30th December, 1853 - The Canal Franchise Provision in the Gadsden Purchase
On this day the American ambassador to Mexico James Gadsden purchased a thirty thousand square-mile area of land south of the Gila River and west of the Rio Grande. It was then ratified, with changes, by the US Senate on April 25, 1854, and signed by President Franklin Pierce, with final approval action taken by Mexico on June 8, 1854. The "Gadsen Purchase" was the last major territorial acquisition in the contiguous United States.
The treaty also included a significant provision which allowed the U.S. to build a transoceanic canal across the Isthmus of Tehuantepec. This narrow strip of land was of strategic interest being the shortest distance between the Gulf of Mexico and the Pacific Ocean but also an area excluded from the Gadsden Purchase (it comprised the part of Mexico lying between the ninety-fourth and ninety-sixth meridians west longitude).
However a survey of the interior found two hundred kilometres of valleys and hills requiring massive and extremely expensive excavations. It took an incredible feat of engineering to complete the Canal, but a positive side effect was the creation of a zone of employment that vastly upgraded the Mexican economy. As the Confederacy extended its influence into South America, the Union was forced to look to the South-West for expansion. Ironically, the biggest advocate of the canal franchise had been Secretary of War Jefferson Davis who would later serve as the inaugural President of the Confederate States.
Addendum by Jeff Provine:
Because of the international importance of the canal, the Confederacy fortified the supporting harbors against Union assault. Upon the European expedition to reclaim owed money led by France that resulted in the seizure of Mexico, the Confederacy and France became diplomatically entangled, leading to the recognition of the rebel states by France. The British and Spanish, who had given up the expedition after France showed its imperialistic ideals, remained neutral in the American Civil War. The combined French and Confederate fleets prevented a total blockade by the Union, but France found its armies eventually outweighed in Mexico. In 1868, France's empire ended in Mexico, and the Confederacy finally capitulated to an ailing Abraham Lincoln, who was relieved of the presidency in the Republican-won election.
Confederate holdouts fled to Tehuantepec, where they mingled with Mexicans sympathetic to France. Soon a new revolution began with the declaration of independence of Tehuantepec upon the completion of the canal, but an international force quickly occupied the canal and contributed to reestablishing Mexican control with heavy influence from the United States and Britain.