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The Inter-oceanic Canal 
 
 OF Nicaragua 
 
 ITS HISTORY 
 
 PHYSICAL CONDITION 
 
 PLANS AND PROSPECTS 
 
 : : PUBLISHED BY : : 
 THE NICARAGUA CANAL 
 CONSfkUCTlON COMPANY 
 
 : : : : OFFICERS OF THE COMPANY : : : : 
 
 WARNER MILLER President 
 
 GEO. W. DAVIS • 2D Vice President aud General Manager 
 
 J. W. MILLER Secretary 
 
 H. B. SLAVEN Treasurer 
 
 A. G. MENOCAL Chief Engineer 
 
 DALY, HOYT & MASON Counsel 
 
 New York 
 
OFFICERS • OF 
 
 THE • MARITIME • CANAL • COMPANY • OF • NICARAGUA 
 
 *^-^ 
 
 President Hiram Hitchcock 
 
 Vice President Chas. P. Daly 
 
 Secretary and Treasurer Thos. B. Atkins 
 
 Chairman of Executive Committee • • -James Roosevelt 
 • Counsel Daly, Hoyt & Mason 
 
 The New York Pbintino Co., 
 
 (thb republic press.) 
 
 636 and 538 Pearl Street, New York. 
 
TABLE OF CONTENTS. 
 
 The Maritime Canal of Nicaragua. 
 
 PAGE 
 
 Chapter I. Its History, 3 
 
 II. Physical Condition of Country Traversed, 19 
 
 III. Climate, 33 
 
 rv. The Proposed Canal. The Route and Description of the Work, 35 
 
 V. The Work Accomplished, 48 
 
 VI. Financial Aspect op the Enterprise, ...... 59 
 
 Table op Distances, 75 
 
 APPENDIX. 
 
 I. United States Charter, - 1 
 
 n. NiCARAGUAN Concession, -..--_-.. 4 
 
 III. Costa RiCAN Concession, 18 
 
 IV. Dickinson. Ayon Treaty, • . 33 
 
 V. Frelinghuysen-Zavala Treaty, (Not Ratified), - - . . 36 
 
 VI. The Nicaragua Canal, by Senator John Sherman, ... 43 
 
 VII. Speech op Hon. John T. Morgan, 48 
 
 Vni. Report op Consulting Engineers, 69 
 
 JX. Volcanoes and Earthquakes, 73 
 
 X. Statement by Hon. Warner Miller, 79 
 
 XI. Report op Chief Surgeon, 83 
 
 LIST OF ILLUSTRATIONS. 
 
 Birds-eye View of Canal, -.-...-. Facing Page 1 
 
 Castillo, The Rio San Juan, -----... <• "19 
 
 Engineering Party's Camp, " " 32 
 
 Breakwater at San Juan del Norte, " " 35 
 
 Dredges Working in the Canal, - . . " " 48 
 
 Dredges, Embankment and Railroad Train, " "59 
 
 World Chart with Sailing Routes, .... ■ - . " "76 
 
 Storehouse and Quarters at La Fe, Facing Appendix Page 4 
 
 Railroad Building Through Swamp, " " " 33 
 
 Lake Nicaragua and Ometepe, " " "48 
 
 Diamond Drill Boring Party, " " " 48 
 
 Cathedral of Riv as, - - " " "73 
 
 Market in Granada, ....,...<• « "73 
 
 Hospital Buildings, < " "83 
 
SOME CHAPTERS ON 
 
 The Maritime Canal 
 
 •OF* 
 
 Nicaragua. 
 
 " In accordance with the early and later policy of the Government, in 
 obedience to the often expressed will of the American people, with a due regard 
 to our national dignity and power, with a watchful care for the safety and pros- 
 perity of our interests and industries on this continent, and with a determination 
 to guard against even the first approach of rival powers, whether friendly or 
 hostile, on these shores, I commend an American Canal, on American soil, to 
 the American people and congratulate myself on the fact that the most careful 
 explorations have been started, and that the route standing in this attitude be- 
 fore the world, is the one which commends itself as a judicious, economical and 
 prosperous work." — General U. S, Grant in North American Review, Feb. 1881. 
 
THE MARITIME CANAL OF NICARAGUA. 
 
 CHAPTER I. 
 
 ITS HISTORY. 
 
 The problem of Inter-oceanic Communication by a water-way across the 
 Isthmus that connects North and South America and, at the same time, separates 
 there the Atlantic and Pacific oceans, which, since the time of Columbus, has ex- 
 cited the interest and stimulated the enterprise of the civilized world, has been 
 gradually narrowed through the process of elimination, or more justly speaking, 
 by the survival of the fittest, from a multitude of theoretical solutions, to the 
 question of the possibility, the feasibility and the advantages of such a commu- 
 nication, by the way of the San Juan River and Lake Nicaragua, through the 
 territory of the Republic of Nicaragua. 
 
 As early as the year 1550 Antonio Galvao indicated this route as one among 
 those regarded by him as most available ; many others have since been sug- 
 gested, investigated and their availability discussed, but since 1879, attention 
 has been centered, from time to time, upon three of the suggested solutions of 
 the problem. Two of these are now conceded to be impracticable, while the 
 demonstration of the entire feasibility of the third becomes continually more 
 and more conclusive, and its practical realization more certainly assured. 
 
 One eminent man, having gained well-deserved fame and prestige by the 
 accomplishment of engineering works in our own country, of great advantage 
 to the nation and people, boldly proposed the transportation upon wheels, of 
 deep sea vessels of the largest size across the Isthmus of Tehuantepec. The 
 prestige gained by his successful opening of the Mississippi River to deep 
 sea vessels, and the accomplishment of other important engineering works 
 secured to Captain Eads a patient hearing for this bold and novel project, and 
 from 1881 to 1886 his ship railway scheme was urged upon the Congress of 
 the United States for adoption. At the same time most persistent endeavors 
 were made both in America and Europe to launch the project as a private enter- 
 prise, but the attempt failed utterly; the common sense of mankind proving in 
 this case a safer guide than the confident assertions of an over sanguine enthu- 
 siast. Unfortunately, this principle does not always prevail. 
 
 Another great man, one of the most illustrious of the century, having 
 joined the waters of the Mediterranean and the Red Sea, by the construction of 
 a sea level canal, asserted that by no other than a similar means of transit at 
 the Isthmus of Panama, could the demands of commerce for a passage connect- 
 ing the Atlantic and Pacific oceans be satisfied; and staightway huadreds of 
 millions of money, even double the sum he demanded at first for the accomplish- 
 
4 THE NICARAGUA CANAL. 
 
 ment of the work, were thrust upon him. After the expenditure of a vast, 
 amount of treasure, and the sacrifice of thousands of human lives, less than 
 one-fourth the total mass of material requiring removal was excavated ; and not 
 only was the problem still unsolved, but it had become manifest that there had 
 been no proper apprehension, from the outset, of the nature and value of its 
 factors, as presented at the locality chosen. 
 
 The third scheme for the solution of this problem of inter-oceanic communica- 
 tion has moved less rapidly but more certainly on its ^ay, a full and intimate 
 knowledge of its features has been obtained, and it now commands public atten- 
 tion and interest, with continually increasing assurance of ultimate aud satisfac- 
 tory success. The physical features of the route for a canal by the way of the 
 San Juan River and Lake Nicaragua, have been carefully and minutely studied 
 in all their relations, and have been made the subject of plans, thoroughly 
 elaborated in all details, and of estimates as thoroughly and carefully calculated. 
 Every doubtful question has been closely scrutinized, and competent engineers 
 pronounce the project unembarrased by any difficulty except that of magnitude, 
 which in this age of magnificent undertakings, is a hindrance only when it 
 advances the cost of construction beyond the limit of remunerative returns. 
 
 Omitting reference to earlier and less careful explorations, a rapid retro- 
 spect of what has been done during the present century will show how thor- 
 oughly the problem has been considered. 
 
 Since 1849, the entire field of inter-oceanic communication across the 
 American Isthmus has been thoroughly explored, by individual and by National 
 enterprise, the route by Lake Nicaragua always commanding the attention to 
 which, because of its many and magnificent advantages, it was entitled. It is 
 noteworthy that the first official cognizance of the question by the United States 
 Government, was in connection with this route. 
 
 In February, 1825, Senor Don Antonio Jose Canaz, Minister of the 
 United States from the new republic of Central America, which consisted of 
 the States of Guatemala, Honduras, Salvador, Nicaragua and Costa Rica, then 
 recently liberated from the rule of Spain, addressed a note to the Secretary of 
 State calling the attention of the United States Government to the subject of 
 uniting the Atlantic and Pacific oceans by a canal through the republic of which 
 he was the representative, and inviting participation in the enterprise. 
 
 Even at that early time the superiority of the route by Lake Nicaragua 
 was acknowledged, as will be seen by the following extract from Mr. Clay's re- 
 ply, dated April i8th, 1825 : 
 
 "The idea has been conceived of uniting the two oceans by a canal naviga- 
 tion. The execution of it will form a great epoch in the commercial affairs of 
 the whole world. The practicability of it can scarcely be doubted. Various 
 lines for the proposed canal have been suggested, and have divided public 
 opinion. The evidence, tending to show the superiority of the advantage of that 
 which would traverse the Province of Nicaragua, seems to have nearly settled 
 the question in favor of that route. " 
 
 On the loth of February, 1826, Mr. Clay, in compliance with a promise 
 given Senor Canaz instructed Mr. Williams, then Charge d'affaires in Central 
 
THE NICARAGUA CANAL. 5 
 
 America, to make an investigation. He thus writes: "It will at once occur to 
 you to ascertain if surveys have been made of the proposed route of the canal, 
 and if entire confidence may be placed in their accuracy. What is its length, 
 what the nature of the country, and of the ground through which it is to pass? 
 Can the supply of water for feeders be drawn from Lake Nicaragua, or other ade- 
 quatesources? In short, what facilities do the country and the state of itspopul i- 
 tion afford for making the canal, and what are the estimates of its cost ? It is not 
 intended that you should inspire the Government of the Republic of Guatemala 
 with any confident expectation that the United States will contribute by pecu- 
 niary or other means, to the execution of the work, because it is not yet known 
 what views Congress might take of it. What the President desires is, to be put 
 into possession of such full information as will serve to guide the judgment of 
 the constituted authorities of the United States in determining, in regard to it, 
 what belongs to their interests and duties." 
 
 On the i6th of June, 1826, a contract was entered into between the Central 
 American Government and Mr. A. H. Palmer of New York, for the construction 
 of a canal through Nicaragua with a capacity "for vessels of the largest burden 
 possible." With Mr. Palmer was associated the Hon. De Witt Clinton, the 
 builder of the Erie Canal and at that time Governor of the State of New York ; 
 the Hon. Stephen Van Rensselaer, of New York ; Monroe Robinson, Esq., Presi- 
 dent of the Bank of the United States; the Hon. Edward Forsyth, of Louisiana; 
 C. J. Catlett, Esq., District of Columbia, and others. Their surveys and esti- 
 mates were evidently very inadequate, for they proposed to do the work with a 
 capital of only $5,000,000. Their scheme failed because of their inability to 
 raise the amount proposed, but the merits of the project were so evident that 
 the King of The Netherlands on his individual account, and as patron of an as- 
 sociation of capitalists, took up the matter and sent his envoy. General Ver 
 Veer, to Nicaragua in March, 1829, with full power to treat with the Central 
 American Government. When he arrived political affairs were in a disturbed 
 state, and nothing was accomplished until the Congress of Central America was 
 convened in 1830, when a decree was issued authorizing the construction of the 
 canal and with full provisions for all financial and political relations, this with a 
 view to offering the concession to the association already organized in The 
 Netherlands. The negotiations with the King of The Netherlands were, how- 
 ever, fruitless of results, because of the political disturbances in his own coun- 
 try, which resulted in the separation and subsequent independence of the King- 
 dom of Belgium. 
 
 In May, 1835, the United States Government ordered an inspection by Col. 
 Chas. H. Biddle of the different canal routes then under discussion, commencing 
 with that through Nicaragua, but although Col. Biddle visited Central America 
 the inspection was not made. 
 
 In 1837 and 1838 Lieut. John Bailey, a half-pay officer of the British Royal 
 Marines, who had resided in Nicaragua for many years, surveyed a canal route 
 under the orders of the Central American Government. He was thoroughly 
 competent and well equipped for the undertaking, and in its prosecution made 
 many maps and drawings, of which afterward he gave free use, and also of all 
 
6 THE NICARAGUA CANAL. 
 
 the data he had collected, to Mr. John L. Stephens, who was sent by the 
 United States Government in 1839 on a special and confidential mission to Cen- 
 tral America. Mr. Stephens made the inspection of the canal route one of the 
 subjects of his report, wherein he embodied the measurements and levels taken 
 by Mr. Bailey, together with an estimate of the cost of construction, which, 
 amounted to $25,000,000. He remarks: "The data given are, of course, insuffi- 
 cient for great accuracy." Lieutenant Bailey's explorations were made chiefly 
 between the Lake and the Pacific Ocean. 
 
 In 1844 Don Francisco Castellon of Nicaragua visited France to solicit 
 from the government of Louis Philippe a protectorate over his country and the 
 development of the project of an inter-oceanic canal. Other interests inter- 
 fered and prevented the realization of his wishes, but he was permitted to 
 solicit the interest and co-operation of Prince Louis Napoleon Bonaparte, then 
 a state prisoner at Ham. The Prince had studied the subject closely, was im- 
 pressed with its importance, and, responding to the desire of Senor Castellon, 
 embodied his ideas in a letter. On the 8th of January, 1846, the Nicaragua 
 Government gave Prince Napoleon power to organize a company in Europe and 
 informed him that it had been resolved to confer upon the new route for the 
 commerce of the world, the name of "Le Canale Napoleone de Nicaragua.'' 
 The project received some encouragement from the Prince, and in the same year 
 a pamphlet, entitled "The Canal of Nicaragua, or a Project for the junction of 
 the Atlantic and Pacific Oceans by means of a Canal," was published under his 
 name, but whether he ever had any serious purpose of engaging in the work 
 itself, may be questioned. A significant passage in one of his letters is always 
 to be remembered — "With the name I bear, I must have the light of the throne 
 or the obscurity of the dungeon." On May 25th, 1846, the prisoner escaped 
 from Ham, and it is not unlikely that in the months which followed, the canal 
 project served as a convenient cloak for larger designs. The project was 
 entirely lost sight of, however, in the important events which ensued and cul- 
 minated in December, 1848, in the election of Louis Napoleon to be President 
 of the French Republic. 
 
 About this time, when it became apparent that large territorial acquisitions 
 would be made by the United States, as the result of the Mexican war. Great 
 Britain seized the port of San Juan del Norte, which they afterward named Grey- 
 Town, the only possible eastern terminus of the canal, on the pretext of protec- 
 tion to their ally, the King of the Mosquitos, a savage ruler of a coast tribe. 
 The Government of Nicaragua earnestly and repeatedly solicited the United 
 States to interfere. 
 
 In one of his letters, the Supreme Director of the State of Nicaragua says: 
 "The obvious design of Great Britain in seizing upon the port of San Juan, and 
 setting up pretensions to sovereignty, in behalf of savage tribes within the terri- 
 tories of Nicaragua, is to found colonies, and to make herself master of the 
 prospective inter-oceanic canal, for the construction of which the Isthmus alone 
 has the requisites of feasibility and facility." 
 
 In his instructions to Mr. Elijah Hise, appointed Chargd d' affaires from 
 the United States to Central America at that time, Mr. Buchanan, the Secre- 
 
THE NICARAGUA CANAL. 7 
 
 tary of State, says: "The object of Great Britain in this seizure is evident 
 from the policy which she has uniformly pursued throughout her history, of 
 seizing upon every available commercial point in the world whenever circum- 
 stances have placed it in her power. Her purpose probably is to obtain control 
 of the route for a railroad and canal between the Atlantic and Pacific Oceans 
 by way of Lake Nicaragua." Secretary Buchanan gave Mr. Hise no definite 
 instructions, but concluded his letter by saying: "The Government of the 
 United States has not yet determined what course it will pursue in regard to the 
 encroachments of the British Government. " 
 
 Though not empowered to treat, Mr. Hise was so impressed with public 
 sentiment at home, and, upon his arrival in Nicaragua, with the importance to 
 the United States of the right of free transit across the territory of that State, 
 that he assumed authority and requested the appointment, by the Republic, of 
 a Commissioner to open negotiations with him. His request was complied with, 
 and on June 21st, 1849, he met at Guatemala the Nicaraguan Commissioner, 
 Senor Don Buenaventura Selva, and they agreed upon the terms of a treaty; 
 but Mr. Hise's act was disavowed by his government. Another treaty negoti- 
 ated by his successor, Mr. E. G. Squier, was approved by President Taylor and 
 submitted to Congress. 
 
 For various reasons, among others the active and influential opposition of 
 the British Minister, Sir Henry Bulwer, action upon the treaty was postponed 
 until Congress adjourned, and a subsequent session passed with the same result. 
 Sir Henry Bulwer's opposition was occasioned by his desire, formulated in the 
 Clayton-Bulwer Treaty subsequently ratified by the two powers, to have Great 
 Britain associated with the United States in any future relations with Central 
 America, or the inter-oceanic canal. 
 
 The treaty was scarcely more than ratified, when it became the fruitful 
 source of controversy. On the part of the United States it had been considered 
 desirable chiefly because it put an end to the obnoxious Mosquito protectorate 
 and to foreign colonization ; Great Britain, however, had other views as already 
 indicated. As early as 1857, Lord Napier communicated to his government, 
 the expression of the President of the United States concerning it, as follows: 
 " The President denounced the Clayton-Bulwer Treaty as one which has been 
 fraught with misunderstanding and mischief from the beginning. It was 
 concluded under the most opposite constructions by the contracting parties. If 
 the Senate had imagined that it could obtain the interpretation put upon it by 
 Great Britain it would not have passed." 
 
 These misunderstandings have not yet been adjusted, and as recently as 
 1882-83, were the subject of an interchange of views between the State Depart- 
 ments of the two governments. 
 
 In September, 1849, Mr. Squier, acting for and on behalf of Cornelius 
 Vanderbilt, Joseph L. White and their associates, obtained a concession for an 
 inter-oceanic canal. The existence of this grant was recognized in the Clayton- 
 Bulwer Treaty. Under the provisions of the concessionary contract a survey of 
 the route was made in 1850-51 by Col. O. W. Childs of Philadelphia, whose 
 report was referred to Col. Abbott and Major Turnbull, of the United States 
 
8 THE NICARAGUA CANAL. 
 
 Topographical Engineers, and they pronounced the proposed plan feasible. 
 Col. Childs is entitled to credit for pointing out the lowest depression in the 
 Cordillera between the Arctic Ocean and Cape Horn. Through this divide, 
 which he found to be 153 feet above the sea level, he located a route, the main 
 features of which have been incorporated in the final location of the canal 
 through the country between Lake Nicaragua and the Pacific Ocean. Col. 
 Childs' was the first thorough instrumental examination of the whole route, of 
 which a record has been preserved that responds to the demands of engineering 
 science ; and its general accuracy has been fully confirmed by all subsequent 
 explorations. 
 
 The canal proposed by Mr. Vanderbilt was not built, and after several 
 modifications, made at the instance of the grantees, the concession finally lapsed 
 and was declared forfeited by the Nicaraguan Government. Mr. Van- 
 derbilt and his associates had, however, availed themselves of the collateral 
 privileges which the concession granted, to establish an inter-oceanic transit busi- 
 ness by the way of San Juan River and the Lake, which the large traffic with the 
 newly discovered gold regions of California, made enormously profitable, until 
 the construction of the Panama railroad furnished a means of transport, more 
 certain, more speedy, more comfortable and less costly than could be supplied 
 by the river steamboats and the stage coaches of the Transit Company. 
 
 In 1858, the contract with the Transit Company, as well as that for the 
 canal, work on which was never commenced, having been declared forfeited by 
 the Nicaraguan Government because of non-compliance by the grantees with its 
 conditions, Nicaragua and Costa Rica jointly conferred upon Felix Belly of 
 Paris and a company to be organized by him, a concession for the construction 
 of a canal by the route proposed by Childs. 
 
 M. Belly had devoted many years of his life to explorations and to the 
 solution of the Isthmian transit problem. He was an enthusiast concerning the 
 advantages of the Nicaraguan line, but neither his knowledge nor his zeal won 
 success. For several years Central American affairs, especially in Nicaragua, 
 were in a very disturbed condition, and later on the civil war in the United 
 States had a discouraging effect upon the successful inauguration of large enter- 
 prises on this continent. Before M. Belly succeeded in obtaining the necessary 
 funds, notwithstanding the favorable disposition of the Nicaraguan Government, 
 his concession lapsed. 
 
 In 1852 there was commenced a series of explorations covering the whole 
 of the American Isthmus. Some were undertaken by individual enterprise 
 directed to particular routes, but the more important were under the control and 
 direction of the United States Government, the object being to secure a syste- 
 matic examination of any and all the routes which presented any possibilities of 
 a practicable solution of the problem. These explorations were carried on with 
 more or less continuity until 1880; every locality possessing any claims for 
 consideration was carefully examined, and data were accumulated for a compe- 
 tent and impartial comparison. The route through Nicaragua was explored in 
 1872-1873 and made the subject of a thorough report by Commander E. P. Lull, 
 aided by Mr. A. G. Menocal as Chief Engineer. 
 
THE NICARAGUA CANAL. 9 
 
 In all these investigations, public and private, the part taken by the Govern- 
 ment of the United States was most prominent. The reports of the several 
 exploring expeditions dispatched by the United States, reflect great credit upon 
 the ability and painstaking diligence of the ofiicers, who contributed to the 
 accomplishment of the work entrusted to them. The reports of all the expedi- 
 tions organized at that time were not printed until December 20th, 1875.' 
 
 In 1872, President Grant appointed a commission consisting of Gen. A. A. 
 Humphreys, Chief of Engineers, U. S. A., Capt. C. C. Patterson, Superintendent 
 of the Coast Survey, and Admiral Daniel Ammen, U. S. N. , Chief of the Bureau 
 of Navigation ; "to examine into, make suggestions and report upon the subject 
 of inter-oceanic ship canal communication." The work was conducted by this 
 Bureau of the Navy department under the personal supervision of Admiral 
 Ammen. 
 
 Of the numerous projects for inter-oceanic communication by canal, many 
 were soon seen to be impracticable. Only eight routes were deemed worthy of 
 particular investigation; the length of each route and the altitude of the 
 "divides" traversed were found to be as follows: 
 
 es. Altitude 755 feet. 
 
 " 153 " 
 
 " 295 " 
 
 " II4S " 
 
 " 1008 " 
 
 800 " 
 
 " 95° " 
 
 778 " 
 
 The committee reported to the President as follows: 
 
 Washington City, February 7th, 1876. 
 To the President of the United States : 
 
 The commission appointed by you to consider the subject of communica- 
 tion by canal between the waters of the Atlantic and Pacific Oceans across, 
 over, or near the Isthmus connecting North and South America, have the honor, 
 after a long, careful and minute study of the several surveys of the various 
 routes across the continent, unanimously to report: 
 
 That the route, known as the " Nicaragua Route," beginning on the Atlan- 
 tic side at or near Greytown, running by canal to the San Juan River; thence 
 following its left bank to the mouth of the San Carlos River, at which 
 point navigation of the San Juan River begins, and by the aid of three 
 short canals of the aggregate length of 3.5 miles reaches Lake Nicaragua; 
 from thence across the lake and through the valleys of the Rio Del Medio 
 and the Rio Grande to what is known as the port of Brito, on the Pacific 
 Coast, possesses, both for the construction and maintenance of a canal, greater 
 advantages, and offers fewer diflficulties from engineering, commercial and 
 economic points of view than any of the other routes shown to be practicable 
 by surveys sufficiently in detail to enable a judgment to be formed of their 
 relative merits, as will be briefly presented in the appended memorandum. 
 
 Tehuantepec 
 
 . Lengt 
 
 h 150 
 
 Nicaragua . 
 
 << 
 
 169 
 
 Panama 
 
 ( ( 
 
 41 
 
 San Bias . 
 
 (( 
 
 30 
 
 Caledonia-Tuyra 
 
 ti 
 
 87 
 
 Atrato-Tuyra 
 
 n 
 
 IIS 
 
 Atrato-Truando • 
 
 IC 
 
 125 
 
 Atrato-Napipi . 
 
 11 
 
 180 
 
10 THE NICARAGUA CANAL. 
 
 The data for the conclusions of the commission will be found in the reports 
 of the various surveys and examinations made under the direction and auspices 
 of the Navy Department, copies of which are transmitted herewith. 
 
 A statement relating to these surveys and examinations, with a brief 
 account of the characteristic features of the routes, will be found in the accom- 
 panying memorandum prepared by the commission. 
 We have the honor to be, with high respect, 
 
 Your obedient servants, 
 
 Andrew A. Humphries, 
 Brigadier-General, Chief of Engineers, U. S. A., etc. 
 
 C. P. Patterson, 
 Superintendent United States Coast Survey. 
 
 Daniel Ammen, 
 Commodore and Chief of Bureau of Navigation. 
 
 On April 15, 1879, Congress called upon the President for the report of the 
 commission, and it was printed as a public document by the government. 
 
 'In 1876-77 Mr. Menocal, while in the employ of the Nicaraguan Govern- 
 ment surveying for harbor improvements at San Juan del Norte, made large 
 additions to the knowledge of the topography of the lower San Juan. 
 
 On the 19th of April, the President appointed Rear Admiral Daniel 
 Ammen and Civil Engineer A. G. Menocal, delegates on behalf of the United 
 States Government to attend an International Congress appointed to convene at 
 Paris May 15th, 1879, ostensibly to determine concerning the relative merits of 
 the different canal schemes, but really, as was afterwards apparent, to select 
 and approve the route at the Isthmus of Panama, for which Lieut. Napoleon 
 Bonaparte-Wyse had the year previous obtained a concession from the Colom- 
 bian Government, Just before the assembly of this Congress, an agent, repre- 
 senting French interests, failed by one vote only in the Senate of Nicaragua to 
 secure the confirmation of a concession for a canal which he had just negotiated. 
 Had a valid Nicaragua canal grant been available at this time in Paris, it would 
 probably have influenced materially the decision arrived at there, in favor of 
 Panama. 
 
 Admiral Ammen and Mr. Menocal were present at all the sittings of the 
 Congress, and at the proper time ably presented the advantages of the Nicar- 
 aguan route. Action was, however, limited by the early adoption of a resolu- 
 tion, to the effect that the construction of a canal at a uniform level was possi- 
 ble; and it was reported by a commission, to which the question had been re- 
 ferred, that "the maritime canal which would above all offer such advantages, 
 should be located between the Gulf of Limon and the Bay of Panama. " The 
 limitation of the canal to one of "uniform level," which it was claimed was 
 possible at Panama, purposely excluded the Nicaragua route, where a canal 
 could only be constructed with locks, and left no choice to the Congress. 
 
 Believing the Panama project to be impracticable, a Provisional Inter- 
 oceanic Canal Society, consisting of Capt. S. L. Phelps, Gen. U. S. Grant, 
 
THE NICARAGUA CANAL. II 
 
 Admiral Daniel Ammen, Gen. Geo. B. McClellan, Gen. Edward F. Beale, Hon. 
 Levi P. Morton, Messrs. Geo. W. Riggs, Howard Potter, Hugh J. Jewett and 
 others, obtained from the Republic of Nicaragua, in May, 1880, through the 
 Society's representative, a concession for the construction of a canal. The con- 
 tract was negotiated by Mr. Menocal, who, while awaiting the assembly of a 
 special session of the Nicaragua Congress for its ratification, made a re-survey of 
 the western division between the Lake and the Pacific Ocean, and also made 
 some further examination of the eastern section of the canal line under orders 
 from the United States Government. In December, 1881, a bill was introduced 
 in the Senate of the United States, by Senator Miller of California, with the object 
 of granting the aid of the United States to the construction of the canal, but it 
 was hindered in its progress by opposing interests until the time allowed by the 
 concession for the commencement of work lapsed. But before this occurred, 
 Capt. Phelps, with the aid of Captain Lull, an officer of the Navy, had obtained 
 from Nicaragua an extension of time until September 30th, 1884. The bill, 
 which the Committee on Foreign Affairs had reported to the 47th Congress, was 
 not acted upon, and a similar bill was brought before the following Congress by 
 Mr. Rosecrans of California, and referred to the House Committee on Foreign 
 Affairs, December loth, 1883. Both bills were hindered in their progress by 
 active and powerful opposition, both in committee and before Congress, from the 
 friends of the Panama Canal and the Tehuantepec Ship Railway projects, who had 
 little or nothing to hope for themselves, but were most zealous in their endeavors 
 to prevent the friends of the Nicaragua route from obtaining the desirable 
 assistance of the United States Government, which both bills provided for. 
 M. de Lesseps and Captain Eads appeared, personally or by their representatives 
 and friends, before different committees, apparently not so much to advocate 
 their own projects as to oppose that of Captain Phelps and his associates. 
 Action on the bill was continually deferred in one session after another, until at 
 last towards the close of December, 1883, it came up as unfinished business. 
 The vote in favor of taking it up for consideration was 127 ayes to 76 nays, but 
 notwithstanding there was a large majority in favor of adopting the bill, imme- 
 diate action could not be had, inasmuch as a two-thirds vote was a preliminary 
 necessity, and no subsequent opportunity could be secured. 
 
 Before this time the Provisional Society had been merged into a corporation 
 tinder the designation of the Maritime Canal Company of Nicaragua, and nego- 
 tiations for capital were carried on, outside of the attempt to secure aid from 
 Congress. The negotiations resulted in the formation of a syndicate of capitalists 
 who, with the co-operation of Gen. U. S. Grant and Gen. Geo. B. McClellan, 
 agreed to undertake the construction of the canal. The failure of the firm 
 of Grant & Ward, however, prevented the business being carried to a conclusion, 
 and before other arrangements could be made the concession lapsed. 
 
 It is not improper to say at this point, that during a considerable period of 
 time prior to these events Mr. Blaine, while in office as Secretary of State, 
 and his successor, Mr. Frelinghuysen, had been preparing the way for a 
 more definite and positive interest on the part of the United States Govern- 
 ment in a Nicaragua Canal. As a consequence, while there was a continual 
 
12 THE NICARAGUA CANAL. 
 
 assertion to the world, of th« desire on the part of the government for the con- 
 struction of this work, its construction by private enterprise did not receive that 
 support from Mr. Frelinghuysen, which otherwise it might have expected. As 
 a matter of fact, he was actively engaged, even before the expiration of the 
 Maritime Company's concession, in preparing the way for a treaty between the 
 two governments with reference to the construction of the canal by the United 
 States Government itself. The limit of time granted the Maritime Canal Com- 
 pany in which to commence work, expired September 30th, 1884, and Mr. 
 Frelinghuysen made such progress with his negotiations that his treaty was con- 
 cluded and submitted to the Senate in December of the same year. On Decem- 
 ber 15th, 1884, the Secretary of the Navy ordered Mr. A. G. Menocal, Civil 
 Engineer, U. S. Navy, to proceed to Nicaragua to perform certain labors in 
 connection with the treaty. In his letter of instruction, dated December 15th, 
 the Secretary says: "A treaty has been lately concluded with Nicaragua, 
 which gives to the United States the right to build a canal across the Isthmus 
 within the territory of that Republic following the most available route from 
 ocean to ocean." 
 
 On December 20th, Mr. Menocal, with several assistants, ofificers of the 
 U. S. Navy, sailed from New York, arriving in Nicaragua early in January, 
 1885. Mr. Menocal's instructions directed his attention to the surveys already 
 made, and particularly to any change in route which had been suggested as 
 possibly available for shortening the line and diminishing the cost, and he was 
 directed to make clear to the Nicaraguan Government the advantage to Nica- 
 ragua of the treaty. 
 
 The work of the expedition was strictly confined to a re-location of the 
 Eastern section of the canal. The Western section was rectified by Mr. 
 Menocal in his survey made under orders of the department in 1880. The ex- 
 pedition returned to New York June 3rd, 1885, and its report, a very valuable 
 document, was completed and submitted by Mr. Menocal to the Secretary of 
 the Navy in the following November. 
 
 As has already been stated, the treaty with Nicaragua was submitted to the 
 Senate in December, 1884. Great secrecy as to its provisions was maintained, 
 but journalistic enterprise secured in some way a copy of President Arthur's mes- 
 sage, with which the treaty was transmitted, as well as of the treaty itself, and 
 both were published entire in the New York Tribune of December i8th, 1884.* 
 
 Its most noteworthy conditions were as follows : 
 
 The canal was to be built by the United States, and to be owned jointly by 
 the United States and Nicaragua. The United States was to protect perpetually 
 the integrity of the territory of the Republic. 
 
 Privilege was given the United States to construct from ocean to ocean 
 railway and telegraph lines joining the termini of the canal. 
 
 A tract of land two and one-half miles wide, of which the canal was the 
 central line, and another two and one-half miles wide around the southern 
 end of the lake, were conceded. 
 
 The canal was exempted from taxation. 
 
 *See full text of treaty in Appendix No. 5. 
 
THE NICARAGUA CANAL. IJ 
 
 The United States was to have exclusive control of construction. 
 
 The net revenues were to be divided between the owners in the proportion 
 of one-third to Nicaragua and two-thirds to the United States, and accounts 
 were to be liquidated quarterly. 
 
 The United States was to loan Nicaragua $4,000,000 for works of internal 
 improvement, to be refunded out of Nicaragua's share of the revenues. 
 
 The treaty was signed by Fredererick T. Frelinghuysen, Secretary of State, 
 on behalf of the United States, and Joaquin Zavala, Special Envoy, on behalf 
 of the Republic of Nicaragua. 
 
 The treaty was before the Senate until January 29th, 1886, when it was 
 considered in executive session; it failed of ratification, but only under the 
 two-thirds rule. The vote upon it stood 32 ayes to 23 nays. A motion to re- 
 consider was entered and the treaty remained before the Senate. On the 4th of 
 March, 1885, President Cleveland took office. Early in his administration the 
 treaty was withdrawn for further executive consideration, and was not again 
 presented to Congress. January 29th, 1886, Mr. Menocal's report of the sur- 
 vey of 1885, with its accompanying drawings, was printed, but no further action 
 was taken. 
 
 The friends of the enterprise, though unsuccessful in these attempts, were 
 not disheartened. No sooner were they assured of the failure of the treaty 
 than they began to seek new associates and to reorganize in order to take 
 advantage of the favorable temper of the Nicaraguan Government, and of the 
 intimate knowledge of the route which had been acquired by the recent surveys 
 made under the auspices of our own government. 
 
 In April, 1886, it was determined to bring the matter again before the 
 public. Commander H. C. Taylor, at that time on duty in New York, remem- 
 bered the interest which had always been taken in the subject by the American 
 Geographical Society, and the discussion before that body in 1879, of the inter- 
 oceanic ship canal question. He sought the opportunity to present the subject 
 to their attention anew, and through the kind offices of the President of the 
 Society, Hon. Chas. P. Daly, was invited to do so. 
 
 Public attention was in this manner again called to the subject, a number 
 of prominent individuals at once became actively interested and, on the 20th of 
 October, 1886, met together by appointment to consider ways and means. 
 This resulted in the organization of an association, which undertook to obtain 
 a concession from Nicaragua, the payment of such guarantees as it was under- 
 stood that Government would demand, the making of necessary surveys and 
 examinations of the route, and the incorporation and organization of such 
 companies as should be found necessary to carry forward the enterprise to its 
 consummation. 
 
 Hon. Chas. P. Daly, Commander H. C. Taylor, Horace L. Hotchkiss, 
 A. S. Crowninshield, Francis A. Stout, Frederick Billings, Hiram Hitchcock, 
 A. B. Darling, J. W. Miller, James Roosevelt, R. A. Lancaster, Henry R. 
 Hoyt, F. F. Thompson, G. H. Robinson, A. C. Cheney, H. Fairbanks, C. H. 
 Stebbins, C. Ridgely Goodwin, A. B. Cornell, J. F. O'Shaughnessy, A. G. 
 
14 THE NICARAGUA CANAL. 
 
 Menocal, Admiral D. Ammen, Robert Garrett, T. Harrison Garrett, G. E. 
 Kissell, Henry A. Parr, Chas. D. Fisher, John L. Williams, Jules Aldig^, and 
 many other distinguished persons became members of an association which, at a 
 meeting called for the purpose, was formally organized December 3d, 1886, by 
 the adoption of Articles of Agreement and by the election as its first officers, 
 of Mr. Francis A. Stout, President, Mr. J. W. Miller, Secretary, and Mr. 
 Horace L. Hotchkiss, Treasurer. 
 
 On March and following, the association dispatched Mr. A. G. Menocal to 
 Nicaragua, with full authority to negotiate with the government. He arrived at 
 Managua, the capital, on the i6th, and there met the representative of the 
 Nicaraguan government. Dr. Adan Cardenas, with whom, on behalf of the 
 ■association, he negotiated a concession which was ratified by the Nicaraguan 
 government April 24th, 1887.* A provision was inserted requiring payment to 
 the government, within sixty days, of one hundred thousand dollars, forfeitable 
 in case of failure, and to be applied on account of police charges in case of 
 success. The concession was duly secured to the association by compliance 
 with this condition. 
 
 On the 30th of November, 1887, an engineering expedition was dispatched 
 to Nicaragua in charge of Mr. R. E. Peary, Sub-Chief Engineer, for the 
 purpose of making the final surveys and location of the canal. Mr. Menocal 
 was constituted by the association Chief Engineer of the enterprise. 
 
 The party arrived at San Juan del Norte, December 9th, and commenced 
 work at once, and was shortly afterward joined by the Chief Engineer. This 
 corps re-inforced from time to time has been constantly employed until a recent 
 date. It consisted of six land parties, one hydrographic party and two boring 
 parties, numbering some forty-five engineers, rod and chain men, and one 
 hundred laborers. They re-located the entire route of the canal and acquired 
 the most minute information concerning its every physical feature, so as to 
 permit an accurate estimate of the character and cost of the work in all its parts 
 and in every detail. Although the length of artificial canal is less than thirty 
 miles, the total length of lines actually surveyed by transit and level, in cross- 
 sectioning, location of locks, dams, embankments, railroads, flowage lines, etc. , 
 etc., through a most difficult country, is not less than 4,000 miles. 
 
 In December, 1887, the 49th Congress assembled and on January loth, 
 1888, Senator Edmunds introduced a bill in the Senate for the incorporation of 
 the Maritime Canal Company of Nicaragua. A similar bill was introduced by 
 Mr. Norwood in the House of Representatives. They were both referred to the 
 usual committees, and reported back with amendments in February; that 
 from the Senate Committee on the gth^^and that from the House Com- 
 mittee on the 1 6th. Each committee recommended the passage of its 
 respective bill. 
 
 In the meantime the decision of the boundary question between Nicaragua 
 and Costa Rica, which had been referred to President Cleveland for arbitration, 
 made it apparent that a concession from Costa Rica, if not indispensable, was 
 certainly desirable to assure certain rights to the company, and such a con- 
 
 *See Appendix No. 2. 
 
THE NICARAGUA CANAL. 1$ 
 
 cessiOH was at once negotiated with that republic. It was ratified August 9th, 
 
 1888, and assured to the company all that it desired.* 
 
 The Senate bill was passed without delay, and being identical with that 
 "before the House, was permitted to take its place. Action upon it by 
 the House was delayed, however, for one reason or another until February 
 7th, 1889, when it was passed by a vote of 178 yeas to 60 nays. There 
 were eighty-four members not voting, of whom many probably a majority, 
 were warm friends of the canal and had worked energetically for the passage of 
 the bill. It was approved by the President and became a law February 20th, 
 
 1889, and named as incorporators, Messrs. Frederick Billings, Charles P. Daly, 
 Daniel Ammen, Francis A. Stout, Horace L. Hotchkiss, Edward F. Beale, 
 Hiram Hitchcock, C. Ridgely Goodwin, A. C. Cheney, J. F. O'Shaughnessy, 
 H. C. Taylor, J. W. Miller, A. S. Crowninshield, A. G. Menocal, C. H. Steb- 
 bins, T. Harrison Garrett, Jules Aldige, R. A. Lancaster, A. E. Mills, G. E. 
 Kissell, H. Fairbanks, George H. Robinson, A. B. Darling, J. E. McDonald, 
 James Roosevelt, Christian Devries, F. F. Thompson, Henry A. Parr, and their 
 associates, f In the meantime, the Association had also caused to be incorpor- 
 ated as a necessary adjunct, a Construction Company, under whose direction 
 the final surveys and the preliminary work were carried on. This company is 
 now executing the work, having entered into a contract with The Maritime 
 Canal Company, for that purpose. Its first President was Francis A. Stout, 
 who was succeeded in office by A. C. Cheney. On March 5, 1890, 
 Hon. Warner Miller was elected to, and accepted the presidency of the com- 
 pany, and it is under his direction that the work of the canal is now being 
 prosecuted. 
 
 On May 4th, i889,The Maritime Canal Company of Nicaragua was organized 
 by the Association, as required by Article VIII of the Nicaraguan concession, 
 and by virtue of the charter granted by the United States; and to this company 
 both of the concessions were transferred. Hiram Hitchcock was elected presi- 
 dent and continues in that office. On the 26th of May a construction party, 
 • consisting of forty-seven engineers and their assistants, were dispatched to 
 Nicaragua with supplies and material; they arrived at San Juan del Norte 
 June 8th, and at once commenced work. 
 
 Shortly afterward questions concerning the respective rights of Nicaragua 
 and Costa Rica, consequent upon different views of the boundary question and 
 the "Treaty of Limits," caused some delays, but everything was finally ad- 
 justed, with satisfaction to all parties, by the kindly offices of Mr. Mizner, 
 Minister of the United States to Central America, under the instructions of 
 Mr. Blaine, Secretary of State. 
 
 On the 2 ist of August, 1890, at the request of Mr. A. L. Blackman, who 
 claimed to be the representative of some imaginary rights in Nicaragua, Mr. 
 Richardson of Kansas offered a bill in the House of Representatives to repeal 
 the charter of The Maritime Canal Company. This attack on the company was 
 the occasion only of an affirmation of its rights. The bill was at once referred 
 
1 6 THE NICARAGUA CANAL. 
 
 to the Committee on Commerce. On the 30th of August the chairman pre- 
 sented the report of the committee, which was as follows : 
 
 "Having carefully examined into the condition and affairs of said company, 
 for the purpose of determining whether any abuse of the powers and privileges 
 conferred by the act of incorporation has been practiced, or whether any of its 
 corporate duties and obligations have been disregarded, or whether in the 
 exercise of its sovereign power Congress should say that the public good is to be 
 subserved by a repeal of the charter, your committee conclude that the exercise 
 at this time of the power invoked would be a great wrong. Such powers 
 have never been exercised except for the gravest reasons, and your com- 
 mittee believe that Congress is not yet prepared to exercise its reserved 
 powers of repeal when every reason exists why it should commend rather that 
 criticise." 
 
 The committee then sets forth at length its reasons for the action recom- 
 mended and concludes as follows: 
 
 "Your committee beg leave to express the opinion that it would be a gross 
 breach of faith for the United States Government to permit in any way the 
 embarrassment of the project by considering unfounded propositions from any 
 source for the repeal of the company's charter. When completed, as we have 
 no doubt it will be at the earliest possible date, it will prove of greater impor- 
 tance and benefit to the United States than any other similar work in our history. 
 It will make the Atlantic and Pacific coasts substantially one and be of incal- 
 culable advantage in the development of the trade of California, Oregon and 
 Washington." 
 
 On the 6th of November, 1890, Senors Don J.A.Roman and Don Maximilian 
 Sonnenstern, commissioners appointed by the Nicaraguan government October 
 4th, 1890, to inspect the performance of work by the canal company, with refer- 
 ence to the question of compliance with Article XLVII of the concession, which 
 required an expenditure during the first year of the work of two million dollars 
 ($2,000,000), reported, that from the official inauguration of the works on Oc- 
 tober 8th, 1889, until October 7, 1890, there had been an expenditure by the 
 company of more than the two million dollars ($2,000,000) required in the con- 
 cession, and the commissioners presented to the government a detailed account 
 of the expenditures, signed by themselves and by the representatives of the 
 canal company. On the loth of November Senor Don J. F. Medina, Minister 
 of Public Works, advised the general agent of the company at Managua, Hon. 
 Henry C. Hall, that the company had more than fulfilled its obligations as to 
 expenditure upon the works, under the requirements of the concession. 
 
 On the 12th of December following, by the direction of His Excellency, 
 the President of Nicaragua, the Hon. Horacio Guzman, the Minister of 
 Nicaragua to the United States, informed the company that Article XLVII of 
 the concession had been "fully and completely complied with." Fulfillment of 
 the requirements of this article satisfies the condition which entitles the company 
 to a term of ten years during which to construct the canal. 
 
 On the loth of January, 1891, a bill* was introduced in the Senate of the 
 
 *The full text of the bill appears In Senator Morgan's speech. See Appendix No. : 
 
THE NICARAGUA CANAL. 1 7 
 
 United States by Senator Sherman*, empowering the United States to guarantee 
 the principal and interest at four per cent, per annum, of an issue of f 100,000,000 
 of canal company bonds to be issued for construction purposes. The President 
 of the United States was empowered by the bill to name six of the directors of 
 the company, and $70,000,000 of the capital stock of the company was to be 
 placed in the custody of the Secretary of the Treasury, as a pledge and security 
 for the repayment to the United States of any amounts advanced in pursuance 
 of the guarantee. The duty was to be conferred upon the Secretary of the 
 Treasury, to vote upon the stock at his discretion, and an option was reserved to 
 the United States to purchase the same at any time before the maturity of the 
 bonds. 
 
 The introduction of the bill was not at the instance of the promoters of the 
 canal enterprise. The measure originated with the Senate Committee, as stated 
 by Mr. Morgan, one of its members, in his argument advocating its adoption. 
 It was, in fact, a far-sighted measure of public policy, devised and matured by 
 the experienced and public-spirited men who presented it, the members of the 
 Senate Committee on Foreign Relations. It was reported late in the session, 
 at a time when other questions of grave importance demanded immediate atten- 
 tion , it was also regarded by some with alarm or misgivings as involving, 
 although remotely, the possibility of financial liability on the part of the govern- 
 ment, and therefore not to be passed without careful consideration and dis- 
 cussion of all its provisions. The bill was strongly presented by Senator 
 Morgan and ably supported by every member of the committee and by many 
 other Senators, but owing to the pressure of other public business, which pre- 
 cluded the possibility of a sufficient discussion, Senator Sherman gave notice on 
 the 27th of February that it would not be called up again for further consideration 
 during the session. 
 
 Although the measure was not inspired or even suggested by the Canal 
 Company, its Directors, recognizing the national character and importance of 
 the enterprise, consented to accept its provisions and to forego the profits and 
 advantages which they expected to realize from the prosecution of their enter- 
 prise as a commercial undertaking; non-action by the Senate, however, restored 
 the former status, and steps were taken without delay for a presentation of the 
 enterprise, now advanced to a demonstration of its feasibility, to the capitalists 
 of the world. 
 
 On March 14th, 1890, Hon. Warner Miller, President of the Construction 
 Company, undertook a personal inspection of the work. He sailed from New 
 York for Nicaragua on the steamship Aguan with a company of gentlemen, 
 among whom were H. F. Donaldson and H. F. Gooch, prominent English 
 engineers, D. McN. Stauffer, an American engineer, Maj. C. E. Dutton, U.S.A., 
 formerly of the United States Geological Survey, Lieut. Guy Howard, U. S. A., 
 and several journalists. Commander' Brownson, U. S. N., and Lieut. W. I. 
 Chambers, U. S. N. , joined the expedition upon its arrival at Nicaragua. The 
 
 *The views of Senator Sherman, chairman of the Senate Committee on Foreign Relations, and the 
 speech of Senator John F. Morgan, member of same committee, in adrooaoy of the measure, will be 
 found in Appendixes Nos. 6 and 7. 
 
l8 THE NICARAGUA CANAL. 
 
 government officers accompanied the party in an official capacity and have made 
 reports of their inspection to the Government. 
 
 On the 26th of March the Aguan was wrecked upon a coral reef in the Carib- 
 bean Sea, but the entire party escaped without loss of life, and after a stay 
 of six days on the island were rescued and taken by the coasting steamer Carazo 
 to San Juan del Norte, where they arrived safe and well on the and of April. 
 
 The inspection of the canal throughout the entire route and including the 
 terminal ports proceeded without further misadventure, and resulted in the 
 eminent satisfaction of President Miller and the entire party. The engineers and 
 government officers especially spoke with unqualified approval of all that had 
 been done, and of what was proposed for the future. The English engineers, 
 representatives of the contractors for the Manchester Ship Canal, said they had 
 never known a large work so thoroughly studied and mastered in every detail, 
 and moreover, that in its achievement no engineering difficulties were involved. 
 The only question presented was one of magnitude. The inspection showed 
 that in all the work done the cost had been materially less than the estimates, 
 in some instances as much as fifty per cent, below them. The railroad built 
 through the swamp back of San Juan del Norte and on towards the divide, 
 for which $60,000 per mile was allowed in the estimate, has actually cost 
 but $40,000 per mile. The ascertained cost of dredging, through the efficiency 
 of the great machines brought from Colon, is found to be very materially less 
 than the estimate. 
 
 President Miller returned from his inspection May 7th, and an extract from 
 his report will be found in the Appendix.* 
 
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CHAPTER II. 
 
 PHYSICAL DESCRIPTON OF COUNTRY TRAVERSED. 
 
 The political division known as the Republic of Nicaragua; one of the five 
 States of Central America, lies between Honduras and Salvador on the north 
 and Costa Rica on the south, extending from Cape Gracias a Dios to the mouth 
 of the San Juan River on the Caribbean Sea, and from the Gulf of Fonseca to 
 to the Bay of Salinas on the Pacific Ocean, that is from latitude lo degrees 90 
 minutes to 15 degrees north, and from longitude 83 degrees 20 minutes to 87 
 degrees 40 minutes west from Greenwich. 
 
 In shape, it is an irregular quadrilateral or trapezoid, of which the longest 
 side extends across from the Gulf of Fonseca notheasterly to Cape Gracias a 
 Dios 290 miles; from this cape along the Caribbean to the mouth of the San 
 Juan is 250 miles, and thence along the Costa Rican boundary to the Bay of 
 Salinas' on the Pacific is 120 miles. The Pacific coast-line, from the Bay of 
 Salinas northwesterly to the Gulf of Fonseca, is 185 miles in extent. 
 
 The State has an area of about 49,000 square miles and in point of size 
 is first among the Central American Republics. Within its limits is found a 
 population of about 400,000, of which about nine-tenths are of aboriginal origin, 
 negroes or mixed races ; the remainder are pure whites, mostly of Spanish 
 descent. Its shores were first seen by Europeans when Columbus in 1503 
 Tounded its northeasterly point, which he named Gracias i Dios, in thanks- 
 giving to God for more favorable winds. He was probably the discoverer 
 also of the harbor of San Juan del Norte, as he sailed southerly along the 
 ■entire eastern coast. Nicaragua was visited and first explored by Gil Gon- 
 zales Davila in 1522. In 1524 it was subjected to the Spanish crown, and sub- 
 sequently became a part of the Captain-Generalcy of Guatemala, which 
 embraced the principal provinces or intendencies of Guatemala, Honduras, San 
 Salvador, Nicaragua and Costa Rica. In 1821 these provinces threw off their 
 allegiance to Spain and formed a confederacy, but this was dissolved in 1839, 
 and since that date these States have existed as distinct Republics ; occasional 
 attempts at confederation have proved futile. 
 
 Excepting the Department of Segovia, which borders on and resembles the 
 •central portion of Honduras, Nicaragua has a topography and climate differing 
 in marked degree from its neighbors. 
 
 Its mountain system can scarcely be considered as resolved into ranges, 
 although it is frequently so spoken of. The Cordillera which traverses both 
 continents has nowhere in Central America the character of a single clearly 
 defined chain like the Pyrenees or the Appenines in Europe, or the Cascades 
 and parts of the Andes in the Western continent. The crest of the Isthmian 
 portion of the system is generally parallel to the Pacific shore ; although it 
 occasionally diverges from it, it is never more than about 75 miles distant from 
 
20 THE NICARAGUA CANAL. 
 
 the western coast, while in some portions of Nicaragua and Costa Rica it 
 approaches to within six or seven miles of it. In southern Honduras and Nicar- 
 agua, instead of any appearance of a chain or range, there is found a wide 
 extent of country of generally high elevation, from which occasional peaks rise 
 still higher, attaining at times altitudes of 4,000 or 5,000 feet above the sea, but 
 appearing less lofty than they really are because of the high platform from 
 which they spring. This mountain mass extends from Honduras into Nicaragua 
 in the department of Segovia, and thence southeasterly, subsiding gradually 
 into low hills until its line is completely interrupted by the San Juan River on. 
 its course to the sea; it sweeps along the eastern shores of Lakes Managua 
 and Nicaragua, throwing out spurs towards the Atlantic between which flow the 
 streams which empty into the Caribbean. Its declivities, towards the shores of 
 the lakes, are often abrupt but not precipitous ; on the east they fall off in gentle 
 undulations and wooded plains towards the Mosquito shore. South of the San 
 Juan the hills gradually rise again into the lofty mountain masses of Costa Rica. 
 This is the true Cordillera of the continent ; the fact that its continuity is inter- 
 rupted by the valley of the San Juan, which carries eastward to the Atlantic the 
 waters which fall upon the western slopes is, so far as an inter-oceanic canal is 
 concerned, a fortunate provision of nature. In some remote period of the past, 
 there was opened a way for the discharge eastward of the waters of the lake, 
 that otherwise would have found their way westward to the Pacific through a 
 depression but a few feet higher. West of the lakes, along the whole Pacific 
 coast, there is found a hilly region of some elevation commonly known as the 
 Coast Range, but the hills are scarcely of sufficient height to entitle them to the 
 dignity of recognition as a mountain chain. Across this ridge, which actually 
 parts the waters flowing to the Atlantic and Pacific, there are several low and 
 easy passes, of which that between the mouth of the Rio Lajas on Lake Nicara- 
 gua and Brito on the Pacific Ocean is the lowest that exists anywhere across the 
 continental divide from the Arctic Ocean to the Straits of Magellan. It has an. 
 elevation of only 153 feet above the sea. 
 
 Between the Cordillera and the Coast range is found the great geographical 
 feature of Nicaragua, a remarkable depression about 70 miles wide and nearly 
 200 miles long, its major axis parallel to the Pacific coast. Here are found the 
 broad and beautiful Lakes of Nicaragua and Managua, and the fertile Plains of 
 Leon and Cone jo, elevated but a few feet above the lakes. In this depression, 
 the bottom of which is below the sea level, are gathered the waters which flow 
 from the mountains and plains on either hand, the surplus of which is discharged 
 by a single outlet, the San Juan River, which, traversing a valley between low and 
 densely wooded hills, flows through the break in the Cordillera and then through 
 the lowlands of the coast into the Atlantic Ocean. The valley of this river, 
 the inland waters of the great central plateau, and the low pass across the 
 Coast Range, are nature's route for inter-oceanic communication. 
 
 Scattered throughout this central depression is found a remarkable series of 
 isolated cones of volcanic origin, commencing with the low wooded islands of 
 Solentiname and Chichicaste, which rise in the southeastern part of Lake Nicar- 
 agua, and terminating with the peak of Coseguina (4,000 feet high), in the ' 
 
THE NICARAGUA CANAL. 21 
 
 extreme northwest corner of the State. A group of these volcanic peaks, the 
 principal of which are El Viejo (6,000 feet), Momotombo (7,000 feet, the high- 
 est point in the State) and Coseguina, already named, are crowded close to- 
 gether in the extreme northwest, between Lake Managua and the Gulf of Fon- 
 seca. Most or all of them are extinct, but several may still be regarded as 
 active, though for the time being quiescent. 
 
 In the south-central part of the State, the Cordillera becomes a confused 
 mass of peaks and ridges with scarcely any elevations exceeding 1,000 feet. 
 The San Juan River valley, extending from the great lake to the Atlantic, 
 between the mountains to the northward and the still loftier peaks of Costa 
 Rica to the southward, together with the low altitude of the Coast Range, 
 affords a natural pathway through which the northeast trades, blowing from the 
 Caribbean Sea, sweep continually over the coast and valley region, changing, 
 cooling and purifying its air, and modifying its temperature, to such a degree 
 that early writers, carried away with the delights of its climate, spoke of it as 
 the Paradise of Mahomet. 
 
 These winds blow with such continuity and regularity that, under their 
 influence, the waters of the lake rise and fall regularly ; this movement long since 
 occasioned a popular but erroneous notion that the level of the lake responded 
 to the movements of the ocean tides. The winds are strongest from noon until 
 evening, and bank up the waters upon the southwestern shore in foaming 
 breakers. They subside towards morning, and the waters recede and the 
 equilibrium is restored. The regularity with which the trade winds blow, gives 
 a corresponding regularity to the apparent rise and fall of the lake and the 
 semblance of a tidal movement. 
 
 Lake Nicaragua, known also as the Lake of Granada, is the largest body of 
 freshwater between Lake Michigan and Lake Titicaca. It is no miles long 
 and 40 miles in width. According to recent soundings it has a depth at some 
 points of 240 feet. In most parts its margins are shoal, but occasionally there 
 is deep water close along shore. Its outlet, the River San Juan, draining a 
 watershed of some 8,000 square miles, which has an average annual rainfall of 
 at least 80 inches, is a stream of large volume and in its upper reaches without 
 flats or shoals. It is 121 miles long, and from 100 to 400 yards broad, and in 
 the upper half of its course has a depth of from ten to twenty feet, but is 
 interrupted by several rapids which interfere with its navigation. These rapids 
 are traversed at all times by the canoes or "bungos " of the natives, and during 
 the rainy season all, except the Castillo Rapids, are passed by steamers of light 
 draft with engines of moderate power. The steamer Victoria, now in use on the 
 lake by the Navigation and Trading Company, and built at Wilmington, Dela- 
 ware, in 1882, for that service, was "warped " up them during the high waters 
 of the rainy season. 
 
 Near the centre of Lake Nicaragua is the twin island of Ometepe, its peaks, 
 Ometepe and Madera, rising from the waters of the lake, with beautifully 
 wooded slopes to heights respectively of 5,320 and 5,200 feet. The island is 
 about eighteen miles long, and about six miles in width. On the slopes of these 
 peaks and along the shores are coffee and cacao plantations, and the island has 
 
32 THE NICARAGUA CANAL. 
 
 a population of about 8,000 souls. Madera is covered with verdure to its top, 
 and Ometepe about two-thirds of the way up. The beauty of these mountains, 
 their wooded slopes rising from the bright transparent waters of the lake, and 
 their summits lost in fleecy clouds, dominates the landscape and attracts the eye 
 from every quarter. Other and smaller islands covered with verdure, add 
 beauty to the scene. Along the shores of the lake vegetation stops abruptly 
 before reaching the water's edge, and there appears a broad sandy beach, upon 
 which the waves, driven by the trade winds, break in a heavy surf with the roll 
 of the ocean. In the northern part of the lake, near Granada, is a group of 
 little islands, called "Los Corales," said to number several hundred, remarkable 
 for their picturesque beauty. To the northwest, about 15 miles distant and 
 connected with Lake Nicaragua by the Estero Panaloya and the Rio Tipitapa, 
 lies Lake Managua, another beautiful sheet of water 35 miles long and about 
 20 miles wide. Its level is about 134 feet above the sea or 24 feet above Lake 
 Nicaragua. Upon the southwest are broad and fertile slopes and level plains 
 covered with luxuriant verdure ; to the north and east, miles away, and with a 
 broad, gently sloping plain intervening, are the mountains of Matagalpa. In 
 the Department of Segovia are loftier peaks, and when the sun is sinking behind 
 the western hills, their summits are lighted up with a gorgeous glow and a 
 magnificence of coloring unsurpassed in all the world. 
 
 The wide expanse of these beautiful lakes receives and temporarily impounds 
 the rainfall of the surrounding watershed, the surplus gradually and regularly 
 escaping through the "Desaguadero, " (an ancient designation for the San Juan 
 River, signifying a water outlet). This is nature's provision against any torren- 
 tial rush of waters, such as is common to all other streams in tropical America. 
 But for this fortunate provision a canal would probably be as impracticable by 
 this route as elsewhere, for in the absence of the great storage basin which the 
 lakes supply, the river would be as uncontrollable a torrent in times of flood, as 
 the Chagres at Panama. 
 
 Between these lakes and the coast hills, in the rolling plains country, gen- 
 erally beautiful and fertile, are found the principal cities and nine-tenths of the 
 entire population of the Republic. Rivas with a population of about 8,000, 
 Granada with 15,000, Managua with 10,000, Leon with 35,000, Chinandega 
 with 12,000, principal towns of the departments of the same names, and Masaya 
 with 18,000 in the Department of Granada, are all west of the lakes. Mata- 
 galpa with 9,000 inhabitants in the Department of Matagalpa and La Libertad 
 with 5,000 in the Department of Chontales are the most important places east 
 of the lakes. 
 
 The broad expanse of country between the foot hills of the Cordillera and 
 the Caribbean Sea, in Nicaragua and in Costa Rica also, is generally low and 
 level ; it is mostly covered with dense tropical growth, and is drained by several 
 large rivers which are only navigable for a few miles near the ocean. This 
 coast region already produces very remunerative crops of plantains, bananas and 
 other tropical fruits ; but not one per cent, of the soil adapted to culture has 
 been appropriated. The entire district is also as well adapted to the growth of 
 sugar, fibre plants, and rice as any region on earth. The rainfall is much greater 
 
THE NICARAGUA CANAL. 23 
 
 •here than in the interior, the comparative coolness of the intervening country 
 -chilling and precipitating the excessive moisture from the clouds, before 
 they leave the coast, and are carried by the prevailing winds over the 
 lake basin. 
 
 The river Wanks, or Coco, or Segovia, for it is known by each of these 
 names, rises in the mountains of the Department of Segovia and discharges into 
 the Caribbean Sea at Point Gracias a Dios; it forms the boundary between 
 Honduras and Nicaragua for a large part of its course. Farther south are the 
 Grand, the Blewfields, and the San Juan in Nicaragua, and the Sucio, Reventazon 
 ■and the Matina in Costa Rica. 
 
 Lying at a mean elevation of 2,000 or 3,000 feet above the sea, in''the 
 northern part of the Republic, the uplands of Chontales, Matagalpa and 
 Segovia, enjoy a mild climate well suited to the cultivation of maize and other 
 products of the temperate zones, and to grazing. There are said to be half a 
 million head of cattle on the ranches north and east of the lake. 
 
 The metalliferous porphyries of the Cordillera abound in gold and silver- 
 bearing quartz, especially in Chontales and the uplands of northwestern Segovia. 
 The Chontales gold mines have been intermittently worked for many years. 
 The mining industry is centred chiefly about La Libertad, the capital of Chon- 
 tales, and Santo Domingo in Matagalpa. There are recent reports of the dis- 
 •covery of very rich placer mines between Segovia and Martis creeks — branches 
 -of the Prinza-pulka River, which empties into the Caribbean Sea no miles north 
 ■of San Juan del Norte. 
 
 The extensive primeval forests of the San Juan and the central departments 
 ■abound in mahogany, cedar, rosewood, ironwood, pine, caoutchouc, gum copal, 
 vanilla, sarsaparilla, logwood, and many other dyewoods, medicinal plants and 
 valuable timbers. 
 
 The western provinces are chiefly agricultural, but there is also much valu- 
 able timber. The fertility of the soil is remarkable ; it yields where cultivated, 
 enormous crops of sugar, cotton, tobacco, cacao, coffee, rice and maize. Plan- 
 tains, which furnish one of the staples of food to the lower classes, are also 
 ■extensively cultivated. The opening of an inter-oceanic canal will not only 
 provide convenient access to these slightly developed regions, but will also 
 bring to Nicaragua an increase of population which will make its home markets 
 for the more perishable commodities, a source of incalculable prosperity to the 
 •country at large. As has already been remarked, the principal cities are located 
 in the western departments. 
 
 Leon, on the railroad which connects Momotombo at the northwestern 
 ■corner of Lake Managua and Corinto on the Pacific, is the most interesting and 
 "by far the largest city of Nicaragua. From the roof of its cathedral one may 
 see the Pacific Ocean, and from the top of one of its towers the waters of Lake 
 Nicaragua. The cathedral is a grand old building, probably the largest 
 religious edifice south of the city of Mexico. Its construction was commenced 
 in 1706 and completed in 1743, and is said to have cost between four and five 
 inillions of dollars. It covers an entire square, and its front occupies the 
 ■width of the Grand Plaza. It is constructed of cut stone, and is one firm 
 
24 THE NICARAGUA CANAL. 
 
 mass of masonry. During the civil wars it was several times converted into a 
 fortress. Its roof is composed of massive arches, and in 1823 not less than 
 thirty pieces of artillery were planted upon it. For more than a century and a 
 half it has stood the vicissitudes of earthquake, weather, war, piracy and revo- 
 lution, and its walls are still solid and unshaken. 
 
 Managua, the seat of government, admirably situated on a slight bluff on 
 the western shore of the lake of the same name, near its southern extremity, 
 though smaller than either Granada or Leon, is in many respects the most 
 enterprising and most thriving city of the Republic. 
 
 The country immediately around Managua is as rich and fertile as any 
 portion of the State, but between it and Masaya, which is about twelve leagues- 
 distant, occurs what is known by the natives as the mal-pais or bad lands, an 
 immense field of lava on the slope of the volcano of Masaya, which at its last 
 eruption flowed down from the mountain towards the lake. This eruption is 
 said to have occurred more than two centuries ago. Everywhere the fields- 
 are utilized up to the lava beds either for cultivation or grazing. 
 
 Granada, on the western shore and near the head of Lake Nicaragua, is 
 another important city. It may be considered the commercial centre of the 
 State, and for that reason probably more foreigners settle there than in the 
 other cities. It is connected with Managua by a narrow guage railway thirty 
 miles long, the running time of which between the two cities is two and one-half 
 hours. This is the oldest known settlement in Nicaragua. It was founded by 
 Fernandez de Cordoba in the year 1522, on the site of an ancient Indian town, 
 the capital of the Cacique Nicarao, a native prince, who received there hospitably 
 the discoverers and subsequent conquerors of his country. 
 
 In the early days of Spanish domination there was held in Granada an 
 annual fair, at which the merchandise of Spain was exchanged for the products- 
 of the country. Credible documents show that the business of the fair amounted 
 to more than f 1,000, 000 annually, a sum which represented a much greater 
 value then than at the present time, but wealth tempted attack, and the city was 
 several times plundered by bucaneers and other freebooters and its prosperity 
 destroyed. It was wantonly burned by the filibuster Walker when he was 
 driven out by the Central American forces in 1855, but since then it has been. 
 gradually recovering. Its location on the lake, and with reference to the sur- 
 rounding country, give it commercial advantages, from which it cannot fail ta 
 reap renewed prosperity, in any general industrial development. At the head 
 of Lake Nicaragua, it must become, when the inter-oceanic canal is completed, 
 the natural market for the coffee and other products grown in the adjacent 
 country. Around it, and beyond Masaya and in the direction of Managua, are 
 located the largest coffee haciendas. 
 
 Rivas, another important town in the department of the same name, about 
 five miles north of the line marked for the route of the canal between Lake 
 Nicaragua and the Pacific Ocean, is about three and one-half miles distant from 
 San Jorge, its port on the lake, and is connected with that place by an excellent 
 macadamized road and a horse railroad, recently completed. It is situated in 
 a rolling and fertile country noted throughout the State for its rural beauty and 
 
THE NICARAGUA CANAL. 25 
 
 "fertility. Within two leagues around it there is a larger rural population than is 
 found within the same area in any other portion of the State. 
 
 The waters of the San Juan River, the outlet of the lakes, reach the ocean 
 by several channels. Forty years ago a larger part was discharged at San Juan 
 del Norte than now, but at the present time nine-tenths of its waters are dis- 
 charged through the Colorado mouth or branch about fifteen miles to the south. 
 As the canal utilizes for its course, the channel of the river above Ochoa only, 
 there is an actual advantage in this deviation, inasmuch as it will facilitate the 
 maintenance of the harbor, by preventing the deposit there of large quantities 
 of alluvium with which the waters of the river are charged, and which are now 
 carried into the ocean by the Colorado. As the San Juan, from a point three 
 miles below Castillo, constitutes the boundary line between the sister Republics 
 of Nicaragua and Costa Rica, the section of the canal, which utilizes that part 
 of the river above Ochoa, will also border on the territory of Costa Rica up to 
 the point indicated; and as that Republic has rights of navigation upon the 
 river, the canal there will afford commercial facilities of great importance to her 
 and of mutual advantage. The products, climate and general characteristics of 
 Costa Rica are in many respects the same as those of Nicaragua. The general 
 altitude of the interior is, however, more elevated. 
 
 The country through which the course of the canal is laid, for the first ten 
 miles from the coast, is a flat alluvial formation, the accumulation of centuries, 
 •with occasional lagoons and swamps covered with zacate and with silico palms, 
 or the primeval forests and a dense tangled, almost impenetrable, mass of under- 
 brush and vines. From this point, its course is through wooded and fertile val- 
 leys between low hills to the divide cut, and thence to a connection at Ochoa 
 with the San Juan; above Ochoa it receives the waters of the San Carlos com- 
 ing from the mountains of Costa Rica. This affluent must in course of time be- 
 come a valuable route of water communication with the State in which it takes 
 its rise, opening up as it will a section of country of exceptional fertility, acces- 
 sible at present only by boats of little size and draft, or over mountain roads 
 which are almost impracticable during a portion of each year. From the mouth 
 of the San Carlos the course of the San Juan — then and thereafter the route of 
 the canal — is through what may be termed the highlands of the river, the abut- 
 ting flanks of the Cordillera. Sixteen miles above the San Carlos occur the 
 Machuca Rapids, five and six miles farther on Balas, six miles beyond are Cas- 
 tillo Rapids, the most important of all, and nine miles farther the Toro Rapids ; 
 — beyond which to the lake, the course of the river is through a broad valley of 
 low lands bounded by more remote hills. Above the San Carlos and at Machuca 
 the forests which clothe the banks of the river are tropical in luxuriance. 
 The lofty trees are draped with vines which creep and twine among their 
 branches and droop to the water's edge in massive walls of verdure. 
 
 Above Machuca there are occasional clearings — where the lands are cultivated 
 or grazed — through which the distant hills appear; at other places the hills 
 themselves rise with steep and almost precipitous slopes directly from the river. 
 Squier likens this part of the river to the Highlands of the Hudson. 
 
 At Castillo is an old Spanish fort, garrisoned by the Nicaraguan Gov- 
 
26 THE NICARAGUA CANAL. 
 
 ernment. It was considered impregnable by its builders, but was captured by a 
 British force in 1780. Post Captain (afterwards Admiral) Nelson was in com- 
 mand of the Naval Corps of the expedition. 
 
 The erection of a dam at Ochoa and the execution of other works of canal- 
 ization will of course change many of the present aspects of the river, deepening 
 its waters over the rapids and in numerous places expanding them into broad 
 and lake-like surfaces, adding to its advantages for navigation and to its beau- 
 ties as part of an already delightful landscape. One important peculiarity of the- 
 San Juan, already adverted to, should be particularly noted. It is entirely- 
 exempt from the floods common to all other tropical streams. This is owing- 
 to the fact that the great lakes serve as receiving reservoirs, on the broad ex- 
 panses of which the rainfall is stored and from which it is delivered slowly- 
 instead of being concentrated from the adjacent hillsides into narrow valleys, 
 and thus massed into rushing, torrential floods. 
 
 The harbors of Nicaragua, are San Juan del Norte (popularly known as- 
 Greytown), on the Atlantic, and the Bay of Salinas, Port of Corinto, and Gulf of 
 Fonseca, on the Pacific. More than a quarter of a century ago the harbor of 
 San Juan del Norte ; which before that time was easy of access, well protected 
 and the principal port of Central America, with a depth of 24 feet of water in' 
 both channel and harbor; was closed entirely by a sandbar which formed across 
 its entrance, and for years it was merely a fresh water lagoon, accessible onl)r 
 by lighters through a narrow and difficult entrance two and a half miles to the 
 eastward. The closing of the original entrance occasioned a gradual partial 
 filling of the old harbor with silt. The erection of a breakwater, extending- 
 already a thousand feet into the ocean and to be extended farther, has resulted, 
 as Mr. Menocal anticipated, in the reopening of the old entrance; and the- 
 channel thus formed has been deepened to about fifteen feet at the present time. 
 The effect of the breakwater and the action of the drifting sand, has thus far- 
 been very satisfactory to the company, and to the engineers who have inspected 
 the work, and indicates the ultimate and thorough success of the plans adopted 
 for the restoration of the channel and harbor, and its perfect adaptation to the 
 needs of commerce and as the eastern terminus of the canal. 
 
 Brito has been designated as the western terminus and port of the canal 
 upon the Pacific, not because of any present excellence, but because of 
 its availability, as the point at which the lowest pass across the Isthmus- 
 debouches on the ocean, and on account of its perfect adaptability ta 
 the needs of the work. It is situated at the mouth of the Rio Grande 
 the valley of which stream is utilized for the canal after it leaves the 
 valley of the Rio Lajas and passes the western divide. This valley 
 which opens out broadly towards the ocean, apparently once formed a con- 
 siderable bay extending back more than a mile from the coast line, which in 
 course of time has been filled up by river deposits. It is proposed to erect 
 proper and necessary breakwaters and to re-open, by dredging — so far as it may 
 be found requisite — what has once been, and may easily be made again, a good 
 harbor. 
 
 The geology of Nicaragua and Costa Rica has not been thoroughly studied 
 
THE NICARAGUA CANAL. 27 
 
 except along the line of the canal. Of the region generally, a few facts rela- 
 vant to its geological characteristics are here given : 
 
 First. The Atlantic coast region of Nicaragua and Costa Rica, extending 
 inland towards the lake, consists generally of low, alluvial, wooded plains, but 
 here and there occur ridges and hills of considerable elevation. It has many 
 swamps and lagoons, and traversing the low lands is the delta of the San Juan 
 River. Then comes a region of greater elevation, undulated by the demolished 
 cones of long extinct volcanoes, now evidenced only by ridges and low wooded 
 hills, the highest of which attain an altitude of perhaps a thousand feet. 
 Farther inland the hills are of greater magnitude and elevation, finally merging 
 into the main Cordillera. Along the line of the upper San Juan are found vol- 
 canic remains belonging to a past geologic age, but no recent volcanos or 
 lavas exist anywhere in the vicinity. All volcanic action there has been wholly 
 extinct during the present geologic age, and the lavas at the surface have been 
 decoiyposed into clay; the rock that remains showing only in the stream beds. 
 
 Second. Between the west shore of Lake Nicaragua and the Pacific, the rocks, 
 generally of volcanic origin, are all buried deeply in the product of their own 
 decay ; their covering, which consists of clay, loam and sand, has a depth rang- 
 ing from ten to fifty feet or even more. These buried lavas were the product of 
 intense volcanic action in periods very remote, and covered everything save here 
 and there an outcrop of older limestone or other sedimentary rocks. They are 
 uncovered only in the beds of the streams, along the ocean and lake shores, and 
 occasionally they appear as perpendicular escarpments of a hundred feet or 
 more. The volcanos which furnished these lava flows are not only extinct, but 
 their craters have been destroyed, their cones demolished, and their location 
 even is unknown. Some of them have left eminences, varying from mere knolls 
 of ten feet to hills hundreds of feet in height, which disclose no evidence of vol- 
 canic origin, except to the geologist. 
 
 Third. To the northwest of the lake is a region resembling in many of its 
 characteristics that last described, except that the hills are less numerous though 
 more lofty and extensive plains of but slight elevation occur. There is more 
 limestone and less evidence of volcanism, though nearly all the hills and ridges 
 are built of igneous rocks. Here, also, excellent hydraulic lime is found in 
 abundance. 
 
 Fourth. In the northern part of Chontales, Matagalpa and Segovia is a 
 district of greater general elevation than exists elsewhere in Nicaragua. There 
 is an extensive mountain system, rich in minerals and disclosing no evidence of 
 volcanic action, recent or remote. The rocks studied and classified are similar 
 to those usually found in mineral bearing regions— granite, porphyry, and others 
 of igneous origin ; also extensive stratified masses with numerous faults and 
 displacements. 
 
 Fifth. Stretching from Coseguina, on the south shore of the Bay of Fon- 
 seca, to Ometepe, a mountain rising in Lake Nicaragua — a distance of about 
 160 miles — is found running parallel with the Pacific and generally at a distance 
 of about 20 miles, a chain of isolated volcanic peaks, a few of which have 
 shown signs of activity during the history of Nicaragua. Of these are the 
 
THE NICARAGUA CANAL. 
 
 following: Ometepe, with its twin peak Madera, -forming an island in the lake, 
 is distant some 21 miles from the nearest canal lock. Masaya, 55 miles 
 distant, Momotombo, 80 miles distant, Santa Clara, 20 miles farther on, and, 
 lastly, Coseguina, about 160 miles from the La Flor locks. All the other cones 
 — including Madera in the lake — are entirely extinct, or have been dormant 
 since the Spanish Conquest. The nearest of the Costa Rican volcanoes is not 
 less than 40 miles away from the canal. 
 
 Our knowledge of the earth structure of the region traversed by the canal, 
 although not extensive, is fortunately ample as regards the number, distribution 
 and magnitude of its volcanic peaks, and is sufficient to permit the formation of 
 intelligent conclusions regarding their influence upon the general question of 
 the practicability of this route for the inter-oceanic canal. 
 
 No one will assert or even suggest that a volcanic eruption could have any 
 effect whatever upon this question, unless the lava flows and other ejecta should 
 fall into the canal. As the nearest vent, and this one now dormant, is situated 
 13 1-2 miles from the nearest shore of Lake Nicaragua, and as the lake or canal 
 must be filled with lava before navigation could be impeded, and as there is no 
 other volcano within thirty miles of the canal, the liability of damage to it from 
 volcanic action may be dismissed as too remote for consideration. It is, how- 
 ever, conceded that earthquakes are of more frequent occurrence in districts 
 containing volcanoes than in regions remote from them, and as such movements 
 of the earth sometimes shatter and even overthrow structures built upon it, it 
 becomes necessary, treating earth tremors as concomitant with, if not the result 
 of volcanic action, to consider the volcanic phenomena of Costa Rica and 
 Nicaragua, and as these natural manifestations are far more active in the coun- 
 try first named they have earliest attention. 
 
 The vents nearest to the eastern division of the canal location are found in 
 that portion of the main Cordillera that traverses the country to the eastward of 
 the lake, and is interrupted by the valley of the San Juan River. The nearest 
 of this group is Poas, 40 miles due south of the junction of the San Carlos with 
 the main stream; the next, Irazii, the most forcible and active of all, is 58 miles 
 distant from the same locality. Turialba, 6 miles to the eastward of Irazii is 
 about the same distance away. These three are the principal peaks in the 
 group. The northwestern group, which is separated from the other by the 
 valley of streams flowing to the Atlantic, comprises Orosi, La Vieja, Miravalles 
 and Tenorio. The first named, about 38 miles southeast of Rivas and the La 
 Flor locks, is the most important of the number. La Vieja is 13 miles farther 
 to the southeast, Miravalles 12 miles beyond, and Tenorio 65 miles distant. 
 Although some of these occasionally show signs of commotion none can be con- 
 sidered as active. Orosi, the nearest on this side to the canal, has not given 
 any sign within the memory of the oldest man living in its vicinity, nor does it 
 have any appearance of an eruptive cone. It is not known to have a vent and 
 though it is reported to have been in action, there is no evidence that warrants 
 the assertion. 
 
 The principal centre of volcanic or seismic disturbance of Costa Rica is the 
 eastern group, and at San ]os6 quakes have frequently occured. The city of 
 
THE NICARAGUA CANAL. 2g 
 
 Cartago, at the foot of Irazvl was greatly injured in 1841, and in 1888, during 
 eruptions of Poas and Irazd, the ground in their immediate vicinity was some- 
 what shaken, but it does not appear that their activity has ever occasioned any 
 disturbance outside of their immediate neighborhood, nor produced any other 
 effect than slight tremors as far away as the Nicaraguan border Castillo Viejo, 
 the Spanish fort on the San Juan built as early as 1675, having high parapets 
 and a central tower 60 feet in height, stands entirely intact, without a crack in 
 its walls, and is as solid and substantial as if built yesterday. 
 
 Of the Nicaraguan volcanoes, Ometepe has already been referred to. It 
 shows no sign of action at present, but erupted in 1883. The next is Mombacho, 
 overlooking the City of Granada. It shows lava on its slopes some cen- 
 turies old, but there is no record or tradition of any eruption. This peak, 
 however, seems to be the centre of a region throughout which quakes and 
 tremors are of not infrequent occurrence. In 1890 Granada was quite severely 
 shaken, but without injury to its most substantial buildings, and the ruinous 
 walls of an old church, destroyed by Walker's iilibusters 40 years ago, were not 
 thrown down. At Rivas, which is between Granada and the canal and about 
 38 miles distant from the former, the shock was felt only as a slight tremor. 
 Mombacho is upwards of 40 miles from the canal, and nearly 50 from the locks 
 at La Flor. About two centuries ago there was a volcanic eruption at Masaya, 
 some 17 miles beyond Granada. From accounts preserved we learn the eruption 
 was attended with very little violence, though the mass ejected was large ; it 
 came from an orifice of low elevation which has since given no sign. 
 
 Momotombo at the northern end of Lake Managua, Santa Clara, El 
 Viejo and the rest of the chain beyond, are too remote (100 to 125 miles) to 
 deserve more than a passing notice. The same may be said of Coseguina, on 
 the shore of the Bay of Fonseca, which in 1835 was, it is true, the centre of the 
 most violent outburst ever known in Central America, but this peak is 160 miles 
 from the canal. With the exception of this eruption, seismic disturbances in 
 Nicaragua have been of moderate energy, disturbing but a small area and to a 
 slight degree. Such, concisely stated, are the facts concerning volcanic and 
 seismic action in the country traversed by the Nicaraguan Canal. 
 
 For the most recent and by far the most valuable contribution to our 
 knowledge of the orographic features of the neighborhood of Lake Nicaragua, 
 and especially for an able discussion of the influence of seismic action upon the 
 canal and its masonry constructions, we are indebted to Major C. E. Button, 
 U. S. Army, formerly connected with the Geological Survey of the United 
 States, and who is well known to the scientific world through his published writ- 
 ings on volcanic geology. This officer spent several weeks in Nicaragua in 
 1891, in critical investigation of the volcanic and seismic phenomena. He is the 
 only geologist of note known recently to have visited this interesting region, and 
 the only one who has given special attention to the question of risk to the canal 
 by reason of its proximity to volcanoes. He possesses rare qualifications for 
 this study, and his opinions are therefore entitled to great weight. 
 
 In the preparation of this sketch of the physical aspects of the region, 
 recourse has been had to the paper referred to and also to the published writings 
 
3° THE NICARAGUA CANAL. 
 
 of Other travellers and explorers who have visited the country or described its 
 features. The full text of Major Button's discussion will be found in Appen- 
 dix.* 
 
 As regards incidental phenomena, the manner in which seismic waves are 
 propagated, the varying effects produced upon the earth surface by forces of 
 equal intensity, acting from different depths, the conclusions deducible from 
 surface indications as to the remoteness from the surface of the seat of dis- 
 turbance, and as to the energy of the force itself, the reader is referred to the 
 Major's able paper for a clear and graphic exposition of the most recent sci- 
 entific thought. To summarize his remarks would be but to copy in large 
 measure the text itself. 
 
 Other conclusions, not stated by the Major, seem deducible from the facts, 
 and in strict agreement with his reasoning, namely ; that the general features of 
 seismic disturbances in Central America indicate very shallow centra and propor- 
 tionately limited areas of destructive force ; also that the seat of disturbance in 
 all cases of quakes there observed, seems to have been in close proximity to 
 active craters, or directly beneath them, and that volcanic activity — in some 
 degree — occurred simultaneously with the quakes. 
 
 It would also seem inferable from the observed data that the concentration 
 of energy and manifestation of it within restricted areas, as has always been 
 the case in the portion of Central America in question, are influenced by the 
 proximity of the active vents, through which escapes the force that would 
 otherwise be stored up^to find expression later in shocks of greater violence 
 and throughout wider areas. The permanent integrity of the fortress of Cas- 
 tillo Viejo already cited, and the solidity of all well constructed stone buildings 
 in Rivas, which is near the canal line, and the immunity from injury enjoyed by 
 Managua, Granada and Leon, which are nearer centres of volcanic activity, all 
 point to the soundness of this reasoning. 
 
 Major Button also responds to a suggestion for an expression of his views 
 concerning the effect of earthquakes upon superstructures and substructures of 
 different kinds. The reader is referred to the paper itself for the full discussion. 
 One important paragraph, however, is quoted. 
 
 " Only in the most formidable earthquakes are foundations liable to suffer, 
 except perhaps incidentally, and secondarily from abnormal strains thrown upon 
 them by the rocking of the superstructures." 
 
 The significance of this remark is obvious when the character of the canal 
 constructions is considered, for not only are they all so remote from earthquake 
 centres, as to be entirely beyond the radius in which destructive force has been 
 known to act in the past, but they are of a nature which experience has shown 
 will effectually resist such force, unless of extraordinary power. The locks are 
 all sub-structures sunk deep in the earth and built upon solid foundations with no 
 superstructures to support, the oscillations of which might 'disrupt their founda- 
 tions. The dams and embankments have bases many times as wide as their 
 height, and are incapable of oscillation. 
 
 If the remote contingency of damage to the canal accessories by earthquakes 
 
 *See Appendix No. 9. 
 
THE NICARAGUA CANAL. 31 
 
 be held as forbidding the undertaking, then the same argument should be con- 
 sistently applied to all other industrial works and instrumentalities. The logi- 
 cal application of this reasoning would require that one-fourth of the area of 
 the globe should remain a wilderness. Charleston and Lisbon should not have 
 been rebuilt, and San Francisco should be abandoned. 
 
 The risk of injury to Nicaragua Canal constructions by earthquakes, only 
 exists in the theories of those who are interested in the making of a canal at 
 some other locality, or in the mind of the man who is naturally a pessimist and 
 opposed to all bold undertakings. 
 
CHAPTER III. 
 
 CLIMATE, 
 
 It has already been stated that the climate of Nicaragua is modified by its 
 topography; it may be added that it owes its salubrity, which is notable, to the 
 fact that the country lies entirely within the zone of the trade winds, the south- 
 ern limit of which is approximately lo degrees north. There is a general im- 
 pression that the whole American Isthmus is very unhealthy ; whatever may be 
 the fact as regards some portions of the territory, it is in no respect correct as 
 to Nicaragua. The experience of the different exploring expeditions, and of 
 the surveying and working parties of the Nicaragua Canal Construction Com- 
 pany, show an exceptional condition of good health under unusual conditions 
 of exposure and hardship. 
 
 The seasons are divided into dry and wet, and in the interior and on the 
 western coast are of nearly equal duration, the dry season beginning about the 
 first of November. From November to May it is almost rainless, but there are 
 occasional showers, as during the rainy seasons there are many clear days. 
 
 There is, however, a marked difference between the humidity of the Atlan- 
 tic coast and that of the interior valley and the west coast. On the Atlantic 
 side the wet and dry seasons are not so well defined, but there are four or five 
 months each year during which the rainfall does not generally exceed that usual in 
 the United States in the same months ; but during the rest of the year, the daily 
 average precipitation at San Juan del Norte is nearly 11-2 inches; this occurs 
 generally at night, and the day, until 3 o'clock, is usually pleasant. The total pre- 
 cipitation observed during the past year was 297 inches — distributed, 236 inches 
 during the wet season and 61 inches during the remainder of the year — but this 
 excessive precipitation is only found immediately along the coast. The heavier 
 rainfall on the coast is attributable to the fact that the trade winds, which blow 
 almost continuously, sweeping for hundreds of miles over the Caribbean Sea 
 come to the coast laden with moisture, the surplusage of which is condensed 
 by the cooler air of the higher Atlantic slopes of the Cordillera and precipi- 
 tated. The atmosphere, thus discharged of much of its humidity, has less to 
 distribute over the central valley and the west coast, and the rains there are 
 correspondingly less heavy and less frequent. 
 
 The " trades " blow almost continously up the river valley, and although 
 the temperature rises to 95° at mid-day, it is still comfortable in the shade and 
 the nights are cool and pleasant. This is more marked on the lake, and in the 
 countr>y between the lake and the Pacific. These trade winds, blowing contin- 
 uously, dissipate everywhere all miasma and exhalations, such as have proved so 
 pernicious in that part of the Isthmus, which lies a few degrees farther south 
 within the belt of tropical calms; they also lower the temperature of the whole 
 
w 
 PI 
 
 2 
 
 O 
 
 n 
 
THE NICARAGUA CANAL, 33 
 
 country and give to it an exceptional equability. At Rivas the maximum tem- 
 perature recorded during a term of years was 95° Fahr., the minimum 65", 
 while the greatest variation in any one year was 26.5*' and the least 16.2°. At 
 Granada, as determined by observations recorded at the National Institute in 
 that city, the variations are about 2° less. The temperature records of the 
 Canal Company cover the past year and a portion of the present. At San Juan 
 del Norte from the ist of June to the ist of November, 1890, the maximum was 
 89.5°, the minimum 71°, showing an extreme range during that time of only 18°. 
 In general terms it may be said that the temperature in the shade rarely rises 
 above 90° and rarely falls below 70°; the ordinary variation is thus about 20° 
 only, while the extreme variation does not exceed 26° or 37° during the entire 
 year. 
 
 No better proof of the healthfulness of the country can be asked than the 
 practical experience of the men who have been employed in surveys of the 
 route and on actual work of construction thus far accomplished. The surveys 
 were made through dense forests and jungle, where every foot of advance was 
 gained by the use of the axe or machete, and through swamps and streams 
 where the men were often compelled to do their work up to their waists in 
 water. 
 
 The report of the surveying party of 1885, under Mr. A. G. Menocal, pub- 
 lished by the United States Government, says: "During the four months we 
 remained in the country, of which more than three months were of constant, 
 arduous work, exposure and privation, no officer of the party was ever affected 
 by sickness due to climatic causes ; and as for the natives attached to the party, 
 their only ailments were due to bruises caused by want of protection for their 
 feet or limbs. It may be proper to add that our work was confined to the unin- 
 habited, and what is generally regarded as the most unhealthy portion of the 
 country." 
 
 In December, 1887, the engineering expedition under the charge of Mr. 
 Peary, consisting of some forty-five surveyors, including their assistants, and ac- 
 companied by about one hundred negroes from Jamaica, landed at Greytown and 
 commenced work. Peary says that, excepting the negroes, ' ' only five members 
 of the expedition had ever been in tropical climates before, and the rodmen and 
 chainmen of the party were young men just out of college, who had never done 
 a day's work nor slept on the ground a night in their lives. The rainy 
 season prevailed more than a month beyond the usual period, during which time 
 and for months afterward, all the members of the party, engineers and laborers 
 alike, were equally exposed in their tents and in the forests, working sometimes 
 on land, sometimes in the streams and swamps, to all the vicissitudes of the 
 climate." 
 
 The only precaution observed was that the day's work was preceded by a 
 cup of strong coffee and, when the work was concluded, it was followed by a 
 Taath and change of wet clothing for dry. After the evening meal, the men lay 
 down in their dry clothing and slept, on the ground when on the march, or in 
 their tents or thatched huts, on cots or cane beds when they were in camp, and 
 this mode of life was endured day after day for months by them and by their 
 
34 THE NICARAGUA CANAL. 
 
 successors. Yet, notwithstanding all this exposure, not only were there no- 
 deaths on the expedition, but there was not a single case of serious illness, and. 
 those who, at the expiration of their contract, returned to the United States, 
 came back in better health and weight than when they went away. Of course, 
 the men were well fed and sanitary rules were strictly enforced, but the results 
 proved the natural salubrity of the climate. 
 
 Previous experiences are fully corroborated by recent reports of the sur- 
 geon-in-chief of the Canal Construction Company, Dr. J. Edward Stubbert. 
 His annual report to the President of the company for the year 1890 is printed 
 in full in the Appendix. * 
 
 It will be seen that Dr. Stubbert gives the total number of deaths occur- 
 ring among employees of the company during the fourteen months as 23 ; of 
 these, 5 were due to accident, 6 to disease contracted before entering the ser- 
 vice of the company and only 12 were the result of diseases contracted while ia 
 the employ of the company, or which could in any sense be considered as cli- 
 ihatic. The only deaths among the ofificers, who are mostly from the United 
 States, were accidental. There are very few cities in the temperate zones that 
 can show so good a sanitary record, and none can show better. The death rate- 
 in the chief hospital of the company for the past year was i 38-100 per cent. 
 In the New York Presbyterian Hospital, it was 10 73-100 per cent. ; in the 
 Roosevelt Hospital, New York, it was 9 76-100 per cent., and in the Orange 
 Memorial Hospital it was 7 88-100 per cent. 
 
THE BREAKWATER, SAN JUAN DEL NORTE. 
 
CHAPTER IV. 
 
 THE PROPOSED CANAL. THE ROUTE AND DESCRIPTION OF THE WORK. 
 
 San Juan del Norte, or Greytown, on the Atlantic and Brito on the Pacific 
 :are the termini; the distance from port to port is 169 1-2 miles, of which 26 3-4 
 ■will be excavated channel and 142 2-3 miles in lakes, rivers and basins. The 
 summit is necessarily Lake Nicaragua, no feet above the sea. There will be 
 three locks near either end ; the summit level, maintained as shall be after- 
 wards explained, reaching to within 12 3-4 miles of the Atlantic and extending 
 to within 3 1-2 miles of the Pacific. This summit reach will therefore be 153 1-4 
 miles long. 
 
 For purposes af description, the route has been divided into four divisions, 
 viz. : the Eastern, the San Francisco, the River and Lake and the Western. 
 
 The following is a brief description of the adopted route, illustrated by the 
 map. Here are represented the results of all these painstaking labors, which 
 were accomplished amidst difficulties of the most discouraging nature at times. 
 But the investigation was steadily and uninterruptedly prosecuted with the 
 -single purpose of reaching the truth, the whole truth, and nothing but the truth. 
 
 EASTERN DIVISION. 
 
 From San Juan del Norte Harbor to the San Francisco Basin, 18 y-S miles. 
 
 For 91-4 miles from the inner harbor the line extends southwesterly across 
 the lowlands of the coast to the first lock, which is in the foothills of the eastern 
 divide. This reach will be at the sea-level and will be given a bottom width of 
 120 feet, surface width of 288 feet, and depth of 28 feet. The cross-section of 
 the waterway contains 5,712 square feet, against 3,700 square feet at Suez. 
 This reach becomes practically an extension of the harbor, for its width is suffi- 
 cient to allow a continuous line of the largest ships to be tied up on one side 
 and ample space left for the passage of others. The formation, as shown by 
 ^borings, is entirely alluvial, and will be excavated by machinery throughout. 
 
 Lock No. I 
 
 Will have a lift of 31 feet, and, like all others on the line, is to have a 
 length of 650 feet, width of 80 feet — ample in dimensions to receive two vessels 
 ■of 2,500 tons each — and founded on a very stiff, tenacious red clay. If it be 
 urged that this will be an insecure foundation for so heavy a structure, and 
 unable to withstand the water pressure, the reply is that the great lift-locks of 
 the North Sea Canal, at Amsterdam, Holland, are founded on a soft mud flat, 
 -Stability secured by some 6,000 wooden piles, which, in Nicaragua, will be 
 ^unnecessary. Again, many of the best dry docks throughout the world, some 
 
35 THE NICARAGUA CANAL. 
 
 of them upwards of thirty feet in depth, are founded on piles, driven in soft 
 mud. All the locks will be built of solid concrete masonry and iron. 
 
 Lock No. 2 
 
 Will be I 1-4 miles beyond No. i, and through the intervening space flows 
 the little stream Deseado, which rises in the eastern dividing ridge. A dam in 
 connection with the lower lock will raise the level of the waters some 20 
 feet above the present bottom of the valley, and through the flooded area the 
 canal line passes only partially in excavation to the second lock, lift 30 feet, 
 located in hard ground in a hill spur to the south of the valley just mentioned. 
 This raises the water level to 61 feet. 
 
 The embankments, which permit the formation of the second basin, have 
 a maximum height of 38 feet, an average of about 20 feet, and 2,450 feet long. 
 The only excavation here required consists in the removal of four low hills of 
 clay. Thus, with a small amount of work, i 3-4 miles of navigation is secured 
 in a broad and deep basin, which supplies an ample and convenient passing 
 place for the vessels proceeding in opposite directions. 
 
 Lock No. 3, 
 
 With a lift of 45 feet, is 12 3-4 miles from Greytown and very nearly 2 
 miles from the second lock. The Deseado, here hardly more than a smart brook, 
 is spanned by other embankments of the aggregate length of i 1-3 miles, the 
 average height being 21 feet. By these means an artificial lake upwards of 3 
 miles is created, with a depth varying from 30 to 70 feet, and this without 
 excavations, except in a few spots aggregating one-third ot a mile in all. 
 
 It is proposed to maintain the water in this basin at an elevation of 106 
 feet; in other words, the summit or "lake" level is carried across the divide 
 to Lock No. 3, only 12 3-4 miles from the Atlantic and 3 1-2 miles from the 
 sea level reach, which, it will be remembered, extends inland from the harbor 
 91-4 miles. Provision is made for the discharge of the surplus water. This, 
 in the engineer's plans, consists of weirs (or equivalent sluices), of which 1,400 
 feet running length are proposed. 
 
 As may be seen from the map, immediately above each lock is to be a 
 large basin or reservoir, and their utility is apparent when it is known that the 
 quantity of water required to fill the upper lock is over two and one-third 
 million cubic feet. If this amount of water were taken from the average canal 
 prism, very injurious currents and changes of level might result. Under the 
 conditions that will exist no injurious or objectionable alternations of level or 
 currents can occur. 
 
 THE "eastern divide" CUT. 
 
 About three miles beyond the upper lock, begins the heaviest cutting on the 
 whole line. The piercing of this ridge enables the vessel to pass at one level 
 from the Atlantic coast proper into the valley of the San Juan, that portion of 
 which is intended for use in the transit being inundated, and the whole region 
 for many miles becomes an extension of the interior lake. It is true the canal 
 
THE NICARAGUA CANAL. 37 
 
 could be made along the valley of the San Juan, but this would entail an in- 
 crease in total distance of some twenty miles; there would have to be at least 
 a half dozen locks on this side alone ; and grave difficulties in disposal of the 
 surface drainage would be encountered. After very careful consideration of 
 all the governing conditions, a knowledge of which was arrived at after long 
 study and the most painstaking surveys, it has been decided as by all odds the 
 best plan to penetrate this ridge, and so gain the very valuable advantages of 
 shorter distance, less obstructed and more rapid navigation, ample passing 
 places, exemption from surface drainage difficulties, and ultimately of reduced 
 expense of construction and maintenance. 
 
 This dividing ridge, which must be crossed by the adopted route, a spur of 
 the main Cordillera, is 2.9 miles wide, and its crest, a mere "backbone," is 298 
 feet above the summit level. The average cutting for the distance given is 
 141 feet to the floor of the canal. The material to be removed is fortunately 
 mostly rock, and steep side slopes will therefore be permissible. Of the total 
 excavation required for the whole line 21 per cent, is concentrated at this 
 locality. 
 
 The magnitude of this work grows less striking as we examine it in detail, 
 and in connection with the whole work. Its advantages may be thus stated: 
 
 First. It is located on the direct line from San Juan to Ochoa — the two 
 objectives ; the one, of necessity the Atlantic terminus, and the other, the point 
 where the line must join the main river channel. 
 
 Second. It is the lowest and narrowest point at which this ridge can be 
 crossed and is nearly equi-distant from the objectives. 
 
 Third. The material to be removed is principally solid, homogeneous 
 rock; thus ensuring a minimum of excavation and permanence of slopes. 
 
 Fourth. It will supply the material (rock) that must be had in building the 
 dams at Ochoa and elsewhere along the line — the embankments, the locks, the 
 breakwaters at Greytown, and rubble for pitching the canal banks. The mate- 
 rial for most of these objects must be obtained in this ridge, as there is no 
 other source of supply nearer San Juan or Ochoa. 
 
 Fifth. The locality is one of the healthiest in Nicaragua, the drainage 
 being perfect and pure water abundant. 
 
 Sixth. Close at hand on both sides of the cutting is an inexhaustable 
 water-power that can be utilized with great economy in driving the excavating 
 machinery and lighting the works. These are the principal considerations that 
 led to the resolution to push through this massive barrier. In fact, it is doubt- 
 ful if the adoption of any of the alternatives for its avoidance would have left 
 it possible to secure every desideratum of a transit route capable of fulfilling 
 the rigid requirements that environ the undertaking. 
 
 SAN FRANCISCO DIVISION. 
 
 From the divide to Ochoa, 12 1-2 miles. 
 Near the crest of the dividing ridge rise two little streams, the Deseado and 
 Limpio. The valley of the former a few miles below its source is appropriated 
 by the canal on the east, just as is the valley of the latter on the west. Both 
 
38 THE NICARAGUA CANAL. 
 
 penetrate deeply into the dividing mass, and by utilizing the stream beds, 
 wrought by erosion, we greatly reduce the magnitude of the work of uniting 
 their drainage channels. For three-quarters of a mile, after leaving the end of 
 the ''Divide' excavation, the bed of the Limpio must be deepened to an average 
 of 16 feet, in order to gain the requisite depth for navigation. 
 
 Also rising in the dividing ridge a mile or so to the north, and flowing west, 
 is another brook, the Chanchos; this is joined by the Limpio in a valley of con- 
 siderable width, the combined streams bearing the name of the former, falling 
 into the San Francisco a little farther on. The San Francisco is a tributary of 
 the San Juan, into which it flows 3 1-2 miles to the south. The lower course of 
 this river is through a low and swampy tract of small elevation. Just above the 
 junction of the Chanchos and San Francisco, in the angle between the two val- 
 leys, are some low hills. The canal line descending the Chanchos diverges from 
 the stream and passes north of these hills through a low pass into the valley of 
 the San Francisco proper. This it traverses for some 21-2 miles, crosses 
 another low ridge to the Florida Lagoon, drained by the Danta, the latter being 
 also a San Juan tributary. Traversing another succession of low ridges and 
 valleys for 2 1-2 miles the canal will enter the Machado valley, a few hundred 
 yards above its junction with the San Juan, and here is to be the 
 
 OCHOA DAM.* 
 
 This work, 1,900 feet long and 70 feet maximum height, is to raise the 
 waters of the San Juan 56 feet to the lake level. Until engineers had satisfied 
 themselves by close personal investigation that the level of the lake could be 
 extended to this point and maintained, if necessary, all the way across the San 
 Francisco basin, the Nicaragua Canal problem, and indeed the inter-oceanic 
 transit problem, could not be considered as solved satisfactorily. 
 
 The distance from the divide cut to Ochoais, as before stated, 12 1-2 miles, 
 of which 7 1-2 miles of the line are tangents and the remainder consists of 
 curves having a minimum radius of 4,000 feet. The hills bounding the line on 
 the south do not form an unbroken range. Several gaps exist, and these must 
 be closed by embankments aggregating a length of 3, 440 feet, measured on the 
 floor line, and 12,600 feet on the crest. The maximum height of these works 
 taken at the proposed water level is 60 feet. Besides, 59 other minor embank- 
 ments will be required with an aggregate length on crest line of 16,770 feet, 
 for the surfaces do not always rise to the canal level. 
 
 Of the total length of the San Francisco basin 8 2-3 miles will be in flooded 
 valleys of many times the width required, and from thirty to sixty feet deep. 
 Of the remainder, 2 1-2 miles will be partly, and i 1-4 miles wholly in excava- 
 tion, the material clay. 
 
 Besides the economical advantages of securing such a large stretch of 
 canal for so moderate an expenditure, there are others far more important. A 
 few are specified. 
 
 First. Unless the level be raised, as proposed, the "divide" cut would 
 
 * An alternative location for this dam, which possesses soma advantages, has been found two 
 miles down the river, but it has not yet been decided to adopt it. 
 
THE NICARAGUA CANAL. 39 
 
 be of such proportions as to considerably increase its cost and the Deseado 
 basin would be an impossibility. 
 
 Second. Free navigation through a wide and deep basin is secured instead of 
 impeded navigation through a restricted channel. Ships can proceed at ocean 
 speed, passing each other at will, while in an excavated channel their progress 
 would be slow and confined to rigid conditions. 
 
 Third. The drainage problem is vastly simplified, for it must be remem- 
 bered there is a liability, indeed, almost certainty, of rainfalls of six inches in 
 twenty-four hours. The watershed of San Francisco has an area of about 
 sixty-five square miles, and were the canal wholly in excavation at about the 
 natural level of the San Juan, the exclusion of the surface water, an indis- 
 pensible pre-requisite, would be well nigh impossible. Our designs provide for 
 many square miles of reservoir that will store the floods and equalize discharge, 
 for the outlets are so extensive that no harm to the works can result. The 
 lineal extent of the weirs and sluices is 4,750 feet, and, assuming there is no 
 leakage, the maximum depth of water on the crest of the spillways could not 
 exceed fifteen inches in the highest flood. Guard gates may be placed in the 
 three short sections of the canal along this route, so as to isolate each sub- 
 division of the reservoir, if desired. 
 
 LAKE AND RIVER DIVISION. 
 
 From Ochoa Dam to West Shore of the Lake 121.04 Miles. 
 
 The Ochoa dam is to hold the waters of the river permanently at the 
 "height of 106 feet above the sea. The lake level is to be no feet. The 
 difference, three-quarters of an inch per mile in the 64 miles of river, is 
 taken as the slope necessary to enable a free discharge of the lake and river 
 waters, which have been estimated as reaching 20,000 cubic feet per second. 
 By this dam, slack water navigation all the way to the lake will be secured, 
 and with the exception of 28 miles above Toro Rapids, the navigation channel 
 -will be 1,000 feet wide, and from 28 to 130 feet deep. Rock blasting and 
 dredging above Toro to the lake will be required to an average depth of 4 1-2 
 feet in several localities, in all for 24 miles. When the river channel is deep- 
 ened it will have a bottom width of 125 feet and a top width from 500 to 1,500 
 feet. Besides, at two or three points the river bends will be improved by 
 removal of projecting promontories, so as to decrease abruptness of the curves. 
 The Costa Rican tributary, San Carlos, debouches into the Rio San Juan a few 
 miles above Ochoa. The hills bounding its valley on the east are not contin- 
 uous at the proposed water level, and several embankments of inconsiderable 
 height will be required to retain the waters backed up in the San Juan. 
 This inundated valley will become navigable and of vast benefit to Costa Rica, 
 because it will bring navigable waters twenty miles nearer to her capital. 
 
 Dredging in Lake Nicaragua to an average depth of ten feet in soft mud, 
 bottom width 150 feet, will be necessary for fourteen miles from the shore 
 to secure a navigable channel of thirty feet to deep water. 
 
40 THE NICARAGUA CANAL. 
 
 THE LAKE, 
 
 From the San Juan outlet of the lake to the mouth of the Lajas is 56 1-2 
 miles. For upwards of 42 miles the natural depth varies from 30 to 150 feet. 
 The west coast of the lake is shoal for 1,400 feet, and deepening will be neces- 
 sary here also. It has been estimated as rock, such being the indications. 
 
 The trade winds make considerable swell on the west shore, and jetties 
 will be necessary to insure a safe entrance to the canal. They will be cribbed 
 constructions, filled in with rock. Their lengths will be 1,800 and 2,400 feet 
 respectively. 
 
 The mean level of the lake is about 105 feet above the sea. It will be 
 increased to no feet by the Ochoa dam, and thq dredging and deepening 
 spoken of are predicated on this raising of the level. 
 
 WESTERN DIVISION. 
 
 From Lake to Pacific 17.04 Miles. 
 
 Of this distance 11 1-2 miles will be in excavation and 5 1-2 miles in 
 the Tola basin. The excavated portion joining the lake to the basin is 9 miles 
 long, and the deepest excavation pierces the continental divide by a cut through 
 the ridge, which is here 43 feet above the canal level and 153 feet above the 
 ocean mean tide. For a distance of about 5 miles through the deepest cut- 
 ting, principally rock, a bottom width of canal of 80 feet is proposed. The 
 approach to this section from the lake, i 1-2 miles long, will have a bottom 
 width of 120 feet and top width of 210 feet. 
 
 Beyond the divide to Tola basin the line follows the Rio Grande, having a 
 bottom width of 80 and a top width of 184 feet. The basin is 5 1-2 milea 
 long, and no work whatever is required in it for 4 1-2 miles. 
 
 THE TOLA BASIN. 
 
 The dam at La Flor is to be 1,800 feet long and 70 feet high, and inundates 
 4,000 acres of grazing and wooded land in the valleys of the Grande and Tola. 
 
 The average width of the sailing line in the basin will be a mile and the 
 depth of water from 30 to 70 feet. 
 
 Locks 4, J and 6. 
 
 Locks 4 and 5, close together near La Flor, have lifts of 42 1-2 feet each. 
 No. 6 will have a variable lift from 21 to 29 feet, according to the tide. It is 
 11-2 miles below La Flor, and the canal prism intervening has bottom width of 
 80 and top of 184 feet. Locks 4 and 5 are founded upon rock, and No. 6 
 upon indurated clay. From the lower lock to Brito, i 1-4 miles, the canal will 
 be at the level of the sea, and as its bottom width is 120 and top 288 feet, this 
 section becomes practically an extension inland of the Brito port. 
 
 The lake level, or summit reach, is prolonged to Lock No. 4, beyond the 
 Tola basin, and this broad sheet of water thus becomes practically an acces- 
 sory port; as its western entrance is but 3 1-2 miles from the Pacific. 
 
THE NICARAGUA CANAL. 
 
 41 
 
 The dam, which maintains the basin, is the most massive of any required on the 
 line of the canal, although its height and mass are much less than that given 
 many earthen embankments located in different parts of the world, some of 
 Tvhich have been fulfilling their purposes for centuries. 
 
 As the discharging capacity of the lock sluices will be some 4,500 cubic 
 feet per second, it is thought there need never be a flow over the weir, even in 
 periods of flood, considering that the flood waters from the Grande and Tola can 
 have free escape to Lake Nicaragua, by way of the canal itself, but as a pre- 
 cautionary measure there will be a guard gate in the divide cut so that the 
 ■waters of the lake may be excluded. 
 
 HARBOR OF GREYTOWN. 
 
 Some thirty years ago this was a good and capacious port. An area of 
 about 500 acres, having 20 feet of water and upwards, was nearly enclosed on 
 the sea face by a sand spit joining the main shore to the eastward; between 
 the western extremity of this spit, or "hook," and the main land still farther 
 west and north, was the harbor entrance, and although narrow, it was easily 
 traversed by vessels of 25 feet draft. Due to well-known causes which need 
 not now be described, this entrance was blocked up, and the old harbor became 
 an inclosed lagoon. 
 
 The plans for the restoration of this port are based on long continued 
 ■observation and investigation, and on experience gained elsewhere ; they par- 
 ticularly take cognizance of the fact that the northwesterly movement of the 
 ocean sands (brought to the coast from the Costa Rican mountains by the 
 lower San Juan and its tributaries) under the influence of the prevailing winds 
 «xtended the sands pit entirely across the entrance and sealed the port. 
 
 It is intended to oppose to the further movements of the sand drift a solid 
 jetty or breakwater, about 3,000 feet long, projecting seawards at right angles 
 to the shore line, to the 6-fathom curve, then to dredge under the lee of this 
 jetty a new entrance. The shifting sands, arrested by this structure, will accumu- 
 late in the angle formed by it and the coast. As the triangular space becomes 
 filled, the water may shoal towards the sea end of the jetty, and this will neces- 
 sitate its extension until the new shore line is at right angles to the prevailing 
 wind, which it will be remembered is the northeast "trades." Eighteen hun- 
 dred feet of the jetty, constituting its shore end, is to be built of creosoted 
 timber, filled in with rock or concrete and fascines, the stone to be brought from 
 the divide cut and laid or deposited at random. 
 
 The entrance channel is to be 30 feet deep and 500 feet wide at that depth. 
 The inner basin or harbor proper, the depth of which is to be increased to 30 
 feet, is to have an area of upwards of 200 acres, which, with the enlarged 
 section of the port reach of canal, gives a total harbor area of about 350 acres, 
 -exclusive of the remainder of the inner bay, where, throughout a considerable 
 area, there is now a depth of from 10 to 20 feet. 
 
 The first 1,000 feet of this protection jetty has been already built, and the 
 Tesult has proved a complete demonstration of the accuracy of the theory on 
 
42 THE NICARAGUA CANAL. 
 
 which the design was based, for, where a few months ago there was a dry beach, 
 is now a channel of depth sufficient to admit vessels drawing 12 to 15 feet of 
 water. 
 
 BRITO HARBOR. 
 
 This is of necessity the western terminus, and although not now a harbor 
 in any proper sense of the word, or even a roadstead, yet the practicability of 
 constructing a harbor at this point has never been questioned, the only differ- 
 ence of opinion being as to details. 
 
 The Rio Grande discharges at this locality, and its lower course for 6, 000 
 feet back from the beach is through a low valley, which it is believed once 
 formed a large bay or harbor. A high rocky promontory connecting with the 
 interior ridge juts out into the ocean just north of the river mouth. It is pro- 
 posed to build from this rocky point a breakwater 900 feet long, its extremity 
 to be in seven fathoms of water; also to build another jetty, normal to th& 
 beach, 830 feet long, the extremity of the latter to be nearly opposite and 
 some 800 feet distant from the sea end of the former. A considerable area of 
 deep water will thus be enclosed ; but the principal portion of the harbor wilL 
 be formed by excavation in alluvium, thus securing a deep, broad basin, pene- 
 trating 3,000 feet from the present shore line and 3,900 feet from the entrance. 
 As an extension of the harbor, the canal itself is to be excavated with an en- 
 larged prism to the first lock, which, as previously stated, is 3,000 feet farther 
 inland. An area of nearly 100 acres will thus be inclosed, and with the en- 
 larged canal will make upwards of 100 acres. Should this space be found 
 insufficient, it may be increased to any extent desired by excavating in the ad- 
 joining lowlands, which are now submerged at high tide. Besides, it must not 
 be forgotten that the Tola basin is but 3 1-2 miles away, and affords a perfect 
 harbor for a hundred of the largest ships. 
 
 CAPACITY OF THE CANAL. 
 
 The experience gained at Suez has been profited by. There the bottom, 
 width is 72 feet, and it has been found that 6,000,000 tons per annum cannot 
 be passed without serious delays to navigation. A widening of the prism at 
 various places has bee"n in progress for some time, but throughout the 100 miles 
 included in this transit, there is but one basin en route of sufficient depth and 
 width to permit vessels to pass, and this is but 10 or 11 miles long. At one 
 other point there is a lake in communication with the canal into which vessels 
 may diverge and anchor. It has been noticed that the longest single reach 
 of the Nicaragua Canal in excavation is less than 10 miles in extent, and the 
 passing places are frequent and ample. Throughout, there are but 70 miles 
 where any work at all is needed to secure a sufficient width and depth, and 
 there are nearly 100 miles of free navigation that will not need a stroke of 
 work. 
 
 But notwithstanding these favoring conditions it was felt to be necessary 
 to provide at once for a waterway of the most ample capacity. Of the 26 3-4. 
 
THE NICARAGUA CANAL. 43 
 
 miles of excavated channel, but 13 1-4 miles have as small a bottom width as 
 80 feet, which is 8 feet greater than at Suez. The remainder has a bottom 
 width of from 120 to 150 feet, and the top width varies from 80 feet (confined 
 to the two "divides") to 288 feet. If it be thought necessary, these two rock 
 cuts may be increased in width to 100 feet, at an increased cost of the whole 
 work of some 6 per cent. 
 
 The locks will be the longest hitherto built ; in fact there is but one in ex- 
 istence comparable — that at St. Mary's Falls, connecting Lakes Superior and 
 Huron. This is 515 feet long and 80 feet wide, and when the chamber is 
 in communication with the upper reach the water is 39 feet deep. It is filled in 
 in II minutes and emptied in 8 minutes. In 1889 4,684 vessels, carrying 
 7,516,000 tons of freight were passed, and last year upwards of 9,000,000 tons. 
 But this lock is of insufficient capacity to meet the requirements, and now the 
 government is engaged in building a new one 800 feet long and 100 feet wide, 
 with a depth of 21 feet on mitre sills. However, at St. Mary's the governing 
 conditions are not the same as will be at Nicaragua. There the vessels 
 average small, one steamer frequently towing two or more large barges, 
 and great area is therefore required. The vessels which will frequent the inter- 
 oceanic transit will be larger, and the need of locking more than one at a time 
 will be of less frequent occurrence. It has, therefore, been decided that a 
 -650-foot lock, 80 feet wide, will be sufficient for all present and all except re- 
 mote future needs. When this condition arises, it will be necessary to build 
 a second series of locks, provision for which will be made at the outset. 
 
 For a single lockage 45 minutes are allowed, and assuming that only one 
 vessel will enter at a time, 32 can pass in 24 hours, or 11,680 in a year. If 
 these vessels have the same size as those frequenting the Suez Canal, their 
 aggregate would be the enormous figure of 20,440,000 tons. Of course this 
 would involve continuous navigation, night and day. 
 
 With respect to timo required for passing vessels from ocean to ocean, 
 the governing conditions of depth, width and directness of the route in its 
 several parts must be regarded. At Suez, although the regulations of the 
 company prohibit a speed of more than 51-2 miles per hour, yet some 
 of our own naval vessels have exceeded a speed of six knots, say seven 
 statute miles; the "Tennessee," for example, in 1875, drawing 23 3-10 
 feet. In the Bitter Lakes, where there is free navigation for some 10 miles, 
 the regulations allow steamers to proceed at the usual speed, as they will ir. 
 the Nicaragua lakes and basins. The Suez Canal is now lighted by electricity 
 throughout, and the passage is effected from ocean to ocean in less than 
 twenty-four hours. 
 
 The Chief Engineer has estimated for a speed of 5 miles per hour in 
 the reaches of the canal where the sectional area of the prism is upwards of 
 3,600 square feet, and for a speed of 2 1-2 miles in the deep rock cuts, where 
 the top and bottom widths are but 80 feet. He assumes a speed of 7 
 miles in the basins, of 8 miles in the River San Juan, of 10 miles in Lake 
 Nicaragua, and 45 minutes for passing each lock. We then have the 
 following: 
 
H. 
 
 M. 
 
 • 3 
 
 04 
 
 • 3 
 
 38 
 
 • 3 
 
 OS 
 
 . 8 
 
 04 
 
 • S 
 
 39 
 
 • 4 
 
 30 
 
 44 THE NICARAGUA CANAL. 
 
 ESTIMATED TIME OF TRANSIT. 
 
 7.841 miles narrow canal at 2 1-2 miles per hour 
 18.189 miles broad canal, at 5 miles per hour . 
 21.619 miles basins at 7 miles per hour, 
 64.540 miles San Juan River, at 8 miles per hour 
 56.500 miles Lake Nicaragua, at 10 miles per hour 
 Lockages, 6, at 45 minutes each 
 
 169.448 miles, total time of transit . . . Hours 28 00 
 The average time of transit at Suez — 100 miles — is 24 hours. 
 
 WATER SUPPLY. 
 
 The outflow of the lake has been gauged by several engineers, and the least 
 reported, when the river was at its lowest stage, is 11, 390 cubic feet per second. 
 The flood discharge has been estimated by several engineers at 18,000 cubic 
 feet per second. The mean flow is, therefore, taken at 14,724 feet, or 1,272,- 
 530,600 cubic feet per day. 
 
 The water required for one lockage on each' side is about four and a half 
 million cubic feet, and for 32 lockages 144,000,000 cubic feet. The supply is, 
 therefore, about nine times greater than needed for a transit of 20,000,000 tons. 
 
 It is expected, and indeed hoped, there will be for some years considerable 
 leakage through the rock-filled dams, so affording time for the thorough con- 
 solidation of the embankments, and this will relieve the discharge at the over- 
 flows and sluices. 
 
 One word in regard to these dams, because some have expressed grave 
 ■doubts as to their stability and practicability. If no such works had ever been 
 executed the justice of the criticism might be admitted. The fact is, that the 
 dams and embankments proposed, although colossal (more in respect of num- 
 ber and quantity of material required for their construction than as regards the 
 dimensions of the largest), have had many parallels in the history of engineer- 
 ing, and have been surpassed by many. Leaving out of consideration the 
 great masonry dams, there is here given a few examples of dams built of earth. 
 Montaubry dam in France, built to secure slack water navigation for a canal, 
 is 54 feet high. 
 
 The water supply of Dublin is derived from a reservoir impounded by a dam 
 66 feet high. 
 
 The reservoir dam of the Bolton Water Works, in England, is 120 feet 
 high. 
 
 The Oued Muerad dam in Algeria, is 95 feet high. 
 
 The embankment of the Ashti reservoir is 58 feet high, and 12,750 feet 
 long. 
 
 The Karak-Vasla dam is over 70 feet high. 
 
 The Tansa dam, Bombay, is 118 feet high and 8,500 feet long. 
 
 The Cummun dam, in India, built a thousand years ago, is 102 feet high. 
 
 This is a sufficient answer to the incredulous. 
 
THE NICARAGUA CANAL. 45 
 
 THE ESTIMATED COST. 
 
 This estimate of cost is the result of very careful computations of all the 
 ■works and accessories incidental to completion, and is based upon the most 
 recent and accurate data. Thousands of borings have been made at points 
 where work is required, for example, at all the deep cuttings, embankment 
 sites, and lock sites, and where the material is rock, the cores brought up by 
 the diamond drills have been preserved for inspection. Whenever there is a 
 doubt as to the character of the material to be removed, the worst is estimated 
 for. Of the 26 7-8 miles of canal in excavation, more than 12 miles will be 
 done by improved dredging machines, the material to be deposited directly by 
 the dredges on both sides of the cutting. 
 
 There are some 10,000,000 yards of excavation in the great divide cut, of 
 which 7,000,000 are rock. The dumping ground for the earth is close at hand, 
 and a large portion of the rock will be required in the San Juan breakwater, 
 and in the numerous locks, dams and embankments. On the western division 
 there will require removal some 12,000,000 yards, nearly one-half rock, but 
 this comes from comparatively shallow cuts, and a large quantity will be needed 
 in harbor, lock and embankment work. There will be nearly 10,000,000 yards 
 of dredging at San Juan, and 5,500,000 at Brito. These are some of the prin- 
 cipal items of works. The following is a general summary of quantities and 
 estimated cost of units: 
 
 EXCAVATING, ETC. 
 
 34,654,737 yards dredging at 20 cents. 
 
 5,390,605 yards dredging at 30 cents. 
 
 15,596,081 yards earth excavation at 40 cents. 
 
 214,785 yards earth excavation at 50 cents. 
 
 6,587,185 yards rock excavation at $1.25. 
 
 7,030,539 yards rock excavation at $1.50. 
 
 575,445 yards sub-aqueous rock excavation at $5. 
 
 70,049,377 cubic yards total excavation. 
 
 EMBANKMENTS. 
 
 I 748,000 yards earth from cuts at 20 cents. 
 
 629,090 yards earth from cuts at 25 cents. 
 
 4,076,034 yards earth from cuts at 30 cents. 
 
 1,786,084 yards rock from cuts at 40 cents. 
 
 ' 996,936 yards rock from cuts at 50 cents. 
 
 293,240 yards earth from cuts at 70 cents. 
 
 383,899 yards rock from cuts at $1.50. 
 
 0,913,283 yards total embankments. 
 
46 
 
 THE NICARAGUA CANAL. 
 MASONRY. 
 
 614,101 yards concrete at $6. 
 1,550 yards concrete at $10. 
 19,080 yards stone at f 10. 
 
 634,731 yards total masonry. 
 
 STONE PITCHING. 
 
 262,641 yards protecting banks at $2. 
 
 CLEARING LAND. 
 
 3,427 acres at $100. 
 
 Other important items of expense provided for are electric lighting the 
 whole route at half-mile intervals from end to end and 30 arc lights for each 
 lock. 
 
 Railroad for construction purposes, 45 miles mainline, at $60,000 per mile. 
 Electric telegraph lines are included, 80 miles. 
 
 For machinery, buildings at the locks, including gates, fenders, wales, etc., 
 nearly $2,000,000 are allowed; this for lock equipment alone. 
 
 The following is a recapitulation of Mr. Menocal's estimates, corrected to 
 January 31, 1890: 
 
 RECAPITULATION, EASTERN DIVISION. 
 
 Section i, from Greytown to the Divide 
 
 Section 2, the Divide 
 
 Railroad and Telegraphs 
 
 Lock No. 1 . . . 
 
 Lock No. 2 ... 
 
 Lock No. 3 ... 
 
 Harbor of Greytown . 
 
 Auxiliary Works 
 
 $3,950,523 40 
 
 11,786,106 60 
 
 731,000 00 
 
 1,271,059 10 
 1,111,501 10 
 1,631,671 20 
 
 2,649,575 00 
 554,611 90 
 
 $23,686,048 30 
 
 RECAPITULATION, SAN FRANCISCO DIVISION. 
 
 Excavation, lighting, clearing, etc .... . 
 
 Railroad and telegraphs ...... 
 
 Embanknients and weirs in valley of the San Francisco 
 
 $1,562,241 50 
 
 920,000 00 
 
 2,681,076 60 
 
 $5,163,318 10 
 
 RECAPITULATION, LAKE AND RIVER DIVISION. 
 
 Section 1, River San Juan 
 Section 2, Lake Nicaragua 
 Embankments in San Carlos Ridge Line 
 Dam across Rio San Juan at Ochoa 
 
 $2,888,701 00 
 
 1,857,825 20 
 
 219,893 00 
 
 726,137 50 
 
 $5,692,556 70 
 
THE NICARAGUA CANAL. 
 
 47 
 
 RECAPITULATION, WESTERN 
 
 Section i, canal 
 
 Diversion of the Rio Lajas into the lake 
 Railroads and telegraphs .... 
 La Flor dam .... 
 
 Locks Nos. 4 and 5 . . . . . 
 
 Tidal Lock No. 6 
 
 Other auxiliary works .... 
 
 Harbor of Brito ..... 
 
 Right of way indemnity .... 
 
 Tipitapa Canal ..... 
 
 GRAND RECAPITULATION. 
 
 Eastern Division 
 San Francisco Division 
 Lake and River Division 
 Western Division 
 
 $52,067,340 55 
 
 Surveys, hospitals, shops, management and contingencies, 25 
 
 percent 13,016,835 45 
 
 DIVISION. 
 
 
 . 
 
 . $9,753,849 35 
 
 . 
 
 30S>785 70 
 
 • 
 
 459,000 00 
 
 • • . 
 
 577,520 00 
 
 . 
 
 1,946,720 40 
 
 a . . 
 
 1,248,395 90 
 
 ' 
 
 1,139,018 00 
 
 • 
 
 1,720,128 10 
 
 . 
 
 100,000 00 
 
 • 
 
 275,000 oo- 
 
 DN. 
 
 $17,525,417 45 
 
 
 $23,686,048 30 
 
 . 
 
 5,163,318 10 
 
 . 
 
 5,692,556 7°- 
 
 • 
 
 17,525,417 45 
 
 Grand total 
 
 $65,084,176 00 
 
 Early in the year 1889 the engineering estimates, plans and all official data 
 that had been previously collected, and that had a bearing upon the technical 
 question, were submitted to a board of distinguished civil engineers for their 
 revision and opinion. 
 
 The gentlemen referred to were : 
 
 Mr. John Bogart, State Engineer, State of N. Y. 
 
 Mr. E. T. D. Myers, railroad engineer, Richmond, Va. 
 
 Mr. A. M. Wellington, editor Engineering News, of New York. 
 
 Mr. H. A. Hitchcock, Prof. Engineering, Darthmouth College. 
 
 Mr. Charles T. Harvey, former Chief Engineer, St. Mary's Falls Locks. 
 
 All are well-known and distinguished in their profession. The report of 
 these gentlemen is an exhaustive document, going at length into all the details. 
 The full text will be found in the Appendix.* They give their reasons in full 
 for increasing some of the estimates submitted and make a much larger con- 
 tingent allowance than did Mr. Menocal. They estimate the total cost of 
 the work at $87,799,570, and conclude their able report with the following 
 paragraph: "In conclusion, we think it proper to express our opinion that the 
 explorations and study of the region have been sufficient to warrant the con- 
 clusion that, unless hindered by obstacles or sinister influences such as would, if 
 permitted to weigh, forbid the success of all ventures, this enterprise is full 
 of promise. " 
 
 It should be noted that the data upon which this board of consulting en- 
 gineers made their computation and review was less complete in details than 
 that used by Mr. Menocal one year later in his final estimates. 
 
 *See Appendix No. 8. 
 
CHAPTER V. 
 
 THE WORK ACCOMPLISHED. 
 
 The historical sketch given in Chapter I. of this pamphlet, contains a very 
 brief account of the initiatory steps taken for completing the knowledge of 
 topographical details along the line of the proposed canal, and for commencing 
 the work itself. 
 
 It will not be here attempted to state the details of the preparatory opera- 
 tions and execution, but rather to summarize the means employed and results 
 accomplished to November ist, 1891. 
 
 It will be remembered that the contract entered into by the Nicaragua 
 Canal Association and the Government of Nicaragua, which provides for the 
 opening of this route to inter-oceanic transit, was duly ratified by the Congress 
 of the Republic on the 24th of April, 1887, so becoming a law of the land; and 
 on the 30th of November of the same year the first engineering expedition was 
 dispatched from New York. This expedition was entrusted with the duty of 
 making the final surveys and location for construction. The work was fairly 
 under way by the beginning of the year 1888, and had been substantially 
 completed by the close of the same year, permitting the preparation of plans for 
 construction, and the detailed estimates of quantities and cost. 
 
 Although some months elapsed after the completion of this important pre- 
 liminary,before the voluminous plans and detailed drawings were approved by 
 the Nicaraguan government and the work of construction permitted to begin, 
 yet a corps of engineers was kept constantly employed, and when construction 
 work was initiated, this force only needed to be properly augmented. The first 
 reinforcement was sent out in May, 1889, and others followed from time to 
 time as necessities required, so that by the close of the year 1890 a force of 
 nearly 2,000 officers, foremen and laborers was actively employed. 
 
 Upon the open, unprotected sea beach in front of the Greytown lagoon — 
 which was the former capacious harbor of San Juan del Norte — all supplies 
 had to be landed, and this, in itself, was a very serious and expensive operation, 
 for the vessels had to lie at anchor in the open roadstead two miles from land, 
 where they were almost constantly exposed to the northeast "trades." These 
 winds here usually have a velocity of 20 miles an hour, and of course produce 
 a violent surf, which had to be passed through in each trip between ship and 
 shore. So difficult and tedious was the landing of cargoes there during the earl- 
 ier operations before the opening of the harbor, that it was no»uncommon occur- 
 rence for vessels laden with only ordinary packages of goods to depart without 
 discharging their freights. 
 
 At first it was attempted to house the engineering force and workmen under 
 canvas ; but experience soon showed that this material was neither an economi- 
 cal nor suitable shelter. During all the surveying and other preliminary work 
 
H 
 
 a 
 w 
 
 d 
 
 ■pi 
 w 
 
 U 
 
 o 
 
 •2. 
 
THE NICARAGUA CANAL. 
 
 49 
 
 inland, and even up to the present time, the workmen of all classes have lived 
 in temporary shelters thatched with palm leaves, and many thousands of dollars 
 have been expended for labor (there was no other outlay) on such structures. 
 
 The surveys were necessarily slow and expensive, for they were prosecuted 
 in a tropical forest, where nothing could be seen at a distance of 50 feet, and 
 where every step had to be preceded by the blow of a machete to clear away 
 the tangled mass of vines and other vegetation that everywhere obstructed 
 progress. The country along the line from San Juan to Ochoa was entirely 
 -without highways or other means of communication, except in a few locali- 
 ties, where navigation of the small streams was possible by canoes after clear- 
 ing the water courses from logs, stumps and other obstructions. From the 
 small coast settlement of San Juan, where all supplies were landed and stored, 
 all the way to Ochoa, a distance of 30 miles, the method of transport of pro- 
 visions and all other supplies, except in the restricted localities where canoes could 
 "be used, was similar to that employed by explorers in the heart of Equatorial 
 Africa, viz. : packs of suitable weight borne on the shoulders of men , up 
 and down hills so steep that support in climbing must be had from the 
 brushwood or trees, much of the time with the rain pouring in torrents, 
 through marshes and swamps, where for long stretches the men had to flounder 
 along in water and mud waist deep , and this through a wilderness as wild and 
 trackless as that about the headwaters of the Congo. No description can give 
 an accurate idea of the tediousness, difficulty and weariness of this task. 
 
 The government and other surveys by Childs and Menocal previous to 1886, 
 had sufficed to demonstrate the feasibility of the general line of the San Juan 
 River and Lake Nicaragua from Greytown to Brito for the Inter-oceanic Ship 
 ■Canal route, but the present company, appreciating the importance of ameliorat- 
 ing, if possible, the difficulties to be encountered, could not properly omit the most 
 careful investigations of very extended adjacent areas, in the hope of revealing 
 an improved location in whole or in part. While the government survey of 1872 
 served to demonstrate the entire practicability of the Nicaragua route, it will 
 be interesting to know that of the line as now located between the Atlantic and 
 the San Juan River at San Carlos mouth, and also between the Pacific and Lake 
 Nicaragua, a total distance of some 49 miles, but about 8 1-2 miles in extent of 
 present location, coincides with the government route of 1872. 
 
 The government survey of 1885 proved the superior advantage of a line 
 diverging from the San Juan River near the mouth of the San Carlos, over the 
 earlier location of 1872 in the San Juan Valley, but the execution of the work 
 on this route, remote from the river, involved the piercing of a ridge or spur of 
 hills at a point which was some 500 feet high, unless a lower and practicable 
 pass could be found, but the dense forest prevented an easy determination of 
 this point. The passage across this ridge was but three or four miles long, yet, 
 in order to eliminate all doubt, and make certain that no improvement was pos- 
 sible, it was necessary to examine the whole watershed and the approaches 
 thereto for many miles on either flank, to meander every neighboring creek and 
 rivulet, to their origin on the divide, in fact, to examine about every square 
 rod of this highland, so as to permit the accurate plotting of all the information 
 
JO THE NICARAGUA CANAL. 
 
 and the correct representation of all the topographical details on charts that 
 could be studied at leisure. 
 
 Therefore it is that the examinations have covered not only the one line 
 first selected, but any and all routes that presented any indications of practica- 
 bility. So, too, has it been necessary to explore every range of neighboring 
 hills, and every small stream, in order to determine the limits and area of basins 
 drained by streams flowing to or across the canal line. The Costa Rican bank 
 of the San Juan River was critically examined from Rio San Carlos to the Colo- 
 rado bifurcation, in the hope — which finally proved delusive — of finding a prac- 
 ticable site for erection of a dam 20 miles below Ochoa, that would permit the 
 avoidance altogether of the ridge before mentioned, and the location of the line 
 from the supposititious site of the dam at point Sarapiqui through the San 
 Juanillo; valley to the port at San Juan del Norte; but the whole country on the 
 Costa Rica bank of the river back for several miles was found low and flat, 
 intersected with creeks and lagoons, forbidding the further consideration of the 
 alluring suggestion of inundating the lower San Juan, and so saving many mil- 
 lions of expense in heavy rock cuttings ; but it cost much time and money to 
 ascertain that this idea, which had been urged by some intelligent men, was 
 impracticable. 
 
 So soon as the first corps of engineers was landed, the surveying parties 
 were organized and at once pushed out. Traversing the low lands for a few 
 miles back of Port San Juan, were some sluggish streams whose courses favored 
 the idea of utilization for water-borne carriage of supplies. A steam snag boat 
 was immediately set at work removing the obstructions, and barriers too heavy 
 and massive for displacement otherwise were broken up with dynamite. The 
 San Juanillo and Deseado were thus cleared and utilized for a distance of 
 upwards of thirty miles of their course, but the streams were so crooked that 
 the actual land mileage accomplished was only about one-third the distance by 
 water. Then trails for the packers were cut out, foot bridges built across impe- 
 ding streams and ravines, so that supplies could be transported with certainty 
 though slowly to and beyond the eastern divide. 
 
 The San Juan River has long been used by a steamboat transportation 
 company, and a large part of the produce of Nicaragua has for forty years 
 been moved from the interior by this route. Steam transport, via the river 
 was, of course, availed of by the engineers when it served their needs but 
 much of the surveying work was remote from the river, and hence its unavaila- 
 bility, except in the region beyond "the divide" towards Ochoa, where the 
 canal and river were in closer proximity. As will be seen by reference to the 
 map, the canal line, beyond the dividing ridge, intersected the valleys of th'e 
 San Francisco, Chanchos and Danta. The channels of these streams were also 
 cleared and made available for canoe traffic from the San Juan River. 
 
 Numerous camps and depots of supplies were constructed and stocked 
 wherever necessary, and fleets of light steel canoes were employed as means of 
 communication and supply. 
 
 The idea was early entertained of utilizing the channel of the San Juan River 
 for slack water canal navigation, and thus making it serve as a portion of the In- 
 
THE NICARAGUA CANAL. 5 1 
 
 ter-oceanic ship transit route. The Childs survey of 185 1 demonstrated its suit- 
 ability for such use and the Government survey of 1872 confirmed Childs' obser- 
 vations and deductions, but in both these projects it was proposed to construct 
 at each of the principal rapids, dams and locks of low lifts, and thus to convert 
 the stream into a series of pools or reaches. The general level of the canal at 
 any point would, therefore, conform closely to the natural level of the river. 
 Such a treatment of the problem would have precluded the shortening of the 
 line and reduction of the expense gained by the adoption of the nearly direct 
 " overland route" from this point to the sea. 
 
 The excavation involved in passing from Rio San Carlos, at the point of 
 divergence, through the eastern divide at the natural level of the waters in the 
 river, would have demanded double the work and expense that should suffice if 
 the "lake level " were extended to Rio San Carlos, and then maintained all the 
 ■way through the eastern dividing ridge as is now proposed. 
 
 The confident belief was early expressed by the Chief Engineer that a 
 series of low dams in the upper San Juan was not the best treatment, for he be- 
 lieved the " lake level " could be maintained to or below the junction of the 
 San Carlos, and so the rapids in the river could be all submerged, but he realized 
 that this treatment would demand, as a sine-qua-non, the erection and main- 
 tenance of a massive dam — across the main stream near the point where the 
 canal diverged — high enough to raise the water level at its site to the same 
 level as that proposed for the lake itself; in other words the dam had to be 
 high and strong enough to hold back the flow of this powerful river when its 
 level should be raised 56 feet. It was soon ascertained that the natural con- 
 ditions, at a place named Ochoa were favorable, as to the width of stream, 
 character of bottom and solidity of abutments, for the erection of such a dam, 
 but a further examination of the Costa Rican territory became necessary 
 to make sure that the waters when so raised would not escape through the hills 
 and lowlands bordering the river on this bank. Surveyors spent many weeks in 
 this investigation, and secured exact information that fortunately proved the 
 feasibility of the plan of embaying the waters of the river, and converting its 
 valley into an extension of the lake, upwards of 60 miles in length. 
 
 The information collected by former expeditions in regard to the topogra- 
 phy west of the lake was so complete that to elucidate the problem of quantity 
 and cost, less new surveying work was there required than along the eastern 
 portion of the route. Nevertheless, the whole line was re-surveyed, and the 
 additional information thus secured enabled the engineer to introduce important 
 changes and improvements in location and plans of construction, that could 
 not be embraced in the earlier designs. 
 
 But the work of the surveyor was not ended with the completion of these 
 studies of the ground for final location. It was impossible to classify the mate- 
 rial to be removed and assign a cost per unit, until exact knowledge was had of 
 the nature of the concealed strata in all localities where excavations would be 
 required. So the surveyors for "final location and construction" had to be 
 ■equipped, not only for obtaining an accurate knowledge of the surface of the 
 earth, but as well of the strata beneath the surface. For this purpose a boring 
 
52 THE NICARAGUA CANAL. 
 
 and drilling equipment was provided, with which, at the site of all important 
 works, such as dams, embankments and locks, as well as at the points where: 
 heavy cuttings will be required, subterranean examinations have been made in 
 great numbers. Earth augers were used where there was no rock, and when 
 this was encountered the annular diamond drill was used, and cores of the 
 rock itself brought up and preserved for future reference and examination by en- 
 gineers and contractors proposing to submit tenders for work. Owing to the 
 transportation difficulties, steam drills were impracticable and the work was ac» 
 complished with hand power. 
 
 Although a corps of engineers, mechanics and laborers for commencing 
 the construction was sent out in the summer of 1889, the work itself was not 
 formally inaugurated until the 8th of October of this year, but much valuable, 
 preparatory work was done meanwhile, such as the commencement of the erec- 
 tion of permanent quarters, wharves, store-houses, clearing the ground and. 
 accumulating supplies, tools, etc. 
 
 The necessity of securing a safe entrance to the old harbor (which, until 
 i860, was easily accessible to vessels of upwards of 20 feet draft), was realized 
 as indispensible to economical and rapid progress, and the first work begun of 
 actual construction was in execution of the engineers' plans for restoring th& 
 harbor. One of the means to this end was the erection of a breakwater for pro- 
 tection of the entrance, of which a description will be found in another chapter. 
 This massive work which will ultimately absorb many hundred thousand cubic 
 yards of the rock excavated from the " divide cut " has been pushed out about 
 1,000 feet, and is continually being filled in with mattrasses, rock and hydraulic- 
 cement concrete. Quarters for accommodation of the workmen and storage for 
 supplies were erected near this work. A railroad track was laid upon the break- 
 water as it advanced, and was extended landward to a point whence was brought 
 the building material and other supplies. In this breakwater, creosoted piling- 
 only is used in the frame work, as the marine worm {teredo navalis) would, 
 soon destroy unprotected wood. 
 
 The bar in front of the old San Juan harbor, which, in i860, was closed by 
 a sand spit formed, across its entrance, has since been known as one of the most 
 dangerous on the coast. From the beach to and across this bar the breakwater 
 had to be constructed and, therefore, it encountered the full force of the waves, 
 but it has been carried forward through the heavy surf, without stopping at ali- 
 en account of the weather, and without accident of any kind. 
 
 As the pier advanced, it afforded a partial shelter to the beach to leeward, 
 and also served as a barrier to the moving beach sand, which, impelled by the-, 
 waves and prevailing winds had formerly been driven constantly to the west- 
 ward, and so built up and maintained the sand spit that thirty years ago closed 
 the old port San Juan. 
 
 This artificial interruption to the operation of the winds and current, which, 
 were always active in bringing sand for building and renewal of the beach, per- 
 mitted countervailing forces of nature to come into play ; and the result was 
 that, by the time the pier had been pushed out 600 feet, the sand beach under 
 its lee was swept away and an open channel formed, communicating from the 
 
THE NICARAGUA CANAL. 53 
 
 open ocean to the old harbor, now restored to the extent of permitting the en- 
 trance of light draft sea-going vessels, and this at a point where six months be- 
 fore was a sand bank three or four feet above the sea level. 
 
 The attainment of this result was without assistance of a dredge or any 
 other artificial aid than that afforded by the breakwater. A most important 
 deduction is evident from this experience, namely : That the plan devised by 
 Mr. Menocal for the restoration of the port of San Juan, which some engineers 
 had declared to be impracticable, is sound. 
 
 The building of this important work has steadily progressed as materials 
 were available, and its total length is now i,ooo feet. The outer end is in 20 feet 
 of water, and a force is constantly engaged in filling in the spaces between the 
 piles with mattrasses, rock and concrete. The depth of the channel under the 
 lee of the pier reached 10 feet when the structure had been extended to 800 
 feet. In the winter of 1890-1 a dredge increased this depth to about 15 feet, and 
 this has been maintained since, except in very restricted areas, which are easily 
 deepened by the dredging machines, if necessary. The first deep sea vessel 
 to enter the restored port was the steamer " Sverdrup, " with a cargo of machin- 
 ery, etc., on the 7th of January, 1891, and since then many other vessels have 
 frequented the port. 
 
 During the Summer of 1889 permanent buildings were begun, and building 
 constructions have been in progress ever since. The structures are all of 
 wood (pine from the United States), and roofed with corrugated galvanized 
 iron. The offices, quarters and hospitals are all ceiled and painted inside, 
 have wide verandahs outside, and are neat and comfortable. All the permanent 
 buildings so far erected are in the immediate vicinity of San Juan, for at this 
 point is located the General Head-cj^uari^ers, , and here have . been concentrated 
 the most important operations. 
 
 The buildings now occupied consist of five groups (all near the sea beach), 
 and have the floor space stated below: 
 
 13,986 sq. ft. floor. 
 
 - 14,174 " " 
 21,864 " " 
 
 - 18,778 " " 
 7,100 " '• 
 
 Headquarters, 
 
 8 
 
 buildings. 
 
 Hospital, 
 
 10 
 
 i( 
 
 La Fe Depot, 
 
 8 
 
 t( 
 
 R. R. Headquarters, 
 
 9 
 
 a 
 
 Camp Cheney, 
 
 4 
 
 a 
 
 Total, 39 " . . - . - 75,9oj " " 
 
 Besides the above, there are numerous and extensive wharves, equipped for 
 unloading freight, sheds, small outhouses, water tanks, etc. The machine 
 and smith's shops are equipped with a varied and extensive assortment of mod- 
 ern machine tools, and a tramway connects the more important of these estab- 
 lishments. 
 
 The concession allows to the enterprise (Arts. XVII., XVIII., XIX. and 
 XX.) all the lands required for any and all purposes incidental to the construc- 
 tion of the whole work, including accessories, and this without charge or cost 
 where the lands required belonged to the government at the date of the conces- 
 
54 THE NICARAGUA CANAL, 
 
 sion. In case the lands appropriated by the canal belonged to private owners 
 compensation for them must be made, the amount determined by the usual pro- 
 ceedings of condemnation and expropriation. The i,ooo manzanas of land 
 (1,723 acres) referred to in Art. XX., have already been placed at the disposal 
 of the company, and payment has been made in the sum of $50,000, as pro- 
 vided in the article referred to. East of the lake, and all the way to the Atlan- 
 tic coast, the whole district is unsettled, save by a few fruit growers, and the 
 title to the lands still vests in the republic; therefore the cost of expropria- 
 tions here will be merely nominal. 
 
 Work in clearing the canal line of forest growth was begun in January, 
 1890, and for a distance of about 10 miles back from the coast, the clearing has 
 the full width of 486 feet. The same work was commenced on the west side 
 of Lake Nicaragua in the month of November, 1890, and for a distance of 9 
 miles this ground is made ready for the active construction work.. 
 
 The necessity for a telegraph reaching to the interior, connecting with 
 the telegraph system of the country and the ocean cables, very soon became 
 apparent. This was one of the first works commenced; it was soon pushed 
 through to Castillo, with its loops amounting to 60 miles. The first ten miles of 
 the line back of San Juan was across a very difificult swamp, where the work was 
 most arduous, and the poles, which were made of native timber, were difificult 
 of procurement, and together with all other supplies had to be carried by men 
 ■wading in water from 2 to 4 feet deep. The water was so deep that in some 
 places poles could not be set in the earth at all. In such cases they were wired 
 to tree stumps, and otherwise supported by wire guys. Through the hill country 
 the line was also an expensive one to build and is very difficult to maintain. To 
 ensure immunity from falling timber, a clearing of the forest was necessary loo 
 feet wide. All the offices and more important camps and stations are in tele- 
 phonic communication. 
 
 A quarry was opened at Silico Lake, some 15 miles distant from the harbor, 
 and thence was brought in lighters at heavy expense for rehandling a consider- 
 able quantity of rock for the breakwater, but this source of supply was soon 
 exhausted. 
 
 As the heaviest body of work to be accomplished on the whole line is con- 
 centrated within a distance of three miles, at what has been designated as the 
 " Eastern Divide," and, as the time that will be required to complete the canal 
 is measured by the time spent in the opening of this deep cut, it was felt to be 
 important to install a plant for this heavy rock cutting at the earliest date possi- 
 ble. But so great were the difficulties of transportation of heavy machinery, 
 etc. , from the harbor to the site of this heavy cutting, it was at once apparent 
 there was no alternative to be considered but the immediate construction of a 
 railroad. This was begun in the summer of 1890. It extends across what had 
 always been considered an impassable swamp, and for the first 10 miles there 
 are but about 4 miles of hard ground. Soon after beginning heavy rains 
 set in, and the swamp was flooded to a depth of from i to 4 feet. No earth for 
 filling could be had from along the track and so all had to come from a distance 
 brought by train, and these conditions necessitated a reversal of the ordinary 
 
THE NICARAGUA CANAL. 55 
 
 proceeding, /. e., laying the track first and making the required embankment 
 afterward. 
 
 To accomplish this, novel methods were employed. A heavy corduroy of 
 logs, gotten from the neighboring forest, was laid for many miles. These were 
 rolled, floated or dragged by man power alone to the line of proposed track, 
 and there arranged as compactly as possible. Upon them were laid longitudi- 
 nal stringers, also consisting of native tree trunks — the straightest that could be 
 found. Then came the railroad ties, resting on the stringers, and lastly the 
 steel rails, all spiked down. Now, the cars, loaded with sand, were run out 
 over the log embankment and there unloaded, the sand being packed into the 
 interstices and under the ties, which were raised gradually by the workmen 
 until the desired grade was secured. There were six miles in all of this swamp 
 work. Except in filling the sand trains, no other power was used than that of 
 men, and nearly always the swamp water was above knee deep and often to 
 the waist or armpits. 
 
 The material used in grading and ballasting the roadbed was taken from 
 the canal prism, near the harbor, and delivered along the line by trains of 
 cars, loaded by means of a steam shovel or "navvy," capable of delivering upon 
 cars 1,300 cubic yards per day. 
 
 There are several places along the line, where streams and other water 
 courses are crossed. These are spanned by pile bridges, and a powerful steam 
 pile driver has been used in their construction. The length of road completed 
 to date is II miles — the most difficult of the whole line, and seven miles remain 
 to be completed in order to reach the " divide." There are several miles of side 
 track, switches, etc. , already put down. 
 
 The road is equipped for construction work, and supplied with four locomo- 
 tives, fifty cars, steam shovel, ballast unloader, jacks and other requisite ap- 
 pliances. All the cross-ties and bridge timbers are of northern pine, and charged 
 with 16 lbs. creosote oil to the cubic foot. At the railroad terminus on the harbor 
 is a fine wharf, 264 feet long, built in the best manner of creosoted timber, and 
 equipped with modern steam conveniences for handling freight rapidly. 
 
 The survey for the remainder of the railroad line, extending to the San 
 Juan River at Ochoa, has been completed ; in fact, there have been two lines 
 surveyed and profiles prepared in sufficient detail to enable a close estimation of 
 cost. Between Lake Nicaragua and the Pacific the railroad line is also located, 
 and everything made ready for its construction, which, it is realized, must pre- 
 cede the beginning, upon a large scale, of the work of canal construction itself. 
 
 In the Summer of 1890 there was purchased from the American Contracting 
 and Dredging Company the very extensive and valuable plant used so successfully 
 on the eastern end of the Panama Canal from the year 1881 to the collapse of 
 that enterprise in 1 888. The property consisted of seven dredges, the most power- 
 ful ever built ; two fine tug boats, twenty lighters, several launches and a vast 
 quantity of tools, spare parts, materials for repair and renewals, an entire ma- 
 chine shop, stationary engines, pumps, etc., etc. Many of the articles are in 
 abundance sufficient to suffice until the Nicaragua Canal can be completed. 
 During the Autumn of 1890 this property was transferred to San Juan del Norte — ■ 
 
56 THE NICARAGUA CANAL. 
 
 all save one of the oldest and least valuable of the dredges, . which was lost at 
 sea. Upon the arrival of this plant, portions of it were immediately equipped ■ 
 for work, and three of the dredges have since been in use for various periods, 
 two upon the line of the canal proper and a third in increasing the depth of 
 water at various points in the harbor and upon the bar. The canal line to the 
 width of 280 feet and depth of 17 feet has been opened for 3,000 feet inland 
 from the harbor, the material excavated being sand almost wholly. No 
 buried wood or other obstructions to free dredging have been found. A power- 
 ful suction dredge for working upon the bar at San Juan has been constructed 
 in Scotland for this company, and is ready to be sent to its destination. 
 
 All the engineers employed on the line have been men of known and 
 tried ability. Those in positions of chief responsibility have had extensive 
 practice in works of engineering construction in the United States and the 
 tropics. All are graduates of the best technical schools. Mr. A. G. Menocal, 
 who has been connected with the enterprise from its organization, is the Chief 
 Engineer. 
 
 The engineers, administrative staff, surveyors, nearly all the skilled me- 
 chanics, .foremen, etc., have been hired in the United States and sent out 
 under contract for at least a year's service. The common laborers are of 
 two classes — the natives of Central America and the negroes from the island 
 of Jamaica. All have been housed and fed by the company, and supplied 
 with medicine and hospital attendance free. The rate of wages paid to com- 
 mon laborers varies from 20 to 30 soles per month (the Colombian soie has. 
 a value of about 75 cts. gold), and it is evident from experience gained that 
 an abundance of acclimated labor, entirely adapted to the company's needs,- 
 is readily obtainable from the localities named. 
 
 Mention has been made of a steamboat company operating a line of boats 
 upon the San Juan River and Lake Nicaragua. As the owner of these . boats 
 held an exclusive privilege for navigating the San Juan River and Lake Nicar- 
 agua by means of steam vessels, it became necessary for this company to ac- 
 quire the property referred to. This was done in the Fall of 1889, and the line 
 has since been operated in the interest of the Construction Company. 
 The franchise is a very valuable one, aside from its bearing upon the construc- 
 tion of the canal. 
 
 Reference has also been frequently made to the Rio San Juan and the 
 town and port of San Juan del Norte. The river which drains Lake Nicara- 
 gua and discharges into the Caribbean Sea has always been known by that 
 name, but the town and port at its mouth, anciently known as San Juan de 
 Nicaragua, and afterwards as San Juan del Norte — to distinguish, it from San 
 Juan del Sur on the Pacific coast — was re-named Grey Town by Great Britain, 
 when that power seized the port some thirty years ago. This is the popular 
 name now, but not recognized by the Republic. San Juan del Norte is the 
 only correct appellation, and this in common parlance is shortened to "Del 
 Norte," as the name of the Pacific port near Brito is to "Del Sur." 
 
 The point where the canal enters the harbor is some two miles distant from 
 Greytown, and in the Autumn of 1889 the Government laid out a town site on 
 
THE NICARAGUA CANAL. 57 
 
 the shores of the harbor at the point where the canal enters it. This has been 
 named " America," and here are located the canal headquarters. 
 
 The maps bound in this pamphlet and other illustrations will assist the 
 reader to a better understanding of the verbal description here given. 
 
 The company has gone to its work of building the canal in a plain, unos- 
 tentatious, systematic manner, and, although nearly all accomplished to date 
 may be described as preliminary, yet a very important advance has been made. 
 These results may be summarized as follows : 
 
 1. The completion of the final surveys for location and construction. 
 
 2. The subterranean examination of the strata requiring removal, by means 
 of borings with the diamond drill. 
 
 3. The restoration of the harbor of San Juan del Norte to the extent of 
 securing an easy entrance to the port for vessels of 12 feet draft. 
 
 4. The construction of extensive wharves and landing facilities. 
 
 5. The erection of permanent buildings for offices, quarters, hospitals, store- 
 houses, shops, etc., having a floor area of an acre and three-fourths. 
 
 6. The building of a large number of temporary camps along the line for 
 accommodation of employes. 
 
 7. The completion of a telegraph line permitting ready communication of 
 the New York office with any part of the work. 
 
 8. The clearing of the canal line of timber for some 20 miles. 
 
 9. The completion of surveys for location and plans of construction of the 
 railroad system, and the construction and equipment of ri miles of this line. 
 
 10. The acquisition by purchase of the most valuable and powerful dredging 
 plant to be found in America under one management. 
 
 11. The fitting up and operation of this plant -and the opening of nearly 
 a mile of the canal. 
 
 12. The acquirement by purchase of the valuable and exclusive franchise 
 for steam navigation of the San Juan River and the lake, together with the ex- 
 tensive plant of the Nicaragua Mail Steam Navigation Company, consisting of 
 ■ofhces, lands, steamboats, tugs, lighters, repair shops, etc., etc. 
 
 13. And, lastly, what is felt to be the most important result of all is the 
 <lemonstration, secured by experience, of the salubrity of the climate, the 
 
58 ' THE NICARAGUA CANAL. 
 
 efificiency of labor and the sufiSciency of the estimates of the chief engineer 
 for the harbor and canal dredging and railroad work. 
 
 FINALLY, The government of Nicaragua has formally made acknowledg- 
 ment of the fact that the company has fully complied with the requirement im- 
 posed by Article XLVII. of the canal grant, which provides that the work of 
 construction shall not be considered as commenced unless two million dollars 
 are expended in the first year. 
 
 This formal acknowledgment confirms the company's title to the conces- 
 sionary rights for a term of ten yeciis in which to compelte the canal and open 
 it for traffic. 
 
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CHAPTER VI. 
 
 FINANCIAL ASPECTS OF THE ENTERPRISE. 
 
 Among the many advantages possessed by Nicaragua, there is one which 
 far exceeds in value all her natural resources of mine, or field, or forest. She 
 stands midway between the northern and southern extremities of the American 
 continents, and the barrier she there presents to direct communication between 
 the Atlantic and PaciHc Oceans and the countries bordering upon them is the 
 least that exists anywhere in the entire length of the mountain range, which 
 extends from the Arctic Ocean to the Straits of Magellan. What this barrier 
 is, and the ease with which it may be surmounted has already been described in 
 these pages. What its importance to the commercial world amounts to remains 
 to be considered. 
 
 As a means of transport, a continuous ocean voyage between port and port 
 is of the greatest value to the merchant, because, other things being equal, he 
 attains thereby the lowest cost for transportation of the commodities in which 
 he traffics. The comparative cost for maritime and railroad transportation on long 
 routes is as i to 5 when the maritime transportation is by steam, and as i to 9 1-2 
 ■when it is by sail. To shorten the length of a voyage is to lessen not only the 
 cost of transportation, but also to diminish, in a proportionate degree, other 
 expenses and risks. The operation of this principle in our own time, and since 
 the construction of the canal at Suez, has naturally resulted in the return of 
 commerce to one of its ancient routes — that by the Red Sea, the Isthmus of 
 Suez and the Mediterranean. The diversion of commerce from route to route, 
 because of risks diminished or advantages gained, is only indicative of what 
 may certainly be anticipated as the result of opening a waterway for vessels 
 across the American Isthmus. But there are also elemental principles, not 
 brought into play at Suez, which will become actively operative with regard to 
 the movement of commerce over the new route, proposed to be created for it by 
 way of Nicaragua, and which practically multiply the importance of that route 
 to the merchant, to an incalculable degree. What is meant can be best illus- 
 trated by reference to the development of the western portion of the United 
 States. The entire railroad system of the country has been built up since the 
 year 1826, when the first railroad in the State of New York, from Albany to 
 Schenectady (17 miles), was built. In 1830 there were only 23 miles of railway 
 constructed, and in 1832 the total number of miles in operation was but 229. 
 Since then the growth of the system has been rapid. There exists now nearly 
 170,000 miles of railways equipped with 30,000 locomotives and 1,000,000 cars, 
 carrying more than 700,000,000 tons of merchandise and 500,000,000 pas- 
 sengers annually. The population of the country in 1832, when there was but 
 229 miles of such roads, was between 13,000,000 and 14,000,000, mostly dis- 
 tributed along the seabward, the borders of the great lakes and the courses of 
 
6o THE NICARAGUA CANAL. 
 
 the great rivers. To-day it amounts to 65,000,000, distributed wherever a rail- 
 way will carry a man, or bring to market the product of his fields or forests, 
 and mines ; and not only is the enormous increase and spread of population 
 over inland territory attributable to the facilities afforded for transportation, 
 but the growth of the great cities upon the seaboard to an importance compara- 
 ble with that of the great cities of Europe, is owing entirely to the facilities the 
 railroads have afforded for interchange of commodities between all parts of the 
 country, and between the country at large and the world. The ease with which the 
 accumulated wealth of the country responded to the unusual demands of Europe, 
 during the Winter and Spring of 1890 and 1891, for gold to help meet her obliga- 
 tions* is evidence of the profits which the merchants of the United States have 
 acquired and accumulated in thus facilitating the transactions of trade. Such 
 a growth of material prosperity is also conclusive indication of what may cer- 
 tainly be expected to repeat itself, whenever there is provided a more convenient 
 means of communication between the eastern portion of- the United States and 
 the Pacific coast of both North and South America ; for the development of the 
 Western States and Territories is not the establishment of a new precedent, but 
 the operation of old and well established principles, universally operative and, 
 therefore, to be accounted for and estimated in a commercial forecast, with as 
 great certainty as any other factor which enters into the problem. Since 1848, 
 the date of the gold discovery, California, Oregon and Washington have grown 
 from wild and almost unknown Territories into prosperous, powerful and import- 
 ant States with large and rapidly increasing populations and an annual produc- 
 tion of the staples of trade, over and above their needs for home consumption, 
 which demands the most favorable conditions for its transport to the markets of 
 the world. 
 
 In 1890 the wheat product of Oregon was 12,865,000 bushels, that of Wash- 
 ington 8,071,000 bushels, and California produced 30,000,000 bushels. The 
 wool clip of the same territory for the same year was estimated at 65,000,000 
 pounds, California alone shipped by rail in the same year 235,000,000 pounds 
 of fruit — canned, dried and fresh — to eastern markets, and over 4,500,000 
 gallons of wines, brandy, etc. The commerce of San Francisco with the rest of 
 the world amounted for the year to more than $250,000,000. These facts indi- 
 cate the development which has been attained on the Pacific coast of the United 
 States alone, in face of the heavy cost of transportation of products by rail 
 across the continent, or by sail around Cape Horn to their markets. Of these 
 products the wheat, the wool, and the wines were largely marketed in Europe, 
 and went by sail around Cape Horn, a distance of 15,600 miles. The canal 
 route will shorten that distance over one-half, to 7,600 miles. 
 
 Between New York and San Francisco the ocean route will be shortened 
 from 15,600 miles, " around the Horn," to 4,900 miles by the canal,'as against 
 the railroad route which is about 3,300 miles. What the effect of such a saving 
 in transportation, of time as against sail, and cost as against rail, will be upon 
 the further development of the Pacific coast is but slightly indicated by the 
 
 ♦The amount of gold remitted to Europe in 1891, prior to August 1st, was $71,838,039, and the amount 
 leturned to the United States, from the latter date to November IS, 1891, vas upwards of $25,000,000. 
 
THE NICARAGUA CANAL. 6l 
 
 growth that has already been realized there, or by what has been accomplished 
 by the construction of railroads in other parts of the United States. The 
 present product of wheat and wine and wool indicate the development of indus- 
 tries naturally incident to, and which follows the growth of population and set- 
 tlement of the country. The growth of other industries of similar nature and 
 relations, though of lesser magnitude, might be mentioned, but it would only be 
 to add evidence to what is already conclusive in that direction. There are, how- 
 ever, other possibilities incident to the country itself which may not be ignored. 
 That the climate is favorable to growth of the products, of which the foregoing 
 statistics are given, it is not necessary to say ; the isothermal line of northern Vir- 
 ginia meets the Pacific ocean 200 miles north of the northern boundary of Wash- 
 ington, giving the Pacific slope a mildness of temperature especially favorable 
 to agricultural industries ; it may not, however, be out of place to speak espe- 
 cially of the quality of some of the products. The wheat grown on the Pacific 
 slope has long been celebrated ; its berry is large, hard and plump, and weighs 
 considerably over sixty pounds to the bushel ; the fibre of the wool is uniform, 
 and by proper selection and care of the flocks the finest grades may be and are 
 produced. The grapes of the more southern sections, are rich in sugar and not 
 only yield wine, of a quality which with growing experience in the processes of 
 treatment is steadily improving, but they also produce raisins which compete 
 with the finest offered in the New York markets. 
 
 But in the forests and the fisheries of Western Oregon, Washington and 
 Alaska there exists, ready to the hand of the incoming settler, an indigenous 
 source of wealth, the value of which it is impossible to estimate. There are 
 20,000,000 acres of forest land and 400,000,000,000 feet of merchantable timber 
 in western Washington alone. The trees are principally evergreen, the most 
 ■valuable being the Douglas and other firs, white cedar, hemlock, spruce and 
 white pine. The Douglas fir constitutes the largest portion of the forests, and 
 trees 200 feet high and 10 feet in diameter are not uncommon. 
 
 The present capacity of the Puget Sound mills is 900,000,000 feet per an- 
 num. Some of these mills work up logs 120 feet long and 6 feet in diameter, 
 and yet are not of sufficient capacity to handle much of the timber there found. 
 A year or two a ago a lumberman shipped a stick of this timber to San Fran- 
 cisco measuring 154 feet in length and 24 inches in thickness. The white cedar 
 shingles made in the Puget Sound district are of such desirable quality that 
 they bear the heavy charges of railroad transportation to markets as far 
 east as central Ohio. The forests of Maine are denuded of spar timber, and 
 for the last six or seven years cargoes of large sticks have frequently found 
 their way to eastern ports, even at the cost of a voyage round Cape Horn. The 
 Gulf States, also, already find their supply of timber rapidly diminishing, and 
 lumber for building purposes brought from the Pacific coast will find a ready 
 market in the Gulf ports and the West Indies so soon as it can be delivered at 
 prices not too much enhanced by costly transportation. Thus the eastern and 
 more densely settled portions of the States will become the convenient market 
 for the abundant product of the now remote forests of the Pacific Coast. 
 
 The products of Alaska, as well as of Washington and Oregon, mostly 
 
62 THE NICARAGUA CANAL. 
 
 low-priced commodities furnishing a large bulk of tonnage, will be carried at 
 less cost to eastern markets, the markets of the western coast of South America 
 will be opened to the low-priced coals of our southwestern States, and the 
 coasting trade now carried on with the West Indies to the extent of over 500,000 
 tons per annum will be extended beyond calculation. If a traffic of such 
 magnitude has been developed between the United States and the islands of 
 the Caribbean Sea only, what may be expected when the markets of the Pacific 
 coast of Colombia, Mexico and Central America, of the States of Equador, 
 Peru, Bolivia, Chile and of California are opened to .the easy access of coasting 
 vessels ? 
 
 In the existing fake and and coastwise trade of the United States, steel 
 barges carrying from 1,500 to 3,000 tons freight towed by powerful tugs 
 are taken at low cost to market points, and there left to discharge and reload 
 for a return voyage, while their motive power returns without delay with freight 
 in similar barges, made ready for departure before their arrival. Thus, move- 
 ment of freight is accelerated, invested capital is made to yield its largest re- 
 turns, shippers profit by the possibility of lowered rates and consumers by the 
 possibility of lowered prices. Under such conditions the traffic of the Sault Ste. 
 Marie Canal has developed from 1,567,741 tons in 1881 to the enormous ag- 
 gregate of 8,388,891 tons in 1891,* and is still increasing. And this traffic has 
 grown up in connection with the internal trade only of a portion of the north- 
 western States with the East. Like results will follow similar methods, which 
 are equally available in the waters connected by the Nicaraguan canal, and 
 commercial enterprise will not be slow to avail itself of the unprecedented 
 opportunity. We have already mentioned the products of the forests and fish- 
 eries of Oregon, Washington and Alaska, and the products of British Col- 
 umbia; returning to the subject, the following facts will also be of interest: 
 
 The salmon pack of British Columbia, Alaska, Washington and Oregon 
 and California amounted in 1889 to 1,683,800 cases, about 84,200 tons, valued 
 at $9,064,000, exceeding in quantity the pack of 1888 by 527,000 cases; 
 680,000 cases of the product were from Alaska, and 422,000 from British 
 Columbia. This is a growing industry ; the pack amounted in 1880 to only 
 679,490 cases; in ten years it has increased nearly 250 per cent. Hop growing 
 as an industry was commenced in Oregon and Washington as recently as 1885. 
 In 1889 the product was 70,000 bales, regularly quoted and competing in qual- 
 ity with other goods in the New York market. The fur seal and whale fisheries 
 are also important industries. 
 
 The cultivation of India rubber in Central America, and on the western coast 
 of Mexico, is already attracting attention. The increasing demand for the gum 
 and the destruction of trees in their natural state by the reckless huleros or 
 native gum gatherers, makes attention to an artificial supply for future demands 
 of manufacture imperative ; already large manufacturing corporations in this 
 country are making plantations to meet it. The tree grows naturally in Central 
 America and Mexico. The we.stern coast of these countries, from the sea level 
 to 1,800 or 2,000 feet of elevation above the sea, seems particularly favorable 
 
 *Jnne 30th, 1890, to June 30th, 1891. 
 
THE NICARAGUA CANAL. 63 
 
 to its best development. This is an industry which will pay tribute to the 
 canal. 
 
 But in the forests of the northwestern Pacific coast there exists material 
 which needs only the facilities of the canal for its transportation to a favorable 
 market to yield a tonnage, which alone will probably exceed that of all other 
 industries combined. The wonderful growth of the lumber trade of that section, 
 under present limitations of transportation, is an indication of the magnitude to 
 which it will grow with the opening of new and more extended markets, by the 
 shortening of distances to therh on lines within the still waters of the temperate 
 and torrid zones, instead of by the routes now existing through the tempestuous 
 seas of the storm zone. 
 
 In 1886 the shipment of lumber from Oregon amounted to 6,000,000 feet, 
 equal to 12,500 tons; in 1887, to 48,000,000 feet, equal to 100,000 tons. In 
 1888 the amount cut amounted to 706,985,000 feet, and the shipments abroad 
 to 471,325,000 feet, equal to 981,925 tons, or nearly 1,000,000 tons. 
 
 The forests of Maine no longer yield the timber needed for masts and spars 
 of large vessels. In the forests of Oregon trees grow to 12 feet diameter and 
 300 feet in height. The average length of a cargo of sticks taken to Boston 
 from Puget Sound by the bark " Crapo," in 1890 was 126 feet, and theiraverage 
 diameter 39 inches. Sixty of these sticks were bought by a shipbuilder of 
 Bath, Me. This fact shows how depleted the Maine forests are of spar timber. 
 Cuba commenced the importation of lumber for building purposes around 
 Cape Horn, but found the experiment too costly to be continued. In our South- 
 ern States the hard pine, though less desirable, is taking the place of soft 
 pine because of advancing prices. All these demands will be met and sup- 
 plied, from the Oregon and Washington lumber fields, with the opening of the 
 
 canal. 
 
 What this demand and its supply will actually amount to is mere conjecture, 
 but considering the coast-wise trade as a whole, including the growing trade in 
 coffee cacao and India rubber, in the mahogany, rosewood, ironwood, and other 
 hard woods of Central America, the whale oil and the seal fisheries of the North- 
 ern Pacific the furs of Alaska, the wheat, canned salmon and other products of 
 British Columbia, Washington and Oregon, the spar timber and other lumber from 
 the forests, and the return trade in coal, textile fabrics, agricultural implements, 
 machinery, iron goods, etc., an estimate of 1,000,000 tons per annum for the 
 amount of its addition to existing commerce, will be conceded to be none too 
 great an allowance. 
 
 The most healthy and most attractive portions of the Spanish-American 
 republics are those bordering on the Pacific ocean, occupying the western slopes 
 of the mountain chain which extends north and south through both continents. 
 This entire section of country will be brought by the canal nearer to its present 
 markets, which are chiefly in Europe, say from 2,000 to 6,000 miles; but what 
 is of greater importance, it will also be brought from 5,000 to 10,000 miles 
 nearer to New York than at present and at the same time 2,700 miles, or sub- 
 stantially the width of the Atlantic, nearer to New York than to any European 
 port Such an advantage cannot fail to have the effect of developing enor- 
 
64 THE NICARAGUA CANAL. 
 
 mously the commerce between these countries and the United States, which at 
 present is but limited. 
 
 By the facilities thus afforded for the transactions of commerce, the indus- 
 tries of the several countries will be stimulated and developed, and immigration, 
 with its beneficial effects to South American shores as well as to those of Cali- 
 fornia, Oregon, Washington and Alaska will follow. A great increase of popu- 
 lation along the entire western coast of the American continents, together with 
 the growth of commerce which will naturally accompany it, will unquestionably 
 result from the completion of the canal ; what it will actually amount to ihay 
 perhaps be indicated by the instances already cited of the growth of the United - 
 States from the extension of her railroad system. To venture upon an estimate 
 of its probable magnitude and to state it definitely in figures, would expose one, 
 whether deservedly or not, to the charge of permitting an over-sanguine imagi- 
 tion, or some less excusable motive, to influence sober judgment; but in view 
 of existing facts, no one can reasonably ignore the certainty of such a develop- 
 ment to a material degree; and it follows that the commerce incident to it will 
 very materially contribute to the profits of the canal. Other important incidental 
 developments may also be expected, such as the transfer to the United States 
 of much of the commerce of Europe with Asia in commodities which the 
 United States can produce of equal quality and at as low a price as elsewhere, 
 the traffic in which she is now excluded from competing for by the longer routes 
 and correspondingly higher cost of transportation. But, aside from such possi- 
 bilities, the business which already exists within what may properly be consid- 
 ered the radius of the canal's influence, when it shall be opened to commerce, 
 is of a magnitude to assure financial success to the enterprise without any re- 
 gard to future developments. 
 
 In this connection the first question which suggests itself to one interested 
 in the project and the possibility of its realization is: To what distance from 
 the canal will its attracting influence be felt ? Upon the satisfactory answer of 
 this question depends the reply to another which logically follows. At what 
 cost will it pay to construct the canal? To the first of these questions the 
 answer is : It will be felt so far as the charges for transit of a vessel are less 
 than the costs saved the merchant and shipowner by the reduction in the length 
 of her voyage. 
 
 The first and all-important advantage offered by the canal to the shipowner 
 and the merchant, is the great reduction effected by it, in distances by ocean 
 routes, between important commercial points. This is the primary question to 
 be considered by any projector of a transportation scheme, and without such an 
 advantage the scheme that possesses every other attractive feature can only re- 
 sult in destructive competition. What advantages the Nicaragua Canal offers 
 in this respect will be best understood by a careful study of the table at page 76 
 which has been carefullv compiled from data furnished by the United States 
 Hydrographic Bureau, and may therefore be relied upon as correct. 
 
 The voyage from San Francisco around Cape Horn to Liverpool is about 
 15,600 miles, varying with the season. As a very large and annually increasing 
 business in grain is transacted by this route between the ports named, the 
 
THE NICARAGUA CANAL. 65 
 
 Statistics of which are well ascertained, it will afford, perhaps, the most reliable, 
 as well as the most accessible, data upon the subject. This business at present 
 is chiefly transacted in sailing vessels which may in course of time be changed 
 for steamers, but as the increased speed and capacity of steamers is attended 
 by an increased cost of original construction and of daily operation, which ad- 
 vantages and costs are in a great measure compensative, the conclusions deduc- 
 ible from present conditions, corroborated, as they are, by the practical 
 experience of steamers now in use, may be relied upon as generally applicable. 
 
 The cost of a sailing vessel of 2,000 tons register, equipped complete, is 
 about $60 per ton, or say $120,000. The annual allowance usually charged 
 against her earnings for interest on capital (6 per cent.), insurance (8 per cent.), 
 depreciation or amortization (10 per cent.), is 24 per cent. In order that the 
 estimates of cost may be on the side of safety we will assume a gross charge 
 for these items of 4 per cent, less, say an even 20 per cent; this amounts to 
 $66.40 per day, to which must be added, for wages and subsistence, about 
 $1,000 per month, or say, $33.33 per day, making the total daily expense of 
 such a vessel about $100. If her crew is discharged upon arrival in port 
 it is replaced by stevedores, so that no allowance need be made on that ac- 
 count. Her port charges will amount to about $4,000 on each voyage. 
 
 The voyage from San Francisco to Liverpool, usually made in sailing ves- 
 sels and around Cape Horn, will on an average occupy 120 days, and the vessel 
 will be in port discharging and receiving cargo from 30 to 60 days. Allowing 
 120 days for passage and only 40 days in port, the whole voyage is estimated at 
 160 days, which is within the average. Freights for wheat in San Francisco 
 fluctuate very materially, according to supply and demand. During the year 
 1890 they fluctuated between $7.50 and $10.96 per ton, the average rate being 
 $9.45, but most of the wheat charters in the Fall, were taken at rates varying 
 between $8. 50 and $9. 15. It cannot be considered too high then if we take 
 $8.50 per ton as an established rate for freights; the figure is certainly low 
 enough. 
 A vessel of 2,000 tons register will carry about 3,000 net tons of 
 
 cargo, which at $8.50 per ton will earn for the voyage . $27,000 00 
 
 The expenses of the voyage, 160 days at $100 per day, 
 
 as above $16,000 
 
 Port charges say .... . • • 4,000 $20,000 00 
 
 Leaving a net profit of . . .... $7,000.00 
 
 for 160 days service. This estimate of profit may be somewhat too large, inas- 
 much as the estimate of expenses of current voyages has been made low in order 
 to avoid the charge of unjust discrimination in favor of the voyage by the canal. 
 
 Assuming the cargo to be entirely of wheat at 75 cents per bushel and forty 
 bushels to the ton, its value would be $90,000. We have thus, as the data with 
 which to make comparison, the voyage of 160 days at an expense of $100 per 
 day, yielding a profit to the ship owner in freight of $7,000 carrying a cargo 
 worth about $90,000. 
 
 At 120 days' passage, the 15,620 miles between ports would be traversed at 
 
66 THE NICARAGUA CANAL. 
 
 the rate of 130 miles per day, which is better than the average of sailing voyages. 
 By use of the canal projected at Nicaragua, the distance between ports would 
 be shortened 7,993 miles or 61 days' time which, at $100 per day, as above, 
 would amount to a saving in expense alone of $6, 100. 
 
 In addition to this the voyage would be made in 59 days instead of 120, 
 which would enable the shipowner to make 31-2 voyages in the year instead of 
 2 1-4, as at present, thus increasing the earning capacity of the vessel over 55 
 per cent. There would also be less stress on the vessel and her rigging, sailing 
 through quiet waters instead of by the stormy route around Cape Horn, and 
 consequently less depreciation from wear and tear ; and lower rates for insurance, 
 because of increased safety, would necessarily follow. The annual earning ca- 
 pacity of such a vessel would thus be increased by the shortening of the voy- 
 ages at least .......... $11,000 
 
 To which add diminution of expenses on 3 r-2 voyages, at $6,100 per 
 
 voyage 21,350 
 
 There would thus accrue a fund of . . . . . . $32,350 
 
 over and above the previous annual earning capacity of the vessel against which 
 to charge canal tolls at such rates as might be found practicable. There will 
 also be an advantage to ship-masters of iron vessels in passing through the 
 freshwater canal and lake, the value of which is important, but cannot — for 
 lack of data — ^be appraised. The marine growth upon the hulls of such vessels, 
 in tropical waters, is so great as to materially retard their speed, and so rapid, 
 as to necessitate their "docking" at least three times a year. The change 
 from salt water to fresh, in passing through the canal, will destroy the animal 
 and vegetable life and at least greatly retard its accumulation. But, in addition 
 to the advantages which the shipowner might derive from the use of this canal, 
 the saving of interest to the merchant by the more prompt delivery of his 
 goods; which upon each such cargo of wheat would alone amount to $900, 
 increasing above that amount in the proportion that the cargo becomes more 
 valuable ; the greater frequency with which, for reason of the shorter voyage, 
 his capital would become available for use ; the diminished cost of insurance 
 which greater safty of transit would induce; and the narrowing of the risks of 
 trade by shortening the term of transportation, are each and all potent in- 
 fluences with the owner and shipper of merchandise, the value of which can- 
 not be justly arrived at except from practical experience; and it is the owner of 
 the goods who, first considering the price demanded for service rendered, to- 
 gether with all contingent circumstances, ultimately determines by what means 
 his property shall be transported to market. 
 
 The rate of $2.50 per ton has been assumed as the probable canal toll in 
 connection with all recent projects for transit across the American Isthmus. 
 At this rate, and upon the basis of the facts used in the foregoing illustration 
 it is estimated that a saving of 2,300 miles in a voyage of 13,000 miles will be 
 more than a sufficient inducement for shipowners to make use of the canal. 
 That the estimate is a safe one, and applicable to steamers as well as sailing 
 vessels, is apparent from the fact that British steamers, between the ports of 
 
THK NICARAGUA CANAL. 07 
 
 Sydney and Melbourne in Australia and English ports, find it advantageous to 
 use the Suez Canal for a saving of 1,231 miles at the cost of the tolls estab- 
 lished at Suez, which amount to about $1.96 per ton. Upon this basis it would 
 pay to use the Nicaragua Canal at $2.50 tolls for a saving of considerably less 
 than 2,000 miles in an equal voyage, say 12,000 miles. We may, then, assume 
 that an economy of from 2,000 to 2,300 miles in a voyage is necessary to the 
 advantageous use of the canal at a tariff of $2.50 per ton. 
 
 That the transportation of freight on long voyages will ultimately be made 
 by steam in preference to sail is apparent from the change which has taken 
 place in that direction during the past decade. Such a change will not, how- 
 ever, materially affect the conclusions arrived at, except, perhaps, to magnify 
 the importance of the shorter route. 
 
 It follows next in order, to consider more particularly the question of the 
 amount of existing traffic likely to be attracted to an inter-oceanic canal across 
 the Isthmus when opened. It has been commonly said that the attractive influ- 
 ence of such a canal will be felt as far as the iioth meridian of longitude, east 
 from Greenwich. There can be very little doubt as to the correctness in gen- 
 eral of this opinion, for there is even room for question whether it will not be 
 felt beyond that limit. Owing to favoring winds and currents, which prevail in 
 the Pacific, it is no unusual thing for English sailing vessels which make the 
 outward voyage to Hong Kong or Australia by the way of Good Hope to return 
 around Cape Horn. Such vessels are debarred from the use of the Suez Canal 
 by the frequent shoals and the uncertain winds of the Red Sea, the length of 
 which, 1,310 miles, is too great for economical towage; these objections do 
 not exist as against the Nicaragua Canal, and in view of the fact but just 
 stated, it may be expected that the attractive influence of the canal, at least so 
 far as homeward voyages are concerned, will extend beyond the equal division 
 of distances, which the iioth meridian is assumed to make. 
 
 The meridian, no degrees east from Greenwich, includes the entire coast 
 of China with the ports of Macao, Hong Kong, Shanghai and the Island of For- 
 mosa, the Kingdom of Corea, the Empire of Japan, the Phillippine Islands, 
 Borneo, New Guinea, Australia, Tasmania, New Zealand, and, in fact, almost 
 all the islands of the Pacific. These points, together with the entire inhab- 
 ited portion of the Pacific coast of the American continent, are brought nearer 
 to the eastern ports of the United States by distances varying from 3,000 to 
 10,000 miles. But what is of still greater importance to the United States is 
 that all of them are brought nearly the whole width of the Atlantic Ocean 
 nearer to New York than to European ports. New York and Liverpool are now 
 practically equi-distant from Valparaiso, Callao, Acapulco, San Francisco and 
 all intermediate ports, but with the opening of the canal New York will be 
 brought 2,700 miles nearer these ports than Liverpool will be; at the same time 
 Valparaiso, on the Pacific coast of South America, is brought 1,000 miles nearer 
 to Liverpool and other European ports than by existing routes; and points 
 north of Valparaiso are approximated by distances varying from 1,000 to 6,000 
 miles. 
 
 New York is brought 1,800 miles nearer Australia, 2,700 miles nearer New 
 
68 THE NICARAGUA CANAL. 
 
 Zealand, 1,900 miles nearer Japan and 300 miles nearer Shanghai than those 
 places are to Liverpool by. the shortest routes. New Orleans has 760 miles 
 more of advantage than New York. The eastern ports of the United States are 
 thus placed on an advantageous basis as competitors for" the commerce of those 
 countries. These facts, aside from any comparison of new routes with the old 
 between present markets, or of any of the conditions that attach to either, war- 
 rant the assumption that a certain portion of existing commerce will be diverted 
 from present routes to the new, by its diversion from old markets to new ones ; 
 certainly the enterprise of American merchants will have ceased to be what it 
 has been in the past, if such is not the result. 
 
 In view of these conditions, it will not be considered improper to claim that 
 all the commerce existing within the limits designated, is subject to the attrac- 
 tive influence of a canal across the American Isthmus, although there may be a 
 difference of opinion as to the degree to which the attraction will be felt. So- 
 much of it as already exists, or may in the future be developed, between ports 
 on the Pacific Ocean and the eastern and gulf ports of the United States, 
 together with that transacted between Europe and the western coasts of the 
 American continents, Japan, etc., must sooner or later be irresistibly attracted 
 to the canal under any tolls that are not prohibitory. It has been questioned 
 whether all the business between Europe and the Pacific coast of South America, 
 will find it advantageous to use the canal at such tolls as may be established, 
 inasmuch as the saving of distance to Valparaiso by steamers which pass through 
 the " Straits" is but little over a thousand miles. 
 
 If this were all, the doubt would appear to be well founded, but with an 
 understanding of the facts as they really exist that doubt will disappear. Nine- 
 tenths of all this business is transacted by the Pacific Steam Navigation Com- 
 ■pany which runs its boats from Liverpool to Callao, stopping at Valparaiso and 
 other ports en route. The distance via the Straits of Magellan from Liver- 
 pool to Callao, which includes Valparaiso, and is the actual length of the voyage, 
 is about 9,960 miles. The distance, making the voyage via the Nicaragua 
 Canal to Valparaiso as a terminus, would be 7,734 miles, without reference to- 
 calling at the intermediate ports, which would add about the same mileage in 
 either case, showing a saving of at least 2,226 miles on the voyage. For sail- 
 ing vessels, which cannot avail themselves of the shorter route by the "Straits,"' 
 but must double Cape Horn in their passage, Valparaiso itself, independently of 
 Callao, will be within the zone of attraction. 
 
 Of the commerce between Europe and other ports of the Pacific, as for 
 instance with Hong Kong, Shanghai, the Straits Settlements, Japan, Australia, 
 New Zealand, Tasmania, etc., a very large proportion is carried in sailing ves- 
 sels, to which the use of the canal would undoubtedly prove advantageous; of 
 the rest, some portion, such as is carried by vessels with auxiliary steam power 
 may also find advantage, because of favoring winds and currents, in its use on 
 homeward bound voyages. 
 
 In 1890, the wheat and flour fleet from San Francisco carried 780,000 tons 
 of wheat and flour to Europe. Chile and Bolivia sent about 860,000 tons of 
 nitrates and 75,000 tons of wheat, and Peru sent about 80,000 tons of nitrates- 
 
THE NICARAGUA CANAL. 69 
 
 and guano. In the same year the United States sent 714,150 tons of illumina- 
 ting oil, mostly in sailing vessels from Atlantic ports, to foreign ports on the 
 Pacific, in addition to 37,000 tons shipped to San Francisco principally by rail. 
 California also exported in the same year from the port of San Francisco alone 
 148,446,150 pounds of canned and dried fruits, including raisins; 1,625,867 
 cases of canned salmon; 4,500,000 gallons of wines and brandy; 5,734,120 
 pounds of hops, and 22,662,000 pounds of wool, fully 90 per cent, of all which 
 was transported to eastern ports of the United States or to Europe ; the great 
 "bulk of it paid the cost of railroad transportation. Portland, Seattle, Tacoma 
 and other cities were also large exporters of like commodities, and large quan- 
 tities of shingles were shipped from Puget Sound. All of these places were at 
 the same time large importers of provisions from the eastern States by rail. 
 This business, including the traffic around Cape Horn and across the Isthmus of 
 Panama between ports of the United States and ports of British Columbia with 
 ■eastern ports of the United States cannot be estimated at less than 500,000 tons 
 annually, and is probably much in excess of that amount. 
 
 Statistics of the tonnage of traffic, excepting in particular commodities at 
 particular points, such as above instanced, are not generally reliable ; it is, 
 therefore, convenient and more satisfactory to base an estimate of bulk upon the 
 actual values of exports and imports as ascertained from the customs reports of 
 different countries taken at a liberal average valuation for the ton. Upon such 
 an estimate carefully made, it appears that the tonnage of the traffic, referred 
 to on page 68 as already existing between foreign ports of the Pacific Ocean and 
 the eastern and Gulf ports of the United States, together with that between 
 Europe and the western coast of the American continents and Japan, etc., 
 excepting that in the commodities but just cited, amounts to 4,150,000 tons. 
 
 On a similar estimate, the commerce between Europe and more remote 
 ports of the Pacific (referred to on page 68), together with other traffic which 
 must be considered as only partially tributary amounts in the aggregate to 
 5,600,000 tons. This item, however, can only be considered as contingently 
 tributary to the canal — that is to say, so far as it may be influenced by con- 
 ditions already referred to ; what the proportion which will be attracted may be, 
 it is impossible to say, but we shall not be considered as claiming too much if 
 we estimate it at 1,000,000 tons only. Summarizing the foregoing we have 
 the following result: 
 
 San Francisco wheat and flour fleet, p. 68, . , . . 780,000 tons 
 
 Chile nitrate shipments, p. 68, ...... 860,000 " 
 
 Chile wheat shipments, p. 68 7 5, 000 " 
 
 Peru nitrates and guano, p. 68, 80,000 " 
 
 U. S. illuminating oil to Pacific ports, p. 69, . . . . 714, 150 " 
 Traffic around Cape Horn, by Isthmus,- and by railway, etc., 
 
 between U. S. ports, etc., domestic commodities, p. 69, . 500,000 " 
 
 General traffic entirely tributary, p. 69, 4,150,000 " 
 
 Proportion of general traffic only contingently tributary, p. 69, 1,000,000 " 
 
 Total .... . . 8,159,150 tons* 
 
 ♦ For estimatB of Tonnage existing In 1884, by M. Amfidie Marteau, see Appendix pp. 62 and 63, 
 
70 THE NICARAGUA CANAL. 
 
 This total may be regarded as the tonnage now existing, which, if transit 
 by the canal were possible to-day, would naturally seek that route and pay its 
 tolls in preference to following those which are at present in use. 
 
 Statistics show the normal growth of commerce to be at the ratio of about 
 I per cent, per annum. Assuming that the canal will be completed and ready 
 for use by the year 1897, and that the statistics which we have used are for the 
 year 1890, we must add 7 per cent, for natural growth, say 571,140 tons, mak-. 
 ing 81 73°, 290 tons the aggregate of freight existing in 1897, for which the 
 canal if open to traffic, will afford the most convenient route for transportation, 
 but this is only allowing for a normal growth of commerce, and for reasons 
 worthy of consideration, which have already been indicated, growth in greater 
 proportion than normal is to be expected, whenever the near prospect of the 
 canal's completion shall give such assurances of its advisability as to warrant 
 merchants in venturing upon new enterprises. With the opening of the canal 
 not only will a new route be provided, but new fields will be opened to com- 
 merce by the more advantageous provisions for its transaction. If we add for 
 this development 1,000,000 tons as estimated on page 63, the aggregate of 
 the traffic apparent, from which the canal may be expected to derive its busi- 
 ness and its revenue, amounts to 9,730,290 tons, not to speak of those unfore- 
 seen and unexpected'developments, of which the commerce of all. new countries 
 has always been prolific, whenever increased facilities have afforded more 
 favorable opportunity for an exploitation of the natural resources of the region. 
 In this respect the opportunity of the Nicaragua Canal is unique. The coun- 
 tries chiefly brought into nearer contact by the Suez Canal are old and densely 
 populated. Europe with its population of loi to the square mile, and Asia with, 
 a population of 57 to the mile, or, to speak more precisely, England, France 
 and Belgium, as parts of Europe, and India and China, as parts of Asia, have 
 very few new or untried resources yet remaining open for development. On 
 the other hand, by the Nicaraguan Canal, North America with a population of 14 
 to the mile chiefly east of the Rocky Mountains, South America with a popula- 
 tion of 5 to the mile, and Australia with a population of only i 4-10 to the mile, 
 all of them the abodes of vigorous, rapidly increasing and enterprising peoples, 
 with as yet many only partially developed resources, the magnitude and 
 value of which are already shown to be almost incalculable by such essays as- 
 have been possible under existing circumstances, are brought nearer to each, 
 other and into closer connection with Europe, by a channel of communication 
 through a country unsurpassed in its natural attractions, equally rich in its 
 resources, and of a climate exceptionally healthy, which from its natural beau- 
 ties must, when facilities for travel are afforded, become a pleasure resort for 
 travelers from all parts of the world. It would seem that if the conditions for 
 an unprecedented growth of population, commerce and material prosperity ever 
 existed anywhere, they exist here to a degree never before exceeded. The 
 great success of the canal at Suez, not only in respect of its returns to those 
 who ventured their capital in its construction, but more especially in the realiz- 
 ation of all the advantages to commerce which were predicted of it by its pro- 
 jectors, is an assurance that the Nicaragua Canal will find commerce ready 
 
THE NICARAGUA CANAL. 7 1 
 
 to avail itself at once of its advantages, instead of waiting until the more 
 venturesome spirits shall have tried them and proved their value. Because 
 of the grand success at Suez, the advantages of canal transit have ceased to 
 be the subject of experiment, and have become demonstrated facts. The 
 business of the Nicaraguan Canal, therefore, will not be of small 
 beginnings and slow growth, but will at once assume a magnitude commensurate 
 with the opportunity; and it is not unreasonable to expect, that of the 9,730,290 
 tons estimated as within the zone of attraction, at least two-thirds, or say 
 6,500,000 tons, will seek the new route for transit as early as within the second 
 year of its availability. 
 
 If the canal tolls be fixed at $2.50 per ton, this amount of traffic (6,500,- 
 000 tons) will yield a gross revenue of $16,250,000. 
 
 The cost of maintenance and operation of the canal, after its completion, 
 cannot be large. The route is made up principally of broad stretches of water 
 with natural banks, or of cuttings through solid rock which once made will be 
 permanent; and there are no sands drifting from widespread desert plains, as at 
 Suez, to fill its channel continually and make necessary large and unceasing 
 expenses for dredging. The cost of maintenance must, from the nature 
 of things, therefore be moderate. The operation of the lock of the Sault Ste. 
 Marie canal, which passed nearly 7,500,000 tons in the season of 1890-91, 
 together with all other expenses of that canal forthatyear, amounted to $45,417. 
 Allowing $50,000 for each of the six locks of the Nicaraguan Canal for operating 
 alone, and making a similarly liberal allowance for maintenance, administration 
 and all other expenses, the total annual cost cannot exceed $1,500,000, which, 
 on an annual traffic of 6,500,000 tons at the rate of toll suggested, shows a net 
 revenue of $14,750,000, or 5 per cent, on a total capitalization of $295,000,000, 
 to be realized upon the attainment by the enterprise, of such a condition of 
 advancement as will afford opportunity for demonstration of its capabilities. 
 
 What the growth of its traffic and revenues may be from this point is, of 
 course, a matter of conjecture, but in view of all the contingent conditions, it 
 cannot fail to be large and rapid, and it is not unreasonable to believe, that 
 although the canal has been projected with a view to the accommodation of a 
 large traffic, its capacity, before many years shall have passed, will be taxed to 
 the utmost. 
 
 In May, 1889, the estimates, made by Mr. Menocal, of the cost of con- 
 struction were submitted to the investigation of an independent committee of 
 eminent engineers, and made by them the subject of a careful report, the full 
 text of which will be found in the Appendix. * The following comparative state- 
 ment will give a summary of the estimates of the chief engineer and of the con- 
 sulting engineers: 
 
 *See Appendix No. 8. 
 
72 
 
 THE NICARAGUA CANAL. 
 
 Menocal. Committee. 
 
 Cost of Eastern Division .... $23,686,048 $34,649,805 
 
 San Francisco Division 5,103,318 5,411,551 
 
 Lake and River Division 5,692,55? 6,623,663 
 
 Western Division 17,525,417 20,231,289 
 
 Surveys, hospitals, contingencies, etc . . . 13,016,836 6,250,000 
 
 Further allowance 14,033,262 
 
 $65,084,176 $87,799,570 
 To these figures add for interest during construction 15,000,000 20,000,000 
 
 Making total cost $80,084,176 $107,799,570 
 
 Five per cent interest thereon .... 4,004,209 5,389,979 
 
 Estimated net earnings on 6,500,000 tons . . 14,750,000 14,750,000 
 
 In addition to the many sources of revenue already indicated, the value of 
 which may in some measure be estimated, another is shortly to be added, con- 
 cerning which but few data exist whereon to formulate an opinion of its impor- 
 tance. The projected Russian railway, from the heart of that great empire to 
 the port of Vladivostock on the Sea of Japan, will bring into close commercial 
 relations with the United States, all of Asiatic Russia and much of the interior 
 of Central Asia now practically inaccessible to commerce. The lower valley of 
 the Amur, before that river turns northward to its debouchement into the sea of 
 Ochotsk, is said to possess an excellent climate, an exceptionally fertile soil, 
 and to be especially adapted to wheat growing. The rigors of the climate of 
 Siberia are generally considered as characteristic of its entire territory; as a 
 fact, the climate of the southern provinces is said to compare favorably with 
 that of the central parts of Europe. Such portions of the country are, therefore, 
 likely to attract wide attention and great development with the advent of the 
 railroad ; but, however that may be, it is a fact that much of the present popula- 
 tion of this widely extended territory is primitive and agricultural, and is likely 
 to continue so under the most favorable conditions of growth. Ready access 
 to it means the exchange of textile fabrics, farming implements and machinery 
 of all kinds; the products of the looms, the workshops and forges of the United 
 States, or of such other manufacturing nation as shall furnish the most advan- 
 tageous market for its commodities. This business, too, whoever may transact 
 it, will pay its proportion of tribute to the canal. At the same time the trade 
 with Corea may be expected to assume important proportions. In 1884 the 
 total value of the exports and imports of the last named country amounted to 
 $1,408,037 only. In 1889 it amounted to $4,611,656, an increase of more 
 than 227 per cent., or at the ratio of more than 25 per cent, for each successive 
 year. 
 
 The commerce of Japan, although already of a considerable magnitude, it is 
 to be remembered, is as yet in its infancy, and therefore susceptible of develop- 
 ment in a ratio more than normal ; of this no account has been taken in the fore- 
 going estimate. As a fact, the commerce of that empire has doubled in the last 
 five years, and its manufacturers are now commencing to buy cotton of us, for 
 
THE NICARAGUA CANAL. 73 
 
 their looms. Japan has a population of 40,000,000, and its people are intelli- 
 gent, enterprising and progressive. In 1889 its commerce amounted to about 
 $136,000,000 for the year, or say $3.40 per capita. The commerce of the 
 United States, as compared with its population, amounts to over $25.00 per 
 capita. To equal one-half this ratio the commerce of Japan must increase to 
 fourfold its present magnitude. 
 
 In whatever direction attention is turned, the substantial elements of an 
 enormous and unprecedented commercial development, in connection with the 
 opening of the Nicaragua Canal, are apparent to such a degree as to make an 
 estimate of results based thereon seem fabulous, and for that reason to be 
 avoided. Enough has been shown to prove that the canal will have an abun- 
 dant business, from the day when a vessel may pass through it from ocean to 
 ocean, to pay interest on all of the capital ventured in its construction, and to 
 richly reward its projectors. The canal is, however, to be considered in other 
 aspects than that of its relations to commerce or as a remunerative investment 
 to capitalists. 
 
 In this connection, the views of President Arthur, expressed in his message 
 of December 10, 1884, wherewith he transmitted to Congress for its considera- 
 tion the treaty negotiated by the United States with Nicaragua concerning a 
 canal across her territory, command attention. He says : 
 
 " The establishment of water communication between the Atlantic and 
 Pacific coasts of the Union is a necessity, the accomplishment of which, how- 
 ever, within the territory of the United States is a physical impossibility. While 
 the enterprise of our citizens has responded to the duty of creating means of 
 speedy transit by rail between the two oceans, these great achievements are 
 inadequate to supply a most important requisite of national union and pros- 
 perity. For all maritime purposes the States upon the Pacific are more distant 
 from those upon the Atlantic than if separated by either ocean alone. Europe 
 and Africa are nearer to New York, and Asia is nearer to California than are 
 those two great States to each other by sea. Weeks of steam voyage, or months 
 "under sail, are consumed in the passage around the Horn, with the disadvant- 
 age of traversing tempestuous waters or risking the navigation of the Straits of 
 Magellan. A nation like ours cannot rest satisfied with such a separation of its 
 mutually dependent members. We possess an ocean border of considerably 
 over 10,000 miles on the Atlantic and Gulf of Mexico, and including Alaska, of 
 some 10,000 miles on the Pacific. Within a generation the western coast has 
 developed into an empire with a large and rapidly growing population, with 
 vast but partially developed resources. At the present rate of increase, the end 
 of the century will see us a commonwealth of, perhaps, nearly 100,000,000 
 inhabitants, of which the West should have a considerably larger and richer 
 proportion than now." 
 
 Among other mention, the President briefly adverts to the past efforts to 
 find a practicable route for a ship canal across the Isthmus between the two 
 oceans, all of which, with a single exception, have resulted in the discovery of 
 insuperable obstacles to the building of a profitable inter-oceanic canal, the 
 exception being that of the route across Nicaragua. Further on he says : 
 
74 THE NICARAGUA CANAL. 
 
 "From a purely commercial point of view the completion of such a water- 
 way opens a most favorable prospect for the future of our country. The 
 nations of the Pacific coast of South America will, by its means, be brought 
 into closer connection with our Gulf States. The relation of those American 
 countries to the United States is that of a natural market from which the want 
 of direct communication has hitherto practically excluded us. By piercing the 
 Isthmus the heretofore insuperable obstacles of time, sea and distance disap- 
 pear, and our vessels and productions will enter upon the world's competitive 
 field with a decided advantage, of which they will avail themselves. When to 
 this is joined the large coasting trade between the Atlantic and Pacific States 
 which must necessarily spring up, it is evident that this canal affords even alone 
 an efficient means of restoring our flag to its former place on the seas. Such a 
 domestic coasting trade would arise immediately, for even the fishing vessels of 
 both sea-boards, which now lie idle in the winter months, could then profitably 
 carry goods between the eastern and western States." 
 
 " The political effect of the canal will be to unite closer the States now 
 depending upon railway corporations for all commercial and personal intercourse, 
 and it will not only cheapen the cost of transportation, but will free individuals 
 from the possibility of unjust discriminations. It will bring European grain 
 markets of demand within easy distance of our Pacific, and will give to the 
 manufacturers of the Atlantic sea-board economical access to the cities of 
 China, thus breaking down the barrier which separates the principal manufac- 
 turing centres of the United States from the markets of the vast population of 
 Asia, and placing the Eastern States of the Union, for all purposes of trade, 
 midway between Europe and Asia." 
 
 Still another aspect calls for passing attention. In a strategic point of view 
 the canal will be of greater value to the United States than is Suez to Great 
 Britain. By the Suez Canal the Indian domain of Great Britain is approxi- 
 mated to the seat of Government 3,600 miles in a distance of 11,600, which is 
 the length of the voyage to Calcutta by the way of Cape of Good Hope. Upon 
 the opening of the Nicaragua Canal the distance between the naval stations of 
 the United States, on the Gulf of Mexico, and San Francisco, on the Pacific 
 coast, will be reduced to 4, 150 miles, as against 13,530, the length of the voy- 
 age at present by the Straits of Magellan, a saving of 9,400 miles. Assuming 
 that in case of necessity, a vessel would steam not less than 350 miles a day, 
 the saving of time between Great Britain and Calcutta by Suez is about 10 1-2 
 days; between the eastern ports of the United States and San Francisco by 
 Nicaragua it will be 26 3-4 days, and the time required for transit from any 
 Gulf station to the Pacific Ocean will not exceed five days. The time required 
 for transit between Great Britain and India, on the same basis, is 20 1-2 days. 
 
 In this connection, the remark of President Hayes, made in his message of 
 March 8, 1880, is pertinent: 
 
 "An inter-oceanic canal across the American Isthmus will essentially change 
 the geographical relations between the Atlantic and Pacific coasts of the United 
 States, and between the United States and the rest of the world. It will be the 
 
THE NICARAGUA CANAL, 75 
 
 great ocean thoroughfare between the Atlantic and Pacific shores and virtually 
 a part of the coast line of the United States. Our mere commercial interest in 
 it is greater than that of all other countries, while its relation to our power and 
 our prosperity as a nation, to our means of defense, our unity, peace and safety 
 are matters of paramount importance to the people of the United States." 
 
■p-1 
 
 •S 
 
 I9AO eS'KHIBApY 
 
 S(io£-T-i'-it-oe»t-eotDgMoe 
 asMODOTioeOT-tcocot-oswt^ic 
 mS^oSoOT-HOJt- CD ■*(=>_'* w 
 
 os'os"art-'"-*io'«o'io" •^co'i-TTfoa 
 
 . 
 
 •eijnoa: Sm 
 
 -XTBg J8A0 aSBIJUBApy 
 
 11,853 
 
 7,993 
 
 948 
 
 1,646 
 
 
 •XBUBQ 'BnSBJBOIil BT A 
 
 t(<00i-i001O(S5OOS00t1I«DC0C0^ 
 TH«0SO»e««>I^Mi-IO5 ■* t-,'-*,^! 
 Tf«'oa'e«Tft-"icr!o"T-rio'!D"t-"os'i- 
 
 1-1 TH 
 
 
 ■adoH 
 
 poor) JO edBQ BJA 
 
 13,857 
 14,505 
 
 ■sxassa^ 
 niB8?g pgjeAiOd; 
 
 COCQ00005t-iCT-iOl5DO-tH 
 lO 05 -^ O 00 -^ » CO <» ?D <» i> O^ 
 CO" rn" Oa O C» 05 i-T « th" o' os" 00 CO 
 tH-iHt-ItH t-( t-H i-H T-l 1-H tH 
 
 •siassaA SntuBg xoj 
 niog edBO punoxy 
 
 16,000 
 
 15,630 
 
 13,130 
 
 9,380 
 
 ( 
 
 5 
 
 New Orleans and SanFrancisco 
 
 Acapulco 
 
 Mazatlan 
 
 Callao 
 
 Valparaiso . . 
 Liverpool and San Francisco. . 
 
 Acapulco 
 
 Mazatlan 
 
 Auckland 
 
 Guayaquil 
 
 Callao 
 
 Valparaiso 
 
 Honolulu 
 
 Yokohama 
 
 
 •9inoa raB3^g 
 
 I9A0 eSBIJUBApV 
 
 COt-COOi-HCD 05«t-06t-« 
 04 (M (M CO U3 CO ^.."^ '^ ^. ® ■■^ 
 
 Qo'QO'oo'oo'ao"od' atieo<s>ot>eii 
 
 ■a;).noa Sm 
 -XiBgjaAO aSB^uBApv 
 
 CO ODOOOQO CO «D 
 lO 1003 O»C0 so O 
 i> OOSOOt-IO ■* 
 
 O" Co'lOCO"-*!-" •* 
 tH 
 
 'XBUBO BnSBJBOI^BIA 
 
 0®t-0-*!>05(StO«>-rH-*«-S 
 OSCOtHi#OCOSOC«QO-^"^I> ffi^O 
 
 TiH" lo CO i> co" co" o os" oT 00 CO co" CO* in 
 
 ■adoH 
 pooo JO adBO BJA 
 
 oc-oos 
 in T-H CO CO 
 
 t-OQOOO 
 
 co-ioo*-* 
 
 •siassBA 
 
 urea^g pajaA^oj; 
 
 tp^ JO J uBneSBH BT A 
 
 i*inajinint- oosoooo 
 t-cocooioco coaso3-^o-^ 
 iH^os -"ji^t- 113 o_ 00 lo « co_eo_-a< 
 
 co'co -^Ks TH c5 <M"i-rco'"arood' 
 
 i-( TH TH 1H rH tH tH tH tH tH 
 
 ■SiassaA SmjiBg aoj 
 UJOH adBQ punoay 
 
 15,660 
 
 13,760 
 13,600 
 15,480 
 
 9,430 
 
 
 ! 
 
 New York and San Francisco. 
 Puget Sound. . 
 
 Sitka 
 
 Bering Straits. 
 
 Acapulco 
 
 Mazatlan 
 
 Hong Kong. . . 
 Yokohama. . . . 
 
 Melbourne 
 
 Auckland, N.Z 
 Honolulu, S. I. 
 
 CaUao 
 
 Guayaquil. . . . 
 Valparaiso 
 
 O lO '00 t- t- o 
 
 O Hj< IS O CO oi 
 
 t- eg ■* 00 io_ o 
 
 ea eo" os" «" th" i-" 
 
 t- O O t- TH o 
 
 -* CO 00 oj » o 
 
 TH o t* tH CO CO 
 
 «" TdT lo" ■^" th" 
 
 a O 
 
 PI ri 
 
 ff ^ I I 
 
 
iXautical Miles, betireen Commercial Ports of the World, and Distances Saved by tlie Nicaragua Canal. 
 
 k data furnished by tke United States IlydroprapMc Office. Leuffth of Sailing Routes approximate only. 
 
 13,760 
 12,600 
 15,480 
 
 all 
 
 all 
 
 1 
 
 1 
 
 '4 
 
 1:3 
 
 fJ 
 
 
 
 
 
 
 
 > 
 
 ' 
 
 
 -fl-*^ 
 
 13,174 
 
 
 1,907 
 
 10,753 
 
 «,267 
 
 13,933 
 
 
 5,865 
 
 
 8,270 
 
 14,439 
 
 
 6,177 
 
 
 8,262 
 
 15,705 
 
 
 7,402 
 
 
 8,303 
 
 11,555 
 
 
 3,046 
 
 
 8,510 
 
 18,037 
 
 
 3,675 
 
 
 8,362 
 
 
 13,750 
 
 10,692 
 
 3,058 
 
 
 
 15,217 
 
 9,227 
 
 6.990 
 
 
 12,800 
 
 12,830 
 
 9,862 
 
 3,898 
 
 2.998 
 
 11,59!* 
 
 14,069 
 
 8,462 
 
 4,1.38 
 
 3,l:i7 
 
 13,290 
 
 
 6,117 
 
 7,063 
 
 6,873 
 
 9,640 
 
 
 3,744 
 
 
 6,896 
 
 10,300 
 
 
 3,227 
 
 
 7,073 
 
 8,440 
 
 
 6,014 
 
 4,406 
 
 3,426 
 
 New Orltans and iSan Franeisec 
 " " Acapulco, 
 
 " " Mazatlan, 
 
 " Ciillao, 
 " Valparaiso, 
 Liverpool and San Frauuisco, 
 " " Acapulco, 
 
 " " Mazatlan, 
 
 " " AucKland, 
 
 " " Guayaquil, 
 
 " " Callao, 
 
 " " Valparaiso, 
 
 " Houululu, 
 " " Yokohama, 
 
 lA 
 
 s= i 
 
 S 
 o 
 
 .2 
 
 l| 
 
 u 
 
 Iff 
 
 
 
 
 
 
 16,000 
 
 ii,,™ 
 
 11.93) 
 12.402 
 10.005 
 8,805 
 
 
 4.117 
 2.2S5 
 2,915 
 2,984 
 4,254 
 
 11.853 
 
 1.-1,620 
 
 13,4!U 
 U,875 
 12,Si7 
 
 
 7,627 
 6,765 
 6 395 
 
 7,993 
 
 12,1.30 
 
 11,919 
 10,620 
 9,960 
 
 13. ."557 
 
 11 182 
 5,947 
 6,464 
 
 948 
 
 9,380 
 
 8,760 
 13,610 
 
 14,505 
 
 7,734 
 9,137 
 11,947 
 
 1,646 
 
 9,392 
 9,635 
 9,487 
 7,021 
 4,551 
 6,807 
 6,110 
 6,962 
 737 
 4,673 
 3,496 
 1,026 
 4,473 
 2,5.58 
 
 147 Western Port of Canal to San Francisco, 2,700 
 
 2,060 " " •' " Portland 3,316 
 
 4,780 " " •• " Pucet Sound, 3,4.58 
 
 5,127 " " '■ " Valparaiso, 2,807 
 
 4,691 " " " " Callao, 1,637 
 
 1,300 " Yokohama 7,020 
 
 Lon^tude 
 
• T^PPBNDICES • 
 
APPENDIX I. 
 
 TJlSriTED STATES CHARTER OF THE MARITIME CANAL COMPANY OF 
 
 NICARAGUA. 
 
 Be it enacted by the Senate and House of Representatives of the United States 
 of America in Congress assembled. That Frederick Billings, Charles P. Daly, Daniel 
 Ammen, Francis A. Stout, Horace L. Hotchkiss, Edward F. Beale, Hiram Hitchcock, C. 
 Ridgley Goodwin, A. C. Cheney, J. F. O'Shaughnessy, H. C. Taylor, J. W. MiUer, A. 8. 
 Crowninshield, A. G. Menocal, Charles H. Stebbins, T. Harrison Garrett, Jules Aldige, R. 
 A. Lancaster, Alfred E. Mills, Gustav E. Kissell, Horace Fairbanks, George H. Robinson, 
 Alfred B. Darling, Joseph E. McDonald, James Roosevelt, Christian Devries, Frederick F. 
 Thompson, Henry A. Parr, and such other persons as may be associated with them and 
 their successors are hereby constituted and created a body corporate and politic in deed 
 and in law, by the name, style and title of "The Maritime Canal Company of Nicaragua," 
 for the construction, equipment, management and operation of a ship-canal from the At- 
 lantic to the Pacific Ocean either entirely through the territory of the Republic of Nicara- 
 gua or through Nicaragua and in part through the territory of the Republic of Costa Rica 
 with such collateral, connecting or cross canals as may be necessary to connect therewith, 
 and to exercise such other powers as have been conferred by the Government of Nicaragua 
 by the concession of that Republic to the Nicaragua Canal Association, through Mr. A. G. 
 Menocal, its representative, and dated the twenty -third day of March, anno Domini eight- 
 teen hundred and eighty -seven, and finally approved by the legislative and executive 
 authority of the Republic on the twentieth, twenty-third, and twenty -fourth days of April, 
 anno Domini eighteen hundred and eighty-seven, and such powers as the Republic of Costa 
 Rica may confer of the same kind as those named in said concession ; and the said Mari- 
 time Canal Company of Nicaragua, by that name shall have perpetual succession, may sue 
 and be sued, plead and impleaded, defend and be defended in all courts of law and equity 
 within the United States ; may make and have a common seal ; and shall have and possess 
 the rights, powers and privileges usually possessed by similar companies. It may receive, 
 purchase, hold and convey such real and personal estate, property and rights of property, 
 or concessionary rights as may be necessary to carry into effect the purposes of this act ; 
 may issue stock to the amount of the just value of such estate, property, and rights, and 
 for work and labor done or materials provided in the execution of the work of constructing 
 said ship-canal; and the stock issued for these purposes shall be deemed paid-up stock and 
 shaU not be liable to any further calls or assessments ; may do all lawful things to secure 
 the fuU enjoyment of the powers, privileges, rights, benefits and grants contained in any 
 canal concession so made by the Republic of Nicaragua or to be made by the Repubho of 
 Costa Rica, as aforesaid; and to aid in the construction of said canal and to carry out the 
 purposes of this act the said Maritime Canal Company of Nicaragua is hereby authorized 
 to issue its bonds, and to secure the same by mortgage on its property and rights of prop- 
 erty of all kinds and descriptions, real, personal and mixed, including its franchise to be a 
 corporation. The principal office of said corporation shall be in the city of New York, and 
 aU legal process may be served upon the person who may at the time be in charge of said 
 office or upon the attorney of said company, whose name and address shall be certified by 
 the president of the company, and such certificate shall be filed in the office of the Secre- 
 tary of State of the United States. Provided, however. That nothing in this act contained 
 
2 THE NICARAGUA CANAL. 
 
 shall be so construed as to commit the United States to any pecuniary liability whatever 
 for or on account of said company, nor shall the United States be held in anywise liable 
 or responsible in any form or by any implication for any debt or liability in any form 
 which said company may incur, nor be held :as guaranteeing any engagement or contract 
 of said company, or as having assumed, by virtue of this act, any responsibility for the acts 
 or proceedings of said company in any foreign country, or contracts or engagements entered 
 into in the United States. 
 
 Sec. 2. That the capital stock of said company shall consist of not less than one 
 million shares of one hundred dollars each, with the right to increase the capital stock to 
 two milUon shares of one hundred dollars each, upon the vote of two-thirds of the stock 
 of said company at any time outstanding, which shares shall in all respects be deemed per- 
 sonal property and shaR be transferable in such manner as the by-laws of said corporation 
 may provide. Five incorporators who shall be chosen by a majority of the number from 
 those named in this act, shall have power to open books of subscription to the capital stock, 
 of said company in the city of New York, and at such other places in the United States, 
 Nicaragua, or elsewhere, as they may designate, who shall receive all subscriptions for 
 stock ; and no stock shall be transferable except upon the books of the company provided 
 for that purpose. The said incorporators shaU give thirty days' notice of the time and 
 place of the opening of said books, by publication in one daily newspaper in New York 
 City, and one newspaper in Managua, Nicaragua, and one in San Jose, Costa Eica, if the 
 said canal should be in part in the territory of that Republic. Sixty days' previous notice 
 shall be given of the payment required of the time and place of payment by publication in 
 one daily newspaper in the city of New York and in one newspaper in Managua, Nicara- 
 gua, and one in San Jose, Costa Eica, if the said canal should be in part in the territory of 
 that Republic ; and in case any stockholder shaU neglect or refuse to pay, in pursuance of 
 such notice, the stock held by him may be sold to the highest bidder for cash, according to 
 the regulations to be made therefor in the by-laws of said company. The directors here- 
 inafter provided for may adopt regulations and by-laws not inconsistent w^ith the provis- 
 ions of this act. AU shares, stocks, bonds, certificates or other securities which the com- 
 pany may issue to raise the corporate capital shall be executed and issued at the principal 
 office in the city of New York. 
 
 Sec. 3. That no certificates for stock, except as otherwise provided in this act, shall 
 be issued till at least ten per cent, of the par value thereof shall be fully paid for in money, 
 and such money deposited in the treasury of said company ; and there shall be at least 
 $1,000,000 in money paid on such subscriptions into the treasury of said company within 
 one year from the passage of this act; and said company is hereby prohibited from return- 
 ing or repaying any part of the iHoney so paid. No part of the captital stock paid in 
 shall be at any time withdrawn or returned to the stockholders, or in any manner diverted 
 from the proper uses of the corporation. Any violation of the provisions of this section 
 shall subject the charter to forfeiture. 
 
 Sec. 4. That the affairs of the said company shall be managed by a board of direct- 
 tors, fifteen in number, who shall hold their office for three years and until their successors- 
 are duly chosen and qualified, and a majority of whom shall be citizens and residents of 
 the United States. 
 
 At the first election five shall be chosen by the stockholders for one year, five for 
 two years, and five for three years, and at each annual election thereafter five shall be 
 chosen by the stockholders for three years. The said board shall elect from its number a 
 president, who shall be a citizen and resident of the United States, and one or more 
 vice-presidents of the company, who shaU also be citizens and residents of the United 
 States, who shall hold office for such terms as the by-laws of said board may provide, and 
 until their successors are duly elected and shall have qualified. 
 
 Sec. 5. That for the management and disposition of the stock, property, estate and 
 effects of the said company, the board of directors may make such by-laws, rules, and 
 regulation as may conform to the authority granted in such canal concessions, and not be 
 inconsistent with this act, of the laws of the United States, or the existing treaty stipu- 
 
APPENDICES. 3 
 
 lations of the United States with the Government of Nicaragua or of Costa Eica, if the 
 said canal should be in part in the territory of that Republic ; and may fix the time for 
 election of directors, and in case of vacancy in said board, caused by death, resignation, or 
 otherwise, iray fill the same. No person shall be a director who is not a stockholder, and 
 any one ceasing to be a stockholder shall cease to be a director. All meetings of stock- 
 holders shall be held at the office of the company in the city of New York, and at least one 
 such meeting shall be held in each year ; but failure to elect directors on the day appointed 
 by said by laws shall not be deemed to dissolve said company, but such election may be 
 holden on any day appointed thereafter by the directors, first giving thirty days' notice 
 thereof in manner aforesaid. The directors, of whom eight, including the president, shall 
 be a quorum, shall have fuU power touching the election or appointment of aU officers of 
 the company, and said officers shall hold office at the will and pleasure of said board. 
 
 Sec. 6. Said company shall make a report on the first Monday of December in each 
 year, to the Secretary of the Interior, which shall be duly verified on oath by the President 
 and Secretary thereof, giving such detailed statement of its affairs and of its assets and 
 liabilities as may be required by the Secretary of the Interior, and any wilfully false state- 
 ment so made shall be deemed perjury and punishable as such. And it shall be the duty 
 of the Secretary of the Interior to require such annual statement and to prescribe the form 
 thereof and the particulars to be given thereby. 
 
 Sec. 7. Nothing in this act contained shall be deemed or construed to in any wise 
 Testrict or impair any right of the United States under any treaty in f orce^with the Ee- 
 pubUo of Nicaragua. 
 
 Sec. 8. That Congress shall at all times have the power to alter, amend, or repeal 
 this act, when in its judgment the pubUc good may so require. This act shall expire and 
 be of no force or effect at the end of three years unless the construction of said canal 
 shall be commenced and prosecuted in good faith within that time. 
 
 Approved February 30th, 1889. 
 
APPENDIX n. 
 
 CONCESSIONS AND DECREES OP THE REPUBLIC OF NICARAGUA TO THE 
 NICARAGUA CANAL ASSOCIATION. 
 
 The President of the Republic to the Inhabitants thereof: 
 Know Ye That Congress has ordered as follows : 
 
 The Senate and Chamber of Deputies of the Republic of Nicaragua do hereby 
 
 DECREE. 
 
 Only Article. — The contract for a maritime inter-oeanic canal entered into the 23d of 
 March, ult., between Dr. Adan Cardenas, commissioned especially by the supreme govern- 
 ment, and Mr. A. G. Menocal, member and representative of the Nicaragua Canal Associ- 
 ation organized in New York, is hereby ratified. This contract shall be a law of the Re- 
 public if Mr. Menocal accepts it as soon as he be notified, with the following modifications 
 and upon the following terms : 
 
 "The undersigned, Adan Cardenas, Commissioner of the Government of the Republic, 
 party of the first part, and Aniceto G. Menocal, representative of the Nicaragua Canal 
 Association, party of the second part, both having sufficient pow^ers, have entered into the 
 following contract for the excavation of an inter-oceanic canal through the territory of 
 Nicaragua. 
 
 Aeticle I. 
 
 The Republic of Nicaragua grants to the aforesaid Nicaragua Canal Association, and 
 Mr. A. G. Menocal, representative of the said association, accepts on its behalf, for the 
 purposes set forth in Article VII., the exclusive privilege to excavate and operate a mari- 
 time canal across its territory, between the Atlantic and Pacific Oceans. 
 
 Article II. 
 The canal shall be of sufficient dimensions for the free and commodious passage of 
 vessels of the same size as the large steamers used for ocean navigation in Europe and 
 America, provided that no locks used in said work shall be leas than five hundred and fifty 
 (550) feet in length and thirty feet in depth. 
 
 Article III. 
 The State declares this work to be one of public utility. 
 
 Article IV. 
 
 The duration of the present privilege shall be for ninety -nine (99) years, to be counted 
 from the day the canal shall be opened to universal traffic. During the aforesaid period 
 the company shall have the right to construct and operate a railway along the whole ex- 
 tent of the canal, or those parts of the same that amy be considered convenient for the 
 better service and operation of the said work. 
 
 Article V. 
 The State binds itself not to make any subsequent concession for the opening of a canal 
 between the two oceans during the term of the present concession, and also to abstain 
 from granting a concession for a railroad, such as might compete with the canal for the 
 
o 
 
 w 
 
 w 
 o 
 
 > 
 
 ■pi 
 H 
 W 
 73 
 
 > 
 
 
APPENDICES. e 
 
 transportotion of merchandise, during the same period; but nothing in this article shall 
 prevent the Government of Nicaragua from constructing or permitting the construction 
 of such railways as it may deem advisable for commerce and internal traffic. Said 
 government also to have the right to construct or permit the connstruction of an inter 
 oceanic railway if, in course of time, it be demonstrated that the canal is not sufficient to 
 satisfy the demands of the traffic of all nations. 
 
 The grantee company shaU have the right to establish such telegraph lines as it may 
 deem necessary for the construction, management and operation of the canal. The gov- 
 ernment shall have the right to occupy these lines for the public service without any re- 
 muneration to the company. 
 
 Article VI. 
 
 The Government of the Republic declares durmg the term of this concession the 
 ports at each extremity of the canal, and the canal itself, from sea to sea to be neutral, and 
 that consequently the transit through the canal in case of war between two powers, or 
 between one or more and Nicaragua, shall not be interrupted for such cause ; and that 
 merchant vessels and individuals of aU nations of the world may freely enter the ports and 
 pass through the canal without molestation or detention. 
 
 In general, aU vessels may pass through the canal freely, without distinction, exclu- 
 sion or preference of persons or nationality, provided they pay the dues and observe the 
 regulations established by the grantee company, for the use of the said canal and its de] 
 pendencies. The transit of foreign troops and vessels of war wiU be subjected to the 
 prescriptions relating to the same estabhshed by treaties between Nicaragua and other 
 powers, or by international law. But entrance to the canal wiU be vigorously prohibited 
 to vessels of war of such powers as may be at war with Nicaragua or with any other of 
 the Central American Eepubhcs. 
 
 Nicaragua wiU endeavor to obtain from the powers that are to guarantee the neu- 
 traUty, that in the treaties that shaU be made for that purpose, they shall agree also to 
 guarantee a zone of land parallel to the canal and also a maritime zone in both oceans, the 
 dimensions of which wiU be determined in such treaties. 
 
 Article VII. 
 
 This present agreement, with all its charges and advantages, shall be the object of a 
 company of execution in agreement with Articles I., X., and those following thereafter 
 
 Said company shall be the grantee, and whenever said name is used, in this present 
 contract, reference is made to it. 
 
 Article VIII. 
 
 The present concession is transferable only to such company of execution as shall 
 be organized by the Nicaragua Canal Association, and in no case to governments or to 
 foreign pubHc powers. Nor shall the company cede to any foreign government any part 
 of the lands granted to it by this contract ; but it may make transfers to private parties 
 under the same restriction. 
 
 The Republic of Nicaragua caimot transfer its rights or shares by selhng them ta 
 any government. 
 
 Article IX. 
 
 The people of all nations shall be invited to contribute the necessary capital to the 
 enterprise, and it shaU be sufficient for the fulfillment of this requirement to publish an 
 advertisement for thirty (30) consecutive days in one of the principal daily papers of each 
 of the cities. New York, London and Paris. 
 
 The capital stock of the final company shall be composed of shares, bonds or obli- 
 gations of any other kind, in such proportion as it may deem convenient. The issue and 
 transfer of these obhgations shall be exempt from stamp dues, and from any other im- 
 posts or taxes established or that may be hereafter established in the Republic. 
 
 Of the capital with which the company shall organize, and which it proposes to dis- 
 
6 THE NICARAGUA CANAL. 
 
 -tribute among the different countries interested in the enterprise, there shall be reserved 
 at least five (5) per cent, for the Central American Governments and citizens that may de- 
 sire to subscribe. 
 
 As soon as the company is ready to open subscription books it shall advise the Gov- 
 ernment of Nicaragua, which will invite the other governments, and through them private 
 parties, to subscribe. All such shares not taken within six months f oUovraig the date on 
 which the government shaU have been advised of that circumstance, shall remain subject 
 to the free disposition of the company. 
 
 Article X. 
 
 The company shall be organized in the manner and under the conditions generally 
 adopted for such companies. Its principal office shall be in New York, or where it may 
 be deemed raost convenient, and it may have branch oflS.ces in the different countries of 
 Europe and America, where it may consider it expedient. 
 
 Its name shall be the "Maritime Canal Company of Nicaragua," and its Board of 
 Directors shall be composed of persons, one-half at least, of them, shall be chosen from 
 "the promoters who may yet preserve their quality as such. 
 
 Akticle XI. 
 
 The Government of Nicaragua in its character of shareholder in the company of ex- 
 ecution, as hereiaafter provided, shall have the perpetual right of naming one director, 
 who shall be an integral part of the board of directors of the company, with all the rights, 
 privileges and advantages conferred upon them by the statutes of the company and the 
 Jaws of the country under which it shall organize. 
 
 The government shall also have the right in its aforesaid capacity of shareholder to 
 -take part in such elections as the company may hold. 
 
 Article XII. 
 The company is bound to keep a representative in Nicaragua vested with all powers 
 aiecessary for the proper conduct of the service and for the transaction of its business with 
 ithe government. 
 
 Article XIII. 
 
 The canal will follow the valley of the Eiver San Juan to Lake Nicaragua, through 
 -which will be designated the most convenient route for communication with the Pacific 
 Ocean. In any event the company shall have the most ample freedom te select the route 
 which it considers most convenient between the two oceans for the excavation of the 
 •canal and its dependencies and its ports, particularly those serving for entrance and exit 
 ■on both oceans. The company shall have the same liberty to adopt the route which may 
 be deemed most advantageous and economical for the construction«of the canal, after the 
 :Qnal survey by a commission of competent engineers. 
 
 However, should the company, after the survey of the Eiver San Juan, find it neces- 
 sary to abandon, in any place, the bed of the river, and cut a lateral canal, the govern- 
 ment of Nicaragua reserves the right of requiring from the company the duty of estab- 
 Jishing a communication between the part of San Juan not used for canal purposes, and 
 the dividing level of the canal, by means of a look, or a series of locks, suitable for the 
 navigation of ships of six feet draft. As soon as the final plans are adopted and laid before 
 the government, it shall notify the company within one month after their receipt whether 
 -or not they meet with its approval, ia order that the company may proceed ia accordance 
 therewith. It is understood that this duty does not in any manner compel the company to 
 place or to maintain in navigable condition for small craft the lower part of the river 
 which these locks may be intended to place in communication with the canal. 
 
 Article XIV. 
 Within three years, to be counted from the commencement of the work upon the 
 Jnter- oceanic Canal, the company shall, at its own expense, construct a navigable canal be- 
 
APPENDICES. 7 
 
 tween Lake Managua and the navigable part of the Tipitapa river, near Pasquier, of suffi- 
 cient dimensions to admit of the free passage of vessels drawing six feet and of 150 feet in 
 length. When completed, this canal shall be taken possession of by the Government of 
 Nicaragua, and "will be, after that date, the property of the Repubhc which, by virtue of 
 Its ownership, shall be bound to bear all expenses required in the future for the service, 
 maintenance, repair and operation of the canal. But the company shall have the right 
 to make use of it for all purposes useful for the maritime canal enterprise, and to pass 
 through it freely with its vessels and those belonging to contractors employed in the ser- 
 vice of the Inter-oceanic Canal during the term of this concession without being subject to 
 any charge whatever, or to pay tolls or contributions of any kind to the Government 
 of Nicaragua, or to any person or company that may, through any cause, be in charge 
 of the administration and operation of the work and its dependencies. 
 
 The Government of Nicaragua will place at the disposal of the company, free of all 
 expenses and charges, all the lands that may be required, as well as the materials found 
 thereon, or on those belonging to the government and that may be utilized by the company 
 in the execution of this work. 
 
 Abticle XV. 
 All expenditures for surveys, construction, maintenance and operation of the Inter- 
 oceanic Maritime Canal shall be borne by the concessionary company, without any subven- 
 tion in money or guaranty of interest on the part of the Republic, nor other concessions 
 than those specified in the present agreement. 
 
 Article XVI. 
 
 The company shall construct, at its expense, and maintain in good condition, two large 
 ports, one in the Atlantic and one in the Pacific, to serve as termini of the canal, each of 
 them to have a lighthouse of the first order. It shall also construct at the two points on the 
 borders of the lake, where the canal disembogues, two ports of lesser size, with the respec- 
 tive lighthouses. 
 
 The company is also obUged to maintain and improve said ports by means of dredges, 
 dikes, piers, embankments or any other works it may deem advisable, having always in 
 view the good service of the traffic through the canal. 
 
 It may, for this purpose, select on the coasts of the two oceans, within the territory of 
 Nicaragua, the locaUties which the surveys may indicate as preferable. 
 
 Article XVII. 
 All the space necessary, whether on the main land, in the lake, and its islands at the 
 ports, roadsteads or rivers of the two oceans for the establishment of the canal, its paths 
 and embankments, for depositing the materials from the excavations and cuttings for the 
 necessary spaces to be occupied by water after raising the dams which are to be con- 
 structed in the bed of the river, for aU necessary deviations of streams, as weU as for 
 reservoirs, dikes, spaces about the locks, stations, Ughts and beacons, storehouses, build- 
 ings, and workshops, deposits for materials, and also aU those spaces necessary for the 
 Toutes, service railways and canals of the same nature for the transportation of the mater- 
 ials to the line of the work and for feeders for the canal; in short, all lands and places 
 necessary to the construction and operation of the canal, as laid down in the drawings, 
 and plans made by the engineers of the company, shall be placed at the disposal of the 
 company by the State, under the conditions set forth in the following articles. 
 
 Article XVIII. 
 Said lands belonging to the State will be given to the company without any compen- 
 sation whatever; and, with regard to those belonging to private parties, the State charges 
 itself with their expropriation if the company so requests. The compensation which may 
 be required in this case shall be paid by the company. 
 
8 
 
 THE NICARAGUA CANAL, 
 
 Article XIX. 
 In aU relating to the expropriation that may be made in conformity with the preceding 
 article, the company shaU enjoy all the immunities and privileges which the laws of the 
 country accord to the State ; so that in no case shall the company be obliged to pay more 
 than the State would under similar circumstances. 
 
 Article XX. 
 The government obliges itself to place the company, within six months after its re- 
 quest, in possession of up to one thousand (1,000) manzanas of land between the lake and 
 the Pacific, at such places as the company shall designate, but they are to serve exclusively 
 for cutting the canal, its havens, ports and other accessory works. The government shall 
 on its own account cause the necessary expropriation to be made, and the company shall 
 pay to it for all indemnity the sum of fifty thousand dollars ($50,000) American gold. This 
 payment to be made by the company in Managua within four months after the date of its 
 request. 
 
 Article XXI. 
 The company shall have the right to take, free of charge, from the public lands for 
 the purpose of construction, operation and maintenance of the canal, whatever materials- 
 may be found on them, especially timber for construction and for fuel, the lime, stone, 
 clay for bricks and earth for flUings, as may be necessary. As regards materials found on 
 private lands, the company shall pay for what it may need thereof, enjoying in this respect 
 the same rights and privileges which the State enjoys according to law. 
 
 Article XXII. 
 Should the company require to occupy, temporarily, and during the con- 
 struction of the canal, lands in the territory of Nicaragua which are not included in those 
 designated' in Articles 17, 18 and 31, it shall not be obliged to pay an indemnity for them 
 if they are pubUc lands; and the State shall not have the right to sell or dispose of them 
 in any other manner after the company has determined to occupy them, unless under the 
 reservation of this right, whose hmit shall be the completion of the works on the Inter- 
 oceanic Canal. Should the lands belong to private parties, the company shall enjoy, in 
 regard to their temporary occupation, all the rights and privileges which the law ac- 
 cords to the State, with the special privilege of occupying them immediately after the 
 declaration of necessity and utiUty, and after paying the compensation, which shall not 
 exceed that which the State should be compelled to pay in a similar case. 
 
 Article XXIII. 
 
 The Republic of Nicaragua, desiring to assist the company eiHcaciousIy in the construc- 
 tion of the Inter-oceanic Canal, a work in which it takes the deepest interest, cedes in fee 
 simple to the said company the pubUo lands hereinafter mentioned, in alternate lots with 
 other similar ones which is reserves to itself, and of the dimensions and in the places as 
 specified hereinafter. 
 
 1st. On the left bank of the River San Juan, from the Atlantic to CastiUo Viejo, lots 
 of three mUes frontage on the canal and six miles in depth from the banks of the river. 
 Where the canal diverges more than six miles from the banks of the river the lots are to 
 be measured on both sides of it and shall be three miles wide and six miles deep. And 
 where this distance is less thad six miles the lots shall be three miles front and three miles 
 deep, and they shall be measured from the bank of the canal to the river, taking what 
 may be lacking from the opposite bank of the canal. 
 
 2nd. Three miles distance from Castillo up stream, on the right bank and up to the 
 lake, lots of two miles in depth and two of frontage on the canal. From the lake along its 
 south shore to the River Sapoa and thence to the River Lajas, lots of one mile frontage 
 and one mile depth. On the left bank of the river from a point in front of Castillo and up 
 to the lake, lots of three miles of frontage on the canal and four miles in depth. 
 
APPENDICES. 9 
 
 3rd. On the north shore of the lake as far as the River 7 ule, lots of two miles frontage 
 on the lake and two miles deep . 
 
 4tli. In the places which the company selects in accordance with the government, of 
 the existing public lands, forty (40) lots, each four miles frontage by five miles deep, re- 
 serving always the acquired rights. 
 
 It is imderstood that the government reserves around each of the forts Castillo and San 
 Carlos, the lands included in a circle of one and one-half {1}4) miles radius, whose centre 
 shall be the respective fortresses. 
 
 As a general rule, at the extremities of the Inter-oceanic Canal and at its points of 
 contact with the lake, the opposite lots will be allotted one to the government and one to 
 the company ; but if this be not possible the first will belong to the government. 
 
 From the Atlantic to the lake, that part of the river bed occupied by the canal shall be 
 considered as part of the latter for all purposes of this article. 
 
 The measurement and setting out of all lands ceded by this contract shaU be made at 
 the expense of the grantees under the supervision of the government. 
 
 The State shall vest in the company the possession of said lands so soon as the said com- 
 pany shall begin operations on the canal. Operations shall be regarded as begun when the 
 provisions set forth in Article 47 shall have been complied with. The final deeds shall not 
 be granted except as the work of the canal progresses and in due proportion. 
 
 Article XXIV. 
 
 In the unforseen case that a new survey should show the necessity of adopting another 
 line for the construction of the canal, which varies wholly or in part from^ the line set forth 
 in Article 13, the company shall have the right to the lands and other elements necessary 
 for the construction of the canal according to Articles 16, 17, 18, 19, 21 and 23. 
 
 The company shall, in that event, also have the right to the lands mentioned in the 
 preceding article, in the same proportions, conditions and dimensions therein established 
 with the single proviso that if it alter the line, the localities whence these lands shall o 
 taken shall be altered accordingly. 
 
 Article XXV. 
 
 The State reserves the right to occupy, in the several lots of land granted the company, 
 such places as it may need for such roads and public buildings as it may deem convenient. 
 In the same manner it may use timber and other building materials found on such lands 
 whenever they may be necessary for any work upon which it may determine. However, 
 these lands, with all their products, vegetable and mineral, shall be subject to the laws of 
 the country so soon as they become the property of individual citizens, by transfer from 
 the company, and then, should the State need them for the ends set forth in this article, or 
 for any others, it shall make compensation to their owners according to law, without any 
 right on the pai-t of the expropriated owners to reclaim against the company. 
 
 Should the company have improved the lands so taken for purposes of use, ornament 
 or pleasure, the State shall be bound to reimburse it for such damages as it may have suf- 
 fered, according to the assessment of experts. 
 
 Article XXVI. 
 Mines of coal, stone, gold, silver, iron or other metals situated in the lands granted to 
 the company, shall belong to it by right, without need of previous "denunciation," it hav- 
 ing the right to work them when considered expedient, subject to the laws of the country. 
 
 Article XXVII. 
 The company shall also have the right to utilize for its account, for sale or exportation, 
 the lumber in the forests situated in the lands ceded to it by the State, from the time they 
 enter into possession of them in accordance with this contract ; that is, from the time of 
 commencement of the works, always saving the acquired rights. 
 
10 THE NICARAGUA CANAL. 
 
 Akticle XXVIII. 
 From the day on which the present concession is ratified by Congress, the public lands 
 included in those necessary for the construition of the canal cannot be sold, nor can any of 
 those ceded to the company on the banks of the canal, by Article 33. Nor can they be 
 leased to the prejudice of the company. 
 
 Article XXIX. 
 
 The company shall have the right, throughout the extent of the canal as weU as at its 
 mouths on both oceans, and in the lake and throughout the extent of the lands ceded by 
 ■virtue of Articles 16, 17,23 and 33, to enter upon the work of locating, leveling, excavating, 
 dredging, and in general any other work of whatsoever nature that may be judged useful 
 for the establishment and feeding of the canal, or for its operation, preservation and main 
 tenance. The company is specially authorized to execute along the canal line and on the 
 banks of the Eiver San Juan and its affluents, within the territory of Nicaragua, and also 
 on the tributaries of Lake Nicaragua, the lakes or water courses which can be utilized in 
 their flow to the Pacific, the system of dikes, rectifications, dredgings, embankments, dams, 
 cuts, location of buoys, and in general all the works that in the opinions of the engineers 
 of the company are deemed indispensable, for the construction, feeding, navigation and 
 operation of the canal. The company may also do all works of like character deemed 
 necessary at the entrances of the canal into Lake Nicaragua, as well as the lake itself, in 
 accordance with the route that may be determined upon in order to secure in it easy navi- 
 gation, and as may be found necessary in the other lakes or lagoons that are to be tra- 
 versed. 
 
 The embankments, fillings and dikes formed in the mouths of the canal in the lake and 
 in the ports on the oceans, by deposits of materials resulting from the excavations of the 
 canal, shall belong in fee simple to the company; the government having the right to use 
 them if necessary, after compensation made. But it may never obstruct said ports nor 
 w^iden the beaches in front of them, unless there is absolute necessity to do so, and in this 
 case the embankments and fillings that it may be necessary to construct in front of the 
 ports shall belong to the Republic. 
 
 In general the company shall have the right to use all the lakes and rivers of Nicara- 
 gua, the waters of which may be necessary, in the judgment of the engineers of the com- 
 panv, for the construction and supply of the canal and for maintaining its operations. It 
 being understood that the damages caused to private parties by the deviation of the water 
 courses shall be compensated for by the company according to a just assessment by experts 
 in agreement with the laws of the Repubhc. 
 
 Article XXX. 
 
 The company shall not import merchandise into the territory of the Repubhc for the 
 purpose of trafficking without paying the import duties estabhshed by law. But it may 
 import free of custom duties, and of any tax whatsoever, the articles needed for the works 
 of the enterprise, such as surveys, examination of localities, construction, use, operation, 
 maintenance, repairs and improvements of the canal ; for the telegraphic service and for 
 that of the railways; for running the workshops the company may keep ia operation; and 
 such articles may consist of tools, machinery apparatus, coal, limestone of all classes, Ume, 
 iron and other metals, raw or manufactured, mining powder, dynamite, or any other analo- 
 gous substance. These articles may be transported between whatever points they may 
 be required during the work of opening of the canal, and be discharged and stored free of 
 all local taxes. 
 
 The company may import free of duties and taxes, during the work on the canal, pro- 
 visions and medicines absolutely necessary for its own consumption. Goods, the commerce 
 of which is not free, are excepted from the privileges contained in this article, which 
 goods, excepting powder, dynamite and other explosives, remain subject to the requisites 
 and duties prescribed by the laws. 
 
APPENDICES. II 
 
 Article XXXI. 
 The vessels employed by the company as tugboats or for the service of the canal shall 
 'be free from all duties and also the materials for their repair and the fuel they use. The 
 "vessels and appurtenances, from whatever place they may be coming for the use of the 
 ■company, shall also be exempt from all duties. 
 
 Article XXXII. 
 
 The government will estabUsh such regulations as it may judge necessary to prevent 
 : smuggling and to maintain public order in the region of the canal. 
 
 The company is bound to lend its assistance for the enforcement of such regulations. 
 But in the free zone along the margin of the canal, as hereinafter provided, measures for 
 the prevention of smuggling shall be limited to vigilance on the part of the employe or 
 employes whom it may concern without any further measures being taken against pas- 
 sengers, vessels or their cargoes, excepting when an attempt at smuggUng is discovered; it 
 being the intention of the State that there should be the most ample liberty of transit by 
 the canal for persons and property, with the sole hmitations established by this contract. 
 'Consequently the company shall have the right to discharge and reload ships in transit at 
 ; such points as may be necessary in order to make repairs, lighten the vessel, shift cargo, 
 or on account of any accident that renders it absolutely necessary, without being subject to 
 . search, exactions or contributions of any kind, provided that in each case, and before be- 
 ginning operations, the nearest custom house authority shall be notified. 
 
 Article XXXIII. 
 The government shall lend its protection, in conformity with the laws of the country, 
 to the engineers, contractors, employes and laborers engaged in the preliminary surveys 
 or in the works of construction and operation of the canal. 
 
 Article XXXIV. 
 
 The company shall be exempt from all forced loans and military exactions in time of 
 •peace and of war. The foreign agents and employes shall Hkewise be exempt from direct 
 contributions, forced loans and military exactions during the time they are in the service 
 of the canal, but they shall pay the taxes estabUshed by the laws, if they acquire real 
 property. 
 
 Article XXXV. 
 
 The company may freely introduce immigrants into the lands ceded to it, and the em- 
 ployes and workmen needed in its works and workshops. Asiatics, however, are excepted. 
 Both the immigrants and the employes and workmen will be subject to the laws of the 
 Republic and the regulations of the company. The government assures them aid and pro- 
 tection, and the enjoyment of their rights and guarantees in conformity with the con- 
 stitution and the national laws during the time they remain on Nicaraguan territory. 
 
 Article XXXVI. 
 The Government of Nicaragua assures to the company and its agents, under the laws 
 of the country as it does to the other inhabitants, the f uU enjoyment of the guarantees and 
 rights which the constitution and the same laws grant to them. And reciprocally the 
 company and its agents bind themselves strictly to respect the laws and regulations that 
 are in force in Nicaragua, and especially to comply with the executory judgments of the 
 tribunals without considering themselves vested with other rights than those which the 
 laws concede in favor of the Nicaraguans. 
 
 Article XXXVII. 
 
 The government shall estabUsh all along the line of the canal, included between th« 
 
 two terminal ports, such police stations and revenue oflSces as in its judgment are necessary 
 
 to preserve order in the region of the canal, and for the observance of the fiscal laws of the 
 
 Republic. All expenses incident to this service, including those of buildings, endowments. 
 
■12 THE NICARAGUA CANAL. 
 
 salaries and allowances of employes and transportation of the forces, shaU be paid to the 
 government by the company on such terms and conditions as may be established, taking 
 into consideration the requirements and necessities of such service. The company, how- 
 ever, shaU have the power to establish guards and watchmen for the -service of the canal 
 and the enforcement of its regulations, 
 
 Article XXXVIII. 
 Contracts for labor on the canal shall enjoy the privileges which the laws of the coun- 
 try accord to agricultural contracts, provided they be clothed with the formalities that the- 
 laws require in such contracts. And the contracts in regard to canal labor that the com- 
 pany execute in foreign countries shaU be valid and lawful in Nicaragua during the term 
 stipulated in them, provided they do not violate the laws of the Republic ; provided also- 
 the documents containing them be presented to the proper authorities, with due authenti- 
 cation, that they may be registered. 
 
 Article XXXIX. 
 The company shall be exempt during the period of this concession, in peace and in. 
 war, from all manner of taxes upon the real property it may acquire by virtue of this con- 
 tract, and from every kind of direct contributions, local taxes, or any other tax relating to 
 the property and use of the canal, its buildings and constructions appertaining thereto, in 
 its entire length, including those that are situated in the ports aud maritime establishments 
 on the two oceans, as also the lands conceded to the company for the whole term of the 
 privileges. This franchise is not assignable to those who buy the real estate which the' 
 company may dispose of by virtne of this concession. 
 
 Article XL. 
 
 The Republic of Nicaragua shall not establish any tonnage, anchorage, pilot, lighthouse 
 dues or charges of any kind whatsoever upon vessels of whatever class, or upon the mer- 
 chandise, baggage and passengers which may pass through the canal from one ocean to 
 the other, all such dues being reserved for the benefit of the Company, as hereinafter set 
 forth in Article 43. 
 
 But all such merchandise as shall be loaded or discharged at any point of the canal, 
 intended for sale, shall pay the import and export duties fixed by the revenue laws of the- 
 State. 
 
 Article XLI. 
 
 With the view of seciiring the most ample freedom in the transit of persons and prop- 
 erty and in order to remove as far as possible occasions for disagreeable questions, there ^ 
 shall be on each side of the canal a free zone, the extent of which shall be one hundreds 
 yards, measured from the water's edge in the canal, it being understood that the borders of 
 the lake shall not be considered as margin of the canal for the purpose of this stipulation. 
 
 All traffic declared illegal by the laws of the Republic shall be prohibited within the- 
 said zone, and the revenue authorities charged with watching and preventing smuggling 
 shall act in conformity with the stipulations in Article 33. 
 
 It is expressly agreed that every vessel that passes through the canal shall carry on 
 board an officer named by the government when the authorities think it necessary, and 
 this employe shaU act in conformity with the law in case he discovers its infringement. 
 
 The two ports to be constructed for the entrance and exit of the canal on the two 
 oceans shall be declared free ports, and they shall be recognized as such from the beginnings 
 of the work to the termination of this concession. 
 
 The government in agreement with the company shall estabHsh, by special decree, the- 
 limits of the freedom of these ports, which Umits shall not extend beyond the waters of 
 the port, which are those included between the mouth of the canal and the entrance ta 
 the said ports. 
 
appendices. 13 
 
 Article XLII. 
 
 For the proper administration of the canal and its appurtenances, and in order to facili- 
 tate its construction and operation, the company shall estabUsh the necessary regulations, 
 which shall be binding on all persons found in its waters or its appurtenances : the sole 
 reservation being that the rights and sovereignty of the State be respected. 
 
 It being understood that the company in the exercise of the powers conferred by this 
 Article may not make other regulations than those necessary for the administrasion 
 ^nd particular management of thecanal, and that before executing and enforcing these 
 regulations they shall be submitted to the. government for approval. The State will lend 
 the aid of its authority for the enforcement of these regulations. 
 
 Article XLIII. 
 
 By way of compensation for the expense of surveys, construction, maintenance and 
 operation of the canal, which under the present concession shall be at the cost of the com- 
 pany during the period of said privilege, it shaU have the right to establish and collect for 
 the passage of all kinds of vessels, travellers and merchandise through the canal, and in the 
 waters and ports pertaining to it, taxes on navigation, tonnage and pilotage, towage, stor- 
 age, lay days, anchorage, light, roadstead dues, wharfage, hospital dues, and any other 
 similar charges in conformity with the tariff to be established by it in accordance with 
 Article LII. of this contract. 
 
 These tariffs may be modified by the company at any time on condition that aU modi- 
 feations that may be introduced shall previously be communicated to the government, 
 which in case of finding them within the limits established by the said Article LII., shall 
 <5ause them to be complied with as if they were regulations enacted by itself. 
 
 The payment of all the tariff dues shall be exacted without any exception or preference, 
 and under identical conditions, from all vessels, whatever be the place they come from or 
 their nationality, with the exception stipulated in the following Article. 
 
 Article XLIV. 
 
 As compensation for the privileges and concessions that Nicaragua grants by this con- 
 tract, it is hereby stipulated that the Republic shall enjoy the special privilege that Nicar- 
 aguan vessels sailing under the Nicaraguan flag may navigate the canal at a reduction of 
 fifty (50) per centum from the general tariff while engaged in the coasting trade or in the 
 reciprocal trade with the other Eepubhcs of Central America. It is declared that the vessels 
 referred to in the preceding paragraph must be exclusively of the Register of the RepubUc, 
 and they must not be owned, either in whole or in part, by citizens of other countries. 
 
 A reduction of fifty (50) per cent, from the general tariff is also granted to vessels that 
 begin their voyage for a foreign country in any of the ports belonging to the Repubhc, 
 Tvith a cargo wholly composed of products of the country. All the privileges to which this 
 Article refers shall be extended to the other Republics of Central America whenever 
 Nicaragua shall find itself free from international obligations which may prevent it, or 
 whenever one or more of the said RepubUos shall form a single nation with Nicaragua. 
 The company cannot collect any navigation dues whatever upon vessels and craft naviga- 
 ting the Lake of Nicaragua and its prolongations without passing out of the locks. The 
 Nicaraguan vessels of war, and in the case above provided those of the Republic of Central 
 America, shall not pay any dues on passing through the canal. 
 
 Article XLV. 
 In case it may be possible to utihze the waters of the canal and its dependencies for 
 the irrigation of plantations, gardens and streets, or for the supply of towns that may be 
 without it, or as motive power for private enterprises, the company shaU have power to 
 supply it, collecting dues in proportion to the amount furnished, according to the tariff 
 that it may estabhsh in agreement with the government. 
 
14 THE NICARAGUA CANAL. 
 
 Akticle XLVI. 
 
 In view of the existence of an exclusive privilege granted by the Republic in favor of 
 Mr. F. Alf. Pellas, by a contract ratified on the 16th of March, 1877, for the navigation by 
 steam on the lake and rivers for the purposes of the internal commerce of the RepubUc, the 
 Canal Company shall have the right of expropriation against Mr. Pellas, as regards his.- 
 rights and properties, on just assessments by experts, after making a corresponding com- 
 pensation according to the laws of the Republic. 
 
 It is also stipulated that the company binds itself to pay to the government of the Re- 
 public all it may from now on expend in any way for the improvement of the navigation 
 of the river and the port of San Juan del Norte. This payment shall be made within six. 
 months of the date of the beginning of the works of the canal, and according to the origi- 
 nal accounts of the coi'responding office. 
 
 Article XL VII. 
 
 The company shall undertake at its expense the final surveys of the ground and the- 
 location of the line of the canal by a comm.ission of competent engineers, two of whom, 
 shall be appointed by the Government of the Republic, which shall protect as far as it may 
 the said commission. 
 
 There is granted to the concessionary company a term, not exceeding one year, in. 
 which to commence the final surveys for the canal, and one year and one half additional 
 for completing them ; to organize the executing company, and commence the work of con- 
 struction. Said terms shall begin to be counted from the date of the ratification of the 
 present contract by the Nicaraguan Congress, published in the official paper, which shall, 
 be construed as notification. Furthermore, said terms are not to be extended, and it is un- 
 derstood that operations are not considered to have been begun if during the first year of 
 the work two milUon doUars ($3,000,000) are not expended on it. 
 
 Article XL VIII. 
 
 A term of ten years is also granted to the company for the construction, completion, 
 and opening of the canal for maritime navigation. However, should events of main force- 
 arise duly justified, and sufficient to impede the regular progress of the works during the 
 period of the said ten years, an extension shall be granted equal in duration to the time that 
 may have been lost by such delays. 
 
 If, at the expiration of the ten years aforesaid, the works should not be com- 
 pleted so as to have the maritime communication between the the two oceans opened, in 
 consideration of the great capital the company may have invested in the enterprise, and of 
 the- good wiU aad ability it may have shown, and the difficulties encountered, the Republic^ 
 binds itself to concede* a new extension. 
 
 Article XLIX. 
 As a guaranty of the fulfillment of the obUgations which the company incurs in accord- 
 ance with Article 47, it shall deposit to the order of the Government of Nicaragua in a bank, 
 or in a mercantile house in the city of New York, which the government may designate, 
 and -within sixty (60) days from the date of the ratification of this contract, the sum of on& 
 liundred thousand (|100, 000) doUars, American gold, which the company shall forfeit to- 
 the RepubUc if it do not fulfill the said obligations ; and which sum otherwise shall be con- 
 sidered an advance to the government on account of the necessary expenses of payment of 
 the poUce of the canal according to the stipulations set forth in Article 37. This deposit, as. 
 soon as made, shall be at the disposal of the government. 
 
 Article L. 
 In consideration of the valuable privileges, franchises and concessions granted to the 
 company by this contract, the RepubUc shall receive in shares, bonds, certificates or other 
 seourities which the company may issue to raise the corporate capital, six per centum of 
 the total amount of the issue. 
 
APPENDICES. I^ 
 
 Such shares, bonds, certificates or other securities shall be free of all payment on the 
 part of the Republic, being considered as paid in full. The six per centum shall in no event 
 be less than four miUion dollars (|4, 000, 000), that is to say, forty thousand shares or obliga- 
 tions of whatsoever kind of one hundred (|100) dollars each. 
 
 Of said shares, bonds, certificates or securities of whatsoever class, two-thirds shall not 
 be transferable ; but aU shall participate in the benefits, interests, partitions, dividends, 
 sinking fund, rights, privileges, and in all the advantages given to paid up shares without 
 any distinction. The Government in its capacity of shareholder shall besides have the 
 right to appoint one director who shall represent its interest in the board of directors of the 
 canal company from the time of its definite estabhshment. The shares referred to in this 
 article shall be deUvered to the agent the government may appoint to receive them, and as 
 soon as the company shall be ready to issue the certificates for its capital. 
 
 Article LI. 
 
 In order that the canal association may indemnify itself for the expenses it may have 
 had to incur for the verifications, preparations, explorations and surveys hereinbefore 
 mentioned, and for all other expenditures that it will have to make until the definite organi- 
 zation of the company, it shall have the right from the time of the organization of said 
 company to six per cent- in shares, bonds, certificates or other securities which the com- 
 pany may issue for the purpose of raising the corporate capital, and which are to be issued 
 in excess of the capital to be subscribed. 
 
 These bonds, shares or securities shall be identically hke the subscription shares, and 
 issued from the same register or stock book. As a consequence, they shall participate in 
 all benefits, interests, partitions, dividends, sinking fund, rights, privileges and of all the 
 advantages given to the paid up shares, bonds or securities without any distinction what- 
 ever. 
 
 Article LII. 
 From the receipts of the enterprise the company shall take in the first place the neces- 
 sary amount to cover aU the expenses for maintenance, operation and administration ; all 
 the sums necessary to secure the interest which shall not exceed six per centum, and the 
 amoritizationof the obligations and of the shares, and what remains shall form the net 
 profits, of which at least eighty per centum (80 per cent. ) shall be divided among the share- 
 holders, it being agreed that after the lapse of ten years after the completion of the canal 
 the company shall not divide among the shareholders in payment of dividends, directly or 
 indirectly, by issue of shares or otherwise, more than fifteen per centum (15 per cent. ) 
 annually or in this proportion, from dues collected from the aforesaid canal, and where it 
 shall appear that these dues yield a greater profit, they shall be reduced to the fixed Limit 
 of fifteen per cent, per annum. 
 
 Article LIII. 
 
 The present concession shall be forfeited : 
 
 1st. Through the failure on the part of the company to comply with any of the condi- 
 tions contained in Articles 8, 46, 47, 48 and 49. 
 
 3d. If the service of the canal, after its completion, be interrupted for six months, 
 except in cases of main force. 
 
 When the concession shall have been declared forfeited, from whichever of these 
 causes the pubUc lands granted by tliis convention wiU revert to the Republic, in whatso- 
 ever state they may be, and without compensation even in the case that buildings may 
 have been erected thereon. 
 
 Such lands shall be excepted as may have been aUenated to private parties by the com- 
 pany, with the formalities prescribed by law, provided that such alienations shall not have 
 taken place within the six months preceding the date on which the company may have 
 become legally liable to the penalty herein estabUshed. 
 
i5 
 
 THE NICARAGUA CANAL. 
 
 Article LIV. 
 
 On the expiration of the ninety -nine years stipulated in this concession, or in the event 
 of the forfeiture contained in the preceding article, the Eepublic shall enter upon possession 
 in perpetuity, of the canal, of works of art, Kghthouses, storehouses, stations, deposits, 
 stores, and all the establishments used in the administration of the canal, without being 
 obliged to pay any indemnity to the company. 
 
 There shall be excepted from this condition, the vessels belonging to the company, its 
 stores of coal and other materials, its mechanical wort-shops, its floating capital and 
 reserve fund, as also the lands ceded to it by the State, excepting those in which are estab- 
 lished the works indicated in the first part of this article, and which will revert to the 
 State together with their immediate appurtenancess as necessary for the service of the 
 canal, and as an integral part of the same. 
 
 But the company shall have the right at the expiration of the aforesaid term of ninety- 
 nine years, to the full enjoyment of the free use and control of the canal in the capacity 
 of lessee, with all the privileges and advantages granted by the said concession and, for 
 another term of ninety ^nine years, on the condition of paying twenty -five per cent, of the 
 annual net profits of the enterprise to the government of the Eepublic, besides the dividends 
 due to it for its shares in the capital stock. 
 
 The company furthermore shall have the right to fix at its discretion the dues referred 
 to in Article 43 of this concession, so that the shareholders still receive dividends not to 
 exceed ten per centum per annum on the whole capital after deducting the payment of 
 twenty-five per cent, of the net gains to the government. 
 
 At the expiration of this second term of ninety-nine years the government shall enter 
 into perpetual possession of the canal and other properties referred to in the first part of 
 this article, including also in this possession, all that which is included in the said first part 
 with the exception of the reserve and the amortization funds. The failure to comply with 
 any of the terms of the lease shall terminate it, and the State shall enter into possession of 
 the canal and other works belonging to it in accordance with the provisions df the pre- 
 ceding paragraph. 
 
 Article LV. 
 
 Any misunderstanding that may arise between the State of Nicaragua and the com- 
 pany in regard to the interpretation of the present stipulations shall be submitted to a court 
 of arbitrators composed of four members, two of which shall be appointed by the State 
 and two by the company. 
 
 These arbitrators shaU be designated by each of the parties within the period of four 
 months from the day on which one of the contracting parties shall have informed the other 
 in writing of the want of agreement on the point at issue. Should one of the parties allow 
 the aforesaid term to pass, it shall be considered as assenting to the opinion or claim of 
 the other. 
 
 The majority of the votes of the arbitrators shall decide finally and without recourse. 
 In case of a tie vote the arbitrators shall select, by mutual consent, a fifth person ■who shall 
 decide. If unable to agree to such nomination, they shall draw by lot the names of the 
 diploma,tic representatives accredited to Nicaragua, and the first one drfiwn out shaU exer- 
 cise the functions of the fifth arbitrator ; he shaU either adopt the opinion of one or the 
 other of the parties to the controversy, or render his opinion between these extremes, and 
 his decision shall be final and without any appeal whatever: the fifth arbitrator failing, 
 the second person drawn shall exercise these functions, and so on successively until a 
 decision is reached. 
 
 Prior to the initiation of the works of opening the canal the government shall formulate 
 with the concurrence of the company rules to be observed by the arbitrators in all matters 
 relating to procedure. 
 
 ' Questions between the company and individuals residing in Nicaragua, shall be under 
 the jurisdiction of the ordinary tribunals of Nicaragua, in conformity with the legislation 
 
APPENDICES. 17 
 
 of the country. In matters pertaining to non-residents of Nicaragua the rules of inter- 
 national private law will be observed. 
 
 In witness of the foregoing stipulations, we have signed two instruments of the same 
 tenor in Managua, on the 23d day of March, one thousand eight hundred and eignty- 
 seven. 
 
 AD. CAEDENAS, 
 A. G. MENOCAL. 
 
 The government, finding the foregoing contract in conformity with the instructions 
 transmitted, determines to approve it in all its parts and to submit it to Congress for its 
 ratification ; 
 
 Managua, April twelfth, one thousand eight hundred and eighty-seven. 
 
 E. CARAZO, 
 The Acting Sub-Secretary of the Interior. CANTON. 
 
 Done in the Hall of Sessions of the Chamber 
 of Deputies, Managua, April 20, 1887. 
 TOMAS ARMIJO. 
 LEOPOLDO M. MONTENEGRO. 
 
 LUIS E. SAENZ. 
 To the S. E. P., HaU of the Senate, 
 Managua, April 23, 1887. 
 
 JOAQUIN ZAVALA. 
 
 S. Morales. 
 
 ELIODORO RIVAS. 
 Therefore: be it executed. Managua, April 24, 1887. 
 
 E. CARAZO. 
 
 The Sub-Secretary of the Interior in charge of the office. 
 
 ALEJANDRO CANTON. 
 
 Accepted on the same date. 
 
 CANTON. A. G. MENOCAL. 
 
 I do hereby certify the preceding signature of the Sub-Secretary of the Interior, 
 which reads Alejandro Canton, to be genuine. 
 Managua, April 35, 1887. 
 
 JOAQUIN ELIZONDO. 
 
APPENDIX III. 
 
 CONCESSIONS AND DECREES OF THE REPUBLIC OF COSTA 
 RICA TO THE NICARAGUA CANAL ASSOCIATION. 
 
 THE CONSTITUTIONAL CONGRESS OF THE REPUBLIC OP COSTA RICA, IN 
 
 THE EXERCISE OF THE POWERS GRANTED TO IT BY SECTION 4, 
 
 ARTICLE 73 OP THE CONSTITUTION. 
 
 Article First. 
 
 DECREES. 
 
 The contract entered into on the 31st of July last, between the Honorable Minister of 
 PubUc "Works, authorized for this purpose by the Honorable President of the Republic, on 
 behalf of the Government of the same, and Mr. Aniceto G. Menocal on behalf of the 
 Nicaragua Canal Association, for excavating and operating an intM:-oceanic canal, cross- 
 ing, either in whole or in part, through the territory of the Republic, or running along the 
 whole or part of its boundary with Nicaragua, is hereby approved. 
 
 The aforesaid contract vnth the modifications agreed to by Congress reads UteraUy as 
 f oUows : 
 
 The undersigned, Pedro Perez Zeledon, Secretary of State for the Bureau of Public 
 Works, especially authorized by the Honorable General, President of the Republic, to 
 celebrate ad-referendum the present contract, party of the first part, and Aniceto G. 
 Menocal, representing the Nicaragua Canal Association, vnth full powers from it, and 
 also authorized for this purpose by the Executive Committee of the said Association, 
 party of the second part, have revised the contract for the canal made in Washington on 
 the nth of last May, by the party hereto of the first part, in his capacity as Envoy Extra- 
 ordinary and Minister Plenipotentiary of the Republic of Costa Rica, to the Oovem- 
 ment of the United States of America, and Mr. Hiram Hitchcock, President of the 
 aforesaid association; the said contract with the modifications now agreed to by the 
 undersigned, reads as follows : 
 
 Article I. 
 
 The RepubUcof Costa Rica grants to the Nicaragua Canal Association, its successors 
 and assigns, the exclusive privilege to excavate and operate a maritime canal between the 
 Atlantic and the Pacific Oceans, running either wholly or in part through the territory of 
 the said Republic or along the whole, or a part of her border line with the Repubhc of 
 Nicaragua. 
 
 To render this contract fully eflicient between the contracting parties hereto, it will be 
 sufficient if the Association aforesaid should use or occupy for the works of the said canal, 
 or for any of its ports in one or the other oceans, any Costa Rican waters or at least waters 
 ia which Costa Rica has joint ownership or has rights of use and navigation. 
 
 Whenever the word "Association" is used in this present document reference is 
 made to the "Nicaragua Canal Association," its successors and assigns. 
 
 Article II. 
 The canal shall be of sufficient dimensions for the free and commodious passage of 
 vessels of the same size as the large steamers used for ocean navigation between Europe 
 and America. 
 
APPENDICES. 
 
 19 
 
 Article III. 
 The State declares this work to be one of public utility. 
 
 Article IV. 
 
 The duration of the present privilege shall be for ninety-nine years, to be counted from 
 the day on which the canal shall be opened to universal trafiBc. 
 
 During the aforesaid period the association shall have the right to construct and operate 
 within the territory of Costa Rica, a railroad along the whole extent of the said canal, or 
 those parts of the same which it may consider convenient for the better service and opera- 
 tion of the said work. 
 
 The Republic binds itself not to make any subseqnent concessions for the opening of a 
 canal between the two oceans as long as the present privilege lasts. 
 
 The Republic will also abstain during the same period, from granting, within a zone 
 of twenty-five miles along the canal, concessions for railroads from sea to sea, that might 
 compete with the canal in the traffic between foreign nations. Thi^ restriction shall not pre- 
 vent the construction of new railroads that may be convenient for Costa Rica to build to 
 the canal, or to any point on the northern frontier of the RepubUo, either connecting or 
 not with any other railroads. 
 
 Article V. 
 
 The grantee association shall have the right to estabhsh such telegraph lines as may 
 be considered necessary for the construction, management and operanon of the canal. 
 
 The Government shall have the right to use the telegraph lines of the company from 
 any station to any station that may be included within the line from sea to sea, without 
 being obliged to pay the company for such service. 
 
 Article VI. 
 
 The Government of the Republic declares and accepts that the ports at each extremity 
 of the canal and the canal itself from sea to sea, during the time of this concession, shall 
 be neutral; and consequently in case of war between other nations, or between one or more 
 nations and Costa Rica, the transit through the canal shall not be interrupted for such 
 cause, and the merchant vessels and individuals of all nations of the world may freely enter 
 the aforesaid ports or pass through the canal without molestation or detention. 
 
 In general, all vessels shall freely pass through the canal without distinction, exclusion 
 or preference, whether of persons or nationalities, provided that they pay the dues and 
 comply with the rules established by the association for the use of the said canal and its 
 dependencies. 
 
 The transit of foreign troops and vessels of war shall be regulated by such provisions in 
 regard thereto, as are now or may be hereafter established in the treaties between Costa Rica 
 and other powers, or by international law. But the entrance of the canal shall be strictly 
 forbidden to vessels of war of any nation which may be at war with Costa Rica, or with 
 any other of the repubUcs of Central America. 
 
 Costa Rica shall endeavor to obtain from the powers that are to guarantee the neu- 
 trality, that in the treaties to be made for that purpose, they shall also bind themselves to 
 guarantee the same conditions to a zone of land parallel to the canal, and also to a mari- 
 time zone in both oceans, the dimensions of which shall be fixed by such treaties. 
 
 Article VII. 
 
 The present concession shall be transferable only to such company or companies as may 
 be organized for the purpose of constructing or operating the canal, and in no case to for- 
 eign governments or to foreign public powers. 
 
 NorshaU the association have the right to transfer to any foreign government or public 
 power any part of the lands granted to it by this contract. But it shall have the right to 
 make such transfers to private parties under the same restrictions. 
 
 The Republic of Costa Rica shall not transfer its riglits and privileges in this respect to 
 the canal to any foreign government or public power. 
 
20 THE NICARAGUA CANAL. 
 
 The people of all nations shall be invited to contribute the necessary capital to the- 
 enterprise, and it shall be sufficient for the fulfillment of this requirement to publish an 
 advertisement for twenty consecutive days in one of the principal daily papers of each of 
 the cities, New York, London and Paris. 
 
 Article VIII. 
 
 The capital stock {capital social) of the final company which is to operate the canal 
 shall consist of shares of the face value of one hundred dollars each, which shall be issued 
 in such amounts as may be deemed necessary. The issue and transfer both of these shares 
 and of all the bonds and obligations that the company may issue shall be exempt from 
 stamp dues and from all other taxes or imposts now established or to be hereafter estab-^ 
 lished in the Eepublic. 
 
 A five per centum, at least, of the capital stock with which the said company may be 
 organized shall be reserved for such Central American Governments and citizens as may 
 wish to subscribe. 
 
 As soon as the said company is ready to open subscription books, notice shall be given 
 by it to the Governments of Costa Rica and Nicaragua, which shall invite the other gov- 
 ernments of Central America, and through them private parties, to subscribe. 
 
 The shares which, within six months to be counted from the date of the notice given 
 to the government of the opening of the subscription books, are not paid for shall remain at 
 the free disposition of the company. 
 
 Article IX. 
 
 The company shall be organized in the manner and under the conditions generally 
 adopted for such companies. Its principal office shall be either in the City of New York or 
 in such place as may be deemed convenient. 
 
 Its first board of directors shall be composed of persons, one-half, at least, of whom, 
 shall be chosen from those members of the Nicaragua Canal Association who were pro- 
 moters of the enterprise. 
 
 Article X. 
 
 The Government of Ciosta Rica, in its capacity of stockholder in the final company as. 
 hereinafter provided, shall have the perpetual right of appointing one director who shall 
 be an integral part of the Board of Directors of the said company, with all the rights, privi- 
 leges and advantages conferred upon the other directors of said company by the charter, 
 by-laws and statutes of the company and the laws of the country under which it shall 
 organize. 
 
 The government, in the said capacity of stockholder, shall also have the right to take- 
 part in the elections that the company may hold. 
 
 Article XI. 
 
 The said final company is bound to keep a representative in Costa Rica, vested with 
 ample pewers for everything that may be of interest to the company, either actively or 
 passively. 
 
 Article XII. 
 
 The association shall have the most ample liberty to select and adopt the route whichi 
 it may deem most convenient, advantageous and economical between the two oceans f or 
 the excavation, construction and operation of the canal and its dependencies and ports 
 whether the same passes wholly or in part through the territory of Costa Rica or only along- 
 its border line. 
 
 Should the canal deviate from the River San Juan, in that section of the same in which 
 Costa Rica has the right of navigation, the association binds itself to establish at such 
 points as the engineers may deem proper, a communication between such parts of the San 
 Juan River as may not be canalized and the dividing level of the canal, feo the end of facili- 
 tating, without payment of any dues whatever, the navigation of Costa Rica vessels- 
 
APPENDICES. 21 
 
 between the non canalized part of the San Juan River and the canal, by means of a 
 Jock or series of looks suitable for the navigation of vessels of six feet draught. 
 
 It is understood that this obligation does not in any manner bind the association to 
 ^lace or to keep in navigable condition the lower part of the river which these locks may be 
 intended to place in communication with the canal. 
 
 Article XIII. 
 All expenditures for surveys, construction, maintenance and operation of the canal 
 shall be borne by the association without any subvention in money or guarantee of interest 
 on the part of the Republic. 
 
 Article XIV. 
 The association shah construct, at its expense, and shall keep in good condition two large 
 ^orts, one on the Atlantic and one on the Pacific, at such points or locahties as it may select 
 within or without the territory of Costa Rica to serve as termini of the canal ; and each of 
 them shall have a light-house of the first order. 
 
 Article XV. 
 All the area within the territory of Costa Rica, whether at the ports, roadsteads or 
 Tivers of the two oceans which may be necessary for the establishment of the canal, its 
 paths and embankments, or which may be occupied and covered by water after raising the 
 dams which are to be constructed in the beds of the rivers, or for all necessary deviations to 
 be made as well as for reservoirs, dikes, spaces about the locks, stations, light-houses and 
 canals, store-houses, buildings and workshops, deposits for materials, and also all those re- 
 quired for the routes, service railways and canals of the same nature, for the transportation 
 of materials to the line of the work and for feeders of the canal ; in short all lands and 
 places within the territory of Costa Rica necessary to the construction and operation of the 
 canal, as may be laid down in the final drawings and plans made by the engineers of the 
 association shall be placed by the State at the disposal of the said association under the con- 
 -ditions set forth in the following Articles. 
 
 Article XVI. 
 Such unappropriated lands as belong to the State shall be given to the association 
 -without any compensation whatever, and with regard to those lands belonging to private 
 -parties the State undertakes to condenon them, should the association demand it. 
 
 The compensation which in agreement with the laws of Costa Rica may have to be 
 paid in such ca«es, shall be paid by the association, and to it shall be added the amount of 
 the expenses and costs of the respective actuations, in such a way that the National Trea- 
 sury shall suffer no loss. 
 
 Article XVII. 
 
 In all relating to the condemnation to be made under the provisions of the preceding 
 Articles the association shall enjoy all the immunities and privileges that the laws of the 
 .coimtry grant to the State, so that the association may not be obhged to pay more than the 
 State would imder similar circumstances. 
 
 Article XVIII. 
 For the construction, maintenance and operation of the canal, the association shall have 
 the right to take free of charge, from the lands belonging to the State whatever material of 
 a spontaneous production of the land that may be found on them, especially timber for con- 
 struction and fuel, and lime stone, clay for bricks and earth for fillings that are to be made. 
 As regards materials of the said class found on lands belonging to private parties, the associ- 
 ation shaU have the same rights and privileges granted by the laws to the State. 
 
 Article XIX. 
 If it should be necessary for the association to occupy temporarily and during the con- 
 .struction of the canal lands in the territory of Costa Rica which are not included in those 
 
22 THE NICARAGUA CANAL. 
 
 designated in the Articles XV, XVI, and XVIII, it shall not be obliged to pay any compen- 
 sation for them if they are unappropriated lands And the State shall not have the right ta 
 sell or dispose of them in any other manner after the association has once determined ta 
 occupy them, unless under the reservation of this right the limit of w^hich shall be the exe- 
 cution of the works of the Inter-oceanic Canal. Should the said lands belong to private 
 parties, then the association shall enjoy so far as the temporary occupation thereof is con- 
 cerned, all the rights and franchises which the laws grant to the State with the special 
 privilege of occupying them immediately after the declaration of utility and necessity, and 
 after payment of the proper compensation, which shall never exceed that which the State 
 would be obliged tc pay in a similar case. 
 
 Aeticlb XX. 
 The Eepublic of Costa Rica desiring to aid efficiently the association in this enterprise 
 cedes in fee simple to the said association the public lands hereinafter mentioned, in alter- 
 nate lots, with other similar ones which it reserves for itself, to wit: 
 
 lat On the right or southern bank of the San Juan Biver, from a point three English 
 miles below Castillo Viejo to the confluence of the San Carlos, should the canal follow the 
 valley of the Ban Juan, lots fronting on the canal three English miles front by six deep. 
 
 2d. Between the San Carlos River and the Atlantic, should the canal pass wholly or in 
 part through the territory of Costa Rica, or along the boundary of Costa Rica, lots of thre& 
 English miles frontage on the canal and four deep. 
 
 3d Should the route of the Salinas Bay be adopted, lots of two English miles frontag& 
 on the canal by two deep in the Costa Rican territory crossed by the canal or along which 
 it may run, from the Pacific Ocean to a point two English m'ies distant from the mouth of 
 the Sapoa River in the Lake of Nicaragua. 
 
 4th. Should the canal deviate from the San Juan River more than four miles towards^ 
 the interior of Costa Rica, lots to be measured on both sides of the canal of two miles front 
 and two deep Should the deviation be less than four miles, then the lots of the northern 
 bank of th» canal shall have a front of two miles and extend in depth until they touch the- 
 San Juan River 
 
 5th From the Rio Frio to the Sapoa on the south coast of the Lake of Nicaragua, at 
 two miles distant from the same and following the curve of its bank, lots of two English, 
 miles front by two deep. 
 
 6th. In the places where the company in accordance with the government may select 
 from the existing unappropriated public lands, twenty-five lots, each two English miles in. 
 frontage by four deep. As a general rule, at the extremities of the Inter-oceanic canal, 
 should the same be within the territory of Costa Rica, the opposite lots will be allotted, on& 
 to the government and one to the company; but, if this be not possible, the first wiU belong- 
 to the government, 
 
 The State shall vest in the association the possession of said lands as soon as the loca- 
 tion of the canal is finally determined and its construction begun by the association. 
 
 Th-. rights acquired by private parties in the lands set forth in the preceding clauses- 
 are hereby reserved 
 
 The measurement and setting out of all lands ceded by this contract shall be made at 
 the expense ol the grantee, -with the intervention of the government. 
 
 The final title deeds shall be issued in due proportion as the work advances and nofc 
 before. 
 
 Between the Atlantic and the point three miles below CastiUo Viejo, all parts of the 
 San Juan and Colorado Rivers occupied by the canal shaU be considered for the purposes- 
 of the present Article, as a part of the said canal. 
 
 Itishereby understood that the whole of the lands transferred to the association by- 
 Costa Rica, in the different places and in the form as set forth in the forgoing article, shall 
 
APPENDICES. 23 
 
 not exceed in amount one-fourth of the total amount of lands granted to the company by 
 the Government of Nicaragua, according to the contract made by it. Should they exceed 
 such amount, the difference shall be deducted by reducing the number of lots mentioned in 
 sub-division 5th of this Article. 
 
 Article XXI. 
 
 The State reserves the right to occupy, in the several lots of land ceded to the associa- 
 tion, such space as may be needed for such roads and public buildings as it may deem con- 
 venient. In the same manner it shall have the right to use timber and other building 
 materials which may be found on said lands, vchenever they may be necessary for any 
 virork upon wliich it may determine. Should these lands become the pi'operty of private 
 persons by virtue of a transfer made by the company, and the State should need them for 
 the purpose set fortn in this Article, or for some other purposes, it shall pay their owners 
 for them in conformity with the laws, and the expropriated parties shall have no right or 
 claim against the association. 
 
 Should the association have made improvements on the lands referred to whether for 
 the purposes of utility, ornament or pleasure the State shall be bound to compensate it for 
 such damages as it may suffer according to appraisals of experts. 
 
 Article XXII. 
 Mines of coal, gold, silver, iron or other metals and stone quarries situated in the lands 
 ceded to the association shall belong to it by right without the necessity of previous denun- 
 ciation and it shall have the right to work them whenever it may deem it convenient, 
 subject to the laws of the EepubHc, but such lands as may be transferred by the association 
 to private parties shall not enjoy this privilege. 
 
 Article XXIII. 
 The association shall also have the i-ight to utilize for the works of the canal and its 
 appurtenances the timber in the forests situated in the lands granted to it by the State 
 from the very moment from which it enters into possession of the same under the present 
 contract, the acquired rights always being reserved. 
 
 Article XXIV. 
 From the day in which the present concession shall be ratified by Congress, no aliena- 
 tion shall be made of any unappropriated lands necessary for the construction of the canal 
 nor of those ceded to the association on the banks of the same. Nor shall the said lands 
 be leased to the prejudice of the company. However, should the location of the canal not 
 be definitely settled when this contract is ratified the Une of the canal shall for the 
 purposes of this article be presumed to f oUow the northern boundary line of Costa Eica, 
 
 Article XXV. 
 
 The association shall have the right of doing throughout the whole extent of the canal 
 within the territory of Costa Rica, at the mouths of the canal on the two oceans and in the 
 whole extent of the lands which under the present contract have been granted to it accord- 
 ing to Articles 15, 16 and 30 all such works as may be necessary for locating, leveling, 
 excavating and dredging the canal and aU other works that may be required for the estab- 
 lishment, feeding, operation, preservation and maintenance of the canal. 
 
 The association is especially authorized to make along the line of the canal and on the 
 Costa Eican bank of the San Juan Eiver and its Costa Eican affluents and confluents, as 
 weU as on the Costa Eican rivers tributary to the Lake of Nicaragua, the lakes or water- 
 courses which may be utilized in their flow to the Pacific or to the Atlantic ; to construct 
 dikes and dams ; make rectifications, dredgings, embankments and deviations, to locate 
 buoys, and in general to do aU the works that in the opinion of the engineers of the associ- 
 ation may be deemed indispensable for the construction, feeding, navigation and operation 
 of the canal. The embankments, flUings and dikes which may be made within the terri- 
 
24 THE NICARAGUA CANAL. 
 
 tory of Costa Rica at the mouths of the canal on the ports on the two oceans, by using 
 materials resulting from the excavation of the canal, shall belong in fee simple to the asso- 
 ciation ; but the government shall have the right to occupy them in whole or in part after 
 compensation made. Should any port of the canal be within the territory of Costa Rica 
 the association shall not obstruct such port nor widen its beaches unless there is absolute 
 necessity to do so, and in this case the embankments and flUings that it may be neccessary 
 to construct in front of said port, shaU belong to the republic. 
 
 In general the association shall have the right to use all the lakes and rivers of Costa 
 Rica, the waters of which may be necessary in the judgment of the engineers of the asso- 
 ciation to construct and feed the canal and to maintain its operations, but this right shall 
 have the following restrictions, to wit. : 
 
 1st. The navigation of the Costa Rican rivers, which the association may dam or other- 
 wise use for the benefit of the canal shall remain at the termination of the respeetive works 
 in as good condition as it was before they were made. 
 
 2d. In the places where the waters of said rivers may overflow in consequence of the 
 erection of dams or other artificial obstructions made by the association , the said associa- 
 tion shall be obliged to do whatever may be practicable to prevent the formation of swamps 
 and marshes. 
 
 3d. Such damages as may be caused to private parties in consequence of the deviation 
 or elevation of the streams shall be compensated for by the association according to 
 appraisals made by experts in conformity with the laws of the RepubUo, but the associa- 
 tion shall not be obUged to pay more than the State would under similar circumstances. 
 
 Article XXVI. 
 
 The association cannot import merchandise into the territory of the republic for the 
 purposes of trafficking with it without paying the custom duties established by law, but it 
 shall have the right to import free from custom duties and of any other imposts whatso- 
 ever, the articles needed for the works of the enterprise, its surveys, explorations, examina- 
 tion of localities, constructions, use, operation, maintenance, repairs and improvements of 
 the canal, and also for tlie telegraphic and railroad service of the same, and for the works 
 and workshops of the company, and the said articles may consist of implements, machin- 
 ery, apparatus, coal, limestone of all classes, lime, iron and other metals, whether raw or 
 manufactured, mining powder, dynamite or any other analogous substance. These articles 
 may be transported between whatever points they may be needed during the work of the 
 construction of the canal, and shall be la,nded and stored free from all local taxes. 
 
 The association shall also have the right to import free from duties or imposts during 
 the work of constructing the canal, such provisions, clothing for the workmen, and medi- 
 cines as may be absolutely necessary for its own consumption. 
 
 Those articles the commerce of which is not free are excepted from the privileges 
 granted in this article, and shall remain subject, with the exception of gunpowder, dyna- 
 mite and other explosives, to such requisites and duties as are established by law. 
 
 Article XXVII. 
 
 The vessels that the association may employ as tugboats or for the service of the canal 
 shall be free from all imposts or taxes of any kind whatever, and also the material to be 
 used for their repair and the fuel that they may consume. 
 
 The vessels and their appurtenances from whatever place they may come for the ser 
 vice of the association shall be exempt from all duties and imposts. 
 
 Article XXVIU. 
 
 The government shall enact such regulations as it may deem necessary to prevent 
 
 smuggling, and for the preservation of pubUc order in the region of the canal lying within 
 
 the territory of Costa Rica or bordering on it, and in the waters where it may exert joint 
 
 jurisdiction. The company shall be bound to lend its assistance for the enforcement of 
 
APPENDICES. 25 
 
 such regulations. But in the free zone along the margin of the canal, as hereinafter pro- 
 vided, measures for the prevention of smuggling shall be Umited to vigilancj on the part 
 of the employe or employes whom it may concern, without right to any further measures 
 either against passengers, vessels or their cargoes excepting when an attempt at smuggling 
 may be discovered ; it being the intention of the State that there shall be most ample free- 
 dom of transit through the canal for persons and property with the sole limitations estab- 
 lished by this contract. Consequently the association shall have the right to unload and 
 reload ships in transit at such points as may be necessary in order to make repairs or lighten 
 the vessels or shift their cargoes, or on account of any accident that unavoidably may 
 render it necessary, without being subject thereby to search, exactions or contributions of 
 any kind, provided in each case, and before beginning operations, notice is given to the 
 nearest Custom House authority. 
 
 Article XXIX. 
 The government shall afford its protection in conformity with the laws of the EepubUc 
 to the engineers, contractors, employes and laborers that may be engaged in the prehmi- 
 nary surveys or in the works of construction and operation of the canal. 
 
 Article XXX. 
 The association shall be exempt from aU forced loans and military exactions, whether 
 in time of peace or of war. The foreign agents and employes shall also be exempt from 
 direct taxes, forced loans, and military exactions during the time in which they are in the 
 service of the canal, but they shall pay the direct taxes established by law in case they may 
 become owners of real property, or commercial or industrial establishments. 
 
 Article XXXI. 
 The association may freely introduce into the lands granted to it employes and laborers 
 of every race who may be needed in its works and workshops ; and it may also introduce 
 immigrants of all nationalities excepting Asiatics and negroes. Both the immigrants and 
 the employes and laborers shall be subject to the laws of the Republic and to the regula- 
 tions of the company. The government assures them aid and protection and the enjoy- 
 ment of their rights and guarantees in conformity with the constitution and the national 
 laws during the time that they may remain within Costa Rican territory. 
 
 Article XXXII. 
 The Government of Costa Rica shall assure the association and its agents, under the laws 
 of the Republic as it does to the other inhabitants, the fuU enjoyment of the guarantees 
 and rights which the constitution and laws grant to them. Reciprocally the association 
 and its agents bind themselves strictly to respect the laws and regulations in force in Costa 
 Rica and especially to comply with the final decisions of the Courts, without considering 
 themselves vested with other rights than those granted by law to Costa Rican citizens. 
 
 Article XXXIII. 
 
 The government shall establish all along the line of the canal which may be within 
 the territory of Costa Rica or along its frontier, or in the waters appertaining to it in 
 ownership or joint jurisdiction such police stations and revenue oflSces as in its judgment, 
 may be necessary for the preservation of order in the region of the canal and for the ob- 
 servance of the fiscal laws of the Republic. 
 
 The expenses incident to said services including those of buildings, salaries, wages, and 
 allowances of the employes and transportation of the forces and which may be in excess 
 of such as are now borne by the Government for the Custom House actually established 
 at the mouth of the San Carlos, or on any other point that may be crossed by the canal, 
 shall be paid to the Public Treasury by the company on such terms and conditions as may 
 be established hereafter, taking into consideration the requirements and necessities of such 
 services. 
 
 The association shall also have the right to estabhsh guards and watchmen for the ser- 
 vice of the canal and the enforcement of its regulations. 
 
26 THE NICARAGUA CANAL. 
 
 ABTICLE XXXIV. 
 
 All contracts in regard to the works of the canal that the association may enter into 
 in foreign countries shall be valid and effective, and shall have full force and effect in 
 Costa Rica, provided they do not violate the laws of the Eepublic. 
 
 Article XXXV. 
 
 The association shall be exempt during the period of this concession, both in time of 
 peace ard in time of war, from all kinds of taxes upon the real estate that it may acquire 
 by virtue of this contract, and from all kinds of direct taxes, local charges, or any other 
 imposts relating to the property and use of the canal, or of its Duildings and the construc- 
 tion and dependencies thereof, all along its extent, including those situated in the ports 
 and maritime establishments on tha two oceans. 
 
 This franchise is not transferable to the purchasers of the real estate which the associa- 
 tion may alienate under this grant. 
 
 Article XXXVI. 
 
 The Eepublic of Costa Rica shall not establish any tonnage, anchorage, pilot or light- 
 house dues, or any other charges of any kind whatsoever, upon vessels of any class what- 
 ever, or upon the merchandise, baggage and passengers which may pass through the canal 
 from one ocean to the other; all such dues are reserved for the benefit of the association, 
 as provided in Article 39. 
 
 Article XXXVII. 
 
 For the purpose of securing the most ample liberty or the transit of persons and prop- 
 erty, a free zone shall be established on each side of the canal, and the width thereof shall 
 be 90 metres and 288 millimetres, measured from the water's edge in the canal. 
 
 All traffic declared illegal by the laws of the Republic shall, however, be prohibited 
 within the said zone, and the revenue authorities whose duty it is to watch for and prevent 
 smuggling, shall act in conformity with the stipulations of Article 28. 
 
 It is expressly agreed that every vessel that may pass through the part of the canal 
 which may be within the territory of Costa Rica, or along its borders or in waters over 
 which it exerts co jurisdiction, shall carry on board an officer appointed by the Govern- 
 ment whenever the authorities may deem it convenient, and that officer shall act in con- . 
 f ormity with the law should he discover that it is being violated. 
 
 The two ports to be constructed for the entrance and exit of the canal on Doth oceans, 
 which may be wholly or in part within the territory or in waters of Costa Rica, shall be 
 declared free ports, and shall be recognized as such from the opening of the canal do the 
 end of this concession. 
 
 The Government, in agreement with the company, shall establish, by means of a spe- 
 cial decree, the limits of this franchise, which shall never extend beyond che waters of 
 the ports comprised between the mouth of the canal and the entrance of said ports. 
 
 All merchandise that shall be loaded or discharged at any point of the canal within 
 the territory of Costa Rica, and intended for internal commerce, shall pay the import and 
 export duties fixed by the revenue laws of the State. 
 
 Article XXXVin. 
 
 For the proper administration of the canal and its dependencies, and in order to faciU- 
 tate its construction and operation, the association shall establish the proper regulations, 
 which shall be binding upon every person who may be found in its waters or in its depend- 
 encies ; the sole reservation being that the rights and sovereignty of the State be respected. 
 
 It is understood that the association, in the exercise of the powers conferred by this- 
 article, shall not make other regulations than those necessary for the administration and 
 particular management of the canal : and that before carrying them into effect, they shall 
 be submitted for the approval of the Government. The State shall lend the aid of its au- 
 thority to enforce these regulations. 
 
APPENDICES. 27 
 
 AUTICLE XXXIX. 
 
 By way of compensation for the expenses incurred in the surveys, construction, main- 
 tenance and operation of the canal, or any part thereof, during the period of said privi- 
 lege, the said association sliall have the right to establish and collect for the passage of all 
 kinds of ships, vessels, travelers and merchandise through the canal, and in the waters 
 and ports pertaining to it, such dues of navigation, tonnage, pilotage, towage, stowage, lay 
 days, anchorage, light, roadsteads, wharfage, hospital dues and any other similar charges, 
 in conformity with the tariflEs to be established by it in accordance with Article 45 of this 
 contract. 
 
 These tariffs may be modified by the association at any time, on condition that all 
 modifications that may be introduced in it shall be previously communicated to the Gov- 
 ernment, which, in case of finding them within the limits established by said Article 45, 
 shall cause them to be compUed with as if they were regulations enacted by itself. 
 
 The payment of all the tariff dues shall be exacted without any exception or prefer- 
 ence, and under identical conditions, from all vessels, whatever be the place they come 
 from or their nationality, with the exception stipulated in the following Article. 
 
 Article XL. 
 
 In compensation for the privileges and concessions that Costa Bica grants by this con- 
 tract, it is hereby stipulated that the Republic shall enjoy the special privilege that Costa 
 Eican vessels, navigating under the flag of Costa Rica, shall be entitled to navigate the 
 canal at a reduction of fifty per centum of the general tariff while engaged in the coasting 
 trade, or in the reciprocal trade with the other republics of Central America. 
 
 To enjoy this privilege, the said vessels shall be necessarily of the register of the Re- 
 pubUc, and belong to citizens of the same. 
 
 A reduction of fifty per centum of the general tariff is also granted to all vessels that 
 begin their voyage for a foreign country at any of the ports belonging to the Repubhc, with 
 a cargo wholly consisting of products of the country. 
 
 Costa Rican vessels of war and revenue cutters shall pay no dues in passing through 
 the canaL No dues shall be paid by the vessels of the National Register navigating either 
 Costa Eican waters connected with the canal or the canal itself, without passing out 
 of the locks, but said vessels are not in any way to obstruct the free navigation of the 
 canal. 
 
 Costa Eica, on its part, shall not object to the enjoyment by Nicaraguan ships of the 
 advantage granted in this article to those of Costa Rica, provided that Nicaragua, on 
 its part, consents that the ships of Costa Eica shall enjoy in Nicaraguan waters the said 
 privilege. 
 
 All the concessions to which this article refers shall be extended to the other Republics 
 of Central America, or any of them, whenever Costa Rica and Nicaragua shall find them- 
 selves free from international obligations which may prevent it, or whenever one or more 
 of said Republics shall form a single nation with Costa Rica. 
 
 Article XLI. 
 In case it may be possible to utilize the waters of the canal and its dependencies for 
 the irrigation of plantations, gardens and streets, or for the supply of towns that may be 
 without it, or as motive power for private enterprises, the company shall have the power 
 to supply it, collecting dues in proportion to the amount furnished, according to the tariff 
 that it may establish in agreement with the government. 
 
 Article XLII. 
 The association shall undertake at its expense the final surveys of the ground and the 
 ocation of the line of the canal by a commission of competent engineers. The Govern- 
 ment of Costa Eica shall have the right of visiting and inspecting the final surveys which 
 are in progress, and those already completed by an engineer appointed by said government. 
 
28 THE NICARAGUA CANAL. 
 
 and whose salary shall be paid by the association, the amount thereof to be fixed hereafter 
 by special agreement between the government and the company. 
 
 A period of two years and a half to be counted from the date of the ratification of the 
 contract is granted the association f ot the final surveys of the canal, and within the said 
 time the association shall have to make the said final surveys, organize the company, 
 which is to carry on the work, and begin the work of construction. 
 
 The work of construction shall be understood to have commenced, if within three 
 years after its inception, two millions of dollars have been expended on it. 
 
 The period herein provided for shall admit of extension by the republic at the request 
 of the association, and upon grounds of justice, in the judgment of the government. 
 
 Article XLIII. 
 
 A term of ten years is also granted to the association for the construction, completion 
 and opening to traffic the canal for maritime navigation. However, should events of 
 main force arise duly justified, and sufiBcient to impede the regular progress of the works 
 during the period of the said ten years, an extension shall be granted equal in duration to 
 the time that may have been lost by such delays. 
 
 If at the expiration of the ten years aforesaid the works should not be completed, so as 
 to have the maritime communication between the two oceans opened, in consideration of 
 the great capital the company may have invested in the enterprise, and the good will and 
 sbility it may have shown, and the difficulties encountered, the republic binds itself to 
 grant a new extension. 
 
 Article XLIV. 
 As a guaranty of the fulfillment of the obligations which the final company which is 
 to construct the canal incurs in accordance with Article 42, it shall deposit to the order of 
 the Government of Costa Eica, in a bank or in a mercantile house in this city, or with an 
 agent which the government may designate immediately after the certificates are issued, 
 one thousand shares of its capital stock of the nominal value of |100 each. The said one 
 thousand shares of capital stock shall be considered an advance to the government of the 
 payment of the police and revenue expenses to be made under Article 33, and the associ- 
 ation shall be credited with the actual value of said shares at the time such payments are 
 made. 
 
 Article XLV. 
 In consideration of the valuable privileges, franchises and concessions granted by 
 virtue of this contract to the association, the republic shall receive in shares, certificates or 
 other values representing the capital stock of the final company, an amount equal to one 
 and one-half per centum of the total amount of the issue of said capital stock in shares or 
 certificates of |100 each. This sum shall in no event be less than $1,500,000. Said shares 
 shall be considered as f uUy paid up, and two-thirds thereof shall not be transferable. All 
 these shares shall participate in the benefits, interests, distributions, dividends, amortiza- 
 tions, rights, privileges, and all other advantages granted to paid-up shares without any 
 difference whatever. These shares together with the other privileges herein granted by 
 the association to the government shall be in f uU compensation to the republic for all 
 pubhc unappropriated lands that may be flooded and for all the privileges, and concessions 
 conferred by this contract, and shall cover completely aU claims of this description on the 
 part of the State against the association or the flnal company. The shares to which this 
 Article refers shall be delivered to the agent appointed by the government for this purpose 
 as soon as the company may be ready to issue certificates of its capital. 
 
 Article XLVI. 
 From the earnings of the enterprise the company shall take, in the first place, the 
 necessary amount to cover all the expenses for maintenance, operation and administra- 
 tion; all the sums necessary to secure the interest, which shall not exceed six per centum, 
 and the amortization of the obligations and of the shares, and what remains shall form 
 
APPENDICES. 29 
 
 the net profits, of -which at least eighty per centum (80 per cent.) shall be divided among- 
 the shai-eholders, it being understood that after the lapse of ten years after the completion 
 of the canal the company shall in no case divide among the shareholders in payment of 
 di-vidends, directly or indirectly, by issue of shares or otherwise, more than fifteen per 
 centum (15 per cent.) annually or in this proportion, from dues collected from the aforesaid 
 canal- and -where it shall appear that these dues yield a greater profit, they shaU be reduced 
 to the fixed limit of fifteen per cent, per annum. 
 
 Akticle XLVII. 
 
 The present concession shall be forfeited ; 
 
 1st, Through the failure on the part of the company to comply with any one of the 
 conditions contained in Articles VII. , XLII. and XLIII. 
 
 2d. If the service of the canal, after it is completed, is interrupted for six months, 
 unless in case of unforeseen accidents or main force. 
 
 When the concession shall nave been declared forfeited from -whichever of these 
 causes, the public lands granted by virtue of the present contract shall revert to the repub- 
 lic in whatever condition they may be, and without compensation, such lands as may have 
 been alienated by the company with the formalities prescribed by law, shall be excepted, 
 provided that such alienations shall not have taken place within the six months preceding 
 the date on which the company may have become legally liable to the penalty herein 
 established. 
 
 Article XL VIII. 
 
 At the expiration of the ninety-nine years stipulated in this concession, or in the event 
 of the forfeiture expressed in the preceding Article, the republic shall enter into the posses- 
 sion in perpetuity of that part of the canal, its warehouses, stations and other establish- 
 ments used for the management thereof, that may be found within the national territory. 
 Such works as may be found in waters in which the repubUc has joint sovereignty shall 
 belong to her in joint ownership. And in regard to such parts of the canal or of the waters 
 thereof in which Costa Eica has not the eminent domain, but simply the right of use and 
 free navigation, the republic, at the expiration of the ninety-nine years, or in the cases of 
 forfeiture above named, shall retain in perpetuity the said rights of use and free naviga- 
 tion. The republic shall not be obliged to pay to the company any compensation for the 
 same. 
 
 There shall be excepted from this condition the vessels belonging to the company, its 
 stores of coal and other materials, its mechanical workshops, its floating capital and 
 reserve fund, and at the expiration of the said ninety-nine years, also the lands ceded to it 
 by the State under the present contract, excepting those in which the works indicated in 
 the first part of this article may be found established, which will become the property of 
 the State, with their immediate dependencies as necessary for the ser-vice of the canal and 
 an integral part of the same. 
 
 But the company shall have the right, at the expiration of the aforesaid term of ninety- 
 nine years, to the full enjoyment and a free use and control of the canal, and such parts 
 thereof as may be within the territory of Costa Eica, with all the privileges and advan- 
 tages granted by this concession in the capacity of lessee for a second period of ninety nine 
 years, upon payment to the government of Costa Eica of six and one-quarter per centum. 
 of the annual net profits of the enterprise, besides the dividends due to it for its share in 
 ttie capital stock. 
 
 The company shall have the right to fix at its discretion the dues referred to in Article 
 39 of this concession, so that the shareholders, after the payment of 31 1-4 per cent, is 
 deducted, shall still receive dividends of ten per cent, per anuum on the whole capital. 
 
 At the expiration of this second period of ninety -nine years, the government shall 
 enter into perpetual possession of the canal and the other property referred to in the first 
 part of this article ; and this delivery shall also embrace everything excluded in the said 
 first part except the lands ceded to the associattion by this contract, and the reserve and 
 sinking fund. 
 
30 THE NICARAGUA CANAL. 
 
 The failure to comply with any of the cunditions of the lease shall terminate it, and the 
 State shall enter into the possession of the part of the canal which corresponds to it, owing 
 to it being situated in Costa Rican territory or in the places in which Costa Rica is joint 
 owner, and also of the other works which belong to the canal in accordance with the pro- 
 visions of the preceding paragraph. 
 
 Aeticle XLIX. 
 
 Any misunderstanding that may arise between the republic and the company in regard 
 to the interpretation of the present stipulations shall be submitted to a Court of Arbitrators, 
 composed of four members, two of whom shall be appointed by the State and two by the 
 company. 
 
 These arbitrators shall be designated by each party within the period of four months 
 from the day on which one of them shall give notice to the other in writing of the want of 
 agreement on the point at issue. Should one of the parties allow this period to lapse it shall 
 be considered as assenting to the opinion or claim of the other. 
 
 The majority of the votes of the arbitrators shall finally decide without resource. In 
 case of a tie vote the arbitrators shall appoint, by mutual consent, a fifth person who shall 
 decide, and in case of their default the respective parties will appoint him. If they cannot 
 agree to su'-b appointment they shall draw by lot the nanies of the diplomatic representa- 
 tives accredited to Costa Rica, and the first one drawn out shall exercise the functions of 
 the fifth arbitrator. He hhall concur on one of the two opinions, and what may be so de- 
 cided shaU be final and vrithout recourse * anv kind. If the fifth arbitrator should faU, 
 the second person drawn shall exercise ' aese . c_Jctions, and so on successively until the 
 decision is reached. 
 
 Prior to the initiation of the work of oper^ng the canal the government, in concur- 
 rence with the company, shall formulate a set of rmes to oe observed by the arbitrators in 
 all matters relating to procedure. 
 
 All questions between the association and private parties residing in Costa Rica shall 
 be determined by the ordinary Courts of Costa Rica in conformity with the legislation of 
 the Republic. In matters pertaining to parties not residing in Costa Rica the rules of prU- 
 vate international law shall be observed. 
 
 Akticle L. 
 This contract, after being approved by the Hon. General President of the Republic, 
 shall be submitted to the supreme legislative power for the purpose that if they deem it 
 convenient they should impart to it the necessary ratification, and in case such approval is 
 not obtained, the Nicaragua Canal Association will be released from all the obligations to 
 which it is bound by it. Such ratification or non-ratification shall be made within one 
 hundred and twenty days from this date. 
 
 In vtitness whereof, the undersigned have set their hands to four copies of the 
 present contract, two for each party, in San Jose de Costa Rica, 31st July, 1888. 
 
 PEDRO PEREZ ZELEDON. 
 A. G. MENOCAL. 
 
 Palace op the PREsn>ENT, 
 San Josfi, July 31, 1888. 
 In consideration that the foregoing contract agrees with the instructions given for its 
 celebration to the Honorable Secretary of State, who authorizes it, it is hereby approved in 
 all its parts for the purpose that it may be submitted to the deliberation of the Consti- 
 tutional Congress. 
 
 Countersigned by his Honor the President of the Republic. 
 
 PEREZ ZELEDON. 
 
APPENDICES. 31 
 
 AKTica: E 2. — The contract to which the foregoing article refers is hereby exempted 
 tiom the payment of stamp duties. 
 
 To THE Executive Power. 
 Given in the Hall of Session? of the National Palace in San Jose, on the 9th day of 
 August 1888 
 
 A. EsQxnvEL. 
 President 
 
 Manuel J. Jimenez, Felix Gonzalez, 
 
 Secretary. Vice Secretary. 
 
 Presidential Palace, 
 
 San Jos^, August 9, 1888. 
 
 Therefore- Be it executed. 
 
 BERNARDO SOTO. 
 
 The Secretary of State of the Department of Public Works. 
 
 Maximo Fernandez. 
 
APPENDIX IV. 
 
 DICKINSON-AYON TREATY OF FRIENDSHIP COMMERCE AND NAVIGATION. 
 
 Concluded June 21st, 1867; ratifications exclianged at Granada, June 30, 1868; 
 proclaimed August 13, 1868, 
 
 The United States of America and the Republic of Nicaragua, desiring to maintain and 
 to improve the good understanding and the friendly relations which now happily exist be- 
 tween them, to promote the commerce of their citizens, and to make some mutual arrange- 
 ment with respect to a communication between the Atlantic and Pacific oceans by the 
 River San Juan and either or both the lakes of Nicaragua and Managua, or by any other 
 route through the territories of Nicaragua, have agreed, for this purpose, to conclude a 
 treaty of friendship, commerce and navigation, and have accordingly named as their re- 
 spective plenipotentiaries, that is to say : 
 
 The President of the United States, Andrew B. Dickinson, Minister Resident and Ex- 
 traordinary to Nicaragua ; and his Excellency, the President of the Republic of Nicaragua, 
 Senor Licenciado Don Tomas Ayon, Minister of Foreign Relations ; 
 
 Who, after communicating to each other their full powers, f oimd in due and proper 
 form, have agreed upon the following articles : 
 
 Article 1. 
 decslaration of amity. 
 There shall be perpetual amity between the United States and their citizens on the one 
 part and the Government of the Republic of Nicaragua and its citizens of the other. 
 
 Aeticle II. 
 Freedom of commerce. 
 Coasting trade. 
 
 Article III. 
 Most favored nations. 
 
 Article IV. 
 
 No discrimination in duties and charges on exports and imports. 
 
 Article V. 
 No discrimination in tonnage duties. 
 
 Article VI. 
 No discrimination in duties on vessels. 
 
 Article VII. 
 Privileges of citizens of one nation in the territory of the other in business affairs. 
 Protection to persons and property. 
 
 Article VIII.' 
 Privileges of citizens of one nation in the territory of the other. 
 Real estate. 
 Estates of deceased persons. 
 
 Note.— As Articles II. to XIII. inclusive of this treaty have no direct bearing upon the canal 
 enterprise, their subjects only are here mentioned. See "Treaties and Conventions Concluded Between, 
 the United States of America and Foreign Powers," Government Printing Office, Washington, 1889. 
 
APPENDICES. 33 
 
 Article IX. 
 Intermarriage and holding property not to change national character. 
 Exemption from miUtary service and contributions. 
 Property not to be taken without compensation. 
 Freedom of travel and intercourse. 
 
 Article X. 
 Consuls. 
 
 Most favored nation privileges accorded to Consuls. 
 
 Diplomatic agents and Consuls. 
 
 tUiticle XI. 
 In case of imf riendly relation, citizens may remove property. 
 
 Article XII. 
 Privileges of citizens of one nation in the territory of the other. 
 
 Article XIII. 
 Refuge and asylum. 
 
 Article XIV. 
 The Republic of Nicaragua hereby grants to the United States, and to their citizens 
 and property, the right of transit betvireen the Atlantic and Pacific Oceans through the 
 territory of that republic, on any route of communication, natural or artificial, whether 
 by land or by water, which may now or hereafter exist or be constructed under the 
 authority of Nicaragua, to be used and enjoyed in the same manner and upon equal terms, 
 by both repubhcs and their respective citizens, the Republic of Nicaragua, however, 
 reserving its rights of sovereignty over the same. 
 
 Article XV. 
 
 The United States hereby agree to extend their protection to all such routes of com- 
 munication as aforesaid, and to guarantee the neutrality and innocent use of the same. 
 They also agree to employ their infiuence with other nations to induce them to guarantee 
 such neutrality and protection. 
 
 And the Republic of Nicaragua, on its part, undertakes to establish one free port at 
 each extremity of one of the aforesaid routes of communication between the Atlantic and 
 Pacific Oceans. At these ports no tonnage or other duties shall be imposed or levied by 
 the Government of Nicaragua on the vessels of the United States, or on any effects or mer- 
 chandise belonging to citizens or subjects of the United States, or upon the vessels or effects 
 of any other country intended, bona fide, for transit across the said routes of communica- 
 tion, and not for consumption within the Republic of Nicaragua. The United States shall 
 also be at liberty, on giving notice to the government or authorities of Nicaragua, to carry 
 troops and munitions of war in their ovs^n vessels, or otherwise, to either of said free ports, 
 and shall be entitled to their conveyance between them without obstruction by said gov- 
 ernment or authorities, and without any charges or tolls whatever for their transportation 
 on either of said routes: Provided, said troops and munitions of war are not intended to be 
 employed against Central American nations friendly to Nicaragua. And no higher or other 
 charges or tolls shall be imposed on the conveyance or transit of persons and property 
 of citizens or subjects of the United States, or of any other country, across the said 
 routes of communication, than are or may be imposed on the persons and property 
 of citizens of Nicaragua. 
 
 And the Republic of Nicaragua concedes the right of the Postmaster-General of the 
 United States to enter into contracts with any individuals or companies to transport the 
 mails of the United States along the said routes of communication, or along any other 
 routes across the Isthmus, in its discretion, in closed bags, the contents of which may not 
 be intended for distribution within the said republic, free from the imposition of all taxes 
 
M 
 
 THE NICARAGUA CANAL. 
 
 ov duties by the Q-overnment of Nicaragua ; but this liberty is not to he construed so as to 
 permit such individuals or companies, by virtue of this right to transport the mails, to 
 ■carry also passengers or freight. 
 
 Article XVI. 
 
 The Republic of Nicaragua agrees that, should it become necessary at any time tc 
 employ military forces for the security and protection of persons and property passing 
 over any of the routes aforesaid, it will employ the requisite force for that purpose; but, 
 upon failure to do this from any cause whatever, the Government of the United States may, 
 with the consent or at the request of the Government of Nicaragua, or of the minister 
 -thereof at Washington, or of the competent legally appointed local authorities, civil or mil- 
 itary, employ such force for this and for no other purpose ; and when, in the opinion of 
 the Government of Nicaragua, the necessity ceases, such force shall be immediately with- 
 drawn. 
 
 In the exceptional case, however, of Tmforseen or imminent danger to the lives or 
 property of citizens of the United States, the forces of said republic are authorized to act 
 for their protection without such consent having been previously obtained. 
 
 But no duty or power imposed upaw. or conceded to the United States by the provisions 
 of this article shall be performed or exercised except by authority and in pursuance of laws 
 of Congress hereafter enacted. It being understood that such laws shall not aflfect the pro- 
 tection and guarantee of the neutraUty of the routes of transit, nor the obUgation to with- 
 draw the troops which may be disembarked in Nicaragua directly that, in the judgment of 
 the government of the republic, they should no longer be necessary, nor in any manner 
 bring about new obUgations on Nicaragua, nor alter her rights in virtue of the present 
 treaty. 
 
 Article XVII. 
 It is understood, however, that the United States, in according protection to such 
 Toutes of communication, and guaranteeing their neutrality and security, always intend 
 that the protection and guarantee are granted conditionally, and may be withdrawn if the 
 United States should deem that the persons or company undertaking or managing the 
 same adopt or establish such regulations concerning the traffic thereupon as are contrary 
 to the spirit and intention of this treaty, either by making unfair discriminations in favor 
 of the commerce of any country or countries over the commerce of any other country or 
 countries, or by imposing oppressive exactions or unreasonable tolls upon mails, passengers, 
 v^essels, goods, wares, merchandise, or other articles. The aforesaid protection and 
 guarantee shall not, however, be withdrawn by the United States without first giving six 
 months' notice to the Eepublic of Nicaragua. 
 
 Article XVIII. 
 And it is further agreed and understood that in any grants or contracts which may 
 liereaf ter be made or entered into by the Government of Nicaragua, having reference to 
 the inter-oceanic routes above referred to, or either of them, the rights and privileges 
 granted by this treaty to the government and citizens of the United States shall be fuUy 
 protected and reserved. And if any such grants or contracts now exist, of a vaUd 
 haracter, it i s further understood that the guarantee and protection of the United States, 
 stipulated in Article XV of this treaty, shall be held inoperative and void until the holders 
 of such grants and contracts shall recognize the concessions made in this treaty to the 
 government and citizens of the United States with respect to such inter-oceanic routes, or 
 «ither of them, and shall agree to observe and be governed by these concessions as fuUy as 
 if they had been embraced in their original grants or contracts ; after which recognition 
 and agreement said guarantee and protection shall be in full force : provided, that nothing 
 herein contained shall be construed either to affirm or to deny the vahdity of the said 
 ■contracts. 
 
APPENDICES. 35 
 
 Article XIX. 
 After ten years from the completion of a railroad, or any other route of communica- 
 tion through the territory of Nicaragua from the Atlantic to the Pacific Ocean, no company 
 which may have constructed or he in possession of the same shall ever divide, directly or 
 indirectly, by the issue of new stock, the payment of dividends or otherwise, more than 
 fifteen per cent, per annum, or at that rate, to its stockholders from tolls collected there- 
 upon ; but whenever the toUs shall be found to yield a larger profit than this, they shall be 
 reduced to the standard of fifteen per cent, per annum. 
 
 Article XX. 
 
 DURATION OP TREATY. 
 
 The two high contracting parties, desiring to make this treaty as durable as possible, 
 agree that this treaty shall remain in full force for the term of fifteen years from the day 
 of the exchange of the ratifications ; and either party shall have the right to notify the other 
 of its intention to terminate, alter, or reform this ti'eaty, at least twelve months before the 
 expiration of the fifteen years ; if no such notice be given, then this treaty shall continue 
 binding beyond the said time, and until twelve months shall have elapsed from the day on 
 which one of the parties shall notify the other of its intention to alter, reform or abrogate 
 this treaty. 
 
 Article XXI. 
 
 RATIFICATIONS. 
 
 The present treaty shall be ratified, and the ratifications exchanged at the city of 
 Managua, within one year, or sooner, if possible. 
 
 In faith whereof, the respective Plenipotentiaries have signed the same, and affixed 
 thereto their respective seals. 
 
 Done at the city of Managua, this twenty-first day of June, in the year of Our Lord 
 one thousand eight hundred and sixty-seven. 
 
 [Seal] A. B. DICKINSON. 
 
 [Seal] TOMAS AYON. 
 
APPENDIX V. 
 
 TEEATY*— FRELINGHUYSEN-ZAVALA (UNRATIFIED)— PROVIDING FOR THE 
 
 CONSTRUCTION OF AN INTER-OCEANIC CANAL ACROSS THE 
 
 TERRITORY OF NICARAGUA. 
 
 The United States of America and the Republic of Nicaragua, recognizing the impor- 
 tance of an Inter-oceanic communication across the Isthmus at Nicaragua, which shall 
 bring into close communication the ports of North and South America and shall facilitate 
 commerce between Europe and the ports of the Pacific, between the Eastern parts of Asia 
 and the Atlantic seabord, and the ports of the United States on the Pacific and Atlantic, 
 have agreed for this purpose to build a canal, and to that end to conclude a treaty, and 
 have accordingly named as their respective plenipotentiaries the President of the United 
 States, Frederick T. Frelinghuysen, Secretary of State of the United States of America, 
 and the President of Nicaragua, General Joaquin Zavala, ex-President of the Republic of 
 Nicaragua, who, after communicating to each other their full powers, found in due and 
 proper form, have agreed upon the following articles : 
 
 Article I. 
 The canal shall be built by the United States of America, and owned by them and the 
 Republic of Nicaragua, and managed as hereinafter provided. 
 
 Aeticle II. 
 There shall be perpetual alliance between the United States of America and the Re- 
 public of Nicaragua, and the former agree to protect the integrity of the territory of the 
 latter. 
 
 Article III. 
 
 FULL POWERS GIVEN TO THE UNITED STATES. 
 
 A practicable ship canal for vessels of the largest size commonly used in commerce, 
 shall be begun by the United States, and be prosecuted to as speedy conclusion as circum- 
 stances may permit, subject to the limitation provided in Article XX. of this convention. 
 This canal shall follow what may be decided to be the most available route from ocean to 
 ocean, and the United States, in building the canal, shall enjoy the fuUest liberty in its 
 •construction and in its location, and that of its dependencies, accessories and works, as 
 ■weU as in the selection of entrance ports, should it be found necessary or desirable to leave 
 the bed of the San Juan River at any point, and to construct a lateral canal. The govern- 
 ment of Nicaragua reserves the right to require the establishment of a lock communication 
 for vessels of 6 feet draft and 160 feet length, between the lower part of the river and 
 that part used for the canals, but the Government of Nicaragua will advise the United 
 States of its wishes in this regard as soon as work shall be begun in the river; and it is ex- 
 pressly stipulated that Nicaragua alone shall be responsible for the maintenance and opera. 
 tion of this communication and for the navigable condition of the lower river. 
 
 Article IV. 
 For the purpose of carrying out this agreement, the Republic of Nicaragua agrees to 
 give the United States free use of Lake Nicaragua; to furnish, free of cost, all the spaces 
 necessary to the construction, maintenance, use and enjoyment of the canal and for any 
 
 *This treaty lias never been officially published. It is reprinted from the New York Tribune of De- 
 cember 18, 1884. 
 
APPENDICES. 37 
 
 probable future enlargement thereof, whether these spaces be upon the dry land, in the 
 lakes and upon their islands, in the rivers and upon their islands, or at the ports and road- 
 steads of the two oceans, together with their surroundings and declivities, and all the spaces 
 required for the deposit of material from excavations and cuttings, from the overflows aris- 
 ing from dams in the rivers, for all deviations of streams f i-om. their channels, as well as 
 for reservoirs, dikes, piers, docks, spaces about locks, for lights, beacons, storehouses, ma- 
 chine shope, buildings, and for whatever other thing necessary, and, in short, all lands, 
 waters and places within the Republic of Nicaragua required for the construction, mainten- 
 ance, use and business of the canal, including a railway from one terminal of the canal to 
 the other, substantially parallel to and near the bank of the canal and along the southern 
 shore of Lake Nicaragua, together with a telegraph hne, should the United States decide 
 to construct either said railway or telegraph line, or both, which shall be regarded for all 
 purposes of this treaty as part of the canal so long as they are maintained. 
 
 Article V. 
 The work shall be declared one of public utility, and for the purposes of building and 
 operating the canal, railway and telegraph line the Republic of Nicaragua undertakes to 
 expropriate lands belonging to individuals. Any private property and real estate^actually 
 held by individuals or corporations which shall be taken or used by the United States for 
 the construction of the canal or its accessories, or for their maintenance, shall be so taken 
 upon condemnation and appraisement of the value of such property, and the Government 
 of the United States will pay to the owners thereof the value iixed by a commission of 
 assessors, comprising three members, one of whom shall be appointed by the President of 
 the United States, one by the President of Nicaragua, and the third to be chosen by these 
 two jointly. The United States or the Board of Managers hereafter provided for, as the 
 case may be, shall have the right to take from the public lands of Nicaragua any materials 
 whatever needed for the construction, preservation, maintenance, and use of the canal 
 and of its ports, dependencies, accessories and equipments. When the materials are taken 
 from priva,te lands the United States, o^- the said Board of Managers, shall enjoy in their 
 use all the rights the RepubUc of Nicaragua enjoys by law and usage. As to the contract 
 of the Government of Nicaragua with Mr. F. A. Pellas relating to steam navigation, that 
 government engages that said contract shall not be considered applicable to the necessary 
 operations of either party to this convention in constructing or operating the canal or any 
 part of it during the time the contract has yet to run, this exemption to include nec- 
 essary canal work and transportation on Lake Nicaragua and the rivers of tlie republic. 
 Purther, the said Government of Nicaragua agrees that, should the Government of the 
 United States during the period the said contract has yet to run find it advisable to pur- 
 chase the franchise, property and rights now held by said Pellas by virtue of said contract, 
 the said franchise, property and rights shall be expropriated by the same form and under 
 the same conditions as are fixed in this article for the expropriation of other private pro- 
 perty. Should the United States, in the construction of the said works, find it necessary to 
 occupy any lands belonging to the Republic, they shall have the right to do so free of 
 charge during such temporary occupation, and the land so occupied, if sold or otherwise 
 alienated, shall be conveyed with the reservation of this emporary right of occupation by 
 the United States. 
 
 Article VI. 
 The United States shall have the right throughout the extent of the canal, and of its 
 accessories, dependencies and adjuncts, as well as its mouths at both oceans, and in the 
 lake and river which the canal route may traverse, and that may be used ia any manner 
 in connection with the canal construction, to enter upon work of any kind whatsoever 
 deemed necessary by the engineers for the construction of a safe, effective, durable and 
 speedy route for the transit of vessels from ocean to ocean without let or hindrance of any 
 kind from the government or people of the Republic of Nicaragua, and also for the con- 
 struction of the said railway and telegraph line. 
 
3^ the nicaragua canal. 
 
 Article YII. 
 setting aside lands. 
 A strip of territory two and one-half English miles in width, the middle of the strip to 
 coincide with the centre Une of the canal, and also a strip two and one-half miles wide 
 around the southern end of the lake where the lake is used as a water course for the canal, 
 as well as a strip two and one-half m iles wide along the river, where the river is used as a 
 part of the canal, shall be set aside for the work and owned by the two contracting parties, 
 and where the railway and telegraph line aforesaid may of necessity pass beyond the 
 bounds of such strip of land a plot one-half of a mile in width, whose centre line shall 
 coincide with the railway outside of the belt reserved for the canal shall also be set aside 
 and owned, and all the land in this Article referred to shall be subject to the agreement 
 hereinbefore made as to lands, when owned by the State or by private individuals, neces- 
 sarily used in the prosecution of the work; but the said lands in this Article described shaU 
 not include towns, vUlages or cities now in existance. In such case, only that part shall 
 be considered as embraced in this article as is absolutely essential to the economical pros- 
 ecution or administration of the work over these strips. In time of peace, Nicaragua shall 
 exercise civil jurisdiction, and its inhabitants shall not in any way be considered as impaired 
 in their rights as citizens of the republic. 
 
 Article VIII. 
 
 PROVISIONS AS TO VESSELS AND THEIR CARGOES. 
 
 No Custom House tolls, or other taxes or impositions of any sort or kind, shall be levied 
 by the Government of Nicaragua upon any vessels passing the canal, their cargoes, stores, 
 passengers, crews or baggage, or for unloading, loading, docking or repairing vessels, it be- 
 ing the intent of this agreement that vessels, their cargoes and passengers and crew shaU. 
 pass the canal free of any charge other than that imposed upon them by the two Govern- 
 ments, in their capacities as owners of the work. Nicaragua may, however, provide a 
 poUce system along the line of canal to keep the peace and to prevent smuggling into her 
 territory, the reasonable cost of which, as approved from time to time by the Board of 
 Managers, shall be a charge upon the revenues of the canal. The Board of Managers shall 
 have the right to discharge and reload ships in transit, at such points as may be convenient, 
 in order to make repairs or to Ughten the vessel, to ship cargo, by reason of any cause ren- 
 dering any of these acts necessary, or may tranship cargo without being subject to search, 
 actions, duties, or taxes of^any kind, but before beginning such operations notice thereof 
 must be given to the nearest customs authority. 
 
 Article IX. 
 The Government of the EepubUc of Nicaragua, in conformity with the laws, shall lend 
 its protection to the engineers, contractors, agents, employes and laborers employed in the 
 construction, maintenance and management of the canal and its accessories, and they shall 
 oe wholly exempt from military requisitions and forced loans ; but if any such persons shaU. 
 acquire real estate outside of the strips provided for in Article VIII hereof, they shall be 
 subject to the taxes fixed by law. The Government of Nicaragua guarantees to the canal 
 and its accessories, and to its agents of ah. classes, security, under the laws of the country, 
 against domestic acts of hostility in the same degree as in the case of other inhabitants, em- 
 ploying all its powers for their protection. 
 
 Article X. 
 
 FREE FROM TAXATION. 
 
 All contracts for the construction, maintenance and management of the canal and 
 accessories may be enforced according to the laws of Nicaragua and the provisions of this 
 convention. 
 
APPENDICES. 39 
 
 Article XI. 
 The canal and its accessories and dependencies of every kind shall be exempt in peace 
 and in war from every form of taxation upon real or personal property acquired in virtue 
 of this convention, and from every form of direct or indirect taxation, contributions, local 
 taxes or other dues in respect to the ownersliip and use of the canal and its accessories, or 
 of the buildings or constructions or equipments or appUances appertaining thereto, or to 
 the ports and maritime establishments thereof anywhere in the repubhc and upon the lands 
 set aside for the purposes of the canal and its accessories. The Repubhc of Nicaragua binds 
 itself not to estabUsh tonnage dues, anchorage, hght, vi'harf or pilot dues, or charges of any 
 class whatsoever, upon vessels of whatever kind, or upon merchandise, or crews, or passen- 
 gers, or gold, or silver, or diamonds, or anything traversing the canal, all such dues being 
 for the benefit of the two governments in their capacity as joint owners and managers of 
 the canal and its accessories ; but merchandise, loaded or unloaded, in any part of the canal 
 or its accessories, coming from or destined to Nicaragua and intended for sale, shall pay 
 dues for exportation and importation fixed by the revenue laws of Nicaragua. 
 
 Article XII. 
 
 EXEMPTING MATERIALS FROM DUTY. 
 
 All articles necessary for the construction and repair of the canal and its accessories 
 may be imported without duty or tax of any kind being laid thereon by the Government 
 of Nicaragua, including such iron, steel, locomotives, cars, telegraph wires and instru- 
 ments, tugs, dredges and vessels or other things as may at any time be used in the con- 
 struction, improvement, prosecution or maintenance of the work, or in the maintenance or 
 improvement of the same after its completion ; and during the construction of the canal 
 and its accessories, aU supplies, whether personal or otherwise, except tobacco, spirits or 
 wines, used by those engaged in the work, shall be free of any customs or other tax ; but 
 no such supplies shall be permitted to be sold to those not actually engaged in the work, or 
 to be smuggled into or sold in the interior. All vessels in the service of the canal and its 
 accessories, with their equipment and outfit, arriving at any port of Nicaragua from any 
 point whatever, shall be free of aU duties and port charges. 
 
 Article XIII. 
 For and in consideration of the preceding articles, the United States of America agree 
 to furnish the money to build the said canal and its accessories, including, if found advisa- 
 ble, the said railway and telegraph lines, together with all docks, locks, machine-shops, 
 annexes, machinery, feeders, etc., it being the intent of this agreement that the United 
 States of America shall build and complete the canal and everything appertaining thereto, 
 for the safe and speedy passage of the vessels hereinbeiore described, and for 
 through communication between ocean and ocean, and such loading and repairing as may 
 be necessary, at their sole cost and without expense to the Government of Nicaragua. 
 
 Article XIV. 
 
 EXCLUSIVE control GIVEN TO THE UNITED STATES. 
 
 The United States shall have exclusive control of the construction of the canal and 
 railway and telegraph Une,. if the same be built, and shall be invested with all the rights 
 and powers necessary thereto. The management, care and protection of the canal and its 
 accessories, including the said railway telegraph line, if built under the general super- 
 vision of the two governments, shall be entrusted to a board of managers, which shaU. 
 consist of six members, three of whom shall be appointed by the President of the United 
 States by and with the advice and consent of the Senate thereof, should the Senate be in 
 session ; or, should the Senate not be in session, the three members shall be appointed by 
 the President subject to confirmation by the Senate at its next session ; and three by the 
 Eepubhc of Nicaragua. Any vacancy which may occur among the members of the board 
 j;.ppointed by the President of the United States shall be fiUed by the said President in the 
 
4° THE NICARAGUA CANAL, 
 
 manner provided in the United States for filling of vacant government ofllces ; and any 
 vacancy which may occur among the members of the board appointed by the President of 
 Nicaragua shall be filled by the said President in the manner provided in Nicaragua for 
 filling vacant government offices. This board shall be designated as soon as the canal is 
 ready for traffic, and shall determine all questions by a majority vote. The chairman of 
 the board shall be one of the members appointed by the President of the United States, 
 and designated as chairman by him ; and in case of a tie, the chairman shall have an 
 additional vote. This board shall be entrusted with the general executive management of 
 the canal and its accessories, including said railway and telegraph line when built, and of 
 all matters rela^ting to the maintainance or improvement thereof; shall fix the tolls and 
 provide rules and regulations for the management thereof. Their action shall be, how- 
 ever, at aU times subject to a joint direction by the Presidents of the two Republics, which 
 they shall be bound impKcitly to obey. The said board of managers shall have the right 
 and power to levy and collect for steamers, ships and vessels of every class entering the 
 canal or the ports at the canal entrances, and for passengers, merchandise and cargo of all 
 kinds, transit, navigation, tonnage, light and port dues, as well as for towage, storage, 
 anchorage, wharfage and hospital dues, and all other like fees. The Government of 
 Nicaragua guarantees the enforcement of the regulations so adopted by the board of 
 managers as if issued by the Government of Nicaragua. The tolls hereinbefore provided, 
 shall be equal as to vessels of the parties hereto, and of all nations, except that vessels 
 entirely owned and commanded by citizens of either one of the parties to this convention 
 and engaged in its coasting may be favored. Nicaraguan vessels using a portion only of 
 the canal shall pay proportionate tolls, and shall pay no tolls where the canal shall use 
 any part of auy existing navigable waterway. 
 
 Article XV. 
 The books and affairs of the said Board of Managers shall be subject to such inspec 
 tion or examination as the President of either republic shall at any time direct. The Board 
 of Managers shall, on the first days of January, April, July and October in each and every 
 year, make to the President of each republic a full and complete report of their transac- , ,j| 
 tions during the preceding quarter, and the President of either republic may at any time 
 caU upon them for such other or further information as he may deem expedient. The 
 Board of Managers shall appoint and remove all officers engaged upon the canal and its 
 accessories, including the railway and telegraph line, and naay make regulations for the 
 appointment and removal of all subordinate employes. 
 
 Article XVI. 
 
 HOW THE REVENUES SHALL BE USED. 
 
 All the proceeds of the canal and its accessories, including the .railway and telegraph 
 line, shall be apphed: 
 
 First. To the maintenance and improvement, if found necessary, of the works, in- 
 cluding the salaries of the Board of Managers and all officers and other employed. 
 
 Second. The balance shall be paid to the two governments in the following propor- 
 tions, viz. : To Nicaragua one-third, and to the United States two-thirds. Liquidation of 
 the accounts of the Board of Managers and payment of the balances herein prescribed 
 shall be effected quarterly on the first days of January, AprU, July and October in each 
 and every year. 
 
 Article XVII. 
 The Government of Nicaragua grants to the United States during the construction of 
 the canal and its accessories, and to the Board of Managers thereafter, the right to use any 
 of the ports of the repubUc open to commerce as places of refuge for the vessels in the 
 service of the canal and its accessories, or for any other vessels whatever having the right 
 to pass the canal, and wishing to enter any Of the said ports, and these vessels shall be free 
 of all duties or charges of any kind on the'part of the Eepublic of Nicaragua. 
 
APPENDICES. 41 
 
 Article XVIII. 
 The United States frankly disavow any intention to in any way seek to impair the inde- 
 pendent sovereignty of Nicaragua or to aggrandize themselves at the expense of that State 
 or of any of her sister Republics in Central America; but, on the contrary, desire to 
 strengthen the power of free Eepubhcs on this continent, and to promote and develop 
 their prosperity and independence. Pursuant to this wish they have united with Nicaragua 
 in the construction of this work which will be of advantage not only to the two nations 
 -most intimately concerned, but to all those with whom they are on terms of friendship. 
 
 Article XIX. 
 If, in virtue of any existing treaty between the Eepubhc of Nicaragua and a third 
 power, privileges or rights are stipulated in favor of such third power of an inter-oceanic 
 i;ransit way, which may not be compatible with the terms of the present convention, the 
 Eepublio of Nicaragua engages to terminate such treaty in due form by giving to the said 
 third power the stipulated notification within two months from the date of the exchange 
 •of the notification hereof ; and if such treaty between Nicaragua and any third power con- 
 tain no termination clause, the Eepubhc of Nicaragua engages to procure its abrogation or 
 modification so as not to conflict with the present compact, and the United States will use 
 their good offices, if need be, to the end of effecting such abrogation or modification. 
 
 Article XX. 
 
 VTHEN WORK ON THE CANAL WILL BE BEGUN. 
 
 The United States Of America engage to begin effective work on the canal within two 
 .yeare from the exchange of ratifications of this treaty and to complete the canal within ten 
 years after beginning it, in default of which this treaty shaU become inoperative. Provided, 
 however, That should there arise insuperable obstacles to retard the work during this time 
 at shall be prolonged in proportion to the time lost by reason of such obstacles ; And Fur- 
 ther, if at the expiration of the said ten years the canal shall not be opened to commerce 
 between the two oceans, then, in consideration of the large capital invested in the work, 
 and of the good faith and abihty shown as weU as of the difiiculties encomitered, the Ee- 
 jubUc of Nicaragua binds itself to extend this period so far as is just and necessary. 
 
 Article XXI. 
 Any diflBculties between the parties hereto shall be submitted to the arbitration of a 
 -friendly power, if one can be agreed upon, or, failing such agreement, each party shall 
 request a friendly nation to name an arbitrator, and the arbitrators thus named shall 
 select a third ; the decision of the arbitrating power or a majority of the Board of Arbitra- 
 tors, as the case may be, shaU be final and conclusive. 
 
 Article XXII. 
 The United States will aid by their good offices, if desired, in securing the union of the 
 five Central American Eepublics under one representative government, and the reorganiza- 
 "tion of the said republics in one nationality being accomplished, the Central American 
 Republics shall have the same rights and bear the same obligations as Nicaragua has and 
 ■bears by virtue of this treaty. 
 
 Article XXIII. 
 
 FINANCIAL aid FROM THE UNITED STATES. 
 
 It appearing that the financial condition of Nicaragua is prosperous, that the republic 
 is without incumbrance of debt, and that the government finds it necessary to finish as 
 ■soon as possible certain railways within the republic, to extend its telegraph line, and to 
 improve the navigation of the Eiver San Juan, which enterprises will be of aid to the 
 canal and favorable to its speedy construction and successful operation, the government of 
 -the United States agrees to loan to the Government of Nicaragua the sum of $4, 000, 000, to be 
 
4* THE NICARAGUA CANAL. 
 
 applied to the above enumerated projects. Of this amoimt $1,000,000 shall be paid in the- 
 Caty of Washington within ninety days after the exchange of the ratifications of this con- 
 vention, and the remaining $3,000,000 in installments of $500,000 each every six months 
 thereafter until the amount shall have been paid, but the failure to pay any of these sums 
 from accident or non-action of Congress at the exact dates herein specified, such payments 
 being made thereafter In good faith, shall not be held as affecting in any viray the other 
 engagements of this convention. 
 
 The Government of Nicaragua agrees that the Government of the United States shaU 
 be credited with and receive the share of Nicaragua in the net revenues of the canal, to be 
 applied to the payment of this loan until it shall have been entirely extinguished, with the 
 interest thereon at three per centum per annum, fi-om the dates when the several sums 
 shall be received by Nicaragua, and the Republic of Nicaragua may vote yearly through 
 its Congress an additional sum from the general revenues of the Republic to be applied to 
 the payment of this loan and to aid in its speedy extinguishment; and further, the 
 Government of Nicaragua assuming the repayment of said loan, binds itself to consider 
 it until extinguished together with the interest thereon, as hereinbefore provided, as a 
 lien upon all rights of Nicaragua in the canal, its accessories and appliances, this lien 
 to continue until the repayment of the sum so advanced with the interest, but the repayment 
 is not to be exacted until ten years after the said canal shall have been completed, and 
 opened to commerce. 
 
 Article XXIV. 
 Neither of the parties to this convention shall sell, assign or otherwise alienate or suffer 
 itself to be deprived of its or any part of its interest, right or property in or to the said 
 canal, railway or telegraph line, should the same be built, or their or any other adjuncts or 
 accessories, or any of the works or establishments pertaining thereto without the consent 
 of the other manifested by legislative enactment. 
 
 Article XXV. 
 
 KATIPICATION OF THE TREATY. 
 
 This treaty is concluded subject to ratification by the proper constitutional authority 
 of each party hereto, and to the legislation by the appropriate legislative bodies of each, 
 which is necessary to carry it into effect. It shall be ratified as soon as possible, but 
 within two years from this date, and the ratifications thereof shall be exchanged in the 
 city of Washington within six months from the approval by the said legislative bodies of 
 Nicaragua and of the United States of the present treaty. In testimony whereof the un- 
 dersigned plenipotentiaries have hereunto afiixed their hands and seals. Done in duplicate 
 in the EngUsh and Spanish languages, in Washington this first day of December, in the 
 year of our Lord, one thousand eight hundred and eighty-four. 
 
 FRED'K T. FRELINGHUYSEN, [sealJ 
 
 JOAQ'N ZAVALA. [seal] 
 
APPENDIX VI. 
 
 THE NICARAGUA CANAL. 
 
 BY SENATOR JOHN SHERMAN. 
 
 Republished by permission, from The Forum for March, 1891. 
 
 No other measure of public policy now submitted to the people of the Untfceii States is 
 ■of such wide-reaching importance as the proposed construction of the Nicaragua Canal, 
 and it is the duty of the organs of public opinion to state the elements of the problem that 
 it offers, so that their readers may intelligently Judge whether the United States should aid 
 in its execution, and, if so, to what extent and in what manner. Hitherto such questions 
 as this have been hidden under the cloak of diplomacy; but now, by the action of the Sen- 
 -ate in removing the injunction of secrecy from negotiations with foreign powers, this 
 gi-eat measure is open to the inspection of the American people, and is submitted to 
 their judgment. 
 
 By a treaty, signed on December 1, 1884, between the United States and the Republic 
 ■of Nicaragua, provision was made for the construction by the United States of an inter- 
 oceanic canal from the Atlantic to the Pacific, across the territory of that republic. It was 
 isent to the Senate on December 10, 1884, accompanied by a message from President Arthur 
 recommending its ratification in strong and earnest language ; but it was not formally acted 
 upon prior to the inauguration of President Cleveland, on March 4, 1885. Mr. Cleveland, a 
 lew days thereafter, formally withdrew the treaty from the consideration of the Senate, 
 .and, in his annual message to Congress, in December of that year, stated as his reason for 
 so doing that it contained ' 'propositions involving paramount privileges of ownership or 
 right outside of our own territory, coupled with absolute and unlimited engagements to 
 defend the territorial integrity of the state where such interests lie." He further said: 
 
 "Maintaining, as I do, the tenets of a line of precedents from Washington's day 
 which prosci-ibed entangling alliances with foreign states, I do not favor a policy of 
 acquisition of new and distant territory, or the incorporation of remote interests with 
 our own. " 
 
 Subsequently, on April 25, 1887, the Republic of Nicaragua, deeply interested in the 
 construction of the work, granted to a private association of citizens of the United States a 
 concession of the right to build an intei'-oceanic canal. A like concession was made by 
 the Republic of Costa Kica, situated on the southern borders of the San Juan River and 
 Lake Nicaragua. The association obtaining these concessions was incorporated by an act 
 ■of Congress approved February 30, 1889, under the name of "The Maritime Canal Company 
 •of Nicaragua. " It appears from the terms of these concessions that the Maritime Canal 
 ■Company is invested with the clear and unquestionable right to construct the work pro- 
 posed, to seU its stock and bonds for the funds required, and to seek the aid of foreign pow- 
 ers, especially that of the United States. The American company thus authorized and 
 ■organized has supplemented the previous examinations and reconnaissances of officers of 
 the army and navy of the United States by careful detailed instrumental surveys measure- 
 ments, soundings, and estimates of cost ; so that the precise vi ork to be done and the diffl. 
 culties to be overcome are known. This work has been revised by a board of consulting 
 engineers, and, before any aid shall be rendered by the government, it is to be further re- 
 vised by officers of the army and navy of the United States on whose skill and judgment 
 ■entire reliance can be placed. The revised estimates place the cost of the work at |73, 176, _ 
 .308, to which is added for possible contingencies $14,633,362; and to this must be added 
 interest on the money invested during the progress of the work, making the aggregate cost 
 
44 THE NICARAGUA CANAL. 
 
 about $100,000,000. The Maritime Company has entered upon the actual work of con- 
 struction, and satisfactory progress has been made, so that the cost, location, and engineer- 
 ing problems involved are fully knovrn. It is apparent that the physical difllculties to b& 
 overcome are not greater than those of many of the works of improvement undertaken 
 within our own country, for the highest part of the water way is to be only 110 feet above- 
 the two oceans — a less altitude than that of the base of the hills which surround the city of 
 Washington. The works proposed include a system of locks, similar in character to the- 
 one built by the United States at the falls of SaultSainte Marie and to those constructed by 
 Canada around the Falls of Niagara. A single dam across the San Juan Biver, 1,350 feet long^ 
 and averaging 61 feet high, between two steep hills, will insure navigable waters of suffi- 
 cient depth and width for the commerce of the world, for a length of 130 miles. The ap- 
 proaches to this level, though expensive, are not different from similar works, and will be- 
 singularly sheltered from floods and storms. Of the distance of 169.4 miles from ocean to 
 ocean, 143.6 miles is to be accomplished by slack- water navigation in lake, river, and 
 basins, and only 36.8 miles by excavated canal. The greatest altitude of the ridge which 
 divides the water of Lake Nicaragua from the Pacific Ocean does not exceed at any point 
 43 feet above the lake. 
 
 Perhaps the chief engineering difficulty is in the construction of harbors at the Pacific 
 and Atlantic termini of the canal ; but that at Greytown, on the Atlantic coast, which is. 
 considered the most formidable, has already been partially built. Vessels requiring 14 feet 
 of water can now safely enter this harbor and discharge their cargoes at the docks of the 
 company. The obstacles are not to be compared with those encountered in the attempted, 
 construction of the Panama Canal, or with those which were easily overcome in the con- 
 struction of the Suez Canal ; and the whole work, from ocean to ocean, is free from the- 
 dangers of moving sand and destroying freshets. Lake Nicaragua itself is one of the most 
 remarkable physical features of the world. It fills a cavity in the midst of a broken chain 
 of mountains, whose height is reduced, at this point, nearly to the level of the sea, and it 
 furnishes not only the means of navigation at a low altitude, but enormous advantages as- 
 a safe harbor. 
 
 Though the length of transit is greater than in the cases of the other routes proposed, 
 the difficulties in the way are far less. These are disappearing as the work goes on, whil& 
 the advantages which will be gained by the construction become more apparent, and can 
 scarcely be measured. The first is one that will be, and ought to be, shared by the whole 
 civihzed world. ITie estabhshment of a water way between the Atlantic and the Pacific 
 will realize the dream and hope of Columbus, who underestimating the circumference of 
 the earth, started on his voyage for the coast of India, and found his way blocked by the- 
 newly-discovered continent. Since that time, for nearly four centuries, explorers have 
 hoped to find some open way across the Isthmus, or, failing in that, to construct such way 
 by artificial means. Every explorer and adventurer, every king and power, has shared in. 
 this hope, and to reaUze it many hazardous enterprises have been attempted. The Govern- 
 ment of the United States, in later years, especially since the settlement of Cahf omia, ha& 
 felt the deepest interest in aocompHshing this latter achievement, has sought by negotiation 
 and by treaties to protect the region from hostile occupation, has joined in several plans to- 
 construct canals across the Isthmus, and has caused to be made elaborate and careful sur- 
 veys, both by civil and by military engineers, with a view to the selection of the best route. 
 Other nations have been equally interested, but not so active or effective in preparing- 
 the way and in selecting the location. The success of the Suez Canal led M. de Lesseps, 
 who was the chief agent in the construction of that work, to seek to complete the channel 
 of navigation around the world by a water way at Panama. The schenae contemplated the 
 digging of a canal from sea to sea, partly at the level of tide water and partly below it. 
 The work, thus far, has been a failure, and the plan is beUeved to be impracticable. The 
 Nicaragua route, though burdened with the delays of lockage, is now conceded to be more- 
 practical, far less costly, and more useful, than the one at Panama, and will accomplish, 
 the same object. 
 
 The second great advantage to be derived from the construction of this canal, is the ex- 
 
APPENDICES. 45 
 
 tension of our coast line through it to our western States and to neighboring countries. 
 Vessels sailing from New York to San Francisco are now compelled to pass around Cape 
 Horn, a distance of 19,000 mEes. The benefits to be derived from this extension can 
 scarcely be measured. The enormous quantities of wheat, lumber, and otlier articles pro- 
 duced on the Pacific coast can now be transported to the Atlantic States only by 3,000 
 miles of railway or by the long voyage around South America, so that the entire value of 
 these productions is often consumed in the expense of the journey. It is believed that our 
 coasting trade would be increased many fold by the use of the canal through Nicaragua, 
 and that by it employment would be given to vessels at seasons of the year when they are 
 now laid up in northern ports. 
 
 Another benefit to be derived by the United States from the construction of this canal 
 is that it will give our people a community of interests with the western coasts of Mexico 
 and South America, now substantially closed to our commerce. The commerce of these 
 coasts, being compelled to go around Cape Horn, can from that point reach with less dif- 
 ficulty the markets of Europe than the markets of our own country ; while, if the canal be 
 constructed, there wiU be a safe, well-protected water -route between the western ports of 
 the Americm continent and our chief commercial cities. The canal wiU, for the first time, 
 make possible an enf oixement of the Monroe Doctrine, hitherto a mere dogma in Ameri- 
 can policy. The communion of interests between the American States will be enormously 
 strengthened by this work. The South American republics are patterned after ours ; there 
 can be no clasMng of interests between us. For many years they are not likely to be 
 manufacturing countries, but will be devoted mainly to agriculture and mining. They 
 would naturally exchange their gold, silver, sugar, coffee, tropical fruits, guano, and other 
 sources of wealth for tlie manufactures and productions of the United States. 
 
 The construction of this canal would seem, judging by statistics, to be a very profitable 
 investment for American capital. The rapid accumulation of wealth in our country has 
 removed us from among the nations that, by their means, are Hmited to home enterprises. 
 Assuming that the estimate of tonnage is not excessive, and that the cost of the improve- 
 ment wiU not exceed $100,000,000, the smallest rate of toUs proposed by anyone will 
 yield at least five per cent, on the investment, as well as secure to our citizens, from their 
 proximity to the work, great advantages of trade and profit over foreign competitors. 
 
 I will not enter into details as to the nature of the work, or as to the further benefits 
 to be derived from its construction. The question remains. How shall it be executed? And 
 this question must be solved, not in such a way as to advance the interests of private citi- 
 zens or companies, but as to benefit all the the people of the United States. It is proper 
 forme to emphasize the fact that the Maritime Canal Company, and the Construction Com 
 pany, organized by it, have made no application to Congress for aid. The Maritime Canal 
 Company can, no doubt, by making great sacrifices of its stock and bonds, secure the com- 
 pletion of the canal ; but all experience shows that this will involve an output of stock and 
 bonds that wiU be a permanent charge and burden upon the commerce that passes through 
 the canal. The Senate Committee on Foreign Relations has examined the officers of the 
 Maritime Company as to their plans for raising money, which appear to be substantially 
 the same as those adopted for other works of improvement constructed by private corpo- 
 rations. As no income or profit can be derived from the work until its completion, and 
 until the actual passage of vessels through the entire length of the canal, the company, 
 without aid from the government, would be obUged to reUe upon its credit, or upon its own 
 resources; and, under the raost favorable circumstances, it is shown that the burden of 
 liabilities upon the completed work would be not less than §350,000,000, and might extend 
 to $400,000,000, most of the amount borrowed at a high rate of interest, accompanied by 
 large discounts. The stock and bonds would have to be disposed of in the open market, 
 and would be sold largely in Europe. Therefore, though the work would have been insti- 
 tuted and conducted by American citizens, the control and management of the corporation 
 would necessarily drift into the hands of holders who have no regard to the important 
 American interests involved in the enterprise. On the other hand, it is apparent that if 
 the United States should aid the work by their credit, the Maritime Company would be able 
 
46 THE NICARAGUA CANAL. 
 
 to complete it at the estimated cost without discount or loss ; and that, in consideration of this 
 aid, the United States could prescribe such terms and conditions as would carry out the 
 object of the concessions and the fixed policy of this government. Vessels of the United 
 States will, in all probability, carry the chief commerce through the canal, and it is for 
 the interest of our people that the charges on these vessels shall be so low as to induce the 
 largest possible number of their owners to avail themselves of the benefits of the 
 canal. 
 
 The question, then, before those who were drafting a bill to secure government aid, 
 was in what way this aid should be rendered without involving a departure from our 
 established pohcy as stated by Mr. Cleveland, and without pecuniary loss or entangling 
 aUiances. The only method that was suggested was the one adopted by other nations 
 under like circumstances, and especially by Great Britain in respect to the Suez Canal, 
 namely, that the government should, in consideration of its guarantee, secure such a con- 
 trol of the majority of the stock as to enable it to protect the interests of the people, and 
 such control of the expenditures on the work as certainly to limit the obligations of the 
 company to the actual cost of the canal in money. These primary objects have been, it is 
 thought, secured in the biU now pending, by an unconditional guarantee of payment of 
 the principal and interest of the bonds of the company ; by the application of the proceeds 
 of these bonds, under the direction of United States engineers, to the work actually done; 
 andby the transfer of 170,000,000 out of |100,000,000 in stock to the United States, with 
 the power to vote at any meeting of the company and with a proper representation on the 
 board of directors. These, and other provisions of the bill reported, will, it is confidently 
 believed, not only secure the completion of the work at cost, but wiU place it in the power 
 of the United States to protect their citizens in the full rights conceded by Nicaragua and 
 Costa Eloa, and will prevent the management of the work from falling into the hands of 
 men who are indififerent or hostile to American interests in that portion of the world. 
 
 These objects being secured, the question arose as to what arrangement should be 
 made with the American citizens who had, when the United States decKned to construct 
 the work, obtained concessions, and who had actually entered upon its construction. The 
 act of their incorporation provided that it might be altered, amended, or changed, at the 
 pleasure of the United States ; but the exercise of this power without regard to the inter- 
 ests of the incorporators, and without neglect or forfeiture on their part, would have been a 
 breach of the public faith. The only result would have been that the government would 
 have been compelled to undertake the work itself, or, by decUning to do so, would have 
 maintained the dog-in-the-manger pohcy of refusing to execute, or to allow any other 
 power to execute, a work of conceded importance to all the nations of the world. At the 
 same time the public naturally objects to the use of the credit or the money of the United 
 States to advance the personal interests and profit of individuals. It was therefore pro- 
 vided that the promoters of the Nicaragua Canal should be reimbursed only for the actual 
 cost to them of the work already done, and that this cost should be ascertained by proper 
 officers of the government and paid in the bonds of the Maritime Company guaranteed by 
 the United States. In addition, it was provided that the promoters should have such 
 reasonable allotment of the stock that they already own by virtue of the concession 
 granted to them, as would be a just and fair compensation for their vested rights and for 
 their services. By the terms of the contract entered into by the Maritime Company with 
 the Construction Company, the latter is entitled to 113,000,000 in stock, in consideration 
 for the concessions and privileges granted by Nicaragua and Costa Rica, which were trans- 
 ferred by the Construction Company to the Maritime Company. It was deemed, after 
 careful consideration, that, as this stock has not yet been earned, the Maritime Company 
 should be allowed to issue to the Construction Company stock of the former company to 
 the value of |3, 000, 000, upon condition that aU other stock of the Maritime Company, of 
 every kind, name, and natnre, issued or agreed to be issued, should be surrendered and 
 canceled, except $6,000,000 stipulated to be given to Nicaragua for its concessions, and 
 $1,500,000 to be given to Costa Bica. The value of this stock at first would be nominal, 
 and its future value would depend entirely upon the value of the completed work. This 
 
APPENDICES. 47 
 
 proviso is regarded by the Maritime and Construction Companies as harsh and iUiberal, 
 jet they have agreed to it, as well as to the other terms and conditions proposed in the 
 pending bill. 
 
 The more I reflect upon the transcendent importance of the work proposed, upon the 
 international difla.culties which formerly surrounded the subject, upon the objections of a 
 large portion of our citizens to the direct construction of the work by the United States 
 according to the plan proposed by the treaty, and upon the just claims of the American 
 promoters of this enterprise who have been engaged in it, the more I am convinced that 
 the aid to be given by the United States, if the bill should become a law, would be a wise 
 act of public policy, second in importance to no other in the history of our country, and of 
 general benefit in promoting our commierce and industry in every section. No doubt the 
 cities along the Gulf of Mexico and the southern Atlantic coast will first feel the beneficial 
 •effect of this improvement, but it will extend to the people of every State, by the increase 
 ■of their commerce and productions. 
 
 To reject or to neglect the opportunity now offered would leave this enterprise to the 
 chances of failure, or transfer its control to commercial rivals whose interests and fixed 
 policy would lead them to convert a great highway of nations into a dependency more 
 formidable than Gibraltar and more troublesome than Canada. A commercial company in 
 India has been converted into a vast empire ; the single port of Hong Kong is made to 
 dominate a great population in China; the control of the Suez Canal and of Egypt has been 
 purchased in the stock market— these are suflicient warnings to the American people to 
 avail themselves of the opportunity now open to them to protect their coastwise trade, and 
 at the same time, with little cost and no risk, to contribute to the world one of the greatest 
 achievements of mind over matter that has ever been undertaken. 
 
APPENDIX VII. 
 
 SPEECH 
 
 OF 
 
 HON. JOHN T. MORGAN, 
 
 IN THE 
 
 UNITED STATES SENATE. 
 
 Mr. MOEGAN. I call up the bill (S. 4837) to amend the act entitled "An Act toincor. 
 porate the Maritime Canal Company of Nicaragua," approved February 20, 1889; and I ask 
 that it be read. 
 
 The Bill was read, as follows : 
 
 Be it enacted, etc. , That the capital stock of the Maritime Canal Company of Nicar- 
 agua shall consist of one million shares of $100 each, and no more. 
 
 Sec. 3. That the words "the Nicaragua Canal," whenever used in this act, or the act 
 to which this is an amendment, shall be held to include all railroads, piers, channels, dams, 
 locks, embankments, and other works necessary for or incidental to the construction, equip- 
 ment, maintenance, and operation of the said inter-oceanio canal, made or that may .be 
 made by the Maritime Canal Company of Nicaragua, or under its authority, by virtue of 
 the said acts and the concessions granted or to be granted by Nicaragua and Costa Eica. 
 
 Sec. 3. That in consideration of the provisions of this act all the stock of the Maritime 
 Canal Company of Nicaragua, heretofore subscribed for or issued, except as in this act pro- 
 vided, and all contracts and agreements heretofoffs made not consistent with the provisions, 
 of this act shall be made to conform therewith or be canceled, and the stock of said com- 
 pany shall only be disposed of as hereinafter provided, it being the intent and object of this 
 act to secure the construction of the Nicaragua Canal by the said company, vsdth the aid of 
 the United States to the extent herein provided, upon the basis of the concessions of Nicar- 
 agua and Costa Eica, and the contracts and engagements heretofore made consistent with 
 the provisions of this act or that may hereafter be made by said Maritime Company consis- 
 tent with the provisions of this act, and, as far as practicable, at its actual cost. 
 
 Sec. 4. That to secure the means to construct and complete said canal and to meet 
 the expenditures made on account thereof the said Maritime Canal Company of Nicaragua, 
 is hereby authorized to issue either coupon or registered bonds, or both, of the said com- 
 pany, in denominations of not less than |100 nor more than $1,000, to an amount not ex- 
 ceeding $100,000,000, to be dated on the first day of January, 1891, to be payable on the 
 1st day of January, 1911, with interest at the rate of 3 per cent, per annum, payable quar- 
 terly, on the 1st day of April, July, October and January of each year, from the delivery 
 of the bonds to said company by the Secretary of the Treasury from time to time as in this 
 act provided. 
 
 And saW bonds shah, be secured by a first mortgage on its property and rights of pro- 
 perty now existing or hereafter acquired of all descriptions, real, personal and mixed, and 
 including all concessions, franchises, and rights of the said company. Such mortgage shall 
 be so framed as to be vaUd as a first hen under the laws of Nicaragua and Costa Eica. The 
 form and sufficiency of such mortgage as the first lien upon the Nicaragua Canal shall, be- 
 fore execution, be approved by the Attorney-General of the United States, and the trustees 
 named in such mortgage shall be approved by the Secretary of the Treasury; and such 
 mortgage shall be duly executed in triplicate by the officers of said company. And such 
 
^AKE NICARAGUA, OMETEPP ANP MADERA. 
 
 DIAMOND DRILL BORING PARTY. 
 
APPENDICES. 4Q 
 
 mortgage shall be recorded in the office of the Secretary of the Treasury in Washington 
 and in the proper offices in Nicaragua and Costa Rica, to be designated by the Government 
 of each of said States. 
 
 Sec. 5. That the said mortgage bonds shall be prepared, engraved, and printed at the 
 Bureau of Engraving and Printing, in the City of Washington, at the expense of said Mari- 
 time Canal Company of Nicaragua, and, after being duly executed by the officers of said 
 compaiiy, shall be deposited in the Treasury of the United States at Washington, and 
 shall be issued by the Secretary of the Treasury from time to time to the said Maritime 
 Canal Company of Nicarag-ua only as the work on the Nicaragua Canal progresses, as 
 hereinafter provided. 
 
 Before the issue of said bonds by the Secretary of the Treasury he shall cause to be en- 
 graved and printed and duly executed on each of said bonds the guaranty of the United 
 States, in accordance vrith such regulations as may be prescribed by the President of the 
 United States, in the vrords and figures following, to wit: 
 
 "The United States of America guaranties to the lawful holder of this bond the pay- 
 ment by the Maritime Canal Company of Nicaragua of the principal of said bond and the 
 interest accruing thereon, and as it accrues. 
 
 And no bonds shall be issued by the said company except as provided for in this act. 
 
 And the Secretary of the Treasury is heredy authorized and directed, if the interest on 
 said bonds as it becomes due is not paid by the Maritime Canal Company of Nicaragua, to 
 pay the same, and the sum required for that purpose is hereby appropriated out of any 
 money in the Treasury not otherwise appropriated. 
 
 The Maritime Canal Company of Nicaragua, shall pay the interest on the guarantied 
 bonds herein provided for as it becomes due, and the guaranty of the United States shall 
 not be held or construed as lessening the liability of said company as the principal obUgor 
 in said bonds. Upon the failure of said company to pay the interest as it becomes due on 
 said bonds and upon the payment of such interest by the United States, the said company 
 shall pay to the United States the amounts paid by the United States on such guaranty, 
 with interest annually at 4 per cent, until paid. 
 
 Sec. 6. That for all sums of money that the United States may pay upon the princi- 
 pal or interest of said bonds under their said guaranty the United States shall be subrogated 
 to all the rights and hens under the said mortgage which the holders of said bonds or any 
 of them would have had in respect thereof if the same had remained unpaid by the Mari- 
 time Canal Company of Nicaragua and had not been paid by the United States under their 
 guaranty ; but until the expiration of five years after the said canal shall be put in 
 operation and so long as during said five years the canal shaU be in operation and 
 remain under the control of the Maritime Canal Company of Nicaragua, this subro- 
 gated lien and right of the United States as aforesaid shall not be enforced by foreclosure 
 or otherwise of the said mortgage against the property covered by said mortgage. 
 
 Sec. 7. That as soon as practicable after the passage of this act the surrender and 
 cancellation of the stock, and the cancellation or modification of all contracts and agree- 
 ments of said company for the construction of said canal, as provided for in Section 3 of 
 this act, the Secretary of the Treasury shall deliver to the Maritime Canal Company of 
 Nicaragua bonds of the said company guarantied as aforesaid at the par value thereof, to 
 an amount equal to the amount expended by said company and the Nicaragua Canal 
 Association prior to the Ist day of January, 1891, in securing concessions from Nicaragua 
 and Costa Eica, in promoting the enterprise and in the construction of said canal, including 
 the expenditures for the plant of the Nicaragua Canal Construction Company, if transferred 
 to the Maritime Canal Company, together with interest on such amounts from the date of 
 payment not exceeding the total amount of |4, 000, 000. The Secretary of the Treasury 
 shall also, as soon as practicable after the passage of this act, dehver to the Maritime 
 Canal Company of Nicaragua bonds of the said company guarantied as aforesaid at the par 
 value thereof to an amount equal to the amount of money which shall be actually paid out 
 and expended by said company in the construction of said canal from and including the 
 1st day of January, 1891, to the final adjustment of the account, with interest thereon at 
 
50 THE NICARAGUA CANAL. 
 
 the rate of 6 per cent, per annum : Provided, That all such amounts, both of moneys ex- 
 pended prior to January 1, 1891, and subsequently thereto, shall be ascertained to the satis- 
 faction of the Secretary of State and Secretary of the Treasury upon accounts to be ren- 
 dered by said company. Said bonds shall be received and applied by said company and the 
 stockholders in full payment and satisfaction for any and all expenditures heretofore made 
 •or to be made and in satisfaction of aU liabilities, including issues and agreements to issue 
 iStock and bonds of said company to be recalled and canceled or modified, as provided for 
 in this act, iucurred prior to such adjustment, in the construction of said canal, tKfe pro- 
 motion of the enterprise in securing such concessions, 'and for all property acquired, ma- 
 terial furnished, services rendered, and work performed. The performance of such con- 
 ditions shall be ascertained by the Secretary of the Treasury prior to the delivery of such 
 "bonds. 
 
 Sec. 8. That the President of the United States is hereby authorized and directed to 
 «ause a careful detailed estimate and statement to be made, as soon as may be, of the cost 
 of the Nicaragua Canal as proposed to be constructed and completed according to the plans 
 and specifications of the Maritime Canal Company of Nicaragua, including in such estimate 
 reasonable costs of administration and the interest accruing on the bonds herein provided 
 for prior to the 1st day of January, 1897. And the President shall, within sixty days after 
 the passage of this act and from time to time thereafter and as frequently as once in sixty 
 days, cause an estimate and statement to be made of the cost of the work actually done on 
 .said canal, including reasonable costs of administration, since the 1st of December, 1890, or 
 the last preceding estimate, and thereupon the Secretary of the Treasury shall deliver to 
 said Maritime Canal Company of Nicaragua the bonds of the said company guarantied as 
 aforesaid, to the amount of such cost and also interest to become due before the next esti- 
 mate ; but the total amount of such bonds to be dehvered shaE not exceed the cost of said 
 •canal ; and the proceeds of all said bonds so far as necessary shall be wholly apphed in pay- 
 ment of the cost of the construction of such canal and reasonable expenses of administra- 
 tion and accrued interest upon the outstanding bonds of the company, and shall not be sold 
 •or disposed of at less than par. 
 
 A sum or sums necessary to pay the expense of making the estimates provided for in 
 this section is hereby appropriated out of any money in the Treasury not otherwise appro- 
 priated. 
 
 Sec. t». That to secure to the Governments of Nicaragua and Costa Eica the benefits 
 stipulated by their concessions, and to indemnify and save the United States harmless 
 from its guaranty of the bonds of the said Maritime Canal Company of Nicaragua, the 
 stock of the said company, by this act limited to 1100,000,000, shaU be issued only as 
 follows : 
 
 First. An amount of the stock wliich at the face or par value thereof shall, with the 
 a,mount of the bonds at their par value, to be issued to the Nicaragua Canal Company for 
 •expenditures by it prior to January 1, 1891, as provided for in Section 7 of this act, make 
 •an aggregate of 17,000,000, may be retained by the said canal company and the stock- 
 iolders thereof, and shall be non-assessable. 
 
 Second. The amounts of shares stipulated to be delivered to the Governments of 
 Nicaragua and Costa Eica, according to the terms of their respective concessions. 
 
 Third. The amount of $70,000,000 of shares to be issued to, and in the name of, the 
 Secretary of the Treasury of the United States, in such certificates as he may prescribe, to 
 be held in the Treasury as a pledge and security to the United States for the repayment to 
 the United States, on demand, of any sum or sums paid by it in pursuance of its guaranty 
 ■on said bonds, with interest on the sums so paid from the date of payment at the rate of 
 — per cent, per annum, payable annually ; and the Secretary of the Treasury, on behalf 
 •of the United States, may at his discretion vote said stock, either in person or by proxy, at 
 any meeting of the stockholders of said company, and the United States shall, at any time 
 before the maturity of sucli bonds, have the option, at the discretion of Congress, to pur- 
 chase at par value or subscribe for and hold in its own right all or any part of said stock 
 so hypothecated. And the United States may apply in payment for such stock the sums 
 
APPENDICES. 51 
 
 paid by the United States by reason of said guaranty and the interest thereon, and the 
 remainder of the purchase price of said stock shall be applied, according to the discretion 
 of Congress, either to the purchase and redemption of the bonds of said company, or for a 
 sinking fund for the purchase and redemption of such bonds at maturity, or for both of 
 these purposes. 
 
 Fourth. The rest and residue of the stock shall only be issued by the Maritime Canal 
 Company of Nicaragua after the same shall have been subscribed for, and such stock shall 
 only be offered by the company for subscription when, in the opinion of the President of 
 the United States, the proceeds of the installments of the mortgage bonds herein provided 
 for shall be insufficient to meet the current requirements of the company in respect to the 
 enterprise. 
 
 Sec. 10. That to secure the proper application of the aid to be furnished by the United 
 States by this act. Section 4 of the act approved February 20, 1889, entitled "An act to 
 incorporate the Maritime Canal Company of Nicaragua, " is so amended that six of the 
 fifteen directors of said company shall be appointed by the President of the United States, 
 by and with the advice and consent of the Senate, two of whom shall hold office for two 
 years, two for four years, and two for six years, as may be designated in their appoint- 
 jnents, and their successors shall hold office for six years. And such government directors 
 «haU not be stockholders of said company, and shall report direct to the President of the 
 United States. And aU parts of said act approved February 30,1889, inconsistent with this 
 act are hereby repealed. 
 
 Sec. 11. That all the rights and powers reserved to Congress by Section 8 of the act to 
 "which this is an amendment are hereby reserved and re-enacted, and shall apply also to 
 this act. 
 
 Mr. Morgan. — Mr. President, the bill which has just been read to the Senate has a 
 support from every section of the country that gives to it a broad, national character. 
 Maine, Vermont, and Oregon on the northern border, Louisiana, Alabama, and Georgia on 
 the southern border, and Ohio and New York in the central body of States are represented 
 on the committee, and give to it their earnest and united support. 
 
 Our distinguished colleague on the committee, the Senator from Georgia (Mr. Brown), 
 lias been detained from the Senate by ill health during the examination of this subject. 
 He has, however, been fuUy informed of the facts that were under consideration and the 
 measure proposed by the committee, and has authorized me to express his entire concur- 
 Tence in the bill and report submitted to the Senate. The people understand his wise and 
 ■conservative views on questions relating to public indebtedness and finance, and will be 
 glad to know that this bill has the honorable Senator's earnest support. The people of the 
 South especially have learned to value his opinions on all practical business questions. 
 
 The plan for aiding in the construction of the Maritime Canal of Nicaragua is new to 
 the country, and has been recommended by the Committee on Foreign Relations, after the 
 most careful consideration. I am not assuming to speak for the committee, but for myself 
 and in the discharge of a duty to my own constituency, in presenting a statement of the 
 facts and conditions that I think are imperative in their demand that I shall give my earn- 
 est support to this biU. 
 
 A sense of duty to the whole country scarcely less commanding also requires me 
 to advocate this measure. I wiU not now detain the Senate by a statement of the 
 careful examinations that have been made of the Isthmus of Darien with a view to ascer- 
 tain the best route for a ship canal to connect the waters of the Atlantic and Pacific 
 Oceans. Some of the transatlantic powers have been looking into this matter for more 
 than three centuries, and it has been a matter of the deepest concern to the United States 
 since our Government was ordained. The civilized world has united in the opinion that 
 such a canal is practicable and that it vrill be constructed. 
 
 The time for its construction and the best location of the canal are matters that have 
 Ijeen delayed as to their final determination by circumstances that are not quite easy of 
 explanation, until the demands of the commerce and steam navigation of the world have 
 
52 THE NICARAGUA CANAL. 
 
 become impossible of longer denial. The opening of such a canal at some point on the 
 Isthmus of Darien, following the opening of the Suez Canal, is as logically a necessity of 
 the world's commerce as it is that the tides of oceans should be affected by the movements 
 of the planetary systems. 
 
 As to our coastwise commerce the free passage of ships through this Isthmus at mod- 
 erate charges on freights and passengers is as important to us as the navigation of the 
 Mississippi and the lakes of the north are to our internal commerce. If all the plans and 
 counterplots relating to the interests of the different nations in this great line of communi- 
 cation could be brought to light, we would discern two very important facts that have- 
 retarded the construction of such a canal : First, that aU. who have seriously contemplated 
 this great work have been convinced that the work could not be accomplished as a private 
 enterprise at a cost that the interests of commerce could tolerate ; and, second, that the 
 United States has never been willing that any transatlantic government should either con- 
 struct or control this canal transit. 
 
 Our consent that England or France or Germany should construct and control the 
 canal, wherever it might be located, that would cut the Isthmus of Darien, would long 
 since have secured this great work to the world; but we never could consent to that. 
 
 The national power that controls the transit of ships across the Isthmus of Darien must 
 necessarily be one of the greatest powers in the world in its influence on commerce and 
 naval warfare. 
 
 It is a simple and inadequate illustration of the military feature of the subject to say 
 that it requires two fleets, separated by 12,000 miles of sailing distance, to blockade one 
 fleet of equal power to either in Lake Nicaragua. But, this doubling of the power of a 
 fleet at anchor in Lake Nicaragua, over that of any other great maritime power that is 
 moving across the Atlantic or the Pacific to attack our coasts, is but a small part of the 
 strategic advantage of such a situation. 
 
 As a point d'appui, a foothold from which to attack or defend, to threaten or protect 
 all the coasts of this hemisphere and the islands and adjacent seas, it is more a point of 
 commanding power in the Atlantic and Pacific Oceans than Gibraltar is in the Mediter- 
 ranean Sea. I do not now intend to elaborate this great matter, but to refer to it as a 
 means of accounting for the jealousies of nations in respect of the control of this isthmian 
 transit which has delayed the construction of a ship canal to connect the two great 
 oceans. 
 
 An examination of our treaties with the local governments of Central America and 
 with Great Britain discloses extreme solicitude on the part of aU the governments about 
 the ship transit across the Isthmus of Darien. We have been pressing our claims in the 
 direction of securing our rights in the use of the canal, wherever it should be constructed, 
 and have given guaranties of protection to the local governments against domestic strife 
 that might endanger our commerce and that of other nations while in transit across the 
 Isthmus, and we have also guarantied the sovereign right of the local governments to own 
 and control a ship canal through the Isthmus, under certain conditions, against the inter- 
 ference of any foreign power. 
 
 But, in our dealings with Great Britain on the subject of our right as a great and 
 infiuefitial power in America, and our more specific interests, rights, and duties, as the 
 greatest commercial nation on the western hemisphere, we have found that government 
 intent upon depriving us of our natural and legitimate influence over this transit for ships 
 between the great oceans. 
 
 I will not now enter upon the discussion of the diplomatic arrangements by which this 
 purpose has been, so far, accomplished, nor the humiliation that is felt by those Americans 
 who have supported the theory of American rule in American affairs— the home rule of 
 American people— that we call the Monroe doctrine, when they find that other Americans 
 are willing to yield to Great Britain this ascendency in the control of the domestic 
 policies of American states. 
 
 That may now be a practical question, but there is but one American side to it. If it 
 is a living question, it is also a burning one, and the sooner it is settled the better it will 
 
APPENDICES. 53 
 
 be for all the world. But I refer to it now only to emphasize the fact that this transit 
 for ships across the Isthmus of Darien is a subject of such vast and far-reaching 
 importance. 
 
 In the earlier centuries, after the discovery of America, almost every maritime power 
 instituted careful explorations and surveys to ascertain the most practicable route for a 
 canal ; and in this century the policy of the greater powers has caused them to provide 
 in their treaties with the Central American States, and with each other, and with the 
 United States, for the regulation of their commercial and other interests in the canal, in 
 peace and war, because its completion has been regarded as nearly approaching. 
 
 We are affected with admiration for the wisdom and forecast of British policies, but 
 sometimes we have found the enterprise of that great power in disagreeable conflict with 
 our rights and the security of our commerce. 
 
 There has been no occasion in which the friction of British interference has been 
 more keenly felt than it was when the Crown interposed what that government insists is 
 a barrier to the shortening of our coast hne of travel and traffic to connect our Pacific 
 States with our Gulf and Atlantic States. 
 
 Our attitude on that subject, and in reference to many others, is one of natural, 
 peaceful, inevitable, and beneficent growth and expansion, in which all the world will 
 find a rich harvest of blessings. The attitude of Great Britain towards us is selfish, 
 obstructive, aggressive, grasping, and domineering. On a question that is attended with 
 such incidents, if it were even unimportant as a practical question, I could not hesitate to 
 align myself with my own country. 
 
 But I am not now intending to state the histoi'ic facts that make this a question of 
 the highest importance and demonstrate that we have the right side of it. I only mean 
 to say that the canal is the most important subject now connected with the commercial 
 growth and progress of the United States, and I point to the British policy in relation to 
 it as a powerful proof of its importance. 
 
 The canal through Nicaragua will now be built, and no company and no nation wiU 
 be permitted to use it in such manner as to injure or seriously threaten or embarrass our 
 coastwise commerce with our Pacific States. That is the new and practical phase of the 
 question. Whether this is Monroe doctrine or the law of necessity, it is the resolve of the 
 people of the United States. The only question that this resolve now presents to Congress 
 is, whether we shall delay its assertion while it may be peacefully accompUshed until 
 some future time when its cost will be incalculable in money, in the sacrifices of war, and 
 in the loss of precious lives. 
 
 I state the question in this way, because the construction of the canal is now an 
 assured fact, to be realised within six years ; and it is no less an assured fact that, in the 
 near future, the loss to us of the practical control of this canal, as owner or part owner of 
 the capital stock, would be in strong resemblance to, but more grievous to our people than 
 the loss of our now divided dominion on the northern lakes. 
 
 As to these lakes, let me suppose a case for the sake, merely, of illustration. 
 
 If their northern coasts were occupied by a warlike people differing from us in race 
 and language, with competing interests and a disposition to be aggressive towards us, 
 instead of a race of the same blood, with strong ties of kinship between us and strong 
 identity of interests, such as the Canadians have, we can at once see that a divided juris- 
 diction on the lakes could only be peaceably maintained by the presence of strong military 
 and naval forces. 
 
 Such conditions would make war inevitable. When all the maritime powers shall 
 meet in this isthmian canal it wiU be found that the best if not the only guaranty of 
 peace and justice in the common use of the canal will be the power of some great nation 
 having a right to control it. Without some such guaranty the canal and the states 
 through which it is located would only become a temptation to the cupidity of the great 
 maritime powers. 
 
 We can decline this duty [if we prefer to sacrifice our coast trade with the Pacific 
 States, or greatly to embarrass it, and if we perfer to see some great commercial nation 
 
54 THE NICARAGUA CANAL. 
 
 interpose between us and South America, and the navy of some great European power in 
 command of the Gulf of Mexico and the Caribbean Sea. 
 
 I do not apprehend that the United States will ever be forced to this attitude by the 
 pressure of the poUcy I have indicated. I think that will be impossible ; but the cost of 
 reclaiming in the future what we will presently lose by indifiference to this matter will 
 cause bitter reproaches to be heaped upon us by generations to come. The time to act is 
 now, and the circumstances are at present more favorable than they wiU be at any time in 
 the future for our peaceful and perfect success. 
 
 As it is my purpose to urge upon the Senate the necessity for early action upon this 
 measure, I will pay no further attention to collateral questions that may arise than to say 
 that whenever they arise and in whatever form they may come, our patriotic duty will be 
 to meet them without flinching, and settle them in a way to satisfy the just demands of 
 the people of the United States, whoever else may be offended at such a course. We 
 must meet all such questions sooner or later, and the present is the best time to meet 
 them. 
 
 To properly understand this measure it must be kept in mind that it is solely the work 
 of the Committee on Foreign Eelations, and is not in any sense the result of any suggestion 
 coming from the Maritime Canal Company, or any officer or agent of that company, or of 
 any person having a pecuniary interest in the canal company, or any other company, re- 
 lating to the work upon the canal. 
 
 The willingness of the canal company to accept the provisions of the bill reported by 
 the Committee on Foreign Relations is justly attributable to their desire that the means for 
 the construction of the canal shall be furnished in the United States, and that the directors 
 of the company and its stockholders shall be American. 
 
 No bonds of the company have yet been issued. The money that has been employed 
 with such encouraging success in the beginning of the work has been realized from sales 
 or pledges of stock to persons interested in the company. 
 
 The time has an-ived when the stock of the company and the sales of its mortgage bonds 
 must be resorted to in order to raise the money to conduct and complete the work, and the 
 question is presented for prompt solution, whether the company shall raise the money in 
 foreign or domestic financial centres. As a private enterprise the canal company must 
 suffer an immense loss on the ultimate actual value of its stock and bonds in order to raise 
 this money. This sacrifice will greatly increase the rates of tolls upon vessels passing 
 through the canal whether the stock and bonds of the company are sold to«the people of the 
 United States or to European purchasers. 
 
 An investment that will draw no profits from the earnings of the canal until it is com- 
 pleted, which will be about six years from the present time, can not be a favorite among 
 investors, except at a very large discount on the face value of the bonds and stock. This 
 loss will count heavily in the basis upon which dividends are to be declared, as so much 
 money expended by the company, and^the canal, which it will cost less than $100,000,000 
 in actual expenditure of money to construct and complete, will have cost the company 
 more than 1200,000,000. 
 
 Aside from all other considerations the tax which will be thus imposed on the com- 
 merce of the United States in the enhancement of freight charges should be saved to the 
 people by the United States Government. This wiU be done if we will loan to this com- 
 pany the credit of the United States on the terms as to security for the loan provided for 
 in the bill reported by the Committee on Foreign Eelations. Unless this is done the canal 
 will be constructed at more than double the cost to the company for which it can be com- 
 pleted with such assistance. 
 
 That it will be constructed at whatever cost is now beyond reasonable doubt, and the 
 commercial world is already very eager and imperative in its demand for the completion 
 of this canal at as early a day as the work can be done. 
 
 The expenditure by the French people of a sum exceeding 1300,000,000 in the effort to 
 construct a canal across the Isthmus of Panama sufficiently proves the estimate which 
 that wise and intrepid people put upon the commercial importance and value, as an 
 
APPENDICES. 
 
 55 
 
 investment, of a successful effort to cross the Isthmus of Darian with a ship canal. They 
 -were not mistaken as to its value, but they fell into a fatal error as to its location in 
 •disregarding the earnest protests of our commissioners to the Paris Conference in 1879. 
 
 The theory of M. Lesseps, whose opinions then stood for unquestionable certainty in 
 ■canal engineering, was that, with money enough, the engineers could construct a sealevel 
 ship canal across the Isthmus at Panama, and that it would be the shortest hne between 
 the oceans. 
 
 Responding to that opinion, the French people rushed to the conclusion, forced upon 
 ^;hem by a just estimate of the financial, commercial, and military value of the canal, that 
 "too much money could not be expended legitimately in such an enterprise ; that it would be 
 Si paying investment, even at a cost of $500,000,000. 
 
 It can not be said, truly, that the French people overestimated the value of this great 
 -work as a source of revenue. But, it can now be said, in the light of a sad history, that M. 
 Lesseps did not heed the advice of our American commissioners as to the location of the 
 canal, and that a lamentable failure has resulted. 
 
 M. Lesseps, in locating a canal at the sea level, to be fed by the waters of the two 
 •oceans, and having no adequate supply of water at greater elevations to feed it, was forced 
 to depress the bottom of the canal prism to a level that made it the constant prey of the 
 Chagres River and the enormous floods of water that rushed down from the highlands 
 through that channel to inundate and destroy the canal. 
 
 Nothing could protect the canal against such disasters but a reversal of the laws of 
 nature that regulate the rainfall in the Isthmus of Darien. It was at this point that the 
 Panama Canal project met its death, an event that our engineers clearly foresaw and pre 
 -dieted with confidence and earnestness at the Paris conference. 
 
 A sea-level canal across the Isthmus is now a confessed impossibility, and if there are 
 advantages in such a canal over one with secure and convenient locks, in the saving of time 
 -and expense in the transit of vessels, it is not an unreasonable claim that the value to the 
 ships of a passage of 170 miles through fresh water will more than counterbalance any loss 
 of time or expense in lockage and delay in cleaning the ships' bottoms, etc., in opportuni- 
 ties for repairs, and coaling and victualing the ships, and in the refreshment of their 
 -crews. 
 
 But the commercial world will not now return to the plan of a sea-level canal through 
 the Isthmus of Darien. That is exploded. The Suez Canal is through a country that has 
 no obstructing ridge of high lands. When engineering science was in its earliest infancy 
 it was able to dig a canal through the sands of the Isthmus of Suez, and to lead the waters 
 •of the Nile into it, to supplement those of the Red Sea and the Mediterranen in fiUing 
 .its prism. 
 
 M. Lesseps only repeated the history of a very early date with vastly increased facilities 
 for digging and dredging another Suez Canal and securing its banks with concrete stones, 
 the materials for making which were abundant, cheap, and near at hand. There is no rea 
 resemblance or parallel between the Suez Canal and the projected Panama Canal. The 
 physical conditions are in the strongest contrast. 
 
 The tropical rains in Central America are the most difficult embarrassments to the main- 
 tenance of a great canal. It must be located out of reach of the sudden and excessive inun- 
 dation that occur in that climate to make the work permanent or useful, and this can not 
 be accomplished at any point in the Isthmus of Darien where the bottom of the canal 
 through its entire length, or nearly so, is placed below the level of the sea. 
 
 The cost of such a canal at any point on that Isthmus would forbid its construction ; 
 but the other difficulty I have mentioned makes it impossible. Those who wish to dig a 
 canal, and not merely to theorize about so grand an achievement, will consult the history 
 of recent disastrous experiments in Panama and the inexorable logic of facts, and will 
 turn their attention to some practical plan. 
 
 A canal with locks or lifts must have at its highest level an abundant and safe supply 
 -of water, and it must come from a fountain of supply that is not beyond control in periods 
 •of heavy rainfall and high waters. "We have under our own observation here in Wash- 
 
S6 THE NICARAGUA CANAL. 
 
 ington an illustration of the necessity of having a positive safeguard against flood vraters: 
 in the fountains that feed a canal. 
 
 In a single flood the Cumberland Canal was made a wreck by the overflowing waters- 
 of the Potomac, along which it is located, and of the smaller streams that fed it, and it 
 is now a task of great magnitude to restore it. In a country where a drainage watercourse 
 will rise a foot, as an ordinary occurrance, while the Potomac would rise an inch under the 
 heaviest rainfall in the mountains, we can understand how reckless a thing it is to place a 
 ship canal along the course and frequently across the channel of a great river. The Pan- 
 ama Canal crosses the Chagres River seventy-eight times and the Eio Grande thirteen 
 times. The entire length of the canal is 74 kilometers, while the canals to carry off these 
 waters are 64 kilometers, only one-tenth less than the main canal. 
 
 The second great and essential condition to the construction and maintenance of a- 
 canal with locks or lifts, being an adundant, safe, and controllable water supply at the 
 highest level, we search in vain through Central America, and would search in vain 
 through the world, for advantages that approximate those afforded by Lake Managua and 
 Lake Nicaragua. I mention them jointly for these reasons : The are both bound around 
 their entire circumference by walls of rock, except at one place of outlet for each lake, and 
 those are very narrow. 
 
 Lake Managua is north of Lake Nicaragua, and is at the foot of the highest ground in 
 Nicaragua. It catches the waters from the mountains in the rainy seasons and confines 
 them within its deep basin, from which they are dravra off to Lake Nicaragua through a 
 narrow, rock-bound outlet. Lake Nicaragua has a superficial area of 3,600 square miles. 
 The watershed is about 8,000 square mUes, so that the heaviest fall of water never causes^ 
 either lake to overfiow its borders, and the highest flood only raises the level of Lake Nica- 
 ragua about two feet. At ordinary tide it furnishes ten times the water needed for the 
 canal. 
 
 The relation of this system of lakes to the two oceans can be best described by the 
 fact that they supply the water, in quantities that are inexhaustible, to feed the canal that 
 leads out to each ocean ; and the location of the canal is such that the level of Lake Nica- 
 ragua is maintained in it, with a few changes of flowage to a point within 10 miles of 
 the Caribbean Sea on the ea^t, and to a point within 4 miles of the Pacific Ocean on the 
 west, 
 
 A signal from a ship at either extremity of this long level can be read on the oceans- 
 it almost connects. 
 
 The most fervid imagination is surprised and captured by this splendid reality. 
 
 I must not loiter among these grand and enticing developments. They will be bless- 
 ings for posterity that will be richer in their results than it has yet entered into the heart 
 of man to conceive. 
 
 It is but recently that the extension of this summit level of the canal for so great a dis- 
 tance has been thought of. The fact alone would defy the competition of every other fact- 
 in controlling the location of a ship canal in the Isthmus of Darien, and would force its 
 location to the ground now selected. But much more important advantages are gained 
 by this location. Along the left bank of the San Juan River, which is the outlet of Lake 
 Nicaragua, from a point called Ochoa, to the southeastward, a range of low hills extends^ 
 to the Delta of the San Juan. 
 
 At Ochoa (as may be seen from a photolithograph that accompanies the report of the 
 Committee on Foreign Relations) two opposing points of highland furnish abutments for a 
 dam across the San Juan River. This dam raises the surface of the river to the level of 
 the lake back to its point of exit from the lake, and almost entirely dispenses with dredg- 
 ing through the whole extent of the river, a distance of 64 miles. 
 
 The other effect of the dam is to divert the water from the San Juan River to the 
 northward and eastward behind the range of hills I have described as skirting the left bank 
 of the river. There, in a reach of 13 mUes, in the direction of and on the shortest route to- 
 Greytown, canalization is almost entirely dispensed with. A barrier of rock crosses this. 
 
, APPENDICES. 57 
 
 «stuary of deep waters thus formed at right angles. It is more than two miles in width^ 
 and near its eastern base is found the level of the seashore. 
 
 This rock, as building material for the dam at Ochoa and for the breakwater at Grey- 
 town, and for the locks, weirs, and other security for the canal and the railroad that is a 
 tender to it, is a most valuable and essential feature of the work. De Lesseps had to manu- 
 facture stone for the Suez Canal. In the Nicaragua Canal it is obtained without waste 
 ■of labor in the very prism of the canal. 
 
 Two miles inside the coast line at Greytown and 4 miles inside the coast line at Brito 
 natural basins are found, in which five hundred sail can ride at anchor, with ample room. 
 At all places along the line of the canal the largest ships can pass each other. The facts 
 stated in the report of the committee and the appendices thereto, are from the most authen- 
 tic sources. I vsdU call attention to some of them that are most important further on in 
 my remarks. 
 
 The view of this great subject that I have already presented, though it is a mere sketch 
 of prominent facts, leads me to the conclusion that this is the only practicable project for 
 a. ship canal that has been or can be presented vsath any hope of a successful result. As 
 to the cost of the canal and the income that it will yield I will speak presently. 
 
 I assume that this work deserves the pohtical and financial aid of the United States, 
 and that when it is built with money borrowed on private account, in the markets of the 
 world, it will create a tax upon our commerce that it is the duty of the Government of the 
 United States to prohibit, and that now is the time to accomplish that purpose. 
 
 Two questions arise in the minds of our people, or rather of our representatives in 
 Congress, that deserve vsrise and thoughtful consideration in this connection. The first 
 ■question relates to the power of Congress to pledge the credit of the United States 
 in aid of such a \vork as this. The second question relates to our obligations to other 
 powers which might stand in the way of this work of beneficence for our own people. 
 I wiU first consider the second of these questions. 
 
 As to Nicaragua and Costa Rica, we find no impediment to our lending the credit a., 
 the United States to aid a work those states are so eager to accomplish. Our treaties with 
 Nicaragua will only be the more perfectly observed and executed if we adopt a plan for 
 aiding this canal company similar to that set forth in this bill. 
 
 As to the other American states, their privileges under the concessions of Nicaragua 
 and Costa Eica for this canal are all preserved in this measure, and wUl be carefully 
 protected. 
 
 As to European powers, none of them have ever thought it necessary to shape the policy 
 •of the United States in our relations to the Isthmus of Darien and the Central American 
 States except Great Britain. The platitudes of the Clayton-Bulwer treaty, in which each 
 party yielded something to the other that neither possessed, making mutual concessions 
 for a consideration that did not exist and could not be valuable, have become a stale demand 
 upon the people of both nations, and there is no longer room for their serious and practical 
 treatment. 
 
 If one President and Senate can fix a theoretical or dogmatic policy upon our people for 
 all time to come, because another policy may not suit Great Britain, it seems to be m vain 
 that we ever attempted to divorce ourselves from the power of the British Crown. 
 
 To put it plainly and tersely, I only voice the sentiment of every generation of Amer- 
 cans when I say that it has always been and will always be impossible to bind them to an 
 agreement that they wiU not help any local government to construct a canal through the 
 Isthmus of Darien. 
 
 There is ground for impatience with the spirit that must first consult Great Britain be- 
 fore we can know what we may do for our own people. There has been too much of that 
 fashion of snobbishness in American politics. All our ports are open to every British sub- 
 ject, as freely as they are to our own people. Yet a ship approaching a British-Canadian 
 port loaded with supplies for their half -fed people would be captured, with guns if need 
 "be, and confiscated. British goods come and go across our soil to Canada, in bond and 
 free of duty, but if we send a barrel of fish through Canada it is immediately confiscated. 
 
58 THE NICARAGUA CANAL. < 
 
 Our right to ship goods without discriminative duties or charges through the Welland 
 Canal is nullified by drawbacks in favor of goods that find the seaboard through the St. 
 Lawrence River. We saved Oregon and Washington from British dominion only by the- 
 intrepidity of our pioneer population, but yielded to an unjust British demand the whole- 
 country between 49 degrees and 54 degrees 40 minutes north lattitude. 
 
 Great Britain had neither a natural nor an historical right to that country. It was^ 
 ours, and was won from us by the spirit of unceasing aggression. After we had acquired 
 the Pribylov group of islands in our purchase of Alaska from Bussia, Great Britain en- 
 couraged her Canadian subjects to slaughter the fur seals, until extermination is seriously 
 threatened, and so to deprive us of a commerce that we alone can protect. 
 
 Open markets for fish, without duty, along our northeastern coast would, almost cer- 
 tainly, save our rights of property in fur seals. They deprive us of our rights, and then 
 sell them to us. No clearer right came to us from the war of the Revolution than the- 
 right of free fishing on the coasts of Newfoundland, Labrador and Canada; but we were 
 compelled to yield those rights, won from the French by the blood of our own people, to- 
 the arrogant demands and pressure of -British aggression. 
 
 The Monroe doctrine was eaten away by the corrosion of British policy in the Belize, 
 and aggressions, excused by a pi'etentious love for the rights of the vilest nest of free- 
 booters that ever assembled on this continent, grew into crown colonies and are there now 
 as defiant proofs of her disregard of the spirit of her treaties with the United States. If, 
 in our desire to assist the commerce of the United States and to discharge the trust in favor 
 of posterity that grows out of the control of the shores of the Atlantic and Pacific Oceans 
 by connecting them through a short line of navigation, we shall offend against a lurking 
 policy of Great Britain, shrewdly hidden away in an old treaty formulation of dogmas 
 and economic doctrines, I shall be glad how soon the dust is removed from the hiding 
 place of this ancient fraud. 
 
 If we need to have an influence in the direction of this canal, we will have it, so far as 
 Great Britain is concerned. If we make it useful to our own people, we will make it 
 equally useful to the world, except that no transatlantic power will be permitted to monop- 
 ohze its ownership or control as against our own people. 
 
 The other question I have stated is whether Congress has power to loan the credit of 
 the United States to this Maritime Canal Company. I know of no reason, and would 
 deeply regret to find any, why the United States, in its sovereign powers, is not the equal 
 of any other government. 
 
 In its internal and external relations it is the most powerful nation in the world, be- 
 cause it has the intelligent and affectionate support of a people who, in the aggregate and. 
 in the individuals composing it and controlhng its destiny, are at least the equals of any 
 other great community; and it is also founded upon the sovereignty of forty-four powerful 
 States. The Federal representative of such powers must be powerful. We have had a 
 chosen national pohcy that has confined our national endeavors to the western hemisphere, 
 and will find useful employment in that grand field of development and progress for a- 
 long period to come. But in the necessary growth of our power our borders have enlarged, 
 and we can safely claim that we have been an advantage of incalculable value to the peo- 
 ple over whom our jurisdiction has been extended, and also to neighboring governments;- 
 even to those that yielded territory to increase our national domain. 
 
 Our influence has extended south to Patagonia, and has secured to aU the vast area be- 
 tween the oceans the blessings of free, constitutional liberty and self-government. 
 
 The Hving example of this great Republic of RepubHos has wrought out the securities 
 for personal liberty that are building up great communities into strong and free nations 
 that were but recently weak and prone to decay. This example without the support of 
 enough of power to maintain its teachings, would have been wasted on the people to the 
 south of us, and would have left them still fettered with the shackles of foreign government. 
 
 In our growth we have found power enough to purchase the French territory, reaching 
 from the Gulf of Mexico to the State of Washington, the Spanish territory of Florida, and 
 the Russian territory of Alaska. We have found power enough in our national sovereignty/ 
 
APPENDICES. 59 
 
 to annex the independent republic of Texas ; and enough of military power to conquer and 
 annex the vast domain, from Mexico, covered by the treaty of Guadaloupe Hidalgo, and to 
 purchase the great addition thereto covered by the Gadsden treaty. 
 
 In the way of providing facilities for the expansion and protection of our commerce in 
 distant regions we have not done much, but we are beginning to feel the pressure of that 
 necessity. 
 
 In Samoa we acquired the right to establish a naval station, and the slightest threat 
 against its full and permanent enjoyment caused Congress to vote money to hold that 
 station, and the President pressed negotiations upon other powers with urgency for its 
 protection. In Hawaii we acquired similar but stronger rights in Pearl Harbor, and the 
 Committee on Foreign Relations through the Senator from Oregon [Mr. Dolph] have repor- 
 ted a biU to establish a naval station in that harbor. 
 
 But the Navy is not the only agency that we may properly employ in fostering and 
 protecting our commerce in foreign countries. The power to use the Navy for any other 
 purpose than warlike offense and defense, which is very clear, necessarily implies the power 
 to use any other peaceful agency in extending and protecting our trade in foreign 
 countries. 
 
 The use of a ship canal to shorten by two -thirds the distance between our Atlantic and 
 Pacific coasts is a juatter that stands most prominent in the necessities of our situation, and 
 is as naturally included in our national powers and duties as the erection of lighthouses, 
 the researches of the Coast Survey, the soundings of deep waters in foreign seas by the 
 Hydrographic Surveys, the propagation of food fishes in the ocean, the Life-Saving and 
 Signal Service, and the laying and protecting electric cables to distant countries. 
 
 Ships on the great oceans are not post offices, and post roads are not their invisible 
 tracks, as they sail back and forth with our mails ; and yet, we find no difficulty in estab- 
 lishing and supporting, with heavy appropriations, our trans-oceanic mail fines. We could 
 build ships for these purposes as weU as we can purchase their services for one or more 
 voyages. It would be a curious state of case that we could build a ship to sail through the 
 Nicaragua Canal with our mails, but we could not assist a company to open or maintain 
 the canal. 
 
 It is not a new thought with me that I am a Democrat. My convictions as to the 
 value of that creed have, at times, cost me everything except my life. I behave that the 
 doctrines of that party are so essential to liberty, in the best meaning of that sacred word 
 that I would sacrifice all the external glory of the republic rather than deprive our people 
 of the enjoyment of that blessing. 
 
 But American liberty does not require its votaries to live in a republic that is crippled 
 in its powers or humihated in its spirit. The best government in the world ought to be the 
 strongest and the proudest. Its true glory and strength consist in the fact that its citizens 
 are better protected against the aggressions of power than those of any other government. 
 The Government of the United States secures to its citizens the supreme blessing of hberty 
 because it has enough of power to protect them against all danger from foreign aggression, 
 and it has not enough of lawful power to wrong the weakest citizen of the republic. 
 
 There are no restraints upon the power of the United States, as a government, except 
 such as are interposed, under a written constitution, for the security of the individual man 
 and the rights of the States. If no citizen and no State can justly complain of an act done 
 by the United States respecting our foreign relations, that act must be within the just 
 powers of the government. 
 
 Taxation of the people, except for govermnent purposes, is not within the grant of 
 powers to the Federal Government, 
 
 The purposes of government that are within the powers of the States are left by our 
 constitution to their care, and the powers necessary to accomphsh these purposes are 
 reserved to the States and the people. Those purposes of government that from their 
 nature are national, are put under the care of our Federal Government, with full and ade- 
 quate powers for their accomphshment. These include all that is necessary to be done for 
 tiie welfare of the people in our dealings and relations with other nations. 
 
6o THE NICARAGUA CANAL. 
 
 The power of Congress to borrow money on the credit of the United States is added to 
 the powers of taxation, and was granted to meet all emergencies of government that could 
 not be conveniently met thi-ough the power to raise money by taxation. We are constantly 
 resorting to this power in order to execute those purposes of goverument that are intrusted 
 to Congress and the President. 
 
 The extinguishment of the Indian title to tribal lands and funding the debt in our own 
 bonds is a constantly recurring illustration of the employment of this power. 
 
 The sale of bonds to raise money to prosecute the late civil war is an instance of the 
 use of this power in a way that is still compelling the heavy taxation of the people. The 
 subsidizing of the transcontinental railroads is another instance of the use of this power in 
 a much more questionable form than is presented in the provisions of the bill under discus- 
 sion. The power of Congress to indorse the bonds of those companies has been conceded 
 by all concerned as being unquestionable. The Supreme Court and many other courts. 
 State and Federal, have predicated decisions upon those powers of Congress exercised even 
 within the States of the Union. 
 
 The alleged purpose of the government involved in these subventions were the necessi- 
 ties of the then military condition of the United States in time of war; the holding in check 
 of the wild Indian tribes of the West ; the transportation of mails, troops, and munitions 
 of war, and the regulation of commerce with the Indian tribes and foreign countries. It 
 "was only when they came in conflict with State authority that any question of the power 
 of the United States was raised, and that was decided in the recent California tax cases in 
 favor of the Federal Government, on the ground that the Central Pacific RaUroad was an 
 instrumentahty of government. 
 
 Whatever question can be raised as to the pohcy of these subventions I think that none 
 can now be successfully made as to the power of Congress to grant them. An estimate of 
 the advantages that have inured to the people and the government from these transcon- 
 tinental Unes of railway is simply impossible. No man in the Senate would vote to destroy 
 these roads under any circumstances. We would double the public debt rather than abol- 
 ish them. We could not remand the country to the condition from which they have built 
 it up, and no man can say that he would regret that the United States had indorsed their 
 bonds even if it should result in the loss of the 1113,000,000 these roads now owe the United 
 States, when he considers the blessings that the use of this great sum has bestowed upon 
 the people. 
 
 Who is there that would destroy the locks in the St. Mary's River and leave the com- 
 merce of the lakes at the mercy of ftie rocks and floods? Who would destroy the Eads jet- 
 ties at the mouth of the Mississippi, or the Mussel Shoals Canal on the Tennessee River, 
 for five times the money thej have cost? These and many others, indeed all other works 
 on rivers and harbors, are based on the power of Congress to regulate commerce, coupled 
 with the duty of Congress to make navigation free and convenient for commerce, because 
 the States have ceded their navigable waters to the United States for those purposes. 
 
 The power to regulate commerce does not stop at our borders. It is beyond our bor- 
 ders that it finds its untrammeled action. From the beginning it has been one of the 
 supreme cares of government to conclude commercial treaties with all the nations of the 
 world. Could we not find the power in our constitution to devote the revenues derived 
 from foreign commerce to facihtating the passage of our ships through straits and narrows 
 in foreign countries by treaty agreement with them, as readily as we could pay them 
 for reciprocity in trade by yielding to them the revenues on commodities exported by 
 them to our country? 
 
 But I will not further discuss this matter, but will content myself with repeating my 
 settled conviction that the proposed subvention to this canal company is as clearly within 
 the power of Congress as it is to grant the charter that we are now proposing to amend. 
 If I remember correctly, very few, if any, of the members of this body have denied that 
 Congress has the power to enact the law under which this corporation was created. The 
 votes recorded in the Journals of the Senate have cei-tainly put that question at rest. 
 
 The care that the Maritime Canal Company has exercised in obtaining exhaustive sur- 
 
APPENDICES. 6l 
 
 Teys of this canal route and the country adjacent to it, and the precision of its location, and 
 the analysis of every engineering problem connected with it, and of every fact relating to 
 its cost and income, has practically removed every doubtful feature from the subject. 
 
 The abaities of Mr. Menocal as a civil engineer are conceded by all who are informed 
 as to his work in this and other fields. He has made the canalization of the Isthmus of 
 Darien a study for many years, and has devoted his attention to the Nicaraguan route 
 with earnest labor and zeal. He has examined that country in ten different years and has 
 spent four years and six months there in continuous work as an engineer. It is no exag- 
 geration to say that he is the thorough master of the subject. His associates in these labors 
 are also men of distinguished abilities. The appendices to the report of the committee on 
 this measure set forth his estimates in such accuracy of statement and measurement and 
 in such f uU and exact detail that any mistake or error of any importance cannot escape 
 detection. 
 
 On pages 101 to 106 of the report of the committee will be found the full statement of 
 the cost of the canal and all its belongings, as estimated by Mr. Menocal, the grand total 
 being 865,084,176. This estimate includes a railroad and telegraph Une, and all the neces- 
 sary woi"k on the harbors of Brito and Greytown, at the terminal points of the canal. 
 ******** 
 
 The estimates submitted by Mr. Menocal in January, 1889, were then submitted by 
 the company to the careful revision of Messrs. John Bogart, E. T. D. Myers, A. M. WeUing- 
 ton, H. A. Hitchcock, and Charles T. Harvey, each of whom is a distinguished and experi- 
 enced civil engineer.* 
 
 ******** 
 
 Here we have Menocal's report of the cost of the canal, the railway and telegraph 
 
 hue, and the maximum cost of the entire work computed on the same data by these other 
 
 five civU engineers. That computation allows 20 per cent, to cover all contingencies of 
 
 construction and every other probable disturbance of the work, and makes the cost of the 
 
 work, all told, $87,799,570. That allowance for contingencies was in addition to $13,016,176 
 
 allowed in Mr. Menocal's estimates for the same reason. I could not possibly present in a 
 
 safer form the merits of Mr. Menocal's report than is done in this review, which I wiU 
 
 read: 
 
 * « * * » 
 
 The estimate of the committee, that the entire cost of the canal, including interest on 
 the bonds, can not exceed $100,000,000 when it is fuUy completed, is certainly a safe one. 
 
 That this will be a line of transit that will, at a moderate tax upon commerce, yield 
 a revenue equal to that of the Suez Canal no one will entertain a doubt. That it will ulti- 
 mately yield a much greater revenue is easily capable of demonstration : 
 
 The French estimate of the income of the Panama Canal is stated by Lieut. Charles C. 
 Rogers, United States Navy, as follows: 
 
 PROBABLE TEAFFIC OF THE CANAL. 
 
 In 1870 the traflBc of the Suez Canal was represented by 486 ships of 435,911 tons, 
 yielding a revenue of 5,159,327.32 francs; in 1885 it had increased to 3, 634 vessels, of 8,985,- 
 411 tons, and paying the company 63,307,439.21 francs. Not being familiar with the 
 detailed statistics of the world's commerce, and such information not being at hand, it is 
 useless for me to attempt a discussion of the financial future of this great enterprise. 
 
 But it may be of interest to the department to know the estimates upon which the 
 canal company and its subscribers base their hopes of success. M. Levasseur, member of 
 he Institute, takes the statistics of 1876 as a basis of calculation, and has estimated that if 
 the canal were open in 1889 the total tonnage of vessels passing through it would be 
 
 *See Appendix No. 8. 
 
62 
 
 THE NICARAGUA CANAL. 
 
 7,250,000. But the following table, published in the Bulletin du Canal Inter-oceanique. 
 
 shows in detail the estimates of M: Amedie Marteau, chief editor of the capital Journal du 
 
 Havre : 
 
 Movement of ocean trade of England vnth Pacific in 1884 
 
 COUNTRIES. 
 
 SAILING SHIPS. 
 
 STEAMERS. 
 
 TOTAL. 
 
 
 Entries. 
 
 Departures. 
 
 Entries. 
 
 Departures. 
 
 
 Pacific Islands 
 
 No. 
 
 11 
 
 283 
 
 103 
 
 108 
 
 13 
 
 30 
 
 Tons. 
 
 5,659 
 
 370,058 
 
 70,035 
 
 64,213 
 
 3,262 
 13,041 
 
 No. 
 4 
 
 140 
 97 
 
 356 
 55 
 21 
 
 Tons. 
 3,164 
 211,597 
 
 74,457 
 184,811 
 
 33,434 
 
 15,496 
 
 No 
 
 1 
 
 2 
 
 11 
 
 31 
 
 47 
 
 Tons. 
 1,193 
 3,513 
 19,424 
 64,688 
 84,695 
 
 No. 
 
 3 
 
 3 
 
 13 
 
 40 
 
 74 
 
 1 
 
 Tons. 
 
 1,656 
 
 4,761 
 
 19,484 
 
 71,653 
 
 106,589 
 
 881 
 
 No. 
 18 
 438 
 333 
 435 
 188 
 43 
 
 Tons. 
 11,872 
 
 United States, Pacific coast 
 Peru 
 
 589,929 
 183,391 
 
 Chili 
 
 385,263 
 
 Colombia 
 
 226,980 
 
 
 29,418 
 
 
 
 
 
 Total 
 
 1,134 
 
 1,436,853 
 
 
 
 
 
 
 
 
 
 
 
 Movement of ocean trade of France with Pacific in 1884. 
 
 COUNTRIES. 
 
 Entries. 
 
 Departures. 
 
 Total. 
 
 Peru 
 
 No. 
 
 139 
 48 
 70 
 29 
 
 Tons. 
 120,153 
 
 75,337 
 117,724 
 
 43,108 
 
 No. 
 
 15 
 
 81 
 
 59 
 
 4 
 
 Tons, 
 
 19,939 
 106,053 
 
 90,006 
 2,624 
 
 No. 
 154 
 139 
 129 
 33 
 
 Tmts. 
 140,093 
 
 Chili 
 
 181,380 
 
 
 207,730 
 
 
 44,732 
 
 
 
 Total 
 
 286 
 
 355,812 
 
 159 
 
 218,623 
 
 445 
 
 573,934 
 
 
 Movement of ocean trade of Hamburg vnth Pacific in 1884. 
 
 COUNTRIES. 
 
 California, Pacific coast 
 
 Mexico, Pacific coast 
 
 Central America, Pacific coast 
 
 Chill, Pacific coast 
 
 Peru, Ecuador and Bohvia, Pacific coast 
 
 Total 
 
 Entries. 
 
 No. 
 
 1 
 
 11 
 
 8 
 
 62 
 
 156 
 
 338 
 
 Tons. 
 
 863 
 
 4,099 
 
 4,156 
 
 55,903 
 
 129,131 
 
 198,140 
 
 Departures. Total. 
 
 No. 
 
 3 
 
 13 
 
 9 
 
 73 
 
 35 
 
 132 
 
 Tons. 
 
 1,841 
 
 5,156 
 
 3,740 
 
 63,134 
 
 13,416 
 
 85,287 
 
 No. 
 
 S 
 
 24 
 
 17 
 
 135 
 
 181 
 
 360 
 
 Tons. 
 
 2,703 
 
 9,255 
 
 6,896 
 
 122,036 
 
 142,537 
 
 283,437 
 
 Movement of ocean trade of England with Australia and Pacifi 
 
 c islands in 
 
 1884. 
 
 COUNTRIES. 
 
 SAILING SHIPS. 
 
 STEAMERS. 
 
 Total. 
 
 
 Entries. 
 
 Departures. 
 
 Entries. 
 
 Departures. 
 
 ' 
 
 Australia 
 
 No. 
 243 
 109 
 116 
 
 37 
 
 Tons. 
 358,898 
 101,556 
 103,780 
 
 18,169 
 
 No. 
 
 368 
 90 
 96 
 
 7 
 
 Tons. 
 
 436,847 
 
 87,350 
 
 81,061 
 
 7,105 
 
 No. 
 96 
 
 27 
 17 
 30 
 
 Tons. 
 307,678 
 66,865 
 36,333 
 52,947 
 
 No. 
 
 174 
 
 33 
 
 78 
 18 
 
 Tons. 
 311,887 
 
 70,609 
 124,054 
 
 32,668 
 
 No. 
 881 
 259 
 307 
 
 72 
 
 Tons. 
 1,316,901 
 336,380 
 335,098 
 110,889 
 
 NeAV" Zealand 
 
 Java 
 
 
 
 Total 
 
 495 
 
 477,494 
 
 561 
 
 612,343 
 
 160 
 
 353,713 
 
 303 
 
 538,818 
 
 1519 
 
 1,983,378 
 
 
APPENDICES. 
 
 Maritime movement of France in 1884 with the countries below. 
 
 63 
 
 COUNTRIES. 
 
 Australia 
 
 ■Oceanica 
 
 East Indies. . . . 
 -New Caledonia 
 
 Total 
 
 Entries. 
 
 Tons. 
 
 86,757 
 
 112,138 
 
 81,744 
 
 40,253 
 
 209,881 
 
 Depart- 
 ures. 
 
 Tons. 
 
 7,448 
 
 43,920 
 52,227 
 
 103,595 
 
 TotaL 
 
 Tons. 
 
 94,208 
 
 1,128 
 
 125,664 
 
 292,479 
 
 313,476 
 
 Holland Countries of production or of destination. 
 
 COUNTRIES. 
 
 Entries. 
 
 Departures. 
 
 «C!Mli ,,, 
 
 No. 
 
 27 
 
 50 
 
 6 
 
 51 
 
 268 
 
 213 
 
 106 
 
 32 
 
 41 
 
 107 
 
 31 
 
 91 
 
 121 
 
 1,134 
 
 Tons. 
 
 23,324 
 
 33,696 
 
 2,653 
 
 83,038 
 
 267,926 
 
 261,302 
 
 110,881 
 
 11,836 
 
 51,569 
 
 188,436 
 
 38,057 
 
 37,099 
 
 150,775 
 
 No. 
 69 
 18 
 8 
 55 
 77 
 92 
 11 
 76 
 20 
 70 
 37 
 83 
 78 
 
 Tons. 
 57 441 
 
 Peru 
 
 13,372 
 
 -Guatemala (Pacific) 
 
 3,567 
 
 Colombia (Pacific) 
 
 83 837 
 
 ■Colombia (Atlantic) 
 
 342,279 
 
 Australia 
 
 174,430 
 
 Philippines . 
 
 11,581 
 
 
 60,503 
 
 China 
 
 37,411 
 
 
 156,677 
 
 
 51,354 
 
 Mexico ^Pacific coasts 
 
 33,314 
 
 JEast Indies 
 
 93,301 
 
 
 
 Total 
 
 1,260,593 
 
 994 
 1,134 
 
 3,138 
 
 1,008,849 
 
 
 1,260,593 
 2,269,441 
 
 
 
 SUMMARY. 
 
 Estimates of tonnage passing through the Panama Canal in 1884. 
 
 Tons. 
 
 3Iovement of ocean trade of England with Pacific 1,426,353 
 
 Movement of ocean trade of France with Pacific 573,934 
 
 Movement of ocean trade of Hamburg with Pacific 283,437 
 
 Mevement of the other ports of Germany with Pacific 76,573 
 
 Movement of other European ports with Pacific 310,000 
 
 llovement of ocean trade of England with Australia and Pacific islands 1,983,378 
 
 Maritime movement of France with Australia, Oceanica, East Indies, and New 
 
 Caledonia 313,476 
 
 Maritime movement of Hamburg with same countries 70,000 
 
 Maritime movement of other ports of Germany with same countries 30, 000 
 
 Maritime movement of other countries of Europe with same countries (Holland, 
 
 Spain, Italy, Greece, etc) dU0,0UU 
 
 Total of countries of production or of destination 8,869,442 
 
 *Grand total 7,536,983 
 
 * For estimate of revenues of the canal, prepared by the company, see Chapter VI. 
 
64 THE NICARAGUA CANAL, 
 
 I think the majority opinion in the committee was that the canal traffic, exclusive of 
 passenger traffic, would not fall below 7,000,000 tons per annum. 
 
 Mk. Hoak. How much? 
 
 Mr. Morgan. That it would not fall below 7,000,000 tons per annum, and that, evert 
 at $1 a ton, to say nothing of the $2. 50 that is charged by the Suez Canal, would more than> 
 pay the interest on the debt, and the expense of keeping the canal in order. 
 
 With these facts before the committee, they could not hesitate to declare their unani- 
 mous conviction on three essential points, namely: 
 
 First. That this canal ought not to be permitted to cost a sum exceeding $100,000,000" 
 as a basis on which to levy taxation on the commerce that will pass through it. 
 
 Second. That such a sum of money could not be raised on private loans in the United 
 States or in transatlantic countries, except at too great a sacrifice in interest and discounts, 
 and by the absorption of the stock of the canal company. 
 
 Third. That it is the duty of the government of the United States to so provide that 
 the direction of the affairs of the company, in accordance with the concessions from the 
 Governments of Nicaragua and Costa Eica, should not pass into the control of any but 
 Americans. 
 
 Great ship canals, like those of Nicaragua and Suez, have a relation to the commercial 
 and naval affairs of all nations that makes them, of necessity, pohtical factors of the inost" 
 important character. 
 
 Aside from all ambitious considerations, their guardianship will be ultimately devolved, 
 upon powers that are strong enough to secure to all nations a just participation in their 
 benefits. With less governmental security than that they would soon attract the efforts, 
 of enterprising powers to seize and appropriate them, and that would create strife that- 
 would afflict the world. 
 
 The United States could not abdicate such an influence in the Nicaraguan Canal with- 
 out injustice to the Western Hemisphere and without national dishonor. 
 
 The history of our dealings with other nations, as well as the nature and spirit of our 
 non-aggressive government, is a full guaranty to all the nations that our influence in the- 
 control of the affairs of the canal wiU be impartial, just and friendly towards each and alL 
 of them. 
 
 We have no national need to fill up our Treasury with tolls exacted from the commerce- 
 of other countries or of our own people. We seek only to enrich our government by giv- 
 ing to our people proper opportunities to enrich themselves by honest industry. 
 
 In line with this estabUshed policy the chief interest that our government has in this- 
 great work is to place its benefits within easy reach of our people. 
 
 To do this it is the duty of the United States to assist in this work, in order to give to- 
 it credit, permanency, economy of administration, cheapness of toUs, and freedom of use 
 for commercial purposes. 
 
 The bill and the report of the committee disclose f uUy, and without reserve, the entire- 
 line of action that the government of the United States should, in the opinion of the com- 
 mittee, adopt in reference to this great work. 
 
 The facts stated in the report of the committee, and more in detail in the appendices- 
 thereto, show that the Maritime Canal Company have made very remarkable progress in. 
 this work. 
 
 Their expenditures have been characterized by careful and wise economy, and hav& 
 been drawn from their own private contributions of money and credit. No bonds have 
 been sold and only a small amount of stock ; excellent buildings for the use of the com- 
 pany, including comfortable quarters for the laborers, hospitals, storehouses, wharves, and 
 machine shops have been amply provided. 
 
 The clearing for the line of the canal and railroad has been made from the seacoast to- 
 the hills of the interior, a distance of 12 miles, and the dredges, purchased from the Panama 
 Canal Company, are at work on the canal and the approaches to it. The railroad is built 
 in excellent style out to the foot of the hills, passing through a swampy region that was 
 considered very difficult The pier or breakwater extending across the bar at the harbor 
 
APPENDICES. 
 
 65 
 
 ■of Greytown, has already demonstrated that the water there can be deepened by natural 
 erosion, so as to accommodate the largest ships. Not one apprehended difficulty has been 
 encountered that has not been more easily overcome than was expected. 
 
 The committee found that the company felt entirely confident of their ability to pro- 
 gress with the work through the assistance of money to be raised by the sale of mortgage 
 bonds and the pledge of the stock of the company. But they expected that the discounts 
 •upon their securities in the markets, and interest, and brokerage, and other commissions 
 would be so great that it would require the issue of a large sum in excess of §100,000,000 of 
 bonds and the addition of $75,000,000 of the stock of the company to enable them to secure 
 the money to finish the canal in five or six years. 
 
 The committee thus state that the burden that would fall upon commerce by reason 
 of the inability of the company to obtain money to construct the canal at reasonable rates 
 in the markets, on pages 14 and 15 of the report, which I wiU venture to read, as a better 
 statement and explanation of that point than I could possibly give at my desk in the 
 Senate : 
 
 "The act incorporating the Maritime Canal Company of Nicaragua provides that the 
 capital stock of said company shall consist of not less than 1,000,000 shares of SlOO each, or 
 .§100,000,000 with the right to increase the capital stock to 2,000,000 shares of §100 each, or 
 §200,000,000 on the vote of two-thirds of the stock of said company at any time outstand- 
 ing. It also anthorizes the company in the construction of said canal, and to carry out 
 the purposes of the act, to issue its bonds and secure the same by mortgage on its property 
 -and rights of property of all kinds and descriptions, real, personal, and mixed, including its 
 franchise to be a corporation. The amount of said bonds is not limited, but assuming, as 
 "the act contemplates, that it would be equal to the amount of stock outstanding, the 
 amount of stock and bonds might range from §300,000,000 to $400,000,000, with authority 
 "to increase the amount of bonds to an indefinite extent. 
 
 Under the provisions of this charter the Maritime Canal Company entered into a pro- 
 "visional contract by which the canal company agreed to pay the construction company, 
 for the work proposed, stock to the amount of $92,500,000, being the total stock authorized, 
 less concessions to Nicaragua and Costa Rica, and $150,000,000 in bonds, an aggregate of 
 ^242, 500, 000. It was assumed that the bonds of the company, bearing interest at 5 or 6 per 
 -cent, per annum, could be sold at the rate of about 60 cents on the dollar, the rate at which 
 "the first bonds of the Suez Canal were sold. 
 
 The stock was to be given to the contractors as a bonus to induce them to undertake 
 "the contract. In view of the difficulties in the way of the enterprise, your committee is of 
 the opinion that the contract was as favorable a one as could be made, if we may judge by 
 "the contracts made for similar undertakings by private companies and in view of the risks 
 and hazards of the future. The ability of the construction company to perform the work, 
 •even for this great sum, would depend entirely upon its ability from time to time to sell the 
 Becurities of the Maritime Company, 
 
 Any stringency or fluctuation in the money market might prevent their sale and thus 
 •arrest the progress of the work. Any neglect on the part of the Governments of Nicaragua 
 -and Costa Eica to protect the contractors in the performance of the work would necessarily 
 add to its cost, and perhaps as in similar enterprises disable the company and forfeit their 
 -charter privileges. Any failure of the bankers purchasing these securities to pay for them 
 according to the conditions of the sale would have the Hke effect. The work is so great 
 and the benefit of its completion so transcendent that it would seem that its execution 
 should not be left to private entei-prise that, in the chances of the future, may fail. 
 
 It is doubtful whether any private company, corporation, or combination, however 
 strong it may appear,, would be able to complete so great an enterprise, one that could yield 
 no income during its progress, and could not in any event yield profit vmtil after the whole 
 enterprise was completed. Unlike railroads, the investment could not yield any income or 
 3)roflt until it was demonstrated by actual trial that commercial vessels could pass from 
 •ocean to ocean with reasonable faciUty, and without delay or danger. In whatever view 
 -the committee could take of the enterprise there appears grave doubt whether it could be 
 
66 THE NICARAGUA CANAL. 
 
 executed without the strong, certain, and powerful support of a great nation or a combi- 
 nation of nations. " 
 
 Hon. Warner Miller, whose ability as a financier and as a statesman has become his- 
 toric in the Senate, thus states the causes which, in the beginning of a great enterprise like^ 
 this, depress the market for the bonds of the best organizations. I beg leave to read, as I 
 think it is important: 
 
 By Mr. Payne : 
 
 Q. That embraces his estimate for the extras? 
 
 That is, the engineer's estimate. 
 
 A. Yes. " Now, as to the method of raising this amount of money; of course, it cani 
 only be done by selling the securities of the company. They consist, or will consist, of 
 stock and bonds. Since I have been president of the construction company I have con- 
 sulted with many leading financial men in the country, and of course it is impossible to say 
 at this time at what price bonds of the company could be negotiated, but I am frank to say 
 that I do not believe that they can be negotiated at par or very near it. This is a peculiar- 
 enterprise, which presents many obstacles, and of course it wiU be looked upon by the in- 
 vesting world as somewhat problematical. 
 
 The first bonds of the Suez Canal, I believe, netted the company only about 60 cents on. 
 the doUar. How much more than that we shall be able to obtain for our bonds I am unable- 
 to say, but I have no doubt but what the bonds can be negotiated in the* markets of the 
 world at a price much above that of the first Suez bonds. The present intention of the- 
 company is to make arrangements with what would be called a syndicate of bankers, get- 
 ting one large and reputable banking house to take the lead in the matter, and that house- 
 to associate with itself a large number of banking houses in this country and in London,, 
 and in Amsterdam, and in Frankfort, and in Berlin — houses which are now in the habit 
 of associating themselves together for the placing of large loans or the placing of a large- 
 amount of securities — and expect to make a contract with the leading house, the head of 
 the syndicate, to take these securities and market them as best they can, so as to give us- 
 somewhere in the neighborhood, we will say, of ten to fifteen millions of money per annum 
 as the work shall go on. 
 
 Banking houses are ready to undertake this work, and the only question about it is a. 
 question of commissions and the question as to what price the bonds shall goto the public at. 
 in order to induce them to take them. We can not expect the public will come in and 
 take these bonds unless they are offered to them at such a price as to give them a large- 
 profit incase the work succeeds. This project is entirely different from the project of build- 
 ing a railroad and issuing bonds upon it as it is constructed." 
 
 In consideration of the concessions made by the Governments of Nicaragua and Costa 
 Eica to the Maritime Canal Company, 6 per cent, of the stock of the company is to issue to- 
 Nicaragua and 11-2 per cent, to Costa Eica. This bill Umits the capital stock of the com- 
 pany to $100,000,000, leaving 193,500,000 of stock to be disposed of after satisfying the obli- 
 gations of the company to those states. 
 
 Of this sum 170,000,000 are to be issued to and in the name of the Secretary of the- 
 Treasury of the United States as a pledge and security to the United States for the redemp- 
 tion of the bonds and interest issued to the company in payment for work done on the- 
 canal. At any time before the maturity of the bonds the United States shall have the 
 option, in the discretion of Congress, to take the stock at par and dispose of it. 
 
 Section 7 of the biU extinguishes all existing liabihties of the Maritime Canal Company 
 except those to Nicaragua and Costa Eica for stock, as I have already explained, and in full, 
 payment for the same and for all property acquired, material furnished, services rendered, 
 and work performed it turns over to the company |7, 000, 000. Of that sum, bonds issued 
 and guarantied by the United States are to be delivered to the company by the Secretary 
 of the Treasury to the amount that he shall ascertain to have been actually paid out and 
 expended by the company in the construction of the canal, with interest thereon at 6 per 
 cent, and the residue of the sum of $7,000,000 is to be paid to the company in non- 
 assessable stock. 
 
APPENDICES. 67 
 
 It will require a large part of this stock to meet the engagements of the company which 
 are outstanding and are to be canceled so as to leave the company without any debt or lia- 
 bility of any kind, except the percentage of the stock that is to be issued to Nicaragua and 
 Costa Eica. 
 
 This company is composed of men of excellent character and has acted in good faith 
 and with marked courage and ability in the promotion of this great American enterprise, 
 and it well deserves the confidence of the government and the approbation of the people. 
 
 Men who have been able to inaugurate successfully this immense work, with no re- 
 Bourcesbut their own private fortunes, and in face of the competition, if not the opposition, 
 of the Panama Canal, then promising to be a great success, confer honor upon their coun- 
 try and deserve fair and considerate treatment, which I have no doubt will be cordially 
 given them. 
 
 They are all well known for their high character and patriotic zeal for the honor of 
 their country. They are entitled to much credit for the readiness they have exhibited to 
 yield the financial advantages which they had secured in order that their government might 
 have an unobstructed course in securing to the people the great blessings of free transit for 
 ships through the Isthmus of Darien— a blessing which no company and no nation should 
 be permitted to monopolize. 
 
 The merits of this bill and all its surroundings and incidents wiU stand the closest 
 scrutiny, and that is invited by the Committee on Foreign Relations. They have no doubt 
 or apprehension that the stock of this company will be at par, or above par the day the 
 canal is completed. They believe that it will be constructed and in complete working 
 order within six years from the date of the passage of this bill. They are satisfied that the 
 whole expenditure in the construction of the canal will not exceed $70,000,000, and that it 
 will speedily acquire a business amounting to 7,000,000 tons of actual freight, and 4,000 
 passengers per annum, and that, at one-half the rate of charges exacted by the Suez Canal, 
 it will pay aU operating expenses, the interest on its cost, and a dividend of 8 or 9 per cent. 
 on the money invested in it. 
 
 They conclude from the undisputed facts presented in their report that the Govern- 
 ment of the United States will not lose any money by its indorsement of the bonds of the 
 company, but will, if it chooses to do so, make large profits by converting the bonded in- 
 debtedness into the stock of the company. The government having assisted transconti- 
 nental railroads by the loan of its credit and by immense grants of lands, it is only just to 
 the people that they should have the advantage of the fair competition between land and 
 water routes of transportation for the interchange of trade between the Eastern States and 
 those lying west of the Rocky Mountain range. 
 
 The §113, 000,000 that the United States will be entitled to have refunded from the 
 Union and Central Pacific Railroad Companies about 1897 has been bread cast upon the 
 waters in our splendid developments. It will aU be paid in cash into the Treasury, but if 
 it were all lost the country has been benefited §1,000,000,000 by its use. If any emergency 
 in the finances of the country should make it convenient to apply that fund as it is paid 
 into the Treasury to the construction of the Nicaraguan Canal, it wiU be in easy reach of 
 the power of the Government for that purpose. 
 
 What great sum of money, unless it was the|15, 000,000 paid to France for the Louisiana 
 territory or the §15,000,000 paid to Mexico for the Gadsden purchase, has ever accomplished 
 so much for the country as this §113,000,000 will do if it is employed in opening the canal 
 through Nicaragua, after it has aided in building the pioneer lines of railway from the 
 Mississippi River to the Pacific Ocean? In the few statements that I have made to-day I 
 have scarcely touched upon the great body of facts of the most interesting and conclusive 
 character embodied in the appendices of the report of the committee. I have only at- 
 tempted to open the door to inquiry and invitation to others that they may enter upon this 
 great subject and display its importance as it deserves. 
 
 The Southern States have such great and peculiar interests in this measure that I have 
 feared to attempt to advocate it lest I might not present its merits worthily. I have hoped 
 to live to witness the completion by the people of the United States, who are the Govern- 
 
68 THE NICARAGUA CANAL. 
 
 ment, of this inexpressible blessing to mankind, which will, when completed, be the most 
 impressive memorial of the genius, enterprise and good- will of our people that they can 
 ever place on the records of their history outside their own territorial limits. 
 
 That only 19 miles of actual canalization should be required to bring the waters of the 
 Atlantic and Pacific into union, with the largest ships passing freely through from ocean 
 to ocean, seems to threaten us with reproach if we fail, when we know that we can so 
 easUy and so safely remove the barrier, and in doing this secure great profits from the out- 
 lay. I shall be very proud if it shall turn out that I am one of the generation of men who 
 will have the courage to obey this evident duty imposed upon us by the great powers and 
 resources of wealth and strength committed to our keeping. If I could serve in the 
 Senate for a century, and in every moment could be endued with the wisdom of Solomon, 
 I could find no opportunity to bless the people of Alabama so greatly as this, which is 
 thrust upon me with a command that I do not dare to disobey. 
 
APPENDIX VIII. 
 
 REPORT OF THE BOARD OF CONSULTING ENGINEERS ON THE PLANS AND 
 ESTIMATES OF THE CHIEF ENGINEER. 
 
 To the Nicaragua Canal Construction Company : 
 
 Gentlemen — The undersigned were requested by your letter of January 10th, 1889, 
 to examine the plans and estimates prepared by your Chief Engineer, Mr. A. G. Menocal, 
 for a Ship Canal between the two oceans at Nicaragua, and to indicate the cost, in their 
 judgment, of constructing a canal along the line proposed and following, in general, the 
 plans of your Chief Engineer. You also requested an opinion upon the practicabiUty of 
 the canal as now proposed, with due reference to the end in view, namely, the safe and 
 convenient passage of sea-going ships from ocean to ocean. We beg to present the follow- 
 ing report: 
 
 We have carefully examined the unusually full maps, profiles, borings, samples of 
 materials, etc., etc., which have been prepared and collected under the directions of your 
 Chief Engineer, and the completeness and excellent form of which reflect credit upon your 
 engineering staff. 
 
 We find certain elements of the designs submitted which may probably be advantage- 
 ously modified ; this would, in some cases, reduce, and in others increase, the quantities. 
 It is also altogether likely that some parts of the work may be let at lower, and other 
 parts at higher prices than are estimated. We, however, are disposed to base our con- 
 clusions on quantities and prices which should prove sufficient to accompUsh it upon the 
 assumption of good and honest management, backed by an ample treasury. We have 
 necessarily borne in mind the fact that the cost of the notable precursors of this canal 
 project, both at Suez and Panama, has greatly exceeded the amount of the original esti- 
 mates, and that this has been true of many other important works. While this might be, 
 perhaps in a large measure, traced to unfortunate management as well as the lack of such 
 careful preliminary studies as have been laid before us in this case, we have nevertheless 
 endeavored to guard against a similar result by a liberal allowance for every apparent 
 contingency. 
 
 Acting on this principle, we have not deemed it wise to reduce the quantities or prices 
 of your Chief Engineer's estimates in any instance, even when it appeared possible that 
 this might prudently be done. His figures are, of course, founded upon a better knowl- 
 edge of the local conditions than we can now possess. But to the extent to which it has 
 appeared at all doubtful we have liberally increased one or both. Our conclusions are as 
 follows : 
 
 The project, as a whole, appears to have comparatively few elements of doubt about 
 it, as contrasted with other works of at all similar magnitude, and we consider it to be 
 unquestionably feasible. The great area of Lake Nicaragua offers immunity from serious 
 floods by regulating flow. Much of the earth excavation and dredging, the rock drilUng 
 and the concrete mixmg can be done by mechanical means, to that extent reducing the 
 need for manual labor. The dams and embankments are proposed to be made largely from 
 the immense mass of otherwise useless rock spoil. Under the climatic conditions, as we 
 understand them, an adequate supply of labor should be obtainable. The project in detail 
 consists of the following elements : 
 
 First. Of 10 miles on the east end and 0.57 miles on the west end of sea-level canal 
 dredged in from the coast. The borings submitted seem to warrant the opinion [that this 
 wiU be entirely through alluvial deposits, as is also the case in certain parallel [river diver- 
 sions. The samples of material taken from these borings all appear favorable for dredging 
 
70 THE NICARAGUA CANAL. 
 
 and the cost of such dredging can be foreseen with the greater precision, because less 
 influenced by climate, weather, and rates uf wages than most other engineering work. 
 
 Second. Of a flight of three locks on each end, aU within a distance of about one and 
 one-half miles at one end and two miles at the other, by which the ascent is made from 
 the sea-level to the summit-level of 110 feet, (this elevation being some four feet less on 
 the eastern end to allow for a necessary fall of three-fourths of an inch per mile in the San. 
 Juan River). These locks are shown by the borings submitted to be all founded on rock. 
 The proposed size for locks, 650 feet by 70 feet by 30 feet deep, seems sufficient for all 
 demands. 
 
 Third. Of a very long summit level of 155.98 mUes, consisting of four main parts: 
 
 a — The great divide cuts of three and eight miles in length respectively which are- 
 shown by the evidence submitted to consist chiefly of rock, overlaid vnth a few feet of 
 earth. 
 
 b — The Deseado, San Francisco, Machado and Tola basins, formed by dams, furnish 
 21.57 miles of slack-water navigation, 18.13 miles of which require no excavation, and the- 
 remaining 3.44 miles earth dredging only. 
 
 c — The River San Juan, raised in level by a dam at Ochoa so as to furnish slack-water 
 navigation, and Lake Nicaragua furnish, together, 121 miles of free navigation, of which. 
 36.5 miles require some earth dredging and 3.83 miles some rock dredging. 
 
 d — An inconsiderable amount (1.63 miles) of canal section in earth, chiefly to connect 
 the San Francisco and Machado basins. 
 
 The two great rook cuts are by far the heaviest features of the work. In considering- 
 the plans for them, and determining the proper amount and cost of work, we have felt 
 that every provision should be made to secure permanent slopes and to provide a section 
 suitable for any vessels which can pass the locks. We think that the estimates, as mcdi- 
 fled by us, will secure these results. 
 
 The four great basins present a most admirable feature of the plans. As compared 
 with a restricted canal channel, they facilitate navigation as well as reduce the cost. They 
 are made, as is also the slack-water navigation of the San Juan River, by dams and em- 
 bankments of considerable extent, none, however, of very great height. The plans sub- 
 mitted provide for forming these dams and embankments chiefly of heavy rock filling, th& 
 proximity of the great rock cuts (from which material must otherwise be wasted) to the- 
 sites of these dams and embankments, facilitating their permanent construction at mod- 
 erate cost. While we are not ready to say that the details of the plans submitted may not- 
 be, in some respects, modified, we regard the estimates adopted as suflcient to attain the 
 results desired, subject to the followine contingency: 
 
 There is the possible hazard in respect to the San Francisco and other basins, that they 
 may not prove sufficiently retentive, owing either to leakage around the ends or under the 
 bases of the dam and embankments, or to concealed permeable strata beneath the natural 
 surface. We deem this a remote danger, since both the surface and subterranean forma- 
 tions, so far as revealed by borings and by the reports of the observations of reliable men, 
 familiar with the locality, are favorable. 
 
 For a work of ordinary magnitude we would accept such evidence as ample, but, in 
 view of the great area and volume of the basins, we agree that the possibility ought to be- 
 covered by the estimate. The Drobability is great that there are no permeable strata be- 
 neath the surface ; if they exist they might not necessarily cause leakage, and even if 
 leakage resulted it would not necessarily do serious harm. Concentrated leakage, if it oc- 
 curred, might possibly be remedied, and, if it should develop at all, would be likely to- 
 occur at an early stage of the work of construction. The worst result to be feared is that 
 it might impel a modification of the original features of the project, enforcing a lowering 
 of the water level at certain points, and at an additional cost of about |7, 000, 000. Under 
 the circumstances, we, out of abundant caution, have deemed it wise and right to make 
 the general contingency of allowance (§14,633,262) large enough, in our opinion, to cover 
 this amount. 
 
APPENDICES. 7r 
 
 The requisite depth in the San Juan River and in Lake Nicaragua is obtained by a 
 considerable amount of dredging, largely of earth, but also with an amount of rook 
 blasting under water, the precise extent and cost of which it is exceptionally difficult 
 to foresee. "We have therefore made an allowance for this work. 
 
 We have included in the estimates the sum of $1,035,000, for the diversion of the 
 Rio Grande, as it seems proper to provide for the possible necessity of the diversion of 
 this important stream from the canal. "We have also included in the estimate the 
 amount named by the Chief Engineer for the work that may be necessary in the valley 
 of the San Carlos and in the construction of the canal between Lake Managua and Lake 
 Nicaragua, this construction being a requirement of the concession. 
 
 The estimates for the harbor improvements at Brito and Greytown we leave unchanged. 
 It appears probable that the amounts estimated may prove ample for all requirements 
 other than gradual enlargement of basin areas, but whether so or not (and it is always 
 extremely difficult to anticipate with certainty what may be the ultimate requirements for 
 work of this class), we do not see the necessity in this work, as we do in the canal proper, 
 for the endeavor to provide at the outset for all future demands of commerce. Sufficient 
 expenditure prior to the opening of the canal to meet reasonable requirements for the first 
 year or two after opening, is all that we have taken into consideration in our estimates. 
 The canal once opened, adequate harbors can certainly be provided at a moderate per cen- 
 tage on the total cost of the canal, even should the sum herein estimated for harbors and 
 contingencies prove insufficient. We must not be understood as implying by this state- 
 ment, however, that we now see reason to fear that the present estimate for harbor work 
 wUl probably prove inadequate. Such is not the fact. 
 
 It may not be regarded as improper to mention also that while the cuts, locks, dams, 
 etc., etc., should be completed for the full depths at the outset, something like one-fifth of 
 the total amount of the estimate is for dredging and earth excavation under water, which 
 is not required to afford 30 feet draught, and which can be completed with little or no 
 disadvantage after the canal has been so far constructed as to pass vessels of that draught, 
 making it possible— if found advisable— to open the canal for 30 feet draught for about 
 four-fifths of the final cost. 
 
 Our estimate, which is intended to represent the maximum sum which the canal ought 
 to cost, assuming, as aforesaid, integrity, good management, and no interruption,of work 
 from financial or other causes, is as follows: 
 
 Auxiliary railways, double track, standard guage, from Divide Cut east to 
 Greytown, and from Divide Cut west to Ochoa Dam, 30 miles and tele- 
 graph, temporary and permanent systems $1,110,000 
 
 Same on Pacific slope, Rio Lajas to Brito, 18 miles 459,000 
 
 11,569,000 
 
 Harbor Works, Greytown $3,550,667 
 
 Harbor Works, Brito __1^0428 ^^^^^^^^^^ 
 
 Carried forward $5,839,795 
 
 Eastern Division: 
 
 Brought up $5,839,795 
 
 Section 1. From Greytown to the Divide 5,398,537 
 
 " 3 The Eastern Divide 18,338,639 
 
 LocksNos. 1, 3and3 4,195,828 
 
 Diversion of the Deseado and San JuaniUo 983,016 
 
 San Francisco Division 5,411,551 
 
 Lake and Rivee Division: 
 
 Rio San Juan • $3,685,701 
 
 Lake Nicaragua 3,311,835 
 
 Dam at Ochoa 736,137 
 
72 the nicaragua canal. 
 
 Westeen Division: 
 
 From Lake Nicaragua to the Pacific fl3,133,849 
 
 Diversion of Eio Lajas 346,786 
 
 XaFlorDam 577,530 
 
 Lock(» 4, 5 and 6 and Guard Gates 3,899,116 
 
 Eight of Way Indemnity 100,000 
 
 Auxiliary Work — Guard Gates in Divide, Piers at Lake, Bridges, etc 1,139,018 
 
 Embankments and Weirs in the Valley of the San Carlos, and canal between 
 
 Lake Managua and Nicaragua 1,000,000 
 
 Diversion of the Rio Grande 1,035,000 
 
 For Engineering Management, Labor Agencies, Shops, Police, Sanitary Ser- 
 vice and Incidentals 6,350,000 
 
 $73,166,308 
 Add to cover specified and unspecified Contingencies of Construction, 30 per 
 
 cent 14,633,363 
 
 Grand Total of Estimate $87,799,570 
 
 In conclusson, we think it proper to express our opinion that the exploration and 
 studies of the region have been suflicient to warrant the conclusion that, unless hindered 
 by obstacles or sinister influences such as would, if permitted to weigh, forbid the success 
 of all ventures, this enterprise is full of promise. 
 
 Respectfully, 
 
 JOHN BOGART, 
 E. T. D. MYERS, 
 A. M. WELLINGTON, 
 H. A. HITCHCOCK. 
 
 I concur in the foregoing estimates as being in the aggregate ample for the purposes 
 stated. 
 
 CHAS. T. HARVEY. 
 May 9th, 1889. 
 
THE CATHEDRAL OF RIVAS, FIVE MILES FROM CANAL LINE. 
 
 MARKET IN GRANADA. 
 
APPENDIX IX. 
 
 VOLCANOES AND EARTHQUAKES, NICARAGUA AND COSTA RICA. 
 
 San Antonio Arsenal, San Antonio, Texas, 
 June 23nd, 1891. 
 
 To the President Nicaragua Canal Construction Company: 
 
 My Deae Sir : — I have your lettei- of 13th instant, in which you invite me to 
 give a general description of the volcanic phenomena found in that portion of Central 
 America traversed by the Nicaragua Canal, and to express any conclusions which I may 
 have reached concerning the effects of possible earthquake disturbances upon theproposed 
 structures of the Canal. 
 
 In reply, I would say that the portion of the Canal between Lake Nicaragua and the 
 Caribbean, apart from the San Juan River, traverses a country in which the rocks of the 
 surface are mainly volcanic, but belong to a past geological age. No recent volcanoes or 
 lavas are known to exist anywhere in the vicinity. Volcanic action has been wholly ex- 
 tinct there during the present geological age, and the surface lavas have been decomposed 
 into a red clay, containing occasionally rounded boulders of the original rock as the last 
 Temnants. Underneath these red clays other lavas are found, some of them in a good state 
 ■of preservation, others showing a partial decomposition. Interstratified with them are 
 beds of volcanic ashes, to which your surveyors have given the name of slate and 
 telpetate. 
 
 The active volcanoes which are nearest to this portion of the Canal, are situated 
 in Costa Rica. There are two chains of volcanoes in Costa Rica, which exhibit 
 signs of unrest and which may be regarded in a certain sense active, 
 though the activity of some of them is nothing more than a little steam at the sum- 
 mits or from lateral vents. Much the greater number of peaks in these two chains have 
 given no sign during the present century, and in most cases have been silent ever since the 
 ■discovery of the country. There are, however, four or five of them which must be 
 regarded as active, for they have within a century broken out in strong eruption and still 
 maintain a condition of unrest. 
 
 Of the two chains, the one nearest to the San Juan River is situated fifteen to eigh- 
 teen miles north of San Jose, the capital of the country, and include three volcanoes which 
 may be regarded as active. Of these, the one nearest the San Juan is named Poas. It is 
 forty miles due south of the junction of the Rio San Carlos with the San Juan, and about 
 fifty -eight miles from the proposed location of the eastern locks. 
 
 About thirty miles southeast of Poas is Irazfi, the most active and forcible of all the 
 •Costa Rican volcanoes. It is about fifty-eight miles from the junction of the San Carlos and 
 a little more, say sixty-two or sixty-three miles, from the eastern locks. About six miles 
 «ast of Irazii, and substantially the same distance from the Canal, is Turiaba, also an active 
 
 vent. 
 
 The other volcanic chain is much longer. It lies near the Pacific coast, being only 
 twelve to fifteen miles distant from Puntarenas. It extends in a northwest direction as far 
 as the Volcano Orosi, which is thirty-eight miles southeast of the town of Rivas. It con- 
 tains but one or two cones which may be regarded as active, though there are in all four 
 or five which have at times disclosed some traces of volcanic action, but hardly enough to 
 warrant us in calling them active. The Volcano Orosi, which is the northwesternmost of 
 the chain and much nearer than any other to the Canal, is not positively known to be an 
 active vent; certainly it has given no sign within the memory of men now living in its 
 vicinity. Nor does it have the appeai'ance of an active cone. I was within eight miles of 
 it on the northern side, whence it seemed to be an old cone in an advanced stage of degrada- 
 
74 THE NICARAGUA CANAL. 
 
 tion by weathering, and no traces of recent action were visible. I have been unable to 
 find any record of an eruption from it. Yet it is reputed in the works of several writers to 
 be active, though no dates or incidents of such an occurrence are given, so far as I have 
 been able to learn 
 
 Nicaragua contains a single chain of volcanoes parallel to the Pacific Coast and gen- 
 erally about twenty miles from it. The southeasternmost cones of this chain are the twin 
 peaks Madera and Ometepe in Lake Nicaragua. They are about fifteen and eleven miles 
 respectively from the shore of the lake, and opposite the point at which the Canal will 
 leave it leading to the Pacific. Madera is apparently extinct, but Ometepe is active, hav- 
 ing been in eruption in 1883. The proximity of these two cones to the Canal makes them 
 objects of special interest, for they are much nearer to it than any others. The next vol- 
 cano of this chain is Mombacho, at the foot of which the large town Granada is situated. 
 While there has been no eruption from it during the history of Nicaragua, there are some 
 lava-streanis emanating from it which bear the look of recency, and cannot be more than 
 a very few centuries old. It is also one of the principal sources of earthquakes and 
 tremors. Its distance from the Canal locks near Brito is, I believe, a little over forty miles. 
 
 About a century ago a considerable eruption occurred near Masaya, some sixteen or 
 eighteen miles beyond Granada. From the meagre accounts preserved, it would seem to 
 have been attended with very little violence, though a very considerable body of lava wa& 
 ejected and overflowed a large tract of country. This quiet form of eruption is sometimes, 
 seen elsewhere among basaltic outbreaks, and is especially characteristic of the vast lava, 
 floods of Mauna Loa and Kilauea in the Island of Hawaii. There is no mountain or even 
 large cinder cone to mark the orifice of the Masaya eruption which was situated in a com- 
 paratively low country. 
 
 There is a group of volcanic cones on the southwest shore of Lake Managua, near the 
 city of Managua, but they appear to be extinct. No other active volcano exists in this 
 chain, until Momotombo, at the extreme western bay of Lake Managua, is reached. It is 
 a large cone, and is always steaming at the summit, and gives evidence of a dormant 
 activity in many ways. It is reputed to have erupted twice during the present century, 
 the last time only a few years ago. Twenty miles northwest of it and north of Leon is the 
 Volcano Santa Clara, which is also steaming, but as these two are more than one hundred 
 miles distant from the Canal, they may be regarded as outside the limits of discussion. 
 
 In only one intance has any eruption in Central America been of the extremely violent 
 class. The exception was the outbreak of Coseguina on the Bay of Fonseca in 1835, which. 
 was one of the most forcible of the present centui-y. Otherwise the eruptions have been 
 of small or moderate energy, causing no serious and widely spread disasters. The ejec- 
 tions are largely in the form of scoria and ashes, though lava streams sometimes flow. 
 
 As regards earthquakes, it is well known that they are comparatively frequent, espec- 
 ially in Costa Rica and Nicaragua, and a few have been destructive in very restricted 
 localities. It is no doubt a matter of great interest to the Canal Company ; for the ques- 
 tion at once arises whether there is not danger of serious damage from this cause to the 
 works of construction, and of the still more serious damage of long suspensions of traffic. 
 In order to reach some estimate of the magnitude of this danger, it may be well to state, as 
 briefly as possible, some general considerations which must serve for a logical basis of any 
 estimate : 
 
 (1) The forecast of earthquakes contemplates probabilities only and not certainties. 
 That one will happen in a particular region in a specified number of years, is a probability 
 which is great or small according to the nature of the locality and its extent. We may 
 view such probabilities as having the nature of risk analogous to those of fire and ship- 
 wreck, with the following diiference-: Fires and shipwrecks are of such frequent occur- 
 rence, and have been so thoroughly investigated by insurance companies, that their 
 probabilities under widely varying circumstances can be estimated with great precision, 
 and the commercial value of the risk accurately determined. Earthquake risks have never 
 been so investigated, and it is therefore impossible to assign specific numerical values to 
 them. Nevertheless, it is sometimes practicable to show that the risk is so smallthat it 
 can be left out of consideration with prudence, though we may not be able to assign its. 
 precise value. 
 
APPENDICES. 75 
 
 (3) In attempting to forecast the future probabilities of earthquakes, we must 
 assume that the future will be like the past, precisely as is done in insurance probabilities. 
 "We must assume that where they have been frequent and violent they will contmue to be 
 so, and that countries seldom visited by them in the past will be as seldom visited in the 
 future. There is no other possible basis of reasoning. 
 
 (3) Earthquakes originate at very different depths in the earth, rarely, perhaps 
 never, exceeding twelve miles, and generally not exceeding three or four miles. We know 
 almost nothing of the ultimate nature of the forces or causes which generate them ; but we 
 know considerable about the manner in which they are propagated after they have been 
 started, and concerning their subsequent action and effects. Whatever may be the causes, 
 ■we must assume that the subterranean track or seat in which they originate occupies some 
 space of very limited extent and contains some point which may be regarded as its centre, 
 — commonly called the centrum. From the seat of origin the impulses are propagated as 
 elastic waves in every direction, in a manner having much in common with waves of sound 
 in the air. 
 
 (4) The intensity or violence of these waves diminishes like that of the air, at as 
 rapid a rate as they are propagated. At any given spot the intensity is inversely propor- 
 tional to the square of the distance from the centrum. 
 
 (5) In all destructive earthquakes, the extent of country in which they are destruc- 
 tive is but a small fraction of the total area throughout which the tremors are preceptible. 
 Ordinarily it is not far from the four-hundredth part of the area perceptibly shaken. The 
 area in which the shocks may cause damage varying from slight to serious (but not demo- 
 lition or what are usually considered destructive effects) is commonly about four to eight 
 times as large as the destructive area, or from the fiftieth to the one-hundredth part of the 
 area of perceptible vibration. Those ratios are only roughly approximate, and they are 
 subject to some qualification, ordinarily not large, dependent on the depth of the centrum. 
 They are of importance as showing the comparatively narrow localization of destructive 
 and even damaging effects. Still, the destructive areas may in some cases be absolutely 
 considerable, being proportional to the total energy of the shock at the centrum. The 
 destructive area of the Charleston quake had a radius of not far from forty miles, but 
 its tremors were preceptible at a distance of seven hundred to one thousand miles. Its 
 great extent, as well as the distances at which its tremors were felt, cause it to rank among 
 the most powerful shakes of the present century. Its intensity at the surface, however, 
 while formidable, was not so excessive as has been experienced in some other memorable 
 earthquakes. This was because its depth was extreme, being in all probability one of the 
 most deeply seated of which we have sufficient knowledge to form an opinion. In striking 
 contrast was the Casamicciola earthquake, on the Island of Ischia in the Bay of Naples, in 
 1884. Here the destructive area had a radius of less than two miles, but within that area 
 the violence was superlative and the havoc great. At Naples, twenty-five or thirty miles 
 away, the shock was only a faint tremor. The depth of the Charleston quake is computed 
 at about twelve miles, with a very moderate probable error. The Casamicciola quake had 
 its origin at a depth probably of less than half a mile. Immediately over the centrum its 
 intensity was apparently quite equal to that in the central area of the Charleston, but the 
 total energy of the shocks was hardly one seven-hundredth part as great. These two 
 extreme instances may illustrate the varying effects of total energy and depth upon 
 aarface intensity. The comparison is analogous to one on a smaller scale between the 
 explosion of one hundred pounds of dynamite at a depth of one hundred feet, and of 
 thirty tons at a depth of half a mile. The effects at the " epicentrum " (point on the sur- 
 face vertically over the centrum) would not differ much, but the larger and deeper charge 
 wovrfd effect a vastly greater area, and would be felt at a much greater distance. 
 
 The foregoing will suffice for our purpose, and it is needless to enter into a general 
 diseuBsfoa of the principles involved in earthquakes. It only remains to put those already 
 set forth Into relation with the facts presented in Nicaragua and Costa Eica. 
 
 In both of these countries, the principal earthquakes, so far as we know them, and 
 perhaps we may say all the forcible ones, have had their centra in close proximity to the 
 volcanoes or underaeath them, and are incidents apparently of the volcanic activity. There 
 is BO' evidence nor any suggestion, so far as I can ascertain, that any of them have orlgi- 
 
76 THE NICARAGUA EAMAL. 
 
 nated at a considerable distance from the volcanoes. The country on either side of the 
 -volcanic chains has not been visited by any earthquake shocks, except such as have been 
 transmitted through the rock from the centra within the volcanic areas. 
 
 Earthquakes are frequent in the vicinity of San Jose, the capital of Costa Rica, and of 
 the other towns surrounding it upon the high, fertile and populous plateau of this country. 
 A very few of them have been more or less destructive. By far the most energetic one 
 occurred in 1841, coriipletely destroying the large town Oartago, situated afthebaseof 
 Irazu, and killing many people. The intensity or violence of this quake, in close prox- 
 imity to the centrum, appears to have been very great. But the indications, from the 
 imperfect accounts we have of them, are to the effect that the intensity declined with 
 increasing distance at a very rapid rate ; for at San Jose,, only thirteen miles distant from 
 Cartago, the intensity hardly reached the destructive stage; and the injuries to the build- 
 ings were seldom great. In towns somewhat more remote the shocks caused great terror, 
 but no serious damages, while at a distance of forty miles or more they appear to have 
 been harmless. These accounts are very characteristic of the Casamicciola type of earth- 
 quake, involving a shallow centrum, a rather small "epicentral tract" with high intensity 
 (because of the shallowness ( f the origin), and a rapid decline of intensity with increasing 
 distance, because of a relatively small or moderate amount of total energy. The accounts 
 of other earthquakes in Costa Rica, which have occasioned serious damage or destruction, 
 are very meagre. But their general tenor is indicative of similar characteristics, but of 
 less total energy. In general, it may be said that the earthquakes of that country appear 
 to be very local in their destructive effects, and the shocks become harmless quivers or 
 tremors within twenty to thirty miles of their origin. 
 
 The portion of the Canal between Ochoa and the Caribbean is, in my opinion, too- 
 remote from the localities in which the Costa Rican earthquakes originate to be liable to 
 any serious injury from them. At long intervals of time, averaging, perhaps, from five to- 
 ten years, some exceptionally powerful shock may transmit waves as far as the Canal with 
 sufficient intensity to produce marked vibrations and tremors ; but that they will have 
 force enough to materially injure the structure of the Canal is in my judgment too improb- 
 able to call for any special precautions against them. Very light and barely noticeable 
 tremors will be much more common. If it could be shown that strong shocks have had 
 their origin near the line of the Canal, the danger would be much more pronounced. But 
 I am not awai'e that there is any indication whatsoever of such an. occurrence. It is true' 
 that light tremors have been noticed in Greytown, but they are in all probability the van- 
 ishing waves of forcible shocks originating far to the southward. There is no reason tO' 
 suppose that the country through which this portion of the CanaE extends is an earth- 
 quake country. The risk of damage from that cause I regard as immaterially small. 
 
 With respect to the portion of the Canal leading from Lake Nicaragua to the Pacific- 
 there seems to be a somewhat larger risk, but not large enough to cause any serious appre- 
 hension. The Volcano Ometepe in the lake is only about thirteen miles from the outlet of 
 the Canal, and about twenty-one miles from the locks. Its eruption in 1883 was a some- 
 what forcible one, attended with strong tremors, which sufficed to produce some cracks in 
 the houses and area walls in Eivas.* I saw several of these cracks, though they were not 
 common and in no case endangei'ed the structures. The Canal locks, if they had been in 
 existence at the time, would probably not have been injured, if built on rock foundations, 
 or upon very solid eai-th not liable to slip or settle under a series of such tremors. The- 
 tremors there were considerably lighter than at Rivas, and they would be much less sus- 
 ceptible of damage than the fragile walls of which Central American houses are built. A 
 few cracks in a large town indicate a fairly definite degree of intensity, and give a far 
 better measure of it than the terror and panic of the inhabitants. 
 
 Although the eruption of Ometepe in 1883 was the first since the conquest, earth- 
 quakes have before emanated from it, and some of them have been as forcible as the- 
 one spoken of, but none, so far as can be ascertained, that were measurably more so. 
 
 With regard to the possibility of earthquakes originating from Orosi-f , we have no 
 suflScient data to warrant any very (definite opinion. It stands in a wilderness which 
 
 * Rivas is about hall way between Ometepe and the locks, 
 t In Costa Rica. 
 
APPENDICES. 77 
 
 has always been little inhabited except by Indians, and if any eartliquakes have 
 originated there, the shocks were so enfeebled by tlie time they reached the settled portions 
 that they were' harmless. Nor would it be practicable for a people unobservant in such 
 matters to ascertain their source, or to collate from an uninhabited country the facts which 
 would enable others to determine it. As this volcano i.s , ituated forty miles from the Canal 
 locks, it would require much more decisive indications of seismic activity in its neighbor- 
 hood thai we now know of to justify any fears from it. To all appearance it is a long 
 extinct volcano, not likely to trouble the world again with any eruption or violent 
 shakings. . , 
 
 The Volcano Mombacho* is a centre of decided earthquake activity. A very few 
 years ago — the exact year I do not recall — the city of Granada at its base was severely 
 shaken, many houses being damaged and a number of them wrecked. A large church 
 nearly ready for the roof was badly shattered, A few lives were also lost. This shock was 
 felt forcibly at Managua, about thirty miles distant, and, though it caused mucli alarm and 
 even panic there, it does not seem to have produced any serious damages. At Rivasf , which 
 is about twice as far from Mombacho as Managua, it was harmless, though causing much 
 alarm. It requires only a light and harmless shake, but one perceptible to everybody, to 
 cause great fear and even panic. Other shocks, some of great force, have been known to 
 emanate from Mombacho. This seismic centre, however, is too remote from the Canal to 
 be a source of any apprehension. 
 
 No shocks are known ever to have originated along the line of the Canal from the 
 lake to Brito, nor in any dangerous proximity to it, except those from Ometepe. This 
 section of the Canal does not in reality lie within the volcanic axis or areas. The Nicara- 
 guan chain, beginning with Madera and Ometepe, is a little to the north of it and the 
 western Costa Eican chain ends with Oi'osi. The nearness of Onutepej:, however, would 
 be a source of danger, were it not for the fact that the past behavior of the volcano has 
 been for more than two centuries so moderately demonstrative as to give little cause of 
 apprehension of more vigorous action in the future. Unless future shocks from it should 
 be much more powerful than in the past, they will not endanger the locks; and there is 
 nothing else on this part of the line which an earthquake would be likely to injure. 
 
 There is a tendency on the part of nearly all persons who have not made special 
 study of the subject, to entertain exaggerated ideas of tlie risks and dangers of what are 
 termed earthquake countries. The terrors of the ' 'epicentral tract" in a great devastating 
 series of shocks cannot, indeed, be exaggerated. The error consists in assuming them to be 
 frequent, widespread and typical of the country. In truth, they are rare, even in the most 
 afflicted region, and when they do come they are destructive within relatively narrow 
 limits only, while the country at large is shaken only by harmless quivers. It is exceed- 
 ingly rare for one generation living on any spot on earth to have seen two destroying 
 earthquakes in the same locality. In many volcanic countries there are a few spots where 
 such catastrophies repeat themselves, though usually after very long intervals of years. 
 These are known and can be shunned by the engineer and architect, if need be. Apart 
 from these, all localities within an earthquake country sufficiently removed from the 
 known centres or axis may be regarded as being in far less peril from earthquakes than 
 from sweeping destruction by an uncontrollable fire. 
 
 Briefly, then, my opinion is that the risk of serious injury by earthquakes to the con- 
 structions proposed for the Pacific section of the Canal is so small that it ought to be 
 neglected alike by the Maritime Canal Company, the Construction Company, and by con- 
 templating investors ; also that the risks to the Atlantic section are still smaller than those 
 to the Pacific section. 
 
 You suggest that I submit ' ' some observations upon the subject of the effects upon 
 engineering super-structures and sub-structures of those earth movements which in some 
 instances have destroyed cities and populations, changing topographical features of locali- 
 ties, and, on the other hand, movements which have destroyed in some instances massive 
 works and have passed harmlessly others of seemingly frail construction. " 
 
 *'In Nicaragua, 35 miles north of the Canal line. 
 + Rivas is between Mombacho and the Canal. 
 $ Ometepe is 23 miles distant from the locks. 
 
^8 THE NICARAGUA CANAL. 
 
 Observations of tlie effects 6f great siliocks iipoH buildings of many kinds are very 
 abundant, and liave been carefully made and studied. It maybe said iu general that super- 
 structures of stone or brick are far more liable to injury than sub-structures, excepting 
 in those transcendent quakes which nothing, not even the earth mass itself, can withstand. 
 
 In shocks which are less than superlative, though still destructive, foundations are 
 seldom much injured, even when super- structures are extensively demolished. A super- 
 structure is liable to cumulative vibration, i. e., to oscillations of steadily •increasing 
 amplitude, while a sub-structure is not. Any ordinary walled structure is liable to have, 
 either as a whole, or in some of it3 parts, a definite vibratory period. If this period be the 
 same as, or a small but exact multiple of, the period of a series of earthwaves, the extent 
 of vibration will rapidly increase, and the liability to destruction is greatly multiplied. 
 
 A sub-structure can have no greater amplitude of movement than the ground itself. 
 Only in the most formidable earthquakes are foundations likely to suffer, except, perhaps, 
 incidentally and secondarily from abnormal strains thrown upon them by the rocking of 
 the super-structure. The escape of fragile structures, while strong ones are overthrown, is 
 not a mystery. They are not in harmony with the wave period, and therefore not liable to 
 cumulative vibration. 
 
 There is a mistaken impression prevailing among those who are unfamiliar with recent 
 progress in seismic investigations, which it is important for engineei's to be advised of. It is 
 a common impression that earthquake motion has a definite direction in each case. There 
 is no warrant for this in theory, and the seismegraph wholly disproves it. There is no 
 one direction of motion to a particle on the ground during an earthquake. The motion is 
 in every direction. Perhaps I can best express it by saying that the ground squirms and 
 wriggles. The path of an earth particle during a shake is like a long hair rolled up into 
 a ballTiietween the flattened palms of your ha'rnis, or like the path of- a-fiy hovering under 
 a chandelier. Still, it is usual for the components of all the motions to have some slight, 
 and sometimes a very marked, predominance in one direction. The vertical components 
 are generally smaller, except in very close proximity to the epicentrum. where they may 
 become very large. Away from the epicentrum the largest horizontal component will 
 more frequently, but by no means always, be in a line connecting the place with the epicen- 
 trum, or nearly in that direction. But the maximum vibration may be in any direction, 
 being determined probably by accidents of the ground. It would be illogical, therefore, to 
 attempt to fortify against earthquakes by building structures calculated to resist move- 
 ments coming from any specific quarter, unless, indeed, it be decided to follow the example 
 of the deacon in building the " One Horse Shay." The only precaution I know of, which 
 is of the slightest utility, is to build on solid rock instead of sub soils, gravels or any sort 
 of unconsolidated strata. The amplitude of motion during a quake is less, and there is less 
 liability to permanent displacement. But in the visitation of a first class earthquake even 
 this precaution would be useless. 
 
 The structures most easily injured would undoubtedly be the locks. The masonry 
 might be cracked by a powerful shock, but unless the ground beneath were permanently 
 displaced, or the walls moved bodily, the damage could be repaired at small cost. The 
 gates might be jammed or broken or slightly displaced also. But shocks of suflQcient 
 severity to produce any of these results, are hardly to be anticipated. The dams, if built 
 in the manner proposed, of loose rock with very long slopes (6 or 8 to 1), would require 
 shocks of extraordinary power, accompanied with considerable displacement of the ground 
 beneath them, to damage them. As against earthquakes, they would be the safest that 
 could possibly be built. 
 
 Being already nothing but shattered fragments, it is not apparent what more an 
 earthquake could do, except to dislocate the earth beneath them. Such permanent distor- 
 tions of the earth do not occur except in the most forcible convulsions, far more forcible 
 than any that have ever been known to occur in Nicaragua. 
 
 Very truly yours, 
 
 C. E. BUTTON, Major. 
 Ordnance Department, U S. Arv}y. 
 
APPENDIX X. 
 
 STATEMENT 
 
 By the Hon. Warner Miller, President op the Nicaragua Canal Construction 
 Company, Who Made a Careful Inspection of the Whole Canal Route in April 
 AND May, 1891. 
 
 The party reached San Juan del Norte, all in good health, on the 2d of April, and at 
 once began inspection of the work already accomplished. The construction work has so 
 far been confined to the harbor and the first few miles of land work. A year ago the 
 harbor was entirely closed by the bar at the entrance. Our party, however, sailed in on the 
 Carazo, passing over the bar, where at present there is a depth of 13 feet of water. This 
 opening of the harbor has been accomplished through the work of the canal company, 
 which has built the pier or breakwater, extending a distance of 1000 feet into the sea. 
 The construction of this pier has operated exactly according to the calculations of the 
 engineers, and the result has been, as I have stated, 13 feet of water on the bar at the 
 present time. > Commencing at San Juan del Norte, the line of the canal has been entirely 
 cleared of the dense growth of tropical vegetation which covered it, for a distance of 18 
 miles; the trees have been aU felled and burned. The actual excavation of the canal 
 was begun about the 1st of January of the present year. One of the first of the American. 
 dredges purchased from the Panama Canal Company, the City of New York, was set at 
 vrork. The company has six of these large and powerful dredges, which will be at work 
 as fast as they can be set in order. Two of them are now at work, and three others wiH 
 be ready in a short time. These dredges are the most powerful ever constructed, being 
 capable of excavating to the depth of 35 feet. They raise material out of the cut and 
 deposit it at a distance from the bank of the canal, so that the material does not have to 
 be removed a second time. The two dredges now at work have already excavated the 
 canal for a distance of half a mile to a width of 270 feet and a depth of 17 feet. Two 
 other dredges will f oUow these, and complete the excavation to a depth of 30 feet, which 
 is to be the depth of the completed work. The company has constructed from del Norte, 
 parallel with the line of the canal, a railroad for the purpose of enabling it to transport 
 men, material and machinery into the interior, so that the work may be begun simultane- 
 ously at several different points upon the line of the canal. This railroad is now com- 
 pleted a distance of 10 miles, and two miles more are graded and nearly ready for track 
 laying. It has an equipment sufficient for its present service, and this will be increased 
 as there is need, and the road wiU be extended to a point on the San Juan, called Ochoa, 
 where the river is to be dammed. This dam will raise the waters of the San Juan to the 
 level of Lake Nicaragua, and from that point to the lake, a distance of 65 miles, the river 
 itself becomes part of the canal. The company has also constructed and is operating 60 
 miles of telegraph line between San Juan del Norte and Castillo, where our line con- 
 nects with that of the Nicaraguan Government; the latter connects with the Ocean 
 Cables, permitting immediate communication of the New York office with any part of the 
 work. 
 
 After inspecting the work at del Norte and on the railroad, the party r-ade a march 
 through the wilderness near the line of the canal to Ochoa. This was a work of great 
 difficulty, because the entire distance was through an almost impenetrable tropical forest. 
 The only paths through this forest were those made by the engineers and surveyors. The 
 distance was some 35 or 40 miles, which the party succeeded in covering in three days, 
 thus examining the actual line of the proposed canal, enabling all the engineers to judge 
 of the character of the work that had been done and the kind of material — rock and earth 
 that had to be moved. They were entirely satisfied with the examination. 
 
8o THE NICARAGUA CANAL. 
 
 At Ochoa the party took a steamer on the San Juan and went up the river to Lake 
 Nicaragua. There they were transferred to the steamer which is employed on the lake for 
 carrying freight. Before making an investigation of the western end of the canal — ^that 
 part between Lake Nicaragua and the Pacific Ocean — the party went up the lake, a distance 
 of something over 100 mUes, to Granada, one of the principal cities of Nicaragua, and from 
 Granada to Managua, the capital of the country, 30 odd miles, where several days w^ere 
 spent. We then took the steamer and went down the lake to Eivas, near which city the 
 canal leaves the lake for the Pacific Ocean. The distance from the lake to the Pacific on 
 this, the western side, is about 16 miles. The country there is generally cleared, settled 
 and cultivated. On this account the party were enabled to make the investigation of the 
 line on horseback. Three days were spent here in examining the line of the canal, from 
 which the forest has almost all been cleared. The point where the canal leaves the lake 
 for the Pacific is the terminus of the line which presents the fewest obstacles to the cutting 
 of the canal. The highest point on this line is only 43 feet above the water of the lake. 
 No difficulties of any kind present themselves on this side ; it is simply a matter of remov- 
 ing a certain amount of earth, and the three locks which are to be built will bring the 
 canal down to the level of the Pacific. 
 
 The entire party were greatly pleased with their trip across the country, and all the 
 engineers expressed themselves entirely satisfied as to the feasibility of the route and the 
 perfection of the plans of the company's engineers. In addition to the several surveys of 
 this route made by the United States Government since 1873, the present company has 
 spent nearly three years of time and employed a large number of engineers in the field, 
 and no work of any great magnitude has ever been so thoroughly surveyed and studied 
 in advance of its execution as this. 
 
 The party expressed great satisfaction at the quantity, character and stability of the 
 work that had been done at Greytown. In addition to what I have already ruentioned the 
 company has established machine shops and storehouses, built docks and wharves for 
 unloading vessels and constructed fifty buildings, including warehouses, offices for engin- 
 eers, quarters for the men, and railroad terminals, including locomotive houses and other 
 structures necessary to carry on the work of the railroad. 
 
 Personally, I was much pleased with the condition of affairs. Of course, I knew 
 before going that the work had been done, but after my examination upon the groiind I 
 found the results exceeded my own expectation. 
 
 In conclusion I must say that I am thoroughly satisfied of the entire feasibility of the 
 plan for building the canal, and I believe the cost will be less than our estimates. All the 
 work thus far, has been accomplished within the estimate of our engineers, and I have no 
 doubt of the ultimate success of the enterprise. 
 
 Another close observer whose opinions are deserving of confidence, and who was of the 
 party accompanying Mr. Miller in the inspection, is Mr. D. McN. Stauffer, the Editor in 
 Chief of The Engineering News of New York. Mr. Stauffer is also a Civil Engineer of 
 high reputation and large experience in the design and execution of extensive engineering 
 works in the United States. 
 
 An extract from one of Editor Stauffer's articles in his journal, published after his re- 
 turn to New York, is as follows : 
 
 ' 'At the time of our visit the main breakwater, commenced in December, 1889, extended 
 about 1,150 ft. from the point of beginning. At the risk of repeating what has already 
 been detailed in this journal in past issues, the work done can be described as follows : The 
 total width of the pier is 42 ft., and the greater part is constructed by driving 13 piles 
 across the width of the pier in bents 8 ft. apart. Each bent is capped by a 14 x 14 in. yel- 
 low pine timber secured to the piles by drift and screw bolts, and each bent is braced trans- 
 versely by six4x 10 in. diagonal timbers, spiked to opposite sides of the piles. Securely 
 bolted to these caps are eight 13 x 13 in. timbers running lengthwise with the pier. Along 
 the two sides of the pier a soUd wall is formed by driving piles between the bents and in- 
 
APPENDICES Si 
 
 «ide'the box thus formed brush mattrasses are sunk by loading them with rock. This fill- 
 ing is intended to extend above high- water mark, and, except at the extreme seaward end, 
 these mattrasses have already been filled solidly with sand, and tlie shore line on the wind- 
 ward side has been advanced in a long, flat curve 153 ft. since the date of beginning. A 
 railway on the pier carries an ingeniously contrived jet-pile driving machine, and extends 
 back, about one-quarter mile, to a wharf located in deep water on the lagoon. To pre- 
 vent cutting behind the breakwater a wing-wall about 700 ft. long of sheet piling has 
 been driven from the pier to the lagoon. As the sand is very hard, ordinary pile driving 
 was practically impossible and the jet-pile driver has been used with eminent success. 
 
 The timber used in the piles and timbers of the breakwater is North Carolina pine 
 ■creosoted. The first — and fortunately a small — lot of piles were treated to 14 lbs. of oil per 
 cu. ft. These piles have f aided badly, some of them being eaten half off by the teredo in their 
 one year of service. Since then all timbers used contain 16 lbs. of oil per cu. ft., and so far 
 there is no evidence of failure. 
 
 The immediate effect of the building of this pier, before any dredging was done, was 
 the natural cutting by the sea of a channel to the westward of the pier, about 600 ft. wide 
 and with 6 l-3it. of water at low tide." 
 
APPENDIX XF. 
 
 ANNUAL EEPOET OF CHIEF SUEGEON. 
 
 Hon. Warner Miller, President Nicaragua Canal Construction Co. 
 
 Dear Sik: — In submitting to you the first annual report of the medical department of 
 the above company, I wish to say that, for the sake' of future convenience, I have made 
 this report embrace the period from September 1st, 1889, to December 31st, 1890. 
 
 On the former date there were in the engineering force of the company about five 
 hundred officers and men located in various camps on the Deseado Eiver, Eastern Divide- 
 and San Francisco Eiver. On the beach at San Juan del Norte were located Camps No. 1, 
 Francis, La Fd and Headquarters. Toward the close of' the year 1890 the total number of 
 employes had been increased to nearly 3,000. 
 
 There was in the company's employ at this time Drs. Barnum, Birt, Salinas, Johnson 
 Kuehn and Stubbert, located as follows : Dr. Barnum at Camp Carazo ; Dr. Birt at Camp 
 Menocal ; Dr. SaUnas on leave ; Drs. Johnson and Kuehn at San Juan del Norte and visit- 
 ing the camps on the beach. 
 
 Dr. Stubbert arrived on August 29th, and attended to the erection of a hospital on the 
 beach near Headquarters. At this time a small buildiug of about thirty -five by twenty 
 feet was used as a temporary hospital. The services of Assistant Surgeons Johnson and 
 Kuehn were dispensed with early in September, and Assistant Surgeon Stubbert took 
 charge of all the work at Del Norte, including Headquarters, Camps No. 1, Francis and 
 La Fe, Temporary Hospital and the erection of Headquartera Hospital. 
 
 The condition of ailairs at this time, in so far as related' to the medical work, was 
 very unsatisfactory, the assistant surgeons in camp- being; poorly supplied with drugs, 
 and'those on the beach drawing their supplies from a local pharmacy owned by one of 
 the assistant surgeons. Eequisitions made on New York for a larger and more varied as- 
 sortment were promptly fiUed, and since there has been constantly on hand a sufficient, 
 supply. 
 
 Headquarters Hospital at first consisted of one building accommodating about thirty 
 patients, but, as its capacity was entirely inadequate, another building was erected for 
 laborers. In October the Chief Engineer arrived from New York, and immediately com- 
 menced the construction of a large building for laborers' wards. During the year out- 
 buildings have been erected to meet new demands or replace temporary shacks, and 
 now the Headquarters Hospital consists of a group of twelve buildings to be enumerated 
 later. 
 
 In the spring of 1890 Dr. Stubbert was promoted to Chief Surgeon, and Dr. Barmua 
 to House Surgeon in August, 1890. W. S. Fox was assigned as Druggist in March, 1890, 
 having served the company in that capacity without regular contract from September, 
 
 1889. Dr. Kuehn was again employed from November, 1889, to December, 1890. Drs. 
 Archer and Menocal entered the service of the company iniMay, 1890, Dr. De Soto in July^ 
 
 1890, and Dr. Bigelow in October, 1890. 
 
 STAFF. 
 
 The Medical Staff of the Company on December 31st, 1890, was as follows . 
 J. Edward Stubbert, M. D., Chief Surgeon. Walter M. Barnum, M. D., House Surgeon» 
 Oscar A. Menocal, M. D., Assistant. Henry De Soto, M. D., Assistant. 
 
 Blake Bigelow, M. D., Assistant, Sebastian. Salinas, M. D., Assistant. 
 
 "Walter S. Fox, Druggist. Louis H. Birt,,M. D., Assistant. 
 
APPENDICES. 83 
 
 The -work of the Medical Department ia thus divided: 
 
 Hospitals, Medical Stations, OutPatient Department, Sanitary Department and Drug- 
 gist's Department, 
 
 HOSPITALS. 
 
 There have been in operation during the past fifteen months one permanent and two 
 temporary hospitals. The first of the latter class was discontinued when the permanent 
 hospital was erected, the other is still in use. 
 
 Headquarters Hospital is situated on the beach, nearly a mile west of the harbor. It 
 •consists of twelve buildings. No. 1 is a two-story house, used as living quarters for the 
 House Surgeon, his assistants, and for the offices of the Surgeons. 
 
 No. 2. A large two-story building surrounded on both floors with broad verandas. 
 In this building are the Hospital Pharmacy, Examining Room, Operating Room and eight 
 awards for tlie use of invalid officers. 
 
 No. 3. A two-story buUding, containing baths and closets for the use of patients, 
 ^vater being supplied from a large tank of rainwater. 
 
 No. 4. A two-story building, the lower part being occupied as a druggist's store-room, 
 •while the second story is used for a linen room and sleeping quarters for the steward and 
 some attendants. 
 
 No. 5. The mess-room. 
 
 No. 6. A large two-story building with verandas on both stories ; it is used a i the 
 laborers' division, containing four large wards, baths, closets and a linen room. 
 
 No. 7. A one-story building, used as a kitchen, and containing also the steward's 
 ■store-room and pantry. 
 
 Nos. 8 to 12 inclusive. One story buildings used as stable, dead-house, laundry, dry- 
 ing house and barracks. 
 
 Owing to the mild climate, the use of overhanging verandas, and unglazed windows 
 ■on all but the sea-sides cf the buildings, it is here possible to provide much more perfect 
 ventilation than can be obtained in northern climes, and therefore its capacity, referred to 
 the number of cubic feet, is greater than would bo supposed. The wards are furnished in 
 a similar manner to those of well-regulated hospitals in New York. A corps of nurses, 
 ■under a competent head nurse, attend the patients day and night. A well-conducted stew- 
 ard's department is under the care of an experienced man. The staff of the hospital con- 
 sists of a House Surgeon and two assistants. 
 
 MEDICAL STATIONS. 
 
 Seven miles and a-half out on the railroad line, and nine miles from Headquarters, is 
 located a temporary hospital. 
 
 Stations have been estabUshed at points remote from the hospitals. They are generally 
 located so as to be within easy communication of a number of camps, and as the latter are 
 generally situated along a river course, this is comparatively easy. 
 
 There have been at different times during the period covered by this report, four of 
 these stations, at each one an Assistant Surgeon, whose duty it was to visit at least twice 
 •each week every camp in the residency of his station and oftener if called upon in cases 
 of emergency 
 
 On the Pacific Division, as the work lias been recently inaugurated, one station has 
 been sufficient. Dr. Barrios, a native physician, located at Rivas, was employed to render 
 «uch services as were required. Supplies of drugs, surgical dressings, etc. , are sent from 
 (Headquarters Hospital as needed. 
 
84 THE NICARAGUA CANAL. 
 
 OUT patients' department. 
 
 This branch of the work, while not apparently of much importance, is very useful irf 
 preventing the development of diseases among the employes, and to its careful operation' 
 is due most of the good results that have been obtained in preventing sicjkitess and a high, 
 death rate. 
 
 At Headquarters Hospital, Temporary Hospital No. 1, and R. R. Camp No. 1, there- 
 have been out-patients' stations. This work has been carried on at the first-named place 
 every day during the time covered by this report; at the second, daily during the 
 time of its operation, and at the last, daUy from the last week of May, 1890. The object of 
 this branch of the work is to bring under observation of a medical man all employes who, 
 while not sick enough to enter a hospital, are what they uniquely call "half sick." By this- 
 means very often the development of serious, if not fatal disease, lias been prevented with 
 the least possible loss to the company of hours of labor : and again, men who were really 
 needing hospital care, and yet through ambition, prejudice or ignorance of the gravity of 
 their condition were opposed to entering the hospital, have been cornpelled to yield to the- 
 judgment of the doctor, being thus saved from lingering iUness, if not death. 
 
 sanitary work. 
 
 Every possible precaution against the development of disease among the company's^ 
 employes has been observed by watching for and removing all local causes and prohibiting 
 the entrance into our camps from outside sources the germs of contagious or epidemic- 
 diseases. 
 
 With this object in view every surgeon is invested with the power of a sanitary inspec- 
 tor in his residency, and has orders to report to the Chief Surgeon anything in the loca- 
 tion or building of a new camp that may be in his judgment likely to cause sickness among- 
 the employes located there. After a camp is built and occupied, he sees that hygienic- 
 rules are observed in its management, and is required to report to the Chief Surgeon every 
 ten days upon the sanitary condition of all camps in the residency. 
 
 quarantine work. 
 
 Situated as we are, on a coast at various points of which yellow fever is reported to be- 
 developed or existent every summer, and thus being exposed to this highly dangerous- 
 disease by steamers and numerous small schooners haUing from ports on this coast as well 
 as the West Indies, it is obviously of paramount importance that this company should 
 control absolutely the entrance of vessels to this port during the quarantine season. Recog- 
 nizing the importance of this step, the Governor of the City of America was called upon to 
 make such arrangements as seemed best and were possible for protecting our camps from- 
 outside sources of disease. 
 
 Owing to the fact that San. Juan del Norte is the port of entry for ships consigned to- 
 the company, although aU of our interests are located in the City of America, I was- 
 requested to meet the Port Surgeon and together with him draft such quarantine regula- 
 tions as we deemed the circumstances required. This we did, and they were approved by 
 the Governors of Del Norte and America. A Harbor Pohoe Force was established whose- 
 duty it is to watch for aU small trading schooners and stop them at the bar until they are- 
 examined and passed by a doctor. 
 
 Upon the recommendation of the Governor of America the government of the republic 
 invested me -with the title and office of Port Surgeon -with the powers of Port Captain, thus- 
 placing the government poUce of America under my orders in quarantine and sanitary 
 matters. An edict was published by the government to the effect that, between certain 
 hours of the day I should have the right to enter any house in America for the purpose of 
 sanitary inspection, and that all failures to carry out sanitary orders within a specified 
 time would compel the government to do so at the owner's expense. Accordingly Quaran- 
 tine rules were in active operation from the latter part of May, 1890, until early in October, 
 1890, i. e., until the United States authorities at New Orleans raised the quarantine against 
 this coast. 
 
APPENDICES. 
 
 DRtraaisT s work. 
 
 85 
 
 At Headquarters Hospital is located the Druggist's Stores where all supplies from New 
 fork are received and kept, and whence aU supplies for hospitals, medical stations or camps 
 axe distributed. At Headquarters Hospital is also a well fitted and stocked Pharmacv and 
 ■at Temporary Hospital No. 1 there is a smaller one In each Medical Station is always 
 iept on hand a good assortment of drugs and surgical dressings, while for every subordi- 
 -Date camp a small emergency case is provided. 
 
 The Druggist has general supervision of both hospital pharmacies and the medical 
 .supplies in stations and camps. He receives and fills all requisitions after they have been 
 approved by the Chief Surgeon. The dispensing of drugs in stations and camps is done 
 by the Assistant Surgeon of the Residency. The Druggist keeps an account with each 
 pharmacy and camp, so that at all times it is easy to ascertain the indebtedness and re- 
 sponsibility of any one of them. 
 
 AMBULANCE SERVICE. 
 
 At Headquarters Hospital there has been in operation since October, 1889, a very eflSc- 
 ient ambulance service. Most of the time it has been possible to operate the Ambulance 
 anywhere on the beach between the Hospital and Greytown, but since excavation of the 
 canal has begun. La Fe and Headquarters are the only two points that can be reached. At 
 the former, connections by boat are made with all points. Since the beginning of Novem- 
 'ber, 1889, the Ambulance trips have averaged a little more than two per day. 
 
 FIRE DRILL. 
 
 At Headquarters Hospital a Fire Drill has been instituted during the past six months, 
 .nine stations having been established and every man detailed to one of these as on ship- 
 aboard. Each station has buckets which are kept constantly filled with water.' In addition 
 to the water buckets are Babcock Extinguishers, ladders and axes. A system of signals 
 for alarm, etc., have been posted at each station. The men are drilled at least once a week 
 .and have become very efficient. The time consumed between sounding the first alarm and 
 having the stations reported as fuUy manned, varies from one minute and a quarter to two 
 .minutes. By actual and repeated experiments it has been found that within five minutes 
 ■of the first alarm there can be emptied upon any point in the hospital enclosure thirty buckets 
 •of water, after which the buckets can be refilled rapidly. 
 
 STATISTICS, 
 
 "We now come to the number of patients treated, classification of diseases, mortality, 
 •etc. The time covered by the statistical portion of this report will be from November 1st, 
 1889, to December 31st, 1890, as owing to the fact that until October 16th there was no 
 recognized head to the department, no previous records are in existence. During these 
 ^fourteen months there have been admitted into Headquarters Hospital 1669 patients, of 
 which 1347 were Medical and 333 Surgical. Of the whole number there have been dis- 
 ■charged cured or improved 1646. The total number of deaths has been 23 or 1 38-100 per 
 ■cent, of those admitted. These deaths can be subdivided as follows : 
 
 Those due to accidents •''.or 1-3 of 1 per cent. 
 
 Those due to chronic diseases contracted before entering 
 
 the company's employ 6, or 1-3 of 1 per cent. 
 
 Those due to diseases contracted while in the employ, 
 
 i.e. CLIMATIC DISEASES 13, or 7-10 of 1 per csnt 
 
 Tim fact I wish to .emphasize, viz: That mii of -overlWO patients, only 12 have died 
 from diseases that ma)/ be termed climatic 
 
86 THE NICARAGUA CANAL. 
 
 It has been generally supposed that this country teems with fatal maladies, and thaif 
 the employes are exposed to severe and dangerous types of fever. After a professional 
 experience of ten years, most of which time has been spent in the tropics, and being 
 famihar with nearly every climate of the globe, I can state that Nicaragua is exceptionally 
 exempt from any fatal endemic disease. 
 
 To show how varied in character are the diseases met with and how closely they 
 resemble in class those of a temperate rather than of a tropical, clime,, 1 will enumerate 
 some of the most prevalent in this hospital. 
 
 Remittant Fever 203 . Intermittent Fever 433 ?fernicious Fever 6 
 
 Bronchitis 65 Cholerine 19 Pneumonia 17 
 
 Indolent Ulcers 38 Phthisis Pulmonalis 3 Dysentery 47 
 
 The disease which is most liable to prove fatal is Dysentery, but this characteristic off 
 that grave disorder is the same in all oUmates. Most of the diseases met with have been, 
 mild in type, this being especially true of Bronchitis and Pneumonia, the latter frequently 
 having its crisis on the sixth day. The cases of fever, when of the remittent or intermittent 
 types, are very amenable to treatment and not of long duration ; the former- generally dis- 
 appearing in about four and a half instead of twelve to fourteen days, its usual duration 
 in the States. 
 
 No epidemic disease has visited the country since the conrpany has been at work andi 
 the occasional rumors one hears of such visitations in the- past, upon investigation liack 
 sufficient evidence to give them credence . Two illustrations will suffice.. During the sum- 
 mer of 1889 a great panic was caused by reported cases of Yellow Fever in Del Norte. 
 The sequel proved them to be nothing more than a few isolated cases of a Pernicious. 
 Malarial Fever, in vsfliich Jaundice was a prominent symptom. In tha summer- of 1890 a 
 number of cases of Chagres Fever and Adynamic types of Malarial Fever were brought tO' 
 this port from Colon on towing steamers in service of the company ; some of these were- 
 reported by the populace as cases of Yellow Fever. Every one of these admitted tO' our 
 hospital recovered, while of those admitted to the Colon hospital a. number died. Thus, it 
 is seen that not only are we not specially subject to fatal diseases but when aggravated 
 cases of endemic disorders are brought here from other localities,, the tendency is towards 
 recovery. 
 
 CLIMATE.. 
 
 The climate of Nicaragua is, as has been asserted, and we thiH& proven by the record 
 of this department, a salubrious one. Far removed from the severity of northern winters, 
 even while geographically in the tropics, we enjoy an equable teperature throughout the 
 whole year. The North East Trade wind tempers the atmosphere, and has a, marked in- 
 fluence. The tempei-ature had an extreme range of 18. 5 degrees, from a minimum of 11 
 degrees to 89.5 degrees, or a mean of 77.35 degrees. The dredges have been at. work in, the 
 harbor and in the opening of the canal line for some months, without, causing, an increase 
 in the percentage of illness. 
 
 IMMUNITY FROM SICKNESS OF OFFICERS. 
 
 Our experience in this respect has been eminently satisfactory. Two- officers only have 
 died ; one a case of suicide, and the other killed by a falling derrick. The fact that not a 
 single case of fatal illness has occurred amonr; our officers, most of whom are brought 
 here from colder cUmates and exposed constantly to the elements, working in swamps and 
 dense forests, speaks for itself 
 
 EXAMINING LABORERS SEEKING TO ENTER THE COMPANY'S SER-VICE. 
 
 It is easier to prevent the entrance of diseases among our employe* than to eradicate 
 it when present ; therefore no laborer is employed until he haftpassed a satisfactority physi- 
 
APBENDICESi, 8^ 
 
 cai examination. I have soggeBteJ the advisabffity of locating a member of the medical 
 staff at Kingston, Jamaica, for the purpose of examining all men shipped thence by th» 
 coinpany's agent. 
 
 Pending the execution of this recommendation, the agent in Jamaica was directed to 
 have the men examinedi by local ph/y8ieia,n8> These exanaiinations. -were unsatisfactory, 
 either through ignorance or dishonesty, there being imposed upon the company numerous 
 boys, chronic invalids and syphilitic men. Therefore I believe that, as the force is aug- 
 mented, by far the most satisfactory and economical method will be to station one of our 
 medical staflf at Kingston, ship all laborers from that poiiit,, and have tliem examined at 
 the time of embarking. 
 
 EXPENSES OF THE DEPARTMENT. 
 
 Attached to this report will be found an accurate account, in soles, of the running 
 expenses during the year 1890. Sheet A shows the total expenses of the department as a 
 whole during the year. Sheet B gives total cost of Headquarters Hospital. 
 
 Respectfully submitted, 
 
 J. EDWARD STUBBERT, M. D., 
 
 Chief Surgeon, N. C. C. Co. 
 Headquarters 
 Nicaragua Camal Construction Co., 
 
 San Juan del Norte, Nicaragua, 
 Feb'y 17th, 1891. 
 
 SHEET A. 
 
 TOTAL COST OF MEDICAL. DEEAETMENT FOB THE YEAR ENDTNQ DECEMBER 31, 1890. 
 
 Total interest on Headquarters Hospital Buildings for the year ending Decem- 
 ber 31st, 1891 3,507 75 
 
 Total interest on equipments for the year ending December 31st, 1890 1,649 11 
 
 Total cost of subsistence for the year ending December 31st, 1890 17,170 53 
 
 Total interest on surgical instruments for the year ending December 31st, 1890. 144 61 
 
 Total salaries of officers andi employes for the year ending December 31st, 1890.. 19,703 30 
 
 Total cost of drugs used diiring the year ending December aist, 1890 6,165 40 
 
 Total $47,340 69 
 
 SHEET B. 
 
 COST OF HEADQUARTERS HOSPITAL FOB THE YEAR ENDING DECEMBER 31, 1890. 
 
 Total interest on Headquarters Hospital Buildings for the year endmg Decem- 
 ber 31st, 1890 1 fi?q 1 1 
 
 Total interest on outfit for the year ending, December 31st, 1890 1 7 i ^ J» 
 
 Total cost of subsistence for the year ending December 31st, 1890 17, 170 53 
 
 Salaries and wages of officers and employes for the year ending Decem- 
 
 ber 31st, 1890 •••■ 14,050 80 
 
 Total cost of drugs used in Headquarters Hospital during the year endmg 
 
 December Slst, 1890 ■_____ 
 
 Total 139,603 92 
 
 Total number of days for one man in Headquarters Hospital during the year ^^ ^^^ 
 
 ending December 31st, 1890 ' ^^ 
 
 Ctost of one patient per day •■• •••• *^" 
 
S8 THE NICARAGUA CANAL. 
 
 METEOROLOGICAL REPORT FOR THE YEAR ENDING DECEMBER 31st, 1890. 
 
 Headquarters Hospital, 
 
 February 14th, 1891. 
 
 Month. 
 
 Total. 
 
 Daily 
 Average. 
 
 Maximum 
 Temperature. 
 
 Minimum 
 Temperature. 
 
 Average 
 Temperature. 
 
 January 
 
 February 
 
 March 
 
 April 
 
 May 
 
 Inches. 
 26.80 
 
 6.36 
 
 5.93 
 18.11 
 
 4.93 
 46.84 
 52.55 
 35.72 
 
 8.14 
 24.36 
 25.55 
 41.65 
 
 Inches. 
 .86 
 .237 
 .191 
 .60 
 .164 
 
 1.55 
 
 1.69 
 
 1.15 
 .37 
 .78 
 .85 
 
 1.34 
 
 81 
 
 80 
 
 81 
 
 78 
 
 80 
 
 84 
 
 81 
 
 81 1-3 
 
 89.5 
 
 80.5 
 
 83 
 
 81 
 
 70 
 
 73 
 73 
 73 
 73 
 74 
 75 
 75 
 75 
 74 
 71 
 73 
 
 75 
 76 
 77 
 75 
 76 
 
 June 
 
 79 
 
 July 
 
 78 
 
 August 
 
 September 
 
 October 
 
 November. . . . 
 December . . . 
 
 78 
 83 
 77 
 
 76.5 . 
 76.5 
 
 1st — Average monthly rainfall for the year 34.75 inches 
 
 3nd — Average daily rainfall for the year 819 inches. 
 
 3d— Total rainfall for the year 296.94 inches. 
 
 METEOROLOGICAL REPORT. 
 
 For Part of Year Beginning January 1st, 1891, prom Records op the Headquarters HospitaIj, 
 
 America, Nicaragua. 
 
 Mean temperature 
 Monthly average rainfall 
 Daily average rainfall 
 
 Compiled from the original record. 
 
 Month. 
 
 Total Rain- 
 fall, Inches. 
 
 Daily Aver- 
 age, Inches. 
 
 Maximum 
 Temperature 
 
 Minimum 
 Temperature 
 
 Daily 
 
 Average. 
 
 January 
 
 14.16 
 19.49 
 23.57 
 26.95 
 13.78 
 10.40 
 1.95 
 3.57 
 20.30 
 20.20 
 
 .474 
 
 .62 
 
 .76 
 
 .87 
 
 .444 
 
 .347 
 
 ,06 
 
 .09 
 
 .655 
 
 .65 
 
 86° 
 
 83 
 
 86.05 
 
 85.5 
 
 86 
 
 81.67 
 
 81.33 
 
 80 
 
 81 
 
 95 
 
 ,740 . 
 
 75 
 
 74 
 
 74 
 
 73 
 
 77 
 
 74 
 
 72.67 
 
 67 
 
 73 
 
 80«! 
 
 February 
 
 March 
 
 79 
 80.02 
 
 
 79.7 
 
 May 
 
 79.5 
 
 
 79.67 
 
 July 
 
 77.11 
 
 August 
 
 September 
 
 October ......... 
 
 76 
 
 74 
 77.5 
 
 
 
 78.25 degrees. 
 15.34 inches. 
 504 " 
 
/ X 
 
 '— ^TJ 
 
 
 ' 4 
 
 
 
 
 * >