The United States built the Panama Canal to create a relatively short, direct link for commercial and military shipping traffic between the Pacific and Atlantic oceans. France attempted to build a canal there in the late 1800s, but gave up the project. The United States completed the construction between 1904 and 1914.
Before the canal was built, ships were forced to travel to the southern tip of South America and navigate around Cape Horn to move from one ocean to the other. The canal shaved about 8,000 miles from that journey.
President Theodore Roosevelt decided a canal was needed after the United States won the Spanish-American War and acquired Puerto Rico, Guam and the Philippines. He believed it was crucial to create a shorter route for the Navy to travel by ship from one ocean to the other.
When Columbia owned the rights to the isthmus where the canal would be created, it refused to make a deal with the United States to allow it to build the canal. However, in 1903, when Panama became an independent nation, the new country sold the rights to the United States for $10 million. During the peak time of construction, 25,000 workers removed more than 1 million cubic yards of earth each day.