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Nicaragua Railway & Canal 1849-1871

British and US interests in Nicaragua grew during the mid-1800s because of its strategic importance as a transit route across the Central American isthmus. Throughout the 1800s, American and British leaders and businessmen wanted to ship goods quickly and cheaply between the Atlantic and Pacific Coasts. For divers reasons nothing was accomplished toward establishing an adequate interoceauic communication, in any form, down to 1849.

In 1849 Elijah Hise, the United States minister at Nicaragua, reported to the US Secretary of State that Nicaragua had offered to the United States, through him, the exclusive right to build, maintain, and forever control an inter-oceanic canal across that republic; and offered to enter into treaty stipulations to that effect. Mr. Hise strongly urged the acceptance of this offer, and prepared and forwarded to the State Department a treaty, accepted by the government of Nicargagua, which confirmed in specified terms the offer of full and complete control and government of said canal.

Hise negotiated the treaty with the State of Nicaragua on 21 June 1849. Prior to that time he had been recalled, and Ephraim George Squier had been appointed by the Administration which succeeded that of President Polk. Mr. Hise had received no knowledge of his removal; no instructions from the new Administration at the time when he made the treaty. In the instructions which the Secretary of State gave to E. George Squier on 02 May 1849, when he was about to proceed to Central America to supersede Mr. Hise, Squier was directed to "claim no peculiar privilege; no exclusive right; no monopoly of commercial intercourse". The Hise Treaty, was never accepted or presented to the Senate for ratification and adoption, but was somehow quietly smothered.

Later in 1849 year a new arrangement was made with Cornelius Vanderbilt and Joseph L. White of New York, in which the government of the United States, through its representative, E. George Squier, became concerned. Afraid of Britain's colonial intentions, Nicaragua held discussions with the United States in 1849, leading to a treaty that gave the United States exclusive rights to a transit route across Nicaragua. In return, the United States promised protection of Nicaragua from other foreign intervention. On June 22, 1849, the first official United States representative, Ephraim George Squier, arrived in Nicaragua. Both liberals and conservatives welcomed the United States diplomat. A contract between Commodore Cornelius Vanderbilt, a United States businessman, and the Nicaraguan government was signed on August 26, 1849, granting Vanderbilt's company--the Accessory Transit Company--exclusive rights to build a transisthmian canal within twelve years. The contract also gave Vanderbilt exclusive rights, while the canal was being completed, to use a land-and-water transit route across Nicaragua, part of a larger scheme to move passengers from the eastern United States to California.

With the advent of the California gold rush in 1849, Nicaragua proved a popular interoceanic shortcut. Cornelius Vanderbilt's Atlantic and Pacific Steamship Company (APSSCo.) transported supplies and prospectors from the Atlantic, along Nicaragua's San Juan River, then across Lake Nicaragua to the Pacific. A founding father of Vanderbilt University, Vanderbilt accumulated his fortune in the shipping and railroad industries. Although not a military officer, his skillful domination of the shipping business earned him the nickname "Commodore." At age 13 he was helping his father with shipping cargo in New York Harbor and by 16 he had purchased a small boat to ferry passengers and freight - the beginning of his shipping empire. He bought his first steamship in 1829.

During the Gold Rush, Vanderbilt reduced the travel time to California by establishing a new route through Nicaragua. Although many said the route was not navigable, he personally piloted a small steamboat up the San Juan river to test the route. Vanderbilt's Nicaragua route was cheaper than Panama - he immediately slashed the prevailing fair of $600 to $400. By one recent estimate Vanderbilt's route was 600 miles and 2 days shorter to California than through Panama, though another contemporary account related that while the Nicaragua route had the advantage, in distance, over the Panama route, of about one thousand miles; the passage from San Francisco to New York was acccomplished in the shortest time by way of Panama.

The distance from San Juan to Realejo is about three hundred miles. Passengers going the Nicaragua route took a steamboat at San Juan, which runs up to the Castilian Rapids; then, after a portage of half a mile, another steamboat took them up the river to San Carlos; thence across Lake Nicaragua to Virgin Bay. Then by pack-mules they were taken to San Juan del Sud, on the Pacific. The distances on the river and lake were about equal, being about seventy-five miles each, and from twelve to fifteen miles by land. There was every facility for crossing, there being several steamboats plying on the river and lake. Steamships entered the mouth of the San Juan River, and the river boats come along side, consequently passengers incurred no expense in the transfer, and were not obliged to land, as the small steamboats took them immediately up the river.

This arrangement gave rise to complications with Great Britain. British economic interests were threatened by the United States enterprise led by Vanderbilt, and violence erupted in 1850 when the British tried to block the operations of the Accessory Transit Company. As a result, United States and British government officials held diplomatic talks and on April 19, 1850, without consulting the Nicaraguan government, signed the Clayton-Bulwer Treaty. The Clayton-Bulwer Treaty reign in rivalry over a proposed canal through the Central American Republic of Nicaragua, and perpetually guaranteed the neutrality of the canal to be constructed. The Treaty gave Great Britain and the United States joint control over canal rights at the mouth of the San Juan River in Central America. John Middleton Clayton served as President Zachary Taylor's secretary of state, and the Clayton-Bulwer Treaty was regarded as the outstanding achievement of Taylor's administration.

"The governments of the United States and Great Britain hereby declare that neither the one nor the other will ever obtain, or maintain foritself, any exclusive control over the said ship canal; agreeing that neither will ever erect or maintain, any fortifications commanding the same, or in the vicinity thereof: or occupy, or fortify, or colonize, or assume or exercise any dominion over Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America.... Both governments will facilitate the construction of said canal and establish two free ports, one at each end of said canal."

Although the Nicaraguan government originally accepted the idea of a transit route because of the economic benefit it would bring Nicaragua, the operation remained under United States and British control. Britain retained control of the Caribbean port of San Juan del Norte, and the United States owned the vessels, hotels, restaurants, and land transportation along the entire transit route.

Critics contended that the operation of the Clayton-Bulwer treaty practically conceded to Great Britain the control of any canal which might be constructed in the isthmus, as that power was required, by its insular position and colonial possessions, to maintain a naval establishment with which the United States could not compete [at that time]. As the American government had bound itself by its engagements in the Clayton-Bulwer treaty not to fight in the isthmus, nor to fortify the mouths of any waterway that might be constructed, if any struggle for the control of the canal were to arise England would have an advantage at the outset which would prove decisive. Critics charged that the treaty commanded the US government not to use a single regiment of troops to protect its interests in connection with the interoceanic canal, but to surrender the transit to the guardianship and control of the British navy.

The Anglo-American canal never went beyond the planning stages. Within one year after she signed and ratified the Clayton-Bulwer Treaty, and agreed therein "occupy, or fortify, or colonize, or assume or exercise any dominion over Nicaragua, Costa Rica, the Mosquito Coast, or any part of Central America", Great Britain did just that, when she to control of the five islands in the Bay of Honduras, called the Bay Islands. The British did this in derogation of the declarations of the Monroe Doctrine, and in seeming violation of the Clayton-Bulwer, which she had so recently entered into. The British, in their defense, argued that the Treaty applied only to the mainland, and not offshore islands.

Vanderbilt's engineer, O. Childs, made a survey of the route for a canal in 1851, and recommended one from the mouth of Lajas River to Port Brito, traversing the Rio Grande Valley. The contractors evantually failed to carry out their agreement as regarded the construction of a canal, but established the Accessory Transit Company, and by means of steamers on the two oceans, and on the river San Juan and Lake Nicaragua, rendered valuable service in the transportation of passengers [until 1869, when it ceased to exist].

Bayley in 1852 proposed a canal route from La Virgeu to Sail Juan del Sur, nearly following that of the Transit Co. without passing through the valley of the Lajas, which Baily recommended in 1843. In 1853 K. Squier tied to revive Belcher's canal plan of utilizing both lakes, and reaching Fonseca Bay through the Conejo Valley and the Estero Real. Squier's proposed Honduras railway also was to reach that bay; and it is quite possible that lie contemplated connecting the two works. In 1855 Mr. Aug. Myionnet Dupuy prepared a map of various canal routes between the Atlantic and Pacific, by open transit through the Republic of Nicaragua. The chart detailed five of routes with an indication of the principal ones for the inter-oceanic canal.

Nicaragua was a country beset by struggle between liberal and conservative forces centered respectively in the cities of Len and Granada. Founded by the Spanish in the early 1550s, the two cities became competing poles of power. Their militant rivalry often left Nicaragua subject to outside interests even after the country gained independence from Spain in the early 1800s.

In 1855, at the invitation of Nicaraguan liberals, a Tennessee filibusterer named William Walker invaded Nicaragua with a small armed force and the hope of extending the southern US slave culture overseas. He enjoyed initial success. Walker also allied himself with Vanderbilt's rivals in the contest for control of the transit route, hoping that this alliance would provide both funds and transportation for future recruits. His call for Nicaragua's annexation by the United States as a slave state garnered some support from United States proslavery forces. When he presumed to establish himself as president of Nicaragua, Walker was routed by the joint efforts of Nicaragua's opposing political factions, Vanderbilt's steamship company, the British government, and other Central American republics. A key factor in Walker's defeat was the Costa Rican seizure of the transit route; the seizure permitted Walker's opponents to take control of the steamers on Lago de Nicaragua and thereby cut off much of Walker's access to additional recruits and finances. Vanderbilt played a major role in this effort and also supplied funds that enabled the Costa Ricans to offer free return passage to the United States to any of the filibusters who would abandon the cause. Many took advantage of this opportunity, and Walker's forces began to dwindle. Walker narrowly escaped capture, only to surrender himself to the US Navy in 1857. Three decades of Conservative rule followed.

The devastation and instability caused by the war in Nicaragua, as well as the opening of a railroad across Panama, adversely affected the country's transit route. After only a few years of operation in the early 1850s, the transit route was closed for five years from 1857 to 1862, and the entire effort was subsequently abandoned in April 1868.

Felix Belly, for Belly, Millaud, and Company, in a contract of May 1858 with the Nicaragua government, purposed carrying into execution Orsted's canal proposition; but after several years waiting without Belly or his assigns, the International Canal Co., accomplishing anything, or offering better prospects for the future, the government, in 1868, declared his contract forfeited, and entered into another with Michel Chevalier, from which better expectations were entertained; but they were destined not to be realized. Chevalier required, as a condition sine qua non, that the contract should be ratified by the Costa Rican congress. This took place a year later, and then came the war between France and Prussia in 1871, and Nicaragua's last effort, like all former ones, was frustrated.

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Page last modified: 05-07-2011 02:54:54 ZULU