Panama Canal

THE PANAMA CANAL was a failed French project led by Ferdinand de Lesseps in the 1880s. In 1903, the United States entered the doomed enterprise and finished the canal. With U.S. interference, the Republic of Panama seceded from Columbia. The United States controlled the Panama Canal for most of the 20th century, and intervened occasionally in the Republic of Panama. The Panama Canal was a campaign issue in at least three countries: France, the United States, and Panama.

In the 1880s the Republican system in France was still unstable. De Lesseps, the aging father of the Suez Canal project, engaged in the much more demanding Panama Canal project. He wanted to finance it with small private shareholders. As the project got into technical and financial trouble, he and his bankers started a large bribing operation, financing friendly newspapers and buying the support of over 100 French parliamentarians.

The canal company soon went bankrupt, but the scandal broke only in 1892, when the anti-Semitic and anti-democratic newspaper La Libre Parole published the story. The Panama corruption scandal became the defining political theme in the French 1893 campaign. Many important parliamentarians lost their seats. Public confidence in the Republic and the parliamentary system fell to an all-time low in modern French history. Although the corruption was a legitimate campaign issue, it was a vehicle for anti-Semitic and anti-democratic propaganda, soon to be replaced by the Dreyfus affair as a French campaign topic in the 1890s and in the early 20th century.

The Panama Canal issue entered U.S. politics in 1880, when it was still a French-led operation and President Rutherford B. Hayes confirmed the Monroe Doctrine concerning the envisaged canal. U.S. politics remained firm on this during the 1880s, and assured European governments that the United States would only tolerate the construction as a private enterprise under Ferdinand de Lesseps, but not as a project run by European governments. When the French-led enterprise collapsed, U.S. diplomacy paved the way for American involvement. But, in the United States there was still a dispute about whether Panama would be the right location.

At the same time as the failed French Panama Canal project, the United States had its own collapsed canal enterprise in Nicaragua. The Nicaragua Canal, for most of the 1890s, seemed to be the winning project. But finally, the Panama Canal project succeeded with the Spooner Act in 1902. In the Panama-Nicaragua decision, the threat of volcanoes in Nicaragua was highly exaggerated. The Panama Canal is the most visible symbolic of the presidency of Theodore Roosevelt, when the United States discovered the importance of the link between the Atlantic and the Pacific—which became the Panama Canal—and when the United States became a world power.

The canal was also a political issue in Central America: Before the secession of the Republic of Panama, it [Page 481]was a political issue in Columbia. The canal was the lifeline of the Republic of Panama; therefore all election campaigns dealt with the issue. The canal was the generator of income for the Republic of Panama, and it was the cause of its long instability and U.S. intervention. In 1989, the United States invaded Panama to oust Manuel Noriega, the strongman of Panama and a leading drug dealer. The Republic of Panama is much more stable now; however, the canal remains a campaign topic, especially in the 2006 Panama Canal expansion referendum, in which expansion was decided by nearly 77 percent.

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