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se MARINE REVIEW. : (July 3 HISTORY OF THE PANAMA CANAL TO DATE. When President Roosevelt affixes his signature to the bill passed by congress providing for the construction of a canal across the Isthmus of Panama "the dream of the navigator," as the building of a canal to con- nect the Atlantic with the Pacific ocean has been called, will have gained such substance that a comparatively few years will suffice to bring it to a reality. The thought of uniting the two oceans by means of a canal across the isthmus sprang up the moment the conviction was reached that the passage which, from the days of Columbus, was thought to exist toward the Southern sea had no existence in fact. The first survey with a view to determining the feasibility of making a connection between the two oceans, however, was not carried out until the year 1581. In that year, in obedience to instructions, Capt. Antonio Pereira, governor of Costa Rica, organized an expedition and explored the route by way of the San Juan river, the lake, and the rivers emptying into Gulf Nicoya, Costa_Rica. Thirty-nine years later Diego de Mercado submitted to King Philip of Spain an elaborate report in favor of the construction of a canal over that route, which is known as the Nicaragua route. The Panama canal project was conceived later, and other projects were advanced later, and subse- quently, also, other projects were advanced for connecting the oceans, one of which was the bold conception of James B. Eads, an American engi- neer, to construct at Tehuantepec a railroad which would be able to carry the largest ships from ocean to ocean. The scheme of connecting the two oceans has possessed a fascination for men of science and an intense inter- est for men of commerce ever since it was proposed. The literature on the subject is vast. On no question which ever has been before the con- gress of the United States has so much been written and spoken as that of the Isthmian canal. A number of surveys of the Panama and Nicar- agua routes were made during the past half century, but it may be said that not until 1879 was the first positive step taken toward the realization of the project on which so much thought had been expended. In May of that year an international congress was convened in Paris by M. Ferdi- nand de Lesseps to discuss the plan of cutting a canal through the Isthmus of Panama. The congress adopted a plan which had been prepared pre- viously by M. de Lesseps, and immediately following that action the Panama Canal Co. was formed. The company secured from Lieut. Lucien Napoleon Bonaparte Wyse of the French navy the concession which he had obtained from the United States of Colombia. i After the concession had been secured by the company, a commission, known as the De Lesseps engineering commission, was sent to Panama to make surveys and prepare estimates of cost. The commission estimated that a canal could be made for 843,000,000 francs. De Lesseps reduced these figures to 600,000,000 francs, or $120,000,000, and announced that a canal a niveau, or tide-level canal, could be completed for that sum. So confident was he of the accuracy of his calculations that he invited men of prominence to attend the opening of the canal, which he set for 1888. FIRST SURVEY AT PANAMA WAS MADE IN 1881, On Feb, 21, 1881, the first detachment of canal employes arrived at Colon. Surveys were made, and the building of camps, hospitals and other necessary buildings followed. In 1882 the Panama Canal Co. pur- chased the Panama railway. Interest charges accumulated between 1882 and 1888, while nothing like the progress on the canal which had been anticipated had been made. In the autumn of 1888 further borrowing be- came impossible, and then came a crash which shook the financial world. On Jan. 1, 1889, the company was forced into liquidation. This event created a ferment throughout France, no less than 800,000 French share- holders having been induced to invest in the stock of the company, largely through the appeals which had been made to their patriotism. A receiver was appointed by the court of the Seine with unlimited powers. In If) the receiver sent a commission of French and other engineers to Panama to report on the actual condition of the work. The report was discourag- ing. Not more than a fifth of the proposed work had been done; a valu- able plant, estimated at $30,000,000, was rusting away and useless; the tide level at Colon was filling in, and the harbor was shallowing, owing to the cut. In 1891 the government of Colombia granted to the Panama Canal Co. an extension of ten years from 1893 in which to finish the con- tract, provided operations be resumed before February, 1893. In Novem- ber, 1892, a member of the French chamber of deputies, M. Delahaye, created a profound sensation in Paris by declaring on the floor of the chamber that the Panama Canal Co. had obtained exceptional privileges, which it had used for the purpose of defrauding investors, by the bribery of no fewer than 100 deputies. The demand for an investigation of the charges was of such force and insistence as to be irresistible, and the min- istry decided to submit the whole question to a committee. Following this decision, Baron Reinach, a banker accused of being the instrument or agent of much of the corruption of the company, died suddenly, and it was alleged that he had poisoned himself. Amid a popular clamor, such as Paris had not known for many years, the investigation was carried on, and the disclosures before the investigating committee indicated that the operations of the canal company had been slimed with fraud. It was shown that the Panama company had bribed deputies and journalists on an extensive scale in order to cover up its shortcomings and leave the way open for further imposition on its trusting shareholders and creditors: In February, 1898, 'M. de Lesseps, his son Charles, and some of their colleagues were sentenced to various terms of imprisonment for fraud and bribery. At the time the blow fell M. de Lesseps had passed his eightieth year. A few years before he had married a young woman, and all France had extended congratulations to him upon the birth of a child to his attractive spouse. Bitter as was the feeling of the French public toward those who were responsible for their loss of money, much sympathy was manifested toward the man who had been the presiding genius of the great enterprise. That he had been knowingly a party to the great fraud which had wrecked the hopes and fortunes of so many worthy persons in France the public was loath to credit. The sympathy for him took such form that he was not imprisoned. But the great engineer, who had reaped so much glory through the construction of the Suez canal, was unable to with- stand the blow which the Panama exposures gave him. He died in No- vember of the year following. At the end of 1893 the only prominent person left in prison as the result of the Panama prosecution, was M. Baihut, formerly minister of public works. In 1894 a prominent French engineer proffered a scheme a by which he claimed the work could be completed in four years at an additional cost of $110,000,000. A new company was formed, and 300,000 shares were issued. Work on the canal was resumed under French auspices. Early in 1895 a strike occurred among the laborers on the canal, and the methods of the new company were criticised severely by the stockholders. Another scandal such as had attended the operations of the original company was feared, but developments showed that the suspicions were unwarranted. Nevertheless, the confidence of the French public in the ultimate success of the enterprise had been shaken to an extent as to make it manifest that the completion of the canal under French auspices was no longer a possibility, as additional financial sup- port would not be forthcoming. That being the situation, those who were bound up in the enterprise turned toward America for relief. The United States, up to that time, had concerned itself, as far as the building of a canal was considered, solely with the Nicaragua route. The first survey for a canal at Nicaragua under American auspices was made in 1852 by Col. A. W. Childs. The project as outlined by him has been the basis for all subsequent locations. -A second survey was made in 1872 by a party under the charge of Commander E. P. Lull of the United States mavy. Eleven years later another survey was made by A. G. Menocal, a civil engineer, also of the United States navy. In 1889 the Maritime Canal Co. was organized to construct the Nicaragua canal on the lines of the Menocal project. As there was, for a decade following, consider- able enthusiasm over the Nicaragua canal scheme in this country, the prospects of the Panama company enlisting American capital, and especially governmental aid, were anything but promising. Nevertheless, an auxiliary American company was organized. In the investigation of the French company's affairs which was made by the new American com- pany, it was ascertained that of the $156,400,000 expended by the original company only $88,600,000 had been expended legitimately upon the exca- vation and construction, the rest having gone in bribery and corruption. The second French company was started with a capital of 65,000,000 f., about one-half of which was expended cautiously on construction in four years. The second French company had abandoned the original plan of constructing a tidewater canal. Its plan contemplated the construction of a canal with locks. THE NICARAGUA ROUTE HAS DECLINED STEADILY IN FAVOR. The history of the isthmian canal project during the past five years shows that while the sentiment in favor of the construction of a canal has grown steadily, faith in the Nicaragua route as the most practicable has suffered a steady decline. This decline has been due, more than anything else, perhaps, to the uncertainty of the cost of carrying out the project. The first estimate of the Maritime company was $67,000,000. After doing more or less work on the canal the Maritime company ceased operations in 1893 for lack of funds. In 1895 congress appointed the Ludlow com- mission to examine and report upon the Maritime company's project. This commission placed the cost of the canal's completion at $133,472,893. The Walker commission, appointed subsequently, increased the estimate to $140,000,000. Up to the outbreak of the war with Spain the project of constructing an isthmian canal, while acquiesced in by the general public in the United States, has received ardent advocacy only in quarters where a special study of the subject had been made. But at the commencement of that conflict the people of the United States received an impressive -object lesson on the need of a canal. That lesson was the historic trip of the battleship Oregon. With the declaration of hostilities American attention was absorbed by the possibility of the Spanish fleet under Admiral Cervera making a sudden attack upon some one of the important cities of the Atlantic coast. At that time the Oregon, a newly constructed battleship, was on the Pacific station. It was considered desirable to have the ship added to the strength of the Atlantic fleet. Orders were sent to her com- mander, Capt. Clark, to bring her around Cape Horn, using all speed possible. The American people watched with anxiety the famous voyage. It furnished an argument for the construction of an isthmian canal more effective than a century of discussion. But coincident with the making up of the American mind that a canal must be built there came the conflict of opinion as to the choice of routes. Those who were interested in the Panama enterprise were quick to. see the opportunity opened to them. When the commission that was appointed by President 'McKinley, in 1899, to examine the American isthmus at every available point in order to determine the most practicable and feasible route for a ship canal, went to Paris to examine the plans of the Panama company, the company, realizing the improbability of its being able to raise sufficient funds in France to go on with the enterprise to a successful conclusion, decided to take its chances in competition with the Nicaragua project before the American congress. At a meeting of the directors it was decided to transfer all of the property of the company, its rights and powers, together with those of the American auxiliary com- pany, to a new American company. That company was organized under the laws of the State of New Jersey, with the title of the Panama Canal Co. of America. The capital was fixed at $30,000,000, and the company was authorized to increase the amount if necessary. The arrangement which it made with the French company, in taking over its rights, was to pay the shareholders of that company partly in money, but mainly in shares of the American company. The French company retains only an equity in the shape of a lien on a specified percentage of the profits remaining after the payment of all operating expenses and fixed charges and a dividend to the stockholders of the new company. An international commission of French, German, Russian, English, and American engineers, consulted by the French company in drawing up its plans, estimated the cost of completing the Panama canal. at $102,000,000, if the two locks be made of a certain width, and $125,000,000 if the locks be wider. The extended concession from the Colombian government runs until Oct. 31, 1910, a bonus of 3,000,000 f. having been paid to the government to secure the extension. After the American company was organized and the proposition for a transfer was brought definitely before the French directors, so much opposition was developed to the surrender of an enterprise that had absorbed so much French enthusiasm and entailed such sacrifices on the " ,