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 be known as the Maritime Canal Company of Nicaragua passed Congress and was approved on the 20th of February 1889, and on the 4th of May 1889 the company was organized. It took over the concessions and, acting through a construction company, began work upon the canal in June 1889. Operations upon a moderate scale and mainly of a preliminary character were continued until 1893, when the financial disturbances of that period drove the construction company into bankruptcy and compelled a suspension of the work. It has not since been resumed. At that time the canal had been excavated to a depth of 17 ft. and a width of 280 ft. for a distance of about 3000 ft. inland from Greytown; the canal line had been cleared of timber for a distance of about 20 m.; a railroad had been constructed for a distance of about 11 m. inland from Greytown; a pier had been built for the improvement of Greytown harbour and other works undertaken. In all, about $4,500,000 had been expended.

Congress continued to take an interest in the enterprise, and in 1895 provided for a board of engineers to inquire into the possibility, permanence, and cost of the canal as projected by the Maritime Canal Company. The report of this board, dated April 1895, severely criticized the plans and estimates of the company, and led to the appointment in 1897 of another board, to make additional surveys and examinations, and to prepare new plans and estimates. The second board recommended some radical changes in the plans, and especially in the estimates, but its report was not completed when the revival of the Panama scheme attracted the attention of Congress, and led to the creation in 1899 of the Isthmian Canal Commission. In the meanwhile the property of the Maritime Canal Company has become nearly worthless through decay, and its concession has been declared forfeited by the Nicaraguan government.

The interest of the United States in an isthmian canal was not essentially different from that of other maritime nations down to about the middle of the 19th century, but it assumed great strength when California was acquired, and it has steadily grown as the importance of the Pacific States has developed. In 1848 and again in 1884, treaties were negotiated with Nicaragua authorizing the United States to build the canal, but in neither case was the treaty ratified. The Spanish War of 1898 gave a tremendous impetus to popular interest in the matter, and it seemed an article of the national faith that the canal must be built, and, furthermore, that it must be under American control. To the American people the canal appears to be not merely a business enterprise from which a direct revenue is to be obtained, but rather a means of unifying and strengthening their national political interests, and of developing their industries, particularly in the Pacific States; in short, a means essential to their national growth. The Isthmian Canal Commission created by Congress in 1899 to examine all practicable routes, and to report which was the most practicable and most feasible for a canal under the control, management and ownership of the United States, reported that there was no route which did not present greater disadvantages than those of Panama and Nicaragua. It recommended that the canal at Panama have a depth of 35 ft. and a bottom width 150 ft., the locks to be double, the lock chambers to have a length 740 ft., width 84 ft. and depth 35 ft. in the clear. The cost of a canal with these dimensions, built essentially upon the French plans, was estimated at $156,378,258. A plan, however, was recommended in which the height of the Bohio dam was increased about 20 ft., the level of Lake Bohio raised by that amount, the lake made the summit-level, and the Alajuela dam omitted. The cost upon this plan was estimated at $143,971,127.

According to the plan recommended by the Commission for Nicaragua the line began at Greytown on the Caribbean Sea, where an artificial harbour was to be constructed and follow the valley of the San Juan for 100 m. to Lake Nicaragua; thence across the lake about 70 m. to the mouth of Las Lajas river; then up the valley of that stream through the watershed, and down the valley of the Rio Grande, 17 m. to Brito on the Pacific, where also an artificial harbour was to be constructed. The distance from ocean to ocean is 187 m. About midway between the lake and the Caribbean the San Juan receives its most important affluent, the San Carlos, and undergoes a radical change in character. Above the junction it is a clear water stream, capable of improvement by locks and dams. Below, it is choked with sand, and not available for slack-water navigation. A dam across the San Juan above the mouth of the San Carlos was to maintain the water of the river above that point on a level with the lake. The line of the canal occupied essentially the bed of the river from the lake to the dam; from the dam to the Caribbean it followed the left bank of the river, keeping at a safe distance from it, and occasionally cutting through a high projecting ridge. The lake and the river above the dam constitute the summit-level, which would have varied in height at different seasons from 104 to 110 ft. above mean sea-level. It would have been reached from the Caribbean side by five locks, the first having a lift of 36 ft., and the others a uniform lift of 18 ft. each, making a total lift of 110 ft. from low tide in the Caribbean to high tide in the lake. From the Pacific side the summit would have been reached by four locks having a uniform lift of 28 ft. each, or a total lift of 114 ft. from low tide in the Pacific to high tide in the lake. The time required to build the canal was estimated at ten years, and its cost at $200,540,000.

The report of the commission, transmitted to Congress at the end of 1900, ended thus:—

This report caused the New Panama Canal Company to view the question of selling its property in a new light, and in the spring of 1901 it obtained permission from the Colombian government to dispose of it to the United States. It showed itself, however, somewhat reluctant to name a price to the Canal Commission, and it was not till January 1902 that it definitely offered to accept $40,000,000. In consequence of this offer, the commission in a supplementary report issued on the 18th of January 1902 reversed the conclusion it had stated in its main report, and advised the adoption of the Panama route, with purchase of the works, &c., of the French company. A few days previous to this report the Hepburn bill authorizing the Nicaragua canal at a cost of $180,000,000, had been carried in the House of Representatives by a large majority, but when it reached the Senate an amendment—the so-called Spooner bill—was moved and finally became law on the 28th of June 1902. This authorized the president to acquire