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THERE is no doubt that Ferdinand de Lesseps entered upon the canal enterprise in the full belief that it could be carried out and that it would be so profitable as to stand the weight of almost unlimited expenses. In order to create confidence in the project and secure the necessary subscriptions to stock, he found himself obliged to institute a plan of promotion that involved the support of powerful newspapers and financial houses. This cost enormous sums of money, and, at the outset, the company formed for the construction was hampered with a load of liabilities, which were recklessly increased as time went on. From the inception of the undertaking De Lesseps was associated with a number of speculators and schemers, who had nothing but their individual interests in view, and many of whom became wealthy at the expense of the deluded shareholders.

In the light of our present knowledge it is safe to say that disease alone would have rendered the accomplishment of the task by the French practically impossible, but the disastrous termination of their effort was due mainly to causes that might have been avoided and the responsibility for it must be laid at the door of the chief promoter. De Lesseps dominated all the affairs of the Panama Canal Company. He directed the promotion proceedings, authorized the lavish outlays, decided upon all plans and even took all the engineering features under his control. He did not hesitate to override the judgment of the business and technical directors, and to depart from their decisions whenever he saw fit. Without consulting them, he went so far, on more than one occasion, as to materially alter their estimates and statements before issuing them to the public. De Lesseps, it must be understood, was not an engineer by education, although he had picked up a considerable amount of technical knowledge in the course of his experience with the Corinth and Suez Canals, but his ability did not compare in any degree with that of men whose opinions he confidently set aside when they failed to coincide with his own. Nevertheless, he constituted himself the sole arbiter in all matters relating to the project and directed every step without counsel or control. It is only charitable to suppose that his great powers had begun to wane at this time, but if so, the decline was not accompanied by any diminishment in his self-confidence, for one of his first public utterances was that “ the Panama Canal will be more easily begun, finished and maintained than the Suez Canal." Nor was it long before he infected the common people with his optimistic belief. Showers of silver came to him from the little hoards of the French peasantry, and continued to flow long after the world at large had lost all faith in the enterprise.

At the first meeting of the shareholders they were informed that the following expenses had to be met by way of establishment:

For the Concession
Preliminary Expenses
Profit on Preliminary Expenses
American Financial Group




Of course no detailed explanation of these vaguely expressed items was attempted, nor could it have been made without an undesirable exposure of graft at the very outset. For instance, the payment to the “ American Financial Group

was no more nor less than a bonus to secure the co-operation of certain newspapers and financiers in the United States, and, as the event proved, a very unprofitable investment. However, the shareholders who attended this meeting were so deeply impressed with De Lesseps' recital of his great plans and the immense profits which would surely follow their execution, that a matter of eight or nine millions of dollars looked like a mere bagatelle to them. " Founders' profits

were provided for in the first appropriation of cash, and continued to be a drain upon the company as long as there was anything to be extracted from it. In addition to immediate cash payments a provision was made for the receipt by the founders of fifteen per cent of the net profits of the Company. These contingent profits were capitalized in order to enable the beneficiaries to realize immediately upon their prospects. Parts de fon

. dateur of 5,000 francs each were issued. The original number of these was 500, but later th were increased to 900. So effective had been the publicity campaign with which this ill


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