Panama was a part of independent Colombia so the U.S. needed Colombia's consent in order to build a Canal. The U.S. attempted to negotiate but that stopped when Colombia asked for more then what the U.S. was willing to provide. So the U.S. launched battleships to aid in the Panamanian War. The U.S. Navy convinced Colombia not to suppress the uprising and then Panama announced its independence and granted America the control over the "Canal Zone". In order to secure the land and its vital trade link its paid Panama $10 Million and annual rent of $250,000.

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