Abstract: The Colony Strikes Back: Colombia, Jersey Standard, and the American Payment of Reparations for the Loss of Panama

Xavier Duran


Scholarship on economic imperialism has analyzed this phenomenon as a unidirectional one in which the 'colonized' country is affected (negatively or positively) by the actions of the empire. However, the literature has overlooked the strategies developed by the colonized countries to exploit internal imperial conflicts in order to reduce the net transfers of wealth to the empire. We examine a paradigmatic case of economic imperialism: the U.S. support for the separation of the Colombian province of Panama in 1903. Despite its relative weakness, Colombia eventually received $25 million reparation from the United States. Contrary to previous interpretations, we show that this payment was not a product of a new vision within the United States on how it should relate to its southern neighbors. Rather, this was possible because Colombia developed strategies to induce the U.S. oil multinational Standard Oil Company of New Jersey (SONJ) to lobby for Colombia in the United States for the payment of reparations. Our calculations show that, although SONJ gained oil concessions as a result of this operation, the average U.S. taxpayer lost. The main winners in the United States were the oil refiners, while Colombia reduced its losses from the separation of Panama.