How Wall Street Created Panama

In 1900, a group of investors led by William Nelson Cromwell, the founder of the "prestigious" New York law firm, Sullivan & Cromwell, and the banker J.P. Morgan, created a secret syndicate of Wall Street financiers and politicians to buy the shares of the bankrupt French Panama Canal Company, which owned the right to build the Panama Canal, from thousands of small shareholders throughout Europe. They invested about $3.5 million and gained control of the company...

Only one problem—Panama was at the time a province of Colombia, and the United States needed Colombia's approval to move ahead. Teddy Roosevelt sent Cromwell, who stood to benefit financially from the deal, to negotiate with Colombia. Colombia balked, demanding more money. Cromwell decided to circumvent Colombia, and to instead get Panama to secede and create it's own country—which it did...

"I want people to know a chapter in world history that brought down a French republic, a Colombian government, created a new republic, shook the political foundations in Washington with corruption and gave birth to American imperialism in Latin America," Diaz says.

"It was one of the biggest scams in history. And I believe that alone is worth knowing about."

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