Panama was claimed by the Spanish in 1501. Nearly two decades later, the City of Panama was established. A part of New Granada after 1739, Panama (and the rest of New Granada) left the Empire over 80 years later. At that point, Panama became part of Gran Colombia. Panama was viewed as a potential route between the Atlantic and the Pacific as far back as 1825. By 1855, the United States had bankrolled a railroad from Colon to Panama City. In 1903, Panama broke with Colombia and soon agreed to develop a canal zone that would be under US control. Eleven years later, the mighty Panama Canal was opened. Functioning as a protectorate of the US (i.e., the US guaranteed the 'independence' of the country), the US maintained that it had the right to intervene militarily when its interests were threatened, as it did in 1918. In 1936, the protectorate status was abolished and the US agreed that it would not have the right to intervene in the cities of Panama and Colon. A new canal treaty was negotiated in 1977; it provided for the Panamanians to take control of the canal in 2000. Politically, Panama experienced some instability when the country's military head (and, basically, the leader of the country) General Manuel Noriega, was indicted by the US on drug charges. Noreiga refused to resign and the US ended up freezing Panamanian assets in US banks. A year later, Noreiga nullified the results of the election (he was losing) and made himself the sole power in the country. The US responded by invading the country, capturing Noreiga, trying him in the US and convicting him.


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