When Walker was elected president he found that the Accessory Transit Company had not lived up to the terms of its concession with the Nicaraguan Government. His efforts to hold it to the terms of its concession led to his overthrow. By its charter the Transit Company agreed to pay to Nicaragua ten thousand dollars annually and ten per cent. of the net profits; but the company, whose history the United States Minister, Squire, characterized as “an infamous career of deception and fraud,” manipulated its books in such a fashion as to show that there never were any profits. Doubting this, Walker sent a commission to New York to investigate. The commission discovered the fraud and demanded in back payments two hundred and fifty thousand dollars. When the company refused to pay this, as security for the debt Walker seized its steamers, wharves, and storehouses, revoked its charter, and gave a new charter to two of its directors, Morgan and Garrison, who, in San Francisco, were working against Vanderbilt. In doing this, while he was legally in the right, he committed a fatal error. He had made a powerful enemy of Vanderbilt, and he had shut off his only lines of communication with the United States. For, enraged at the presumption of the filibuster president, Vanderbilt withdrew his ocean steamers, thus leaving Walker without men or ammunition, and as isolated as though upon a deserted island. He possessed Vanderbilt’s boats upon the San Juan River and Nicaragua Lake, but they were of use to him only locally.
His position was that of a man holding the centre span of a bridge of which every span on either side of him has been destroyed.
Vanderbilt did not rest at withdrawing his steamers, but by supporting the Costa Ricans with money and men, carried the war into Central America. From Washington he fought Walker through Secretary of State Marcy, who proved a willing tool.
Spencer and Webster, and the other soldiers of fortune employed by Vanderbilt, closed the route on the Caribbean side, and the man-of-war _St. Marys_, commanded by Captain Davis, was ordered to San Juan on the Pacific side. The instructions given to Captain Davis were to aid the allies in forcing Walker out of Nicaragua. Walker claims that these orders were given to Marcy by Vanderbilt and by Marcy to Commodore Mervin, who was Marcy’s personal friend and who issued them to Davis. Davis claims that he acted only in the interest of humanity to save Walker in spite of himself. In any event, the result was the same. Walker, his force cut down by hostile shot and fever and desertion, took refuge in Rivas, where he was besieged by the allied armies. There was no bread in the city. The men were living on horse and mule meat. There was no salt. The hospital was filled with wounded and those stricken with fever.