In 1534, Charles I of Spain ordered the first survey of a proposed canal route through the Isthmus of Panama. More than three centuries passed before the first construction was started. The French labored 20 years, beginning in 1880, but disease and financial problems defeated them.
In 1903, Panama and the United States signed a treaty by which the United States undertook to construct an inter-oceanic ship canal across the Isthmus of Panama. The following year, the United States purchased from the French Canal Company its rights and properties for $40 million and began construction. The monumental project was completed in ten years at a cost of about $387 million. Since 1903 the United States has invested about $3 billion in the Canal enterprise, approximately two-thirds of which has been recovered.
The building of the Panama Canal involved three main problems --
engineering, sanitation, and organization. Its successful completion was due principally to the engineering and administrative skills of such men as John F. Stevens and Col. George W. Goethals, and to the solution of extensive health problems by Col. William C. Gorgas.
The engineering problems involved digging through the Continental Divide; constructing the largest earth dam ever built up to that time; designing and building the most massive canal locks ever envisioned; constructing the largest gates ever swung; and solving environmental problems of enormous proportions.
Now, more than 80 years after the first official ocean-to- ocean transit of the waterway, the United States and Panama have embarked on a partnership for the management, operation and defense of the Panama Canal. Under two new treaties signed in a ceremony at OAS headquarters in Washington, D.C., on September 7, 1977, the Canal will be operated until the turn of the century under arrangements designed to strengthen the bonds of friendship and cooperation between the two countries. The treaties were approved by Panama in a plebiscite on October 23, 1977, and the U.S. Senate gave its advice and consent to their ratificaton in March and April 1978. The new treaties went into effect October 1, 1979.
The Panama Canal Commission, a U.S. government agency, will operate the Canal during the 20-year transition period that began with Panama Canal Treaty implementation on October 1, 1979. The Commission is supervised by a nine-member binational board. For the first 10 years, a U.S. citizen served as Chief Executive Officer, under the title of Administrator, and a Panamanian was the Deputy. Effective January 1, 1990, as mandated by the treaty, a Panamanian serves as Administrator and a U.S. citizen is the Deputy.
The Commission replaced the former Panama Canal Company, which, together with the Canal Zone and its government, was disestablished on October 1, 1979. On December 31, 1999, as required by treaty, the United States will transfer the Canal to Panama.
The Commission remains committed to serving world trade with the standards of excellence that have been the tradition of the waterway throughout its history. With prudent investment in maintenance, modernization and training programs, the Canal will remain a viable, economic transportation artery for world trade well into the future.