E. George Squier and the Honduras Interoceanic Railroad Project Open Access

E. George Squier is a familiar figure in Central American history. His diplomatic mission to Nicaragua, just prior to the signing of the Clayton-Bulwer Treaty in 1850, has generally been recognized as one of the first significant efforts on the part of the United States to establish its influence in Central America. Squier’s voluminous writings on Central American subjects, especially his Nicaragua (1852), and his States of Central America (1858), are perhaps even better known. But there has been a good deal of mystery concerning Squier’s private and promotional interests in Central America. Writers such as Mary W. Williams, Dexter Perkins, and Richard W. Van Alstyne have been aware of his promotional activities in the decade of the 1850s, but have been able only to hint darkly as to his true interests and motives.¹

Squier’s primary concern in this period, particularly between 1853 and 1859, was the promotion of the Honduras Interoceanic Railroad project. Despite his dedicated, dogged efforts, involving him deeply in Honduran politics and Anglo-American isthmian questions, he failed to put a single mile of railroad in operation. The story of this venture, unsuccessful but important, sheds much light on the controversial figure of Squier himself and contributes to an appreciation of the depth of foreign influence in Central America in the 1850s.

The idea of a railroad across Honduras first occurred to Squier in 1850, when he visited the Bay of Fonseca in the course of his duties as United States chargé d’affaires in Central America. At that time he noticed that the Goascorán River, which rises in the mountains near Comayagua, interrupts the long, continental mountain chain on its way to the Bay of Fonseca. Available maps showed that the Humuya and Ulúa Rivers continued the interruption on the Atlantic side. In view of the rapidly increasing New York-California traffic by way of the isthmus of Central America, Squier’s interest was aroused, but supposing that the Nicaragua Canal would soon be built, he made no further investigation.² In 1852, after surveys of Nicaragua discouraged canal entrepreneurs, he began to investigate the possibilities of a transportation route across Honduras. Comparing Honduras to other isthmian routes, he calculated that Honduras was approximately 1500 miles shorter than Panama, 800 miles shorter than Nicaragua, and 200 miles longer than Tehuantepec. Honduras’ greatest advantages, however, lay in its superior harbor accommodations, which appeared to be much more commodious and safer than those of its rivals, and in its more salubrious climate.³ Spanish sources, he found, confirmed the existence of a transportation route from the Bay of Honduras to the Bay of Fonseca, left undeveloped because of the expense and for fear of pirates.⁴

Rival companies already in operation apparently did not discourage Squier. Cornelius Vanderbilt’s Accessory Transit Company had inaugurated a steamer-carriage service across Nicaragua via the San Juan River and Lake Nicaragua to the Pacific coast in 1852, but passengers were subject to many delays, dangers, and annoyances. Isthmian transit via Panama was ordinarily safer and faster, and most passengers, even before completion of the Panama Railroad in January 1855, chose to go by this route.⁵ Actually, huge profits enjoyed by these companies encouraged Squier to believe that an additional route would also be successful.

Armed with this information and with his characteristic optimism, Squier pleaded with friends to support an exploration of the Honduran terrain. Seven men, mostly New York merchants, joined Squier in contributing $1,000 apiece to finance the venture. Former Secretary of the Treasury Robert J. Walker, an ardent expansionist, and Commodore Robert F. Stockton, of Mexican War fame, were among the contributors. Possibly the most enthusiastic supporter of the proposal, next to Squier, was Amory Edwards, a minor New York City railroad official and consul-general for Nicaragua in the United States. Officially, the eight partners combined for the purpose of determining the road’s “greater or less feasibility” and of procuring a charter authorizing the work.⁶

It is clear that, from the beginning, Squier and at least some of his backers were interested in more than just a railway across Honduras. Squier believed that Honduras, not to say all of Central America and Mexico, would inevitably fall into the hands of the United States. With Central America under the protection of the United States, or even in anticipation of such an event, European emigration could partially be diverted to Central America. Because settlers would need farms, Squier wanted land, “as much land as possible,” to sell to them. Even if the railway scheme proved a failure, Squier supposed that land values would be enhanced by the expected immigration. “I can get hold of property,” Squier said, “which—road or no road—must soon prove of the highest value, but which now can be obtained for a song.”⁷ He also wanted control of mines—gold, silver, copper, diamond, coal, and iron—heretofore unexploited “for want of scientific knowledge, intelligence, machinery, and capital.”⁸ The railway, then, although the nucleus of the promotion scheme, would be only one source of the millions of dollars the promoters hoped to make in Honduras.

Squier himself agreed to head the exploring party, consisting of three engineers, a draftsman, and a physician who doubled as a mineralogist, and to conduct the necessary negotiations with the government of Honduras for a charter.⁹ In order to escape detection and possible harassment from the rival Panama and Nicaragua companies, the group called itself a “scientific expedition.” Squier purchased his steamer ticket under an assumed name. The men left New York in February 1853. After some difficulties with the Accessory Transit Company authorities, who refused passage across Nicaragua to the expedition, they made their own way across the isthmus and began their work at the Bay of Fonseca.¹⁰ The engineers, headed by Lieutenant William N. Jeffers, on leave from the United States Navy, found no serious impediment to their progress and speedily concluded a cursory exploration of the proposed route. Jeffers reported from Comayagua in May, and from Omoa on the Atlantic coast in June 1853, that there could be no serious difficulty in constructing a railroad over the terrain examined. His reports confirmed Squier’s belief that a road no more than 160 miles in length would suffice to cross the country.¹¹

While the engineers familiarized themselves with Honduran topography, Squier made contact with government officials. He learned that the political situation was certainly favorable to such an enterprise as the eight associates proposed. Honduras harbored the only Liberal government in Central America in 1853 and appeared in need of outside assistance. Isolated and harassed by opposition from the other four republics, particularly from neighboring Guatemala, the stronghold of Rafael Carrera and Conservatism, Honduras might well have looked to aid from another quarter. Furthermore, President José Trinidad Cabañas of Honduras, who had succeeded Francisco Morazán “as the acknowledged leader of the Liberal or Republican party,” was not only a friend of Squier, but also a well-known advocate of the greater extension of United States influence in Central America.¹² Squier arrived in the capital city of Comayagua in April 1853, fully prepared to take advantage of this situation for the benefit of himself and his associates.

Leaders of the government of Honduras, including Cabañas and Ramón Mejía, minister of state, were not in Comayagua when Squier arrived. Carrera’s troops had just crossed the border into southern Honduras, and Cabañas had hurried to Santa Rosa, preparing to resist the invaders. Although Cabañas expected an engagement with Guatemalan troops at any moment, he deemed Squier’s mission of such importance that he immediately appointed León Alvarado and Justo T. Rodas, prominent Comayagua merchants, to negotiate with Squier.¹³

In the month-long negotiations which followed Squier found the two Comayaguans quite cooperative, especially Alvarado, who became Squier’s devoted friend. The result was a charter granting all that the Americans desired. It conceded to the Honduras Interoceanic Railway Company (yet unorganized) the exclusive right to construct an interoceanic communication system through Honduras, granted free use of natural timber and stone for construction materials, specified that passengers from all nations could use the route free of charges, passport requirements, and baggage examination, and allowed eight years for the completion of the work. The charter made an exceptionally generous land concession. It granted 1,000 square miles of territory in the department of Yoro on the Atlantic coast and allowed the company the right to purchase an equal amount along the line of the road at twelve and a half cents an acre. In return, the company agreed to pay one dollar to the government of Honduras for each through passenger over ten years of age. Squier and the representatives of Honduras signed the charter on June 23, 1853.¹⁴

Hoping to secure quick approval of the charter by Cabañas and ratification by the Honduras legislature, Squier now acted upon secret instructions from his associates. He offered Honduras a loan to pay the expenses of getting the legislature together, hinting that arms, and possibly men, might be placed at the disposal of the government. In addition, he suggested that in order to inject money immediately into the faltering Honduran economy the company was ready to begin land purchases.¹⁵ Unbeknown to Cabañas or even to his New York partners, except Edwards, Squier had already initiated bargaining for the purchase of Sacate Grande, largest Honduran island in the Bay of Fonseca and proposed terminus for the interoceanic railway.¹⁶ Although still maneuvering for position against the Guatemala invaders, Cabañas invited Squier to come to government headquarters at Santa Rosa to talk over his proposals.¹⁷

On July 10 Squier arrived in Santa Rosa only to find that Cabañas had gone to the frontier. The minister of war, however, remained in Santa Rosa because of illness, and Squier immediately began a series of significant conversations with him and other officials of the Honduras government. “I was told that my arrival had been anxiously expected,” Squier reported, “not only in reference to our project but in reference to other matters which had for a long time occupied their thoughts.” Cabañas, Squier was told, had given up all hope of peace or prosperity for Honduras because of the constant hostility of Conservatives from the other Central American states and therefore wished “to procure the admission of Honduras into the American Union.” The government officials asked Squier’s advice on how it could be brought about. “I replied,” said Squier, “that I thought the matter a very delicate one . . ., that although it might not be immediately, it would be ultimately successful; and that they might count upon my cooperation.”¹⁸

Before the talks could be continued Squier learned that Honduran forces had penetrated Guatemalan territory and had suffered a disastrous defeat near Chiquimula, Guatemala, and that Carrera’s army again threatened Honduras. Guatemalan troops advanced unopposed as far as Santa Rosa, which they sacked on July 19, retiring the following day.¹⁹ Squier, who had left Santa Rosa just in time to escape the pillage, returned to the ruined town a few days later to greet Cabañas and the remnants of his shattered army.²⁰

This time Squier had “several confidential interviews with Cabañas & the minister of state.”²¹ Cabañas obviously could not conceal the weakness of his position. Guatemalan ascendancy in the Honduras-Guatemala war, which had been characterized by intermittent border skirmishes since 1852, daily threatened to bring down Central America’s remaining Liberal bastion. The railroad project, with its promise of immigrants, arms, and money, offered Cabañas a means of strengthening his country against Guatemala. Cabañas readily approved the charter but refused to work for speedy ratification unless the company aided him against Guatemala. Squier, believing that success of his plans depended on Cabañas, promised him a $20,000 loan to be used for the purchase of arms in the United States.²²

The suggestion that Honduras annex herself to the United States, which, according to Squier, Cabañas reiterated personally, did not find the railway promoters unprepared. Indeed, one of the several possibilities considered by the eight associates was that Squier should have himself named Honduran minister to the United States in order to negotiate a treaty, presumably of annexation, between the United States and Honduras. This plan was discussed by Edwards in March 1853, before Squier and Cabañas met.²³ After discussing the matter with Cabañas, however, Squier apparently gave up his ambition to represent Honduras in his own country. Realizing that a cooperative Honduran could serve the purpose with less suspicion, Squier, on behalf of the company, agreed to pay the expenses of a minister to the United States up to $500.²⁴

At the same time that Cabañas was promising to appoint a representative to Washington, the company was trying to get President Franklin Pierce to send a minister to Comayagua. Instead, Pierce named Solon Borland, then senator from Arkansas, as minister to all five of the Central American republics and gave him instructions to visit Nicaragua first.²⁵ Upon hearing of the Borland appointment, Squier fired off letters to the State Department and to Borland, insisting that the new minister come first to Honduras to show sympathy toward Honduras in its fight against the Guatemalan Conservatives.²⁶ Borland, who was entirely sympathetic with the Young American expansionist philosophy and the Honduras railway project, agreed to come, but he delayed so long in the United States and stayed so briefly in Central America that his influence was of no assistance to the railroad company. Appointed in April 1853, he did not leave the United States until August and did not arrive in León, Nicaragua until October.²⁷ He resigned the following February without ever reaching Honduras.

Since Borland could be of no help, Squier placed his hope for a treaty on the Honduran mission to the United States. But, as in the case of the Borland mission, delays and uncertainties foiled Squier’s plans. Cabañas’ first and second appointees did not accept, and he could not immediately decide on a third. Then one more Guatemalan incursion into Honduras, aimed at the Atlantic port of Omoa, required Cabañas’ full attention.²⁸ When it became clear that the Honduran mission would be delayed and that the legislature could not be assembled until 1854, Squier resolved to return to New York. After a quick trip to El Salvador and an unsuccessful attempt to negotiate for a Salvadoran terminus of the railway,²⁹ he returned to New York by way of Omoa and British Honduras, arriving in December 1853.

Following the return of the expedition Squier immediately published a brief report lavishly extolling the Honduras route. He stated that a railroad approximately 160 miles in length could easily be built from Puerto Caballos (slightly northeast of Omoa) to the island of Sacate Grande in the Bay of Fonseca. He emphasized that the reputedly rugged mountains of Honduras would not impede construction of the proposed railway because “the valleys of the Humuya and Goascoran, . . . constitute a great transverse valley extending from sea to sea, completely cutting through the chain of the Cordilleras. . . .” The surrounding country afforded “a variety of climate adapted to every caprice, and a temperature suitable for the cultivation of every product of every zone,” and “the hills and mountains of the interior contain numberless mines of the precious metals.” Construction materials could be found among the “inexhaustible quantities of the finest white and blue marble and sandstone, as also of the best pine, oak, and other varieties of useful timber,” he said. Laborers sufficient to the needs of the railway could be found, according to Squier, among the Black Carib mahogany cutters, of which “there is, probably, no equal number of men under the tropics so inured to hard labor and exposure or so well instructed in precisely the kind of work which we require.. . .”³⁰

Convinced of the superiority of the Honduras route the eight associates proceeded to organize a preliminary Honduras Interoceanic Railway Company with headquarters in New York. One thousand shares of stock were printed for distribution to the original promoters and their friends. They intended to seek public subscription as a formal stock company, but the unfavorable financial outlook in 1854 and difficulties in Honduras prevented them from carrying out their plans. The company chose Edwards as president and Squier as secretary. Augustus Follin, United States consul in Omoa, was selected as the company’s agent in Honduras.³¹

Edwards now undertook to expedite the company’s business in Honduras. In January 1854 he went to Honduras to secure ratification of the charter and to get the proposed Honduras-United States negotiations under way. Squier remained in New York to arrange the shipment of the promised arms to Honduras. Convoking the Honduras legislature proved to be a difficult and expensive task. Edwards reported from Honduras that “the association may feel sanguine of the ratification, but they [must] make up their minds to some expense, and the President [of Honduras] makes up his mind to hard work and a good deal of intrigue.” Between $2,500 and $5,000 would be needed, he estimated, to “send for the members of the legislature.”³² In March he reported that only two members were missing and that an escort had been sent out to bring them to Comayagua.³³ At last the legislature met, and, although some members boldly criticized the railroad scheme, on April 28 the charter was ratified.³⁴

Edwards did not disclose the ultimate expense of getting the legislature together, but it cost the company at least two $20,000 loans (which the company did not expect to recover) to insure the cooperation of Cabañas. The first loan, arranged in Santa Rosa by Squier and Cabañas, bought six cannons, 270 cartons of rifles, and an unspecified amount of ammunition.³⁵ The arrival of the arms shipment in early April brightened the outlook considerably for Cabañas. Writing to Squier, he said: “The arms and other implements of war that you were kind enough to send me have been placed at the disposition of the commandant of Omoa.. . . This remission is a new testimony that you have not forgotten the interests of Honduras and its government.”³⁶ Edwards and Cabañas signed the second $20,000 loan in Comayagua on the day the legislature ratified the charter.³⁷

Meanwhile, news of Squier’s operations in Honduras, magnified by rumor and by fear of the United States, had aroused considerable hostility to the railway enterprise. Fighting with the aid of Guatemala to return to power in his native Honduras, General Santos Guardiola issued broadsides with the railway a favorite target. His view was that the “imaginary and impossible” railway enterprise would be followed by an invasion of New Yorkers.³⁸ The Gaceta, de Guatemala, which opposed the railway project from the beginning, claimed that the railway company was not a legitimate enterprise, but in reality a ruse designed to prepare first Honduras, then the other republics, for annexation. Squier’s true object, according to the Gaceta, was “to foment disorders and stir up political questions in order that later the intrigues of the annexationists, of whom Squier is an agent and active collaborator, will find the ground prepared.”³⁹ El Salvador echoed this theme when it rejected the overtures of Squier for a Salvadoran terminus of the railway.⁴⁰ Obviously Squier’s ulterior plans had not escaped the vigilant attention of Central Americans. Contrary to the views of his critics, however, Squier did intend to build a railway; the railway was the foundation, while other fanciful plans grew from this base.

The shipment of arms, though it temporarily placed Cabañas out of danger from Carrera, increased the bitterness between Honduras and Guatemala and probably strengthened Carrera’s determination to oust Cabañas. Consul Follín reported as much from Omoa. “The determination of the parties in power in Guatemala,” he said, “is open and avowed, to break up the proposed American enterprise of opening an interoceanic communication through this State. And from what I can ascertain this is one of the principal objects of the existing war on Honduras.”⁴¹ Henry Savage, United States consul in Guatemala City, agreed.⁴² Follin and Savage believed, as did Squier, that Guatemalan antagonism to the railway enterprise grew from the fear that Guatemala’s trade with Belize would be abandoned in favor of the Honduras route. The opposition became more intense, if necessarily more cautious, when the Guatemalans learned that the company was supplying Cabañas with arms.

In answer to charges of unwarranted interference in the Honduras-Guatemala war Squier explained: “The transaction was a straightforward, commercial one, precisely like others which take place daily. The Honduras Railroad Company had sufficient faith in the honesty of Honduras to guarantee the payment of its purchases, and is prepared to do so, to any reasonable amount which that State may require.”⁴³ However commercial the arms deal may have appeared, it was in essence political: Cabañas was “taking the best means of securing himself the future presidency, ” as a friend of the railway project put it,⁴⁴ by reconstructing his army, and the railway company was trying to insure its position by strengthening a friendly government.

The railway associates even considered going further. Realizing that Cabañas might need men as well as arms, Squier and Edwards discussed the possibility of sending “settlers ‘with back sights’” to Honduras and made preliminary arrangements to send a crew of filibusters in support of Cabañas.⁴⁵ Captain Randolph B. Marcy, who did not “have the slightest doubt” of the ability of the United States to digest any “piquant morsel” of territory that might fall its way, agreed to head an armed expedition to Honduras.⁴⁶ Fortunately for Squier’s reputation, the plans (which were never fully described in the available correspondence) were called off before they could be carried out. As Squier explained it to Cabañas: “Capt. Marcy, who proposed going to Honduras with some men, has not yet returned from the frontier. He will be here probably next month, when we shall consult upon the matter of his going out, etc. Until then I do not think any steps will be taken in reference to it. At present, for reasons which I have given above [unfavorable financial outlook], it will be quite impossible for us to carry out the plans discussed between you and Mr. Edwards.”⁴⁷ Marcy renewed his offer to head a military expedition to Honduras as late as December 1856, and other filibustering suggestions received attention during 1856, but the company did not send any further military aid, either of men or materials, to the government of Honduras.⁴⁸

One of the reasons for the hesitancy in engaging filibusters was the expectation that the ends of the railroad associates could be accomplished through legal, diplomatic channels. For a time at least prospects of success seemed good. In December 1853 Cabañas prevailed upon the reluctant José Francisco Barrundia, elder statesman of Central American Liberalism, to accept the appointment as Honduran minister to the United States.⁴⁹ The selection delighted the railway men. Barrundia was devoted to the United States, was a “firm and consistent republican,” an enemy of Carrera, an Anglophobe, and an admirer of Squier.⁵⁰ Barrundia, known as “our minister” in the Squier-Edwards correspondence, sailed in May 1854 from Omoa for the United States, his passage paid by the railway company. Edwards, having completed his work in Honduras, accompanied him.⁵¹ If not a willing accomplice to the company’s intrigue, Barrundia certainly appeared to be a captive or a dupe.

Another aim of the scheme was to excite anti-British feeling in both the United States and Honduras in order to drive the two countries into each other’s arms. Squier, well-known as an Anglophobe, had prepared the ground in 1852 by writing a series of vitriolic articles attacking British policy in Central America.⁵² Now, in an apparent effort to convince the United States government that Great Britain endangered the sovereignty of Honduras by its continued occupation of the Bay Islands in the Bay of Honduras, Squier insisted that the Honduran minister be well supplied with documentary proof of hostile British acts.⁵³ To exacerbate relations further between Honduras and Great Britain Squier urged Cabañas—unsuccessfully, as it turned out—to refuse to receive the newly appointed British consul to Comayagua.⁵⁴

Newspaper reports of the Barrundia mission focused on the annexation question. According to the Gaceta de Guatemala, “the Hondurans are frightened because of their war with Guatemala and because of the questions in dispute with Great Britain about the Bay Islands and other matters. In consequence, they wish to hand themselves over to the United States.. . . Mr. Squier. . . has influenced them to make the solicitation.”⁵⁵ And the New York Herald, which claimed to have a copy of Barrundia’s secret instructions, alleged: “The great object of Gen. Barrundia, which comprehends all others, is the downright, absolute, positive annexation of Honduras to the United States.” Annexation, continued the story, was the only way Honduras Liberalism would be safe from the rapacious Conservatism of Guatemala.⁵⁶

Squier and Edwards certainly placed great importance on the Barrundia mission. In urging Cabañas to appoint a minister to the United States Squier had argued that “the proper agent in Washington and New York can do much more than it is in the power of Mr. Borland to accomplish, especially in those matters not connected with diplomacy.”⁵⁷ Edwards, perhaps with annexation in mind, said: “If Carrera marches in and beats Gen. Cabañas, I think a temporary Govt can be arranged. . . during the armstice [sic] Gen¹ Barrundia can complete his arrangements which will supersede the necessity of elections—therefore push Barrundia negotiations.”⁵⁸

That Barrundia truly bore instructions from his government to arrange its demise may be doubted. Officially, he went to the United States to further the railroad project by negotiating for the easy entry into Honduras of settlers from the United States.⁵⁹ Barrundia is reported to have written from New York: “Here all the newspapers say that I have come to work for the annexation of Honduras. I have undeceived them of this error.”⁶⁰ Perhaps Squier and Edwards intended to manipulate Barrundia into negotiating United States annexation. That they planned to mold the Honduran mission to their own interests is clearly revealed by the following excerpt from a letter from Squier to Edwards: “A hint about our minister when I bring him on. He must be kept as much away from t’other Molina [Cabañas’ first choice for the mission was Pedro Molina. Felipe Molina was Guatemalan minister to the United States from 1852 to 1855] as possible, & be well fed. A snug private dinner every day while in N. Y. preparing for his duties in Washington will be necessary for his health & good for our interests.. . . Think of these things, so that they shall not surprise you nor our friends.”⁶¹

The high hopes for success of the Barrundia mission were broken by an unexpected disaster. Barrundia had presented his credentials to President Pierce and had made one significant speech in Washington in which he innocuously advocated more intimate relations with the United States,⁶² but on August 4, 1854 he suddenly fell ill and died, before negotiations had begun.⁶³ His death, which Squier lamented as a “national calamity,”⁶⁴ wrecked the clandestine schemes of Squier and Edwards and dealt a severe blow to the railway project.

Denied the expected electrifying diplomatic success, the promoters of the railway project faced an increasingly gloomy prospect. Efforts to get Cabañas to appoint a new minister proved unavailing, as did renewed efforts to get Pierce to name a minister to Honduras. Cabañas began to squander his precious arms by aiding his political comrades in Nicaragua, thus exposing his own régime to danger.⁶⁵ Squier and Edwards both fell ill from fever apparently contracted in the “eminently salubrious” climate of Honduras.⁶⁶ Edwards’ New York financial interests took a turn for the worse.⁶⁷ And above all, perhaps because of the near completion of the Panama railway and the success of Vanderbilt in opening a makeshift transit route across Nicaragua, few Americans could be persuaded to invest in the Honduras route. “Times are exceedingly bad here, money being scarce, and confidence destroyed,” Squier reported. “Of course, no enterprise like ours can prosper under such circumstances. We confine ourselves simply to carry out what we have commenced and shall delay active operations until there is what is called a ‘let up.’”⁶⁸

By the end of 1854 the dispirited associates concluded that the enterprise could neither be furthered as part of a diplomatic scheme to annex Honduras nor advanced by filibustering expeditions. They were thrown back, as it were, on mundane, legitimate entrepreneurship. Having also concluded that American capital could not be raised in sufficient quantity to locate and build the road, they looked to European capitalists to keep the project alive. Squier, appointed “special agent and attorney of the proprietors,” went to Europe in early 1855 to solicit the cooperation of French and British capital in the venture.⁶⁹

Squier’s task was to get foreign capital behind the original company or, failing that, to sell out for as much as possible. The European mission of nearly two years’ duration proved to be one of the most difficult in Squier’s career. In France, where he talked to officials of the Crédit Mobilier and the Rothschild banking interests, he almost succeeded, only to see his negotiations collapse at the last minute.⁷⁰ Crédit Mobilier agents did go to Honduras to investigate the railroad line and mining possibilities; their unfavorable report apparently broke up the negotiations.⁷¹ In England Squier found a number of government officials and capitalists favorably disposed toward the Honduras project. Foreign Minister Lord Clarendon was Squier’s most influential convert. Lord Clarendon asked for an examination of the Honduras route by an independent observer, and Captain Robert FitzRoy of the British Navy, using documentary material supplied to him by Squier, issued a report fully endorsing the Honduras project.⁷² Chief among the interested capitalists was William Brown, brother of Lord Clarendon. Brown was a well-known member of Parliament and a Liverpool banker who had family connections with banking houses in Baltimore, Philadelphia, and New York.⁷³

Intricate three-way negotiations involving Honduras, Great Britain, and the United States now required Squier’s attention. The British capitalists, believing that getting funds to build the road would be impossible as long as the so-called “Central American Question” remained unsolved, declined to back the railway project until friendly relations between Great Britain and Honduras were restored.⁷⁴ The difficulty between the two nations centered on the British protectorate of the Mosquito Indians in Honduras and Nicaragua territory and on the Bay Islands, claimed by Honduras but occupied by Great Britain. Honduras officials had long complained of the Mosquito protectorate, and they were not pacified by the British promise, formalized in the Clayton-Bulwer Treaty, not to colonize or settle any part of Central America in the future. The controversy over the Bay Islands, which had been occupied from time to time by British subjects since the British became interested in the Mosquito Coast, erupted in 1852 when the British government proclaimed them a British colony. The United States joined Honduras in protesting this move, claiming that it constituted a violation of the Clayton-Bulwer Treaty. The British government preferred to accept the American interpretation of the treaty rather than see it destroyed and by 1855 was looking for a face-saving way out of the Mosquito and Bay Islands predicament. Lord Clarendon wished to abandon the protectorate and turn the islands over to Honduras, but he refused to relinquish control until the residents, some of them British citizens, had been assured of adequate protection against possible Honduran vengeance.⁷⁵ In order to advance the railway project Squier found it necessary to take part in settling these diplomatic problems. Just two years before he had conspired to aggravate them.

All through 1856 Squier worked in London trying to arrange a settlement satisfactory to Honduras, Great Britain, and the United States. The Dallas-Clarendon convention, signed in London October 17, 1856, which United States Minister George M. Dallas admitted was founded on Squier’s plan, was the fruit of Squier’s work behind the scenes.⁷⁶ It provided for British abandonment of the Mosquito protectorate and withdrawal from the Bay Islands, but it restricted Honduran control of the islands’ residents. The United States Senate accepted this plan with amendments, but when the British Foreign Office rejected the amendments the convention was dropped.⁷⁷

Simultaneously Squier worked to effect British withdrawal by direct negotiations between Honduras and Great Britain. He claimed to be in complete charge of the Honduran case in London: “I have procured the appointment of two ministers from C. A.. . . whom I have to take care of and whose dispatches I am obliged to write, who are now here under my charge.”⁷⁸ León Alvarado and Victor Herrán, the two Honduran negotiators, who publicly acknowledged their indebtedness to Squier,⁷⁹ signed a treaty with Lord Clarendon August 26, 1856. It was similar to the Dallas-Clarendon convention in declaring the Bay Islands under Honduran sovereignty, but exempting their residents from Honduran taxation and military service and guaranteeing their right of self-government. It also provided for relinquishment of the Mosquito protectorate. A so-called additional article bore specifically on the railroad project. It provided that the Honduras railway would “be at all times open and free to the government and subjects of Great Britain,” and that “in order to secure the construction and permanence of the route or road herein contemplated . . . Great Britain recognizes the rights of sovereignty and property of Honduras in and over the line of said road, and for the same reason guarantees positively and efficaciously the entire neutrality of the same.”⁸⁰

For about two years the outcome of the Honduras-Great Britain convention remained in doubt, and the resulting uncertainty caused the railway promoters much dismay. Despite the efforts of Squier and Alvarado, opposition to the solution provided by the convention developed in Honduras. The Honduras legislature, meeting in early 1857, failed to bring the issue to a vote, thus allowing the time limit set for ratification to elapse. Squier blamed the hostile influence of Costa Rica and Guatemala for the inaction, but it seems clear that the Hondurans themselves were displeased with the convention, primarily because of the objectionable restrictions on their sovereignty.⁸¹ The British were not able to terminate their embarrassing occupation of the Mosquito Coast and the Bay Islands until April 22, 1861, when the Wyke-Cruz Treaty, negotiated in Comayagua in late 1859, was finally ratified.⁸²

Separate negotiations involving the United States and Honduras took even longer. After the failure of the Dallas-Clarendon convention the railway promoters tried to get a commercial treaty between the United States and Honduras with an additional article providing for United States guarantee of the Honduras railroad route. Changes of government in Honduras and the Civil War in the United States prevented final negotiation and ratification of such a treaty until 1864, after Squier had given up hopes of building the road.⁸³

Despite the diplomatic uncertainties Squier did convince a group of British capitalists that a solution to the Central American question was so near that their investment in Honduras would be safe. Instead of supporting the American company, the British group, after protracted haggling over the purchase price, bought the charter and privileges obtained by Squier and his associates and organized a new company. They paid approximately $120,000 in cash and promised some $375,000 more in shares and proceeds from the sale of land.⁸⁴ In January 1857, the British businessmen organized the Honduras Interoceanic Railway Company, Limited, with its seat in London and with an agency in New York. William Brown, who favored the Honduras project but hesitated to take any new duties because of his age, accepted the chairmanship of the company at the solicitation of Lord Clarendon. R. W. Crawford, later governor of the Bank of England, was named vice chairman.⁸⁵ Squier returned to the United States as a member of the Board of Directors and head of the New York agency, which was to be the headquarters of the field operations. As earlier in 1854, the company postponed public stock subscription until the financial situation improved, and until an adequate survey could be completed.⁸⁶

While Squier acquainted European “graybeards and capitalists” with “the simplest lessons in geography,”⁸⁷ two events of great importance to the railway project had occurred in Central America: Cabañas fell from power in Honduras, and William Walker became president of Nicaragua. The ouster of Cabañas put the company’s previously favorable position in Honduras to a severe test. “The revolutionary leaders now at the head of affairs,” commented Squier, “are, no doubt, disposed to look with suspicion if not with hostility on all the acts and measures of their predecessors in office without reference to their merits or value.”⁸⁸ The new president, as of February 17, 1856, was General Santos Guardiola, who had conducted his revolutionary campaign against Cabañas from Guatemala and who had openly received aid from Carrera. Both Squier and Guardiola had publicly condemned each other in unrestrained language.⁸⁹ For the sake of the railroad project, now referred to in his letters as the “cause,” Squier disregarded the old antagonism. But for the first several months in office Guardiola did not disclose his views on the interoceanic railroad, so that the promoters became concerned over their investment.

The advent of Walker in Nicaragua equally challenged the company’s position, for Walker’s filibustering activities made all Americans suspect in the eyes of many Central Americans. Central Americans who feared absorption by the Northern Colossus could point to the Accessory Transit Company (which had brought hundreds of recruits to Walker) and ask whether Honduras wished to be the medium for the introduction of more American adventurers to Central America. Capitalists, too, were uneasy because of Walker. William Brown regarded filibustering as the most important of all deterrents to British investment in Central America in the 1850s.⁹⁰

Recent events in Central America had caused concern among the British directors for another reason. The company hoped to secure the direct sanction of the projected railway by the British government, which was then considering the isthmus of Honduras as part of a mail and military route to the Far East. It was hoped that Great Britain would authorize the sounding of the harbors at Puerto Caballos and Sacate Grande and follow with an on-the-spot examination of the route to confirm the company’s survey. First though, the company had to prove to the British Foreign Office that Honduras favored the enterprise, for, despite Lord Clarendon’s acceptance of the feasibility of the route, there remained some doubt as to the approval of the enterprise by Guardiola and the people of Honduras.⁹¹

For these reasons—the uncertainty of President Guardiola’s attitude, the unsettling effect of Walker’s presence in Central America, and the desire to get British government sanction of the railway— the new British directors made great haste to reestablish the company’s position in Honduras by preparing to dispatch a corps of engineers to survey the route in detail. Squier was instructed to organize and superintend the surveying expedition from New York. By April 15, 1857, or within sixteen days of his return to New York from London, Squier managed to get together an expedition of some forty men, headed by Chief Engineer John C. Trautwine, and send them off to Honduras.

Company officials awaited with great interest news of the expedition’s reception in Honduras. To their great relief, George H. Gliddon, chief agent of the company in Honduras, reported that the expedition was received at Omoa with “every possible kindness” and that the government was “thoroughly friendly, all rumors to the contrary notwithstanding.”⁹² Further reports from Gliddon, Alvarado, and others indicated that Guardiola, as well as other leading Hondurans, had been entirely captured by the great dream of linking the two oceans by rail.⁹³ Past animosities and fears of foreign encroachment paled beside visions of prosperity and progress.

Honduras’ favorable attitude was complemented by a relaxation of opposition from both Guatemala and El Salvador. Factual accounts of the progress of the engineer corps appeared in the columns of the Gaceta de Guatemala without adverse criticism.⁹⁴ The Gaceta even praised Dr. Gustavus Holland, physician of the Trautwine expedition, for his efforts to combat a cholera epidemic which affected both Honduras and Guatemala.⁹⁵ Reports from El Salvador indicated that a similar change of attitude had occurred. Two factors were responsible for the change: the company was now a British rather than an American company, and Conservatives rather than Liberals now governed Honduras.

Probably, as enthusiasm for the railway waxed among the Central Americans, it waned among members of the Trautwine expedition, who fought swamps, floods, rapids, mountains, and insects on the way across Honduras from May 1857 to March 1858. It was not that Trautwine was inexperienced. He had faced similar obstacles before, once as engineer employed by the Panama Railroad and again on an independent search for a canal route along the Atrato River in Colombia.⁹⁶ This time, however, an incredible array of mishaps, personal disagreements, and faulty decisions plagued Trautwine, his problems complicated, no doubt, by his weakness for liquor.⁹⁷ Scarcely had the surveying party arrived at Omoa when two of the three principal assistant engineers resigned, accusing Trautwine of drunkenness.⁹⁸ The rainy season came early and delayed operations on the Atlantic coast. An outbreak of cholera, the first in Central America in twenty years, further disturbed the work. As if this were not enough, Gliddon fell to quarreling with Trautwine and had to be replaced; he committed suicide on the way home.⁹⁹ A Vanderbilt agent who had taken employment with the corps peppered Chairman Brown, who appeared to be especially credulous of any bad news, with unfavorable reports. Because of these and other unforeseen problems, costs of the survey soared to nearly $200,000, over three times Squier’s original estimate, and spread pessimism among the British directors.

Good news from England helped temporarily to neutralize the bad reports from Honduras. Learning of the favorable response of Guardiola and convinced of the intention of the promoters to go ahead, Lord Clarendon gave his blessing to a further British connection with the railway project. He now yielded to the request for a formal examination of the route to determine its fitness for mail and military transportation between England and its Pacific possessions.¹⁰⁰ Also under consideration was a proposal to make the Bay of Fonseca the Pacific station of the British navy rather than Valparaíso. Lieutenant Colonel Edward Stanton of the Royal Engineers was selected in mid-1857 to go to Honduras to investigate the route and its harbor accommodations. His instructions came from Sir John Burgoyne, Inspector General of Fortifications,¹⁰¹ but the company gladly agreed to pay his wages and expenses.¹⁰²

The Stanton inspection trip only added to the company’s problems. Rather than go directly from England to Honduras, he chose to go by way of New York. Then, when he missed the regular Panama steamer, he insisted on a lengthy, cross-country trip to New Orleans to catch one of the infrequent steamers to Central America from that port.¹⁰³ He finally reached the Bay of Fonseca in January 1858. Edwards, who went along as escort, obligingly hired a pack train of forty-seven mules to carry Stanton, his assistants and servants, and their baggage across Honduras.¹⁰⁴ The company paid all of his expenses for this trip, including reimbursement for the contents of his wallet, which was stolen in New Orleans!¹⁰⁵ After all this, the directors of the company confidently expected a favorable report. Stanton stunned them, however, by his noncommital conclusions; he neither endorsed nor adversely criticized the project. In his brief final report he blandly said that the ports were “adequate” and the route “practicable.” He did not enter into the matter of expense of construction but hinted that the railway would be costly.¹⁰⁶ The British government, although indicating that it would be happy to see the railway built,¹⁰⁷ made no further move to support the project.

If Stanton’s neutral reaction was not sufficient to kill enthusiasm for the Honduras railway, the final report of Chief Engineer Trautwine was. Trautwine had no doubt of the feasibility of the railway, but his estimates as to distances and costs were so much greater than Squier’s figures that his report dismayed friends of the project. He raised Squier’s original 160-mile estimate of the length of the line to 231 miles. And though Squier had claimed that the road would not require “a single tunnel or bridge of any magnitude,” Trautwine’s proposed line would necessitate at least eight tunnels and several major bridges. He concluded that $14,347,679 would be needed to build the road.¹⁰⁸ In the 1857 prospectus of the British company Squier had estimated the costs at approximately $6,000,000.¹⁰⁹ Trautwine also had to admit that, because of his crew’s illness and the need for haste, he had not surveyed some 40 miles of the most rugged part of the line.¹¹⁰

Squier adamantly refused to quit. In 1858 he made a final trip to England to urge the company to seek public stock subscription. He found the English backers afraid to go ahead. They complained of Trautwine’s incomplete reports and of the unexpectedly high cost of the survey. They were understandably confused by the conflicting estimates of Squier and his chief engineer. Probably they were not favorably impressed by Squier’s attempt to show that the chief engineer was incompetent.¹¹¹ The $14,000,000 figure was not impossible, but what if it was too low? Brown maintained a suspicious view that all estimates were too low, including Trautwine’s.¹¹² Squier responded with cost-cutting suggestions, such as using an inclined plane with stationary engines or using steamer navigation a few miles up the Ulua River. In desperation he suggested the construction of a temporary carriage road across the isthmus of Honduras.¹¹³ As they were debating these possibilities, the financial outlook worsened, and war threatened in Europe; the company directors advised delay. A year later, in September 1859, the board of directors abandoned plans of launching the project in the near future.¹¹⁴

By early 1859 even Squier had ceased to hope for immediate success. When he first became interested in promoting the Honduras route in 1852, he had promised to “devote three years to making money. . . and no more,” hoping to make his fortune so that he could return to his scholarly interests.¹¹⁵ After nearly eight years devoted “to the prosecution of the enterprise and the adjustment of political and other questions connected with it,”¹¹⁶ the scheme had not succeeded and Squier’s fortune was still not made. “I am pretty much ‘tired to death’ with this abominable railway,” Squier wrote on the last day of 1858, “& long to have it out of my way.”¹¹⁷ When he returned to New York in January 1859, without having persuaded the British backers to bring the project before the public, he acknowledged that prospects for success were dim, although his natural optimism kept him looking for better times in the future.¹¹⁸

During the decade of the 1860s Squier turned to other pursuits, and Hondurans themselves carried on the promotion of the grandiose project upon which the prosperity of the country was believed to depend. León Alvarado, a supporter of the railway project since he helped to negotiate the charter with Squier in 1853, took the lead in getting loans from Great Britain and France with which to build the railway.¹¹⁹ Between 1867 and 1870 the Honduras government negotiated three huge loans, but they failed to bring the long-sought railway to Honduras. Only a trickle of the vast sums contracted for ever reached Honduras; the rest went for discounts, commissions, and interest. The chief result was a huge debt which burdened the country far into the twentieth century. Before the money ran out the contractors managed to build fifty-seven miles of the railway from the Atlantic coast inland to a point past San Pedro Sula.¹²⁰ This section was completed in 1871, but a few years later a traveler reported it abandoned and in ruins.¹²¹

By this time, the dream of an important interoceanic transportation route through Honduras was shattered by the completion in 1869 of the transcontinental railroad within the borders of the United States. Writing in 1870, Squier professed to see “no antagonism of interest” between the transcontinental route and the Honduras route. He claimed that the ten-day train trip across the continent was “past the limits of human endurance” and far too costly for ordinary passengers and freight. “The great bulk of passengers,” he predicted, would prefer the Honduras route.¹²² The transcontinental railroad, however, soon cut deep into Panama profits, and, although Squier stubbornly refused to admit it, it also made the Honduras project primarily a local concern.

Realizing that the interoceanic project might not bring immigration and international commerce to Honduras, as Squier promised, Hondurans have still tended to cling to the hope of finishing his great design. They have consequently been moderate in their judgment of Squier. They might have lashed out at him for implanting in the republic an impossible goal, which led to overborrowing and financial disaster. They might have criticized him for the profits he made in selling the charter to the British capitalists or for his extremism and irresponsibility in attacking his opponents. They might further have criticized him for his Manifest Destiny views and for his intrigues to bring Honduras into the American union. Surprisingly, they have not. They have chosen, rather, to consider Squier as Honduras’ greatest foreign friend, as one who strove as mightily as any of its citizens to advance the interests of the republic.¹²³ Partly, this unwarranted faith in Squier is due to the lack of information concerning his motivations and intrigues, but primarily it is due to the Hondurans’ willingness to share his vain dream.

Author notes