Now, on November 6, 1903, three days after the alleged revolution, our State Department cabled this to the American consul general at Panama and said Mr. KENDALL. Who was Secretary of State then? Mr. RAINEY. I think Mr. Loomis sent the telegram, but Mr. Hay was Secretary of State. Here is the telegram: The people of Panama have by an apparently unanimous movement dissolved their political connections with the Republic of Colombia, and resumed their independence. When your are satisfied that a de facto government, republican in form, and without substantial opposition from its own people, has been established in the State of Panama you will enter into relations with it as the responsible Government of the territory and look to it for all due action to protect the persons and property of citizens of the United States and to keep open the Isthmian transit in accordance with the obligations of existing treaties governing the relations of the United States to that territory. Mr. SHARP. To whom was that sent? Mr. RAINEY. To the American consul general at Panama, and it was sent 72 hours after the revolution, and 48 hours after the proclamation of the declaration of independence of Panama. The declaration of independence was prepared in New York. Mr. SHARP. Will you read again the first few lines? The people of Panama have by an apparently unanimous movement dissolved their political connection with the Republic of Colombia and resumed their independence. When you are satisfied that a de facto government, republican in form, and without substantial opposition from its own people, has been established in the State of Panama, you will enter into relations with it. If that is true, it is an important statement. I claim it is untrue. The people of Panama, by an apparently unanimous movement, did not accomplish their independence. On the 3d day of November, in the morning, when the revolution occurred, we will show you that no man knew anything about it except the revolutionists on the Isthmus of Panama-just a few of them, not over 10 or 12 of themand the officers of the Panama Railroad & Steamship Co., who were under the control of William Nelson Cromwell, of New York, and the State Department officials in Washington. No one knew it was going to occur when it did occur except those I have mentioned and some of the Colombian generals in Panama, who had been bribed to betray their country and to turn over their troops to the new Republic as soon as it was formed. Mr. SHARP. Before that revolution was generally known, or at least was recognized, or at least that country was recognized as a new epublic, isn't it a fact that our Government had warships situated or stationed on both sides? Mr. RAINEY. Yes, sir. The warships arrived on the very day of the revolution. That is the question I am going into now. Mr. HARRISON. Were those revolutionists natives of Panama or citizens of the United States? Mr. RAINEY. They were natives there, most of them. I don't know where the officers of the Panama Railroad claimed their residence; I think most of them claimed their residence up here. At that time among the revolutionists were Col. Shaler, who was general superintendent of the railroad; Mr. Prescott, who was his assistant; Mr. Arango, who was land agent down there for the railroad and who was also a local attorney in Panama; Dr. Amador, who was the physician for the railroad; and Capt. Biers, who was the American freight agent of the railroad on the Isthmus. Those were the railroad officials who were on the Isthmus-all the important railroad officials. All of them aided the revolution and assisted in planning for it. Mr. KENDALL. Were there any troops turned over by the revolutionists? Mr. RAINEY. I think these gentlemen, except Arango and Amador, might be United States citizens. The Colombian garrison espoused the cause of the revolution. They were bribed to do it. The commander was paid two days afterwards $25,000 in silver for doing so, and he is living now on the Isthmus of Panama engaged in the cattle business and is being paid $400 every month in silver, a pension by the Panama Government. At that time in Panama there was only one company of troops loyal to Colombia, and there was only one general they couldn't bribe. Our railroad officials down there couldn't bribe him, and he with his company-this loyal company-was sent away just a few days before the time for the revolution, to repel a fake invasion from Nicaragua. They went into the jungles of Panama to stop a force that wasn't coming at all. The mistake Gov. Abaldio made was this: He telegraphed to his Government or wrote them a formal letter advising them that the sovereignty of Colombia in the Isthmus of Panama was threatened by an army from Nicaragua. This so frightened Colombia-they were so anxious to preserve their sovereignty-that they sent some gunboats out not for the purpose of suppressing the revolution, but for the purpose of assisting in repelling an invasion supposed to have come from Nicaragua. As soon as the governor of Panama, appointed by the President of Colombia, received the information from his Government that they were sending him troops to help in repelling that invasion, he sent back word that there was no invasion-don't send the troops. At that time the loyal officer and his company were out 100 miles or so in the jungle, where they could offer no opposition to the proposed revolution. Colombia acted so promptly in an effort to preserve her sovereignty that, when this second communication reached the Government, they had already sent two gunboats to Panama and they got there just before the revolution started. Mr. DIFENDERFER. Were any of these men you have mentioned there in the pay of the United States Government? Mr. RAINEY. No; they were in the pay of the Panama Railroad & Steamship Co., which was a New Jersey corporation-the controlling interest of which at this time was owned by the new French canal company. They were in the pay of that corporation, and the representative of that corporation in New York was William Nelson Cromwell. They belonged to him. He was the revolutionist whopromoted and made possible the revolution on the Isthmus of Panama. At that time he was a shareholder in the railroad and he was its general counsel in the United States, and when the old Panama canal company, just before its dissolution, acquired control of the Panama Railroad Co. by buying a majority of the stock they annexed, unfortunately for this Government, William Nelson Cromwell, of New York, the most dangerous man this country has produced since 29008-No. 1-12-2 the days of Aaron Burr-a professional revolutionist-and, we will be able to show you, one of the most accomplished lobbyists this country has ever produced. Mr. DIFENDERFER. When did the Panama Railroad pass into the possession of the American Government? Mr. RAINEY. When we bought the property and the franchises from the French companies. A MEMBER. Your position is that William Nelson Cromwell, through whom we purchased the properties of the French companies in Panama, brought about this revolution for two purposes-the United States in order to get the territory to construct a canal, and the old French company to sell out property that was comparatively valueless to thein. Is that your understanding of it? That Mr. Cromwell and his associates were the prime movers in bringing about this revolution? Mr. RAINEY. Yes, sir. A MEMBER. They were aided by the Executive of this Nation, the Executive having in view the getting of this territory in order to construct the Panama Canal? Mr. RAINEY. Yes, sir. And the object primarily being of Mr. Cromwell and his associates--the object primarily being to get $40,000,000, or whatever we would pay, for the French company and keep Colombia from getting it? A MEMBER. They were working for money and we-I mean the American officials-were working for territory? Mr. RAINEY. They were working also for the French company to get them the entire $40,000,000. That was all Cromwell was working for, and we assisted him in that scheme. In effect, what we did was to assist Mr. Cromwell in beating Colombia out of the large part of the $40,000,000 that she ought to have had. We could have acquired all the rights we wanted by giving Colombia a little more of the $40,000,000 than we were willing she should have. The fight our officials made here was not for the purpose of getting the canal across the Isthmus we could always do that if we wanted to; but I contend that the fight on the part of this Government was to see that this corrupt French company, which was composed almost entirely of penalized stockholders, except a few small shareholders who held a small part of the stock, get the $40,000,000. By "penalized stockholders" I mean stockholders who had stolen from the old company and who were compelled to take stock in the new company to an amount of stock equal in value to the sums they had stolen in order to keep from going to the penitentiary. A MEMBER. Do you believe the French company got all that money? Mr. RAINEY. I don't want to discuss that. Mr. COOPER. You think that Roosevelt and John Hay got most of it? Is that your position? Mr. RAINEY. On the contrary, I am convinced that they did not. On behalf of these gentlemen, I deny that. Mr. COOPER. I am glad to hear that. Mr. GOODWIN. Your position is that an investigation of this matter would reveal the fact that Mr. Cromwell and his associates got up this revolution for the purpose of selling out to the United States? Mr. RAINEY. Yes, sir. Mr. GOODWIN. And getting a larger share of what the United States would pay for that canal than they otherwise could get ? Mr. RAINEY. Yes, sir. Mr. GOODWIN. And that our Government through its officials assisted him in order to put money in the pockets of the French rather than pay it to the Republic of Colombia? Mr. RAINEY. Yes, sir. Mr. COOPER. But what did you mean a moment ago when you spoke of the fight being to get Colombia a larger share out of the $10,000,000, or something like that? Mr. RAINEY. She was trying to get more than that Mr. RAINEY. She wanted more of the amount than we were willing to pay. Mr. FOSTER. It was in the treaty. Mr. COOPER. It is so long since I have read it. Have you heard that when she had an opportunity she refused to accept the $10,000,000 because a lot of the money from the transcontinental railroads got busy with her supreme legislature and stopped that? Mr. RAINEY. I haven't heard that. Mr. COOPER. I have. Mr. RAINEY. But I know what the records down there show. Mr. COOPER. They had agreed to accept the $10,000,000 and when they had the opportunity to take it they made up their minds that they didn't want it. I have had prominent men connected with some of these transcontinental railroads speak to me of the dreadful nuisance of the Panama Canal. I have heard the rumors-I have and I think Members of the House have that money was sent from this country to prevent Colombia from taking that $10,000,000 and letting us build that canal, and that thereupon there was a substantial unanimity among the people of Panama who thought upon the subject at all that they should get rid of Colombia as soon as possible and let the United States build that canal, and that alone was the trouble. Mr. RAINEY. The rumors you heard I think I heard too, but I can call some facts to your attention which will show there could be absolutely nothing in those rumors. William Nelson Cromwell, who was promoting the sale of the Panama Canal Co. to the United States and who was responsible for the revolution, was one of the attorneys for the Harriman Lines, or, to speak more accurately, was the attorney for the Harriman Steamship Co., operating on the Pacific coast from San Francisco down to Panama. He would not have permitted the company he represented, if he could help it, to send any money to Colombia to prevent the very sale he was trying to accomplish. Mr. COOPER. As a matter of fact they always have been opposed to the construction of this canal. Mr. RAINEY. Yes; I think they are opposed to the construction of all canals. I think they are opposed to the construction of this canal across the Isthmus and are opposed to the railroad across the Isthmus farther up. Naturally you would expect them to oppose it; but the Hay-Herran treaty was unpopular in Colombia from the start, from the time it was entered into here by Dr. Herran at the instance of William Nelson Cromwell. It was at once repudiated in Colombia, and speeches were made on the floor of the National House immediately after the news reached there, and before any transcontinental money could have gotten there at all speeches were made denouncing Dr. Herran as a traitor to his country and threatening him with execution when he returned home. The President of Colombia-the man whom the railways would have approached first af all, because our evidence will show that he might have been approached-stated afterwards that the halter would have been a proper recompense to Dr. Herran for entering into that treaty. Mr. GOODWIN. Isn't it a fact that there was a great difference-a great drop in the bonds of the Panama company at the time we expected to cross over the Nicaragua route, at which time those bonds were low-at ebb tide-when we switched from the Nicaragua to the Panama route? And then the bonds were certainly inflated and rose to high tide. At that time we bought those bonds on the crest of the wave. Mr. RAINEY. I think you are right. Mr. GOODWIN. That was paying two prices for the Panama company as compared with the time when we could have had them for half that price? Mr. RAINEY. We could have made better terms with Colombia if we had let the contract expire. Mr. LEVY. The fact is that the only satisfaction we got for the $10,000,000 was the control of the Panama Railroad, and wasn't it generally supposed that we also paid in that $10,000,000 sufficient for all claims that they might have against us for their profits or their proportion of the rental for that railroad instead of giving them now $250,000 a year in addition? Mr. RAINEY. Those contentions were made of course at that time. But those contentions are not important in the present controversy. It isn't important what assets we got from the Panama Canal Co. It isn't important whether or not the railroads sent a corruption fund to Colombia to keep her from ratifying this agreement. The important thing, and the only thing I want to present is, not whether the railroads have been corrupt; not whether Colombia has been corrupt; but the sole question is whether we have stultified ourselves, that is all. We do not care how many persons were bribed in Colombia. We do not care what amount of money the railroads contributed for bribery in Colombia, if they contributed money for such purpose. The question is how can we do justice to ourselves and resume the position we ought to occupy among the twenty-two republics of the Western World. Mr. COOPER. You want us to resume the high position held among the nations of the western world? Has there ever been a time in the history of this Republic when the position was as cordial as it is at the present moment? Has the friendship for us ever been as great as it is at this hour? Mr. RAINEY. I am not aware that the friendships have ever been particularly close between the United States and the Latin Republics on the south of us, except perhaps Mexico. But no matter how close it is at the present time, it wouldn't do our trade any harm to have it closer. The trade we ought to have with the Latin Republics is going to other nations. To-day, in the plazas of the more important cities of the Spanish American Republics, as they sit there in the |