The Panama Canal

Updated August 5, 2020 | Infoplease Staff

One of the greatest engineering achievements in history marks its 100th anniversary

Canal Facts Opened on 8/15/14 Cost $336,650,000 36 to 38 ships pass through each day at a pace of 8-10 hours 52 million gallons of water are used in each transit A ship traveling through the canal from the Atlantic to the Pacific Ocean leaves the canal 27 miles east of its entrance A vessel sailing from New York City to San Francisco saves about 7,800 miles by using the canal rather than traveling around South America "We are running a container port business which has nothing to do with the operation of the Panama Canal." —Hutchison Whampoa Ltd. owner Li Ka-shing Related Links Famous Ship Canals Republic of Panama The Panama Canal Web Site

After encouraging Panama's independence from Colombia, the U.S. signed a treaty in 1903 that gave it the rights to build and operate the Panama Canal for perpetuity. The agreement also gave the U.S. the right to govern the 10-mile wide, 40-mile long strip of land around the canal, called the Panama Canal Zone.

U.S. engineers organized thousands of workers for the 10-year project that would eventually become one of the greatest engineering achievements in history.

The United States government owned and operated the canal and the surrounding zone for 85 years, establishing it as a valuable trade route and important piece of national security for its armed forces. During World War II the U.S. population in Panama included 65,000 soldiers plus tens of thousands of civilian employees.

Source of Bad Relations

The canal gradually became a source of bad relations. Anti-U.S. riots in the 1960s sparked negotiations for a new treaty. On Sept. 1, 1977, after a one-vote victory in the Senate, President Carter signed the Panama Canal Treaties. The legislation called for the step-by-step transfer of the canal to the government of Panama beginning on Oct. 1, 1979, and officially ending on Dec. 31, 1999.

Between 1979 and 1999, a U.S. government agency called the Panama Canal Commission, made up of five Americans and four Panamanians, supervised the transition. On Dec. 31, 1999, the U.S. honored a 22-year-old treaty and handed the canal—and the responsibilities that come with it— to the Republic of Panama. The new Panama Canal Authority assumed responsibility for the canal.

What Happens Next?

Some wonder if the canal transfer was a mistake. To many Americans, the Panama Canal symbolizes a key piece of the nation's economic and millitary success. After all, Panama is a country slightly smaller than South Carolina and it has no military. The state department says the hand-over of the canal was a gesture of American confidence in the Panamanians. Officials claim the land essentially belongs to Panama and all of Latin America.