VI. The World Wars and the Interwar Period, 1914–1945 > E. Latin America and the Caribbean, 1914–1945 > 3. Central America > b. Panama
  The Encyclopedia of World History.  2001.
(See Sept. 2)
b. Panama
After more than ten years, and the deaths of over 5,000 workers, the Panama Canal was opened. Construction of the canal radically altered both the ethnic makeup of Panama (introducing thousands of Caribbean immigrants into the population) and the economy of the country. Panamanian elites, backed by the presence of thousands of U.S. troops in the Canal Zone, based their newfound prosperity on the international commerce associated with the canal. On numerous occasions they invited U.S. troops into the country to put down popular protests that called for improved social and economic conditions.  1
A boundary dispute with Costa Rica, inherited from the period of Colombian sovereignty, threatened to provoke war when Panamanian troops occupied disputed territory and armed clashes ensued (Feb.–March). The U.S. government induced Panama to evacuate the area involved, which was then occupied by Costa Rica (Aug.)  2
April 20
By the THOMSON-URRUTIA TREATY (See 1921, April 20), Colombia recognized the independence of Panama. The boundaries, hitherto disputed, were adjusted, diplomatic relations established, and various accords signed (1924–25).  3
The Encyclopedia of World History, Sixth edition. Peter N. Stearns, general editor. Copyright © 2001 by Houghton Mifflin Company. Maps by Mary Reilly, copyright 2001 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.