|Christopher Columbus arrives in Panama on his fourth travel, which started in Nicaragua and ended in Panama. It is in this trip he discovers the Chagres river, which in the XX Century it would be the main resource to build the Panama Canal. He arrived to the Caribbean coast where he baptized the area with the name of Portobelo (in English, Beautiful Port). Columbus then explored Veraguas and founded Santa Maria de Belen, which would be the first Spanish settlement on the continent, leaving Bartolome, his brother, in charge.
Eventually, this settlement was destroyed by the local native population and the few surviving members returned to Spain.
Founding of Panama La Vieja
It wasn´t until 1519 when the Spanish decided to settle the new city. This time they chose a site in the Pacific ocean, which was discovered six years before by Vasco Nuñez de Balboa. The new city, today known as Panama La Vieja, was founded in August 15th, 1519 by orders of governor Pedrarias Davila and became an important port during the Spanish gold trade from Peru to the Caribbean islands and finally to Europe. The merchandise from all over South America would come into Panama and travel to Portobelo using the Camino de Cruces (old stone road) crossing the jungle and navigating the Chagres river. From Portobelo it would distribute to the islands and then to Spain.
Because of its importance and its location the city was an easy target for pirates. However, protection from pirates was only one of its many problems, as it was settled in a site composed mainly by mangrove land, diseases and fires weakened their position, until it was finally destroyed by pirate Henry Morgan in 1671.
Founding of Casco Antiguo
In 1673 a new city of Panama was founded. This time, a rocky peninsula was chosen, still on the Pacific side. A healthier site with crossed winds and easier to defend from both land and ocean attacks. Called interchangeably Casco Viejo, San Felipe, Catedral or Casco Antiguo, it is from here where Panama would declare independece from Spain and later join and separate from Colombia. It will see the boom and bust of the Gold Rush, the French attempt to build a Canal and later its completion by the United States.
After about 320 years under the rule of the Spanish Empire, on 10 November 1821, independence from Spain was declared in the small town of La Villa, today known as La Heroica. On 28 November, presided by Colonel Jose de Fabrega, a National Assembly was convened and it officially declared the independence of the isthmus of Panama from Spain and its decision to join New Granada, Ecuador and Venezuela in Bolivar’s recently founded Republic of Colombia.
In 1830, Venezuela, Ecuador and other territories left the Gran Colombia, but Panama remained as a province of this country, until July 1831 when the isthmus reiterated its independence, now under General Juan Eligio Alzuru as supreme military commander. In August, military forces under the command of Colonel Tomás Herrera defeated and executed Alzuru and reestablished ties with New Granada.
Ten years later, on November 1840, during a civil war that had begun as a religious conflict, the isthmus declared its independence under the leadership of the now General Tomás Herrera and became the ‘Estado Libre del Istmo’, or the Free State of the Isthmus. The new state established external political and economic ties and drew up a constitution which included the possibility for Panama to rejoin New Granada, but only as a federal district. On June 1841 Tomás Herrera became the President of the Estado Libre del Istmo. But the civil conflict ended and the government of New Granada and the government of the Isthmus negotiated the reincorporation of Panamá to Colombia on December 31, 1841.
In the end, the union between Panama and the Republic of Colombia was made possible by the active participation of the US under the 1846 Bidlack Mallarino Treaty, which lasted until 1903. The treaty granted the US rights to build railroads through Panama and to intervene militarily against revolt to guarantee New Granadine control of Panama. There were at least three attempts by Panamanian Liberals to seize control of Panama and potentially achieve full autonomy, including one led by Liberal guerrillas like Belisario Porras and Victoriano Lorenzo, each of which was suppressed by a collaboration of Conservative Colombian and US forces under the Bidlack Mallarino Treaty.
In 1902 US President Theodore Roosevelt decided to take on the abandoned works of the Panama Canal by the French but the Colombian government in Bogotá balked at the prospect of a US controlled canal under the terms that Roosevelt’s administration was offering. Roosevelt was unwilling to alter its terms and quickly changed tactics, encouraging a minority of Conservative Panamanian landholding families to demand independence, offering military support. On November 3, 1903 Panama finally separated and Dr. Manuel Amador Guerrero, a prominent member of the Conservative political party, became the first constitutional President of the Republic of Panama.
In November 1903, Phillipe Bunau-Varilla—a French citizen who was not authorized to sign any treaties on behalf of Panama without the review of the Panamanians—unilaterally signed the Hay-Bunau Varilla Treaty which granted rights to the US to build and administer indefinitely the Panama Canal, which was opened in 1914. This treaty became a contentious diplomatic issue between the two countries, reaching a boiling point on Martyr’s Day (9 January 1964). The issues were resolved with the signing of the Torrijos-Carter Treaties in 1977 returning the former Canal Zone territories to Panama.
The second intent of the founding fathers was to bring peace and harmony between the two major political parties (Conservatives and Liberals). The Panamanian government went through periods of political instability and corruption, however, and at various times in its history, the mandate of an elected president terminated prematurely. In 1968, a coup toppled the government of the recently elected President Arnulfo Arias Madrid.
While never holding the position of President himself, General Omar Torrijos eventually became the de facto leader of Panama. As a military dictator, he was the leading power in the governing military junta and later became an autocratic strong man. Torrijos maintained his position of power until his death in an airplane accident in 1981.
After Torrijos’s death, several military strong men followed him as Panama’s leader. Commander Florencio Flores Aguilar followed Torrijos. Colonel Rubén Darío Paredes followed Aguilar. Eventually, by 1983, power was concentrated in the hands of General Manuel Antonio Noriega.
Manuel Noriega came up through the ranks after serving in the Chiriquí province and in the city of Puerto Armuelles for a time. He was a former head of Panama’s secret police and was an ex-informant of the CIA. But Noriega’s implication in drug trafficking by the United States resulted in difficult relations by the end of the 1980s.
United States invasion of Panama
On 20 December 1989, 27,000 U.S. personnel invaded Panama in order to remove Manuel Noriega. A few hours before the invasion, in a ceremony that took place inside a U.S. military base in the former Panama Canal Zone, Guillermo Endara was sworn in as the new President of Panama. The invasion occurred ten years before the Panama Canal administration was to be turned over to Panamanian authorities, according to the timetable set up by the Torrijos-Carter Treaties. During the fighting, between two hundred   and four thousand Panamanians, mostly civilians, were killed.
Noriega surrendered to the American military shortly after, and was taken to Florida to be formally extradited and charged by U.S. federal authorities on drug and racketeering charges. He became eligible for parole on September 9, 2007, but remained in custody while his lawyers fought an extradition request from France. Critics have pointed out that many of Noriega’s former allies remain in power in Panama.
Under the Torrijos-Carter Treaties, the United States turned over all canal-related lands to Panama on 31 December 1999. Panama also gained control of canal-related buildings and infrastructure as well as full administration of the canal.
The people of Panama have already approved the widening of the canal which, after completion, will allow for post-Panamax vessels to travel through it, increasing the number of ships that currently use the canal.