The indigenous peoples who lived in today's
Panama when Europeans arrived in the 16th century were
quickly decimated by persecution and disease. The area
became a center of trade in the new Spanish colonial
empire. Independence from Spain was proclaimed in 1821
when it was part of new state formation. The
construction of the Panama Canal, which began in the
late 1800s, helped Panama with the support of the United
States proclaim itself its own state in 1903.
The Spanish Rodrigo de Bastidas was in 1501 the first
European to land on the Panamanian nose. At that time,
there were an estimated 500,000 to one million
inhabitants on the area corresponding to today's Panama.
The gold objects carried by the indigenous people -
which the Europeans came to call Indians - led the
Spaniards to believe that they had found El Dorado: the
city which according to Spanish myth was full of gold.
Comprehensive guide to and popular abbreviations of Panama, covering history, economy, and social conditions.
During the first decades of the 16th century, the
Spaniards penetrated deeper into the country. In 1519,
the Spanish governor moved his residence to a small
fishing village on the Pacific coast, four kilometers
east of today's capital. The indigenous people called
the village of Panama which is said to mean "plenty of
Spanish colonization in Panama hit the urinals hard.
They were enslaved, escaped, killed or died of European
diseases against which they lacked immune systems. As
the population declined, there was a labor shortage that
the Spaniards filled with imports of African slaves.
Panama City became the center of the slave trade in
The Spaniards found no gold treasures on the
Panamanian nose. However, Panama became an important hub
for transporting precious metals from South America to
Europe. Eventually, however, trade slowed and Spain lost
interest in the colony. In 1739, Panama was incorporated
into the Spanish Viceroy of New Granada, which also
included today's Colombia, Venezuela and Ecuador.
Panama becomes free from Spain
At the same time as the rest of Central America,
Panama proclaimed its independence in 1821. But Panama
did not join the Central American Federation, but became
part of the Republic of Greater Colombia, which included
the same territory as New Granada.
In 1830 Venezuela and Ecuador broke out of the Union.
Remaining were Colombia and Panama which formed the
Republic of New Granada. In 1866 the name was changed to
In the mid-1800s, an American company built a
railroad across the Panamanian Sea to facilitate
transports between the Atlantic and Pacific. The United
States and Colombia signed an agreement that gave the
United States the right to be responsible for the
protection of the railways.
The increased transport needs also updated old plans
on a channel through the nose. The Spaniards had hoped
to be able to transport Peruvian silver on such a
channel. Now it was also in the interest of the US that
a sea link between the US east and west coast was
The canal is being built
The channel came to dominate Panama's history.
Frenchman Ferdinand de Lesseps, creator of the Suez
Canal, began digging in 1879. But the problems were
great, among other things, tropical diseases harvested
the lives of tens of thousands of workers and eventually
sacked the cash register. de Lesseps was forced to give
up in 1889 after digging two-fifths of the route. The
United States negotiated with Colombia on a channel
construction and it was agreed to establish a channel
zone. But the Colombian Congress had objections, and the
negotiations collapsed in 1903.
This led the Panamans, with US support, to revolt
against Colombia. In 1903 they proclaimed the
independent republic of Panama. The Washington
government hastily signed an agreement with the new
Panamanian government. It guaranteed the United States
total control over the 1.6 mile wide "forever" channel
zone. In return, the United States would pay an annual
compensation to Panama. The agreement made Panama a US
protectorate. The United States guaranteed Panama's
sovereignty and, in exchange, allowed "sovereign rights"
to intervene in the country's internal affairs. This
created an ambiguity that in the following years caused
many disputes between the two countries about the
interpretation of the text of the agreement.
The canal building was completed and the Panama Canal
opened to traffic in August 1914. It was just over eight
miles long with inlets and consisted of three locks at
both ends as well as dug canals and two artificial
lakes. The canal has remained one of the world's most
important waterways and is considered a masterpiece in
The first decades after independence in 1903 were a
politically unstable time with many regime changes.
There was a liberal and a conservative party, but in
practice the political power was limited to a small
circle of rich white families.
For many years, Panama consisted of two units. The
canal zone was ruled by a governor who was only
responsible to the US president. Panama's
dissatisfaction with the terms of the agreement forced
two amendments to the treaty: 1936 and 1955. In 1939,
Panama's status as an American protectorate was revoked.