How the US Acquired the Panama Canal Zone

The Hay–Bunau-Varilla Treaty (1903)

The US acquired the Canal Zone via a treaty signed November 18, 1903, two weeks after Panama's independence from Colombia.

Key Terms

• Zone: 10 miles (16 km) wide, 5 miles each side of canal centerline.
• Rights: "In perpetuity" use, occupation, control for canal construction, operation, sanitation, defense.
• Payment: $10M upfront + $250K/year annuity (gold coin).
• US intervention right: To protect canal security.

Controversial Context

• Philippe Bunau-Varilla (French engineer) negotiated for Panama—had not lived there 17 years.
• Panamanian delegation not consulted on final terms.
• Colombia rejected earlier Hay-Herrán Treaty; US encouraged Panama's separation.
• US gunboats prevented Colombian troop movement.

Legacy

Treaty caused decades of tension. Renegotiated by Torrijos-Carter Treaties (1977) → full Panamanian sovereignty by 1999.