Friday, March 27, 2009

US Invasion of Panama - Ch.2

Panama’s Fight for Sovereignty: A History


Panama is not just a canal. Neither did its history begin with the construction of the waterway.

Panama is a country with a rich and complex history and with vibrant cultural traditions. A history of pain and suffering under Spanish colonial oppression, Colombian neglect and indifference, and misrule by a series of corrupt oligarchies in alliance with US imperialism.

It has also been a history of bitter struggles for national independence, sovereignty, and self-determination – from its many attempts to secede from Colombia and up to its present resistance against Washington’s economic domination and military aggression.

Visited by the explorer Christopher Columbus in 1502, the isthmus was the principal transshipment point for treasure and supplies to and from South and Central America during the era of Spanish colonial rule in the sixteenth, seventeenth, and eighteenth centuries. During those years of wanton plunder, Panama was constantly attacked by pirates, corsairs, and buccaneers.

In the colonizers’ lust for gold, mistakenly thought to exist in abundance in Panama, they slaughtered hundreds of thousands of indigenous Indians in the belief that the natives were hiding the precious metal from them.

After having virtually eliminated the Indians, the Spaniards brought in tens of thousands of African slaves to work the land between 1518 and 1820. Both the Indians and Africans mounted several revolts against the Spaniards. As a result, many Africans escaped bondage and fled to the mountains, where they set up their own kingdom and lived relatively isolated until the early 1900s.

In 1821 when Central Americas revolted against Spanish rule, Panama joined Colombia, which had already declared its independence. For the next eighty-two years the country struggled unsuccessfully to end its status as a “department” of Colombia.

Anti-colonial forces in Panama had been inspired by the leadership of Simon Bolivar, Latin America’s most prominent fighter against colonial rule. In 1826 Bolivar convened the Congress of Panama to lay plans for a unified federation of free Latin American states.

Throughout the nineteenth century, Colombia treated Panama as a poor and unimportant fiefdom, exploited by military officials and tax collectors sent to govern this “backward department.” During this period Panama received neither the autonomy and self-government that it had sought nor the protection from foreign powers that it had been guaranteed when it voluntarily joined Colombia.

In 1841 the Panamanians declared themselves an independent “State of the Isthmus,” and in 1855 they set up the “Federal State of Panama,” but neither effort was sustainable, and the country fell back into its “department” status.

The southern-most of the Central American countries, Panama is roughly the size of the US state of South Carolina. It is marked with volcanic mountains in the west and rain forests in the fertile eastern region. Most of this land, however, is uninhabited, with the population of 2.5 million concentrated close to the canal. The canal bisects the isthmus connecting North and South America at its narrowest and lowest point, allowing passage between the Caribbean and the Pacific Ocean.

Panama’s singular geography, more than any other factor, has fashioned the country’s political history in the twentieth century.

The predominant cultural influence has been Spanish. But the country’s indigenous peoples, as well as the descendants of African slaves and Caribbean peoples who migrated from the islands at the beginning of this century, have together helped shape Panama’s identity and its national character.

Panamanian historian Ricuarte Soler argues that a Panamanian national consciousness and a sense of being “predestined to control the crossroads of the world” was well established before the formation of the Panamanian republic in 1903.

In the second half of the nineteenth century, French capitalists, who had built the Suez Canal in Egypt, became interested in building a waterway across the Central American isthmus. In 1878 they obtained a concession from Colombia to build a canal under the direction of Ferdinand de Lesseps, the engineer who built the Suez Canal.

After nine years in which thousands of workers died from disease, the French Canal Co. – by then bankrupt, scandal-ridden, and technologically depleted – abandoned the project.

The French effort did not go unnoticed by the US capitalist rulers. President Rutherford Hayes in 1880 and later President Theodore Roosevelt both stated that Washington wanted to build a canal under US control. They argued that it was necessary for “strategic defense” and for expansion beyond US continental borders.

As a result of the brief war with Spain in 1898, the US government won absolute control of Puerto Rico and the Philippines and established a “protectorate” over Cuba.

Washington was now an imperialist power with colonies in two oceans, and so both desired and needed a canal to shorten the travel time to its colonies, as well as to facilitate trade between the East and West coasts of the United States itself. Control of the canal would also place the rising imperialist power in a competitive position in world trade and commerce and bolster its military position.

The US Congress had long been considering a route through Nicaragua, utilizing that country’s huge lake on its western side. But in comparison to Panama, it was claimed that the Nicaraguan project would have been more costly. Moreover, the country was susceptible to earthquakes and volcanic eruptions.

By 1903, therefore, Panama had become the more practical and feasible route. By then the US rulers were determined to have “their” canal one way or another. To them, flexing of imperialist muscle against Colombia seemed to be a perfectly logical and convenient way to achieve this goal.


No consideration was given to the views and sentiments of the pro-independence forces in Panama, who were excluded from the negotiations of the Herran-Hay Treaty of 1903. This agreement granted the United States “exclusive and absolute option” to build and then operate the canal for 100 years.

Under the draft treaty, the United States agreed to pay Colombia $10 million plus $250,000 annually, to begin nine years after the ratification of the treaty. Meanwhile, Washington, without consulting the Colombian government, agreed to pay the bankrupt French Canal Co., which was still subject to Colombian sovereignty, $40 million for its rights and assets. On March 17, 1903, the US Senate ratified the Herran-Hay Treaty and then waited for the Colombian congress to do the same.

The Colombian government had sought a percentage of the money Washington paid to the French company, but failed to wrest an additional penny. Five months later the US rulers were stunned by an announcement that the Colombian congress had rejected the treaty approved by the US government.

There had been heated debate in Bogota, the Colombian capital, marked by what one historian described as “floods of anti-treaty oratory that invoked national honor.” The Colombian congress responded with no fewer than nine amendments to the treaty, all aimed at clarifying and preserving Colombia’s sovereignty over the isthmus, its residents, and its two port cities of Colon on the Caribbean coast and Panama City on the Pacific.

Infuriated by Colombia’s rejection, President Roosevelt railed against “those contemptible little creatures in Bogota” who ought to understand “how much they are jeopardizing things and imperiling their own future.”

Abandoning further negotiations with the Colombian government, the US rulers then shifted tactics by promising the Panamanian independence forces diplomatic and military support to carry out a “revolt” against Colombia.

Using a crafty French engineer, Philippe Bunau-Varilla, a former representative of the French Canal Co., as an intermediary with the forces favoring Panamanian independence, the Roosevelt administration promised that it would “guarantee” Panama’s independence.

The independence forces were unable to prevent Secretary of State John Hay and Bunau-Varilla from drawing up a new treaty behind their backs and rushing it through the Senate for speedy ratification. So the infamous Panama Canal Treaty of 1903 was put together without the participation of a single Panamanian official.

In accordance with the “independence plan” worked out by Hay and Bunau-Varilla, the Panamanians would be given a flag, a declaration of independence, a constitution, and $100,000. On November 5, 1903, US marines landed in colon while the small Colombian garrison in Panama City retreated back to Colombia. Panama became independent the day after without a shot being fired. A US army officer on hand was given the “honor” of raising the Panamanian flag over city hall. Panama was at once made and recognized by the United States.

On February 24, 1904, the US Senate ratified the canal treaty, which allowed for interventions by the US Army into Panamanian territory beyond the Canal Zone if required to maintain “order.”

For canal rights, the US government paid Panama $10 million.

The treaty also stated, “The Republic of Panama grants to the United States all the rights, power and authority within the zone… which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of panama of any such sovereign rights, power or authority.”

By November Washington forced the Panamanian government to abolish its army and replace it with a weak, and at times weaponless, national police force.

Writing about the 1903 treaty, historian Wallace LaFeber noted the US government’s “breathtaking” powers to acquire any land or control any water “outside the Canal Zone but incident to canal uses.” The zone itself is a ten-mile-wide strip across the isthmus.

Moreover, the US officials controlled Panama’s immigration and communications. They could intervene in Panama City and Colon, where most Panamanians lived, to enforce law and order, acquire buildings, and run sanitation.

Construction of the canal was begun in 1904 and completed in 1914. It was hailed as an engineering marvel of the twentieth century and a triumph of US technology and know-how.

Tens of thousands of Black workers were brought over from the Caribbean islands to carry out the back-breaking work of building the canal. Of these, close to 5,000 died from disease, malnutrition, and sheer exhaustion.



The central feature of Panama’s history from 1903, the time it won what some commentators in the region have described as “the most dependent independence” in the history of Latin America, is the quest of the popular masses for sovereignty over the Panama Canal and the Canal Zone.

In struggling to rid themselves of imperialist domination, the Panamanian working people have had to confront direct US military intervention and occupation, a succession of neo-colonial oligarchies, extreme economic dependency, severe social inequalities, and pervasive racism.

The US colonial enclave set up as the Canal Zone controlled both the political and economic life of Panama. This domination was so extreme that in 1908, 1912, and 1918 local elections in Panama were directly supervised by the US Army.

After World War I, the Panamanian economy slumped, and so did public expectations of the economic benefits of the canal.

At the same time, mass resentment began to build up against the excessive rights and privileges enjoyed by the US government in the Canal Zone as guaranteed by the Hay – Bunau-Varilla Treaty of 1903.

In 1926 Panama’s National Assembly, under pressure from the population, rejected an initiative by Washington called the Kellogg-Alfaro Treaty, which was designed to temper some excesses while reserving Washington’s rights under the 1903 treaty.

In 1934 President Franklin Roosevelt, seeking to pacify the growing nationalist movement, visited Panama and called for a new treaty that would “eliminate as far as was possible all causes of friction and all reasons for legitimate complaint on the part of Panama without sacrificing those rights considered essential for [the US] government.”

One of the main causes of friction, which was not acted upon by Roosevelt, was the Canal Zone’s role as a US colonial enclave inside Panama.

Whenever a Panamanian travels across the country he or she must invariable cross the US-controlled Canal Zone, which covers a total area of over 500 square miles. The zone not only cuts through the middle of the Republic of Panama but the capital city abuts on the zone and the city of Colon is surrounded by it. In both cities, the principle commercial wharves are located within the zone. The US government uses only 3 percent of the land in the zone for the canal; 68 percent is taken up by military bases and reservations.

Roosevelt’s proposed treaty was approved by Panama’s National Assembly in December 1936. However, it was not ratified by the US Senate until 1939. Among Washington’s concessions was a renunciation of its right of “eminent domain” in the cities of Panama and Colon and an increase in the annuity paid to the Panamanian government from $250,000 to $430,000.

In addition, the treaty gave to the Panamanian oligarchy “full opportunity” for local merchants to make sales to vessels arriving at terminal ports of the canal or transiting the canal, as well as the right to collect tolls from merchant ships in the port cities of Colon and Panama.

In return for these minor concessions, the United States government received the right of unimpeded transit across and along the Colon corridor, as well as the right to set up roads within it. The corridor had been established to provide Panamanian access to the city of Colon.

The economic depression that hit the capitalist economy worldwide in the 1930s left Panama even more dependent upon US capitalism. Reduced investments by US businessmen and bankers in the Canal Zone led to increased unemployment among Panamanian workers, lowering their purchasing power and spreading poverty. This, in turn, produced working-class upheavals that helped lead to the election of a populist capitalist politician, Arnulfo Arias, to the presidency in 1940.

Arias drew up a nationalist constitution reflecting the sentiments of the Panamanian masses for sovereignty over the Canal Zone. But he was soon overthrown by the dominant forces among the local capitalists in collusion with Washington and the Panamanian National Police.

A serious social revolt was averted after Arias’s overthrow, partly because Panama’s capitalist economy was in an upswing from the increased use of the canal by the US military during World War II and from the construction boom related to the new US military bases.

Due to the 1936 renegotiation of the canal treaty, the zone market was opened to Panamanian capitalists during the war. The increase in traffic of US warships through the canal strengthened the demand for locally provided goods and services, which gave an impetus to domestic agricultural and industrial production. Energy consumption rose by 62 percent in Panama City and 73 percent in Colon. Employment in the zone increased from 14,800 in 1939 to 40,000 in 1942. By 1945, participation of the Canal Zone in Panama’s gross domestic product reached 21 percent.

From its control of the canal during the war years, US big business also accrued significant benefits.

According to information presented to the US Congress by the Canal Zone governor in 1947, “monetary saving to the United States arising from the use of the canal [during the war years] is estimated as $1,500 million in maritime costs alone without considering the lives and materials that were saved.”

In the immediate postwar period a recession hit Panama as the Canal Zone demand for goods declined by 20 percent and that for services by 50 percent. Unemployment reached 11.4 percent of the total labor force and 22.3 percent of non-agricultural labor.

Income received from raw material exports lagged behind payment for manufactured imports.

As the recession deepened, vast slums spread around Colon and Panama City.

Soon after the war ended in 1945, the Panamanian National Assembly ordered the minister of foreign affairs to inform Washington that the US military bases built during the war should be removed from Panamanian territory “no later than one year after the end of hostilities.” Panamanian public opinion firmly supported this mandate, but the US government refused to accept it.

Mobilizations of workers, farmers, students, and women exploded in the streets of Panama City and Colon, forcing Washington to back down and order the immediate withdrawal of 2,000 troops and military equipment in 1947. The US military retained the wartime Rio Hato air base.

Working-class protests against imperialist domination picked up momentum. Banana workers challenged the privileges and rights of the US-based multinational corporation United Fruit, which operated as a huge foreign fiefdom in Panama with its own security forces.

Throughout the 1950s and 1960s agricultural workers struck repeatedly for higher wages and better working and living conditions, and students agitated for Panamanian control over the Canal Zone.

This growing anti-imperialist mass movement, coupled with the postwar economic recession and the resulting decline in living standards, spurred internal conflicts within the local ruling class. In the three years from 1949 to 1953 the country had four presidents.

The power of the traditional political and economic oligarchy waned as the National Guard emerged as a political force in its own right. Racial and class tensions among Panamanians increased. Discriminatory practices against Panamanians in both jobs and wages within the Canal Zone continued.

A quasi-nationalist regime led by Jose Antonio Remon, former commander of the National Guard, took control in 1953 under the popular slogan, “Neither millions nor handouts [from the United States] – we want justice.”

Remon invited US President Dwight Eisenhower to visit Panama, which he did in 1955, leading to the Remon-Eisenhower revision of the canal treaty. The US government conceded to increase its annual payment for use of the canal and to grant the local ruling class the right to tax Panamanians who worked in the Canal Zone. But its pro-sovereignty rhetoric notwithstanding, the Remon government did not demand or win any gains under the new treaty in the direction of Panamanian control over the canal and the Canal Zone.

Panamanian capitalists were the only local beneficiaries from the 1955 treaty. Local manufactured goods were exempted from application of the Buy American Act in the Canal Zone, and US business agreed to stop manufacturing inside the zone as soon as it could be shown that similar goods could be produced in Panama. Panama became marginally stronger in relation to the US colonial enclave through the acquisition of these new resources. The economic weight of the Panamanian capitalists increased.

Local food production expanded while the importation of food, which in 1951 had been 20 percent of total imports, fell to 15 percent in 1955 and to 12 percent in 1960. The penetration of capitalist relations into agricultural production intensified and wageworkers grew from 4.5 percent of agricultural labor in 1950 to 22.8 percent in 1961. Thousands of small farmers displaced from the land moved to the cities, where they faced large-scale unemployment, wretched housing, and inadequate public services.

In 1958 a movement to highlight the oppression of colonialism and neo-colonialism was organized primarily by high school and university students with support from women’s groups and some labor unions. The movement demanded a revision of all existing treaties between Panama and the United States.

In response, President Eisenhower agreed to allow the Panamanian flag to be flown alongside the US flag in the Canal Zone’s Shaler Triangle as a symbol of Panamanian sovereignty, and in 1962 President John Kennedy joined with President Roberto Chiari of Panama to designate public buildings that would fly either both flags or none.

The triumph of the Cuban revolution in 1959 under the leadership of Fidel Castro and the July 26 Movement inspired the nationalist and anti-imperialist forces throughout the Americas, including Panama.

Emboldened by this historic victory, patriotic Panamanian students and working people stepped up their pro-sovereignty mobilizations and actions.

 In January 1964 an incident took place in the Canal Zone that was to become a watershed in the Panamanian peoples’ anti-imperialist struggles.


The list below includes cases of direct intervention by US military forces in the Caribbean and Central American region. it does not include acts such as the CIA-directed overthrow of the government of Guatemala in 1954; the US-organized contra war against Nicaragua; the numerous campaigns of political and economic destabilzation; or the large-scale military and financial assistance to right-wing regimes such as in El Salvador.

  • COSTA RICA: 1917
  • CUBA: 1898-1902, 1906-09, 1912, 1961
  • DOMINICAN REPUBLIC: 1903, 1904, 1912-14, 1916-24, 1965
  • GRENADA: 1983
  • GUATEMALA: 1904, 1920
  • HAITI: 1914, 1915-34
  • HONDURAS: 1905, 1907, 1910, 1912, 1919, 1923, 1924, 1929
  • MEXICO: 1914, 1916, 1918
  • NICARAGUA: 1906-09, 1912-16, 1927-33
  • PANAMA: 1903, 1908, 1912, 1918, 1919-20, 1925, 1989

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On January 9, US students and their parents living in the zone hoisted the US flag at Balboa High School, disobeying the orders of the zone governor, and refused to allow the Panamanian flag to be flown alongside it. When Panamanian students entered the zone and secured permission to raise their flag, they were stopped by the US students, and the Panamanian flag was desecrated.

This triggered a revolt that lasted for two days and nights. Panamanian protesters were fired upon by zone police and later by US soldiers, resulting in 21 Panamanian deaths and 400 wounded, many of them critically.

News of the rebellion sent shock waves throughout the Americas. Panama broke off diplomatic relations with the US government and appealed to the Organization of American States, which set up a commission of inquiry that later recommended the two countries draw up a new treaty.

More importantly, however, this event helped open a new chapter in the struggle for Panama’s sovereignty. By 1977 the US government had been forced to sign treaties committing itself to cede control over the canal and the Canal Zone to Panama.

As this brief account shows, Panamanians fighting today to implement those treaties are part of a long history of struggle for their country’s sovereignty. This is what Washington is desperately fighting as it seeks to maintain its domination.


- pages 17-29


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