The Panama Canal

An engineering marvel, it was completed on August 15, 1914.

A picture of the Panama Canal shortly after construction was completed.
The US Severn is pulled through the upper east chamber of the Panama Canal by locomotives in the canal's inaugural year. (April 15, 1914). (Photo by Hulton Archive/Getty Images)

On August 15, 1914, the Panama Canal, a man-made waterway connecting the Atlantic and Pacific oceans, officially opened to traffic.  This day marked the culmination of one of the largest construction projects ever undertaken by the United States.  The $400 million dollar project began in 1909 on the Isthmus of Panama and was actually completed ahead of schedule, despite the challenges faced by the construction crews.


The Canal Zone was initially ceded to the United States indefinitely, but in 1977 as a result of pressure from the Panamanian government, U.S. President Jimmy Carter signed a new treaty that returned the Panama Canal to Panama on December 31, 1999.

The Beginnings of the Panama Canal

Since the early part of the 19th century, Panama was under the dominion of neighboring Colombia.  Initially, Colombia was cooperative with the canal project, which was first undertaken by the French in 1869.  The French began construction in 1881, but encountered many difficulties.

The project finally stalled in 1889 due to the bankruptcy of the construction company owned by French businessman Ferdinand de Lesseps.  After a three-year period of inactivity, Lesseps’ company was purchased by another engineer, Philippe-Jean Bunau-Varilla; however, Bunau-Varilla never restarted the canal project.

In 1902, the United States purchased Bunau-Varilla’s rights to the canal project.

  After a successful victory over Spain in the Spanish-American War (1898) resulted in a gain of Latin American territories for the United States, the U.S. desired easier access to the Atlantic and Pacific for trading. 

The Isthmus of Panama provided the best opportunity to create an easier trade route.

  Prior to the Panama Canal’s completion, ships traveling from the East Coast to the West Coast of the United States were forced to navigate around the tip of Cape Horn at the very southern end of South America, a long and arduous journey. Crossing via a canal through Panama would cut 8,000 nautical miles off the journey, lessening both the danger and the hefty expenses of travel. 

The United States Pushes for Panama’s Independence

While Bunau-Varilla was allowed to sell his company’s rights to the canal project, the United States also needed the approval of the Colombian government to proceed with the construction.  At the behest of U.S. President Theodore Roosevelt, Secretary of State John Hay negotiated a treaty with the Colombian government that would become known as the Hay-Bunau-Varilla Treaty. 

The United States Senate, at the urging of Roosevelt, quickly ratified the treaty. The Colombian government, however, was concerned about the United States’ territorial aims and refused to sign the treaty; thus, the canal project was once again stalled.

Roosevelt was incredibly displeased with the hold-up and decided to take matters into his own hands.  He got in contact with Bunau-Varilla and urged the Frenchman to lead the Panamanians in a revolt against the Colombians.


Bunau-Varilla organized the revolt via the Panamanian construction workers who had been a part of the canal project and on November 3, 1903, this group sent a declaration of independence to the Colombian government.  Behind- the-scenes support for the revolt was provided by the United States, which quickly recognized Panama’s status as a sovereign nation.

An Agreement Is Reached

The United States moved quickly to solidify the Hay-Bunau-Varilla Treaty with the new country of Panama.  The Panamanians gave their approval quickly, largely out of a feeling of obligation for the assistance of the United States during their brief fight for independence. 

The deal was also sweetened by the United States with an initial deposit of $9 million and a promise of future yearly payments set to begin in 1912.


Roosevelt was eager to begin the project, one of his primary goals in foreign affairs since assuming the presidency in 1901.

Construction Begins on the Panama Canal

Construction on the Panama Canal began the following year; however, poor planning made the initial effort challenging – both physically and monetarily.  The first chief engineer, John Wallace, did not study the previous French failures and repeated many of the same mistakes.  Workers became ill, both from bad food and contagious diseases, and most returned to America shortly after their arrival.  Wallace was soon replaced by railroad engineer John Stevens.

Stevens quickly re-prioritized the building project, first focusing on improving conditions for the workers so the Panama Canal construction could move forward successfully.  He hired Colonel William Gorgas to act as the chief sanitation officer.  

While Stevens oversaw the building of better accommodations for lodging and dining, Gorgas set about combating the issues related to disease that had plagued the Panama Canal project.  Within two years of his appointment, Gorgas had succeeded in nearly eradicating malaria and other mosquito-born diseases that had proved so problematic during the French and initial American efforts.

Structure of the Panama Canal

The Panama Canal was designed to stretch across nearly 50 miles of land, which consisted of varying terrain.  In order to accomplish this feat, the design of the canal needed to feature a series of “locks,” which would allow a boat to travel between varying water levels without ever leaving the canal.

  In total, a boat traversing the Panama Canal must go through a series of six locks in order to complete the journey.  Between the locks are a series of lakes.

A lock has a very basic function – to raise or lower the level of water the ship encounters in order for it to pass into the next section of the canal.  A ship enters a lock by traveling through a gate that is open to the ship’s existing water level.  The gate then closes and the lock master (or controller) manipulates the lock’s mechanics to either let water out (which lowers the water level inside the lock) or to let water in (which raises the level of water inside the lock).  Once the water inside the lock is at the desired level, the gate on the opposite side of the lock opens. The ship then leaves the lock and enters the next body of water.  

The Panama Canal Is Completed

When the conditions for workers improved, the construction effort began to show progress.  In 1907, Stevens resigned and was replaced by Army Major George Washington Goethals.  Goethals, who possessed previous lock-building experience, continued the work Stevens had begun.  Within seven years, he successfully oversaw the completion of the project.  The total cost of the project was $375,000,000, a bit less than the $400,000,000 initially projected.

The official opening of the Panama Canal was held on August 15, 1914.  The United States’ cargo ship, the SS Ancon, was the first ship to officially traverse the Panama Canal.  Although the event marked the completion of a modern engineering marvel, the world press was focused on the growing war in Europe (World War I) and coverage of the event did not reflect its true role in the future of world trade affairs.

Post Completion Issues  

In the initial period following the Panama Canal’s completion, U.S. control of the Canal Zone was relatively issue-free; however, in the time period following World War II, relations between the United States and the Panamanians began to go downhill.  The Panamanian government and its people began to express feelings that they had been manipulated by the United States from the beginning and that the honorable action would be for the United States to return the canal and its operations to Panama.

The process towards “Panamization” of the canal would be a slow one.  Advancements were not made until the mid-1970s when the Torrijos-Carter Treaty was established.  The treaty was signed in 1977 by U.S. President Jimmy Carter and Panamanian leader Omar Torrijos

The Torrijos-Carter Treaty stated that the United States would return the Panama Canal to the Panamanian government by the end of the twentieth century, as long as the Panamanian government would guarantee continued access to the canal for all nations.

On December 31, 1999 at noon, the Panama Canal was turned over to Panama to control.

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Goss, By Jennifer L., Contributing Writer. "The Panama Canal." ThoughtCo, Jul. 30, 2015, Goss, By Jennifer L., Contributing Writer. (2015, July 30). The Panama Canal. Retrieved from Goss, By Jennifer L., Contributing Writer. "The Panama Canal." ThoughtCo. (accessed December 13, 2017).