HayBunauVarilla

Hay-Bunau-Varilla, commonly referred to as the Hay–Bunau-Varilla Treaty, was an 1903 agreement between the United States and the Republic of Panama that established the terms for the construction and control of a canal across the Isthmus of Panama. Signed on November 18, 1903, the treaty granted the United States control over a Canal Zone and outlined the conditions for building and operating the canal.

Background: After Panama declared independence from Colombia with U.S. support, Panamanian envoy Philippe-Jean Bunau-Varilla negotiated with U.S. Secretary of State John Hay. Bunau-Varilla was a former French engineer who represented the new Panamanian government and sought security for a swift canal project.

Terms: The United States obtained sovereignty over a canal zone roughly ten miles wide that crossed Panama, in perpetuity, and the right to construct, maintain, and defend the canal. In exchange, Panama received a one-time payment of $10 million and an annual rent of $250,000. The treaty also granted the United States broad authority to ensure the canal’s security and neutral status.

Impact and legacy: The treaty enabled the United States to build and operate the canal, shaping U.S.–Panama relations and sovereignty debates for decades. It remained in effect until superseded by the 1977 Torrijos–C Carter Treaties, which began transferring canal administration to Panama and were fully implemented by 1999.