The Birth Canal

How a ten-mile strip of land brought life to a new nation.

It was a “great sight,” the president recalled as the u.s.s. Louisiana approached the shores of Panama. It was a land “strange and beautiful with its mass of luxuriant tropical jungle, with the treacherous tropic rivers trailing here and there through.” The first U.S. president to ever leave American soil while in office, Theodore Roosevelt arrived in this tropical jungle to inspect construction progress on the Panama Canal. The project had become T.R.’s baby. He reveled in the fact that while other nations had been discussing canal plans for the better part of four centuries, America was now actually doing it.

Early in Roosevelt’s tenure as president, he took swift action to build a canal that would connect the Atlantic and Pacific oceans. He negotiated an end to the Clayton-Bulwer Treaty between the U.S. and Britain. It had precluded either country from building a canal without the other’s consent. He then spent $40 million to buy the French company that had tried unsuccessfully to build a canal. (Ferdinand de Lesseps had begun the project in 1879, but it fizzled because of financial mismanagement and disease among project workers.) Free to act unilaterally, T.R. then began to negotiate.

Nicaragua and Colombia (which controlled Panama at the time) both wanted the contract. Roosevelt was not so much concerned about where to dig the canal, just that it got done. The Nicaraguan route was longer, but at sea level it didn’t need locks. A canal through Panama, though shorter, would cut through a sizable stretch of mountainous terrain.

In December of 1901, an engineering report convinced Roosevelt that Panama was the best route. Nineteenth century technological advancements had made it easier to lower the highlands and raise rivers. So Roosevelt offered Colombia $10 million up front and an annual payment of $250,000 for a 99-year lease. He held his breath awaiting the treaty’s passage in the U.S. Senate. Yet, to Roosevelt’s great surprise, it was the Colombian senate, not the U.S., which rejected it! Colombia turned greedy, upping their cash demand to $25 million. Roosevelt balked, calling the Colombians “the foolish and homicidal corruptionists of Bogota.”

Meanwhile, relations between Colombians and its northernmost inhabitants in the district of Panama were strained. It had been that way ever since Colombia gained independence in 1821. It was partly because of racial differences and because of the geographical separation between Colombia proper and the isthmus, where Panamanians lived. From 1850 to 1900, there had been more than 50 riots, insurrections and attempted revolutions in Colombia. The United States was responsible for suppressing most of those Panamanian rebellions.

But when the Colombian Senate rejected America’s offer in 1903, U.S. policy flip-flopped. Roosevelt was half tempted to start digging despite the Colombian vote. Instead, he offered tacit support to Panamanian rebels in their quest for independence. When Panama declared independence in November 1903, Roosevelt sent a navy vessel to “monitor” the situation off the shores of Colombia. When Colombia buckled under U.S. pressure, Panama had won perhaps the least bloodiest revolution in history. (Just one innocent bystander was killed.)

Roosevelt now had a more accommodating partner with which to do business. He agreed to pay the newly formed Panamanian government the same amount he had offered Bogota; only, instead of leasing the strip for 99 years, the treaty gave America “in perpetuity, the use, occupation and control” of the Canal Zone. In other words, America offered to buy the land outright, like it had the Louisiana Purchase a hundred years before.

Panama opened its arms wide to the generous offer. For them, it was a win-win situation. It would provide its newly formed government with a steady flow of income, thousands of jobs for its economy and protection from Colombia.

Besides that, America would do all the work. It took ten years for 100,000 Americans, with the help of 100 gigantic steam shovels and 115 locomotives, to remove enough dirt to fill 240 football stadiums to the rim. By the time the canal opened in 1914, it had cost the United States $378 million and 5,609 lives.

For the U.S., however, the price was worth the tremendous strategic value. Since it shaved more than 8,000 miles off travel between the two oceans, Roosevelt viewed the canal as an effective way to essentially double the size of the U.S. Navy. (The Pacific fleet could be used in the Atlantic and vice versa.)

Aside from the time it saved naval ships, the location of the canal proved to be equally important for America’s strategic interests. In 1963, America made the Canal Zone its Southern Command headquarters. In its heyday, there were ten huge U.S. bases and over 65,000 troops situated on the ten-mile strip.

Even America’s military presence was an obvious benefit to Panama. In 1989, U.S. forces invaded Panama and toppled Manuel Noriega’s dictatorial regime, restoring peace and order.

Under U.S. control, the canal was also a cash cow, not for America, but for Panama. Nearly 15,000 ships pass through the canal each year, generating more than $550 million in annual tolls. America used most of that to maintain the man-made wonder. Fifteen percent, however, went directly to Panama—almost $90 million per year. That doesn’t count the tens of millions of dollars America pumped into Panama’s economy indirectly. As Panama’s second largest employer (behind its government), the canal had a staff that was 95 percent Panamanian.

Yet, despite these many benefits for both sides, President Carter’s administration felt it necessary to give full control of the canal and the ten U.S. bases to Panama. And no president since has felt it necessary to reverse the handover.

We have warned our readers that America’s withdrawal is a prophetic sign that the U.S. has lost the pride in its power. This overshadows the obvious threat U.S. withdrawal brings upon Panama itself. There is the threat from China, with which Panama has no diplomatic relations. Panama recognizes Taiwan. Yet it leased the container ports at each end of the canal to a Hong Kong-based company with communist connections.

There is also a threat from Colombia, which worries Panama much more than China does. Rife with corruption and drug trafficking, Colombia still considers Panama part of its own. This is particularly scary for a nation with no standing army.

Then there is the question of what a tiny, Third World nation is to do with the world’s most important international shipping gateway. The canal is worth an estimated $1 billion. And it does draw hundreds of millions in toll fees, but it barely broke even under American control. Should Panama’s government decide to pocket more of the tolls (they have already upped their cut 60 percent), the aging canal will begin to deteriorate. Experts have warned that without a substantial investment, the canal is in danger of becoming obsolete.

These facts, figures and questions make it hard to justify U.S. withdrawal. Even the majority of Panamanians never wanted the U.S. to leave.

The majority of Americans, however, did not care. So Uncle Sam left, almost without hesitation. And now the canal that once gave birth to a little nation might well bring that life to an end.