Panama Canal Zone
The Panama Canal Zone, also known as just the Canal Zone, was a concession of the United States located in the Isthmus of Panama that existed from 1903 to 1979. It consisted of the Panama Canal and an area generally extending on each side of the centerline but excluding Panama City and Colón. Its capital was Balboa.
The Panama Canal Zone was created on November 18, 1903, from the territory of Panama; it was established with the signing of the Hay–Bunau-Varilla Treaty, which allowed for the construction of the Panama Canal within the territory by the United States. In 1904, the Isthmian Canal Convention was proclaimed, granting the United States in perpetuity the use, occupation, and control of a zone of land and land underwater for the construction, maintenance, operation, sanitation, and protection of the canal. From 1903 to 1979, the territory was controlled by the United States, which had purchased the land from its private and public owners, built the canal and financed its construction.
The Canal Zone was abolished on October 1, 1979, as a term of the Torrijos–Carter Treaties two years earlier; the canal itself was later under joint U.S.–Panamanian control until it was fully turned over to Panama in 1999.
History
Proposals for a canal
Proposals for a canal across the Isthmus of Panama date back to 1529, soon after the Spanish conquest. Álvaro de Saavedra Cerón, a lieutenant of conquistador Vasco Núñez de Balboa, suggested four possible routes, one of which closely tracks the present-day canal. Saavedra believed that such a canal would make it easier for European vessels to reach Asia. Although King Charles I was enthusiastic and ordered preliminary works started, his officials in Panama soon realized that such an undertaking was beyond the capabilities of 16th-century technology. One official wrote to Charles, "I pledge to Your Majesty that there is not a prince in the world with the power to accomplish this". The Spanish instead built a road across the isthmus. The road came to be crucial to Spain's economy, as treasure obtained along the Pacific coast of South America was offloaded at Panama City and hauled through the jungle to the Atlantic port of Nombre de Dios, close to present-day Colón. Although additional canal building proposals were made throughout the 16th and 17th centuries, they came to naught.The late 18th and early 19th centuries saw a number of canals built. The success of the Erie Canal in the United States and the collapse of the Spanish Empire in Hispanic America led to a surge of American interest in building an interoceanic canal. Beginning in 1826, US officials began negotiations with Gran Colombia, hoping to gain a concession for the building of a canal. Jealous of their newly obtained independence and fearing that they would be dominated by an American presence, the president Simón Bolívar and New Granada officials declined American offers. The new nation was politically unstable, and Panama rebelled several times during the 19th century.
In 1836, U.S. statesman Charles Biddle reached an agreement with the New Granadan government to replace the old road with an improved one or a railroad, running from Panama City on the Pacific coast to the Chagres River, where a steamship service would allow passengers and freight to continue to Colón. His agreement was repudiated by the Jackson administration, which wanted rights to build a canal. In 1841, with Panama in rebellion again, British interests secured a right of way over the isthmus from the insurgent regime and occupied Nicaraguan ports that might have served as the Atlantic terminus of a canal.
In 1846, the new US envoy to Bogotá, Benjamin Bidlack, was surprised when, soon after his arrival, the New Granadans proposed that the United States be the guarantor of the neutrality of the isthmus. The resulting Mallarino–Bidlack Treaty allowed the United States to intervene militarily to ensure that the interoceanic road would not be disrupted. New Granada hoped that other nations would sign similar treaties, but the one with the United States, which was ratified by the US Senate in June 1848 after considerable lobbying by New Granada, was the only one.
The treaty led the U.S. government to contract for steamship service to Panama from ports on both coasts. When the California Gold Rush began in 1848, traffic through Panama greatly increased, and New Granada agreed to allow the Panama Railroad to be constructed by American interests. This first "transcontinental railroad" opened in 1850. There were riots in Panama City in 1856; several Americans were killed. US warships landed Marines, who occupied the railroad station and kept the railroad service from being interrupted by the unrest. The United States demanded compensation from New Granada, including a zone wide, to be governed by US officials and in which the United States might build any "railway or passageway" it desired. The demand was dropped in the face of resistance by New Granadan officials, who accused the United States of seeking a colony.
Through the remainder of the 19th century, the United States landed troops several times to preserve the railway connection. At the same time, it pursued a canal treaty with Colombia. One treaty, signed in 1868, was rejected by the Colombian Senate, which hoped for better terms from the incoming Grant administration. Under this treaty, the canal would have been in the middle of a zone, under American management but Colombian sovereignty, and the canal would revert to Colombia in 99 years. The Grant administration did little to pursue a treaty and, in 1878, the concession to build the canal fell to a French firm. The French efforts eventually failed, but with Panama apparently unavailable, the United States considered possible canal sites in Mexico and Nicaragua.
The Spanish–American War of 1898 added new life to the canal debate. During the war, American warships in the Atlantic seeking to reach battle zones in the Pacific had been forced to round Cape Horn. Influential naval pundits, such as Captain Alfred Thayer Mahan, urged the construction of a Central American canal. In 1902, with the French efforts moribund, US president Theodore Roosevelt backed the Panama route, and Congress passed legislation authorizing him to purchase the French assets on the condition that an agreement was reached with Colombia.
In March 1902, Colombia set its terms for such a treaty: Colombia was to be sovereign over the canal, which would be policed by Colombians paid for by the United States. The host nation would receive a larger percentage of the tolls than provided for in earlier draft treaties. The draft terms were quickly rejected by American officials.
Roosevelt was in a hurry to secure the treaty; the Colombians, to whom the French property would revert in 1904, were not. Negotiations dragged on into 1903, during which time there was unrest in Panama City and Colón; the United States sent in Marines to guard the trains. Nevertheless, in early 1903, the United States and Colombia signed a treaty which, despite Colombia's previous objections, gave the United States a wide zone in which it could deploy troops with Colombian consent. On August 12, 1903, the Colombian Senate voted down the treaty 24–0.
File:Go Away Little Man Charles Green Bush.jpg|thumb|upright|1903 cartoon: "Go Away, Little Man, and Don't Bother Me". President Theodore Roosevelt intimidating Colombia to acquire the Panama Canal Zone.
Roosevelt was angered by the Colombians' actions, especially when the Colombian Senate made a counteroffer that was more financially advantageous to Colombia. A Frenchman who had worked on his nation's canal efforts, Philippe Bunau-Varilla, represented Panamanian insurgents; he met with Roosevelt and with Secretary of State John Hay, who saw to it that his principals received covert support. When the revolution came in November 1903, the United States intervened to protect the rebels, who succeeded in taking over the province, declaring it independent as the Republic of Panama. Bunau-Varilla was initially the Panamanian representative in the United States, though he was about to be displaced by actual Panamanians, and hastily negotiated a treaty, giving the United States a zone wide and full authority to pass laws to govern that zone. The Panama Canal Zone excluded Panama City and Colón, but included four offshore islands, and permitted the United States to add to the zone any additional lands needed to carry on canal operations. The Panamanians were minded to disavow the treaty, but Bunau-Varilla told the new government that if Panama did not agree, the United States would withdraw its protection and make the best terms it could with Colombia. The Panamanians agreed, even adding a provision to the new constitution, at US request, allowing the larger nation to intervene to preserve public order.
Construction (1903–1914)
The treaty was approved by the provisional Panamanian government on December 2, 1903, and by the US Senate on February 23, 1904. Under the treaty, Panama received, much of which the United States required to be invested in that country, plus annual payments of ; with those payments made, as well as for the purchase of the French company assets, the Canal Zone was formally turned over by Panama on May 4, 1904, when American officials reopened the Panama City offices of the canal company and raised the American flag. This marked the beginning point for U.S. excavation and construction which concluded in August 1914 with the opening of the canal to commercial traffic.Governance
By order of President Theodore Roosevelt under the Panama Canal Acts of 1902 and 1904 the secretary of War was made supervisor of canal construction and the second Isthmian Canal Commission made the governing body for the Canal Zone. Under the Panama Canal Act of May 24, 1912, President Woodrow Wilson issued Executive Order 1885, January 27, 1914, effective April 1, 1914, abolishing the previous governance and placing it under the direction of the Secretary of War, with the entity designated as The Panama Canal. This Executive Order charged the Governor of the Panama Canal with "completion, maintenance, operation, government and sanitation of the Panama Canal and its adjuncts and the government of the Canal Zone". A number of departments were specified in the order, with others to be established as needed by the Governor of the Panama Canal with approval of the President and under the supervision of the Secretary of War. Defense of the canal was the responsibility of the Secretary of War who retained control of troops with provisions for presidential appointment of an Army officer in wartime who would have "exclusive authority over the operation of the Panama Canal and the Government of the Canal Zone". The executive order noted in closing "that the supervision of the operations of the Panama Canal under the permanent organization should be under the Secretary of War", thus establishing the essentially military arrangement and atmosphere for the canal and Canal Zone.On September 5, 1939, with the outbreak of war in Europe Executive Order 8232 placed governance of the Canal and "all its adjuncts and appurtenances, including the government of the Canal Zone" under the exclusive control of the Commanding General, Panama Canal Department for the duration. The US Secretary of War stated that the air forces and anti-aircraft artillery covering the Canal Zone must be greatly augmented. Prior to 1939, the equipment of the Air Corps was generally outdated and of questionable value. Thereafter, air defense of the Zone underwent major expansions.
Effective July 1, 1951, under an act of Congress dated September 26, 1950, governance of the Canal Zone was through the Canal Zone Government with the canal operated by the Panama Canal Company until 1979 when the Panama Canal Commission took over its governance. The entire structure was under the control of the United States government with the secretary of the Army appointing the Panama Canal Company board of directors and the Canal Zone Government was entirely financed by the company. The office of the governor of the Panama Canal Zone was not usually a stepping stone to higher political office but a position given to US Army active duty general officers of the United States Army Corps of Engineers. The governor was also president of the Panama Canal Company. The Canal Zone had its own police force, courts, and judges.
Everyone worked for the company or the government in one form or another. Residents did not own their homes; instead, they rented houses assigned primarily based on seniority in the zone. When an employee moved away, the house would be listed and employees could apply for it. The utility companies were also managed by the company. There were no independent stores; goods were brought in and sold at stores run by the company, such as a commissary, housewares, and so forth.
In 1952, the Panama Canal Company was required to go on a break-even basis in an announcement made in the form of the president's budget submission to the United States Congress. Though company officials had been involved in previewing the requirement, there was no disclosure in advance, even though the Bureau of the Budget directed that the new régime become effective on March 1. The company organization was realigned into three main divisions; Canal Activity and Commercial Activity with the Service Activity providing services to both operating activities at rates sufficient to recover costs. Rate adjustments in housing and other employee services would be required and a form of valuation, compared to a property tax, would be used to determine each division's contribution to the Canal Zone Government.