The United States spent almost $500 million (roughly equivalent to $15.2 billion in 2023) to finish the Panama Canal 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 SS Ancon.
The French diplomat and entrepreneur Ferdinand de Lesseps was the driving force behind French attempts to construct the Panama Canal (1881–1889). De Lesseps had made his reputation by successfully constructing the Suez Canal (1859–1869), a route which had soon proved its value in international commerce.
The United States acquired the rights to build and operate the Panama Canal during the first years of the 20th century. The Hay-Herrán Treaty, negotiated with the nation of Colombia in 1903, allowed the United States rights to the land surrounding the planned canal.
Building the Panama Canal, 1903–1914, President Theodore Roosevelt oversaw the realization of a long-term United States goal — a trans-isthmian canal. Throughout the 1800s, American and British leaders and businessmen wanted to ship goods quickly and cheaply between the Atlantic and Pacific coasts.
Politically, the canal remained a territory of the United States until 1977, when the Torrijos–Carter Treaties began the process of transferring territorial control of the Panama Canal Zone to Panama, a process which was finally completed on Dec. 31, 1999.
The treaties guaranteed that Panama would gain control of the Panama Canal after 1999, ending the control of the canal that the U.S. had exercised since 1903. The treaties are named after the two signatories, U.S. President Jimmy Carter and the Commander of Panama’s National Guard, General Omar Torrijos.
The Panama Canal was one of the largest public investments of its time. In the first decade of its operation, the canal produced significant social returns for the United States. Most of these returns were due to the transportation of petroleum from California to the East Coast.
How profitable is the Panama Canal?
In 2024, the canal’s revenue stood at nearly $5 billion, which represents about four percent of Panama’s GDP.
The net present economic value of the canal to the world is estimated to be of the order of $6 billion, and the value to the United States is approximately $1.6 billion.
Why did the U.S. give back the Panama Canal? Following riots by Panamanians protesting U.S. control of the canal in 1964, the United States and Panama renegotiated the treaty, and in September 1977 President Jimmy Carter and Panamanian leader Brig. Gen. Omar Torrijos Herrera signed two treaties.
President Trump believes treaties between the United States and Panama have been broken with China’s growing involvement in the canal. The president has declared that we gave the canal to Panama and not to China. China has denied that it is in any way controlling the canal.
“The accusations that China is running the canal are unfounded,” Ricaurte Vasquez Moralez, the head of the Panama Canal Authority, recently told the Wall Street Journal.
Panama’s President Jose Raul Mulino has also denied the presence of Chinese forces. “There are no Chinese soldiers in the canal, for the love of God,” he said in December 2024.
My wife and I made the 12-hour, 51-mile canal voyage. We saw nothing disturbing but were in awe of one of the greatest engineering feats ever accomplished.
The most amusing part of our trip was that it generally took four to five Panama federal workers with one supervisor looking on, to tie and untie one rope attached to our ship as we made our way in and out of the locks. It all looked like typical federal money and manpower at work.
Yes, it would be nice if we owned and controlled the Panama Canal. We did and we gave it up. There is probably a better chance of people in hell getting ice water than us getting the canal back. However, I would never count our president out at this stage of the deal.
— Dr. Glenn Mollette is read in all 50 states. Find out more at GlennMollette.com. He may be emailed at gmollette@aol.com.
