Colombia's congress opened contentious debate over the Hay-Herrán Treaty, which would have granted the United States rights to build a canal across the Panama isthmus in exchange for a one-time payment and annual rent. Colombian senators, wary of ceding sovereignty for what many considered inadequate compensation, ultimately rejected the treaty, prompting Theodore Roosevelt to back Panamanian separatists later that year.
The stakes could hardly have been higher: whoever controlled the isthmus crossing controlled the future of global shipping, cutting weeks off voyages between the Atlantic and Pacific. Colombian senators recognized this leverage and pushed for better terms, some demanding compensation from the French New Panama Canal Company as well as the United States.
Washington had already grown impatient with the French effort under Ferdinand de Lesseps, which had collapsed in bankruptcy and scandal, and Theodore Roosevelt was eager to seize the opportunity his predecessors had fumbled. When Colombia's senate rejected the treaty in August 1903, Roosevelt's administration quietly encouraged Panamanian revolutionaries, and U.S. naval vessels ensured Colombian troops could not suppress the resulting uprising in November.
The episode left a lasting scar on U.S.-Colombian relations; decades later, the United States paid Colombia $25 million in a settlement that some historians still call inadequate compensation for what amounted to a stage-managed dismemberment of its territory.