A History of Panama

• Introduction
• Chapter 1: The First Inhabitants: Pre-Columbian Panama
• Chapter 2: The Spanish Arrival and Colonial Foundation
• Chapter 3: The Crossroads of the Empire: The Royal Audience of Panama
• Chapter 4: The Age of Pirates and the Decline of Portobelo
• Chapter 5: The Darien Scheme: Scotland's Ill-Fated Colonial Ambition
• Chapter 6: The Bourbon Reforms and the Seeds of Discontent
• Chapter 7: The Path to Independence from Spain
• Chapter 8: Union with Gran Colombia: A Tumultuous Partnership
• Chapter 9: The California Gold Rush and the Panama Railroad
• Chapter 10: The French Attempt: Ferdinand de Lesseps and the Canal Scandal
• Chapter 11: The Thousand Days' War and its Aftermath on the Isthmus
• Chapter 12: The 1903 Separation from Colombia and the Birth of the Republic
• Chapter 13: The Hay-Bunau-Varilla Treaty and the Establishment of the Canal Zone
• Chapter 14: The Construction of the Panama Canal: An American Triumph
• Chapter 15: The Early Republic and the Struggle for National Identity
• Chapter 16: The Rise of Arnulfo Arias and Panamanian Nationalism
• Chapter 17: The 1964 Flag Riots and the Demand for Sovereignty
• Chapter 18: The Omar Torrijos Era and the Fight for a New Treaty
• Chapter 19: The Torrijos-Carter Treaties and the Promise of the Future
• Chapter 20: The Manuel Noriega Dictatorship and the Years of Crisis
• Chapter 21: Operation Just Cause: The U.S. Invasion
• Chapter 22: The Return to Democracy and Economic Reconstruction
• Chapter 23: The Handover of the Canal: A Nation in Control of its Destiny
• Chapter 24: The Canal Expansion and Panama's Role in Global Trade
• Chapter 25: Contemporary Panama: Challenges of the 21st Century

To understand the story of Panama is to understand the power of geography. Few nations in history have been so thoroughly defined, shaped, and dominated by a single geographical feature as this narrow isthmus, the slender ribbon of land connecting two great continents and separating two vast oceans. For centuries, its destiny has been written not just by its people, but by its location. Its official motto, Pro Mundi Beneficio—For the Benefit of the World—is a testament to this reality, a simultaneous acknowledgment of its global importance and a subtle hint at a history where the world's benefit often came before its own. This book tells the story of how that sliver of land became a nation, a crossroads, and a stage for global ambition, conflict, and ingenuity.

The history of Panama is a paradox. It is the story of a place of immense strategic and commercial value that has, for much of its existence, been controlled by others. It is a tale of connection, of linking seas and economies, yet also one of separation, of a nation bisected by a foreign-controlled zone and often disconnected from its own destiny. From the earliest days of European conquest to the complexities of 21st-century global trade, Panama's path has been one of navigating the powerful currents of outside interests, a constant struggle to assert its own identity and sovereignty against the gravitational pull of larger powers who saw the isthmus not as a home, but as a shortcut.

Long before the arrival of Europeans, the isthmus was a land of its own, a bridge for migrating peoples and a home to sophisticated societies. Though they did not build the grand stone empires of the Mayans or Incas, the early inhabitants of Panama, including groups like the Monagrillo, Cueva, and Chibchan peoples, developed complex cultures. Archaeological discoveries have revealed intricate pottery, stunning goldwork, and societies with ranked social structures, indicating a rich and varied existence tied to the land's abundant resources. They lived in communities scattered across the region, from the coasts to the mountainous interior, their lives governed by the rhythms of the tropical environment. It was a world that was soon to be irrevocably shattered.

The arrival of the Spanish in the early 16th century marked the beginning of Panama's role as a global crossroads. Rodrigo de Bastidas first explored the coast in 1501, but it was Vasco Núñez de Balboa who, in 1513, etched Panama into the annals of world history by crossing the isthmus and confirming the existence of a "South Sea," the Pacific Ocean. This discovery transformed the narrow strip of land from a barrier into a vital strategic link. Suddenly, Panama was the key to unlocking the riches of the newly discovered lands. Spain’s conquest of the Inca Empire in Peru solidified the isthmus as the indispensable conduit for the vast wealth of the Americas.

The Spanish Crown quickly established a system to exploit this geographical advantage. Two of the most important trails in the Americas, the Camino Real and the Camino de Cruces, were carved through the dense jungle, connecting the Pacific port of Panama City with fortified towns like Portobelo and Nombre de Dios on the Caribbean coast. For nearly two centuries, the bulk of Peruvian silver and gold was hauled by mule train across this treacherous path, destined for the treasure fleets that would carry it back to Spain. This flow of wealth made Panama a jewel in the Spanish colonial crown, a bustling hub of commerce and administration.

The fabulous wealth passing through the isthmus did not go unnoticed. Panama quickly became a magnet for those who sought to prey on the Spanish Empire. The name "Panama" became synonymous with pirates and privateers. The legendary Sir Francis Drake haunted its coasts in the late 16th century, and in 1671, the notorious buccaneer Henry Morgan led a devastating raid, marching his men across the isthmus to sack and burn the original city of Panama, forcing its relocation to its present-day site. These attacks highlighted the vulnerability of the Spanish treasure route and presaged centuries of foreign interest and intervention.

Even other European powers, envious of Spain’s American empire, saw Panama as a potential prize. In one of history's more spectacular colonial failures, the Kingdom of Scotland attempted to establish a colony in the Darién region in the late 1690s. The Darien Scheme was a bold, if ill-conceived, plan to create an overland trade route to rival Spain's. The venture was an unmitigated disaster, doomed by poor planning, disease, and the inhospitable climate. The failure nearly bankrupted Scotland and was a contributing factor in its decision to enter into the Act of Union with England in 1707, a historical footnote with profound consequences born from a failed Panamanian dream.

As the Spanish Empire waned, so too did Panama's prominence. The decline of the Portobelo trade fairs and the shifting of trade routes left the isthmus a neglected backwater of the Viceroyalty of Peru and, later, Gran Colombia. For a time, its strategic importance faded from the world's view. It remained a remote province, tenuously connected to the government in Bogotá and left to its own devices. The dream of a trans-isthmian route, however, never fully died. It lay dormant, waiting for a new catalyst to reawaken global interest in this forgotten corner of the world.

That catalyst arrived in the mid-19th century with the cry of "Gold!" in California. The California Gold Rush created a massive demand for a faster, safer route for prospectors and supplies to travel from the eastern United States to the West Coast. The perilous journey by wagon train across North America could take months, while the sea voyage around Cape Horn was long and dangerous. Panama once again became the answer. Thousands of fortune-seekers descended upon the isthmus, braving disease and difficult conditions to make the crossing.

The surge of humanity and commerce fueled the construction of the Panama Railroad, completed in 1855. This marvel of engineering, built at a great cost in both money and human lives, was the first transcontinental railroad in the Americas. It dramatically reduced the time and difficulty of crossing the isthmus and funneled immense traffic and wealth through Panama. For a time, the railroad made the isthmus one of the most prosperous regions in the Americas, reaffirming its destiny as a corridor of transit. The railroad was a precursor, a tangible demonstration of what was possible, and it set the stage for a far grander ambition.

The success of the Suez Canal, completed in 1869, inspired the world to turn its attention back to the ultimate prize: a water route through Panama. The great French diplomat and developer Ferdinand de Lesseps, fresh off his triumph in Egypt, took up the challenge. In 1881, his company began the monumental task of carving a sea-level canal through the Panamanian jungle. De Lesseps, however, had vastly underestimated the obstacles. Unlike the flat, dry desert of Suez, Panama presented a formidable foe of dense jungle, mountainous terrain, torrential rains, and, most deadly of all, tropical diseases.

The French effort was a tragic saga of engineering hubris, financial scandal, and horrific human suffering. Malaria and yellow fever, whose mosquito-borne transmission was not yet understood, ravaged the workforce. It is estimated that over 20,000 laborers, mostly from the Caribbean, died during the French attempt. The relentless rains caused devastating landslides that filled the excavations as quickly as they were dug. After nearly a decade of struggle and the expenditure of a vast fortune, the French company collapsed in a wave of scandal and bankruptcy in 1889, its dream of a canal drowned in mud and disease.

The French failure left behind a scarred landscape, a collection of rusting machinery, and a dream that refused to die. The United States, an emerging global power with growing interests in both the Atlantic and Pacific, had long coveted a trans-isthmian canal. The strategic importance of such a waterway was driven home during the Spanish-American War in 1898, when the battleship USS Oregon took 67 days to sail from San Francisco to the Caribbean. President Theodore Roosevelt, a man of formidable will and ambition, became the champion of the canal project.

Roosevelt's administration initially negotiated a treaty with Colombia to take over the French concession and build the canal. However, in 1903, the Colombian Senate, viewing the terms as an infringement on its sovereignty, rejected the Hay-Herrán Treaty. This rejection proved to be a fateful miscalculation. Roosevelt, infuriated by the delay, was not a man to be trifled with. A group of Panamanian separatists, with the encouragement and financial backing of Philippe Bunau-Varilla—a French engineer and major shareholder in the failed canal company—saw their opportunity.

On November 3, 1903, Panama declared its independence from Colombia. The declaration might have been easily crushed by Colombian forces were it not for the convenient presence of the U.S. Navy. American warships, dispatched by Roosevelt, prevented Colombian troops from landing to put down the rebellion, effectively guaranteeing the success of the fledgling republic. The United States recognized the new nation of Panama with almost comical speed, just three days after its independence. This episode, which Roosevelt would later unapologetically describe as "I took the isthmus," remains one of the most controversial chapters in U.S. foreign policy.

The new Panamanian government, eager for the protection and economic benefits of the canal, quickly moved to negotiate a treaty with the United States. Its representative in Washington was none other than Philippe Bunau-Varilla. Without any Panamanians present at the signing, Bunau-Varilla negotiated the Hay-Bunau-Varilla Treaty, which granted the United States control of a ten-mile-wide Canal Zone "in perpetuity" and the right to act within it as "if it were the sovereign." The treaty gave the U.S. far more extensive rights than it had sought from Colombia, a deal so favorable that it would become a source of profound resentment for Panamanians for generations.

With the treaty secured, the United States embarked on one of the greatest engineering feats in human history. The American effort succeeded where the French had failed for two key reasons: organization and sanitation. Under the military-style leadership of engineers like John Stevens and George Washington Goethals, the project was a model of efficiency. More importantly, chief sanitary officer Dr. William C. Gorgas understood the link between mosquitoes and disease. He launched a massive campaign to eradicate the mosquito population, eliminating yellow fever and controlling malaria, which saved countless lives and made the construction possible.

For ten years, a massive workforce, drawn from the United States and dozens of other countries, but again composed primarily of laborers from the West Indies, toiled to tame the landscape. They moved mountains of earth, built the world's largest dams and artificial lakes, and constructed a complex system of locks to lift massive ships over the Continental Divide. The construction of the Panama Canal was a triumph of technology and human determination, and when the first ship officially transited the waterway on August 15, 1914, it reshaped global trade and cemented America's status as a world power.

While the canal was a source of pride for the United States, for Panama, it created a complicated reality. The nation owed its very existence to the canal, yet the treaty had created a foreign-controlled territory that split the country in two. The Panama Canal Zone was a slice of America transplanted into the heart of Panama, with its own laws, police, and communities. Life inside the Zone was starkly different from life outside. A system of segregation, known as the "gold" and "silver" rolls, was implemented, where skilled, mostly white American workers were paid in gold and enjoyed superior housing, schools, and amenities, while the largely Black and unskilled workforce was paid in local silver currency and lived in far inferior conditions.

This "invisible barrier" bred resentment and fueled the rise of Panamanian nationalism. Throughout the 20th century, the central theme of Panamanian politics became the struggle for sovereignty over the Canal Zone. The figure of Arnulfo Arias, a populist leader who served three non-consecutive terms as president, embodied this nationalist sentiment. He challenged the traditional oligarchy and the dominant presence of the United States, becoming a powerful and often controversial voice for Panamanian identity.

Tensions periodically boiled over. The most significant eruption of violence occurred in January 1964, when a dispute over the right to fly the Panamanian flag alongside the American flag in the Canal Zone led to riots. Panamanian students marching into the Zone were met with force, and the ensuing conflict left several Panamanians and some U.S. soldiers dead. The "Flag Riots" were a traumatic event that led to a temporary break in diplomatic relations and powerfully demonstrated the depth of Panamanian frustration. It became clear that the 1903 treaty was no longer sustainable.

The 1968 military coup that brought General Omar Torrijos Herrera to power marked a turning point. Torrijos, a charismatic and authoritarian leader, made the negotiation of a new canal treaty the centerpiece of his rule. He skillfully reframed the issue as a matter of global anti-colonialism, rallying support from Latin America and the Non-Aligned Movement to pressure the United States. Torrijos was not officially president but ruled as the "Maximum Leader of the Panamanian Revolution," and his single-minded focus on the canal defined his era.

This diplomatic campaign culminated in the signing of the Torrijos-Carter Treaties on September 7, 1977. U.S. President Jimmy Carter, who believed that returning the canal was a moral imperative, invested significant political capital to push the treaties through a skeptical U.S. Senate. The two treaties abolished the Canal Zone, laid out a timetable for the complete handover of the canal to Panama by the end of the century, and guaranteed the waterway's permanent neutrality. For many Panamanians, the treaties were the fulfillment of a long-held national aspiration. The final handover was set for noon on December 31, 1999.

The years following the treaties and the sudden death of Torrijos in a 1981 plane crash were tumultuous. His successor as head of the Panama Defense Forces, General Manuel Noriega, consolidated power and established a brutal and corrupt military dictatorship. Noriega, who had long-standing ties to the CIA, became deeply involved in drug trafficking and money laundering, turning Panama into a narco-kleptocracy. His increasingly erratic and anti-American behavior created a crisis in U.S.-Panamanian relations.

After Noriega annulled the results of the 1989 presidential election and his forces killed an unarmed U.S. serviceman, the situation reached a breaking point. On December 20, 1989, President George H.W. Bush launched Operation Just Cause, a full-scale military invasion of Panama. The primary objectives were to depose Noriega, protect American lives, and restore the democratically elected government. The Panama Defense Forces were quickly overwhelmed, and after taking refuge in the Vatican's diplomatic mission, Noriega surrendered to U.S. forces on January 3, 1990.

The invasion left a legacy of controversy and trauma but also paved the way for the restoration of democracy in Panama. The country embarked on a path of economic reconstruction, grappling with the challenge of rebuilding its institutions and healing the wounds of the dictatorship and the invasion. Throughout the 1990s, Panama prepared for the most significant moment in its modern history: the final handover of the canal.

On December 31, 1999, as the world prepared to celebrate a new millennium, Panama celebrated the dawn of a new era. In a ceremony filled with national pride, the United States formally transferred control of the Panama Canal to Panama. For the first time, the nation was in full control of its most valuable asset and its own destiny. An autonomous government entity, the Panama Canal Authority, was created to manage the waterway, and it has since been run with remarkable efficiency and professionalism.

The dawn of the 21st century saw Panama embrace its role in the global economy with new vigor. Recognizing that modern shipping vessels were becoming too large for the original locks, Panama undertook a massive canal expansion project. Completed in 2016, the expansion involved building a new, larger set of locks, effectively doubling the canal's capacity and allowing the transit of enormous "Neopanamax" ships. This ambitious project has solidified the canal's importance in global trade and has been a major driver of Panama's economic growth.

Today, Panama is more than just a canal. It is a bustling hub for global finance, logistics, and tourism. The skyline of Panama City, dominated by glittering skyscrapers, is a testament to its economic dynamism. Yet, the nation still faces the challenges common to the region: inequality, corruption, and the need to create sustainable development that benefits all its citizens. Its history, a story of being shaped by external forces, continues to inform its present as it navigates its own path in an interconnected world.

This book will journey through these pivotal moments, exploring the people, the politics, and the immense projects that have defined Panama. It is a history rich with drama, irony, and consequence—a story of a small country with a global destiny, a nation that was forged in the space between two oceans and is, at last, the master of its own crossroads.

Long before its destiny was shaped by canals and conquistadors, the Isthmus of Panama was a landscape rich with human life. For millennia, it served not only as a land bridge for the great migrations that populated the Americas but also as a homeland for a succession of sophisticated cultures. These peoples, though they left behind no single, towering empire, created a vibrant mosaic of societies that mastered the diverse environments of the isthmus, from the humid Caribbean coast to the dry Pacific plains and the cool mountain highlands. Their story, pieced together from the patient work of archaeologists, begins thousands of years before the first European sails appeared on the horizon.

The very first human footprints in Panama date back to the Paleo-Indian period, over 11,000 years ago. These earliest inhabitants were small, nomadic bands of hunter-gatherers, part of the great southward expansion of peoples from North America. Evidence of their presence, including distinctive fluted projectile points similar to the Clovis tools found further north, has been discovered in various locations, such as the area around Madden Lake in the modern-day Canal Zone. These early Panamanians hunted the large game of the late Pleistocene and foraged for edible plants, adapting their survival strategies to the tropical forests and savannas they encountered. Their world was a cooler, drier version of the Panama we know today, and they moved through it in rhythm with the seasons, leaving only the faintest of traces.

As the Ice Age ended and the climate warmed around 10,000 years ago, the environment of the isthmus transformed into the lush, tropical landscape of the present. This shift marked the beginning of the Archaic period, a long era of adaptation and innovation. The megafauna disappeared, and people turned to hunting smaller game and intensifying their use of marine resources and wild plants. They learned to exploit the riches of the coastal estuaries, gathering shellfish and fishing in the abundant waters of both the Pacific and the Caribbean. A key development during this time was the beginning of plant cultivation. Long before they settled into permanent villages, these early groups were practicing a form of slash-and-burn horticulture, clearing small patches of forest to grow plants like arrowroot, squash, and bottle gourds.

One of the most significant developments in this era came from the central Pacific coast, near the Parita Bay. Here, around 2500 B.C., a people known as the Monagrillo culture began creating some of the earliest pottery in the Americas. The Monagrillo pottery was simple, poorly fired, and often unadorned, save for some basic incised lines or daubs of red paint. The vessels were primarily open bowls and neckless jars, likely modeled after the gourds they had long used as containers. The existence of this pottery, found at sites like He-5 near the Parita River delta and in rock shelters further inland, marks a crucial step toward a more sedentary lifestyle, one tied to reliable food sources and the need for durable containers.

The slow and steady adoption of agriculture eventually led to a more settled way of life. The introduction of maize, or corn, was a game-changer. Cultivated alongside beans and squash, it formed a powerful nutritional trio that could support larger, more permanent populations. All across the isthmus, small villages began to appear, particularly in the fertile river valleys. This agricultural revolution laid the groundwork for the next major phase of Panamanian prehistory: the rise of complex societies. By the first few centuries A.D., many communities were no longer simple collections of egalitarian farmers but were organized into ranked societies known as chiefdoms, or cacicazgos.

These chiefdoms were characterized by social hierarchies, with powerful chiefs (caciques), nobles, and commoners. The chief, often a hereditary ruler, held political and religious authority, controlled trade, and led warriors in battle. This social stratification is most vividly seen in the elaborate burial practices of the time. While commoners were given simple burials, the elite were interred in large, deep graves filled with vast quantities of luxury goods and, often, the bodies of retainers or sacrificed individuals. These tombs, which have provided archaeologists with a treasure trove of artifacts, paint a picture of societies that valued power, status, and artistic expression. Before the arrival of the Spanish, the isthmus was a dynamic landscape of competing chiefdoms, each controlling a specific territory. Archaeologists often divide pre-Columbian Panama into three broad cultural regions: Gran Coclé, Gran Chiriquí, and Gran Darién, each with its own distinct artistic and social traditions.

The Gran Coclé region, centered on the Pacific plains of modern-day Coclé province, was arguably the most artistically spectacular of the pre-Columbian cultures. This area was home to a succession of cultures, including the Tonosi and Cubita, that culminated in a flourishing society best known for its stunning artifacts. The most famous archaeological site from this region is Sitio Conte, a burial ground for the elite chiefs of the Coclé people who flourished here between roughly A.D. 700 and 900. Excavations at Sitio Conte, first by the Conte family after floods exposed the graves in the early 20th century and later by archaeological teams from the Peabody and Penn museums, unearthed breathtaking finds.

The graves at Sitio Conte were layered and complex, sometimes containing dozens of individuals. The principal chief was typically placed in the center, adorned with a dazzling array of golden regalia. These rulers went to the afterlife dressed in hammered gold plaques, elaborate pendants depicting fierce animal-human hybrids, cuffs, helmets, and beads. One of the most famous objects is a pendant of a composite creature, possibly a jaguar, with a large, polished emerald set in its back. Alongside the gold were objects carved from whale ivory and manatee bone, necklaces of animal teeth, and mirrors of polished pyrite. This wealth of goods was not just for the chief; they were buried with numerous retainers and sacrificial victims, laid out in layers to accompany their leader into the next world.

The artistry was not limited to gold. The potters of the Gran Coclé region produced some of the most striking ceramics in the Americas. Their polychrome pottery is famous for its strong, geometric designs and stylized representations of crocodiles, birds, and other animals, painted in black, red, and purple on a cream background. The intricate designs on this pottery echoed the motifs found in the goldwork, suggesting a shared and deeply ingrained symbolic system that permeated all aspects of their culture. The splendor of Sitio Conte reveals a society with powerful leaders, specialized artisans of incredible skill, and a complex religious system where status and power were displayed through magnificent, and often deadly, funerary rituals.

To the west, in the highlands and on the Pacific coast of what is now Chiriquí province near the Costa Rican border, lay the cultural area of Gran Chiriquí. One of the most intriguing cultures to emerge here was centered at the site of Barriles, which was occupied between approximately A.D. 300 and 900. The people of Barriles are famous for their unique monumental stone sculptures. They carved large statues of individuals, some of which depict a man, likely a chief or a person of high status, sitting on the shoulders of another, subservient figure. These double-figure statues are interpreted as clear evidence of a socially stratified society. Another distinctive artifact from Barriles is the large, ceremonial grinding stone, or metate, sometimes decorated with a fringe of small, carved human heads, which some have suggested is evidence of warfare or ritual sacrifice. The site itself, located near the modern town of Volcán, was named for the peculiar barrel-shaped stones also found in the area.

In the eastern part of the isthmus, stretching across the vast and densely forested Darién region, lived a variety of peoples, the most prominent of whom the Spanish would come to know as the Cueva. Less is known about the Cueva than about the peoples of Gran Coclé and Gran Chiriquí because their material culture was less durable and the archaeological record is less complete. However, early Spanish accounts describe them as a numerous and warlike people, living in large villages and organized into powerful chiefdoms. They were a Chibchan-speaking people, part of a large linguistic family that stretched from Honduras to Colombia. They lived by farming, hunting, and fishing, and controlled the eastern portion of the isthmus. Tragically, the Cueva bore the full, initial brunt of the Spanish conquest. Within a few decades of European contact, their society was utterly destroyed by violence, enslavement, and disease, and they were driven to extinction, leaving behind a profound demographic void.

The isthmus was never an isolated land. Its position as a geographic crossroads ensured that it was a zone of constant interaction and exchange. For centuries, the chiefdoms of Panama participated in a long-distance trade network that connected the great civilizations of Mesoamerica to the north and the Andes to the south. Panamanian goldwork, particularly from the Gran Coclé region, has been found as far away as the Mayan city of Chichen Itza in Mexico's Yucatán Peninsula. Conversely, objects from other regions, such as Colombian emeralds and jade from Costa Rica, made their way into the graves of Panamanian chiefs. This exchange was not just of goods, but also of ideas and technologies. The techniques for sophisticated metallurgy, such as lost-wax casting and the creation of a gold-copper alloy called tumbaga, likely arrived in Panama from the Andean region.

On the eve of European arrival in 1501, the Isthmus of Panama was a bustling, populated land. Estimates of the population vary wildly, from 200,000 to as high as two million people. It was a landscape of dozens of competing chiefdoms, large and small, each with its own territory, alliances, and enemies. They lived in villages of thatched-roof houses, cultivated fields of maize, and fished the rivers and coasts. Their leaders were adorned in brilliant gold, their shamans communed with a world of powerful animal spirits, and their warriors engaged in ritualized conflict. It was a world with a deep and complex history, a dynamic and living place that was utterly unprepared for the cataclysm that was about to unfold. The arrival of a few Spanish ships would not be a simple encounter; it would be a collision of worlds that would shatter the universe of Panama's first inhabitants forever.