Panama Canal Zone, former territory within Panama, 553 sq mi (1,432 sq km), that was administered by the United States under a 1903 treaty (with later amendments) with Panama. The zone included the Panama Canal and an area extending 5 mi (8.1 km) on each side. Under the terms of a later treaty (1977), the zone was abolished in Oct., 1979, and returned to Panamanian rule; the canal itself was ceded to Panama in 1999. Panama has begun turning former military installations into housing, civilian ports, hotels, industrial parks, universities, and sports facilities. Some bases have been converted into tourist complexes aimed at attracting cruise-ship passengers, while some undeveloped areas have become eco-tourist sites. The northern section of the former territory is now part of Colón prov., and the southern section part of Panamá prov. Cristóbal, Balboa (Caribbean and Pacific ports, respectively), and Ancon are the chief towns.

Panama Canal, waterway across the Isthmus of Panama, connecting the Atlantic (by way of the Caribbean Sea) and Pacific oceans, built by the United States (1904-14) on territory leased from the republic of Panama. The canal, running S and SE from Limón Bay at Colón on the Atlantic to the Bay of Panama at Balboa on the Pacific, is 40 mi (64 km) long from shore to shore and 51 mi (82 km) long between channel entrances. The Pacific terminus is 27 mi (43 km) east of the Caribbean terminus. The minimum depth is 41 ft (12.5 m).

From Limón Bay a ship is raised by Gatún Locks (a set of three) to an elevation 85 ft (25.9 m) above sea level, traverses Gatún Lake, then crosses the Continental Divide through Gaillard (formerly Culebra) Cut and is lowered by Pedro Miguel Lock to Miraflores Lake and then by the Miraflores Locks (a set of two) to sea level. The average tidal range on the Atlantic side is less than a foot (.3 m); that on the Pacific side is 12.6 ft (3.8 m).

U.S. Interest in a Canal

Building an interoceanic canal was suggested early in Spanish colonial times. The United States, interested since the late 18th cent. in trading voyages to the coast of the Pacific Northwest, became greatly concerned with plans for a canal after settlers had begun to pour into Oregon and California. Active negotiations led in 1846 to a treaty, by which the republic of New Granada (consisting of present-day Panama and Colombia) granted the United States transit rights across the Isthmus of Panama in return for a guarantee of the neutrality and sovereignty of New Granada.

The isthmus gained more importance after the United States acquired (1848) California and the gold rush began, and the trans-Panama RR was built (1848-55) with U.S. capital. At the same time, interest in an alternate route, the Nicaragua Canal, was strong in both Great Britain and the United States. Rivalry between the two countries was ended by the Clayton-Bulwer Treaty (1850), which guaranteed that neither power should have exclusive rights or threaten the neutrality of an interoceanic route. In the 1870s and 80s the United States tried unsuccessfully to induce Great Britain to abrogate or amend the Clayton-Bulwer Treaty.

After the United States acquired territory in the Caribbean and in the Pacific as a result of the Spanish-American War (1899), U.S. control over an isthmian canal seemed imperative. Following protracted negotiations, a U.S.-British agreement (see Hay-Pauncefote Treaties) was made in 1901, giving the United States the right to build, and by implication fortify, an isthmian canal. It was then necessary for Congress to choose between Nicaragua or Panama as the route for the canal.

French Attempts

Meanwhile a concession for building a sea-level canal in Panama (granted 1878) was acquired by a French company under Ferdinand de Lesseps. Work began in 1881, but poor planning, disease among the workers, construction troubles, and inadequate financing drove the company into bankruptcy in 1889. Amid charges of corruption and mismanagement, French courts transferred (1894) the rights and assets to a new company. Although the alternate Nicaragua route was favored by the United States, an American representative of the French company, William Nelson Cromwell, began working vigorously to interest the United States in the Panama route, and Philippe Bunau-Varilla, a leading figure in the new company, devoted himself to the cause. When a U.S. commission recommended a canal through Nicaragua in 1901, Bunau-Varilla persuaded the French directors to reduce the price of the company's rights, gaining the support of Mark Hanna and later of the new President, Theodore Roosevelt. The commission reversed its recommendation, and Congress authorized purchase of the French company's rights and construction of the Panama Canal.

Insurrection against Colombia

The Hay-Herrán Treaty, signed (Jan., 1903) with Colombia, would have given the United States a strip of land across the Isthmus of Panama in return for an initial cash payment of $10 million and an annuity of $250,000, but the Colombian senate refused to ratify it. An insurrection, involving Bunau-Varilla and other proponents of the canal as well as the regional population, was encouraged by the United States. Panama rose in revolt on Nov. 3, 1903, declaring itself independent of Colombia. Invoking the treaty of 1846, the United States sent an American warship to Panama, and its presence prevented Colombian troops from quelling the outbreak. The new republic was formally recognized three days later, and on Nov. 17 the Hay-Bunau-Varilla Treaty was signed, granting to the United States, in return for the same terms offered Colombia, exclusive control of a canal zone in perpetuity, other sites necessary for defense, and sanitary control of Panama City and Colón. Colombia's efforts to secure redress for the loss of Panama later resulted in ratification of a treaty (1921) by which the United States paid Colombia $25 million, and Colombia recognized the independence of Panama.

Construction and Improvements

Construction of a lock canal was decided on in 1906. The first three years were spent in the development of construction facilities, surveys, and disease control. The canal was informally opened Aug. 15, 1914; formal dedication took place on July 12, 1920. The total cost was $336,650,000, and c.240 million cu yd (184 million cu m) of earth were evacuated. Madden Dam, which stores additional water for the locks, was completed in 1935.

In 1939 treaty amendments increased Panama's annuity to $434,000 (retroactive to 1934 to offset dollar devaluation), provided for a transisthmian highway, and (at Panama's insistence) abrogated the U.S. guarantee of the neutrality and sovereignty of Panama. Although in the same year Congress authorized construction of a third set of locks, World War II intervened, and the plans were shelved. In 1955 the annuity was raised to $1,930,000, and the United States undertook to build a high-level bridge (completed 1962) over the Pacific side of the canal. The Gaillard Cut was widened in 1969 to permit two-way traffic. The largest modern merchant and fighting ships, however, cannot pass through the canal.

Panamanian Control

In the 1960s there was increasing agitation in Panama to achieve greater Panamanian control over the canal, resulting in the negotiation of a new treaty (1967) which failed, however, to gain ratification by the Panamanian government. In 1977 negotiations were successful, and a new treaty was signed. It returned the Panama Canal Zone to Panama while setting up joint U.S.-Panamanian control of the canal until the end of 1999, when Panama gained full control. A separate treaty (1979) guarantees the permanent neutrality of the canal. In 0ct., 2006, Panamanian voters approved a plan for expanding the canal by adding a third series of locks paralleling the existing locks; the new locks, which the plan calls for constructing from 2008 to 2012, would be larger, enabling wider, longer vessels with deeper drafts to transit the Isthmus. The plan would utilize the work begun but abandoned on a third series of locks prior to World War II.

or Panama Canal Zone

Strip of territory, a historic administrative entity in Panama over which the U.S. formerly exercised jurisdictional rights (1903–79). The zone came into being in 1904 when Panama granted the U.S., in return for annual payments, sole right to operate and control the Panama Canal, including a strip of land 10 mi (16 km) wide along the canal extending from the Atlantic to the Pacific Ocean and bisecting the Isthmus of Panama. The zone was abolished by treaty in 1979, and civil control of the territory was returned to Panama. By the same treaty a commission under joint U.S.-Panamanian ownership was established to operate the canal until the year 2000, when Panama assumed full control.

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Lock-type canal, Panama. Extending across the Isthmus of Panama, it connects the Atlantic and Pacific oceans. It is about 50 mi (82 km) long from deepwater to deepwater, with an average depth of 43 ft (13 m). The width varies between 500 to 1,000 ft (150 to 300 m). In 1881 a French company began constructing the canal, but the enterprise collapsed in 1889. Under a 1903 treaty Panama granted the U.S. the Panama Canal Zone and the rights to build and operate a canal. Work began in 1904; facing enormous obstacles, George Washington Goethals directed the construction from 1907, and the canal opened on Aug. 15, 1914. The canal enabled ships traveling between the two oceans to avoid the lengthy circumnavigation of South America and was a boon to world commerce. After disputes over sovereignty, a 1977 treaty provided for Panama to take control of the canal by 2000; it did so in 1999. Except for small craft, no vessel can pass through the canal under its own power. Ships are towed by electric locomotives, and it generally takes 15–20 hours to complete the passage (including waiting time). Sets of double locks enable ships to pass in opposite directions simultaneously.

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