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 all the property of the Panama Canal Company, including not less than 68,869 shares of the Panama Railroad Company, for a sum not exceeding $40,000,000, and to obtain from Colombia perpetual control of a strip of land 6 m. wide; whlle if he failed to come to terms with the company and with Colombia in a reasonable time and on reasonable terms, he was by treaty to obtain from Costa Rica and Nicaragua the territory necessary for the Nicaragua canal.

Negotiations were forthwith opened with Colombia, and ultimately a treaty (the Hay-Herran treaty) was signed in January 1903. The Colombian Senate, however, refused ratification, and it seemed as if the Panama scheme would have to be abandoned when the complexion of affairs was changed by Panama revolting from Colombia and declaring itself independent in November 1903. Within a month the new republic, by the Hay-Bunau-Varilla treaty, granted the United States the use, occupation and control of a strip of land 10 m. wide for the purposes of the canal. A few days after the ratification of this treaty by the United States Senate in February 1904—the concession of the French company having been purchased—a commission was appointed to undertake the organization and management of the enterprise, and in June Mr J. F. Wallace was chosen chief engineer. Work was begun without delay, but the commission’s methods of administration and control soon proved unsatisfactory, and in April 1905 it was reorganized, three of its members being constituted an executive committee which was to be at Panama continuously. Shortly afterwards, at the end of June, Mr Wallace resigned his position as chief engineer and was succeeded by Mr John F. Stevens.

In connexion with the reorganization of the commission a board of consulting engineers, five being nominated by European governments, was appointed in June 1905 to consider the question, which so far had not been settled, whether the canal should be made at sea-level, without locks (at least except tidal regulating locks at or near the Pacific terminus), or should rise to some elevation above sea-level, with locks. The board reported in January 1906. The majority (eight members out of thirteen) declared in favour of a sea-level canal as the only plan “giving reasonable assurance of safe and uninterrupted navigation”; and they considered that such a canal could be constructed in twelve or thirteen years’ time, that the cost would be less than $250,000,000, and that it would endure for all time. The minority recommended a lock canal, rising to an elevation of 85 ft. above mean sea-level, on the grounds that it would cost about $100,000,000 less than the proposed sea-level canal, that it could be built in much less time, that it would afford a better navigation, that it would be adequate for all its uses for a longer time, and that it could be enlarged if need should arise with greater facility and less cost. The chief engineer, Mr Stevens, also favoured the lock or high-level scheme for the reasons, among others, that it would provide as safe and a quicker passage for ships, and therefore would be of greater capacity; that it would provide, beyond question, the best solution of the vital problem how safely to care for the flood waters of the Chagres and other streams, that provision was made for enlarging its capacity to almost any extent at very much less expense of time and money than could be provided for by any sea-level plan; that its cost of operation, maintenance and fixed charges would be very much less than those of any sea-level canal; and that the time and cost of its construction would be not more than one-half that of a canal of the sea-level type. These conflicting reports were then submitted to the Isthmian Canal Commission for consideration, with the result that on the 5th of February, it reported, one member only dissenting, in favour of the lock canal recommended by the minority of the board of consulting engineers. Finally this plan was adopted by Congress in June 1906. Later in the same year tenders were invited from contractors who were prepared to undertake the construction of the canal. These were opened in January 1907, but none of them was regarded as entirely satisfactory, and