Panama Scandal

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Panama Scandal

 

a swindle involving abuses and corruption in the management of the Compagnie Universelle du Canal Interocéanique, formed in France in 1879 to organize the digging of the Panama Canal. More than 800,000 people acquired shares in the company. By 1888 more than twice as much money had been spent on the construction of the canal as had been planned, and only one-third of the work had been completed. The company halted work and terminated payments. Its failure bankrupted and ruined tens of thousands of small shareholders. A judicial examination of the affair between 1889 and 1893 revealed that the company, finding itself in financial difficulties, had bribed influential officials, politicians, and newspaper editors. The investigation of the Panama scandal by the authorities uncovered corruption deep within the bureaucracy of the Third Republic. The affair provoked a public outcry. However, almost all of the officials entangled in the scandal escaped punishment, and only the minor defendants were convicted. The term “Panama scandal” has come to denote large-scale fraud and swindles.

V. A. DUNAEVSKII