Phillipe Bunau-Varilla, mastermind behind the Panama canal

[With the shift in focus of this series, it seemed right to adapt the name to reflect what’s being discussed. Rather than discussing all history of Latin America, we’ll now look at U.S.-Latin relations] As U.S. naval power grew in the 19th century, the desire for a canal across Central America grew along with it. The California gold rush heightened the demand for such a canal.

In 1849, Cornelius Vanderbilt signed an agreement with the Nicaraguan government to operate a combined water-land crossing from the Atlantic to the Pacific. This quickly became one of the principal trade routes between New York and San Francisco, until civil war and social instability made the passage unsafe.

Plans continued for the construction of a canal across Nicaragua. A treaty was signed between Nicaragua and the U.S., providing for the construction of this canal. This treaty was later rejected by the U.S. when the decision was made to build in Panama.

Meanwhile, the French backed construction of a canal across the Colombian province of Panama; the construction was being carried out by the same group that had built the Suez Canal. Funding for the project proved insufficient, and the French canal company sought to cover their losses. The United States was a logical buyer, and negotiations began.

The U.S. also negotiated with the Colombian government for the rights to the land, signing a treaty that would have granted the U.S. a renewable lease in perpetuity. The chief engineer of the French project, Phillipe Bunau-Varilla, had a better idea. If the U.S. would help Panama obtain its independence, the rights could be obtained much more easily and with better terms. The U.S. agreed. When Panama declared independence, U.S. warships blocked Colombian troops from responding to the revolt. Well-placed bribes reduced the fighting in Panama itself, and the deed was done.

(To help the cause along, Bunau-Varilla hired William Nelson Cromwell as a lobbyist for the Panama canal. Cromwell was able to place a story in the New York Sun that falsely reported a volcanic eruption in Nicaragua that would have threatened the proposed canal zone. An actual volcanic eruption in the Caribbean helped sway Congress to approve the Panama canal… by four votes. Cromwell was paid $800 thousand for his efforts.)

Bunau-Varilla was able to get himself named as Panamanian ambassador to the U.S., despite the fact that he was a French citizen. He signed the treaty that gave the U.S. the right to build the canal, also giving his company a $40 million dollar sale. Panama received $10 million, and Colombia eventually received $10 million in exchange for their recognition of Panama.

Lots of dirty deals, but the road was now clear for the construction of the canal. We’ll look at that tomorrow.