Saturday, November 26, 2005

History of Panama

History of Panama. This is a brief history of the Central American nation of Panama.

How Wall Street Created a Nation noted, "In 1900, a group of investors led by William Nelson Cromwell, the founder of the prestigious New York law firm, Sullivan & Cromwell, and the banker J.P. Morgan, created a secret syndicate of Wall Street financiers and politicians to buy the shares of the bankrupt French Panama Canal Company, which owned the right to build the Panama Canal, from thousands of small shareholders throughout Europe. They invested about $3.5 million and gained control of the company. The covert investors then spent the next three years getting the United States government to buy the holdings for $40 million, the payment of which would flow back to them. In order to do this, they first had to defeat an entrenched Nicaragua lobby. Nicaragua was the preferred route for the canal because of its two big lakes, and also because the French had already tried to build a canal in Panama but had failed miserably. And the U.S. was already on its way to building the canal in Nicaragua. The House of Representatives unanimously passed a Nicaragua canal bill, a treaty was signed with Nicaragua, President McKinley had already signed the bill, and the excavation had already began in Nicaragua. It was a done deal—until Cromwell arrived on Capitol Hill and began throwing money around. Senator Mark Dollar Hanna, who was at that time the chair of the Republican Party and probably the most powerful man in America, received $60,000, at the time the largest donation to any politician. In return, Hanna began a campaign to build the canal in Panama instead. U.S. policy was reversed, and in 1902, Congress decided that the Canal was to go through Panama. Only one problem—Panama was at the time a province of Colombia, and the United States needed Colombia's approval to move ahead. Teddy Roosevelt sent Cromwell, who stood to benefit financially from the deal, to negotiate with Colombia. Colombia balked, demanding more money. Cromwell decided to circumvent Colombia, and to instead get Panama to secede and create it's own country—which it did. What is shocking about this part of the story is that Wall Street planned, financed and executed the entire independence of Panama, Diaz says. In effect, Cromwell and J.P. Morgan hired Panama's Jefferson and Washington, a tale of intrigue that Diaz documents. Panama was declared a nation, Cromwell negotiated a canal treaty with his cronies, and made off with millions. (Or as Senator Samuel Hayakawa put it years later, we stole it, fair and square.)"

To this day, many Colombians claim Panama is an illegal nation due to the actions of the USA. They insist that as the action was illegal that Panama is still Colombian and that the USA owes Colombia billions for the use of the Canal Zone. They claim that Panama exists de facto but under international law it does not exist de juris. Of course, that is not how international law works. The international community fully recognizes Panama and that is the end of this debate.

From the site:

Panama's history has been shaped by the evolution of the world economy and the ambitions of great powers. Rodrigo de Bastidas, sailing westward from Venezuela in 1501 in search of gold, was the first European to explore the Isthmus of Panama. A year later, Christopher Columbus visited the isthmus and established a short-lived settlement in the Darien. Vasco Nunez de Balboa's tortuous trek from the Atlantic to the Pacific in 1513 demonstrated that the isthmus was, indeed, the path between the seas, and Panama quickly became the crossroads and marketplace of Spain's empire in the New World. Gold and silver were brought by ship from South America, hauled across the isthmus, and loaded aboard ships for Spain. The route became known as the Camino Real, or Royal Road, although was more commonly known as Camino de Cruces (Road of the Crosses) because of the frequency of gravesites along the way.

Panama was part of the Spanish empire for 300 years (1538-1821). From the outset, Panamanian identity was based on a sense of "geographic destiny," and Panamanian fortunes fluctuated with the geopolitical importance of the isthmus. The colonial experience also spawned Panamanian nationalism as well as a racially complex and highly stratified society, the source of internal conflicts that ran counter to the unifying force of nationalism.

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