The World Crisis and the Good Neighbor Policy in Panama, 1936-41

Abstract

The 1936 Hull-Alfaro treaty, which fulfilled New Deal pledges to Panama, represented also the impact of Panamanian nationalism. For thirty years following the 1903 isthmian revolution, Panama remained a subject of American Canal policy. In 1921, for instance, the Panamanian government hurried troops to the Costa Rican boundary in order to compel a favorable decision in a long-standing border dispute. The Department of State, however, had decided that Panamanian military action against Costa Rica was unjustifiable. Arguing that hostilities between Panama and Costa Rica endangered Canal security, a warning was sent to Panama City, followed by the cruiser Sacramento. This act of “gunboat diplomacy” was castigated throughout Panama, but the Panamanian government withdrew its troops. Similarly, Panamanians voiced charges of economic domination, even exploitation, by arguing that the Canal failed to satisfy the republic's commercial aspirations. In 1903, Panamanians had welcomed military intervention by the United States on the grounds that it would be followed by technological intrusion capable of building the canal. By the late 1920's, however, it was obvious to many Panamanian critics that the profits of the isthmian waterway were returned to the United States. The American government strictly limited the operation of Panamanian merchants inside the Canal Zone. Moreover, the more desirable positions in Zone employment, the so-called “gold roll” jobs, were invariably meted out to Americans. Those Panamanians who found employment in the Zone were usually grouped with imported West Indian Negroes on the “silver roll,” a term referring to unskilled positions. Racial antagonism between West Indians and Panamanians resulted from economic competition.