The Panama Canal has been connecting the Atlantic and Pacific for more than a hundred years, saving ships thousands of kilometers on the sea route. Until 1914, ships still had to make the arduous journey across the tip of South America to transport goods from one sea to the other. One can imagine what an enormous relief and change the opening of the Panama Canal brought with it. The opening was preceded by a total of two decades of construction, a miserable failure at the first attempt and centuries of dreaming beforehand. Because a canal in Panama, this dream has not only existed for a short time. Quite a few others have fantasized about this.
The "Discovery" of Panama
Discussions about building a Panama Canal began at the time of the so-called discovery of America by the Spanish. The fact that there was actually nothing to discover there and that the inhabitants might have had a say in the matter is left out here. It was also a Spanish conquistador who was the first European to cross the Isthmus of Panama:Vasco Núñez de Balboa. And as soon as he reported this discovery to Europe in 1513, the first considerations began as to how the isthmus of Panama could be used strategically. A few years later, the King of Spain (and almost as a part-time Emperor of the Holy Roman Empire) Charles V gave the order to examine the construction of a canal in Panama. However, since we never heard from these plans again after that, the test may have turned out negative. Or the Emperor was just otherwise distracted. After all, someone had to make life difficult for Martin Luther.
Nevertheless, over the following centuries, the idea of a Panama Canal remained alive. With the expanding European colonial empires and their gigantic trade networks, shipping traffic also increased rapidly. So a shortcut from the Atlantic to the Pacific was a pretty tempting idea. At the end of the 17th century, the Scots of all people tried to establish themselves in southern Panama and establish a colony in the Darien region. Part of the consideration was once again that the isthmus could be used as a source of income for the new colony, whether in the form of a canal or overland transport. Obviously no part of the consideration was how to ensure the survival of the Scottish Highlanders in the tropical, disease-ridden climate. Accordingly, the result was …
France and its failed Panama Canal
But just because the idea of a Panama Canal didn't seem feasible for centuries doesn't mean it couldn't be tried again! And in the late 19th century the time seemed finally to have come. The European empires were finally able to achieve anything they set their minds to during this period! They controlled half the world. How hard can it be to dig a canal somewhere? Then, in 1869, France proved it could be done. The Suez Canal was officially opened this year, financed and planned by a French company or its shareholders. The canal saved the colonial empires countless kilometers of transport, as they no longer had to drive around the Cape of Good Hope to get to East Asia. But the Suez Canal also had enormous cultural influence. Its opening was enthusiastically received by the world public. Giuseppe Verdi even created a musical monument to the canal with the opera "Aida".
Now people in France thought:If it works in Egypt, why shouldn't it also work in Panama? The Panama Canal Company was founded just ten years after the opening of the Suez Canal and was soon able to obtain a construction concession from the Colombian government. Yes, Panama was part of Colombia at the time, but we'll hear about that a little later. Construction work began in the early 1880s, carried out by the Panama Canal Company and financed with stocks and promissory notes. Unfortunately, the costs soon exceeded the available capital. After all, an average of seven construction workers die every day from tropical diseases such as yellow fever and malaria! And even if the deaths of foreign construction workers in France shouldn't have caused any major waves of indignation, it was quite expensive. At the end of the 1880s the company finally had to admit bankruptcy.
At least that's what she admitted to the French state. But then she bribed masses of parliamentarians and media houses for quite a while in order to keep this bankruptcy a secret and to keep investors on board. When this soon-to-be-christened Panama scandal broke in 1892, 800,000 people lost their investments in the company. It was the biggest corruption scandal of the 19th century and the French dream of building the Panama Canal for their colonial empire was also history. Instead, they set out to find a buyer for the old patents and plans. So when was the Panama Canal opened and by whom?
The road to the opening of the Panama Canal
This buyer was eventually found in the United States, which acquired the rights from France in 1902. At that point in time, the USA had long been the aspiring major power number one. A few years earlier they had expanded their influence in Latin America and the Philippines during the Spanish-American War. A US-controlled Panama Canal was just what the strategists in Washington needed. Instead of the $110,000 that France would have liked for the rights and preparatory work, the US then paid only $40,000. And there was The Art of the Deal not even written back then! But a problem still stood in the way of the new builders. Colombia was suddenly no longer willing to extend the concession for the Americans. The master of the house forbade them to continue building the canal.
The USA reacted to this refusal with some sniffles. They simply sent soldiers to Panama a year later and occupied the Canal Zone. Politicians allied with the Americans in Panama then simply unilaterally declared the state independent of Colombia. The Canal Zone was then kindly ceded to the United States as part of that independence. As you can see, American influence in the state affairs of other countries has become something of a tradition. Over the next ten years the USA then built this Panama Canal and they did it a lot more competently than the French before them. The death rate dropped to about two deaths a day, with dead foreign workers worth no more in the US than they had been in France. But that certainly had a positive impact on the costs. In August 1914 the time had come and after an almost endless construction period, the Panama Canal was officially opened. Although... it didn't get all that celebratory, since the First World War had broken out just a few weeks before. But sometimes you're unlucky.
It was only less than twenty years ago that the USA gave up control of the Panama Canal and the entire Canal Zone. In 1999, the state of Panama took over the administration there, and a few years ago the canal was even expanded again to offer space for modern container ships. The business model still works today. The dream that Europeans have kept alive for centuries is still alive. In fact, it is so attractive that Nicaragua is now considering building a canal as well. I have a tip for you:don't hire the French!
In the podcast accompanying this article, I talk in detail about the Panama Scandal that shook France in the 1890s. I go into more detail there about how this Panama Canal company was set up, how it planned to finance itself and how it ended up bribing politicians en masse. I also turn to what this scandal tells us about conditions in the French Republic at the time. Because some of the problems of the following years are already anticipated.