Nicaragua Canal - 1895-1916

The Nicaragua Canal Board, also known as the Ludlow Commission after its chairman, Col. William Ludlow, was appointed by President Grover Cleveland, April 25, 1895, to ascertain the feasibility of completing the Nicaragua Ship Canal begun by the Maritime Canal Company. The Board report, October 31, 1895, recommended a thorough reexamination of the route. President William McKinley appointed the Nicaragua Canal Commission (first Walker Commission), under Rear Adm. John G. Walker, July 29, 1897, which surveyed the route of the canal. The Nicaragua Canal [first Walker] Commission reexamineed the logistics of a canal route through the Isthmus of Nicaragua.

Any canal had a powerful domestic enemy in the transcontinental railway combination. These very Pacific roads were, however, themselves the first fruits of the country's post-bellum policy of encouraging private enterprise with promises of governmental support, and now it was proposed to carry out somewhat the same idea with regard to the Nicaragua canal.

Among many other projects, J.A. Latcha had planned the construction of the Duluth, South Shore, and Atlantic Railway Company (DSS&A) through the Upper Peninsula of Michigan in 1886. At that time, Latcha was the chief engineer and superintendent of construction for Brown, Howard & Co., contractors for the building of the DSS&A. Latcha argued against the Canal in 1898, writing in the a The North American Review "We cannot open the Nicaragua Canal without becoming involved in the diplomatic quarrels, the growth of centuries, in Europe. Are we strong enough as a naval power to enter the lists, not only against Great Britain, but against Germany and Russia? Can we dictate the policy of the Nicaragua Canal if we build it? Can we defend it against the world if our interests demand it? If not, we dare not build it? Our commercial salvation at this time demands that we stake our all on the maintenance of the Monroe doctrine, We must delay the opening of the Nicaragua Canal by every diplomatic device to the latest date possible. But when it is opened we must own and operate it solely for the purpose of forcing all traffic crossing the limits of the American continent into channels within the borders of the United States. To accomplish this result, we must make such improvements upon our great railroad system as would enable us to carry the worlds commerce at vastly less cost than now governs, and in doing this we would increase the tonnage carried on our lines of transportation. This action is essential for our self-preservation, and must be had before Russia opens the Trans-Siberian Railroad and perfects its outlet to the White Sea."

After studies from December 1897 through February 1899, the Nicaragua Canal [first Walker] Commission submitted its report in March 1899. The commission estimated the cost of construction at $118,113,790 not including interest and administration. The Senate Committee on Interoceanic Canals was established on 15 December 1899, succeeding the Senate Select Committee on the Construction of the Nicaragua Canal, 1895-99. As its name implies, the initial focus of this committee was on legislation to authorize the construction of an isthmian canal to connect the Atlantic and Pacific Oceans, not neccessarily through Nicaragua.

Taking advantage of divisions within the Conservative ranks, Jose Santos Zelaya led a Liberal revolt that brought him to power in 1893. Zelaya ended a longstanding dispute with Britain over the Atlantic Coast in 1894, and reincorporated that region into Nicaragua.

The Hay-Pauncefote Treaty of 1901 abrogated the earlier Clayton-Bulwer Treaty between the US and UK, and licensed the United States to build and manage its own canal. Following heated debate over the location of the proposed canal, on June 19, 1902, the U.S. Senate voted in favor of building the canal through Panama. Investors in the Panama Canal had convinced the United States Congress of the danger posed to passengers going such a short distance from an active volcano -- at that this time both the Concepcion and Momotombo Volcanoes had experienced eruptions.

Unable to persuade the United States to build in Nicaragua, starting in 1904 Nicaragua's President Zelaya sought support from France, Germany and Japan to build a canal in Nicaraguae to compete with the the US-built canal through Panama.

By 1909, differences had developed over the trans-isthmian canal and concessions to Americans in Nicaragua; there also was concern about what was perceived as Nicaragua's destabilizing influence in the region. In 1909 the United States provided political support to Conservative-led forces rebelling against President Zelaya and intervened militarily to protect American lives and property. With the exception of a 9-month period in 1925-26, the United States maintained troops in Nicaragua from 1912 until 1933.

Nicaragua and the United States signed but never ratified the Castill-Knox Treaty in 1914, giving the United States the right to intervene in Nicaragua to protect United States interest. Emiliano Chamorro signed the treaty with Williams Jenning Bryan on 5 August 1914 in which the United States agreed to give an exclusive concession for building an interoceanic canal across the San Juan River for a period of 99 years. By signing this treaty Nicaragua received the sum of three million dollars. Because the United States had already built the Panama Canal, however, the terms of the Chamorro-Bryan Treaty served the primary purpose of securing United States interests against potential foreign countries -- mainly Germany or Japan -- building another canal in Central America. The treaty also transformed Nicaragua into a near United States protectorate. The modified version of Castill-Knox Treaty, the Chamorro-Bryan Treaty, omitting the intervention clause, was finally ratified by the United States Senate in 1916.

The convention with the United States terminating the Convention respecting a Nicaragua canal route (Chamarro-Bryan Treaty) of 5 August 1914 was signed in Managua on 14 July 1970. It was approved by resolution 3 of 27 July 1970 and resolution 282 of 10 August 1970, and ratified by decree 2 of 17 February 1971.