Panama

B

Colombian Rule

In the early 1800s Spain’s American empire broke apart as the movement for Latin American independence swept through the colonies. Panama declared independence from Spain in 1821 and decided to become part of the newly independent Republic of Colombia. For the next 82 years the Panamanians lived in uneasy isolation from the central government, often making their own laws, frequently staging revolts, and occasionally declaring their independence. They grew apart culturally and materially from the rest of Colombia, becoming less religious, more liberal in politics, and more open to outside influences than Colombians.

By the mid-1800s events from beyond the region began to affect Panama. The dominant maritime power of the age, Britain, and the rising power in the hemisphere, the United States, began to compete for the rights to control transit across Central America. The preferred route for a canal was in either Panama or Nicaragua. American businessmen took the lead in 1848 when they gained rights to build a railroad across Panama, which was completed in 1855. The discovery of gold in California brought a flood of prospectors seeking quick access, and for years the Panama Railroad was the most profitable in the world. Businesses to serve travelers flourished, providing a boom for Panamanian merchants.

With the railroad came U.S. intervention. Rebellions against Colombian rule and violence between local factions occurred frequently. In addition, an increase in the number of U.S. citizens and businesses created tensions with Panamanians. During this period the United States frequently sent its Marines to Panama to preserve law and order and to protect U.S. lives and property. Although still a province of Colombia, Panama was on its way to becoming a U.S. protectorate.

C

Independence and the Canal

In the late 1870s, French diplomat Ferdinand de Lesseps, who had built the Suez Canal in Egypt, called a conference in Paris to design and raise money for a Central American canal. Deciding on a sea-level canal in Panama, he began to raise money privately, and started work in 1882. But the project was dogged by equipment delays, tropical diseases, financial problems, and poor planning. The canal design turned out to be impossible to build with the technology available at the time. The enterprise went bankrupt in 1888 and was replaced with a holding company to protect the interests of investors. The project, however, had brought Panama a more diverse population, including many Caribbean blacks who came to work on it.

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During the 1890s some U.S. leaders urged their government to take over the effort to build a Central American canal. The United States had for some time wanted a shorter sea route between the Atlantic and Pacific for trade and military purposes. It also stood to benefit from a canal more than any other country. Several land surveys were conducted, and some construction even began in Nicaragua. In 1902, however, a complex set of developments led the U.S. president and Congress to favor buying and rehabilitating the French route in Panama.

The United States negotiated a treaty with Colombia for rights to build the canal, but the Colombian senate refused to ratify it. Representatives of French and U.S. investors, the railroad, and the U.S. government then conspired with Panamanians to declare the isthmus independent from Colombia. President Theodore Roosevelt, who wanted to make the Panama Canal the centerpiece of his administration, made sure the conspiracy succeeded. When the Panamanians rebelled, U.S. troops prevented Colombian forces from moving in to suppress the revolt. The Republic of Panama became independent on November 3, 1903.

Two weeks later a treaty was signed giving the United States the rights to build a canal on terms that made Panama a virtual U.S. protectorate. The United States received a perpetual lease for a section of central Panama 16 km (10 mi) wide, stretching from ocean to ocean, for the canal. Within this zone, the United States would exercise complete control, as if it owned the land. It also was granted the right to military intervention in Panama to maintain order, and the right to take over more Panamanian land if necessary. In exchange, the United States guaranteed Panama’s independence and paid $10 million, plus an annual payment of $250,000. On Panama’s side, the treaty was negotiated and signed not by Panamanians but by Philippe Bunau-Varilla, a French citizen who represented the French canal company. The treaty terms were resented by Panamanian nationalists and became a source of continuing controversy in Panama’s history.

From 1903 on, Panama had two governments, one for the republic and another for the canal zone. The republic was subordinate to the government of the U.S. zone in every way—financially, militarily, and administratively. Panama adopted a constitution and elected its first president, Manuel Amador Guerrero, in 1904. But in fact, the chief engineer of the canal construction works and then the governors of the canal zone oversaw affairs in Panama. They made sure that nothing impeded the maintenance, security, and operation of the canal.

Panama’s independence was strictly limited: With no military, it was vulnerable to intervention by U.S. troops from the canal zone. It had limited resources and had to borrow money from banks, using the canal annuity as guarantee. Virtually all the country’s trade and immigration came through the zone and was therefore subject to U.S. control. Panama depended on the zone for water, jobs, revenues, imports, transportation, and even security. Panama’s relationship was both unequal and subservient to the United States. See also Panama Canal; Panama Canal Zone.

Construction of the canal, from 1904 to 1914, brought more than 150,000 people to Panama. These immigrants changed the country’s ethnic and cultural composition. They included a large number of black West Indian laborers, some European workers, and some Americans.

During Panama’s early years, President Belisario Porras led efforts to build the nation, constructing roads, hospitals, schools, and other facilities. Porras, leader of the Liberal Party, achieved a working relationship with the U.S. authorities and dominated the country’s government until the late 1920s. However, resentment of U.S. domination grew among some Panamanians.

D

The Arias Years

In 1931 a secret nationalist organization, Acción Comunal (Common Action), carried out a coup and held new elections for president. A group of reformers, headed by Harmodio Arias Madrid, took control of the government and sought to make it more effective. In contrast to the elite families that had always ruled Panama, Arias and his family came from a modest rural background, and their success marked the rise of middle-class Panamanians into government leadership. Under Arias’s presidency (1932-1936) and those of his successors, the police force became stronger, the economy began to diversify, the university was established, and Panama took on a new sense of national pride. In 1936 the United States and Panama negotiated treaty changes that ended the U.S. right to intervene in Panama’s affairs and its right to appropriate more land. The treaty also increased the annual payments the United States made to Panama.

Arias’s younger brother, Arnulfo Arias, became president in 1940 and intensified policies to strengthen the nation and oppose U.S. power. He fostered a greater sense of nationalism among Panamanians, stating that Panama was more than a canal and had a national destiny beyond serving the United States. Arias insisted that the United States negotiate as an equal with Panama for new treaty concessions and resisted U.S. efforts to establish new military bases in Panama during World War II (1939-1945). Arias was sympathetic to some European fascist governments of that time. He also introduced a new constitution that gave him a longer term in office and revoked the citizenship of non-Hispanic immigrants.

Arias’s initial term in power was brief, however. Under his presidency, the National Police were given more weapons and a bigger role in politics. Ironically, the police deposed him in a coup in 1941, and in later years would overthrow him twice more and rig elections to defeat him. By the mid-1940s, the commander of the police had the power to choose and depose presidents as he wished.

E

Increasing Unrest

The culmination of increased police involvement in politics came in 1952. Police commander José Antonio Remón, after years of deciding who would hold the presidency, became convinced he could do a better job than the civilians. He ran for office and was elected honestly. Remón continued many of the policies of the Acción Comunal reformers. He pushed to diversify the economy, developing industry and agriculture to reduce Panama’s dependence on the canal. He further strengthened the police, making it more like a military force and renaming it the National Guard. New treaties were negotiated to give Panama more benefits from the canal. Remón also built a strong coalition of political parties. He was assassinated in 1955.

Relations with the United States deteriorated in the late 1950s. Panamanians grew increasingly frustrated over U.S. control of the canal zone and their country’s lagging development. They were inspired by the successful revolution in Cuba and events in 1956 in Egypt, where the government seized and nationalized the Suez Canal. Anti-American demonstrations increased, during which U.S. flags were torn down, U.S. agencies were stoned, and Panamanians clashed with canal zone troops. These protests led to a more serious confrontation in 1964 known as the flag riots, in which violence broke out over attempts to fly the Panamanian flag in the canal zone as a symbolic gesture. More than 20 people were killed, most of them Panamanians, and the United States and Panama temporarily broke off relations. The confrontation persuaded the United States to begin negotiations to replace the unpopular 1903 treaty, but the effort took 13 years to complete.

Public order declined during the mid-1960s, as the economy stagnated and government seemed incapable of administering the nation. Public frustration with the situation helped Arnulfo Arias win the 1968 election. When he threatened to dismiss some leading officers of the National Guard, they overthrew him after ten days in office. Two officers, Boris Martínez and Omar Torrijos Herrera, led the coup and formed a ruling council, or junta. By early 1969 Torrijos assumed full control of government and announced a revolutionary program.

F

The Torrijos Regime

The Torrijos era brought Panama a mixture of military rule, social and economic reforms, and a more vigorous, left-wing foreign policy. Torrijos suspended the constitution and eventually replaced it with one that gave him full powers as head of state for six years. Disbanding the National Assembly, he governed by decree, outlawed political parties, and used the National Guard to repress opposition. However, he won popularity for his social and economic policies and, more importantly, for confronting the United States over control of the canal. He also established ties with Cuban leader Fidel Castro and the rebel Sandinistas, who were fighting the dictator of Nicaragua.

Under Torrijos, the government intervened more strongly in the economy, introducing land reform and prolabor policies, and encouraging international banking to establish a base in Panama. Openly attacking the wealthy upper class of Panama, Torrijos recruited middle- and lower-middle-class citizens to staff the upper ranks of government. Because foreign banks were eager to lend money and Panama’s international banking industry was growing, Panama was able to borrow a great deal of money during the 1970s. Torrijos used it to create state-run industries and utilities; to expand social services, building schools, clinics, and housing; and to aid farmers. These measures, while popular, contributed to a large national debt, and economic growth slowed.

The hallmark of the Torrijos years was the negotiation of new treaties with the United States to replace the controversial 1903 canal agreement. The new treaties, signed by Torrijos and U.S. president Jimmy Carter in 1977, provided that the canal would be turned over to Panama on December 31, 1999. More than 60 percent of the canal zone was to be turned over to Panamanian control in 1979 under the treaty, but it allowed the United States to retain some military bases until 2000. The treaty also provided that more money from canal tolls would go to Panama. The agreements provoked opposition in both countries; some Panamanians objected that the treaties did not go far enough, while many Americans felt the canal was U.S. property that was being given away. However, both nations ratified the treaties, which took effect in 1979.

Once the treaties were signed, Torrijos stepped down as head of government and began to reinstate civilian rule in Panama. He formed the Democratic Revolutionary Party (PRD), which provided backing for his civilian figurehead president. But Torrijos retained control of the National Guard and remained the dominant figure in Panama’s politics until he died in a plane crash in 1981.