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History of Panama

Panamanian History

Panama has played a significant role in both Central America and the world. Whole civilizations have risen and fallen or been built and bankrupted within the borders of this tiny country. As many people know, much of Panama’s storied history is owed at least in part to its location. Panama is the narrowest spot between the Pacific and Atlantic oceans in the Americas. For over six centuries, foreign nations have viewed Panama as a place to find wealth or transport goods. Clashes with indigenous groups were common and many of the resulting stories are tragic and epic.

Sadly, much of Panama’s physical history is lost beneath the leaves and branches of the country’s ever-growing jungles. Early indigenous communities lacked structures that could stand the test of time, and most colonial establishments were abandoned and subsequently lost when the gold ran out or the danger grew great. As happens, the jungle kept growing and soon buried whatever was left of these once vibrant places.

There are areas, however, where the jungle was kept at bay and historic structures still stand. A stroll through Panamá Viejo or Casco Viejo in Panama City will give you a good idea of what the city once looked like, as will some of the ruins along the Caribbean coast near Portobelo and Colón. The Panama Canal itself is a living tribute to the tireless effort and ingenuity of mankind in Panama.

But it is the Panamanian people themselves – who come in every color and from every creed – who are perhaps the most prolific source of history in Panama. In a very real way, the past is still present in the language they use, the religion they follow, and the meals they cook. The Panamanian people of today are a cogent, colorful, and vital link to Panama’s past—and their story forms the backbone in the history of this small but very important isthmus.

Ancient Civilizations

According to archaeologists, humans lived in Panama as early as 12,000 B.C. and primarily used the country as a way to get between North and South America. Arrowheads found near Lago Alajuela (Madden Lake) in the Panama Canal point to human habitation around 9,000 B.C., and there are traces of agriculture along Panama’s central Pacific coast that date back to 5,000 B.C. Several sites along the Azuero Peninsula, including Monagrillo, have yielded a large amount of ceramic pottery that is thought to be from 2,500 B.C. These ceramics are, in fact, some of the oldest pottery ever found in the Americas. Even so, our understanding of the people that built them is weak; many of Panama’s archeological sites have been damaged or robbed over the last few centuries.

In Panama (as in the Talamanca region of Costa Rica), dispersed villages were the norm. Most villages had fewer than 1,500 residents and were self-sustaining. The communities remained autonomous and widely scattered, perhaps due to the rugged and often impassable terrain that surrounded them. Many groups lived in the hills of central Panama and established communities and religious centers along the banks of rivers.

The largest amount of evidence for advanced civilizations is found in central Panama at Sitio Conte. Set near the town of Penonomé, Sitio Conte is one of the most famous pre-Columbian archaeological sites in the Americas. It wasn’t discovered, however, until the early 20th century when the Río Grande shifted course and washed up gold artifacts on the surrounding riverbank. Dating back to 750-950 A.D., the site was used primarily as a cemetery. Harvard archeologists excavated here and dug up some 60 graves, 1,000 gold ornaments, ceramic pottery, and stonework. One of the biggest finds was the tomb of a chief who was buried with 22 sacrificial companions and a mountain of gold. Since the initial excavation, however, most of the items have left Panama—today most are placed in museums across the U.S. and Europe. These days, not much is left of Sitio Conte. It’s located on a private farm and is not open to the public.

Not far from here is another site near the tiny town of Natá, Parque Arqueológico del Caño, which dates back to 800-1,100 A.D. The original site was ringed with large stone columns shaped like animals and humans. According to archeologists, it may have been used as a playfield or ceremonial area. Sadly, none of the columns – some of which stood six meters tall – are still there. Most were carted off by an American in the 1920s and taken to museums in the U.S. Today only their pedestals remain. Unfortunately, not much is known about the people who built the columns; based on some findings, they may have traded with other groups as far away as Belize.

Other vestiges of ancient civilizations in Panama include petroglyphs carved into stone. Some can still be seen near El Valle, Penonomé, and Boquete. The petroglyphs have crude drawings of animals and humans, as well as abstract designs. No one knows exactly what purpose these were meant to serve.

The Arrival of the Spanish

The first sustained effort by Europeans to explore Central America occurred in 1501 when Spanish explorer Rodrigo de Bastidas sailed along the Darién’s Caribbean coastline. Also on this trip was Vasco Núñez de Balboa, who would return twelve years later and become the first European to trek through the Darién and see the Pacific Ocean. Aside from introducing Balboa to Panama, however, Bastidas’ trip was without much consequence. He found few precious items, encountered hostile locals, and soon returned to Spain.

Christopher Columbus came to the isthmus in 1502 on his fourth and final voyage to the New World. Exploring the Caribbean coastline that Bastidas skipped – from Bocas del Toro in the west to Nombre de Dios in the east – he encountered gold-adorned locals and thickly forested islands. The gold caught his eye and he and his crew spent a significant amount of time in the Bocas archipelago. Much to his dismay, he soon realized that most of the gold had come from South America. Disappointed but still lusting for wealth, Columbus and his men robbed the locals of their most valuable items. Today, many places in Bocas del Toro still bear his name, including Isla Cristóbal (Christopher Island), Isla Colón (Columbus Island), and Almirante Bay (Admiral Bay).

It was during this voyage that the first European settlement in Panama was established. Known as Santa María de Belén, this settlement was placed at the mouth of the Río Belén along central Panama’s Caribbean coast. The Europeans encountered hostility from indigenous groups almost immediately. Led by a chief known only as “the Quibián,” the locals fought with tooth and nail and soon brought this Spanish foothold to a quick (and bloody) end. Columbus left the country for Jamaica, sailing back with only two of the four ships that he initially came with.

Back in Spain, however, Columbus told tales of gold on the isthmus. He recounted seeing natives bedizened with gold jewelry and even went so far as to describe fishermen who used gold as weight on their lines. Upon hearing this, Spanish monarchs Fernando and Isabel ordered Panama to be resettled.

The next attempt to establish a colony in Panama would be placed squarely in the hands Vasco Núñez de Balboa. Balboa returned to Panama in 1510 and established the Spanish settlement of Santa María de la Antigua del Darién (or simply Antigua).

Set within the eastern reaches of Panama’s Darién jungle, the terrain here was rough and rugged. Even so, Balboa and his men prospered and the settlement eventually became the first capital of Castilla del Oro. Balboa quickly rose to a position of power and became the acting governor. Indigenous groups who opposed Balboa were subjugated, while those that submitted were peacefully incorporated into the Spanish colony.

Balboa had heard from natives that there was a gold-rich area along Panama’s “South Sea.” On September 1, 1513 he decided to pursue the possibility and set out with 190 soldiers, an estimated 1,000 indigenous peoples, and a pack of dogs. With him was Francisco Pizarro, a man who would later go on to conquer the Incan Empire in Peru.

Crossing Panama proved to be a difficult task, as Balboa and his men had to face both the hazards of the jungle and the indigenous groups that they encountered along the way. However, some three weeks later, on September 25, 1513, Balboa was rewarded for his efforts. On this day he told his remaining 67 men to wait while he hiked one last hill. Upon summiting the ridge, Balboa became the first European to lay eyes on the Pacific Ocean. Rumor has it that when he finally made it to the shore four days later, Balboa, dressed in a full suit of armor, waded into the ocean and claimed it and all the land that it bordered as the property of Spain.

During this period, King Ferdinand of Spain had appointed Pedro Arias de Ávila (known as Pedrarias) as governor of the isthmus. Pedrarias was known to be a brutal and violent man, characteristics that would win him the nickname Furor Domini (the wrath of God) with the locals. Pedrarias viewed Balboa as a rival and in 1519 had him beheaded him for treason.

Pedrarias moved the capital from Antigua to a fishing village on the central Pacific coast known as Panama. It was here that he founded Panama City on August 15, 1519, Europe’s first settlement along the Pacific coast of the Americas. The Spanish were met with fierce resistance by indigenous peoples led by legendary rulers París and Urracá. Eventually, the Spanish prevailed—París died of natural causes and Urracá eventually made peace with the conquerors. Today, Urracá’s profile is found on Panama’s one-centavo coin.

The remnants of the original Panama City can be found today in Panamá la Vieja, or Old Panama. These extensive ruins are found along the eastern-edge of the modern day metropolis. The original city was burned down during a battle with Welsh pirate Henry Morgan in 1671, and because many structures were made of wood, only the partial remains of stone buildings still stand. These include the cathedral tower (which was built between 1619 and 1626) as well as the Casa del Obispo (the Bishop’s House).

Like elsewhere in Latin America, the Spanish enslaved the indigenous people wherever they went. The diverse group of Panamanian natives is thought to have once numbered two million or higher, some two-thirds of Panama’s modern population. Within a few generations, most of these people were either killed by the Spanish or died of European diseases to which they had no immunity.

This decimation of the local people inevitably led to the growth of the African slave trade in the mid-1500s; Panama even became a principal distribution point for slaves sent to other parts of Spanish America. Blacks became a part of the colony’s ethnic make up and by 1610 a census of Panama City reported that three-fourths of the population was black or mulatto. Spanish explorers rarely brought wives to Panama, and soon the country’s ethnic composition was almost entirely blended. Whites, however, continued to remain on top of the social hierarchy.

Pirates and Colonialism

Spain’s main interest in Panama was as a transshipment point for gold, silver, pearls and other treasures gathered from the Americas. The riches were first brought to Panama City and then transported to the Caribbean via two overland routes – the Camino Real and Camino de Cruces – before being shipped off to Europe. Interestingly enough, it was not gold that made up the bulk of this treasure, but silver, most of it from the mines in Peru. In fact, when the 17th century drew to an end, Spain had tripled the amount of silver circulating in the world, largely due to this Peruvian-Panamanian connection.

By 1670, Panama City was the New World’s wealthiest city. Other nations, including European rivals England and France, began to eye Panama greedily and hoped to break the Spanish monopoly on the region. However, the most direct threat to the Spanish gold trade came not from national fleets but from pirates. The Panamanian isthmus was often neglected and poorly protected. As a result, pirates had an easy time sacking and looting Panama throughout the Spanish era.

Sir Francis Drake was one such pirate. Drake’s first attack at Nombre de Los Dios in 1572 was only mildly successful. He was injured during the attack and only briefly captured the port. However, his men went on to loot a mule train along the Camino Real that was laden with gold and silver. Damaged but not dissuaded, Drake continued to raid and pillage Panama for the next twenty years. He was so successful that the queen of England even knighted him for his national service.

Drakes’ exploits were the stuff of novels. He intermixed adventure with humor and violence with cooperation. He fought countless hand-to-hand battles and even received help from escaped African slaves eager to turn the sword on their former Spanish masters. Drake eventually fell ill and died in Panama on January 28, 1596. His lead-lined coffin was buried at sea near Portobelo. In the centuries that followed, it’s been searched for countless times but never been found.

In 1597 the Spanish decided to abandon Nombre de Dios and move to Portobelo. This was a smart decision. Nombre de Dios had a shallow harbor, was exposed on nearly every side, and was difficult to defend. In contrast, Portobelo’s harbor was long and surrounded by hills, upon which the Spanish built fortifications. Despite the better location, Portobelo was not immune to external pressure: it would continue to be sacked and rebuilt for the next 200 years.

In 1668, Welsh pirate Henry Morgan attacked Portobelo. During the raid, Morgan employed especially vicious tactics—he used priests and nuns as human shields, and tortured people who refused to reveal where goods were hidden. Still, his gambit paid off and he eventually captured the port and ransomed it back to the Spanish for a huge sum. Leaving Portobelo with heavy pockets, Drake and his men went west and captured another fort along the Caribbean coast, Castillo de San Lorenzo el Real (Fuerte San Lorenzo).

Built near the mouth of the Río Chagres, Fuerte San Lorenzo had the dubious distinction of being made of wood. Morgan shot flaming arrows into the fort and easily burned the whole thing down. The ashes still smoldering, Morgan continued up the Río Chagres en route to Panama City. Like nearly everywhere else he went, Morgan sacked, looted, and burned the place to the ground. Following the destruction, Panama City was rebuilt eight kilometers (5 mi) west at a more defensible location. This area, known as Casco Viejo or Casco Antiguo, still stands today.

By the early 1700s, South America’s gold and silver mines were becoming less productive, and Panama’s privileged trading position began to wane. At the same time, the Spanish authorized other ports in Spanish America for trade and continued to level high tariffs, both of which caused Panama’s position in the Americas to decline.

Ironically, the country’s abundant gold had attracted so many pirates that the Spanish changed their route from Peru’s gold mines. Instead of taking overland shortcuts across Panama, ships began to opt for the longer but safer route around South America.

The final blow occurred in 1739, when a British fleet destroyed Portobelo and Spain ended Panama’s trading privileges. From 1740 to 1821, Panama was largely forgotten and treated as a backwater area. During this time it formed part of the Viceroyalty of Nueva Granada, which included modern-day Venezuela, Peru, Colombia, and Ecuador. The country’s economic foundation was weakening alongside the Spanish empire.

Independence from Spain

On November 10, 1821 a letter was written to Simón Bolívar of Venezuela asking for help breaking away from Spain. Written by the residents of La Villa de Los Santos, a small town on the Azuero Peninsula, this letter is known as the Primer Grito de la Independencia (First Cry for Independence) and is celebrated as a national holiday in Panama. A few weeks later, on November 28, Panama broke from Spain and joined Colombia in a union known as Gran Colombia that included Venezuela and Ecuador. November 28 is celebrated today in Panama as Independence Day.

Bolívar convened a congress in Panama City in 1826 that included Mexico, Central America, Peru, and Colombia. It was Bolívar’s hope that the region would be united under one government, but talks fell through when local and regional disputes proved insurmountable. Even so, the meeting is considered an important event in Latin American history. Following Bolívar’s death in 1830, the federation of Gran Colombia dissolved and Panama remained a province of Nueva Granada (which later became Colombia). The isthmus tried to break away from Colombia three times between 1831 and 1841, but failed each time.

The Prestán Uprising of 1885 was another bloody, if ill thought-out, attempt to secure freedom. The background of Pedro Prestán, the man behind the uprising, isn’t well known; most historians peg him as either a fierce revolutionary or a foreigner-hating mulatto. The trouble began when Rafael Aizpuru, a former president of the department of Panama, attempted to take over power in Panama City. Colombian troops were dispatched from the Caribbean coast, leaving Colón largely undefended. Prestán seized the moment and reportedly led a band of men in a looting spree across Colón. He took hostages (including the American consulate) and threatened to kill them if the U.S. warship Galena, which was stationed at a port in Colón, landed its troops. He then demanded to be given arms. The consulate promised to give Prestán the weapons and Prestán released the hostages. However, the Galena towed the steamer full of arms away from the shore before Prestán could arrive.

Colombian troops eventually returned to Colón and began battling with Prestán and his men. In retreat, Prestán allegedly set fire to city, which was largely made of wood, and burned the whole thing down. Colombian troops finally caught and executed all of Prestán’s men. Prestán was given a trial and hung, and Aizpuru, whose rebellion in Panama City had failed, was sentenced to 10 years in exile. Panama remained Colombian.

At this time, worldwide interest in a canal through Central America was growing. Panama – the narrowest spot in all of Central America – was an obvious option. In 1846 the U.S. negotiated a treaty with Colombia that gave the U.S. transit rights through Panama. In turn, the U.S. promised to protect Colombian sovereignty over Panama, which was important, since the British had recently gained a foothold in Central America with their capture of the Nicaraguan town of San Juan del Norte. Ratified by congress in 1848, the Bidlack-Mallarino Treaty thus allowed the U.S. to intervene militarily in Panama to protect financial or human interests. This treaty was a huge first step in the long and tumultuous 150-year relationship between Panama and the U.S.

The Panama Railroad

Gold was discovered in California during the mid 19th century and the rush was on. Unfortunately, the trip from the east to the west coast of the U.S. could take up to a year and was hellish—some 10 percent of travelers died attempting the journey. At this time, the country was being crossed not only by gold-diggers, but postal workers as well. This being the case, the U.S. government had an incentive to find a way to get people from coast-to-coast in a safer and faster manner. A suggested alternative was to re-route through Panama. Gold prospectors and mailmen alike could boat down to Panama, cross the isthmus, and take another boat up to California. This took only five weeks versus the year it took most people to hoof it overland.

The Bidlack-Mallarino Treaty gave the U.S. transit rights across Panama. A railroad was a logical option for moving people and goods across the isthmus. In 1850, an enterprising American merchant named William Henry Aspinwall negotiated a contract with Nueva Granada to build a railway across Panama. The contract gave Aspinwall free land on which to build and run the railway for 49 years, although Nueva Granada had the option to purchase it from the company after 20 years.

Building the railroad was not easy. Although the route itself was only 76.5 kilometers (47.5 mi) long, the obstacles were incredible. The railway had to go through mountains and across swamps, and the workers dealt with plagues of mosquitos, tropical downpours, and diseases like malaria and yellow fever.

Workers were imported from around the world. They included Africans, Chinese, Jamaicans, English, Irish, and Germans. Panamanians helped build an adjacent highway and often served as guides, but had little interest in the hard, brutal work of laying rail. Many of the workers got sick as soon as they arrived and the hard working conditions quickly took their toll. Suicide was commonplace.

It’s said that every railroad tie corresponded to one dead worker. This is probably an overestimation, but so many people did die that the Panama Railroad Company started a side business of shipping preserved cadavers to medical schools and hospitals across the world.

The railroad was completed in 1855 and, with close to $7 million in construction costs, was the most expensive railroad at the time. It cost significantly more than the original estimate of $5 million, but it quickly made up for this in revenue. The Panama Railroad Company charged US $25 in gold for a one-way trip, and within a decade, the railroad was pulling in over $11 million annually. It transported hundreds of people every day—between 1848 and 1869 more than 600,000 people crossed the isthmus using the railroad.

The massive amount of foreigners in Panama changed the social makeup of the isthmus and helped foster a sense of unity and nationalism among native Panamanians. The Caribbean port that had been built by the railroad company was called “Aspinwall” after its owner, but Panamanians refused to use this name and instead called it Colón, a reference to Christopher Columbus. Panamanian postal workers even went so far as to refuse to recognize “Aspinwall” on mail, and to this day the port retains its Spanish name. This anti-American rhetoric undoubtedly helped shape the national identity of Panamanians.

Although the railroad brought large amounts of money to its U.S. investors and to Panama’s economy, the local people saw little improvement. Panamanians began to grumble about American involvement and influence in the region. Indeed, the American community was a sizeable cultural and economic force. The dollar replaced the peso, English had displaced Spanish in some areas, and the first major newspaper published in Panama – the Panama Star and Herald – was written in English. Tensions were ripe for conflict.

The Watermelon War

The frustration felt by many Panamanians came to a climax in the so-called Watermelon War of 1856. During this incident, an allegedly drunk white train passenger helped himself to a slice of watermelon from a poor black vendor and refused to pay. The vendor protested and the traveler produced a pistol. Nearby Panamanians did the same. Rioting followed, and at the end of the day at least sixteen people were dead, most of them North Americans.

A report detailing the incident was sent to Washington. It recommended a military occupation of Panama, and six months later U.S. soldiers landed on the isthmus and took control of the railway station. The U.S. justified their intervention by referring to the Monroe Doctrine and the Bidlack-Mallarino treaty with Colombia, in which they had pledged to keep Panama open for transit. This was the first of many military interventions in Panama; thirteen more would occur before Panama gained independence from Colombia 47 years later. In this sense, the Watermelon War underscored how far the United States would go to protect its economic interests in Panama. The issue of sovereignty surrounding the railway would also help define Panamanians’ sense of nationalism in the coming years.

The French Canal

The idea of a canal across Panama had been debated for hundreds of years. Linking the Pacific Ocean to the Caribbean, a canal would save merchant ships thousands of miles of travel. Spain, Colombia and the United States had all proposed the idea, but it was the French who would be the first to attempt it.

In 1878, the Compagnie Universelle de Canal Interoceanique (University Company of Inter-Ocean Canal), a French company, was granted by Colombia the right to build a canal. Colombia was to receive $250,000 annually and 5 percent of the profits.

Construction began in 1879 and was led by Ferdinand de Lesseps, the project’s director. Lesseps, a French diplomat who lacked an engineering background, had led a successful effort to build the Suez Canal in 1869. A sea-level canal in Panama, he reasoned, would be easier since Suez was twice as long. However, Panama’s geography included 3,300-meter-tall (10,827-ft.) mountains, an issue that Lesseps was unable to fully resolve. In one of his most impractical proposals, he suggested building a ship tunnel through the mountains.

The French soon learned that the mountains were not their only problem. Tropical diseases, including yellow fever and malaria, began to sicken workers. The workers quickly filled up hospitals and between 50 to 70 percent of the French officials in Panama died from tropical disease. Some officials got sick as soon as they stepped off the boat—one French consul even died within a week of arriving. In total, it’s estimated that some 20,000 workers died during the French’s seven-year effort.

The difficulty of digging through the mountains and the toll of disease were taking their toll, and progress on the canal was slow. Even so, Lesseps continued to persist even when the situation was dire. Eventually, however, his funds ran dry and on February 4, 1889, Lesseps’ company declared bankruptcy. The French company had completed around 40 percent of the canal and built buildings and infrastructure that would eventually be used by the United States.

The U.S. Canal and Independence

Following the Spanish-American war in 1898, the United States was looking to expand its role as a world power. The idea of a U.S.-owned canal had been floated for some time, but with the bankruptcy of the French company and the rising influence of the U.S., the moment was ripe. A canal through Panama would give the U.S. a physical and economic foothold in Central America and be important to their relations with other Latin American countries. A route through Nicaragua had also been proposed but was eventually discarded after realizing that several active volcanoes would border the canal.

The Panamanian national identity was growing. Protests were frequent, as was military rule by Colombia. A civil war in Colombia in 1902 made Panamanians even more restless. It seemed an opportune time to break away.

The U.S. had purchased the French concession in Panama, but fought over the payment amount with Colombia. As negotiations fell apart, President Theodore Roosevelt took action and supported Panama’s independence movement. Headed by prominent Panamanians and Panama Railway officials, the movement was small but growing. On November 2, 1903 a U.S. warship arrived in Panama to intimidate Colombian military forces.

The war for independence was remarkably peaceful – in fact, only five shots were fired and one person killed. Much of this is owed to one quick-thinking Panama Railroad official. U.S. forces had landed in Colón under orders to secure the railroad depot. The railroad official convinced Colombia’s commander to ride the railroad to Panama City ahead of his men, who would come there soon to secure the city. Once he and his officers arrived in Panama City, however, they were taken prisoner by Panama-based Colombian soldiers bought off by Panamanian revolutionaries. U.S. forces arrived two days later and the Colombian troops were sent home. The whole revolution lasted less than five days.

The United States quickly recognized the new republic of Panama and a few months later signed the controversial Hay-Bunau-Varilla Treaty, which gave the United States the right to build a canal across Panama. The controversy laid in the fact that Panama’s first diplomat, Phillipe Bunau-Varilla, was a Frenchman. Bunau-Varilla had been a director and shareholder in the French canal effort, and had been working furtively with the U.S. on another attempt to build a canal. After independence, Panama’s revolutionaries allowed Bunau-Varilla to travel to the U.S. on their behalf. They planned to come later and help negotiate a treaty. Bunau-Varilla, however, signed the treaty before the Panamanian delegation arrived.

The U.S. paid a one-time payment of $10 million and would make annual payments of $250,000 to acquire rights to the Canal Zone. The U.S., however, did not own the canal or purchase the land – the canal was still Panamanian, but controlled and managed by the U.S. The reality of the situation, however, was much different. The Canal Zone became a place where U.S. law and power were supreme. The arrangement gave the U.S. sovereignty “in perpetuity” and authority to act “as if it were sovereign” in the Canal Zone. In effect, the Canal Zone was now a territory of the U.S. The treaty’s ambiguous language also gave the U.S. some degree of latitude to intervene in Panama’s domestic affairs—one article even allowed the U.S. to intervene militarily in Panama to maintain order.

With its biggest moneymaker in the hands of another country, the new republic of Panama was now economically dependent on the United States.

The United States would not follow France’s ill-fated plan for construction. Rather than trying to dig a sea-level canal, they would use a series of locks to lift ships across the isthmus. Before any of this began, however, the U.S. focused its attention on more basic infrastructure. It built offices, hospitals, housing quarters, police and fire departments, courts, and a post office. The Canal Zone would come to be dominated by American culture, customs and laws.

Roosevelt assigned direction of construction to George Washington Goethals. Preparations for construction began in 1904, but actual construction would not begin for another three years. One of the largest challenges (again) was tropical disease. In the time between the French and U.S. efforts, however, medical science had learned a great deal about disease, in particular yellow fever and malaria. The French had believed that yellow fever was caused by noxious gases from wetlands and was passed from person to person through sewage and filth. Conclusive evidence that yellow fever was due to mosquitos came from a Cuban doctor, Carlos Juan Finley, in 1881. A U.S. army doctor tested Finley’s proposals in Cuba following the Spanish-American war and had great success. He was transferred to Panama and implemented a program that included draining all standing water and replacing an old water system with aqueducts. Additionally, streets were paved, houses were fumigated, and mosquito nets were set up over windows and doors. As 1905 came to an end, malaria had been wiped out in both Panama City and the Canal Zone.

American labor shortages also mirrored those of the French. According to historian Alfredo Castillero Calvo, workers came to Panama from 97 different countries. There were over 45,000 workers by 1912, including some 30,000 Afro-Caribbeans (largely from Jamaica), 2,000 Italians, and 1,1000 Greeks. When the canal was finally finished, over 250,000 men had helped with its construction. Blacks in particular had a hard time, as they faced discrimination both from the Americans and Panamanians. Fights between blacks and Panamanians were common.

The construction of the canal was a herculean task. It required an excavation three times as large as the Suez Canal, and required the builders to cut through nine miles of mountains. One of the most important sections was the Culebra Cut (later named the Gaillard Cut), which connected the locks along the Atlantic side of Panama with Lake Gatún. Although this section was only 14 kilometers (8.5 mi) long, it took over 9 million kilos of dynamite, 6,000 workers, and six years to complete. In order to fill the canal, the Chagres River was dammed. This created Lake Gatún, the world’s largest artificial lake at the time.

To this day, the Panama Canal is considered one of the world’s most spectacular engineering feats. It cost the U.S. $352 million and took some 5,600 lives. More than 183 million cubic meters of dirt and rock were moved.

On August 15, 1914 the Panama Canal opened for business. The onset of World War I dramatically lowered the amount of traffic the canal saw for the next four years. As the war ended, however, trade returned to normal and there was a fourfold increase in the number of ships passing through the canal’s locks.

The Shaping of A New Nation

Panama was officially created a democracy. Its early leaders, however, typically had three things in common: wealth, European descent, and light skin. In this sense, many historians have considered Panama’s formative years more of an oligarchy than a true democracy.

Panama’s relationship with the United States complicated both domestic politics and the new nation’s feeling of sovereignty. The United States backed the early Conservative government in Panama, which aligned best with its own goals on the isthmus. In fact, any challenge to Panama’s Conservative party was met by U.S. force—on multiple occasions the U.S. military was sent to Panama to quell uprisings and Liberal protests. This led to the slow buildup of a permanent U.S. military presence in Panama, particularly within the Canal Zone. By the end of World War I, the U.S. had 14 bases within the Canal Zone and more than 7,400 soldiers stationed in Panama.

In 1927 the Panamanian assembly protested the terms of the original treaty with the United States and received some concessions. The next year, President Herbert Hoover established his “Good Neighbor Policy,” which stated that the U.S. would cease to intervene in Latin America. Soon afterwards, a small nationalist group called Acción Comunal (Communal Action) forced Panamanian President Florencio Harmodio Arosemena to resign. Nearly ten years later, Panama and the U.S. would sign the Hull-Alfaro Treaty of 1936, which ended Panama’s status as a protectorate of the United States. The treaty did not, however, address what Panamanians most wanted – control of the canal. The battle over the canal would last another 60 years.

Arnulfo Arias

Arnulfo Arias, a Harvard-educated physician, was elected president in 1938. Arias had been a member of the group that overthrew President Arosemena in 1931, along with his brother Harmodio Arias Madrid, who also served as president for a short time. Arias would have a long and storied career in Panamanian politics.

Arias visited Nazi Germany in 1937 and returned a strong nationalist. He espoused a type of nationalism based upon Panamanians’ frustration with U.S. occupation. Known as panameñismo (which translated roughly as “Panama for Panamanians”), Arias sought to expel non-Panamanians from the country. In 1941 he introduced a new constitution that forbade the immigration of blacks from non-Spanish-speaking countries, as well as Indians, Chinese, and Arabs. At the same time, it stripped those people already in Panama of their citizenship. The same constitution also extended the president’s term to six years. Between 1940 and 1984, Arias was elected president of Panama four times. Although some of the elections were surely rigged, Arias nonetheless had widespread support from Panama’s poor and middle class, who viewed him as an alternative to the oligarchy.

However, in 1941, while Arias was secretly in Cuba visiting his mistress, Rogelio Fábrega, the second-in-command for the National Police, reported Arias’ absence and Arias’ supporters were arrested. The Panamanian Supreme Court declared the presidency vacant and Ricardo Adolfo de la Guardia was made caretaker president. Arias went into exile in Argentina, but would return in 1949 to become president again for a short amount of time. Arias’ disposal was tacitly supported by the United States and the new Panamanian government sided again with U.S. interests when World War II arrived—the U.S. was allotted 134 sites to use as military bases.

During the next eight years, six presidents would hold office in Panama, one of them for less than a day. This signaled not only the unstable political environment of Panama during the mid 20th century, but also the willingness of the National Guard to intervene when it saw fit.

The tensions between the U.S. and Panama would continue for most of the 20th century, largely due to the U.S.’s repeated interventions in the domestic affairs of the country. Because of its vested interest in the Panama Railroad and Panama Canal, the United States saw the country as critical to its own success. Panamanians were beginning to grow increasingly wary with the United States and on several occasions took to the streets to protest new treaties. In 1949, the Panamanian national legislature met to consider a treaty that would allow U.S. military bases outside the canal. Some 10,000 protesters showed up and clashed with police. There were deaths on both sides, and the treaty was rejected.

The Flag Riots

A boiling point was reached in 1964 when Panamanian citizens attempted to fly their flag in the Canal Zone. Flags are symbolic of power and presence—understandably, both sides fiercely wanted their own colors hoisted in the air.

There were disagreements within the U.S. about what to do. Those within the Department of Defense saw it as an infringement on U.S. sovereignty in Panama, while the Department of State thought it a reasonable concession to the Panamanians. In January 1963, President Kennedy issued an order to fly the Panamanian flag alongside the U.S. flag. However, before the policy went into effect, Kennedy was assassinated in Dallas. The new Johnson administration put the flag policy on hold, and the Canal Zone governor issued a moratorium on flying either flag. The U.S. citizens in the Canal Zone were angered and flew U.S. flags throughout the Zone anyway.

In January 1964, both flags flew at a few locations, but the Panamanian flag remained noticeably absent at Balboa High School within the Canal Zone. On January 9, 1964 a group of college students from the University of Panama entered the Canal Zone determined to raise the Panamanian flag in front of the school. A fight broke out and a riot erupted. The details of what followed remain fuzzy, but a great deal of violence, looting and destruction occurred both inside and outside the Canal Zone. U.S.-owned businesses in Panama City and other cities (such as David and Santiago) were burned and looted. The fighting continued for four days. In the end, some two-dozen people were killed, including innocent Panamanians and four U.S. soldiers, and hundreds more wounded. Both the U.S. and Panama suffered millions of dollars in damage.

The Panamanians who died are officially considered martyrs—January 9 is still a national day of mourning in Panama. And the avenue on which this all took place – Fourth Of July Avenue, which separated Panama City from the Canal Zone – was renamed Avenida de los Mártires (Avenue of The Martyrs).

Following the Flag Riots, President Johnson’s government issued a report acknowledging that the Canal Zone was largely irreconcilable with peace. A few months later, President Johnson announced plans for a new canal treaty.

Arnulfo Arias was briefly elected president again in 1968. Once in office, Arias called for the immediate turnover of the canal to Panama and tried to take control of the National Guard. Up to this point, armed forces had been a moderating force in Panama but were never involved in direct governing. The move to take over the National Guard proved a mistake—11 days into the new president’s term, the National Guard overthrew Arias.

Omar Torrijos and A New Treaty

One of the men involved in the overthrow of Arnulfo Arias was Omar Torrijos. At the time of the coup Torrijos was a colonel and reportedly not out for power. However, once Arias was disposed, Torrijos landed newfound power and began to thrive.

Before Torrijos, Panama had never known a military dictatorship or had a leader who was so vocally opposed to U.S. hegemony in Latin America. Torrijos was also a populist and had some socialist ideas, perhaps inspired by his friendship with Fidel Castro. He did, in fact, institute a number of social reforms—land was redistributed (towards poor farmers), roads and bridges were built, public health programs were expanded, and the school system was reformed.

Torrijos’ real goal, however, was to solve the issue surrounding the Canal Zone. He once said, “I do not want to enter into history. I want to enter into the Canal Zone.” Torrijos had a strong, somewhat irreverent attitude towards the U.S. presence in Panama. For the first time since the late 1950s, the U.S.’ influence in Panama was challenged.

Torrijos’ own rule, however, was being questioned as well. While attending a horse race with his friend Demetrio Basilio Lakas in Mexico City, Torrijos received a message that he had been overthrown. He and Lakas quickly flew home, rallied supporters in David, and headed to Panama City to take back power. Once there, he found the conspirators already under arrest by loyal officers. Torrijos regained power and sent the colonels into exile. He also made Demetrio Lakas president, although his appointment was largely symbolic, since Torrijos still held the real power.

Torrijos’ popularity was in large part owed to his focus on creating a new treaty with the U.S. that would turn control of the canal over to Panama. He negotiated with the Nixon administration, but real progress wasn’t achieved until Jimmy Carter was elected president in 1977. That year, Torrijos met Carter in Washington to sign two new treaties.

The first allowed for a gradual turnover of the canal to Panama, thus allowing the country to slowly acclimatize to running the canal. Some twenty years later, on December 31, 1999, Panama would gain complete jurisdiction over the canal and former Canal Zone. The second treaty – known as the Neutrality Treaty – ensured that both the United States and Panama would guarantee the canal’s neutrality in both peace and war, and also allow unrestricted transit of all ships, no matter the nation. The United States did, however, reserve to right to act against threats to the canal; other than this, the U.S. agreed to not intervene in Panama’s domestic affairs.

In order to gain favor in Washington for the treaties, Torrijos stepped down as president and began a process of democratization. Arnulfo Arias was allowed to return to Panama, and in 1978 the constitution was amended to weaken the power of the president and increase the power of the national legislature (the Asamblea Legislativa). Despite his seemingly diminished role in government, however, Torrijos held onto his position as head of the National Guard, which still gave him ultimate authority.

Aristides Royo, backed by Torrijos, was elected president by the legislature. Also during this time, the Partido Revolucionario Democrático (Democratic Revolutionary Party), or PRD, was granted official recognition. Torrijos largely controlled this party. National elections in 1980 saw a few opposition parties gain representation in the national legislature, but by and large Torrijos ensured that most seats were won by the PRD.

The next year, on the night of July 31, 1981, Torrijos died in a plane crash in the mountains above central Panama. How the crash happened remains a mystery, and many people still believe that it was an assassination. However, Torrijos was known to be reckless at times and the wreck may have been pure accident. The area surrounding the crash, El Copé, was turned into a national park and named in his honor.

Following Torrijos’ death, a period of instability followed. A number of military leaders took and subsequently lost power. This was the political climate that allowed General Manuel Noriega to gain political traction and take control of Panama.

Enter Noriega

Manuel Noriega was born into a poor Panama City slum in 1936. During his youth, his brother landed a job as a minor official at the Panamanian embassy in Lima and helped the young Noriega attend Peru’s Chorrillo military academy in 1958. It was here that he began his long relationship as a paid informant for the U.S. Central Intelligence Agency (CIA), which would continue for over 30 years. Torrijos had CIA connections as well, but was considered by many as contradictory to U.S. interests in the region. Washington officials, however, perceived Noriega as loyal and cooperative.

After his graduation, Noriega returned to Panama and was given a job in the National Guard under Omar Torrijos. He became Panama’s chief of intelligence and gradually grew connected with people – both good and bad – across the world. By 1983, Noriega had gained control of the National Guard and renamed it the Fuerzas de Defensa de Panamá (Panama Defense Forces).

While Torrijos was a handsome man with loyal followers, Noriega had a pockmarked face (which earned him the nickname cara de piña, or pineapple face) and ruled through fear. He thrived on vice, carnal passions, and corruption. Once in power, he used his position as a vehicle for his own wealth.

U.S. policy towards Latin America during this time was shifting away from the multilateral approach favored by the Carter administration towards a bilateral support for anti-communist regimes in Latin America. Panama became an important linchpin in the struggle against communism in Central America. Noriega used U.S. fears of communism to his own financial benefit and reorganized Panamanian politics to fit his agenda. The PDF party controlled Panama, and although Noriega was not president, it was widely known that he held the real power.

The Panamanian elections of 1984 were meant to give some legitimacy to Noriega’s regime. Instead, they proved how far Noriega had gone to undermine the Panamanian political process and degrade democracy. Noriega’s PDR candidate, Nicolás Ardito Barletta, a former World Bank vice president who had earned a Ph.D. in economics from the University of Chicago, went up against the 83-year-old Arnulfo Arias, who had reemerged to attempt a fourth run at the presidency. Arias had lessened his anti-U.S. rhetoric and instead had pointed his attacks at the PDF, and by association, Noriega.

Both sides predicted victory, but with Noriega’s stronghold on the country and coercion of the opposition, there was little hope for Arias. Barletta won, despite rumors that the election had been rigged. There was widespread suspicion of the election process, but Noriega and the PDF quieted protests quickly. The U.S. accepted the election and even went so far as to send the Secretary of State to the new Panamanian president’s inauguration.

Noriega’s fall began in September 1985 with the murder of Dr. Hugo Spadafora, a charismatic Noriega opponent who had been an official in the Torrijos government. In the late 1970s, Spadafora had led a group of Panamanian volunteers against Nicaragua’s oppressive Somoza regime, and in the eyes of many Panamanians was something of a hero. When he learned of Noriega’s drug trafficking, he decided to return to Panama and challenge Noriega. He crossed over to Panama from Costa Rica by bus, but was stopped near the town of Concepción and forced off. Spadafora was tortured and beheaded by one of Noriega’s intelligence agents. His body was found the following day in Costa Rica just across the borer. The Spadafora murder would prove to be a catalyst for opposition groups to confront Noriega and begin to re-work the relationship between his regime and the United States.

The next year, Seymour Hersh, a Pulitzer Prize-winning investigative reporter, began writing stories in The New York Times that detailed Noriega’s sketchy dealings. Among these were his involvement in drug dealing and money laundering, his CIA connections, his rigging of the 1984 election, and his implication in the murder of Spadafora. As the Iran-Contra scandal broke, Noriega was further implicated as a major player, and whatever legitimacy was left began to crumble. U.S. officials abandoned all support for him.

Operation Just Cause

Noriega’s downfall began with another election. This one, held in 1989, saw Noriega-backed candidate Carlos Duque run against Guillermo Endara, a protégé of Arnulfo Arias. Arias, at the age of 86, had died the previous year.

Not surprisingly, the election was corrupt. Ballots were lost or destroyed and voters were turned away from the polls. Jimmy Carter flew to Panama to observe the election and declared, “The government is taking the election by fraud.” Carter proclaimed Endara to have won by a huge margin, but the Panamanian government acknowledged Duque as the victor. Following the government’s declaration, Endara and his running mates mounted a protest but were met by the Panama Defense Force. Protesters were shot with tear gas, Endara was knocked unconscious, and his running mates were beaten.

At this point, many people within the PDF were beginning to get weary of Noriega and his tactics. A major named Moises Giroldi mounted a coup (with support from the U.S.) and took Noriega hostage at his headquarters. However, amidst the confusion Noriega phoned loyal troops, who surrounded the building and fought with the rebels. Noriega eventually won out, and everyone involved with the coup was killed. In the wake that followed, the U.S. government denied any dealings with Giroldi.

Everything came to a boil with the murder of U.S. Marine Corps lieutenant Robert Paz. Paz was shot in Panama City on December 17, 1989 in a clash with the PDF. Three days later, U.S. President Bush ordered an invasion of Panama. Known as Operation Just Cause, this invasion was justified by the Bush administration as an attempt to protect U.S. civilians living in Panama, as well as to stop the massive drug trafficking and money laundering that was taking place in Panama.

Noriega fled and sought asylum at the residence of the representative of the Vatican in Panama. However, on Christmas Eve, 1989, U.S. forces began a psychological operation against Noriega by blasting loud rock music outside the residence. Noriega was rumored to detest rock music, and it prevented him from getting any sleep. He surrendered on January 3, 1990 and was immediately flown to the U.S. In 1992 he was sentenced to 40 years in a Miami prison on drug and racketeering charges. His sentence was later reduced and was completed in 2007. He remained in custody while facing extradition to France, where he faced more charges. He was finally extradited in 2010 and sentenced to seven years in a French prison.

Panama later called for his extradition, and on December 11, 2011, Manuel Noriega was extradited to Panama and incarcerated at the El Renacer Prison. In 2012, he was briefly taken to a hospital after suffering a stroke. He returned to the prison and remains there to this day.

Although it is difficult to pin down an exact number, Operation Just Cause is thought to have left between 400 and 4,000 civilians dead. One of the hardest hit areas was El Chorrillo, one of Panama City’s poorest neighborhoods. Largely made up of wooden tenements, El Chorrillo was ravaged by fires that left hundreds of people dead.

Democracy in Panama

During the U.S. invasion, Guillermo Endara, the presidential candidate who had been cheated out of the presidency in 1989 and subsequently beaten by Noriega’s goons, was sworn in as president. His presidency saw another round of instability, as the country attempted to recover from the invasion and other economic issues related to U.S. sanctions. A failed military coup during this time also led to the disbandment of the Panama Defense Forces. Today, Panama lacks a standing army, but has limited military forces that include the National Police and National Borders Service.

Although Endara’s presidency was without major successes, it did establish a base for legitimate democracy in Panama. Ernesto Pérez Balladares, a member of the PRD (the same party as Noriega and Torrijos), succeeded Endara in 1994. The election was notable for featuring Ruben Bladés, the famous singer and actor, and Mireya Moscoso, the widow of Arnulfo Arias. By all accounts it was fair, with Balladares winning with 33 percent of the vote.

Many Panamanians felt uneasy about the PRD’s return to power and feared that the country may swing again towards an authoritarian, corrupt form of government. Balladares, however, did a good job of quelling these fears both at home and abroad. He promised to fight drug traffickers and maintain civilian leadership of Panama’s security forces. Despite this proclamation, however, Balladares and his administration still faced charges of corruption and money laundering. His popularity suffered further when he attempted to enact free-market reforms that were met with protests. He also tried to change the constitution to allow him a second term in office, but voters struck this down too.

Following Balladares’ term, Mireya Moscoso again ran for the presidency in 1999. He main opponent was Martín Torrijos, son of the late dictator. Her popularity rested in the fact that she was not related to the dictator Torrijos or the PRD party.

Moscoso won the election and became the first female president of Panama. She pledged to fight social injustice and poverty and reverse some of the unpopular policies of Balladares, including the privatization of Panama’s state industries. She also promised a smooth turnover of the Panama Canal, and on December 31, 1999, Panama established full control of the canal. The canal soon after began a billion-dollar expansion and began making a sizeable profit through its raised tolls.

Despite her pledge to return the government towards a populist agenda, Moscoso did little help the poor and her administration remained plagued by accusations of corruption. Environmentalists also had issues with her, especially surrounding her proposal to build a road between Cerro Punta and Boquete. The proposed road would run right through Parque Nacional Volcán Barú and, critics said, destroy important habitat along the way. The plan was eventually thrown out after public protests.

One positive legacy of the Moscoso administration was the establishment of the Comisión de la Verdad (Truth Commission) in 2001. This commission was charged with investigating the disappearance of 100 people during the Torrijos and Noriega administrations. In the wake that followed, human remains were discovered and unearthed across the country. The commission reported at least 70 cases of murder.

Moscoso’s presidency ended in 2004. Martín Torrijos ran a second time and won. As with other presidents, his term had its ups and downs. In 2005 he overhauled Panama’s social security system, a move that was met with strikes and violent protests. The new law required workers to contribute more to the system and also work an additional five years before reaching the qualifying age for retirement. The next year his administration was strongly criticized for its poor response to a public health crisis that left at least 115 patients poisoned from faulty cough syrup. Health officials had made the syrup with imposter glycerin supplied by a Chinese company that lacked a license to sell medical ingredients. An official count of the number injured is still not known, and many families continue to berate the government for not being sufficiently vigilant in its investigation.

During Torrijos term, however, the economy did well and he pushed forward an expansion of the Panama Canal. The work on the canal – which involves building a third set of locks – began in 2007 and is scheduled for completion in 2014. The expansion will double the capacity of the Panama Canal by allow more ships, and larger ships, to transit the canal.

In 2009, Ricardo Martinelli was elected president of Panama. He won by a large majority, receiving some 60 percent of the vote. He enjoyed enormous popularity early on by fighting corruption, investigating former leaders, and enacting a plan to bring a massive metro system to Panama City. The metro system is currently being built and the first line was completed in 2014. Some critics have called Martinelli a power grabber and complained of corruption within his administration. His presidential term ended in 2014.

In 2014, Juan Carlos Varela, was elected president of Panama.

Reference:  Useful information provided by our partner Anywhere Panama.



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Greene, Julie. The Canal Builders. New York: Penguin Press, 2009. Print.

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Internet Resources

The History of Panama,

Panamanian History,

Panama Railroad Era,

History of the Panama Railroad,

The Panama Canal,

Panama Canal: Interesting Facts,