Panama Canal - Business in United States of America

Identification: Artificial waterway that permits oceangoing vessels to travel between the Caribbean Sea and the Pacific Ocean by passing through Panama
Date: Opened to shipping in 1914
Significance: The canal allowed the United States to transport goods in ships from the East Coast to Asia easily and efficiently, opening up new markets and creating profit for manufacturers, shippers, and the canal operators.
The late nineteenth century was a bleak time for the United States, which experienced a great economic slump as it began the transition from an agricultural to an industrial economy. The Panic of 1873, which mostly affected the countryside, was followed by the Panic of 1893, the first true crisis of the newly industrialized economy of the United States. Railroads collapsed, as did banks and their investors. Credit markets became shaky, and defaults on bond payments led to an even greater crisis. Countless workers—perhaps numbering in the millions—lost their jobs. The economy was in a shambles. However, the American victory in the Spanish-American War (1898) created a wave of optimism. The war had produced enormous political and economic benefits, including an expansion of overseas markets, at very little cost to the national treasury.
In the midst of this optimism, legislators and the American public were soon faced with plans for the construction of a Central American isthmian canal with an estimated price tag of some $400 million. This plan was part of the Republican platform of 1896, on which William McKinley had been elected president. The platform proposed the following course of action: the building of a “steel, blue-water” navy; the construction of an isthmian canal somewhere in the Western Hemisphere, so as to defend American commercial interests; and the expansion of U.S. markets abroad, especially in Asia.
During his involvement in the Spanish-American War, President Theodore Roosevelt had become convinced of the absolute necessity of such a canal, and by 1902, Congress had passed the Spooner Bill, which authorized the building of a canal through Panama. Congress appropriated $40 million for the president to purchase the property and supplies of the New Panama Canal Company in Paris. Then, it authorized the president to opt for one of two plans: If the canal was to be routed through Panama, Congress earmarked $135 million to begin the project, whereas if the canal was to pass through Nicaragua, $180 million could be spent.
In 1903, the United States and Panama signed the Hay-Herrán Treaty, in which Colombia, the power that controlled Panama, consented to the project. Opposition to the project arose in Colombia, but the government soon had to deal with other matters, when a revolutionary junta, under the command of José Agustín Arango, mounted a rebellion. On November 6, 1903, President Roosevelt recognized the revolutionary junta as the official government of Panama. On November 11, the Panamanian representative, Philippe-Jean Bunau-Varilla, concluded a Panama Canal convention with Secretary of State John Hay. The Hay-Bunau-Varilla Treaty was ratified on December 2, and the U.S. Senate approved it on February 23, 1904.

Panama Canal Zone