In November 1901, the Walker Commission, a group of engineers that had been appointed by the late President McKinley, recommended the Nicaraguan over the Panamanian route for an isthmian canal, largely on the basis of lower costs. Panicky, the French canal company that had the rights to the Panama route dropped its price to $40 million, a saving of $69 million that tipped the scales in favor of Panama. President Roosevelt, who had apparently earlier favored the Nicaraguan route, now persuaded the Walker Commission to vote for a Panama canal.
But the French company was not yet out of the woods. In January 1902, nine days before the Walker Commission reversed itself, the House of Representatives voted for a Nicaraguan canal by 308 to 2. Alarmed, the French company swung into action with some influential lobbyists, including William Cromwell, a prominent New York lawyer who had recently contributed a reported $60,000 to the Republican campaign in 1900 to get the party not to go on record in favor of a Nicaraguan canal. (He reportedly charged his contribution to the company...) Moeover, as Thomas Bailey explains in A Diplomatic History of the American People (tenth edition), pp. 489-90:
"The company was also well served by a remarkable Frenchman, Philippe Bunau-Varilla, fomer chief engineer of the original organization and a large stockholder of the new concern. In the interests of his fellow investors he came to America and zealously made contacts with the 'right people,' including John Hay, Mark Hanna, and Theodore Roosevelt. He attempted to disparage the Nicaraguan route by raising the bogey of volcanic activity, but his efforts did not meet with much success until May, 1902, when Mont Pelee, on the West Indian island of Martinique, suddenly blew its top and wiped out a town of 30,000 people. A few days later a Nicaraguan volcano became active--the very mountain (Momotombo] that was engraved on the postage stamps of the republic. Bunau-Varilla hastened to the stamp dealers of Washington:
"'I was lucky enough [he later wrote] to find there ninety stamps, that is, one for every Senator, showing a beautiful volcano belching forth in magnificent eruption.
"'I hastened to post my precious postage stamps on sheets of paper...Below the stamps were written the following words, which told the whole story: 'An official witness of the volcanic activity of Nicaragua.'
Bunau-Varilla then took steps to place one of these stamps in the hands of each Senator."
Anyway, the Panama lobbyists--led by Mark Hanna who as Chairman of the Republican National Committee was doubtless grateful for Cromwell's 1900 contribution--scored a victory in Congress; they got the Senate to substitute a Panama canal for the House's Nicaraguan route, and the House went along.
Let's suppose that neither Pelee nor Momotombo had erupted in 1902. (Or that in any event Nicaragua hadn't put an erupting Momotombo on its postage stamp.) Granted, all the money spent by the Panama lobbyists might still have been decisive. Still, the vote in the Senate for the Panama route was relatively close (42-34), many Southerners preferred the Nicaraguan route (longer, but closer to Gulf ports), the volcano might have persuaded some undecided Senators to oppose a Nicaraguan route, and TR was more interested in getting a canal built as soon as possible than in where it would be built. Any thoughts on the consequences of a Nicaragua Canal?