In 1534, Charles V first looked into the possibility of digging a canal through the Panama isthmus. Since then there have been a numer of similar projects.

The french canal

In 1876, an international company was set up to fund exploration of the Darien isthmus. Lesseps was amongs its members. The company sent a team of engineers led by Lucien Napoleon Bonaparte-Wyse, to investigate the possible routes. After two reconnaissance missions to Panama, Bonaparte-Wyse signed with Columbia, in 1878, a document known as the “Wyse Concession”, granting the company the right to build the canal and operate it for 99 years.

On 15 th May 1879, an international congress was held on the interoceanic canal project at the headquarters of the Geographical Society in Paris and Lesseps was appointed chairman. The congress decided to construct a canal at sea-level, without locks, across the Panama isthmus. On 5 th July of the same year, Lesseps purchased the rights granted under the Bonaparte-Wyse concession. On 8 th July, the articles of association of the “Compagnie Universelle du Canal Interocéanique de Panama” were registered and Lesseps made an offer of stock to pay for construction of the canal, but the offer failed, raising only 300 million francs of the 400 million required.
		Map of the Panama isthmus put forward by Wyse and Reclus and adopted by the Congress on 15 May 1879 Enlarge image

However Lesseps did not give up the project and arrived in Panama with his family on 30 th December 1879. After a short stay in Panama, he travelled to New York where he was given a hero's welcome by local people. Unfortunately, though, his business met with opposition in political circles. Indeed, since 1823, the United States had been developing the Monroe doctrine under which no foreign acquisition of territory in the Americas would be tolerated. American leaders were polite in their dealings with Ferdinand de Lesseps, but made no secret of their intention to oppose his project at every turn. In October 1880, the Company was founded. Charles de Lesseps, Ferdinand's son, turned his attention to the offer of capital (300 million francs) which took place in December 1880.

 

Work began in early 1881 and very soon big difficulties occurred, due to climatic conditions (heavy rains), geographical conditions (Andes Cordillera) and health risks (yellow fever, malaria).

One particular obstacle was also the Culebra cut (at an altitude of 87 meters). Lesseps made the mistake of trying to construct a canal at sea-level as he had done at Suez and it took two years before he came to the idea of a lock-operated canal. In late 1887, Lesseps asked Gustave Eiffel to manufacture the locks.

The financial situation worsened and the “Compagnie Universelle du Canal Interocéanique de Panama” went into liquidation on 4 th February 1889.

In 1891, a complaint for fraud and breach of trust was lodged against Ferdinand, Charles de Lesseps and the company's managers. On 9 th February 1893, the Paris Court of Appeal sentenced the Lesseps to five years' imprisonment and to a 3000 francs fine. It was only on account of his age – he was now 88 – that Ferdinand avoided the sentence. On the 15 th of June 1893, the Court of Cassation set aside the Court of Appeal sentence and both men were released.

At the same time, on 8 March 1893, a second action was brought against Company's managers at the Assize Court, for corruption of members of Parliament. Besides Charles de Lesseps, five members of Parliament are among the accused. The Court will sentence Charles de Lesseps to one year imprisonment, a punishment merging with the criminal court's one. He will be free after six months.

Memorial erected in the Plaza de Francia in honour of the French workers and engineers who took part in the construction of the Canal
Memorial		Memorial
Memorial		Plaque "in memory of the French"
Bust of Ferdinand de Lesseps		Bust of Léon Boyer
Bust of Pedro Sosa		Bust of Lucien Bonaparte-Wyse

French cemetery where most of the men who died working on the first phase of the Canal are buried
French cemetery		Memorial in memory of the Frenchmen who died during the construction of the Panama Canal

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The North American Canal

In 1894, the “New Panama Company” is founded, to replace the company which had been liquidated in 1889. Philippe Bunau-Varilla, one of the engineers who had been involved in the work on the Panama canal becomes one of the shareholders of this company. The chances of saving the project are decreasing. In 1898, the new company offered to sell the property of the canal as well as all its rights to the United States, but these were more interested in building a canal in Nicaragua than in the Panama region.

Philippe Bunau-Varilla organised a trip to the United States to promote the idea of continuing the work in Panama. Tuning out to his advantage, the eruption in 1902 of the Mont Pelée Volcano in Martinique served as a reminder to Americans of the danger of volcanoes in Nicaragua. In the same year 1902, President Roosevelt signed the Spooner Act which opted for the Panama Canal and earmarked 40 million dollars to buy all the rights, privileges and property of the French company.

According to the Herran-Hay Treaty signed on 22 nd January 1903, Colombia sold to the States the right to build the canal and to operate it for 100 years, as well as a strip of land either side. In August 1903, the Colombian Congress rejected the treaty. The United States decided then to encourage the Panamanian separatists to revolt against Colombia and on 3 rd November, the Republic of Panama was proclaimed. On 7 th November, the US Congress recognised the new republic. On 18 th November, Philippe Bunau-Varilla, as ambassador of the new government, signed the Hay-Bunau-Varilla Treaty in Washington DC. The United States obtained a concession to operate the canal in perpetuity, together with the control of a 16 km wide area on both sides of the canal and sovereignty over the canal zone. The United States were also entitled to intervene in Panama's internal affairs and to maintain order in the country. In return, the States guaranteed the Republic of Panama's independence.

In 1904, the United States bought all rights related to the canal from the French company for $40 million. Work began again and the canal was officially inaugurated on 15 th August 1914.

On 7 th September 1977, the Torrijos-Carter Treaty was signed, which set out the gradual transfer of the canal and all its settlements to the Panamanian authorities. Panama would regain full sovereignty on 31 st December 1999.

At this date, the United States indeed handed back the canal and the canal zone to the Republic of Panama.