Panamanian history, which has been shaped by the recurrent theme of transisthmian (extending across an isthmus) commerce, looked now at the possibility of a canal to replace the difficult overland route.

In the 1520s and 1530s, the Spanish crown had ordered surveys of the isthmus to determine the feasibility of such a canal but the idea was soon abandoned.

The Panama Canal

French Start

From 1880 to 1889, the French Compagnie Universelle du Canal Interocéanique under the direction of Ferdinand de Lesseps, who had successfully built the Suez Canal, attempted to construct a sea-level canal in the same general area as the present Panama Canal.

The company faced insurmountable health problems such as yellow fever and malaria as well as engineering challenges caused by frequent landslides, slippage of equipment and mud. In the end, the company failed in a spectacular collapse which caused the downfall and incarceration of many of its financial backers in France. A new company was formed in 1894 to recuperate some of the losses of the original canal company.

U.S. in Panama

U.S. President Theodore Roosevelt convinced the U.S. Congress to take on the abandoned works in 1902, while Colombia was in the midst of the Thousand Days War.

During the war there were at least three attempts by Panamanian Liberals to seize control of Panama and potentially achieve full autonomy, including one led by Liberal guerrillas like Belisario Porras and Victoriano Lorenzo, each of whom was suppressed by a collaboration of Conservative Colombian and U.S. forces under the Mallarino-Bidlack Treaty.

By the middle of 1903, the Colombian government in Bogotá had balked at the prospect of a U.S. controlled canal under the terms that the Roosevelt administration was offering. The U.S. was unwilling to alter its terms and quickly changed tactics. According to the terms of the treaty, the U.S. was to pay the stockholders of the French company that had tried to build the canal across Panama the sum of $40,000,000.

The Colombian Senate’s rejection of the treaty confronted these French investors with the prospect of losing everything. At this point, the French company’s chief lobbyist (and a major stockholder), Philippe Bunau-Varilla went into action. Justly confident that the Roosevelt administration would support his initiative, from a suite in the Waldorf-Astoria hotel in New York, Bunau-Varilla arranged for the Panama City fire department to stage a revolution against Colombia.

The USS Nashville was dispatched to local waters around the city of Colón, where a force of 474 Colombian soldiers had landed and was preparing to cross the isthmus and crush the rebellion. The USS Nashville’s Commander John Hubbard sent a small party ashore and with the support of the American superintendent of the Panama Railroad, kept the Colombians from taking the train to Panama City. On November 3, 1903, after 57 years of policing Bogotá’s interests, the United States had sided with Panama.

Less than three weeks later, on November 18, 1903, the Hay-Bunau Varilla Treaty was signed between Frenchman Philippe Bunau-Varilla — who had promptly been appointed Panamanian ambassador to the United States, representing Panamanian interests — and the United States Secretary of State John Hay.

The treaty allowed for the construction of a canal and U.S. sovereignty over a strip of land 10 miles (16 km) wide and 50 miles (80 km) long on either side of the Panama Canal Zone. In that zone, the U.S. would build a canal — then administer, fortify, and defend it “in perpetuity.”

Roosevelt’s explanation of the U.S.’ role in the region was made abundantly clear throughout the many speeches and addresses he gave from 1902 on. First he invoked the Bidlack-Mallarino Treaty; second, he made it clear that Colombia had rejected his government’s offers for a deal; and finally, he demonstrated that Colombia had never been capable of preventing Panama from regaining its sovereignty.

On his December 7, 1903 Third Annual Message to the Senate and House of Representatives he enumerated an extensive list of interventions the U.S. armed forces had made in Panama since 1850 explaining:

“The above is only a partial list of the revolutions, rebellions, insurrections, riots, and other outbreaks that have occurred during the period in question; yet they number fifty-three for the fifty-three years…”

And he added:

“In short, the experience of over half a century has shown Colombia to be utterly incapable of keeping order on the Isthmus. Only the active interference of the United States has enabled her to preserve so much as a semblance of sovereignty. Had it not been for the exercise by the United States of the police power in her interest, her connection with the Isthmus would have been sundered long ago.”

It is evident that treaties like the Bidlack-Mallarino Treaty were not considered unconstitutional or illegal at the time, given the fact that they included interference of the U.S. government in internal matters of a sovereign country.

It is also evident that Roosevelt’s speeches made clear that the United States decided to unilaterally break with the Bidlack-Mallarino treaty and instead of solving the internal Panamanian problem as the treaty forced them to do, helped with the separation of Panama from Colombia — thus enforcing that part of the treaty which was of interest to the United States, namely “It granted the U.S. significant transit rights over the Panamanian isthmus.”

It is a common mistake to call the 1903 events “Panama’s independence from Colombia.” Panamanians do not consider themselves former Colombians. They celebrate their independence from Spain (like the rest of Hispanic America) on November 28, 1821; and November 3, 1903, the separation from Colombia.

Construction

The Panama Canal was built by the U.S. Army Corps of Engineers between 1904 and 1914; the existing 83-kilometer (50-mi.) lock canal is considered one of the world’s greatest engineering triumphs.

On January 5, 1909 the government of Rafael Reyes in Colombia signed and presented to its Congress a treaty that would officially recognize the loss of its former province but the matter was dropped due to popular and legislative opposition without any ratification being achieved. Different negotiations continued intermittently until a new treaty was signed on December 21, 1921 which finally and formally accepted the independence of Panama.

While Roosevelt’s “walk softly and carry a big stick” as well as the Canal Company’s apartheid administrative policies early on, have been the subject of much criticism. The fact is that, beyond the financial injection to the country’s economy and workforce, the changes brought about by the canal venture were largely positive for Panama.

Well aware of the need to sanitize the area before and during the construction, engineers developed an infrastructure that guaranteed the treatment of potable water, sewage, and garbage that encompassed both the Canal Zone as well as the cities of Panama and Colon. High standards employed in construction techniques, transportation systems and landscaping maintenance operations for the Canal Zone’s urban development employed during the first half of the 20th century, had no parallel in tropical regions in the hemisphere.

The work of Dr.William Gorgas, deploying the techniques pioneered by Cuban physician Carlos Finley, made it possible to rid the area of yellow fever between 1902 and 1905. Gorgas’ work in the sanitation of the Canal Zone and the cities of Panama and Colon eventually made him a sought after authority internationally.

Military Coups and Coalitions

From 1903 until 1968, Panama was a republic dominated by a commercially-oriented oligarchy. During the 1950s, the Panamanian military began to challenge the oligarchy’s political hegemony. The January 9, 1964 Martyrs’ Day riots escalated tensions between the country and the U.S. government over its long-term occupation of the Canal Zone. Twenty rioters were killed, and 500 other Panamanians were wounded.

In October 1968, Dr. Arnulfo Arias Madrid was elected president for the third time. Twice ousted by the Panamanian military, he was again ousted (for the third time) as president by the National Guard after only 10 days in office.

A military junta government was established and the commander of the National Guard, Brig. Gen. Omar Torrijos, emerged as the principal power in Panamanian political life. Torrijos’ regime was harsh and corrupt, and had to confront the mistrust of the people and guerrillas backing the populist Arnulfo Arias. However, he was a charismatic leader whose Socialist domestic programs and nationalist foreign policy appealed to the rural and urban constituencies who were largely ignored by the oligarchy.

On September 7, 1977, the Torrijos-Carter Treaties were signed by the Panamanian head of state and U.S. President Jimmy Carter for the complete transfer of the Canal and the fourteen US army bases from the US to Panama by 1999. These treaties also granted the U.S. a perpetual right of military intervention. Certain portions of the Zone and increasing responsibility over the Canal were turned over in the intervening years.