PANAMA TO CONTROL CANAL:

September 7, 1977

In Washington, President Jimmy Carter and Panamanian dictator Omar Torrijos sign
a treaty agreeing to transfer control of the Panama Canal from the United States
to Panama at the end of the 20th century. The Panama Canal Treaty also
authorized the immediate abolishment of the Canal Zone, a 10-mile-wide,
40-mile-long U.S.-controlled area that bisected the Republic of Panama. Many in
Congress opposed giving up control of the Panama Canal--an enduring symbol of
U.S. power and technological prowess--but America's colonial-type administration
of the strategic waterway had long irritated Panamanians and other Latin
Americans.The rush of settlers to California and Oregon in the mid 19th century
was the initial impetus of the U.S. desire to build an artificial waterway
across Central America. In 1855, the United States completed a railroad across
the Isthmus of Panama (then part of Colombia), prompting various parties to
propose canal-building plans. Ultimately, Colombia awarded the rights to build
the canal to Ferdinand de Lesseps, the French entrepreneur who had completed the
Suez Canal in 1869. Construction on a sea-level canal began in 1881, but
inadequate planning, disease among the workers, and financial problems drove
Lesseps' company into bankruptcy in 1889. Three years later, Philippe-Jean
Bunau-Varilla, a former chief engineer of the canal works and a French citizen,
acquired the assets of the defunct French company.By the turn of the century,
sole possession of the proposed canal became a military and economic imperative
to the United States, which had acquired an overseas empire at the end of the
Spanish-American War and sought the ability to move warships and commerce
quickly between the Atlantic and Pacific oceans. In 1902, the U.S. Congress
authorized purchase of the French canal company (pending a treaty with Colombia)
and allocated funding for the canal's construction. In 1903, the Hay-Herran
Treaty was signed with Columbia, granting the United States use of the territory
in exchange for financial compensation. The U.S. Senate ratified the treaty, but
the Colombian Senate, fearing a loss of sovereignty, refused.In response,
President Theodore Roosevelt gave tacit approval to a Panamanian independence
movement, which was engineered in large part by Philippe-Jean Bunau-Varilla and
his canal company. On November 3, 1903, a faction of Panamanians issued a
declaration of independence from Colombia. The U.S.-administered railroad
removed its trains from the northern terminus of Colon, thus stranding Colombian
troops sent to crush the rebellion. Other Colombian forces were discouraged from
marching on Panama by the arrival of the U.S. warship Nashville.On November 6,
the United States recognized the Republic of Panama, and on November 18 the
Hay-Bunau-Varilla Treaty was signed with Panama, granting the United States
exclusive and permanent possession of the Panama Canal Zone. In exchange, Panama
received $10 million and an annuity of $250,000 beginning nine years later. The
treaty was negotiated by U.S. Secretary of State John Hay and Bunau-Varilla, who
had been given plenipotentiary powers to negotiate on behalf of Panama. Almost
immediately, the treaty was condemned by many Panamanians as an infringement on
their country's new national sovereignty.In 1906, American engineers decided on
the construction of a lock canal, and the next three years were spent developing
construction facilities and eradicating tropical diseases in the area. In 1909,
construction proper began. In one of the largest construction projects of all
time, U.S. engineers moved nearly 240 million cubic yards of earth and spent
close to $400 million in constructing the 40-mile-long canal (or 51 miles long,
if the deepened seabed on both ends of the canal is taken into account). On
August 15, 1914, the Panama Canal was inaugurated with the passage of the U.S.
vessel Ancon, a cargo and passenger ship.During the next seven decades, the
United States made a series of concessions to Panama, including regular
increases in annual payments, the building of a $20 million bridge across the
canal, and equal pay and working conditions for Panamanian and U.S. workers in
the Canal Zone. The basic provisions of the 1903 treaty, specifically the right
of the United States to control and operate the canal, remained unchanged until
the late 1970s. In the 1960s, Panamanians repeatedly rioted in the Canal Zone
over the refusal of U.S. authorities to fly the Panamanian flag and other
nationalist issues. After U.S. troops crushed one such riot in 1964, Panama
temporarily broke off diplomatic relations with the United States.After years of
negotiations for a new Panama Canal treaty, agreement was reached between the
United States and Panama in 1977. Signed on September 7, 1977, the treaty
recognized Panama as the territorial sovereign in the Canal Zone but gave the
United States the right to continue operating the canal until December 31, 1999.
Despite considerable opposition in the U.S. Senate, the treaty was approved by a
one-vote margin in September 1978. It went into effect in October 1979, and the
canal came under the control of the Panama Canal Commission, an agency of five
Americans and four Panamanians.On September 7, 1977, President Carter had also
signed the Neutrality Treaty with Torrijos, which guaranteed the permanent
neutrality of the canal and gave the United States the right to use military
force, if necessary, to keep the canal open. This treaty was used as rationale
for the 1989 U.S. invasion of Panama, which the saw the overthrow of Panamanian
dictator Manuel Noriega, who had threatened to prematurely seize control of the
canal after being indicted in the United States on drug charges.Democratic rule
was restored in Panama in the 1990s, and at noon on December 31, 1999, the
Panama Canal was peacefully turned over to Panama. In order to avoid conflict
with end-of-the-millennium celebrations, formal ceremonies marking the event
were held on December 14. Former president Jimmy Carter represented the United
States at the ceremony. After exchanging diplomatic notes with Panamanian
President Mireya Moscoso, Carter simply told her, "It's yours."