Panama: Made In U.S.A.


More than a year ago the American government began to huff and puff at the house of Panama’s military strong man, Manuel Noriega. Washington is red in the face, but Noriega’s walls are still standing. Economic sanctions tied Panama’s business life in knots, but Noriega endured. The Organization of American States has tried to broker a deal among Panamanian factions that would entice him to quit peacefully, but Noriega finds such proposals easy to resist. An American court would like to try him on narcotics charges but can’t get its hands on him. In May there was an election in Panama that his opponents obviously won. His answer was to have two of his winning rivals beaten bloody in the streets while he declared the results null and void. He seems as indestructible as he is outrageous.

Why doesn’t the United States use its military muscle to get rid of him? There are several answers. Great powers cannot easily get away with this kind of “solution” anymore without unacceptable diplomatic losses. The military and domestic political costs, too, could be fierce. Even anti-Noriega Panamanian nationalists might carry on guerrilla resistance that would spark U.S. countermeasures and turn our “liberating” troops into occupiers. And Latin American neighbors who agree that Noriega is an embarrassment don’t want Yankee firepower to bring him down. It would awaken too many awkward memories of the long period when American Presidents lectured them on their duty to elect “good men” or to pay their debts—and sent in the Marines to back up the lessons.


Especially in Panama, above all places, a show of force would be embarrassing. The country was created by a one-day American-run revolution that tore it from Colombia. In return for the favor it became a de facto American colony, pledging to let the United States administer a good part of its territory forever—a condition modified only as recently as 1977. Its earliest armed forces and civil servants were American-trained. Its currency is still the dollar. Its first ambassador to the United States was a French engineer who had no permanent residence in Panama. Its first flag was designed and sewn by hand in Highland Falls, New York, using fabric bought in Macy’s.

In 1898 the United States was particularly eager to push on with a longfavored project—a canal that would link the Atlantic and Pacific. The two likeliest sites were through Nicaragua and the Isthmus of Panama, then a part of Colombia. Congress was leaning toward Nicaragua. The Panama route was shorter, but the engineering difficulties were brutal.

This was common knowledge because only recently a French effort to dig a Panama canal had collapsed under the weight of landslides, floods, and yellow fever that defeated and decimated a work force of thousands. The company organized to execute the project went broke. All this seemed compelling testimony against a Panama “cut.” A Nicaraguan canal bill was on the verge of passage. But the story wasn’t over.

A new French corporation, the New Panama Canal Company, took over the assets of its bankrupt predecessor and conceived the idea of salvaging something by selling them to the United States. Its first step was to hire a New York attorney, William N. Cromwell, of the firm of Sullivan & Cromwell. A canny veteran of dealings with Washington, Cromwell was able to stall a pending congressional bill to put a Nicaraguan canal in the works. Precisely what else he did was not something he talked about very much, but he charged the French company eight hundred thousand dollars, which was paid without protest.

In 1901 a second advocate of the Panama route entered the story. He was Philippe Bunau-Varilla, an 1880 graduate of the French Ecole Polytechnique. He had taken part in the French effort, been devastated by its failure, and decided to devote himself “to the single idea of saving the honour of this great creation by preserving its life.” The only feasible way of doing so was to get America to take over the job. Among his converts, by early 1902, was the powerful Republican party leader Sen. Marcus A. Hanna. Possibly through Hanna, Bunau-Varilla also won the pro-Panama advocacy of President Theodore Roosevelt. What with all these new pressures, Congress in June of 1902 reversed its course and passed legislation directing the President to buy out the New Panama Canal Company’s rights for forty million dollars and negotiate a treaty with Colombia for “perpetual control” of a canal.

But now came a major snag. The United States offered Colombia a treaty that would include a ten-million-dollar outright payment to build the canal, an annuity of a quarter of a million dollars, and a century-long lease on a sixmile-wide canal zone that the United States would have the right to defend. Mixed tribunals of Colombians and Americans would settle any conflicts between Colombian and American laws in the zone.

Colombian nationalists thought the arrangement took too big a bite out of Colombia’s sovereignty, and in August 1903 the Colombian senate turned the treaty down. Rage crackled through Washington; the President was especially indignant at those he had referred to in a letter to Secretary of State John Hay as "[t]hose contemptible little creatures in Bogotá.” Roosevelt decided to exploit a special Colombian weak spot —discontent in Panama.