United States

Strategic necessity and the desire of Eastern businessmen to have easy access to Pacific markets combined in the late 1890s to convince the president, Congress, and a vast majority of Americans that an isthmian canal linking the Atlantic and Pacific oceans was vital to national security and prosperity. In the Hay–Pauncefote Treaty of 1901, the British government gave up the rights to joint construction with the United States that it had gained under the Clayton–Bulwer Treaty of 1850. A French company, which had tried unsuccessfully to dig a canal across the Isthmus of Panama, was eager to sell its right-of-way to the United States. Thus, the only obstacle to the project was the government of Colombia, which owned Panama. When Colombia was slow to cooperate, Roosevelt, in 1903, covertly supported a Panamanian revolution engineered by officials of the French company. A treaty was quickly negotiated between the United States and the new Republic of Panama; construction began, and the canal was opened to shipping on August 15, 1914.

Panama Canal: Gaillard (Culebra) Cut constructionWorkers on the Panama Canal dug by hand through the 1907 Cucaracha landslide in Gaillard (Culebra) Cut.Corbis

Concern over what Americans regarded increasingly as their “lifeline” increased in proportion to progress in the construction of the canal. An early manifestation of that concern came in 1902–03, when Britain, Germany, and Italy blockaded Venezuela to force the payment of debts, and particularly when the Germans bombarded and destroyed a Venezuelan town; so agitated was American opinion that Roosevelt used a veiled threat to force Germany to accept arbitration of the debt question by the Hague Court. When the Dominican Republic defaulted on its foreign debt to several European countries in 1904, Roosevelt quickly established an American receivership of the Dominican customs in order to collect the revenues to meet the country’s debt payments. Moreover, in his annual message to Congress of 1904, the president announced a new Latin-American policy, soon called the Roosevelt Corollary to the Monroe Doctrine—because the Monroe Doctrine forbade European use of force in the New World, the United States would itself take whatever action necessary to guarantee that Latin-American states gave no cause for such European intervention. It was, in fact, a considerable extension of the Monroe Doctrine, not a correct historical interpretation of it, but it remained the cornerstone of American policy in the Caribbean at least until 1928.

Actually, Roosevelt was reluctant to interfere in the domestic affairs of neighbouring states; his one significant intervention after 1904—the administration of the Cuban government from 1906 to 1909—was undertaken in order to prevent civil war and at the insistence of Cuban authorities. Roosevelt’s successor, however, William Howard Taft (see U.S. presidential election of 1908), had more ambitious plans to guarantee American hegemony in the approaches to the Panama Canal. Adopting a policy called Dollar Diplomacy, Taft hoped to persuade American private bankers to displace European creditors in the Caribbean area and thereby to increase American influence and encourage stability in countries prone to revolution. Dollar Diplomacy was a total failure; its one result was to involve the United States in a civil war in Nicaragua with the effect of perpetuating a reactionary and unpopular regime. (Similar initiatives by the Taft administration in the Far East—most notably a plan for the internationalization of the railroads of Manchuria—also failed.)

Taft, William Howard: inspection of Panama CanalWilliam Howard Taft (centre) at an inspection during construction of the Panama Canal.Encyclopædia Britannica, Inc.

The accession of Woodrow Wilson in 1913 (see U.S. presidential election of 1912) seemed to augur the beginning of a new era in Latin-American relations; the new president and his secretary of state, William Jennings Bryan, were idealists who had strongly condemned interventions and Dollar Diplomacy. But, although Wilson did negotiate a treaty with Colombia to make reparation for U.S. complicity in the Panamanian revolution, it was defeated by the Senate. Wilson also tried hard to promote a Pan-American nonaggression pact, but it foundered on the opposition of Chile, which had a long-standing border dispute with Peru.

Wilson, Woodrow: first inauguration Pres. Woodrow Wilson speaking at his first inauguration on the east portico of the U.S. Capitol, March 4, 1913, Washington, D.C. Library of Congress, Washington, D.C. (cph 3a16546)