Historical Overview of the Panama Canal

[Moderator_02]

Part 1 of 5 parts.

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The Panama Canal is a passageway that connects the Atlantic and Pacific Oceans through the country of Panama. Panama was chosen because it is the narrowest landmass between these two oceans. The Canal is approximately 50 miles long. It consists of three locks and dams that enable ships to travel from the Port of Cristobal on the Atlantic side to the Port of Balboa on the Pacific side and vice versa. Ships can navigate through the Canal in approximately 24 hours.

During the more than 80 years of the Canal’s existence, over 800,000 ships have taken advantage of this short cut. Currently, nearly 40 ships pass through the Canal each day. Ships traveling through the Canal pay by weight, which can be very expensive. Each ship must pay tens of thousands of dollars. The highest toll a ship ever paid to sail through the canal was $165,235 (the lowest was less than a dollar paid for a man who wanted to swim through the Canal in the 1920s). Despite the seemingly high fees, the savings in fuel and time make it worth the Canal’s fee. It would cost more money to maintain ships during the extra several thousand miles and extra several days it would take to sail around South America.

The world’s largest ships, such as supertankers, can not fit through the Canal. And even Panamax ships (the term given to the largest ships that can actually fit through the Canal) have a difficult time fitting. They have only two feet of extra space on each side of the locks.

 

http://www.cotf.edu/earthinfo/camerica/panama/PCtopic1.html

[Moderator_02]

Part 2 of 5 parts.

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The idea of making a passageway across Panama dates back to 1534, when Spain considered the possibility of building a canal. In 1850 the Colombian government (Panama was part of Colombia until 1903) gave the French, who were interested in a passageway to the Pacific Ocean, permission to create a canal. However, it was not until January 20, 1882 that the French company under the direction of Ferdinand Lesseps actually began to dig a sea-level canal across Panama.

The United States was also interested in building an interoceanic canal. In 1887 a U.S. regiment was sent to survey Nicaragua as a possible site for the canal. The Maritime Canal Company was asked in 1889 to build a canal either in Nicaragua or Panama. Nicaragua was chosen for the canal site and construction was begun. Construction continued until 1893 when the Maritime Canal Company lost all of its funding as a result of a stock panic in the United States. At that time, all work on the canal in Nicaragua stopped. The United States, however, did not lose interest in constructing a canal. Four years later in 1897 and again in 1899, Congress appointed a Canal Commission to research the issue of locating a site for an interoceanic canal. Both Canal Commissions recommended Nicaragua for the site to build the canal.

In the meantime, the French were having problems excavating a canal in Panama. Malaria was claiming thousands of lives, and the project was suffering financial set-backs. In 1889 Lesseps' company was liquidated in order to repay investors. A second company, Compagnie Nouvelle du Canal de Panama, was formed in 1894 to complete the canal. However, the new company, was also unable to accomplish the task of building the canal. In order to recover some of the money that was invested in the canal project, the French began looking for someone who would buy their equipment and the rights to build the canal in Panama. The price of $100 million dollars was set.

Two primary stock holders of the French holding company, William Cromwell and Lieut.-Colonel Philippe Bunan-Varilla, took on the task of finding a buyer. Bunan-Varilla who was the Chief Engineer of the French Panama Canal Company believed that the United States was the only country with enough resources to make the purchase and finish the canal.

However, based on the recommendations of both Canal Commissions, the United States still favored building a canal in Nicaragua because it would be less expensive. While the United States continued the process of debate and ratification necessary for any legislative action, Cromwell and Bunan-Varilla mounted an effort to convince U.S. Representatives and Senators that Panama was a better site than Nicaragua for the canal.

First, they got the French company to lower the asking price from $100 to $40 million making the cost of the Panama site equal to the Nicaragua site. Then, using their own personal funds, they began a publicity campaign to influence the U.S. decision. They purchased space in newspapers and magazines, they had pamphlets printed, and they even gave public lectures all pointing out the merits of Panama as a canal site. During their campaign Cromwell and Bunan-Varilla also focused on the potential risk associated with the United States building its canal in Nicaragua because the site chosen was within twenty miles of a large volcano. On the day scheduled for the Senate vote, each Senator received from Cromwell and Bunan-Varilla a Nicaraguan stamp with a picture of the volcano on it.

Cromwell and Bunan-Varilla's efforts paid off. In 1902, a legislative bill, selecting Panama as the canal site, passed the Senate and the House of Representatives and was signed by President Teddy Roosevelt. Only one hurdle remained--the Colombian government.

The United States proposed the Hay-Herran Treaty to the Colombian government. The terms of this treaty included the United States giving the Colombian government $10 million initially plus $250,000 annually for the duration of a 100-year lease of a six-mile-wide strip of land on either side of the canal. The Colombian government refused the offer. President Roosevelt's reaction to the refusal was "We were dealing with a government of irresponsible bandits. I was prepared to. . .at once occupy the Isthmus anyhow, and proceed to dig the canal. But I deemed it likely that there would be a revolution in Panama soon." In fact there had been numerous anti-Colombian governments insurrections over the years.

Bunan-Varilla was determined to overcome this last hurdle so he organized a Panamanian rebellion for independence from Colombia. He describes U.S. involvement in the revolution by saying, "In preparing the revolution I avoided anything that could be interpreted as a connivance between Washington and the insurgents. If President Roosevelt went with the high speed which was indispensable for final success, after the revolution became a fact, it was because I had carefully respected his independence. Evidently the quickness of his actions exposed him to the most poisonous arrows. . ."

To protect "American lives in Panama," President Roosevelt sent the U.S. battleship Nashville to Panama. The battleship prevented the Colombian military from sailing to Panama and an invasion through the dense Panamanian jungle was impossible. The rebellion was successful and Panama declared its independence from Colombia. Bunan-Varilla was made the American ambassador for Panama as compensation for his financial assistance to the rebels. He and U.S. Senator John Hay drafted a treaty between Panama and the United States, which was ratified by the Panamanian government in 1903 and by the United States in 1904.

The Panama Canal Treaty of 1903 gave the United States ownership of a path extending five miles on each side of the proposed canal. Essentially, the United States could treat this land as if it were U.S. territory. In return, Panama received $10 million per year. Unlike the Hay-Herrán Treaty, this treaty did not set a time at which the agreement would end.

In 1914 after only 10 years of work, the construction of the Panama Canal was completed.

http://www.cotf.edu/earthinfo/camerica/panama/PCtopic2.html

[Moderator_02]

Part 3 of 5 parts.

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From the very beginning of the Panama Canal's existence, several political and economic issues have strained relations between the United States and Panama. Two major issues of conflict--U.S. intervention and the question of sovereignty of the canal zone--were a direct result of the terms of the Panama Canal Treaty of 1903.

Some of the articles of the hastily drafted treaty were vague and ambiguous and the actions of the United States based on U.S. interpretation of the treaty quickly lead to resentment by the Panamanian government. From 1903 through the early 1920s, U.S. intervention took several different forms and with one exception, resulted from a request of the Panamanian government. Nevertheless these interventions caused resentment to grow among Panamanian nationalists. The issue of sovereignty became a sore point with the Panamanian government in 1903 and continued to be a point of contention until 1977 when the Torrijos-Carter Treaty was signed. During that time span, there were many confrontations between the Panamanians and U.S. citizens. One confrontation was particularly destructive and centered on an issue of national pride.

Panamanian nationalists resented the fact that only the U.S. flag was flown within the canal area. Flying the Panamanian flag in the canal area was a complicated issue for the United States. On one hand, the Department of Defense felt that flying the Panamanian flag in the canal area would undermine U.S. control and set a dangerous precedent to future relations. On the other hand, the Department of State felt that flying the Panamanian flag was a small concession for U.S. presence in Panama. The U.S. eventually made the decision to fly both flags at one location in the canal area. On September 21, 1960, a ceremony was held and for the first time both flags were raised and flown together.

Panamanians nationalists continued to resent the fact that their flag was only flown in one location while the U.S. flag was flown at multiple locations. Another agreement was reached and the Panamanian flag was to be raised along with the U.S. flag at several locations.

U.S. citizens living in the canal area, likewise resented the presence of a "foreign" flag being flown in a "U.S. territory." On January 8 and 9, 1964, with the consent of adults, U.S. students raised only the U.S. flag in front of their high school. News of the action spread and in the evening of January 9th approximately 200 Panamanian students entered the canal area with their flag. A battle broke out in which the Panamanian flag was torn. The torn flag ignited the smoldering resentments of the Panamanian people. The resulting mob violence lasted for three days causing the death of at least 20 people and the destruction of $2 million worth of property. Panama accused the United States of aggression and appealed to the Organization of American States and the United Nations.

The only action taken by the United Nations was to appeal to both nations to exercise restraint. When Panama could not obtain a satisfactory resolution to the problem, they severed relations with the United States and tension between the two nations remained high. Panama appealed to the Organ of Consultation and a committee was formed to investigate the dispute. A recommendation was presented by the committee and signed by both Panama and the United States and relations were restored. That same year,1964, U.S. President Lyndon B. Johnson announced that plans were being made for a new canal, which would necessitate the negotiation of a totally new treaty. Attempts to negotiate a new treaty met with strong opposition from Panamanian nationalists.

The issues resented by the Panamanian government and nationalists in 1903 were still present. Many Panamanians wanted U.S. military presence and intervention gone, and they wanted sovereignty of the canal zone. Unable to obtain sufficient votes to ratify the treaty and fearful that signing the new treaty would cost him the 1968 election, President Marcos Robles decided that further negotiations would have to be made.

Those negotiations did not begin again until 1971 and they continued for nearly two years without any progress being made. In frustration, Panama turned to the UN Security Council to put pressure on the United States. In March of 1973 a resolution from the United Nations called on the United States to negotiate a "just and equitable" treaty but it was vetoed by the United States.

During the latter part of 1973 the United States renewed their interest in renegotiating the terms of the treaty. Negotiations continued for nearly a year but progress was slow because of U.S. preoccupation with the Watergate scandal (1974). After the resignation of President Richard Nixon, President Gerald Ford stepped up the treaty negotiations only to have them become deadlocked over four major issues: treaty duration, the amount of revenues paid to Panama, the amount of territory used for U.S. bases for the duration of the treaty, and a 40-50 year lease for U.S. bases.

The United States felt compelled to maintain a presence in the canal zone in order to protect its interests in the canal. The issue of how that presence was to be maintained became an issue during the U.S. elections of 1976. Meanwhile, in Panama economic conditions were deteriorating and increased revenues from the canal became more and more important to Panama.

Finally, on August 10, 1977, after several more months of negotiations, an announcement was made that terms for a new treaty had been reached. On September 7, 1977, President Jimmy Carter of the United States and President Omar Torrijos Herrera of Panama signed two new canal treaties: the Panama Canal Treaty (also called the Torrijos-Carter Treaty) and the Neutrality Treaty. The Panama Canal treaty replaced all previous agreements between the United States and Panama concerning the Canal.

Under the Panama Canal Treaty, Panama was given an increasing amount of responsibility for the operation and management of the Canal until the termination of the treaty at noon on December 31, 1999, Panama time. At that time, the United States would transfer full control of the Canal to Panama. The treaty also specifies that the flag of the Republic of Panama shall be given a place of honor in the canal area--including those areas occupied by the United States--for the duration of the treaty. Other issues addressed in the treaty are the principle of nonintervention by the United States or its citizens in Panamanian affairs, and the possible future need for a sea-level canal or another lane of locks in the existing canal, which would be negotiated between the two parties and built by the United States.

The Neutrality Treaty guarantees that the Canal will remain neutral, and therefore open to ships from all countries even during times of war. This Treaty grants Panama the sole right to operate the Canal and to maintain military forces within its national territories. Although the United States is given authority to use its military to defend the neutrality of the Canal the excerpt (below) from the treaty emphasizes the point that the United States cannot intervene in Panama's internal affairs.

"The correct interpretation of this principle is that each of the two countries shall, in accordance with their respective constitutional processes, defend the Canal against any threat to the regime of neutrality, and consequently shall have the right to act against any aggression or threat directed against the Canal or against the peaceful transit of vessels through the Canal. "'This does not mean, nor shall it be interpreted as, a right of intervention of the United States in the internal affairs of Panama. Any United States action will be directed at insuring that the Canal will remain open, secure, and accessible, and it shall never be directed against the territorial integrity or political independence of Panama.'"

 

http://www.cotf.edu/earthinfo/camerica/panama/PCtopic3.html

[Moderator_02]

Part 4 of 5 parts.

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Not only is the Panama Canal important to Panama for income and jobs, but it is also considered to be vitally important to the United States economy. Many U.S. exports and imports travel through the Canal daily (over 10% of all U.S. shipping goes through the Canal). Exports represent jobs for U.S. citizens because the products were made by U.S. workers. Imports enable U.S. consumers to receive needed products.

Since the United States is the only superpower in the world, the United States is interested in keeping the global economy running smoothly. If world trade is disrupted, it can lead to worldwide economic problems. Therefore, any disruption in the flow of goods through the Panama Canal could directly hurt the U.S. and global economies. For instance, if England were selling products to Peru, England's economy would suffer if the Canal were not operating. Without access to the Canal, the cost of exports from England to Peru would significantly increase because England would have to regain the added expenses involved in sailing around South America. Because of increased prices, Peru could not afford to purchase as many products from England, which in turn would decrease England's revenues gained from exports. Decreased revenues means that England would have less money available to purchase products from the United States and other countries. A "domino effect" would be set in motion as the United States and other countries experienced similar problems with their exports and imports. This example illustrates the economic importance the Panama Canal has to the U.S. and global economies.

If one considers the thousands of ships full of goods that pass through the Canal every year and the impact that closing the Canal would have on the world economy, one can understand the economic importance of the Canal. Therefore, keeping the Canal open is directly and indirectly important to the United States and to the global economy.

http://www.cotf.edu/earthinfo/camerica/panama/PCtopic4.html

[Moderator_02]

Part 5 of 5 parts.

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At noon on December 31, 1999, the United States of America handed full control of the Panama Canal over to Panama. With the transfer of responsibility and power came many concerns.

Panamanian Control
Although the Panama Canal Treaty of 1977 was signed more than 20 years ago, many people in the United States and Panama think the treaty was a mistake. Some argue it was a mistake because they do not believe Panama was ready to manage the Canal. Panama has been a democracy for only a decade, and some people fear that the military could take over control of the government and the Canal.

The United States and Panamanian politicians have expressed concerns about political corruption. Since operation of the Canal brings in millions of dollars, the potential for corruption is high, especially in the Panamanian government.

Recent polls found that approximately 70% of Panamanians would have liked to seen the United States continue to be involved, at least in part, in the Canal operation. This feeling was also expressed by Panamanian politicians, including the president of Panama.

Security Concerns 
Another concern about the transfer of the Canal to the Panamanians centered around Canal security. Panama's neighbor, Colombia, has an active revolutionary group that has been crossing over into Panama. The rebels say they do not intend to cause any problems in Panama. However, some U.S. officials are not sure the rebels can be trusted. One fear is that the rebels might try to gain publicity for their cause by targeting the Canal. A terrorist act against the Canal could cause major disruptions in international trade. Without the U.S. military stationed in the canal area (a 5-mile section of land on each side of the Canal), the Canal would not be as well defended against terrorist attacks.

Landmines and Hazardous Materials Another concern is what the United States left behind in the U.S. canal area of Panama. This section along the Canal was used by the United States as a military training base to test explosives, as well as other things. Unexploded landmines still exist in the rainforests that were part of the U.S. area along the Canal.

Hazardous materials, such as chemical weapons were among the materials left behind. Although most areas containing hazardous materials were cleaned up, some areas were fenced off to keep people out. The U.S. military maintains that these areas were too thickly forested for all of the materials to be removed. Cutting the trees down to allow access would have destroyed the rainforest. Therefore, the U.S. military argued that fencing them off was the best option. The military also pointed out that only a fraction (about 2%) of the U.S. territory would be left contaminated.

Improvements 
One pressing issue that faced Panama as it took on the responsibility of managing the Canal was making the regular improvements necessary to keep the Canal operational. Modernizing the Canal involves, among other things, widening the Canal in some areas and updating the tugboats that pull the ships through the Canal's locks.

These improvements will help to keep traffic flowing through the Canal in a timely manner. Smooth traffic flows will keep the Canal an economic way to ship goods. If Canal traffic gets too slow, more countries could begin to ship their goods across the United States by railroads. Unfortunately, improving the Canal can be very expensive--one tugboat can cost tens of millions of dollars. Yet, since countries have other ways to ship their goods, Panama must continually improve the Canal.

http://www.cotf.edu/earthinfo/camerica/panama/PCtopic5.html

[Keith Woolford]

In a lighter moment on Monday during the press session prior to their meeting, President Trump commented to President Varela that the U.S. "did a good job of building" the Canal to which the Panamanian leader quipped "yes, a hundred years ago".

 

 

[JimAndNena]

And it is still functioning better than the expansion project. Old technology may be better.

[TwoSailors]

Yes 100 years ago. Varela had to say that as Trump probably did not know that.