If a surviving CSA built the Nicaragua Canal and the US still built Panama Canal. How different would North America be and How would this effect Global Economy and Politics.
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I doubt they'd have the money, a CSA that managed to secede would be a Banana Republic itself, especially if a bitter Union clamped down on regular trade and blocked loans. The Confederacy would be a none to efficient police state.
The USA would not be in a position to build the Canal if the country splits in the 1860s. And the CSA would definitely not be in a position to build a canal
If a surviving CSA built the Nicaragua Canal and the US still built Panama Canal. How different would North America be and How would this effect Global Economy and Politics.View attachment 795617
The eastern coast of Nicaragua, and a contiguous portion of Honduras' coast, functioned as the autonomous Mosquito Kingdom from the 1600s to the late 1800s. The Mosquito Kingdom existed as a protectorate of the British and was used by them as a base to project their own power into the region so they could destabilize it. The British eventually extended their recognition of the Mosquito Kingdom to include the the Bay Islands north of Honduras which they claimed was their right to do because the Bay Islands supposedly belonged to Belize. While the authority of the Mosquito Kingdom was restricted to a coastal strip they claimed the eastern half of Nicaragua and the eastern quarter of Honduras.

The United States and United Kingdom signed the Clayton–Bulwer Treaty in 1850 after repeated low level clashes in the area. That Treaty aimed to create a peaceful open door policy in the region and to respect neutrality of any potential canal. While war was avoided that Treaty was ineffectual and disputes remained. However, between the distraction of the Crimean War and the evolving economic relationships between the Anglo countries, the United Kingdom became disinterested in the area and broke up the Mosquito Kingdom to the respective Central American countries. In 1860 Nicaragua took suzerainty over its Mosquito Coast as a semi autonomous region, though the British maintained a presence in it for another forty years.

One potential way to avoid British entanglement over the Mosquito Coast would be to begin the eastern portion of the Nicaragua Canal in northern Costa Rica, though I am unsure of the geological difficulties involved in such an endeavor. There may also be other geopolitical entanglements with taking such a route.

The position of the Confederacy with respect to Central America depends on how the Confederacy separates from the United States. In the 1850s the South has men on the ground such as Solon Borland, and William Walker ruled Nicaragua for almost a year in the mid 1850s with the initial support of President Franklin Pierce. The Confederacy could have an advantage in acquiring Central American territory if you alter events in that era. The United Kingdom was losing interest in the region so a series of events could conceivably compel the British out of it early or compel them to yield to an American canal project, but it would likely be a complicated series of events since the British were closer to the Confederacy than the Union. Perhaps the British could turn it over to the Confederacy as a sort of middle manager.

Actually, the canal projects might be swapped compared to how you proposed. The USA might take on the Nicaragua Canal while the CSA, which was closer to Britain and France, might take on the Panama Canal. Conceivably, an engineering delegation from the CSA would be sent to an alternate International Congress for Study of an Interoceanic Canal. The Confederate delegation may have had more experience in tropical environments than the OTL attendees, thus that Congress could have chosen Adolphe Godin de Lépinay's damming project to create a vast lake accessed by locks. The Lépinay Plan was reputedly an easier construction project than what was chosen by that Congress. Panama would likely still be part of Colombia in this case, though perhaps with Americans involved in the project they would have negotiated a harder bargain from Colombia than returning the lease without compensation after 99 years.

Wikipedia: Mosquito Coast
Wikipedia: Clayton–Bulwer Treaty


It's a good point that neither nation may be in a financial position to do a canal project. As a corollary, neither nation may be willing to let the other do a canal project without raising a huge stink.

This could be a cause for a war.
The CSA has a lot less strategic need for a canal than France or the US (barring some scenario they're fortunate enough to grab Sonora/Baja California). So it would be associated with hypothetical attempts at their own imperialism in the area which in turn would be backed by France/Britain who would be funding the bulk of the efforts.

Come to think of it, it could be something the CSA would want. Perhaps they finally abolish slavery in the 1890s and the solution to the free blacks is to ship them to Central America to work on the canal at the behest of France/Britain. European powers provide the money, the CSA provides the labour.
This would probably be best achieved with a pre-ACW PoD, with William Walker's Nicaragua surviving for longer (not alienating his support would help). Long enough that they eventually are voluntarily annexed into the CSA (possibly to deter any invasion attempts by their neighbours, who have plenty of reason to hate them). As other posters mentioned, it would probably be bankrolled by their European allies, most likely France, who would probably see it as a useful asset to get around their expanding sphere of influence in Latin America (started with the Second Mexican Empire), and a shortcut to their Pacific colonies. The CSA would probably see the most value in having Nicaragua as a state; a first step in trying to build a sphere of influence in the Caribbean (the golden circle they always wanted), and some easily accessible Pacific coast (it'd be easier to get than trying to convince Mexico to sell states to them).

Meanwhile, the US would be interested in a canal across Central America for the same reasons as in OTL, and in this world they'll still have coastlines, influence, and interests in both oceans. In this world they'd have the added reason of countering the CSA, trying to build their own sphere of influence in Latin America, and so competing with the CSA for territory, influence, and allies. So they'd still support the Panamanian independence movement (Colombia may ally with the CSA in response), and once they have it will be building a canal through it as soon as they hear about Franco-Confederate plans to build a Nicaraguan one.

The biggest effect on politics would be that two power blocs each have their own canal, competing with each other to attract shipping. It wouldn't be a cause of the US-CS rivalry for influence in the Americas, but it would be a product of it, and likely exacerbate it. And it would be a point of interest in the wider rivalry between the European powers, allied with either the USA or the CSA, and each using them as an important link between their metropole and some of their colonies. If a general European war begins, there would be fighting in the area.