The Panama Canal Zone, also known simply as the Canal Zone, was a Central American territory bordering the Panama Canal. The zone was leased to the United States of America in 1903 by a treaty with Panama, which had gained independence from Colombia just five days earlier. Initially, the Panamanian government took control of the area’s postal services and the first distinctive stamps were insured in June 1904.
Plans for the construction of a canal joining the Atlantic Ocean and Pacific Ocean, as well as dividing North America from South America, had been considered some time earlier. Survey work had been conducted in 1881 by the celebrated French Engineer, Ferdinand de Lesseps (who had built the Suez Canal) under a concession by the Colombians who controlled the area at the time. However, the French company commissioned to build the canal accumulated vast debts and went into liquidation in 1889. De Lesseps was accused of bribery, corruption and fraud, and imprisoned in France. He was later exonerated but never fully recovered from the ill-fated events.
Following the 1903 Hay-Bunau-Varilla Treaty, the US assumed responsibility for the Canal’s construction and it was formally declared complete in 1925. The Panama Canal Zone, an area generally extending five miles (8km) either side of the canal, became an unincorporated territory of the US. It’s capital was Balboa and remained in existence until 1979. The first stamps for the territory issued in 1904, were contemporary stamps of Panama, overprinted ‘CANAL ZONE’ and low value US stamps overprinted ‘PANAMA CANAL ZONE’. Panama’s stamps were overprinted for use in the zone until 1924, when overprinted US stamps were again used.
Between 1928 and 1940, distinctive definitives inscribed ‘CANAL ZONE’ were issued at intervals. These generally depicted scenes of the canal’s construction or personalities associated with government or the Canal Zone Company. This included General Gorgas who appeared on the 1c denominated stamp of 1928 and is best known for his work in abating the transmission of yellow fever and malaria during the construction of the Panama Canal. Subsequently, stamps were issued commemorating a wide variety of topics including the 25th anniversary of the establishment of the Canal Biological Area, Boy Scouts’ Golden Jubilee, centenary of the California Gold Rush and centenary of the Panama Railway. The Canal Zone was abolished in 1979 in accordance with the Torrijos-Carter Treaty of 1977. The canal remained under joint US / Panamanian control until it was fully returned to Panama in 1999.
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