Lecture #12 - Panama Canal & Early 20th-Century U.S. Foreign-Policy Notes

Background: The Long-Standing Dream of a Central American Canal

Vision of a “water corridor” linking the Atlantic and Pacific dates back centuries.
- Pres. Ulysses S. Grant ( $1869\text{–}1877$ ) commissioned $7$ U.S. expeditions ( $1870\text{–}1875$ ) to survey potential routes.
Early competing routes
- Isthmus of Tehuantepec (Mexico)
- Plan: hoist ships onto railroad flatcars → haul overland.
- Seen as an impractical, “hare-brained” scheme; never built.
- Nicaragua Route
- Would exploit existing rivers/lakes (e.g.
  Lake Nicaragua).
- Con: significant volcanic activity along path.
- Panama Route (then part of Colombia)
- Pros:
  - Only $\tfrac{1}{3}$ the length of the Nicaragua line.
  - Free of active volcanoes.
  - U.S.-built Panama Railroad (completed $1855$ ) already crossed isthmus.
  - Established port cities on both coasts.
- Con: extremely rugged, rain-soaked terrain; heavy excavation required.

French Attempt (1881–1888)

Company: Compagnie Universelle du Canal Interocéanique de Panama.
Chief Engineer: Ferdinand de Lesseps
- Celebrated builder of Suez Canal (opened $1869$ ).
Concept evolution
- Initially favored a sea-level canal like Suez.
- Terrain forced a shift to a lock-and-dam system (first time considered).
- Gustave Eiffel designed massive lock gates; also invested heavily.
Financing
- Frenzy of small, middle-class French investors bought stock.
Collapse (1888)
- Company bankrupt; work stops.
- Wipes out thousands of life savings; topples Loube government.
- De Lesseps tried, convicted, sentenced to $5$ yrs.

U.S. Takeover & Strategic Rationale

After French failure, U.S. sees canal as test of industrial might → comparable to later Manhattan Project or Apollo moonshot.
President Theodore Roosevelt initially favored Nicaragua but flips to Panama in $1902$ .
Building canal = proof of U.S. arrival as global power; required new advances in
- Hydraulic engineering
- Steam-powered excavation machinery

Orchestrating Panamanian Independence (1903)

Context: Panama = province of Colombia.
Hay–Herrán Treaty (U.S.–Colombia) rejected by Colombian Senate → TR loses patience.
Roosevelt’s options
- Contemplated direct invasion.
- Opted for covert support of a Panamanian revolt.
3 Nov 1903 – Revolt
- Few, unpaid Colombian troops in Panama.
- U.S. Navy positions $10$ warships to block reinforcements.
- U.S. bribery package:
- Rank-and-file soldiers: $\$50$ each.
- Generals: $\$65{,}000$ each.
- Result: virtually bloodless; only fatality = Chinese shopkeeper hit by stray shell in Colón.
Immediate U.S. recognition (< $1$ hr after receiving notice) grants new republic legitimacy & U.S. protection pledge.
Colombian attempt to march through Darién Gap fails (disease, swamp, rough terrain).

The Hay–Bunau-Varilla Treaty (1903)

Negotiated with new Panamanian govt.
Key terms
- U.S. receives “Canal Zone”: canal plus $10$ mi on each bank (total $20$ -mi strip) “in perpetuity.”
- Panama gets $\$10{,}000,000$ cash + annual rent $\$250,000$ (later modifications).
U.S. later pays Colombia $\$25{,}000,000$ compensation ( $58$ M mentioned in lecture = aggregate of multiple payments + banking fees; larger than prices for Louisiana, Alaska & Philippines combined).
Financing: new Panamanian govt receives large J.P. Morgan loan → binds economy to Wall Street.

Construction Under U.S. Administration (1904–1914)

Chief Engineer succession: John F. Wallace → John Stevens → Gen. George Goethals.
Engineering choice: lock canal rather than sea-level.
- Gatun, Pedro Miguel & Miraflores lock complexes lift/lower ships $85$ ft.
Scale & cost
- Largest federal project to date.
- Final cost ≈ $\$350{,}000,000$ (≈ $1/3$ of annual U.S. budget then).
- Opened 15 Aug 1914, $6$ mo ahead of schedule.
Distance/time savings
- Cuts East Coast ↔ West Coast voyages by $8{,}000$ mi.
- Toll → ~ $\tfrac{1}{10}$ cost of sailing around Cape Horn.
World War I effect: first-year traffic lower than projections due to wartime shipping disruptions.

Labor Force & Racial Dynamics

Local workforce inadequate → recruitment from British West Indies (Barbados & Jamaica).
- Black laborers = >70\% of total workforce.
- Average wage $\$87$ /month; no promotion path → zero black supervisors.
Casualties
- Total black deaths ≈ $4,500$ .
- Causes: landslides, accidental explosions (over $50\%$ handled dynamite), tropical diseases (malaria, yellow fever, pneumonia, typhoid, dysentery, bubonic plague).
- Blacks died at $3$ × the white mortality rate.
- Many interred in mass graves.
Segregation inside Canal Zone mirrors Jim Crow South.
- Dual wage & housing systems (“Silver Roll” for non-white; “Gold Roll” for white).
- Chinese exclusion law enacted by Panamanian govt at U.S. urging.

Roosevelt’s 1904 Site Visit

First foreign trip by sitting U.S. president; stayed $12$ days.
Roosevelt personally inspects operations; suspects managers hiding problems.
Publicly staged photo: TR at controls of $95$ -ton Bucyrus steam shovel → emblem of slogan “Make the dirt fly.”
Privately criticizes inadequate black housing; little immediate reform.

Strategic & Military Significance

Canal permits creation of U.S. Pacific Fleet post–WW I; key to WWII readiness.
Solidifies U.S. naval doctrine (Alfred Thayer Mahan): sea power = world power.
Showpiece of American industrial capability; praised by historian David McCullough as “one of the supreme human achievements.”

Post-Construction Diplomacy & Control

1977 Carter–Torrijos Treaties
- Abrogate perpetual U.S. control; gradual turnover completed 31 Dec 1999.
- Controversial domestically—critics saw as surrendering colonial asset.

Doctrines & Diplomatic Framework

Big Stick / Gunboat Diplomacy (Roosevelt)
- Alleged African proverb: “Speak softly and carry a big stick.”
- Meaning: pursue negotiations but maintain credible threat of force.
- Enabled by Great White Fleet— $16$ white-hulled battleships.
Monroe Doctrine (1823)
- Pres. James Monroe: European powers must not meddle in Western Hemisphere.
- Initially unenforceable; often ignored.
Roosevelt Corollary (1904)
- Adds U.S. right to intervene if Latin American states fail to maintain “order” or pay debts.
- Casts U.S. as hemispheric policeman.
Dollar Diplomacy (Taft, 1909–1913)
- Motto: “Substitute dollars for bullets.”
- Replaces overt force with U.S. bank loans & investments to secure influence.
- By $1912$ , >\tfrac{1}{2} of all U.S. foreign investment in Latin America.
- Gunboats still deployed when financial leverage failed (e.g.
  Guatemala, Nicaragua, Honduras, Haiti).

Broader Imperial & Economic Context

Territorial empire (Puerto Rico, Philippines, Guam, etc.) small compared with European empires, but
- Economic & cultural reach outsized.
- $1914$ : U.S. manufactures $\tfrac{1}{3}$ of world’s industrial output.
Canal assures access to global markets, enables two-ocean navy, reinforces open-door commercial strategy.

Numerical Summary & Timeline

$1855$ ‒ Panama Railroad completed.
$1870\text{–}1875$ ‒ $7$ U.S. survey missions.
$1881$ ‒ French begin work.
$1888$ ‒ French company collapses.
$1902$ ‒ U.S. switches to Panama route.
$3\,Nov\,1903$ ‒ Panamanian revolution.
$18\,Nov\,1903$ ‒ Hay–Bunau-Varilla Treaty.
$1904$ ‒ Roosevelt on-site visit; formal start of U.S. construction.
$1904\text{–}1914$ ‒ Construction period; >350 M dollars.
$15\,Aug\,1914$ ‒ Official opening.
$1977$ ‒ Carter treaties signed.
$1999$ ‒ Full Panamanian control.

Ethical, Philosophical & Practical Implications

Canal exemplifies tension between technological triumph and exploitative labor / imperial coercion.
Raises questions of sovereignty: U.S. engineered secession, controlled Canal Zone as de facto colony.
Racialized labor hierarchy echoes U.S. domestic segregation; sets precedent for global racial capitalism.
Illustration of shifting U.S. foreign policy tools—from gunboats to finance—yet persistent in aim: secure markets & resources.

Connections & Analogies

Compared to Manhattan Project & Apollo Program → showcases how national prestige fuels mega-projects.
“Make the dirt fly” imagery = precursor to modern political photo-ops.
Canal’s trade impact analogous to Suez (1869) and later Malacca & Suez expansions—chokepoints as leverage in geopolitics.

Key Takeaways for Exam Review

Know WHY Panama was eventually chosen despite harsher terrain.
Explain French failure vs. U.S. success (finance, disease control, engineering, political timing).
Trace Roosevelt’s tactics in fomenting Panamanian independence.
Distinguish Big Stick, Roosevelt Corollary & Dollar Diplomacy.
Be able to cite major statistics: $350$ M cost, $8{,}000$ mi saved, $4{,}500$ black deaths, $70\%$ West Indian labor.
Situate canal within broader narrative of U.S. rise to world power & transition from 19th-century continental expansion to 20th-century overseas empire.