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Freightwaves Classics: Panama Canal Serves Shipping and Commerce for More Than 100 Years - Freightwaves 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves 0 -34.140 -0.2% OTLT.USA 2.812 0.002 0.1% OTRI.USA 21.700 0.280 1.3% OTVI.USA Asia-Pacific Business Europe FreightWaves Classics Infrastructure Insights Intermodal International Maritime News Rail Shipping Trade and Compliance FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years Scott Mall, Managing Editor of FreightWaves Classics • Wednesday, July 21, 2021 11 minutes read An aerial view of the Panama Canal. (Photo: Panama Canal Authority) Listen to this article 0:00 / 16:07 1X As most people are aware, the Suez Canal was blocked earlier this year for six days (March 23-29). According to the Suez Canal Authority, which https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 1/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves maintains and operates the waterway, the canal has closed five times since it opened for navigation in 1869. Interestingly, the Panama Canal has never been blocked, and has only been closed for a day. That occurred in 1989, when U.S. military forces staged an assault in Panama to depose the country’s leader, Manuel Noriega. A shortcut to the Orient The idea of creating a water passage across the isthmus of Panama to link the Atlantic and Pacific oceans dates back to at least the 1500s, when King Charles I of Spain (whose nation laid claim to most of Central and South America) instructed his regional governor to survey a route along the Chagres River. A shorter water route from Europe to Asia across Central America was the goal. However, engineering and other challenges of building a canal across the mountainous, jungle terrain proved much too daunting for the engineering knowledge of the time. Nonetheless, the idea was considered many times; the desire for a shortcut from Europe to Asia was too tempting. In particular, throughout the 1800s, U.S. and British politicians and business leaders wanted to ship goods quickly and cheaply between the Atlantic and Pacific coasts. A canal across Central America connecting the two great oceans via the Caribbean Sea would allow ships to avoid sailing through the Straits of Magellan at the tip of South America, which added another 5,000 miles to a voyage. (Map: freeworldmaps.net) https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 2/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves A close-up map of the Panama Canal and its components. (Map: porteconomicsmanagement.org) First attempts to build a canal across Central America According to the Office of the Historian at the U.S. Department of State, in 1850 the U.S. and Great Britain negotiated the Clayton-Bulwer Treaty to end “rivalry over a proposed canal through the Central American Republic of Nicaragua.” However, the proposed Anglo-American canal never progressed past the planning stage. An illustration of Count Ferdinand de Lesseps and his https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 3/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves successful Suez Canal. (Image: Alchetron) A French canal? Ultimately, the first country to attempt a canal in Central America was France. The French were led by the builder of the Suez Canal in Egypt, Count Ferdinand de Lesseps. Construction began on a sea-level canal in 1880. The French quickly realized the huge challenges they faced. Heavy and ongoing rain caused landslides. Worse yet, yellow fever and malaria killed more than 20,000 of the construction crew, sidelined many others and demoralized the rest. After years of effort, De Lesseps came to the realization that a sea-level canal was an impossible task. He then conceived of a canal using locks; however, the project’s funding was terminated in 1888. The U.S. steps in Despite the failure of the French effort, U.S. interest in a canal continued. The Isthmian Canal Commission was created and authorized by the U.S. Congress in 1899 “to determine the most feasible and practicable route” in Central America to build a canal to connect the Atlantic with the Pacific. The commission was chaired by retired U.S. Navy admiral John G. Walker. Interestingly, Walker also chaired another Congressional commission (the Nicaragua Canal Commission); its final report recommended Nicaragua for the construction of a canal. But there were financial, business and political interests that favored a canal through the Colombian province of Panama… The U.S. Department of State’s Office of the Historian wrote, “The Hay- Pauncefote Treaty of 1901 abrogated the earlier Clayton-Bulwer Treaty and licensed the United States to build and manage its own canal.” The Panama Canal Commission issued its report on November 16, 1901; it also recommended Nicaragua. Why? Because the company that owned the assets of the failed French attempt to build a canal wanted more than $109 million for its assets. After difficult negotiations, the company lowered its price to $40 million on January 4, 1902; the Commission hastily reconvened at the urging of President Theodore Roosevelt. Reconsidering the location of the proposed canal, the Commission this time chose Panama as the preferred route. https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 4/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves This led the U.S. Senate to vote in favor of a location in the Colombian province of Panama for the canal on June 19, 1902. Before the end of the year, U.S. Secretary of State John Hay and Colombian Foreign Minister Tomás Herrán signed a treaty to build the new canal in Panama. However, the financial terms of the treaty were rejected by the Colombian Congress. President Theodore Roosevelt pushes the canal as a national imperative. (Image: thirteen.org) Following through on his ideology of “speak softly and carry a big stick…,” President Roosevelt responded by sending U.S. warships to Panama City (on the Pacific Ocean coast of Colombia) and Colón (on the Atlantic Ocean coast of Colombia) in support of Panamanian independence. Colombian troops were unable to move swiftly enough through the jungles of the Darien Strait; the province of Panama declared its independence on November 3, 1903. The new Republic of Panama appointed Philippe Bunau-Varilla (a French engineer who had been involved in the French effort to build a canal) as its “Envoy Extraordinary and Minister Plenipotentiary.” He and U.S. Secretary of State Hay negotiated the Hay-Bunau-Varilla Treaty of 1903. The treaty granted the United States a 10-mile wide strip of land in perpetuity for the canal in exchange for a payment of $10 million to the new government of Panama, an annual annuity of $250,000 and a U.S. guarantee regarding Panama’s independence. There was also the $40 million payment made to https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 5/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves the French company that had sought to build a canal in the 1880s for its equipment. A political cartoon from the Spanish-American War period. (Image: miami-history.com) The liberation of Spanish territory in the New World To take a step back, the Spanish-American War took place in 1898. The U.S. won, ending Spain’s centuries-long domination of much of the Caribbean, Central and South America. Under the treaty, which was signed on December 10, 1898, Spain renounced claims to Cuba, ceded Guam and Puerto Rico to the U.S., and transferred sovereignty over the Philippines to the United States for $20 million. Because Cuba was a U.S. territory, troops were stationed on the island (and still remain more than a century later at Guantanamo Bay). Like Panama and much of Central America, Cuba was also plagued by yellow fever and malaria. Therefore, on August 1, 1900, U.S. military physician General Walter Reed and three others visited Dr. Carlos Finlay, a Cuban physician and scientist who had developed a “mosquito hypothesis.” Reed thought the key to beating yellow fever was to determine how the disease was transmitted. He and his associates moved forward with Dr. Finlay’s work and demonstrated that Aedes aegypti mosquitoes transmitted the fever. https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 6/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves The battle against yellow fever included isolating patients with the disease. (Photo: Panama Canal History Museum) Major William C. Gorgas, Chief Sanitary Officer in Havana, used Reed’s discovery to control yellow fever in Cuba. As the 20th century began the United States was now a world power with overseas possessions and a role in international affairs. At the same time, construction of the Panama Canal was at a standstill. What today is a key shipping route connecting the Atlantic and Pacific oceans was a breeding ground for disease, particularly yellow fever. https://www.freightwaves.com/news/freightwaves-classics-panama-canal-serves-shipping-and-commerce-for-more-than-100-years 7/15 7/22/2021 FreightWaves Classics: Panama Canal serves shipping and commerce for more than 100 years - FreightWaves A graveyard in Panama for Americans who died during the construction of the Panama Canal.
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