The region which the conquistadors call Darién is the site of the first stable Spanish settlement on the mainland. In 1510, on the west coast of the Gulf of Urabá, Balboa founds Santa María la Antigua del Darién.
It is from here that he sets off on the journey in 1513 which brings him to the Pacific. His discovery of this other sea adds a new dimension to Spanish ambitions. Santa María la Antigua acquires its own bishop in about 1514. But as early as 1519 the bishopric, and with it the seat of local government, is moved across the narrow isthmus to the fishing village of Panama on the Pacific coast.
Panama immediately becomes a place of focal importance in the developing Spanish empire. From here expeditions set out to colonize the Pacific coast (most notable being the departure of Pizarro on his voyage to Peru in 1530). And here the produce of the Pacific colonies is subsequently brought, to start its journey to Spain.
The goods are carried on caravans of mules for fifty miles across the isthmus to Portobelo – a harbour named beautiful by Columbus in 1502. Portobelo becomes the scene of a great trade fair. Each year, until the event is discontinued in 1748, a fleet of Spanish galleons arrives, to deliver European goods for the colonies and to take home the wealth of Latin America.
Panama in Colombia: AD 1821-1903
In 1821, when Bolívar is still engaged in driving the Spanish out of New Granada, the region of Panama briefly declares a separate independence. But before the end of the year it throws in its lot with Bolívar’s Republica de Colombia (more often referred to nowadays as Gran Colombia). When that disentegrates, in 1830, Panama remains part of the rump republic, Colombia.
The significant aspect of the isthmus of Panama, from its discovery by Balboa in 1513, has been its status as the easiest link between two oceans. The arrival of the railway age makes this function even more commercially attractive. In 1846 the Colombian government negotiates a treaty with the United States as guarantor of a proposed railway from coast to coast.
Under the terms of the treaty the United States guarantees to protect the neutrality of the isthmus together with the right to unimpeded transit for every nation. With this much agreed, steps are undertaken to build the railway. The contract goes to the Panama Railroad company, chartered in New York in 1849. The work is completed by 1855.
The construction period has coincided with the California gold rush, beginning in 1849. The alternative route across Nicaragua (requiring only existing steamships and carriages) is better equippped to carry the surge of traffic at this stage. But these two routes, across Panama and Nicaragua, now become the rivals for the next great development – the siting of a canal.
Plans for a canal: AD 1879-1903
In Paris in 1879 there is a high-level gathering of 135 delegates to consider the important topic of a canal linking the Atlantic and the Pacific. The president of the International Congress for Consideration of an Interoceanic Canal is the 74-year-old Ferdinand de Lesseps, hero of the successful completion of the Suez canal just ten years earlier.
De Lesseps is entrusted with the new undertaking, to be achieved through Panama rather than Nicaragua. Unfortunately the ageing engineer, rejecting expert advice, decides on the almost impossible task of a sea-level canal. The intention is to cut through the continental divide which runs the length of the isthmus.
This error, combined with financial incompetence and the ravages of equatorial disease, forces the French Panama Canal company into liquidation in 1889. The scandal escalates when members of the French government are suspected of taking bribes from the company. De Lesseps is tried in 1893 and is sentenced to five years in prison (he has served none of his sentence by the time the verdict is quashed a few months later).
The collapse of this French effort leaves the field to the Americans, who have been considering a rival venture through Nicaragua. Urgency is added to the issue in 1898 when a much needed US battleship, the Oregon, takes two months to steam from the Pacific to the Atlantic round South America.
In 1902 a deal is agreed for the US to purchase the uncompleted work of the French company in Panama, putting this route way ahead of the competition in Nicaragua. During the later months of this same year an agreement is negotiated between the Colombian chargé d’affaires in Washington and the US government for the creation and maintenance of a canal zone. It is generally held that the treaty grants favourable terms to Colombia.
The agreement is ratified in Washington in 1903 as the Hay-Herrán treaty. But three months later it is rejected by the Colombian government – in a reckless act which leads directly to the independence of Panama.
Provincial leaders in Panama fear that this setback may cause the US to select the rival canal route through Nicaragua. An envoy is sent to Washington with details of a planned Panamian revolution. No direct help is promised, but the US warship Nashville steams towards the region. She appears off the coast near Colón on 2 November 1903.
The expected uprising occurs on the very next day, followed by the proclamation of the independent republic of Panama. The Nashville plays no active part, but her presence deters Colombian troops from moving west along the isthmus in time to suppress the revolution. The new republic is immediately recognized by the United States.
Building the Panama Canal: AD 1903-1914
One of the first acts of the Panamanian government is the signing of a treaty with Washington for the creation of the proposed canal. In the Hay-Bunau-Varilla Treaty of November 1903 the USA is given in perpetuity exclusive control of a zone (about ten miles wide) through the centre of Panama, in return for $10 million and an annual rent.
With this agreed, there is nothing to delay the construction of the canal except the practicalities of one of the world’s most ambitious engineering projects. Debate continues on the relative merits of a sea-level canal or a high-level one (with locks from both Atlantic and Pacific raising ships to a dammed Gatun Lake as the long central section of the waterway).
The latter and more practical scheme eventually prevails, under the influence of the chief engineer appointed to the scheme, John F. Stevens (from 1907 he is succeeded in the role by George W. Goethals).
The canal opens to shipping on 15 August 1914. Far away in Europe, just two weeks earlier, the First World War has broken out – confronting the new canal with the first challenge to its proclaimed neutrality. This status has been safely maintained ever since (though if the USA itself is at war the situation becomes academic – an enemy ship, if allowed safely through the canal, will be fair game soon after leaving it).
Panama and the USA: AD 1903-1977
The Hay-Bunau-Varilla agreement of 1903 brings close US involvement in Panamanian politics, along with administrative rights in the Canal Zone. The treaty allows the US to intervene with military force to quell disturbances anywhere in Panama. This right is exercised on four separate occasions between 1908 and 1925.
However the concessions granted in perpetuity in 1903 soon come to seem intolerable in Panama. From the 1930s they are gradually modified. In 1936 the Panamanian president, Harmodio Arias, negotiates an end to the US right of interference. He also achieves a rise in the annual rental for the canal zone, previously fixed at $250,000.
Further US concessions follow in 1955, relating in particular to the rights of Panamanians living and working in the Canal Zone. By the late 1950s confrontation centres on Panamanian demands to fly the national flag within the Zone. This issue leads in 1964 to public riots and several deaths, after Panamanian and US students at the Balboa high school begin feuding about their respective flags.
These disorders, followed by a brief spell of US military rule in the Canal Zone, make both sides aware that a radically new agreement is now essential.
After a decade of difficult negotiations, agreement is finally reached early in the US presidency of Jimmy Carter. A new treaty, signed in 1977, provides for the gradual transfer of the Canal Zone from US to Panamanian control. The final stage of US withdrawal is scheduled for completion by the end of 1999, though the US is to retain certain rights in the defence of the canal beyond that date.
Modifications to this plan are made during the 1990s, allowing some of the US bases to remain. This is partly for their contribution to the Panamanian economy, but also as front-line posts in the battle against the drugs cartels – an issue which provokes dramatic US interference in Panamanian affairs in 1989.
The Noriega years: AD 1983-1989
Although Panama has had some democratically elected presidents, for much of its independent existence it has succumbed to the Latin American tradition of caudíllos. This has been particularly true in the later decades of the 20th century. In 1968 a military coup brings to power the commander of the National Guard, Omar Torrijos, who gradually equips himself with full dictatorial powers.
In 1981 Torrijos is killed in a plane crash. There is an interim period when a return to democracy seems possible, but in 1983 Manuel Noriega wins control of the National Guard. With his appointment dictatorship and gangsterism become partners in the exploitation of Panama.
Colombia, Panama’s southern neighbour, is by now a centre of the illegal drugs trade in which the USA is the main consumer market. Noriega becomes an eager middleman in these lucrative enterprises, while using the secret police and army to murder his opponents and to terrorize the population. Outrage at his activities increases steadily, inside Panama as well as abroad.
The climax comes in December 1989, when Noriega declares the nation to be in a state of war with the US. The next day Panamian soldiers kill a US marine officer. President Bush reacts with ‘Operation Just Cause’, sending 24,000 troops to occupy Panama City and to seize Noriega.
For four days Noriega avoids capture. He then seeks asylum in the Vatican embassy in Panama City, but soon gives himself up to the US forces. He is taken under arrest to Miami. In 1992 he is tried and convicted in a US court for drug trafficking and money laundering.
Under US protection Guillermo Endara is sworn in as president of Panama (he has almost certainly won a presidential election in May 1989, the results of which were suppressed by Noriega). Subsequently there are elections every five years. The most recent, in 1999, is won by a woman, Mireya Moscoso – who duly presides over the end-of-millennium ceremony when full sovereignty over the canal is transferred to Panama.