$14.3 Billion (2007 dollars)
Until 1914 the only way to transport goods by ship from New York City to San Francisco was along a circuitous 12,000 mile route around the tip of South America. For many forward-looking leaders in the U.S., cutting a canal across the Panama Isthmus made a lot of sense since this new route would only be around 5,000 miles. In this regard, the canal would make the journey to the west coast easier, a lot safer, less costly, and so much faster. Instead of around sixty days to make the voyage it would take about eleven. In addition to the United States, many European leaders since the sixteenth century also thought this shorter route to the Pacific was absolutely essential for expanding their trade with the Pacific coastline and the Far East.
The Project Begins
It wasn’t until 1880, however, that a French engineer, Ferdinand de Lesseps, with the consent of Columbia, began to construct a canal across the Isthmus of Panama that would link the Atlantic with the Pacific. It would be a Herculean effort but De Lesseps was enthusiastic over the prospects of such a project, a challenge mostly inspired by his success in building the Suez Canal. Soon thousands of workers arrived, mostly the locals and laborers from the West Indies working for about $125 a month. With steam shovels, excavators, dredges, and explosives, they hacked a broad swatch through the nearly impenetrable jungle. Over the following years, however, the project failed not only because the extent of the effort was grossly underestimated and poorly designed, but also from severe financial difficulties, corruption, mismanagement, and most significantly, disease.
Yellow Fever And Malaria Strike
One of the largest contributors to the project’s failure was yellow fever and malaria. In fact, between 1881 and 1889 it was estimated that approximately 22,000 employees, from laborers to directors, died of yellow fever and malaria. Once the rains came to the sweltering and bug infested jungle the unfortunate victims were mostly the white Frenchmen since the locals, although immune to yellow fever were quick to succumb to malaria. Since the infectious role of the mosquito was unknown at the time, even hospital patients with minor ailments often fell victim to its bite thanks to the open and unscreened windows and doors of the wards.
Project In Jeopardy
With large numbers of workers off the job at any given time, either from sickness, death, or because many simply quit and returned home, it became very difficult to maintain an active and experienced workforce. Under these unstable conditions it was inevitable that production schedules were impossible to meet which only drove up the cost and jeopardized the entire project.
France Throws In The Towel
By 1893, the French realized the futility of continuing this enormous project and began to search for a purchaser to finish the canal. But because their records were so poorly maintained, their total cost for the 24 years of work performed in Panama is reported only as an estimate.
Cost to the French: $287 Million (1893 dollars) or $6.8 Billion (2007 dollars)
Now that the French were leaving, their asking price for the work already done and the remaining equipment was $100 Million.