In December 1879, the determined De Lesseps embarked on a trip to the proposed site in Panama, before journeying to the United States.  The Hayes administration would have been leery about any European enterprise in Central America, but was particularly uneasy after French involvement, given the failed attempt by (now-deposed) Napoleon III to install a puppet ruler in Mexico in the 1860s.  In his annual message to Congress in December 1879, President Hayes warned that an interoceanic canal must be "under the protective auspices of the United States."  On January 9, 1880, he ordered two American naval ships to dock near the possible sites, and requested $200,000 from Congress to establish coaling stations in the area.

On February 10, 1880, Hayes informed his cabinet that he intended to send a special message to the Senate on the issue, which he believed threatened the prosperity and, especially, the security of the United States.  The cabinet strongly endorsed his stance, but the president's secretary, William Rogers, had to work on gaining press support, particularly from Harper's Weekly.  In the newspaper's February 28 edition (on newsstands February 18), George William Curtis disputed the assumption that De Lesseps's plan threatened the vital interests of the United States or violated the Monroe Doctrine.  The editor pointed out that it was a private enterprise, not backed by the French or any other foreign government, to which Americans could invest and buy shares.

Rogers contacted Curtis on February 23 to urge him to support the administration's policy.  The secretary explained the president's position and stressed how important press opinion was on the issue.  In the March 13 issue (available March 3), Curtis artfully straddled the question.  He first summarized the arguments of both De Lesseps and his political opponents, then stated that while construction of an interoceanic canal by a Frenchman or French company was not itself a threat, it did raise the possibility of trouble.  Therefore, a clear statement by the American government was justified so that all parties knew what was and was not permissible.

In New York City, De Lesseps assured Americans that not only was his a private venture which desired American investors, but that he would consider locating its headquarters in the United States.  On March 8, as De Lesseps was testifying before a committee of the U.S. House of Representatives, Hayes issued his special message to the Senate in which the president stated unequivocally the administration's position:  "The policy of this country is a canal under American control."  

Whether or not De Lesseps had read Curtis's second editorial, which contended that the project's director and all interested parties would welcome an explicit administration statement, he acted in accordance with it.  De Lesseps hailed the president's message as good news for his project, then went on a round-trip speaking tour across the country.  Meanwhile, the French government promptly sent their American minister to reassure Hayes that they had no direct or indirect involvement in the project.

To win public approval and give the impression of U.S. government support, De Lesseps established an American advisory committee and offered the chairmanship to Ulysses S. Grant, who had advocated construction of an interoceanic canal while president.  After Grant's rejection, De Lesseps turned to Navy Secretary Richard Thompson, who in December 1880 accepted the $25,000 salary, while intending to remain at his administration post (paying $8,000).  An angry and appalled President Hayes, who had just reiterated his firm position on the canal in his final annual message to Congress, fired Thompson.

Although Hayes did not stop the project, the issue of the proposed interoceanic canal prompted the president to expand his vision in foreign policy.  After it arose, he called on Congress to subsidize steamship lines to Latin America, Asia, and Australia; to subsidize a telegraph cable from California to Hawaii, then to Asia and Australia; and to increase the number of ships in the tiny American navy, which would sail in every region of the globe.

De Lesseps's company began excavation for the Panama canal in 1881, but was plagued with problems and went bankrupt in 1889.  An investigation by the French government into the company's operations resulted in five-year prison sentences for De Lesseps and his son, Charles, but an appeals court reversed the decision.  In 1903, the Hay-Bunau-Varilla Treaty gave the United States sole rights to construct and operate a canal in Panama.  The next year, De Lesseps's former company, which had reorganized in 1894, sold its holdings to the United States.  The Panama Canal was officially opened in 1914.  In 1977, President Jimmy Carter signed the Panama Canal Treaty which returned ownership to the Republic of Panama in 2000.