The second event spoken of was the Panama Canal affair. De Lesseps, the maker of the Suez Canal, had undertaken to excavate a similar one across the Isthmus of Panama, but the work was managed with such wild extravagance that vast sums were spent and the poor investors widely ruined, while the canal remained a half-dug ditch. At a later date this affair became a great scandal, dishonest bargains in connection with it were abundantly unearthed, bribery was shown to have been common in high places, and France was shaken to its center by the startling exposure. De Lesseps, fortunately for him, escaped imprisonment by death, but others of the leaders in the enterprise were condemned and punished. In the succeeding years perils manifold threatened the existence of the French Republic. A moral decline seemed to have sapped the foundations of public virtue, and the new military organization rose to a dangerous height of power, becoming a possible instrument of ambition which overshadowed and portended evil to the state. The spirit of anarchy, which had been so strikingly displayed in the excesses of the Parisian Commune, was shown later in various instances of death and destruction by the use of dynamite bombs, exploded in Paris and elsewhere. But its most striking example was in the murder of President Carnot, who was stabbed by an anarchist in the streets of Lyons. This assassination, and the disheartening exposures of dishonesty in the Panama Canal case trials, stirred the moral sentiment of France to its depths, and made many of the best citizens despair of the permanency of the republic. DESPOTISM OF THE ARMY LEADERS But the most alarming threat came from the army, which had grown in power and prominence until it fairly overtopped the state, while its leaders felt competent to set at defiance the civil authorities. This despotic army was an outgrowth of the Franco-Prussian war. The terrible punishment which the French had received in that war and in particular the loss of Alsace and Lorraine, filled them with bitter hatred of Germany and a burning desire for revenge. Yet it was evident that their military organization was so imperfect as to leave them helpless before the army of Germany, and the first thing to be done was to place themselves on a level in military strength with their foe. To this President Thiers had earnestly devoted himself, and the work of army organization went on until all France was virtually converted into a great camp, defended by powerful fortresses, and the whole male population of the country were practically made part of the army.