Panama Canal

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Panama Canal

The Central American isthmus of Panama has enjoyed global significance for nearly five centuries, ever since Spain started carrying Peruvian silver overland through Panama en route to Seville in the 1530s. It was not until the early nineteenth century that plans for a canal across the isthmus began to take serious shape. In 1848 they were given huge impetus by the United States's conquest of California from Mexico and by the simultaneous discovery of gold in the newly acquired territory. The distance from New York to San Francisco by what was then the only available sea route, via Cape Horn at the southernmost tip of the Americas, is 13,230 nautical miles; via Panama the voyage is cut to no more than 5,307 miles. The benefit to U.S. shipping of an isthmian canal was thus axiomatic, but it had even more consequence for the world at large.

It was the French, not the Americans, who first acted on this awareness. In the 1880s Ferdinand de Lesseps (1805–1894), the architect of the Suez Canal, began to cut a seaway through Panama, but when the project failed, the U.S. government took up the challenge. After a decade of Herculean construction work its lock canal opened on August 15, 1914. It operated under exclusive U.S. direction, under a 1903 treaty with Panama, granting the United States virtual sovereignty over a canal zone embracing the waterway, as well as tenure in perpetuity. This plenitude of power reflected the cardinal importance which Americans attached to the canal, which not only rendered a massive service to U.S. merchant shipping, but also gave the existing "one-ocean" U.S. Navy the ability to transfer its warships from one coast to the other with relative speed. As such, one U.S. senator, Claude Swanson, praised it to the skies as the most valuable American possession anywhere in the world.

Washington chose to present its command of the canal as a "mandate from civilization," and the Republic of Panama took as its motto "Pro Mundi Beneficio" ("For the Benefit of the World"), which was apt because Panama, like Suez, shrank the earth dramatically and made maritime trade links correspondingly more profitable. London, for instance, also became much closer to San Francisco. But for the 75-year duration of the treaty there was no doubt that U.S. national interest came far ahead of any concern for the canal as an international seaway, just as Britain regarded its control of Suez as paramount.

THE CANAL AS A TRADE ROUTE

The governors of the new canal strove vigorously to enhance its commercial value. By the terms of the canal treaty the commissary of the Panama Railroad, built by a U.S. corporation to transit the isthmus in the early 1850s, had the right to sell any items "necessary and convenient" to zone employees. This made it a thriving business, but General George Washington Goethals, the first governor, had more ambitious plans. In 1912 he secured legislation to allow the commissary to make sales to passing ships and bring in revenue that would help keep tolls down and maximize the advantage of the Panama route. Beyond this he envisioned large warehouse complexes at the Atlantic and Pacific terminals to turn the zone into a vast entrepôt, not simply an area dedicated to the operation of the canal—all this regardless of the interests of Panama, which in 1904 had been given a U.S. guarantee that the zone would not be developed in such a way as to shut Panamanian dealers out of its lucrative trade. Successive Panamanian governments fought strenuously against any expansion of the zone's business activities during further treaty negotiations in the 1920s and 1930s. The result, in the treaty of 1936, was a repeated recognition that the zone must not function at the expense of Panama, and that Panama was entitled to a share of the commercial opportunities created by the canal.

By this time traffic through the waterway was increasing despite the world depression, with annual transits up 18 percent on the previous decade. But the heightening international crisis of the 1930s inevitably accentuated Panama's importance as a strategic artery, not its role as a commercial highway. In 1934 merchant shipping was held up to make way for the passage of the fleet during an imagined crisis with Japan, and in August 1939, on the eve of World War II, Congress authorized a third set of locks to supplement the existing twin-lock chambers; they were to be for the exclusive use of the U.S. Navy. During the 1940s the commercial value of the canal fell into eclipse, with transits well down under the impact of the war and the severe postwar debilitation of world trade, and the tonnage shipped through Panama dropped by 28 percent.

Even though the canal made an incalculable contribution to the war effort in shuttling men and materials from ocean to ocean, it emerged as much less than the matchless prize it once had been. Its central weakness was the lock system, now not only vulnerable to a nuclear strike but far too small to handle the new generation of aircraft carriers. Two conflicting solutions were proposed: the third-locks scheme, which was suspended in 1942, and a sea-level canal. After a long wrangle the sea-level design was turned down on the grounds of unfeasibility, but so too was the third-locks project, deemed redundant by a navy now large enough to operate independently in both Atlantic and Pacific. With the advent of the supertanker in the 1950s, the inadequacy of the existing locks, which had a width of only 110 feet, was pointed up yet again. Though traffic doubled between 1950 and 1960, one senior U.S. government figure, Thomas Mann, drew the conclusion that the canal was "a wasting asset which will become obsolete in a relatively short period of time," (Major, 1993, p. 337) and there was the uneasy sense that it was a technological antique from a bygone era.

THE HANDOVER TO PANAMA

This feeling no doubt underlay the U.S. willingness in 1964 to enter into treaty negotiations to turn the canal over to Panama. The treaty-making process was inordinately protracted in the teeth of diehard congressional opposition, but its subject was a property through which now passed less than 1 percent of the U.S. gross national product. So in 1979 the Panama Canal Zone was liquidated and in 1999 the canal itself came under full Panamanian authority.

Although Panama ceased to be an outstanding emblem of U.S. naval and commercial might, it remained a key thoroughfare of international maritime trade. By the year 2000 the tonnage it shifted had more than tripled since 1960, much of it carried in "Panamax" vessels tailored to the dimensions of the locks. And transit through the canal was a highlight for the growing number of tourists arriving on cruise liners. As the waterway approached its centennial a large program of improvements, notably the widening of the central cut, proclaimed Panama's faith in its long-term future. Indeed, if we remember how much it has transformed seaborne communications in the past ninety years, it is impossible to imagine the world without it.

SEE ALSO Agriculture; Canals; Cargoes, Freight; Cargoes, Passenger; Colombia; Containerization;Petroleum;Shipbuilding;Shipping, Inland Waterways, North America;Ship Types;United States.