Map of the area before canal construction
Proposals for a canal
Proposals for a canal across the Isthmus of Panama date back to 1529, soon after the Spanish conquest. Álvaro de Saavedra Cerón, a lieutenant of conquistador Vasco Núñez de Balboa, suggested four possible routes, one of which closely tracks the present-day canal. Saavedra believed that such a canal would make it easier for European vessels to reach Asia. Although King Charles I was enthusiastic and ordered preliminary works started, his officials in Panama soon realized that such an undertaking was beyond the capabilities of 16th-century technology. One official wrote to Charles, "I pledge to Your Majesty that there is not a prince in the world with the power to accomplish this". The Spanish instead built a road across the isthmus. The road came to be crucial to Spain's economy, as treasure obtained along the Pacific coast of South America was offloaded at Panama City and hauled through the jungle to the Atlantic port of Nombre de Dios, close to present day Colón. Although additional canal building proposals were made throughout the 16th and 17th centuries, they came to naught.
The late 18th and early 19th centuries saw a number of canals built. The success of the Erie Canal in the United States and the collapse of the Spanish Empire in Latin America led to a surge of American interest in building an interoceanic canal. Beginning in 1826, US officials began negotiations with Gran Colombia (present-day Colombia, Venezuela, Ecuador and Panama), hoping to gain a concession for the building of a canal. Jealous of their newly obtained independence and fearing that they would be dominated by an American presence, the president Simón Bolívar and New Granadan officials declined American offers. The new nation was politically unstable, and Panama rebelled several times during the 19th century.
In 1836 U.S. statesman Charles Biddle reached an agreement with the New Granadan government to replace the old road with an improved one or a railroad, running from Panama City on the Pacific coast to the Chagres River, where a steamship service would allow passengers and freight to continue to Colón. His agreement was repudiated by the Jackson administration, which wanted rights to build a canal. In 1841, with Panama in rebellion again, British interests secured a right of way over the isthmus from the insurgent regime and occupied Nicaraguan ports that might have served as the Atlantic terminus of a canal. In 1846 the new US envoy to Bogotá, Benjamin Bidlack, was surprised when, soon after his arrival, the New Granadans proposed that the United States be the guarantor of the neutrality of the isthmus. The resulting Mallarino–Bidlack Treaty allowed the United States to intervene militarily to ensure that the interoceanic road (and when it was built, the Panama Railroad as well) would not be disrupted. New Granada hoped that other nations would sign similar treaties, but the one with the United States, which was ratified by the US Senate in June 1848 after considerable lobbying by New Granada, was the only one.
The treaty led the U.S. government to contract for steamship service to Panama from ports on both coasts. When the California Gold Rush began in 1848, traffic through Panama greatly increased, and New Granada agreed to allow the Panama Railroad to be constructed by American interests. This first "transcontinental railroad" opened in 1850. There were riots in Panama City in 1856; several Americans were killed. US warships landed Marines, who occupied the railroad station and kept the railroad service from being interrupted by the unrest. The United States demanded compensation from New Granada, including a zone 20 miles (32 km) wide, to be governed by US officials and in which the United States might build any "railway or passageway" it desired. The demand was dropped in the face of resistance by New Granadan officials, who accused the United States of seeking a colony.
Through the remainder of the 19th century, the United States landed troops several times to preserve the railway connection. At the same time, it pursued a canal treaty with Colombia (as New Granada was renamed). One treaty, signed in 1868, was rejected by the Colombian Senate, which hoped for better terms from the incoming Grant administration. Under this treaty, the canal would have been in the middle of a 20-mile zone, under American management but Colombian sovereignty, and the canal would revert to Colombia in 99 years. The Grant administration did little to pursue a treaty and, in 1878, the concession to build the canal fell to a French firm. The French efforts eventually failed, but with Panama apparently unavailable, the United States considered possible canal sites in Mexico and Nicaragua.
Panama Canal Zone
Map of completed canal, 1911
The Spanish–American War of 1898 added new life to the canal debate. During the war, American warships in the Atlantic seeking to reach battle zones in the Pacific had been forced to round Cape Horn. Influential naval pundits, such as Captain Alfred Thayer Mahan, urged the construction of a Central American canal. In 1902, with the French efforts moribund, US President Theodore Roosevelt backed the Panama route, and Congress passed legislation authorizing him to purchase the French assets on the condition that an agreement was reached with Colombia. In March 1902 Colombia set its terms for such a treaty: Colombia was to be sovereign over the canal, which would be policed by Colombians paid for by the United States. The host nation would receive a larger percentage of the tolls than provided for in earlier draft treaties. The draft terms were quickly rejected by American officials. Roosevelt was in a hurry to secure the treaty; the Colombians, to whom the French property would revert in 1904, were not. Negotiations dragged on into 1903, during which time there was unrest in Panama City and Colón; the United States sent in Marines to guard the trains. Nevertheless, in early 1903, the United States and Colombia signed a treaty which, despite Colombia's previous objections, gave the United States a 6 miles (9.7 km) wide zone in which it could deploy troops with Colombian consent. On August 12, 1903, the Colombian Senate voted down the treaty 24–0.
Roosevelt was angered by the Colombians' actions, especially when the Colombian Senate made a counteroffer that was more financially advantageous to Colombia. A Frenchman who had worked on his nation's canal efforts, Philippe Bunau-Varilla, represented Panamanian insurgents; he met with Roosevelt and with Secretary of State John Hay, who saw to it that his principals received covert support. When the revolution came in November 1903, the United States intervened to protect the rebels, who succeeded in taking over the province, declaring it independent as the Republic of Panama. Bunau-Varilla was initially the Panamanian representative in the United States, though he was about to be displaced by actual Panamanians, and hastily negotiated a treaty, giving the United States a zone 20 miles (32 km) wide and full authority to pass laws to govern that zone. The Panama Canal Zone (Canal Zone, or Zone) excluded Panama City and Colón, but included four offshore islands, and permitted the United States to add to the zone any additional lands needed to carry on canal operations. The Panamanians were minded to disavow the treaty, but Bunau-Varilla told the new government that if Panama did not agree, the United States would withdraw its protection and make the best terms it could with Colombia. The Panamanians agreed, even adding a provision to the new constitution, at US request, allowing the larger nation to intervene to preserve public order.
Charts of excavation progress and contribution to the canal excavation
The treaty was approved by the provisional Panamanian government on December 2, 1903, and by the US Senate on February 23, 1904. Under the treaty, Panama received US$10 million, much of which the United States required to be invested in that country, plus annual payments of US$250,000; with those payments made, as well as for the purchase of the French company assets, the Canal Zone was formally turned over by Panama on May 4, 1904, when American officials reopened the Panama City offices of the canal company and raised the American flag. This marked the beginning point for U.S. excavation and construction which concluded in August 1914 with the opening of the canal to commercial traffic.