REPORT OF BOARD OF CONSULTING ENGINEERS, PANAMA CANAL.


The contract or concession was subsequently transferred to the Compagnie Universelle du Canal Interoceanique du Panama, chartered under the laws of France, and Ferdinand de Lesseps became its leading spirit. The condition imposed in the concession, that an amicable arrangement should be made with the Panama Railroad Company, was met by the purchase of a controlling amount of the stock of the railroad company. The work of constructing the canal was then taken up and a vast amount of money expended, but in December, 1888, the effort was given up. In February, 1889, a liquidator or receiver was appointed and authority given to transfer the assets of the company to any new company. These delays made extensions of time necessary, which were successively granted in 1890, 1893, and finally in 1900; under the last extension the time for completing the canal was fixed at October 31, 1910.
 In October, 1894, a new company, under the name of the New Panama Canal Company, was organized under the laws of France, in which the receiver of the old company was a party. Under this organization work was resumed on the canal on a moderate scale, consisting mainly of the care of the plant and other property accumulated by the old company and the prosecution of excavation at the Culebra cut. The latter was chiefly important as giving valuable information respecting the character of the materials in the cut and the cost of removing them. Other investigations bearing upon all questions affecting the construction of the canal were taken up and pursued with great thoroughness.
 In 1899 steps were taken by the United States looking toward the acquirement of the right to build a canal across the Isthmus of Panama. A commission was appointed to consider the whole question of Isthmian transit, including the cost of purchasing all the rights, privileges, and franchises held and owned by corporations, associations, and individuals in the different canal routes. The commission reported January 18, 1902, in favor of the Panama route.
 The data which form the basis of the foregoing are found in the report of the Isthmian Canal Commission of 1899-1901.
 The act of Congress approved June 28, 1902, authorized the President to acquire, at a cost not exceeding $40,000,000, the rights, franchises, and property of every kind belonging to the New Panama Canal Company, including its shares of the Panama Railroad Company, provided a satisfactory title could be obtained. The President was also authorized to acquire from the Republic of Colombia, upon such terms as he might deem reasonable, perpetual control of a strip of land not less than 6 miles in width across the Isthmus of Panama, and to construct and perpetually maintain, operate, and perfect a canal from the Caribbean Sea to the Pacific Ocean, which control should include the right to perpetually maintain and operate the Panama Railroad, provided the United States should acquire a controlling interest therein.
 The act also directed the President to cause to be constructed a ship canal from the Caribbean Sea to the Pacific Ocean "of sufficient capacity and depth as shall afford convenient passage for vessels of the largest tonnage and greatest draft now in use, and such as may be reasonably anticipated with all necessary locks and other appliances, as well as safe and commodious harbors at the termini, and suitable provisions for defense.
 The sum of $10,000,000 was appropriated, and the President directed to cause contracts to be entered into for the construction of the canal, its harbors and defenses, limiting the expenditure to the additional sum of $135,000,000, to be met by future appropriations, and the Secretary of the Treasury was authorized to borrow a sum not exceeding $130,000,000 on bonds bearing interest at the rate of 2 per cent per annum. The act finally created the Isthmian Canal Commission, to be composed of seven members. Owing to various delays the Commission was not appointed until 1904. In the meantime a treaty had been negotiated by Mr. Hay, Secretary of State, and Mr. Herran, representing the Government of Colombia, to empower the United States to construct the canal. This treaty was ratified by the United States, but rejected August 12, 1903, by the Colombian Congress. Discontent in the Department of Panama over the rejection of the treaty ripened into revolt on the 3d of November, and independence was declared. A government was organized immediately and recognized by the United States. The Republic of Panama designated Mr. Philippe Bunau-Varilla as its envoy extraordinary and minister plenipotentiary to the United States, and a treaty, known as the Hay465A-06-37


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