604 Chapter 22 From Isolation to Empire
Pauncefote, the British ambassador, and Secretary of
State John Hay negotiated an agreement abrogating
the Clayton-Bulwer pact and giving the United States
the right to build and defend a canal connecting the
Pacific Ocean with the Caribbean Sea.
One possible canal route lay across the
Colombian province of Panama, where the French-
controlled New Panama Canal Company had taken
over the franchise of the old De Lesseps company.
Only fifty miles separated the oceans in Panama. The
terrain, however, was rugged and unhealthy. While
the French company had sunk much money into the
project, it had little to show for its efforts aside from
some rough excavations. A second possible route ran
across Nicaragua. This route was about 200 miles
long but was relatively easy since much of it traversed
Lake Nicaragua and other natural waterways.
President McKinley appointed a commission to
study the alternatives. It reported that the Panamanian
route was technically superior, but recommended
building in Nicaragua because the New Panama Canal
Company was asking $109 million for its assets, which
the commission valued at only $40 million. Lacking
another potential purchaser, the French company
lowered its price to $40 million, and after a great
deal of clever propagandizing by Philippe Bunau-
Varilla, a French engineer with heavy investments in
the company, President Roosevelt settled on the
Panamanian route.
In January 1903 Secretary of State Hay negotiated
a treaty with Colombia. In return for a ninety-nine-
year lease on a zone across Panama six miles wide, the
United States agreed to pay Colombia $10 million
and an annual rent of $250,000. The Colombian sen-
ate, however, unanimously rejected this treaty. It
demanded $15 million directly from the United
States, plus one-fourth of the $40 million U.S. pay-
ment to the New Panama Canal Company.
A little more patience might have produced a
mutually satisfactory settlement, but Roosevelt
looked on the Colombians as highwaymen who were
“mad to get hold of the $40,000,000 of the
Frenchmen.” (“You could no more make an agree-
ment with the Colombian rulers,” Roosevelt later
remarked, “than you could nail currant jelly to a
wall.”) When Panamanians, egged on by the FrenchThe grand opening of the huge Miraflores lock on the Panama Canal in October, 1914. The locks were big enough to allow passage of the largest
American warships.