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THE PANAMA CANAL JOURNEY OF TRANSFORMATION AND SOVEREIGNITY
Part Two: A Journey to Sovereignty
For many years, I have had the joy of interpreting the Panama Canal to visitors as an interpretive guide—whether from the bridge of a ship transiting its locks or on land, exploring the former U.S. Canal Zone and the Panama Canal visitor centers.
My most recent groups of visitors to Panama often ask, “Could the Panama Canal ever be taken over by another country again? Is this going to happen?” It’s a question that stirs deep emotions for us Panamanians. The canal is more than a marvel of engineering—it’s a symbol of resilience, independence, and the power of ownership. While I have learned that anything is possible today, some politicians may think this could be a simple yes-or-no answer. The reality is far more complex. To truly understand our position, you must know and understand our history and who we are as a nation.
As someone deeply connected to my country’s history, I feel compelled to share the story of the canal from the perspective of a Panamanian. This is a story of how a narrow strip of land transformed from a pawn in global politics to a beacon of national pride. It’s a tale of perseverance, transition, and empowerment.
The story is long and to avoid making it a single long 50 pages article, I decided to divided into three separate but related blog articles. This is the second part. If you are interested in the true story of the Panama Canal and the view of Panama, I invite you to read them in order.
Let’s embark on this journey together, tracing the steps of those who built it, those who fought for it, and those who now steward it into the future.
A Dream Bound by Strings: The US Negociations for the Panama Canal and the Price of Sovereignty
The dawn of the 20th century was a time of shifting power, and the world was watching as the United States extended its reach across oceans. Fresh from victory in the Spanish-American War, the rising superpower had secured new territories—Puerto Rico, the Philippines, and Guam—fueling an era where economic ambition and military strategy moved as one. But the real prize lay elsewhere: a path between two oceans, a gateway that would change the course of global trade forever.
Panama, a land where empires had left their mark for centuries, stood at the center of this vision.
For decades, the idea of a canal had been pursued and abandoned, most notably with the failed French attempt. When the Hay-Herrán Treaty, a U.S. proposal to build the canal under Colombian authority, was rejected in Bogotá, a new path was forged—one where Panama’s fate would be determined by forces beyond its own hands.
In 1903, as the embers of discontent with Colombian rule burned hotter, the United States saw its moment. With whispers of support and strategic backing, Panama’s long-held dreams of separation from Colombia gained momentum. The moment of rupture arrived, and independence was declared. Yet, while the world witnessed the birth of a new nation, the terms of its future had already been set.
Thousands of miles away, behind closed doors, the Hay-Bunau Varilla Treaty was signed—Phillipe Bunau Varilla who had been given the mission to negotiate with United States, not just negotiated, signed an agreement that would shape Panama’s destiny for generations. No Panamanian was at the table. The treaty granted the U.S. control in perpetuity over the land needed to construct the canal, cementing a powerful, complex, and often uneasy relationship between the Giant of the North and this small but strategic nation.
Key Aspects of the Treaty:
- The U.S. gained control of a 10-mile-wide Canal Zone.
- The lease was permanent, rather than the 100-year agreement Panamanians had expected.
There are moments in history when survival and sovereignty stand at odds, when prosperity comes at a cost. For Panama, this was such a moment. A new nation had emerged, but the weight of its independence came tethered to a project that, while promising transformation, also cast a long shadow over its future.
The US Contruction of the Panama Canal: A Journey of Persistence and Transformation
Exploring the Former US Canal Zone and the locks of the Panama Canal today, watching massive ships glide through waters that once seemed impossible to tame, I often think about the immense struggle it took to carve this passage through the Isthmus. The vision was grand, but the execution was anything but easy. The American effort to build the canal was a journey of trial and error, shaped by three key engineers—John F. Wallace, John F. Stevens, and George Washington Goethals. Each played a distinct role, each faced monumental challenges, and together, they turned an impossible dream into reality.
Role of Wallace, Stevens, and Goethals in the Canal’s Success
John F. Wallace: The First Attempt
In 1904, the United States took over the abandoned French canal project, determined to succeed where others had failed. John F. Wallace, the first chief engineer, arrived full of ambition. However, he was immediately faced with a chaotic and deadly worksite. The jungle was unforgiving, filled with swamps that bred disease, outdated equipment left behind by the French, and an infrastructure system that barely functioned.
Yellow fever and malaria were still rampant, and thousands of workers were dying. Wallace quickly realized that before the canal could be built, the entire region needed to be made livable. Yet, overwhelmed by the logistical nightmare, bureaucratic red tape, and Washington’s slow decision-making, Wallace resigned after just one year. His departure was a stark reminder that engineering brilliance alone wouldn’t be enough—the canal needed someone who could see beyond the blueprints and tackle the human and logistical challenges of the isthmus.
John F. Stevens: The Mastermind Behind the Plan
In 1905, John F. Stevens was appointed as Wallace’s replacement. Unlike his predecessor, Stevens was not just an engineer—he was a strategist. He recognized that the key to success wasn’t just digging, but first building the necessary infrastructure to support the workforce and operations.
Stevens prioritized three critical areas:
- Infrastructure Development: Before any serious excavation could begin, Stevens improved railways, roads, and housing, allowing workers and materials to be transported efficiently.
- Public Health Measures: Working closely with Dr. William Gorgas, he helped implement aggressive disease control measures, including widespread mosquito eradication programs. Within two years, yellow fever was virtually eliminated, and malaria cases had significantly declined.
- Engineering Strategy: Perhaps his most crucial contribution was advocating for a lock-based canal instead of a sea-level design. The lock system would control water flow and allow ships to pass through elevations without having to excavate the entire isthmus. This decision changed the course of the canal’s construction.
Stevens’ leadership gave the project new direction. However, just as momentum was building, he abruptly resigned in 1907, reportedly frustrated with political interference and the strain of the job. Once again, the canal effort faced uncertainty—but this time, a leader was ready to step in and finish what had been started.
George Washington Goethals: The Committed Executor
In 1907, President Theodore Roosevelt turned to George Washington Goethals, a no-nonsense military engineer from the U.S. Army Corps of Engineers. Unlike his predecessors, Goethals had both technical expertise and an authoritative leadership style. He brought discipline, organization, and a military approach to management, ensuring that the project remained on schedule.
Under Goethals’ leadership, the canal’s most challenging phases were completed:
- The Culebra Cut excavation—one of the most difficult and dangerous tasks—was finally conquered, removing millions of cubic yards of rock and soil.
- The massive lock system, based on Stevens’ design, was constructed successfully.
- Worker morale was maintained, despite the intense labor and dangerous conditions. Unlike previous engineers, Goethals made himself accessible to the workforce, holding open office hours every Sunday where workers could bring their concerns directly to him.
In 1914, ahead of schedule, the Panama Canal officially opened, revolutionizing global trade and proving that with vision, resilience, and strong leadership, even the most daunting challenges could be overcome.
By 1914, the canal was operational, but Panama’s struggle was far from over. The Zone remained an American stronghold for decades, a constant reminder that their land was controlled by a foreign power. The divide was not just physical—it was economic, racial, and deeply political.
The Human Cost: Sacrifice and Legacy
The construction of the Panama Canal came at an immense human cost. From 1904 to 1914, approximately 5,609 to 5,855 workers lost their lives due to disease, accidents, and harsh working conditions. Among them were 350 American workers, but the vast majority of the casualties were West Indian laborers, particularly from Barbados.
These men endured the toughest conditions, often assigned to the most perilous excavation zones with minimal safety precautions. Their contributions were indispensable to the canal’s success, yet their sacrifices often went unrecognized in history books.
Once construction ended, many Caribbean workers remained in Panama, settling in Panama City and Colón. They integrated into Panamanian society, bringing with them rich cultural traditions—music, cuisine, and language influences that became an essential part of Panama’s national identity.
A Divided Land: The Canal Zone as an American Enclave
What happens when a foreign power builds a modern city within another country, but only for its own citizens? The Panama Canal Zone was more than an engineering marvel—it was a controlled, self-sufficient enclave where U.S. citizens lived in government-provided comfort, while Panamanians and Afro-Caribbean workers labored under strict segregation. It was a place where capitalism and socialism blended into an unusual hybrid system—efficient yet exclusionary, prosperous yet deeply unjust.
The Canal Zone became a segregated outpost of the United States, cutting Panama in two. Inside its borders, the U.S. built modern infrastructure, schools, hospitals, and commissaries—but these luxuries were reserved for Americans. Panamanians, though living just beyond the boundary, were barred from its benefits, treated as second-class citizens in their own homeland.
The very land that had been severed to make way for the canal now symbolized a deeper, more painful division.
A Hyper-American Suburb in the Tropics: The Creation of an “Other”
Between 1912 and 1940, the Canal Zone was meticulously designed to resemble an idealized American suburb, a “Little America” that was completely detached from the surrounding Panamanian landscape, culture, and people. This separation was both physical and ideological, rooted in American imperial attitudes that framed Panama and Panamanians as the “Other”—an entity to be kept at a distance.
Canal Zone towns were planned to insulate white American residents from:
- An “Other” natural landscape – The tropical rainforest was seen as wild, untamed, and dangerous, a place that needed to be controlled or avoided. Canal Zone housing developments created manicured lawns, tree-lined streets, and golf courses that reinforced an artificial sense of home, far removed from the Panamanian “jungle.”
- An “Other” cultural landscape – Panamanian cities were perceived as chaotic, foreign, and unstructured, standing in contrast to the orderly, government-run towns of the Zone. American communities were laid out in neat, symmetrical grids, with street names, schools, and homes mirroring those of suburban America.
- An “Other” people – The West Indian labor force and Spanish-speaking Panamanians, who had physically built the canal, were largely excluded from the communities they helped sustain. The social and economic structure ensured that Americans remained privileged, while non-Americans were kept in segregated neighborhoods, working under harsher conditions for lower wages.
This artificial environment was not just about comfort—it was an assertion of American superiority, a visual and social reminder that the U.S. was in control. The rigid planning of the Canal Zone towns reflected the moral, social, and economic views of their American administrators, who sought to rationalize discrimination through urban planning and cultural separation.
A System of Control: Capitalism with a Socialist Safety Net
At its core, the Canal Zone was a government-run enterprise where efficiency and security took precedence over free enterprise. The Panama Canal Company, a U.S. government-owned corporation, operated the zone as a closed economic system.
Everything—from the labor force to the economy, from housing to retail stores—was controlled by Washington. Private businesses were prohibited from entering the Zone, ensuring that economic benefits remained within U.S. control.
Yet, for American citizens working in the Zone, life resembled a state-sponsored utopia. The U.S. government provided:
- Subsidized housing, assigned based on job rank and seniority.
- Free healthcare, with well-funded hospitals.
- American-style schools, following U.S. curricula.
- Tax-free shopping, at government-run commissaries.
- Public infrastructure and services, from roads to police and fire departments.
This structured, government-provided lifestyle was reminiscent of a socialist welfare system, yet its benefits were strictly reserved for U.S. citizens. Meanwhile, capitalism’s sharp edges were felt by those outside the privileged class.
The “Gold and Silver Roll” Divide: A Capitalist Hierarchy
The Gold and Silver Roll system institutionalized inequality. White American workers were placed on the Gold Roll, enjoying the highest salaries, the best housing, and exclusive access to government-provided benefits. Afro-Caribbean and Panamanian workers, who built and maintained the canal, were placed on the Silver Roll, earning significantly lower wages and denied the privileges of their American counterparts.
This labor system mirrored a colonial capitalist hierarchy:
- Gold Roll employees lived in subsidized homes and enjoyed a comfortable, tax-free life.
- Silver Roll workers did the hardest labor but were excluded from the benefits their work supported.
- Racial segregation ensured that wealth and privilege remained concentrated in American hands.
Despite the wealth the canal generated, Panamanians saw little of it, their economy deliberately cut off from the Zone’s prosperity.
A Shifting Purpose: From Military Stronghold to Economic Dilemma
For decades, the Panama Canal was a cornerstone of U.S. military strategy. It provided the United States Navy with an unmatched advantage—the ability to rapidly move warships between the Atlantic and Pacific Oceans. This strategic edge proved crucial in World War II, enabling the U.S. to defend both coasts efficiently.
But by the mid-20th century, the world had changed. The U.S. had built military bases across the globe, reducing its reliance on the canal. Meanwhile, warships and commercial vessels were growing larger, making parts of the canal obsolete. The high operational costs, combined with the growing resentment in Panama, made U.S. control of the canal less attractive and more burdensome. What had once been a vital military and geopolitical asset was now becoming an economic and diplomatic challenge.
Yet for Panama, the issue was deeper than strategy or economics. The canal had been built on our soil, yet Panamanians were largely excluded from its benefits. The Canal Zone, a strip of land dividing our country in two, was a foreign-controlled enclave. It was a constant reminder of lost sovereignty, and by the 1960s, the frustration had reached a boiling point.
The Chiari-Kennedy Agreement: A Step Toward Recognition
By the early 1960s, tensions between Panama and the United States were at an all-time high. The Canal Zone, controlled by the U.S. since 1903, was seen by Panamanians as a territorial wound—a symbol of foreign control over our own land. Panamanian President Roberto Chiari recognized that a change was necessary and began pressing Washington for a renegotiation of Panama’s role in the canal’s administration.
In a landmark discussion, Chiari met with U.S. President John F. Kennedy to address the issue. The most significant outcome was the Chiari-Kennedy Agreement, which allowed for the Panamanian flag to be flown alongside the U.S. flag in certain areas of the Canal Zone. It was a symbolic gesture, meant to acknowledge Panama’s sovereignty while maintaining American control.
But symbolic gestures can only go so far. Implementation of the agreement was slow and met with resistance from Canal Zone authorities and U.S. citizens living in the zone, who saw it as an encroachment on their territory. The delay fueled frustration in Panama, reinforcing the belief that the United States was unwilling to treat Panama as an equal partner.
The 1964 Riots: Martyrs of Sovereignty
On January 9, 1964, the slow-burning frustration ignited into full-blown conflict. A group of Panamanian students, determined to see their national flag raised in the Canal Zone, marched to Balboa High School. Their intent was peaceful, yet they were met with hostility from U.S. students and authorities. A clash ensued, and soon, violence erupted throughout the city.
What began as a symbolic protest escalated into widespread riots. Panamanians took to the streets, demanding sovereignty over their own land. U.S. troops were deployed to suppress the unrest, but the damage had already been done.
By the time the riots ended, more than 20 Panamanians lay dead, hundreds were injured, and Panama had severed diplomatic relations with the United States.
The Martyrs’ Day Riots became a defining moment in Panama’s struggle for sovereignty. The images of young Panamanians dying while demanding control over their own land resonated across the world. It was a stark reminder that symbolic agreements were not enough—Panama needed true control over the canal.
A Turning Point Toward Sovereignty
The events of 1964 forced the United States to reconsider its position. The canal was no longer just an economic and military asset—it had become a political liability. The global condemnation of U.S. actions during the riots, combined with Panama’s severing of diplomatic ties, made it clear that a long-term solution was necessary.
These events set the stage for negotiations that would eventually lead to the Torrijos-Carter Treaties of 1977. This agreement paved the way for the full transfer of the canal to Panama by December 31, 1999. But it was the sacrifices of the Panamanians who stood up in 1964 that forced the world to listen. Their courage ensured that our nation would reclaim its most valuable asset.
The Torrijos-Carter Treaties: A Turning Point
I was five years old when the Torrijos-Carter Treaties were signed. At the time, I had no idea that this moment would shape the course of Panama’s history—or that it would one day shape my own connection to my homeland. In the 1970s, General Omar Torrijos led a campaign that would forever alter our nation’s destiny. His vision was clear: Panama had to reclaim the canal that ran through the heart of our land, dividing not just our geography but also our people.
For decades, the Canal Zone had been a foreign enclave within our borders, a piece of Panama that did not belong to us. The land was cut off from our sovereignty, controlled by a nation that saw it as a strategic asset rather than an extension of the home we cherished. Torrijos knew that this had to change, and against all odds, he fought to make it happen.
The struggle to reclaim the canal was not just a political negotiation—it was a battle for dignity. Panama had long endured the reality of having its most valuable resource under foreign control, its people watching from the sidelines as revenues flowed elsewhere and decisions about our own land were made beyond our reach.
Torrijos understood that this was about more than money—it was about identity, self-respect, and the right to determine our own future. He carried this message to the world, making it clear that Panama would not stop until justice was served.
His fight led to the historic Torrijos-Carter Treaties, signed on September 7, 1977. The agreements set in motion a timeline that would see the gradual transfer of the canal from U.S. to Panamanian control, with the final handover set for December 31, 1999. It was a moment of triumph, but one that came with challenges. Panama had 22 years to prepare to take full responsibility for one of the world’s most complex and strategically vital waterways.
Manuel Noriega: From Shadow Operative to Marked Man
He stood at the pinnacle of power, a man who had mastered the art of survival in a world where loyalty was currency and betrayal an inevitable cost. Manuel Antonio Noriega, with his pockmarked face and calculating gaze, had spent decades navigating the murky waters of geopolitics, playing both sides, forging alliances in the dark corridors of power. He had once been Washington’s man in Panama—a trusted informant, a military strongman trained in U.S. institutions, a Cold War asset. But now, the tides had turned. The same forces that had elevated him were preparing to strike him down.
His story was one of contradictions. A student of the U.S.-run School of the Americas, trained in counterinsurgency and intelligence, Noriega quickly ascended the ranks of Panama’s National Guard. By the 1970s, he was a key player in the region, feeding intelligence to the CIA, assisting U.S. operations in Central America, and allowing Panama to become a strategic hub for American interests. But he was also a man of ambition, and ambition has its price. He played too many games, with too many masters.
As the Cold War raged, Noriega’s Panama became a crossroads of clandestine dealings. He was a valuable asset in the Iran-Contra affair, facilitating arms and drug trafficking networks that funded U.S.-backed anti-communist rebels in Nicaragua.
At the same time, he courted Washington’s adversaries—making deals with Cuba, Libya, and drug cartels, all while growing his personal power. The CIA, accustomed to using strongmen for its own ends, chose to look the other way, so long as Noriega remained useful.
But by the late 1980s, his usefulness had run out. His growing defiance, his blatant corruption, and his deepening entanglements with drug cartels had made him a liability. In 1988, the U.S. indicted him on drug trafficking charges, a rare move against a sitting head of state. Washington had made up its mind: Noriega had to go. The question was—how?
Operation Just Cause: Force Over Diplomacy
What followed was one of the most controversial military interventions in U.S. history. On December 20, 1989, under the pretext of restoring democracy and protecting American lives, the U.S. launched Operation Just Cause, a full-scale invasion of Panama. More than 27,000 U.S. troops flooded the streets, turning Panama City into a battlefield. Airstrikes pounded neighborhoods, tanks rolled through the streets, and Panamanians—both armed and unarmed—were caught in the chaos.
Noriega, ever the survivor, evaded capture for days, hiding in safe houses, moving through a city engulfed in flames. But his time was up. With nowhere left to run, he sought refuge in the Vatican embassy, where he remained for nearly two weeks as U.S. forces surrounded the compound.
In an act of psychological warfare, the military blasted deafening rock music outside the embassy, a bizarre spectacle for a man who had once commanded absolute authority. On January 3, 1990, Noriega surrendered.
He was whisked away to the United States, tried for drug trafficking, racketeering, and money laundering, and sentenced to 40 years in prison. From there, he would be extradited to France, and later to Panama, where he spent his final years in confinement—a man who had once ruled through fear, now powerless and forgotten.
The Cost of Intervention: A Just Cause or a Show of Force?
On Christmas Eve 1988, I learned firsthand what it meant to live under Noriega’s rule. I was sixteen when I was beaten with police sticks and dragged into a police station, accused of being a sedicioso for simply meeting the wrong gaze. That night, as holiday lights flickered across a city gripped by fear, I understood the weight of his dictatorship.
So, when his regime collapsed, I—like many others Panamanians—celebrated. But even in the triumph of that moment, one question refused to fade—Was it worth the cost?
History is rarely simple. It does not offer easy answers, nor does it unfold in neat chapters. It is shaped by decisions made far beyond our borders, by forces that see our land not as home, but as strategy.
And as has happened too many times before, it was Panama that bore the cost. Not just in lives lost or neighborhoods destroyed, but in the painful reminder that being at the crossroads of the world means forever standing in the path of foreign interests.
But we are more than a battleground for others’ ambitions. We are more than a nation defined by what has been taken from us. What we do with this lesson, how we honor those we lost, and how we guard our sovereignty moving forward—this is our responsibility. The past is written, but the future remains ours to shape.
The Day the Canal Became Ours
I was there. Part of a sea of Panamanians gathered around the Panama Canal Administration Building on December 31, 1999. The air was electric with anticipation. The sky was clear, the moment was near, and a wave of pride washed over the crowd as the Panamanian flag was raised over the canal. The canal was finally ours.
The joy in that moment is something I carry with me to this day. I still have the two small Panama flags that I waved that night—flags that remind me of where we were and how far we had come. During the celebrations Patria, the song by Rubén Blades, became our second national anthem. As the melody filled the air, Panamanians sang together, their voices woven into a single, resounding message: we were home, and our homeland was whole again. New responsibilities, new opportunities.
Final Thoughts: The Journey Continues
The water flows endlessly through the locks, just as it has for over a century. But today, it moves under a different watch—no longer directed by foreign hands, no longer dictated by outside interests. The Panama Canal, once the symbol of control and exclusion, now stands as a testament to resilience, ownership, and the power of a nation that dared to reclaim its future.
Yet sovereignty is not the end of the story—it is only the beginning of a new chapter. Taking control of the canal was one battle; proving to the world that Panama could operate it efficiently, profitably, and equitably was another. The weight of expectation was immense. Could this small nation, once dismissed as incapable of self-management, rise to the challenge? Would the canal thrive under Panamanian leadership, or would the skeptics be proven right?
In our final installment of The Panama Canal: A Journey of Transformation and Sovereignty, we will explore what happened next. How has the canal evolved under Panamanian administration? What do the numbers reveal about operational costs, revenue, and economic impact? And in a world where neutrality is constantly tested, what does it truly mean for Panama to be the guardian of one of the most strategic waterways on Earth?
The journey is not over. The canal remains a living force, shaping Panama’s present and future. Join me for the third and final chapter as we uncover the legacy of a nation that turned history into destiny.