<P> The treaty led the U.S. government to contract for steamship service to Panama from ports on both coasts . When the California Gold Rush began in 1848, traffic through Panama greatly increased, and New Granada agreed to allow the Panama Railroad to be constructed by American interests . This first "transcontinental railroad" opened in 1850 . There were riots in Panama City in 1856; several Americans were killed . US warships landed Marines, who occupied the railroad station and kept the railroad service from being interrupted by the unrest . The United States demanded compensation from New Granada, including a zone 20 miles (32 km) wide, to be governed by US officials and in which the United States might build any "railway or passageway" it desired . The demand was dropped in the face of resistance by New Granadan officials, who accused the United States of seeking a colony . </P> <P> Through the remainder of the 19th century, the United States landed troops several times to preserve the railway connection . At the same time, it pursued a canal treaty with Colombia (as New Granada was renamed). One treaty, signed in 1868, was rejected by the Colombian Senate, which hoped for better terms from the incoming Grant administration . Under this treaty, the canal would have been in the middle of a 20 - mile zone, under American management but Colombian sovereignty, and the canal would revert to Colombia in 99 years . The Grant administration did little to pursue a treaty, and in 1878, the concession to build the canal fell to a French firm . The French efforts eventually failed, but with Panama apparently unavailable, the United States considered possible canal sites in Mexico and Nicaragua . </P> <P> The Spanish--American War of 1898 added new life to the canal debate . During the war, American warships in the Atlantic seeking to reach battle zones in the Pacific had been forced to round Cape Horn . Influential naval pundits, such as Captain Alfred Thayer Mahan, urged the construction of a Central American canal . In 1902, with the French efforts moribund, US President Theodore Roosevelt backed the Panama route, and Congress passed legislation authorizing him to purchase the French assets on the condition that an agreement was reached with Colombia . In March 1902, Colombia set its terms for such a treaty: Colombia was to be sovereign over the canal, which would be policed by Colombians paid for by the United States . The host nation would receive a larger percentage of the tolls than provided for in earlier draft treaties . The draft terms were quickly rejected by American officials . Roosevelt was in a hurry to secure the treaty; the Colombians, to whom the French property would revert in 1904, were not . Negotiations dragged on into 1903, during which time there was unrest in Panama City and Colón; the United States sent in Marines to guard the trains . Nevertheless, in early 1903, the United States and Colombia signed a treaty which, despite Colombia's previous objections, gave the United States a 6 miles (9.7 km) wide zone in which it could deploy troops with Colombian consent . On August 12, 1903, the Colombian Senate voted down the treaty 24--0 . </P> <P> Roosevelt was angered by the Colombians' actions, especially when the Colombian Senate made a counteroffer that was more financially advantageous to Colombia . A Frenchman who had worked on his nation's canal efforts, Philippe Bunau - Varilla, represented Panamanian insurgents; he met with Roosevelt and with Secretary of State John Hay, who saw to it that his principals received covert support . When the revolution came in November 1903, the United States intervened to protect the rebels, who succeeded in taking over the province, declaring it independent as the Republic of Panama . Bunau - Varilla was initially the Panamanian representative in the United States, though he was about to be displaced by actual Panamanians, and hastily negotiated a treaty, giving the United States a zone 20 miles (32 km) wide and full authority to pass laws to govern that zone . The Panama Canal Zone (Canal Zone, or Zone) excluded Panama City and Colón, but included four offshore islands, and permitted the United States to add to the zone any additional lands needed to carry on canal operations . The Panamanians were minded to disavow the treaty, but Bunau - Varilla told the new government that if Panama did not agree, the United States would withdraw its protection and make the best terms it could with Colombia . The Panamanians agreed, even adding a provision to the new constitution, at US request, allowing the larger nation to intervene to preserve public order . </P>

What nation owned the territory of panama in 1901