nded.
In October 1968, Dr. Arnulfo Arias Madrid, elected president for the third time and twice ousted by the Panamanian military, was again ousted (for the third time) as president by the corrupt National Guard after only 10 days in office. A military junta government was established, and the commander of the National Guard, Brig. Gen. Omar Torrijos, emerged as the principal power in Panamanian political life. Torrijos' regime was harsh and corrupt, and had to confront the mistrust of the people and guerrillas backing the populist Arnulfo Arias. However, he was a charismatic leader whose populist domestic programs and nationalist foreign policy appealed to the rural and urban constituencies largely ignored by the oligarchy.
Enthused by the success of the Suez Canal, the French, under Ferdinand de Lesseps, began construction on the Panama Canal, a sea-level canal, on January 1, 1880. In 1893, after a great deal of work, the French scheme was abandoned due to disease and the sheer difficulty of building a sea-level canal, as well as lack of French field experience. Although no detailed records were kept, as many as 22,000 workers are estimated to have died during the main period of French construction, which was a leading factor in the project's abandonment, besides the financial scandal that broke out in Paris from fraudulent funding of the canal project by unscrupulous financiers.
In 1904, the United States began work on the project after having bought the French equipment and excavations. President Theodore Roosevelt negotiated control of the Panama Canal Zone after having helped Panama to declare independence from Colombia.
A significant investment was made in eliminating disease from the area, particularly yellow fever and malaria, the causes of which had recently been discovered. With the diseases under control, and after significant work on preparing the infrastructure, construction of an elevated canal with locks began in earnest. The canal was formally opened on August 15, 1914, with the transit of the cargo ship Ancon.
After World War II, United States control of the canal and the Canal Zone surrounding it became contentious as relations between Panama and the U.S. became increasingly tense. Many Panamanians felt that the Canal Zone rightfully belonged to Panama; student protests were met by the fencing in of the zone and an increased military presence. Negotiations toward a new settlement began in 1974, and resulted in the Torrijos-Carter Treaties. Signed by President Jimmy Carter and Omar Torrijos of Panama on September 7, 1977, this set in motion the process of handing the canal over to Panamanian control without charge. Though controversial within the U.S., the treaty led to gradual Panamanian control, with full control to become effective on December 31, 1999, at which time it was transferred to the Panama Canal Authority (ACP).
President Torrijos died in a mysterious plane crash on August 1, 1981. The circumstances of his death generated charges and speculation that he was the victim of an assassination plot. Torrijos' death altered the tone but not the direction of Panama's political evolution. Despite 1983 constitutional amendments, which appeared to proscribe a political role for the military, the Panama Defense Forces (PDF), as they were then known, continued to dominate Panamanian political life behind a facade of civilian government. By this time, Gen. Manuel Noriega was firmly in control of both the PDF and the civilian government, and had created the Dignity Battalions to help suppress opposition.
Despite covert collaboration with Ronald Reagan on his Contra war in Nicaragua, relations between the United States and the Panama regime worsened in the 1980s. The United States froze economic and military assistance to Panama in the summer of 1987, in response to the domestic political crisis and an attack on the U.S. embassy. General Noriega's February 1988 indictment in U.S. courts on drug trafficking charges sharpened tensions. In April 1988, President Reagan invoked the International Emergency Econo