MAURICE JOYCE: The House of Representatives quickly passed a bill to build the Nicaragua canal. Then the French company reduced its price for the land and building rights in Panama. It decided some money was better than no money at all.

President Roosevelt was pleased. He gave his support to the Panama plan. When the Senate began debate, however, it appeared the Nicaragua plan would win.

Then a volcano exploded in the Caribbean area. A city was destroyed. Thirty-thousand people were killed. Soon, reports said another volcano had become active and was threatening a town. The volcano was in Nicaragua.

Nicaragua's president denied there were any active volcanoes in his country. But one of Nicaragua's postal stamps showed a picture of an exploding volcano.

A photo dated 1902 shows smoke coming from the Momotombo volcano, the "smoking terror" in Nicaragua

That little stamp weakened support for the Nicaragua canal. The Senate passed a bill for a Panama canal instead. The House of Representatives changed its earlier decision. It approved the Senate bill.

RICHARD RAEL: At that time, Panama was a state of Colombia. Canal negotiations between America and Colombia did not go smoothly. After nine months, the United States threatened to end the talks and begin negotiations with Nicaragua. The threat worked.

In January nineteen-oh-three, Colombia signed a treaty to permit the United States to build the Panama Canal. The treaty gave the United States a canal zone. This was a piece of land ten kilometers wide across Panama. The United States could use the canal zone for one hundred years. In exchange, it would pay Colombia ten million dollars, plus two hundred fifty thousand dollars a year.