For those who want a Japanese or German canal in Nicaragua after the US went the way of Panama you might be out of luck. US probably would not have allowed any other nation to build a competing canal.
Nicaragua and the United States signed but never ratified the Castill-Knox Treaty in 1914, giving the United States the right to intervene in Nicaragua to protect United States interest. Emiliano Chamorro signed the treaty with Williams Jenning Bryan on 5 August 1914 in which the United States agreed to give an exclusive concession for building an interoceanic canal across the San Juan River for a period of 99 years. By signing this treaty Nicaragua received the sum of three million dollars. Because the United States had already built the Panama Canal, however, the terms of the Chamorro-Bryan Treaty served the primary purpose of securing United States interests against potential foreign countries -- mainly Germany or Japan -- building another canal in Central America. The treaty also transformed Nicaragua into a near United States protectorate. The modified version of Castill-Knox Treaty, the Chamorro-Bryan Treaty, omitting the intervention clause, was finally ratified by the United States Senate in 1916.
Nicaragua and Panama were important when it came to the 1848 Gold Rush of California. It was quicker to go via those two nations then overland US or sailing around the tip of South America.
This some info. on it:
http://www.bruceruiz.net/PanamaHistory/argonauts.htm
US had a report made in 1876 on the possibility of a canal via Nicaragua.
The following on US interest in the Canal. Seems Nicaragua went to other European nations after US lost interest.
Read this:
http://www.globalsecurity.org/military/facility/panama-canal-nicaragua-2.htm
Once at that above page you will see an index to the right to continue or see other stories on Nicaragua and the canal.
The following is a map of what was originally planned. The numbers 1 thru 4 near the Atlantic side and 5 thru 8 on the Pacific side are the locks that were planned.
Rio San Juan was the border with Costa Rica. But in that map the Canal is North of that river.
Its a big map:
http://farm4.static.flickr.com/3236/3040888199_34f0be9171_o.jpg
In Dec. 2008 there is a story that Russia might be building the Nicaragua Canal. But with the world economy has it is it will probably be delayed. I would think Nicaragua has a better chance of building a dry canal via rail or roads. Thats what Honduras is doing.
This is a current map of the Nicaragua Interoceanic canal from 2006 from a report.The map shows which routes they would be taking. The map is in a PDF report on page 34.
http://www.pancanal.com/esp/plan/documentos/canal-de-nicaragua/canal-x-nicaragua.pdf
Side Note - Seems the San Juan river is the way they will probably be going. But that would damage the environment. Plus that would create problems with Costa Rica. The San Juan river is the border between Costa Rica and Nicaragua but Costa Rica only controls the South Bank of the river just before the river moves NW into Nicaragua. When I say the South Bank I mean up to the waters edge. Where the water begins belongs to Nicaragua. So Nicaragua controls the entire river. Story gets better.
Costa Rica really wants no Canal there but they do not control the river since they gave up the river in the Cañas-Jerez treaty in 1858. Treaty was even taken to arbitration by both nations to US President Cleveland 30 years later. Anyway, the thing is it seems the treaty has been violated and they could claim half the river.
Seems in 1897 they finally started marking the border. Problem was that the land area south of lake Nicaragua was flooded so the people marking the border had to go 2.5 KM south looking for dry land. They built a marker but that marker was suppose to indicate that the border was 2.5 Km North. Since no one lives there and that place is isolated with time everyone thought that was the actual border.
See Map on this page:
http://www.rutaalterna.org/Mod2/MI%20COSTA%20RICA%20PARA%20WEB/articulos/hito13.htm
On that map the pink color under the 1858 treaty should belong to Costa Rica but because of that mistake it is under Nicaraguan control. Its a park.
Some people of that area wanted to proclaim a Republic in that small territory. The Republic of Airrecu. They even asked for UN recognition.
Here is the story:
http://www.accessmylibrary.com/coms2/summary_0286-26440119_ITM
Map of Airrecu:
http://www.geocities.co.jp/SilkRoad-Lake/2917/syometsu/airrecu01.gif
Seems there have been many border problems in Central America. Costa Rica once invaded Panama in 1921 but that is another story.
That would also make a good alternative history story.
From a real NY Times headline from 1921:
COSTA RICANS TAKE NEW PANAMA TOWN; Continue Advance to Almirante --Panama Says 2, Nicaragua Reports 18 Killed. U.S. GUNBOAT ON THE WAY League Council Sends Message to Two States--Panama Says Washington Will Mediate. 18 Dead, Many Wounded, Reported. Costa Rica Wants League Solution. State Department Asks Navy Protection
And do not be fooled into believing that today Costa Rica has no military. Offically they do not but they have a paramilitary made up of rural and civil guards and which is one of the best trained in latin america even though they have no heavy equipment.