The administration meanwhile kept closely in touch with affairs in Panama, and having reason to suspect the possibility of a revolution sent war vessels to the isthmus on November 2, 1903, to prevent troops, either Colombian or revolutionary, from landing at any point within fifty miles of Panama. Since the only way by which revolution in Panama could be repressed was through the presence of Colombian troops, the action of the American government made success highly probable in case a revolt was attempted. On the next day the plans of the Canal Company agents or of some of the residents of Panama came to a head; early in the evening a small and bloodless uprising occurred; and while the United States kept both sides from disturbing the peace, the insurgents set up a government which was recognized within two days, and Philippe Bunau-Varilla, a former chief engineer of the Company, was accredited to the United States as minister. A treaty was immediately arranged by which the United States received the control of a zone ten miles wide for the construction of a canal, and in return was to pay $10,000,000 and an annuity of $250,000 beginning nine years later, and to guarantee the independence of Panama. The Secretary of State, John Hay, described the process of drawing up the treaty in a private letter of November 19, 1903:
Yesterday morning the negotiations with Panama were far from complete. But by putting on all steam, getting Root and Knox and Shaw together at lunch, I went over my project line by line, and fought out every section of it; adopted a few good suggestions: hurried back to the Department, set everybody at work drawing up final drafts—sent for Varilla, went over the whole treaty with him, explained all the changes, got his consent, and at seven o'clock signed the momentous document.
Although the Senate ratified the treaty, the action of the President was the cause of a storm both in that body and throughout the nation. In self-defence Roosevelt condemned Colombia's refusal to ratify the Hay-Herran treaty and asserted that no hope remained of getting a satisfactory agreement with that country; that a treaty of 1846 with Colombia justified his intervention; and that our national interests and the interests of the world at large demanded that Colombia no longer prevent the construction of a canal. On the other hand the President's critics called attention to the unusual haste that surrounded every step in the "seizure" of Panama; condemned the disposition of war vessels which prevented Colombia from even attempting to put down the uprising; and insinuated that the administration was in collusion with the insurgents. Roosevelt's successors in the presidency felt there was some degree of justice in the claim of Colombia that she had been unfairly treated by her big neighbor and several different attempts were made to negotiate treaties which would carry with them a money payment to Colombia. On July 29, 1919, the Foreign Relations Committee of the Senate unanimously reported to that body the favorable consideration of a treaty providing for a money payment of $25,000,000, but other matters intervened and no further progress resulted.[3]
The work of constructing the waterway was delayed by changes of plan until 1906, when a lock canal was decided upon, and shortly afterward a start was made. So huge an undertaking—the isthmus is forty-nine miles wide at this point—was an engineering task of unprecedented size, and involved stamping out the yellow fever, obtaining a water supply, building hospitals and dwellings and finding a sufficient labor force, as well as the more difficult problems of excavating soil and building locks in regions where land-slides constantly threatened to destroy important parts of the work. At length, however, all obstacles were overcome and on August 15, 1914, the canal was opened to the passage of vessels.
The final diplomatic question relating to the canal concerned the rates to be charged on traffic passing through. By the terms of the Hay-Pauncefote treaty with Great Britain, the United States agreed that the canal should be free and open to all nations "on terms of entire equality." In 1912 Congress enacted legislation exempting American coast-wise vessels from the payment of tolls, despite the protest of Great Britain. As President Wilson was of the opinion that our action had been contrary to our treaty agreement, he urged the repeal of the act upon his accession in 1913, and succeeded in accomplishing his purpose.
The construction of the Canal under American auspices committed the United States to new responsibilities in the Caribbean. Her coaling station in Cuba, the possession of Porto Rico and the protection of the isthmus made it a matter of national safety to preserve stable governments in Central America and the West Indies. The infiltration of American capital into the region served to ally economic with political interest, for like European investors, our capitalists have taken a part in the exploitation of South American sugar, fruit, coffee, oil and asphalt. With the islands and shores of the Caribbean Sea alone, American trade doubled in the decade after 1903. Orderly government south of the United States became accordingly essential to the welfare of our outlying possessions, and to the commercial interests of a group of investors. The most important international questions that have arisen in Spanish America related to Venezuela in 1902 and Santo Domingo in 1905.
Venezuela had long granted concessions to foreign investors—Germans, English, Italians and others—in order to develop her mines, timber and railroads, but unsettled conditions in the country frequently resulted in the non-fulfillment of the obligations which had been entered into. Germany, for example, claimed that the government of Venezuela had guaranteed dividends on the stock of a railroad built by German subjects and had failed to live up to the contract. Having in mind the possible use of force to compel Venezuela to carry out her alleged obligations, Germany consulted our state department to discover whether our adherence to the Monroe Doctrine would lead us to oppose the contemplated action. The attitude of President Roosevelt in 1901 was that there was no connection between the Monroe Doctrine and the commercial relations of the South American republics, except that punishment of those nations must not take the form of the acquisition of territory. In 1902 Germany, Great Britain and Italy proceeded to blockade some of the ports of Venezuela, and the latter thereupon agreed to submit her case to arbitration. Apparently, however, Germany was unwilling to relinquish the advantage which the blockade seemed to promise, and in the meantime Roosevelt became fearful that the result of the blockade might be the more or less permanent occupation of part of Venezuela. He therefore told the German ambassador that unless the Emperor agreed to arbitration within ten days, the United States would send a fleet to Venezuela and end the danger which Roosevelt feared. The pressure quickly produced the desired results, and during the summer of 1903 many of the claims were referred to commissions. The three blockading powers believed themselves entitled to preferential treatment in the settlement of their claims, over the non-blockading nations, while the latter held that all of Venezuela's creditors should be treated on an equality. This portion of the controversy was referred to the Hague tribunal, which subsequently decided in favor of the contention raised by Germany, Great Britain and Italy, and eventually all the claims were greatly scaled down and ordered paid.[4]
The Venezuela case made evident the possibility that European creditors of backward South American nations might use their claims as a reason for getting temporary control over harbors or other parts of these countries. There was also ground for the fear that temporary control might become permanent possession. Hence in the Santo Domingo case, the United States adopted a new policy. The debts of Santo Domingo were far beyond its power to pay; its foreign creditors were insistent. An arrangement was accordingly made by which the United States took over the administration of the custom houses, turned over forty-five per cent. of the income to the Dominican government for current expenses, and used the remainder to pay foreign claims. The plan worked so well that its main features were continued and imitated in the protectorates over Haiti (1915) and Nicaragua (1916).
The progress which has been made in composing the jarring relations among the American states is due in part to the Pan American Union and to the Pan American Conferences. The Union is an organization of twenty-one American republics which devotes itself to the improvement of the commercial and political relations of its member states. The first Pan American Conference, held at Washington in 1889, has already been mentioned.[5] At the second, at Mexico City in 1901, the American republics which had not already done so agreed to the conventions signed at The Hague in 1899. At the third conference at Rio de Janeiro in 1906 and the fourth in Buenos Aires in 1910, its field of effort was further broadened, and in the latter year a recommendation was passed that the Pan American states bind themselves to submit to arbitration all claims for pecuniary damages.
President Wilson continued unbroken the policy of protectorates which President Roosevelt had initiated in the case of San Domingo. His statements of general policy were conciliatory and evidently designed to allay suspicion, and he constantly expressed the view that the American states were cooperating equals. And having asserted that the United States had no designs upon territory, and nothing to seek except the lasting interests of the peoples of the two continents, he gave practical evidence of his purposes by urging that all unite to guarantee one another their independence and territorial integrity, that disputes be settled by investigation and arbitration, and that no state allow revolutionary expeditions against its neighbors to be fitted out on its territory.[6]