Until the arrival of the Spaniards, Panama was occupied by several Indian groups. Panama was the center of Spains new world commercial system until about 1740. In 1821 Panama declared its independence from Spain and then joined the Columbian union immediately to the south. Before the discovery of gold in California in 1848, the construction of the Panama railroad was negotiated. The US entered a convention that guaranteed Panama would remain neutral and that transit across the isthmus would be restricted.   The Spanish had thought of building a canal across Panama but the French were the first to try.   The work began in 1880 but by 1898 the privately owned company that was to construct the canal went bankrupt and the work stopped.   In 1902, the US congress authorized President Theodore Roosevelt to pay $40 million for the assets of the French company and complete the construction of the canal. The next year the president of Columbia agreed to transfer a piece of land for the canal to the United States but the treaty was rejected by the Columbian senate. Panama proclaimed its independence from Columbia in November 1903. The presence of naval forces off the Pacific and Caribbean coasts of Panama deterred a Columbian effort to stop the succession. A treaty between the US and Panama gave the Americans occupation and control of the Panama Canal Zone in perpetuity was signed on November 18, 1903. The treaty granted the US a ten mile wide, ocean to ocean canal zone. The treaty allowed the US to govern the canal and it was opened in August 1914. In the years to come Panamanians became irritate by the presence of the US, although President Roosevelt assured the Panamanians that the US would not run the canal zone as a foreign colony bisecting the small nation in two. But the Panamanians felt that their sovereignty had been imposed upon and the relationship between the US and Panama grew bitter. In an attempt to improve relations between the two countries, several treaties... [continues]

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