The Panama Canal: A Brief History
Summer Lowery

The Panama Canal was an idea established to connect the Atlantic and the Pacific oceans. It would make it possible for ships to transport goods by using the Chagres River in Panama instead of traveling all the way around the bottom point of South America. This would decrease the time of travel in half. The first to begin work on the canal were the French in 1882, however, they were unsuccessful and the United States took over control of the canal in 1904 under President Theodore Roosevelt. The U.S. was successful in creating the Canal with John Frank Stevens, the head engineer. After the completion of the canal Panama had gained it’s independence from Colombia and there were growing animosities and resentment towards the United States due to their political intervention and lack of acknowledging Panama as independent. Along with the resentment came the social changes that had occurred during the construction of the canal, Panama had a new middle class and was now segregated by class and race due to the fact the many Americans now lived in the Canal Zone.

Panama tries to regain control after Independence
Panama had been trying to regain control of the Canal since it gained independence from Colombia in 1903 with the help of the United States. Panama was grateful to the U.S. for their military support in regaining their independence but now wanted to regain control of the Canal Zone. Panama had now established their own government and the policies that the U.S. had put in place for the canal did not coincide with the policies they wanted. The U.S. also continued to intervene in Panamanian government and society. Many Panamanians believed that the U.S. was even helping to rig the elections of their presidents. They also intervened in other government issues as well as their ownership of economic entities in the Canal Zone as well as other properties they owned.
Student Rioters Storming the Canal in 1964
Panama tried to reason with the U.S. government many times by establishing treaties such as the Hull-Alfaro Treaty in 1939, which stated that the U.S. must acknowledge and respect that Panama is independent as well as raise the price that the U.S. had to pay in order to be in the Canal Zone without causing conflict, etc. This treaty was only upheld for a little over a year or at least until the start of WWII.

During the war Panama agreed to help the U.S. and the Panamanian government extended the leases of over 100 properties to the United States until one year after the war ended. However, when the war ended Panama relinquished the leases and the U.S. sent “Ambassador Frank T. Hines to propose a twenty-year extension of the leases on thirteen facilities” (Panama-History) to the Panamanian government in 1947. Then all hell broke lose. The people of Panama had had enough of the U.S. intervention and their policies and began to riot against the U.S. government. The younger generation of Panamanians started to riot first in 1964 by complaining that the Panama flag was not present on the canal but the U.S. flag was. They rioted until the U.S. agreed to put up the Panama flag. This was not enough. Panama wanted their flag represented along the whole canal, as was the U.S.’s flag. The U.S. refused and shortly after Panamanian students stormed the Canal Zone with their flags and the rioting continued for three days. After the rioting was implemented by the students the government followed suit, and they refused to make treaties with the U.S. as well as refused to stop the rioters. The U.S became concerned and questioned whether they should even be involved in Panama anymore because they’re international relations with the Latin American countries were suffering.

Election of 1968
Riots had died down for a while after the storming of the Canal because of the upcoming presidential election in 1968. The main candidates for the election were Arnulfo Arias and Marco Aurelio Robles. Panamanians were cautious in voting because many believed the previous elections had been rigged. Despite their attempts to elect their own representative, many Panamanians voted for Arias because of his appeal to the poor and working classes. Arnulfo Arias was officially elected into office in October 1968 and immediately following, the Panama National Guard removed Aria from presidency. Students began rioting again and in 1969 Omar Torrijos Herrera took power, “in a year he personally controlled Panama.” (LaFeber) Before Torrijos, Panama had had an oligarchy and now Torrijos had established a new party known as the Democratic Revolutionary Party. Although Torrijos was in modern day terms a dictator, many reforms were made. He appealed to the poor by personally going to their towns and telling them about the new programs he had established such as the Democratic Revolutionary Party, which would give them jobs, etc. He also made international relations better with Peru and Bolivia and he also “established a mutually supportive relationship with Cuba's Fidel Castro.” (Panama-History) These relationships would help Torrijos later on when confronting the United States. Although Torrijos had created all of these new reforms for the Panamanians his main focus was renegotiations of the treaties with the United States. Panama’s economy was deteriorating and the Torrijos government was relying more and more on regaining control of the canal because Panama needed the profits that the canal produced.
Panama’s growing ties with other Latin American countries was making it impossible for the U.S. to keep control of the canal. This is because some of the other Latin American countries supported Panama and agreed that the Canal Zone should be controlled by Panama. This was causing not only bad relations with Panama for the U.S. but also with other Latin American countries. The current President of the United States, Jimmy Carter knew that in order to keep good relations with all of the countries he was going to have to relinquish control of the Canal and the Canal Zone to Panama.

The Panama Canal Treaty
Negotiations were put into affect for two treaties between the Panamanian and the U.S. governments. In 1977 they had come to an agreement on the two treaties. “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 Canal, 1914-1999)
Panama finally had control of the Canal and the Canal Zone and with it came an overwhelming sense of National pride from the people. The first treaty which was The Panama Canal Treaty stated that Panama would be given control of the Canal Zone in 1979 and the full relinquish of the zone would be complete in 1999 as well as full retreat of U.S. workers. The second treaty, which was the Neutrality Treaty stated that “the United States required a guarantee to ensure that the canal would remain neutral and open when the treaty terminated” (Ryan) this meant that Panama could have control just as long as they kept the canal neutral meaning that they could not deny ships from specific countries. It also stated that Panama had full military control of the zone, however the U.S. military is allowed to intervene only if it is an issue of the canal being neutral, but the U.S. will no longer intervene in Panama’s political or social affairs. Torrijos also included that no countries, not just the U.S., could intervene in Panama’s affairs. Also, the Canal Zone was not the only U.S. controlled zone that was relinquished back to Panama, “all right, title and interest of the United States in property, installations and equipment in the Ports of Balboa and Cristobal” (Panama Canal Treaty, Article V) were relinquished back to Panama as well. Panama finally had control of the canal. Along with the overwhelming National pride from the people, Panama now also had a new economic factor that would help to bring their economy out of debt.

Panama's new control of the Canal
The new control of the Canal and the Canal Zone made substantial changes for Panama. The profit made from the canal now went to the Panamanian government. The government imposed its own policies on the canal and created its own tariffs for ships passing through. This made it possible for money to be put into government owned property such as schools, cities and even into agriculture. Also along with the Canal Zone, it is estimated that Panama also received $100 million in the U.S. property that was turned over. This also helped Panama’s economy not just because of the initial estimated $100 million but Panama now also had control of the land and the businesses on said land as well as the right to build more profit earning assets. The profits from the canal also increased Panama’s proficiency and made them more marketable for world trade because now they had more land for agricultural goods as well as more land to create businesses for textile goods, etc. The government wasn’t the only thing that profited from regaining control of the Canal Zone. The people also profited, “As mandated by the treaty documents, the American employees of the Panama Canal Commission are gradually being replaced by Panamanians.” (Augelli) This made a drastic increase in the amount of jobs that were available for Panamanians as well as a change in life style for those working on the canal because they were now being compensated for their work. There were also more jobs created on the land that was returned to Panama because new companies and buildings were being constructed. As a whole the regaining of control of the Panama Canal improved the lives of the Panamanians, the economy, and made the Panamanian government officially independent.

The Canal Today
Today the the canal continues to be an economic asset to the government as well as the people. There is still a tariff implemented by the government on ships who pass through the canal and the profit from the tariff goes to the government.
What the Canal Currently Looks Like.
The government also continues to pay the workers wages and almost all of the workers are Panamanian now. The government has also recently put into plan an expansion of the canal because the ships being used today are bigger than the ships that were used when the canal was first built. These plans will cost the government quite a bit of money but the expected outcome is to be that more ships will use the canal because all types of ships will be able to fit through which will create a profit because of the tariff. Also they will have to increase their amount of workers in order to get the expansion done in a reasonable time. It is safe to say that the Panama Canal continues to be a major economic asset in Panama. It is also safe to assume that the regaining of the Panama Canal not only created official independence for Panama, despite some U.S. influence that is still in affect today, and it also gave Panama the economic boost that they needed in order to be a thriving country.

Works Cited and Works Consulted:

Augelli, John P. "The Panama Canal Treaties of 1977: Impact and Challenges." University of Kansas Lawrence, n.d. Web. 25 Nov. 2012. <>.

"The Canal, 1914-1999." Global Perspective: A Remote Sensing & World Issues Site. Wheeling Jesuit University, n.d. Web. 28 Nov. 2012. <>.

Conniff, Michael L. Panama and the United States: The Forced Alliance. Athens, GA: University of Georgia Press, 1992. Print.

LaFeber, Walter. The Panama Canal. New York, NY: Oxford University Press, 1978. Print.

McCullough, David. The Path Between the Seas . New York, NY: Simon and Schuster, 1977. Print.

"Panama Canal Treaty." Panama Canal Treaty and Related Documents. N.P., n.d. Web. 27 Nov. 2012. <>.

"Panama-History." Country Studies Program, n.d. Web. 27 Nov. 2012. <>.

Ryan, Paul B. The Panama Canal Controversy. Stanford, CA: Hoover Institution Publication, 1977. Print.