Hay-Herran Treaty

In late 1901, the United States Congress successfully renegotiated the Clayton-Bulwer Treaty of 1850. This treaty allowed the United States to build, fortify, and control an isthmian canal in Central America. Congress also authorized the Walker Commission to suggest possible canal routes in Panama and Nicaragua. Commissioners initially favored a Nicaraguan route. However, Philippe Bunau-Varilla, the New Panama Canal Company’s representative, argued that volcanic activity in Nicaragua and other factors made that route unacceptable. Bunau-Varilla effectively lobbied policy makers to select the Panama route.

Because Panama was a province of Colombia at the time, Secretary of State John Hay negotiated terms with Tomás Herrán, Colombia’s chargé d’affaires in Washington, D.C. According to the terms of the proposed agreement, Colombia would receive an initial payment of $10 million and an annual payment of $250,000 for the duration of the 99-year canal lease. In return, the U.S. would control a six-mile wide canal zone in Panama. The agreement was signed by Hay and Herrán on January 22, 1903.

The United States Senate ratified the treaty on March 17, 1903. Colombian leaders, recognizing that the New Panama Canal Company’s charter would revert back to Colombia in 1904, employed stalling tactics. Initially, Colombia requested additional money from both the United States and agents representing the New Panama Canal Company. When John Hay refused to alter the terms of the treaty, the Colombian Senate rejected it on August 12, 1903.

A furious President Theodore Roosevelt responded to the news by letting it be known that he would not be displeased if the Panamanians revolted. He also sent the USS Nashville to the region to “protect American lives in Panama,” although the action had the added benefit of preventing Colombian troops from suppressing the rebellion after it started in November 1903. The subsequent Hay-Bunau-Varilla Treaty (November 18, 1903) offered Panama the same financial incentives listed in the Hay-Herrán Treaty. The U.S. won the right to build, fortify, and control an expanded ten-mile wide canal zone in perpetuity.