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 is occupied by the canal for a large part of its length. This stream is of torrential character, its discharge varying from a minimum of about 350 cub. ft. to a maximum of over 100,000 cub. ft. per second. It rose at Gamboa on the 1st of December 1890, 18 ft. in twelve hours, its volume increasing from 15,600 cub. ft. to 57,800 cub. ft. per second at the same time; and similar violent changes are not uncommon. To admit a stream of this character to the canal would be an intolerable nuisance to navigation unless space could be provided for its waters to spread out. For a canal with locks the remedy is simple, but for a sea-level canal the problem is much more difficult, and no satisfactory solution of the question was ever reached under the Lesseps plan.

Work under this plan continued until the latter part of 1887, the management being characterized by a degree of extravagance and corruption rarely if ever equalled in the history of the world. By that time it had become evident that the canal could not be completed at the sea-level with the resources of time and money then available. The plan was accordingly changed to one including locks, and work was pushed on with vigour until 1889, when the company, becoming bankrupt, was dissolved by a judgment of the Tribunal Civil de la Seine, dated the 4th of February 1889, a liquidator being appointed by the court to take charge of its affairs. One of the more important duties assigned to this official was to keep the property together and the concession alive, with a view to the formation of a new company for the completion of the canal. He gradually reduced the number of men employed, and finally suspended the works on the 15th of May 1889. He then proceeded to satisfy himself that the canal project was feasible, a question about which the failure of the company had caused grave doubts, and to this end caused an inquiry to be held by a commission of French and foreign engineers. This commission reported on the 9th of May 1890 that a canal with locks, for which they submitted a plan, could be built in eight years at a cost of 580,000,000 francs for the works, which sum should be increased to 900,000,000 francs to include administration and financing. They reported that the plant in hand was in good condition and would probably suffice for finishing the canal, and they estimated the value of the work done and of the plant in hand at 450,000,000 francs.

The time within which the canal was to be completed under the Wyse Concession having nearly expired, the liquidator sought and obtained from the Colombian government an extension of ten years. Twice subsequently the time was extended by the Colombian government, the date ultimately fixed for the completion of the canal being the 31st of October 1910. For each of these extensions the Colombian government exacted heavy subsidies.

The liquidator finally secured the organization of a new company on the 20th of October 1894. The old company and the liquidator had raised by the sale of stock and bonds the sum of 1,271,682,637 francs. The securities issued to raise this money had a par value of 2,245,151,200 francs, held by about 200,000 persons. In all about 72,000,000 cub. yds. had been excavated, and an enormous quantity of machinery and other plant had been purchased and transported to the isthmus at an estimated cost of 150,000,000 francs. Nearly all of the stock of the Panama railroad—68,534 of the 70,000 shares existing also had been purchased, at a cost of 93,268,186 francs.

The new company was regularly organized under French law, and was recognized by the Colombian government. It was technically a private corporation, but the great number of persons interested in the securities of the old company, and the special legislation of the French Chambers, gave it a semi-national character. By the law of the 8th of June 1888, all machinery and tools used in the work must be of French manufacture, and raw material must be of French origin. Its capital stock consisted of 650,000 shares of 100 francs each, of which 50,000 shares belonged to Colombia. It succeeded to all the rights of the old company in the concessions, works, lands, buildings, plant, maps, drawings, &c., and shares of the Panama railroad. For the contingency that the canal should not be completed, special conditions were made as to the Panama railroad shares. These were to revert to the liquidator, but the company had the privilege of purchasing them for 20,000,000 francs in cash and half the net annual profits of the road. The Panama railroad retained its separate organization as an American corporation.

Immediately after its organization in 1894 the new company took possession of the property (except the Panama railroad shares, which were held in trust for its benefit), and proceeded to make a new study of the entire subject of the canal in its engineering and commercial aspects. It resumed the work of excavation, with a moderate number of men sufficient to comply with the terms of the concession, in a part of the line—the Emperador and Culebra cuts—where such excavation must contribute to the enterprise if completed under any plan. By the middle of 1895, about 2000 men had been collected, and since that time the work progressed continuously, the number of workmen varying between 1900 and 3600. The amount of material excavated to the end of 1899 was about 5,000,000 cubic yards. The amount expended to the 30th of June 1899 was about 35,000,000 francs, besides about 6,500,000 francs advanced to the Panama Railroad Company for building a pier at La Boca.

The charter provided for the appointment by the company and the liquidator of a special engineering commission of five members, to report upon the work done and the conclusions to be drawn therefrom, this report to be rendered when the amounts expended by the new company should have reached about one-half its capital. The report was to be made public, and a special meeting of the stockholders was then to be held to determine whether or not the canal should be completed, and to provide ways and means. The time for this report and special meeting arrived in 1898. In the meanwhile the company had called to its aid a technical committee composed of fourteen engineers, European and American, some of them among the most eminent in their profession. After a study of all the data available, and of such additional surveys and examinations as it considered should be made, this committee rendered an elaborate report dated the 16th of November 1898. This report was referred to the statutory commission of five, who reported in 1899 that the canal could be built according to that project within the limits of time and money estimated. The special meeting of stockholders was called immediately after the regular annual meeting of the 30th of December 1899. It is understood that the liquidator (who held about one-fourth the stock) refused to take part in it, and that no conclusions were reached as to the expediency of completing the canal or as to providing ways and means. The engineering questions had been solved to the satisfaction of the company, but the financial questions had been made extremely difficult, if not insoluble, by the appearance of the United States government in the field as a probable builder of an isthmian canal. The company continued to conduct its operations in a provisional way, without appealing to the public for capital.

The plan adopted by the company involved two levels above the sea-level—one of them an artificial lake to be created by a dam at Bohio, to be reached from the Atlantic by a flight of two locks, and the other, the summit-level, to be reached by another flight of two locks from the preceding. The summit-level was to have its surface at high water 102 ft. above the sea, and to be supplied with water by a feeder leading from an artificial reservoir to be constructed at Alajuela in the upper Chagres valley; the ascent on the Pacific side to be likewise by four locks. The canal was to have a depth of 29 ft. and a bottom width of about 98 ft., with an increased width in certain specified parts. Its general plan was the same as that adopted by the old company. The locks were to be double, or twin locks, the chambers to have a serviceable length in the clear of 738 ft., with a width of 82 ft. and a depth of 32 ft. 10 in., with lifts varying from 20 to 33 ft., according to situation and stage of water. The time required to build the canal was estimated at ten years, and its cost at 525,000,000 francs for the works, not including administration and financing.

The occupation of the Panama route by Europeans, and the prospect of a canal there under foreign control, was not a pleasing spectacle to the people of the United States. The favour with which the Nicaragua route had been considered since 1876 began to assume a partisan character, and the movement to construct a canal on that line to assume a practical shape. In 1884 a treaty, known as the Frelinghuysen-Zarala Treaty, was negotiated with Nicaragua, by the terms of which the United States Government was to build the canal without cost to Nicaragua, and after completion it was to be owned and managed jointly by the two governments. The treaty was submitted to the United States Senate, and in the vote for ratification, on the 20th of January 1885, received thirty-two votes in its favour against twenty-three. The necessary two-thirds vote not having been obtained, the treaty was not ratified, and a change of administration occurring soon afterwards, it was withdrawn from further consideration. This failure led to the formation in New York by private citizens in 1886 of the Nicaragua Canal Association, for the purpose of obtaining the necessary concessions, making surveys, laying out the route, and organizing such corporations as should be required to construct the canal. They obtained a concession from Nicaragua in April 1887, and one from Costa Rica in August 1888, and sent parties to survey the canal. An act for the incorporation of an association to