The Canton Company began a contest with a more vigorous race, in China, using like methods, but not with like results, although to-day Hong-Kong stands in front of the Capsing-Moon Pass, a stern menace to the commerce of great provinces, of which Canton is the emporium, and to which at least 100,000,000 inhabitants directly contribute.

France, emulative of England, has seized upon territories and commanding positions for her commercial aggrandizement. The subjugation of the Anamite provinces in 1859, as a sequence to mercantile occupation, and the subsequent creation of a protectorate over the remaining remnant of the ancient kingdom of Camboja, her appropriation of New Caledonia, and more recently of islands in the South Pacific, her invasion of Mexico during our civil war, are instances illustrating that national ambition which is independent of form of government, and evidence of that desire for possession and dominion in the world common to all vigorous and enterprising peoples.

The history of the events which led to the Clayton-Bulwer treaty affecting, as it does, our more immediate interests, is big with lessons applicable to the present occasion. A few subjects of Great Britain entered the woods of Central America to cut logwood and mahogany. From this small beginning in a little while grew the colony known as the Belize, in full British possession. Obscure traders engaged in a traffic with a few miserable Mosquito Indians, whence sprung the wretched farce of a British protectorate over the Mosquito Kingdom, whose territory was declared to embrace the mouth of the outlet of Lake Nicaragua and the port of San Juan del Norte, which, to that time, the world had accepted as a port of Nicaragua. An active and aggressive action in that section was inspired by our growing possessions on the Pacific, and the desire to control what was then regarded as the great future water highway of the commere of that ocean. The importance of the route to the United States was looked upon as inestimable, and our government sought to remove the dangerous pretensions of Great Britain. The Clayton-Bulwer treaty is evidence that we waived many of our national rights to attain that end, and with results sure to follow from a policy wanting in vigor, firmness, and independence. To this day the Belize-better known as British Honduras-remains a colony as before, and the Mosquito Kingdom is by no means a relinquished idea in British governmental circles. There are now pending disputes, in which the Emperor of Austria is acting as arbitrator, involving questions that have arisen between Nicaragua and the English Government touching treaty stipulations. between the two powers in regard to the Mosquito Indians, and embracing the sovereign rights of Nicaragua in the Mosquito territory. It will suffice to cite the fact that one of the points of issue is England's assertion of the right of the Indians to open a port of entry and levy port-charges for their own account. Nicaragua claims that such action would be a violation of her sovereign rights. The far-reaching results which have thus grown from small and apparently insignificant beginnings should awaken in us a jealous care for our interests and supremacy in this hemisphere, and teach us not to disregard the warnings that come to us in so many ways and forms in the world's history. A mere mercantile enterprise has been the beginning of subjugation too often to be regarded as the innocent business attempt we are told the Panama Company has in view.

Compared with the petty commercial associations that have led on to events of such grandeur in the history of mankind, that company is organized upon a basis immeasurably great, and its power from the outstart will be proportionately great.

It is said we are already a colossal power and need to fear nothing in the future. France, too, is a great power, a warlike power, and one of our rivals in the race for the commerce of the world and for influence upon its destiny. She is neither afraid to acquire nor to defend.

In contemplating the possible consequences of a successful progress of the company under French protection, I am carried back to the warning words of Urquhart, already quoted, which aptly and peculiarly apply to the question of which we now have to treat the conversion of some part of the isthmus to a strait. Before us are those beautiful and alluring tropical regions of Central and South America, rich in all but the population, enterprise, and energy necessary to develop the great resources nature offers there to man. The country is attractive in the suggestions of possibilities alike to the traveler, scientist, artist, agriculturist, and sensualist. The practical and ideal man there find equally the broadest field for expansion. The culture of cacoa, of coffee, of indigo, present opportunities for the realization of the garden of Eden. What more natural than that an active, ambitious, and greedy people, in constant view of so rich a prize, should desire to possess, or that the region north and south of the straits to be opened should "fix the attention, excite curiosity, awaken activity, suggest apprehensions, and finally prompt designs?"

Given a great corporation in the control of men of broken fortunes and imperial connections, imbued in considerable degree with taste for court intrigue, carrying on a great undertaking in a country inhabited by half-breeds, ignorant and impover ished, impressible to all forms of power, and few in number, led by a limited body of

men of purer extraction and greater advantages, there is presented the freest field for domination and absolute control, not only of commercial and business interests, but of political power and of social life as well. We need but regard the supremacy of the great railway corporations in our own populous, rich, civilized, and energetic communities to learn what degree of control might be exercised by similar corporations in any and all the little republics of that region. The toils of California in the relentless grasp of the Pacific Railway corporations have been aptly likened to the Laocoon group held in hopeless and helpless agony by the pitiless coils of the boa. If a great State, populated by an enterprising, intelligent, and industrious people, can be so subjected, what may we not anticipate as a result of the influence of the designing and skillful men engaged in the Panama enterprise? It was a dream of Louis Napoleon to free Latin America from Anglo-Saxon influence and power and to erect the Spanish states into a government under French auspices, which might counteract and be a barrier to the growing influence and rapid spreading of our race on this continent.

The project of a ship-canal in Nicaragua was one of the favorite modes by which he had hoped to attain results and begin the work of impressing French influences upon those states. In the pursuit of these ideas, he invaded Mexico during our civil war. He subsidized lines of steamers to reach various portions of Spanish America, and, in all practical ways, sought the advantage of his American policy. The foremost men in the Panama Canal project are in some form connected with, and are adherents of, the Bonaparte family. They are imbued with its political views and aspirations; and these views, as entertained in marked degree by Louis Napoleon, are hostile to the United States, and cherished in a spirit of determination to counteract and abridge the growth of our power and influence. It is hardly supposable that the Panama Company will not be conducted in this spirit, and, in connection with it, that other spirit of a more generous nature, coming of the competition natural between the citizens of nations for the advancement and advantage of national as well as personal interests.

I now reach the inquiry as to what are the interests of the United States in this new strait which may be especially affected. The first consideration is the importance of a ship-canal to us in war, as it would become a most effective channel for or against us, depending upon its being in the control of our people or in that of the enemy. It will be in fact a strait, a narrow passage of approach, which we must consider as an important factor in the system of defense of our Pacific coast. While it will be for us, as for all other of the great powers, the highway of a foreign trade with nations on the Pacific, it will be also our thoroughfare for a domestic commerce and exportation equal, if not superior, in amount to the traffic of all other nations passing the canal. Over this great trade and domestic interest, in which no other nation or people can or does have any direct part, a foreign company proposes to exercise jurisdiction, unrestrained by the state from which it obtains its grant, and by which it is made the judge in its own case.

This view of the subject makes it necessary to recall the arguments offered on the other side in pleading the sovereign rights of Colombia over her internal improvements, as in other respects, and urging that it ill becomes the United States to exert her overshadowing power in any degree to coerce this weak sister republic. Was there no obligation resting on Colombia when she gave this extraordinary Wyse concession? Was there no moral duty binding upon her to consult the United Statesan obligation of a character which nations are slow to disregard, and which usually is of more binding force over them in the pursuit of national interests than are treaty stipulations and declarations of intentions? Colombia exists in security because the United States wills that she shall. Remove from her the protection of the flag that floats over this Capitol, and how long would Colombia sustain herself in that inevitable struggle in which the law of existence, for nations as for individuals, is the survival of the fittest? By invoking and accepting the guarantee of security from the United States, Colombia bound herself by the strongest of moral obligations to regard, in all things dependent upon her action, the interests and rights of the protecting power. How did she fulfill this duty resting upon her in such weighty degree?

According to articles 14 and 17 of the contract, the Panama Company is to establish rates, make rules and regulations governing vessels in the canal, to fix the fines for their infringement, and detain the vessels if the fines are not paid. The company is the judge of damage done by any vessel, fixes the amount, and, if not paid, detains her; the vessel in either case to be prosecuted according to the laws. There is no reservation by the government of any authority to supervise any action of the company in these respects, nor are the rules, regulations, or fines to be submitted to it for approval or otherwise.

This reference "to the laws" in article 19 is so indefinite as to leave doubt as to what laws are referred to, or at least such would be the case had it not been announced by Mr. de Lesseps that French courts will have jurisdiction and French laws prevail.

Colombia, in thus investing a foreign company with independent powers of legisla.

tion, has abdicated her sovereign right and duty as to the government of the canal in favor of that company. She has violated the rights and interests of this country in authorizing a tariff of charges unreasonable in amount and arbitrary in method, and has, by adopting and authorizing a manner of measurement unheard of heretofore in the commercial world, granted a power in respect to canal tolls that may be made an oppressive and insupportable tax, not only upon our coastwise trade between the shores of the Atlantic and Pacific Oceans, but also upon the entire exportation of our Pacific possessions.

I hold in my hand one of the circulars of the French company, and find this statement: "The navigation dues cannot exceed 10 francs for each cubic meter (that would make 40 francs a ton, but Mr. de Lesseps has reduced the tariff to 15 francs per ton)." In addition, there are charges for tonnage, light, anchorage, &c. It is not necessary to enlarge on this aspect of the question further than to illustrate the importance of this matter of tolls by stating that the wheat crop of the Pacific coast for exportation the present year would be subject to a canal tax, according to the quotation I have given, in amount from $3,700,000 to $8,000,000, depending upon the rate at which the canal superintendent may elect to put the tonnage of shipping engaged in transporting the grain.

The paragraph relating to reduction of "special navigation dues" when the net earnings shall exceed 12 per cent. on the capital shares, is a device to place no limit whatever; for it does not affect the canal tolls at all, and any reduction whatever in the special dues complies with the provision. That I am right in this construction is shown in these two circulars of the Panama Company, in which it is calculated that the dividends the first year after the canal is completed will be 21 per cent., and that in 1895 the shareholders will divide 44 per cent., proving clearly that De Lesseps finds no limitation on tolls in the contract, whatever the earnings of the canal may be.

Thus, I consider that Colombia, in having disregarded the interests of the United States by granting powers and by relinquishing her sovereign rights over the management of the canal, has forfeited all claim to consideration on the part of this government, and has given just and real cause for a decided affirmative action by the United States.

Returning to the assertion of the sovereign rights of Colombia, as interpreted by the other side, we may properly ask if, under that view, the United States, notwithstanding its protecting power and treaty stipulations, could intervene to object to the transfer of Colombia bodily by herself to France as a colony? May we not anticipate, in all the relations to spring up with France under the stimulus of influence gained by this great corporation, that same disregard of the interests of this country shown in such marked degree by the terms of this canal grant?

In

There will not be then the little excuse I now find for her action in her disappointment at the results of United States canal surveys made in her territory. In the reports of those surveys will be found the probable explanation of the fate, in our Senate, of the canal treaties negotiated with Colombia, which treaties have been brought here as proofs of the exhaustive efforts of that government to interest the United States in her canal. While the negotiations were pending, surveys were being conducted by the United States with results unfavorable to the hopes of Colombia. 1872 a board of distinguished officers was convened in Washington to report which route was shown by surveys to be the most practicable. The board reported that it could not determine the question until a line of canal with locks should be located across at Panama. The survey was made, with the result of scarcity of water in the dry season, and a canal costing twice as much as one across Nicaragua. The board met again in 1876 and reported the route by the San Juan River and Lake Nicaragua as the most favorable one found. Colombia was doubtless granting a concession in more or less of a despairing spirit, and was willing to give any conditions, as the grant fully establishes.

Jefferson, in 1823, stated these as rules that should govern our people: "Our first and fundamental maxim should be, never to entangle ourselves in the broils of Europe; our second, never to suffer Europe to intermeddle with cis-Atlantic affairs." And Mr. Cass, in 1854, said, "Embody this principle of European non-intervention in American affairs in a solemn Congressional act, and I, for one, will adhere to and support it, come what may.'

And again, “I desire the exclusion of European power and influence from all portions of the western continent not actually held as colonies by some European government, and I believe true principles of public law applied to the position of American States fully justify this pretension."

Does not the divided condition of the Spanish American Republics, especially those of Central and South America, render them peculiarly susceptible to influencs which the two great statesmen I have just quoted so wisely deprecated? I have endeavored to show that the insidious intervention of private enterprise has often been the most powerful and effective means for the subjugation of and dominion over weak and divided states. Nowhere in history is there record of a corporation so gigantic as this one,

which, if successful in the construction of its canal at all, must expend at the least $500,000,000 in one form and another in its enterprise. It is thus a company organized on a fitting scale to control and master those little States which have each but a few hundred thousand inhabitants, while the company, besides the influence of a vast capital, is armed with power of an extraordinary character. In the exercise of these powers from the beginning of its enterprise, reasons of sufficiently substantial character will not be wanting to justify calling in the aid of the national arm of France. In the outstart of work the company will take possession of and transfer to French control the Panama Railway, which for thirty years has been an object of solicitude to the United States, whose ships of war have constantly been at hand on either side of the isthmus to guard and protect our citizens and our commerce availing of this route. Perhaps not a single year has passed during which our force had not to be called upon once or several times to protect the railway from and keep off from it contending parties in the frequent revolutionary movements of the Panama state people; and our citizens have been massacred in the stations. This duty will now devolve upon French ships of war, the property passing, as it will, to French ownership. It is certain that 12,000 or 15,000 men cannot be employed on the isthmus in a work of such duration and magnitude without giving rise to disorders and troubles which the local government, under the conditions surrounding it, cannot control or suppress. Conflicts will arise demanding the use of a protecting French force. The United States, in this way, have more than once had ample occasion to seize and appropriate the isthmus.

In any event, we will have reason to anticipate speedy troubles to arise from French intervention along the line of that railway.

I wish to state here that the conviction has grown upon me that this governmentin the interests of peace, of its commerce, and of the development and defense of the Pacific coast States and Territories-should build, own, and control the ship-canal across the American isthmus. It should at least take such an interest as to enable it to limit tolls, and to provide that in no event can the control of the canal pass from American hands by the sale of a majority of the shares to any European government or people.

Mr. RICE. Has the Colombian Government in its concessiou reserved to itself any right to regulate tariffs?

Mr. PHELPS. Not in the slightest degree. There is in the concession what would appear to be a regulation, but which in point of fact is not, because it refers not to tolls, but to special dues.

Mr. RICE. Then the result of it would be that this French corporation would have the right to fix and regulate tolls at its own will and pleasure.

Mr. PHELPS. Only limited by the measurement of the ship in cubic meters, the ship being considered as a square box, and each cubic meter being liable to a charge of 10 francs, which they say would be equivalent to 40 francs a ton carrying capacity.

Mr. HILL. If the profits would be as great as that, would it not pay to have two canals.

Mr. PHELPS. Unfortunately the basis of the calculation is all wrong. They say that the Panama Canal will cost 600,000,000 of francs, and upon that they propose to divide 44 per cent. But it will cost probably $600,000,000, so that the whole basis of calculation is false and fraudulent.

Mr. HILL. So that there is nothing in the percentage of private business that can be relied on?

Mr. PHELPS. Only to show that there is no limitation to the tolls in their concession, and no intention of anything of the kind further than the limitation that the rate shall not exceed ten francs per cubic meter.

Mr. HILL. In regard to the Nicaragua canal, do you mean that this government shall furnish the capital or guarantee bonds for its construction?

Mr. PHELPS. I think that the government should take such measures that it may at any time have control of the shares.

Mr. HILL. Do you think that the capital should be furnished by the government, or a controlling part of it, or that government bonds should be sold in order to get money to build the road?

Mr. PHELPS. No; I do not think that that is really a desirable way. I think it very desirable that the government should at once become a subscriber to the capital stock, at least to the extent of one-half, if there were no other way by which it could secure the capital shares from going out of the country.

Mr. RICE. Suppose that the government, in chartering the Nicaragua Company, should provide for the same control as it did in the case of the Pacific Railroads; would not that do?

Mr. PHELPS. I suppose that the only power which the government would have in that matter is that which it obtained under the treaty with Nicaragua.

Mr. HILL. We have had a good deal of trouble about the building of the Pacific Railroads-trouble with Jay Gould, the credit mobilier, and all that sort of thing. Suppose that the Government of the United States should go into this thing to the

extent of being one-half owner of the canal which is to be built and operated by a private corporation; would not the result be a clear swindle on the government just to the extent that the government went into it? Would not these men so manage to make their estimates, contracts, &c., as practically to throw the entire cost of it upon the government? Would there not be danger of that?

Mr. PHELPS. There would be such danger; but I would suppose that if the government went into it it should have equal control. Under the contract with Nicaragua the Nicaraguan Government is to appoint one of the directors. If the United States owned one-half of the stock, the United States Government would appoint five directors, so that between the United States and Nicaragua they would hare a majority ef the directors.

Adjourned till Thursday, 27th instant.

WASHINGTON, D. C., January 27, 1881.

Present, the chairman, and Messrs. Wilson, Bicknell, King, Herndon, Hill, Rice, and Morton.

ARGUMENT OF MR. THOMPSON CONCLUDED.

Mr. THOMPSON said: Mr. Chairman, and gentlemen of the committee: I have thus far, in all the remarks made by me, tried to confine myself to what I understood to be the legitimate inquiry within your legislative jurisdiction, which connects itself simply with the question of what is the duty of the government in reference to these different oceanic canal routes and transit routes. I carefully avoided any commitment of myself as to the relative merits of those propositions-a thing about which, if I were to undertake it, I should not be able to express a satisfactory, and perhaps not an intelligent, opinion. I simply assume that the commercial necessities of the world call for the construction of a canal across the isthmus, and that whensoever it can be constructed (without any encroachment upon or violation of the rights of the Government of the United States), we would be very much advantaged by the work.

I find, however, that one serious objection (perhaps the controlling one), in the minds of a number of gentlemen, is that the Panama Canal cannot be built, and that, therefore, it should be stopped. The statement of the proposition is a sufficient answer to it. If it cannot be built that is the end of it. Why stop it? If it should turn out to be true, after a thorough examination or on the examinations already had, that it can be built, the other question as to whether it shall be a sea-level canal or a canal with locks is of course an interesting question to the commercial world; but those are things which I do not propose to discuss. I want, however, before I go on to the main proposition (about which I shall have but little more to say), to correct an impression which I fear prevails in the minds of some in regard to the power of the Panama Canal Company over the tolls that it may levy. It is thought that article 14 of what I call the charter gives it that power. I will read that article:

"ART. 14. As a compensation to the grantees for the expenses of the building, preservation, and operation of the canal, which are for their account, they shall have the right during all the period of this privilege to charge and collect for passage over the canal, and the ports dependent upon it, dues for light-house, anchorage, transit, navigation, repairs, pilotage, towing, hauling, storage, and station, as per the tariffs they may establish, and which may be modified at any time."

That would seem to be a grant of absolute power ad libitum to charge whatsoever tolls the company might please, and if left at that point it would be objectionable, not only to us and to all the commercial world, but to Colombia herself, because she would have put it in the power of this transit company to impose upon her own citizens.

You will observe that in another clause of this charter it is provided that all the vessels of the world shall pass through this canal at the same tolls charged by the canal company to the citizens of Colombia; so that they all stand on an equality. But a subsequent clause in that part of the section limits the whole thing After going on to say that the company may establish whatsoever tolls it pleases, it provides that they shall be modified at any time under certain express conditions; and the third condition is that the principal dues to be collected shall not exceed 10 francs for each cubic meter. There is the limitation per maximum. The entire toll allowed to be charged on freight is only 10 francs per cubic meter. And what is that? We call ten francs in common parlance $2. It is, however, a fraction less than $2. What is a cubic meter? A cubic meter is somewhere between 30 and 35 feet. Now, when yon recollect the fact that a commercial ton is only 40 cubic feet (and that is the measurement the world over), you will find that the limitation of 10 francs to every