UNITED STATES IN THE CARIBBEAN

USA AND PANAMA

REASONS US URGENTLY WANTING A CANAL ZONE

1. After the war with Spain (Spanish-American War 1898), the US needed a means of
speedy communication between her colonies and trading interest in the Pacific and
Atlantic. The best way would be by a canal which linked the two oceans.
2. The need for a canal was made clear when it took the US Oregon more than two
months to sail from California around Cape Horn to join the war in Cuba 1898. The
war was almost over before the ship arrived hence the need for a shorter route for
defensive purposes.
3. Give US a political foothold in Central America.

THE SEA ROUTES THAT WERE UNDER CONSIDERATION

The Americans were to select a route for the canal. They favoured Nicaragua at first because
the Americans already had roads and waterway interest in the area and also the route would
take in Lake Nicaragua. The Americans however, soon sung its interest to a new route across
the Isthmus of Panama which was part of a province in the Republic of Colombia.

REASONS THE PANAMA ROUTE WAS CHOSEN OVER NICARAGUA

1. Even though the Panama route was more rugged, covered with jungle and drenched
with tropical rains, it was considered to be a shorter route as it was measured to be
only 80 km across the Isthmus.
2. A French Company, headed by Ferdinand de Lesseps had already carefully surveyed
the route and had begun excavating.

OBSTACLES US FACED IN CONTROLLING THE CONSTRUCTION OF THE

CANAL

1. By the Clayton-Bulwer Treaty of 1850 the US and Britain had agreed to share in the
construction and control of a canal.
2. The French Company formed by Ferdinand de Lesseps had sold out to another French
company, the New Panama Canal Company which still held the rights to build a canal
from the Colombian government until 1904.
3. The route via Panama was through Colombian soil
4. The US wanted the sole right to fortify a canal.
STEPS US TOOK TO OVERCOME THE OBSTACLES FACED IN CONTROLLING
THE CONSTRUCTION OF THE CANAL

1. Britain agreed to the US breaking the Treaty if she promised that the future canal
would be free and open to vessels of commerce and war of all nations. Britain
therefore freed the US from the Clayton- Bulwer Treaty in 1901 by signing the Hay-
Paunceforte Treaty which gave US the sole right to build, control and fortify a canal.

2. The New Panama Canal Company was anxious to sell the assets left behind by de
Lesseps Company in 1881 and its rights from the Colombian government before its
Treaty expired in 1904. The US paid the New Panama Canal Company 40,000,000 for
its rights to build a canal on Colombian soil.

3. In 1903 under the Hay-Herran Pact Treaty signed between US and Colombia, the US
agreed to pay Colombia $10,000,000 and an annual rent of 250,000 for a ninety -year
lease on a ten km wide corridor across the Isthmus of Panama. The new Senate in
Colombia however, revoked the agreement later in 1903 on the grounds that the
compensation was not enough and that it threatened their rights in Panama. In
November 1903, President Theodore Roosevelt organized a few Panama to declare
independence from Colombia. He knew he would have the support of the French
Company because they would not want to lose their 40,000,000 in compensation. He
instigated a revolution in Panama. The US prevented Colombia from crushing the
revolution by sending in marines to keep out the Colombian forces.

4. Panama became an independent state and under the Hay- Buneau- Varilla Treaty of
1903 gave US the right to build the canal. The zone was increased to 17km from the
10 that was originally offered to Colombia. The life of the Treaty was extended to
perpetuity and the US would act as the sovereign of the territory. The US recognized
the new government of Panama and paid what it agreed formerly to pay to Colombia.

POLICY APPLIED BY THE US TO CONTROL THE CONSTRUCTION OF THE

PANAMA CANAL

ROOSEVELT COROLLARY

Came in a speech by Theodore Roosevelt to Congress in 1904. He said, “I took Panama. It

was the only way the canal could be constructed. He later stated that US had the right to
interfere in the Americas whenever there were chronic wrong doings.

PERIOD OF CONSTRUCTION OF THE CANAL

The Panama Canal was built between 1904 and 1914 under the direction of Colonel George
Goethals an US army engineer.
 LABOURERS

Mainly West Indian labourers. Thousands of workers recruited from Barbados and Jamaica
and elsewhere within the Caribbean.

US CONTROL DURING THE CONSTRUCTION OF THE CANAL

The US could now wield its influence and exert its authority over the canal zone that
extended from Colon to Panama City. While the Canal was under construction the American
flag was flown in place of the Panama flag. There was a separate police force to maintain law
and order and special courts were set up to provide justice to United States citizens.

REASONS PANAMANIAN NATIONALISTS OBJECTED TO THE US CONTROL

OF THE CANAL

1. They felt that the rights and power granted to the Americans compromised the
republic’s sovereignty and independence and could lead to discrimination against the
citizens in their own country. Since the zone was under the exclusive jurisdiction of
the US, this could mean that Panamanian laws would not always apply within the
zone.

2. Also, the overwhelming cultural influence of the US within the canal zone would
soon spread throughout the republic and begin to erode or compete with the
Panamanian culture.

3. The US presence there would give the Americans the pretext to intervene into the
internal affairs of the country.

HOW US CONTROL OF THE CANAL ZONE AFFECTED HER RELATIONSHIP

WITH PANAMA

The new government headed by President Harmodio Arias Jr. negotiated a new agreement on
the future operation of the canal with the US.

HULL-ALFARO TREATY OF 1936

1. The US terminated its protectorate over Panama in return for a commitment from
Panama to join the US in defending the canal.
2. The US gave up the right to acquire additional lands and waters to maintain and safe
guard the canal.
 3. Businesses within the canal zone were confined to those activities necessary for the
protection, maintenance, sanitation and defense of the canal.
4. Panamanians obtained equal privileges with Americans to sell to vessels in transit.

After 1945, Panamanian sought greater measure of sovereignty over the canal. They were
annoyed by the scant employment and few economic benefits they receive from the canal.

THE EISENHOWER REMON TREATY 1955

1. Increased the canal rental

2. Allowed Panama to impose income tax on Panamanian citizens working in the canal
zone
3. Forbade official shops in the zone to sell goods to non-Americans who did not live in
the canal zone.

HOW THE CONTROL OF THE ZONE AFFECTED CARIBBEAN POLICY OF THE

USA

Desire to safe guard, the Panama Canal dominated US policy in the Caribbean in the 20th
century and led to her intervention in many Caribbean countries especially when she
considered her routes were threatened in the First World War.