Tycoon's War

The carriage drew up at the Fifteenth Street entrance to the Northeast Executive Building, a squat, thirty-year-old, two-story structure, its leaden-gray paintwork leavened with white trim. Designed by James Hoban, architect of the white-painted Executive Mansion, or the White House as it has become known, which stood just two hundred yards away, the gray building had an imposing, north-facing front entrance with an ornate pediment topping six grand white Corinthian columns. But anyone who did business with the U.S. State Department in 1849 knew to use its Fifteenth Street side entrance.

Cornelius Vanderbilt stepped down from the carriage and arched his back to shake off the stiffness of the journey. He was an imposing man, lanky, lean, and handsome. His hair was thick and gray; he was clean-shaven but for luxuriant, gray pork-chop side whiskers. His mouth was tight, his eyes assessing. Vanderbilt, impatient to do business, strode forward and tramped up four steps and passed in through the Executive Building’s side door. The second traveler, hurrying to follow his long-legged companion, was Joseph L. White, Vanderbilt’s efficient lawyer and business partner.

Hard-swearing, frugal-living Cornelius Vanderbilt, the descendant of poor Dutch immigrants, the Van der Bilts, would die in 1877 possessing more money than was held by the U.S. Treasury. By one estimate, his fortune exceeded $96 billion in present-day dollars.² Far and away America’s richest man, he built his massive fortune on steam—first, his fleets of steamboats and ocean steamers plying North American rivers and the world’s oceans, and later, after the American Civil War, steam trains on his ever-expanding network of North American railroads. “I have been insane on the subject of money-making all my life,” Vanderbilt would tell the New York Daily Tribune shortly before his death.³

When gold was discovered in California in January 1848, Vanderbilt was already a multimillionaire, but the immense wealth he would amass by the time he died was then still only the stuff of dreams. Within a year, the Forty-Niners—the first wave in a sea of gold-seeking immigrants who would flood California—were heading west, hoping to swiftly make their fortunes in the gold fields. Vanderbilt had figured out another way to make a fortune from the gold rush. And that was why he had come to Washington. Ironically, this Washington meeting would create the circumstances that would, within seven years, bring Vanderbilt to the brink of financial disaster and send him to war to save his business empire.

Passing clerks on the staff of the Fifth Auditor of the Treasury, who occupied the first floor, Vanderbilt reached a wide south-side staircase. Topping the stairs, he waited for White to join him. A former Washington politician, White knew his way around this building; the State Department occupied the fifteen offices on this second floor and the six offices on the attic floor above. White led the way to the northeast corner, opening a door and ushering Vanderbilt into the reception room of the secretary of state. Through an open doorway, Secretary of State John M. Clayton, working at his desk in the adjoining office, saw the pair, rose to his feet, and came out to greet them.

A solid man with bristly gray hair and probing eyes, fifty-two-year-old Clayton was a Delaware native and Yale graduate who, in 1829, had become the youngest member of the U.S. Senate. Considered one of the finest orators in the country and one of the nation’s best minds, Clayton had been secretary of state for barely a month, having resigned from the Senate to accept the appointment from President Zachary Taylor. The State Department that Clayton administered had 218 personnel at twenty-seven embassies and 197 consulates around the world. Here in Washington, Clayton administered the foreign interests of the United States with a total of twenty-two staff.⁴

Clayton warmly greeted White, an old friend, and then shook the hand of Cornelius Vanderbilt. To close friends, Vanderbilt was “Corneel.” To mere acquaintances such as Clayton, he was “Mr. Vanderbilt.” Clayton was a nationalist and an ardent advocate of America’s commercial expansion beyond its borders. The State Department had been abuzz with national sentiment ever since the United States won the Mexican War the previous year and came out of the conflict with half a million acres of Mexican territory stretching from the Rio Grande to the Pacific Ocean. This victory had come on the back of the 1845 U.S. annexation of the independent Republic of Texas, with the approval of the Texans. Despite these successes, Clayton was wary of further U.S. involvement in Mexico or the rest of Central America yet was just as wary of the ambitions of European powers in the region.

The Spanish, who were thrown out of Central America in 1821 by the locals, seemed content to focus on their Caribbean territories—the islands of Cuba and Puerto Rico. But Britain and France, both of which had extensive Caribbean island possessions, had been sending expansionist signals concerning Central America. In 1838, the French had planned to build a railroad across the Central American isthmus, only for the project to die for lack of funds. And in 1848, the French government had discussed with a Nicaraguan government envoy an agreement that would have allowed the French to develop a canal across Nicaragua to link the Caribbean Sea and the Pacific Ocean.

Meanwhile, in January 1848, coinciding with the discovery of gold in California, Britain had landed Royal Marines at San Juan del Norte, a settlement on San Juan Bay at the mouth of San Juan River, on Nicaragua’s Caribbean coast—a region known as the Moskito, or Mosquito, Coast, because it is the home of the Moskito Indians. The British took control of that Nicaraguan settlement, renaming it Greytown, and British warships frequently dropped anchor there and at Bluefields, another British settlement farther up the Mosquito Coast. To cover their territorial grab, the British set up the protectorate of the Mosquito Shore and said they recognized the Moskito king’s sovereignty over the Mosquito Coast. In some U.S. circles, there was concern that the British planned to extend their influence in Central America from this Mosquito Coast jumping-off point, and Clayton shared that concern.

In his modestly furnished reception room, the secretary of state listened intently to the business tycoon and the lawyer. Clayton and White were members of the same political party, the liberal-minded Whigs, and had been members of Congress at the same time—White had represented Indiana in the House of Representatives prior to his recent move to New York. As for Vanderbilt, Clayton did not know him personally, but he knew of him. Who in America then didn’t?

Unschooled Vanderbilt may have been—he left school at the age of eleven to work as a laborer on vessels plying the East River. But he was notoriously street-smart. “If I had learned education,” Vanderbilt once said, “I would not have had time to learn anything else.”⁵ Vanderbilt wrote nothing down, reputedly keeping every detail of his business dealings in his head, and at any given time knew his income and expenditures down to the last cent. So, while the colorful businessman might inject a curse word or two into every sentence, what he had to say was of keen interest to the secretary of state.

Vanderbilt spoke of California and the gold rush. Only a small percentage of the thousands of Americans and immigrants from Europe flooding west with the hope of making their fortunes in California made the journey overland in covered wagons. Their route cut through dangerous Native American homelands and clawed over treacherous mountain passes and took as long as six months. Hundreds of travelers died each year as a result of accidents, exposure, starvation, or Indian attacks. The alternative route was by sea. Some sailed down to the bottom of South America, rounded Cape Horn, then sailed up the Pacific side to California. The graceful clipper Flying Cloud, the largest American merchant ship built to that time, would in 1851 set a new record of eighty-nine days for the voyage from New York to San Francisco via Cape Horn. This sea route was quicker than the Oregon Trail, and safer. But it was expensive, costing six hundred dollars a head for a one-way ticket, in steerage, the cheapest and most uncomfortable class of ocean travel.

Several American shipping companies had spotted another way to cash in on the California gold rush. For the past two years, the shipping line operated by George Law, and the Pacific Mail and Steamship Company— known as the Pacific Mail Line—headed by William Aspinwall, had been running steamer services to and from the United States and Panama, which was then part of Colombia. Law’s United States Mail Company, operating as the U.S. Mail Line, had a contract from the U.S. government to carry the U.S. mails to and from Panama and the East Coast. Aspinwall’s line, which had steamships running on the Pacific side and conveyed passengers from Panama to San Francisco, had the U.S. mail contract from Panama to San Francisco. A third operator, Charles Morgan, had ships of his Empire City Line on the route from New Orleans to Panama, via Cuba.

Six hundred dollars would take you, via Cuba, from New York to Chagres on the east coast of Panama; put you on a horse or mule; take you on a weeklong trek across the Panamanian isthmus along muddy tracks and over flooding rivers, hopefully avoiding local bandits; and then, on the Pacific side, put you aboard another steamer, which conveyed you up to San Francisco, with refueling stops at Acapulco or Mazatlan along the way. This route took just four weeks. Six hundred dollars was the equivalent of several years’ salary for a laborer, yet thousands of passengers were lining up to take the Panama route to “Californy,” as Cornelius Vanderbilt called it.⁶ William Aspinwall also intended to build a railroad across Panama; Aspinwall’s engineering team, headed by John L. Stephen, was at this very moment surveying the route.

This was where Cornelius Vanderbilt came in. He’d run ferries up and down the Hudson River and across New York Harbor to Staten Island before graduating to large side-wheel ocean steamers. He could easily put existing ships onto the California trade, could quickly have new ships built. But, he told Secretary Clayton, he would not use the Panama route. And he scoffed at the six hundred dollars being charged by the operators who did use Panama.

“I can improve on that,” Vanderbilt assured Clayton, spreading a map of Central America in front of them. “I can make money at three hundred dollars, crossing my passengers by Lake Nicaragua, a route six hundred miles shorter.”⁷

It wasn’t just California passengers the Commodore was after. Vanderbilt wanted the U.S. mail contracts—jointly worth $365,000 a year, or several hundred million dollars in today’s money. He could also see an even larger pot of gold in the future. Vanderbilt tapped his map, pointing to Nicaragua, or “Nicaraguey,” as he called it.⁸ Vanderbilt proposed to build a canal across the country—in fact, two short canals, combining them with the existing waterways, Lake Nicaragua, the largest lake in Central America, and the San Juan River. Just twelve miles of land on the west coast separated the lake and the Pacific. A large lock would be necessary in the twelve-mile west coast canal to bring vessels down to sea level from the lake, which was ninety-five feet above sea level. The task on the eastern seaboard would be more challenging, for via several sets of rapids, the San Juan River dropped in stages from Lake Nicaragua to the Caribbean. Vanderbilt proposed to build an eighty-mile-long canal from the Mosquito Coast, to join the San Juan above the rapids, with several locks along the way.

Vanderbilt told Clayton he wanted exclusive rights from the Nicaraguan government to build his canals across Nicaragua. In the meantime, he said, he would run steamships to and from Nicaragua from New York and San Francisco, conveying his passengers up the San Juan and across Lake Nicaragua by river and lake steamers and across the twelve-mile stretch from the lake to the Pacific by mule. This would cut hundreds of miles and several days off the journey from New York to San Francisco.

The secretary of state wanted an American company to build any Nicaraguan canal and so was warm to Vanderbilt’s request that the U.S. government support his bid to win exclusive rights from the Nicaraguan authorities. This would serve both of Clayton’s Central American objectives: excluding the British and expanding American interests. Already, Clayton was thinking about how to use the Vanderbilt initiative in planned talks with the British government. Although the secretary of state told Vanderbilt he would think on the proposal for a time, Vanderbilt and White returned to New York confident that their Nicaragua plan would receive government backing.

At around the time that Vanderbilt and White met with the secretary of state in Washington, in New Orleans, a city that had just experienced a deadly cholera epidemic, another American was overcome with grief. William Walker was a boyishly handsome twenty-four-year-old. Five foot seven, wiry, with dark hair and piercing gray eyes, he was the editor of the Daily Crescent, a New Orleans newspaper making a name for itself crusading against crime and corruption in Louisiana. Walker’s fiancée of twelve months, Ellen Martin, had just died in the cholera outbreak, her fever culminating in fatal “congestion” according to attending physician, Dr. Kennedy.⁹ Walker was mortified. The epidemic seemed to have passed when Ellen fell ill. Walker, a qualified doctor himself after studying medicine in the United States, France, Germany, and Britain, had been unable to save the woman he loved. Ellen’s death would shape the rest of his life.

Walker was born in Nashville, Tennessee, in 1824. His father, James Walker, a native of Glasgow, Scotland, had migrated to the United States after his uncle died and left him a dry-goods business in Nashville. James had made a success of that small business, using it as the foundation of a highly profitable insurance company. The wealthy young Scotsman had subsequently married local girl Mary Norvell. Her family, considered one of Nashville’s best, could trace its lineage back to seventeenth-century English colonists who founded Williamsburg, Virginia. Mary’s father, Lipscombe Norvell, served as a lieutenant under George Washington during the Revolutionary War, and her brother John Norvell was a former U.S. senator and founder of the Pennsylvania Inquirer newspaper in Philadelphia (which became the Philadelphia Inquirer in 1860). James Walker built his bride a brick mansion in the best part of Nashville, and there they’d raised their children—three boys, including William, and a girl, Alice.

James Walker was a member of the Disciples of Christ, a Protestant sect whose members lived their lives according to strict biblical interpretation. He had expected eldest son William to become a minister of the church, but the boy had other ideas. Mary Walker had been ailing for several years, and the local physicians were unable to diagnose her condition. Devoted to his mother, William determined to become a doctor and cure his mother’s mystery illness. He had started reading and writing while very young and consumed books from the family’s well-stocked bookshelves, often reading aloud to his bedridden mother. By age twelve, William had mastered Greek and Latin, and his father took him to the University of Nashville, proposing that the boy be admitted. When skeptical college authorities put the boy to the test, young William effortlessly translated the Latin tests of Caesar’s Commentaries and Cicero’s Orations and did the same with Greek passages of the New Testament. Twelve-year-old William was admitted to the university and, two years later, graduated summa cum laude. He had already begun to read medicine with the family’s physician, and within months of graduating, he moved to Philadelphia, home of his uncle, newspaper publisher John Norvell. At fourteen, William enrolled at the medical school of the University of Pennsylvania, and by eighteen, William Walker had his M.D. Not satisfied with that, young Dr. Walker set off for Europe to further his studies.

After a year at the Medical Faculty of the University of Paris, Walker took himself to Heidelberg in Germany, another leading center of medical instruction, attending lectures from top German doctors and participating in fencing contests. He emerged skilled at both saving life and taking it. During his time in Europe, too, Walker added French, German, and Spanish to the languages in which he was fluent. In Scotland, he attended lectures at the University of Edinburgh, which had been made famous by the likes of Joseph Lister, an early proponent of the use of vaccination against infectious disease.

Walker had arrived back in Nashville a highly skilled physician, only to find his mother on her deathbed. Despite all his training, Walker was unable to save her; Mary Walker died soon after. Devastated, Walker set off for New Orleans. With his faith in medicine destroyed by his mother’s death, Walker threw himself into legal studies and, with the help of tutor Edmund Randolph, whose grandfather had been George Washington’s attorney general, obtained a law degree within two years. He had not long been practicing law in New Orleans as Randolph’s partner when he was approached by local businessmen A. H. Haynes and J. C. McClure. Intending to set up a new daily newspaper, the Crescent, the pair proposed that Walker come in as a partner and the paper’s editor.

By this time, Walker’s best friend Edmund Randolph had introduced him to a beautiful local girl, Ellen Galt Martin. A year younger than Walker, with silky dark hair and an angelic face punctuated by large eyes and a small, pert mouth, Ellen was reputedly the belle of New Orleans. Scarlet fever at the age of five had left her totally deaf, but her affluent parents, leading members of New Orleans society, had sent her to a special school in Pennsylvania, where she had received an excellent education and been taught the new sign language for the deaf recently introduced into the United States from France. Ellen, who had grown into a dark-eyed beauty, had a lively mind and was determined to socialize despite her deafness. She had gone to balls and parties equipped with a tiny pad and a pencil, with which, said a family member, she would “exchange lively repartee with many” a budding suitor.¹⁰

And then William Walker came along. With his facility for languages, Walker quickly made himself fluent in sign language. Ellen lived at home with her widowed mother, Clarinda Glasgow Martin, who welcomed the accomplished and gentlemanly young Tennesseean, especially when she saw how devoted and tender Walker was with her daughter. Ellen and Walker became virtually inseparable, and Ellen encouraged him to take on the editorship of the Crescent. Quite probably influenced by his newspaperman uncle, John Norvell, Walker, convinced that the pen could potentially be mightier than either the scalpel or the gavel, became a newspaper editor. Among his staff members was a young Walt Whitman.

With Walker at the helm, the Crescent gained a strong readership with its liberal stance. Walker particularly relished taking on corrupt politicians, judges, and police. One of his stinging editorials condemned proslavery North Carolina senator and former U.S. vice president, John C. Calhoun: “We do not rank among his admirers.”¹¹ Walker himself had been raised in a household where slavery was abhorred—James Walker had employed several free blacks for many years, and on the Crescent’s pages, his son expressed the belief that slavery should be abolished in the United States, state by state.

Ellen had proudly supported Walker’s crusades, even when they twice led to challenges to duels from affronted New Orleans power brokers. One challenge even led him to the field of combat, where Walker and his opponent each fired a single shot before walking away unhurt and with honor intact. Walker had been devoted to Ellen, just as he had been devoted to his mother. Ellen was a Catholic, and on the day in 1848 that they had become engaged, she gave William a gold crucifix on a chain. He would wear it around his neck until the day he died.

For weeks following Ellen’s death, Walker could not bring himself to write a word for the Crescent. But eventually, to escape his grief, the embittered twenty-five-year-old threw himself into his work, never imagining that before too many years had passed, he would be the most famous man in America, with people calling him “Mr. President.” Or that he would take on Cornelius Vanderbilt in an unparalleled duel for power.

It seems that in August, Secretary of State Clayton tipped off Cornelius Vanderbilt, via old friend Joseph White, that the secretary was about to send a new ambassador to Central America to negotiate a treaty between the United States and Nicaragua. The treaty would, among other things, give exclusive rights to an American company to build a canal across Nicaragua.

On August 27 in New York City, while the new ambassador, Ephraim George Squier, a twenty-seven-year-old journalist and archaeologist, was en route to Nicaragua, Cornelius Vanderbilt signed a contract as president of the newly formed Atlantic and Pacific Ship Canal Company. Lawyer and fellow director Joseph L. White also signed, as did the company’s vice president, Daniel B. Allen, a Vanderbilt son-in-law. Another director was a prominent New York businessman, Nathaniel J. Wolfe.

Joseph White immediately gave the signed contract, which was to become known as the Transit charter, to his brother Colonel David L. White and sent him hurrying off to Nicaragua with it. On reaching Granada, the Nicaraguan capital, Colonel White was welcomed by the government, which was worried about the British presence on the Mosquito Coast; an American presence in their small country would, they hoped, counter British expansionism. In March, the Nicaraguan government had attempted to negotiate a canal treaty with David Brown, a representative of the New York and New Orleans Steam Navigation Company. But the British consul general to Central America, Frederick Chatfield, who was based in nearby Guatemala, thwarted the contract by warning the Nicaraguan government that Britain would deny Nicaragua the right to grant concessions in territory that did not belong to it—reminding the Nicaraguans that, apart from the new British-sponsored Mosquito Shore Protectorate, both Costa Rica and Honduras had long-standing claims to parts of the Mosquito Coast.

While the Nicaraguans didn’t want to be dominated by any foreign power, they preferred to get into bed with economic powerhouse America rather than empire-building Britain. So, in desperation, Nicaraguan envoy Buenaventura Selva was sent to negotiate a treaty with Elijah Hise, the American chargé d’affaires in Guatemala City. On June 21, although possessing no authority from Washington to do so, Hise had signed a treaty between the United States and Nicaragua. Hise and Selva also signed a secret agreement, which became known as the Hise-Selva Convention; this gave the American government or any company it endorsed a monopoly on a canal in Nicaragua. Hise sent the two agreements to Washington, but Secretary Clayton would not submit them to Congress for ratification. Instead, the secretary sent new U.S. envoy Squier to negotiate a treaty incorporating terms that were acceptable to Clayton and to Cornelius Vanderbilt.

On September 3, Squier signed the authorized treaty with the Nicaraguan government. Article 35 of the treaty preserved the exclusive right of an American company to build a canal across Nicaragua. Within days, as if by coincidence, Colonel David White arrived in Granada while ambassador Squier was still in town, bearing the Atlantic and Pacific Ship Canal Company contract for canal and transit rights.

The contract provided for an immediate payment of $10,000 (several million in today’s dollars) to the Nicaraguan treasury, plus $200,000 in canal company stock and $10,000 a year until construction was completed. The contract required the canal to be built within twelve years, and once it was operational, the Nicaraguan government would receive 20 percent of net profits. After eighty-five years, ownership of the canal would pass to the Nicaraguan government.¹² Unafraid of Britain now that they had a treaty with the United States, the Nicaraguans signed without hesitation, giving Cornelius Vanderbilt the exclusive right to build and operate his Nicaraguan canal.

Early in 1850, the enormity of the task of raising the money to build the canal, which, if it proceeded, would be one of the largest civil engineering projects in the world up to that time, caused Vanderbilt and his directors to send Colonel White back to Granada to negotiate a slight amendment. This provided exclusive rights for the Canal Company or a company authorized by it “to construct a rail road, or rail and carriage road, and water communication between the two oceans” and to convey passengers via that route from ocean to ocean. ¹³ In return, the Nicaraguan government was guaranteed 10 percent of the annual net profits from that trans-Nicaragua operation. While in Granada, Colonel White registered a new company, the Accessory Transit Company, with Cornelius Vanderbilt as president.

In Washington, Clayton began a series of long and sometimes rocky negotiations over Central America with the new British ambassador to Washington, Sir Henry L. Bulwer. Clayton was aided at times during the negotiations by his lawyer friend Joseph L. White, who, according to the press, played “a very conciliatory part throughout.”¹⁴ While these negotiations continued, the Canal Company hosted a dinner in New York at which the Nicaraguan chargé d’affaires to the United States, Eduardo Carcache, was guest of honor. Vanderbilt’s son-in-law and company vice president, Daniel Allen, presided, and Joseph L. White gave the keynote speech, lauding the canal project as if it was a fait accompli.

After the U.S.-British negotiation reached mid-March without a resolution, President Zachary Taylor denounced the British government in a March 19 message to Congress and sent the Senate several pertinent documents, including the previously secret and unratified Hise-Selva Convention. By early April, with the United States seemingly about to break off negotiations, the pragmatic Sir Henry Bulwer came to see the positive side of the Canal Company’s contract with the Nicaraguans. Bulwer expressed the view that the prospects of building a Nicaragua canal would be vastly improved with an injection of British capital, and he encouraged Clayton to urge the Canal Company to seek British financial support. Clayton, seeing the diplomatic benefits of such a concession, agreed, and treaty drafting began.

The secretary of state and the British ambassador signed the Clayton-Bulwer Treaty on April 19, 1850. That treaty provided a “Convention for facilitating and protecting the construction of a ship canal between the Atlantic and Pacific Oceans,” and recognized the primacy of the contract between the Atlantic and Pacific Ship Canal Company and the government of Nicaragua. But there was an important condition—within one year, Vanderbilt’s company must show its good intentions regarding the project, or lose its rights in Nicaragua. In addition, the United States and Great Britain agreed not to fortify, colonize, or settle in Central America and agreed that the ports used as the Caribbean and Pacific termini of the planned canal would be free ports, with no customs duties, and that both countries would act as middlemen in any regional territorial disputes that might frustrate the canal project. Both sides also agreed not to allow the relations that either country might have with political entities of the region to interfere with the canal project.

The Clayton-Bulwer Treaty was a total victory for Cornelius Vanderbilt and his business partners. The New York Herald saw the fingerprints of Vanderbilt’s partner Joseph L. White all over it and claimed the treaty had been “concocted” by White and foisted on a “weak” and “ignorant” Clayton. ¹⁵ Clayton denied having been influenced by White or anyone else, but Vanderbilt knew who to thank for his new Nicaraguan gold mine—he would give the names John M. Clayton and Sir Henry L. Bulwer to two steel-hulled stern-wheel river steamers he ordered from Wilmington boat-builders Harlan and Hollingsworth for use in Nicaragua.

To meet treaty requirements and ensure the continued backing of the U.S. and British governments, Vanderbilt dispatched Colonel White to Panama to buy a river steamer, which White was then to take to the San Juan and use on a survey of the river. Vanderbilt also engaged Colonel O. W. Childs, a highly respected engineer responsible for recently enlarging the Erie Ship Canal, to conduct a detailed feasibility study for the trans-Nicaragua canal, requiring engineering plans and an estimate for the cost of construction and for operating the completed waterway by the following April. This would allow Vanderbilt to comply with the deadline set down by the Clayton-Bulwer Treaty for evidence of the Canal Company’s good intent.

In June, Colonel White, who had arrived at Greytown in the newly acquired Panamanian river steamer Orus, obtained permission from James Green, the British consul at Greytown, for the Canal Company to set up a depot on Punta Arenas, a point of land on the southern side of the mouth of the San Juan River. Stocks of coal and equipment were soon ferried to Punta Arenas from Greytown.

When, on August 5, the SS Prometheus, the first of several new ocean steamers commissioned by Vanderbilt for the planned Nicaragua run, slid down the stocks of the New York shipyard of Vanderbilt’s nephew Jeremiah Simonson, and took to the water, there could be no doubting the Commodore’s seriousness about his Nicaraguan venture. In late September, Vanderbilt and Joseph White set off for England by transatlantic steamer. Arriving on October 5, they conducted a whirlwind series of meetings. In one of those meetings, British foreign secretary, Lord Palmerston, promised every assistance from the British government on the canal project. Palmerston also guaranteed that, in accordance with the Clayton-Bulwer Treaty, customs duties currently levied on every merchant ship that dropped anchor at Greytown would be abolished. The foreign secretary kept his word, at the end of that month issuing to Her Majesty’s Consul James Green at Greytown an instruction that duties must cease to be imposed there, beginning next January 1.¹⁶

Vanderbilt and White also met with numerous financiers to discuss British investment in the canal project. Bankers including Lord Percy, the Rothschilds, and the Baring brothers gave the pair cordial hearings, and on September 15, the Times of London announced that satisfactory financial arrangements for the canal had been completed by the two Americans.¹⁷ In reality, Vanderbilt and White returned to the United States empty-handed; the British money men, while interested in the canal project, would not make any commitment to finance it until they had assessed the results of Colonel Childs’s feasibility study.

But Vanderbilt wasn’t waiting. His contract with the Nicaraguans permitted him to carry passengers across Nicaragua at once, and he intended making money out of the right without delay. In the second week of December, with the two giant paddlewheels on her sides churning, the brand new Prometheus steamed out of New York, towing an equally brand new river steamer, the side-wheeler Director, another product of the Simonson yard. The Prometheus turned south. Apart from her crew, she carried just a single passenger, her owner, Cornelius Vanderbilt. The purpose of the voyage was so secret that not even Vanderbilt’s wife, Sophia, knew that her husband had left town, let alone where he was going. Left to spend Christmas with her thirteen children and their spouses, Sophia only learned where Cornelius was three weeks later, in a letter from her husband that reached her via Panama.

Vanderbilt was on a mission. The news from Colonel David White in Nicaragua had not been good. The little steamer Orus had been wrecked on rapids in the San Juan River. The rapids were impassable, said a frustrated Colonel White, who declared that the Commodore’s dream of conveying passengers up the river to the lake was unrealizable. Cornelius Vanderbilt would see about that. He would not let a few rocks stand in the way of making a fortune in Nicaragua.