FREE ESSAY ON POLITICS OF THE PANAMA CANAL

POLITICS OF THE PANAMA CANAL

During the Spanish-American War the warship Oregon was summoned from the West Coast. The
trip took two months to travel 14,000 miles around Cape Horn to the Atlantic. (The
American Journey 741) How was the United States supposed to defend it shores if it took
ships that long to get between them? The United State had to build a canal through
Central America; national security depended on it.
The Politics of the Panama Canal are confusing. This confusion includes the building, the
economics and the operation of this facility. The canal, began in 1881 and finished in
1914(Dolan 55), has caused one country to fail, another to triumph, and another to gain
its independence.
There was a need for a canal through the isthmus of Central America. The big question was
who would step up and build it. France had just lost the Franco-Prussian War against
Germany. The country felt that it had lost some prestige in eyes of other nations. There
seemed only one certain way to restore its glory, undertake and complete the most
challenging engineering feat in history. Build a canal through Central America and link
the world's two greatest oceans. (Dolan 53)
The French chose Panama to build its canal because it was far narrower than Nicaragua,
it's closet competitor. They obtained permission from Columbia to lay the waterway.
(Dolan 53) A private company was founded in 1879 to raise the needed capital to undertake
the construction. Appointed president of the company was Ferdind de Lesseps, who had
guided the construction of the Suez Canal. (Panama)
The French abandoned the project in 1889, due to a lack of funding. (Dolan 59) Now it was
time for the American's to get involved. But there was one problem; they had signed a
treaty with Great Britain that said, if one or the other decided to build a canal then
the two countries would work together. This treaty was called the Clayton Bulwer Treaty.
In 1901 the treaty was replaced with the Hay-Pauncefote treaty. It called for Great
Britain to give the United States the right to act independently in the development of an
Atlantic Pacific waterway. Why did the British agree to the treaty? They were tied up in
the Boer War in South Africa and didn't want to split the bill on a canal? (Dolan 63)
Now congress had to decide on where to dig the canal. The two main choices were Panama
and Nicaragua. Just days before the vote on the canal site, Philipee Benau-Varilla
obtained ninety Nicaragua stamps that pictured a railroad dock with an active volcano in
the background, and sent them to all of the senators with a message: "An official witness
of the volcanic activity in Nicaragua. (Mcneese 78) Did it work? Panama got the go
ahead.
The United States now to get permission from Columbia to dig in Panama. In 1902, John
Hay, the U.S. Secretary of State began negotiate with the Colombian government. An
agreement was finally reached in January 1903 in the signing of the Hay-Banau-Varilla
Treaty, which granted the United States a strip of land 6 miles wide along the general
route laid out by de Lesspes. The U.S. had the right to administer and police this zone.
In return they would pay the Colombian government $10 million, and after nine years of
operation Columbia would get an annual fee of $250,000. (Dolan 63)
The treaty had to be ratified in both the U.S. and Columbia before it could take affect.
The U.S. gave its approval in March 1903, but the Colombian Congress said there was not
enough money for the right to dig in Panama. They wanted an additional $5 million from
the Americans. They also objected to many of the points on the administration of what was
now known as the Canal Zone. (Dolan 64)
When the Columbian Government refused to ratify the treaty, Panama revolted because they
feared the United States would build through Nicaragua. After they declared their
independence from Columbia, President Theodore Roosevelt ensured the success of the
revolt when he ordered a U.S. warship to prevent Colombian troops from entering the
isthmus. (Panama) Now Panama had its independence and the U.S. had the right to build the
canal.
The Canal Zone was ten miles wide and 50 miles long; it embraced an area of 553 square
miles- an area that, totaling 5 percent of the nation's landmass speared its way directly
through the heart of Panama. The Panamanians complained that it chopped their already
small country into smaller pieces. The split made it difficult, if not impossible for
Panama to grow as a single united nation and with the Canal lying in their path, the
people would have trouble moving from one side of the country to the other. Families and
friends would be separated. Business would be difficult to conduct across the waterway.
Political views might grow too different on each side. In the end, Panama could end up
being two countries. (Dolan 101) But these concerns would have to wait the treaty had
already been signed, in fact the Canal was already nearing completion.
When the canal was finished in 1914(McCullogh 609) it was approximately 51 miles long.
Passage through it by a ship sailing from New York to San Francisco saved 7, 872 miles
and it the same plans of operation that the canal has today. It was also very costly. The
canal had cost the American's $352 million. When added you that to the French
expenditures the total peaks out approximately at $639 million. In 1914 this made the
Panama Canal the greatest single construction project in American History. In, lives the
canal cost the Americans 5,609; workers, added to the French, the total swells to nearly
25,000. (McNeese 85)
Another cost to the United States was an indemnity to Columbia of $25 million during the
Wilson administration. Apparently this was to smooth out tensions between the two
countries. As can be expected Columbia was infuriated by the aid Panama received from the
United States. Now Columbia was evolving into one of the most important countries in
South America, really only second to Brazil. It was a neighbor to the United State's
canal and it had power. The payment was to insure America's investment. However this
still angered former President Theodore Roosevelt. In a letter he wrote to Banau-Varilla,
he said "Is that they are eager to take advantage of the deeds of the man of action when
action is necessary and then eager to discredit him when the action is once
over."(McCullough 617)
The Panama Canal had substantial effect on the Panamanian Economy. In addition to the $10
million payment to Panama, the U.S paid $250,000 after the canal had been in operation
for nine years. That annuity has increased since, in 1999 it was well over $100 million.
The canal also prompted many American Companies to invest in Panama. They bought land
from the nation's rich land owning families. This money seldom filtered down to the
ordinary citizens. However, there were advantages for these citizens. (Dolan 98)
The canal and the zone, until recently, were ran by two organization, the zone government
(to supervise such bodies as the police, postal, and court systems) and the Panama Canal
Company, which held responsibility for operating and maintaining the waterway. These two
organizations were the major employer on the isthmus. Between 1914 and 1940 they
consistently employed between 10,00 and 13,000 civilian workers. When the work force
stood at 13,000 in 1977, 3,500 employees were Americans and 9,600 were non-U.S. citizens.
The non U.S. citizens were mainly Panamanians. (Dolan 99)
Many other Panamanians also profited from the waterway. Though not directly employed by
the canal, they sold goods and services to the zone and its workers, the passing ships,
and the 10,000 U.S. military troops (and their families) stationed in the zone to protect
the canal. It has been estimated that the canal accounted for over 20 percent of Panama's
employment. (Dolan 99)
The canal tolls per ton were not raised for 59 years. In 1915 tolls were about $14
million. By 1970 they exceeded $100 million. In 1973 the Panama Canal Company recorded
its first loss, this was the reason for the change from 90 cents per cargo ton to $1.08.
Revenues in 1975 exceeded $ 140 million. (McNeese 215)
Was the Hay-Banan-Varilla Treaty fair? In the words of former President Jimmy Carter "No
Panamanians had ever seen the terms of the treaty of which were highly favorable to the
U.S.". Among the terms that Panama resented was the U.S. control over the zone. The
question of sovereignty over the canal aroused deep passions, which came to boil in 1964
with massive rioting by Panamanians, a response to U.S. troops, bloodshed on both sides.
In the aftermath, President Lydon Johnson agreed to renegotiate the treaty related to the
Panama Canal. (Conaway)
In 1977 United States and Panama agreed on a new treaty. The most significant agreement
was the transferring of ownership of the canal to Panama to take the place on December
31, 1999. Also they agreed to cooperate in the defense of the canal. The annual payment
was upped to $ 10 million and was to be paid from the canals revenue, plus a payment of
30 cents for each ton of shipping. And when Panama took control of the canal it was free
to employ Americans. (Dolan 128)
Also included in the treaty was a neutrality clause. The canal is to remain open to
merchant vessels of all nations indefinitely, without discriminations as to conditions or
tolls. The clause does not allow the U.S. to intervene in the internal affairs of Panama.
It does however give the United States and Panama the responsibility to insure that the
canal remains open. (Crane 81)
Though it was rich with symbolic significance the signing ceremony on September 7, 1977,
hardly ended the controversy over the treaties. The ratification battle in the U.S.
Senate still lay ahead, and it called for the use of every political tool available to
President Carter's team. It was a battle won vote by vote, through personal appeals,
political accommodations, and occasionally silly details. Carter recall one senator, a
former college professor, was proud of a book he had written on semantics. Before meeting
with him to try to persuade him to vote for the treaties, Carter read the entire book -
"which was really boring" - and proved that he had by discussing some of it's point with
him. He eventually got the senator's vote. (Second Decade)
In 1988 the canal became involved in a struggle for power in Panama. Manuel Noreiga had
assumed military power over Panama. In response President Ronald Reagan decided to ban
the annual payments to Panama and freeze Panama's assets in U.S. banks. This cut Noriega
revenue by $180 million a year. (Dolan 140)
Facing a rapidly deteriorating situation, President Bush ordered U.S. troops into Panama
on December 20 1989, to protect U.S. citizens, to meet treaty responsibilities, to defend
the canal, and to assist in restoring democracy and bring Noreiga to Justice. The
Panamanian democratic opposition formed a new government led by President Guillermd
Endum. (Second Decade)
Finally Panama was under democratic control and had something to look forward to. The
turning over of the Panama Canal to Panama. No longer would their economic depend on how
another country wanted to run things. They now will decide how they want to run the
canal. And they will run it as the please because as of December 31, 1999, the day the
U.S. turned over the canal, they owned the canal. Finally after decades of frustration
they were truly free.
Politics will undoubtedly have an influence in the maintaining, the economics, and the
operation of the Panama Canal in the years to come. They will help the canal expand in
the lives of more Panamanians and maybe someday even building of another canal over the
Isthmus of Panama.
Bibliography
Works Cited
Crane, Phillip F: Surrender in Panama, the Case Against the Treaties. New York:
Dale Books, 1978
Conaway, Janell. America's. Jan 1999, 16. NewsBank, Online 1999
Dolan, Edward F.: Panama and the United States, Their Canal, and Their Stormy Years. 
New York: Moffy Press Inc., 1990
McCullough, David: The Path Between the Seas. New York: Simon a Schuster, 1977
McNeese, Tim. The Panama Canal. San Diego: Lucent Books. Inc, 1997
"Panama". The Volume Library. South Western Company, 1994
The Second Decade: Panama at the Canal Treaties. U.S. Department of Dispatch, 1990