The New Panama Canal Company (Compagnie Nouvelle du Canal de Panama) was formed in 1894 following the collapse of its predecessor, the Compagnie Universelle du Canal Interoceanique (CUCI). The latter was created by Ferdinand de Lesseps, who had been supported by many French financiers after his success with the Suez Canal. Following de Lesseps' failure to build a canal in Panama, the CUCI went into liquidation in 1889 amid accusations of [G 14 / skulduggery] and fraud. In order to revamp the company's image and restore confidence amongst investors, it was reconstituted as the New Panama Canal Company (NPCC).
The Hay - Bunau-Varilla Treaty of 1903 between the US and Panama dashed French hopes of ever building the Panama Canal. Granting America full rights for any future canal building, the French had no choice but to reluctantly sell their holdings in the NPCC to the US in 1904. To add insult to injury the French were persuaded in 1901 to drop the price of their company down to $40 million from $109 million. This was accomplished by a clever attorney named Cromwell who worked for the Panama Railroad (whose majority ownership was held by the NPCC). It took only three years for the French to capitulate and by 1904, the NPCC had become American property.
When President Roosevelt implemented plans for the actual building of the canal, the NPCC came under a new umbrella known as the Isthmian Canal Commission, which was completely controlled and run by the US government.
