PANAMA CANAL

In the 1840s, as American settlers began pouring into Oregon and California, the United States sought a way of facilitating ocean travel to the Pacific Coast. The government therefore negotiated an agreement with New Granada (a nation composed of present-day Colombia and Panama) for transit rights from the Caribbean Sea to the Pacific across the narrow Isthmus of Panama. When the discovery of gold in California in 1848 vastly increased westward migration, the United States funded the construction of the Panama Railroad. But both America and Great Britain dreamed of building a canal across either Panama or Nicaragua, with the two countries agreeing (Clayton-Bulwer Treaty, 1850) that neither would seek independent rights over such a canal. The United States, however, became increasingly intent on exclusive control, particularly after the Spanish-American War (1898) brought the nation new territory in both the Caribbean and the Pacific. The British were persuaded to relinquish their claim in the Hay-Pauncefote Treaty (1901).

The next question was where to locate the canal. A French company under Ferdinand de Lesseps had started construction of a sea-level canal in Panama in 1881, but the project went bankrupt after a few years. In 1901, a U.S. commission recommended that the canal go through Nicaragua rather than Panama. But representatives of the New Panama Canal Company (which had taken over the French rights in Panama) lobbied vigorously for the Panama route, and President Theodore Roosevelt settled on it when the company reduced its asking price from $109 million to $40 million. The U.S. commission then reversed itself in January 1902, and in June, Congress authorized construction of the canal through Panama.

Early the next year, Congress ratified the Hay-Herrán Treaty, which granted the United States a strip of land ten miles wide across the isthmus for $10 million in cash and an annuity of $250,000 per year. But the senate of Colombia, hoping for a higher price, refused to approve the treaty. Shortly thereafter (November 3, 1903), a Panamanian uprising was engineered by Philippe Bunau-Varilla (a representative of the New Panama Canal Company), other canal supporters, and some local residents. The United States provided indirect support and promptly recognized the new Republic of Panama. Within a week the Hay-Bunau-Varilla Treaty was signed, granting the United States a renewable ninety-nine-year lease on the Canal Zone in exchange for the same payment that had been offered to New Granada. The treaty was ratified by the U.S. Senate in February 1904.

Various logistical problems, indecision about whether to build a sea-level or a lock canal, and the devastations of tropical disease delayed construction until 1906. A lock canal was decided upon, and work began on surveys and construction of the necessary facilities. Col. William Gorgas made a crucial contribution with his eradication of yellow fever and malaria. Col. G. W. Goethals of the U.S. Army Corps of Engineers directed most of the actual construction, which cost well over $300 million and involved the excavation of 240 million cubic yards of earth. The canal, forty miles in length, opened to shipping in August 1914 and was formally dedicated on July 12, 1920. In 1921, the United States paid Colombia $25 million as redress for the loss of Panama; in exchange, Colombia formally recognized Panama's independence.

In the 1960s and 1970s resentment mounted in Panama over the terms of the original agreement. Negotiators, working in an increasingly hostile atmosphere involving demonstrations and sometimes violence, tried to resolve the sticking points and arrive at a new treaty. At issue were the treaty's duration, economic benefits to be accorded Panama, and the right of the United States to expand canal facilities. The matter became a campaign issue in the 1976 presidential elections.

Finally on September 7, 1977, President Jimmy Carter and Panama's chief of government, Brig. Gen. Omar Torrijos Herrera, signed two treaties in the presence of twenty-six representatives of Western Hemisphere nations. The United States agreed to turn the canal over to Panama on December 31, 1999. The treaties included provisions protecting America's interests in the canal and increasing Panama's economic benefits.

See also Expansion, Continental and Overseas.