ΡΑΝΑΜΑ.

CANAL EXPLORATION.

Concession to an American from Nicaragua - Baily's Exploration of the Nicaragua Region - The First Survey of the Panama Line - Development of the United States as a Factor in the Canal Question - The Vanderbilt Company in Nicaragua - An Able Survey of the Nicaragua Route The Construction of the Panama Railroad- An Important Senate Investigation - Establishment of the Interoceanic Canal Commission - Report of the Interoceanic Canal Commission - Various Ship Railway Projects.

Early in 1825, the Republic of Central America, through its representative at Washington, conveyed to Henry Clay, then Secretary of State, a desire for "the co-operation of the American people in the construction of a canal of communication through Nicaragua, so that they might share, not only in the merit of the enterprise, but also in the great advantages which it would produce." Clay was fully alive to the importance of the project, the execution of which, he said, "will form a great epoch in the commercial affairs of the whole world." He returned a favorable answer to the proposition and promised an investigation on the part of the United

States of the claims advanced in favor of the Niearagua route.

CONCESSION TO AN AMERICAN FROM NICARAGUA.

In 1826, the Republic of Central America, having grown impatient of the delay on the part of the United States, entered into a contract with Aaron II. Palmer of New York for the construction of a canal capable of accommodating the largest vessels afloat. The work was to be started within a year from the date of the agreement. The contract was to remain in force as long as might be necessary for the reimbursement of the capitalists engaged, in the amount of the money invested, together with ten per cent per annum, and for seven years after such reimbursement the company was to receive one-half of the net proceeds of the canal. At the expiration of the seven years in question the property was to be transferred to the Republic. It was expressly stipulated in this contract that the passage should at all times be open to the ships of friendly and neutral

nations without favor or distinction.

Having secured his concession, Palmer endeavored to organize a construction company with a capital of five million dollars. The utter inadequacy of this amount is illustrative of the lack of explicit information which characterised all similar enterprises until quite recent times. Palmer failed both in America.

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and in England to enlist the necessary financial aid and the contract was never acted upon.

*

After an abortive attempt to complete arrangements with a Dutch company, the Central American Republic again addressed the Government of the United States with an offer to grant to it the right to construct a canal. In response to a recommendation of the Senate growing out of these overtures, President Jackson commissioned Charles Biddle to visit Nicaragua and Panama, with instructions to examine the different routes that had been contemplated and to gather all the information and documents procurable bearing upon the matters in interest. No satisfactory results followed this mission. A message was sent to the Senate to the effect that it was not expedient at that time to enter into negotiations with foreign governments with reference to a transisthmian connection. The truth is that the Government and its agents were not sufficiently assured as to the stability of the new republics and feared to create relations that might lead to political embroil

ment.

BAILY'S EXPLORATION OF THE NICARAGUA REGION.

Meanwhile the active interest in the canal question was not confined to the United States. In 1826 an

* House Report No. 145, 30th Cong., 2nd session.

English corporation sent John Baily to Nicaragua for the purpose of securing a concession. In this object Baily was forestalled by the American, Palmer, but he remained in the country, and about ten years later was employed by President Morazin to determine the most favorable location for a cutting.

Baily threw valuable light upon the Nicaragua route and made a very able report. He recommended a route from Greytown to Lake Nicaragua, across the lake to the Lajas, and thence to San Juan del Sur on the Pacific coast. With the termini he expressed himself as well satisfied. He proposed to utilize the entire length of the San Juan, which would necessitate blasting the rocks at the rapids, diverting the Colorado into the San Juan and deepening the latter river. He found the four principal rapids within a stretch of twelve miles, formed by transverse rocks, with a passage on either side affording a depth of from three to six fathoms. The river was navigated at the time by piraguas, large flat-bottomed boats of as much as eight tons burden, which passed the rapids without serious hazard.

Baily's line from the mouth of the Lajas, which he proposed to use for three miles of its length, was seventeen miles. This he thought might be reduced to about fifteen and a half miles. His summit level was 487 feet above the lake and the canal was to accommodate ships of twelve hundred tons with a

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depth of eighteen feet. He offered an alternative plan which would reduce the summit level to 122 feet above the lake but would necessitate the connection of two of his stations by a tunnel over two miles in length. The report frankly estimated the difficulties involved in the undertaking, and closed with the statement that although he could not speak confidently as to the feasibility of the route, which had never been surveyed, he believed that a continuation through the Tipitapa into Lake Managua and thence to the port of Realejo was worthy of serious consideration. Whilst these investigations were procceding in the north, examination of other probable routes was being made. In 1827 President Bolivar commissioned J. A. Lloyd to survey the Isthmus of Panama with special regard to the possibilities of rail and water communication. Despite the fact that this was the first transcontinental route, the scientific knowledge of the territory was most insignificant. The geography of the strip was imperfectly known and the relative heights of the oceans or the altitude of the mountains separating them had never been ascertained.

THE FIRST SURVEYS OF THE PANAMA LINE.

Lloyd made a careful survey from Panama to a point within a few miles of the mouth of the Chagres. He seems to have considered plans for a