In 1903 America was basking in the glow of having entered the arena of imperial world politics. The year 1898 had seen the Spanish-American War, out of which Cuba became independent under U.S. "protection" and Puerto Rico was annexed. In Asia, American forces had completed the brutal suppression of an independence movement in the Philippines; the U.S. took possession of the islands instead of giving the Philippine people the freedom they had been promised for their assistance in fighting the Spanish forces at Manila.
Having now become a Pacific power, America needed an easy and reliable route for moving naval vessels from one coast to the other — or so President Theodore Roosevelt was fervently convinced. And out of this vision of America as a two-ocean power, Panama was born.
There had been several attempts to build a canal across the isthmus of Panama in the 19th century, the most famous by Ferdinand de Lesseps, the builder of the Suez Canal. All of them had failed because of jungle diseases and engineering difficulties.
At the turn of the century, Panama was a province of Colombia. A French-owned company, The New Panama Canal Company, held a concession from the government of Colombia to build a canal across the isthmus. Though virtually bankrupt and unable to find any private financial backing to continue construction, the company stockholders viewed the concession as valuable. They knew that the U.S. government was interested in purchasing the concession and building a canal at American taxpayers' expense.
The initial selling price of $109,141,400 was viewed as too high, and a U.S. commission suggested a canal across Nicaragua instead. The company responded by hiring a New York lawyer wit h close connections with the Republican Administration as a lobbyist and contributing $60,000 to the Republican campaign fund. They also lowered their selling price to $40,000,000. The U.S. commission revised its recommendation and advised selecting the Panama route.
In January 1903 Congress voted to buy the concession and to pay the Colombian government $10,000,000 plus an additional $250,000 annually. The Colombian Senate rejected the offer. President Roosevelt was outraged, declaring that “we may have to give a lesson to these jack rabbits."
Some of the stockholders of The New Panama Canal Company, seeing their $40,000,000 going out the window, met at the Waldorf Astoria Hotel in New York City. Their plan was to arrange a "revolution" in Panama, with the new, independent government accepting the terms of the sale. One of the stockholders, Philip Bunau-Varilla, advanced $250,000 to a group in Panama for the revolution. The "revolutionaries" were assured that President Roosevelt had said he would be "delighted if Panama were an independent state."
With the money, a force of about a hundred men was organized in Panama; but at the last minute the leaders insisted on U.S. protection for their revolt. They were promised that, just by "coincidence", a ship-of-war, the USS Nashville, would be arriving at Colon on the Caribbean side of the isthmus on November 2, 1903.
On November 3, the revolt began. A force of 450 Colombian troops had arrived by gunboat at Colon the night before to suppress any rebellion. The commander of the Nashville, however, had received orders to "Prevent their [the Colombian troops] landing if, in your judgment, the landing would precipitate a conflict." Since a conflict would only arise if the Colombian government attempted to put down the insurrection, these orders, in fact, meant that U.S. military forces were used to prevent Colombia from maintaining its own territorial integrity. The US ship landed and its soldiers soundly defeated the 450 Colombian troops.
Panamanian independence was declared the next day on November 4. The U.S. government recognized the new state on November 6, and Philip Bunau-Varilla was appointed Panamanian minister to the United States. On November 18, a treaty was signed in Washington between the United States and Panama giving the U.S. a ten-mile wide "canal zone" for which the new Panamanian government received the $10,000,000 originally offered to Colombia and the promise of the $250,000 a year. The New Panama Canal Company, in turn, completed the sale of its concession to the U.S. and pocketed the $40,000,000. Work on building the canal began shortly afterwards under the supervision of the U.S. Army Corps of Engineers…
A Canal and the Birth of Panama
America’s Imperial Influence
Why did the United States want to build a canal in Panama?
Why attempts past to build the Panama Canal fail?
What was the plan of the New Panama Canal Company in reaction to the Columbian government rejecting the US offer to buy the Canal land?
How did the US support their plans (in #3) ?
How did the US react to Panama declaring independence?