Editing Gadsden Purchase (section)

=== Isthmus of Tehuantepec ===
During negotiations of the treaty, Americans had failed to secure the right of transit across the {{convert|125|mi|km|adj=mid|-wide}} [[Isthmus of Tehuantepec]] in southern Mexico. The idea of building a railroad here had been considered for a long time, connecting the Gulf of Mexico with the Pacific Ocean. In 1842 Mexican President Antonio López de Santa Anna sold the rights to build a railroad or canal across the isthmus. The deal included land grants {{convert|300|mi|km}} wide along the right-of-way for future colonization and development. In 1847 a British bank bought the rights, raising U.S. fears of British colonization in the hemisphere, in violation of the precepts of the [[Monroe Doctrine]]. United States interest in the right-of-way increased in 1848 after the gold strikes in the [[Sierra Nevada]], which led to the [[California Gold Rush]].<ref name="Roberson p. 182. Kluger p. 493">{{harvp|Roberson|1974|p=182}}; {{harvp|Kluger|2007|p=493}}.</ref>

[[File:Isthmus of Tehuantepec-aeac.jpg|thumb|Isthmus of Tehuantepec in southern Mexico]]
The Memphis commercial convention of 1849 recommended that the United States pursue the trans-isthmus route, since it appeared unlikely that a transcontinental railroad would be built anytime soon. Interests in Louisiana were especially adamant about this option, as they believed that any transcontinental railroad would divert commercial traffic away from the Mississippi and New Orleans, and they at least wanted to secure a southern route. Also showing interest was Peter A. Hargous of New York who ran an import-export business between New York and [[Veracruz (city)|Vera Cruz]]. Hargous purchased the rights to the route for $25,000 (equivalent to ${{inflation|US-GDP|25000|1849|r=-5|fmt=c|cursign=$}} in {{inflation-year|US-GDP}}{{inflation-fn|US-GDP}}), but realized that the grant had little value unless it was supported by the Mexican and American governments.<ref name="Roberson p. 182. Kluger p. 493" />

In Mexico, topographical officer [[George Wurtz Hughes|George W. Hughes]] reported to Secretary of State [[John M. Clayton]] that a railroad across the isthmus was a "feasible and practical" idea. Clayton then instructed [[Robert P. Letcher]], the minister to Mexico, to negotiate a treaty to protect Hargous' rights. The United States' proposal gave Mexicans a 20% discount on shipping, guaranteed Mexican rights in the zone, allowed the United States to send in military if necessary, and gave the United States most-favored-nation status for Mexican cargo fees.<ref>{{harvp|Kluger|2007|pp=493–494}}; {{harvp|Roberson|1974|p=182}}.</ref> This treaty, however, was never finalized.

The [[Clayton–Bulwer Treaty]] between the United States and the United Kingdom, which guaranteed the neutrality of any such canal, was finalized in April 1850. Mexican negotiators refused the treaty because it would eliminate Mexico's ability to play the US and Britain against each other. They eliminated the right of the United States to unilaterally intervene militarily. The United States Senate approved the treaty in early 1851, but the Mexican Congress refused to accept the treaty.<ref name="Kluger2">{{harvp|Kluger|2007|p=494}}.</ref>

In the meantime, Hargous proceeded as if the treaty would be approved eventually. [[Judah P. Benjamin]] and a committee of New Orleans businessmen joined with Hargous and secured a charter from the Louisiana legislature to create the Tehuantepec Railroad Company. The new company sold stock and sent survey teams to Mexico.<ref>{{harvp|Roberson|1974|p=182}}.</ref> Hargous started to acquire land even after the Mexican legislature rejected the treaty, a move that led to the Mexicans canceling Hargous' contract to use the right of way. Hargous put his losses at $5 million (equivalent to ${{Formatprice|{{inflation|US-GDP|5000000|1850|r=-6}}}} in {{inflation-year|US-GDP}}{{inflation-fn|US-GDP}}) and asked the United States government to intervene. President Fillmore refused to do so.<ref name="Kluger2" />

Mexico sold the canal franchise, without the land grants, to A. G. Sloo and Associates in New York for $600,000 (equivalent to ${{Formatprice|{{inflation|US-GDP|600000|1850|r=-6}}}} in {{inflation-year|US-GDP}}{{inflation-fn|US-GDP}}). In March 1853 Sloo contracted with a British company to build a railroad and sought an exclusive contract from the new [[Franklin Pierce]] Administration to deliver mail from New York to San Francisco. However, Sloo soon defaulted on bank loans and the contract was sold back to Hargous.<ref>{{harvp|Kluger|2007|pp= 494–495}}.</ref>