Illicit Nation: State, Empire, and Illegality on the Isthmus of Panama

A Dissertation Presented by Matthew Scalena to The Graduate School in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in History

Stony Brook University

May 2013

Copyright by Matthew Scalena 2013

Stony Brook University The Graduate School

Matthew Scalena

We, the dissertation committee for the above candidate for the Doctor of Philosophy degree, hereby recommend acceptance of this dissertation.

Dr. Paul Gootenberg Dissertation Advisor Professor, History, Stony Brook University

Dr. Brooke Larson - Chairperson of Defense Professor, History, Stony Brook University

Dr. Eric Zolov Associate Professor, History, Stony Brook University

Dr. Greg Grandin Professor, History, New York University

This dissertation is accepted by the Graduate School Charles Taber Interim Dean of the Graduate School

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Abstract of the Dissertation Illicit Nation: State, Empire, and Illegality on the Isthmus of Panama by Matthew Scalena Doctor of Philosophy in History Stony Brook University 2013 Three years before 26,000 U.S. troops invaded Panama to apprehend General Manuel Noriega the New York Times broke the story that would eventually serve as the primary justification for the invasion. Panama Strongman, the 1986 A1 headline screamed, Said to Trade in Drugs, Arms and Illicit Money. The irony seemed thick. The Central American home of the U.S.operated Panama Canal and the North American military headquarters for Latin America now doubled as a safe haven and transit point for those evading and exploiting U.S.-inspired international crime control. The puzzling question: how could a small nation ostensibly created by U.S. imperialism have become a dangerously independent illicit global entrept in less than a century? My dissertation explores this question from a historical perspective. While rooted in the deep colonial past, I take Panamas 1903 independence from Colombia and the political creation of the U.S.-occupied Canal Zone as the principal entry point to analyze the myriad ways that both patron and client state engaged smuggling and the borderland cultures of narcotics use, gambling, boozing, and prostitution. The centrality of Panama to U.S. empire building makes it an ideal location to consider a somewhat counterintuitive empire effect: that U.S. domination often inadvertently fosters illicit state activity, breaking down local boundaries between bureaucratic and outlaw cultures. Illicit activity, I argue, constituted a key element of both Panamanian state formation and U.S. imperial expansion. Panama served as an early workshop for U.S. officials to experiment with extraterritorial criminal justice initiatives as a means of control in lieu of direct occupation. Local power holders worked with these powerful intrusions but often not in ways U.S. officials hoped. Indeed, my research illustrates that Panamas limited economic benefit from the canal and its traffic combined with foreign legal impositions drove state engagement with newly criminalized activity underground. Controlling the burgeoning illicit infrastructure of state became a crucial component of institutionalized politics and power, setting the important political, economic, and cultural foundation for Panamas infamous role as a so-called narco-state in the late twentieth century.

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Table of Contents

Introduction: The Making of an Illicit Entrept.1 I. II. III. IV. V. Illicit Crossings: the Deep History of Contraband and Disorder at an Imperial Outpost..............................................................................................................22 Vice, Race, and the Demands of Empire: Constructing the Panama/Canal Zone Border and U.S. Global Expansion in the Early Twentieth Century.......59 Building through Absence: Institutionalizing Illegality in Panamas Borderlands...................95 Domesticating Panamas Borderlands: Criminalizing Border Flows and Diasporic Peoples in the Republic of Panama128 The Business of the Commissary: Smuggling and Sovereignty on the Canal Zone158 Epilogue: The Borderlands Go Global During the Cold War.....189 Bibliography...207

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List of Illustrations (courtesy of the Panama Historical Society unless otherwise noted)

Coln-Aspinwall, 1863.....46 Pay day on Front Street in Coln, 188655 The political boundaries of the U.S.-occupied Panama Canal Zone58 A Culebra street on payday on the Canal Zone, 1907..71 A Chinese store in Gorgona on the Canal Zone, 1909.71 Typical married Gold Roll quarters on the Canal Zone...82 A horse race in Coln, 1912...105 Panamas National Police, 1910.114 The market in Panama City, 1910..136 The beach market in Panama City, 1910136 29 years of Freedom143 A popular Coln bar during World War Two, 1944..196

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List of Abbreviations

ABP AMREP ANP ARL-NYPL ARJA NACP TNA E30GP JCCP JSCC NAMP CO FO RC RG SB SJ B C E F P S T

Archivo Belisario Porras. Archivo del Ministerio de Relaciones Exteriores de Panam Archivo Nacional de Panam Albert Roswell Lamb papers. Manuscripts and Archives Division. The New York Public Library. Astor, Lenox, and Tilden Foundations. Museo, Archivo, Biblioteca Ricardo J. Alfaro The U.S. National Archives and Records Administration at College Park (Maryland) The National Archives of the UK Entry 30 General Correspondence Juzgado Cuarto del Circuito de Panam Juzgado Segundo del Circuito de Coln National Archives Microfilm Publication Colonial Office Foreign Office Ramo Criminal Record Group Seccin Biblioteca Seccin de Justicia Box cajn expediente Folder Part Serie Tomo

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Acknowledgements

This dissertation was a long time in the making and I have accumulated an extensive list of acknowledgements along the way. First, as a student of Latin American history, I was lucky enough to be taught by some very outstanding teachers, most notably Professors Paul Gootenberg and Brooke Larson at Stony Brook University and Professor Alexander Dawson at Simon Fraser University. These teachers played an important role in shaping this particular project and also the way I understand Latin America and the study of history more generally. My doctoral advisor Paul Gootenberg deserves special mention. Paul worked tirelessly with me over the last years, providing consistent insight, advice, and encouragement, as I wrote fellowship applications, conducted research, and endeavored to make sense of source material during the write-up process. He provides the model for an effective mentor and I am incredibly grateful that I had the opportunity to work with him. I would also like to thank two other members of my committee. Professor Eric Zolov provided incisive and detailed notes for each chapter draft. The final product is unquestionably better because of his thoughtful readings. Professor Greg Grandin served as my outside reader and his wide-ranging and insightful comments will prove especially helpful as I move forward. This group of historians truly set the standard for generosity intellectual and otherwise and my project is far better because of them. There are many others I would like to acknowledge for providing useful suggestions, thought-provoking conversations, and helping hands along the way. I would like to thank my fellow graduate students in the History Department at Stony Brook University for providing a stimulating and convivial environment, with a particular thanks going to Michael Murphy.

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Mike not only served as an important sounding board throughout my graduate school career but also went so far as to conduct archival research for me in a pinch. A true sign of a great friend! Professors Jana Lipman and Willem van Schendel met with me at different moments early on in this project and those fruitful discussions helped me think through some of my earliest concerns. The community of scholars from, and interested in, Panama helped me sort out life in the capital, especially Richard Millett, Aims McGuinness, Berta Ramona Thayer, Michael Conniff, Frank Robinson, Bill Furlong, Alfredo Castillero Calvo, and Alfredo Castillero Hoyos. Other friends I met in Panama, like Gregorio Gonzlez, Telma Quintanar, Ivn de Len Paz, Ashley Carse, Jeff Parker, Ezer Vierba, and Blake Scott, made Panama City feel like home, while invariably expanding my understanding of the country and its history. I also would like to thank the helpful librarians and archivists from various repositories in Panama, the United States, and the United Kingdom for an overwhelmingly positive experience over the course of many months of research. In Panama, I benefitted from the friendly staffs at the Archivo del Ministerio de Relaciones Exteriores de Panam, the Archivo Nacional de Panam, the Museo, Archivo, Biblioteca Ricardo J. Alfaro, and the Biblioteca Nacional de Panam, where Griselda de Valds and Gregorio Gonzlez deserve a special thank you. The staffs at the Archivo Belisario Porras, the Instituto del Canal y Estudios Internacionales, and the Biblioteca Simn Bolvar (all at the University of Panam) were also very welcoming. In the United States, I spent considerable time at the U.S. National Archives and Records Administration at College Park (Maryland) and the New York Public Library. In England, I conducted research at the National Archives of the UK and logged many hours at the university library at the London School of Economics.

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The extensive research undertaken for this project was only possible because of funding from a number of institutions. This dissertation was made possible by support from the Social Science Research Councils International Dissertation Research Fellowship, with funds provided by the Andrew W. Mellon Foundation. I also came to count on the generous support of the Social Science and Humanities Council of Canadas Doctoral Fellowship. Two highly successful reconnaissance research trips were made possible because of the James R. Scobie Memorial Award from the Conference on Latin America and a Tinker Field Research Grant from Stony Brook Universitys Latin American and Caribbean Studies Center. Finally, I would like to acknowledge the invaluable support of my family my mom, my dad, my grandparents, my brothers, my in-laws, and, most especially, my wife, Kim. She moved with me from Canada to New York, saw me off on research trips that lasted far too long, and provided a source of encouragement through my deepest moments of uncertainty. We were together before I ever conceived of this project and Kim was there as I printed off the last chapter. In fact, it was the birth of our daughter, Ophelia, which provided me with a powerful desire to bring this project to a close. The three of us can now begin our next exciting chapter anew.

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Introduction

The Making of an Illicit Entrept ! ! Three years before 26,000 U.S. troops invaded Panama to apprehend General Manuel Noriega the head of the Panamanian Defense Forces in control of the Panamanian state the New York Times broke the story that came to primarily justify the invasion. Panama Strongman, the 1986 A1 headline screamed, Said to Trade in Drugs, Arms and Illicit Money.1 Colombian drug cartels, U.S. cold warriors, Castros Cuba, the Israelis, the leftist Sandinistas of Nicaragua, and their right-wing enemies the Contras: all engaged the Panamanian state to facilitate contraband flow. The irony appeared thick. The Central American home of the U.S.operated Panama Canal and the North American military bases charged with hemispheric security doubled as a safe haven and transit point for those evading and exploiting U.S.-inspired international crime control. The puzzling question: how could a small nation ostensibly created by U.S. imperialism have become a dangerously independent illicit global entrept in less than a century? My dissertation explores this question primarily through an analysis of the first half of the twentieth century. Taking Panamas 1903 independence from Colombia and the political creation of the U.S.-occupied Canal Zone as the starting point, I explore the myriad ways that both patron and client state engaged smuggling and the borderland cultures of narcotics use, gambling,

1 ! Seymour M. Hersh, Panama Strongman Said to Trade in Drugs, Arms and Illicit Money. New York Times, June 12, 1986, A1.

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boozing, and prostitution activities that many at the time simply referred to as vice.2 I argue that illicit activity constituted a key element of both Panamanian state formation and U.S. imperial expansion. Panama served as an early workshop for U.S. officials to experiment with extraterritorial criminal justice initiatives as a means of control in lieu of direct occupation.3 Local power holders worked with these powerful intrusions but often not in ways U.S. officials hoped. Indeed, my research illustrates that Panamas limited economic benefit from the canal and its traffic combined with foreign legal impositions drove state engagement with newly criminalized activity underground. Controlling the burgeoning illicit infrastructure of state became a crucial component of institutionalized politics and power, setting the important political, economic, and cultural foundation for Panamas infamous role as a so-called narcostate in the late twentieth century. If the 1989 invasion made the Isthmus unique, however, Panamas illicit past did not necessarily make it an imperial outlier. In fact, the centrality of Panama to U.S. empire building makes the Isthmus an ideal location to consider a somewhat counterintuitive empire effect: that U.S. domination often inadvertently fosters illicit state activity, breaking down local boundaries between bureaucratic and outlaw cultures.4 I explore this hypothesis through charting
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What constitutes vice is, of course, is rooted in time and place. While I do use the term throughout this dissertation, I maintain a critical distance that illustrates its historical construction in line with other studies of vice cultures. See, for instance, Paul J. Vanderwood, Satan's Playground : Mobsters and Movie Stars at America's Greatest Gaming Resort (Durham, NC: Duke University Press, 2010). Greg Grandin, Empire's Workshop : Latin America, the United States, and the Rise of the New Imperialism, 1st ed. (New York: Metropolitan Books, 2006). The empire effect refers to the apparent positive benefits of colonial status in the British context. British colonies acquired relatively low borrowing costs in comparison to similar jurisdictions falling outside the boundaries of Empire. See Niall Ferguson and Moritz Schularick, "The Empire Effect: the Determinants of Country Risk in the First Age of Globalization," The Journal of Economic History 66, no. 2 (2006). My argument falls closer to the work of Shannon Lee Dawdy, who argues that colonialism in general frequently creates conditions that foster not only cultures of resistance, but also circuits of seditious power and contraband flow. Shannon Lee Dawdy, Building the Devil's Empire : French Colonial New Orleans (Chicago: University of Chicago Press, 2008), 4.
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the construction and maintenance of the Panama/Canal Zone border over time and the muddied, intersecting worlds of legal and illegal activities in Panamas borderlands. Tracing the dance between those constructing, guarding, and subverting Isthmian borders, I contend, throws the interactions of the states functionaries, the peoples of Panama, and the Isthmuss diasporic cultures into sharp relief and provides a novel lens through which to explore the dynamic interactions of a state in formation, a budding empire, and the vast illegal economic activity that developed alongside canal-inspired legal trade.

The Scope of the Project This dissertation focuses on three interrelated conceptual areas in order to chart the emergence of two distinct regulatory orders on the Isthmus: U.S. imperial domination, Panamanian nation-state formation, and the way that diverse actors in Panama contested, complicated, and participated in these forms of state domestication and control through engaging illicit commerce. First, as a question of empire, my dissertation shifts the focus to examine the neglected relationship between the criminalization of certain goods and activities and political and economic domination. The apparent irresistible growth of the United States post-war Market Empire, as others have pointed out, actually developed in relation to the spread of U.S. criminal justice norms, law enforcement priorities, and policing practices throughout much of the world.5 Indeed, as a recent major synthesis in the history of international relations argues, the end result of twentieth-century extraterritorial criminal law has been something of an

5 ! Victoria de Grazia, Irresistible Empire : America's Advance through Twentieth-Century Europe (Cambridge, Mass.: Belknap Press of Harvard University Press, 2005).

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Americanization of criminal justice systems throughout much of the world.6 Industrialised countries dominated global legal trade in this regulatory environment, whereas the growing number of illegal trades became areas of significant comparative advantage for developing countries.7 This universalizing dynamic of international law divided the developed and developing worlds and served to justify regular, if often subtle, interference in the affairs of sovereign states on the part of the United States.8 The powerful strategy of expanding influence, ensuring considerable regulatory power around the globe without most of the political and economic costs of formal colonization, emerged from the United States experience with empire at the turn of the twentieth century, the time in which Panama gained independence from Colombia with the help of its new North American patron.9 I contend that U.S. imperialism inadvertently fostered the development of illicit activity in Panama through a combination of far-reaching policies and day-to-day activities. The United
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Peter Andreas and Ethan Avram Nadelmann, Policing the Globe : Criminalization and Crime Control in International Relations (Oxford ; New York: Oxford University Press, 2006), 107. See also Ethan Avram Nadelmann, Cops Across Borders : The Internationalization of U.S. Criminal Law Enforcement (University Park, PA: Pennsylvania State University Press, 1993). On the role of exporting criminal justice initiatives in other colonial contexts, see James H. Mills and Patricia Barton, Drugs and Empires : Essays in Modern Imperialism and Intoxication, c.1500-c.1930 (Basingstoke ; New York: Palgrave Macmillan, 2007); Aspirat Petschiri, Eastern Importation of Western Criminal Law: Thailand as a Case Study (Littleton, CO.: Fred B. Rothman, 1987).
7 ! International legal norms weighted heavily towards the interest of wealthy and powerful nations are obviously not unique to the twentieth century, though the twentieth century did see unparalleled international cooperation. See David T. Courtwright, Forces of Habit : Drugs and the Making of the Modern World (Cambridge, Mass.: Harvard University Press, 2001). 6

For the distinction between hard military power of the United States and the more subtle soft power that prefaces international interaction on cooperation instead of coercion, see Joseph S. Nye, The Paradox of American Power : Why the World's Only Superpower Can't Go It Alone (New York: Oxford University Press, 2002), 9. For a critique of this sharp dichotomy and a call to use the middling term coercive co-optation, see Andreas and Nadelmann, Policing the Globe : Criminalization and Crime Control in International Relations, note 29 on p. 259.
9 ! The idea of early-twentieth-century imperial expansion serving as an important period in which the United States developed strategies for exerting international influence that did not necessarily involve occupation is an argument made in Grandin, Empire's Workshop : Latin America, the United States, and the Rise of the New Imperialism; Alfred W. McCoy and Francisco A. Scarano, Colonial Crucible: Empire in the Making of the Modern State (Madison: University of Wisconsin Press, 2009); William O. Walker III, National Security and Core Values in American History (New York: Cambridge University Press, 2009), 45-74.

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States purposefully excluded Panamanians from canal work, instead developing a third country labor system that resulted in between 150,000 to 200,000 West Indian migrants to migrate to the Isthmus during the construction decade (let alone migrants from the United States, Europe, and elsewhere).10 The Canal Zone administration then used the full power of the colonial state to gain control over almost all aspects of life within the ten-mile-wide strip of U.S.-occupied territory, effectively outlawing most of the leisure pursuits in demand from this exceedingly large population of highly mobile, single young men.11 The Zone quickly became a highly regulated moral and racial model that the United States presented as a showpiece for its broader project of expansion. North American administrators, however, never showed the same concern for Panamanian development or the consequential outflows from the Zone into the Republic. Two flows stand out: the consistently heavy flow of commissary contraband that undermined Panamanian state revenue and licit and legal commerce and the thousands of Zone residents and visitors who routinely crossed into Panamas border-hugging terminal cities in search of booze, gambling, drugs, and sex. Panama became, as one U.S. official wrote in 1911, the Redlight District of the Canal Zone.12 The putative threat of Panamanian disorder symbolized by the flow of canal employees, visitors, and especially U.S. soldiers across the border to visit Panamas racially mixed bars and brothels led North American officials to focus considerable attention on Panamas criminal justice system. U.S. officials attempted to coercively co-opt certain regulatory functions of the
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Michael L. Conniff, Black Labor on a White Canal : Panama, 1904-1981 (Pittsburgh, Pa.: University of Pittsburgh Press, 1985), 27-28. I detail this process in chapter two but accounts of life on the Canal Zone can also be found in Julie Greene, The Canal Builders: Making America's Empire at the Panama Canal (Penguin, 2009), 24-44; Conniff, Black Labor on a White Canal : Panama, 1904-1981; David G. McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914 (New York: Simon and Schuster, 1977). ! 62.
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Arthur Bullard, Panama: the Canal, the Country, and the People (the Macmillan Company, 1911), 61-

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Panamanian state.13 They compelled Panama to establish laws meant to quell its problematic entertainment sector, while pressing the client state to employ a North American police expert to ensure proper implementation of these laws. From day one, then, Panama provided an early laboratory for the United States to work through strategies of domination and control that did not involve full-blown colonial occupation. And, at base, the United States pursued strategies against Panamanian vice that resonate today, not least the unrelenting focus on the problem of foreign supply over that of domestic demand. The second conceptual focus of this dissertation centers on the ways the Panamanian nation-state developed in relation to illicit activity. Panamanian history has been rife with smuggling and other illegal activity since the sixteenth century, when colonial Spain began to use the Isthmus to transport Peruvian silver. But, while continuities with Panamas deep past remain, the interwoven nature of illegality in modern state formation most clearly reflects the distinct social realities of the twentieth century. The new client state with questionable legitimacy, a limited social base, and a foreign power occupying territory that pierced the center of the country developed firmly within the contours of U.S. power: that is, with a foreign power occupying its most important resource, the transit route.14 Panama received no significant benefit from canal employment, no income tax revenue from canal employees, no commercial access to the ships that passed through the canal, and very little everyday commercial activity

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Andreas and Nadelmann, Policing the Globe : Criminalization and Crime Control in International Relations, note 29 on p. 259. For a classic essay detailing the route of transit as Panamas primary natural resource, see Alfredo Castillero Calvo, "Transitismo y dependencia: el caso del Istmo de Panam," Nueva Sociedad 5 no. marzo-abril (1973).
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from those living and working on the Canal Zone.15 In fact, state officials had to defensively criminalize Canal Zone commissary goods in an ineffectual attempt to salvage its own national market. Under such trying circumstances, office holders chose to promote economic activity for which the United States had no interest, whether legal in Panama or not. Merchants and state officials in the Republic established unwritten working relationships or unofficial state policies to generate cross-border traffic based on the demand for services prohibited on the Canal Zone.16 Servicing the desire for alcohol, drugs, gambling, and prostitution, then, became large niche Panamanian markets in which the merchants of Panama had a distinct comparative advantage.17 The Panamanian state engaged commissary smuggling and the flourishing entertainment industry using both licit and illicit methods. I explore the intersecting worlds of legal and illegal state practices from the bottom up, through examining the regulatory practices of the everyday. It is the practices and politics of life, anthropologists Veena Das and Deborah Poole point out, that shape the political, regulatory, and disciplinary practices that constitute, somehow, that

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For a recent economic analysis of the economic benefit of the canal for Panama, see the chapter titled Passed by the Ditch in Noel Maurer and Carlos Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal (Princeton: Princeton University Press, 2011), 189-211. Commodity studies have long pointed to the beneficial connections between commodity interests and the state. See, for instance, Mauricio A. Font, Coffee, Contention, and Change in the Making of Modern Brazil (Cambridge, Mass.: B. Blackwell, 1990); Steven Topik, Carlos Marichal, and Zephyr L. Frank, From Silver to Cocaine : Latin American Commodity Chains and the Building of the World Economy, 1500-2000 (Durham, N.C.: Duke University Press, 2006). For a study that focuses on implicit state policy in relation to illegal activity, see Luis Astorga, "Traficantes de drogas, polticos y policas en el siglo XX mexicano," in Vicios pblicos, virtudes privadas: la corrupcin en Mxico, ed. Claudio Lomnitz (Mexico: Centro de Investigaciones y Estudios Superiores en Antropologa Social (CIESAS), 2000). Bordellos, bars, and gambling houses thrived just outside U.S. company towns, U.S. foreign military bases, and indeed the United States itself. See Greg Grandin, Fordlandia : the Rise and Fall of Henry Ford's Forgotten Jungle City, 1st ed. (New York: Metropolitan Books/Henry Holt and Co., 2009), 10-12, 158-59; Jana K. Lipman, Guantnamo : a Working-Class History between Empire and Revolution (Berkeley: University of California Press, 2009), 105-17; Vanderwood, Satan's Playground : Mobsters and Movie Stars at America's Greatest Gaming Resort.
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thing we call the state.18 From the traditional perspective of comparative state studies (assuming Western Europe as the norm) Panama would be deemed institutionally weak, making the state susceptible to penetration by criminal elements.19 This dissertation moves away from such unhelpful comparisons, eschewing simplistic binaries of good/bad, legitimate/illegitimate, legal/illegal to instead broaden the traditional definition of what constitutes a state strategy to secure revenue.20 Similarly to other client states around the Caribbean basin, government became one of the few Isthmian enterprises that remained (almost entirely) in the hands of Panamanians. Its agents therefore developed pragmatic, imaginative, and often-clandestine practices (usually termed simple corruption) to circumvent damaging foreign impositions and generate revenue.21 From this vantage point, state corruption can be read as a necessary form of resistance to colonial domination that quickly became an important component of institutionalized state politics and power. Certain cross-border flows provided economic lifelines for the Republic. At the same time, however, these flows originating from the Canal Zone contributed to a virulent strain of anti-Americanism in Panama that helped congeal nation with state. Many Panamanians began to
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Veena Das and Deborah Poole, "State and its Margins: Comparative Ethnographies," in Anthropology in the Margins of the State, ed. Veena Das and Deborah Poole (Santa Fe, N.M.: School of American Research Press, 2004), 3. See also G. M. Joseph and Daniel Nugent, Everyday Forms of State Formation : Revolution and the Negotiation of Rule in Modern Mexico (Durham: Duke University Press, 1994). For an example of the study of corruption from this institutional perspective, see Alfonso W Quiroz, Corrupt Circles: a History of Unbound Graft in Peru (Baltimore: John Hopkins University Press, 2008). Carolyn Nordstrom, Shadows of War : Violence, Power, and International Profiteering in the TwentyFirst Century (Berkeley: University of California Press, 2004), 36; Carolyn Nordstrom, Global Outlaws : Crime, Money, and Power in the Contemporary World (Berkeley: University of California Press, 2007); Willem van Schendel and Itty Abraham, "The Making of Ilicitness," in Illicit Flows and Criminal Things : States, Borders, and the Other Side of Globalization, ed. Willem van Schendel and Itty Abraham (Bloomington: Indiana University Press, 2005). Cuba offers the clearest example. Studies of Cuba that have particularly shaped my thinking on Panama include Louis A. Prez, Cuba under the Platt Amendment, 1902-1934 (Pittsburgh: University of Pittsburgh Press, 1986); Eduardo Senz Rovner, The Cuban Connection : Drug Trafficking, Smuggling, and Gambling in Cuba from the 1920s to the Revolution (Chapel Hill: University of North Carolina Press, 2008).
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see the Canal Zone demand for vice as a corrupting influence on the new country. Worse was the humiliation that many locals felt at the hands of often drunk and disrespectful visitors, who acted as though the Republic was a lawless environment full of racial inferiors deserving of little more than contempt. The regular violence that erupted in the terminal cities between U.S. visitors and Panamanians and the dismissive stance of the North American administrators towards Panamanian complaints of contraband stoked a defensive, xenophobic nationalism. The Panama/Canal Zone border, for many Panamanians, became the ultimate symbol of arrogance and injustice, the cross-border cooperation that U.S. officials liked to celebrate flowing in but one direction. Finally, the third conceptual focus of my dissertation looks at the ways in which diverse people in Panama complicated, contested, and participated in these state projects of domestication and control. Merchants, workers, sailors, soldiers, and hustlers, among others, crisscrossed the border daily in this inherently transnational space.22 These lives existed outside the traditional confines of the nation-state, straddling distinct sovereignties and existing in neither one nor the other entirely.23 But, as historian Jana Lipman points out in her study of the U.S. naval base in Guantnamo, Cuba, studies that focus on borderlands disregard state power at their own peril. The term international, the history between states, does not lose its value, Lipman writes. If anything international relations were magnified in such obviously transnational spaces, with those living in the borderlands keenly aware of the international
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On the transnational turn see Shelley Fisher Fishkin, "Crossroads of Cultures: The Transnational Turn in American Studies; Presidential Address at the American Studies Association, November 12, 2004," American Quarterly 57, no. 1 (2005); Micol Seigel, "Beyond Compare: Comparative Method after the Transnational Turn," Radical History Review 91, no. Winter (2005); Sandhya Rajendra Shukla and Heidi Tinsman, "Introduction: Across the Americas," in Imagining our Americas : Toward a Transnational Frame (Durham: Duke University Press, 2007); David Thelen, "The Nation and Beyond: Transnational Perspectives on United States History," Journal of American History 86, no. December (1999).
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Schendel, "Spaces of Engagement: How Borderlands, Illicit Flows, and Territorial States Interlock," 43-

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border that constituted their daily reality.24 My dissertation takes this border awareness as a starting point, delving into the varied ways in which people engaged the border with the specific purpose of either breaking or manipulating the law or avoiding the ire of those interested in upholding purported community standards the ways, in other words, that they participated in what Peter Andreas calls border games.25 Gaming the border, more often than not, aided in producing and reproducing the broad social meanings of the increasingly distinct sovereign territories of the transit zone: racial order and disorder, morality and immorality, virtuousness and corruption. Global entrepreneurs Panamanians, U.S. citizens, and immigrant Cubans, Jamaicans, Colombians, Jewish, Chinese, and Middle Easterners, among others often set up shop near the Panama/Canal Zone border in the Republic to profit from decidedly stringent Zone regulation. These traders maintained symbiotic, if clandestine, relationships with Panamanian state functionaries. All traders, however, were not equal in Panamas borderlands. State agents unofficially targeted the most politically vulnerable migrant communities West Indians and the Chinese especially extracting more onerous requirements to maintain these insecure partnerships. But even those considered least desirable in Panamas increasingly nationalistic environment successfully negotiated with the state. Chinese cantina owners served up cheap booze to a crowd of Panamanians, U.S. soldiers, canal workers, and sailors, as Jamaicans traded in sex alongside French, Panamanian, and Colombian women. And, while U.S. administrators consistently wrung their collective hands over Panamanian disorder, racial and otherwise, the tantalizingly exotic
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Lipman, Guantnamo : a Working-Class History between Empire and Revolution, 5.

The distinction I make between illegal and illicit: illegality is defined entirely through the laws of a sovereign state, whereas illicit is based more on social perceptions of activities. The illicit, then, is not necessarily illegal and the illegal is not necessarily illicit. See Schendel and Abraham, "The Making of Ilicitness." See also Peter Andreas, Border Games : Policing the U.S.-Mexico Divide (Ithaca, N.Y.: Cornell University Press, 2000).

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draw of Panama for Canal Zone inhabitants nonetheless enabled the United States to successfully project the Canal Zone as a symbol of Anglo-Saxon Protestant discipline, efficiency, and virtue. The growing starkness of the Panama/Canal Zone border provided opportunities on the Canal Zone, too, though they were often more exclusionary due to a combination of the limitations on private enterprise and the staunch white supremacy that colored U.S. expansion. Certain traders of European heritage played the increasingly less competitive Zone market to their advantage, colluding with colonial state functionaries to wield considerable influence over processes like Canal Zone business licensing or the awarding of lucrative supply contracts. A great many others manipulated the Panama/Canal Zone border in more quotidian ways. The Canal Zone, in fact, served as a veritable staging ground for many running contraband into Panama, the highly fluid border providing a shield of sovereignty from Panamanian law. The U.S. administration in the end made a series of incremental and half-hearted attempts to crackdown on illegal commissary flows into Panama. The racially specific measures did little, however, to quell the contraband flow. Indeed, perhaps more than anything else, the policy shift highlighted the continuously trying circumstances that certain diasporic migrant groups faced in the Panamanian borderlands, a space between empire and nation, licit and illicit state functions, and similarity and difference.

Contributions to the Existing Literature My dissertation engages four main bodies of scholarship, bringing into dialogue literatures that have yet to be cross-fertilized the literature on U.S. imperialism, the scholarship on illegal and illicit goods and people, the study of borders and borderlands, and the historical research on Panama. First, the study of U.S. empire is a well-developed field that has moved

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towards a more relational or two-way approach, focusing as much on culture as on political and economic domination.26 This more holistic approach, among other things, highlights the varied ways in which U.S. imperialism has differed from classic European models, not least the loosely articulated character of expansion that saw government partner with private and not-for-profit organizations such as the Young Mens Christian Association (YMCA).27 Moral reformers, Protestant missionaries, clean-government crusaders, and Anglo-Saxon supremacists accompanied soldiers, civil servants, and capital abroad with the pronounced goal of reforming the world.28 These moral entrepreneurs were often veterans of progressive-era domestic campaigns to rid North American urban centers of prostitution, alcohol, opiates, cocaine, gambling, and government corruption. They now extended the fight outside the nations borders, forging an international agenda that reflected the preoccupations of upper-middle-class AngloAmerican Protestants. Moral reform, as historian Ian Tyrrell recently put it, while noting the increase in American missionaries working abroad went from 900 in 1890 to 14,000 in 1920, became part of the glue of American empire.29 This reformist zeal permeated the broader

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The foundational text that has spawned a vast literature on the cultures of imperialism is Amy Kaplan and Donald E. Pease, Cultures of United States Imperialism (Durham: Duke University Press, 1993). For a useful synthesis of the recent literature with a programmatic edge, see Paul A. Kramer, "Power and Connection: Imperial Histories of the United States in the World," The American Historical Review 116, no. 5 (2011). For a Latin American focused anthology that makes an explicit attempt to wed political economy perspectives (usually through a dependency perspective) popular in the 1960s and 1970s with more recent cultural concerns, see G. M. Joseph, Catherine LeGrand, and Ricardo Donato Salvatore, Close Encounters of Empire : Writing the Cultural History of U.S.-Latin American Relations (Durham, N.C.: Duke University Press, 1998). Alfred W. McCoy, Francisco A. Scarano, and Courtney Johnson, "On the Tropic of Cancer: Transitions and Transformations in the U.S. Imperial State," in Colonial Crucible: Empire in the Making of the Modern State, ed. Alfred W. McCoy and Francisco A. Scarano (Madison: University of Wisconsin Press, 2009), 7, 30. Ian R. Tyrrell, Reforming the World : the Creation of America's Moral Empire (Princeton: Princeton University Press, 2010); Alan Dawley, Changing the World: American Progressives in War and Revolution (Princeton: Princeton University Press, 2003); Emily Rosenberg, Spreading the American Dream: American Economic and Cultural Expansion, 1890-1945 (New York: Hill and Wang, 1982). Ian Tyrrell, "Empire in American History," in Colonial Crucible: Empire in the Making of the Modern State, ed. Alfred W. McCoy and Francisco A. Scarano (Madison: University of Wisconsin Press, 2009), 554.
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expansionist project and had deep ramifications on the societies that came under U.S. domination the various effects of which historians are now only beginning to untangle.30 My dissertation centers on this particular aspect of the U.S. imperial project in Panama. Inspired by the emergent interdisciplinary literature on illicit flows, I contend that illicit and illegal border crossings provide an illuminating lens to flesh out the particularities of these distinct regulatory systems, born of lopsided power relations, diverging legal frameworks, economic interests, and political and cultural norms.31 At the same time, however, such a focus highlights a number of unacknowledged linkages that bound these seemingly disparate communities together. Indeed, in many ways, the Isthmian communities remained a single social field: a new kind of community, as historical anthropologist William Roseberry put it, forged not simply in contact between separate and discrete cultures changed but nonetheless still discrete through contact but also, and more fundamentally, through an ongoing set of relationships that were part of the daily material and cultural reality.32 Panamanians, U.S. citizens, and other diasporic peoples produced and maintained these connections through daily strategic border crossings, in the process fostering specific types of primitive accumulation, generations of cumulative experience, and infrastructural development that profoundly affected the path of Isthmian development.
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See, for instance, Alfred W. McCoy, Policing America's Empire : the United States, the Philippines, and the Rise of the Surveillance State (Madison, Wis.: University of Wisconsin Press, 2009), 59-125; McCoy and Scarano, Colonial Crucible: Empire in the Making of the Modern State, 83-128. For a study that challenges the formulation that the United States imposed drug laws on Mexico specifically, see Isaac Campos, Home Grown : Marijuana and the Origins of Mexico's War on Drugs (Chapel Hill: University of North Carolina Press, 2012). The best representation of this emerging subfield is Willem van Schendel and Itty Abraham, Illicit Flows and Criminal Things : States, Borders, and the Other Side of Globalization (Bloomington: Indiana University Press, 2005). William Roseberry, "Social Fields and Cultural Encounters," in Close Encounters of Empire : Writing the Cultural History of U.S.-Latin American Relations, ed. G. M. Joseph, Catherine LeGrand, and Ricardo Donato Salvatore (Durham, N.C.: Duke University Press, 1998), 519-20.
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These important cross-border flows have remained in the scholarly shadows until recently because of a long held, often tacit, scholarly assumption that the territorial state marked the limits of social life.33 The third body of scholarship, the field of borders and borderlands, challenges such a conception through focusing on both sides of the border, in effect de-centering the state and privileging that passing across it over a static and naturalized boundary.34 A borderland focus not only makes clandestine flows much more visible, as Asian historical anthropologist Willem Van Schendel points out, but also highlights a fact obscured by the language of control employed by the state and its agencies. That is, borders need illegal goods and gain significance through practices of regulation and exclusion. Charting border construction and maintenance on the Isthmus, then, lays bare the fact that the border was a profoundly human construction. Guarding against illegal threats, whether contraband goods or opium dens, melded easily with broader discourses of otherness that existed on either side of the divide, helping to both create and reinforce potent constructions of racial, moral, and cultural difference.35 Last, my project brings to light a significant aspect of one of the least-studied countries in the Americas. Two broad trends have existed in the traditional historical literature on twentieth-

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For an overview of the problem of state-centrism, see Schendel, "Spaces of Engagement: How Borderlands, Illicit Flows, and Territorial States Interlock." The borderlands literature is immense. I have drawn on geographically varied work, including Andreas, Border Games : Policing the U.S.-Mexico Divide; Michiel Baud and Willem van Schendel, "Toward a Comparative History of borderlands," Journal of World History 8, no. 2 (1997); Hastings Donnan and Thomas M. Wilson, Borders : Frontiers of Identity, Nation and State (Oxford ; New York: Berg, 1999); Paul Nugent, Smugglers, Secessionists & Loyal Citizens on the Ghana-Toga Frontier : the Life of the Borderlands since 1914 (Athens: Ohio University Press, 2002); Willem van Schendel, The Bengal Borderland : Beyond State and Nation in South Asia (London: Anthem, 2005); Samuel Truett and Elliott Young, Continental Crossroads : Remapping U.S.-Mexico Borderlands History (Durham: Duke University Press, 2004). Paul Gootenberg, "Talking like a State: Drugs, Borders, and the Language of Control," in Illicit Flows and Criminal Things : States, Borders, and the Other Side of Globalization, ed. Willem van Schendel and Itty Abraham (Bloomington: Indiana University Press, 2005). On human agency in the transformation of a space into a place, see Raymond B. Craib, Cartographic Mexico : a History of State Fixations and Fugitive Landscapes (Durham [N.C.]: Duke University Press, 2004), 1-7.
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century Panama.36 Much of the English-language scholarship has focused on the presence and impact of the United States on high-level diplomacy and stories of U.S. engineering excellence or progress that centered on the canal.37 The scholarship from Panama, on the other hand, has spent considerable energy illustrating Panamas national bona fides in the face of longstanding claims of it being an artificial, imperial creation.38 In the case of the former body of scholarship, economic activity spurred on by the canal has been celebrated while the illegality that it stimulated went unmentioned; in the latter, passionate insistence on the legitimacy of the nation has obscured its illicit nature. Panamanian historiography, more recently, has expanded to tackle subjects as varied as the countrys evolving national imaginary, the West Indian and Chinese diasporas, the politics of labor in the Republic and on the Canal Zone, the environmental impact of the canal, and the militarization of Panamanian politics. Outside of personality driven accounts of Noriegas infamous narco-state during the 1980s, however, no study has taken illicit activity in the

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This scholarly division is also outlined in Peter Szok, "Beyond the Canal: Recent Scholarship on Panama," Latin American Research Review 37, no. 3 (2002). Gerstle Mack, The Land Divided, a History of the Panama Canal and other Isthmian Canal Projects (New York,: Knopf, 1944); McCullough, The Path between the Seas : The Creation of the Panama Canal, 18701914; Walter LaFeber, The Panama Canal : the Crisis in Historical Perspective, Updated ed. (New York: Oxford University Press, 1989); John Major, Prize Possession : the United States and the Panama Canal, 1903-1979 (Cambridge ; New York: Cambridge University Press, 1993); William David McCain, The United States and the Republic of Panama, Duke University publications (Durham, N.C.: Duke University Press, 1937). For a detailing of Panamas leyenda negra, see Peter A. Szok, "La ltima gaviota": Liberalism and Nostalgia in Early Twentieth-Century Panam (Westport, Conn.: Greenwood Press, 2001), 39-43. For recent examples of scholarship that maintain Panamas inauthentic roots, see Ovidio Diaz Espino, How Wall Street Created a Nation : J.P. Morgan, Teddy Roosevelt, and the Panama Canal (New York: Four Walls Eight Windows, 2001); John Weeks and Phil Gunson, Panama : Made in the USA (London: Latin American Bureau, 1991). The work of Ricaurte Soler best illustrates the traditional research on Panama. See, for instance, Ricaurte Soler, "Panam, nacin y oligarqua, 1925-1975," in Las clases sociales en Panam, ed. Marco A. Gandsegui (Panam: CELA, 2008); Ricaurte Soler, Formas ideolgicas de la nacin panamea (Panam: Ediciones de la Revista Tareas, 1963). For a diverse illustration, see the anthology Alfredo Figueroa Navarro, ed. "visin de la nacionalidad panamea": simposio celebrado el 6 de julio de 1991 en el teatro "La Huaca" (Atlapa), Panama, vol. 91/92 (Panama: Instituto Latinoamericano de estudios avanzados,1991).
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twentieth century as its focus.39 This is not to say that illegal and illicit activity is absent in Panamanian historical writing. It surfaces regularly, if fleetingly, when, say, historian Walter LaFeber mentions the type of person the Isthmus attracted the rootless, lawless, transient who obeyed no authority or when historian Marixa Lasso claims that illegality in seventeenthcentury Panama sheds light on the origins of not so agreeable, but fundamental, aspects of our present-day thinking.40 It is the subtext of newspaper articles that argue that deceptive and unscrupulous behavior known locally as el juega vivo panameo is so Panamanian that the country may cease to exist as a nation if the word juega vivo disappeared from the popular lexicon and the explicit focus of a sophisticated body of historical research on Panama spanning the Spanish colonial period into the nineteenth century.41 It has been, in short, a potent force across the broad expanse of Panamanian history. My dissertation seeks to bring illegal activity to the fore of twentieth-century Panamanian research, recalibrating, in the process, the study of state and empire in Latin America.

Method and Structure

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The one exception, in that it focuses on illegality during the entire military period post 1968 coup, is Steve C. Ropp, "Explaining the Long-Term Maintenance of a Military Regime: Panama before the U.S. Invasion," World Politics 44, no. 2 (1992).
40 ! LaFeber, The Panama Canal : the Crisis in Historical Perspective, 24; Marixa Lasso de Paulis, "La ilegalidad como sistema en la sociedad panamea del siglo XVII," Humanidades 2, no. abril (1994): 7. 39

Luis Pulido Ritter, Teora del juega vivo, La Prensa de Panam, January 25, 2005, accessed August 31, 2012, http://mensual.prensa.com/mensual/contenido/2005/01/25/hoy/opinion/115077.html. For studies that focus on illegality during the colonial era, see Celestino Araz, "El contrabando en el Istmo de Panam y la Nueva Granada, una de las causas del colapso de las ferias en Tierra Firme (1700-1731)," Revista Lotera 342-343(1984); Alfredo Castillero Calvo, "Venalidad de los cargos pblicos y nacimiento de la primera oligarqua," in Historia general de Panam, Volumen I Tomo I, ed. Alfredo Castillero Calvo (Panam: Comit Nacional del Centenario de la Repblica, 2004); Germn de Granda, "Una ruta martima de contrabando de esclavos negros entre Panam y Barbacoas durante el asiento ingls," Revistas de Indias 143-144(1976); Lasso de Paulis, "La ilegalidad como sistema en la sociedad panamea del siglo XVII."; Argelia Tello, "Contrabando vs. Audiencia. Una encrucijada panamea del siglo XVIII," Revista Lotera 320-321(1982).

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The obvious challenge in researching illegal and illicit activity is its clandestine nature. Drug trade researcher Michael Kenney likens the process to that of a paleontologist piecing together a reasoned scientific account out of an incomplete record of plant and animal fossils. The study of illegal activities similarly relies on a sketchy empirical record: the researcher must cast the research net wide in order to compile a coherent narrative.42 This wide-net approach accurately describes the research I undertook for this project, a process during which I visited more than 10 different archives in Panama, England, and the United States. What follows, however, is not a single, unified story but rather a series of stories that center on the bordercrossing themes of smuggling and vice. I chose this thematic presentation in order to highlight the multivalent and heterogeneous nature of border construction and maintenance. Borders, after all, do not develop in relation to a single flow (as a term like drug route suggests) but rather through multiple types of crossings that often have common characteristics, involve the same actors, and feed off of each other.43 My focus on a number of loosely related border interactions, then, is meant to capture the differing political, economic, and cultural concerns that shaped the distinct but interrelated state projects of domestication and control on the Isthmus of Panama. The dissertation begins with a broad overview, detailing illicit activity on the Isthmus of Panama through the broad expanse of its boom and bust history that began in the Spanish colonial era. Chapter One specifically highlights a tension that has perpetually existed on the Isthmus: that is, the political and economic need for a strong relationship with a foreign power
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Michael Kenney, From Pablo to Osama : Trafficking and Terrorist Networks, Government Bureaucracies, and Competitive Adaptation (University Park, Pa.: Pennsylvania State University Press, 2007), 1618. Nordstrom, Global Outlaws : Crime, Money, and Power in the Contemporary World; Eric Tagliacozzo, Secret Trades, Porous Borders : Smuggling and States along a Southeast Asian frontier, 1865-1915 (New Haven: Yale University Press, 2005); Schendel, "Spaces of Engagement: How Borderlands, Illicit Flows, and Territorial States Interlock."
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and the simultaneous need to subvert foreign control in order to generate local profits from the transit route. It notes the gaps that perpetually existed between the broad documentable colonial designs and the undocumented local norms and practices that actually gave form to Isthmian governance. Panamanian authorities deep history of insubordinate, duplicitous, and politically savvy dealings with outside powers, I argue, ultimately set the stage for its twentieth-century association with the United States. Chapters Two and Three center on the first decades after Panama gained its independence from Colombia and the United States took formal possession of the Canal Zone. Chapter Two focuses on the somewhat arduous project of the Canal Zone administration to transform its territory from a space nearly indistinguishable from the wild and racially mixed terminal cities of the Republic in 1904 to a putative model of morality and racial order by the end of construction in 1914. It links the general racial and moral claims that colored the broader project of U.S. expansion to the on-the-ground project in Panama, arguing that the Panama/Canal Zone border became ground zero in the increasingly activist colonial states struggle to establish a sharply defined Anglo-Saxon Protestant moral order. Strategic border crossings became the norm for Canal Zone residents and visitors alike, while servicing the demand for alcohol, drugs, gambling, and prostitution became almost exclusively the domain of the Republic. Chapter Three sketches the muddied, intersecting worlds of legal and illegal practices in Panamas cosmopolitan terminal cities in the decades after canal construction. The impact of Canal Zone policies in combination with the lack of licit economic opportunities vis--vis the canal and its traffic led public office holders and merchants to focus on generating cross-border traffic based on the demand for services prohibited on the Canal Zone. North American pressure on Panamanian lawmakers to reform its criminal justice system, however, drove state engagement with the

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newly criminalized activities underground. The paradoxical effects of Panamas continuously popular vice markets was to exacerbate an already tense relationship between Panama and the United States, bolster anti-American sentiment in Panama, and increase local politicos reliance on the burgeoning illicit infrastructure to consolidate political power and fund the project of state modernization. Panamanian merchants and office holders exploited regulatory contrasts in the highly fluid borderlands but this did not negate the need for the state to cultivate its territorial authority at the Panama/Canal Zone border. Chapters Four and Five survey Panamas efforts to better demarcate its sovereignty in the borderland. Chapter Four centers on the broad impact of the 1915 law to criminalize Canal Zone commissary good use among non-canal employees in the Republic. While spawning a culture of permissible illegality in Panama among merchants, consumers, and state functionaries, who often used the law as a tool to illicitly augment meager wages I argue that anti-smuggling legislation nonetheless served as a productive force for the larger project of nation-state building. The putative battle against contraband not only increased the political relevance of the border for all crossers but provided fuel for Panamas increasingly defensive and xenophobic national imaginary. Enforcement effortlessly merged with broader discourses of otherness already percolating in the Republic, vilifying the United States in the abstract and concretely targeting the politically vulnerable West Indian and Chinese populations on the ground. Chapter Five explores commissary smuggling with an optic trained on the Canal Zone. It probes the significant disconnect between the principled rules that codified Zone conduct and the everyday regulatory practices that turned the U.S.-occupied territory into a shielded staging area for running contraband into Panama. The Canal Zone administration and many Canal Zone employees dismissed Panamas consistent calls for tighter commissary

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regulation, employing an often-hostile nationalist rhetoric that celebrated U.S. sovereignty over the Canal Zone and treated collaboration with Panama as something of a retreat. For all the purported strength of U.S. authority, however, transnational flows continued in both directions, notably the Zone adopting race-based measures that reflected the regulatory practices of Panamanian state functionaries. Such reforms, while solidifying links between race, culture, and delinquency across Isthmian borders, did little to stifle cross-border contraband. In fact, as I argue, decades-long toleration of rule-skirting commissary practices on the Canal Zone helped undermine both the rule of law in the young Republic and the legitimacy of the Panamanian state more generally. This dissertation concludes with an epilogue that follows the most pertinent themes developed over the first half of the twentieth century into the decades after World War Two. The local dynamics that characterized the Panamanian borderlands in effect went global. The Cold War, the establishment of a truly global U.S.-inspired drug prohibition regime, the rise of financial globalization, the revolutionary strife in Central America, and the explosive growth of neighboring Colombias cocaine industry all led to new illicit opportunities that reignited Panama as an important point of international traffic apart from the U.S-controlled canal. And, while geography undoubtedly played a role, so too did the Republics established illicit infrastructure and the normalized culture of illegality that had blossomed via its relationship with the United States over the first half of the twentieth century. General Noriegas putative narcostate is the obvious end to this story. With that said, however, it is worth pointing out that the actions of Noriega seem less exceptionally evil from the analysis found in this dissertation. Indeed, from this perspective, the 1980s provide just another example of Panamanian power holders subverting specific foreign impositions on the transit route in order to amass as much

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profit from an ephemeral boom as possible. Noriega was not the first. And, as anyone familiar with Panama today will attest, he most certainly was not the last.

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Chapter 1

Illicit Crossings: the Deep History of Contraband and Disorder at an Imperial Outpost

This chapter charts Panamas history as a colonial transit site, from its beginning as a transport hub in Spains sixteenth-century American holdings through the 1903 Hay-BunauVarilla Treaty that turned Panama into a protectorate of the United States. Over these four centuries, Panama was never fully independent. The particular sets of economic and political arrangements imposed on Panama by distant metropoles led to an inordinate degree of acquisitional power in local positions of authority. I argue that Panamas governing elite adopted pragmatic, imaginative, and often-illegal tactics to manipulate laws governing international trade flows for local benefit. This deep history of insubordinate, duplicitous, and politically savvy engagement with outside power ultimately set the stage for the twentieth-century association with the United States a tense relationship full of willful misunderstanding, manipulation, and outright hostility. Three interrelated themes exist throughout the broad expanse of Panamas boom and bust history and center the focus of this chapter: the elites economic reliance on outside power, the elites political reliance on outside power, and the elites consistent unreliability as subservient colonial administrators for outside power. First, as a question of economic reliance on outside power, this chapter sketches how Spains colonial system created lasting economic dependence on foreign interest in Panama as a site of international transit. Lodging, transport, and other related service activities dominated the local economy. Without international traffic, as locals found time and again over the course of the four centuries under review, the Isthmus became
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little more than an economically stagnant backwater. Second, the commercial focus of the local economy combined with fundamental economic uncertainty to create chronic political instability. Panamas power holders were not hacendados (with power exercised through land monopolization in an agricultural society) but urban merchants who had fewer significant ties of persuasion to Panamas urban, black majority. The maintenance of their privilege relied on outside military power. Foreign troops stationed on the Isthmus to ostensibly protect the transit route consistently played a crucial local role in preserving Panamas lopsided status quo. The chapters final theme is Panamas consistent unreliability as a subservient colonial outpost. The elite may have relied on international alliances at base but the day-to-day economic interests of local power holders rarely squared with those of foreign power. Spain, Bogota, and private companies, such as the New York-based Panama Railroad Company, sought an acquiescent and orderly Isthmian environment through which to route their goods and people elsewhere; locals, on the other hand, hoped to amass as much of the profit from the fleeting transit booms as possible. It was, in essence, a zero-sum game and gaps perpetually existed between broad documentable colonial designs and undocumented local norms and practices. I argue that this inherent tension is thrown into sharpest relief through a focus on local activities that countered larger colonial designs: smuggling and rampant tax evasion, on the one hand, and colonial Panamas raucous service economy that specialized in gambling, booze, and brothels, on the other. Panamas governing elite consistently disappointed foreign allies when it came to local domestication and control strategies. The clannish world of Panamanian power politics and commerce, in short, had little respect for foreign impositions that ran counter to the interests of personal or kinship group networks.

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The Creation of the Isthmian Transit Route The Spanish colonial system that created silver-rich Potos a city chillingly high on the Bolivian altiplano that nonetheless had more inhabitants than Paris or Madrid by the end of the sixteenth century also created Panama, fueled by that silver, as the most active route of interoceanic transport between Europe and the American Pacific. A significant portion of Panamas indigenous population already had perished by the time that migrating Spanish traders and colonial officials arrived to exploit Panamas important position for colony-metropole trade in 1540.1 Thereafter, four to five thousand soldiers accompanied Seville-based merchants once a year to meet Peruvian traders in Nombre de Dios and then Portobelo after 1597 to trade in silver, gold, cacao, slaves, and other colonial commercial goods. Panamas colonial fair became one of the most important trade fairs of the early modern period: 60 to 65 percent of the 16,886,000 kilos of silver and the 185,000 kilos of gold that entered Spain from the colonies between 1503 and 1660 passed across the Isthmus.2 Visitor Thomas Gage, who tempted his English readers to attack Spains colonies through emphasizing Spanish corruption and riches, marveled that the mule trains to Portobelo came thither from Panama [City], laden with wedges of silver, which

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Panamas indigenous population thrived prior to contact. See Alfredo Castillero Calvo, "Reorganizacin econmica y poltica del espacio: 1519-1581. Fundacin y funcin de los pueblos de espaoles e indios," in Historia general de Panam, ed. Alfredo Castillero Calvo (Panam: Comit Nacional del Centenario de la Repblica, 2004). Certain indigenous populations did continue to thrive, however, and conflict with Spanish colonizers did exist. See, for instance, Ignacio Gallup-Diaz, The Door of the Seas and Key to the Universe : Indian Politics and Imperial Rivalry in the Darin, 1640-1750, Rev. ed. (New York, NY: Columbia University Press, 2005). For charts documenting the patterns of the fleets and fairs, see Alfredo Castillero Calvo, Los metales presiosos y la primera globalizacin (Panam: Banco Nacional de Panam, 2008), 145; Christopher Ward, Imperial Panama : Commerce and Conflict in Isthmian America, 1550-1800, 1st ed. (Albuquerque: University of New Mexico Press, 1993), 104-11. The amount of precious metal that passed through the Isthmus can be found in Enriqueta Vila Vilar, " Las ferias de Portobelo: apariencia y realidad del comercio con Indias," Revista Lotera 358(1986): 39.
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were unladen in the public market-place, so that there the heaps of silver wedges lay like heaps of stones in the lost.3 The trade riches at Panama drew transient Spaniards who, as chronicler Pedro Cieza de Len famously put it, do not intend to be [in Panama] longer than it takes to get rich; and so some go and others come; and few or none watch out for the public good.4 While a few locally based merchants engaged in international trade, the great majority profited from servicing the needs of visitors. The dizzying prices charged during fair time reflected the highly advantageous circumstances in which Panamas merchants found themselves for a month or so each year. Mule transport along the Portobelo-Panama route was 13 times more expensive than the HuancavelicaPotos route and 44 times that of the Acapulco-Veracruz route; a single pound of beef sold for two reales in Portobelo during the fair, whereas the regular price was thirteen pounds for half a real; Isthmian money lenders charged up to forty percent interest on short term loans; and one desperate merchant paid 1000 pesos to rent a small commercial space for just fifteen days in 1648. Speculative commerce trumped economic diversification and development for merchants, who often imagined Panama as a lucrative steppingstone to elsewhere.5 The inconsistent and uncertain nature of Isthmian trade heightened the ferocity of competition among Panamas budding elite to dominate commercial and political life. This led to four powerful clans emerging by the turn of the seventeenth century, aligned through a
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3

Thomas Gage, The English-American: A New Survey of the West Indies, 1648 (Taylor & Francis, 2004),

365, 68. Quote taken from Celestino Araz and Patricia Pizzurno Gels, El Panam hispano (1501-1821) (Panam: Ediciones La Prensa, 1991), 58. Castillero Calvo, "Transitismo y dependencia: el caso del Istmo de Panam," 43-44; Alfredo Castillero Calvo, "Economa terciaria y sociedad de Panam en los siglos XVI y XVII," in Poblacin, economa y sociedad en Panam : contribucin a la crtica de la historiografa panamea, ed. Jos Eulogio Torres Abrego (Panam: Editorial Universitaria "Carlos Manuel Gasteazoro", 2000), 333; Ward, Imperial Panama : Commerce and Conflict in Isthmian America, 1550-1800, 70-71.
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combination of familial and economic interests. It was customary to use all means available to gain the political and the commercial upper hand, with little respect for the legal impositions of the Crown. In fact, the Crowns monopolistic trade law and extreme if not impossibly high level of taxation signaled exciting illicit opportunities for local elite.6 For-sale and appointed government posts became undisguised tools for kinship groups to amass power and wealth through the biased application of law, nepotism, tax evasion, smuggling, and outright pillaging of Crown resources. The recently arrived, and uniquely incorruptible, President of Panamas Audiencia, Francisco Valverde y Mercado, for instance, battled the Crowns local treasurer, freight clerk, and accountant over their support for the appointment of the treasurers brother-inlaw as the Portobelo Customs Officer in 1607. Valverde y Mercado argued that the position was a virtual gold mine for illicit enrichment. The treasurers brother-in-law, he continued, was not only highly unqualified for the position but was heavily indebted (as, the President noted, were his three sponsors). Valverde y Mercado managed to revoke the appointment in the end but this single, difficult victory for the Crown was akin to plowing the sea. Less than 15 years later, after Valverde y Mercado had left the Isthmus, reports suggest that contraband passing through Portobelo was three times that actually declared. Valverde y Mercados rare battle, then, points to a larger Isthmian truth spelled out by Panamanian historian Marixa Lasso: the integrity of a functionary was a rare virtue, she writes, and public office was a good and normal way to illicit enrichment.7
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Lasso de Paulis, "La ilegalidad como sistema en la sociedad panamea del siglo XVII," 26-28. See also Alfredo Castillero Calvo, "La vida poltica en la sociedad panamea colonial. La lucha por el poder," La Lotera noviembre-diciembre (1985); Castillero Calvo, "Venalidad de los cargos pblicos y nacimiento de la primera oligarqua." Castillero Calvo, "Economa terciaria y sociedad de Panam en los siglos XVI y XVII," 328; Lasso de Paulis, "La ilegalidad como sistema en la sociedad panamea del siglo XVII," 8, 12-13; Ward, Imperial Panama : Commerce and Conflict in Isthmian America, 1550-1800, 80-88.
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The undocumented local conventions that privileged personal power over colonial law provide an example of what historical anthropologist Shannon Lee Dawdy calls rogue colonialism. The history of the Atlantic world, Dawdy contends, is not just the story of imperial expansion but also the myriad forms of resistance to imperial designs that were just as often carried out by disloyal Europeans as by indigenous peoples, slaves, and other marginalized groups.8 Rebellious colonies thrived across the Atlantic world in the early modern period due to the fundamentally experimental nature of colonial rule. Abstract and untested colonial designs imposed upon locals in the thrall of defining a frontier society, Dawdy writes, helped create an environment that encouraged many actors to individually refashion themselves and to collectively invent new institutions. Panama, like French New Orleans, became a countercolonial fiefdom in the process, where local power holders organizational strength, political shrewdness, internal battles, and oligarchic tendencies led local government to resemble something closer to an organized crime syndicate than a dependable imperial outpost.9 Panamas flourishing culture of leisure provides another manifestation of the local anarchic spirit. Local traders sought to take full advantage of the thousands of soldiers and sailors temporarily on the Isthmus during the fairs. Young men overwhelmed bars and prostitutes made a small fortune with the same clientele. The Spaniards, Gage noted, were much given to sin, looseness and venery especially.10 Many spilled over from bars and brothels into highly profitable and popular gaming houses, where some unlucky soldiers not only parted with money
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Castillero Calvo makes a similar point for the Panamanian context, arguing for the importance of studying less explosive inter-elite conflict as opposed to large-scale rebellions. Castillero Calvo, "Conflictos sociales, guerra y pax hispana," 492. Dawdy, Building the Devil's Empire : French Colonial New Orleans, 4-5; Charles Tilly, "War Making and State Making as Organized Crime," in Bringing the state back in, ed. Peter B. Evans, Dietrich Rueschemeyer, and Theda Skocpol (New York: Cambridge University Press, 1985). Hernn F. Porras, "Papel histrico de los grupos humanos en Panam," in Las clases sociales en Panam (Panam: CELA, 2008), 15; Gage, The English-American: A New Survey of the West Indies, 1648, 365, 68.
10 9 8

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but weapons and even clothes. The scale of visitors gambling losses prompted the Crown to outlaw gambling on the Isthmus. Such legal impositions, however, flew in the face of powerful local interests with proprietary skin in the game. Spains attempt to control Panamanian gambling, in many respects, served as an illustration of local respect for Crown law more broadly. The gambling industry continued to thrive unimpeded, regardless of decrees issued from Europe.11 The permanent troop presence on the Isthmus meant that gambling, booze, and bordellos played an important economic role in Panama that spanned well past the trade fair. While foreign buccaneers proved the most obvious threat to Panama, Crown soldiers also provided defense against the fairly consistent domestic threat from slaves and free blacks on the Isthmus. The Spanish imported Africans to build and maintain Spanish fortifications, man the mule trains that transported goods across the Isthmus, and work as boat pilots as well as in domestic service.12 Africans and those of African heritage made up almost seventy percent of Panamas population by the turn of the seventeenth century. The skewed population created tension in AfricanSpanish relations throughout the colonial period, illustrated by the powerful communities of renegade ex-slaves (cimarrones) that waged war on the colonial community throughout the

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Araz and Pizzurno Gels, El Panam hispano (1501-1821), 64-68, 71-74; Pablo Emilio Prez-Mallana, Spain's Men of the Sea : Daily Life on the Indies Fleets in the Sixteenth Century (Baltimore, Md.: Johns Hopkins University Press, 1998), 155, 69; Ward, Imperial Panama : Commerce and Conflict in Isthmian America, 15501800, 65, 78-79; Xabier Lamikiz, Trade and Trust in the Eighteenth-Century Atlantic World : Spanish Merchants and their Overseas Networks (Woodbridge: Royal Historical Society/Boydell Press, 2010). There was never an easy dichotomy between white Spanish soldiers and African or indigenous threats from the popular classes. African and indigenous men from the popular classes also served as soldiers. See Matthew Restall and Ben Vinson III, "Black Soldiers, Native Soldiers: Meanings of Military Service in the Spanish American Colonies," in Beyond Black and Red : African-Native Relations in Colonial Latin America (Albuquerque: University of New Mexico Press, 2005). For a detailed exploration of the consistent colonial violence in Panama, see Castillero Calvo, "Conflictos sociales, guerra y pax hispana."
12 11

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sixteenth century.13 The inability of the increasingly militarized Spanish community to stifle what they saw as an existential threat required landing additional imperial troops from Peru.14 Racially tinged social conflict continued well after the cimarron communities were put down. In fact, as historian Alfredo Castillero Calvo argues, social conflict was integral to Panamas violent and bloody colonial period, with Isthmian residents living in a state of permanent tension.15

Contraband Countercurrents and the Decline of the Portobelo Trade Fair Panama became less important as a zone of transit for Spain as the colonial period wore on. Silver production at Potos began its significant decline after 1640. More problematic for Panama, however, was the thriving contraband trade between Peru and Buenos Aires. The Isthmus no longer served as the only path to South Americas west coast and the increasingly superfluous fair occurred with much less frequency during the latter half of the seventeenth century.16 At the same time, however, Panama received an economic boost by becoming one of the principal slave distribution sites for the entire continent. The Portuguese ships of the Compaia de Grillo y Lomelin began to arrive to Panama with human cargo from Africa and other points around the Caribbean in 1664. These slave ships carried a host of non-slave-related
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Ruth Pike, "Black Rebels: The Cimarrons of Sixteenth-Century Panama " The Americas 64, no. 2 (2007): 244. See also Luis A. Diez Castillo, Los cimarrones y los negros antillanos en Panam (Panama 1981); Mara del Carmen Mena Garcia, "Negros rebeldes y cimmarrones " in Poblacin, economa y sociedad en Panam : contribucin a la crtica de la historiografa panamea, ed. Jos Eulogio Torres Abrego (Panam: Editorial Universitaria "Carlos Manuel Gasteazoro", 2000); Jean-Pierre Tardieu, Cimarrones de Panam : la forja de una identidad afroamericana en el siglo XVI (Madrid; Frankfurt am Main: Iberoamericana; Vervuert, 2009). Ward, Imperial Panama : Commerce and Conflict in Isthmian America, 1550-1800, 48; Pike, "Black Rebels: The Cimarrons of Sixteenth-Century Panama ": 260-62.
15 16 14 13

Castillero Calvo, "Conflictos Sociales, Guerra Y Pax Hispana."

Ward, Imperial Panama : Commerce and Conflict in Isthmian America, 1550-1800, 150-51; Castillero Calvo, "Economa terciaria y sociedad de Panam en los siglos XVI y XVII," 329-30.

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products from Europe and the Caribbean, too, and so the thriving illicit trade between slave merchants and Isthmian residents began in earnest. Both Frances Compagnie de Guine and Great Britains South Sea Company joined in the illicit trade in the early eighteenth century and new and important trade links contraband countercurrents that passed outside of official Spanish-sanctioned trade were forged between Panama and non-Spanish dominions, the Barbados, Curacao, and Jamaica. Caribbean tobacco, sugar, drinks, tools, and cordage were traded on the Isthmus for cacao from Guayaquil, alpaca wool from the Peruvian altiplano, and a host of other goods from the Pacific coast of South America, not least silver. Panama became an active center for illicit regional commerce, with the non slave-related trade on the Isthmus quickly overtaking the slave trade in economic importance.17 The last trade fair at Portobelo occurred in 1739 but by then the Panamanian economy had shifted to center on the slave and the contraband trade.18 In fact, contraband had reached such levels that local smugglers developed an illicit transport system southwest of the capital to mirror the official route, carving out spaces along the imperial frontier in which the authority of the Spanish Crown was entirely absent or compromised. The wealthy Panama City merchant Gregorio Crespo established the route in 1716 and made alliances with both Dutch and British traders, who would sail fleets up the Ro Cocl del Norte to trade goods with local smuggling organizations. These illegal outfits, with names like Sacra Familia, Real Jurisdiccin, and Apostolado de Penonom, employed hundreds of men and operated large warehouses for
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Araz, "El contrabando en el Istmo de Panam y la Nueva Granada, una de las causas del colapso de las ferias en Tierra Firme (1700-1731)."; de Granda, "Una ruta martima de contrabando de esclavos negros entre Panam y Barbacoas durante el asiento ingls."; Omar Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX (Panama City: Impresora de la Nacin, 1978), 301. See also Lance Raymond Grahn, The Political Economy of Smuggling : Regional Informal Economies in Early Bourbon New Granada (Boulder, Colo.: Westview Press, 1997). Alfredo Castillero Calvo, "Decadencia de las ferias, crisis comercial y nuevos soportes econmicos," in Historia general de Panam, Volumen I Tomo II (Panam: Comit Nacional del Centenario de la Repblica, 2004).
18 17

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merchandise, canoes numbering in the hundreds, and frigates to escort merchandise to Guayaquil and destinations in Peru, Central America, and Mexico. The Crown did occasionally attempt to reassert its authority Spanish ships attacked Dutch smugglers in 1738, for instance, resulting in 28 dead and 66 injured but found it difficult because of the involvement of powerful local residents. The president of the Audiencia implicated 191 people in the contraband trade shortly thereafter: 54 of them held the title Don. They included the mayor of Nat, councilors from Los Santos, merchants from Panama City, hacendados from Cocl, and priests from Panamas north coast. A local Judge, Juan Prez Garca, absolved them all of wrongdoing soon after the accusing president passed away.19 The Crown took a more concerted stand against contraband with the appointment of Dionisio de Alsedo y Herrera as president of the Audiencia in 1743. Typical of Spanish governance, Alsedo y Herrera was an outsider sent to Panama specifically to regain Crown control of the Isthmus. His most crucial project was to snuff out the contraband organizations of Cocl. Alsedo y Herreras ensuing difficulties highlight the lack of political and economic control the Crown exercised on the rogue Isthmus. Alsedo y Herrera first sent an expeditionary force to Nat in 1745 with the goal to sequester all untaxed goods but his plan foundered on the rocks of local intimidation and obstruction. The earliest arrivals abandoned the mission entirely, the apparent result of a lack of collective nerve. The more determined commander of the mission, Pedro Ms, arrived a few days later to be promptly arrested and imprisoned by local officials. Outraged by the insubordination, Alsedo y Herrera had the Crowns Cocl officials arrested only to have a Panama City judge immediately absolve them of any wrongdoing.

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Araz and Pizzurno Gels, El Panam hispano (1501-1821), 217-18; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 302.
19

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Alsedo y Herrera attempted to break up the contraband networks again in 1747 after hearing of a direct threat to regional Spanish control. The president received word that a Jamaican fleet under the control of Samuel Graws had arrived in Cocl to aid in fort construction. This time, Alsedo y Herrera specifically went after the famously powerful smuggler Juan Jos Lpez, aka Perlitas. He charged Alonso de Murgas to head the mission. Murgas left the port of Perico on the Pacific with 25 men and called for reinforcements when he arrived in Nat. The end point was Penonom but Murgas and his men did not make it. Tipped off to their whereabouts, Perlitass troops ambushed him and his men en route. All of Murgass soldiers, as well as 40 indigenous archers that travelled with them, died in the ensuing battle. Murgas himself was captured alive and sliced into pieces with knives before loaded onto a mule reportedly under the British flag. Alsedo y Herrera then decided to use overwhelming force, finally managing to dismantle the smuggling organizations of Cocl later that same year. He mobilized 100 privateers from Cartagena and positioned another 180 men at the mouth of the Ro Cocl del Norte in order to stave off the possibility of foreign aid. Others were sent up the Pacific coastline in order to prevent a southern oceanic escape, while the garrisons of Panama, Portobelo, and Chagres attacked from overland so that escape across the plains into Veraguas was impossible. Alsedo y Herreras force captured and executed almost all those involved in the smuggling operations, save for eight who escaped aboard a Dutch sloop to Jamaica; other accomplices were rounded up and banished from the Isthmus to places such as Valdivia in southern Chile or the island of San Lorenzo in Peru. The Audiencia auctioned off the confiscated merchandise, generating 88,034 of the 324,754 pesos that Alsedo y Herreras administration collected from confiscated contraband in his six years on the Isthmus. Such significant seizures, according to Panamanian historians Celestino Araz and Patricia Pizzurno Gels, give us

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reliable proof of the magnitude of the illicit dealings in Panama. They also point to the consequential threat that a contraband-fighting President posed to local commerce. Not long after the destruction of the Cocl smuggling operations, the local fiscal magistrate acted in concert with other local power holders to charge Alsedo y Herrera with abusing his authority. Alsedo y Herrera was removed from office, soon after returning to Spain.20 Alsedo y Herrera managed to destroy the Isthmus as a thriving smugglers entrept in late 1747. Thereafter, Panama no longer served as a colonial or counter-colonial trade hub, its economic relevance to the Spanish empire continuing to decline, its local economy in ruin. Many of Panamas most successful merchants left for Peru or Cartagena and a large portion of those who remained fanned out into the countryside.21 For the first time since silver was found in Peru, Panama became a region dominated by agriculture produced largely for local consumption. Local capital dried up to such an extent that merchants who remained did not have the ability to take advantage of Spains Bourbon liberal reforms of the latter half of the eighteenth century. Without a doubt, Castillero Calvo writes, Panamanians were victims of an antiquated economic system that impeded them from taking advantage of the opportunities that came with the new order of things.22 It was this period of hardship after many of the itinerant merchant adventurers had fled the Isthmus that locals developed a rooted sense of belonging: the

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Araz and Pizzurno Gels, El Panam hispano (1501-1821), 218-21. Another version of these events in Cocl can be found in Tello, "Contrabando vs. Audiencia. Una encrucijada panamea del siglo XVIII." Tello, "Contrabando vs. Audiencia. Una encrucijada panamea del siglo XVIII," 29-32, 35-36; Alfredo Castillero Calvo, "Fundamentos econmicos y sociales de la independencia de 1821," Revista Tareas 1(1960): 1017; Castillero Calvo, "Decadencia de las ferias, crisis comercial y nuevos soportes econmicos," 468-74; Omar Jan Surez, "El siglo XVIII en Panam y las permanencias estructuras," in "visin de la nacionalidad panamea": simposio celebrado el 6 de julio de 1991 en el teatro "La Huaca" (Atlapa), Panama, ed. Alfredo Figueroa Navarro (Panama: Instituto Latinoamericano de estudios avanzados, 1991).
22 21 20

Castillero Calvo, "Fundamentos econmicos y sociales de la independencia de 1821," 18-20.

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consciousness, as historical geographer Omar Jan Surez describes it, of being, above all, Panamanian.23 Panamas economic decline did not correspond to its geopolitical significance. The Isthmus remained crucial to the integrity of the Spanish empire, with its defense budget growing alongside fears that Panama would be the site of a hostile imperial occupation.24 Up to 80 percent of the Isthmian administrations budget was earmarked for defense, with these expenses largely funded by the situado: 150,000 to 250,000 pesos sent annually from Lima and Bogota to support defense construction and garrison maintenance. Panamas remaining urban elite took refuge in high-ranking military positions that provided access to situado funds; and the money that did end up in the hands of the common soldier who came to account for up to two thirds of Portobelos population and a third of the much larger Panama City was pumped back into what remained of Panamas service industry.25 Panamas barracks economy, then, essentially provided an economic lifeline through this very difficult economic period, compelling urban commercial activity in a certain direction. Panamas self-interested Governor may have exaggerated when he justified soldiers obligatory food deductions by claiming that without it soldiers would be able to gamble and drink the money away without eating.26 But for some, like Englishman John Augustus Lloyd who visited not long after, the prevalence of drinking,
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23 24

Jan Surez, "El siglo XVIII en Panam y las permanencias estructuras," 22-23.

Omar Jan Surez, "La formacin de estructuras econmicas y sociales en el Istmo de Panam: 'el siglo XVIII colonial' (1740-1850," in Poblacin, economa y sociedad en Panam : contribucin a la crtica de la historiografa panamea, ed. Jos Eulogio Torres Abrego (Panam: Editorial Universitaria "Carlos Manuel Gasteazoro", 2000), 455. For a detailed study on the period, see Jos Manuel Serrano Alvarez, Fortificaciones y tropas : el gasto militar en Tierra Firme, 1700-1788 (Sevilla; Madrid: Diputacin de Sevilla : Universidad de Sevilla, 2004).
25 26

Castillero Calvo, "Conflictos sociales, guerra y pax hispana," 492.

Araz and Pizzurno Gels, El Panam hispano (1501-1821), 253; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 298-300.

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gambling, cockfights, and billiards was an unmistakable characteristic of Isthmian life. The worst features of the male character here, he wrote, are the indifference to the pleasures of home, and a propensity to low debauch abroad.27 While many locals felt Spain had economically abandoned the Isthmus, Panama remained a stalwart supporter of the colonial power during the battles for independence through the 1810s. Not only was the Isthmus a Spanish military bastion, with what remained of the local service economy highly reliant on this fact, but garrisons provided domestic security through a turbulent period that saw the Tupac Amaru II uprising in Peru, among other Andean insurrections, along with the Haitian Revolution.28 The ethnic and racial basis of these events gave Panamanian power holders pause during this period of widespread urban misery. The ratio of Panamas gente de color to its white power holders was approximately eight to one, with Spanish naturalist Antonio de Pineda describing his 1790 landing in Panama City as though we had disembarked in Benin or Angola as opposed to Panam. Panama Citys fortified walls constructed after English pirate Henry Morgan sacked the capital in 1671 provide a stunning image of the social and racial order of the Isthmus and the militarys role in its maintenance. Ostensibly built to protect the city from foreign attack, the walls doubled as an exclusionary racial divide for the local population. The walls cordoned off San Felipe, containing the most important religious, political, and commercial buildings as well as the houses of Panamas white
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Araz and Pizzurno Gels, El Panam hispano (1501-1821), 253; John Augustus Lloyd, "Notes Respecting the Isthmus of Panama," Journal of the Royal Geographical Society of London 1(1831): 99-100; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 366-69. Castillero Calvo, "Fundamentos econmicos y sociales de la independencia de 1821," 21-25; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 300-03. For an anthology that looks at the international impact of the Haitian Revolution, see David Patrick Geggus, Rosemary Brana-Shute, and Randy J. Sparks, The impact of the Haitian Revolution in the Atlantic world (Columbia: University of South Carolina, 2001). On indigenous uprisings in the Andes in the late colonial period, see the essays in the first two sections of Steve J. Stern, Resistance, rebellion, and consciousness in the Andean peasant world, 18th to 20th centuries (Madison, Wis.: University of Wisconsin, 1987).
28 27

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elite, with a militarized gate. The area outside the walls, commonly referred to as the Arrabal (or slum), was populated by those of African and mixed heritage. The Spanish military, San Felipe residents believed, was crucial not only to maintain the privilege that existed within those walls but also their lives.29 The Isthmian Creole patriots declared independence from Spain ambivalently and in a decidedly Panamanian way.30 Intrigues and gold were our arms, wrote Panamas most prominent nineteenth-century thinker, Justo Arosemena. With these we defeated the Spanish. Panamas elite bribed Spanish soldiers to board ships to Cuba as the liberation trend across the Americas became increasingly clear. They then declared independence and allegiance to Gran Colombia on 28 November 1821 their solution to what Peruvian historian Mark Thurner terms the Creole predicament.31 The larger nation to the south replaced Spain as the provider of local military support and as the apparent booster for Panamas status as global entrept. Panamas magnificent position between two mighty oceans, Gran Colombia liberator Simn Bolvar wrote in his 1819 Letter from Jamaica, assured its future as an emporium of the world. Bolvar gave weight to his rhetoric when he organized the 1826 Congress of Panama, a hemispheric meeting to establish a broad political alliance among Americas newly independent nations. Regardless of the meetings outcome, which disappointed its grand purpose, the location
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Alfredo Castillero Calvo, "Conflictos sociales y vida urbana: el paradigma panameo," Lotera 426(1999): 66-68. Their ambivalence was hardly unique to Panama. For a study that details the long shadow that the age of insurrection cast on nation-state development in the Andes, see Brooke Larson, Trials of Nation Making : Liberalism, Race, and Ethnicity in the Andes, 1810-1910 (Cambridge, UK ; New York: Cambridge University Press, 2004). Mark Thurner, From Two Republics to One Divided: Contradictions of Postcolonial Nationmaking in Andean Peru (Durham, N.C. ; London: Duke University Press, 1997), 3-4. Quote taken from Szok, "La ltima gaviota": Liberalism and Nostalgia in Early Twentieth-Century Panam, 16; Celestino Araz, La independencia de Panama en 1821: antecedentes, balance y proyecciones (Panam: Academia panamea de le historia, 1980), 80103.
31 30 29

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of the Congress attested to Panamas position as both a literal and figurative bridge for the Western Hemisphere.32 The Isthmian future, once again, seemed bright. In the near term, at least, it was not. The Isthmus entered into twenty-five years of stark depression after independence. The shifting political alliance did little to change the local economic situation and Panama quickly soured on Gran Colombia. Part of the problem was larger than Panamas new political union: the widespread civil strife of the post-independence period had disastrous consequences for trade across Latin America. But the central government in Bogota seemed intent to exasperate the situation by milking every last tax possibility. Punishingly high tariffs on trans-Isthmian trade characterized the first three decades of the union. While local protest movements emerged, some even attempting secession from Colombia, Panamas power holders generally took more modest and pragmatic steps to alleviate recently imposed burdens.33 That is, they aggressively sought to monopolize local government positions of authority in order to effectively contravene outside impositions. The powerful and enterprising trader Ramn Arias, for instance, exerted considerable energy to confirm Carlos de Fabrega in a customs post in 1828. Ariass trade with Jamaica, thereafter, jumped significantly. The creole merchants needed to control the operation of the administrative branch, Panamanian historical sociologist Alfredo Figueroa Navarro argues for the first half of the nineteenth century, because

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Simn Bolvar, "Letter from Jamaica, 1815," in Selected writings of Bolivar (New York: The Colonial Press, 1951); Alfredo Castillero Calvo, "La independencia de 1821: Una nueva interpretacin," in Historia general de Panam: Volumen II, El Siglo XIX, ed. Alfredo Castillero Calvo (Panam: Comit Nacional del Centenario de la Repblica, 2004); Aims McGuinness, Path of Empire : Panama and the California Gold Rush (Ithaca: Cornell University Press, 2008), 19. Secession movements occurred in 1826, 1830, 1831, and 1840-1841. These movements sometimes included the participation of local power holders and sometimes did not. See Castillero Calvo, "La economa hasta mediados del siglo XIX," 1-24; Marixa Lasso, "La crisis poltica post-independista: 1821-1841," in Historia general de Panam: Volumen II, El Siglo XIX, ed. Alfredo Castillero Calvo (Panam: Comit Nacional del Centenario de la Repblica, 2004); Alex Prez-Venero, Before the Five Frontiers : Panama, from 1821-1903 (New York: AMS Press, 1978), 1-24.
33 32

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contraband emerged as the only measure to mitigate Bogotas protectionist restrictions.34 Panama may have transitioned from Spain to Colombia but the timeworn strategies to diminish the effectiveness of foreign legal impositions continued unabated. Panama, then, was no longer a colony but it was undoubtedly still rogue.

Panamas California Gold Rush The economic situation on the Isthmus was altered drastically in the last years of the 1840s, the true end point, some have argued, to Panamas long and economically depressed eighteenth century.35 Colombia signed the Bidlack-Mallarino Treaty with the United States in 1846. The agreement provided tax-free passage across the Isthmus to U.S. passengers and cargo in exchange for a guarantee that the United States safeguards the transit route and Colombian sovereignty over Panama. Free passage combined with the gold rush in California instigated a different but related rush in Panama.36 The Isthmus became the route for hundreds of thousands of North Americans to travel to and from its new west coast from the late 1840s into the 1860s. Panama was transformed virtually overnight. Much of the economic diversification that had occurred during the depressed eighteenth century quickly faltered. Workers fled the agricultural fields and local artisanal production in search of quick money on the route of

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Alfredo Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 3a ed. (Ciudad de Panam: Editorial Universitaria, 1982), 166-69; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 471-74; Soler, "Panam, nacin y oligarqua, 1925-1975," 20. For a study that examines contraband in the first half of the nineteenth-century Colombia in detail, see Muriel Laurent, Contrabando en Colombia en el siglo XIX: prcticas y discursos de resistencia y reproduccin (Bogot: Universidad de Los Andes, Centro de Estudios Socioculturales e Internacionales, 2008).
35 36 34

Jan Surez, "El siglo XVIII en Panam y las permanencias estructuras."

For more on the treaty, see Prez-Venero, Before the Five Frontiers : Panama, from 1821-1903, 55-57, 68, 143-45.

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transit.37 And for a time they found it. Men from the Arrabal served as independent transporters for the foreigners in transit, while local and migrant women sold aguardiente, food, lodging, and sex along the route.38 The transport and service industries thrived, as thousands of U.S. travelers spent upwards of a month on the Isthmus in transit, and upwards of seven thousand migrant workers from North America, Europe, China, Africa, and especially the West Indies arrived to build the Panama Railroad. The considerable commercial opportunities drew an influx of merchants from Colombia, Peru, Jamaica, Spain, Greece, Great Britain, France, and especially the United States. While Panamas urban oligarchy focused on real estate and land speculation, hitching its fortune largely to the rents that would accrue from Panama as an emergent global entrept, moneyed foreigners quickly dominated Panamas most successful commercial enterprises, such as the import business, hotels, and restaurants. The seven largest importers living in Panama City in 1849 were already all from the United States, Great Britain, or France, save for one Panamanian. Only three Panamanians graced the list of Panamas top 20 most commercially successful businessmen seven years later.39 Some of the most successful European and American merchants (along with a few top railroad officials) advantageously married into the elite circles of San Felipe but others saw life on the Isthmus as temporary. Indeed, dynamic newcomers resembled the itinerant merchants who dominated Panamas boom and bust cycles of the colonial period in many
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Castillero Calvo, "Transitismo y dependencia: el caso del Istmo de Panam."; Justo Arosemena, "El estado federal de Panam " in Justo Arosemena: un panameo ilustre y continental, ed. Celestino Araz (Panama: Autoridad del Canal de Panam, 1999), 75-76; Laurent, Contrabando en Colombia en el siglo XIX: prcticas y discursos de resistencia y reproduccin, 253. McGuinness, Path of Empire : Panama and the California Gold Rush, 16-53. For one detailing of a migrant woman from Jamaica working in the transit zone, see Mary Seacole, Wonderful Adventures of Mrs. Seacole in Many Lands (New York: Oxford University Press, 1988). Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 282, 91, 302-09.
39 38 37

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respects: people, one observer noted (harking back to conquistador Pedro Cieza de Len), whose only object is to make money at any cost.40 Not long after vessels began to arrive from New York, the heretofore-sleepy village of Chagres on the Atlantic was home to more than 200 prostitutes. Some arrived from as faraway as New Orleans and Paris to ply their trade. Gambling establishments and saloons thrived, too. Places like the Monte Carlo Casino and the Silver Dollar Saloon were hastily built to charge drink prices upwards of seven times those in New York.41 Other vendors set up shop almost anywhere they could. You cannot turn a corner here or enter a hotel or grocery without encountering a roulette table, with its ever-revolving wheel, or a monte bank with its little pile of specie, William Swain reported in an 1851 letter home from Chagres. Around the table, he continued, you can at all times see a complete, practical amalgamation of the races: the sooty Negro who risks his dime on de turkee buzzard, as they term the eagle in the roulette; the native and negro halfbreed who ventures the earnings of a week on a single card; the moody and discontented emigrant who perchance may risk a XX (double sawbuck, i.e., $20) in an effort to retrieve his fallen fortunes; the ferocious and villainous-looking boatman [most often from the United States, Holland, Ireland, and England] who recklessly wins or loses with equal indifference.42 Cantinas, brothels, and gambling dens spiked with the dramatic increase in newcomers and visitors to the Isthmus.

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Mercedes Chen Daley, "The Watermelon Riot: Cultural Encounters in Panama City, April 15, 1856," Hispanic American Historical Review 70, no. February (1990): 99-100; Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 310-16.
41 42 40

Prez-Venero, Before the Five Frontiers : Panama, from 1821-1903, 86-88.

J. S. Holliday and William Swain, The World Rushed In : the California Gold Rush Experience (New York: Simon and Schuster, 1981), 37-38.

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The same was true for Coln (aka Aspinwall), a railroad company town founded in 1852.43 Robert Tomes detailed his energetic participation in the wild and recklessness of life that characterized the Atlantic port in 1855. He described Coln as a place that would erupt each fortnight with the arrival of a new load of visitors from New York and San Francisco. The inanimate lethargy of the place is at once quickened by the stirring adventurers, he wrote. Barrooms again reek with an atmosphere of gin-sling and brandy-cock-tail, billiard balls begin to circulate, and shops, adding a hundred per cent. to their prices, do a brisk business. While Tomes enjoyed his imbibing time in Coln and made clear he did not wish to affect the Puritan he still believed that U.S. citizens living in Coln might consider some constraint, if only to improve their health and not injure their morals. In the end, he concluded for himself at least, that drinking Champagne cock-tails before breakfast, and smoking forty cigars daily to be an immoderate enjoyment of the good things of this world.44 U.S. railroad officials tolerance for the wild life in the company town of Coln did not extend out the line, where workers were busy laying track throughout the transit zone. In fact, merchants and Panamanian politicians keen to accommodate workers desires for booze, women, and gambling ran into difficulties with railroad officials almost immediately. The alcalde of the town of Gorgona, for instance, went against the specific wishes of the railroad when he authorized the construction of a number of buildings near the railroad labor camp. The buildings, according to a railroad official, were built with the evident intention of selling spirituous liquors
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Colombian officials named the city Coln, after Christoper Columbus, but some Colombians with close ties to the Panama Railroad Company and U.S. citizens decided to call the town Aspinwall, after William H. Aspinwall, the important New Yorker who drove the construction of the railroad. For some time, it was referred to by both names. See McGuinness, Path of Empire : Panama and the California Gold Rush, 73-75; Michael L. Conniff, Panama and the United States : the Forced Alliance, 2nd ed. (Athens: University of Georgia Press, 2001), 29-30. Robert Tomes, Panama in 1855: an Account of the Panama Rail-road, of the Cities of Panama and Aspinwall, with Sketches of Life and Character on the Isthmus (New York: Harper & Brothers, Publishers, 1855), 60-63.
44 43

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to the workmen, and for other evil purposes gambling, &c. contrary to the rules of the work. The Railroad removed the hastily erected buildings. Strained relations continued, however, as the day-to-day commercial interests of the local population hardly squared with the interests of Railroad officials.45 Locals continued to exploit the finite construction period to the fullest extent, often to the annoyance of railroad officials attempting to forge a particular type of Isthmian order. More problematic for railroad (and steamship company) officials was Panamas growing reputation in the United States as a lax, freewheeling, and altogether dangerous place full of multinational hustlers and bandits.46 Panamas infamy threatened its popularity as a transit route. Newspapers printed cautionary tales to warn future travelers. A recent transplant to California, for instance, wrote, A Word to the California Bound, in the New York Times in 1851. Upon arriving to the Isthmus, the author wrote, he and his party arranged transportation on mule from Gorgona to Panama City. The established price was $16 per person and $10 per hundred pounds of luggage. The mules that carried the 1000-odd pounds of luggage already had departed when the transport merchant took the bills of transportation and changed the fee schedule: before our very eyes, the writer recounted, the man substituted $12 per hundred, for $10, as agreed upon, and as the accounts were first presented. A dispute ensued and the merchant became highly agitated, demanding half the fee prior to departure and insultingly telling us to help ourselves if we could. The party capitulated in large part because they had already purchased tickets for a California-bound steamer that departed soon thereafter. Their ordeal, however, was not finished.
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McGuinness, Path of Empire : Panama and the California Gold Rush, 69-75; Lucy M. Cohen, "The Chinese of the Panama Railroad: preliminary Notes on the Migrants of 1854 who "Failed"," Ethnohistory 18, no. 4 (1971); Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 27072. McGuinness, Path of Empire : Panama and the California Gold Rush, 75; Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 275.
46 45

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Told they would be in Panama City within 24 hours, the trek actually took four days due to a series of delays. The luggage did not arrive for a week. It was only the unrelated detention of the steamer that enabled both travelers and luggage to board the ship to California together. The merchants intention, the writer believed, was for the party to board the steamer without their luggage a swindle not uncommon for the less scrupulous in the transportation trade. Be forewarned, the letter concluded, because the man who speaks French, Spanish, and English fluently, and possesses a plausibility of manner apt to entrap the unwary still operated out of Gorgona. He is a tall, sinister looking French Jew, with black bushy hair and whiskers, and a piercing black and treacherous eye.47 Some unscrupulous activity was no doubt inevitable under the highly transitory circumstances. Armed robbery, however, also became a serious problem along the transit route and made headlines stateside. Thousands of travelers combined with millions of dollars worth of gold passing across the Isthmus proved fairly easy targets for groups of bandits holed up in remote areas along route. Panamas sparse law enforcement was unable or unwilling to apprehend these outlaws and some believed that law enforcements reluctance was due to agreements between bandits and certain powerful residents of Panama City. Foreigners do all the business of any importance on the Isthmus, and many of the Panameos and others object to this right, a U.S.-railroad conductor claimed. Bandits operate with impunity, he continued, because of well-placed friends, many of whom live within the walls of Panama [and] use their influence to the injury of foreigners and the Railroad Company in particular.48 Steamship company and railroad officials responded by propositioning former Texas Ranger and Isthmian
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A Word to the California Bound, New York Times, November 6, 1851. See also From the Isthmus, New York Times, October 7, 1851; Panama, New York Times, March 31, 1832. See also Mack, The Land Divided, a History of the Panama Canal and other Isthmian Canal Projects, 146.
48 47

McGuinness, Path of Empire : Panama and the California Gold Rush, 142.

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merchant Ran Runnels to organize a vigilante group to specifically go after Isthmian bandits. After receiving muted sanction from Panamas provincial governor in July 1854, Runnels set out from Panama City with his infamous Isthmus Guard.49 He and his men proved decidedly effective, arresting or killing a large number of suspected outlaws and twice hanging dozens of men along the Panama City seawall. Such a gruesome display of the extralegal security forces power no doubt served as a warning to powerful locals suspected to have clandestine ties to bandits. The route of transit became known locally thereafter as the Yankee strip.50 Railroad completion in 1855 drastically changed the Isthmian environment. The Isthmus Guard was no longer needed. A traveller from New York had the ability to arrive in Coln, board a four-hour train to Panama City for $25, and almost immediately board another steamer for San Francisco. Rather than a place of trade, historian Aims McGuinness writes of the postconstruction period, Panama became increasingly a mere point of transit that goods and people passed over on their way to markets elsewhere. The local economy contracted immediately, even while the railroad posted the highest profits of any rail line in the world through its first 14 years of operation. Panamas working people felt the brunt of the contraction pain. Railroad workers were laid off; passengers for mule drivers and others in trans-Isthmian transportation dried up; the traffic through intermediate towns along the transit route disappeared; the service industry in the terminal cities slowed, as visitors left the Isthmus much more quickly; and the construction of a pier and steam launch service in the capital led to mass unemployment for

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Different secondary sources point to a different arrival date on the Isthmus for Runnels. Alfredo Figueroa Navarro writes that he purchased hotels in Cruces and another in Gorgona in 1851. Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 282. Conniff, Panama and the United States : the Forced Alliance, 28-29; McGuinness, Path of Empire : Panama and the California Gold Rush, 73-77.
50 49

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dockhands and boatmen.51 Many crowded into Panama Citys Arrabal in search of new opportunities, including migrant West Indian railroad laborers and others who could not afford to return home.52 The unemployment, the overcrowding, and the general sense of despair permeated the population outside Panama Citys walls. The increasingly desperate economic circumstances for much of the Isthmian population corresponded with its growing political power. Colombia's 1853 constitution had established universal manhood suffrage and the Arrabal population began to demonstrate its political independence. The increasing politicization of the decidedly Liberal gente de color terrified Panamas largely Conservative elite.53 The economic independence, the dislocation, and the swelling population that emerged out of the booming 1850s only heightened political instability. The U.S. marines first intervened in 1856 during a disputed local election, when much of the capitals white population sought refuge on a U.S. naval ship until order was restored. U.S. troops were on the ground again in 1860 and 1861 at the request of Panamanian authorities and once again in 1862 at the request of authorities in Bogota. It was not the last. All in all, the United States intervened militarily in Panama 14 times between 1856 and its independence from Colombia in 1903. U.S. troops spent approximately two hundred days on Isthmian soil over the course of these 47 years, protecting railroad property through ensuring Panamas status quo.54
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McGuinness, Path of Empire : Panama and the California Gold Rush, 77-80; Conniff, Panama and the United States : The Forced Alliance, 30-31. For West Indian migration to Panama in the nineteenth century, see Conniff, Black Labor on a White Canal : Panama, 1904-1981, chpt 1; Velma Newton, The Silver Men : West Indian Labour Migration to Panama, 1850-1914, Rev. ed. (Kingston, Jamaica: Ian Randle, 2004). A portion of Panamas elites remained with the Liberal Party, though many of the most powerful were Conservatives. See Armando Martnez Garnica, "La accin de los liberales panameos en la determinacin de los polticas del Estado de la Nueva Granada, 1848-1855," in Colombia y Panam: la metamorfosis de la Nacin en el siglo XX, ed. Heraclio Bonilla and Gustavo Montaez (Bogot: Universidad Nacional de Colombia, 2004). Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 342-46; McGuinness, Path of Empire : Panama and the California Gold Rush, 96-112; Thomas L. Pearcy, We
54 53 52 51

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Coln-Aspinwall, 1863

The Turbulent Path to Secession The economic downturn deepened with the completion of the U.S. transcontinental railroad in 1869. No longer was Panama a crucial transit point between east and west coast of the United States. It did, however, emerge as a more important intermediary trade point for contraband textiles, perfumes, shoes, liquor, and salt entering the Colombian mainland from Europe and elsewhere. Indeed, after liberalizing Colombia rescinded the high tariffs that
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Answer only to God : Politics and the Military in Panama, 1903-1947 (Albuquerque: University of New Mexico Press, 1998), 13-38; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 273-80; Alfredo Figueroa Navarro, "Tensiones sociales en el arrabal segn la correspondencia consular francesa (1850-1880)," Tareas 39(1977). For a chart of U.S. interventions in Panama, see Conniff, Panama and the United States : The Forced Alliance, 34.

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characterized the first decades of Panamas union with Colombia in 1849, the Isthmus slowly overtook Jamaica as the primary site from which to smuggle goods into mainland Colombia. Large merchant vessels began to land at Panamas free ports to unload goods destined for Colombia. Smaller Panamanian boats passed easily into Colombia undetected. Boats launched from Coln clandestinely sailed up the Caribbean coast into the Ro Atrato to deliver goods through the Antioquia and Choc regions; others travelled from Panama City down along Colombias northern Pacific coast. This deserted and neglected area of Colombia, as one state functionary put it, did not have a single customhouse between Panama and Buenaventura, making Panamas free ports ideal sites to organize contraband operations.55 Panamas merchants and boatmen participated in this relatively invulnerable trade that took illicit advantage of Colombian policy aimed at reenergizing Panamas legal transit economy.56 The famous director of the Suez Canal, Ferdinand de Lesseps, completed his Egyptian project the same year the United States completed the transcontinental railroad. He then turned his canal-building attention to Panama. His private company negotiated a contract with Bogota to build a canal across the Isthmus in 1876.57 The agreement stipulated that the Compagnie Universelle du Canal Interocnique de Panama pays Colombia 750,000 francs initially and five to eight percent of the annual gross revenue after the canal opened. In exchange, Colombia provided the Compagnie Universelle the exclusive right to build and operate an internationally
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Laurent, Contrabando en Colombia en el siglo XIX: prcticas y discursos de resistencia y reproduccin, 253, 362, 67-70, 74, 550. For more on the Estado Soberano de Panam, which existed in the United States of Colombia from 1855 through 1886, see Aims McGuinness, "Sovereignty on the Isthmus: Federalism, U.S. Empire, and the Struggle for Panama during the California Gold Rush," in The State of Sovereignty: Territories, Laws, Populations, ed. Douglas Howland and Luise White (Bloomington: Indiana University Press, 2009); Prez-Venero, Before the Five Frontiers : Panama, from 1821-1903, 39-42, 95-115. For a broader examination of the French in Central America, see Thomas David Schoonover, The French in Central America : Culture and Commerce, 1820-1930 (Wilmington, Del.: Scholarly Resources, 2000).
57 56 55

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neutral canal in Panama for 99 years, control over one-fifth of a kilometer on either side of the canal, as well as an additional 500,000 hectares of land deemed necessary for the project. The centuries-old vision for a canal in Panama was finally underway. Panamanian elite optimism had reached its apogee. Trade would skyrocket and real estate prices would soar. As important for some elite thinkers, however, was the flow of civilizing European immigration bound for Panama. The Europeans would not only dilute the political power of Panamas gente de color but improve Panamas racial and national stock more generally. The canal project, in short, would make Panama vibrantly modern.58 The dramatic and transformational influx of capital, migrant workers, foreign merchants, and company officials in the 1880s bore a resemblance in many ways to the 1850s but on a much grander scale. The Compagnie Universelle employed thousands of Panamanian laborers but still imported the great majority of its workers. It went from having no employees on the Isthmus in 1880 to 17,436 in 1884. Forty thousand West Indians alone worked on the project by 1886.59 Panamas elite benefitted most from its existing urban real estate holdings, with the value of rental properties in the terminal cities tripling in the first years of construction. They also served as important intermediaries for foreign commercial interests in government, as shipping agents, and as lawyers. Recently arrived merchants, however, once again dominated the service industry:

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Conniff, Panama and the United States : the Forced Alliance, 45-47; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 315-18; Alfredo Figueroa Navarro, "Visin de Panam durante la poca del canal francs," Revista Lotera 292(1980): 17; Mack, The Land Divided, a History of the Panama Canal and other Isthmian Canal Projects, 281-316; Szok, "La ltima gaviota": Liberalism and Nostalgia in Early Twentieth-Century Panam, 13-36. The work on elite racial thought in late nineteenth-century Latin America is well developed. For a very concise overview, see Peter Wade, Race and ethnicity in Latin America (Chicago, Ill. ; London: Pluto Press, 1997), 30-35. Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 319; Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 166.
59 58

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French and German, Italian and Colombian, Jewish and Chinese.60 Thirty-year-old CubanAmerican Jos Gabriel Duque provides a spectacularly successful example of a merchant drawn to the Isthmus. He arrived in Panama in 1879, just before the French bonanza began, and invested heavily in rental properties. Duque later diversified his holdings, engaging in industrial pursuits as varied as ice and beer manufacturing to newspapers. Perhaps his largest commercial coup, however, involved gambling. Colombia awarded Duque a thirty-year contract in 1882 that gave him control of the extremely popular Panamanian state lottery, which paid out winnings up to $27,000 weekly by 1888. He was reputedly the richest man on the Isthmus by the turn of the twentieth century.61 Gambling was big business on the Isthmus during the French project. French engineer Henri Cermoise was part of the first group of Frenchmen to reach Coln in early 1881 and spent two years in Panama. He published a book detailing his experience three years after returning to France. Cermoise wrote that the streets of Coln were full of gaming tables at the time of their arrival. Operators set up shop wherever there was shade, soliciting those passing by, a bag of dice in hand. Craps, card games, and different types of raffles were all popular but roulette was clearly the game of choice. All classes of society were democratically represented at the roulette table, Cermoise noted, from the miserable negro, almost in rags, who anxiously pushed forward his ten cents, to the rich man of commerce with his wad of dollars and banknotes. Operators and the government earned big profits from gamblings popularity through licensing
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Figueroa Navarro, "Visin de Panam durante la poca del canal francs," 19; Alberto Osorio O., "Los Hebreos en Panam, 1876-1903," Revista Lotera 292(1980).! Lotera de Panam, La Estrella de Panam, June 28, 1888, 2; B. Porras to R. Lansing, September 18 1918, DF 819.1151/31 RG 59 (NAMP M607 Roll 10), NARA; Marco A. Gandsegui, "La concentracin del poder econmico en Panam," in Las clases sociales en Panam, ed. Marco A. Gandsegui (Panam: CELA, 2008), 15860; Soler, "Panam, nacin y oligarqua, 1925-1975," 88; Diaz Espino, How Wall Street Created a Nation : J.P. Morgan, Teddy Roosevelt, and the Panama Canal, 58. See also Patricia Pizzurno Gels and Celestino Araz, "Las personajes de la poca," La Crtica, http://www.critica.com.pa/archivo/historia/persona-7.html.
61

60

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fees. In fact, according to Cermoise, it might be more accurate to understand those who worked the tables as another type of public servant because gambling was one of the most serious revenues for the state.62 Booze and prostitution flourished during the 1880s, too, with brothels and cheap saloons turning up in every Isthmian community near canal construction. Most of the overwhelmingly young and male European community participated wholeheartedly. The majority are away from the refining influences of early culture and home life, a Canadian journalist wrote in 1889 after living five years in Panama. If they become one of the boys, and the vast majority do, that is the end of it, and generally of them too, for this means late hours, gambling and other distractions, largely pour passer le temp.63 Cermoise reported that habits began to change in this scorching country and Europeans who normally did not drink alcohol began to drink quantities of cocktails. Other migrant workers seem to have spent time in bars that promoted hasty drinking as well.64 An 1887 U.S. intelligence report generalized the routine of workers from Panama, Colombia, Africa, and a variety of culturally disparate locations in the West Indies. The workmen are paid off on Saturday afternoon, the report claimed. Sunday is generally a day of dissipation with the negro, Monday one of recuperation, and by Tuesday he is generally at work.65
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Henri Cermoise, Deux Ans a Panam. Notes et Recits d'un Ingenieur au Canal, 2nd ed. (Paris: Marpon et E. Flammarion, 1886), 32, 33, 58; "Lei 13.A (de 25 de enero de 1878), sobre impuestos a los juegos no prohibidos de suerte i azar," in Leyes espedidas por la Asamblea lejislativa del Estado Soberano de Panama, en sus sesiones de 1877-1878. (Panam: Imprenta de La Estrella de Panam, 1878), 27-28.
63 62

Wolford Nelson, Five Years at Panama: the Trans-isthmian Canal (New York: Belford Co., 1889), 17Cermoise, Deux Ans a Panam. Notes et Recits d'un Ingenieur au Canal, 31.

18.
64 65

Quote taken from Mack, The Land Divided, a History of the Panama Canal and other Isthmian Canal Projects, 340. For other routines of the period, such as West Indian religious organizing during the French period, see Conniff, Black Labor on a White Canal : Panama, 1904-1981, 18.

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The French project failed for a variety of reasons: rampant disease, poor planning and mismanagement, and the insistence on building a sea level canal. The raucous disorder of the Isthmus, however, also played a role. The Compagnie Universelle was effectively powerless to create an acquiescent and orderly environment on the Isthmus. Two Liberal revolts occurred on the Isthmus in 1885, for instance, in protest to Colombian President Rafael Nezs campaign to recentralize power in Bogota. Liberals General Rafael Aizpuru and deputy Pedro Prestn separately mobilized followers from Panamas popular classes to occupy Panama City and Coln. Prestn captured Coln, taking a U.S. steamship agent, the U.S. consul, two naval officers, and a host of other U.S. citizens hostage in the process. Compagnie Universelle workers and officials essentially looked on as U.S. marines landed to join Colombian troops in firefights with Prestn and his followers throughout the city. Coln ultimately burned to the ground before Prestns attempted revolution was put down. The deputy was hanged and Aizpuru voluntarily surrendered Panama City, marking the final serious threat to the existing power structure by Panamas popular classes in the nineteenth century.66 The widespread disorder stalled the canal project and cost the company millions of dollars. President Nez cited the political and economic chaos of Colombian regions like Panama to justify his 1886 constitution. The document severely hampered the autonomy that Panama had enjoyed since 1855, turning the federal state into a department. It disenfranchised most of Panamas popular classes, enabled Bogota to choose Panamas Governor, made Catholicism the official religion, raised Isthmian taxes, and resurrected the hated customs tariffs
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Conniff, Panama and the United States : the Forced Alliance, 45-46, 50-53; Herbert George Nelson Austin, Cmo fue la muerte de Pedro Prestn (Panam: Centro de Investigacin y Docencia de Panam, 2003); Prez-Venero, Before the Five Frontiers : Panama, from 1821-1903, 112-15; Daniel Wicks, "Dress Rehearsal: United States Intervention on the Isthmus of Panama, 1885," Pacific Historical Review 49(1980); Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 24-26.
66

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for the first time since the 1840s.67 The force of these impositions were onerous but became much worse after the French canal project collapsed at the end of the 1880s.68 All suffered under the new burdens but it was Panamas emergent middle class, along with rural indigenous groups, which tested Bogotas rule most forcefully during Colombias Thousand Days War (18991902). Middle class nationalists saw the civil war in Colombia as an opportunity for Isthmian independence. Local forces captured much of the Panamanian countryside and almost took Panama City in 1900.69 The movement, however, had little support from Panamas urban popular classes, demoralized from the combination of grinding poverty and the defeat during the era of the French canal project. Panamas Conservative elite, too, was against the insurgency, putting its faith in Colombias plan to renegotiate a new canal project. Indeed, power holders went so far as to request U.S. troops to land in Coln to stifle fighting under the guise of protecting Railroad property. U.S. troops occupied Panama City months later for the same reason. Colombian defeat might be possible, nationalist insurgents realized, but only with a level of U.S. impartiality that did not exist. The nationalist forces surrendered soon after, Panama remaining a department of Colombia.70

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For an overview of Nnezs project of regeneracin, see Charles W. Bergquist, Coffee and Conflict in Colombia, 1886-1910 (Durham, N.C.: Duke University Press,, 1978), 21-50. Figueroa Navarro, "Visin de Panam durante la poca del canal francs," 19-20; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 319-20. For a detailing of the resurrection of the French project, see James M. Skinner, France and Panama: the Unknown Years, 1894-1908 (New York: Peter Lang Publishing, 1989). Umberto E. Ricord, Panam en la guerra de los mil das (Panama City 1989), 93-112; Prez-Venero, Before the Five Frontiers : Panama, from 1821-1903, 134-35. Victoriano Lorenzo, a Guaym Indian from Cocl, led the indigenous troops and refused to surrender along with the urban middle-class nationalists. He was ultimately captured and executed but remains a nationalist hero in Panama. See J. Conte Porras, "Victoriano Lorenzo y la Guerra de los Mil Das como antesala de la independencia," Boletn de la Academia de la Historia 4 (1975); Ricord, Panam en la guerra de los mil das, 15053; Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947; Conniff, Panama and the United States : the Forced Alliance, 59-62.
70 69 68 67

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The circumstances that actually led to Panamas independence from Colombia in 1903 resembled its separation from Spain more so than the nationalist's bloody attempt one year before. It was a process replete with intrigue and behind-the-scenes negotiations, involving Wall Street financiers, U.S. and Panamanian politicos, and a shady Frenchman. The context of the secret plan for independence hatched in New York and Washington: the United States had begun negotiations with Bogota to take over the French holdings in Panama in early 1902. Colombian representative Toms Herrn signed an agreement with U.S. Secretary of State John Hay in January of 1903. The agreement provided for the transfer of French equipment, a ten-kilometerwide Canal Zone, a hundred-year renewable lease, shared jurisdiction and civil administration, and a $10 million cash payment to Colombia along with $250,000 annual payments after canal completion. The Colombian Senate, however, rejected the agreement in July, believing the terms favored U.S. and French interests at Colombias expense. Panamas elite was furious, along with a host of private French and American interests. Panamanian representatives immediately travelled to New York to discuss the possibility of future negotiations between the United States and an independent Panama and received a tacit endorsement. The USS Nashville arrived off the coast of Coln to block extra Colombian troops from landing prior to Panamas elite declaring political independence. With little popular support and insufficient local military power, Panama quickly received recognition from the United States and immediately began to negotiate a new canal treaty with Panamanian representatives. A number of conspiring individuals from the United States, France, and Panama were poised to make a large profit.71
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For a discussion of both internal and external forces at work in Panamas independence, see Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 352-56; Alfredo Figueroa, "El departamento colombiano de Panam a fines del siglo diecinueve e inicios de la vigsima centuria," in Colombia y Panam: la metamorfosis de la Nacin en el siglo XX, ed. Heraclio Bonilla and Gustavo Montaez (Bogot: Universidad Nacional de Colombia, 2004). For a recounting that highlights the cleavages within Panamanian society, see Thomas Pearcys analysis, Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 13-38. For histories that focus largely on the diplomatic aspects, see LaFeber, The Panama
71

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The new canal treaty offered much less favorable terms to Panama than those rejected by Colombia only months earlier. Its weak negotiating position (it was, after all, dealing with the power that ensured its continued independence) was made worse by the machinations of its shady minister plenipotentiary to the United States, Philippe Bunau-Varilla.72 The infamous Frenchman Bunau-Varilla had his own reasons for lobbying on behalf of the Panama route in the United States and for aiding Panamanian conspirators in plans to break away from Colombia: namely, he owned considerable stake in the French enterprise up for sale. Bunau-Varillas personal interests directly conflicted with the interests of the new nation that he represented at the negotiating table. Realizing the extraordinary opportunity, Secretary of State Hay made the terms of the treaty much more favorable to the United States. Most notably, the Hay-BunauVarilla Treaty increased the size of the Canal Zone from ten kilometers to ten miles, providing the United States with absolute sovereignty over more than 500 square miles of Panamanian territory. It adjusted the terms of occupation from 99 years to in perpetuity and allowed the United States to intervene in the Republic at any time in order to establish public peace. Fifteen days after Panama gained its independence, then, a cunning Frenchman signed an agreement that created a U.S.-occupied territory piercing the center of the Republic indefinitely. The deal horrified Panamanians, who feared that they had given away the transit route for a pittance, but few other options existed at this late stage. Panama ratified the Hay-Bunau-Varilla Treaty on 2 December 1903, initiating the construction of the Panama Canal and codifying the legal
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Canal : the Crisis in Historical Perspective, 29-57; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 34-63; McCullough, The Path between the Seas : The Creation of the Panama Canal, 18701914, 361-402; Conniff, Panama and the United States : the Forced Alliance, 63-68. For a detailing of the individuals who profited and how, see the popular history by Diaz Espino, How Wall Street Created a Nation : J.P. Morgan, Teddy Roosevelt, and the Panama Canal. For an interesting examination of the extent to which the United States exploited the circumstances in relation to six other Isthmian canal proposals of the past, see Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 86-92.
72

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framework that defined the relationship between Panama and the United States for years to come.73

Pay day on Front Street in Coln, 1886

***** U.S. canal construction produced a host of colonial relationships characteristic of Panamas long history of transit. Panamas power holders remained economically dependent on an outside power to bolster a service economy reliant on international traffic. Panamas power holders remained fundamentally dependent on an outside military power to maintain the
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The full treaty can be found in J.D. Arosemena, ed. Panama in 1915 (Panama: Panama Morning Journal,1915), 21-28; Diogenes A. Arosemena G., Historia documental del canal de Panam, segunda edicin ed., vol. 2 (Panam: Instituto Nacional de Cultura 1997), 31-46. For detailed descriptions, see McCain, The United States and the Republic of Panama, 62-96; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 42-49, 116-26.
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Isthmuss highly unequal status quo. And last, as we will explore in the following chapters, Panamas power holders continued to be unreliable quasi-colonial administrators. Indeed, significant gaps quickly emerged on the ground between the broad colonial designs of the United States and the undocumented governing norms and practices of the Panamanian state. Panamanian authorities deep history of insubordinate, duplicitous, and politically savvy dealings with foreign powers, then, set the stage for modern Panamanian statecraft in which politicized functionaries once again adapted pragmatic, imaginative, and often illegal strategies to deal with damaging economic and political impositions foisted upon them by an outside power. Panamas twentieth-century relationship with the United States, however, was also distinct from past metropole-local relationships. The United States government now occupied a ten-mile-wide strip of sovereign territory in the transit zone and thousands of U.S. citizens (alongside workers from all over the world) were engaged in an engineering project of global significance. Establishing a specific type of order on the Isthmus at this historical moment was absolutely crucial for the United States, not only for the literal success of the project but also for the larger progressive-era narrative that the expansionist United States told its citizens and others about its role in the world. The ensuing attempts at Isthmian domestication played out in and around the newly drawn international border that separated the putatively independent Republic of Panama from the U.S.-occupied Canal Zone. Indeed, the Panama/Canal Border became a focal point for both nascent governing forces on the Isthmus to draw sharp political, social, and cultural lines and establish sometimes less than obvious border-crossing connections. This complicated and contested process of border construction and maintenance through which the Canal Zone ultimately took on the appearance of a wholesomely ordered, racially segregated

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refuge from the apparent lawless, racial disorder of the Republic is the subject to which we now turn.

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The political boundaries of the U.S.-occupied Panama Canal Zone

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Chapter 2

Vice, Race, and the Demands of Empire: The Making of the Panama Canal Zone Border and U.S. Global Expansion in the Early Twentieth Century

The U.S. Army General Richard Blatchford, garrison commander of the Panama Canal Zone during the First World War, had been stationed in many places over the course of his military career, the U.S. frontier, France, Puerto Rico, and the Philippines. None of these varied experiences prepared him for the variety of sinful activities available in the Panamanian terminal cities of Coln and Panama. I doubt whether the conditions of degradation in these cities is equalled by any other city in the world, Blatchford claimed, unapologetically defending his speech at a Canal Zone stadium in which he referred to the terminal cities as the twentiethcentury equivalents of Sodom and Gomorrah.1 The garrison commanders moral outrage led him to action in order to putatively protect U.S. service men on the Zone from the immoral environment that existed just across the Panama Canal Zone border. Army and Navy personnel, he decried, were prohibited from visiting the Republic during leisure hours. Blatchfords order turned the invisible political line passing as it did through busy thoroughfares on both the Atlantic and the Pacific sides of the Isthmus into the end of the road for U.S. service men. That the border would serve as an effective divide for separating thousands of young U.S. soldiers from the infamously good time awaiting them in Panamas terminal cities went unquestioned.

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Underline in original. Richard Blatchford to the Adjunct General of the Army, 12 December 1918, DF 819.1151/31, RG 59 (NAMP M607 Roll 28), NACP.
1

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Fifteen years after the Panama Canal Zone border was first drawn on a map in Washington, D.C., it was a defining feature of Isthmian life. Blatchford saw his imperiousness as entirely justified. He was charged after all with securing the recently opened Panama Canal, an engineering marvel of global significance. The canal was indeed an impressive sight to behold, from the locks and cableways down to its towing locomotives. It connected the western hemisphere in a new and spectacular fashion and established the U.S. as the leader in its own expansionist call for increased Pan American integration. The mechanical spectacles of modernity at Panama, historian Ricardo Donato Salvatore argues, provided a persuasive argument for the United States to speak as the new hemispheric hegemon.2 Such technological achievement gave credence to claims of U.S racial and cultural superiority that were also clearly on display in Panama. Possessing a strong moral fortitude and a penchant for order and efficiency, the Progressive era story went, the white, U.S. community (known locally as the Gold Roll community) turned the Canal Zone into a distinctly American territory unlike anywhere else in the tropics.3 Anglo-Saxon scientific expertise and rationality combined with Protestant discipline and efficiency not only built the canal but justified the growing influence of the U.S. in Latin America and beyond.4 The ordered lifestyle

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Ricardo Donato Salvatore, "Imperial Mechanics: South America's Hemispheric Integration in the Machine Age," American Quarterly 58, no. 3 (2006): 664-72. White, U.S. workers were known as Gold Roll workers because of the race-based system of payment that saw only white, U.S. citizens paid in gold for canal work. Other workers from around the world, Silver Roll workers, were paid in the local silver currency. For Panama, see Alexander Missal, Seaway to the Future : American Social Visions and the Construction of the Panama Canal (Madison, Wis.: University of Wisconsin Press, 2008), 188-225. For a broader framing, see Dawley, Changing the World: American Progressives in War and Revolution, 75-106; Matthew Frye Jacobson, Barbarian Virtues : the United States Encounters Foreign Peoples at Home and Abroad, 1876-1917 (New York: Hill and Wang, 2000), 221-59; Rosenberg, Spreading the American Dream: American Economic and Cultural Expansion, 1890-1945, 7-63; Anders Stephanson, Manifest Destiny : American Expansionism and the Empire of Right, 1st ed. (New York: Hill and Wang, 1995), 66-112.
4 3 2

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of the Gold Roll community, then, was of crucial import for the broader narrative of U.S. imperialism.5 But the Canal Zone territory did not always lend itself to such flattering and self-serving portraits. In fact, the Canal Zone was mired in scandal early on: a place of racially mixed barscum-brothels and gambling dens. This chapter charts the somewhat arduous process of transforming the Canal Zone from a territory nearly indistinguishable from the vice-filled, racially mixed terminal cities of the Republic in 1904 to a model moral and racially segregated community by the end of construction in 1914. Historians such as Julie Greene and Paul Sutter have charted the increasingly dominant strength of the Isthmian Canal Commission (ICC) and it fits the mold of the bold social experiments undertaken by colonial states across U.S. imperial holdings.6 A largely overlooked stimulus for colonial state regulatory growth, however, was the need to quell the boozy disorder of early construction that stimulated racial and cultural mixing among U.S. citizens, Panamanians, West Indians, and others. Colonial officials may have had a much lighter touch on morals than Protestant missionaries and their allies, as historian Ian Tyrrell notes, but Zone bars serving as interracial meeting spots nonetheless gave them pause.7 These sites threatened early official attempts to create stable racial boundaries on the Isthmus, in effect undermining not only the hierarchical racial order structuring the projects organization but challenging the broader racial claims of imperial expansion. Pan American leadership let
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See Ricardo Donato Salvatore, "The Enterprise of Knowledge: Representational Machines of Informal Empire," in Close Encounters of Empire : Writing the Cultural History of U.S.-Latin American Relations, ed. G. M. Joseph, Catherine LeGrand, and Ricardo Donato Salvatore (Durham, N.C.: Duke University Press, 1998). Greene, The Canal Builders: Making America's Empire at the Panama Canal; Paul S. Sutter, "Tropical Conquest and the Rise of the Environmental Management State: the Case of U.S. Sanitary Efforts in Panama," in Colonial Crucible: Empire in the Making of the Modern State, ed. Alfred W. McCoy and Francisco A. Scarano (Madison: University of Wisconsin Press, 2009). For broader anthology, see McCoy and Scarano, Colonial Crucible: Empire in the Making of the Modern State.
7 6 5

Tyrrell, "Empire in American History," 553.

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alone racial and moral uplift was a wholly impractical goal if the projects frontline was populated by white, U.S. citizens increasingly indistinguishable from Panamanians, West Indians, and other racial inferiors on the Isthmus. The Panama Canal Zone border served as ground zero in this struggle. The increasingly activist colonial states focus, trained as it was on establishing a sharply defined Protestant moral order to abet racial and cultural exclusivity among Gold Roll workers, imbued the border with a deep moral and racial significance.8 The Canal Zone was not an exclusively white territory. Workers from all over the world lived on the Zone and the largest contingent consisted of West Indians of African heritage, known as Silver Roll employees along with most other non-U.S. workers. The racial distinction between the Republic and the Canal Zone was defined by the hardening segregation on the Zone. The regulatory arm of the colonial state manifested itself differently according to race. Silver Roll employees as well as Panamanians came to fear the strict and often brutal Zone police. Even law-abiding Silver workers often fled the Zone to live across the border in the more expensive but more relaxed environment of the Republic. While punishment was also harsh for incorrigible Gold Roll employees, the ICCs overall regulatory strategy for white North Americans was far more generous. The administration subsidized almost all aspects of Gold Roll life, developing hyper-American suburbs that provided luxuries an employee would never imagine receiving in the United States.9 In exchange, Gold Roll workers gave up any semblance of real independence. Working, eating, sleeping, shopping, bowling, even praying: all was done under the watchful eye of the ICC. Most did not buck at what some observers saw as a quintessentially un-American situation. In fact, overall, Gold
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On connections between whiteness and Protestantism, see Edward J. Blum, Reforging the White Republic : Race, Religion, and American Nationalism, 1865-1898 (Baton Rouge: Louisiana State University Press, 2005). Stephen Frenkel, "Geographical Representations of the 'Other': the Landscape of the Panama Canal Zone," Journal of Historical Geography 28, no. 1 (2002).
9 8

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Roll workers embraced the arrangement, as it allowed them to perform their putative racial, moral, and national superiority in comfort, day in and day out. The strong sense of community and patriotic mission that developed in the Gold Roll community merged strikingly well with the state project of border construction and maintenance and the broader framework of U.S. progressive imperialism. The Zone, however, was never entirely free from the corruption that Progressive era imperial boosters railed against elsewhere. As the administration increasingly tightened its control over the Zone, many of the markets dried up almost entirely for individual merchants. The markets that remained outside of the purview of the ICC for political reasons such as taverns became stringently regulated. Most Zone tavern owners ended up in the Republic. Others, however, saw the increasingly less competitive Zone market as an unprecedented opportunity, especially those who were able to gain favor with well-placed state officials. A merchant like white Corsican native Pascual Canavaggio, an Isthmian tavern owner and alcohol wholesaler, was able to illicitly acquire numerous valuable liquor licenses, all the while strong-arming competition with threats to their liquor licenses. Some were more vulnerable than others to these tactics, as the racial discrimination certain merchants faced during official transactions ensured little state protection from the predatory machinations of merchant/state collusion. Canavaggio and a number of other merchants from Panama were also able to gain a foothold in a market entirely controlled by the Zone state. Commissary Manager John Burke was charged near the end of construction with accepting bribes and kickbacks from local merchants that influenced which products ended up on the shelves of government-run Zone department stores a system that purchased six million dollars worth of stock per year. The Gold Roll community saw the scandal as an attack on the entire community and energetically supported

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Burke until the charges became irrefutable. The loudest voices then supported the administrations closed-door policy to deal with the charges quickly and quietly. A wide-open investigation, it was believed, would only blemish the otherwise graft-free narrative of canal construction, shining unwanted and threatening light onto its wholesome efficiency. The commissary scandal was not long in the publics consciousness in large part because the entire Gold Roll community had become as invested as the administration in the graft-free image of the Canal Zone. When celebrations of the heroic effort at Panama began less than a year later, no reference to graft was made, except to loudly proclaim that none had ever existed on a project that epitomized the power of Anglo-Saxon Protestant discipline, efficiency, and virtue.

Following the French: the Vicious Disorder of Early Construction, 1904-1907 Panama was portrayed as a perfect test for the confidently expanding U.S. at the turn of the twentieth century. The French attempt to build a canal at Panama not 15 years earlier served as a foil to illustrate the modern and efficient administrative methods of the U.S. The French project, U.S. observers widely reported, often through second-hand accounts, was plagued with corruption and moral decadence. A railroad contractor, for instance, claimed he saw with his own eyes a pile of discarded wine bottles in Coln that rivaled or surpassed the roof of a twostory house.10 Another observer, who lived in Panama from 1861 to 1907, recalled Panama City as a carnival of depravity during the time. The blush of shame was practically unknown.11 The promoters flung French gold among the thieves in Panama like worthless chaff, a third reported. It was the day of high-rollers; of crazy promises and wild expectations; of fraud and
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10 11

McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914, 145-46.

Tracy Robinson, Panama: a Personal Record of Forty-Six Years, 1861-1907 (New York: Star and Herald, 1907), 142-43.

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filth; of death and disaster, until the very name Panama, an Indian word meaning abounding in fish, stank in the nostrils of mankind.12 Such lurid descriptions excited the confident U.S. boosters. The Panama Canal would be, as U.S. historian Alan Dawley notes, one of the main proving grounds for progressive imperialism.13 The French fell into an immoral trap at Panama in part, it was believed, because they did not have legal jurisdiction to impose order. With the signing of the Hay-Bunau-Varilla Treaty in 1903, the U.S. gained legal control over the ten-mile wide strip that enveloped the canal. It was conceived of as a territory apart from Coln and Panama City, the two sites of the oft-discussed French-Panamanian degradation. The logic was simple: the more aspects of the project controlled by the ICC the better, not least economic activity. The Canal Zone drew a bright line around the canal, economic historians Noel Maurer and Carlos Yu point out, from which it was relatively easy to exclude Panamanian (and other potential foreign) competition from the provision of services or other ancillary operations.14 At the same time, however, officials were clearly concerned with the broader optics of canal construction. The entire rationale for overseas expansion, writes historian Emily Rosenberg, was shaped in a domestic crucible. Economic need, Anglo-Saxon mission, and the progressive impulse joined together nicely to justify a more active role for government in promoting foreign expansion. If the point of building the Panama Canal was primarily to satisfy the first of those three rationales facilitating commercial and military expansion construction nonetheless had to be carried out in a way that
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W.A Croffut, Folks Next Door: the Logbook of a Rambler (Washington, D.C.: The Eastside Publishing Company, 1904), 274. Dawley, Changing the World: American Progressives in War and Revolution, 83; Greene, The Canal Builders: Making America's Empire at the Panama Canal, 206-23.
14 13 12

Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama

Canal, 7.

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would not cast aspersions on the larger expansion project as a whole. It had to fit within the framework of powerful reform movements stateside, the loose coalition of moral reformers, clean-government crusaders, and Anglo-Saxon supremacists, of which many government officials, from President Theodore Roosevelt on down, considered themselves a part.15 The first years proved anything but exemplary of the reform ethos characterizing the Progressive era. Indeed, U.S. expansion turned Panama into a chaotic place, fundamentally altering the material and cultural realities of Panamas transit zone. Neither the nascent Panamanian state nor the ICC was initially prepared to effectively deal with what one Panamanian official termed a pernicious immigration of the lowest social order.16 The U.S.occupied Canal Zone alone registered a nearly fourfold population increase in six years, from 23,463 inhabitants in 1905 to 90,435 in 1911.17 The overwhelmingly male newcomer population led to an uncontrolled spike in the Isthmian service industry. Racially mixed bars-cum-brothels along with gambling and opium dens emerged alongside hotels and restaurants to service the desires of these newcomers. Taverns were legal on the Zone until near the end of construction; gambling and prostitution were not.18 The law, however, was not much of a deterrent and the nascent colonial state was clearly overwhelmed by the powerful demographic shifts underway. As the Zone Chief of Police admitted to the Zone Governor more than two years into U.S.
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Rosenberg, Spreading the American Dream: American Economic and Cultural Expansion, 1890-1945, 38-42. For a study that details the nature of President Theodore Roosevelts ideas on race and reform, see Joshua David Hawley, Theodore Roosevelt : Preacher of Righteousness (New Haven: Yale University Press, 2008). Memoria de Gobierno y Justicia, 1914, 72, SB, ANP. See also Aristides Arjona, Memoria de Gobierno y Justicia, 1909, LXX-LXXI, SB, ANP; Liquor on the Isthmus, The Washington Post, March 13, 1904, E6; M. Amador Guerrero to C. Magoon, 22 July 1905, F 62-B-165, P 1, B 362, 150/47/3/3 E30GP, 1905-1914, RG 185, NACP; C. Magoon to M. Amador Guerrero, 25 July 1905, F 62-B-165, P 1, B 362, 50/47/3/3 E30GP, 1905-1914, RG 185, NACP.
17 18 16 15

Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 322.

Isthmian Canal Commission, Laws of the Canal Zone, Isthmus of Panama, Enacted by the Isthmian Canal Commission, (Washington: Government Printing Office, 1906), 15-21; No Saloons in the Zone, Canal Record, 30 April 1913, F 59-G-1, P 10, B 356, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.

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occupation: there are quite a number of vagrants, beggars, habitual drunkards, and other undesirable characters in the Republic of Panama and the Canal Zone.19 Some of the blame for ICC difficulties can be placed at the feet of its organizational structure. Its leadership consisted of a seven-person committee stationed in Washington, D.C., that was slow to make decisions and unmoored to the actual conditions on the ground. Local administrators were hamstrung to implement quick and effective policy based on local conditions.20 The first Chief Engineer, John F. Wallace, cited something as minor as his attempt to provide wholesome entertainment for the laborers as an example of how little discretion he actually had. Wallace sent a routine request to Washington in order to contract the Young Mens Christian Association (YMCA) to staff centers of leisure for employees. It was rejected on the grounds that employing the YMCA might lead to objections from the Catholic Church.21 Such wavering ensured that the Zone early on, as one ICC manager complained, had an absence of any other place of congregation except the saloons.22 The prevalence of Zone saloons and the culture of hard drinking led to difficulties for administrators that spanned well past its negative impact on productivity. We have, in many of our Zone towns, altogether too many saloons, and the great majority of them are doggeries, pure and simple, Chief Engineer John Stevens complained. He cited the towns of Empire and
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Italics mine. Chief of Police to C. Magoon, 24 August 1906, F 46-D-1, P 1, B 298, 150/47/2/1 E30GP, 1905-1914, RG 185, NACP. For other studies that chart early organizational difficulties, see John Berry Biesanz and Mavis Biesanz, The People of Panama (New York: Columbia University Press, 1955), 50-60; Joseph Bucklin Bishop, The Panama Gateway (New York: C. Scribner's Sons, 1913), 155-59; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 67-77. Wallace says Taft all but Cursed Him: Former Chief Engineer of Canal Tells How He Was Hampered, New York Times, February 7, 1906, 4. G. Brooke to F. Stevens, 28 April 1906, F 59-G-1, P 1, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. For an early endorsement of the YMCA, see Isthmian Y.M.C.A. The Coln Starlet, May 5, 1904.
22 21 19

20

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Culebra as examples, using racial shorthand to describe the problem of cultural and racial mixing beginning to take place. Empire had seventeen locations to purchase liquor, he noted, and 13 out of 17 are evidently in the hands of chinamen; Culebra had sixteen liquor establishments out of which 12 are in the hands of chinamen. Chinese-run bars were known on the Isthmus for selling low-grade German liqueurs and Chinese rum.23 And Panamanians from the popular classes, West Indian migrants, and white, U.S. citizens, among others, united in their desire for cheap and plentiful booze. In these gay and festive islands, where the Colombians dwell, a heartsick marine stationed in Empire wrote early on, I am sick of kinkly [sic] ringlets, And the chocolate-colored belles.24 He seems to have been in the minority. Another poem written by a Gold Roll worker celebrated the cross-cultural interaction and the fluidity of identity possible in the Isthmian bar, a place where top-down racial classifications were clearly defied: a place, he wrote, where Mongol mates with Turk and where white mans skin is brown.25 As a growing number of Gold Roll employees patronized these Zone taverns, colonial officials became increasingly concerned. It was unfortunately true, Chief Engineer Stevens wrote, that very many of our white employees will visit places of this description on the Isthmus, who would be ashamed to do it at home. For this cause alone, he concluded, unusual judgment should be exercised as to the parties to whom licenses should be issued.26 Racial degradation and the Zones uncontrolled nightlife became linked in the minds of ICC officials and appeared to be confirmed when white workers entered into sexual relationships
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Alrededor del alcoholism, Diario de Panam, September 6, 1916, 4; Report for the Year 1909 on the Trade and Commerce of Colon and Cristobal, FO 288/125/27, TNA.
24 25 26 23

A Homesick Marine, A Soldiers Valentine The Coln Starlet, April 5, 1904. Greene, The Canal Builders: Making America's Empire at the Panama Canal, 312.

J. Stevens to C. Magoon, 30 April 1906, F 59-G-1, P 1, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP; J. Stevens to C. Magoon, 12 September 1906, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.

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with Panamanian or West Indian women. One ICC Superintendent pointed to the town of Gorgona, for example, where two white men operated saloons. They both had worked for the ICC previously and lost their jobs for living with local (nonwhite) woman. One actually married a negro woman and was, according to the Superintendent, one of the lowest types of white men we have had here and I do not believe he should be encouraged in any manner to stay.27 He called for the ICC to revoke both mens liquor licenses. Another official spelled out the importance of stable and exclusive racial identities to the canal project during a meeting with Gold Roll employees known to be in interracial relationships. The men were given to understand, he wrote, that they are expected to conduct themselves outside working hours in a manner that is not detrimental to the Isthmian service as a whole, and that if they do not do so they will have to accept the consequences.28 It was the seeming disorder of dive bars and race mixing that led Zonian physician A.L. Hames to call for prohibition on the Zone. Morally they are sores of the worst character, he claimed when speaking of Zone saloons, whose every influence is degrading, a plague, compared to which bubonic plague, is mild in character. The doctor pointed out that conditions on the Canal Zone strayed so far from the U.S. rhetoric of rational administration, disciplined Protestant reform, and Anglo-Saxon mission as to fundamentally challenge the narrative that the U.S. citizens told themselves and the world about the broader project of U.S. expansion. Our Government in its altruistic policy of helping the weak and oppressed of other nations, stands for all that is exalted in the eyes of other nations, he wrote, and we can not afford therefore, to assume a lower plain or to come short of living up to our professions of the expectations of the
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G. Brooke to H.H. Rousseau, 10 April 1908, F 59-G-1, P 1, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. Assistant to the Chief Engineer to Colonel Goethals, 3 December 1913, F 62-B-248, P 1, B 364, 150/47/3/3 E30GP, 1905-1914, RG 185, NACP.
28 27

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world. Hames saw prohibition as a crucial component to squaring on-the-ground conditions with so much of U.S. expansionist ideology. It is incumbent upon us, therefore to set ourselves right in the eyes of these people, he concluded, by removing from our midsts, this source of degradation the open saloon.29 It was not long before the pandemonium at Panama gained significant attention in the United States. Journalist Poultney Bigelow made the most famous and damaging charges. He returned from Panama in early 1906, claiming immoral conditions and general signs of rottenness. Graft and bribery were rampant, he reported, living and working conditions deplorable. Only a reckless father would advise his son to take up employment on the Canal Zone, as the canal was not being constructed in a manner worthy of our reputation.30 The project, in short, had many of the same qualities used in the U.S. to pejoratively describe the moral decadence of Old World colonial ventures. Officials from the president on down realized the project at Panama was not fulfilling its Progressive era mission and felt significant political pressure from many scandalized not to mention well organized and vocal stateside residents.31 The capacities of the colonial state had to be enhanced, it was decided, so to gain better control over the boozy, racial disorder on the Zone. If these types of activities were an

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A.L. Hames to C.S. Blackburn, 10 April 1908, F 59-G-1, P 4, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. Conditions on the Isthmus, New York Times January 5, 1906, 10; Criminal Neglect at Colon -Bigelow: Declares Whole Canal System Shows Signs of Rottenness, New York Times January 5, 1906, 7; Panama: Poultney Bigelow Reaffirms His Criticisms of the Canal Work, New York Times January 12, 1906, 8; Poultney Bigelow, "An American Panama. Some Personal Notes on Tropical Colonization as Affected by Geographic and Political Conditions," Bulletin of the American Geographical Society 38, no. 8 (1906): 490. See, for instance, W.B. Palmore to President Theodore Roosevelt and Chairman Shontz, 23 June 1906, F 59-G-1, P 1, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. On the networks of reform-minded interest groups in relation to U.S. empire, see Tyrrell, Reforming the World : the Creation of America's Moral Empire. See also Gaines M. Foster, Moral Reconstruction: Christian Lobbyists and the Federal Legislation of Morality, 18651920 (Chapel Hill: University of North Carolina Press, 2002).
31 30 29

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inevitable aspect of such a massive project, they could no longer be tolerated within the territory controlled by the U.S.

A Culebra street on payday on the Canal Zone, 1907

A Chinese store in Gorgona on the Canal Zone, 1909

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Forging a Proper Racial and Moral Order on the Canal Zone, 1907-1915 In early 1906, the U.S. Senate asked the projects first Chief Engineer how the situation on the Zone could be improved. The only way you can do your work down there successfully, Wallace replied, is to put it in the hands of a pure, absolute despot, and hold his hands up, and keep the wolves off of his back. Others like the outspoken journalist Bigelow agreed.32 Senator John Tyler Morgan suggested that the Zone ought to be reorganized in a hierarchical manner resembling the military, arguing that such powerful control was needed to deal with as uncontrollable and as mischievous a rabble as ever collected at any place in the world. The national interest invested in Panama, it would seem, was too important for civilian commissions and respect for personal liberties. In early 1907, Roosevelt put the project in the hands of the U.S. Army, with the clear intention of bringing a disciplined order absent in the projects first years. Major George Washington Goethals of the Corps of Engineers became the chairman and the Chief Engineer, a man who, in similar fashion to other colonial officials across the U.S.s imperial holdings, was provided with nearly unrestricted power by Washington. A goal of paramount importance was to stamp out much of the wild nightlife that came to be associated with Zone disorder. Goethals arrived on the Isthmus at the moment in which the basic Zone infrastructure had been recently completed: fire departments, post offices, hospitals, housing for all employees, cafeterias, supermarkets, hotels, and schools. That the administration had power over the services structuring Zone life allowed him to quickly augment his control and shape Zone society. Goethals immediately developed a strong policy in support of public morality that coincided
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Wallace says Taft all but Cursed Him: Former Chief Engineer of Canal Tells How He Was Hampered, New York Times, February 7, 1906, 4; More Canal Criticisms from Poultney Bigelow: says the Administration lacks Knowledge of Conditions, New York Times, February 22, 1906, 2.
32

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with strengthening the racially segregated order. While he did not prohibit alcohol at first, he brought it under much more stringent regulation, closing approximately four Zone saloons out of every five. Bars controlled by Chinese merchants were especially singled out for closure, while the remaining tavern owners had to contend with new more restrictive hours of operation.33 In place of taverns emerged clubs, events, and other activities deemed morally proper for employees and sponsored by the state. The breakdown of comfort funds expended illustrated the world of stabilizing racial privilege Goethals was creating. A married Gold Roll worker on average received fifteen times the amount of his Silver Roll married counterpart. The married Gold Roll employee averaged $750 annually, while a married Silver Roll employee averaged just $50; a Gold Roll bachelor averaged $425, while a Silver Roll bachelor averaged $30. While the same cannot be said for all employees of the ICC, few if any of the wholesome wants of Gold Roll employees were left unchecked on Goethalss watch.34 Many Gold Roll employees spent much of their leisure time at the YMCA clubhouse, the administration no longer worrying about bureaucratic interference from Washington regarding such matters. The YMCA was an obvious choice for the ICC to subcontract. It was founded to woo workers away from immoral temptations in mid-nineteenth-century urban centers and was already active in other U.S. imperial holdings.35 The ICC spent $175,000 building five large
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G. Brooke to G. Goethals, 14 May 1907, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP; Public Notice, 6 June 1907, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. For the actual ordinance, see Regulations Respecting the Sale of Intoxicating Liquors in the Canal Zone, Isthmus of Panama, 27 April 1907, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. For licensing prices in Coln, see S.H. Hiudhorsy to R.A. Lane, 26 October 1906, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP; J. Stevens to R. R. Rogers, 31 December 1906, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905-1914, RG 185, NACP; J.H. Ankrom to G.W. Goethals, 6 December 1907, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. Much of the information found in the above two paragraphs was found in Bishop, The Panama Gateway, 273-80; McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914, 555-88. Paul Boyer, Urban Masses and Moral Order in America, 1820-1920 (Cambridge: Harvard University Press, 1978), 108-29; Tyrrell, "Empire in American History," 554.
35 34 33

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clubhouses for Gold Roll workers. YMCA-trained employees were paid by the ICC to create a home away from home for these employees. Workers were charged a ten-dollar annual membership fee. This hardly defrayed the cost for this front line defense as one booster put it in Uncle Sams fight with the Devil.36 Little expense was spared to create these big airy recreation halls, well stocked with mans playthings, where Gold Roll employees gathered after work to bowl, play billiards, read a magazine, or use the gymnasium.37 Churches, too, were given hearty co-operation and generous aid. Thirty-nine churches existed by 1910 and twentysix of those were built and owned by the ICC, with chaplains often on the ICC payroll performing services and visiting the sick.38 ICC chaplains were engaged in an ever-greater number of marriage ceremonies as the first decade of the twentieth century progressed. While an editorial pointed out in 1915 that Uncle Sam has always been in favor of married folks on the Canal Zone, this was not in fact entirely true. During the first years of construction, white, U.S. women were discouraged from coming to Panama. This changed as infrastructure improved. As the administration set its sights on stabilizing the hierarchical order based on race, white families became an asset to the regime. Men began to send for their spouses and single, white women from the U.S. were encouraged to move to the Zone. Goethalss policy nudged racially suitable partners to action. While the bachelor employee continued to be treated like a piece on a checker board, the married

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McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914, 560. See too, for instance, An Up-to-Date Booze Fighter, The Panama Morning Journal, January 20, 1915. Harry A. Franck, Zone Policeman 88: A Close Range Study of the Panama Canal and its Workers (New York: Century Company, 1913), 27.
38 37 36

Bishop, The Panama Gateway, 273-80.

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employee garnered respect.39 The Gold newlywed was immediately transferred out of the sharedroom bachelor quarters into a private living arrangement, at minimum a four-room apartment with a screened porch. Neither was he at the top of the list for transfers, the administration not wanting to uproot his family. His bride saw benefits too. She gained access to the commissary and a life of relative luxury. A Gold Roll wife reported in 1912 that she and her friends enjoyed activities such as afternoon tea, horseback riding, tennis, and picnicking. Each Gold Roll house employed several servants, she assured her readers, which gives the American women ample time to pursue their favorite recreation.40 Most in the Gold Roll community took great pride in being part of this exclusive group, the vanguard of U.S. achievement.41 A poem published in the English language press in 1914 captures the camaraderie of carving out the sovereign colony. Composed by the Canalites, it was written in response to the possibility of Goethals becoming the commissioner of the New York Police Department, and was entitled When George becomes a Cop. If Gothamites get Goethals to boss their crooked mob, theyll see what life will be with a real man on the job. Theyll have a man as is a man, one they cannot bluff and saying well be happy aint saying half enough. For when this job is finished and were turned loose, of course, well beat it back to New York and get upon the force. Therell some of us be captains and some plain working cops; no more roasting in the sun or baking in the shops. Well all be proud as peacocks in uniforms so neat, and throw the daisy fodder as we strut along the street. Well run the whole blamed outfit from battery to Park; well frisk the simple native when we catch him in the dark; well take away his money and bid the wretch begone, and take his plea to Colonel G. the coming Sunday morn. Tom Cooke will be the general, Charlie Rose his aide; Hagan he will walk a beat along with George Greenslade. Therell be forty dozen bottles standing in a row; for Burke
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Editorial The Panama Morning Journal, February 26, 1915; Enforcement of Sanitary laws along Canal Zone The Coln Starlet, March 10, 1904. Women in the Making of the Canal, New York Times, September 22, 1912, X8. For more on U.S. women during the construction period, see Greene, The Canal Builders: Making America's Empire at the Panama Canal, 226-66.
41 40 39

Intrigue to Oust Goethals Alleged, New York Times, July 30, 1912, 3.

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will get a cabaret and keep the fizz a-flow. Judge Jacksonll be handy with some legal club to bust Frank Feuille and Captain Barber wholl be the Arson Trust. And so on down the blooming list, each man will get the post it looks to Uncle George hes fitted for the most. New Yorkll be free of vandals from bottom to the top; therell be no breath of scandal when George becomes a cop.42 The Canalites poem, of course, sheds more light onto life on the Zone than New York City. New York was their next Isthmus: an unruly place full of simple natives that needed to be brought to heel, just as the Zone had been. Comfort funds were only one aspect of this process. Brute force, as the poem suggests, was also crucial. The Zone police force was famous for ensuring the benevolent despotism of Colonel Goethals and ICC regulatory dominance grew as construction progressed. This contrasts with historian Julie Greenes claim that control was a consistent problem for Zone officials. Tough laws on the Zone led to more resistance than compliance, Greene argues. Disorderly behavior, intoxication, loitering, and vagrancy were epidemic.43 That the Zone police were consistently busy is undeniable. With that said, the capacity of the police force grew exponentially throughout the construction period, as did the number of arrests for the most trivial of matters.44 Four Gold Roll employees found out exactly how controlled the Zone had become when they sat down in their own quarters to play a game of poker in 1913. Unbeknownst to them, police officers watched through the blinds. Though the officers did not see money on the table and poker was tolerated if no money changed hands all four men were arrested for gambling. Convicted on circumstantial evidence, the sentence was severe. They lost their jobs, were given a thirty day jail sentence, and a twenty-five dollar fine; upon release, they were scheduled to be deported back to the U.S. In a single sense, these four men were lucky. The
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42 43 44

When George becomes a Cop The Panama Morning Journal, January 28, 1914. Greene, The Canal Builders: Making America's Empire at the Panama Canal, 301. Franck, Zone Policeman 88: A Close Range Study of the Panama Canal and its Workers, 205-07.

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Inspector of Shops took up their case. He reasoned that they deserved a break, considering none of them had a criminal record, all had significant time on the job (two of them over six years service), and their foreman vouched for the good conduct, high reputation, and general behavior of the four men. Goethals himself reduced their sentence due to the circumstances in the end. All four men would not have to serve the jail sentence as long as they paid the fine, resigned, and left the Isthmus immediately. They were not welcome back.45 Zone regulatory focus centered on the Panama Canal Zone border. A border that is not visible for all, in the words of historical anthropologist Willem Van Schendel, is a border that has failed its purpose.46 The ICC went to great lengths to make the invisible line an increasingly relevant feature of Isthmian life. The Assistant Chief of the Zone Police sent out a memo in 1909, entitled Instructions for Zone Policemen, for the Performance of Police Duty, on or along the Boundary Line between the Canal Zone and the Republic of Panama. The protocol made clear that establishing the boundary was of paramount importance going forward. Police officers thereafter had to demonstrate an awareness of the exact coordinates of the border before engaging in active duty and they were absolutely not to pursue criminals past the boundary line into the Republic. This was the case whether the crime committed be serious or petty. The Zone administration demanded the same respect from Panamanian state officials. If a Panamanian police officer crossed onto the Zone with a prisoner arrested in the Republic either by accident or intention the Zone officer was to seize the prisoner immediately, as the Panamanian officer had lost all his authority. The Panamanian state would then have to go
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Inspector of Shops to Mr. Rousseau, 19 February 1913, F 62-B-165, P 2, B 363, 150/47/3/3 E30GP, 1905-1914, RG 185, NACP; Memorandum for the Chairman, 22 March 1913, F 62-B-165, P 2, B 363, 150/47/3/3 E30GP, 1905-1914, RG 185, NACP; G. Goethals to M.H. Thatcher, 25 March 1913, F 62-B-165, P 2, B 363, 150/47/3/3 E30GP, 1905-1914, RG 185, NACP.
46 45

Schendel, "Spaces of Engagement: How Borderlands, Illicit Flows, and Territorial States Interlock," 40-

41.

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through the proper diplomatic channels to retrieve the prisoner, who would be held on the Zone until Zone officials granted the request for the prisoners return.47 The colonial states increasing domination of the Canal Zone had a profound impact on the Republic of Panama, especially the terminal cities of Panama and Coln. Merchants continued to arrive to Panama from around the globe and leisure activities prohibited on the Zone mushroomed as construction progressed.48 Less and less of it, however, took place on the Canal Zone. Even the U.S. citizens who celebrated the Zones emergent order would strategically cross the border into the more relaxed environment of the Republic to drink, gamble, and have sex. Panama and Colon serve as a sort of safety-valve, police officer Harry Franck observed around this time, to get rid of the bad internal vapors that might cause explosion in a ventless society.49 Others ended up in small Panamanian villages near the Panama Canal Zone border. Exactly where they were in the Republic appeared less important than the fact that they were outside the reach of the Zone police. A number of villages in the district of Arraijn were subject to a stream of newcomers, for instance, for whom the almost nonexistent regulatory environment was the draw.50 The Panamanian state ordered a stronger police presence, the reason being, according to Panamanian officials, that people of all nations,

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1st Lieutenant and Assistant Chief, Zone Police, Instructions for Zone Policemen, for the performance of Police Duty, on or along the Boundary Line between the Canal Zone and the Republic of Panama, May 16 1909, F 62-B-209, P 1, B 363, 150/47/3/3 E30GP, 1905 1914, RG 185, NACP. Aristides Arjona, Memoria de Gobierno y Justicia, 1909, LXX-LXXI, SB, ANP; Omar Jan Surez, La poblacin del Istmo de Panam del siglo XVI al XX (Panama City: Impresora de la Nacion, 1978), 22.
49 50 48 47

Franck, Zone Policeman 88: A Close Range Study of the Panama Canal and its Workers, 206-07.

For more on strategic border crossings, see Schendel and Abraham, "The Making of Ilicitness," 22-25; Andreas, Border Games : Policing the U.S.-Mexico Divide.

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for the purposes of crime and other reasons, leave the Canal Zone and cross into the villages of the district.51 Each one of these strategic border crossings socially reproduced the border as a chasm separating increasingly distinct worlds the borders fluidity actually increasing its power as a social force. Punishment was harsh for those who challenged this increasingly accepted reality. Maurice Stein, for instance, briefly passed through the Canal Zone in 1911 en route to Coln from Panama City by train in the company of Sadie Stein. Those minutes in the Zones jurisdiction were all it took for him to be charged with trafficking in white slaves.52 The newspaper story that related his arrest warned that those who necessarily had to travel through the Zone to cross the Isthmus had to be increasing careful. The Canal Zone Government is determined to stamp out immorality within its boundary.53 Three years later, three Panamanians were fined five dollars gold each after the Zone police caught them playing craps. The Panama Morning Journal snarkily reported that these craps players might have just made an honest mistake, as they had always been accustomed to such things as gambling, cockfighting and bull fighting in their dear old Panama, where such things receive official sanction. Not everyone got off with just a fine. That same year Fitz Brathwaite passed just over the line into the Canal Zone while selling Chinese lottery tickets and received a four-month prison sentence.54

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51 52

Manuel Quintero V., Memoria de Gobierno y Justicia, 1909, 186-187, SB, ANP.

The Zone police focussed more on white slave traffic after U.S. Congress passed the Mann Act in 1910, commonly referred to as the white-slave act. Greene, The Canal Builders: Making America's Empire at the Panama Canal, 294. This is not to say that those who engaged in white slave traffic always got a free pass in Panama. See, for instance, Por la sanidad moral, La Prensa, May 15, 1915.
53 54

White Slave Traffic, The Commercial, September 6, 1911, 1.

Jail Sentence for Selling Lottery Tickets in Zone, The Panama Morning Journal, February 28, 1914; Zone Court News, The Panama Morning Journal, January 15, 1914.

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Another case involved ten Jamaican women, who were arrested on the Zone in September 1911. Described as known prostitutes, these women strategically crossed onto the Zone from Panama on ICC payday to offer their services. All ten were charged with vagrancy and sentenced to fifty-five days in jail. Upon release, they were deported and told that they were not welcome on the Zone, ever again, for any purpose. They were not, however, deported to their country of origin. Even though a few had been on the Isthmus only three months and the majority for less than two years, all the women were sent back to the country from which they entered the Canal Zone. This was almost always Panama. These recently arrived women, drawn to the Isthmus because of canal construction, were now Panamas problem as were nearly all the other migrants from around the globe that were deported from the Canal Zone as undesirables.55 The wild nightlife and all its associated problems became the domain of the Republic, to the chagrin of some Panamanians.56 In a few short years, the Zone had undergone profound changes, from a boomtown environment of boozy racial disorder to a highly organized, racially segregated society. As a Zone woman cheerily put it: Instead of lawlessness there is peace; health instead of death; happy wives instead of scarlet women.57 It was a model of Anglo-Saxon Protestant moral discipline and efficiency championed by progressive imperialism. Goethals in many ways came
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J.B. Cooper to Chief of Police, 25 September 1911, F 46-D-1, P 1, B 298, 150/47/2/1 E30GP, 1905 1914, RG 185, NACP; F. Feuille to G. Goethals, 16 October 1911, F 46-D-1, P 1, B 298, 150/47/2/1 E30GP, 1905 1914, RG 185, NACP; A. Johnson to Head of Department of Civil Administration, 25 January 1912, F 46-D-1, P 1, B 298, 150/47/2/1 E30GP, 1905 - 1914, RG 185, NACP; Head of Department of Civil Administration to A. Johnson, 27 January 1912, F 46-D-1, P 1, B 298, 150/47/2/1 E30GP, 1905 - 1914, RG 185, NACP. Panamanian newspapers were littered with editorials that lamented the continuing growth of vice services in the terminal cities. See, for instance, La mendicidad y el trabajo infantil en la cuidad, La Prensa, August 14, 1915, 1; Esos soldados! Diario de Panam, December 3, 1915; Sobre inmigracin Diario de Panam, December 25, 1915; Los borrachos tienen derecho de mortificar a las ciudadanos tranquilos, Diario de Panam, August 3, 1916; La degeneracin social y el alcoholismo, El Conservador, December 30, 1916, 3.
57 56 55

Women in the Making of the Canal, New York Times, September 22, 1912, X8.

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to personify the colonial state and was the reason, most U.S. citizens believed, that such a model community came to exist on the Zone. Proclamations celebrating his accomplishments had reached a fever pitch by the mid-1910s. The Panama Morning Journal proposed in 1915 that Goethals ought to be the Republican candidate for president the following year, considering that he was the hero of the human race. Orderly life in the Canal Zone, more so than successful completion of the canal, proved his bona fides for seeking the position of Commander in Chief: the marvellous manner of planting an army of more than 50,000 people from the temperate latitudes in this torrid zone, in a continuous swamp, the breeding place of fevers, epidemic diseases and veritable human plagues and so disposing of the poisons of earth and air as to make this Canal Zone the veritable model for human habitation. In all the length and breadth of the universe there is nothing to compare with it. Extending clear across the Isthmus we find a ribbon of perfectly ordered homes[,] hotels, hospitals, schools, churches, libraries, printing plants, electric lights, railways, telegraphs, telephones, wireless stations, oil and water pipes, sewers and macadamized streets and roads. The best organized community life in the world to-day is here in the tropics, as the adjunct and outcome of the great canal. Add to these the impregnable forts at either end of the Canal and the placing of the flower of the army along its borders, housed and equipped for permanent occupancy, commanded by a complete staff of capable officers, and these supported by a naval force constantly on guard at either entrance, and you have an accomplishment that fairly dazzles the imagination. All this, the piece concluded, the result of the genius of one modest, unpretentious man and without a dollar of graft in the whole vast transaction.58 This last point, however, was not entirely true.

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The Next President of the United States, The Panama Morning Journal, January 28, 1915, 4. See, also, Intrigue to Oust Goethals Alleged, New York Times, July 30, 1912, 3.
58

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Typical married Gold Roll quarters on the Canal Zone

Regulation and Graft on the Canal Zone, 1907-1915 It was true that the perennial corruption accusations of the first years of construction were part of a largely forgotten past. The Goethals administration had taken strict measures to ensure the absence of graft in the Zone, going as far as to outlaw tipping to avoid the corrupt influencing of employes.59 Such stringent measures were very much in line with reform efforts stateside to rid public life of untoward influence. But it was not true that the Zone was graft free. As the administration increasingly tightened its control over the Zone, the ICC became involved in all Zone markets. While most traders ended up in the Republic, others saw the increasingly less competitive Zone market as an unprecedented opportunity. This was the case for those involved in the retail alcohol market. By the end of 1907, there were only 34 saloons on the
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59

An Anti-Tipping Law for the Canal Zone, The Panama Morning Journal, January 25, 1914, 1.

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Zone, down from between 150 and 200 in the beginning years of construction. Zone judge M.C. Reidell pointed out that each license is an exceedingly valuable concession. He cited the town of Gatun as an example, where one of the two saloons that remained cleared over $13,000 in the eight months prior to April, 1908. Reidell concluded that a Zone liquor license costing $1,200 per year was actually worth closer to $20,000.60 Such high stakes ensured that illicit partnerships were lucrative propositions, both for well-placed state officials and merchants in the alcohol business. Pascual Canavaggio was one merchant who was able to make Zone regulation work for him. His business was first and foremost booze and he was involved both as wholesaler and retailer. Born on the island of Corsica, Canavaggio arrived in Coln in 1880 just as the boozy economic bonanza of the French construction period began. He was well positioned, then, to take advantage of the thirsty newcomers that arrived with the U.S. construction effort. By 1907, Canavaggio was the largest wholesale supplier of alcohol to Zone saloons. He was also the registered owner of a saloon at Las Cascadas on the Zone and at least two in Coln, the Union Bar and the Casino Caf. His commercial interests extended well beyond the liquor business. Among other things, he was contracted to provide food to canal employees at certain Zone labor camps; he was one half of the home decorating shop, Canavaggio Hermanos; and, in later years, he became the owner of the 160-room Hotel Central in Panama City. That the Casino Caf in Coln was reportedly a focal point of corruption that offended public morality and decency did little to hamper Canavaggios reputation as a businessman of high standing. His various interests ensured that he belonged, as one book detailing the whos who of the Republic put it, to
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M.C. Reidell to C.S. Blackburn, 11 April 1908, F 59-G-1, P 4, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP; G. Brooke to G. Goethals, 14 May 1907, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.
60

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the high commerce of Panama. In many ways he epitomized the type of recently arrived merchant who had become a stock character in Panama by the first half of the twentieth century: one of those semi-foreign adventurers, in the words of novelist Erasmo de la Guardia, who eager for riches engaged in all types of transactions, many of them shady.61 Canavaggios dealings of questionable legality first came to light in late 1907, when he was registered as the owner of a single saloon at Las Cascadas. They were brought forward, perhaps unsurprisingly, by U.S. wholesaler J.H. Ankrom, a competitor of Canavaggio. The accusation itself can be read as a method to influence access to the lucrative Zone market. Ankrom wrote directly to Goethals, complaining that Canavaggio had great influence over the issuing of liquor licenses that what he said went on the Zone. It was unjust and unAmerican that Canavaggio a foreigner had so much power in U.S. territory.62 The complaint prompted an investigation into Canavaggios activities and the report uncovered some suspicious arrangements. Canavaggio directly controlled five of the thirty-four bars licensed on the Zone, skirting undue attention from the administration by having the names of employees and family members on the liquor licenses. Charles Bryant ran Canavaggios saloon at Las Cascadas but was the license holder for a bar at Bas Obispo. The bar at Bas Obispo was in fact operated by another Canavaggio hire. At Gatun, Henry Hellengers name was on the liquor
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Erasmo de la Guardia, La tragedia del caribe (Panam: Imprenta Nacional, 1938), 12-13. This description of Pascual Canavaggio has been cobbled together from various sources. Published sources include Sabas A. Villegas, The Republic of Panama: its Economic, Financial, Commercial and National Resources, and General Information (Panama: Imprenta Nacional, 1917), 196; Panama Advertising Co Incorporated, Panama y Zona del Canal/Panama & Canal Zone (Panama: The Star and Herald Company, 1933), 175-76. Unpublished sources include Aristides Arjona, Memoria de Gobierno y Justicia, 1909, 199-200, SB, ANP; Advertisement, The Panama Morning Journal, January 14, 1914; Lista alfabatica de los anunciadores de nuestro libro Panama en 1915, Diario de Panam, April 9, 1915, 6; Canavaggio buys Central Hotel, The Panama Morning Journal, February 16, 1918; Chief of Police to C.E. Magoon, 9 October 1905, F 62-A-1, P 1, B 360, 150/47/3/3 E30GP, 1905 - 1914, RG 185, NACP; G.W. Goethals to J.H. Ankrom, 1 May 1908, F 59-G-1, P 5, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. J.H. Ankrom to G.W. Goethals, 6 December 1907, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 1914, RG 185, NACP.
62 61

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license but he did not run the saloon. He was Canavaggios longtime bookkeeper. Canavaggios brother-in-law Louis Henry Cavallier held a license at Empire but was not the actual owner. At a time when most Zone tavern owners were being shut down, Canavaggio was augmenting his holdings, gaining a significant portion of this increasingly lucrative market. It is possible that Tom Cooke, the Collector of Revenues in charge of saloon licenses, knew nothing of these relations. The General as Cooke was named in the Canalites poem to clean up New York claimed that he did not personally know Canavaggio and had no reason to be suspicious of these license holders.63 Canavaggio obtained these licenses, however, in a way that cast a suspicious shadow on Cooke. Two of his licenses were obtained during a dispute with liquor wholesaler Frank Uhlrich. Uhlrich went to Canavaggio in what he claimed was a spirit of fair competition. He pointed out what seemed to be common knowledge: that Canavaggio already controlled two saloon licenses, one at Bas Obispo and another at Las Cascadas. Uhlrich requested that Canavaggio give others a chance and refrain from increasing his control during the next round of licensing. Canavaggio, though, was still after a license at Empire. They left the meeting on bad terms. If you wont keep your hands off, Uhlrich told Canavaggio, I am going after a license at Gatun. In what Uhlrich believed was a vindictive show of power, Canavaggio applied for the same license in which Uhlrich was interested. The result of the next round of licensing: Canavaggios brother-in-law was granted the license at Empire and the Gatun license was awarded to Canavaggios bookkeeper. Uhlrichs application was unsuccessful.64 Others had similar stories. An Empire saloon owner expressed interest in taking over a saloon at Culebra when the owner, Mr. Cassado, fell ill and left the Isthmus. It would be his
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T. Cooke to Acting Head of Department of Civil Administration, 14 January 1908, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. T. Buliskiou to D.D. Gaillard, 14 December 1907, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 1914, RG 185, NACP.
64 63

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second Zone saloon. Tom Cooke explained to him that it wouldnt look right for one man to have two licenses. The request was denied. Shortly after, a local newspaper announced that Canavaggio had taken control of the saloon at Empire. The liquor license was not in Canavaggios name, however. It remained in Cassados name, even though he had left the Isthmus.65 Canavaggio had a reputation for someone with access to the administration on the Zone. Tracy Smail, a U.S. barkeep, who was reportedly living with a negro woman, went straight to Canavaggio when applying for his license because he claimed he was worried about his business partners previous liquor infractions. The partners together paid Canavaggio four hundred dollars over the regular licensing fee and received the license quickly and without issue. Canavaggio told Smail that he could get him a license anywhere he wanted on the Zone.66 It is no wonder that many with experience in the liquor business on the Isthmus were intimidated by Canavaggio, believing wholeheartedly that he had friends in Panama with sufficient influence to get anything he wanted as one claimed, or that, as Canavaggio himself claimed, was a great friend of Mr. Cooke.67 Canavaggio threatened many saloon owners on the Zone but it does appear that he chose his victims wisely. There is no record of him attempting to strong-arm U.S. citizens, for instance, such privilege hardly being conducive to results. If anything, as with Ankrom, Canavaggio had to worry about U.S. citizens blowing the whistle. Other merchants were more vulnerable. Canavaggio, then, exploited the racially inflected

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T. Buliskiou to D.D. Gaillard, 14 December 1907, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 1914, RG 185, NACP. Memorandum for Colonel Goethals, 25 April 1908, F 59-G-1, P 4, B 355, 150/47/3/2 E30GP, 1905 1914, RG 185, NACP. T. Buliskiou to D.D. Gaillard, 14 December 1907, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 1914, RG 185, NACP; Memorandum for Colonel Goethals, 25 April 1908, F 59-G-1, P 4, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.
67 66 65

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colonial state apparatuses and the prejudices found in broader society.68 Some, like Greek bartender Peter Taaf at George Andrade or French Negro J. Ritchfort at Las Cascadas, reported being squeezed by Canavaggio. So too did many of the remaining Chinese merchants lucky enough to maintain licenses on the Zone.69 Canavaggio gave these merchants the option: purchase more wholesale product from him or have Zone regulators revoke their licenses. Merchants like saloon owner Kie Fu Yon had few alternatives. He could not rely on the state to provide equal protection during official transactions, a fact that left him and others like him especially open to the predation of illicit merchant/state collusion. In the end, the Zone investigation into the Canavaggio/Cooke connection died on the vine. Allegations were chocked up to petty jealousies over Canavaggios success by his competitors. Proof that Tom Cooke was involved was never established and he was never formally charged with wrongdoing. Part of the problem for investigators was that the value of a liquor license inhibited saloonkeepers from speaking freely. The few willing to speak did not have substantive evidence proving the illicit relationship between Canavaggio and Cooke. Those who apparently did feared retaliatory measures. Regulation was stringent enough that even a minor infraction could lead to ones license being revoked. Ankrom claimed that one saloonkeeper with knowledge of these connections would not come forward because Cooke would send his plain clothes men to find some infraction of the law against his place.70 Still, the conclusions of the investigation were by no means unequivocal in claiming the innocence of
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That underworld business maintain prejudices found in broader society is common. See Vincenzo Ruggiero, Crime and markets: essays in anti-criminology, Clarendon studies in criminology (New York: Oxford University Press, 2000), 44-63. J. Stevens to R. R. Rogers, 31 December 1906, F 59-G-1, P 2, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP; J.H. Ankrom to G.W. Goethals, 6 December 1907, F 59-G-1, P 3, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. J.H. Ankrom to G.W. Goethals, 20 April 1908, F 59-G-1, P 4, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.
70 69 68

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either Cooke or Canavaggio. It was more than likely, the final Memorandum to Goethals stated, that some saloon keepers have paid Canavaggio. He may possibly have the influence which he claims or he may be working a game of bluff. Either way, on the Zone, there was undoubtedly the impression that he has great power, and that it is necessary to buy goods from him if saloon keepers desire to obtain licenses or secure renewals of those they hold. Thereafter, Canavaggio was on the radar of a great many Zone officials, not all friendly towards his commercial interests. While he did not maintain his own liquor license at Las Cascadas, he did continue to pursue his alcohol related interests on the Zone using strikingly similar methods to those for which he had been investigated in 1907 and 1908.71 Canavaggio also illicitly expanded into another Zone market entirely dominated by the U.S. government, that of groceries. Government-run department stores in the Zone, known as commissaries, were the bane of existence for most merchants in Panama because it stifled what was expected to be the unregulated market bonanza of the construction years. Its purpose was not commercial but rather to supply canal employees with the necessities of life (defined expansively) at a reasonable price, if not at cost. Retail competition with the commissary for any individual merchant was generally a losing proposition. On the other hand, a wholesale contract with the commissary ensured a merchants success, the ICC literally regulating away the competition. Commissary Manager John Burke another one of the men named by the Canalites to clean up New York was not beholden to the whims of customers or to shareholders. He decided what ended up on the shelves and at what price. Burke became a virtual kingmaker

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G.M. Schontz to G.W. Goethals, 16 August 1909, F 59-G-1, P 6, B 356, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.
71

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through dolling out commissary contracts, a position potentially worth far more than his modest annual salary of $4,800.72 Burke made it pay. He acquired property across North America and numerous bank accounts full of illicit funds in multiple countries. One of his last deposits was reportedly made to a bank as far away as Winnipeg, Canada. Burke auctioned off commissary contracts and also took kickbacks in exchange for favorably manipulating the retail prices of his associates goods. An arbitrary surcharge meant to cover transportation, depreciation, and breakage gave him plenty of leeway without arousing suspicion.73 He even priced certain products at a loss to the government. His illicit dealings began in 1908, a year after he arrived on the Isthmus, with an apparent chance meeting at the Imperial Hotel in Coln with Panamanian businessmen Jacobo Salas and (former Coln Governor) Ricardo Bermudez. Soon thereafter, these merchants began to supply a certain grade of tobacco to the commissary, paying Burke $21,000 for the privilege of contracts worth $200,000. Salas and Bermudez were not the only ones who established this type of mutually beneficial relationship with Burke. When he was indicted on charges of defrauding the U.S. government in 1914, Burke quickly gave up more of his Isthmian associates. Isaac Brandon, President of Isaac Brandon and Bros, Inc., in Coln, paid for the privilege of supplying the commissary with sugar, Robert Wilcox for kerosene oil, and Pascual Canavaggio for wine and macaroni. Canavaggio was arrested while visiting the Zone and sent to the United States to face trial in 1915. He was charged with paying Burke $6000 to facilitate a commissary contract worth $70,000.74
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72 73 74

New Charges Against Burke, New York Times, December 18, 1913, 1. New Charges Against Burke, New York Times, December 18, 1913, 1.

Burke Indicted for Canal Zone Frauds, New York Times, March 15, 1915, 1; Zone Buyer Admits he Accepted Fees New York Times, May 26, 1915, 9; To Try Canavaggio, Defendant in Panama Scandal will be Removed to Indianapolis, New York Times, September 24, 1915, 14.

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The 1913 allegations against Burke that stuck were not the first. Similar accusations were brought to the Goethals Administration in 1911. Much like the accusations against Tom Cooke, nothing came from them. It would seem Goethals had zero interest in corruption scandals, especially not involving well-respected and popular community members.75 As the British Consul Claude Mallet confidentially reported, Colonel Goethalss military despotism blinds him to the difference between right and wrong when the issue at hand is even tangentially related to carrying to a speedy end all the works connected with the Canal.76 For this reason, it seems likely that the clerk in the Commissary Department did not go to Zone authorities with charges of wrongdoing but instead carted his evidence off to Washington, D.C. In Washington, he met with Senator Joseph Johnston, the Chairman of the Committee on Military Affairs and a member of the Committee on Interoceanic Canals. The genie was officially out of the bottle. Thereafter, Goethals had little choice but to seriously investigate the charges.77 It became one of the few scandals during his administration. The commissary scandal was at times framed in the U.S. as foreign corrupting forces penetrating the efficient and graft-free Anglo-Saxon administration. You will not think that because the defendant is a foreigner he must of necessity be a barbarian, or because he is a Spaniard, a grafter? asked Jacobo Salass lawyer at his stateside trial. Another concern of Salass defense was a neutral jury in light of the fact that the alleged conspiracy was connected
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75 76 77

Intrigue to Oust Goethals Alleged, New York Times, July 30, 1912, 3. C. Mallet to E. Grey, January 12, 1914, CO 318/332/441, TNA.

This paragraph was developed from various articles Panama Scandal is under inquiry at Washington, New York Times, December 13, 1913, 1; Metcalfe Stirred Inquiry, New York Times, December 18, 1913, 2; Panama Purchases that are Attacked New York Times, December 21, 1913, 10; No Developments in Commissary Scandal The Panama Morning Journal, January 22, 1914; Burke has been Removed from Office, Strong Action taken in Case, The Panama Morning Journal, February 10, 1914, 1; Ex-Gov. Bermudez is Drawn into the Burke Graft Cases, The Panama Morning Journal, March 25, 1915, 1.

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with such a great national project as the Panama Canal.78 If objective dispassion was tough for U.S. residents when it came to the commissary scandal, it was nearly impossible for the Gold Roll community. Members of the community reacted with overwhelming support for Burke. He was in the U.S. when the allegations were made public. The Strangers Club of Colon immediately elected him their president in absentia. When he did return to the Isthmus, where he continued to work during the investigation, a large banquet was held in his honor at the Washington Hotel. Organized by the Society of the Chagres, the night had a celebratory air as if anticipating that he would be exonerated at any moment.79 Less than a month later, however, Burke was removed from his position as Commissary Manager and was sent back to the U.S. to face charges. His innocence became increasingly difficult to defend. As Burkes guilt became clear, Gold Roll sentiment went from outright denial to support for Goethalss policy of suppressing all but the essential information from the public. While journalists from off the Isthmus complained about the heroic efforts made to smother all attempts to secure information, those on the Isthmus applauded.80 The Panama Morning Journal, claiming that its sole mission is to represent American sentiment on this strip of United States territory, defended the Goethals administrations lack of transparency regarding the Burke case.81 The commissary scandal came at an unfortunate time for a great reputation, the newspaper argued. Canal construction has aroused instincts of pride in every American bosom, especially the wholesome freedom of the great enterprise from any form of mispractice [sic].
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78 79

Goethals Testifies on Frauds in Zone, New York Times, May 25, 1915, 8.

Colon Club Honors Burke, New York Times, December 31, 1913, 1; Burkes Books Straight, New York Times, January 18, 1914, C3. Some Liquors are Cheap on the Zone Panama Morning Journal, January 14, 1914, 1; Intrigue to Oust Goethals Alleged, New York Times, July 30, 1912, 3.
81 80

E.M. Springer, Card to Americans, The Panama Morning Journal, February 5, 1915, 2.

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There were people who would undoubtedly continue to gossip about the proceedings but only those with a born lack of reverence for men in high position and a natural proneness to rake muck. The best outcome for all, the editor argued, would be for the entire affair to disappear. Rumor says, the editor warned further, that Burke knows a lot that the public would like to know. It was imperative for the history of the Canal, then, that the case be handled behind closed doors, lest any painful facts be allowed to fall on vulgar and unsympathetic ears.82 The potent symbol of the canal and the Canal Zone, so crucial to the narrative that U.S. citizens told themselves and the world about the broader project of expansion, far outweighed the benefit of shining an investigative light onto state corruption.83 Without the local media to fan the flame, the commissary scandal dissipated quickly from public consciousness and was soon almost entirely forgotten.

***** Less than a year later, celebrations of the heroic effort at Panama made no reference at all to graft or vice on the Canal Zone, except to loudly proclaim that none had ever existed.84 But both were present during the construction period. A heavy drinking culture that incorporated gambling and prostitution was very much a part of Zone life in the first years of construction; indeed, it was unclear to many how the Canal Zone was any different from the so-called pest
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82 83

A Panama Affaire Germinating? The Panama Morning Journal, February 11, 1914.

This view continued on the Zone long after the burke scandal. Marshall E. Dimock, for instance, wrote in 1934 that the Canal must vouchsafe a superior class of personnel because of its strategic importance and because the rest of the world will judge the government of the United States by this great international establishment. The latter point is particularly important. Marshall E. Dimock, Government-Operated Enterprises in the Panama Canal Zone (Chicago: University of Chicago Press, 1934), 157. Missal, Seaway to the Future : American Social Visions and the Construction of the Panama Canal, 16496; Bill Brown, "Science Fiction, the World's Fair, and the Prosthetic of Empire, 1910-1915," in Cultures of United States Imperialism, ed. Amy Kaplan and Donald E. Pease (Durham: Duke University Press, 1993).
84

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holes of Coln and Panama City. The majority of Zone bars served as interracial meeting spots that threatened early official attempts to create stable racial boundaries on the Isthmus. A growing fear developed among ICC officials that white, U.S. citizens were becoming increasingly indistinguishable from Panamanians, West Indians, and other supposed racial inferiors on the Isthmus. Such a development undermined the hierarchical racial order that would structure the projects organization. At the same time, the boozy environment challenged the overarching narrative that Progressive era imperialists told themselves and the world about U.S. expansion. The belief that Anglo-Saxon Protestants ought to spread across the world, promoting good government, moral reform, and racial uplift, relied on an imperial frontline that exemplified Anglo-Saxon Protestant superiority. The canal project early on was not a beacon of U.S. expansion but rather a national embarrassment. The Panama Canal Zone border served as a focal point for the ICC as it struggled to bring the Zone territory to heel. Vice related activities did in fact decrease during the latter half of the construction project, while the colonial state became better equipped to intervene in almost all aspects of Zone life. Such state dominance over its ten-mile-wide strip of territory pushed both vice merchants and customers into the less harshly regulated cities of Coln and Panama. The state of hyper-regulation on the Zone, however, also led to enticing illicit opportunities for both well-placed state officials and merchants of the Isthmus. All traders were not equal when it came to colluding with colonial state officials. The racially infused process of state formation and the prejudices found in broader society were as present in negotiations behind the scenes as they were in aboveboard transactions. A trader like Corsican-born Pascual Canavaggio was able to utilize the Zone regulatory framework to build his own market share, often by strong-arming those more vulnerable to Zone racial discrimination.

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The powerful image of a graft-free Zone served in many ways to benefit those engaged in state/merchant collusion. The ICC desire to maintain the appearance of clean and efficient government led to hesitancy when it came to probing charges of Zone corruption too deeply. When a scandal did arise, the ICC dealt with it largely behind closed doors. The secretive actions of the Goethals administration received full support from the Gold Roll community. All had a stake in maintaining the Canal Zone reputation as a place entirely free from the corruption that, Zone residents often lamented, so plagued Panama and its Central and South American neighbors. Such unified stonewalling ensured a short shelf life for negative press about the Canal Zone. The U.S.s deserved leadership role in pushing for hemispheric integration remained decidedly intact, as did its ability to portray its role as the natural result of Anglo-Saxon racial and cultural superiority. As the canal neared completion, the ICC began to reorganize yet again, transitioning entirely from the days of construction to those of long-term canal maintenance. One change adopted was to stop granting liquor licenses at all after 1 July 1913. Thereafter, no more saloons would exist on the Zone.85 The imbibing canal employee, however, did not go gentle into that good night. It just meant that he crossed the border en route to Panama or Coln for a good night. Such strategic border crossings across the Panama Canal Zone border point to a glaring blind spot in General Blatchfords moralistic and hostile assessment of the degraded port cities: U.S. citizen demand was driving much of the supply of wild entertainment in Panama and Coln. The nature of that industry in the terminal cities of the Republic, as well as the Panamanian states decidedly open-border policy for crossers in search of narcotics, gambling, booze, and prostitution, is the subject of the next chapter.
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No Saloons in the Zone, Canal Record, 30 April 1913, F 59-G-1, P 10, B 356, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.
85

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Chapter 3

Building through Absence: Institutionalizing Illegality in Panamas Borderlands

The dynamite exploded at 1:10 a.m. on 13 November 1918, leaving General Richard Blatchford unharmed but destroying his Canal Zone residence. Investigators never uncovered the person or persons who made an attempt on the life of the highest-ranking U.S. military official in Panama. It seemed clear to most, however, that it was related to Blatchfords order prohibiting U.S. Army and Navy personnel from visiting the immoral terminal cities of the Republic. The attack was the unquestioned result of my fight on vice in Panama, Blatchford wrote, noting that there had not been one word of censure ore [sic] regret for this occurrence expressed by either Panama papers or by any official of the Panaman Government.1 At the time, many observers thought the whole incident a lamentable diversion; historians, too, have since portrayed the issue of Panamanian vice as peripheral.2 The undiplomatic Blatchford, in effect, unnecessarily provoked Panamanians through extreme actions and insulting rhetoric. This chapter contends that the 1918 crisis was anything but peripheral. In fact, I argue that the continuous strain over acceptable leisure activities in the borderlands highlights a principle tension of the patron-client state relationship. North American officials, at base, sought a disciplined and efficient Isthmian order through which to route their goods and people elsewhere. The broader goals of U.S. imperial expansion trumped concern for the local economy.
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Panaman and Panamanian were used interchangeably in documents of the era. Richard Blatchford to the Adjunct General of the Army, December 12 1918, DF 819.1151/31 RG 59 (NAMP M607 Roll 28), NACP. Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 137-41; Conniff, Panama and the United States : the Forced Alliance, 77.
2 1

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Panamanians, on the other hand, hoped to generate as much profit from the U.S.-controlled transit route as possible. The aggressive regulatory project undertaken on the Canal Zone provided specific opportunities for the Republic and merchants and officials encouraged strategic border crossings to take advantage of the unrelenting demand for booze, gambling, sex, and drugs. While those gaming the border no doubt appreciated Panamas welcoming stance, the raucous entertainment scenes of the terminal cities often led to hostile interactions and routine violence between Panamanians and North Americans. In the end, I argue, borderland interactions helped foster a popular nationalism in Panama that contained a deep strain of anti-American hostility a potent and sometimes-unpredictable political force that Panamanian politicos strained to harness. The turbulent borderlands never brought Panamanian officials closer to the U.S. government vision of a particularly monotonous regulatory order across Isthmian borders. This was not for lack of trying on the part of North American officials. The United States imposed various criminal justice reforms on the Republic but officials were consistently frustrated with corruption in Panamas terminal cities. From the traditional perspective of comparative state studies the new Panamanian state would be considered institutionally weak, making its ranks susceptible to penetration by criminal elements. My analysis here, however, moves away from such a bounded, state-centered framework to instead emphasize the coercive power of the United States in compelling local government officials to adopt unwanted, costly, and inappropriate laws.3 This imperial framework, I argue, highlights power, connection, and contention in the

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For an example of the study of corruption from this institutional perspective, see Quiroz, Corrupt Circles: a History of Unbound Graft in Peru.
3

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local blurring of outlaw and bureaucratic cultures, while at the same time avoiding the pitfalls of overly simplistic binaries such as good/bad, legitimate/illegitimate, and state/non-state.4 This chapter argues that Canal Zone policies combined with a lack of licit economic opportunities vis--vis the canal and its traffic drove state engagement with newly criminalized activities underground. Drawing on previously untapped sources, I illustrate that traders and state officials established unwritten working relationships unofficial state policies to continue servicing canal-related demands that fell outside of Panamanian law. Illegal state activity became interwoven into early state formation, generating important revenue streams that enabled politicos to consolidate personal economic and political power and fund the revenue-strapped project of state modernization. No matter how routine illegality became, however, its clandestine nature left state agents at all levels fundamentally insecure and open to politically motivated attacks. I end this chapter with an exploration of two different charges of corruption in an institutional environment in which all actors walked the precarious line between colonial cooperation and anti-colonial and often illegal local interest. Each case, I conclude, had less to do with genuine whistle blowing and more to do with manipulating the contours of client state governance in the quest for political power.

The Challenges of Early Panamanian Nation-State Formation Panamas elite orchestrated independence in November 1903 but faced decidedly difficult circumstances in the aftermath. The successful separation from Colombia took place
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Dawdy, Building the Devil's Empire : French Colonial New Orleans; Kramer, "Power and Connection: Imperial Histories of the United States in the World."; McCoy, Policing America's Empire : the United States, the Philippines, and the Rise of the Surveillance State; Nordstrom, Shadows of War : Violence, Power, and International Profiteering in the Twenty-First Century, 36; Schendel, "Spaces of Engagement: How Borderlands, Illicit Flows, and Territorial States Interlock."; Amanda Sives, "Changing Patrons, from Politicians to Drug Don: Clientelism in Downtown Kingston, Jamaica," Latin American Perspectives 29, no. 5 (2002): 66.
4

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without struggle. There was no protracted fighting against a colonial power, as there was in, say, Cuba, which fostered cross-class and cross-race ties that bound Cubans together through a shared goal of self-government.5 Rather, on the Isthmus, elite Panamanians declared independence in response to Colombias bungled treaty negotiations over the terms of the North American canal project. They neither sought popular support nor required it, as the USS Nashville stationed off the coast of Coln blocked Colombian troops from landing. Indeed, many of Panamas Liberal nationalists, like future three-time President Belisario Porras, opposed the compromised terms of independence, which led to a leyenda negra (black legend) plaguing the nascent Republic. The new nation of Panama, observers from across Latin America and beyond argued, was a sham: an inauthentic and fraudulent creation of the United States.6 The patron-client state nature of independence ensured that the United States played an important role in Panamanian governance, intervening frequently in the first decades of independence to counter instability. The United States, in effect, had formalized its role as the local elites most recent foreign guarantor of the unequal status quo. At the same time, however, U.S. officials had very limited interest in the Republic apart from stifling unrest that directly threatened the canal and the Canal Zone. The appetite for direct colonial occupation stateside had waned, few significant American investments existed in the country, the capacity of Panamanians (or Colombians) to challenge U.S. dominance was negligible, and European imperial powers had withdrawn from the scene. Thus, while local elite clearly operated within the contours set by foreign power (and, at base, could rely on North American military support), local power holders alone confronted the difficult task of connecting a population deeply
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See Ada Ferrer, Insurgent Cuba: Race, Nation, and Revolution, 1868-1898 (Chapel Hill ; London: University of North Carolina Press, 1999).
6 5

Figueroa Navarro, Dominio y sociedad en el Panam colombiano (1821-1903) : escrutinio sociolgico, 7,

352-56.

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fractured along social, racial, and ethnic lines to the new state in a meaningful way. We were born into a life of independence devoid of all and we have had to develop it little by little, the Panamanian Secretary of Government and Justice acknowledged six years after separation from Colombia.7 Canal construction created distortions that frustrated Panamanian administrators in the quest to develop the nation-state. Migrants from around the world flooded Panamas terminal cities in order to exploit the opportunities that emerged from the massive project. The terminal cities of Coln and Panama essentially tripled in population over the course of just ten years, passing from a combined 33,160 inhabitants in 1905 to 66,502 in 1911 and 89,704 in 1915.8 The waves of migrants stimulated economic activity and generated state revenue but the overcrowding, the skyrocketing costs for rent and basic necessities, and the general violence that accompanied such rapid changes ultimately threw the weakness of the new Panamanian state into sharp relief. The state constructed a new jail in Coln not six years after independence, for instance, and the Secretary of Government and Justice noted almost immediately that it has proven inadequate in the face of the immense growth in that citys population and the large number of detainees admitted each day. In general, he lamented in 1909, we have done nothing to rectify the defects and deficiencies that have been reported since the first days of the Republic.9 The situation began to change with the election of President Belisario Porras in 1912.
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Aristides Arjona, Memoria de Gobierno y Justicia, 1909, XLVII, SB, ANP. See also, Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 35-56; Szok, "La ltima gaviota": Liberalism and Nostalgia in Early Twentieth-Century Panam, 37-62; E. J. Hobsbawm, Nations and Nationalism since 1780 : Programme, Myth, Reality, 2nd ed. (Cambridge ; New York: Cambridge University Press, 1992).
8 9 7

Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 322-23, 481-82. Aristides Arjona, Memoria de Gobierno y Justicia, 1909, XLVII, SB, ANP.

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Porras spent considerable energy over his intermittent ten years in power developing the infrastructure of a modern nation-state the governing capacities that he deemed indispensable for completing the work of our true independence.10 His administration oversaw a finished national railroad, a strengthened national postal service, and telephone and telegraph systems. It built bridges, highways, and roads, constructed schools, and established national scholarships. It created Panamas Public Registry, Civil Registry, and National Archive, while nationalizing the nations lottery and reforming both the Secretary of Treasury and Finance and the National Police. Such an expansive period of state building made Porras, in the words of Panamanian historians Patricia Pizzurno Gels and Mara Rosa de Muoz, the architect of Panamas modern state.11 Porrass varied state-building projects, however necessary, nearly bankrupted the revenue-strapped state. The state ran deficits for nine of its first twelve years, overspending anywhere from 7 to 35 percent of its allocated budget.12 Neither the canal concession paid to Panama by the United States an average of 24.5 percent of the states budgeted revenue between 1904 and 1915 nor state revenue rose in relation to the demands that the rapidly increasing population put on government spending. The budgeted revenue in 1906, for instance,

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Patricia Pizzurno Gels and Celestino Andrs Araz, Estudios sobre el Panam republicano (1903-1989) (Manfer S.A., 1996), 88. Patricia Pizzurno Gels and Mara Rosa de Muoz, La modernizacin del estado panameo bajo las administraciones de Belisario Porras y Arnulfo Arias Madrid (Panam: Instituto Nacional de Cultura, Archivo Nacional de Panam, 1992), 10. See also Peter Szok, ""Rey sin corona": Belisario Porras y la formacin del estado nacional, 1903-1931," in Historia general de Panam, Volumen III Tomo I, ed. Alfredo Castillero Calvo (Panam: Comit Nacional del Centenario de la Repblica, 2004). The government spent an average of 18.6 percent over its allocated budget. The Department of Agriculture and Public Works averaged 31 percent of spending whereas Government and Justice averaged 29 percent for the 22-year period between 1907 and 1929. George Evan Roberts and Herbert Daniel Brown, Investigacin econmica de la repblica de Panam, llevada a cabo a peticin del gobierno de Panam (Panam: Imprenta nacional, 1933), table 1 in the "annex" (no page numbers).!
12 11 10

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was 2,519,440 balboas (B).13 Four years later, it was only minimally higher at B/2,525,152. Public debt mounted. In 1916, after 13 years of independence and the boomtown environment that came with canal construction, the state measured internal debt at B/3,698,678 and external debt at B/3,259,111 both figures more than the total state revenue generated that same year.14 Panamanian officials laid the blame for their fiscal woes on the fact that the Republic lacked access to its most important natural resource, the transit route. The recent research of economic historians Noel Maurer and Carlos Yu support such an understanding. The deliberate isolation of the Panama Canal from the Panamanian economy, they argue, led to a thorough lack of economic benefit for Panama, which captured essentially none of the rents from the Panama Canal. Panama received no significant benefit from canal employment, no income tax revenue from canal employees, no commercial access to the ships that passed through the canal, and very little commercial activity based on the everyday necessities of those living and working on the Canal Zone.15 Regardless of these difficult limitations, North American officials saw Panamas fiscal woes in the context of a broader imperial discourse that portrayed Latin Americans as fiscally irresponsible.16 The obvious solution to the debt problem, from this perspective, was for Panama to turn control of its state finances over to a North American fiscal agent.
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The balboa was the formal Panamanian currency based on the silver standard. Although the balboa is now pegged directly to the U.S. dollar, during the period a gold U.S. dollar equaled two silver Panamanian balboas.! William T. Scoullar, El Libro azul de Panam, 1916-17/The "Blue Book" of Panama, 1916-17 (Panama: The Latin America Publicity Bureau, Inc . 1917), 54; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 322-23; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 205; Miguel Torres, La construccin del sector publico en Panam, 1903-1955 (San Jose, Costa Rica: Instituto Centroamericano de Administracin Pblica, 1982), 52-53. Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 7-8, 189-211.
16 15 14 "#

Salvatore, "The Enterprise of Knowledge: Representational Machines of Informal Empire."

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President Porras addressed the North American recommendation of an outside financial expert in a 1918 letter to Secretary of State Robert Lansing. Porras conceded that Panama absolutely needed financial aid but less because of local mismanagement and more because of detrimental U.S. policies, such as the Zone commissary system. Owing to this, Porras wrote, the commerce of Panama has been sadly coming to decay and as a consequence of this the import duties which the Republic of Panama collects in accordance to its Fiscal Regime, very small indeed, are also decreasing. He continued: If this is taken into account, the loss sustained by the revenue in general on account of the war; the loss of the revenues from the lottery, the suppression of which has been advised to us [by the U.S. State Department]; the loss which [we] have already suffered of the duties on bills of ladings and cargo manifests which are now collected by the employees of the United States ports; the loss also of contribution taxed to the steamer Companies who do not pay it, arguing that their offices are out of Panama, in the Canal Zone, though their business of transports are in fact with my country; the loss of taxes on city lots in the cities of Panama and Coln to pay the urban improvement of the streets, particularly by the refusal of the Company named of the Rail-road who is owner of all the area of Coln [controlled by the U.S. government]; for such a considerable number of resistances that the Government of my country has to contend with to make effective its actual rental regime it certainly is necessary for us to have an expert in finances, who will be lent or suggested by the Government of Your Excellency, with the purpose that he will help us in the hoped for reorganization of our fiscal regime. Porras ended his note with faux sincerity: We accept him, thus, with pleasure.17 The straightjacket-like impossibility of the situation angered Panamanians who bristled at the challenge such an imposition posed to Panamanian sovereignty. At the same time, however, office holders also resisted North American fiscal control on the grounds that it threatened the important role that government had come to play for generating local wealth. The state, after all, remained one of the few Isthmian enterprises in the hands of Panamanians. Indeed, already by
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Underline in original. B. Porras to R. Lansing, 18 September 1918, Folder Secretario de Relaciones Exteriores - cartas 1918-1920 S 4.03 T VIII, p 42-57, ABP; also found in B. Porras to R. Lansing, 18 September 1918, DF 819.1151/31 RG 59 (NAMP M607 Roll 10), NACP.
17

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1908, foreigners dominated Panamas service-centered economy in a similar fashion to past transit booms. Recent arrivals owned 82 percent of Panama Citys 653 retail commercial establishments. The same was true of import/export wholesale businesses. Panamanians controlled only 28 of 106 warehouses in Panama, with merchants of European heritage owning 42, North American heritage 15, and Chinese heritage 12. The financial services industry, with capital of approximately $15,000,000 on the Isthmus, told a similar story. One recently naturalized Panamanian was alone at the higher end of the industry, with a company that held more than $500,000 in funds.18 Private sector competition on the Isthmus was fierce. The Panamanian elite understood that continued economic success was limited to outsiders with capital or insiders with the political power to dole out institutional favors, contracts on public works, and other matters of state.19 A North American fiscal agent, then, threatened one of the few remaining avenues for locals aspiring to power, wealth, and prestige. Panama nonetheless appointed a North American financial advisor as per the wishes of the State Department. The experienced Addison Ruan had had previous successes reforming both the financial situations of Haiti and the Philippines before he arrived to Panama. Ruan, however, proved no match for locals able to draw on generations of cumulative experience to stifle outsider control of local governance. Ruan soon resigned. The next North American agent had little effect either, as evidenced by Panamas continuously high international borrowing costs. In fact, Panamas borrowing rates remained significantly higher than other Latin American countries with North American financial oversight (like Cuba or the Dominican Republic) and
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18 19

Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 322-23, 481-82.

Seccin politica, Diario de Panam, January 14, 1916; Panam Annual Report, 1912 on the Trade and Commerce of Colon and Cristobal, FO 881/10293, TNA, 2, 9; Szok, ""Rey sin corona": Belisario Porras y la formacin del estado nacional, 1903-1931," 53; Pizzurno Gels and Andrs Araz, Estudios sobre el Panam republicano (1903-1989), 55; John Biesanz and Luke M. Smith, "Panamanian Politics," The Journal of Politics 14, no. 3 (1952): 386.

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even many without (like Venezuela or Costa Rica).20 Panamanians remained firmly in control of the allocation of government resources in spite of this imposition. And, not long after, an outside agency commissioned to find waste in Panamanian statecraft reported a great many surplus employees, wages often high enough to be out of proportion to the responsibilities, bureaucrats who literally had no responsibilities at all, and high-level officials who collected up to four salaries at once.21 While most residents of Panama and Coln continued to live in desperately poor circumstances and popular political agitation remained fairly constant in both urban centers jobs in the growing bureaucracy did serve as a stabilizing force, dampening, if only slightly, the tinderbox of popular discontent. Public office holders did use state employment to alleviate chronic unemployment and underemployment but they did so in the context of consolidating personal political power.22 For instance, the Administrator General of the Liquor Tax, Rafael Niera, received a letter from President Porras in 1912, not long after he won his first term in office. Porras questioned Nieras recent appointment of Joaqun Ortiz Aguilera as a liquor inspector in Coln. I did not know that Aguilera had been in furious opposition to your candidacy, Niera responded, and believe me, if I had known, I would not have taken him into my service. A nervous Niera assured Porras that the other Coln inspector was an incorruptible liberal and determined political contributor. He concluded. Above all, remain convinced that I
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Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 200-07. Roberts and Brown, Investigacin econmica de la repblica de Panam, llevada a cabo a peticin del gobierno de Panam, 367-75. The role of the state in Cuba bears closest resemblance to Panama. Prez, Cuba under the Platt Amendment, 1902-1934, 139-43. On the conservative political effects of clientelistic political structures, see John D. Martz, The Politics of Clientelism in Colombia : Democracy and the State (New Brunswick, NJ: Transaction Publishers, 1997), 317; Sives, "Changing Patrons, from Politicians to Drug Don: Clientelism in Downtown Kingston, Jamaica."
22 21 20

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am far from causing you uneasiness with the selection of employees who do not enjoy the sympathy of the government.23

A horse race in Coln, 1912

The Tensions of Borderland Entertainment That an active member of the political opposition held the position of liquor inspector clearly bothered Porras, especially considering that the Canal Zone stopped issuing liquor licenses altogether less than two months later.24 Saloons were about to become the exclusive domain of the Republic and they were big business. Tax on alcohol production and sales alone generated at least a fifth of the Republics reported annual revenue and some years closer to half
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Rafael Nara to Belisario Porras, 14 May 1913, Secretara de Hacienda y Tesoro, T VI, S 3-02, 19121916, p 244-246, ABP. For examples unrelated to alcohol, see Szok, ""Rey sin corona": Belisario Porras y la formacin del estado nacional, 1903-1931," 63. No Saloons in the Zone, Canal Record, 30 April 1913, F 59-G-1, P 10, B 356, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP.
24 23

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while still allowing for huge sums to disappear into the bureaucratic ether.25 The ramifications of alcohol for the Republic spanned well past specific taxation, however. Coln and Panama City had a combined 351 cantinas registered in 1908; in the latter half of the following decade, Panama City alone registered 500 outlets to sell alcohol, 75 percent of all retail businesses.26 Even Panama hat advertisements played on its ubiquity. Nearly as many shops in Panama and Colon sell Panama Hats as sell liquor, an advertisement from a bazaar in Panama City began, and that is going some.27 Luis Lee of the firm Lee Chong and Company warned that 50 percent of the 110 Chinese retail stores in Coln would almost immediately go out of business if the city went dry. Clarence Alberga, a real estate man, deemed Lees prediction very conservative. He estimated that more than 400 rooms occupied for retail would lay vacant without the income generated from alcohol sales.28 Canal Zone residents and visitors drove much of the borderland cantina culture and Panamanian government and business leaders necessarily welcomed these dollar-spending visitors. This border-crossing leisure dynamic became even more important for the Republic as it faced a crushingly deep economic downturn spurred on by canal completion and World War One. International trade slowed and the number of canal employees dropped precipitously. The
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Alcohol-related taxes in 1928, for instance, generated an astounding B/1,478,641.57 or 41 percent of the states income. Roberts and Brown, Investigacin econmica de la repblica de Panam, llevada a cabo a peticin del gobierno de Panam, 381-90. On the role of alcohol taxation in world history, see Courtwright, Forces of Habit : Drugs and the Making of the Modern World, 155-65. La degeneracin social y el alcoholismo, El Conservador, December 9, 1916, 2-3; La renta de licores, propuesta que hacen al gobierno, Diario de Panam, November 2, 1915, 1; Aurelio Guardia Sobre aguardiente Diario de Panam, January 6, 1916, 4; Alrededor de alcoholismo, Diario de Panam, September 6 1916, 4,5,8; Must the City Suffer? The Panama Star and Herald June 2, 1918; Two Kinds of Trade, Panama Morning Journal, June 26, 1918, 4; Why Service Men are not allowed in the Republic, The Panama Star and Herald, June 6, 1918, found in DF 819.1151/18 RG 59 (NAMP M607 Roll 28), NACP.
27 28 26 25

Advertisement, The Panama Morning Journal, January 23, 1914.

Commerce Board and Occupation, Panama Star & Herald, July 4, 1918; De actualidad, La Estrella de Panam, September 3, 1918; District Tenants get Quit Notice, Panama Star & Herald, October 5, 1918. On the role of real estate and political power in Panama, see Soler, "Panam, nacin y oligarqua, 1925-1975."

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canal employed 56,654 workers at its peak in 1913; the number was 34,788 a year after construction ended in 1915 and only 14,389 by 1921. The ICC had lain off 75% of its workforce in less than eight years.29 At the same time, however, the United States had begun to establish a considerable military presence on the Canal Zone. The Zone had nine operational forts by 1917, housing 11,142 soldiers a year later and as many as 68,000 soldiers by the time of the Second World War.30 These soldiers routinely crossed the Panama/Canal Zone border in search of alcohol soaked excitement, providing a particularly focused economic stimulus for a country reeling from recession. Panama, in effect, had another barracks economy. Much of the flourishing entertainment industry was located near the border known as el limite or the limit as well-to-do Panamanians moved away from the Canal Zone into relatively distant communities like Bella Vista and La Exposicin.31 A Panamanian-published guidebook illustrates the way that government and business leaders sought to brand Panama as an international hotspot for nightlife. The guide assured readers in both Spanish and English that one of Panamas world famous nightspots was a veritable must see: the Atlantic is for Panama what the Casino is for Monte Carlo, or, the Eiffell [sic] Tower for France, the guidebook claimed about a nightclub ironically located so near the Panama Canal. The tourists and the travellers know this, and that is the reason why they step in that direction with the fervor of a

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La mendicidad y el trabajo infantil en la cuidad, La Prensa, August 14, 1915, 1; Notas de polica: contra la sanidad, El Diario de Panam, December 14, 1915; C. Mallet to Foreign Office January 25, 1919 FO 371/3856, TNA; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 322-26; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 204-05; Torres, La construccin del sector publico en Panam, 1903-1955, 73. Richard Blatchford to the Adjunct General of the Army, December 12 1918, DF 819.1151/31 RG 59 (NAMP M607 Roll 28), NACP; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 326; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 105-06.
31 30 29

Patricia Pizzurno, "Aspectos de la vida cotidiana del patriciado panameo a inicios del siglo XX," Tareas

112(2002).

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believer that fulfills a rite.32 The Ancon Inn provides another example. The American-owned first-class saloon and restaurant held regular card games outlawed on the Canal Zone. The inn was located on the the most travelled thoroughfare connecting Panama and the Zone, according to a police inspector, making it well situated and equipped to attract the business for which it was intended that is, to draw Gold Roll workers, soldiers, and other U.S. visitors into a more relaxed regulatory environment where they could gamble over a couple of drinks.33 Others looked for different types of excitement in Panama. Gold Roll employee Walter Stephens wrote to complain about a revolting scene that he witnessed from the window of the electric car running from Panama City to Balboa on the Canal Zone in 1916. Stephens reported that a fat black damsel with no shirt on but a short pink petticoat split open wide in the front and shy of stockings was in the street to dispose of the contents of washbasin in full sight of two American ladies, three young girls and several boys. The other half of the show was in her room: a naked white man inside this den who was trying to put on a pair of trousers. Such lewd racial mixing might be acceptable in Panama but, Stephens wrote, I felt ashamed to think that our American Government would permit such things to go on in such a public place and so near the Zone.34 After the military had to treat 986 of the 9,786 soldiers on the Isthmus for sexually transmitted diseases a year later, U.S. officials compelled Panama to cooperate in a joint effort to better enforce regulation that existed for the legal zones of tolerance and crack down on the clandestine sex trade near the Zone. The North American and Panamanian forces rounded up 406 sex trade workers in Panama and 456 in Coln 376 of the former and 436 of the latter were
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32 33 34

Advertising Co Incorporated, Panama y Zona del Canal/Panama & Canal Zone, 56. Albert Lamb, Autobiography - Manuscript, p. 116-120, F: Lamb-Writings (3), B 2, ARL-NYPL.

The Prostitutes, The Commercial, August 19, 1911; Walter Stephens to Chester Harding, July 9 1916, F 64-Y-4, B 1230, 150/47/31/6, RG 185, NACP.

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detained for either syphilis or gonorrhea treatment.35 Soldiers stimulated more than Panamas sex trade. Of all of civilizations occupational categories, historian David Courtwright notes in his sweeping study of drugs in the modern word, that of soldier may be the most conducive to regular drug use.36 Away from the active theaters of war and collectively earning hundreds of thousands of dollars per month, soldiers became the producers of the golden eggs, as one newspaper put it. And, in exchange for his good money, Panama offered a soldier bad booze, worse cocaine and other narcotics, venereal diseases, and bunco schemes of various sorts.37 Panama had criminalized cocaine alongside opium in 1912 at the behest of the United States but the trade remained steady through the 1920s and the 1930s, even as it declined elsewhere.38 In one week in July of 1916, for instance, La Prensa reported that police had arrested twenty-five year old Panamanian Alfredo Naar for selling cocaine to a client base of U.S. soldiers. The office of Panama Citys Alcalde, moreover, delivered five bottles, one small can, and 24 small boxes full of cocaine to the Superintendent of Hospital Santo Toms days later. All of this was seized from illegal sales between U.S. soldiers

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J.A. Ferguson to Homer Davis, July 2 1920, DF 819.00/995 RG 59 (NAMP M607 Roll 10), NACP; Richard Blatchford to the Adjunct General of the Army, December 12 1918, DF 819.1151/31 RG 59 (NAMP M607 Roll 28), NACP.
36 37 #$ 35

Courtwright, Forces of Habit : Drugs and the Making of the Modern World, 140. Lonesome Town Panama Morning Journal, June 17, 1918, 2;

Ley 19 - Por la cual se establecen reglas para el comercio y uso de opio y sus components, cocaina y sus similares, 22-11-1916 Gaceta Oficial # 02485, Asamblea Nacional de Panam, p. 6615-6616; James C. Ryan, Memorandum for M.L. Harney, December 3 1949, F: Drugs: Cocaine, vol. 1, 1933-1962, B 63 (old box #19), Entry 9 Bureau of Narcotics Files, Subject Files, 1916-1970, 230/39/25-/07, RG 170, NACP. See also Certificado - 500, in Sumarias seguidas contra Ana Isabel Rodriguez, por el delito de uso de drogas nocivas, 1935, E 532, C 588, JSCC, RC, SJ, ANP; Interesante para los cocainomanos, Accin Comunal: organo del centro Accion Comunal, 22 September 1932, 5; Sigue el trafico de cocaina libremente en Coln, Accin Comunal: organo del centro Accion Comunal, 13 October 1932, 7; Paul Gootenberg, Andean Cocaine : the Making of a Global Drug (Chapel Hill: University of North Carolina Press, 2008), 143-88, 90. !

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and prostitutes of Cocoa Grove.39 The apparent disorder of Panamas borderland vice culture grafted seamlessly onto U.S. ideas of Panamanian racial inferiority and government incompetence or, as the Charg dAffaires of the American Legation put it in 1918, the hopeless condition of affairs in the Republic of Panama under native control.40 The North American perception of immoral corruption fueled and was fueled by the politicization of vice in Panamanian political discourse. That is, the Panamanian opposition manipulated colonial discourse in the attempt to win favor with patron state officials, in the process providing weight to North American suspicions of corruption.41 A number of Panamanians wrote to Colonel Goethals in 1916, for example, in a clear attempt to have the United States withdraw its support from the Panamanian administration of Ramn Valds. The letter obviously sought to gain traction with U.S. officials by stressing issues of concern for Canal Zone officials. There is nothing but lack of discipline, threats, violence, plundering of its citizens, sham prosecutions against the opium traffic and gamblers and prostitutes, the letter insisted. Worse, it concluded, a very real possibility existed for another clash with U.S. soldiers under the present administration, seeing that the majority of the police are drunkards, brutes and rogues.42
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Arrestados La Prensa, July 13, 1916; Por esas calles La Prensa, July 19, 1916; Dos vendedores de cocana caen en el garlito, Diario de Panam, March 10, 1922, 3; Ley 19 - Por la cual se establecen reglas para el comercio y uso de opio y sus components, cocaina y sus similares, 22-11-1916 Gaceta Oficial # 02485, Asamblea Nacional de Panam, p. 6615-6616.! Elbridge Gerry Greene to Robert Lansing, August 21 1918, DF 819.00/749 RG 59 (NAMP M607, Roll 10), NACP. The U.S. discourse centered on Panamanian corruption mirrored the discourse in Cuba and Puerto Rico. See Prez, Cuba under the Platt Amendment, 1902-1934; Kelvin A. Santiago-Valles, "Subject People" and Colonial Discourses: Economic Transformation and Social Disorder in Puerto Rico, 1898-1947 (Albany: State University of New York Press, 1994).! R. Blatchford to the Adjunct General of the Army, December 12 1918, DF 819.1151/31 RG 59 (NAMP M607 Roll 28), NACP. On property speculation and the creation of the zone of tolerance for prostitutes, see On Prostitution The Commercial, August 25, 1911.! A Number of Panamanians to G. Goethals, September 25 1916, F 80-G-1, B 1324, 150/47/33/5/7, RG 185, NACP.
42 41 40 #%

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While some of the opposition was not above deploying colonial rhetoric, much of the public discourse in Panama vigorously countered such a perspective. Panama City and Coln, many argued, were no different from U.S. cities like New York, Chicago, or New Orleans. Panamas Minister of Foreign Affairs, Narciso Garay, pointed out that Panamas leisure industry emerged from free market principles, implicitly critiquing the absence of U.S. demand in the conversation. That alcohol provides an important part of the business of both terminal cities does not constitute a charge against the government, he wrote. It is, rather, the obvious consequence of the democratic principle of freedom of industry which our Constitution and laws acknowledge.43 Panamas nationalist press more clearly isolated the invisible hand driving borderland commerce. Drugs like morphine and cocaine were unknown in Panama prior to canal construction, it claimed in 1923. It was the mercenary Yankee army combined with the undesirable element of canal workers that planted the seeds of new vices with the gold from their pay.44 Panamanian newspapers more generally bolstered the idea that the disorder in the terminal cities was largely the result of the Canal Zone. Newspapers like El Diario de Panam, for instance, published a running tally of general soldier misbehavior under the exasperated headline, These Soldiers! Reports from the month of December 1915 varied from soldier Robert Spark embracing Panamanian Francisco Latorres wife on the street before attacking
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Garay Gives his View on Vice Conditions Panama Morning Journal, June 8, 1918, 1,3. Panamanians were right to argue that Panama and Coln were not so different from Chicago and New York during this era. For a New York politicos account, see William L. Riordon and George Washington Plunkitt, Plunkitt of Tammany Hall : a series of very plain talks on very practical politics (New York, N.Y., U.S.A.: Signet Classic, 1995); Edward L. Glaeser and Claudia Dale Goldin, Corruption and Reform : Lessons from America's Economic History (Chicago: University of Chicago Press, 2006), section one; Richard Lindberg, To Serve and Collect : Chicago Politics and Police Corruption from the Lager Beer Riot to the Summerdale Scandal (New York: Praeger, 1991). La criminalidad en Panam, Accin Comunal: organo del centro Accion Comunal, ao I no. 1, 10 October 1923, 1; La prostitucin en Panam, Accin Comunal: organo del centro Accion Comunal, ao I no. 3, 10 November 1923, 1; Uso de drogas heroicas, Accin Comunal: organo del centro Accion Comunal, ao I no. 3, 10 November 1923, 3.
44 43

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Latorre himself to soldier Patrick Omalay hailing a taxi only to rob the driver of $13 gold when asked to pay his fare.45 Other reports relished the opportunity to challenge the easy North American representation of the highly ordered Canal Zone in contrast to the disordered Republic. One article noted that a Panamanian police officer heard gunshots one early morning in 1919. He proceeded to witness two Zone police officers pursuing two U.S. soldiers who had shot at their police officer compatriots in an attempt to escape the Canal Zone Noteworthy and edifying examples of discipline! the newspaper exclaimed.46 Panamas terminal cities may have economically relied on this border-crossing leisure dynamic, then, but the raucous nightlife of the visitors clearly bred resentment and fomented considerable anti-American sentiment.47 Longtime Panamanian diplomat Ricardo J. Alfaro captured this generalized anger when he lamented (in private) that his country was long forced to tolerate North American soldiers and sailors who drink like hogs only to attack the Panam police. Indeed, violence between North Americans and Panamanians was a regular feature of life in the terminal cities.48 British Consulate official Claude Mallet explained the issue in a 1915 note to England. Unless a change is adopted in the present system of policing the two cities there will arise a conflict between the military and civil elements that will cause serious rioting and loss of life. The soldiers cannot obtain fermented liquors in the Canal Zone and visit Panama and Colon where they imbibe cheap and spurious spirits which maddens them. The police endeavor to keep order but the American
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Esos soldados! Diario de Panam, December 3, 1915; Esos soldados! Diario de Panam, December 20, 1915; Soldadesco, Diario de Panam, November 22, 1915, 6. Dos soldados americanos disparon sus revolvers de reglamento contra dos patroles. Diario de Panam, April 3, 1919. For a comparative, longue dure approach to anti-Americanism on the Isthmus, see Alan McPherson, "Contrasting Hostilities of Dependent Societies: Panama and Cuba versus the United States," in Anti-Americanism in Latin America and the Caribbean, ed. Alan McPherson (New York: Berghahn Books, 2006). B. Hallio to Arthur Henderson, May 5, 1931, FO 369/2209, TNA. For accounts of regular violence, see F 62-B-199, P 1, B 363, 150/47/3/3 E30GP, 1905 - 1914, RG 185, NACP.!
&$ 47 46 45

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soldiers resent any interference from a coloured man and defy the guardian of the peace who loses his temper and a struggle follows in which the policeman gets worsted owing to his poor physique, so he retaliates by using his revolver which starts a general row.49 Deadly riots, in fact, occurred in 1912 and twice more in 1915. The riots linked Panamanian civilians to the state both tangibly and through a shared defensive hostility towards the United States. In 1912, U.S. witnesses claimed that police officers joined forces with everyday Panamanian citizens to specifically attack North Americans. ICC employee and white American Carl J. DeLeen reported that three or four police officers traveled with three or four Panamanian civilians in search of targets. They approached him outside a bar. One of the Panamanian civilians confirmed he was a North American before hitting him over the head with a rock. While the corner was crowded with natives, negroes, and Spaniards, another ICC employee recounted, they were unmolested. It was plain to be seen that it was Americans only that they wished to trouble. One North American died and a number of others required hospitalization before order was restored. The governments of Panama and the United States came to wildly different conclusions as to the cause of the riot, the disagreement, perhaps more than anything else, highlighting the increasing animosity that characterized the border-crossing leisure dynamic. Panamanian evidence painted a picture of rampaging U.S. soldiers challenging Panamanian sovereignty and dignity; North American officials argued that local police attacked U.S. soldiers without provocation. As the tense negotiations continued the United States at one point threatening to take over policing entirely in the terminal cities if Panama did not accept responsibility for the riot borderland conflicts continued unabated. The two riots in 1915 led to ten dead and over 100 others injured. Outraged crowds of Panamanians stoned a train full of soldiers on its way
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49

C. Mallet to Edward Grey, April 14, 1915, FO 371/2420, TNA.

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back to the Zone. While Panama attempted to collect compensation for the extensive damage to storefronts and houses, officials soon found themselves again on the defensive. The United States demanded that Panama disarm its police force.50 In the end, a humiliated Panama had to deliver its police rifles to army bases on the Canal Zone. This attitude towards a sovereign state which has given to the U.S. evident proofs of friendship and loyalty, President Porras wrote to President Woodrow Wilson in a futile letter of protest, is incomprehensible to my government.51

Panamas National Police, 1910

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C. Mallet to Edward Grey, March 6, 1915, FO 371/2420, TNA; C. Mallet to Edward Grey, April 14, 1915, FO 371/2420, TNA.! This description of the riots was taken from Greene, The Canal Builders: Making America's Empire at the Panama Canal, 322-33.
51 '(

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The Politics of Law Enforcement Disarming the police force was hardly the first slight to the frontlines of Panamanian sovereignty. The United States, however, usually approached Panamanian law and law enforcement reform using subtler methods. The Patron state, for instance, had already quietly obliged Panama to outlaw gambling and opium and cocaine use while imposing stricter measures on the still-legal sex trade.') They also insisted that Panama employ a North American police expert to implement U.S.-style policing reforms. In fact, Panama had hired its first North American police expert back in 1905, the year after its military had been disbanded. Panamas public office holders approached these criminal justice impositions in a similar fashion to outside financial oversight. The first police expert was removed from his post not long after he began due to involvement in local political and financial intrigues. Stonewalling sufficed when cooption proved difficult. Major Wallis B. Clark resigned next in frustration after a few months, followed by Major George Helfert after only ten weeks. Helfert claimed that the terms of his employment made any reform impossible and he refused to serve as a stooge for Panamanian politicians. Counter to historian Thomas Pearcys argument that the local elite sought foreign expertise to create a proficient National Police, these reformers portrayed a government that purposefully provided them with insufficient power and a police force that barely acknowledged their presence, let alone authority.53 The State Department nonetheless continued to insist that Panama employ North American police experts, suggesting in 1917 that it might prove more effective if Panamanians
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Ley 19 - Por la cual se establecen reglas para el comercio y uso de opio y sus components, cocaine y sus similares, 22-11-1916 Gaceta Oficial # 02485, Asamblea Nacional de Panam, p. 6615-6616; Gustavo R. Gonzlez, "Resea histrica de los juegos de suerte y azar y de la lotera," Lotera edicion conmemorativa(1994): 199-201. Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 121, 28, 30, 34; Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 29-56.
53 52

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looked to the Canal Zone for a recruit with previous experience on the Isthmus. The Panamanian Secretary of Government and Justice, Eusebio A. Morales, instead quietly traveled to Washington, D.C. to secure police officer Albert Lamb, another outsider with no experience or contacts on the Isthmus. The action of Dr. Morales was characteristic of the Latin American, Lamb came to believe after maintaining his position as Inspector General of the National Police for ten years, granting the principle asked for and at the same time nullifying its effect. Quietly employing an outsider, as Lamb himself concluded, was a clear sign that Panama was not sincere in wanting to have the Corps of the National Police reformed.54 And, at least according to one State Department official, the strategy worked. In my opinion Inspector Lamb, although now doing very well, is scarcely an ideal man for the position he holds. He was willing during some four years to occupy the position of Inspector of Police of Panama and to draw his salary merely as a figure-head.'' The frustration that U.S. officials felt with terminal city policing ultimately stemmed from the fact that local interests did not square with their own. North American officials sought an orderly environment through which to route goods and people elsewhere, whereas Panamanians hoped to generate as much local economic activity from the U.S.-occupied transit route as possible. This local interest called for a far more casual approach to policing services in demand, whether these activities were conducive to U.S.-desired order or not. The gap that came to exist between the documentable strategies of U.S. domestication and control and the necessarily undocumented practices of Panama are captured in the letters and unpublished book manuscript of Albert Lamb. While hardly a transparent rendering of the Isthmus during his
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54

Albert Lamb, Autobiography - Manuscript, p. 1-9, 27, 33 1/2 f, F: Lamb-Writings (4), B 2, ARLMemorandum: Report on Note from Doctor Porras, DF 819.00/787 RG 59 (NAMP M607, Roll 10),

NYPL.
''

NACP.!

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tenure (he obviously had a personal and professional interest in highlighting and even exaggerating what he considered Panamanian state dysfunction) Lambs personal papers provide much relevant information, including statistical data and varied correspondence on the many difficulties he faced working on the Isthmus. Lamb spends considerable time in his book manuscript, moreover, spelling out the unwritten norms that shaped local law enforcement to an imagined audience in the United States, providing explicit details regarding clandestine relationships between politicos, judges, cops, and terminal city merchants involved in illegal trades. His records, to my knowledge, are a previously untapped source. Lamb joined the National Police in 1917 and set out to reform a force that had an overwhelmingly large number of its members stationed in the terminal cities. 618 of the countrys 909 patrolling officers walked the streets of Panama City and Coln as his tenure came to a close in 1927. An audit of the government that same year claimed that the terminal cities had an unusually high number of police officers: 200 could easily be laid off, it suggested, without the least harm to public peace or order.56 Panamanian office holders undoubtedly disagreed with the report. The police force not only provided a tool for politicians to reward loyal political foot soldiers in the dominant terminal cities but also served as a politicized guard to stifle opposition and ensure election results. It also functioned as the elites crucial first line of defense against the consistently threatening social unrest that emerged from the dire conditions of Panamas Arrabal and the overcrowded slums of Coln.'* A few extra police officers, from this perspective, were well worth the cost. Indeed, as a point of fact, the police force contained over two hundred more officers than it had in 1927 during the tumultuous depths of the
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Roberts and Brown, Investigacin econmica de la repblica de Panam, llevada a cabo a peticin del gobierno de Panam, 415-16. Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 29-56; Szok, ""Rey sin corona": Belisario Porras y la formacin del estado nacional, 1903-1931," 50.
57 56

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economic crisis of the previous decade.'$ Serving as a police officer did not make financial sense on paper in the first years of Lambs tenure. Street-level patrolmen not only had to pay 2.5 and then 5 percent of their pay to political party coffers but forfeited their entire salary for months at a time during the period of state insolvency in the last years of the 1910s.'% The numbers did not add up even when the pay arrived on schedule. La Estrella de Panam estimated that it would cost a single person B/81 per month to live in Coln in 1918: B/36 to eat each meal at a pretty bad restaurant, B/15 for a decent habitation, B/12 for washing, and B/18 for various other necessary items. A patrolmans salary B/45 per month was just over half the required amount. Such challenging economic realities necessitated that law enforcement officials generate other economic rewards using their positions of authority.+( Illicit payoffs served as a systematic component for state functionaries and prohibited goods and services in high demand were the obvious targets. During one opium bust in Panama City, for instance, Chinese migrant Julio Hen offered a police officer between B/300 to B/400 to tamper with the evidence collected at the scene. The suspect officer claimed in court that he was surprised by the request and asked Hen why he believed a police officer would be open to such tricks. Hen responded that he had done business in Panama City, Coln, and in El Limite or, as the officer put it, Hen had lived in Panama for a long time.+" Other examples of routine
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Ley 5 de 1915 - Por la cual se reforma y adiciona la ley 48 de 1913, orgnica de la Polica Nacional, 0901-1915 Gaceta Oficial # 02184, Asamblea Nacional de Panam, p. 5400. Por la primera vez, desde hace algunos aos, los sueldos de la polica, estn al da" Diario de Panam, April 30, 1919; Police Object to Bond Plan, The Star & Herald, May 25, 1918; A. Lamb to W.G. Harding, August 17 1921, F: Lamb (5), B 1, ARL-NYPL; Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 40. La Polica Nacional hace una pecin [sic], La Estrella de Panam, May 25, 1918; Memorandum to the President of the Republic in Response to Verbal Request, August 16 1920, F: Lamb (6), B 1, ARL-NYPL.
61 60 59 58

Declaracin David Sols T, E 206, T 1, C 173, JCCP, RC, SJ, ANP.

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illicit activity surfaced through the frustrated efforts of a few reform-minded officers. Patrolmen arrested cocaine dealer Juan Grau, for instance, while he separated a significant amount of cocaine into saleable packets at his kitchen table in Coln. The cocaine became fruit salt between the police confiscation and the chemical test. Grau went free without charge. The same thing happened after Panama City Officer Jorge Gonzalez M. arrested Joseph Ogest for selling cocaine to U.S. soldiers Albert Herman and Ralph Wilson. The cocaine disappeared at the police station and officers released Ogest almost as soon as Gonzalez had left the building.+) The wheels of the justice system proved slow and ineffective for those actually charged. For example, fewer than 40 percent of those arrested for opium, cocaine, and gambling in the year that ended on July 30, 1922 stood before a judge more than two years after their arrest (even while the law stated the accused must be brought to trial within 36 days). Judges convicted 58 percent of those who did receive a trial. The overall conviction rate for gambling, cocaine, and opium activity usually resulting in a small fine for the convicted was 65 convictions of 292 arrests or 22 percent. Public office holders together with certain police judges not only fail to do their duty in punishing violators of the law such as gamblers, thieves, vendors of cocaine and opium, and violators of the liquor laws, Lamb noted, but use their official positions to protect them. His conclusion: The judiciary of Panama is an open scandal.63 From an institutional perspective, the above examples and figures no doubt signal Panamas institutional weakness: the fragility of the Panamanian state making it susceptible to
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A. Lamb to J. South, July 21 1922, F: Lamb (4), B 1, ARL-NYPL; Historia de los acontecimientos dessarrollados con motive de la captura de Joseph Ogest, y de su acusacion ante el alcalde, F: Lamb (1), B 1, ARLNYPL. A. Lamb to J. South, April 24 1924, F: Lamb (7), B 1, ARL-NYPL. Lamb made similar claims about Alcalde Leonides Pretelt of Panama City. A. Lamb to W.S. Howell, November 24 1924, F: Lamb (7), B 1, ARLNYPL; A. Lamb to J. South, July 21 1922, F: Lamb (4), B 1, ARL-NYPL; Various honorable Christian Panamanians to A. Lamb, April 2 1924, F: Lamb - Misc., B 1, ARL-NYPL.
63 62

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penetration by criminal elements. Such a perspective, however, ignores the coercive power of the United States to compel local government officials to adopt unwanted, costly, and inappropriate laws.+& Panamanian public office holders did not hide the fact that they disagreed with laws on their own books. The Minister of Foreign Affairs, Narciso Garay, for example, argued that prohibitionist principles originating in Anglo-Saxon countries did not gel with Panamas national psychology or local ideas of social morality. The battle to suppress cocaine traffic, he claimed further, has less to do with Panamanian authorities than Americans in the Zone, the North Americans being the causal factor for the severe legislation now in force.65 Other high level officials openly expressed similar hostility to such impositions. The game of poker, of which [North Americans] are so fond, constituted for some time a good revenue stream for our Treasury, President Ramn Valds told Panamas National Assembly in a major 1916 speech. It was only when U.S. officials became alarmed by the river of gold that their employees left us that they quickly insisted that Panama criminalize a game of which professionals do not consider a game of chance.66 Slow, ineffective, and corrupt law enforcement practices, from this local perspective, was in fact a pragmatic and imaginative adaptation that enabled locals to circumvent these damaging foreign legal impositions. Lambs 1924 attempt to investigate a cocaine trust in Coln throws the institutionalized nature of illegality into sharp relief while highlighting the way that Lamb unwittingly acted as a
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That Panamas office holders openly expressed frustration with prohibition-type policies put them firmly in line with elite governing thought around the world during this period. Courtwright, Forces of Habit : Drugs and the Making of the Modern World, 165; Paul Gootenberg, "The 'Pre-Colombian' Era of Drug Trafficking in the Americas: Cocaine, 1945-1965," The Americas 64, no. 2 (2007): 136. Narciso Garay, Memoria del Ministerio de Relaciones Exteriores, 1922, p. 3, AMREP; Albert Lamb, Autobiography - Manuscript, p. 66-68, 116-120, F: Lamb-Writings (3), B 2, ARL-NYPL. Mensaje del Seor Presidente de la Repblica a la Asamblea Nacional, Diario de Panam, September 14 1916; Mensaje del Seor Presidente de la Repblica a la Asamblea Nacional, Diario de Panam, September 15 1916.
66 65 64

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tool in local political contests. Lamb first became aware of the trust through a letter received from various honorable Christian Panamanians. The authors alleged that the presidentappointed Governor of Coln, Juan Demstenes Arosemena, and Alcalde Grimaldo headed up a lucrative drug ring along with Arosemenas wife, her brother (a Deputy in the National Assembly), and a local medical doctor with previous narcotics charges on the Canal Zone. The trust reportedly used prostitutes to influence soldiers and sailors to try cocaine its goal apparently to poison the largest number of U.S. Army soldiers.67 Save police officer Captain Carmelo Conte, the letter warned, no Panamanian official or police officer in Coln ought to be trusted. Lamb assembled a Panama City team to accompany him to Coln to investigate the charge but faced powerful resistance before he had even arrived. Governor Arosomena tellingly complained to President Porras that the political motivations of Captain Carmelo Conte turned the investigation into nothing short of an inquisition. The Secretary of Government and Justice, Rodolfo Chiari, called the investigation off and ordered Lamb and his detectives back to Panama City less than two days after they arrived. Chiari won the presidential nomination of the National Liberal Party only days later and went on to become the President of Panama from 1924 through 1928. The cocaine investigation, in Lambs view, had fallen victim to political horse-trading, as Arosemena played a significant political role at the 1924 political convention nominating Chiari (he maintained his position as Governor of Coln under the Chiari administration and also became the Secretary of Public Works). The period between Chiaris nomination for President and the election, however, provided an opening for Lamb because Chiari had to resign from his post as the Secretary of Government and Justice to run for president. Lamb wrote to President Porras directly, requesting
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67

Varios panamaos cristianos y honrados to A. Lamb, April 2 1924, F: Lamb - Misc., B 1, ARL-NYPL.

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that he restore the right to me to make this investigation. President Porras by all accounts a shrewd politician undoubtedly saw his cooperation as the most politically expedient method to put the issue to rest. He agreed to support the investigation and, indeed, Lamb reported to the American Minister to Panama that Porras was uniquely cooperative. The investigation resumed and Lambs team uncovered significant evidence of high-level involvement in the cocaine trade. Lamb submitted the evidence to Porras, who then dutifully turned the evidence and charges to the Superior Judge of the Republic, Francisco de la Ossa. Shortly after submitting the charges, however, Porras quietly ordered the Judge to suspend all action on the case. The charges disappeared. Frustrating silence soon turned to knowing disappointment. The investigation was for naught. Lamb cited a well founded rumor he heard shortly thereafter. A delegation from Coln headed by Arosemenas brother-in-law, the Deputy of the National Assembly and a reported member of the cocaine trust, called on Porras. He threatened that he and others would establish an oppositional newspaper if the investigation continued.68 The power of the cocaine trust was reportedly too much for Porras, who buried the case in order to maintain crucial political support. This was Lambs understanding. It seems just as likely, however, that Porras easily outwitted Lamb in the game that office holders inevitably play in client states: that is, maintaining the illusion of colonial cooperation while pursuing their proper interests through anticolonial and often illegal methods. The necessarily clandestine nature of regular state activity inevitably left state agents at all levels insecure and open to politically motivated attacks. A 1921 opium scandal provides an
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The details of the cocaine trust investigation was found in A. Lamb to J.W. South, April 24 1924, F: Lamb (7), B 1, ARL-NYPL. The only evidence for the cocaine trust, in the end, is the clearly politically motivated letter and Lambs assurance that he in fact uncovered evidence of wrongdoing. It is worth noting, however, as others have, that drug trafficking traditionally involves wealthy participants with both political and international connections. The governor, in effect, fits the description. See Senz Rovner, The Cuban Connection : Drug Trafficking, Smuggling, and Gambling in Cuba from the 1920s to the Revolution, 13.
68

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example of corruption allegations that stuck. The roots of the scandal began when the head of Lambs Detective Bureau, Captain David Sols T., was suspended for using cruel methods to gain confessions.69 Lamb ordered Aurelio Bermudez to take over for Sols in Panama City and assigned the former head of the detective bureau to command the province of Chiriqu after his reinstatement. Unhappy in Panamas interior, Sols jockeyed to get back to the capital. He requested and received permission from President Porras to visit his family in Panama City. Then, Lamb writes, he attached himself by some intrigue to the President and remained in his personal service for a considerable period. Sols wanted his old job back.70 What at first glance appeared to be an arbitrary police raid on a Panama City opium den was in actuality Solss well-orchestrated coup to regain command of the Panama City Detective Bureau. With the backing of President Porras and unknown to detectives who worked under Bermudez Sols targeted the Chinese Social Club with an ex-detective demoted at the same time as his suspension.71 Sols arrested a surprised owner, Lang Fong, and a number of others at the club and later uncovered a safe that contained the clubs business records. The records included a list of patrons with credit, opium quantities sold (listed under arroz verde or green rice), employees salaries, and the many illicit payouts that Fong made to state agents for protection from prosecution. An angry Fong went down swinging, arguing publicly (that is, before ordered deported) that the raid had nothing to do with the law. Rather, he claimed that he

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This was not the only time that Sols was accused of unduly harsh techniques. See David Sols suspendido en sus funciones de capitan de polica y arrestado por orden de juez superior, Diario de Panam, March 4, 1922, 1; El Capitan Sols acusado de emplear medios inquisitoriales para arrancar confesiones a presuntos reos, Diario de Panam, March 6, 1922, 1. Sols wrote a memoir in which he claims the charges were politically motivated. David Solis T., Recuerdos policivos (pginas tomadas de mi record) (Panam: Tip. Henry, 1923).
70 *" 69

Albert Lamb, Autobiography - Manuscript, p. 257-258, F: Lamb-Writings (3), B 2, ARL-NYPL. Declaracin David Sols T., E 206, T 1, C 173, JCCP, RC, SJ, ANP.!

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was the victim of competitor Juan Julio and Captain Sols in an act of revenge and competition for business.72 Fong had every reason to be upset. The Chinese Social Club had made routine illicit payments to members of the police, detectives, customs officials, and higher-ranking public officials. He paid the detective force B/250 on 1 June 1921, seven detectives B/49 on 4 June 1921, an unrecorded number B/7 on 6 June 1921, and B/20 the next day. Fong paid B/76 to ten detectives on 10 June 1921 and B/60 to 12 detectives eight days later. Similar payouts were made another 15 times between 18 June 1921 and 5 August 1921, with the smallest payout recorded at B/5. Many, however, were significantly larger. Fong recorded Captain Aurelio Bermudez, Soliss replacement, as having received a total of B/850 during the period. His second in command collected another B/250.73 Fongs account book and testimony led to many high ranking officials publicly tarnished, notably Sols who reportedly received illicit funds from the Chinese Social Club prior to his suspension. Sols, however, was not charged with wrongdoing and neither was the Captain of the Port nor a number of those holding higher public offices. Such explosive charges required a separate investigation and led the President to order Subinspector Ricardo Arango to conduct an internal inquiry. Arango then turned the report over to the President who promptly lost it. When the judge questioned the subinspector about his findings, Arango professed not to remember any of the detail, confirming, as Lamb put it, that the men of wealth, political influence, or social standing, cannot be convicted in the courts of Panama, no matter what may
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Entrada # 156, Salida #588, Segunda parte de los empleados pblicos que aparecen sobornados por asiticos, E 206, T 1, C 173, JCCP, RC, SJ, ANP; B. Porras to R. Estripeaut, 13 deciembre 1921, Folder Secretario de Gobierno y Justicia, T IV, S 5-1, 1920-21, ABP.! Entrada # 156, Salida #588, Empleados pblicos que aparecen sobornados por los miembros que component el negocio del fumadero de opio descubierto poe el Capitn Sols en la Avenida B-3 casa nmero 53 el da 7 agosto de 1921, E 206, T 1, C 173, JCCP, RC, SJ, ANP.!
73 *)

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be the nature of the evidence. Aurelio Bermudez and twelve of his detectives, however, were not so lucky. They were charged and detained. Ten months after the raid, Bermudez escaped from his jail cell and fled the country with an ease that led some to believe that the long-time captain knew too much to be brought to trial. The trials of the other detectives had still not begun two and a half years after the initial charges. They would wait nearly a year and half longer before the cases resolved, with only three of the thirteen serving jail time. The court absolved some of the detectives, while others fled the country, but by that time nearly four years after the scandal erupted any public outrage or indeed interest had long dissipated.74 The raid, then, ought to be read as little more than a successful political maneuver on the part of Sols to regain control over the detective bureau. Or, put another way, the issue was never about law enforcement practices it was about control over law enforcement practices and the resources that such control garnered.

***** The cocaine trust and the opium raid provide two different charges of corruption in an institutional environment in which actors walked a precarious line between colonial cooperation and anti-colonial and often illegal local interest. Each case had little to do with genuine whistle blowing and more to do with manipulating the particularities of client state governance. Political power trumped evidence. Sols used corruption to great effect with the backing of the president of the Republic; an unsuccessful Conte, on the other hand, sought the support of the relatively marginal North American police expert. The allegations withered and died on the vine. The difficulties that Lamb faced in pursuing the cocaine trust illustrate just how successful
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74

Albert Lamb, Autobiography - Manuscript, p. 260-262, F: Lamb-Writings (3), B 2, ARL-NYPL.

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Panamanian power holders were at minimizing foreign impositions, whether quasi-colonial officials like Lamb or colonial laws like the criminalization of cocaine. The whole of Lambs records, in fact, reveal a foreign police reformer easily managed by local elite. That office holders were able to draw on generations of cumulative experience to stifle outside control of local governance does not detract from the broader impact of North American power. Indeed, as I have illustrated, Panamanian state formation developed fully within the contours of U.S. imperial domination. The harsh regulatory environment of the Canal Zone forced workers and soldiers into the Republic for the purpose of entertainment; the lack of other licit economic opportunities vis--vis the U.S.-occupied transit route compelled merchants and officials to foster strategic border crossings in order to exploit the demand for booze, gambling, sex, and drugs; and the unwanted, costly, and inappropriate laws imposed upon the Republic encouraged traders and state officials to establish unwritten working relationships to continue servicing canal-related demands outside of the law. Illegal state activity, in short, became interwoven into early state formation, generating important revenue streams that enabled politicos to consolidate personal economic and political power and fund the revenue-strapped project of state modernization. The unofficial state policies that governed the terminal cities provided a stark contrast for North Americans used to the exceedingly regulated Canal Zone. They crossed the Panama/Canal Zone border into a seemingly disordered territory in which legitimate government authority appeared entirely absent. The alcohol-soaked entertainment scenes invariably produced hostile interactions between Panamanians and North Americans, who saw locals as racial inferiors deserving of little more than contempt. The routine violence surrounding vice, I have argued, fanned the flames of popular anti-American sentiment in Panama that office holders strained to

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harness to their advantage. The next chapter explores a more focused attempt by public office holders to use cross-border issues to better unite Panamanians with their government. And borderland smuggling in contrast to leisure involved officials establishing a more discernible state presence at the border.

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Chapter 4

Domesticating Panamas Borderlands: Criminalizing Border Flows and Diasporic Peoples in the Republic of Panama

With the stroke of a pen in early January, 1915, President Belisario Porras and his Secretary of Government and Justice Juan B. Sosa turned the majority of residents in Panamas two largest cities into criminals. State agents thereafter had a mandate to search out and arrest anyone who evaded import tariffs through selling, trading, or otherwise using Canal Zone commissary products in Panama. The official intention was twofold: to protect the Republics merchants from unfair foreign competition and to generate state revenue through increased import taxation. To these ends, the law was unsuccessful. The newspaper La Nacin wrote in 1921 that the commissary contraband trade has acquired the nature of a decent and irreproachable business. No one was immune from the draw of cheap commissary products like soap, flour, sugar, and cigarettes everyone participated, according to La Nacin, from the upper crust lady to the trinket and bead dealer.1 The Panamanian government reached a similar conclusion. An internal report five years after the law came into effect claimed that more than 50 percent of households in Panama and Coln still used commissary goods regularly.2 Defining these licit, everyday products as contraband appeared to have achieved little more than showcase state ineptitude and spawn a culture of permissive illegality.
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El vivir de muchos, La Nacin, October 6 1921, 4; Contrabandos y ms contrabandos, El Nuevo Diario, April 26 1923, 2; Annual Report of Panama Association of Commerce, The Panama Star and Herald, 24 January 1919, found in DF 811f.244/38, B 7725, 250/24/6/3-4, RG 59, NACP.
2 1

E.T. Lefevre, Memoria del Ministerio de Relaciones Exteriores, 1920, pp. 22-24, SB, ANP.

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This chapter seeks to develop a broader reading of Panamas commissary contraband laws, which remained on the books in some form for as long as the Canal Zone existed. Using institutional records and newspaper sources from both sides of the international divide, I argue that defining certain Panama/Canal Zone border flows as contraband ultimately served as a productive force for the larger project of nation-state building. It did so in three primary ways. First, patrolling the border for contraband made the highly fluid border and borderland legible, in the terminology of James Scott, and enabled Panamanian state functionaries to purposefully intervene in cross-border traffic.3 Second, the law subsidized patronage networks that came with the revenue-challenged project of Panamanian state modernization, providing one more tool for customs employees, tax inspectors, and police officers to licitly and illicitly augment meager wages. And last, criminalizing commissary goods provided state officials with a cross-border problem to use as leverage against the United States in both diplomatic and broader political terms. Merchants and state officials sought to galvanize public opinion over the purportedly threatening contraband flows, enabling state officials to link its project of border defense with the popular nationalism bubbling up in the Republic. The border and borderland became the area in which the less diplomatic aspects of international relations played out daily in very tangible ways. Nationality, race, and culture increasingly shaped border-crossing experiences, as Panama came to identify as a mestizo nation with a shared Hispanic cultural past. Panamanian functionaries, though, rarely stopped white North Americans in search of illegal commissary goods. Rather, they targeted the highly visible and politically weak black West Indian and Chinese diasporic populations. Connecting certain conspicuous markers of race and culture to smuggling not only further enhanced the ability of
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James C. Scott, Seeing like a State : How Certain Schemes to Improve the Human Condition Have Failed (New Haven, CT: Yale University Press, 1998).
3

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state functionaries to see and act in the borderland but also provided political cover for functionaries looking to generate illicit revenue. These diasporic communities, after all, had little effective political recourse to counter exploitation at the hands of state actors and increasingly became labeled as chronic and incorrigible smugglers in the public consciousness.4 In this way, I argue, Panamas border domestication strategy served to highlight threatening ethnicities that continued to remain outside of the more inclusive Panamanian national identity as well as an onthe-ground reflection of the negative repercussions of that exclusion. The overarching result was that the Isthmuss most politically vulnerable diasporas paid disproportionately into the statespoils system, while simultaneously struggling to survive in the increasingly hostile borderland environment that reached its apogee during the Great Depression.

The Context of Criminalization Outlandish price increases for everyday goods and services characterized the first years of canal construction. Indeed, even before construction began, prices for rent and basic foodstuffs skyrocketed. Less than six months after independence from Colombia, for instance, Panamanian dockworkers went on strike to protest the drastic increases in the cost of living, costs driven entirely by speculation that came with the future canal project. Not an extra dollar has been paid out on account of the canal, a local newspaper pointed out, and as of yet there is

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This process resembles the police treatment or invention of rateros or street thieves in Mexico City. Pablo Piccato, City of Suspects : Crime in Mexico City, 1900-1931 (Durham: Duke University Press, 2001), 172. It also resembles discriminatory policing based on race, class, and cultural markers across Latin America and beyond. See, for instance, Amy Chazkel, "Beyond Law and Order: The Origins of the Jogo do Bicho in Republican Rio de Janeiro," Journal of Latin American Studies 39( 2007); Luis Alfonso Ramrez, "Corrupcin, empresariado y desarrollo regional en Mxico," in Vicios pblicos, virtudes privadas: la corrupcin en Mxico, ed. Claudio Lomnitz (Mxico: Centro de Investigaciones, 2000). Also see a number of the essays in Ricardo Donato Salvatore, Carlos Aguirre, and G. M. Joseph, Crime and Punishment in Latin America : Law and Society since Late Colonial Times (Durham [N.C.]: Duke University Press, 2001).!
4

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no boom in trade.5 The situation only got worse for the average consumer on the Isthmus. The New York Times reported a year and a half later that canal employees paid Klondike prices for food in Panama. Merchants marked up goods to yield 100 to 150 percent profit, with a dozen eggs costing more than most canal employees daily wage.6 For a project that required an average worker to live far from home in a dangerous environment, many canal boosters argued that Isthmian prices proved the deciding factor for the projects staggering ninety percent turnover rate in its first two years.7 Local merchants laid the blame for high prices on the government. A Coln newspaper directed by one of the wealthiest merchant/landowners of Panama argued that excessive import duties were to blame. The very fact that it was one of the oppressions of oppressive Colombia to grind money out of people in order to assist in crushing the sons of the Isthmus who were struggling for their emancipation should be an incentive to abolish it.8 Colombian customs rates remained on the nascent states books but a large percentage of Panamas merchants ignored or evaded them just as they had under Colombian rule.9 The main market of Panama City, for instance, operated with little state oversight. The Assistant Surgeon for the United States Public Health and Marine-Hospital Service noted in 1904 that market vendors are allowed to sell anything the people will buy. Product was brought to Panama by many small vessels, which
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The Panama Strike: Raising of Rent and Price of Commodities the Cause, -- Plea of Merchants, etc., High Duties The Coln Starlet, April 9, 1904.
6 7 8 5

Pay Klondike Prices for Food in Panama New York Times, September 24, 1905, 14. Bishop, The Panama Gateway, 273; Bullard, Panama: the Canal, the Country, and the People, 487.

The director of The Coln Starlet was Jos Gabriel Duque. See The Panama Strike: Raising of Rent and Price of Commodities the Cause, -- Plea of Merchants, etc., High Duties The Coln Starlet, April 9, 1904; Pay Klondike Prices for Food in Panama New York Times, September 24, 1905, 14. Laurent, Contrabando en Colombia en el siglo XIX: prcticas y discursos de resistencia y reproduccin, 67-70, 74, 253, 362, 550. !
9

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come from up and down the coast for a distance of 100 miles each way. These boats are not inspected, and come and go at will, bringing natives from the country or taking others away without restriction. The entirely uncontrolled market, from his perspective, was admirably adapted to spread disease, in large part because of the informal nature of Panamanian commercial activity that operated outside of the realm of the new and decidedly weak state.10 The high prices of Panama and Coln served to justify the introduction of Canal Zone commissaries in 1905, with U.S. officials in essence refusing to recognize the right of Isthmian merchants to take advantage of the laws of supply and demand.11 The U.S. government-run system of stores one of the largest department stores in the world, according to the New York Times in 1913 usurped what one well-respected Panamanian diplomat called Panamas natural market.12 Competition with the commissary was a losing proposition for merchants of the Republic. Zone stores had the purchasing power to ensure a much lower unit price than any individual merchant; it was exempt from the import duties and the real estate taxes that the merchants of the Republic paid; it used a transportation network controlled by a U.S. government-owned corporation, the Panama Railroad Company; and its mission was not commercial but rather to supply canal employees with the necessities of life at a reasonable

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10

Claude C. Pierce, "Sanitary Report of Panama and Vicinity," Public Health Reports 19, no. 8 (1904):

277. Implementing the commissary as a necessary response to the irresponsible Panamanian merchant was a common justification at the time and can be found in much of the secondary literature in English. See Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 101; McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914, 444; Thomas M. Leonard, "The Commissary Issue in AmericanPanamanian Relations 1900-1936," The Americas 30, no. 1 (1973); McCain, The United States and the Republic of Panama, 225-26; Biesanz and Biesanz, The People of Panama, 107. The diplomat was Ricardo J. Alfaro and the quote was found in Gandsegui, "La concentracin del poder econmico en Panam," 119. See also Col. Wilson Feeds all in Canal Zone New York Times, August 14, 1913, 16.
12 11

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price, if not at cost.13 The commissary system, in short, effectively stifled the anticipated market bonanza of the construction years by offering a large portion of Isthmian newcomers access to goods for significantly lower prices than possible in the Republic.14 There was little Panamanians could do to stop the establishment of the Zone commissary. While local merchants came to begrudgingly accept its existence, they almost immediately began to protest sales practices that they believed went against established diplomatic agreements. Two practices proved especially problematic. First, the Hay-Bunau-Varilla Treaty stipulated that Zone commissaries were only to provide canal employees with goods deemed necessary and convenient. Panamas merchants argued unsuccessfully that such language prohibited the sale of luxury items, such as cigarettes, say, or silk cloth. Second, merchants complained that the commissary did not, as per the agreement, limit sales to canal employees. In fact, it sold goods indiscriminately: Panamanians, transient visitors, and a host of other non-canal employees shopped at the commissary for most of their consumer needs. Canal Zone officials for the most part ignored these complaints throughout the construction period.15 The barely functioning Panamanian state offered little solace to aggrieved merchants. The Panama/Canal Zone border remained an entirely inconsequential political divide for those

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Underline in original. B. Porras to R. Lansing, 18 September 1918, Folder Secretara de Relaciones Exteriores - cartas 1918-1920 S 4.03 T VIII, p 42-57, ABP; Asociacin del Comercio de Panam, "Memorandum sobre las actividades comerciales de los comisariatos del gobierno de los Estado Unidos en la Zona del Canal, y sus efectos sobre el comercio de Panam," in Tercera Conferencia Comercial Interamericana (Washington, D.C.,1927), 2, ARJA; Col. Wilson Feeds all in Canal Zone New York Times, August 14, 1913, 16. The Executive Secretary of the I.C.C. outlines a similar logic for why the commissaries were considered a good idea. Bishop, The Panama Gateway, 266.
14 15 13

Col. Wilson Feeds all in Canal Zone New York Times, August 14, 1913, 16.

Leonard, "The Commissary Issue in American-Panamanian Relations 1900-1936," 84-85; Col. Wilson Feeds all in Canal Zone New York Times, August 14, 1913, 16.

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entering the Republic.16 Sanitation Department employees from the Canal Zone, for instance, crossed over the border daily to work in Coln and Panama City. They laid water pipes on city streets, paved thoroughfares, and went door-to-door fumigating in an effort to rid the Isthmus of diseases, like yellow fever. Fumigation brigades, as one historian put it, passed through Coln and Panama like some strange ragtag army of occupation, with ICC inspectors returning periodically to ensure that locals complied with standards set for open cisterns and other standing water.17 The Governor of Coln complained to Zone officials that even the most insignificant employees were under the impression that they are immune from arrest by Panamanian policemen. The employees, in fact, were largely correct for all but the most serious crimes.18 That the Republic quickly became awash in cheap commissary goods if acknowledged at all largely fell between the cracks of the host of other regulatory issues plaguing the Panamanian state. The merchants of Panama became resolved, as their association recounted, to sustain themselves to a certain extent with the crumbs that fell from the table of the Canal Zone.19 Other sources, however, point to many traders taking a much more proactive stance to compete with Zone department stores. Notably, merchants began to sell easily acquired commissary goods themselves. Shortly after the commissary opened, for instance, vendors in the

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Csar Quintero, "Belisario Porras, el civilizador," Revista Lotera 277, no. marzo (1979): 3. For a detailed description of the Isthmus in 1898, see Figueroa, "El departamento colombiano de Panam a fines del siglo diecinueve e inicios de la vigsima centuria." McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914, 466-67. For more on Panamas protectorate status, see Major, Prize Possession : the United States and the Panama Canal, 19031979, 116-54. M. H. Thatcher to Eduardo Chiari, 30 September 1912, F 62-B-209, P 1, B 363, 150/47/3/3 E30GP, 1905-1914, RG 185, NACP. Asociacin del Comercio de Panam, "Memorandum sobre las actividades comerciales de los comisariatos del gobierno de los Estado Unidos en la Zona del Canal, y sus efectos sobre el comercio de Panam," in Tercera Conferencia Comercial Interamericana (Washington, D.C.,1927), 2-5, ARJA.
19 18 17 16

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terminal cities began to sell untaxed liquor acquired from the commissary.20 U.S. authorities soon thereafter uncovered hundreds of packages of commissary stamped cigarettes for sale in the Republic. Canal employes have been selling these cigarettes to local dealers, the Zone memorandum reported, who thus get them without paying any duty.21 The evasion of Panamanian tax through trading commissary goods was hardly a secret tactic for merchants or residents of the Republic except, it would somewhat ironically seem, to Panamas office holders charged with regulating the territory within the nations borders. President Belisario Porras wrote to Secretary of Exterior Relations Ernesto T. Lefevre six months after he took office in October of 1912. He requested that Lefevre again make efforts to uncover the truth regarding rumors that commissary goods were widely available in Panamas capital city. Porrass information, he assured the Secretary, came from seemingly well-informed people and, if accurate, signaled the ruin of trade in Panama City and consequently also the destruction of a significant portion of our revenue.22 Eight years after commissary goods began to flow unencumbered across the Panama/Canal Zone border, then, Panamas highest officials were still unclear on whether this type of tax evasion was even a valid issue of concern.

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G. Goethals to H.J. Slifer, 16 April 1908, F 59-G-1, P 4, B 355, 150/47/3/2 E30GP, 1905 - 1914, RG 185, NACP. Customs Officers Raid Dealers in Cigarettes, Panama Morning Journal, 16 November 1912, found in F 23-B-3/R, P 1, Nov 1, 1912 to Dec 31, 1934, B 362, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. Belisario Porras to Ernesto T. Lefevre, 13 May 1913, Secretara de Relaciones Exteriores - cartas octubre 1912 - deciembre 1913 S 4.03 T II, p 168-169, ABP; Belisario Porras to Ernesto T. Lefevre, 11 October 1913, Secretara de Relaciones Exteriores - cartas octubre 1912 - dec 1913 S 4.03 T II, pp. 298-299, ABP.
22 21 20

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The market in Panama City, 1910

The beach market in Panama City, 1910

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Defining Commissary Flows as Contraband The inability of the state to render the border intelligible had much broader implications for Panama than a loss of revenue or unfair competition for local merchants. It challenged the Panamanian states implicit but fundamental claim to control its own territory. It is precisely at the borders, historical anthropologist Willem van Schendel points out, that the strategy of state territoriality is dramatized and state sovereignty is paraded.23 Establishing a stronger border presence, however, was not as easy as, say, setting up a number of passport checkpoints. Aside from diplomatic agreements that forbade such border obstructions, the leisure dynamic of the borderland necessitated a highly fluid border so that canal employees, soldiers, sailors, and tourists from the Canal Zone could easily visit the Republic. The challenge for Panamanian state officials moving forward was to balance Panamas broadest economic interests with the demands of individual merchants, state coffers, and the implicit need to demonstrate control over its territory. The state, in effect, needed to single out a certain border flow as dangerous.24 This way, general border crossings could continue unabated as the government simultaneously increased its presence at and around the border. President Porras took up the challenge during the first of his three presidential terms. The 1915 law to criminalize commissary goods was his administrations attempt to better establish state authority in the highly traversed borderland. The law made it illegal for non-canal employees to possess commissary goods in the Republic; canal employees still had the right to enter the Republic with commissary goods for their own use but no longer could trade or

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23 24

Schendel, "Spaces of Engagement: How Borderlands, Illicit Flows, and Territorial States Interlock," 45.

That state borders need illegal goods, gaining a large part of their significance through practices of regulation and exclusion, is the starting point of Josiah McConnell Heyman, States and Illegal Practices (Oxford ; New York: Berg, 1999). See also Andreas, Border Games : Policing the U.S.-Mexico Divide, 5.

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distribute them to non-canal employees.25 The commissary contraband bill fits well within Porrass larger project of state building in three distinct but interrelated ways. First, it gave state functionaries a more defined purpose in the borderland. Such state simplifications are a quintessential practice of the modern state, James Scott points out, devoted as it is to rationalizing and standardizing what was a social hieroglyph into a legible and administratively convenient format.26 Shortly after the law came into effect, for instance, the Finance Administrator for the Province of Coln began to observe the Panama/Canal Zone border as a revenue-generating site that lacked a proper state presence. Illegal purchases at the Cristobal Commissary were so common, he wrote the president months after the law had passed, that the government was forfeiting anywhere from B/1500 to B/2000 per month in lost tax revenue from this single commissary outlet alone. The scale of tax evasion, he continued, demanded that a state agent patrol the Coln/Cristobal borderland with the sole purpose to obstruct this novel contraband flow.27 The increased state presence yielded results. Panamanian authorities arrested local merchant Sing Hing Chong in early June of 1919, for instance, while he crossed the border with 1875 plugs of Courage chewing tobacco, 18 gallons of salad oil, five cases of cigarettes, and an assortment of shoes, shirts, and other clothing products obtained from the commissary. Chong intended to clandestinely sell all of these commissary goods in his Panamanian retail store.28
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Ley 21 - Por la cual se adiciona el codigo de policia, 19-01-1915 Gaceta Oficial # 02172, Asamblea Nacional de Panam, p. 5349; Ley 28 de 1919 - sobre compras en los comisariatos y almacenes de la Zona del Canal, 21-02-1919 Gaceta Oficial # 03036, Asamblea Nacional de Panam.
26 27 25

Scott, Seeing like a State : How Certain Schemes to Improve the Human Condition Have Failed, 3.

Belisario Porras to Aurelio Guardia, 12 October 1915, Secretaria de Hacienda y Tesoro 1915-16 S 3.01, T VIII p 205, ABP. Worthy and Plausible Work of the Customs Employees [translated in my copy from Spanish], La Estrella de Panam, June 6, 1919, found in F 3-B-3/R, P 1, Nov 1, 1912 to Dec 31, 1934, B 463, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
28

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Smuggling arrests made the political boundary that separated Panama City and Coln from the Canal Zone more relevant for all border crossers. This is perhaps most evident when considering the case of Panamanian Simeon Gonzalez, who lived on the opposite side of the Canal Zone from Panamas terminal cities. Gonzalez evidently saw an opportunity after the commissary contraband law came into effect and the terminal-city side of the border became more difficult to cross with illegal commissary goods. Gonzalez began to acquire commissary goods in the sleepy border town of Chorrera in order to transport them to Panama City merchants using his personal boat. Gonzalez bypassed the busy international border entirely, then, so to lessen his chance of apprehension. Panamanian authorities did uncover Gonzalezs smuggling operation, however, as he landed at the Panama City pier with 900 plugs of commissary Courage chewing tobacco in 1919.29 His failed business model, nevertheless, suggests that the contraband law led to a growing general awareness of Panamas border as a significant regulatory and legal boundary. Second, the commissary contraband law contributed to the larger project of state building through serving as an effective tool to augment the meager wages of state employees. The agent responsible for the apprehension of contraband received fifty percent of the proceeds recovered by the Treasury. Such an incentive, in fact, led some to apply for borderland positions with the proviso that they would work for no salary apart from the percentage of proceeds seized.30 The inspectors receive half of what they collect, a Captain of the Port on the Canal Zone wrote,
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Worthy and Plausible Work of the Customs Employees [translated in my copy from Spanish], La Estrella de Panam, June 6, 1919, found in F 3-B-3/R, P 1, Nov 1, 1912 to Dec 31, 1934, B 463, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. H. Obarrio to R. Alfaro, December 26 1931, File 3.44.2.21, ARJA; Ley 21 - Por la cual se adiciona el codigo de policia, 19-01-1915 Gaceta Oficial # 02172, Asamblea Nacional de Panam, p. 5349; Ley 28 de 1919 sobre compras en los comisariatos y almacenes de la Zona del Canal, 21-02-1919 Gaceta Oficial # 03036, Asamblea Nacional de Panam.
30 29

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hence the zealousness.31 Panamanian law enforcement, however, seemed to just as often trade in what political scientist Peter Andreas points out is a key service offered by the state: the nonenforcement of the law.32 It pains me to admit it, wrote the Secretary of Treasury and Finance Aurelio Guardia in 1916 but much of the continued fraud is due in great part to the inertia and the lack of fulfillment of the duty of some of the employees charged with exercising vigilance over smuggling. He continued. On more than one occasion I have given repeated orders to employees of the National Revenue Service to visit premises where cigarettes are sold in order to know whether or not they are defrauding the tax stamp system and, in my opinion, such employees have not proceeded with the necessary energy and integrity.33 Guardias pain was quite certainly feigned, whether he personally benefited from the regulatory inaction or not. One Panama City merchant, for instance, paid out twenty different bribes over the course of a two and a half month period in 1921, with recipients running the range from beat cops and customs agents to higher-ranking officials.34 In this way, as Batrice Hibou points out in a different context, [c]ustoms fraud and smuggling formed a part of foreign trade policy, just as much as protectionism does.35

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This comment was made in regards to Panamanian customs officials more generally. Captain of the Port, Balboa, to P.R. Blunt, 24 July 1914, F 23-A-10, P 1, B 151, 150/46/34/1 E30GP, 1905 - 1914, RG 185, NACP.
32 33 31

Andreas, Border Games : Policing the U.S.-Mexico Divide, 23.

Aurelio Guardia, Asociacion del Comercio de Panama: el asunto del tobaco y cigarilios, Diario de Panam 18 July 1916; La Polica Nacional hace una pecin [sic], La Estrella de Panam, May 25, 1918.
34 35

E 206, T 1, C 173, JCCP, RC, SJ, ANP; El contrabando, El Diario de Panam, September 22, 1916, 2.

Batrice Hibou, "The 'Social Capital' of the State as an Agent of Deception or the Ruses of Economic Intelligence," in The Criminalization of the State in Africa, ed. Jean-Franois Bayart, Stephen Ellis, and Batrice Hibou (Bloomington: Indiana University Press, 1999), 79-81; Claudio Lomnitz, "Introduccin," in Vicios pblicos, virtudes privadas: la corrupcin en Mxico, ed. Claudio Lomnitz (Mxico: Centro de Investigaciones, 2000), 15.

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Third, criminalizing commissary goods provided state officials with a cross-border issue to use as leverage against the United States. Zone contraband flows, for one, enabled Panamanian state officials to diplomatically push back against U.S. encroachment. In 1918, for instance, the United States once again applied pressure on the Panamanian state to reform its National Police more quickly than had yet occurred under the tutelage of Albert Lamb. If the United States was serious about reform, Porras responded, it ought to commission two U.S. detectives of great honorability that nobody will recognize in Panama or the Canal Zone but myself. These detectives would live on the Canal Zone but travel freely throughout both territories to discover the smugglers and the employees that commit peculations, particularly with the duties of importation.36 The State Department did not respond to Porrass request, no doubt in part because of tricky questions over sovereignty but also because of the purposeful ambiguity surrounding the investigatory aims of these hypothetical detectives. The message was clear: the United States ought to consider its own regulatory problems before pressing Panama on further reforms. Merchants and state officials also sought to galvanize public opinion over the issue of commissary contraband, adopting a defensive call of Panamanian unity against these dangerous foreign flows. Secretary of Foreign Relations J.D. Arosemena captured the sentiment. He could not understand how the United States could sacrifice the good will of a people for a few thousand dollars.37 The pro-government Diario de Panam argued that there is nothing as unjust as the situation created by the Zone Commissaries in relation to canal employees who live in Panamanian cities because these people receive all kinds of government benefits and give
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B. Porras to R. Lansing, 18 September 1918, Folder Secretara de Relaciones Exteriores - cartas 19181920 S 4.03, T VIII, p 42-57, ABP. J.D. Arosemena to R. Alfaro, June 26 1933, 2.15.1.28, ARJA; Albert Lamb, Autobiography Manuscript, p. 2, F: Lamb-Writings (4), B 2, ARL-NYPL.
37 36

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nothing to the state in return. Relying on the United States to act in a legal and just way to suppress illegal sales was no longer an option. Panama must act in defense of our country through building surveillance at the borders, declaring foreign our own territory [the U.S.occupied Canal Zone] and establishing the principle that all those who live in the part of our country subject to our sovereign control must pay state taxes.38 The call for border defense seemed to mesh easy with growing nationalist sentiment: patronizing local commerce, the Diario claimed elsewhere, is to advocate in favor of la patria.39

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38 39

Sobre comisariatos, Diario de Panam, July 16, 1916, 2. Algo sobre comisariatos, Diario de Panam, December 21, 1915, 4.

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The above political cartoon, 29 years of Freedom, shows a skeletal, impoverished man (representing the people of Panama) who is weighed down with bags labeled high cost of living, unemployment, high taxes, competition from the commissaries, the workers fund tax, and contraband goods. Underneath reads: The burden that oppresses the men of Panama is, in part, the fruit of understanding and cooperation (commissaries, rental lots in Coln, contraband, etc., etc.) carried out in the last fifteen years by the government of the United States in the Canal Zone in marked contrast to the syrupy language thrown about in Pan-American congresses and conventions.40

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From El Panam Amrica, April 23, 1933 and found in DF 819.00 General Conditions/94, B 5595, 250/29/17/6, RG 59, NACP.
40

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Smuggling, Race, and Panamanian Nationalism Patriotic sentiment did not stop most Panamanians from regularly using commissary contraband. It is an old story, George Roberts and Herbert Brown wrote in a 1933 economic survey commissioned by the Panamanian government, that trade regulations which must be applied to thousands of people, and very informally at best, will be disregarded with more or less freedom if a financial inducement exists.41 The most privileged in the country the 300 high Panamanian officials and other politically connected residents who could well afford patronizing the local merchants quietly maintained commissary access.42 The contraband law forced everyone else to routinely break the law in order to obtain products at prices somewhere in between the low commissary price and the almost always much higher prices existing in the Panamanian market. The price differential was no small issue for the majority of Panamanians who lived in dire economic circumstances. As one National Assembly Deputy put it: Blessed be the commissaries of the Zone, for they are the salvation of our poor people.43 Mundane illegality characterized daily life in Panama City and Coln. Those unlucky enough to be arrested with contraband often claimed that they had obtained the goods from a friend but were not sure of his or her name or exactly where he or she lived. State agents, for instance, fined Ana Zarruhorea for having two commissary tins of sugar and one of powdered milk in her Coln apartment. She could provide little detail about how she acquired the goods,
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Roberts and Brown, Investigacin econmica de la repblica de Panam, llevada a cabo a peticin del gobierno de Panam, 268-69. Vice Consul in Charge to Secretary of State, 6 January 1916, DF 811f.244/26, B 7725, 250/24/6/3-4, RG 59, NACP; William Jennings Price to Robert Lansing, 9 January 1919, DF 811f.244/37, B 7725, 250/24/6/3-4, RG 59, NACP; Belisario Porras Jr. to Ricardo J. Alfaro, November 9 1930, File 2.10.1.10, ARJA. La Zona del Canal y nuestro comercio, Accin Comunal: organo del centro Accion Comunal, ao IX no. 175, 28 Julio 1932. Leonard, "The Commissary Issue in American-Panamanian Relations 1900-1936," 86; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 19598.
43 42 41

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except to say that she purchased the items on the street from a poor man needing cash money.44 Panamanian merchant Ramn Dolande provides another example. Authorities arrested Dolande as he crossed into the Republic with 500 falsely labeled packages of commissary cigarettes. He claimed that he purchased them in Panama from the successful local firm Arrocha Grael Hermanos. While a Panamanian court convicted Dolande on charges of smuggling and commercial fraud, he clearly understood that playing the dupe was his best defense. The ubiquity of commissary goods in the Republic meant that Dolande realistically could have unknowingly acquired the unmarked cigarettes from anywhere.45 Part of the problem for state functionaries was the inherent difficulty of enforcing anticontraband laws along the highly traversed border. Crossers easily concealed most contraband and canal employees legally passed into the Republic with commissary goods for personal use. Such subjective measures (at what point, say, were goods no longer for personal use?) required law enforcement officials to exercise significant personal judgment. Guarding against contraband quickly melded with broader discourses of otherness percolating in Panama, with functionaries coming to rely on specific conspicuous markers as indicators of possible wrongdoing.46 Racial characteristics and cultural markers, such as speaking English or heavily accented Spanish, enhanced officials ability to see and act in the borderlands. Whether or not these stereotypical connections objectively led to more effective border control is unclear. But actually stopping contraband flows was only part of the equation for the state: policing methods that are suboptimal from the perspective of a means-ends calculus of deterrence, Andreas writes of a
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The folder 3-B-3/R, P 1, Nov 1, 1912 to Dec 31, 1934, B 463, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP contains a record of the daily arrests for commissary contraband in the Republic.
45 46 44

E 2645, C 202, JCCP, RC, SJ, ANP.

Memorandum for the Auditor, 11 December 1931, F 23-B-3C, P 2, B 462, 150/47/15/4 E30GP, 1914 1934, RG 185, NACP; Gootenberg, "Talking like a State: Drugs, Borders, and the Language of Control."

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different border context, can be optimal from the political perspective of constructing an image of state authority. A focus on conspicuous markers of race and culture enabled the Panamanian state to more effectively perform its territorial sovereignty at the border. And in many ways it was a public performance, as Andreas notes, for which the border functions as a kind of political stage.47 State functionaries did occasionally stop white North Americans from the Zone in search of illegal commissary goods. But the unwavering support of the powerful North American government for its citizens combined with the fact that many U.S. workers entered the Republic only sparingly meant that West Indians were far more useful marks for Panamanian functionaries.&$ This had something to do with the connected worlds of the Zone and the Republic and the impact of Zone regulation on the Isthmus more generally. The Zones overarching policies led most West Indian canal employees to work and shop on the Zone but live in the Republic, especially after canal completion.&% English-speaking black employees with commissary privileges, then, became the most prolific border crossers just as the Panamanian state criminalized commissary good use in the Republic. They became obvious targets for state agents and smuggling became one more negative quality to attribute to these outsiders widely loathed for acquiring Zone jobs over Panamanians. An odious distinction came to exist in the Republic, according to one Panamanian observer, between people who do not have access to the

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47 48

Andreas, Border Games : Policing the U.S.-Mexico Divide, 9.

Desde Panam, Diario de Panam, March 28, 1916; Interview with Dr. Alfaro Diario de Panam, November 1 1918, found in DF 819.115/27 RG 59 (NAMP M607 Roll 28), NACP; Consul General to Chief of Police, March 10 1914, F 62-B-210, P 2, B 364, 150/47/3/3 E30GP, 1905 - 1914, RG 185, NACP. The non-U.S. population on the Zone, for instance, dropped by 7, 510 in less than six months in 1914. The Number of Americans on Zone Increases, The Panama Morning Journal, July 11, 1914. See also Conniff, Black Labor on a White Canal : Panama, 1904-1981, 45-54, 64-74.
49

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commissaries and actually pay taxes rightfully owed to the state and the others.'( Novelist Erasmo de la Guardia spelled out the identity of the others: There is almost no worker in our West Indian barrio, he wrote, that does not sell cigarettes and sugar obtained from said commissaries.'" The smuggling connection helped solidify West Indians as an antinational element on which to build a more inclusive Panamanian identity. An article entitled The West Indian Problem, for instance, began by invoking an invasion metaphor. The West Indian race, the article claimed, was similar to a harmful germ, quietly infiltrating the nation only to destroy it.') Connecting such inflammatory imagery to contraband proved easy. While some, like the Panamanian Inspector of the Port and Chief of National Customs, claimed in a matter of fact way that smuggling was traceable to silver employees with coupons from silver markets, clubhouses, restaurants, etc., who are in need of cash, others saw the practice as an indicator of something more insidious.'# Smuggling was not just the product of economic need, a Special Commission organized by the Panamanian state reported, but rather the result of outsiders having no loyalty to the country.'&

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50 51

Sobre comisariatos, Diario de Panam, July 16, 1916, 2.

Quote taken from Szok, "La ltima gaviota": Liberalism and Nostalgia in Early Twentieth-Century Panam, 48. El problema antillano, Accin comunal: organo del centro Accion Comunal, ao vii no. 111, 24 julio 1930, 9; Inmigracin sana, Accin comunal: organo del centro Accion Comunal October 10 1923, 3; Sobre imigracion, Accin comunal: organo del centro Accion Comunal, ao II no. 28, 18 abril 1926, 1; Olmedo Alfaro, El peligro antillano, Semanario grfico, August 30 1924. Such fears existed prior to the 1920s. See Capacidad de poblacin, politica inmigratoria, La prensa: diario politico y de informacion, June 18, 1914, 1. Memorandum for the Chief of the Division, August 29 1923, F 23-B-3/R, P 1, B 463, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
54 53 52

Memoria del Ministerio de Relaciones Exteriores, 1920, pp. 22-24, SB, ANP.

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Such findings corresponded to a broader shift underway in Panama to redefine the deeply fractured Isthmian population in terms of mestizaje and a shared Hispanic language and culture. Census takers identified only 2.7 percent of Panama Citys population as Indian and mestizo in the nineteenth century, with dark castes making up 86 percent of the residents. After the influx of non-Spanish-speaking black West Indian migrants during construction and in line with countries like Cuba and more general Latin American currents during the period conceptions of a mixed Panamanian national identity began to emerge that celebrated a deep fusion between Indian and Spaniard.55 The 1920 census did not even provide the racial category mulatto, with census takers identifying almost half (44.1 percent) of Panamas population as mestizo. Ten years later, in 1930, 53 percent of the entire countrys population was mestizo as opposed to just 4.8 percent mulatto even though, as historian Marixa Lasso notes, there was no major migration of mestizos and Indians into the terminal cities and Spanish-speaking blacks and mulattos did not emigrate. Panama Citys colonial black neighborhood of Santa Ana, nevertheless, became thought of as a mestizo neighborhood in contrast to the black West Indian neighborhood of Calidonia.56 Returning home from work in this increasingly suspicious borderland environment became a frustratingly stressful affair for West Indians. Many did not suffer border harassment in silence. Canal employees filed persistent complaints against the Panamanian police to the
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Aviva Chomsky, ""Barbados or Canada?" Race, Immigration, and Nation in Early-Twentieth-Century Cuba," Hispanic American Historical Review 80, no. 3 (2000). Panama considered Canada as a possible model to emulate when it came to immigration as well. See, for instance, Memoria del Ministerio de Relaciones Exteriores, 1922, volume 1, pp. 184, SB, ANP; and Antonio Burgos, Panam y su inmigracin (Panam: Imprenta Nacional, 1913), 77-80. For broad Latin American trends, see Peter Wade, Race and ethnicity in Latin America, 30-35. Marixa Lasso de Paulis, "Race and Ethnicity in the Formation of Panamanian National Identity: Panamanian Discrimination against Chinese and West Indians in the Thirties," Revista panamea de poltica 4, no. julio - diciembre (2007): 67-70. See also Szok, "La ltima gaviota": Liberalism and Nostalgia in Early TwentiethCentury Panam.
56 55

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British Consulate and the Zone administration.57 Zone officials brought a number of these grievances over contraband to Panamas attention in 1925. Some West Indian employees, U.S. officials reported, complained bitterly in a general sense about the inconveniences that silver employees living in Colon are subjected to at the hands of these inspectors. Others had more specific complaints. Employee Joseph Arthur protested against the actions of inspector E. Escartn, a well-known and despised figure among West Indians in Coln. Arthur was returning home to Coln with one months worth of commissary sugar when Escartn stopped him. The Inspector was suspicious of the large quantity of sugar, which Arthur claimed he purchased due to the fact that the price of sugar decreased as the size of the order increased (a commissary policy that, if anything, implicitly promoted cross-border smuggling). Escartn ordered Arthur to accompany him to the station. He was released after a time without any formal charge but not before one of his bags of sugar was confiscated. The Panamanian Inspector General for the Special Commission for Contraband Surveillance was unapologetic. He claimed that his knowledgeable staff, composed of natives of the city, does in fact target Silver Roll workers because of the deep-seated custom of Jamaicans in the service of the Zone to traffic in all classes of articles from the commissary.58 The case of Silver Roll worker Benjamin Carter provides another example. Carter was detained on the morning of 22 August 1922 by a Panamanian who seemed to have been following me from the commissary. Panamanian officials later acknowledged that no evidence
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The British Consulate reported that British Subjects from the West Indies lodged complaints about mistreatment at the hands of the Panamanian police frequently. Acting British Vice-Consul to C. Mallet, November 16, 1911, FO 288/125, TNA. Eusebio A. Morales to H.F. Alfaro, February 1925, found in Memoria del Ministerio de Relaciones Exteriores, 1926: 261-62, SB, ANP. For a later case, see Protestan los antillanos de Coln: dicen que la polica los trata con mucha discriminiacin, El Panam Amrica, March 21, 1935. It ought to be noted that few Jamaicans made up the West Indian population in Panama; Jamaican was used as a synonym for all West Indians. Lancelot S. Lewis, The West Indian in Panama : Black Labor in Panama, 1850-1914 (Washington, D.C.: University Press of America, 1980), 113.
58 57

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of wrongdoing existed when Carter was detained but that they arrested him on speculation because of the quantity of cigarettes he bought an unusual amount for a colored man to purchase. That a West Indian bought four cartons of cigarettes at one time was grounds for Carter to be brought to the police station and then transferred to the Office of the Captain of the Port of Coln. I saw my cigarettes broken into and smoked under my very own eyes in that office, Carter claimed, his detention equivalent to a HOLD-UP. At some point during his illegal arrest and detention, a hot dog vendor in Coln, John Woods, materialized to claim that two of the four cartons Carter purchased were for him a charge Carter denied. He was then ordered to pay a fine of B/12.50. Before his release, Carter demanded a receipt for payment of the fine but was chased out without money, receipt, nor [sic] the four cartons of cigarettes. The Zone Inspector who investigated Carters complaint gave him some practical advice as a Silver Roll worker living in the Republic: I informed him that under the circumstances there appeared to be nothing that could be done about the matter and that in the future he had better buy in smaller quantities and confine his purchases to his own needs to avoid suspicion of smuggling, as long as he lives in Colon.59 Panamanian residents of Chinese heritage also faced discrimination at the hands of state agents charged with fighting commissary contraband. Functionaries, however, targeted the Chinese for different reasons than West Indians: namely, the Chinese were highly visible as traders who dominated Panamas retail market. Chinese residents made up less than two percent of either terminal citys population in 1920 but controlled 38 percent of Panamas national retail

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Benjamin Carter to J.J. Morrow, August 31 1922 and Memorandum for the Executive Secretary, September 13 1922, F 23-B-3/R, P 1, B 463, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
59

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market by the early 1930s.60 The Chinese merchant, foreigners observed, was ever-present in Panama and could always be found in his little tienda, stores which seemed to never close.61 And whether it was evading state tax on retail vegetables or commissioning Silver Roll employees or U.S. soldiers to deliver commissary goods for illegal sale in their stores, Panamanians believed that smuggling was a crucial component to the Chinese merchants success.62 While contraband-fighting state functionaries focused on the border to catch West Indians, the same officials visited retail businesses in Panama to uncover Chinese tax evasion. Chinese retail storeowners engaging in illegal commercial activity bolstered Panamas antiChinese discourse that represented them as foreign parasites with a general disregard for both legal and moral law.63 Born in the Celestial Empire and thirty-six very-Chinese years old, a magazine article detailing the exploits of one newcomer began, Juan Lee had been arrested twenty-five times between November of 1923 and May of 1924. Panamanian police charged Lee, who used six different aliases, with opium smoking, smuggling, immorality, attempted bribery, and the abuse of children and animals, among others. He may have done as much

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Lasso de Paulis, "Race and Ethnicity in the Formation of Panamanian National Identity: Panamanian Discrimination against Chinese and West Indians in the Thirties," 74-76. The first observation was taken from George A. Miller, Prowling about Panama (New York; Cincinnati: The Abingdon Press, 1919), 113. The second from Panama: 15-Hour Coup, Time Magazine, January 12 1931. See, for instance, Un pequeno contrabando de cigarillos Diario de Panam, February 23, 1922; Irregularidades en Coln que no han sido corregidas, Accin comunal: organo del centro Accion Comunal X October 13 1932, 8; Lieutenant, Zone Police, to Acting Chief, Police and Fire Division, 26 June 1919, F 23-B-3/R, P 1, B 463, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. La inmigracin China Diario de Panam, September 28, 1916; Lasso de Paulis, "Race and Ethnicity in the Formation of Panamanian National Identity: Panamanian Discrimination against Chinese and West Indians in the Thirties," 75-76, 81. For a similar experience in Mexico, see Robert Chao Romero, The Chinese in Mexico, 1882-1940 (Tucson: University of Arizona Press, 2010), 145-90.
63 62 61 60

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damage as seven distinct people, the article concluded, but such destruction was in truth carried out by one real Chinaman.64 It was not just the popular press that focused on these sensationally negative stereotypes but policy makers. Panamas Secretary of Exterior Relations, Narciso Garay, himself a suspect involved in various forms of graft related to the Chinese question, began his 1922 annual report from the position that the Chinese were a base and debauched people.65 He declined to make grandiose claims about his departments intention to wipe out the infamous corruption related to Chinese immigration, for instance, because he believed it outside the realm of the possible. Each time that a Secretary of Exterior Relations has proposed a new law regarding restrictions to immigration, he wrote, the illusion has been forged and this branchs annual reports bear witness that the measures would eradicate smuggling and fraud from the roots, once and for all, that Panama would never again be deceived by the ingenuity of the unrepentant Chinese. But such political grandstanding, Garay lamented, was not based in Isthmian reality: it may be said, inverting the terms of the common proverb, that against seven government virtues immediately arise seven Chinese vices.66 The Chinese community predictably resented such characterizations and became increasingly vocal in their attempts to counter them.67 It is a fact, a 1924 Semanario Grfico article began, that the Chinese residents in Panama today differ greatly from the Chinese with
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My emphasis. The line regarding his age reads in Spanish: Naci en el Celeste Imperio y tiene 36 chinescos aos de edad. Casos curiosos de policia: un chinito de los vivos, Semanario grfico, May 17 1924. John South to Charles Hughes, 5 September 1922, DF 819.111/32 RG 59 (NAMP M607 Roll 27), NACP. Garay was not the only official involved in illicitly profiting off Chinese human smuggling. See Mensaje del Seor Presidente de la Repblica a la Asamblea Nacional, Diario de Panam, September 14, 1916, 4.
66 67 65 64

Narciso Garay, Memoria del Ministerio de Relaciones Exteriores, 1922, volume 1, pp. 157, SB, ANP.

Lok C. D. Siu, Memories of a future home : diasporic citizenship of Chinese in Panama (Stanford, Calif.: Stanford University Press, 2005), 51.

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pigtails and chopsticks with rice. They have shed the veneer of submission and humility that has always characterized them and have begun to protest against racial inconsistencies that make them subject to extreme hardship and inexplicable contempt. Against charges that they were heavily involved in opium smoking and gambling, an apparently fictional representative Chinese respondent countered in heavily accented Spanish. You're wrong, friend! [Police] Captain Sols is very strict. A Chinese person smokes a hookah [...] and Sols goes for the police. Panamanians and other foreigners smoke [...] and gamble...I know...I know. Why doesnt Sols go for the police then, too? The result of such discriminatory law enforcement, the respondent claimed, was that the Chinese paid disproportionately into Panamas spoils system that tolo mundo, in the written accent, or everyone, preyed on the Chinese in search of illicit payoffs.68 State functionaries became more brazen in targeting the Chinese diaspora as the nationalist political movement gained steam on a platform of Panama for the Panamanians. Nationalist forces took control of the depression-era state after a successful 1931 coup and controlled the government through to World War Two.69 Their first President Ricardo J. Alfaro received a letter from fifteen Chinese merchants eight months into the new regimes tenure. The merchants complained that officials consistently violated their rights guaranteed under the constitution, specifically the line that all Panamanians and foreigners are equal under the law. The merchants primary complaint stemmed from the actions of Contraband Inspector Luis C. Ayora, who, they claimed, unfairly targeted them and their establishments. Ayoras modus
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68 69

Los Chinos resentidos por la parcialidad, Semanario grfico, December 13 1924.

Accin Comunal, the middle-class-led nationalist political organization, perhaps best illustrates this growing xenophobic sentiment. Founded in 1923, Accin Comunal spread its message through a publication that admonished Panamanians to Speak Spanish, Count in Balboas, and Read Accin Comunal. For examples of this nationalist sentiment, see La criminalidad en Panam, Accin Comunal: Organo del Centro Accion Comunal no. 1, October 10 1923, 1; Nuestros problemas sociales, Accin Comunal: Organo del Centro Accion Comunal, ao VIII no. 129, 7 Mayo 1931. See, also, Thomas L. Pearcy, "Panama's Generation of '31: Patriots, Praetorians, and a Decade of Discord," The Hispanic American Historical Review 76, no. 4 (1996): 694-702.

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operandi was to enter a store and search out older items on the shelves. He then would demand immediate proof of purchase to see that the proper taxes were paid on the chosen item. If the shopkeeper could not provide proof of purchase, Ayora confiscated the goods as contraband. The merchants argued that it is not possible to have proof of that nature on hand for each and every article in a store. Not only were purchasing receipts lost or damaged over the years, they pointed out, but many of these items were acquired at markets where receipts were not customarily received. Such discriminating confiscations were not only unjust, the Chinese merchants argued, but dangerous for commerce in general.70 Inspector Ayora had confiscated goods from four of the fifteen merchants the day they wrote the President: six cans of vegetable soup from Ral Him, a shaving razor from Camilo Jorge, a pair of shoes from Simn Jorge, and a tire tube from Esmerelda Vda. de Sanson. Each merchant paid a B/50 promissory charge to ensure that he or she would report to face the smuggling charge at a later date. Alfaro responded to the merchants using information copied verbatim from a letter he received from the Secretary of Treasury and Finance. The Secretary reminded the President that each of the accused was Chinese. He then continued with specific detail about each case, recounting versions of events that had notable differences from that of the merchants. The soup confiscated from Ral Hims store was the same brand sold in the commissary and Him was unable to provide adequate proof that he had acquired the soup legally. It was therefore confiscated as contraband and he was charged a B/25 promissory charge. Camilo Jorge reportedly confessed his guilt on the spot when questioned about the shaving razor and requested that his promissory charge of B/25 be put toward his larger fine. The court decided the shoe smuggling case at a later date in favor of defendant, Simn Jorge, and reportedly returned
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70

Julio Sierra M., Albert Fong, and thirteen other merchants to R. Alfaro, August 24 1931, 3.57.1.89,

ARJA.

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the shoes along with Jorges promissory charge. And the final case, involving the tire tube of Esmerelda Vda. de Sanson, was apparently little more than a misunderstanding. Ayora did preemptively confiscate the tire tube but returned the item to the retailer after further investigation established that it was not a brand sold on the Canal Zone. Ayora did not charge her the promissory fee. The discrepancy of the two events meant that B/125 in promissory charges alone had appeared to disappear into the bureaucratic ether before guilt or innocence was established. President Alfaros concluding words surely did little to bolster the merchants hopes that the ideals stated in Panamas constitution would be fulfilled anytime soon. A supporter of the nationalization of retail commerce, Alfaro glossed over the significant differences in the recounting of events.71 He did not address the merchants claim, for instance, that each of the four had paid a B/50 promissory charge as opposed to B/25 or less. He also did not address the charge of discrimination in any meaningful way, except to conclude his letter by stating that his government did seek to take steps to prevent abuses being committed against the legitimate rights of merchants and citizens in general. At the same time, however, he reiterated that contraband was a very serious issue in the Republic and the state needed to adequately protect the Treasury against the enormous volume of contraband from the Zone.72 Communication ended. The Chinese merchants gained no relief from their formal letter of protest. In fact, if anything, Alfaros response acknowledged that functionaries like Ayora had the tacit backing of those at the highest levels of government to target Chinese-owned retail establishments for unofficial taxation.
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71 72

Biesanz and Biesanz, The People of Panama, 103; Szok, "La ltima Gaviota," 110-14. R. Alfaro to Julio Sierra M., Albert Fong, y dems firmantes, September 28 1931, 3.57.1.89, ARJA.

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***** It got worse before it got better for the West Indian and Chinese diasporic communities. Indeed, they served as default anti-national whipping posts through the Great Depression and into the Second World War. The difficult era culminated with Panamas constitution of 1941: a document that revoked the citizenship of 50,000 Panamanians of West Indian descent and flat out appropriated hundreds of businesses owned by those of Chinese heritage.73 Such drastic measures, I have argued, had roots in the state project that began 26 years earlier to domesticate the Panama/Canal Zone border. The border and borderland, however, had never become an area for pitched battles between smuggler and state. Rather, it was a regulatory zone in which interactions more closely resembled individual negotiations, with different rules, expectations, and outcomes depending on the specific circumstances. West Indian and Chinese residents became favored targets for Panamanian state functionaries. Connecting conspicuous markers of race and culture to clandestine activities, for one, enhanced the ability of law enforcement officials to see and act in the borderland. These communities also had little political recourse to counter unlawful state activity and therefore served as choice marks for state agents interested in bolstering income in cash or in kind. The visible targeting of these vulnerable communities as incorrigible smugglers had the effect of drawing and calcifying internal borders of inclusion and exclusion already percolating in the Panamanian nation. Panamanian authorities enforced the contraband law unevenly but its very existence still led to a more authoritative state presence in the borderland and ultimately served as a productive force for the larger project of nation-state building. This chapter has outlined three primary
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Jorge Conte Porras, Arnulfo Arias Madrid (Cuidad de Panam: Panam: Litho Impresora Panamea, 1980), 90-101.
73

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functions of the law in the process of Panamanian state formation. First, the focus on commissary smuggling made the highly fluid border and borderland legible for state agents and enabled them to more purposefully intervene in cross-border traffic. Second, the commissary contraband law subsidized patronage networks that came with Panamanian state modernization, providing another tool for customs employees, tax inspectors, and police officers to licitly and illicitly augment the meager salary offered by the rapidly expanding state. And finally, criminalizing commissary goods provided state officials with a cross-border problem to use as leverage against the United States in both diplomatic and broader political terms. Merchants and state officials sought to galvanize public opinion over the purportedly threatening contraband, enabling state officials to link state border defense with popular nationalism bubbling up in the Republic. For all the defensive rhetoric, however, the Panamanian state never successfully stifled commissary contraband flows. Commissary goods remained accessible in the terminal cities and evading import taxes continued to be a relatively safe method to obtain high-quality goods for cheaper prices than legally available in the Republic. The high levels of contraband in the Republic were no doubt in part due to uneven enforcement at the hands of Panamanian state functionaries. They were also, however, due to the lack of regulatory will on the Canal Zone. Indeed, the utter lack of cooperation from the Canal Zone administration and its employees over the years was a continuous point of contention on the Isthmus. The next chapter delves more fully into the exact conditions on the Canal Zone, illustrating that the starkly drawn Panama/Canal Zone boundary that developed to putatively protect Canal Zone residents from Panamanian vice and racial disorder led to a very weak border when it came to stopping commissary goods from illegally flowing into the Republic.

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Chapter 5

The Business of the Commissary: Smuggling and Sovereignty on the Canal Zone

There were few issues that frustrated Panamanian merchants and officials more consistently than the Canal Zone Commissary. The entire operation appeared almost calculated, as one high-ranking Panamanian official put it, to deliberately harm Panamas interests.1 The most egregious and frequently cited example was that commissary stores consistently ignored established diplomatic agreements to limit sales to canal employees. It was true, as Canal Zone officials claimed in response, that aspiring smugglers used various forms of chicanery to obtain commissary goods and that stopping all cross-border smuggling was impossible. It was also true, however, that a great many people participated in this popular trade more openly, taking advantage of the fact that those who conspired to evade Panamanian tax on U.S. territory were not actually breaking Zone law. The highly fluid Panama/Canal Zone border, then, simultaneously served as a sovereign shield from Panamanian law and as a profit generator for those smuggling commissary goods into the Republic. The rampant smuggling that emerged from this unique circumstance had a negative effect on the legal commerce in Panama, the legitimacy of the nascent state, and U.S.-Panama relations more broadly. This chapter explores the everyday functioning of the Zones Commissary Division over the course of the twenty-five-odd years after Panama criminalized commissary good use among non-canal employees in 1915. My primary goal is to probe the significant disconnect between
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1

J.D. Arosemena to R. Alfaro, June 26 1933, 2.15.1.28, ARJA.

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the principled rules that codified Zone conduct and the everyday regulatory practices that actually shaped the functioning of the U.S. colony and its border with Panama. I argue that such a disconnect was the product of what historians Alfred McCoy, Francisco Scarano, and Courtney Johnson term the ad hoc nature of the U.S. imperial state. The fact that the post-1898 colonial administrations of the United States were only loosely articulated within the stateside system provided administrators with considerable discretion to adapt governing strategies to unique local circumstances.2 Such discretion on the Isthmus, I contend, stoked a fundamental tension of the Commissary Division: that between the putative not-for-profit objectives of the division and the reality that a portion of the administrations overall discretionary funds were directly linked to commissary profits. The Commissary Division quickly came to privilege its latter function and soon resembled a successful commercial venture that operated well outside its limited mandate as a supply store. The national market of Panama proved a temptation for commercially motivated commissary management, with higher sales volumes begetting higher profit margins no matter the employment status of the consumer. Cross-border smuggling increased product turnover and commissary management and Zone officials alike became largely complicit with if not facilitators of such activities. Lax regulation at the managerial level was bolstered by a more general sense on the Zone that complying with restrictive sales rules was somehow bending to Panamanian demands. Such views were often couched in nationalist rhetoric explicitly hostile towards the supposedly grasping merchants of the Republic and its ungrateful and corrupt politicos. The contempt of everyday canal employees combined with the self-interest of the Zone administration was a potent mix that ensured significant and enduring gaps in Panama/Canal
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McCoy, Scarano, and Johnson, "On the Tropic of Cancer: Transitions and Transformations in the U.S. Imperial State," 7.
2

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Zone regulation gaps easily exploited to the benefit of illegal traders, aspiring tax-evaders, and the Canal Zone regime itself. The following chapter charts the impact of increasingly acrimonious border relations on the Isthmus. After an opening section detailing the tensions created by the broader organizational structure of the Commissary Division, I outline the everyday operation of Zone supply stores through the fifteen years after the Republic criminalized commissary good use. The near continuous protests from the Panamanian state and the merchants of the Republic did little to change the practices of a Commissary Division protected by U.S. sovereignty. The occasional racially specific regulatory measure implemented by the Zone to placate Panamanian complaints was no match for broader policy shifts that seemed only to encourage wrongful sales and crossborder smuggling. The growing distrust and hostility engendered by such disregard helped stir anti-American sentiment in the Republic that, among other things, bolstered Panamas growing nationalist movement. The ramping-up of Panamas border control efforts during the early years of the Great Depression brought the issue to the fore again. The Zone administration was forced to grapple with commissary contraband in a more serious way than it had since the inception of the supply stores. The final section focuses on the specifics of the Zone administrations engagement after an especially embarrassing arrest of a North American visitor in Coln in late 1931. The ensuing internal investigation found that wrongful commissary sales were carried out on a decidedly massive scale at certain Zone retail outlets and the Zone administration felt compelled to implement conspicuous reforms. While more stringent than previous contraband suppression efforts, depression-era reforms offered little more than an intensification of the racially specific measures long used to deal with the contraband problem. Commissary policy towards Gold Roll

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employees remained almost entirely unchanged. The purchases of Silver Roll workers, on the other hand, came under strict regulation and officials closed a number of Silver Roll commissary windows near the border for good. Such uneven reform measures made headlines and putatively signaled that the United States took Panamanian complaints regarding commissary contraband seriously. On the ground, however, these reforms did little more than give credence to the general suspicion that surrounded black West Indians on either side of the border. In the final analysis, then, the often-antagonistic border domestication efforts between Panama and the United States found common ground in the era of the Good Neighbor as the United States shifted the weight of an intractable point of contention onto the shoulders of an increasingly weak and embattled Isthmian population.

The Business of the Commissary The Canal Zone administration did not have an inherent interest in controlling the flows that passed from the shelves of the commissary into the Republic. Limiting commissary sales was the prerogative of the Republic and its merchants. The merchants rightly feared the economic competition of the commissary; state officials rightly feared the loss of state revenue that came with the United States negotiated right to import supplies free of Panamanian duty. The attempt to limit the impact of the Zone department stores on Panamanian commerce began the year that commissaries were introduced. Local merchants successfully appealed to visiting Secretary of War, William H. Taft, who issued a supplementary executive order to the Taft Agreement prohibiting commissary access to all employes and workmen who are natives of tropical countries.3 This policy, which excluded most canal employees from shopping at supply
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3

Arosemena G., Historia documental del canal de Panam, 153-74.

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stores, had clear racial overtones, as tropical essentially meant non-white. Taft sacrificed the consuming needs of the majority of the canals workforce for the sake of political expediency. From its inception, then, the commissary system was negotiated through the prism of race. Taft sought to provide local merchants with another opportunity to offer goods at prices not in excess of legitimate profit.4 But within six months, as the story goes, Panamas merchants had failed, leading to mass unrest among canal employees still at the mercy of Panamas marketplace. The Zone administration had few options but take control of supplying all of its employees consumer needs. The storefronts that dotted the Canal Zone thereafter provided racially segregated goods and services for all canal employees.5 This narrative may be accurate but it glosses over an important factor in the Zone administrations appropriation of this lucrative Isthmian market. The commissary was not operated by the ICC but rather by a government-owned corporation, the Panama Railroad Company. This crucial distinction not only factored into the Commissary Division pursuing the Silver Roll market numbering over 65,000 consumers at the height of construction but also led to it pursuing a more general expansionist commercial policy that facilitated cross-border smuggling. The government of the United States acquired the Panama Railroad Company at the start of construction and it was the obvious choice under which to develop the commissary system. It had operated its own commissary on the Isthmus since at least the early 1880s, had an existing purchasing department in New York, and had a steamship line to deliver imported supplies. There were other benefits, too. While the Railroad quickly became subordinated to the interests
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4 5

Bishop, The Panama Gateway, 152-53.

This narrative of the introduction of the Silver Roll commissary can be found in McCullough, The Path between the Seas : The Creation of the Panama Canal, 1870-1914; Conniff, Black Labor on a White Canal : Panama, 1904-1981; Major, Prize Possession : the United States and the Panama Canal, 1903-1979; Greene, The Canal Builders: Making America's Empire at the Panama Canal.

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of the ICC the Zone Governor, for instance, simultaneously served as the President of the Railroad it remained an entity entirely distinct from the federal agency that relied on Congress for its annual appropriation. The Railroads corporate status allowed it to operate similarly to a privately held company. It could engage in commercial and quasi-commercial activities in ways the ICC could not and its profits could be invested in ways the administration saw fit. The Canal Zone, then, benefitted from the Commissary Division turning a profit because it generated a local slush fund over and above the more closely regulated federal funds. The size of the fund was directly related to the divisions profit margins.6 The administration may have had an interest in the Commissary Divisions commercial success but it nonetheless took a decidedly hands-off approach. The Zones first Governor was unambiguous in his lack of interest in the day-to-day operation. As long as he got the money, the New York Times wrote, paraphrasing Colonel George Goethals, he did not care where it came from.7 The headquarters for this money spinner was located in Mount Hope on the Atlantic side, a considerable distance from the Zones administrative hub in Balboa on the Pacific. This distance, as Marshal E. Dimock wrote in his 1934 Government-Operated Enterprises in the Panama Canal Zone, led the division to be somewhat freer from the meticulous supervision than they would be otherwise and it became a more or less independent operating unit. The culture of the commissary resembled a private firm more closely than a government bureaucracy. The staff spoke the language of customer satisfaction, product

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Dimock, Government-Operated Enterprises in the Panama Canal Zone, 22-40, 103; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 100-05; Biesanz and Biesanz, The People of Panama, 55-56; John W. Herbert, "The Panama Canal: Its Construction and Its Effect on Commerce," Bulletin of the American Geographical Society 45, no. 4 (1913): 251.
7 6

Zone Buyer Admits he Accepted Fees New York Times, May 26, 1915, 9.

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turnover, and lowest possible prices for quality goods. The General Manager gained his position through exhibiting qualities which distinguish a successful business executive.8 In 1927, spokesperson J.W. Dwyer endeavored to explain the goals of a system that had passed from a single purchasing agent in New York to agents in New York, New Orleans, London (England), Paris (France), Hamburg (Germany), Valparaiso (Chile), Kobe (Japan), Shanghai (China), and Sydney (Australia). There was no evidence in his speech to the Mothers Club at the Balboa Young Womens Christian Association (YWCA) that employees of the division still conceived of it as a system of supply stores providing goods deemed necessary and convenient. Rather, as Dwyer claimed, the division followed a policy of expansion and purchasing goods to the best advantage of our trade, so it can offer its patrons as complete a variety and line of goods as possible at the lowest prices consistent with first quality, having in mind the insistence of the American family on the best that the world offers. The trick to achieving this goal was quite simple: the commissary had to maintain a high volume of sales. A concern that cannot turn its goods over and take profit quickly can not withstand the intense business competition of today, Dwyer informed his audience, while ignoring the fact that the commissary was neither officially a commercial venture nor meant to be in competition with local firms. And on the same line of reasoning, he concluded, the concern that can show the fastest turnover will make the most money all other factors being equal.9 The division proved

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Dimock, Government-Operated Enterprises in the Panama Canal Zone, 22-40, 103-04, 08-09, 29; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 100-05. This speech was published in a local English-speaking publication but exactly which one is unclear. I located it as a clipping in the personal papers of Albert Lamb and cite it as: J.W. Dwyer, The Commissary Past and Present: a Lecture Given Before the Mothers Club at the Balboa Y.W.C.A., April 2 1927, F: Lamb (7), B 3, ARLNYPL.
9 8

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quite successful in this regard. Profits reached upwards of 11 percent on capital invested at the height of the 1920s.10

Isthmian Markets, Sovereignty, and the Border The national market of Panama, in some cases just a few hundred yards from the commissary counter, proved a tempting business opportunity for a division concerned with maintaining high levels of product turnover. This market could be easily tapped through little more than a careless approach to enforcing established sales restrictions. A storekeeper who ran the Silver Roll Commissary at Ancon, for instance, complained to the Chief Quartermaster of the Supply Department in 1914 that it was obvious that non-employees clearly bought commissary goods for use and resale in the Republic. The current protocol of selling goods to anyone with a coupon book, he wrote, made it very difficult to tell whether a man is working for the Panama Canal or not. Stricter policies to establish proof of employment would do little good, however, as so many employees purchased goods for resale. I once refused to sell a silver employee 72 sacks of salt, he claimed, and he took the matter up to the office and I was informed that as long as he owned the [coupon] book I would have to sell him what he wanted. Managerial complicity made it difficult to enforce the rules at the counter. In my opinion, the storekeeper concluded, there is but one way to stop this practice and that is for the Panamanian Government to prosecute the guilty parties.11 Panama criminalized commissary good use among non-canal employees in the Republic only months later but the Canal Zones sovereign border ensured that the Commissary Division
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10 11

Dimock, Government-Operated Enterprises in the Panama Canal Zone, 107-09. Storekeeper to Captain R.E. Wood, August 3 1914, F 23-B-3R, P 1, B 463, 150/47/15/4, RG 185, NACP.

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could continue without tempering its sales practices. In fact, Panamanian observers claimed that Zone policy evolved in the late 1910s to hinder Panamanian law enforcements attempts to suppress commissary contraband. Critics claimed that the Commissary Division deregulated the sale of coupon books in the face of falling sales due to thousands of employees laid off at the end of construction. For the first time, Silver Roll employees were able to purchase an unlimited number of commissary books for cash. Right in the Commissary buildings the days that coupons are issued in the Zone, a Panamanian contraband inspector charged, we have seen negro laborers on the silver roll, selling them to persons, particularly to women, who go from [the Republic] purposely to buy coupons.12 The Inspector, however, could do nothing about those who openly conspired to evade Panamanian taxes on U.S.-occupied territory. Not only did he have no legal authority to act but no one actually broke Zone law.13 The only legal risk for non-employee shoppers from the Republic came when passing back over the border into the Republic. The savings were evidently worth the risks. Panamanian merchants cried foul. The Panama Association of Commerce argued that there was no reason for a Zone administration acting in good faith to permit employees unlimited access to coupon books: it is not rational to presume that a man or women, even with the most extravagant habits, will lead a crazy life purchasing provisions and other goods worth the full amount of his or her salary or three or four times it. The shift in policy to accept cash for coupon books, the Association continued, was carried out for two reasons and two reasons only: first, for non-employees to evade Panamanian customs, and second, to steal this business from

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Apropos de contraband, Diario de Panam, March 30 1920; Sobre comisariatos, Diario de Panam, July 16, 1916, 2.
13 12

Drew Pearson, Panama Agitated by Zone Trading, New York Times, October 2, 1927, XX5.

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traders of this country.14 Periodic reports from other sources confirmed that the commissary competed with local shops. One newspaper reported that its employees scour the shops of Panama City and Coln to ascertain the prices of merchandise and are very successful in using such information to advantage.15 Commissary employees went further than implementing impersonal policy in order to ensure commercial dominance. Indeed, even North American firms operating in the Republic complained about the questionable methods of the Commissary Division. An executive from the Thomas Page Milling Company of North Topeka, Kansas, wrote to Senator Charles Curtis regarding a problem his companys subsidiary faced vis-a-vis commissary competition. The Trans-Caribbean Company had successfully competed against a number of private firms in order to supply the Peruvian Steamship Companys passing vessels with thirty to forty barrels of flour per ship. When the steamship company changed its purchasing agent to a Railroad employee, however, the orders to Trans-Caribbean stopped. The S.S. Urabamba was the first ship of the Peruvian Steamship Company to have its flour order filled by the commissary. They paid 1.75 cents more per pound than its price with Trans-Caribbean. The Captain, the Purser, and the Steward of the companys next ship, the S.S. Huallaga, questioned both the change in affiliation and the more expensive price. The Assistant Manager of the Commissary Division reportedly told them that the lower price of Trans-Caribbean reflected the fact that its product was old and bad. Another commissary employee explained that they had to buy their flour from the government because their new agent worked for the Railroad. The point of the whole affair is this, the executive concluded his letter:
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Asociacin del Comercio de Panam, "Memorandum sobre las actividades comerciales de los comisariatos del gobierno de los Estado Unidos en la Zona del Canal, y sus efectos sobre el comercio de Panam," in Tercera Conferencia Comercial Interamericana (Washington, D.C.,1927), 3, ARJA.
15 14

Commissary has its Scouts and its own Methods, The Panama Star and Herald, July 12 1934.

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The Trans-Caribbean Company is an American concern, privately owned, selling American goods both on the Canal Zone and in the Republic of Panama, and we do not believe it is the policy of the government that the government should compete with American business, and especially to the length it has gone, to deprive an American house of business which it has developed, and rightfully holds.16 Skirting the established rules was the norm. The Thomas Page Milling Company rightly appealed directly to stateside representatives due to local intransigence. Panamanian office holders approached the Zone Governor only months earlier to request that he bar non-employees from entering the commissary. They had no legitimate business in the commissary, locals argued, and permitting them to shop openly made a jest of the vigilance. Zone Governor Jay Morrow dismissed the request, claiming that such a policy was discriminatory and went against the nature of the commissaries as public buildings. The irony was not lost on Panamanian officials. As I see it, one Panamanian official wrote, the commissaries are not public buildings in the true sense of the word because they have been established for the supplying of provisions, etc., to employees of the Canal and of the Railroad Company only. Moreover, he continued, the Zone administration already had a policy of discrimination, since it is well known that in many of these establishments negroes are not permitted to enter. The Governors logic showed little serious engagement with the issue and only illustrated the lack of cross-border cooperation. The Government of Panama in its effort to prevent the abuses which have been committed ever since the commissaries were established in the Canal Zone has tried to arrive at an amicable understanding with the authorities of the Zone but it has been impossible due to the fact that those authorities refuse to cooperate with those of Panama to prevent such abuses, which rather they protect.

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16

Alfred B. Crossley to Charles Evans Hughes, April 12 1921, DF 811f.244/46, B 7725, 250/24/6/3/4, RG

59, NACP.

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Panama, too, saw few options but seek redress in Washington.17 Panamanian Secretary of Government and Justice, Ricardo J. Alfaro, travelled on a special mission to lodge a formal complaint in Washington to the Secretary of State. Alfaro cited tobacco as the most problematically smuggled commissary product. Zone cigarettes sold for approximately half the price of cigarettes in Panama (or for that matter in the United States) because they entered the Zone duty free.18 The smuggling is such, Alfaro wrote to the U.S. Secretary of State, that the importation of chewing tobacco into the Republic of Panama has ceased, and that of the other kinds has decreased in an amazing degree.19 His letter was forwarded to the War Department and sent on to the Canal Zone Governor for consideration and further report.20 Governor Morrow outright dismissed the complaint, refusing to acknowledge that the alleged smuggling was even a problem. Alfaros complaints, he wrote, were minor questions of an entirely local character that are of long standing and have been settled so far as our government is concerned.21

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This is an unusual letter because it is located in NACP and is in English but the insider language and the informality -- it is addressed to My dear friend -- suggests that a Panamanian official wrote it to the Panamanian Secretary of Foreign Affairs. A note from the Department of State attached to the document seven years after it was written questions its origin. I cite it as: Unknown Author to Narciso Garay, February 4 1921, DF 811f.244/49 1/2, B 7725, 250/24/6/3/4, RG 59, NACP; Apropos de contraband, Diario de Panam, March 30 1920. Comparative Price List -- La Boca Clubhouse, July 16 1919, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Drew Pearson, Panama Agitated by Zone Trading New York Times, October 2, 1927, XX5; Memorandum for the Governor, February 23 1932, F 23-B-3, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. That cigarettes were the most popular contraband is not unique to Panama. Fifty percent of all cigarettes consumed in the world are smuggled -- a quite flow in the words of anthropologist Carolyn Nordstrom. Nordstrom, Global Outlaws : Crime, Money, and Power in the Contemporary World, 22. See R. Alfaro to C. Hughes, April 2 1921, DF 811f.244/50, B 7725, 250/24/6/3/4, RG 59, NACP. The text of Alfaros special mission letter was published in Ricardo J. Alfaro, Historia documentada de las negociaciones para la celebracin del tratado de 1926 (Panama City: Editorial Universitaria, 1972), 5-16. R. Alfaro to C. Hughes, April 2 1921, DF 811f.244/50, B 7725, 250/24/6/3/4, RG 59, NACP; John W. Weeks to C. Hughes, August 10 1921, DF 811f.244/50, B 7725, 250/24/6/3/4, RG 59, NACP.
21 20 19 18 17

Jay J. Morrow to John W. Weeks, June 30 1921, DF 811f.244/52, B 7725, 250/24/6/3/4, RG 59, NARA.

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Many North Americans on the Zone supported the Governors position a great number of whom, according to the North American publisher of The Panama American, hate Spigs, as all Panamanians are referred to, and care nothing whatever for the Republic of Panama, its industries, commerce, politics, progress, rise or downfall.22 Support for the status quo came under many guises. The pro-U.S. Panama Morning Journal, for instance, wavered between arrogant dismissal of Panamanian concerns and serious argument in support of the Zone retail outlets. The editors argued in one article that the commissary was a God-send for the people of Panama. Through providing goods at near wholesale prices, the argument went, the commissary not only prevented retail prices in the Republic from spinning wildly out of control but also led them to be artificially low. Panama remained an attractive destination for the better class of settlers from around the world because the commissary forced local merchants to sell the necessities of life at a closer margin than is done anywhere in the world. The commissary would lead to the countrys future development, begetting a larger and more prosperous national market that would result in increased sales and bigger profits.23 There were an infinite number of birds in the bush, the Panama Morning Journal assured the Republics merchants and politicians, as long as they continued to dutifully forgo the one meant for the hand. At other times, however, the newspapers editorial staff seemed exasperated that the issue was even a topic of discussion. Panamanian civilian merchants and business men should be content to accept conditions as they are, the newspaper imperiously argued elsewhere. There was no trade for them before the Canal work began, and but for the Canal there never would be

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Nelson Rounsevell, The Life Story of 'N.R.' or 40 Years of Rambling, Gambling and Publishing (Panam: Panama American, 1933), 146. Untitled, The Panama Morning Journal, January 13, 1915, 4; Cant Fool the Merchants, The Panama Morning Journal, January 15, 1915, 4; Untitled, The Panama Morning Journal, January 16, 1915, 4.
23 22

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any trade here worth considering.24 U.S. journalist Arthur Bullard was another observer indignant about Panamanian complaints. It is hard to like people, Bullard wrote, who have evidently made up their mind to dislike you. The commissary provided a very interesting study of how far political passion can blind people to their economic interests. Bullard cited ice manufacturing as an example. The commissary had a plant that provided ice to the Zone at cost and had the capacity to easily produce ice for the people of the terminal cities at a much cheaper rate than currently existed in the Republic. But ardent anti-Gringo patriotism that merchants industriously fostered ensured that a Panamanian firm monopolized the national market, selling the ice at exorbitant prices and garnering immense profit in the process. If the National Assembly should pass a resolution instructing the President to request the Commission to extend its commissary privileges to the people of Panama, Bullard concluded, nine-tenths of the population would benefit immensely, and only half a dozen already rich families would suffer. Lax regulation at the commissary was lent an air of moral authority.25 Resentment towards Panama often far outweighed sympathy for the plight of its poor. The routine inconveniences, such as providing evidence of employment before a purchase, needled many residents who wondered what other indignities Panama had in store for them if the opportunity arose. The largest and most powerful union on the Zone, the Panama Metal Trades Council, saw Alfaros trip to Washington as a direct attack on Zone sovereignty.26 The union was particularly exercised that the administration had recently allowed Panamanian contraband inspectors to openly observe sales in the commissaries as an apparent show of good faith. Even while these inspectors had no authority on the Zone, the council argued, it was wrong in
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24 25 26

The Way to Look at it, The Panama Morning Journal, February 9, 1915, 2. Bullard, Panama: the Canal, the Country, and the People, 91-92. Dimock, Government-Operated Enterprises in the Panama Canal Zone, 158.

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principle and an unnecessary trespass upon our territory. The real motive behind this invasion, the passed resolution proclaimed, was to curtail certain of our rights and thus force us to fall back upon the merchants of the Republic of Panama. The union used decidedly militaristic and nationalist language in defense of the commissary. The Panama Metal Trades Council is determined to cede nothing, and will defend its interests and rights always, citing its duty toward the members of organized labor employed on the Isthmus, toward the Panama Canal and toward their native land, the United States of America, to defend and champion the best interests of these employes, the Canal, and the Nation.27 Worker passion proved insidious day in and day out because workers intimidated staff members attempting to follow the rules. The Secretary of the Balboa Clubhouse reported in 1920 that the commissary counter was not a pleasant work environment. We are trying to inforce [sic] this rule, he wrote, but the sales staff often felt bullied by Panama Canal Employees, who seem to think that the Salesladies should know that they are Employees and become disgusted with the Clubhouse [when] they have to prove their Authority in order to purchase a cigar. If the staff members were not taking heat from frustrated workers, they were defensively explaining the rules to visitors: hardly a day passes, the secretary reported, when staff were not approached by American Shipping Board Employees, merchant marines, or passengers of passing ships that try to purchase anywhere from one cigar or package of cigarettes to a box or two of cigars or a carton or so of cigarettes to last them during their ships journey. Those refused often express their views, on this Rule, in rather insulting terms. The Secretary concluded that the low pay and the fairly consistent abuse made serving at the commissary

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27

C.Z. Labor to Fight, The Panama Star and Herald, October 7, 1920.

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counter a thankless job and both the consistently high rates of wrongful sales and personnel turnover illustrated as much.28 For all the support the administration had from Zone residents, it nonetheless instituted minor reforms in the early 1920s as Panama and the United States began to negotiate a new treaty. Gold Roll employees continued to face no restrictions at the commissary because, as the Governor put it, it is believed that little if any of this class of traffic can be traced to them. The number of coupon books available to Silver Role employees per pay period, however, was again restricted in a similar fashion to the construction period. The administration implemented the racially specific measure to placate Panamanian complaints and indeed stifle a certain class of smuggling. Commissary staff was reminded that it was hardly above those of African heritage to deceive in order to gain access to commissary goods and continuous vigilance was necessary. Black Non Employees, one internal memorandum read, are not to be sold to unless sent as messengers for parties known by you.29 Other developments suggest that the Canal Zone administration was not entirely interested in stifling contraband flows whether it impacted broader treaty negotiations or not. The most blatant example was the Railroads quiet introduction of bonded warehouses in 1925. Bonded warehouses were inimical to broader regulatory cooperation because they provided individual commissary outlets with the ability to continuously draw on goods in a more decentralized and less controlled manner. Tobacco products proved especially problematic, as much of the warehouse stock was untraceable to the Zone (this went against a 1911 agreement
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T.L. Dweller to T.S. Booz May 17 1920, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. Jay J. Morrow to John W. Weeks, June 30 1921, DF 811f.244/52, B 7725, 250/24/6/3/4, RG 59, NARA; Memorandum of Instructions to SalesLadies [sic] and all others responsible for the Sale of Cigarettes, Tobacos [sic], and Cigars in this Association, August 29 1922, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NARA.
29 28

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that commissary tobacco would be uniquely labeled to aid in its identification).30 An internal Zone report described the impact of the bonded warehouse a few years after its introduction: all organizations in the Canal Zone are in the habit of frequently drawing tobacco supplies from the bonded warehouses, the report claimed, and the unmarked product could easily be introduced into Panama from this source of supply. In fact, the report continued, it frequently was by people who make a business of running contraband into the Republic. The investigators conclusion: the system is faulty.31 A growing number of Panamanians reached the same conclusion. They believed, however, that the Canal Zone administration established the faulty system with clear intent. When you hit a rock with an egg, the egg breaks. Or when you hit an egg with a rock, the egg breaks, a frustrated Panamanian diplomat pointed out in regards to cross-border commissary cooperation. The United States is the rock. Panama is the egg. In either case, the egg breaks.32 Local merchant Emanuel Lyons proved more exacting with his criticism: illicit commissary activity in Cristobal had reached alarming proportions. The brand new commissary building at Cristobal, he wrote to Panamas chief treaty negotiator, Ricardo Alfaro, resembled a department store of an important city. Anyone could purchase items without difficulty and one of its obvious goals was to cater to tourists and others who are not employees of the Canal.33 The actions of the Canal Zone administration spoke louder than words and seemed to confirm for
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Memorandum to Executive Secretary, October 14 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. The introduction of bonded warehouses was not cleared with Panama or the U.S. State Department before they were introduced and is as much as anything an illustration of the deep cleavage between the Zone and Washington regarding relations with Panama. Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 110-14. Memorandum to Executive Secretary, September 30 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NARA.
32 33 31 30

Drew Pearson, Panama Agitated by Zone Trading, New York Times, October 2, 1927, XX5. Emanuel Lyons to R. Alfaro, March 29 1925, 2.4.1.56, ARJA.

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many Panamanians that its treaty partner essentially negotiated in bad faith or, as Panamas chief treaty negotiator remembered it, an atmosphere came to exist in the Republic of suspicion, fear, and mistrust.34 It was through this prism of distrust that Panamanians viewed the more contentious articles of the treaty, such as the continued ability of the United States to expropriate Panamanian land for the canal and the requirement that Panama declare war alongside the United States. Panamas National Assembly ultimately rejected the treaty because of the popular nationalist backlash it inspired. The disingenuousness that characterized everyday border relations led many in the republic to insist on an agreement that would more fully restore to our Republic the essential attributes of independence and autonomy.35

The Heightened Stakes of Commissary Smuggling during the Great Depression The nationalists who organized in protest against the 1926 Treaty captured the Panamanian state in early 1931. They began governing against the backdrop of a global economic crisis spurred on locally by declining canal payrolls and a sharp drop in Isthmian shipping activity.36 This middle-class movement introduced a new cohort of leaders whose beliefs (and political fortunes) centered on pursuing Panamanian interests vis-a-vis the canal in a more aggressive manner than leaders past. One of the first shots across the bow in renewed tension over cross-border smuggling was the arrest of the Purser of the S.S. Martinique, North

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34 35

Alfaro, Historia documentada de las negociaciones para la celebracin del tratado de 1926, XIII.

Pearcy, "Panama's Generation of '31: Patriots, Praetorians, and a Decade of Discord," 698; Pizzurno Gels and Andrs Araz, Estudios sobre el Panam republicano (1903-1989), 158-65. For a concise discussion of Panama during the Great Depression, see Conniff, Panama and the United States : the Forced Alliance, 88-92.
36

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American Fred M. Howe.37 Howe was on shore leave eight months after the Panamanian coup, when Coln authorities stopped him as he crossed the Panama/Canal Zone border with two cartons of commissary cigarettes. He sent the following letter to his United States Senator, the Captain of the Port, Cristobal, the Manager of the YMCA at Cristobal, and the Governor of the Canal Zone. When American citizens can be arrested by half-breeds, negroes and a much lower type of people and brought before a bunch of racketeers who simply take possession of their goods, Howe began his letter, it is high time we bowed our heads in shame and place ourselves at the bottom of the list among the nations of the world. Howes anger appeared to largely stem from the fact that he still did not know he had broken the law. Just why a half-cast should grab me by the arm and force me to give up property which I have purchased on American territory, legally, and with no other object in view, except taking these goods back to my ship and consume them myself, is much more, in fact a great deal more than my American breeding has taught me to understand. Howe finished with some angry policy prescriptions. If Americans can dig a ditch which is a marvel of engineering skill and the greatest achievement of all time, it seems to me we ought to have guts enough to stick up for our rights in that territory. If not, he warned, the crooked politician and the police-gangsters of Panama will rob an American every time they get an opportunity.38 Howe did not realize he had broken the law because the sales staff at the Army and Navy YMCA canteen in Cristobal sold him cigarettes just the same as a regular store in the United
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See Memorandum for the Auditor, April 25 1932, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 1934, RG 185, NACP. Panama also implemented stricter laws in relation to imported cigarettes implemented in 1932. La palabra Panama ira impresa a los cigarillos, tobaco prensado etc., que se importen al pais, Decreto Numero 10 de 1932 (de 25 de enero) - por el cual se dicta una medida de carcter fiscal, 02-02-1932 Gaceta Oficial # 06217, Asamblea Nacional de Panam, p. 23031. Fred M. Howe to Hon. Royal S. Copeland, September 4 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Fred M. Howe to the Secretary of the Young Mens Christian Association, September 4 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
38 37

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States. The staff did not mention the Zone rule that he was only permitted to purchase a single package of cigarettes as a visitor or that he would be in violation of Panamanian law if he crossed the Panama/Canal Zone border. The General Secretary of the YMCA, W.T. Wilke, brought the issue to the attention of the manager of the offending canteen, Harry Blackburn. Wilkes approach was decidedly sympathetic to Blackburn and his staff, resembling the Executive Secretarys impression that commissary cigarettes ended up in the terminal cities only when the sales-ladies mistake such persons for employees possibly through having seen them in the Zone quite often.39 No one was punished for the Howe sale; instead, Wilke commiserated with the Blackburn, whose job was to ensure the staff limits sales according to the rules. I know it is hard to keep them at it but it MUST be done, he wrote, so to see that our merchandise does not drift into Colon. Wilke suggested a sign for the wall: lest there be any more forgetfulness, he told Blackburn, I wish you would have a large notice to the effect that carton quantities cannot be sold to anyone not a U.S. Government employee prepared and posted conspicuously where it cannot fail to be constantly seen by both salesperson and buyer.40 Issue apparently solved. It was not. Not long after Wilkes letter to Blackburn, Zone Inspector Geo V. Graff began investigating the Army and Navy YMCA canteen. He reported that Mr. Blackburn has not taken very seriously the strict instructions of the General Secretary.41 Graffs following investigation documented cigarette sales at the two Army and Navy YMCA canteens on a decidedly massive scale. Together, the canteens on average ordered 110 cases of cigarettes per month, much of the
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39 40

Zone Clubhouses not to Sell Cigs, The Panama Star and Herald, August 8, 1931.

Capitalized in the Original. W.T. Wilke to Harry Blackburn, September 18 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Memorandum for Executive Secretary, November 16 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
41

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product from the bonded warehouses. Each case contained 50 cartons and each carton contained ten packages of cigarettes. Such volume meant that these two canteens on either side of the Zone sold just over 183 cartons daily 1830 packages of cigarettes per day. In order to do so, Graff pointed out, it required that 114 packages be sold each hour, from opening at 7 a.m. until closing at 11 p.m. Put another way, these two counters sold two packages of cigarettes per minute throughout the entire 16 hour day, day in and day out. It is quite obvious, Graff wrote, that the majority are being sold to other than United States Government employees as required by the rules. It is also obvious that no such quantity as shown by the above figures could possibly be sold if the rule regarding retail sales is adhered to. The claim that these retail outlets are endeavoring to follow the rules, he concluded, is the merest farce.42 The majority of the cigarette smuggling was carried out on the Atlantic side of the Isthmus and a broader investigation was launched to examine tobacco sales for Cristobal over a three-month period in late 1931. The Cristobal Restaurant had the same restrictions on tobacco sales as the YMCA canteen but it was found that these two establishments sold more than 50 percent of the total tobacco product purchased: $25,753.18 of the $49,963.13. The restaurant alone sold more tobacco than the main Gold and Silver Roll Cristobal Commissaries combined.43 Investigators requested that Zone Customs Agents stop border-crossers carrying cigarettes so that administrators could get a better sense of international traffic. Those stopped included canal and non-canal employees, notably two employees who passed over the border together with 180 packages of cigarettes at once. The agents recorded a total of 3,280 packages of commissary cigarettes passing into the Republic over a five-day period, with 3110 of those packages
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Memorandum for Executive Secretary, October 5 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. Memorandum for Executive Secretary, November 16 1931, F 23-B-3, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
43 42

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originating from the YMCA canteen counter located a few hundred yards from the border. Provided with these striking findings, Zone Governor Harry Burgess reissued the circular that laid out Zone policy regarding limited sales.44 Many closely involved remained skeptical of the measures effectiveness: unless drastic action is taken, the Chief of the Division of Civil Affairs, C.H. Calhoun, opined, the circular will not be enforced.45 The regulatory inertia was no match for and indeed seemingly directly related to the important role that tobacco had come to play in ensuring that the commissary remained profitable. Inspector Graff claimed that Wilke admitted to him that the tobacco business is really the backbone of their business and without it they would be at a loss for earning sufficient to cover their current operating expenses.46 The Great Depression only exacerbated the role that tobacco played. The legitimate market of the commissary had shrunk, as 3,400 Silver Roll employees were laid-off between 1929 and 1933.47 Lower sales volumes increased the divisions operational costs, which begat higher prices across the board. The resulting vicious cycle, in which higher prices led to reduced sales even among the remaining employees, only drove prices higher still. As revenue dropped from $10,791,490 in 1930 to $7,313,380 in 1933, commissary managers increasingly relied on the sale of luxury items, such as silk, perfume, and tobacco. These products were crucial to the bottom line, Dimock pointed out in 1934, because they can
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H. Burgess, Sales Restrictions in Canal Zone, November 11 1931, F 23-B-3, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Memorandum to Chief, Division of Civil Affairs, October 12 1931, F 23-B3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Memorandum for Executive Secretary, October 14 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. Memorandum for Executive Secretary, November 16 1931, F 23-B-3, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP. Memorandum for Chief Clerk, July 30 1919, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 1934, RG 185, NACP; Memorandum for Executive Secretary, November 16 1931, F 23-B-3, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Memorandum for Executive Secretary, September 30 1931, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP.
47 46 45 44

Conniff, Black Labor on a White Canal : Panama, 1904-1981, 75.

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be marked up to 60 per cent or more and still be sold at a price which is attractive to the consumer. In fact, he concluded, the success of commissary operations is largely dependent upon the sale of so-called luxury goods.48 The Howe investigations nonetheless led the administration to ramp-up its enforcement strategy around the Cristobal docks. Customs agents began to stop more sailors returning from shore leave and they found a significant number of them returning to their ships with commissary cigarettes. A. Androus was the first stopped, returning to the S.S. Empress on 11 December 1931. He had a single carton of commissary cigarettes. At first, he pled ignorance to the rules. He claimed that he walked up to the YMCA canteen and made his purchase without issue, just as Howe had months earlier. After further investigation, however, Androus recanted his story and admitted that he purchased the cigarettes from a colored man milling around the rear window of the canteen one of the few places that Silver Roll employees could purchase commissary goods for cash. Customs agents stopped a number of sailors after Androus for buying commissary cigarettes from black West Indians in Cristobal. The next day, D. Avilla, a member of the crew of the S.S. Acajutla, was found with a carton of commissary Chesterfields. Avilla claimed he had purchased it from a West Indian man who had bought them from the Cristobal Restaurant. Agents detained members of the crews of the S.S. Cofalu and the S.S. Pastores for the same reason and with similar stories less than a week later. Musala Sala of the S.S. Cofalu was stopped with nine cartons of cigarettes. He acquired them, he claimed, from four or five negro men in the vicinity of the Cristobal Commissary. The list continued. Agents detained others on 25 and 26 December as well as 8 January 1932. These types of transactions were nothing new, of
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48

Dimock, Government-Operated Enterprises in the Panama Canal Zone, 103-13.

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course. Panama had complained about them since at least the end of construction. The difference now was that Zone officials considered it a problem: someone, a Captain of the Zone police concluded, is making a business of selling to seamen in violation of regulations or law.49 Years of neglect had in fact made the rule-breaking trade in Silver Roll commissary goods quite popular. The young West Indian Jeff Crooks, for instance, lived in Coln and was formally unemployed when he was apprehended entering the Cristobal dock area with ten packages of commissary cigarettes. He was in a Chinese saloon in Coln, his story went, when a white man from a visiting ship approached him to see about purchasing commissary cigarettes. Crooks arranged to meet his customer back at the saloon before he journeyed onto the Zone in order to obtain them. The undertaking was hardly complicated. He went to the Cristobal Restaurant, where an unknown man with Silver Roll privileges purchased six packages of cigarettes for him. Then Crooks borrowed another mans metal check (employees often displayed the metal check as evidence of commissary privileges) to buy four more packages. The deal would have proceeded smoothly if Crookss customer had not left the saloon to return to his ship. Customs officials apprehended Crooks as he tried to enter the dock area to deliver the cigarettes. Zone law enforcement provided Crooks with an easy choice: because he had not broken the law on the Zone, he could forfeit the commissary goods and be on his way or be turned over to Panamanian officials at the border with the cigarettes. Crooks chose the former and returned to Panama without being formally charged. Panamanian law enforcement was none the wiser.50
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Memorandum for the Auditor, January 14 1932, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 1934, RG 185, NARA. Memorandum for the Acting Auditor, 9 March 1934, F 23-B-3R, P 1, B 463, 150/47/15/4 E30GP, 1905 - 1914, RG 185, NACP.
50

49

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Non-canal employees procured commissary goods often by borrowing an employees metal check. Only days after Crookss arrest, Inspector R.G. Noe detained West Indians Joseph Ellington and L. Fox outside the Cristobal Restaurant. Noe witnessed Ellington, a Silver Roll employee of the Supply Department, purchase at least five packages of cigarettes before passing his metal check to non-employee L. Fox in a surreptitious manner. Ellington told the inspector that he thought Fox was an employee and could see no harm in allowing him to use his metal check. The Inspector remained unconvinced, however, in part because of the covert manner of the action but also because Ellington had disposed of his five packages of cigarettes without having left the vicinity of the restaurant. The first purchase was not for his consumption. Ellington had no previous violations, so he was suspended for five days due to irregularity of check and abuse of privilege. Noe gave Fox (as a non-employee) the option: he could be escorted to the boundary line with the cigarettes and turned over to the Panamanian authorities or he could forfeit the commissary goods and leave the Zone on his own accord. He chose the latter.51 Wrongful sales practices at the Silver Roll commissary were undoubtedly worth the attention of the Zone authorities. But the singular focus was a bit like concentrating on the big toe of an elephant-sized problem. Customs officials apprehended Crooks with just 10 packages of cigarettes; the Ellington case involved but 6 packages. The most any one sailor purchased prior to returning to his ship was nine cartons and most were caught with a single carton or even just a few packages. In contrast, the Balboa Gold Roll Commissary continued to sell improperly labeled (and therefore untraceable) cigarettes without issue and Panama Railroad employees still

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Memorandum for the Acting Auditor, 13 March 1934, F 23-B-3R, P 1, B 463, 150/47/15/4 E30GP, 1905 - 1914, RG 185, NACP.
51

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walked the docks occasionally to fill cigarette orders from parting sailors.52 Enforcement, then, was race-based and decidedly uneven. Zone officials continued to focus their limited regulatory energy on the sales infractions taking place at Silver Roll commissaries. The first measure was to suspend all Silver Roll purchases at the rear window of the YMCA Cristobal canteen. Sales moving forward, Executive Secretary McIlvaine wrote Wilke, ought to be limited to gold personnel who enter the Y.M.C.A.53 More sweeping regulations followed. Effective at once, the General Manager of the Canal Zone Commissary Division ordered in March 1932, no individual sale of more than five plugs of tobacco or five packages of cigarettes may be made to any silver employee.54 These measures, however, went largely enforced. A Zone inspector informed the Chief Clerk less than two months later that the rear window remained in operation nine hours per day for the convenience of the silver class of trade.55 Customs officials apprehended a merchant seaman who returned to his ship with 12 cartons of cigarettes a year and a half later in September 1933. The sailor acquired the cigarettes from the rear window of the YMCA canteen, one at a time, by negroes whom he met at the window. McIlvaine wrote to Wilke again. Setting aside the fact that the rear window was ordered closed long ago, McIlvaine requested that Wilke put the required Zone-wide restrictions into effect: so far as our records show, he wrote, the Army
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Roy R. Watson to General Manager, Commissary Division, February 10 1932, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP; Shakeup on Piers may result from Cristobal Trial, The Panama Star and Herald, October 23, 1935; 76 Receive Retirement Certificates, The Panama Canal Spillway, IV, 33, February 4, 1966, 1. C.A. McIlvaine to W.T. Wilke, January 26 1932, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 1934, RG 185, NACP A.W. Goulet to Commissary Managers, March 19 1932, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NARA. Memorandum for the Chief Clerk, March 15 1932, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 - 1934, RG 185, NACP
55 53 52

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and Navy Y.M.C.A. has not established any limitation on the quantity of tobacco goods that may be sold to United States Government employees.56 The issue of lax regulation partly motivated Panamas President, Harmodio Arias Madrid, to make a surprise visit to the White House the following month. Two issues deeply connected in the minds of Panamanians dominated the discussion with President Franklin Roosevelt: the repatriation of thousands of ex-Silver Roll employees who languished in poverty in Panamas terminal cities and the unrelenting damage caused by the Canal Zone Commissary. Arias came armed with recent sales figures showing that Zone cigarette consumption was five times that of the continental United States. Such figures, he argued, illustrated anything but Roosevelts recently articulated Good Neighbor Policy. There is no other country in which good neighborliness is as important as ours, Ricardo Alfaro wrote from Washington in preparation of the meeting, and I dont believe it is supposed to consist of strangling us with the gold and the power of the United States.57 The meeting was a success from Panamas perspective and led to a joint communiqu in which the United States admitted that Panama had the right to take full commercial advantage of its geographic position. More would be done from within the Zone, Arias was assured, to quell illegal commissary goods from entering the Republic.58 The Zone took preemptive action just as the Washington talks got underway, no doubt to demonstrate the seriousness with which the Zone administration approached the problem of smuggling. Arias requested in Washington that the Zone close all Silver Roll Commissary
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C.A. McIlvaine to W.T. Wilke, September 5 1933, F 23-B-3/C, P 1, B 462, 150/47/15/4 E30GP, 1914 1934, RG 185, NACP J.D. Arosemena to R. Alfaro, August 13 1933, 2.15.1.28, ARJA; R. Alfaro to J.D. Arosemena, August 13 1933, 2.15.1.28, ARJA. For Harmodio Arias Madrids visit, see Conniff, Panama and the United States : The Forced Alliance, 90; Conniff, Black Labor on a White Canal : Panama, 1904-1981, 78; Major, Prize Possession : The United States and the Panama Canal, 1903-1979, 230-32.
58 57 56

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outlets. The Zone administration instead closed down the locations considered the worst offenders. The rear window at the YMCA canteen in Cristobal was the second Silver Roll commissary outlet closed for good. Many Panamanian onlookers applauded the tougher restrictions that specifically linked black West Indians to the contraband trade. Another sales window has been closed to silver employees of the Panama Canal and Panama Railroad Company on this side of the isthmus, the Star and Herald favorably reported, a signal that the local revenue officers have succeeded in their efforts to curb smuggling of cigarettes and other commodities into the republic.59 The impact of these racially specific closures, however, was not as clear-cut as many thought. Panamanian and Canal Zone authorities both admitted that commissary smuggling was increasing constantly over the next few years.60 The more direct result of this racially specific regulation was to increase the generalized suspicion that surrounded black West Indians on either side of the border. Racially specific surveillance and regulation reaffirmed the logic of the second-class fate of West Indians on the Zone.61 In Panama, where West Indians had become the default anti-national whipping posts during the difficult depression years, the intensification of Zone regulatory efforts gave credence to the nationalist rhetoric that deemed West Indians incorrigible defrauders of the Panamanian state. Race-based Zone enforcement, then, not only signaled novel cross-border cooperation when it came to the commissary issue. It also signaled a clear cross-border consensus that West Indians were problematic smugglers. Put another way: in an effort to find common ground with Panama during a stateside push for increased Isthmian cooperation, Zone officials shifted the
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59 60 61

Army-Navy YMCA Stop Silver Sales, The Panama Star and Herald, October 6, 1933. Shakeup on Piers may result from Cristobal Trial, The Panama Star and Herald, October 23, 1935.

Memorandum to Governor, April 17 1941, F 23-C-9, P 10, B 1009, 150/48/25/1-2 UD-UP/1935-1General Correspondence REC RDS, RG 185, NACP.

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weight of the seemingly intractable problem of commissary contraband onto the shoulders of a highly vulnerable portion of its own workforce. And the stopgap measure, which did nothing to fundamentally alter the commissary system, had the intended effect.

***** This chapter has charted the origins of the contraband-facilitating practices of the Commissary Division, highlighting the significant disconnect between the principled rules that codified Zone conduct and the everyday regulatory practices that actually shaped the functioning of the North American colony. I have argued that lax regulation can be traced to the structural position of the Commissary Division within the broader Zone organization. The original government agency/government corporation distinction enabled commissary profits to remain on the Zone for local initiatives and priorities, stoking a fundamental tension between the not-forprofit objectives of the Commissary Division and the reality that a portion of the administrations overall discretionary funds were linked to its profits. Management privileged the latter function with the full support of the administration and many of the residents on the Zone. The Commissary Division quickly came to resemble a private commercial venture that operated well outside its limited mandate as a supply store. The national market of Panama proved a consistent temptation for the commercially motivated commissary management, with higher sales volumes begetting higher profit margins no matter the employment status of the consumer. The Panama/Canal Zone border served as a perfect tool for this end: it offered protection from the laws of the Republic while remaining so fluid as to offer little resistance to those interested in the smuggling trade. Punishment for employees if doled out at all was often little more than a reminder that the admittedly

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cumbersome rules needed to be followed. Non-employees possessing commissary items usually had the goods confiscated before they were escorted from U.S. territory. Panamanian law enforcement was usually none the wiser. The commissary contraband trade, then, was a lowstakes affair for those involved on the U.S.-occupied Canal Zone. This was not the case for the Republic, however. Everyday smuggling punished law-abiding merchants, challenged the legitimacy of state authority, and created opportunities for official graft. It engendered, in effect, a culture of permissive illegality in Panama that spanned well past the use of commissary goods. The racially inflected crackdown of the early 1930s highlighted the possibilities of Isthmian cooperation and ultimately fostered an environment that led to the Hull-Alfaro Treaty of 1936. Panamanians found the agreement much more satisfactory than the aborted treaty of ten years before. It eliminated Panamas protectorate status and codified the Zones more vigorous position to stop commissary contraband flows from entering the Republic. But, as this chapter has demonstrated, high-minded principles often foundered on the rocks of everyday regulatory practices. This was especially the case on the Zone, where administrators and residents alike felt betrayed by what they saw as Washingtons indifference to their plight during negotiations. The defensive Zone posture remained after the treaty excitement died down and ensured a return largely to the status quo: new regulatory measures went ignored in practice and commissary contraband continued to flow into the terminal cities of the Republic.62 The Canal Zone Commissary remained a significant issue for the Panamanian state and its merchants through much of the latter half of the twentieth century. It was a point of contention nearly twenty years after the Hull-Alfaro Treaty was finalized, for instance, when
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Thomas M. Leonard, "The Commissary Issue in American-Panamanian Relations 1900-1936," The Americas 30, no. 1 (1973): 99-101; Major, Prize Possession : The United States and the Panama Canal, 1903-1979, 239-49.
62

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Panamanian President Jos Antonio Remn negotiated another new treaty with the United States.63 The 1955 treaty did not solve the problem either. Eight years later, in 1963, political scientist Mercer Tate claimed that a private tourist or businessman visiting the Canal Zone today will be told that he may not make purchases of goods in the Zone and will be greeted by numerous and clear signs at the doors to the Zone department stores that he may not enter unless he is an authorized person. But no questions are asked if he does so anyhow.64 Thomas V. Greer reported similar findings 67 years after the Canal Zone Commissary first opened its doors. Little of significance is done to stop the smuggling. he wrote in 1972, and it is often alleged that the Panamanian police are active middlemen in this illicit commerce.65 Panamanian functionaries no doubt benefitted from the contraband trade. And, while it may not have been the most lucrative illicit trade, the flow proved highly relevant for illicit state formation. Indeed, the continuous flows of commissary contraband through the first half of the twentieth century helped create an ideal environment in the Republic for more lucrative transnational contraband flows in the globalizing decades after World War II. It is a subject that I explore in more detail in the epilogue.

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On the 1955 treaty, see Larry LaRae Pippen, The Remn Era: An Analysis of a Decade of Events in Panama 1947-1957 (Stanford, California: Institute of Hispanic American and Luso-Brazilian Studies, Stanford University, 1964), 107-20.
64 65 63

Mercer Tate, "The Panama Canal and Political Partnership," Journal of Politics 25(1963): 126.

Thomas V. Greer, "The Mercantile Potpourri Called Panama," Journal of Interamerican Studies and World Affairs 14, no. 3 (1972): 357. See also, for instance, Cantinas clandestinas, Ms 1, no. 39, 7 March 1977, 6.

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Epilogue

The Borderlands Go Global During the Cold War

The local dynamics that characterized the Panamanian borderlands in the first half of the twentieth century went global in the postwar period. The Cold War, the establishment of a truly global U.S.-inspired drug prohibition regime, the rise of financial globalization, the revolutionary strife in Central America, and the explosive growth of neighboring Colombias cocaine industry all provided crucial opportunities for Panama to reemerge as a site of international illicit traffic. And, while Isthmian geography undoubtedly played a role in this development, so too did Panamas established illicit infrastructure and its permissive culture of illegality that blossomed during its decades as a protectorate of the United States. This epilogue ultimately concludes that local authorities drew on generations of cumulative experience as administrators of an insubordinate colonial outpost to exploit the often-lucrative illicit opportunities that emerged from the political cleavages of the Cold War era imaginatively playing nationalism and antiAmerican hostility off and against the lopsided and sometimes incompatible U.S. projects of fighting both international communism and international crime.

Shifting Border Dynamics, 1939-1955 The ratification of the Hull-Alfaro Treaty in 1939 marked the end of Panamas protectorate status but the leisure dynamic of the borderlands remained decidedly intact through the Second World War. Coln, we understood, was noisy, rough, and booming, one of the

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recently arrived U.S. soldiers wrote at the time. Cristobal was sedate.1 The war drew another wave of entrepreneurial migrants to Panama: merchants interested in catering to the demands of the 68,000 troops stationed on the Isthmus, the 10,000 U.S. warships that passed through the canal, and the 22,000 new migrant workers from Central America and the West Indies.2 Many straddled the border between legal and illegal activities. Romanian-born U.S. citizen William Liebowitz (aka William Liebow), for instance, first visited Panama as a serviceman during World War One before returning in 1931 after a failed attempt in New Yorks slot-machine racket. Liebow opened a laundry service in Panama a perfect set-up, according to highly suspicious Canal Zone officials, to become engaged in drug traffic on a large scale. Sailors from passing South American ships delivered dirty linen to Liebow without having to pass through customs. The bags of laundry, officials believed, contained narcotics that Liebow sold to enlisted men stationed on the Canal Zone. The trade had proven quite profitable for him, one report concluded, as Liebow and his wife had much more money than could be made in the laundry business.3 William Liebow was part of Panamas most recent cohort of merchant sojourners getting rich during a Panamanian boom and fleeing at the first sign of a bust. Liebow initially parlayed his laundry wealth into other local ventures, notably the Hotel Internacional, but turned his full attention to hotels and nightclubs in Miami Beach and Cuba shortly after the war ended.4 Panama
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Richard J. Theobald, "The Maiden Voyage of LST-169," The New Yorker, December 25 1943, 55; Jan Surez, La poblacin del istmo de Panam del siglo XVI al XX, 22. Conniff, Panama and the United States : the Forced Alliance, 93-94; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 214. Dudley G. Dwyre to Cordell Hull, 13 May 1938, DF 611.19244/7, B 3098, RG 59, NACP; Dudley G. Dwyre to Cordell Hull, 2 September 1938, DF 611.19244/7, B 3098 RG 59, NACP.! 2 Years Work for Acts, Gals in the Offing The Billboard: the Worlds Foremost Amusement Weekly, 13 March 1948; Miamian Planning to Construct Large Tourist Hotel in Havana Miami Daily News, 23 March 1947; William Liebow Dies, Beach Hotel Owner Miami Daily News, 9 January 1957.!
& # 2 1

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became less commercially attractive for a few reasons. The postwar drawdown, for one, led to a sharp decline in the number of canal-related workers and U.S. soldiers. More troubling for opportunistic merchants like Liebow, however, was the deepening hostility on the Isthmus captured by the failed treaty negotiation of 1947. Panamanian and North American officials once again ran up against popular nationalist opposition to the continued use of Panamanian territory for North American defense sites. The successful protest movement had two immediate results: fewer North American military bases on Panamanian soil and a more pronounced postwar recession than many had expected.5 Panamanian beer sales illustrate the declining leisure dynamic and the hardening Panama/Canal Zone border characteristic of worsening cross-border relations. The Canal Zone population accounted for ten percent of all Panamanian beer sales in 1952. Four years later, it was five percent and only three percent by 1962. The Canal Zone accounted for just 1.6 percent of all beer sales by 1964.6 Panama made an effort to diversify its economy during this period in order to become less reliant on the Canal Zone. One of its first major goals was to develop the Republic as a hub for international traffic apart from the U.S.-controlled canal. The international airport at Tocumen opened in mid-1947 the same year, coincidentally, that the United States began waging a secret war on illicit cocaine that itself had only just emerged as a Pan-American trade. Panamas airport provides an example of local elite engagement with this novel

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Larry LaRae Pippen, The Remn era: an Analysis of a Decade of Events in Panama 1947-1957 (Stanford, California: Institute of Hispanic American and Luso-Brazilian Studies, Stanford University, 1964), 9-21; Conniff, Panama and the United States : the Forced Alliance, 101-07; John Biesanz, "The Economy of Panama," InterAmerican Economic Affairs VI, no. Summer (1952); Orlando J. Prez, "Panama: Nationalism and the Challenge to Canal Security," in Latin America during World War II, ed. Thomas M. Leonard and John F. Bratzel (Lanham, Maryland: Rowman & Littlefield Publishers, 2007).
6 5

Gandsegui, "La concentracin del poder econmico en Panam," 129, 31.

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transnational contraband flow.7 That very year, according to the sensational headlines of La Hora, cocaine smuggling gangs of international renown arrived to do business with prominent merchants from this locality.8 The National Police ultimately arrested two Panamanians in relation to this purported cosmopolitan crime syndicate. The names, Pedro Juan Ayala and Ovidio Busquez Amengor, were published without comment. North American authorities, however, investigated further. They discovered that Ayala (44, single, brown) had a 20-year-long rap sheet that included robbery, vagrancy, and disorderly conduct. The police had never booked him before on drug charges. Amengor (19, single, white) had previous run-ins with law enforcement, too, including robbery, stealing fruit, and selling marijuana.9 Neither Amengor nor Ayala fit the bill of La Horas international smugglers. In fact, it seemed highly improbable that either had anything to do with cocaine traffic above the level of the Panamanian street. Not so for the owner of La Hora newspaper, Roberto Arias, and his brother, Antonio the sons of President Harmodio Arias and the nephews of President Arnulfo Arias. Antonio Arias, who reportedly went by the suspiciously sensationalistic nickname the Druggist, served as the Commissioner of Civil Aviation at Panamas new airport and took advantage of the new illicit opportunities that such a position afforded. His cocaine and gold smuggling operation involved his uncle (who served as President from 1949 to 1951), the airport administrator Pastor
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J. Ray Olivera, Memorandum to the Acting District Supervisor, 15 January 1951, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP; Gootenberg, "The 'Pre-Colombian' Era of Drug Trafficking in the Americas: Cocaine, 1945-1965," 134-36; Gootenberg, Andean Cocaine : the Making of a Global Drug, 246, 73-75. Se intensifica el contrabando de drogas hericas [sic] en Panam, La Hora, April 3, 1947; El contrabando de drogas herocas [sic] lo realiza una banda internacional, La Hora, April 4, 1947; Siguen las detenciones por el contrabando de cocaina, La Hora, April 10, 1947. For another example, see Gran trfico hay aqu de cocaina, El Mercurio, July 28, 1950, 1. V. Lansing Collins, Jr. to George Marshall, 31 May 1947, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP.
9 8 7

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Ponce, as well as a number of customs officials and police officers. Antonio Arias and Pastor Ponce were forced to resign and leave the country after the political opposition uncovered the airport smuggling operation. No one, however, was charged.10 Roberto Arias, on the other hand, remained in Panama but traveled often on a diplomatic passport. North American and British intelligence separately concluded that Arias used his diplomatic immunity for smuggling purposes. The Federal Bureau of Investigation (FBI) alleged in 1954 that Arias frequently traveled from Panama to New York via Mexico, delivering cocaine shipments to the east coast of the United States and returning to Panama with arms and ammunitions. FBI agents worried that Arias was involved with communist plotters on the Isthmus. British Intelligence saw his drug running in terms of personal finance. Although he has built around himself a halo of wealth his financial status is pretty well shaken, a British intelligence agent claimed. Arias stockpiled arms and ammunition in order to pursue the political intrigues in Panama of the Arias family. One could never be sure when a coup opportunity might arise, the owner of La Hora reportedly told a source, so he would like to lay in a store of arms instead of trying to obtain them at the last minute.11 The political enemy of the Arias family was first commandant of the National Police, Jos Antonio Remn Cantera. Remn was one of the earliest police officers recruited for training in the United States after it had abandoned the strategy of North American police experts serving in Panama. The National Police had become an increasingly powerful and independent political force under his tutelage. It had transitioned from a tool of the political elite in the 1930s to a
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10 11

Pippen, The Remn era: an Analysis of a Decade of Events in Panama 1947-1957, 65-66.

L.P.S. to Lloyd Thomas, 1 April 1955, FO 371/114298, TNA; enclosure in H. Beeley to M.G.C. Man Esq., 24 February 1955, FO 371/114298, TNA; J. Edgar Hoover to Dennis A. Flinn, 18 May 1954, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP.

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professionalizing institution courted by those same elite in the politically anarchic years after World War Two.12 Indeed, the staunchly anti-communist powerbroker oversaw five different presidents in the four years prior to 1952, forever enlarging the police force, improving salaries, acquiring additional funding for arms and ammunitions, and ensuring political deference from civilian leaders in the process.13 Remn himself became president in 1952, with the enthusiastic backing of a United States. Concerned about communist infiltrators exploiting popular hostility towards the United States, the State Department and other U.S. agencies immediately increased developmental aid and technical assistance while supporting Remn in his bid to convert the National Police into a militarized National Guard in 1953. Thereafter, the United States provided increased military assistance and military training for officers at the School of the Americas on the Canal Zone.14 Remn served but three years as president before he was gunned down in a hail of machine-gun fire at a local racetrack. Much speculation surrounded his death at the time: an international communist plot, a power play by political enemies, a taxpayers revolt (because his administration began to collect taxes impartially), or a business associates attempt to eliminate a silent partner. All emerged as possible motivations for the death of a man who not only amassed a multimillion-dollar personal fortune but also turned the National Police into a credible route to wealth and power that rivaled the presidency.15 Many, though, ultimately came to believe that his
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12 13

Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 57-80.

Pippen, The Remn era: an Analysis of a Decade of Events in Panama 1947-1957, 8, 20-21, 31, 90; Pizzurno Gels and Andrs Araz, Estudios sobre el Panam republicano (1903-1989), 360. Conniff, Panama and the United States : the Forced Alliance, 105-09; Steve C. Ropp, Panamanian Politics : from Guarded Nation to National Guard, Politics in Latin America (New York, N.Y.: Praeger ; Hoover Institution Press, 1982), 25-29. Pippen, The Remn era: an Analysis of a Decade of Events in Panama 1947-1957, 8, 20-21, 31, 90; Pizzurno Gels and Andrs Araz, Estudios sobre el Panam republicano (1903-1989), 360; Pearcy, We Answer only to God : Politics and the Military in Panama, 1903-1947, 71.
15 14

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death was related to the international drug trade. Some speculated that he paid the ultimate price for charging unreasonably high unofficial taxes on illicit product crossing the Isthmus. Others believed that he might have inadvertently stepped into the crosshairs of warring drug factions in pursuit of a monopoly over the Panama route. Still others suspected that a powerful smuggler quite possibly Charles Lucky Luciano, who allegedly considered setting up shop in Panama after being deported from the United States and Cuba had Remn assassinated because of his uncompromising allegiance to the North American goal of eradicating transnational drug flows.16 The murder was never persuasively solved. From the evidence that does exist, however, it seems clear that Remns assassins did not target him for his unwavering anti-drug policies (indeed, even a so-called political enemy like Roberto Arias smuggled drugs on a diplomatic passport). Remn himself had alleged personal ties to the drug trade that dated back to his earliest days as an officer in Coln, where he also invested in cantinas, gambling establishments, and brothels notorious for drug traffic. These connections continued into his presidency. Not long before his death, for instance, Puerto Rican customs officials discovered illegal drugs in the luggage of his wife on one of her frequent diplomatic trips.17 It was reportedly not an amount that suggested personal consumption. Federal Bureau of Narcotics (FBN) agents, moreover, suspected that some of Remns closest allies in the National Police profited from transnational illicit trade. Agents reported that Remns handpicked successor, Bolvar Vallarino, served as protector for a far-flung contraband network that moved gold, platinum, emeralds, and cocaine from Peru and Colombia to Cuba and
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H. Beeley to M.G.C. Man Esq., 24 February 1955, FO 371/114298, TNA; Pizzurno Gels and Andrs Araz, Estudios sobre el Panam republicano (1903-1989), 400-04; Pippen, The Remn era: an Analysis of a Decade of Events in Panama 1947-1957, 121-44 On Luciano, see Senz Rovner, The Cuban Connection : Drug Trafficking, Smuggling, and Gambling in Cuba from the 1920s to the Revolution, 65-73.
17 16

Pippen, The Remn era: an Analysis of a Decade of Events in Panama 1947-1957, 8, 20-21, 31, 90, 128.

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the United States through Panama.18 Vallarino was, as a political scientist put it, the embodiment of the military officer as entrepreneur.19 And, as borderland opportunities withered in postwar Panama, state-based entrepreneurs and other merchant elite increasingly saw lucrative possibilities for Panama to serve as an illicit route of transit that paralleled the U.S.controlled canal. The undocumented norms and practices long established for conducting business in Panamas borderlands had, in effect, gone global.

A popular Coln bar during World War Two, 1944

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The FBN source has Vallarinos first name as Carlos, though it seems certain that they are referring to atthe-time Third Commandant Bolvar Vallarino. See M.L. Harney, Information from a Confidential Source at Fort Amador, Canal Zone, 28 April 1950, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP; James C. Ryan to Garland H. Williams, 3 September 1949, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP; E. H. Burger to the Provost Marshal General, 11 April 1950, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP; J. Ray Olivera, Memorandum to the Acting District Supervisor, 15 January 1951, Subject File of Bureau of Narcotics and Dangerous Drugs, 1916-1970, FRC Box 161 F 0660 Panama - Thru Dec. 1962, 230/39/30/5, RG 170, NACP. Ropp, Panamanian Politics : from Guarded Nation to National Guard, 29. For more on the Vallarino family, see Gandsegui, "La concentracin del poder econmico en Panam," 160-61.
19 18

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Power and the Path towards True Sovereignty, 1955-1979 Remn had the full support of the United States because he seemed almost uniquely capable of managing Panamas increasingly explosive sociopolitical environment. Panamas traditional elite regained political control of the country after his death, just in time to deal with waves of political unrest fueled by Egypts seizure of the Suez Canal in 1956, Vice-President Richard Nixons violence-provoking 1958 tour of Latin America, and the 1959 Cuban Revolution.20 The same month that Venezuelans attacked Nixons motorcade in Caracas, May of 1958, Panamanian students launched Operation Sovereignty, planting some 60 Panamanian flags on U.S.-occupied territory, before clashing with Panamas National Guard.21 Three separate Cuban-inspired guerrilla movements emerged on the Isthmus within the year (one, interestingly enough, led by suspected drug trafficker, Roberto Arias) and Coln labor leaders organized a Hunger and Desperation March. The march, calling for higher wages, rent and price controls, land reform, and unemployment insurance, mobilized thousands and brought the terminal cities to a grinding halt for days before university students launched another offensive against the Canal Zone. Panama tilted towards crisis.22 The United States scrambled to contain the growing unrest in a country (and indeed a region) that it had long taken for granted. The Kennedy Administration launched the developmentalist Alliance for Progress in 1961 and Panama received early and particularly
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Details regarding Nixons trip to Venezuela and the Cuban Revolution can be found in Alan L. McPherson, Yankee No! : Anti-Americanism in U.S.-Latin American Relations (Cambridge, Mass.: Harvard University Press, 2003), 9-76. See also LaFeber, The Panama Canal : the Crisis in Historical Perspective, 121-24. Panamanian students have long been associated with the development of national consciousness. See, for instance, Victor Avila, Panam: luchas sociales y afirmacin nacional (Panama: Centro de Estudios Latinoamericanos "Justo Arosemena", 1998); Rafael Gonzlez, Universidad de Panam e independencia nacional (Panama City: n.p., 1994). Conniff, Panama and the United States : the Forced Alliance, 110-15; LaFeber, The Panama Canal : the Crisis in Historical Perspective, 124-31; McPherson, Yankee No! : Anti-Americanism in U.S.-Latin American Relations, 90-92.
22 21 20

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special attention.23 This had less to do with the canal its postwar strategic and economic importance waning and more to do with the belief that Isthmian stability proved fundamental for North American security goals across the hemisphere.24 The Canal Zone, after all, had become home to the Defense Departments Southern Command, the headquarters at which the United States gathered extensive regional intelligence, centered its unofficial inter-American defense network, and trained tens of thousands of Latin American military officers in jungle warfare and counterinsurgency tactics.25 The ten-mile-wide strip of U.S.-occupied territory had come to not only pierce the heart of Panama but also the Americas. The use of Panama as a military staging area for U.S. regional security fell outside established treaties and goaded Panamanians interested in forcing the issue of sovereignty over the Canal Zone. The opportunity arose on 9 January 1964, when Canal Zone residents refused to honor a recent agreement that the flags of both Panama and the United States fly at civilian institutions on the Canal Zone. Panamanian students marched onto the Canal Zone with a Panamanian flag. Zone residents blocked the flagpole. A minor scuffle ensued. News of flag violence spread quickly throughout Panama City and 30,000 Panamanians exploded onto the streets. Most charged down 4th of July Avenue that bordered the Canal Zone (renamed shortly thereafter Avenida de los Mrtires or Avenue of the Martyrs). The overwhelmed Zone police quickly turned Zone security over to the military, which began returning sniper fire from buildings across the line. The violent unrest lasted four days, the rage directed at North American
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On the Alliance for Progress, see Jeffrey F. Taffet, Foreign Aid as Foreign Policy : the Alliance for Progress in Latin America (New York: Routledge, 2007). LaFeber, The Panama Canal : the Crisis in Historical Perspective, 43; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 212-63. Conniff, Panama and the United States : the Forced Alliance, 109-10, 50; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 338.
25 24 23

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businesses, symbols, and U.S. citizens unprecedented.26 The protests continued unabated, turning violent in the terminal cities a number of times throughout 1965 and 1966. Panamas traditionally cohesive urban elite, moreover, fractured over the direction of reform efforts related to proposed tax reforms linked to Alliance for Progress aid. The resulting infighting created a political vacuum and heightened the crisis-like atmosphere in the run up to the 1968 presidential election.27 The National Guard seized control of the state shortly after the election and the military reestablished order almost immediately, shutting down the University of Panama, for instance, and imprisoning some 1600 known political activists. The long-term governing approach of the populist General Omar Torrijos, however, who emerged as the Maximum Leader of the Panamanian Revolution, was to gain popular support from labor and student movements alienated from politics by the traditional elite. Torrijos toured the countryside in military fatigues, cigar in hand, winning the admiration of many Panamanians (and foreign observers) through a combination of inclusive policy, cooptation, repression, personality, and nationalist rhetoric that centered on Panamas troubled relationship with the United States. I do not want to enter into history, he famously said. I want to enter into the Canal Zone.28 (And, of course, he

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For a gendered reading of events, see Alan L. McPherson, "Rioting for Dignity: Masculinity, National Identity and Anti-US Resistance in Panama," Gender & History 19, no. 2 (2007). My account was cobbled together from Conniff, Panama and the United States : the Forced Alliance, 120-21; Gandsegui, "La concentracin del poder econmico en Panam," 126-31; LaFeber, The Panama Canal : the Crisis in Historical Perspective, 135-40; Roberto N. Mndez, Panam, 9 de enero: qu pas y por qu (Panama City: Universidad de Panam, 1999); McPherson, Yankee No! : Anti-Americanism in U.S.-Latin American Relations, 94-99.
27 28 26

Soler, "Panam, nacin y oligarqua, 1925-1975," 99-100.

For an example of the type of international support that Torrijos garnered, see Graham Greene, Getting to Know the General: the Story of an Involvement (Vintage Classics, 2000). See also Carlos Guevara Mann, Panamanian Militarism : a Historical Interpretation (Athens: Ohio University Center for International Studies, 1996), 100-06; Conniff, Panama and the United States : the Forced Alliance, 123-39; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 329-57.

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did, negotiating the Torrijos-Carter Treaties of 1977 that dissolved the Canal Zone in 1979 and began the preparations for the handover of the canal to Panama in 1999.29) Torrijos effectively harnessed Panamanian nationalism but he developed his real political base through concrete everyday measures, notably the massive expansion of the state. Panamas public sector employed 11 percent of the nations workforce in 1963, 13 percent in 1970, and 25 percent in 1979. The Panamanian state employed 60,000 people at the start of Torrijoss tenure and 107,000 near the time of his death in 1981. The National Guard grew significantly during the period as well, from 5000 enlisted and 465 officers in 1970 to a force of 8000 soldiers and 700 officers only eight years later.30 Torrijos had, in effect, created a popular bureaucracy that owed its livelihood and primary allegiance to the National Guard.31 He funded much of this growth through Panamas ballooning international banking sector. Seeking to take advantage of rapidly expanding global trade in the early 1970s, Torrijoss finance minister implemented generous corporate tax policies and numbered bank accounts that privileged secrecy and anonymity above all. It worked. Panama went from having 12 banks prior to 1968 to more than 100 by the mid 1970s, with total assets increasing from $854 million in 1970 to $49 billion in 1982 (a twenty-five-fold increase after accounting for the periods high inflation). The growing private stake in Panamanian stability enabled Torrijos to obtain preferential access to foreign
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Conniff, Panama and the United States : the Forced Alliance, 128-39; Major, Prize Possession : the United States and the Panama Canal, 1903-1979, 329-57. Ropp, "Explaining the Long-Term Maintenance of a Military Regime: Panama before the U.S. Invasion," 217-18; Ropp, Panamanian Politics : from Guarded Nation to National Guard, 45-46. The term popular bureaucracy originally comes from Margarita Herrera, Marta Arce, and Mayra Castillo, Los sectores populares y el proletariado (Panama City: Centro de Estudios y Accin Social, 1979), 46. On popular participation under the Torrijos regime, see H. Gandsegui, Marco A., La democracia en Panam, 2nd ed. (Panama City: CELA, 1998), 41-58; Guevara Mann, Panamanian Militarism : a Historical Interpretation, 114-42; George Priestley, Military Government and Popular Participation in Panama : the Torrijos Regime, 1968-75 (Boulder: Westview Press, 1986); Ropp, Panamanian Politics : from Guarded Nation to National Guard, 55-74. For a critical view, see R. M. Koster and Guillermo Snchez Borbn, In the Time of the Tyrants : Panama, 1968-1989 (New York: W.W. Norton, 1990), 168-87.
31 30 29

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capital and the share of Panamas loans derived from private institutions (as opposed to official international sources, such as the World Bank) went from 36 percent in 1970 to 61 percent ten years later. Panama was less dependent on the United States than ever before. For all Panamas independence, however, the anti-communist general sought to assure the United States that he was ultimately a reliable partner. In 1970, for instance, Torrijos allowed the Bureau of Narcotics and Dangerous Drugs (BNDD) to open an office on the Canal Zone under the guise that its agents would work with Panama to suppress transnational drug traffic. BNDD agents trained as police officers and no doubt emboldened by President Richard Nixon declaring a war on drugs in 1971 went against the cooperative spirit that North American diplomats had cultivated with the Torrijos regime almost immediately. They began to investigate Panamanian state officials without informing either Panamanian or Canal Zone officials. Their first target was Joaqun Him Gonzlez, the chief of Panamanian air traffic controllers and the deputy chief of Panamas civil aeronautics. The agents collected evidence proving that Him Gonzlez used his posts to facilitate the passage of heroin and cocaine through Tocumen International Airport. They then proceeded to set a borderland trap for his arrest on the Canal Zone. Seven years after the four-day-long sovereignty riots, and less than three years since the National Guard forcibly reestablished Panamanian order, BDNN agents lured Him Gonzlez just over the border onto the Canal Zone under the pretext of participating in a baseball game. The Zone police then chased down a high-ranking Panamanian official as he literally tried to run back across the border into Panama. The response was immediate on both sides of the border. Torrijos immediately took to the airwaves to address a population wholly preoccupied with Panamanian sovereignty. He demanded the release of the kidnapped Panamanian official and threatened that his soldiers

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might just enter the Canal Zone to free Him Gonzlez themselves. He then ordered all BNDD activities suspended on the Isthmus and expelled the 120 Peace Corps volunteers working in Panama. Officials from the State Department and the Department of Defense seemed almost as upset as Torrijos a birth pang no doubt of the U.S. national security states increasingly blurred boundary between military and policing matters.32 This single arrest, more strategically minded U.S. officials pointed out, could easily upset Panamas precarious stability and potentially threaten North American strategic interests in Panama and Latin America. The damage, though, had been done. It was too late for the United States to back down. The United States tried and convicted the Panamanian national in a Texas courtroom. The Him Gonzlez case, however, ultimately strengthened the Torrijos regime vis--vis the United States. It not only provided Torrijos an early platform to demonstrate his nationalist bona fides at home but underscored the considerable political cleavages existing between the international criminal justice initiatives of agencies like the BDNN and the broader Cold War era concerns of the State and Defense Departments. North American officials took great pains to assure Panamanian authorities that law enforcement cooperation and collaboration remained the order of the day. There would, in effect, not be another case like that of Him Gonzlez a tacit acknowledgement from U.S. officials that geopolitical aspects of the U.S.-Panama relationship overrode the prerogatives of battling illicit trade.33

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See Peter Andreas and Richard Price, "From War-Fighting to Crime-Fighting: transforming the American National Security State," International Studies Review 3, no. 3 (2001). U.S. Congress, Senate, Subcommittee on Terrorism, Narcotics and International Communications of the Senate Foreign Relations Committee, Drugs, Law Enforcement and Foreign Policy: The Cartel, Haiti, and Central America, P 4, 100th Congress, 2d sess., 1988, 2-3; John Dinges, Our Man in Panama : the Shrewd Rise and Brutal Fall of Manuel Noriega, Rev. ed. (New York: Times Books/Random House, 1991), 54-59, 69; Frederick Kempe, Divorcing the Dictator : America's Bungled Affair with Noriega (New York: G.P. Putnam's Sons, 1990), 75-76.
33 32

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The Torrijos regime expanded Panamas role as a parallel route for illicit traffic, helping to turn National Guard officers (almost all of who came from humble origins) into a new branch of the commercial elite.34 Several methods for generating unofficial revenue involved the Coln Free Trade Zone. Colns free zone the second largest in the world responsible for handling seven percent of all Latin American imports by 1979 had facilitated contraband flow since its opening in 1948. The National Guard continued this tradition, using the zone as a launching pad for smuggling liquor, appliances, and other products into neighboring Colombia and Venezuela.35 The guard also increased services offered to include activities like defrauding industrializing countries such as Argentina and Brazil. National Guard officers would provide official documentation to foreign industrialists stating that highly overvalued product from their factories had arrived in Coln and continued on to a third country destination. The goods had not. The National Guard sold the industrial product off to local merchants for a discount evading Panamanian duties in the process and the foreign industrialists collected outsized subsidies at home often worth more than the product itself.36 The increasing number of armed conflicts nearby also provided contraband opportunities for the National Guard, primarily as middlemen for guns passing from places like Cuba, Miami, and Venezuela into Nicaragua, El Salvador, and Colombia. Torrijos himself first established this clandestine arms network in genuine, noncommercial support for the Sandinista guerrilla force battling the Somoza dictatorship in Nicaragua. Commerce, however, trumped solidarity in the
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#& 35

Ropp, Panamanian Politics : from Guarded Nation to National Guard, 46.

For an illustration of the prevalence and open state complicity in contraband operations, see J.B. Clemmons, Jr., Entry of Small Vessels Suspected of Smuggling Cargo out of Colombia, 21 June 1959, General Correspondence REC RDS, B 1010, F 23-C-11, P 2, Jan 1, 1935, 150/48/25/1-2 UD-UP/1935-1, RG 185, NACP. Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 275-78; Ropp, "Explaining the Long-Term Maintenance of a Military Regime: Panama before the U.S. Invasion," 31-32.
36

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end. Members of the National Guard set up a clandestine showroom in the Panama City neighborhood of El Cangrejo, where they showcased increasingly more sophisticated weaponry from European arms markets to potential clients. The National Guard middlemen had begun to sell wares as disparate as American M16s and Chinese-built rocket launchers, building on the infrastructure first developed to run guns into Nicaragua into a lucrative regional operation.37 Payment for clandestine weapon purchases was inevitably drawn from a Panamanian bank.

The Narco-State and the End of the Cold War General Manuel Antonio Noriegas putative narco-state is the obvious end to this history. While Noriega famously engaged in illicit activity with any number of foreign interests, he developed a special relationship with Reagan-era cold warriors preoccupied with the conflicts raging in El Salvador and Nicaragua. North American officials quickly became indebted to Noriega, as he proved willing to ignore prior agreements that limited North American military activity in Panama to canal protection. Instead, the U.S. military used Panama as its base of operations to wage covert war in Central America. Among other things, the United States used Panama to train Contra soldiers battling the Nicaraguan government and Salvadorian soldiers battling leftist guerrillas. It flew nightly planes out of Howards Air force Base over El Salvador to collect tactical information for local military operations and launched nautical spy missions up the east coast of Nicaragua from Panamanian ports. What is more, after Congress banned North American military aid to the Contras in 1984, officials ran covert funds through dummy corporations registered in Panama so the spigot of financial aid remained open. Noriegas cooperation proved crucial to the larger aims of these cold warriors and did not go unrewarded,
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37

Dinges, Our Man in Panama : the Shrewd Rise and Brutal Fall of Manuel Noriega, 100-15, 28-29.

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not least with official North American aid to Panama skyrocketing from $7.4 million in 1983 to $74.5 million just two years later.38 Noriega provided valuable political space for the surreptitious activities of North American officials; and, in turn, U.S. officials implicitly granted his regime considerable latitude in its engagement with illicit trade. Noriega, most notably, had links to some of Colombias most powerful narcotraficantes. Panama profited from serving as a sometimes transshipment point for cocaine flows moving north. More lucrative, however, was its role facilitating the only recently criminalized activity of money laundering.39 The Colombian cocaine business generated an estimated $300 billion in annual profit during the 1980s and Panama laundered much of it with estimates ranging anywhere from $600 million to $2.8 billion per year. Uniformed soldiers met freight planes full of paper money on the airport tarmac. Soldiers transported the cash to Panamanian banks in armored vehicles, where it would pass (without a paper trail) through a series of numbered accounts registered to dummy corporations in more than one bank before being invested in legitimate businesses off the Isthmus. Noriega reportedly charged anywhere from one to ten percent commission for the service.40 The usefulness of Noriega for the United States waned as the 1980s drew to a close and the Cold War wound down. El Salvador moved closer towards a negotiated end to its civil war and the United States ended the Contra war. A pacified Latin America, more generally,
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Conniff, Panama and the United States : the Forced Alliance, 152; Dinges, Our Man in Panama : the Shrewd Rise and Brutal Fall of Manuel Noriega, 147-48; Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 286; Ropp, "Explaining the Long-Term Maintenance of a Military Regime: Panama before the U.S. Invasion," 227, 37. The earliest law targeting transnational money obtained through crime was 1970. The U.S. Congress actually criminalized the act of money laundering in 1986. Andreas and Nadelmann, Policing the Globe : Criminalization and Crime Control in International Relations, 126. Maurer and Yu, The Big Ditch : How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal, 285-86.
40 39 38

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transitioned towards democracy and Washington realigned its global priorities. The leverage that Noriega had used to create political space to maneuver vis--vis the international criminal justice initiatives of the United States a space that perpetually existed in Panama throughout the Cold War shrunk rapidly and left Noriega highly exposed.41 He was no longer an ally but a liability, little more than an isolated dictator/criminal engaged in gun running, narcotics trafficking, and money laundering. For many observers, Noriega personified corruption in Panama and perhaps beyond the leader of an evil empire, who, in the words of a (relatively balanced) North American investigative journalist, obliterated in an orgy of venality and greed the social and diplomatic achievements of the Torrijos era.42 The research and writing of this dissertation, however, has led me to a different conclusion. Noriega was not necessarily any more or any less greedy or corrupt than many Panamanian office holders before (or indeed since). In fact, in the deep historical context I have outlined in this dissertation, Noriega is really just another example of a local power holder who used his power to subvert foreign legal impositions in order to amass as much profit and power from an ephemeral transit boom as possible. The real difference in Noriegas case what made him internationally infamous and landed him in a Miami prison cell to serve a 30-year sentence was that he remained in power as the world quickly transitioned to the post-Cold-War period. The undocumented rules that had long shaped client state governance, in other words, shifted unexpectedly and incontrovertibly. And Noriega got caught.

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41

Grandin, Empire's Workshop : Latin America, the United States, and the Rise of the New Imperialism,

191-92. Michael Wines, Noriegas Evil Empire Described to Senators: Panama Leader also Received Classified U.S. Data on Key Lawmakers, Ex-Aide Tells Panel, Los Angeles Times, February 10, 1988; Dinges, Our Man in Panama : the Shrewd Rise and Brutal Fall of Manuel Noriega, X-XI. For a more lurid example, see Kempe, Divorcing the Dictator : America's Bungled Affair with Noriega.!
&)

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