Impact of the Panama Canal Construction

Abstract

The Panama Canal is a large piece of United States history. This famous canal was made by the United States in order to find a waterway that connected two oceans, the Atlantic and the Pacific Ocean . The Panama Canal represents both the best and the worst of the United States. It represents the best of the United States by showing how they were able to create a system to get through the Atlantic and the Pacific Ocean.  It also shows the worst of the United States by showing how they would use their power to intimidate Latin American countries. Throughout this research paper I will try to explain the history of the Panama Canal and its effects on other countries. This canal helped reduce the travel time for ships by a massive margin, and it allowed shippers of commercial goods to save time and money, which caused consumer prices to be lower for people. I will also try to explain how some countries would be if the Panama Canal was to close up.

Keywords: Panama Canal, United States, Commercial Goods

For many people history can be an interesting subject to learn about, all the historical events with all the many different points of view can be fascinating to do research on. The Panama Canal is one of those historic events that amaze the readers because of how it was formed and its history. Americans see The Panama Canal as a symbol of liberty and victory because they were able to accomplish what other countries couldn’t.

In 1904 Theodore Roosevelt’s administration secured the rights of the US to build the Panama Canal. The first few years the project seemed to be full of controversy and to many people it looked like it was going to have the same fate as the French Canal in 1880. The conditions on the isthmus were not the best. It was full of health hazards, insufficient supplies and a lack of experienced workers. At the time, the workers under Engineer John F. Wallace became skeptical over the construction of the canal and started wondering if it was even possible to build it. To make it even worse there was an outbreak of yellow fever in 1905 which caused a mass departure of workers, who John F Wallace joined back at home and shortly after he resigned his position. After Wallace’s departure, John F Stevens stepped in as his successor. Stevens’s first action was to prioritize the health of his workers, he also recruited skilled and unskilled workers, and provided housing and provisions for feeding, but most importantly Stevens constructed a rail system.  The rail system allowed for enough supplies to get there on time and it also helped in the removal of soil which was the biggest problem they had. Despite the good progress that was happening under Stevens, criticism intensified back at home. A well known journalist, Poultney Bigelow,  posted an article in 1906 criticizing the living conditions of the workers  in Panama, which caused the attention of the people in the US to rise. Bigelow even challenged president Theodore Roosevelt to find out the truth of what was happening. The president’s response was a shocking one, he sailed to panama in November, this grabbed the attention of the world because no president had ever left American soil while in office. Throughout the president’s  three day trip in Panama, he frequently left his escorts behind and conducted inspections and interviews to workers at random times. His trip put to rest most Americans worries about the project. Roosevelt developed the picture of a commander visiting his troops at the front, and his military metaphors led his speech on the isthmus. The president’s trip to Panama changed the people’s view on the project and made it look like it was a promising one, he also recognized every worker as an honorable man as if they had fought in a war.

The Events of 1903

In 1903, the Hay-Herrán Treaty was signed with Colombia, giving the right to the United States to build on the isthmus of Panama, which was part of Colombia at the time, in exchange of financial compensation. The Colombian senate feared a loss of sovereignty so they decided to refuse the ratification of the treaty. Due to this, president Theodore Roosevelt gave the go ahead to panamanian nationalists in order to start a rebellion. The president of the US helped the panamanians even more by bringing the U.S. warship Nashville, this discouraged some Colombian troops. On November 6 the US recognized the republic of Panama and on November 18, the Hay-Bunau-Varilla Treaty was signed with Panama. This treaty gave complete ownership of the isthmus to the United States. In exchange for the signing of this treaty the United States had to compensate Panama, $10 million and 9 years later 250,000 per year. Later on many panamanians felt that the treaty was an infringement to their newly national sovereignty. After decades protesting and negotiation the US gave ownership of the canal back to Panama in 1999.

Why Was Panama the Chosen Place for the Canal?

The idea of a canal had always been in people’s mind and even goes back to 1513, when Vasco Nuñez de Balboa first traveled through the isthmus. There was a few options for the United States to build a canal and that was Nicaragua or Panama, but both of these routes had their own advantages and disadvantages. The Panama route around that time had two great harbors already existing. A good railroad was already in position along the whole route. The construction of the canal was already underway. One huge problem that they had was that they could not accomplish any work where the annual rainfall exceeded 93 inches. The route would lay completely within the bounds of Colombia. The distance to be lighted up and supervised was 46 miles. There were no active volcanoes within a range of 200 miles. The cost on the plans estimated around $100,000,000. The ports were known to be of simple approach The length of the course was 46 miles and the time of transit fourteen hours. There was no strong winds or river currents, even in time of flood, that they had to face.

On the other hand the Nicaragua route needed to have two harbors made, one of which, at Greytown,presented many natural challenges. There was no railroad, and its construction would have been a lot more work. No construction had yet been attempted and many details of the project had not been discussed. The dams necessary along the canal would always be a source of danger. All the difficult work would have to be done in a region of 256-inch annual rainfall. The route lies entirely on the border of Nicaragua and Costa Rica,which meant that there would be a cause of conflicting interest. The separation to be lighted up and supervised was around 176 miles. There was active volcanoes near the route and in 1898 an earthquake had caused devastating destruction to the area. The estimated price, based on “doubtful” data was around $133,000,000. The entrance to the ports were also not secured, especially on the Atlantic coast. There was also heavy winds and strong river currents that they had to face.

At the time, even though the Panama route had many advantages over the Nicaragua route, it would have been almost impossible to do anything on Panama because the concession was unobtainable from the French company, which is why the Nicaragua Canal was the primary option. However, the French company saw that it was impossible to compete against the government of the United States, who quickly entered in negotiations with Colombia for the permission to buy the canal. The negotiations ended up being successful and Colombia agreed to dispose of its rights for a sum of $40,000,000.

What Would Happen if the Canal Was to Close Up?

The Panama Canal is one of the most important canals in the world and many of country’s commercial goods have to go through it.  The canal helps reduce around 15,000 km and it also receives thousands of cargo ships a year. The United States became increasingly dependent on international trade, particularly with countries of the pacific Rim like Japan, South Korea and Taiwan. (Latané, 1914, p.104). This meant that the United States trade through the canal increased immensely. In 1950, roughly 14 million tons of US cargo passed through the canal, meaning a little over 8% of the US water trade. In 1992 the US exceeded over 100 million tons of cargo going through the canal. If the canal were to close an economy as big as the United States would not be affected in the long term. It would find ways to adapt and find new trading systems. However, ports on the east coast and around the Gulf of Mexico would suffer a great economic loss. Many of the industries and businesses in the east coast, would be affected immediately due to the large amount of trade that hey must do.

Even though the closing of the Panama Canal may not seem to be a huge problem to the United States economy in the long term, this is not the case for other smaller countries. Over half of Ecuador’s international trade passes through the Panama Canal (Latané, 1914, p.104). In the short term and long term Ecuador would not recover fast from such a loss, the country’s economy would come down almost to the ground. Without the Panama Canal, a large share of south america’s west coast commerce would have to forfeit their ability to compete and be forced to stop moving. Most of the cargo that move in and out of the South American countries would just have to stop if there was a disruption to the canal or if it were to close. These countries don’t have any other alternatives like the United States and they would all be forced to stop. The South American countries would not be the only ones to be affect but also countries like Japan.  The second largest user of the canal, Japan, would seem heavily affected by the loss of the canal. Japan relies immensely on the canal to transport its goods to the other side of the world and accounts for 40 million tons of cargo (Latané, 1914, p.105). Even though this is only 5% of their total trade, some parts of their international trade are highly dependent on the canal. For example, the majority of japan’s grain imports as well as more than half of all the cars exported to the US go through the canal.  Since Japanese trade have to make long trips across the world to reach their markets, the cost of transportation ends up being a massive percentage of the final cost. If the canal were to be disrupted in any way, Japanese trade be affected in the sense of transportation and it would end up being more expensive.

In conclusion, the Panama Canal is an indispensable piece of history of not only the United States but of the world. The story of its construction is unlike any other historical event, it was built on really bad conditions. This canal has had one of the biggest impact on most countries economy. It has brought so many benefits to the most developed and not so developed countries. The economy of so many countries rely on this canal that it would cause a disaster for many countries of it was to close up.

References

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