Intervention and the Panama Canal
Flag of Panama
The Origins of the Panamanian Revolution
From the most humble days of naval travel to the advent of nuclear-powered warships in the modern time, virtually every nation with global ambitions has found a productive navy and maritime fleet to be a necessity. Through the early nineteenth century American ambition was dedicated to the idea of “Manifest Destiny,” or the divine right of the American people to control all the land from coast to coast. The crushing defeat of Mexico in the Mexican-American War, along with the California gold rush, helped promote this idea, and also led to greater need for quick transoceanic travel. There was not yet a transcontinental railroad, and pioneers leaving the American frontier could expect months of travel before reaching the coast by land. However, to travel by ship all the way from New York to Panama, then across Panama to another ship, to San Francisco took less than two months, despite the additional distance traveled. Realizing this fact, and knowing of the potentially profitable business which would follow a route through the Panama isthmus, the United States quickly sought to expand its influence in the region. It is important to note that from the 1840s onward, the negotiations occurred between Washington and Bogota, Colombia.Panama was not yet a nation, but rather the property of Colombia.
In 1846, the United States gained its first foothold in Panama with the signing of the Bidlack-Mallarino Treaty. The treaty protected “the right of way or transit across the Isthmus of Panama, upon any modes of communication that now exist, or that may be… constructed, shall be open and free to the Government and citizens of the United States.” For America’s end, the United States was charged with protecting the “perfect neutrality of the… Isthmus… that the free transit from one to the other sea, may not be interrupted or embarrassed in any future time… and… also guarantees … the rights of sovereignty and property which New Granada has and possesses over said territory.” In essence, this treaty gave the United States unimpeded power to build a transit network through Panama, so long as the United States promised to protect its work and allow Colombia to retain territorial control. Citing its duty to protect the zone with force, the United States intervened in Panama at least thirteen times before 1903, at the behest of Colombia, and American businessmen.
However, Panama was not the only option for creating a crossing. While America had a legal claim to Panama, through most of the latter half of the nineteenth century a route through Nicaragua was actually preferred. Panama was considered by many to be a disease-ridden swamp devoid of real value. In 1897, a congressional commission chose Nicaragua over Panama, which then-President William McKinley supported. However, fighting between the House and Senate stopped any progress from being made. Then in 1899, a new commission was formed to reevaluate both routes. A few years later the House of Representatives passed a resolution to build a route through Nicaragua instead of Panama by a vote of 308 to 2, despite the second commission’s findings that the Panama project would be cheaper. The Hepburn Bill, as it was known, sought a route through Nicaragua, citing the closer proximity to the United States, the healthier conditions, the better prospect of regional growth, and the easier construction of dams. However, before the Senate could convene, the French company which owned much of the land designated for the Panama route, decided to sell the land to the United States for a substantially cheaper amount. Upon learning of this development, a stalwart conservative senator named John Spooner of Wisconsin proposed an amendment to the bill. The amendment would make Panama the primary build zone, so long as the canal could be built legally within a reasonable time period. President Theodore Roosevelt, along with the vast majority of the conservatives in government, supported this amendment.
In late June 1902 President Roosevelt signed the Spooner Act, which authorized a canal to be built across Panama. Ironically, despite the strong influence of the Monroe Doctrine and America’s ambition to be the ruler of its own “backyard,” it was in fact a charismatic Frenchman who helped save the Panama option. Philippe Bunau-Varilla, an entrepreneur with a vested interest in the canal, mailed a Nicaraguan stamp to various senators, which depicted a volcano exploding. Only a few days before the vote, an eruption occurred in Nicaragua. Panama suddenly appeared to be the better option and the Spooner Act passed by a vote of 42 to 34.
There was also the issue of a separate treaty made with Great Britain to consider. In 1850, the Clayton-Bulwer Treaty had banned the militarization, colonization, or unilateral control of a transatlantic waterway. For expansionists, the Clayton-Bulwer Treaty was a thorn in the side of American power prompting a younger Theodore Roosevelt to write Senator Henry Cabot Lodge (R-Massachusetts) in 1894 complaining, “I do wish our Republicans would go in avowedly… and build an oceanic canal with the money of Uncle Sam.” By 1899, New York Governor Roosevelt had had enough. “As for treaties,” he wrote, “I do not admit the ‘dead hand’ of the treaty making power of the past. A treaty can always be honorably abrogated.” The British were in no position to debate, with the Boer War raging and less inclination to their own sole empowerment. In fact, the London Spectator commented around this time that since England, and one half of the Anglo-Saxon race, holds the Suez Canal between the Mediterranean and the Indian Ocean, “what could be more appropriate than that the other half should hold that between the Atlantic and the Pacific?... It is not for us to delay but to hasten that auspicious hour.
In 1900, Secretary of State John Hay began negotiations with the British for amending the Clayton-Bulwer treaty. While many in the U.S.government felt the treaty was not binding, Hay felt the United States could not honorably renege on its agreement with the British. After much compromise the first Hay-Pauncefote Treaty was signed in February 1900, giving the United States the right to build unilaterally in Panama. The treaty was met with almost instant criticism from the press and in Congress because it conceded America’s desire to fortify the Canal Zone, and instead created a neutral waterway. The Senate rejected the treaty, and since Great Britain rejected the newer version with the Senate’s amendments, Hay was forced to begin anew, much to his dismay. Roosevelt, who was a critic of the first treaty, was elected president during the second wave of negotiations.
In November 1901 the second Hay-Pauncefote Treaty was ratified giving the United States the sole responsibility of building and maintaining the canal. Under the treaty, the canal was to be administered in a similar fashion to the British-controlled Suez Canal. This meant that all ships, of all nations, would be allowed passage in war or peace. Nothing was mentioned about fortifications, and indeed a few small islands were tacked on to American custody. In hindsight, this period and particularly this treaty, mark a period of transition from the ebbing British naval domination of the Caribbean to the rising power of the United States.
By mid 1902 all the pieces for a transoceanic canal under U.S.ownership were falling in place. The British had been successfully deterred from stirring up trouble with the second Hay-Pauncefote Treaty, and the Spooner Act had settled the debate, choosing Panama as a route. All that was needed was a final treaty with Colombia. In theory, this should not have been difficult.Columbia owned the land but did not have the resources to build a canal which would make the land profitable. The United States had the capital to fund a canal project, which neither Colombian or any other private enterprise could acquire, yet it did not have a legal claim to the land.
By January 1903, Secretary Hay had successfully negotiated a deal for a Panamanian canal with Thomas Herrán, his Colombian counterpart. The deal was far from ideal for either side, but the time-frame established by the Spooner Act had expired. The Colombian government however had very different ideas about the proposed canal. Colombia was chaffing under the yoke of civil unrest and governmental fighting, and had little ability to cohesively work on negotiations. However, the Colombians were also aware that Washington was on a deadline and could simply choose to build in Nicaragua instead, making the Panama territory useless and unprofitable. In short, Colombian politicians were caught in a bad situation. They needed the United States to build the canal, but they wanted it to be done on better terms, which they knew they might not get.
The Colombian assembly ultimately rejected Washington’s proposed Hay-Herrán Treaty by a unanimous vote, prompting President Roosevelt to remark, “You could no more make an agreement with them than you could nail currant jelly to a wall.” The treaty was not terribly abusive to Colombia as it created a six-mile wide zone stretching from ocean to ocean with a 100-year renewable lease. The zone was to be shared in terms of control, with Colombia receiving $250,000 annually. The treaty did recognize Colombia’s control of the territory, and Colombia would have received a $10 million lump sum. The Colombians would also have shared in the canal’s protection.
By August 1903 American officials knew that Colombia would not accept the treaty before their recess, and it once again seemed that the Panama Canal was not to be. Proponents of the Nicaragua route were stunned that President Roosevelt was not yet deterred from the Panama option. Despite Colombia’s refusal of the treaty, Roosevelt argued that the 1846 Bidlack-Mallarino Treaty gave the United States the right to build the canal without Colombian consent, so long as the territory remained the property of Colombia. Thus, in October that same year, Roosevelt prepared a recommendation that the United States either make arrangements with Nicaragua, or take control of the isthmus and build in Panama anyway; Roosevelt preferred the latter. However, before the message was submitted, the Panamanian revolution occurred.
In November 1903 Panamanian rebels took to the streets declaring their independence from Colombia. While previous revolts had occurred, they were always small in nature, and never commanded a majority of the population. Panamanians had never considered themselves to be Colombians, and the authenticity of their nationalistic feeling is unquestioned. However, it is doubtful that these rebels would have launched a revolution if it were not assured to them that it would succeed via U.S.intervention. Panamanians were all too familiar with the United States Navy presenting shows of force off coastal waters; the America had been doing it for more than half a century already. This time however, the navy’s guns were not pointed inland at Panama, but towards Colombian reinforcements who dared not make a landing with American ships in such close proximity. The troops that did make it to shore before the blockade began, numbered around four hundred, and found that the Panamanian Railroad Company would not transport them to the insurrection.
As it was later revealed, the Panamanian Railroad Company, an American corporation, had representatives speaking with President Roosevelt and Secretary Hay. While it is not clear the exact nature of their discussions, Bunau-Varilla, working with the company, left the meetings believing President Roosevelt would build the canal in Panama without Colombia’s consent. This much is certain, and can be seen both by Bunau-Varilla’s actions and President Roosevelt’s writing. Shortly after their last meeting, Roosevelt wrote to a friend that Bunau-Varilla was “a very able fellow, and it was his business to find out what he thought our Government would do… no doubt that he was able to make a very accurate guess, and to advise his people accordingly. In fact he would have been a very dull man if he had been unable to make such a guess.” Thus well assured that the United States would not allow the Canal Zone to be endangered, Bunau-Varilla is said to have paid $100,000 of his own money to help start a Panamanian revolution, expecting if not having been offered, American support. For this, he was to be made Panama’s first Minister in Washington.
The revolution was successful and only a few days later, Washington recognized the new Panamanian state. Roosevelt justified the speedy recognition of Panama when he said that America, “instead of using its forces to destroy those who sought to make the engagements of the treaty a reality, recognized them as the proper custodians of the sovereignty of the Isthmus.” Despite the President’s assertions, the sheer speed with which Panama was recognized is telling of Washington’s greater ambitions.Roosevelt’s comments are also interesting considering only a month before, he had favored forcibly taking the isthmus from the very people he was now calling the “proper custodians.”
Acting as the temporary Minister of Panama in Washington, Bunau-Varilla actually restarted negotiations with Secretary of State Hay towards a canal treaty with newly formed Panama. The American government making a treaty with a French businessman on behalf of Panama resulted in an extraordinarily one-sided treaty. The original Canal Zone was expanded from six to ten miles, several offshore islands were given to the United States, the 100-year lease became “in perpetuity,” and the United States gained the right to build military installations within the Canal Zone. Article III also gave the United States perpetual power within the Canal Zone with the right to expand the zone as necessary, and the right to intervene in the canal’s endpoints of Colón and Panama City. Panama was to be given a cash sum of $10 million and an annuity of $250,000. Panama was not allowed to tax the Canal Zone, nor to set the toll for the canal’s use, nor to raise the “rent” paid by the United States. With each year that inflation rose, the canal became cheaper for America. Amazingly, Bunau-Varilla actually feared it was too favorable to Panama and that the Senate would reject it.
Bunau-Varilla’s fears were assuaged several weeks later when the treaty was unanimously accepted in Panama and signed into law in America. The Panamanians knew that their independence rested in America’s continued grace and were not going to fight for concessions to the treaty. It is worth noting that not all Americans were proud of this treaty. A 1903 New York Times editorial referred to the canal as “stolen property” gained after negotiations with “a group of canal promoters and speculators and lobbyists who came into their money through the rebellion we encouraged, made safe, and effectuated.”
Thus, in 1903 the nation of Panama was founded after gaining military aid from the United States in exchange for a concession of rights within the proposed Canal Zone. From the American perspective, this was the culmination of more than a half century of diplomacy, leaving only the final task of actually building the canal. For Panama, freedom from Colombia came at the expense of submission to the United States.
 Ivan Musicant, The Banana Wars (New York: MacMillan, 1990), 82-83.  Russell Crandall, Gunboat Democracy (Lanham: Rowman & Littlefield Publishers, Inc., 2006), 174.  Miles P. DuVal Jr., Cadiz to Cathay, 451-52, quoted in Ivan Musicant, The Banana Wars (New York: MacMillan, 1990), 83.  Crandall, Gunboat Democracy, 174.  Dana G. Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921 (Princeton: Princeton University Press, 1964), 37.  Crandall, Gunboat Democracy, 176.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 41-42.  Crandall, Gunboat Democracy, 176.  Musicant, The Banana Wars, 96.  Lawrence O., Ealy, Yanqui Politics and the Isthmian Canal, 43, quoted in Ivan Musicant, The Banana Wars (New York: MacMillan, 1990),96.  Lawrence O. Ealy, Yanqui Politics and the Isthmian Canal, 44-45, quoted in Ivan Musicant, The Banana Wars (New York: MacMillan, 1990), 97.  Lawrence O. Ealy, Yanqui Politics and the Isthmian Canal, 44, quoted in Ivan Musicant, The Banana Wars (New York: MacMillan, 1990), 97.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 37.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 37.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 38.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 43-45.  Major, Prize Possession, 34, quoted in Russell Crandall, Gunboat Democracy (Lanham: Rowman & Littlefield Publishers, Inc., 2006), 177.  Crandall, Gunboat Democracy, 176.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 46.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 49-50.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 51-53.  Roosevelt to John Bigelow, January 6, 1904. Letters, Vol. III, p. 689, quoted in Dana G. Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921 (Princeton: Princeton University Press, 1964), 57.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 52.  Roosevelt to Congress on January 4, 1904 quoted in Dana G. Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921 (Princeton: Princeton University Press, 1964), 56.  Munro, Intervention and Dollar Diplomacy in the Caribbean 1900-1921, 60-61.  Crandall, Gunboat Democracy, 177-178. Crandall, Gunboat Democracy, 178.