Panama fever (16 page)

In France, though, it was a different story. It was incorrectly rumored that Couvreux, Hersent had signed a contract to build the canal for even less than de Lesseps's most optimistic estimate. No one rushed to deny this. In August, a new subscription was announced, to be held at the beginning of December. On offer would be 600,000 shares of 500 francs each, a total of 300 million francs, which was all the French legislature would authorize. The shares were expensive when 500 francs was nearly a year's wages for about half the working population of France. But the terms were attractive—25 percent down with six years to pay off the difference. During the time of construction, shareholders were to receive 5 percent on their paid installments. Once the canal was completed, they were to get 80 percent of the net profits. A huge publicity campaign was launched: much was made of the fact that 500-franc shares in Suez were now worth more than 2,000 francs and paying a dividend of 17 percent; there were special picnics; de Lesseps was everywhere, staging conferences and banquets, urging the purchase of shares as a patriotic duty; there were advertisements trailed from hot-air balloons; handbills of various eye-catching colors were pasted on every highway; purchases from shops were sent home with advertisements attached; a silver medal was offered to every individual to whom five shares of stock were assigned.

Even more important, de Lesseps had now decided to play on the terms of those who had wrecked his first share offer in August the previous year. This time, the banks would handle the subscription. A syndicate of commerical and investment houses was formed by Marc Lévy-Crémieux, a vicious opponent of the first issue. For the price of a 4 percent commission, or 20 francs a share, the opposition of the financial community melted away. The press, too, was brought on board. One of the chief opponents the first time round, Emile de Girardin of
Le Petit Journal
, was offered and accepted a place on the Company's board of administrators. Elsewhere simple payments were made to editors and journalists, to a total, it emerged much later, of some one and a half million francs. Papers previously scathing about the project were now falling over themselves to find rhetoric sufficient to describe its attractions. “Capital and science have never had such an opportunity to make a happy marriage,”
the Journal de Dé-bats
announced. “Success … is certain,” said
Le Gaulois.
“One can see it, one can feel it.”
La Liberté
proclaimed: “The Panama canal has no more opponents …Oh, ye of little faith! Hear the words of Monsieur de Lesseps, and believe!”

The opening of the sale of the stock on December 7 marks one of the most extraordinary moments in the history of finance capitalism. Within three days more than 100,000 people had subscribed for 1,206,609 shares, more than twice the number available. Eighty thousand were small investors, buying one to five shares each. Sixteen thousand were women ordering shares in their own names. Mothers sent de Lesseps their children's savings wrapped in handkerchiefs. Whether or not they had actually met de Lesseps and been a victim of his overwhelming charisma, the fever of the Great Idea had clearly taken grip of the entire country as no great financial enterprise had ever done before. Together with the influence of the press, de Lesseps's trips to Panama and the United States, or more exactly, his version of them, had won over all doubters. The riches of the ordinary French family were now committed to the great project.

A French commentator later wrote: “At that time they realized the poetry of capitalism… This is private enterprise, this is the shareholders’ democracy which is gradually changing the face of the world and setting humanity free.” As it would turn out, as the share issue stoked the fires of speculation on the bourse and kept the whirlwind of dealing spinning along nicely, a massive time bomb had been laid under the financial structure of the Third Republic.

wo weeks later, Armand Reclus was offered the job of
Agent Supérieur
of the canal company to head up the operation in Panama. He left for the Isthmus on January 6, 1881, together with his deputy, a Franco-Colombian lawyer named Louis Verbrugghe, who had accompanied Wyse on his trip to Bogotá to secure the concession. In Paris, a sumptuous headquarters was purchased for a million francs. The first shareholders’ meeting was held on January 31 with more than five thousand people in attendance, and on March 3 the new company, the Compagnie Universelle du Canal Interocéanique, was officially incorporated. De Lesseps was president, Henri Bionne was secretary general. Charles de Lesseps, who had urged his father not to take on such a mammoth task but who had promised his support when he saw the old man was unmovable, was appointed a director. On the same day the second general meeting of the Company was held. Wasting no time, de Lesseps outlined the program for the year ahead: to clear the line of the canal of vegetation; to study the hydrography of Colón and Panama bays, their tides, currents, and winds; to build houses for the accommodation of the employees and hospitals for the sick; and to build work yards. All preliminary work was to be completed by October, when Culebra would be attacked, and in November and December dredges would start work on the soft soil on the lower parts of the line. De Lesseps announced that the canal would be open to traffic by 1888, predicting that the job would be far easier than what he had achieved at Suez. His comments were greeted with cheers and applause.

News of the incorporation of the Compagnie Universelle reached Panama about a week later. “The company now has a legal existence and a name,” wrote the
Star and Herald.
“It is no longer in the realm of inchoate projects like its rival institution the Nicaragua Canal project, but is a solid and substantial entity, commanding unequaled resources and unrivaled influence. The news is welcome, and we hasten to offer it to the public.”

In the United States, however, the success of the subscription fanned rising fears about an open ship lane through the Isthmus. “The worry is that it will weaken the United States strategically,” wrote the
New York Tribune.
The only option, the paper continued, would be “to exercise such control over it as will prevent the passage of the fleets of any Nation with which we may be at war.” What this would mean would be an abandonment of the long-held policy to avoid “such vast and costly naval armaments as are kept afloat by England, France, Germany and Spain … Otherwise we would find our Western coasts, from San Diego up to Sitka, exposed to attack within a few weeks after the breaking out of hostilities with any country that can keep a formidable squadron in the West Indies … Suppose the canal was open and a sudden quarrel were to arise between the United States and Spain,” the paper wondered prophetically. “What is to prevent Spain from sending a dozen ironclads through the Isthmus to bombard our California towns?”

Such was the success of de Lesseps's money raising that the specter of the canal had changed from being distant and uncertain to an almost done deed, and the dire strategic repercussions of an open waterway under the control of a hostile power were also debated in the House of Representatives, where it was suggested that the United States “insist on acquiring from Colombia the territory through which it runs, in order to be able to fortify its mouths and control its operations in time of war.” But, as the
New York Tribune
reported in mid-February, such was the new wealth of the Compagnie Universelle that it was surely only a matter of time before they controlled the bankrupt Colombian government. To its fury and frustration, the United States seemed powerless.

CHAPTER NINE

“TRAVAIL COMMENCÉ”

On February 1, 1881, de Lesseps read to an enthusiastic French press a telegram from Reclus on the Isthmus, which the journal
La France
described as “eloquence in a few words”:
“Travail Commencé.”
It was thrilling news.

Reclus and Verbrugghe had arrived in Panama at the end of January, together with thirty-five engineers, five of whom brought their wives with them. As always, there was a warm welcome from the people of Panama. Also of the party was Gaston Blanchet, the representative of Couvreux, Hersent, who were to be contracted to do the actual work, although under the overall control of Reclus. The giant engineering firm had an excellent reputation based on their business on three continents. But none of their directors had ever worked in Central America. Alarmingly, Abel Couvreux had made a speech in Ghent at the end of 1880 saying that the so-called deadly climate of Panama “was nothing but an invention of the canal's adversaries.” In March 1881 a contract was signed between Couvreux and the Company that allowed for two years of preparation, assembly of machinery, and preliminary studies, which would determine the costs for the actual excavation. The directors of Couvreux were old friends of de Lesseps from Suez days, and the preliminary contract was loosely drawn and generous.

Following the arrival of the first party from France, almost every boat from Europe brought its share of engineers, office workers, or adventurers hoping to profit from the vast new project. At the beginning of 1881, Henri Cermoise was twenty-two years old and recently qualified as an engineer. French technical schools, run by and for the state, were the finest in the world, with rigorous entrance examinations, strict rules, and a rigid, theoretical approach. After his grueling training as a civil engineer, Cermoise was keen to see something of the world outside “lecture theatres and blackboards.” Having had his application to work in Panama accepted, he sailed from Saint-Nazaire on the hardworking
Lafayette
on March 6, 1881, on the third shipment of personnel to the Isthmus. To gain employment with the company had been difficult, he writes, and he was aware that the journey was long and hard, that he ran the risk of meeting yellow fever “nose to nose,” and that the tropical sun could kill you “like a cannon ball.”
“Mais, bah!”
he writes, he was going all the same.

Those words—
“Mais, bah!”
—typify the bravery and foolhardiness of the French years. Whatever de Lesseps, Abel Couvreux, or the
Bulletin
said, it was common knowledge that Panama was an extremely dangerous posting. But like a young man volunteering for service in a war, there existed for Cermoise and many of his contemporaries a belief, first, that the worst would always happen to someone else; that their country and the general progress of humanity demanded that they take the risk; and that at the end of the day, amazingly, they were prepared to die for the Great Idea of the canal.

Cermoise's account of his journey to Panama is full of excitement and exuberance. After a storm in the Atlantic, on the sixteenth day of the journey they entered calm seas. It became hot and sunny, and the air was now “charged with the perfumes of tropical earth.” There were more stops, at Martinique and on the South American mainland, before at last the
Lafayette
neared Colón. All that morning the passengers remained on deck, excitedly scanning the horizon with their binoculars. Soon a long blue blurred line appeared in the distance. Then, little by little, the wooded summits of the Isthmus came into view. Everyone fell silent. “A great thoughtfulness took hold of us all,” writes Cermoise, “even those least given to contemplation. Silently, we thought of these lands where we were going to engage in the great scientific battle, and where, like in all battles, there would be the wounded and the dead.”