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The Panama Canal is celebrating its 100th birthday; however, its history goes back to the 16th century. After grasping the riches of Peru, Ecuador, and Asia, and taking into account the time it took the gold to reach the ports of Spain, the idea for a canal was suggested to Charles V, c. 1524. The wars in Europe and the thirst for control of the kingdoms in the Mediterranean Sea put the project on permanent hold.
Various surveys were made between 1850 and 1875 showing that only two routes were practical, the one across Panama and another across Nicaragua. In 1876 an international company was organized; two years later it obtained a concession from the Colombian government to dig a canal across the Isthmus. The international company failed, and in 1880 a French company was organized by Ferdinand Marie de Lesseps, the builder of the Suez Canal.
In 1879, de Lesseps proposed a sea level canal through Panama. With the success he enjoyed over the construction of the Suez Canal in Egypt just ten years earlier, de Lesseps was confident he would complete the water circle around the world.
Time and mileage would be dramatically reduced when travelling from the Atlantic to the Pacific Ocean or vice versa. For example, it would save a total of 18,000 miles on a trip from New York to San Francisco.
When the Lesseps’ attempt failed the company offered its assets to the United States at a price of $40 million. The United States and the new state of Panama signed the Hay-Bunau-Varilla treaty, by which the United States guaranteed the independence of Panama and secured a perpetual lease on a 10-mile strip for the canal. Panama was to be compensated by an initial payment of $10 million and an annuity of $250,000, beginning in 1913. This strip was known as the Canal Zone.
The Canal reverted to Panamanian control on December 31, 1999 and in 2007 the project for the construction of the third set of locks officially started. It is expected that it will be finished late 2015.