Panama Canal

Do gefilte fish swim in the Panama Canal? Not quite, although there are those who like to exaggerate the Jewish role in this mighty rift through the earth’s crust. One article even goes as far as claiming, “No people have been more caught up in the romances and tragedies of the Panama Canal than the Jews!”


To back up this preposterous proposition, the article relates how a French Jew, Augustin Solomon, gained a concession to cut a canal through Panama as far back as 5598/1838 and would have garnered its profits for sixty years if he had only succeeded. Unfortunately, an anti-Semitic French official in Panama who cabled an urgent warning to Paris thwarted the idea:

“The keys of the world are here but the name of Senor Solomon does not seem to be sufficiently Christian to qualify him for the role of St. Peter [to whom Christians misguidedly assign a role as guardian to the keys to heaven].” Eventually, Columbia revoked the agreement and poor Solomon was left to wither on the vine of history.

However, to evoke this claim as evidence that the Panama Canal is endowed with the flavor of kugel and gefilte fish is no more than an exaggeration. After all, Augustin Solomon was only one of a horde of entrepreneurs who had been mulling over the idea of gouging out an inter ­ocean seaway between the Caribbean and the Pacific almost since the Spanish conquistador, Vasco Nunez de Balboa, first laid his eyes on the Pacific Ocean in 5273/1513.

By 5284/1524, exasperated mariners were suggesting to King Charles V of Spain that it would be wiser to ship South America’s silver and gold via a placid Panama Canal than brave the violent storms at the American Continent’s southern tip.

After that, canal entrepreneurs came at a dime a dozen. Augustin Solomon’s abortive venture was only one of many similar oft-laid plans that many men sporadically hatched and dispatched over the centuries.

However, that article is correct in pointing out that Jews became major players in the canal during its birth pangs and early development.


After carving the Suez Canal through the Egyptian desert by 5629/1869, the French diplomat, Ferdinand de Lesseps, felt that he might as well finish things off by carving a sister channel in Central America, and to further this end, he helped found the French Panama Canal Company that would join the Pacific to the Caribbean. One of the leading American banks selling stock for the company was the J&W Seligman Company, headed by “New York’s leading banker,” Jesse Seligman and his brother, James. This was one of the many wealthy German- Jewish enterprises flourishing in New York at the end of the 1800s. Before lifting a finger, the Seligmans received an advance of $300,000 “for the privilege of using the Seligman name as patrons of the undertaking.”

Many Americans regarded the Seligman involvement as treachery; they were incensed that France would be heading such a major construction project so close to home. Insults and accusations ripped through New York’s smoky streets. Seligman was “selling America to France!” The Seligman bid was part of an international Jewish conspiracy! Responding to such accusations, Jesse Seligman stated in a newspaper interview:

“It is a private undertaking altogether, and we have every confidence that an enterprise of this kind will pay. Naturally, the United States will receive the largest share of the benefit from it. All the machinery to be used in the work of the construction will be bought here.”

People calmed down; they shut their mouths and dug into their pockets to buy stock, lots of stock. In both the US and France, Canal stock sold like wildfire to the eventual tune of $287 million, while Ferdinand de Lesseps got down to the job of cutting fifty miles through the tropical jungle of the Panama Isthmus. Unlike the flat Egyptian desert, the land over Panama was traversed by rivers and lakes and rose up to a height of 360 feet.

Nevertheless, de Lesseps insisted on digging a ninety-foot wide channel straight through solid rock and mud at sea level, slicing straight through bedrock, hundreds of feet high. While he continued to clear the way, another company began carving a canal through Nicaragua to the north, and for a while it seemed that the happy Americans would have not one, but two canals at their disposal.

However, in the end, de Lesseps was defeated by the tropical winters that brought torrential rains, demolishing months of work, as well as immense armies of insects carrying yellow fever and malaria. By May 5649/1889, his project collapsed after having excavating about fifty-million cubic yards of mud and rocks along the distance of eleven miles. 22,000 lives had been lost and the canal was barely two-fifths of the way through.

On top of that, the stocks of almost a million investors had gone up in smoke, sparking off the “Panama Canal Scandal,” the biggest corruption case of the nineteenth century. It was claimed that only heavy-handed bribing of members of Parliament had kept people pouring money into the Panama enterprise long after its fortunes were lower than sea- level.

This precipitated an anti-Semitic outrage in France, exceeded only by the Dreyfus case a few years later. The Jew-baiting was led by a newspaper publisher, Edouard Drumont, whose newspaper, La Parole Libre, screamed that two Jews, Baron Jacques de Reinach and a henchman, Cornelius Herz, were responsible for the disaster. They had bribed politicians to support the disastrous enterprise! Down with the Jews! His agitating culminated in the giant anti-Semitic rally of 5653/1893.


Meanwhile, a Panama Canal engineer, Philippe Bunau-Varilla, had returned to France where he helped his brother, Maurice, run the Paris newspaper, Le Matin, which was later instrumental in helping to overturn the Dreyfus case.

By 5661/1901, Bunau-Varilla was the leading proponent for the continuation of the Panama Canal Project, with the backing, once again, of Jesse Seligman and company. This time, however, there was a giant fly in the ointment: the US Congress had unanimously voted to abandon the Panama Canal and dig one through Nicaragua instead.

Just in time, one of the most gargantuan natural events of the last century came to Seligman’s aid. On the 8th of May, 5662/1902, a giant volcano erupted on the Caribbean island of Martinique, snuffing out tens-of-thousands of lives within a few minutes and, two days later, a volcano on St. Vincent in the West Indies killed thousands more.

Bunau-Varilla rushed out and bought a few dozen five-peso Nicaraguan stamps depicting its smoking Momotombo volcano, and promptly mailed them three times over to ninety Senators, together with an ominous message: “An official witness to the volcanic activity of the isthmus of Nicaragua.”

This gambit resulted in the Senate overturning the Congress’ pro- Nicaraguan resolution, and Panama was once more on track. Then came a new obstacle: Columbia, which had seized Panama some years previously, decided
she was not interested in having a canal, slicing through her territory, owned and controlled by the US. If the US wanted to dig a canal they would have to look somewhere else.

In the rough and tumble world of American finance, this was not an insurmountable obstacle. If Columbia refused to cooperate, the answer was to get rid of Columbia! Panamanian revolutionaries had in any case long wanted to rid their country of its Columbian overlords.

As Bunau-Varilla told the Seligman bankers, “There is nothing left but to have Panama secede from Colombia. That will mean a revolution!”

The partners did not blink an eyelid.

“How much would a revolution cost?” was James Seligman’s response.

To get the answer to this query, Bunau-Varilla haggled with the revolutionaries in Room 1162 of the Waldorf Hotel in New York, since then known as “the cradle of the Panamanian Republic.” The Seligmans managed to bargain their starting offer of $6 million down to $100,000 and their insurrection had the green light.

That left only the American President, Theodore Roosevelt, with whom to deal. That this would not be too hard a job was obvious from his 5661/1901 State of the Union address:

“No single great material work which remains to be undertaken on this continent is of such consequence to the American people as the building of a canal across the Isthmus connecting North and South America… It is emphatically a work which is for the interest of the entire country to begin and complete as soon as possible.”

“I called on President [Theodore] Roosevelt,” Bunau-Varilla reported afterwards, “and asked him point- blank if, when the revolt broke out, an American warship would be sent to Panama to protect American lives and interests. The President just looked at me; he said nothing. Of course, a President of the United States could not give such a commitment, especially to a foreigner like me. But his look was enough for me.”

Bunau-Varilla’s hunch was correct. In a classic case of gunboat diplomacy, the US warship, Nashville, docked in Panama on November 2nd, bribes were handed over into the right hands, and the bloodless takeover was completed within a few hours.

The Seligmans pulled strings to have Bunau-Varilla appointed as Panama’s first appointed ambassador, and His Excellency forthwith ceded a ten- mile wide Canal Zone to the US “in perpetuity.” The canal was completed on August 15, 1914 at the cost of $352 million, the most expensive project the US had ever tackled until that date, but this was little noticed as World War I erupted on that same day.

So to paraphrase the opening sentence of this article, perhaps it can be more accurately said: no Jews have been more caught up in the romances and tragedies of the Panama Canal than the Seligmans.

(Sources: [1] The San Diego Jewish Press-Heritage, March 12, 1999; [2] Harrison, Donald H., Locks and Bagels; [3] Birmingham, Stephen, Our Crowd: The Great Jewish Families of New York, Harper & Row, New York: 1967.)

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