Panama Canal

In 1903, what is today the Republic of Panama was part of the Republic of Colombia.  Panamanian rebels looked to separate and create their own country.  The United States, under President Theodore Roosevelt, supported this revolution.  Why?

Ship transportation between the east coast of the United States and its west coast had long been a problem as it required a journey around the southernmost tip of South America (Cape Horn).  Central America, a relative narrow strip of land, offered hope of an alternative route.  Panama is the southernmost country in Central America.

On November 2, 1903, American warships blockaded the Panamanian coast preventing Colombia from putting down the rebellion.  The following day, Panama declared its independence.

Shortly after recognizing the new government in Panama, Roosevelt signed a treaty with it.  For $10 million plus a substantial annual payment, the treaty granted from Panama to the United States a renewable lease in perpetuity regarding the land proposed for a canal extending from the Atlantic Ocean to the Pacific.

On May 4, 1904, the USA took control (sovereignty) of the so-called Panama Canal Zone.  A US government established the Isthmian Canal Commission (ICC) to oversee construction of the Panama Canal.  The commission reported directly to Secretary of War William Howard Taft.

"The construction of the canal was completed in 1914, 401 years after Panama was first crossed overland by a European, Vasco Núñez de Balboa. The United States spent almost $500 million (roughly equivalent to $12.9 billion in 2020) to finish the project. This was by far the largest American engineering project to date. The canal was formally opened on August 15, 1914 (107 years ago today), with the passage of the cargo ship SS Ancon."

"The opening of the Panama Canal in 1914 caused a severe drop in traffic along Chilean ports due to shifts in maritime trade routes.  The burgeoning sheep farming business in southern Patagonia suffered a significant setback by the change in trade routes, as did the economy of the Falkland Islands."

"After years of negotiations for a new Panama Canal treaty, an agreement was reached between the United States (under President Jimmy Carter) and Panama. Signed on September 7, 1977, the treaty recognized Panama as the territorial sovereign in the Canal Zone, but gave the United States the right to continue operating the canal until December 31, 1999."

"Despite considerable opposition in the U.S. Senate (which has the right under the Constitution to approve or not all treaties), the treaty was approved by a one-vote margin in September 1978."