Panama Canal Did President Roosevelt 'Steal' the Canal or Obtain It Fairly? Library of Congress The issue

To ensure that the canal would be owned only by the U.S., in 1901 the U.S. negotiated with Britain to revoke the Clayton-Bulwer treaty. Britain, which was fighting the Boer War in South Africa and did not have extra resources to divert for building a canal, agreed to the Hay-Pauncefote Treaty revoking the Clayton-Bulwer Treaty. The U.S. Senate ratified Hay-Pauncefote in December of that year.

With plans to build a canal in place, the question became where to build it. Commissions in 1895 and 1899 had recommended that the canal be built in Nicaragua. Another survey was commissioned in December 1901 to compare routes through Panama and Nicaragua. The survey determined that it would cost roughly $190 million to build a canal through Nicaragua, compared with $253 million for a canal through Panama, including $190 million to purchase all properties and rights from the New Panama Canal Company. Therefore, the commission concluded, the Nicaragua route was the "most practicable and feasible."

Acting on an initial report by the commission, on January 8, 1902, the House passed the Hepburn Bill authorizing the government to build a canal in Nicaragua for $180 million. However, after the commission's report was released, the New Panama Canal Company reduced the asking price for its assets to $40 million. Upon hearing of that offer, the canal commission on January 20 submitted a second report recommending that the canal be built in Panama. In light of the second recommendation by the commission, accompanied by safety concerns after Nicaragua's Momotombo volcano became active, Senator John Spooner (R, Wisconsin) proposed an amendment to the Hepburn Bill that would locate the canal in Panama.

Spooner's amendment authorized the president to purchase the rights and properties of the New Panama Canal Company for $40 million and to negotiate with Colombia for the rights to build a canal in Panama. The bill also declared that if the U.S. could not reach an agreement with Colombia within a "reasonable time" then it would go ahead with the Nicaraguan route. The Senate passed the so-called Spooner Act, 67-6, on June 19, 1902, and the House approved it, 260-8, on June 25. Roosevelt signed the bill two days later.

After the Spooner bill was passed, U.S. Secretary of State John Hay and Tomás Herrán, Colombia's chargé d'affaires in Washington, D.C., began to negotiate a canal treaty. On March 17, 1903, the Senate ratified the so-called Hay-Herran Treaty, which granted the U.S. the rights to a six-mile-wide strip of land across Panama with a 100-year lease. The U.S. would maintain administrative control over the canal zone—for instance, keeping law and order—but Colombia would maintain sovereignty over the zone. In return, the U.S. would pay Colombia $10 million in gold and another $250,000 annually over the next nine years. [See Hay-Herran Treaty (1903) (primary document)]

The Colombian Congress, many of whose members had expressed opposition to the treaty, began considering the treaty in June. But in the meantime, the Colombian government requested that the treaty be amended so that the canal would end up costing the U.S. an additional $25 million. Hay advised Colombia that the Senate would never agree to such additional costs, and the treaty was left as it was.

On August 12, the Colombian Senate unanimously rejected the Hay-Herran Treaty. Discussing the prospects of a canal in Panama, Roosevelt wrote to Hay on September 15, "At present I feel that there are two alternatives. First, to take up Nicaragua; second, in some shape or way to interfere when it becomes necessary so as to secure the Panama route without further dealing with the foolish and homicidal corruptionists in Bogota [Colombia's capital]. I am not inclined to have any further dealings whatever with those Bogota people."

Revolution in Panama Brings Canal for the U.S.

Throughout the summer of 1903 there was speculation that Panama would declare its independence from Colombia if a canal treaty were not worked out. Panama had staged several bids for independence since 1886, when Colombia deprived Panama of the "absolute and unqualified sovereignty" it had originally guaranteed Panama under the terms of their union. Colombia had put down all such movements, often with the help of the U.S.

In October of that year, two army officers sent to investigate the situation in Panama reported to Roosevelt that weapons and ammunition were being smuggled into Panama, and that revolution was imminent. Citing the 1846 treaty, Roosevelt in late October sent three U.S. warships to Panama and a fourth to Cuba. Their instructions were to "maintain free and uninterrupted transit" across Panama, particularly protecting the railroad, and to "prevent landing of any armed force, either government or insurgent, at any point within 50 miles of Panama."

As predicted, on November 3 a group of Panamanians staged a revolt and the following day declared that Panama was independent. Because the U.S. warships had prevented Colombian troops from landing in Panama, the revolution occurred without any bloodshed. [See Panama's Declaration of Independence (Excerpt) (primary document)]

On November 6, Colombia's government offered to ratify the canal treaty it had previously rejected in return for U.S. support in putting down the rebellion. The U.S. spurned Colombia's offer and formally recognized Panama's independence the same day. Secretary of State Hay immediately began negotiations for a canal treaty withPhilippe Bunau-Varilla, a French engineer for the New Panama Canal Company who had been named Panama's minister to the U.S.

The resulting Hay-Bunau-Varilla Treaty was completed on November 18, and Panama's congress ratified it on December 2. The terms were more favorable to the U.S. than those of the canal treaty that had been negotiated with Colombia. Panama's treaty granted the U.S. a 10-mile-wide canal zone, did not set a time limit on U.S. ownership and essentially gave the U.S. complete jurisdiction over the canal zone. In return, the U.S. would give Panama $10 million, with an additional $250,000 each year (starting in 1913), and also agreed to help maintain Panama's independence. [SeeHay-Bunau-Varilla Treaty (1903) (primary document)]

Recognizing the favorable terms of the treaty with Panama, Hay advised the Senate to quickly ratify it without attempting to make any changes to it. Hay wrote to Spooner:

As it stands now as soon as the Senate votes we shall have a treaty in the main very satisfactory, vastly advantageous to the United States, and we must confess, with what face we can muster, not so advantageous to Panama. If we amend the treaty and send it back there some time next month, the period of enthusiastic unanimity, which...comes only once in the life of a revolution, will have passed away, and they will have entered on the new field of politics and dispute. You and I know too well how many points there are in this treaty to which a Panamanian patriot could object.

The Senate heeded Hay's advice. On February 23, 1904, it ratified the treaty in a 66-14 vote, without making any major changes to it. Work on the canal officially began on May 4. [See Construction of the Panama Canal (sidebar)]

Construction on the Gatun lock along the Panama Canal.

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