formation of new company.
See (in this volume) COLOMBIA: A. D. 1893-1900.
CANAL, Interoceanic, A. D. 1899 (December).
Transfer of the Panama Canal to an American company.
The transfer of the Panama Canal from the later French company to an American company, chartered in New Jersey, was accomplished in December, 1899. The new company received all the property, rights, and powers of its French predecessor, the consideration to be paid to the latter being mainly in the form of shares in the American company.
Map of Central America showing the Isthmian Canal Routes
CANAL, Interoceanic, A. D. 1900 (November).
Preliminary report of the Isthmian Canal Commission in favor of the Nicaragua route.
The preliminary report of the Isthmian Canal Commission, appointed under the Act of March 3, 1899, was presented to the President on the 30th November, 1900, and communicated to Congress at the opening of the session. The Commission reported in favor of the Nicaragua route, essentially on the lines laid down by the previous Nicaragua Canal Commission, as defined above. It found that the choice of routes lies between this and the route of the partly constructed Panama Canal, and its discussion of the question presented the following views:
"(a) Between New York and San Francisco, the Nicaragua Canal route would be 377 nautical miles shorter than the Panama route. Between New Orleans and San Francisco 579 miles would be saved, and, in general, the distances between the Atlantic and Pacific ports of the United States are less by way of Nicaragua. Between our east coast and Yokohama and Shanghai the Nicaragua route is somewhat shorter, but for the trade of our eastern ports with the west coast of South America the Panama route is not so long as the Nicaragua.
(b) A part of the saving in distance effected by using a Nicaragua canal instead of one at Panama would be offset by the longer time of transit at Nicaragua. An average steamer would require twelve hours to make the passage through the Panama Canal, and thirty-three through one across Nicaragua. For a 10-knot steamer this difference of twenty-one hours would be equivalent to 210 knots difference in distance, and for a 13-knot steamer, the difference in time of transit would be equivalent to 273 knots.
(c) The Nicaragua route would be the more favorable one for sailing vessels because of the uncertain winds in the bay of Panama. It would not be impossible for sailing vessels to use the Panama Canal, but for average voyages between the two seaboards of the United States, a sailing vessel would require about nine days additional time to make the passage by way of the Panama Canal. However, neither route would be much used by sailing vessels, because of their inability to compete with steamers. They would certainly not be able to compete with steamers, both using the Panama Canal.
(d) For the promotion of the domestic trade of the United States, the Nicaragua route would possess advantages over the Panama route, because the distance between our two seaboards is less. For our trade with Japan, China, the Philippines, and Australia, the advantages of the two routes are nearly equal, the distance by way of the Nicaragua route being slightly less. For our trade with South America the Panama route is shorter and more direct.
(e) The industrial changes which the Nicaragua Canal would produce in the countries through which it will pass would be great. Nicaragua and Costa Rica comprise a region capable of producing a large amount of tropical products for which there is a demand in Europe and the United States. A canal across their territory would give a great impetus to their economic development.
"A careful examination has been made of all the rights, privileges, and franchises held and owned by corporations, associations, and individuals at the different canal routes. This necessarily included a study of the treaties relating to the establishment of an interoceanic communication made by the Republics, whose territory is to be occupied, and by the United States, with one another, and also with foreign governments. The treaties heretofore made exclude all idea of a relinquishment of sovereignty over any of the proposed
routes. In most of them the right of transit and the innocent use of the communication, whether by railway or canal, is granted to the other contracting party, its citizens and subjects, to be enjoyed upon equal terms with other governments and people; and the leading commercial nations of the world have committed themselves to the policy of neutrality at the different routes, and some of them have obligated themselves to use their influence to induce other nations to agree to the same policy. No existing treaties between the United States and the Republics of Nicaragua and Costa Rica, or of Colombia, give our Government the right to excavate and operate a maritime canal through any of these countries. The concessions granted by the different Republics through whose territory the lines of the projected canals extend, in terms, exclude the right of the companies holding them to transfer them to any foreign government, and further treaty rights must be acquired to enable the United States to undertake the excavation of a navigable waterway between the two oceans in a governmental capacity. The only prior obligations to corporations, associations, or individuals in the way of a direct agreement between the United States and Nicaragua authorizing our Government to construct a canal across the territory of the latter, to be under its control, management, and ownership, have been eliminated by the forfeiture and termination of the contracts with the Maritime Canal Company of Nicaragua and the Interoceanic Canal Company.
In view of this declaration the Commission has not made any effort to ascertain the cost at which the concessions of these companies can be purchased, for if these forfeitures are final the rights formerly granted to these companies are not in the way of diplomatic negotiations with the Government interested to acquire the consent and authority necessary for the construction of a canal by this route. The situation in Costa Rica is practically the same.
"The situation at Panama is different. The Republic of Colombia first granted a concession to the Panama Railroad
Company, giving it exclusive privileges on the Isthmus, which will continue according to modifications afterwards made for ninety-nine years from August 16, 1867. A later concession to the Panama Canal Company required it to enter into some amicable arrangement with the railroad company under which the former might occupy the territory along or near its line. The canal company acquired by purchase a majority of the railroad stock, and the necessary arrangements were made. This stock is now under the control of the New Panama Canal Company, which gives it a directing influence in both organizations. The canal concession is to continue according to its latest extension for ninety-nine years from the day on which the canal shall be wholly or partially opened to public service, and the date fixed for this in the contract is October 31, 1910. Should it fail and the concession be forfeited the company will still have exclusive control of the territory through which its line extends till 1966 under the railroad concession. The canal company is absolutely prohibited to cede or mortgage its rights under any consideration whatever to any nation or foreign government under penalty of forfeiture. {68}
The contract with the railroad company contains a like prohibition and declares further that the pain of forfeiture will be incurred by the mere act of attempting to cede or transfer its privilege to a foreign government and such an act is declared absolutely null and of no value or effect. These concessions, if acquired by the United States, would not give to the Government the control and ownership evidently contemplated by the law, that is, an absolute ownership in perpetuity. The right under the contract with the railroad company is designated as 'the use and possession' of the property for ninety-nine years, and it is provided that 'at the expiration of the term of the privilege' and by the sole fact of the expiration, the Government of Colombia shall be substituted in all the rights of the company and shall immediately enter into the enjoyment of the line of communication, its fixtures, dependencies and all its
products. The right of the canal company is substantially of the same character. … An examination of the charter rights of the New Panama Canal Company under the general incorporation laws of France and the special legislation in its behalf resulted in finding an enactment, included in a law passed June 8, 1888, requiring that all the plant necessary for the construction of the canal shall be manufactured in France and that the material must be of French origin. This being the situation, it was manifest that, even if the privileges of the companies could be purchased by and transferred to the United States, they were encumbered with charges and conditions that would not permit this Government to exercise all the rights of complete ownership over a canal constructed by it at the Panama route. A new arrangement is necessary if the United States is to undertake such a work. The relinquishment by the canal company, with the consent of Colombia, of the privileges it has under existing concessions, for a consideration to be agreed upon with the United States, would leave the way open for treaty negotiations between the two governments to ascertain whether Colombia will consent to the occupation of its territory by the United States for the construction of a canal to be under Government control, management, and ownership, and, if so, whether they can agree upon terms mutually satisfactory. The situation is peculiar, as there are three parties in interest. The United States can enter into no agreement with Colombia that does not have the approval of the company, and the concessions do not permit the company to transfer or attempt to transfer its rights to a foreign government.
"The Commission has, however, attempted to ascertain the views of the New Panama Canal Company with reference to a disposition and transfer of its rights. Interviews were had with its president and other officers during the visit to Paris and on several occasions from time to time since then, and on the 10th day of April last a formal letter was addressed to Mr. Maurice Hutin, the president and
director-general, asking whether he was in a position to name terms upon which the company would dispose of its property and interests to the United States. At different times since then the subject has been discussed by the representatives of the company with the Commission and its committee on rights, privileges, and franchises, but no formal reply to the letter was received until this report was being closed. These conferences and correspondence have resulted in no offer to dispose of the property and privileges of the company to the United States upon any terms, even with the consent of the Colombian Government, nor has the company expressed any desire or wish to enter into any negotiations with the United States with reference to such a disposition of its property and rights. It was proposed by President Hutin that the United States might obtain control of the canal scheme as a majority stockholder of a new organization to which the present company could contribute its concession, plant, unfinished work, and other property, at a valuation to be determined by arbitration, and he expressed the opinion that such an arrangement could be made without violating the concessions. But this must include some plan for the protection of the minority stockholders in the financial management, for they would favor a policy that would realize liberal dividends in proportion to the commercial value of the canal, while the policy of this Government might be to reduce tolls and charges to the cost of maintenance or even below it, if the interests of the people would be thereby advanced. The plan, however, which the company prefers is that outlined in its letter of February 28, 1899, addressed to the President of the United States, which has been published in Senate Document No. 188, Fifty-Sixth Congress, first session, pages 41 and 42. This was to reincorporate under the laws of New York or some other State, and accord to the United States such representation in its board of directors and such opportunity to acquire an interest in its securities as its concessions permitted. And an assurance was added to the effect that if the United States should desire to perpetuate or enlarge its existing rights and
privileges acquired under the treaty of 1846, the company would conform to such supplemental treaty as might be entered into between the United States and Colombia. The Commission having no other authority than to make investigations and obtain information submits this result of its efforts to ascertain upon what terms the rights and privileges at the Panama route can be obtained. It is proper to add that the examination of the title of the present company to the canal property under the laws of France and Colombia has satisfied this Commission that the New Panama Canal Company has the entire control and management of the canal property. …
"The estimated cost of building the Nicaragua Canal is about $58,000,000 more than that of completing the Panama Canal, leaving out the cost of acquiring the latter property. This measures the difference in the magnitude of the obstacles to be overcome in the actual construction of the two canals, and covers all physical considerations such as the greater or less height of dams, the greater or less depth of cuts, the presence or absence of natural harbors, the presence or absence of a railroad, the exemption from or liability to disease, and the amount of work remaining to be done. The New Panama Canal Company has shown no disposition to sell its property to the United States. Should that company be able and willing to sell, there is reason to believe that the price would not be such as would make the total cost to the United States less than that of the Nicaragua Canal. … In view of all the facts, and particularly in view of all the difficulties of obtaining the necessary rights, privileges, and franchises on the Panama route, and assuming that Nicaragua and Costa Rica recognize the value of the canal to themselves and are prepared to grant concessions on terms which are reasonable and acceptable to the United States, the Commission is of the opinion that 'the most practicable and feasible route for' an isthmian canal to be 'under the control, management, and ownership of the United States' is that known as the Nicaragua route."
United States, 56th Congress, 2d Session, Senate Doc. Number 5.
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CANAL, Interoceanic, A. D. 1900 (December).
The Hay-Pauncefote Treaty between the United States and Great Britain, to facilitate the construction of the Canal, as amended by the United States Senate.
In his annual Message to Congress, December 3, 1900, President McKinley had the following to say on the subject of the Interoceanic Canal: "The all important matter of an interoceanic canal has assumed a new phase. Adhering to its refusal to reopen the question of the forfeiture of the contract of the Maritime Canal Company, which was terminated for alleged non-execution in October, 1899, the Government of Nicaragua has since supplemented that action by declaring the so-styled Eyre-Cragin option void for non-payment of the stipulated advance. Protests in relation to these acts have been filed in the State Department, and are under consideration. Deeming itself relieved from existing engagements, the Nicaraguan Government shows a disposition to deal freely with the canal question either in the way of negotiations with the United States or by taking measures to promote the waterway. Overtures for a convention to effect the building of a canal under the auspices of the United States are under consideration. In the mean time, the views of the Congress upon the general subject, in the light of the report of the Commission appointed to examine the comparative merits of the various trans-isthmian ship canal projects, may be awaited. I commend to the early attention of the Senate the convention with Great Britain to facilitate the construction of such a canal, and to remove any objection which might arise out of the convention commonly called the Clayton-Bulwer Treaty."
On the terms of the Clayton-Bulwer Treaty:
See, in volume 4, NICARAGUA: A. D. 1850.
The Convention thus referred to was negotiated by the Secretary of State of the United States. Mr. John Hay, with the British Ambassador to the United States, Lord Pauncefote. It was signed at Washington on the 5th of February, 1900, and communicated by the President to the Senate on the same day. The action of the Senate on the Convention was not taken until after the opening of the session of Congress in December. It was then ratified (December 20), but with three amendments which seriously changed its character. The following is the text of the Convention as ratified, with the Senate amendments indicated:
"ARTICLE I.
It is agreed that the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or corporations or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present Convention, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal.
"ARTICLE II.
The High Contracting Parties, desiring to preserve and maintain the 'general principle' of neutralization established in Article VIII of the Clayton-Bulwer Convention, [Added by the Senate] which convention is hereby superseded, adopt, as the basis of such neutralization, the following rules, substantially as embodied in the convention between Great Britain and certain other Powers, signed at Constantinople,
October 29, 1888, for the Free Navigation of the Suez Maritime Canal, that is to say:
1. The canal shall be free and open, in time of war as in time of peace, to the vessels of commerce and of war of all nations, on terms of entire equality, so that there shall be no discrimination against any nation or its citizens or subjects in respect of the conditions or charges of traffic, or otherwise.
2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it.
3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary; and the transit of such vessels through the canal shall be effected with the least possible delay, in accordance with the regulations in force, and with only such intermission as may result from the necessities of the service. Prizes shall be in all respects subject to the same rules as vessels of war of the belligerents.
4. No belligerent shall embark or disembark troops, munitions of war or warlike materials in the canal except in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possible despatch.
5. The provisions of this article shall apply to waters adjacent to the canal, within three marine miles of either end. Vessels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time except in case of distress, and in such case shall depart as soon as possible; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent. [Added by the Senate] It is agreed, however, that none of the immediately foregoing
conditions and stipulations in sections numbered one, two, three, four and five of this article shall apply to measures which the United States may find it necessary to take for securing by its own forces the defense of the United States and the maintenance of public order.
6. The plant, establishments, buildings, and all works necessary to the construction, maintenance and operation of the canal shall be deemed to be part thereof, for the purposes of this Convention, and in time of war as in time of peace shall enjoy complete immunity from attack or injury by belligerents and from acts calculated to impair their usefulness as part of the canal.
7. No fortifications shall be erected commanding the canal or the waters adjacent. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder.
"ARTICLE III.
The High Contracting Parties will, immediately upon the exchange of the ratifications of this Convention, bring it to the notice of the other Powers [and invite them to adhere to it].
[Stricken out by the Senate.]
"ARTICLE: IV.
The present Convention shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by Her Britannic Majesty; and the ratifications shall be exchanged at Washington or at London within six months from the date hereof, or earlier if possible."
United States, 56th Congress, 1st Session, Senate Document Number 160.
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Anticipating the ratification of the above Treaty with Great Britain, the President of the United States, in December, 1900, concluded agreements with the governments of Costa Rica and Nicaragua, both of which were in the following terms:
"It is agreed between the two Governments that when the President of the United States is authorized by law to acquire control of such portion of the territory now belonging to [Costa Rica and Nicaragua] as may be desirable and necessary on which to construct and protect a canal of depth and capacity sufficient for the passage of vessels of the greatest tonnage and draft now in use from a point near San Juan del Norte, on the Caribbean Sea, via Lake Nicaragua, to Brito, on the Pacific Ocean, they mutually engage to enter into negotiations with each other to settle the plan and the agreements, in detail, found necessary to accomplish the construction and to provide for the ownership and control of the proposed canal. As preliminary to such future negotiations it is forthwith agreed that the course of said canal and the terminals thereof shall be the same that were stated in a treaty signed by the plenipotentiaries of the United States and Great Britain on February 5, 1900, and now pending in the Senate of the United States for confirmation, and that the provisions of the same shall be adhered to by the United States and [Costa Rica and Nicaragua]." No action on these agreements was taken in the Senate.
CANAL,
Interoceanic, A. D. 1901 (March).
Rejection by the British Government of the Hay-Pauncefote Treaty as amended by the U. S. Senate.
Early in March, soon after the adjournment of Congress, a communication from Lord Lansdowne, the British Secretary of State for Foreign Affairs, declining with courtesy and in
friendly terms to accept the Senate amendments to the Hay-Pauncefote Treaty, was received by Lord Pauncefote, the British Ambassador at Washington. The objections urged most strongly are against those amendments which touch the neutrality of the proposed canal and its unimpeded use in time of war as well as in time of peace. "The first of them," said Lord Lansdowne, "which reserves to the United States the right of taking any measures which they may find necessary to secure by their own forces the defence of the United States, appears to His Majesty's government to involve a distinct departure from the principle which has until now found acceptance with both governments; the principle, namely, that in time of war, as well as in time of peace, the passage of the canal is to remain free and unimpeded, and is to be so maintained by the power or powers responsible for its control. Were this amendment added to the convention the United States would, it is presumed, be within their rights, if, at any moment when it seemed to them that their safety required it, in view of warlike preparations not yet commenced, but contemplated or supposed to be contemplated by another power, they resorted to warlike acts in or near the canal acts clearly inconsistent with the neutral character which it has always been sought to give it, and which would deny the free use of it to the commerce and navies of the world. … If the new clause were to be added, the obligation to respect the neutrality of the canal in all circumstances would, so far as Great Britain is concerned, remain in force; the obligation of the United States, on the other hand, would be essentially modified. The result would be a onesided arrangement, under which Great Britain would be debarred from any warlike action in or around the canal, while the United States would be liable to resort to such action to whatever extent they might deem necessary to secure their own safety."
To the contention that there is a specific prohibition in the Hay-Pauncefote treaty against the erection of fortifications, and that this would sufficiently insure the free use of the
canal, Lord Lansdowne replies that this "contention is one which His Majesty's government are quite unable to admit." He notes the vagueness of language in the amendment, and says: "Even if it were more precisely worded it would be impossible to determine what might be the effect if one clause permitting defensive measures and another forbidding fortifications were allowed to stand side by side in the convention. To His Majesty's government it seems, as I have already said, that the amendment might be construed as leaving it open to the United States at any moment, not only if war existed, but even if it were anticipated, to take any measures, however stringent or far-reaching, which in their own judgment might be represented as suitable for the purpose of protecting their national interests. Such an enactment would strike at the very root of that 'general principle' of neutralization upon which the Clayton-Bulwer treaty was based, and which was reaffirmed in the convention as drafted."
As to the third Senate amendment, which struck out the provision inviting the adherence of other powers, Lord Lansdowne says: "The amendment not only removes all prospect of the wider guarantee of the neutrality of the canal, but places this country in a position of marked disadvantage compared with other powers which would not be subject to the self-denying ordinance which Great Britain is desired to accept. It would follow, were His Majesty's government to agree to such an arrangement, that while the United States would have a treaty right to interfere with the canal in time of war, or apprehended war, and while other powers could with a clear conscience disregard any of the restrictions imposed by the convention, Great Britain alone, in spite of her enormous possessions on the American Continent, in spite of the extent of her Australasian colonies and her interests in the East, would be absolutely precluded from resorting to any such action or from taking measures to secure her interests in and near the canal."
