The American Nation A History of the United States, Combined Volume (14th Edition)

The Panama Canal 605

Lake

Gatun

Miraflores Lake

Caribbean

Sea

PACIFIC

OCEAN

Madden

Lake

Caribbean Sea

PACIFIC

OCEAN

Panama

Canal

PANAMA

CITY

Colón

Gatun

Balboa

Miraflores

Gatun

Locks

Gatun

Dam

Culebra

Cut

Miraflores Locks

Pedro Miguel Locks

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A

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A

M A

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COLOMBIA

COSTA

RICA

NICARAGUA

PANAMA

PANAMA CANALZONE

The U.S. Panama CanalFollowing many negotiations, construction

of the Panama Canal began in 1904. After many delays and

hardships, it was completed in 1914.

company, staged a revolution against Colombia in
November 1903, he ordered the cruiserNashvilleto
Panama. Colombian government forces found them-
selves looking down the barrels of the guns of the
Nashvilleand shortly thereafter eight other American
warships. The revolution succeeded.
Roosevelt instantly recognized the new Republic
of Panama. Secretary Hay and the new “Panamanian”
minister, Bunau-Varilla, then negotiated a treaty
granting the United States a zone ten miles wide in
perpetuity, on the same terms as those rejected by
Colombia. Within the Canal Zone the United States
could act as “the sovereign of the territory... to the
entire exclusion of... the Republic of Panama.”
The United States guaranteed the independence of
the republic. The New Panama Canal Company then
received its $40 million, including a substantial share
for Bunau-Varilla.
Historians have condemned Roosevelt for his
actions in this shabby affair, and with good reason.
It was not that he fomented the Panamanian revolu-
tion, for he did not. Separated from the government
at Bogotá by an impenetrable jungle, the people of
Panama province had long wanted to be free of
Colombian rule. He sinned, rather, in his disregard
of Latin American sensibilities. He referred to the
Colombians as “dagoes” and insisted smugly that he
was defending “the interests of collective civilization”
when he overrode their opposition to his plans.
“They cut their own throats,” he said. “They tried to
hold us up; and too late they have discovered their
criminal error.”
If uncharitable, Roosevelt’s analysis was not
entirely inaccurate, yet it did not justify his haste in
taking Panama under his wing. “Have I defended
myself?” Roosevelt asked Secretary of War Root.
“You certainly have, Mr. President,” Root retorted.
“You were accused of seduction and you have con-
clusively proved that you were guilty of rape.”
Throughout Latin America, especially as nationalist
sentiments grew stronger, Roosevelt’s intolerance and
aggressiveness in the canal incident bred resentment
and fear.^3
The first vessels passed through the canal in
1914—and American hegemony in the Caribbean
expanded. Yet even in that strategically vital area there
was more show than substance to American strength.
The navy ruled Caribbean waters largely by default,
for it lacked adequate bases in the region. In 1903, as
authorized by the Cuban constitution, the United

States obtained an excellent site for a base at

Guantanamo Bay, but before 1914 Congress appro-

priated only $89,000 to develop it.

The tendency was to try to influence outlying

areas without actually controlling them. Roosevelt’s

successor, William Howard Taft, called this policy

dollar diplomacy, his reasoning being that economic

penetration would bring stability to underdeveloped

areas and power and profit to the United States with-

out the government’s having to commit troops or

spend public funds.

Under Taft the State Department won a place for

American bankers in an international syndicate

engaged in financing railroads in Manchuria. When

Nicaragua defaulted on its foreign debt in 1911, the

department arranged for American bankers to reorga-

nize Nicaraguan finances and manage the customs

service. Although the government truthfully insisted

that it did not “covet an inch of territory south of the

Rio Grande,” dollar diplomacy provoked further

apprehension in Latin America. Efforts to establish

similar arrangements in Honduras, Costa Rica, and

Guatemala all failed. In Nicaragua orderly administra-

tion of the finances did not bring internal peace. In

1912, 2,500 American marines and sailors had to be

landed to put down a revolution.

Economic penetration proceeded briskly. American

investments in Cuba reached $500 million by 1920,

(^3) In 1921 the United States made amends by giving Colombia
$25 million. Colombia in turn recognized the independence of
the Republic of Panama.