Panama Canal - Ferdinand de Lesseps 1880-1889

During the 1880s, following completion of the 105-mile Suez Canal, French entrepreneur Ferdinand DeLesseps poured billions of francs and 25,000 lives into an unsuccessful attempt to build a sea-level canal through Panama. The French effort was thwarted by disease, unreliable machinery, and almost a billion cubic yards of rock that stood in the way.

In 1879, Ferdinand Marie de Lesseps, the builder of the Suez Canal proposed a sea level canal through Panama. With the success he had with the construction of the Suez Canal in Egypt just ten years earlier, de Lesseps was confident he would complete the water circle around the world. Time and mileage would be dramatically reduced when traveling from the Atlantic to the Pacific ocean or vice versa. For example, it would save a total of 18,000 miles on a trip from New York to San Francisco.

Although de Lesseps was not an engineer, he was appointed chairman for the construction of the Panama Canal. Upon taking charge, he organized an International Congress to discuss several schemes for constructing a ship canal. De Lesseps opted for a sea-level canal based on the construction of the Suez Canal. He believed that if a sea-level canal worked when constructing the Suez Canal, it must work for the Panama Canal.

The Compagnie Universelle du Canal Interoceanique was incorporated under French law, March 3, 1881. The capital necessary for the "Company of the Interoceanic Canal of Panama" as it is called, was stated at 600,000,000 francs ($120,000,000), the estimated cost of excavation being 430,000,000 ($86,000,000), that of weirs and trenches to take fresh water to the sea 46,000,000 ($9,200,000), and that of a dock and tide-gates on the Pacific side 30,000,000.

Lesseps wrote of the founding of the Suez Canal [SOURCE] "I had many colleagues and friends who were rich. I got a hundred of them to join me, and proposed to found a company with them. "We each of us put in a share of £200, and this share is now worth over £40,000."

Writing in 1885 [published in 1888], Lesseps stated [SOURCE "I had always been of opinion that as the two seas were on the same level - stoutly as this was denied - the work to be undertaken must be a purely maritime one. I stuck to my text in spite of all opposition, and my obstinacy has had its reward. I intend to act just in the same way at Panama, though many engineers would prefer, on account of the difference in level, not of the seas, but of the tides. to construct a lock. I would not have one at Suez, and I do not intend to at Panama ... It has been seen how we went to work at Suez, and it will be the same with Panama, and I hope with the same satisfactory results. ... These are the men who made the Suez and will make the Panama Canal, and Panama will be opened in 1889. The example of Suez increases the number and confidence of the Panama shareholders. ... [we] shall be able, by 1889, to open a passage sufficient for the purposes of navigation, while after that we shall enlarge the canal, as we have done for Suez, which yields such a magnificent return to the shareholders, and upon which, nevertheless, we are still at work."

The Panama Canal Company, organised with De Lesseps as president, purchased the Wyse concession for the price of 10,000,000 francs. In 1884, Ferdinand de Lesseps took 500 young French engineers to Panama to supervise the construction project that he predicted would last 3 years. By one telling, none of these 500 professionals lived to receive their first month's pay. Despite this catastrophic setback, de Lesseps persisted until he lost more than 30% of his workforce consisting of 20,000 Europeans.

Work upon the canal, begun in 1884, continued until 1899, being managed with a degree of corruption which became notorious. In 1889 the company became bankrupt, was declared in liquidation, and was put into the hands of a liquidator. The Compagnie Universelle du Canal Interoceanique was declared bankrupt and dissolved by Tribunal Civil de la Seine, February 4, 1889, and the assets and property were vested in Compagnie Nouvelle du Canal de Panama, incorporated October 20, 1894.

As the time limit set for the completion of the canal by the Wyse concession had nearly expired, the concession to the French Isthmian Canal Company was renewed in December, 1890, by Nunez. The time limit for its completion was extended ten years, on the condition that work be resumed before March 1st, 1893, by a new company, paying 10,000,000 francs in gold and 5,000,000 in shares.

On November 21, 1892 the bankrupt Compagnie Universelle du Canal Interoceanique was brought up in the French Chamber of Deputies, on an interpellation by M. Delahaye, and though no definite accusations were brought, it was stated that $600,000, at least, had been improperly used by the canal company in bribing Senators and Deputies. The government could not face the storm directly, and it was therefore agreed that a special Committee of thirty-three members be appointed to examine into the truth of the charges. On the same day judicial summonses were issued against the directors of the company charging them with the "use of fraudulent devices for creating belief in the existence of a chimerical event, the spending of sums accruing from issues handed to them for a fixed purpose, and the swindling of all or part of the fortune of others." The case was called up before the Court of Appeals, on 25 November 1892. Within a few days emerged what was practically a vote of lack of confidence in the government, and on 28 November 1892, the Cabinet accordingly resigned, amid the wildest excitement. The special Committee then came forward with startling evidences of corruption. The wholesale bribery of the Paris press was revealed in all its details. Over 100 members of the Legislature were implicated in the scandal.

On 14 February 1893 sentence was pronounced upon the directors. Ferdinand and Charles de Lesseps were each condemned to five years' imprisonment and a fine of $600. Fontane and Cottu to two years in prison and a fine of $400, and M. Eiffel to two years' imprisonment and a fine of $4000, as his own net profits of the general rascality had amounted to a far larger share than the rest. Many other convictions followed. Blondin was sentenced to two more years in prison, and M. Baihaut was punished with five years' imprisonment, a fine of $15,000, and loss of civil rights. But the sentence against the older de Lesseps was not carried into effect, and the convictions were all, indeed, merely nominal.

In 1893 a new concession was made to the liquidator of the canal company, extending for one year the date of the formation of the new company. Work on the canal began again in the Culebra section on 01 October 1893, and on 21 October 2893 a new company was incorporated in Paris. The canal company devoted its energies to improving the harbor at Colon, as well as to working on the Culebra cut. The entire plant of the original company, including buildings, wharves, dredges, barges, steam vessels, pontoons, railway locomotives and cars, and a considerable amount of the necessary machinery, was on the ground, and by 1895 was still in good condition for the work. At that time there were about 2000 men employed on the canal.

M. de Lesseps -- possibly without criminal intent to ruin himself, and all of those nearest and dearest to him, as well as half a million of rentiers, who had a blind faith in him, and some tens of thonsands of men who, assured by an authority they regarded omniscient, went to the Isthmus, many of whom died there. Perhaps half a million persons put their fortunes in the stock of the Panama sea-level canal lost their last sous; and Dauzats, Bionne, Reclus, and a host of other personal friends of le grand Francais, fell victims to the pestiferous climate of Panama, and possibly tens of thousands of other persons died there in a vain strife against the forces of nature.

One third of the funds raised by de Lesseps's unfortunate company were legitimately spent upon the actual construction of the Panama canal. A vast amount of work was done before the project failed. The Panama route had at last been carefully and minutely surveyed. The geological nature of the earth and rock to be excavated has been examined and found favorable. The line had been cleared, and some twenty miles of the canal have already been excavated.

Only about one-third of the work done was of value to the American undertaking. The Compagnie Nouvelle du Canal de Panama was purchased by the United States, April 23, 1904, under authority of the Panama Canal (Spooner) Act of 1902 (32 Stat. 481).