Satellite image showing location of Panama Canal: Dense jungles are visible in green.
Early proposals in Panama
The earliest mention of a canal across the Isthmus of Panama dates back to 1534, when
Holy Roman Emperor and King of Spain, ordered a survey for a route through the Americas that would ease the voyage for ships traveling between Spain and
Peru. Such a route would have given the Spanish a military advantage over the Portuguese.
In 1668, the English physician and philosopher
Sir Thomas Browne speculated in his encyclopaedic endeavour
Pseudodoxia Epidemica - "some Isthmus have been eat through by the Sea, and others cut by the spade: And if policy would permit, that of Panama in America were most worthy the attempt: it being but few miles over, and would open a shorter cut unto the East Indies and China".
Thomas Jefferson suggested that the Spanish should create it since it would be a less treacherous route than going around the southern tip of South America, which tropical ocean currents would naturally widen thereafter.
 During an expedition from 1788 to 1793,
Alessandro Malaspina outlined plans for its construction.
Given the strategic location of Panama and the potential offered by its narrow isthmus separating two great oceans, other trade links in the area were attempted over the years. The ill-fated
Darien scheme was launched by the
Kingdom of Scotland in 1698 to set up an overland
trade route. Generally inhospitable conditions thwarted the effort and it was abandoned in April 1700.
The late 18th and early 19th centuries had a number of canals built. The success of the
Erie Canal in the United States and the collapse of the
Spanish Empire in Latin America led to a surge of American interest in building an interoceanic canal. Beginning in 1826, US officials began negotiations with
Gran Colombia (present-day
Panama), hoping to gain a concession for the building of a canal. Jealous of their newly obtained independence and fearing that they would be dominated by an American presence, the president
Simon Bolivar and new granadans officials declined American offers. The new nation was politically unstable, and Panama rebelled several times during the 19th century.
Another effort was made in 1843. According to the New York Daily Tribune, August 24, 1843, a contract was entered into by Barings of London and the
Republic of New Granada for the construction of a canal across the
Isthmus of Darien (Isthmus of Panama). They referred to it as the Atlantic and Pacific Canal and it was a wholly British endeavor. It was expected to be completed in five years, but the plan was never carried out. At nearly the same time, other ideas were floated, including a canal (and/or a railroad) across Mexico's
Isthmus of Tehuantepec. Nothing came of that plan either.
In 1846, the
Mallarino–Bidlack Treaty, negotiated between the U.S. and
New Granada, granted the United States transit rights and the right to intervene militarily in the isthmus. In 1849, the discovery of gold in California created great interest in a crossing between the Atlantic and Pacific Oceans. The
Panama Railway was built by the United States to cross the isthmus and opened in 1855. This overland link became a vital piece of Western Hemisphere infrastructure, greatly facilitating trade and largely determining the later canal route.
An all-water route between the oceans was still seen as the ideal solution, and in 1855
William Kennish, a
Manx-born engineer working for the United States government, surveyed the isthmus and issued a report on a route for a proposed Panama Canal.
 His report was published as a book entitled The Practicability and Importance of a Ship Canal to Connect the Atlantic and Pacific Oceans.
In 1877, Armand Reclus, an officer with the
French Navy, and
Lucien Napoléon Bonaparte Wyse, both engineers, surveyed the route and published a French proposal for a canal.
 French success in building the
Suez Canal, while a lengthy project, encouraged planning for one to cross the isthmus.
French construction attempts, 1881–1894
Excavator at work, in Bas Obispo, 1886
The first attempt to construct a canal through what was then
Colombia's province of Panama began on January 1, 1881. The project was inspired by the diplomat
Ferdinand de Lesseps, who was able to raise considerable finance in
France as a result of the huge profits generated by his successful construction of the
Suez Canal. Although the Panama Canal would eventually have to be only 40% as long as the Suez Canal, the former would prove to be far more of an engineering challenge, due to the tropical rain forests, the climate, the need for canal locks, and the lack of any ancient route to follow.
De Lesseps wanted a sea-level canal as at Suez, but only visited the site a few times, during the dry season which lasts only four months of the year. His men were totally unprepared for the rainy season, during which the
Chagres River, where the canal started, became a raging torrent, rising up to 10 m (35 ft). The dense jungle was alive with venomous snakes, insects, and spiders, but the worst aspect was the yellow fever and malaria (and other tropical diseases) which killed thousands of workers; by 1884, the death rate was over 200 per month.
 Public health measures were ineffective because the role of the
mosquito as a
disease vector was then unknown. Conditions were downplayed in France to avoid recruitment problems,
 but the high mortality rate made it difficult to maintain an experienced workforce.
Workers had to continually widen the main cut through the mountain at Culebra and reduce the angles of the slopes to minimize landslides into the canal.
Steam shovels were used in the construction of the canal, and they were purchased from Bay City Industrial Works, a business owned by
William L. Clements in Bay City, Michigan.
 Other mechanical and electrical equipment was limited in its capabilities, and steel equipment rusted rapidly in the climate.
In France, de Lesseps kept the investment and supply of workers flowing long after it was obvious that the targets were not being met, but eventually the money ran out. The French effort went bankrupt in 1889 after reportedly spending US$287,000,000 and losing an estimated 22,000 lives to disease and accidents, wiping out the savings of 800,000 investors.
 Work was suspended on May 15, and in the ensuing scandal, known as the
Panama affair, various of those deemed responsible were prosecuted, including
Gustave Eiffel. De Lesseps and his son Charles were found guilty of misappropriation of funds and sentenced to five years' imprisonment, though this was later overturned, and the father, at 88, was never imprisoned.
In 1894, a second French company, the Compagnie Nouvelle du Canal de Panama, was created to take over the project. A minimal workforce of a few thousand people was employed primarily to comply with the terms of the Colombian Panama Canal concession, to run the
Panama Railroad, and to maintain the existing excavation and equipment in salable condition. The company sought a buyer for these assets, with an asking price of US$109,000,000. In the meantime, they continued with enough activity to maintain their franchise.
Phillipe Bunau-Varilla, the French manager of the New Panama Canal Company, eventually managed to persuade de Lesseps that a lock-and-lake canal was more realistic than a sea-level canal.
United States acquisition
At this time, the President and the Senate of the United States were interested in establishing a canal across the isthmus, with some favoring a
canal across Nicaragua and others advocating the purchase of the French interests in Panama.
Bunau-Varilla, who was seeking American involvement, asked for $100 million, but accepted $40 million in the face of the Nicaraguan option. In June 1902, the U.S. Senate voted in favor of pursuing the Panamanian option, provided the necessary rights could be obtained, in the
On January 22, 1903, the
Hay–Herrán Treaty was signed by
United States Secretary of State
John M. Hay and Colombian
Tomás Herrán. For $10 million and an annual payment, it would have granted the United States a renewable
lease in perpetuity from
Colombia on the land proposed for the canal.
 The treaty was ratified by the U.S. Senate on March 14, 1903, but the
Senate of Colombia did not ratify it. Bunau-Varilla told President
Theodore Roosevelt and Hay of a possible revolt by Panamanian rebels who aimed to separate from Colombia, and hoped that the United States would support the rebels with U.S. troops and money. Roosevelt changed tactics, based in part on the
Mallarino–Bidlack Treaty of 1846, and actively supported the
separation of Panama from Colombia and, shortly after recognizing
Panama, signed a treaty with the new Panamanian government under similar terms to the Hay–Herrán Treaty.
On November 2, 1903, U.S. warships blocked sea lanes for possible Colombian troop movements en route to put down the rebellion. Panama declared independence on November 3, 1903. The United States quickly recognized the new nation. On November 6, 1903, Philippe Bunau-Varilla, as Panama's ambassador to the United States, signed the
Hay–Bunau-Varilla Treaty, granting rights to the United States to build and indefinitely administer the
Panama Canal Zone and its defenses. This is sometimes misinterpreted as the "99-year lease" because of misleading wording included in article 22 of the agreement.
 Almost immediately, the treaty was condemned by many Panamanians as an infringement on their country's new national sovereignty.
 This would later become a contentious diplomatic issue among Colombia, Panama, and the United States.
President Roosevelt famously stated, "I took the Isthmus, started the canal and then left Congress not to debate the canal, but to debate me." Several parties in the United States called this an act of war on Colombia: The New York Times called the support given by the United States to Bunau-Varilla an "act of sordid conquest." The New York Evening Post called it a "vulgar and mercenary venture." It is often cited as the classic example of U.S.
gunboat diplomacy in Latin America, and the best illustration of what Roosevelt meant by the old African adage, "Speak softly and carry a big stick [and] you will go far." After the revolution in 1903, the Republic of Panama became a U.S.
protectorate until 1939.
Thus in 1904, the United States purchased the French equipment and excavations, including the
Panama Railroad, for US$40 million, of which $30 million related to excavations completed, primarily in the
Gaillard Cut (then called the Culebra Cut), valued at about $1.00 per cubic yard.
 The United States also paid the new country of Panama $10 million and a $250,000 payment each following year.
In 1921, Colombia and the United States entered into the
Thomson-Urrutia Treaty, in which the United States agreed to pay Colombia $25 million: $5 million upon ratification, and four-$5 million annual payments, and grant Colombia special privileges in the Canal Zone. In return, Colombia recognized Panama as an independent nation.
United States construction of the Panama canal, 1904–1914
Construction of locks on the Panama Canal, 1913
The U.S. formally took control of the canal property on May 4, 1904, inheriting from the French a depleted workforce and a vast jumble of buildings, infrastructure, and equipment, much of it in poor condition. A U.S. government commission, the
Isthmian Canal Commission (ICC), was established to oversee construction and was given control of the Panama Canal Zone, over which the United States exercised sovereignty. The commission reported directly to
Secretary of War
William Howard Taft and was directed to avoid the inefficiency and corruption that had plagued the French 15 years earlier.
On May 6, 1904, President Theodore Roosevelt appointed
John Findley Wallace, formerly chief engineer and finally general manager of the
Illinois Central Railroad, as chief engineer of the Panama Canal Project. Overwhelmed by the disease-plagued country and forced to use often dilapidated French infrastructure and equipment, as well as being frustrated by the overly bureaucratic ICC, Wallace resigned abruptly in June 1905. He was succeeded by
John Frank Stevens, a self-educated engineer who had built the
Great Northern Railroad. Stevens was not a member of the ICC; he increasingly viewed its bureaucracy as a serious hindrance, bypassing the commission and sending requests and demands directly to the Roosevelt administration in Washington, DC.
One of Stevens' first achievements in Panama was in building and rebuilding the housing, cafeterias, hotels, water systems, repair shops, warehouses, and other infrastructure needed by the thousands of incoming workers. Stevens began the recruitment effort to entice thousands of workers from the United States and other areas to come to the Canal Zone to work, and tried to provide accommodation in which the incoming workers could work and live in reasonable safety and comfort. He also re-established and enlarged the railway that was to prove crucial in transporting millions of tons of soil from the cut through the mountains to the dam across the Chagres River.
William C. Gorgas had been appointed chief sanitation officer of the canal construction project in 1904. Gorgas implemented a range of measures to minimize the spread of deadly diseases, particularly
yellow fever and
malaria, which had recently been shown to be mosquito-borne following the work of Dr.
Carlos Finlay and Dr.
Walter Reed. Investment was made in extensive sanitation projects, including city water systems, fumigation of buildings, spraying of insect-breeding areas with oil and larvicide, installation of mosquito netting and window screens, and elimination of stagnant water. Despite opposition from the commission (one member said his ideas were barmy), Gorgas persisted, and when Stevens arrived, he threw his weight behind the project. After two years of extensive work,
the mosquito-spread diseases were nearly eliminated. Nevertheless, even with all this effort, about 5,600 workers died of disease and accidents during the U.S. construction phase of the canal.
Construction work on the
is shown in this photograph from 1907.
In 1905, a U.S. engineering panel was commissioned to review the canal design, which still had not been finalized. It recommended to President Roosevelt a sea-level canal, as had been attempted by the French. However, in 1906 Stevens, who had seen the Chagres in full flood, was summoned to Washington and declared a sea-level approach to be "an entirely untenable proposition". He argued in favor of a canal using a lock system to raise and lower ships from a large reservoir 85 ft (26 m) above sea level. This would create both the largest dam (
Gatun Dam) and the largest man-made lake (
Gatun Lake) in the world at that time. The water to refill the locks would be taken from Gatun Lake by opening and closing enormous gates and valves and letting gravity propel the water from the lake. Gatun Lake would connect to the Pacific through the mountains at the
Gaillard (Culebra) Cut. Stevens successfully convinced Roosevelt of the necessity and feasibility of the alternative scheme.
The construction of a canal with locks required the excavation of more than 170,000,000 cu yd (130,000,000 m3) of material over and above the 30,000,000 cu yd (23,000,000 m3) excavated by the French. As quickly as possible, the Americans replaced or upgraded the old, unusable French equipment with new construction equipment that was designed for a much larger and faster scale of work. About 102 new large, railroad-mounted
steam shovels were purchased from the
Marion Power Shovel Company and brought from the United States. These were joined by enormous steam-powered cranes, giant hydraulic
dredges, and pneumatic power drills, nearly all of which were manufactured by new, extensive machine-building technology developed and built in the United States. The railroad also had to be comprehensively upgraded with heavy-duty, double-tracked rails over most of the line to accommodate new
rolling stock. In many places, the new Gatun Lake flooded over the original rail line, and a new line had to be constructed above Gatun Lake's waterline.
This before photograph of the Panama Canal was used as a guide in the construction of the Cape Cod Canal by the U.S. Army's Office of the Chief Engineers.
This after photograph of the Panama Canal was used as a guide in the construction of the Cape Cod Canal by the U.S. Army's Office of the Chief Engineers.
West Indian labor migration to Panama (1850–1914)
Emancipation in the British West Indies in 1838 freed over one-half million slaves, transforming the islands’ societies and economies. Most freedmen preferred not to do plantation work anymore, and the sugar industries gradually declined. The white colonial elites and mulatto middle classes managed to reconstruct the social hierarchy so that the blacks remained at the bottom. In such a precarious position, black freedmen had to take any jobs that appeared, including those abroad. Thus, the trans-Caribbean migration phase of the diaspora began.
California gold rush of 1849 rekindled interest in a modern transportation route across
Central America and spurred larger migrations of these freedmen. Two crossings were developed, Vanderbilt’s steamship and stage line in Nicaragua and the New York-based Panama Railroad. Both enterprises used imported labor, largely Jamaican. Some 5,000 eventually worked on the Panama railroad line. The projects proved that the West Indian blacks resisted tropical diseases better than other workers and they were available in large numbers due to the islands’ depressed economies.
Caribbean migration on a large scale would resume again in the 1880s as a result of two developments, the French canal project and the spread of banana cultivation. The French company employed over 50,000 West Indians (again mainly Jamaicans) during its unsuccessful bid to build the canal across the isthmus.
Banana cultivation also proved a boon to the region’s economy after the 1880s, expanding commercial agriculture and inducing thousands more to migrate. By the early 20th century, the United Fruit Company operated a string of banana ports, including Puerto Limon (Costa Rica) and Bocas del Toro (Panama).
During the construction of the Panama Canal by the Americans (1904-1914), the West Indian migrations to Panama constituted a demographic tidal wave, the largest yet in Caribbean history. Officially, canal authorities brought over 31,000 West Indian men and a few women, but in fact, contemporaries estimated that between 150,000 and 200,000 men and women must have migrated during the decade 1904-1914. Most did not plan to stay in Panama. Eventually, though, tens of thousands remained on the isthmus because the islands offered few opportunities that could compete with the pay and benefits available in Panama. The West Indians settled, married, had children, and became the largest immigrant group in the sparsely populated country. The descendants of these immigrants are known today as Afro-Panamanians.
George Washington Goethals replaces John Frank Stevens as chief engineer
In 1907, Stevens resigned as chief engineer. His replacement, appointed by President Theodore Roosevelt, was U.S. Army Major
George Washington Goethals of the
U.S. Army Corps of Engineers (soon to be promoted to lieutenant colonel and later to general), a strong,
United States Military Academy–trained leader and civil engineer with experience of canals (unlike Stevens). Goethals directed the work in Panama to a successful conclusion in 1914, two years ahead of the target date of June 10, 1916.
Goethals divided the engineering and excavation work into three divisions: Atlantic, Central, and Pacific. The Atlantic Division, under Major
William L. Sibert, was responsible for construction of the massive
breakwater at the entrance to
Limon Bay, the
Gatun locks, and their 3½ mi (5.6 km) approach channel, and the immense Gatun Dam. The Pacific Division, under Sydney B. Williamson (the only civilian member of this high-level team), was similarly responsible for the Pacific 3 mi (4.8 km) breakwater in
Panama Bay, the approach channel to the locks, and the
Miraflores and Pedro Miguel locks and their associated dams and reservoirs.
Spanish laborers working on the Panama Canal in early 1900s
The Central Division, under Major
David du Bose Gaillard of the
United States Army Corps of Engineers, was assigned one of the most difficult parts: excavating the Culebra Cutthrough the continental divide to connect Gatun Lake to the Pacific
Panama Canal locks.
On October 10, 1913, President
Woodrow Wilson sent a signal from the
White House by
telegraph which triggered the explosion that destroyed the Gamboa Dike. This flooded the Culebra Cut, thereby joining the Atlantic and Pacific Oceans.
(a floating crane built by
Lobnitz & Company, and launched in 1887) was the first self-propelled vessel to transit the canal from ocean to ocean. This vessel crossed the canal from the Atlantic in stages during construction, finally reaching the Pacific on January 7, 1914.
(a cargo and passenger ship built by
Maryland Steel, and launched in 1902 as SS Tremont) was the first ship to transit the canal from ocean to ocean on August 3, 1914.
The construction of the canal was completed in 1914, 401 years after Panama was first crossed by
Vasco Núñez de Balboa. The United States spent almost $500,000,000 (roughly equivalent to $9,169,650,000 now
) to finish the project. This was by far the largest American engineering project to date. The canal was formally opened on August 15, 1914, with the passage of the cargo ship
The opening of Panama Canal in 1914 caused a
severe drop in traffic along
Chilean ports due to shifts in the maritime trade routes.
A Marion steam shovel excavating the Panama Canal in 1908
The Panama Canal locks under construction in 1910
The first ship to transit the canal, the SS Ancon
, passes through on 15 August 1914
Throughout this time,
Ernest "Red" Hallen was hired by the
Isthmian Canal Commission to document the progress of the work.
By the 1930s, water supply would be seen as an issue for the canal; this prompted the building of the
Madden Dam across the
Chagres River above Gatun Lake. Completed in 1935, the dam created Madden Lake (later Alajeula Lake) which provides additional water storage for the canal.
 In 1939, construction began on a further major improvement: a new set of locks for the canal, large enough to carry the larger warships that the United States was building at the time and planned to continue building. The work proceeded for several years, and significant excavation was carried out on the new approach channels, but the project was cancelled after World War II.
After World War II, U.S. control of the canal and the
Canal Zone surrounding it became contentious; relations between Panama and the United States became increasingly tense. Many Panamanians felt that the Canal Zone rightfully belonged to Panama; student protests were met by the fencing-in of the zone and an increased military presence there.
 Demands for the United States to hand over the canal to Panama increased after the
Suez Crisis in 1956, when the United States used financial and diplomatic pressure to force France and the UK to abandon their attempt to retake control of the
Suez Canal, previously nationalized by the
Nasser regime in
Egypt. Unrest culminated in riots on
Martyr's Day, January 9, 1964, when about 20 Panamanians and 3–5 U.S. soldiers were killed.
A decade later, in 1974, negotiations toward a settlement began and resulted in the
Torrijos–Carter Treaties. On September 7, 1977, the treaty was signed by President of the United States
Jimmy Carter and
Omar Torrijos, de facto leader of Panama. This mobilized the process of granting the Panamanians free control of the canal so long as Panama signed a treaty guaranteeing the permanent neutrality of the canal. The treaty led to full Panamanian control effective at noon on December 31, 1999, and the
Panama Canal Authority (ACP) assumed command of the waterway. The Panama Canal remains one of the chief revenue sources for Panama.
Before this handover, the government of Panama held an international bid to negotiate a 25-year contract for operation of the
container shipping ports located at the canal's Atlantic and Pacific outlets. The contract was not affiliated with the ACP or Panama Canal operations and was won by the firm
Hutchison Whampoa, a Hong Kong–based shipping interest owned by