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excited adverse criticism. The papers which had not been subsidized became savage in their attacks upon the enterprise, and a general lack of confidence was exhibited. The additional funds that were urgently needed could not be secured from the public and De Lesseps sought the aid of the Government, which had been extended to him in his Suez Canal undertaking.

In May, 1885, the Panama Canal Company petitioned the French Government to be allowed to raise $125,000,000 on lottery bonds. The petition was not presented to the Chamber of Deputies until a year later. The grant was recommended, but before complying, the Government sent a responsible engineer to the Isthmus, with instructions to make an impartial investigation of conditions. This commissioner reported that, even though the desired Government aid should be given to the Company, it would be practically impossible to complete the work unless the plan should be changed to that of a lock canal. The conclusion was prompted by the consideration that the enterprise was a purely commercial one and would be an utter failure unless the Canal could be completed at a cost that would allow of some return on the money invested.

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De Lesseps would not hear of the proposed change and withdrew the Company's petition. He decided to make another attempt to restore public confidence. He gathered a large party of men influential in commercial and financial circles and with them made a visit to the scene of operations. Few of these persons had any technical knowledge, but most of them proved susceptible to the persuasive ability of the promoter. On their return, the enterprise received the endorsements of a number of chambers of commerce and other prominent institutions. This move was so far successful that the stockholders authorized the issue of additional bonds which were subscribed for, and saved the situation for the time being. But the state of affairs continued to grow worse and by the middle of 1887 De Lesseps was glad to abandon his attitude as to the form of the Canal and consent to anything that held out a hope of a continuance of the work.

A plan for a lock canal was hurriedly made and approved by the directors. The line was to conform to that of the original plan. The summit level was to be 49 meters in elevation. The depth was considerably reduced, and the estimate of cost was placed at figures altogether too low.

The application to the Government was renewed and the Company received permission to issue lottery bonds to the amount of $160,000,000. These were to draw four per cent interest and to share in semi-annual drawings.

Ordinarily such a proposition would have been attractive to the French people, but the credit of the Company had fallen so low that only one-tenth of the offering was taken up. A second attempt to float the bonds with additional inducements to subscribers proved futile.

The Company had at that time outstanding obligations aggregating the enormous sum of $350,000,000. Its annual interest charge was in excess of $16,000,000 and it had not sufficient cash on hand to cover one month's current expenses. It was hopelessly involved, and every effort to raise funds met with failure. On the fourth day of February, 1889, a receiver was appointed to handle the affairs of La Universelle Compagnie du Canal Interoceanique de Panama, to give it its official title. The receiver's statement of the receipts and expenditures of the Company from the date of its organization follows, the sums being approximately reduced from francs to dollars.

RECEIPTS Proceeds from the Capital Stock, various loans and bond issues

$254,338,527 Other receipts from sundry sources

7,933,318 Expenses incurred but not paid

3,668,770 Total amount collected and due by the Company

$265,940,615 EXPENDITURES

(Outlay on the Isthmus) Salaries and expenses of management

$16,540,883 Rents and maintenance of leased property

3,301,070 Purchase of articles and material for consumption 5,847,920 Purchase and transportation of machinery, etc. 23,874,946 Surveys and preparatory work

270,940 Central workshops and management

5,989,577 Various constructions, buildings, and general installation.

9,407,705 Work of excavation and works of construction

89,434,225 Purchase of lands

950,655 Sanitary and religious service

1,836,786 Total expenditures on the Isthmus

$157,224,689 (Outlay at Paris) Paid for the Concession

$2,000,000 Paid to the Colombian Government

150,000 Various expenses incurred before organization 4,612,244 Paid to American Financial Group

2,400,000 Interest on various obligations

43,124,272 Amortization transactions

4,505,617 Expenses of floating bonds, loans, etc., commission, advertising, printing, etc. :

16,616,841 Paid to agents of the Colombian Government

42,760 Boards of management and direction

1,242,458 Salaries of employees

1,023,444 Home Office and furniture

417,479 Compensation to contractors on cancellation of contract

240,000 Total expenditures at Paris

$76,375,115

It is not necessary to dwell upon the judicial proceedings that gave the final tragic touch to this dismal failure. Convictions of a criminal nature were secured against the De Lesseps, father and son, but the sentences against them were not enforced. Many other prominent persons, including a number of Senators, Deputies and Government officials, were found guilty of corruption.

Despite the gross mismanagement that characterized the French undertaking, they did a large amount of work. Much of this has been turned to account by our engineers and has greatly lessened our task. In the matter of surveys they were especially thorough during the later years of their operation. The plan which we are following is based on their investigations and the data received from them. Furthermore, the study of their mistakes saved us from falling into similar errors. Their experiments in machinery and methods were also useful to our engineers and a large quantity of their material and many of their buildings have been used by us. In short, the effort of the French to construct a canal paved the way for us and facilitated our task.

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