Building the Panama Canal
Though an incredible feat of engineering, the Panama Canal ruined many reputations during the 400 years it took to make the dream a reality.
It was supposed to have a glorious historical symmetry. August 2014, exactly a hundred years after the triumphant completion of the Panama Canal, should have seen the opening of the new $5.5bn expansion, one of the biggest engineering projects currently underway anywhere in the world. But the Panama Canal has broken men and reputations before. Amid strikes, huge cost overruns and rumours that the main construction consortium was in financial difficulty, the completion date slipped first to October, then to March 2015; now it is ‘mid 2016’. Each day of delay reportedly costs the canal company nearly a million dollars in lost revenue.
Construction of the massive new locks began in 2009. There was enormous optimism. Vessels carrying up to 12,000 containers – more than twice the current Panamax limit – would be able to cross the isthmus, hugely benefiting world trade and bringing vast revenue for the Panamanian government. But critics smelled corruption and doubted the financial viability of the Spanish-led consortium, which won the main lock-construction contract by underbidding its nearest rival by $1bn. Bechtel, the US engineering giant, which had expected to get the work, sneered that the price bid would not even cover the cost of the concrete required.
The canal project has always attracted insane optimism, corruption and disaster. Part of the danger of what became known as ‘the lure of Panama’ was that, from the very earliest days, it always looked so obvious and easy. Having established a colony on the isthmus’ Atlantic coast in September 1513, the Spanish conquistador Vasco Núñez de Balboa led a party of men into the interior to search for the rumoured Great Ocean across the mountains. Only a third survived the heat, insects, snakes and hostile Cuna Indians in the jungle, but on September 25th Balboa climbed a hill and ‘silent on a peak in Darien’ he turned one way and then the other; he could see both oceans quite clearly. He fell to his knees in prayer and then called up his men, ‘shewing them the great maine sea heretofore unknowne to the inhabitants of Europe, Aphrike, and Asia’.
The ‘discovery’ of the Pacific Ocean came with another realisation: that only a tantalisingly narrow strip of land blocked the way to the riches of the East, the motivation, of course, for the voyages of discovery in the first place. In Balboa’s party was an engineer, Alvaro de Saavedra, who suggested in a report to the Spanish King Charles V that although the search for a strait between the two oceans should continue, if it was not found, ‘yet it might not be impossible to make one’. By 1530 it was clear that no such waterway existed in the tropics and in 1534 Charles ordered that a survey be carried out with a view to excavation. In an early example of the hubris that the canal dream attracted throughout its history, a priest wrote to Charles from Panama:
If there are mountains there are also hands … To a King of Spain with the wealth of the Indies at his command, when the object to be attained is the spice trade, what is possible is easy.
Fortunately for those who would have been ordered to dig, the Spanish authorities soon decided that it was safer to have a wall of land between the riches of Peru and rival European powers, so no work was undertaken. But at the end of the 17th century a Scottish adventurer produced a bold plan.
William Paterson was born in 1658 and as a young man had travelled, as part missionary, part buccaneer, to the West Indies. Returning to England, he made a fortune in business and became a ‘projector’, a promoter of speculative moneymaking schemes. Ever since his sojourn in the Caribbean, Paterson had been in the grip of a ‘Great Idea’, the venture to cap everything. If ports could be established on both coasts of the Panama isthmus, cargoes could be transferred over the narrow strip of land, saving ships the long and dangerous voyage around Cape Horn. He had identified a spot where there was ‘no mountain range at all’ and where ‘broad, low valleys’ extended from coast to coast. It was perfect enough to envisage not just a road but, in time, a waterway. Paterson intended a truly global entrepôt, to rival any in the world, and whoever controlled it, proclaimed the Scot, would possess ‘the Gates to the Pacific and the keys to the Universe’.
When the Scottish Parliament, jealous of the riches flowing into England from trade, passed an Act to encourage new settlements and commerce, Paterson rushed to Edinburgh to sell his scheme. ‘Do but open these doors’, he wrote in his proposal to parliament, ‘and trade will increase trade, and money will beget money.’ There were warnings that the area was jealously guarded by Spain and that Paterson ‘talks too much and raises people’s expectations’, but the government were sold. In June 1695 an Act of the Scottish Parliament established the ‘Company of Scotland trading to Africa and the Indies’. But then the English Parliament turned against the project. Royal assent to the Act was withdrawn, along with substantial English subscriptions of £300,000. However a wave of patriotic indignation in Scotland saw money pouring in from all levels of society. £400,000 was quickly raised, about half the country’s available capital. It was a colossal risk for so much of the national silver.
In July 1698 five large vessels carrying 1,200 people left Edinburgh for Panama. Although more than 40 of the colonists died on the three-and-a-half month voyage, at first all went well. Friendly relations were established with the local tribes, land was cleared and the soil found to be highly fertile. But as soon as the Scots had landed in the New World, there were fierce protests in London from the Spanish ambassador, as well as from English merchants. In response, William III issued orders to the Governors of Virginia, New York, New England, Jamaica and Barbados, forbidding them to trade with or supply provisions to the Darién colonists. For a settlement established as a trading station, this was a fatal blow.
Everything started to unravel. The death rate from fever was rapidly rising. The valleys ‘extending coast to coast’ turned out to be a fiction and no realistic attempt was made as planned to open up an overland route to the Pacific. Relations with the Indians cooled when it became apparent that the new arrivals were preparing no blow against the common Spanish enemy.
Scarcity of food brought increasing weakness, disease and demoralisation; among the first to die was Paterson’s wife. Within six months, nearly 400 settlers had perished from fever or starvation. The onset of the rainy season in May, and the concurrent further worsening of living conditions, was the final straw.
Utterly discouraged, on June 20th, 1699, after just seven months, the Scots abandoned the isthmus. Only half of the weakened settlers would survive the journey home. Two further fleets sailed from Scotland and twice the colony was briefly re-established. But in March 1700 the last settlers, weakened by hunger and disease, were driven out by Spanish troops. In all, Paterson’s ‘Great Idea’ had cost over 2,000 lives and the precious savings of an entire nation. The ‘Darien Disaster’ hastened the coming of the Act of Union that dissolved the Scottish parliament. Seeing the futility of trying to compete with England and stripped of capital from the disaster, Scotland was merged into Great Britain in 1707, an early but spectacular casualty of the ‘lure of Panama’.
The disaster did nothing, however, to dampen interest in the dream of a transisthmian canal. Among those gripped by the idea were Benjamin Franklin and Thomas Jefferson. The former envisaged a canal as a means to ensuring world peace through enhanced commerce and communication; the latter saw the canal as an essential step towards the southwards expansion of US power. During the 18th century France sent a number of explorers to the isthmus. But it was the lifting of the dead hand of Spanish rule in the 1820s, together with the advent of the ‘Canal Age’ in Europe and the United States and the arrival of steam power, that gave the idea fresh momentum.
Thereafter the isthmus saw a stream of optimistic surveyors and explorers from the United States, Britain, France, Italy, Denmark and Holland. Their backers were sometimes private companies, sometimes kings or emperors. The King of the Netherlands and Louis-Philippe of France were at various times interested. It was an idea that, once taken on, seemed again and again to become an obsession. Most of the explorers got lost, perished from hunger or disease, or were wiped out by the hostile Cuna Indians. But they still sent back optimistic reports of ‘remarkable depressions’ and ‘lost’ Indian canals.
The civil engineer, Thomas Telford, proposed a ‘grand scheme’ for a transisthmian canal. The Great Idea of such a structure now attracted not only proven engineers, but millionaires, dreamers, amateur engineers and crackpots. With the canal the great unfulfilled engineering challenge of the world, the isthmus remained the focus of international great power rivalry. In the 1840s it almost brought war between Britain and the US, only averted when the two powers agreed in a treaty in 1850 that neither would build a canal on their own. Particularly for the Americans, no canal was better than one under the control of a foreign power.
At the end of the American Civil War, Washington launched an aggressive policy to reverse creeping European involvement in Central America. For the Secretary of State William Seward, a transisthmian canal was a cornerstone of his country’s Manifest Destiny, spreading US commerce and ‘civilisation’. Under President Ulysses Grant a series of meticulous surveys was carried out to decide the preferred route. The best option, it was decided, was for a canal in Nicaragua, using the high great lake. But the US was held in check by its treaty with Britain and by concerns that it did not have a strong enough navy to defend the waterway should it be completed.
Into this impasse snuck a French company, launching in the 1880s what would result in one of history’s greatest ever engineering disasters. Led by the celebrated builder of the Suez Canal, Ferdinand de Lesseps, it was an effort characterised by corruption, fantasy and heroism. The initiative was doomed from the start: at an international conference in Paris a sea-level canal at Panama was decided on, thanks to the mesmeric influence of de Lesseps, who had decided, before he had even seen Central America, that only an ‘ocean Bosporus’ would do. American delegates at the conference, committed to a lock canal at Nicaragua, condemned the whole show as, ‘a comedy of the most deplorable kind’.
But de Lesseps shared the huge confidence of his age in the benign effects of new technology. The French public were told that it was their patriotic duty to back the canal project and duly did so in their hundreds of thousands. De Lesseps also tried to raise money in Britain and the United States. The Americans were infuriated that the French should be meddling in what they saw as their backyard. So no money was forthcoming from them. In Britain, de Lesseps was applauded for his achievement at Suez, but his Panama plans were cold-shouldered. ‘It is magnificent,’ wrote The Times newspaper, ‘but it is not business.’
In 1880, amid great fanfare, the construction effort was personally launched by de Lesseps, greeted in Panama by banners declaring him ‘The Presiding Genius of the Nineteenth Century’. But by 1884 it was clear that the estimates of cost had been wildly optimistic and there was a pretty much permanent epidemic of disease on the isthmus. The worst killers were malaria and yellow fever. The former was thought to be caused by ‘miasma’ – toxic emanations from the rich corruption of tropical soil disturbed by the digging. Yellow fever was supposedly the result of filth or dead animals, or even, experts suggested, from a particular wind off the sea or from eating apples. Treatment consisted of mustard, brandy and cigars. The realisation that both diseases were transmitted by mosquitoes was still a decade or so away.
Jules Dingler, a proven great engineer, arrived in Panama as chief engineer in early 1883. His theory, shared by many, was that yellow fever was caused by immoral personal behaviour or moral weakness. He declared that only the ‘drunk and dissipated die of yellow fever’. To prove that the disease held no fear for him and to stiffen morale, he brought out to Panama his wife, his son and daughter and his daughter’s fiancé. Within a few months, his daughter, 19-year-old Louise, contracted yellow fever and died a miserable, agonising death. Eighteen months later, her fiancé, brother and then mother had also all succumbed to the disease. Dingler returned to France a broken man.
As many as 20,000 died during the French canal period, the majority of them Jamaicans, who provided the muscle for the effort. Three out of four of the French engineers who set out to be part of de Lesseps’ scheme were dead within three months. The sense of death all around, a sword of Damocles hanging over them, stoked a feeling of idealistic unreality: ‘The constant dangers of yellow fever’, wrote one young engineer, ‘exalted the energy of those who were filled with a sincere love for the great task undertaken. To its irradiating influence was joined the heroic joy of self-sacrifice for the greatness of France.’ Amazingly, some Frenchmen were prepared to die for the canal.
American observers on the isthmus took a more cynical line. To them such reflections were so much ‘Gallic hot air’. ‘Nothing is ever done by the canal company without a great amount of pomp, circumstance and red tape’, one American journalist wrote in late 1887. ‘Of what one hears in Panama disregard one third, doubt one third, and disbelieve the other third … The air is as rife with deception as with miasma.’ In order to raise money at home, the company was forced to cover up the death rate and set ever more unrealistic excavation targets while distributing, it later turned out, over 12 million francs to the French press to keep it on side. Nonetheless, the money borrowed became ever more expensive.
As the de Lesseps adventure slid towards catastrophe, bedeviled by disease and engineering problems (many due to Panama’s extraordinarily heavy rainfall) and also fire, war and earthquakes, American technicians on the isthmus were convinced that their country would assume control of the enterprise. The British in Panama thought the same – the Panama Canal would be taken over by Great Britain, just as de Lesseps’ Suez Canal had been.
Yet, when it came to the crunch at the beginning of the 20th century, the American diplomats found their British counterparts at last willing to remove the restrictions of the 1850 treaty. Embroiled in a costly and unpopular war in South Africa, a naval arms race with Germany and fearful of Russian ambitions towards India, Great Britain was forced to remove the shackles of the treaty and thereby concede to the United States hegemony over the western hemisphere.
The American leadership under Theodore Roosevelt now moved with utter ruthlessness to make the canal a reality. They bought out the French company for $40m, a figure that dwarfs the purchases of Louisiana, Alaska and the Philippines. When the Colombian government seemed unwilling to give in to the American demands that they concede total control over a canal zone, Roosevelt made plans to invade Panama, but instead fomented, supported and protected a separatist revolution on the isthmus. He then bullied the new Panama republic into signing a treaty that reduced it to vassalage and established total military control of the new canal zone. There was a sharp backlash in the US, where the president was accused of dragging the country down to the sordid level of the European land-grabbing powers, but it was a fait accompli and a watershed for US presidential power and American imperial ambition.
The Americans learned virtually nothing from the failures of the French over the canal’s history. For the first two years they even hoped to build a sea-level canal – which had been proven to be impossible. Because of the fallout from Roosevelt’s action, there was pressure to ‘make the dirt fly’ and excavation work started without proper preparation. Determined to avoid the corruption of the French era, the project was tied up in horrendous bureaucracy.
Worst of all, although the mosquito theory of the transmission of malaria and yellow fever had by now been established, conservative members of the US canal leadership dismissed this as ‘balderdash’ and refused to support the work of William Gorgas, the Commission’s head doctor, an experienced yellow fever specialist. The disease inevitably struck and, lacking the motivation of the French, three quarters of the American workers fled the isthmus as panic broke out. A year after the start, the project was on its knees.
After two years of chaotic bungling, a plan was decided on for a lock and lake canal, a ‘bridge of water’ rather than a sea-level through-cut. New leadership emerged in the figure of John Stevens, a successful railway engineer who was hired by Roosevelt to be chief engineer for the canal. He fully supported Gorgas’ work and, in 1906, a visit by the president himself boosted morale.
To attract and retain skilled labour from the US, the canal authorities offered generous holidays, high pay and free accommodation. Nevertheless, such was the turnover of white staff – 100 per cent a year – that in 1907, following a crisis after the resignation of the exhausted Stevens, coupled with criticism at home that the project was riddled with ‘graft’ and waste, Roosevelt found it necessary to hand the project over to the army, or as he said, put it ‘in the charge of men who will stay on the job until I get tired of having them there, or till I say they may abandon it’.
The new army regime was utterly ruthless, arresting and deporting critics and keeping the Panama republic on a tight rein. This achieved, its greatest challenge was the Culebra Cut, the highest point of the canal line. This nine-mile stretch required three quarters of the total excavation. At the peak of the work, it contained 76 miles of track carrying 160 trains, 300 rock drills and 6,000 men. With temperatures reaching 120 degrees, it became known as ‘Hell’s Gorge’. And as the mountain was removed, the ground fought back. Because of the extreme geological complexity of the isthmus, slides were numberless, eventually adding 25 million cubic yards to the total excavation, which in the end would be three times that required for the Suez Canal. An American called it the ‘land of fantastical and unexpected. No one could say when the sun went down at night what the condition of the Cut would be the next morning’. Or, as one West Indian put it: ‘Today you dig, tomorrow it slides.’
Most of the labour force was from the small island of Barbados. Of a population of 200,000, some 45,000 went to Panama during the American period. The West Indians were treated as cheap and expendable by both the French and Americans. The working conditions were described by one as ‘some sort of semi-slavery’ and, under the Americans, there was a rigid apartheid system in place throughout the canal zone. The West Indian workers were given all the most dangerous jobs and were three times as likely as any others to die from disease or accidents on the works. In all nearly 6,000 died during the American construction period, as well as 300 US citizens. Nonetheless, in spite of obvious resentments, the West Indian accounts are full of pride in knowing they were part of a great, heroic and civilising achievement. ‘Many times I met death at the door’, wrote one worker 50 years after the completion of the canal, ‘but thank God I am alive to see the great improvement the canal had made and the wonderful fame it has around the world.’
Thus the canal carries a legacy of poor labour relations. During one of the first strikes soon after the recent expansion plan got underway, a union leader declared that his members ‘would not be treated as our Jamaican forebears were’. Moreover, the estimated costs have been shown to be hopelessly optimistic, and the projected annual revenue of the completed canal – ‘money will beget money’ – has now been revised down from $5 billion a year to just over $3 billion. In a further echo of the initial construction, cost overruns have been blamed on Panama’s fiendish geology and extraordinary rainfall. Given the history, what is startling is that any of these setbacks should come as a surprise.
There may be one further replaying of history. As the European-led expansion effort stumbles from crisis to crisis, so the American embassy in Panama reported to Washington, the US company Bechtel, ‘with their reputation for coming in to clean up messes, are keeping a close eye’ on the project.
