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History of Panama

Panama was home to numerous indigenous people, some of the earliest notable people including the Monagrillo people, who were well known potters. However, when the Spanish arrived to the region in the 1500s the people that lived there was dominated by the Chibchan, Chocoan, and Cueva people, although numerous other groups existed.

Although the first Spanish arrival occurred in 1501, the region wasn't settled by the Spanish until 1509, after which the region became a center of Spanish colonialism and exercised great authority in the still growing colonies of Spain in the "New World." The first permanent European settlement on the mainland of the American continents was in the city of Santa Maria la Antigua del Darien in modern day Panama, which was founded in 1510.

With the Spanish arrival many indigenous people died from European diseases and many of the survivors fled to the isolated forests of Caribbean islands. Many of the rest were slowly enslaved to work the latter Spanish industries.

From this settlement on the Caribbean Sea, exploration of Central America began by the Spanish, first reaching the Pacific Ocean in 1513 via Panama. Soon after Pedro Arias Davila arrived to govern the territory and Spanish conquest had begun.

In 1519 the capital of the region was moved to the Pacific coast to the city of what is today Panama City. Soon this narrow land passage from the Caribbean to the Pacific made Panama the largest trading and transportation hub for Spain in their new American colonies. As the region grew in economic power, so did it grow in political power as in 1538 it became the "Royal Audiencia of Panama," a powerful region within the Spanish government, hence receiving more resources and influence.

From this time until the late 1600s Panama continued its important role for the Spanish crown and as other Spanish regions were merged under the leadership of Guatemala, Panama maintained its status and continuously expanded its power. Also during this time a number of African slaves were brought to the region in order to provide the Spanish cheap labor, making the region more diverse, but also more economically and socially divided. One of the greatest sources of income during this time was as an exchange route from the Far East to Europe and vice versa. Although no canal existed at the time, ships would port on one coast and goods were be moved overland to the other coast, where they would be moved to another ship for final transport.

Another reason for Panama's success was that the capital of Panama City sat on the Pacific coast, and hence was relatively isolated from British pirates. This changed in 1671 though when the city was destroyed by Henry Morgan, but it quickly bounced back and Panama continued its path to stability and prosperity.

Panama's fall from power was the direct result of Spain's loss of power within Europe itself. As Spain struggled, their colonies, including Panama received less resources, support, and money from Spain, and hence lost power and influence. Additionally, advanced ship technology allowed ships to pass around the southern tip of South America more easily and hence one major source of income, transportation from ocean to ocean, had an alternative method.

In 1819 Panama was granted independence from Spain, but the country was indecisive on their direction until newspapers encouraged independence thoughts and soon the country decided to forgo opportunities to join federations to their north and south and move forward as an independent entity, officially creating such in 1921.

Almost immediately after independence, Panama joined then rejoined countries to their south, including Venezuela and New Granada (modern day Colombia) as one country. This union eventually failed though and in 1841 Panama again joined Colombia to form New Granada.

In 1846 the United States joined forces with New Granada (which included Panama), giving the U.S. the rights to build a railroad across the isthmus, which was completed in 1855. This treaty also gave the U.S. the right to intercede militarily to restore order if needed. The U.S. enacted this clause multiple times as they regularly put down riots in the region.

The late 1800s consisted of arguments between Panama and Colombia as power shifted from regional to central as Panama was controlled locally by a small number of wealthy families of almost entirely Spanish descent. Also in the late 1800s the French were given the rights to build a canal across Panama. This attempt was a colossal disaster due to various diseases being spread among the workers and nearly impossible geological formations that slowed progress.

In 1902 the United States took on the task of building the canal, however their conditions of control over the canal fell upon deaf ears in Colombia, leading to hostilities between Panama and Colombia, eventually leading to Panamanian independence from Colombia-controlled New Granada in 1903 (although Colombia didn't officially recognize this until 1921). With independence, Panama gave the United States the rights to build and control the canal (on December 31, 1999 the canal was handed over to Panama).

The canal was built from 1904 to 1914 and during this time many improvements were brought to the region, including healthcare improvements, fighting yellow fever and malaria, plus improved roads, sewage projects, communication, and transportation, all of which were needed to complete the building of the canal.

Throughout the early 1900s Panama was dominated on every level by economic growth and prosperity as an enormous amount of trade moved through the canal and Panama. However, from a political level freedoms were restricted as a small group of the country's wealthy held power throughout this time. This monopoly on power was protested numerous times, most notably in the 1960s. These protests encouraged Panamanians to demand more control and profits from the canal and in 1977 Panama and the United States signed a treaty transferring the canal and all U.S. military bases in Panama over to the Panamanian government by the end of 1999. However, this treaty also gave the U.S. the right to militarily intervene in the country.

With political struggles in the 1980s though came worsening relations with the U.S. This was magnified by the U.S.'s war on drugs, which involved U.S. interjection into the region and even the conviction of some Panamanian citizens. These arguments escalated until 1989 when the U.S. entered Panama and ended violence, but threatened Panama's sovereignty in about a week.

Since the U.S. invasion, Panama has altered political leadership as direction and priorities were argued and regularly altered. However, relations with the U.S. have substantially improved as the two countries are now great allies and the handover of the Panama Canal to Panama was a success.

This page was last updated: March, 2013