The Panama/Nicaragua Canal Debate of 1902 (and the Fletcher Brothers of Pennsylvania)
The Panama canal almost ended up in Nicaragua...
Back in 1902, as the French were grinding down in their ill-fated Panama canal effort, powerful business forces here in the US were pushing our government to blast our own shipping shortcut-- through Nicaragua. After years of struggle and tragedy far from home the French were anxious to cut their losses in Panama. They hoped to entice the adventurous US President Theodore Roosevelt into taking the disastrous headache off their hands. Their lobbyist, an agent of the French Panama Canal Company in Washington, was named Philippe Banua-Varilla. The initial price tag for the whole Panama bundle was reportedly $40 million. Unfortunately for the Panama crowd the US Congress was leaning at the time toward the Nicaraguan plan. Sure enough the House voted in favor of building the canal in Nicaragua. It seemed a virtual shoe-in that the Senate would follow suite. The French immediately reduced the price out of desperation but prospects for success were dim.
Then suddenly, as fate would have it, a volcano exploded on the island of St Martinique killing 30,000 people! The Question of volcanoes in the Nicaraguan canal zone surfaced in Washington but the Nicaraguans sternly denied the presence of any active volcanoes. Legend has it that Banua-Varilla was about to leave town empty handed when a colleague alerted him to a recent Nicaraguan postage stamp displaying the Momotombo volcano spewing lava (see below). Seizing the moment, on the eve of the vote in the US Senate, the French lobbyist is said to have scoured the various Washington area stamp sellers acquiring enough copies to send to every senator with a note suggesting that the stamp proved that Nicaragua was no stranger to violent geological events and the Nicaraguans knew it. In an amazing Hail-Mary turn of events, even though the suspect volcano was 150km from the proposed canal, the stamp ploy was enough to persuade the Senate to vote in favor of Panama-- the Nicaraguan canal deal was dead. Just like that! (1)
The Stamp that changed the world
Earlier, when it looked like the canal would traverse Nicaragua, American officials and Nicaraguan President Jose Santos Zelaya enjoyed positive relations. After the deal fell through everything changed-- Zelaya's hostility toward foreign interests operating in his country grew and he adopted the rhetoric of economic nationalism—this proved to be his undoing-- eventually the American interests decided enough was enough:
According to author Stephen Kinzer in his book Overthrow in 1909 the new President William Taft, who was markedly more pro-business than his predecessor Teddy Roosevelt, quickly focused his attention on the increasingly nationalistic doings of Mr. Zelaya. When Zelaya finally threatened to cancel the lucrative La Luz mining concession, held by (my relatives) the influential Fletcher Brothers of Pennsylvania, Taft’s Secretary of State Philander Knox went on the offensive. He immediately commenced a sabre rattling campaign in the press:
"He seized on several minor incidents in Nicaragua, including one in which an American tobacco merchant was briefly jailed, to paint the Nicaraguan regime as brutal and oppressive. He sent diplomats to Nicaragua whom he knew to be strongly anti-Zelaya, and passed their lurid reports to friends in the press. Soon American newspapers were screaming that Zelaya had imposed a "reign of terror" in Nicaragua and become "the menace of Central America." As their sensationalist campaign reached a peak, President Taft gravely announced that the United States would no longer "tolerate and deal with such a medieval despot."(2)
The hand-writing was on the wall for Zelaya – in October 1909 an American proxy, General Juan Jose Estrada, declared himself president igniting revolution in the country. Taft ordered troops to Panama to further intimidate the besieged Zelaya. Within two months he was forced to resign. Estrada later marched unopposed into Managua. The New York Times printed this when Estrada was sworn in: “On that day began the American rule of Nicaragua, political and economic.” (3) The Fletcher Brothers continued to run the La Luz y Los Angeles mines for decades to follow.
The stamp episode and aftermath was a turning point in Nicaraguan history; it was the first confrontation in what has turned out to be a century of strained relations between Nicaragua and the US. The tensions continue to this day. Nicaragua's failed dreams of a canal linking its Atlantic and Pacific coasts turned out to be costly. Panama’s rewards for success appear to be considerable. Today, about 15,000 ships use the Panama canal each year, carrying 200m tons of cargo, earning the country about $800m annually. (4)
Henry P. Fletcher on the cover of Time in 1934
-Enlisted as Private in Teddy Roosevelt's Rough Riders (1898)
-Served in the 40th U. S. Inf. in the Philippine-American War (1901)
-First Secretary of Legation in China (1907) in waning years of the Manchu Dynasty
-Ambassador to Mexico (1916-1919) at time of the Zimmerman Telegram and WWI
-US Under Secretary of State (1921-1922)
-Ambassador to Italy (1924-1929) during the Mussolini era
-Chairman of the Republican Party (1934-1936)
-Advisor to Secretary of State at the Bretton Woods conference (1944)
Also of interest:=Time Magazine article on Fletcher Bros. during a mine uprising in the 1920s
Cites:
(1) Nicaragua's Stamp Ends Canal Dreams
(2) Overthrow – Stephen Kinzer. Times Books. New York. 2006
(3) ibid
(4) Guardian Weekly (UK) 23oct03 - Nicaragua Hopes to Rival Panama Canal
There is some great historic information in this post. A very interesting
read indeed. I learned some new things about Panama and its people. Thank
you.
I visited the Panama Canal and was impressed by the sheer size of the whole
structure. Seeing some more background information as you have provided
here is really good because it sparked my interest in how it all came
together in the first place.