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.

BibliographyCrane, 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