The history of the United States of America is filled not only with military episodes, but also with examples of how diplomacy and money can change the map of the world more effectively than cannons. Some of the most famous territorial acquisitions of the USA did not happen through wars, but through agreements that had a huge impact on the history of the entire planet.
From Suez to Panama: France’s failed attempt
The idea of connecting the Atlantic and Pacific Oceans through Panama was not new. The French, led by Ferdinand de Lesseps, the engineer who successfully completed the construction of the Suez Canal, were the first to take on this project. However, the challenging natural conditions of Central America proved to be a real challenge for France: landslides, constant rains, malaria and yellow fever epidemics caused catastrophic losses among workers and ultimately forced France to abandon the project in 1888.
USA: how Panama gained independence and the canal
At the beginning of the 20th century, the United States became interested in building the Panama Canal, seeing it as a strategic advantage for military-naval forces and international trade. In 1902, the United States purchased French assets for $40 million. However, the main obstacle to the project’s realization was Colombia, which refused to grant the Americans the right to build.
To solve the problem, the United States supported the Panamanian independence movement. On November 6, 1903, Washington officially recognized the Republic of Panama and shortly after signed the Hay–Bunau-Varilla Treaty with it, giving Americans full control over the future canal zone. Panama received a one-time payment of $10 million and an annual payment of $250,000, but many citizens viewed the agreement as an infringement on the sovereignty of the new state.
Panama Canal: an economic and strategic asset
The construction of the Panama Canal lasted from 1904 to 1914 and involved tens of thousands of workers, mainly from the Caribbean region. The canal shortened the distance between the two oceans by thousands of kilometers, significantly reducing the cost and time of international trade. The military significance of the canal is also hard to overestimate: the United States gained control over a key water route, allowing them to efficiently maneuver their fleet between the Pacific and Atlantic Oceans.
Transfer of the Panama Canal: a long road to independence
U.S. control over the Panama Canal lasted almost a century. In 1977, President Jimmy Carter signed an agreement for the gradual transfer of control to Panama, which was completed only in 1999. Since then, Panama has gained full control over the canal and significant revenues from its operation.
Today, the Panama Canal is one of the most important strategic assets in world trade. Despite climatic challenges, the profit from its operations in 2024 increased by 9.5% and reached $3.45 billion. This once again confirms that control over economic routes is a more effective tool of influence than military conflicts.
Political ambitions and the future of the canal
The question of control over the Panama Canal is becoming relevant again. Former U.S. President Donald Trump has repeatedly expressed a desire to regain American influence in the canal zone. Whether this will happen remains to be seen, but one thing is obvious: owning strategic economic pathways often brings more power than military operations.
Conclusion
The history of the Panama Canal demonstrates that economic leverage is far more effective than military campaigns. Control over trade and logistic routes allows countries not only to strengthen their international position but also to generate stable revenues. The Panama Canal is a great example of how it’s better to trade than to wage war.
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To learn about the history of the biggest real estate purchase – the state of Louisiana – by the US government, read the first part of the series “Better to Sell Than to War? – territorial acquisitions as a transition from war to peaceful land grabbing”:
To learn about the history of Florida’s annexation and the conditions that preceded it, read the second part of the series “Better to Sell Than to War? – territorial acquisitions as a transition from war to peaceful land grabbing”::
To learn about the annexation of Florida and Texas to the US, read the third part of the series “Better to Sell Than to War?”:
Read the fourth part of the series “Better to Sell Than to War?” here:
Read the fifth part of the “Better to Sell Than to Fight?” series on Alaska here:
