The construction of the Panama Canal opened up trade
between the Pacific and the Atlantic Oceans for the
United States as well as the rest of the world. Although
previous to the building of the canal ships could
circumvent South America to reach the other ocean, the
canal reduced the amount of time and cost of shipping
goods. The United States controlled a 10-mile wide strip
of land along the 40-mile canal until 1978 when the canal
was ceded back to the country of Panama effective on
December 31, 1999.
Concluded November 18, 1903; ratification advised by the
Senate February 23, 1904; ratified by President February 25,
1904; ratifications exchanged February 26, 1904; proclaimed
February 26, 1904. (U.S. Stats., vol. 33.)
The United States of America and the Republic of Panama
being desirous to insure the construction of a ship canal
across the Isthmus of Panama to connect the Atlantic and
Pacific oceans, and the Congress of the United States of
America having passed an act approved June 28, 1902, in furtherance of that object, by which the President of the United
States is authorized to acquire within a reasonable time the
control of the necessary territory of the Republic of
Colombia, and the sovereignty of such territory being actually
vested in the Republic of Panama, the high contracting parties
have resolved for that purpose to conclude a convention and
have accordingly appointed as their plenipotentiaries,
The President of the United States of America, John Hay,
Secretary of State, and
The Government of the Republic of Panama, Philippe
Bunau-Varilla, Envoy Extraordinary and Minister Plenipotentiary of the Republic of Panama, thereunto specially
empowered by said government, who after communicating
with each other their respective full powers, found to be in
good and due form, have agreed upon and concluded the following articles:
ARTICLE I
The United States guarantees and will maintain the independence of the Republic of Panama.
ARTICLE II
The Republic of Panama grants to the United States in
perpetuity the use, occupation and control of a zone of land
and land under water for the construction maintenance,
operation, sanitation and protection of said Canal of the
width of ten miles extending to the distance of five miles on
each side of the center line of the route of the Canal to be
constructed; the said zone beginning in the Caribbean Sea
three marine miles from mean low water mark and extending to and across the Isthmus of Panama into the Pacific
ocean to a distance of three marine miles from mean low
water mark with the proviso that the cities of Panama and
Colon and the harbors adjacent to said cities, which are
included within the boundaries of the zone above described,
shall not be included within this grant. The Republic of
Panama further grants to the United States in perpetuity the
use, occupation and control of any other lands and waters
outside of the zone above described which may be necessary
and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal or of any
auxiliary canals or other works necessary and convenient for
the construction, maintenance, operation, sanitation and
protection of the said enterprise.
The Republic of Panama further grants in like manner to
the United States in perpetuity all islands within the limits of
the zone above described and in addition thereto the group
of small islands in the Bay of Panama, named, Perico, Naos,
Culebra and Flamenco.
ARTICLE III
The Republic of Panama grants to the United States all the
rights, power and authority within the zone mentioned and
described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described
in said Article II which the United States would possess and
exercise if it were the sovereign of the territory within which
said lands and waters are located to the entire exclusion of the
exercise by the Republic of Panama of any such sovereign
rights, power or authority.
ARTICLE IV
As rights subsidiary to the above grants the Republic of
Panama grants in perpetuity to the United States the right to
use the rivers, streams, lakes and other bodies of water within
its limits for navigation, the supply of water or water-power
or other purposes, so far as the use of said rivers, streams,
lakes and bodies of water and the waters thereof may be necessary and convenient for the construction, maintenance,
operation, sanitation and protection of the said Canal.
ARTICLE V
The Republic of Panama grants to the United States in
perpetuity a monopoly for the construction, maintenance
and operation of any system of communication by means of
canal or railroad across its territory between the Caribbean
Sea and the Pacific Ocean.
ARTICLE VI
The grants herein contained shall in no manner invalidate the titles or rights of private land holders or owners of
private property in the said zone or in or to any of the lands
or waters granted to the United States by the provisions of
any Article of this treaty, nor shall they interfere with the
rights of way over the public roads passing through the said
zone or over any of the said lands or waters unless said
rights of way or private rights shall conflict with rights
herein granted to the United States in which case the rights
of the United States shall be superior. All damages caused to
the owners of private lands or private property of any kind
by reason of the grants contained in this treaty or by reason
of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the said Canal or of the
works of sanitation and protection herein provided for,
shall be appraised and settled by a joint Commission
appointed by the Governments of the United States and the
Republic of Panama, whose decisions as to such damages
shall be final and whose awards as to such damages shall be
paid solely by the United States. No part of the work on said
Canal or the Panama railroad or on any auxiliary works
relating thereto and authorized by the terms of this treaty
shall be prevented, delayed or impeded by or pending such
proceedings to ascertain such damages. The appraisal of
said private lands and private property and the assessment
of damages to them shall be based upon their value before
the date of this convention.
ARTICLE VII
The Republic of Panama grants to the United States within the limits of the cities of Panama and Colon and their adjacent harbors and within the territory adjacent thereto the
right to acquire by purchase or by the exercise of the right of
eminent domain, any lands, buildings, water rights or other
properties necessary and convenient for the construction,
maintenance, operation and protection of the Canal and of
any works of sanitation, such as the collection and disposition of sewage and the distribution of water in the said cities
of Panama and Colon, which in the discretion of the United
States may be necessary and convenient for the construction,
maintenance, operation, sanitation and protection of the said
Canal and railroad. All such works of sanitation, collection
and disposition of sewage and distribution of water in the
cities of Panama and Colon shall be made at the expense of
the United States, and the Government of the United States,
its agents or nominees shall be authorized to impose and collect water rates and sewerage rates which shall be sufficient to
provide for the payment of interest and the amortization of
the principal of the cost of said works within a period of fifty
years and upon the expiration of said term of fifty years the
system of sewers and water works shall revert to and become
the properties of the cities of Panama and Colon respectively,
and the use of the water shall be free to the inhabitants of
Panama and Colon, except to the extent that water rates may
be necessary for the operation and maintenance of said system of sewers and water.
The Republic of Panama agrees that the cities of Panama
and Colon shall comply in perpetuity with the sanitary ordinances whether of a preventive or curative character prescribed by the United States and in case the Government of
Panama is unable or fails in its duty to enforce this compliance by the cities of Panama and Colon with the sanitary
ordinances of the United States the Republic of Panama
grants to the United States the right and authority to enforce
the same.
The same right and authority are granted to the United
States for the maintenance of public order in the cities of
Panama and Colon and the territories and harbors adjacent
thereto in case the Republic of Panama should not be, in the
judgment of the United States, able to maintain such order.
ARTICLE VIII
The Republic of Panama grants to the United States all
rights which it now has or hereafter may acquire to be property of the New Panama Canal Company and the Panama
Railroad Company as a result of the transfer of sovereignty
from the Republic of Colombia to the Republic of Panama
over the Isthmus of Panama and authorizes the New Panama
Canal Company to sell and transfer to the United States its
rights, privileges, properties and concessions as well as the
Panama Railroad and all the shares or part of the shares of
that company; . . . the public lands situated outside of the
zone described in Article II of this treaty now included in
the concessions to both said enterprises and not required in
the construction or operation of the Canal shall revert to the
Republic of Panama except any property now owned by or in
the possession of said companies within Panama or Colon or
the ports or terminals thereof.
ARTICLE IX
The United States agrees that the ports at either entrance
of the Canal and the waters thereof, and the Republic of
Panama agrees that the towns of Panama and Colon shall be
free for all time so that there shall not be imposed or collected
custom house tolls, tonnage, anchorage, lighthouse, wharf,
pilot, or quarantine dues or any other charges or taxes of any
kind upon any vessel using or passing through the Canal or
belonging to or employed by the United States, directly or
indirectly, in connection with the construction, maintenance,
operation, sanitation and protection of the main Canal, or
auxiliary works, or upon the cargo, officers, crew, or passengers of any such vessels, except such tolls and charges as may
be imposed by the United States for the use of the Canal and
other works, and except tolls and charges imposed by the
Republic of Panama upon merchandise destined to be introduced for the consumption of the rest of the Republic of
Panama, and upon vessels touching at the ports of Colon and
Panama and which do not cross the Canal.
The Government of the Republic of Panama shall have the
right to establish in such ports and in the towns of Panama
and Colon such houses and guards as it may deem necessary
to collect duties on importations destined to other portions
of Panama and to prevent contraband trade. The United
States Shall have the right to make use of the towns and harbors of Panama and Colon as places of anchorage, and for
making repairs, for loading, unloading, depositing, or transshipping cargoes either in transit or destined for the service
of the Canal and for other works pertaining to the Canal.
ARTICLE X
The Republic of Panama agrees that there shall not be
imposed any taxes, national, municipal, departmental, or of
any other class, upon the Canal, the railways and auxiliary
works, tugs and other vessels employed in the service of the
Canal, store houses, work shops, offices, quarters for laborers,
factories of all kinds, warehouses, wharves, machinery and
other works, property, and effects appertaining to the Canal
or railroad and auxiliary works, or their officers or employees, situated within the cities of Panama and Colon, and that
there shall not be imposed contributions or charges of a personal character of any kind upon officers, employees, laborers, and other individuals in the service of the Canal and
railroad and auxiliary works.
ARTICLE XI
The United States agrees that the official dispatches of the
Government of the Republic of Panama shall be transmitted
over any telegraph and telephone lines established for canal
purposes and used for public and private business at rates not
higher than those required from officials in the service of the
United States.
ARTICLE XII
The Government of the Republic of Panama shall permit
the immigration and free access to the lands and workshops
of the Canal and its auxiliary works of all employees and
workmen of Whatever nationality under contract to work
upon or seeking employment upon or in any wise connected
with the said Canal and its auxiliary works, with their respective families, and all such persons shall be free and exempt
from the military service of the Republic of Panama.
ARTICLE XIII
The United States may import at any time into the said
zone and auxiliary lands, free of custom duties, imposts,
taxes, or other charges, and without any restrictions, any and
all vessels, dredges, engines, cars, machinery, tools, explosives,
materials, supplies, and other articles necessary and convenient in the construction, maintenance, operation, sanitation
and protection of the Canal and auxiliary works, and all provisions, medicines, clothing, supplies and other things necessary and convenient for the officers, employees, workmen
and laborers in the service and employ of the United States
and for their families. If any such articles are disposed of for
use outside of the zone and auxiliary lands granted to the
United States and within the territory of the Republic, they
shall be subject to the same import or other duties as like articles imported under the laws of the Republic of Panama.
ARTICLE XIV
As the price or compensation for the rights, powers and
privileges granted in this convention by the Republic of
Panama to the United States, the Government of the United
States agrees to pay to the Republic of Panama the sum of ten
million dollars ($10,000,000) in gold coin of the United
States on the exchange of the ratification of this convention
and also an annual payment during the life of this convention
of two hundred and fifty thousand dollars ($250,000) in like
gold coin, beginning nine years after the date aforesaid.
The provisions of this Article shall be in addition to all
other benefits assured to the Republic of Panama under this
convention.
But no delay or difference of opinion under this Article or
any other provisions of this treaty shall affect or interrupt the
full operation and effect of this convention in all other respects.
ARTICLE XV
The joint commission referred to in Article VI shall be
established as follows:
The President of the United States shall nominate two persons and the President of the Republic of Panama shall nominate two persons and they shall proceed to a decision; but in
case of disagreement of the Commission (by reason of their
being equally divided in conclusion) an umpire shall be
appointed by the two Governments who shall render the
decision. In the event of the death, absence, or incapacity of a
Commissioner or Umpire, or of his omitting, declining or
ceasing to act, his place shall be filled by the appointment of
another person in the manner above indicated. All decisions
by a majority of the Commission or by the Umpire shall be
final.
ARTICLE XVI
The two Governments shall make adequate provision by
future agreement for the pursuit, capture, imprisonment,
detention and delivery within said zone and auxiliary lands
to the authorities of the Republic of Panama of persons
charged with the commitment of crimes, felonies or misdemeanors without said zone and for the pursuit, capture,
imprisonment, detention and delivery without said zone to
the authorities of the United States of persons charged with
the commitment of crimes, felonies and misdemeanors
within said zone and auxiliary lands.
ARTICLE XVII
The Republic of Panama grants to the United States the
use of all the ports of the Republic open to commerce as
places of refuge for any vessels employed in the Canal enterprise, and for all vessels passing or bound to pass through the
Canal which may be in distress and be driven to seek refuge
in said ports. Such vessels shall be exempt from anchorage
and tonnage dues on the part of the Republic of Panama.
ARTICLE XVIII
The Canal, when constructed, and the entrances thereto
shall be neutral in perpetuity, and shall be opened upon the
terms provided for by Section I of Article three of, and in
conformity with all the stipulations of, the treaty entered into
by the Governments of the United States and Great Britain
on November 18, 1901.
ARTICLE XIX
The Government of the Republic of Panama shall have the
right to transport over the Canal its vessels and its troops and
munitions of war in such vessels at all times without paying
charges of any kind. The exemption is to be extended to the
auxiliary railway for the transportation of persons in the service of the Republic of Panama, or of the police force charged
with the preservation of public order outside of said zone, as
well as to their baggage, munitions of war and supplies.
ARTICLE XX
If by virtue of any existing treaty in relation to the territory of the Isthmus of Panama, whereof the obligations shall
descend or be assumed by the Republic of Panama, there
may be any privilege or concession in favor the Government
or the citizens and subjects of a third power relative to an
interoceanic means of communication which in any of its
terms may be incompatible with the terms of the present
convention, the Republic of Panama agrees to cancel or
modify such treaty in due form, for which purpose it shall
give to the said third power the requisite notification within
the term of four months from the date of the present convention, and in case the existing treaty contains no clause
permitting its modification or annulment, the Republic of
Panama agrees to procure its modification or annulment in
such form that there shall not exist any conflict with the stipulations of the present convention.
ARTICLE XXI
The rights and privileges granted by the Republic of
Panama to the United States in the preceding Articles are
understood to be free of all anterior debts, liens, trusts, or liabilities, or concessions or privileges to other Governments,
corporations, syndicates or individuals, and consequently, if
there should arise any claims on account of the present concessions and privileges or otherwise, the claimants shall
resort to the Government of the Republic of Panama and not
to the United States for any indemnity or compromise which
may be required.
ARTICLE XXII
The Republic of Panama renounces and grants to the
United States the participation to which it might be entitled in
the future earnings of the Canal under Article XV of the concessionary contract with Lucien N. B. Wyse now owned by the
New Panama Canal Company and any and all other rights or
claims of a pecuniary nature arising under or relating to said
concession, or arising under or relating to the concessions to
the Panama Railroad Company or any extension or modification thereof; and it likewise renounces, confirms and grants to
the United States, now and hereafter, all the rights and property reserved in the said concessions which otherwise would
belong to Panama at or before the expiration of the terms of
ninety-nine years of the concessions granted to or held by the
above mentioned party and companies, and all right, title and
interest which it now has or many hereafter have, in and to the
lands, canal, works, property and rights held by the said companies under said concessions or otherwise, and acquired or
to be acquired by the United States from or through the New
Panama Canal Company, including any property and rights
which might or may in the future either by lapse of time, forfeiture or otherwise, revert to the Republic of Panama, under
any contracts or concessions, with said Wyse, the Universal
Panama Canal Company, the Panama Railroad Company and
the New Panama Canal Company.
The aforesaid rights and property shall be and are free and
released from any present or reversionary interest in or claims
of Panama and the title of the United States thereto upon consummation of the contemplated purchase by the United States
from the New Panama Canal (company, shall be absolute, so
far as concerns the Republic of Panama, excepting always the
rights of the Republic specifically secured under this treaty.
ARTICLE XXIII
If it should become necessary at any time to employ
armed forces for the safety or protection of the Canal, or of
the ships that make use of the same, or the railways and auxiliary works, the United States shall have the right, at all times
and in its discretion, to use its police and its land and naval
forces or to establish fortifications for these purposes.
ARTICLE XXIV
No change either in the Government or in the laws and
treaties of the Republic of Panama shall, without the consent
of the United States, affect any right of the United States
under the present convention, or under any treaty stipulation
between the two countries that now exists or may hereafter
exist touching the subject matter of this convention.
If the Republic of Panama shall hereafter enter as a constituent into any other Government or into any union or
confederation of states, so as to merge her sovereignty or
independence in such Government, union or confederation,
the rights of the United States under this convention shall not
be in any respect lessened or impaired.
ARTICLE XXV
For the better performance of the engagements of this
convention and to the end of the efficient protection of the
Canal and the preservation of its neutrality, the Government
of the Republic of Panama will sell or lease to the United
States lands adequate and necessary for naval or coaling stations on the Pacific coast and on the western Caribbean coast
of the Republic at certain points to be agreed upon with the
President of the United States.
ARTICLE XXVI
This convention when signed by the Plenipotentiaries of
the Contracting Parties shall be ratified by the respective
Governments and the ratifications shall be exchanged at
Washington at the earliest date possible.
In faith whereof the respective Plenipotentiaries have
signed the present convention in duplicate and have hereunto
affixed their respective seals.
Done at the City of Washington the 18th day of November
in the year of our Lord nineteen hundred and three.
JOHN HAY
P. BUNAU VARILLA