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A Plan, A Canal, ...

The first proposal to build a canal across some part of the Central American isthmus to link the Atlantic and Pacific dates back to 1529. The Spanish rulers saw it as a way of shortening the time taken to transport gold and other booty from their South American empire to Spain. But nothing concrete was done until the late 19th century, when a French company carried out a great deal of excavation but failed to complete the project.

Then the American government got in on the act. Unfortunately for them, the site of the unfinished canal was within Colombia, which was ruled by ‘a government of irresponsible bandits’, in the words of US President Teddy Roosevelt. But a revolt in the province of Panama, aided by a US battleship and a load of marines, soon produced a new country, with a government prepared to let the Americans in (for a price, of course). The US Army re-started work in 1904 but the canal was not completed till ten years later. It was a tremendous engineering feat, marked among other things by special attention to avoiding the malaria and yellow fever that had contributed to bringing down the French effort (it’s estimated that in all over 30,000 people died in building the 50-mile canal).

Having spent millions of dollars and established Panama as a new nation, the US rulers naturally wanted to gain maximum profit from their canal. Apart from its role in increasing American exports and shortening journey times between New York and California, tolls for using it were paid to the US operators rather than to Panama. American troops have been sent to Panama on a number of occasions (e.g. in 1925 to put down a strike and in 1958 to counter demonstrations). A 1903 treaty granted the Canal Zone to the US ‘in perpetuity’, but from the 1970s, formal control was gradually handed over to Panama, with this being complete by 1999.

The canal has, however, declined in importance to some degree. An oil pipeline across the isthmus has cut the number of oil tankers using it, but above all the new super-size ships are just too big for it. In 1982, a commission was set up, consisting of Panama and the two main users of the canal, the US and Japan, to consider improvements. One proposal was to widen the narrowest part of the canal and so increase capacity to fifty ships a day.

Nothing was done then, but there is currently a proposal to widen and deepen the canal, to be financed by the Panamanian government, provided a national referendum gives the go-ahead. The US are again exerting pressure, in none too gentle a way. ‘It's in our nation's interest that this canal be modernized,’ said President Bush on a recent visit to Latin America. Capitalism’s need for reliable routes to transport raw materials and manufactured products remains as pressing as it was when the Panama Canal was first built.