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The Panama Libel Cases* The Panama Libel Cases* CLYDEPEIRCE The Roosevelt-Panama Libel Cases arose out of a melo- dramatic series of events connected with the purchase of the Panama Canal Zone, which find their focal points before and after the Presidential election of 1908. The affair be- came intensified after the election, led to a second congres- sional investigation of the purchase, and resulted in the crim- inal libel cases instigated by President Theodore Roosevelt against Joseph Pulitzer of the New York World and Delevan Smith of the Indianapolis News. The Pulitzer case reached the United States Supreme Court. The author has had ac- cess to newspaper clippings covering the cases from the shelves of the Indianapolis News, and to the personal clip- pings of President Roosevelt, which were forwarded from the Roosevelt Memorial House Library in New York City. A brief account of the acquisition of the Canal Zone is necessary to a better understanding of the cases. After the bankruptcy of the old de Lessepps Company, a New Panama Canal Company was organized to revive the project. The outstanding character in the reorganization was Philippee Bunau-Varilla. In the United States two dummy organiza- tions were formed to Americanize the project. The charac- ter in this action was William Nelson Cromwell. Bunau-Varilla was a French engineer aspiring to de Lessepps’ fame. His efforts took him to several nations, but in the United States he travelled more widely arousing Ameri- can interest in.his company, and, in events following, he was labeled by some as the “arch-conspirator” in the Panama re- volt and in the purchase of the Zone by the United States.l Cromwell was designated by some as the “arch corrup- tionist” in the affair. He was a New York attorney and his clients were classed as “trusts”. Further, he was attorney for the Panama Railroad, the New Panama Canal Company, and later for the Republic of Panama. In the framing of the Republican platform in 1900, he was able to change a *This paper was read before one of the sesaions of the annual Indiana History Conference in the Lincoln Hotel at Indianapolis on December 12, 19.36. ‘Henry F. Pringle. Theodore Roo*euelt. A Bioprophg (New York, 1931) See his two chapters, “The Setting For a MebDrama” and “I Took Panama,” for an excellent short account of the purchase of the Canal Zone and bhe Libel Cases. See also The Stmy of Panama (“Hearings on the Rainq Resolutions before the Committee on Foreign Affairs of the House of Representatives..’ 1913), 70; New York World. Oct. 4. 1909. 172 Indiana Magazine of History plank which favored a Nicaraguan Canal to one in support of an “isthmian canal”. On one occasion, he was reprimand- ed for maintaining a strong lobby in Congress favoring the Panama Canal site. Soon after, however, he contributed $60,000 to the Republican campaign fund.* After some previous reports, the Walker Canal Commis- sion made a final report. This favored a canal through Nic- aragua since the French Panama site and equipment would cost $40,000,000. The Hepburn Bill incorporated the com- mittee’s report and it passed the House by 308 to 2 on Jan- uary 9, 1902. From that date until the bill came up in the Senate is a most interesting period. During this time Bunau- Varilla and Cromwell made names for themselves. They had three things to do: get the company to sell for $40,000,000; get the canal bill changed to permit the possibility of still selecting the Panama line; and get Colombia to grant the transfer. Consent in regard to sale and transfer was ob- tained, but changing the Hepburn Bill took some scheming. Bunau-Varilla set out to make the Senate “volcano conscious”, since some eruptions had just occurred in Nicaragua. Buy- ing Nicaraguan stamps picturing an active volcano, he past- ed a stamp in the center of ninety different letters and wrote the following: “Young nations like to put on their coat of arms what most symbolizes their moral domain or character- istics of their soil. What have the Nicaraguans chosen to characterize their coat of arms or their postage stamps? Vol- canoes!” He mailed these letters just a few days before the bill was to come up in the Senate so as not to allow time for newspaper reb~ttal.~The letters with Senator Hanna’s speech carried the day. The Hepburn bill was amended to authorize the President to purchase the Nicaraguan site unless the French rights to the Panama route could be bought for $40,000,000. The bill as amended passed the Senate by a vote of 42 to 34 on June 25, J902. The same so-called “stamp act” worked on the House. The way was clear ex- cept that the Senate demanded a satisfactory treaty with Co- lombia within a reasonable time to sanction the transfer and secure proper rights in the canal region. That treaty now occupied Bunau-Varilla and Cromwell. Until this time President Roosevelt was inactive, but he now Story of Panam 70-71 : 301-302 paamm. a Philip Bunan-Varilla. Nicarapua or Panama, 31 : Pringle. Roosevelt. 306. The Panama Libel Cases 173 got busy to help secure the treaty. Drafts were drawn by both countries but rejected or drastically amended by the United States Senate. A final draft was sent to the Colom- bian Government. Dictator Marroquin finally convened his Senate at Bogota. This body sat all summer in 1903 and final- ly adjourned without ratifying the draft. The adjournment oc- curred in the face of continued threats of dire consequences by the United States made through Secretary of State John Hay, Bunau-Varilla and others, possibly including Roosevelt. It was said in 1914 that an American railroad lobby prevent- ed ratification.‘ President Roosevelt was baffled. He was advised that he could go ahead building the canal or take the Nicaraguan route. Word of an impending revolt in Panama stayed his hand. Curiously enough a prophetic article was published by Joseph Pulitzer’s paper, khe World, describing just what was going to happen in Panama. This article, it was later found, was written by Cromwell’s press agent. Cromwell and Bunau-Varilla were busy and President Roosevelt ordered United States ships to draw near to Pan- ama. All knew such a revolt could not be successful without aid. Meantime Colombia heard of trouble brewing in Pana- ma and sent troops to Colon. On November 2, 1903, the United States S.S. NushviZZe arrived off Colon. On the same day, President Roosevelt issued his famous “50-rniZe order” to prevent foreign troops from landing in Panama. In the evening of the same day 500 Colombian troops landed at Co- lon, since the Nashville did not receive the order until next day. However, Cromwell’s agents took the Colombian offi- cers by subterfuge to Panama City and held them. At Panama City, the Colombian governor was favorable to the revolution, which was scheduled for 8:OO A.M. on No- vember 3, 1903, during a band concert. At Colon the Ameri- can consul informed acting-Secretary of State, Francis B. Loomis, that a revolt was in progress. Loomis in turn noti- fied the consul at Panama City and asked him to keep the State Department informed. The consul at Panama City wired back that no revolt had yet occurred, but it was expect- ed that night. These communications later led to the sus- picion of American instigation. However, at 5:OO P.M, at ‘Mmninu Searehliuht (Redding. California) Feb. 24. 1904 : Pringle, Rwsewelt: Story of Panam. 174 Indiana Magazine of History Panama City, the revolt broke out prematurely and all was over by 5:49. Officers of Colombia were paid off by the agents of Cromwell and Bunau-Varilla, and, a few days later, Dr. Manuel Amador, Panama Railroad physician, was elected President of Panama. Contrary to international law, Ameri- can consuls were ordered to recognize the Republic officially. On November 10 Bunau-Varilla had himself appointed Am- bassador from Panama to the United States, even though en- voys were at the time already en route to Washington, and a treaty was signed between our federal government and Pan- ama on November 18, just sixteen days after the revolt.6 Thus ended what President Roosevelt described in these words : “It must be a matter of pride to every honest American, proud of the good name of his country that the acquisition of the canal . [was] as free from scandal as the public acts of George Washington and Abraham Lincoln”. Payment of the $40,000,000 was made through J. P. Morgan and Company. According to Cromwell, the money was all paid to a bank in Paris and then divided between the receivers of the old Company and the New Panama Canal Company. The papers, equipment and other belongings of the old company were turned over to officials of the United States. Some of the papers were sent to Washington and some to Panama. The Louisville Courier-Journal, edited by Colonel Henry Watterson, charged corruption from the beginning. Bunau- Varilla defended the deal through the New York Sun. Wat- terson said the $40,000,000 was for the thieves in France and “grey wolves of the American Senate”. On January 17, 1904, the World published nearly a full page article charging cor- ruption. Neither gave any source of information, and no names were mentioned. In February, 1904, national banks were ordered to be ready to make the payment and one bank president said that about one half the money would remain in the United States.O The New York Times asserted that the whole thing was more understandable now that “some of our blessed Yankees” were in on it.’ Agitation was kept up by the Louisville Courier- =J.
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