erally known as the "Salgar-Wyse Contract," under which Ferdinand de Lesseps organized his ill-fated

company.

The history of that company is still fresh in the public mind. In many respects it is probably without a parallel in the annals of bold and shameless rascality. When the company finally broke down and became bankrupt, in 1889, comparatively little work had been done, though fabulous sums of money had been spent. No one who had taken the trouble to familiarize himself with the origin and history of that company, or who was cognizant of its peculiar business methods, was surprised at the result. Indeed, no one competent to judge ever believed that the canal could be opened on the route indicated. Possibly some modified plan might be adopted by the French government, which seemed likely at one time to fall heir to the Company's concession and assets; but in that case, international complications would be almost certain to arise, which would seriously involve the United States government. For, no matter by whom opened, the canal would be merely an artificial strait communicating between two open seas, and its navigation would have to be regulated by the same rules of international law which govern the navigation of straits in general. The only exceptions that could be claimed for it would be such modifications as might become necessary for the protection of the individual rights of the shareholders.

Under the modern rules of international law, when the navigation of both seas is free, the navigation of the connecting channel is likewise free; and this is true, although the connecting channel be bounded on both sides by the territory of some sovereign state, and be so narrow as to be easily commanded by cannon-shot from both sides. In such cases, the territorial jurisdiction of

the sovereign is modified by the public right of passage from sea to sea; but, while this is true, the public right of passage is itself modified by the right of the sovereign through whose territory the channel passes. He may prescribe such rules and regulations as he may deem necessary to his own safety; and these, under certain contingencies, may amount to a positive prohibition. Thus, although open and free to all private merchant vessels of whatever nationality, the channel could be declared closed, as a matter of right, to all public armed vessels whenever this should become necessary to the safety of the state through whose territory it passes. And this would necessarily imply the right of the state to enter into alliances, offensive and defensive, for the enforcement of the closure against possible enemies; which, by the way, was precisely what Colombia did as early as 1846, by article 35 of the treaty of that date with the United States, and that treaty is still in force.

Another rule, applicable in such cases, is that the sovereign through whose territory the channel passes may exempt his own subjects from payment of tonnage or other duties, without thereby invalidating his right to unconditionally withhold such privileges from the subjects or citizens of other states. He may likewise exempt the subjects or citizens of his ally, and thus place them upon an equal footing with his own, without impairing his right to withhold such privileges from the subjects or citizens of all other nations. And this, again, is precisely what Colombia did by the treaty of 1846, wherein she guaranteed to the citizens of the United States "all the exemptions, privileges, and immunities," with respect to the isthmian transit, present and prospective, "enjoyed or to be enjoyed by Colombian citizens."

Nor is this all. In article 35 of that treaty, Colombia guarantees "to the Government of the United States the right of way or transit across the isthmus of Panama, upon any modes of communication" now in existence or that may hereafter be constructed, "free of all encumbrances or restrictions whatsoever." With respect

to the "Government" of the United States, therefore, the right of passage is absolute. Its war vessels may pass and repass without restrictions. While with respect to "citizens" of the United States, their right of passage is limited only by the conditions imposed upon Colombian citizens the consideration in both cases being "the efficient guarantee by the United States" of the neutrality of the transit, and of Colombia's sovereignty and dominion over the isthmus.

It soon became manifest, therefore, that, in case the canal should be completed, no matter by whom, this treaty of 1846, still of force, would stand in the way of French dominion on the isthmus. For it would have been the most natural thing in the world for the two signatory powers (Colombia and the United States) to declare the passage closed, as a matter of right," to the public armed vessels of all other nations; in which case, not even France could have justified a formal pro

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No two principles are more permanently incorporated into the public law of Europe than that which excludes all foreign armed vessels from straits passing through the territory of some sovereign state; and that which admits to the free navigation of such straits all private merchant vessels of whatever nationality. Thus, by the treaty of Adrianople, of 1829, Russia and her allies were admitted to the free navigation of the Black Sea, while the entry to the Straits of Constantinople and to the Dardanelles was prohibited to the war vessels of all other nations. And by the treaty of

London, in 1841, the entry of foreign armed vessels was prohibited, while those waters were declared open and free to merchant vessels of all nations. Later on, when by the treaty of Paris, of 1856, the Black Sea was declared neutral, the straits leading to it were declared closed "as a matter of right" to the war vessels of all nations except those of the allied powers. So also in 1871, when this treaty was modified by the London conference, the two principles - closure to war vessels and freedom to merchant vessels serted; and the declaration was further emphasized by the admitted right of the allies "to agree to the harmless use" of the straits by public armed vessels of the other powers.

were reas

In his clandestine efforts to induce the Colombian Congress to abolish or modify the 35th article of the treaty of 1846, M. de Lesseps once pointed out, through one of his secret agents, that, under the provisions of the Salgar-Wyse Contract, of 1878, a like closure of the Panama canal would be such a violation of the vested rights of the company as would compel the French government to interfere. He had strangely overlooked the fact that nowhere in that contract had Colombia assumed an obligation to permit the free passage of public armed vessels! All that Colombia had stipulated was that when such vessels were allowed to pass, the company had the right "to fix toll rates," etc., and it was competent to Colombia, acting in concert with her ally, to declare that "when." In other words, the special privilege of fixing tolls and establishing regulations as to public armed vessels in the canal, could have no existence until after the right of passage by those vessels had been specifically granted; and aside from this, even if Colombia had incautiously obligated herself, in advance, to allow such vessels to pass, the obligation

would have been a nullity by reason of the prior grant to the United States.

It was during the discussion of these questions, and while M. de Lesseps and his associates had salaried agents in the United States, that the suggestion somehow originated in Washington to the effect that "if the treaty of 1846 was to be construed as an alliance with a weak and impecunious South American state, the best thing to do would be to modify article 35, or else abolish it entirely." No one seemed to know just where or how this suggestion originated, but it was certainly favored by more than one influential newspaper in New York. It was argued very ingeniously, by one or two half-American journals, that we could not afford to disregard the traditions of the country by entering into entangling alliances" even for the purpose of controlling the isthmian transit; and Washington's Farewell Address was freely cited in support of this position.

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All this is now what newspaper men would call "ancient history." But it is not without interest as showing the real nature of the De Lesseps canal bubble. Those who were in a position to know had every reason to doubt his sincerity from the first; for any other conclusion would have been at the expense of his reputation as a man of affairs. True, he may have been over-persuaded by impecunious parties who had lost position and influence by the downfall of the Empire, and who saw in this canal scheme the means of replenishing their private fortunes. If so, it may have been part of the scheme to ultimately unload the enterprise upon the new government, which they sought to make odious. Be that as it may, there can be little doubt that he did at one time entertain a hope that the French government might become so compromised as to be forced to take the job off his hands. Hence the