“While not possessing any single feature better than that of some other route . . . the Panama route has many less bad features than any of the others.” — George S. Morison, engineer and Isthmian Canal Commission member, 1903

How Did Panama Become Independent?

In 1903, French canal builders agreed to sell their stake in the bankrupt Panama venture to the United States for $40 million. Colombia, because of its sovereignty over Panama, expected part of the payment, but felt the price was too low. Unwilling to have the sale jeopardized and recognizing Panama’s desire for independence, the United States quietly encouraged Panama to rebel. The ensuing three-day-long revolution, under the watchful eye of two U.S. gunboats, created the Republic of Panama. A few days later, the United States and Panama signed a treaty to build the canal.

Selecting the canal route was primarily an engineering issue, but individuals outside of the profession determined its final site.

Frenchman Ferdinand de Lesseps downplayed challenging terrain, torrential rains, and rampant disease in his attempt to build a sea-level canal across Panama. When that effort failed, Americans debated whether they should continue the French work or start fresh elsewhere in Panama or Nicaragua. Sovereignty was also a factor; at the time, Panama was part of Colombia, which held legal jurisdiction over the French canal lease.

Although many in Congress and two presidential canal commissions favored Nicaragua, President Theodore Roosevelt, convinced of Panama’s technical merits, decided the canal would be built there.

On December 7, 1880, the Compagnie Universelle du Canal Interocéanique de Panama began selling stock to pay for canal construction. A few years later, the company sold lottery bonds like this one to raise additional funds. Investors, having lost faith in Lesseps and his project, did not buy many, and bankruptcy soon followed. In 1894, the company was reorganized as the Compagnie Nouvelle du Canal de Panama. It, too, eventually failed.

At the request of Congress in 1899, President William McKinley appointed a commission of military officers, government officials, and engineers to determine the cost and most practical route of constructing a canal under U.S. control and ownership. Seated in the front row at the far left is renowned engineer George S. Morison, the commission’s primary proponent of a Panama route.

Most of the members of the Isthmian Canal Commission favored a canal across Nicaragua. Civil engineer George S. Morison wrote the minority views in the Commission’s 1901 report to Congress. He sent this letter to President Theodore Roosevelt explaining the technical reasons for his preference for Panama. The letter helped persuade Roosevelt that Panama was the best route.

The authors of this Scientific American article concluded that construction would be feasible in both Nicaragua and Panama. A Nicaraguan canal would be closer to the United States but four times longer than one in Panama.

Proponents of a Panama canal route emphasized the threat of active volcanoes and earthquakes in Nicaragua, neither of which plagued Panama.