Unfortunately for the conspirators' plans, Walker double-crossed them. Fearing that Vanderbilt, who was known to have influence within the governments of several of Nicaragua's neighbors, would use that influence to undermine him, he secretly reached an accommodation with the businessman in which he would temporarily hinder the Transit Company, which at that time had passed from Vanderbilt's hands, to force its share price down in order to allow the industrialist to regain a controlling share of its stock cheaply. Thereafter, Vanderbilt would help finance a full-scale trans-isthmian canal across Nicaragua, a project which had been talked about for years by shipping interests from several nations.

It would prove to be a fateful choice on Walker's part. Led by Costa Rica, a coalition of Central American states attempted to force the "Yanqui invader" and his supporters from power, motivated by fears that Walker planned to annex Nicaragua to the United States as had happened to the former Mexican state of Texas a decade earlier. Lacking Vanderbilt's support--and with his agents in fact actively promoting dissension among them--the so-called "Allies" would prove unable to overthrow Walker, and when the incoming administration of U.S. President James Buchanan warned that continued efforts to do so would be answered with American military action, the effort fell apart.

Ironically, one reason for the strong U.S. support of Walker would prove to be less than it seemed. On Sept. 22, 1856, President Walker had promulgated the so-called "Slavery Decree" repealing Nicaragua's then 18-year-old prohibition of slavery. Many Southerners, including powerful congressmen and Buchanan's vice-president, Jefferson Davis, saw this as a sign that slavery would be fully reestablished there. Walker, however, who had been raised in a strongly anti-slavery household, had issued the decree simply to attract Southern political and economic support, and found a series of excuses not to follow up with the enabling act which would have actually established slavery. Foreigners were permitted to bring in slaves of their own, but Nicaraguan citizens could neither own slaves nor be owned. When the reality of this compromise was perceived, many Southerners who had been enthusiastic Walker backers turned on him.

Soon enough, however, such people would have other matters to occupy their attention. The outbreak of the U.S. Civil War in early 1861 would absorb American attention for the following four years, allowing Walker to consolidate his power. As the fortunes of the Confederacy waned after mid-1863, however, increasing numbers of slaveowners from the CSA and slave states of the Union began emigrating to Nicaragua. The emigration continued from the defeated South during reconstruction, despite the fact that these latter-day refugees were not permitted to acquire slaves in their new country: as a practical matter, black and native American Nicaraguans often lived in what amounted to slavery anyway.

In 1867, Vanderbilt would approach Walker with detailed plans for his proposed Nicaraguan canal. Unlike the passage through Colombia's Panama province favored by some engineers, a canal through Nicaragua could be built entirely at sea level, sharply reducing the need for pumps and locks and thereby the project's cost. (A limited system of such controls would still be necessary due to the fact that the Pacific sea level is approximately 20 centimeters higher than the corresponding level on the Atlantic side of the isthmus, due to differing wind and heating of the ocean.) Walker, sensing the potential for Nicaragua's--and his own--enrichment, agreed to the plan, and construction began early in 1868.

It would prove to be a formidable undertaking. The Nicaraguan Canal would not open until July 1888, after encountering tremendous problems including a devastating outbreak of yellow fever among the workers building it. Walker himself would contract malaria on a visit to the project in 1870.

William Walker would remain president of Nicaragua for the remainder of his life, and despite recurrent episodes of malaria would live until October 1, 1893. Shortly before his death, he finally bowed to mounting pressure from the U.S. and other nations and rescinded his infamous Slavery Decree.