08/27/2014 06:41 pm ET Updated Oct 27, 2014

The Panama Canal: Part 3 of 3

1904-1914: construction and initial operations of the canal

The new Republic of Panama, initially represented by Bunau-Varilla, granted the United States perpetual rights to the canal and a large area of eight kilometers on each side of it in exchange for a sum of 10 million dollars and an annual rental payment of $250,000.

Once the U.S. government acquired all the rights, machinery, equipment and the construction work already completed by the Compagnie Nouvelle du Canal de Panama for $40 million, it moved in to resume this mammoth project, although on many levels it had to be started over from scratch.

This second stage was under the responsibility of the Intercontinental Canal Company (ICC), a corporation established by the U.S. government. The most pressing task in this second stage of construction was naturally to eradicate malaria and yellow fever, with its high cost in human lives.

It was a Cuban doctor, Carlos Finlay, who in the late 19th century discovered that it was the Aedes aegypti mosquito that transmitted yellow fever. Shortly after the war between Spain and the United States, it was a U.S. army doctor by the name of William C. Gorgas, who put Finlay's findings into practice. Through a meticulous effort in Havana, he managed to eradicate the Aedes mosquito (also known as Stegomyia, which transmits dengue) and then the Anopheles mosquito, which causes malaria.

In 1904, Gorgas was hired to take charge of the health department in Panama, but despite his undeniable success in Havana, the arrogant bureaucracy in Washington refused to believe that a mosquito could be the cause of malaria and yellow fever, and therefore the government refused to allocate the necessary budget to eradicate these insects. The high cost in human lives resulting from this terrible decision is a further example of how the arrogance of bureaucrats can have incalculable social costs. Indeed, Gorgas had already demonstrated successfully that it was possible to eliminate yellow fever and malaria and yet some obscure federal official at his desk refused to fund this effort, arguing that the cause of this disease was simply the poor hygiene of Panamanians. This was a typical view that corresponds more to prejudice than scientific knowledge.

Eventually, fatalism, ignorance, and the negligence of the federal bureaucracy took the lives of hundreds more in Panama. As word of this spread throughout the United States, hiring the necessary labor became almost impossible.

That's when a new chief engineer was appointed by Roosevelt, John Stevens, the best railway engineer of his time. Stevens was already somewhat of a legend in the railroad industry, being responsible for the construction of thousands of kilometers of rail lines across the northwestern United States, where he survived ice storms and attacks by Indian tribes, wolves, and mosquitoes, crossing hundreds of kilometers of the Rocky Mountains on foot to find the best route for the railroad.

When Stevens took control of the construction of the canal, more than US$ 128 million (worth considerably more at the time) had been spent without the engineering plan having been concluded and without having achieved any more than a 40 percent advance in the required digging and excavation.

Stevens immediately understood that in a project of this scale, engineering had to be subordinated to human factors. Digging could not proceed unless the yellow fever and malaria that decimated the work force was eradicated. To do so, he decided to provide Gorgas with all the necessary resources to achieve this goal, which at first seemed impossible. With an army of 4,000 under his responsibility, Gorgas went to work and initiated the most ambitious health campaign that humanity had thus far ever undertaken.

In launching this effort, 300 tons of sulfur, 180.000 liters of kerosene oil, 3,000 trash cans, 4,000 buckets, 1,000 brooms, and 11,000 kilograms of plain soap, and hundreds of mouse traps, among other provisions, were ordered each month. Panama City and the city of Colon were sprayed, house by house. Tanks, septic tanks, and water tanks were sealed and in localities such as Cristobal, Ancon, La Boca, Culebra, Colon, and Panama City, running water was offered for the first time in history.

The bureaucracy in Washington finally understood that in order to successfully build the canal, the war against the mosquitoes had to be won. Stevens then put all the resources at his disposal at the service of this campaign and, with pinpoint performance, the sanitary conditions in the Canal Zone considerably improved and yellow fever was eradicated in a year and a half, twice as long as it took Gorgas to achieve this goal in Havana. In doing so, an example was set on a world scale that even benefits our own generation.

Being a railway engineer himself, Stevens recruited young railway engineers and proceeded in the same way that he was accustomed to doing when building railroads, with maximum precision and efficiency but on a scale previously unknown to humankind. As a good railway engineer, Stevens understood that the construction of the canal was fundamentally a problem of logistics, the shipping of materials, supplies, and people. As a first step, he proceeded to improve the capacity of the trans-isthmus railroad. Stevens tripled the workforce, so that by the end of 1906, the number of workers employed in Panama now numbered 24,000 men, with a base salary of ten cents per hour, ten-hour work days, and six day weeks.

By 1907, 4,892 skilled American workers were on the payroll. This number included masons, blacksmiths, welders, coppersmiths, mechanics, painters, cooks, inspectors, dredge operators, drillers, machinists, and carpenters 1,700 of them. But most of the workforce, the base of the pyramid, was recruited in the different Caribbean islands. In just one year, Stevens built 1,250 buildings and renovated an additional 1,200 to house his men, equipment, and supplies. By 1910, the ICC reported 40,000 people on its payroll.

Stevens understood that to attract talent it was necessary to improve the living conditions in the Canal Zone. With this in mind, he built social clubs, organized cultural events, and even established baseball teams. For the first time, married men were allowed to bring their families from the United States.

The married engineers and technicians were entitled to a furnished apartment, equipped with modern plumbing, running water, electricity and even a cooler. For single men, hotels were built with all the amenities available at that time. A utopia was constructed in the rain forest.

It is striking that even as late as 1905, the commission in charge of the construction of the canal voted in favor of a channel at sea level, which we now know was impossible due to the uncontainable strength of the Chagres River. This shows that for technical questions, democracy is useless. The final report sent to the White House in January 1906 estimated a total cost of US$ 247 million to build a canal at sea level.

Eventually, in an executive action, Stevens chose to ignore the report of the Canal Commission and persuade President Roosevelt to build a dam at Gatun in order to create an artificial lake at the top of the mountain range and huge locks to raise and lower ships in transit. The Canal Commission voted in favor of this plan in February 1906 and a few months later the Senate backed this decision. In doing so, the most important pending engineering issue that had thus far been posed was now resolved.

With this key decision finally resolved, 36 years into the project, construction went into full gear. Twenty-four hours after the Senate vote, the building of the Gatun Dam, which led to the creation of the lake of the same name, began. This was the largest artificial lake to date, and flooded 420 square kilometers of the rain forest, equivalent to the size of Barbados. This resolved the key question of how to control the vast flow of the Chagres River, putting its rushing waters at the service of this work of engineering and transforming the ecology of the isthmus forever. This represents a magnificent example of how effective engineering does not have to fight against nature, but rather take advantage of it.

Stevens managed to simplify the bureaucratic structure that put roadblocks in the way of the most basic decision making and he convinced the President to put in his hands, and those of the chairman of the Canal Commission, Theodore P. Shonts, all matters of importance, directly reporting to the then Secretary of War of the Taft administration. The Panama Canal Commission ceased to exist in 1999 when the Republic of Panama assumed control over the canal.

The importance of this project for the United States can be seen if we consider that in November 1906, Roosevelt was the first sitting president to leave the country for two weeks, to personally monitor the progress of the construction underway in Panama. For the first time, a president could govern at a distance, thanks to wireless communications. Roosevelt sailed to Panama in the warship Louisiana, the largest of the fleet to which a presidential cabin was added.

Once the canal was opened and the dam that led to the creation of Lake Gatun was built, the final task was to construct the locks, a job that had been thus far inconceivable and that required the most modern engineering available. Its mechanism was similar in accuracy and performance to a clock, but on a gigantic scale.

Until a few years ago, the command center of the canal was a scale replica of it, totally foolproof, in which an operator could open and close gates weighing hundreds of tons that moved with the precision of a pocket watch, in order to let the largest ships that had existed for decades in. It has only been in recent years that the massive oil tankers and cargo ships known as Post-Panamax have appeared, which are reasons for the expansion of the canal.

A hundred years ago, on August 3, 1914, the S.S. Cristobal, with its shipment of cement, undertook the first complete voyage through the canal, which was inaugurated on August 15, 1914 without much ado. Its existence changed the course of history of our hemisphere and world trade.