Pedro Arias de Avila, sent out from Spain to succeed Enciso, displaced Balboa, and uniting the provinces of Nueva Andalucia and Castilla del Oro, established that of Tierra Firma in 1514, and in 1519 founded the city of Panama. Panama became the ter minus of transport across the isthmus, with Porto Bello at the eastern or rather the northern end; a paved causeway was built and pack animals and slaves carried the unrecorded treasures of the Indies along the road. Pirates came again and again to waylay the caravans, to lay siege to the ports of Panama and Porto Bello, and to sack and burn both at various times. William Paterson (q.v.) established in 1698 a Scottish settlement at what is still known as Porto Escoces in the north-east, but in 1700 the Span iards expelled the remaining members.
In 1718, when the viceroyalty of Nueva Granada was created, Panama was incorporated under its administration and through out the various vicissitudes of the independence period was re garded as but one province of Nueva Granada in the Colombian federation. In 1841, however, Panama seceded, with the neigh bouring Province of Veragua, setting up the independent State of the Isthmus of Panama. Colombia quelled the rebellion, but in 1853, under the new Granadine Confederation, from which the States had a right to withdraw, Panama again seceded, but la ter returned. In 1885 Panama was bitterly resentful of the action of President Nunez, in overriding the 1863 Constitution recog nizing the sovereignty of the States of Colombia, and the 1886 Constitution was adopted without Panama being heard; it changed Panama from a State to a department and vested its government in Federal appointees. When the French Canal Company began activities, Panama was a rich field for corrupt officials, and the people suffered considerably at the hands of many of the appoint ees from Bogota. In 1895 there was an abortive uprising, and from 1898 to 1903 the province was in continual revolt.
The treaty of the United States and Colombia in 1846, allowing the United States the right of transport across the isthmus and guaranteeing, on the part of the United States, the sovereignty of Nueva Granada on the isthmus, early brought the United States into the Panaman situation. In 1901, the Hay-Pauncefote Treaty settled the right of the United States to build the canal and to control it, alone. Negotiations were begun with Colombia for the site and authority, and in Jan. 1903, the Hay-Herran treaty was finally signed. The Colombian Congress delayed ratification, possibly in the hope of securing better terms, possibly waiting for the expiration of the French concession, when the sums which the United States had agreed to pay the French company would pos sibly be available for Colombian interests. The session of Con
gress called to ratify the treaty adjourned without doing so on October 31. On Nov. 3, the independence of Panama was de clared in Panama City, and the revolutionary activities of Panama surged up. The Colombian troops, landed at Colon to cross the isthmus and engage the revolutionists, were stopped by 47 marines of the U.S. cruiser "Nashville," under the provisions of the treaty of 1846, on the ground that in that document the United States had guaranteed to keep the isthmus open, and civil war would close it. Meanwhile, on Nov. 7, the Panaman minister was re ceived in Washington, and on Nov. 18 a treaty was signed between the United States and the new republic, ceding the Canal Zone for a payment of $10,000,000 and $250,000 annual rental. The Panaman Government was organized and a constitutional assem bly met on Jan. 15, 1904, when the present Constitution was drawn up. The haste with which President Roosevelt recognized the new republic has been the subject of wide criticism, and the payment to Colombia, after 1923, of $25,000,000 was taken in some quarters as acknowledgment of the fault, but this payment was officially made in settlement of various claims for the use 'of Colombian property and to clear title to the physical proper ties of the canal.
Relations between the United States and Panama have on the whole been cordial. The two countries carried on their common affairs under the treaty of 1904 and the so-called Taft Agreement, a series of orders issued by William Howard Taft while secretary of war. These were regarded by Panama as outgrown, however, and in 1922 the question of a new treaty was taken up. One was finally signed in 1927 but failed of ratification by the Panama Congress. Several sources of local irritation from the United States were thus left open until October, 1933, when President Arias, after a seven day conference with President Roosevelt at Washington, gave his approval to a joint declaration of policy gov erning future relations between their respective states. Internal affairs of the republic were comparatively tranquil until 1931. In that year a sudden bloodless revolution was successfully staged, turning out President Arosemena and establishing in power a re form government, first under the presidency of Dr. Ricardo J. Alfaro and later (1932) Dr. Harmodio Arias.