The United States was especially forceful in Panama, which was a province of Colombia. Here the issue was not corruption or debts but a more vital interest. When the United States acquired Hawaii and the Philippines, it recognized the need for a canal that would allow warships to move quickly between the Atlantic and Pacific Oceans. The main obstacle was Colombia, which refused to give the United States a piece of its territory. In 1903 the U.S. government supported a Panamanian rebellion against Colombia and quickly recognized the independence of Panama. In exchange, it obtained the right to build a canal and to occupy a zone 5 miles (8 kilometers) wide on either side of it. Work began in 1904, and the Panama Canal opened on August 15, 1914. 

Starting in the 1870s, almost every country in Latin America acquired railroads, usually connecting mines or agricultural regions with the nearest port rather than linking up the different parts of the interior. All the equipment and building material came from Britain or the United States. So did the money to build the networks, the engineers who designed and maintained them, and the managers who ran them. Argentina, a land of rich soil that produced wheat, beef, and hides, gained the longest and best-developed rail network south of the United States. By 1914, 86% of the railroads in Argentina were owned by British firms; 40% of the employees were British; and the official language of the railroads was not Spanish but English. The same was true of mining and industrial enterprises and public utilities throughout Latin America. 

The term "banana republic" refers to politically unstable countries that become dependent on the export of natural resources, typically exploited by foreign companies. Banana republics are typically characterized by impoverished working classes ruled by political, military, and business elites who control the economy and exploit labor. By the late 19th century, three American multinational corporations (the United Fruit Company, the Standard Fruit Company, and the Cuyamel Fruit Company) dominated the cultivation, harvesting, and exportation of bananas, and controlled the road, rail, and port infrastructure of Honduras. In the northern coastal areas near the Caribbean Sea, the Honduran government ceded to the banana companies 500 hectares per kilometre (2,000 acre/mi) of a laid railroad, despite there being neither passenger nor freight railroad service to Tegucigalpa, the capital city. Among the Honduran people, the United Fruit Company was known as El Pulpo ("The Octopus"), because its influence pervaded Honduran society, controlled their country's transport infrastructure, and manipulated Honduran national politics.