General issues: United States Territory 1904-1979
Country name on general issues: Canal Zone
Currency: 1 Peso = 100 Centavos 1904-1906, 1 Balboa = 100 Centesimos, 1 Dollar = 100 Cent 1924-1979
Population: 44 000 in 1970
Political history Canal Zone
The Canal Zone
The Canal Zone is located in Panama, Central America. The Canal Zone is a stretch of land across the isthmus of Panama, extending 8 kilometers on either side of the Panama Canal. The major Panamanian cities of Colon and Panama City were not included in the Canal Zone. Upon completion, the artificial lakes created to construct the Canal were incorporated into the Canal Zone.Lake Gatun and Lake Alajuela.
The United States, throughout the 19th century, had been negotiating with Colombia – of which Panama was then a department – for the rights to build a canal across the isthmus of Panama – without success. In 1903, Panama – strongly backed by the United States – proclaimed independence. In the same year the United States and Panama signed the Hay-Bunau-Varilla treaty that allowed the United States to build the Panama Canal. The Hay-Bunau-Varilla treaty had far fetching implications. Panama ceded the sovereignty over the Canal Zone to the United States. Panama also allowed the United States to intervene in internal Panamanian affairs – with military force if need be – to secure the continuity of the Canal. What Panama gained was that the United States would guarantee the independence of Panama. Panama thus became a de facto United States protectorate. The formal transfer of the Canal Zone took place in 1904.
The Canal Zone was a United States territory, specifically an unincorporated territory, which meant the Canal Zone was not actually part of the United States. The Canal Zone was initially administered by military and, from 1914, civilian governors – governors appointed by the United States President and acting under supervision of the Secretary of War. In Panama the Hay-Bunau-Varilla treaty would soon be criticized. The treaty would be adjusted in a number of subsequent treaties. Significant is the 1936 Hull-Alfaro treaty by which the rights of the United States were limited to the sovereignty over the Canal Zone – thus ending the status of Panama as a protectorate. After substantial protests in the 1960’s, negotiations were started that would result in the Carter-Torrijos treaty being signed in 1977. The treaty provided for a step by step transfer of the Canal Zone to Panama starting in 1979. The Canal Zone ceased to exist as a United States territory in 1979. The transfer was completed in 1999. The Canal currently accounts for 8% of the GDP of Panama.
Before actual construction started, several plans had been developed to build a canal across the isthmus of Panama – the first by the Spanish in colonial times. The first to put plans into action were the French in 1881, led by Ferdinand de Lesseps who had built the Suez Canal between 1859 and 1869. The French, however, aborted the project in 1894. The United States started construction in 1904 and the Panama Canal was opened in 1914. The United States – unlike the French – chose an above sea level Canal to limit the amount of excavation work required. An artificial lake was created – Lake Gatun. Locks were built on either side of the lake in order to lift ships to the level of the lake. A second artificial lake – Lake Alajuela – was created as a reservoir to control the water level in the Canal. The total length of the Canal is 82 kilometers.
In its first year of operation, 1 000 ships passed through the Panama Canal. In 2014, this number was 14 700. The Canal has given rise to the construction of the so called Panamax ships – ships built to the maximum size that would still allow them to pass through the locks. To keep the Panama Canal up to date, in the light of changes in world shipping, it was decided in 2006 to expand the Canal. The project was started in 2007 and is scheduled to be completed in 2016. The expansion will more than double the capacity of the Canal.
Postal history Canal Zone
Stamps were issued for the Canal Zone by the United States authorities. The first stamps issued, in 1904, were overprints on stamps of Panama – these themselves being overprints on stamps of the former department of Panama. Many varieties of these overprints exist. The second set issued were overprints on United States stamps. This led to protests from Panama and – by a 1904 agreement – subsequent issues were again overprints on stamps of Panama. The 1904 agreement was abrogated in 1924 and a set of overprints on stamps of the United States was issued. A first set of definitives – inscribed Canal Zone Postage – was issued in 1928. The last stamp was issued in 1978. The stamps issued under United States authority were valid until 1979, when they were superseded by the issues of Panama.