American interest in linking the Atlantic and Pacific oceans by means of a canal across Central America had existed for many years. With the signing of the Clayton-Bulwer Treaty, the U.S. and Britain agreed not to act unilaterally on such a project, but by the end of the century the dynamics had changed. The United States had emerged as a world power following the Spanish-American War.
Experiences during the conflict had underlined the need for more rapid deployment of the fleet. More than two months were required to sail from California to New York by way of Cape Horn. Completion of a canal would reduce that voyage by 8,000 miles.
France had begun a canal project in the Panama region of Colombia during the 1880s, but progress was brought to a halt by tropical diseases, engineering problems and a dwindling treasury. The French effort, headed by Ferdinand DeLesseps—engineer for the Suez Canal—declared bankruptcy and was taken over by a group whose sole intention was to sell the defunct company’s assets to the United States.
The French difficulties also served to direct attention toward an alternative location—Nicaragua. Although the northern route was longer, it offered the advantages of a more amenable climate and easier terrain than found in Panama.
Britain, diverted by a growing rivalry with Germany, had given the United States a free hand to develop the canal under the terms of the Hay-Pauncefote Treaty in 1901.
At this juncture, two interesting characters entered the picture, William Nelson Cromwell, an American lawyer and promoter, and Philippe Bunau-Varilla, the agent for the original French construction company. Cromwell made a huge contribution to the Republican Party and set about countering Congressional interest in Nicaragua.
In the spring of 1902, backers of the Panama route gave each member of Congress a Nicaraguan postage stamp depicting Mount Monotombo in full eruption, casting doubt on Nicaraguan government officials who had claimed that no active volcanoes existed within the country.
Congress responded by passing the Spooner Act (June 1902), authorizing $40 million to purchase French rights to canal construction in Panama, but stipulating further that if the Colombian government failed to provide the necessary land, then the U.S. would open negotiations with Nicaragua.
The secretary of state hastily negotiated the Hay-Herrán Treaty in 1903, a proposed agreement that would have given the U.S. the necessary lease rights for canal construction in the Panama. The Colombian Senate, however, refused to ratify the treaty, causing the president to berate the Colombians for blocking a major “highway of civilization.”
Secretary of State John Hay and President Roosevelt let their wishes be known. The United States would smile favorably upon an independent Panama. Bunau-Varilla, with a large commission in the balance, stepped up his activities and orchestrated American aid with the plans of revolutionaries in Panama.
In November 1903, with U.S. warships standing by, a bloodless revolution broke out in Panama City. Firefighters and railroad workers secured government facilities while the U.S. fleet prevented Colombian soldiers from arriving. Independence was declared on November 4 and American diplomatic recognition followed two days later. Bunau-Varilla was named by the new republic to handle the negotiation of a canal treaty in Washington.
The resulting Hay-Bunau-Varilla Treaty secured American rights to construct and maintain the canal in Panama. Bunau-Varilla, now a wealthy man, returned to his native France. Roosevelt would later boast about the signal event of his presidency by proclaiming, “I took Panama.” Colombia was understandably outraged by the United States' naked manipulation and other Latin nations viewed the northern giant with mounting suspicion.
Work began on the canal in 1904. Roosevelt, eager to view his pet project, visited the construction site in 1906 and became the first president to leave the country during his term of office. Colonel George W. Goethals was the overall project supervisor, but was assisted by the amazingly successful efforts of Dr. William C. Gorgas to combat yellow fever and malaria. Despite a nevertheless heavy toll inflicted by disease and a cost of more than $360 million, the canal was completed in 1914, a testament to American single-mindedness and engineering skill.
In 1977, President Jimmy Carter signed the Panama Canal Treaty, which provided for the return of the canal to Panama in the year 2000.