a brief reminder

Panama and its canal

Panama, in the short version, is a thin piece of land connecting North and South America with a fascinating strategic location but some real challenges over time. It also annoys many Americans who feel the rules changed while Panamanians thought the rules were imposed on them.

If we had been as concerned then as we supposedly are now with so-called rules-based international system, President Theodore Roosevelt wouldn’t have recognized the isthmus’ independence as readily as he did in 1903 to build a canal. It was rather back doorish. We, in conjunction with a Frenchman, were instrumental in creating Panama, regardless of its on again, off again relationship with Colombia.

Traversing between Bogotá and Panamá City was quite a chore at the turn of the twentieth century.. Colombia has one of the world’s most challenging topographies because of three soaring Andean chains separated by long, deep river valleys. Once one made it from the Sabana de Bogotá to the Pacific coast, a further maritime excursion was essential to arrive in the less-than-salubrious town aiming to be a Panamian capital.

But, people thought it a potential location for a crucial short cut between the Atlantic and Pacific Oceans as global trade and global power politics awakened.

The better location for a trans-Central American canal was in Nicaragua where the hard excavation would have been a wee bit easier because Lake Managua was smack dab in the middle of the oft-proposed canal site. But geography was a cruel there too as earthquakes drew doubts about a canal’s true sustainability when discussions first arose in the 1850s.

Instead, the impetus for a man-made waterway to short cut the extended journey around Cape Horn moved to Panamá with the expectations that parcel of Colombia would ultimately make its way free. If it did so with a little help from friends on the ground, all the better.

So Theodore Roosevelt’s ambition to establish the United States as a global maritime nation coincided with aspirations for an independent Panama. Colombia rebuffed U.S. entreaties as it suffered through the vicious War of a Thousand Days at the turn of the twentieth century. Colombians were in no mood to entertain Roosevelt’s suggestions that the United States complete the long-abandoned 1880s French scheme. Colombians saw American efforts as an intervention in their domestic affairs, rejecting the suggestion out of hand.

A new Frenchman with vast personal investment in this enterprise met with a Pananamian independence delegation, purportedly in Manhattan rather than Panama City, to solidify his role as representative to Washington to assure a sovereign Panama. Wealthy Panamanians declared their determination to escape Colombia’s control in early November 1903. The Roosevelt Administration welcomed the move by recognizing the independence almost immediately, then opening negotiations with said Frenchman Philippe Bunau Varilla on a canal accord. The entire exercise of declaring independence and conducting bilateral negotiations to allow Washington the right to build and administer the canal took merely days in November 1903, a rapidity unthinkable today. The Hay Banau Varilla Treaty of 1903 stipulated the United States would control the Canal Zone, the term for the waterway and an attached ten mile strip on either side of the waterway (the Canal Zone), “in perpetuity”.

Note Panamanians on the streets had no part of this process with foreigners and wealthy the primary beneficiaries. This foreshadowed questions over who the waterway benefitted, the same root for nationalism common in this region.

The Canal itself was a marvel, largely because the challenges for those excavating, then building the canal were wretched between 1904 and 1914. The U.S. Army Corps of Engineers took the lead, evidence of our national commitment to this epic project. Construction was difficult because of the toughness of the rock. Living conditions were dangerous because malaria and yellow fever pervaded the country, striking down workers at every turn. Indeed, Army physician William Gorgas discovered medical advancements in Panama against the latter, although we are yet to conquer malaria more than a century later.

The United States spent more than $10 billion (in 2024 dollars) on this Canal. Its lock system was a major advancement in technology, opening the door to considerably shorter transit times and enhanced financial operations for commercial ventures between the Pacific and Atlantic ports of the United States and elsewhere. The Canal was a major reason the United States was considered a global power by the end of World War I.

You know a “but” is coming. The early twentieth century is known as the golden era of imperialism, referring primarily to French, British, German, and other European nations competing for territories in Asia, the Middle East, and Africa. Conveniently, we forget that our own actions in the circum-Caribbean were seen as imperialism by many outside our country. Doubts lingered about the true impetus for the Spanish-American War in 1898, a mysterious explosion conveniently providing the United States with the justification to invade Cuba, then govern the Philippines after Spain surrendered several months later. We dominated Cuba politically for decades, sometimes barely maintaining a fig leaf of the island’s independence. U.S.. involvement in several Central American states as the United Fruit Company and other companies appeared advanced not only their own commercial causes but furthered U.S. diplomatic and military presence as well. Finally, American willingness to cross the border into Mexico amid its vicious civil war (1910-1928) only exacerbated anxiety about the nature of American ambition in the Western Hemisphere. All of this fueled nationalism for critics feeling helpless to control their own fates (this sounds similar to the rhetoric we hear from China about the ‘Century of Humiliation, doesn’t it?) under the thumbs of oligarchs connected to U.S. and foreign interests.

Whether we saw events in the same light is irrelevant; this is how many Latin political figures fomented nationalist sentiments condemning Americans in their countries. Panama had a series of undemocratic regimes repressing discontent but rarely ameliorating the standard of living for the bulk of the population. The vast commercial benefits the Canal provided rarely trickled to the average Panamanian whose life was hardly better than it had been under Bogotá before 1903. Military personnel often trained by the United States in connection with protecting the Canal Zone (which was sovereign U.S.territory under the 1903 Treaty) seemed to prefer foreigners to those they were suppose to protect.

Panamanians began demanding control over the Canal almost as soon as construction began but the crescendo occurred over the decades before President Carter actually negotiated the Canal reversion treaty in 1977. as a result of bilateral negotiations, the Canal would become Panama’s to operate, maintain, upgrade, or anything else. U.S. Army posts in the Canal Zone (recall the keefuffel that Senator John McCain faced when he ran for president in 2008 because he was born to an American Naval officer and American wife in the Canal Zone rather than in the continental United States as the Constitution mandates) closed when the Canal Zone reverted to Panamanian control, despite dire predictions that country could not operate the engineering waterway. The U.S. Senate ratified the Canal reversion treaties 68-32 while two-third of Panamanians 67.4% agreed to them. One treaty turned the Canal back to Panama to operate by 1999 while the other gave the United States the right to defend the Treaty to assure it retains a “neutral” status. This second accord meant the Canal would be open for commercial transit, regardless of who ran the country, but under our commitment of protection.

President Jimmy Carter’s determination to pass this territory back to Panama met decided opposition both here and in Panama. Many Americans believed the Canal ours because we built it and because we had an original agreement to operate “in perpetuity”. Carter and others believed circumstances under which Teddy Roosevelt signed the original treaty were no longer, if ever, valid. The transfer to Panamanian control went as planned on 31 December 1999.

Like good capitalists, Panama turned Canal operations over to private companies, including Hutchinson-Whampoa, a Hong Kong-based private corporation. Concerns about anything in Hong Kong/China post-1997 have always existed but the greater threat to the Canal is that technology left the Canal behind decades ago. The waterway can no longer handle the largest U.S. military or commercial vessels. Widening its fifty mile length probably makes no financial sense. Yet the Canal remains vital as a symbol of power and access. Additionally, building a replacement would in Nicaragua might appear preferable but would confront José Daniel Ortega Saavedra, the aging Marxist-turned-kleptocrat in Managua, hardly anyone’s desired partner in such a lucrative enterprise.

Panama has come through the past forty-five years with ups and downs after gaining sovereignty over the Canal. The 1989 U.S. invasion to end Manuel Noriega’s regime did not guarantee clean and fair participatory democracy but removed the military from the dominant position it had during the Cold War (which conveniently ended simultaneously with Noriega’s tenure).

Panama was for many years Taiwan’s “jewel in the crown” with diplomatic recognition until Beijing lured them away just three years ago. Hutchinson-Whampoa’s registry in Hong Kong makes many China hawks suspicious but the commercial benefits of unfettered transit the Canal thus far outweigh any incentive to prohibit U.S. access, military or commercial. The limitation on vessel access matters, however, so even if China tried to force Panama’s hand politically, it’s hard to know how much real effect this would have on U.S. military operations. Operators always seek options so they prefer access to the Canal but large vessels could not use it in any case.

The irony of Panama demanding U.S. companies pay taxes is a rich one since its status as a tax haven long tortured leaders, several of whom have left office under accusation of corruption themselves. Yet, a sense of loyalty to the country’s sovereignty remains passionate there as in many parts of the region. The idea that foreigners simply disregard Panamanian laws creates disgruntlement in the country.

I offer these as a couple of musings about how actions a century ago created consequences still playing out in this small country of 4.5 million in a strategic location. I have no idea how its sovereignty will play out—do you?

I welcome any thoughts about Panama, its Canal, our interests in that Canal, or anything else you find worth pondering. I thank you for your time on this busy Monday. I also thank the subscribers who support me with their financial commitment. Have you considered being a supporter in 2025?

I just came in from a walk in the cold but offer a photograph the Creek last night as we walked.

Be well and be safe. FIN