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THE HISTORICAL BASIS OF ANTI-U.S. SENTIMENT IN PANAMA:
A BRIEF SUMMARY, 1825-1985
Panama is literally a global crossroads, which explains in large
part its distinctiveness from other Central American countries. In
contrast to Guatemala, Nicaragua, El Salvador and Honduras, for
example, Panama is primarily an urbanized, service economy. About
60% of the country's gross domestic product derive from trade,
finance and transportation services. Over half the country's
population resides in Panama City and Colon, one at either end of
the Panama Canal. The Canal splits the country in half
geographically, and of course, has been at the center of Panamanian
politics and economy.
A brief summary of the country's history follows, providing at least
a broad stroke background for understanding Panamanian sensitivity
to US policy, and US politicians' remarks.
From the time that Colombia won its independence from Spain in 1821,
establishing its rule in Panama was problematic. During the 19th
century, the Panamanians revolted 50 times against their Colombian
masters. When the Panamanian rebels seemed near success (1855-1856
and 1885), the US intervened militarily to protect US interests and
end the revolts.
1825: New York businessmen initiated a project to build a canal but
failed to obtain financial support.
1846: The United States signed a treaty with New Granada (Colombia)
to assure US access to any future canal constructed in the province
1849: California Gold Rush. Thousands from the East Coast of US
sailed to the narrowest part of the continent to trek through Panama
on their way to the riches of California. They preferred that route
to the arduous and often dangerous transcontinental trip across the
1851-55: Railroad is constructed across the 48-mile width of Panama,
financed by New York capitalists who obtained an exclusive
concession from Colombia to construct a railroad across its
territory of Panama. The railway reduced the cost of transporting
goods, raw materials and passengers from one ocean to the other.
1856-1865: US Army intervened five times to protect the railroad
from possible attacks by insurgents rebelling against Colombian
1878: Ferdinand de Lesseps, the Frenchman who had constructed the
Suez Canal, began a project to dig a sea-level canal across Panama.
After 11 years of effort, he gave up. Throughout 1878-1899 period,
the US pressured France to abandon the undertaking, asserting its
"rightful and long-established claim to priority on the American
1880s-1890s: Support grew for building a canal through Nicaragua.
1898: Spanish-American War, marking birth of US as imperial power.
US military leaders lobby for construction of an interoceanic canal
1901: A presidential commission endorsed the Nicaraguan route,
despite the more favorable engineering and logistical
characteristics of the Panamanian alternative, because the French
company that controlled the canal concession in Panama wanted $109
million for its rights.
Influential New York attorney William N. Cromwell, and Phillipe
Bunau-Varilla, chief engineer of the de Lesseps project and an
organizer of the New Panama Canal Company (French company with
rights to the canal) acted to change US policy. Cromwell bribed the
Republican party to end its support of the Nicaraguan route. He and
Bunau-Varilla then convinced the company to lower the prices for its
concession to $40 million.
1902: Bunau-Varilla and Comwell managed to push through Congress the
Spooner Amendment, which authorized President Roosevelt to buy the
New Panama Canal Company's rights for the price of $40 million if he
could negotiate a treaty with Colombia.
1903: Secretary of State John Hay pressured the Colombian ambassador
to the US to sign a pact that gave the US a 99-year lease on a strip
of land across the isthmus in return for $10 million and an annual
payment of $250,000. The Colombian Senate rejected the US petition,
demanding more money.
--After a terrible civil war (1899-1902) had severely weakened
Colombia, Panamanian nationalists were ripe for revolt. Working with
the US State Department and the Panamanian rebels, Bunau-Varilla
triggered an uprising in early November. With the help of the US
Navy and liberal bribes paid to Colombian officers who were supposed
to crush the revolt, Panama won its independence.
--Five days after securing Panamanian independence from Colombia,
the first canal treaty with the US was signed. Signing the treaty
for Panama was Bunau-Varilla. He produced a treaty that gave the
United States control over a 10-mile wide canal zone "as if it were
sovereign of the territory." The US was to have "in perpetuity the
use, occupation, and control" of the zone. In return, the US was to
pay Panama $10 million and assume a virtual protectorate over the
new nation. The Panamanian government indignantly protested the
terms of the agreement but eventually accepted the pact, fearing
that the US might either seize the canal with no compensation or
build one in Nicaragua instead.
1903-1914: US Marines were stationed in Panama to protect US
interests during construction of the canal. During this period, the
United States disbanded the Panamanian army, and assumed the
responsibility of defending Panama against external threat. The US
established its own postal system, custom houses, and commissaries
in the Canal Zone, privileges that seriously undermined the
Panamanian economy and injured Panamanian pride.
1904: Panama establishes monetary system based on US dollar.
1908, 1912, 1918: US government and military leaders supervise
Panama's national elections.
1914: Panama Canal completed.
1918: Detachment of Marines arrived in province of Chiriqui and
stayed for two years to maintain public order.
1925: 600 US Army troops marched into Panama City to break a rent
strike. For 12 days, US troops patrolled the streets to keep order
and guard US property.
1926: Popular opposition forced Panamanian government to reject
largely concessionary treaty with the United States.
1936: Via the General Treaty of Friendship and Cooperation, US
relinquished right to unilateral intervention in Panama's political
affairs. In that treaty, the US obtained access to additional lands
and waters for the defense and modernization of the canal.
1942: US-Panama Base Convention allowed US over 100 new military and
telecommunications facilities in Panama, beginning the extensive and
permanent US military presence in the Canal Zone.
1947: Popular protests prevented authorization of increased US
1953: Colon Free-Trade Zone created in Panama based upon proposal by
a vice-president of National City Bank of New York.
1955: Treaty of Mutual Understanding and Cooperation permitted US to
locate another large military base in Panama in exchange for
increased commercial access to the Canal Zone by the local elite.
1960: Panama Canal Zone becomes center for US-sponsored
1964: US authorities prevented Panamanian students from raising
their national flag alongside the US flag at a high school in the
Canal Zone. Riots ensued, street fighting between US military
personnel and Panamanians, resulting in $2 million in property
burned or otherwise destroyed (mainly US), 28 dead, 300 wounded and
500 arrested. Of the dead, 22 were Panamanian citizens. Panama broke
diplomatic relations with the United States.
--The US responded by agreeing to raise the Panamanian flag at the
Canal Zone high school and to negotiate a new canal treaty.
1967: After three years of negotiations, the US proposed a treaty
that was rejected by Panama.
1968: General Omar Herrera Torrijos comes to power in a coup by the
National Guard that threw Dr. Arnulfo Arias Madrid, a member of
Panamanian oligarchy, out of presidential office. Torrijos intiated
a populist program involving increased government services, support
for agrarian cooperatives, and better government relations with the
labor movement. He also greatly expanded the national military
apparatus (the National Guard was transformed into the Panamanian
Defense Forces). Gen. Torrijos instilled nationalism and populism in
Panama, and was particularly beloved by the rural poor. His party
was the Revolutionary Democratic Party (PRD), based on an alliance
among workers, peasants, and political reformers.
1970: Panama passed a banking law that created the ideal conditions
for an international finance center. Bank deposits are not taxed, no
reserves are required for foreign operations or exchange controls,
and profits are exempt from income tax.
1977: Under leadership of Gen. Torrijos, Panama and the United
States reached an agreement over the ownership and operation of the
Panama Canal. Provisions include: 1) Right of US to manage and
operate the canal until the year 2000; 2) perpetual US authority to
protect and defend the canal; 3) all key bases and training areas
operated by the United States to remain under US control until the
year 2000; 3) appropriation of territorial jurisdiction by Panama in
1982 over the Canal Zone (five-mile area on either side of the
canal); 4) perpetual right of the United States to build a new sea-
level canal ten miles to the west; 5) an increase of toll fees
received by Panama from $2.3 million to approximately $70 million
annually; 6) establishment of a nine-member canal commission,
composed of five US members and four Panamanian members, to manage
the canal (in 1989, to change to four US and five Panamanian
1981: Torrijos was killed in an airplane crash. Many suspected CIA
involvement in the crash because of Torrijos' nationalist politics
and friendly relations with Cuba.
1982: Ricardo de la Espriella enters as president of Panama, marking
a move to the right with increasing influence of the National Guard.
1984: Canal commission voted 5 to 4 to increase the canal budget by
$15 million to provide higher salaries to the US employees of the
canal. The five US members of the commission argued that US
employees needed higher salaries because they no longer enjoyed
privileges at the US commissary. Panamanian canal workers were not
granted a raise and 500 were fired for budgetary reasons. Incidents
of this nature have continued to the present, sparking complaints in
Panama City that the nondiscrimination clauses of the canal treaties
were being violated.
--For the 1984 elections, the military and the PRD chose Nicolas
Ardito Barletta, former World Bank president, University of Chicago-
trained economist, and friend of George Shultz and Henry Kissinger.
Backing Ardito Barletta was a PRD-led grouping called the National
Democratic Unity Coalition (UNADE) which consisted of PRD, two
right-wing parties, the Liberal Party, and a splinter group from the
main opposition party. Ardito became the first elected president in
The vote count took place behind closed doors, and the military was
widely suspected of fixing the vote toals. Adding to the election
controversy was the revelation that AIFLD and the PRODEMCA (two
USAID-funded organizations) contributed $20,000 to Ardito Barletta's
September 1985: Gen. Manuel Antonio Noriega, chief of Panamanian
Defense Forces, forces Ardito Barletta to resign, replacing him with
Vice President Eric Arturo Delvalle.
from The NY Transfer BBS 718-448-2358
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