Excerpts from Books and Wikipedia
"In the first 80 years following independence from Spain, Panama was a department of Colombia, after voluntarily joining at the end of 1821. . . . The US intent to influence the area, especially the Panama Canal's construction and control, led to the separation of Panama from Colombia in 1903 and its establishment as a nation. When the Senate of Colombia rejected the Hay–Herrán Treaty on January 22, 1903, the United States decided to support and encourage the Panamanian separatist movement. In November 1903 Panama proclaimed its independence and concluded the Hay–Bunau-Varilla Treaty with the United States. The treaty granted rights to the United States "as if it were sovereign" in a zone roughly 16 km (10 mi) wide and 80 km (50 mi) long. In that zone, the US would build a canal, then administer, fortify, and defend it "in perpetuity". . . . In 1914 the United States completed the existing 83-kilometre-long (52-mile) canal. From 1903 to 1968, Panama was a constitutional democracy dominated by a commercially oriented oligarchy." [Wikipedia]