The Hay - Bunau-Varilla Treaty of 1903 between the US and Panama gave America full rights to any future canal building in the region. Set up by Philippe Bunau-Varilla (who represented the new independent Panama), President Roosevelt and Secretary of State Hay, it in fact was an agreement that violated all Panamanian conditions and would in the long term be the cause of the enormous misunderstanding experienced between the two countries throughout the 20th century.
The treaty gave America "all the rights, power and authority within the zone, which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any sovereign rights, power and authority." The US hold over Panama as a result of this treaty became known as [G 18 / titular sovereignty], but Panamanians would much later refer to it as "the treaty that no Panamanian signed".
Control over the canal area also came cheap. America was obliged to pay Panama $10 million plus $250,000 per annum, which was a minute amount considering the profits the canal would eventually bring in. The Panamanians had relied on the US to gain their independence from Colombia, but were unaware of the deception that would follow which left them in a hopeless no-win situation. They were powerless to protest at the time, but the unfairness of the treaty eventually led to the anti-US skirmishes many years later.
