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History of the Panama Canal


In 1825, a group of American businesspeople announced the 
formation of a canal building company, with interests in constructing 
a canal system across the Isthmus. This project was to take place in 
an area now called Panama. The endeavor was filled with controversy. 
Though the canal itself was not built until the early 1900's every 
step toward the building and ownership, was saturated with difficulty. 
Walter LaFeber illustrates the dilemmas in a historical analysis. In 
his work he states five questions that address the significance of the 
Panama Canal to United States. This paper will discuss the historical
perspective of the book's author, address pertinent three questions 
and give a critique of LaFeber's work, The Panama Canal.

 For proper historical analysis one must understand the 
importance of the Canal. The Panama Canal and the Canal Zone (the
immediate area surrounding the Canal) are important areas used for 
trade. Even before the canal was built there were to large ports on 
both sides of the Isthmus. Large amounts of cargo passed through the 
Isthmus by a railroad that connected the two ports. The most important 
cargo was the gold mined in California before the transcontinental 
railroad was completed in the United States. It has strategic 
significance because of its location, acting as a gateway connecting 
the Pacific and Atlantic oceans. This allows for rapid naval 
deployment between fleets in either ocean. These two facets make the 
Panama Canal very important in the region.

 LaFeber notes that Panamanian nationalism played a large role 
in the creation of the canal and, consequently, the cause for the
area's constant instability. The first expression occurred in the late 
1800's with Panamanian struggle for independence from Columbia. The 
United States eager to build the canal, and control its operation, 
used and backed Panamanian nationalist. During the Roosevelt 
administration, not only did the United States manipulate factors 
isolating Panama from other world powers through the Monroe Doctrine; 
but it committed troops aiding the revolutionaries against another 
sovereign state. The reason this is a surprise is because the 
Roosevelt administration normally held a position favoring stability. 
The United States had no legal right to use force against Columbia.

 Nationalism came back to haunt the United States. With the 
treaty signed and a 99-year lease given to the United States, the
Canal was built. Since then, the United States has varied on its 
stance of ownership and the principles of sovereignty concerning the 
Canal. The ever persistent debate of who owns the Canal and who should 
have sovereign control over it, has not been solved. The United States 
has occasionally attempted to "claim" the Canal zone through various 
methods such as military occupation, exclusion of Panamanians for 
important jobs in Canal operations and even through the customary 
aspect of international law. However, each time the Panamanians have 
managed to maintain claim to the Canal despite the United State's
imperialistic posturing to get it.

 The most recent and notorious of the United States' attempts 
to annex the Canal Zone was during the Reagan administration. 
President Reagan said that the Canal Zone could be equated as a 
sovereign territory equal to that of Alaska. The question here is, was 
he correct? LaFeber points out that, "the United States does not own 
the Zone or enjoy all sovereign rights in it." He uses the treaty of 
1936 in Article III that states, "The Canal Zone is the territory of 
the Republic of Panama under the jurisdiction of the United States." 
The entire topic was summed up neatly by Ellsworth Bunker, a 
negotiator in the region, when he said, "We bought Louisiana; we 
bought Alaska. In Panama we bought not territory, but rights." A 
second important question, is the Canal a vital interest to the United 
States? LaFeber gives three points suggesting that it is not. First, 
the importance of the Canal decreased after 1974, because of the end 
of the Vietnam War and all related military traffic ceased. Second, is 
the age of the antique machinery dating back to 1914. Inevitably the 
machinery will need to be replaced. Lastly, the size of the new 
tankers and cargo ships. The capacity of the canal is too small to 
handle such a large amount of tonnage. These are viable factors; 
however, the first argument is concerning whether a war is taking 
place. It is circumstantial in providing a solid reason for increased 
traffic through the Zone. This can easily change through and emergence 
of a new conflict or trading habits of other countries.

 Thirdly, why have the Panamanians insisted on assuming total 
control of the Canal. The Panamanians are making millions of dollars 
annually and the United States run the Canal efficiently. LaFeber 
points in the direction of economics as the principal factor and 
nationalism as secondary. The Panamanians fear the amount of reliance 
they have on U.S. investments. The fear is enhanced by the large 
dependence of their national economy on MNC's, American banks and 
mining companies. LaFeber continues saying that Panamanians find it 
difficult to cross the Zone because of check points and resent their 
country being split in half. Continuing he asserts that perhaps if the 

Panamanians were to have complete control the Zone the amount of 
revenue would increase. Panamanians could also develop spinoff 
industries such as drydocks and ship building creating an increase in
profits. Walter LaFeber develops a persuasive argument for the 
interpretation of historical events surrounding the creation of the 
Panama Canal. As is consistent with other LaFeber's works, his 
research and fact finding technique in The Panama Canal is complete if 
not exhaustive. He presents an objective outlook on issues surrounding 
the Canal. He uses a historical approach in presenting his 
contribution to a subject that is lacking in information and scholarly 
examination. In conclusion, this paper has addressed the historical 
perspective that the author of the book used. A discussion also 
included three important questions concerning the Canal, its 
importance and the relationship between the United States and Panama. 
Furthermore, this paper examines the effectiveness and usefulness of 
LaFeber's, The Panama Canal. 



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