The war with Spain revived American interest in building a canal across the isthmus of Panama, uniting the two great oceans. The usefulness of such a canal for sea trade had long been recognized by the major commercial nations of the world; indeed the French had begun digging one in the late 19th century only to abandon their efforts due to the difficulties involved. Now that the United States was a power in both the Caribbean Sea and the Pacific Ocean, it saw the military necessity of a canal to provide, when needed, speedier transfer of warships from one ocean to the other.

At the turn of the century, what is now Panama was a northern province of Colombia. When the Colombian legislature in 1903 refused to ratify a draft treaty giving the United States the right to build and manage a canal, a group of impatient Panamanians, with the support of U.S. Marines, rose in rebellion and declared Panama's independence from Colombia. The breakaway country was immediately recognized by President Theodore Roosevelt. Under the terms of the treaty signed in November of that year, Panama granted the United States a perpetual lease to a 16-kilometer-wide strip of land between the Atlantic and the Pacific, in return for $10 million and a yearly fee of $250,000. Colombia later received $25 million as partial compensation. (Under the Panama Canal treaty negotiated by the two countries 75 years later, the Canal will revert to Panamanian sovereignty by the year 2000.)

The completion of the Canal in 1914 was a major triumph of engineering directed by Colonel George W. Goethals, while the conquest of malaria and yellow fever in a tropical jungle proved to be an outstanding achievement of preventive medicine.

Elsewhere in Latin America, the United States fell into a pattern of fitful intervention. Between 1900 and 1920, for example, the United States intervened in six Western Hemispheric nations, establishing protectorates in Haiti and the Dominican Republic, and periodically stationing U.S. Marines in Nicaragua. In 1867 the United States pressured the French into removing troops supporting the Emperor Maximillian in Mexico. Half a century later, however, as part of an ill-starred campaign to influence the Mexican revolution, the United States found itself sending an army of 11,000 troops into the northern part of the country in a futile effort to capture the elusive rebel and outlaw Francisco "Pancho" Villa.

At the same time, the United States also played an important role in establishing an institutional basis for cooperation among the nations of the Americas. In 1889 Secretary of State James G. Blaine proposed that the 21 independent nations of the Western Hemisphere join in an organization dedicated to the peaceful settlement of disputes and to closer economic bonds. Emerging from the first Pan-American conference in 1890 was a permanent body known in its early years as the Pan-American Union and today as the Organization of American States (OAS).

Moreover, the later administrations of Herbert Hoover and Franklin D. Roosevelt repudiated the right of U.S. intervention in Latin America. In particular, the Roosevelt Good Neighbor Policy of the 1930s, though by no means ending tensions between the United States and Latin America, helped dissipate much of the ill-will engendered by earlier U.S. intervention and unilateral actions.

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Source: U.S. Department of State