=Panama.=--This state, formerly a part of Colombia, includes the isthmus of Panama. Geographically it belongs to North America, and practically it can be approached from Colombia by water only. The secession of Panama was brought about by the complications of the isthmian canal. A treaty with the United States gives the latter sovereign control over the canal and the strip of land ten miles wide bordering it. _Panama_ and _Colon_ are the two ports of the canal. The United States exercises police and sanitary regulations in these cities, but it has no sovereignty over them. =Peru.=--Peru has great resources, both agricultural and mineral. Cotton is one of the chief products. The ordinary fibre is excelled only by the sea-island cotton of the United States; the long-staple fibre of the Piura is the best grown. The former is generally employed for mixing with wool in the manufacture of underwear, and is sold in the United States and Europe; the latter, used in the manufacture of thread and the web of pneumatic tires, goes mainly to Great Britain. Cane-sugar is a very large export crop, Great Britain, the United States, and Chile being the principal customers. The area of coffee production is growing rapidly. Coca-growing has become an important industry, and the plantations aggregate about three million trees;[60] a large part of the product is sent to the chemical laboratories of the United States. A small crop of rice for export is grown on the coast. The Amazon forest products yield a considerable revenue. Rubber and vegetable ivory are the most valuable. Cinchona, or Peruvian bark, however, is the one for which the state is best known; and there is probably not a drug-shop in the civilized world that does not carry it in stock.[61] Cattle are grown for their hides, and of these the United States is the chief purchaser. The wool of the llama, alpaca, and vicuna is used in manufacture of the cloth known as alpaca, and the value of the shipments to Great Britain usually exceeds one million dollars a year. In the mining regions the llama is used as a pack-animal, and a large part of the mine products reach the markets by this means of transportation. The mines yield silver and copper; in the main the ores are exported to Great Britain to be smelted. The products already named are the chief exports; the imports are cotton textiles, machinery, steel wares, and coal-oil. Great Britain has about one-half the foreign trade; the United States controls about one-fourth. _Callao_, the port of _Lima_, is the market through which most of the foreign trade is carried on. Steamship lines connect it with San Francisco and with British ports. _Mollendo_ is the outlet of Bolivian trade. The railways are short lines extending from the coast.