The history of the Panama Canal – one of the world’s modern wonders

The Panama Canal is one of the most exciting of the seven wonders of the modern world, and in this article, we’re delving into its history.

Early plans to cross the land

The idea to cut through the Panama Strait was born shortly after Spanish explorer Vasco Nunez de Balboa first reached the Pacific coast through the Panamanian primaeval forest.

Although the sailor first got round the problem caused by the strait between the two oceans by disassembling and then reassembling his ship, it was clear that this method would not work long-term. Instead, the sailors had to travel more than 10,000 kilometres to reach the other shore that was only 80 kilometres away.

The concept of the Panama Canal also emerged from the minds of the German-Roman emperor Charles V and King of Spain (ur. 1519-1556), who considered construction important primarily because of the faster transportation of Mexican gold.

However, after Charles ended up committing himself to the fight against the French and Protestantism, the plans were shelved.

The California Gold Rush was a key driver

The California Gold Rush (1848–1855) began on January 24, 1848, when gold was found by James W. Marshall at Sutter’s Mill in Coloma, California. The news of gold brought approximately 300,000 people to California from the rest of the United States and abroad.

However, finding the gold may well have been easier than transporting it back East. The only hope for avoiding a six-month waggon journey was to travel via the narrowest portion of the continent; the 48 kilometre Isthmus of Panama.

By 1855, when railroads were spanning the region, the trip was significantly shortened. Even so, unloading and reloading ships at each port cost both time and money. To truly connect these two bodies of water, shipping interests needed a canal – a continuous maritime passage through the Isthmus.

The first (French) attempt to build a passage

After Ferdinand Lesseps envisioned the Suez Canal in Egypt by 1869, plans for a Panamanian counterpart became popular again.

The French, intoxicated by self-confidence, also undertook to build it. As early as 1876, the Inter-Ocean Canal Society was founded, with Lesseps also as its leader. Lesseps' success with the Suez Canal persuaded speculators and ordinary citizens to invest nearly $400 million in the project.

The excellent innovator, who wasn’t an engineer by profession, envisioned the waterway as the shortest section between the two seas at sea level so that as much of the route as possible would pass through the freshwater Lake Gatún. 

Lesseps was convinced that building the Panama Canal was going to be a similarly “easy” project to the Suez Canal, therefore he thought the works wouldn’t exhaust all the money that been collected.

The engineering congress estimated the project’s cost at $214 million. This was revised by a different engineering commission to $168.6 million, but Lesseps reduced this estimate twice. His final estimation was $120 million.

Difficulties – rocks and epidemics 

However, the Panama Canal had to be dug and built through the mountainous spine of Central America, not through a flat sandy desert, so it couldn’t be completed as easily as expected.

Unlike Suez, which saw workers deal with sandy soil, the construction of the Panama Canal at sea level required a huge amount of rock to be excavated, while the 9-meter-deep and 26-meter-wide waterway passed through places where even the lowest altitude exceeded 100 metres.

In addition to the unexpected difficulties, the epidemics in the jungle, mainly malaria and yellow fever, also affected the builders – the diseases claimed the lives of more than 20,000 workers in total. 

An accumulation of these circumstances led to the Lesseps enterprise far exceeding planned costs, and the company filed for bankruptcy by 1889. The financial burden was not even reduced by the fact that the engineer eventually abandoned the design of the canal running at sea level and supported a sluice construction.

The construction of the Panama Canal was also teeming with financial abuse and corruption, and the well-known concept of “panicking” spread in the world press just after the bankruptcy of the French company.

Then came the Americans

Although the French, driven by national pride and led by engineer Philippe-Jean Bunau-Varilla, founded another joint-stock company in 1892, they soon had to give up the construction of the Panama Canal. Following this development, the United States stepped in with plans to build a competing route through Nicaragua, and it ruined their business. 

The Americans laid their hands on the concession, allowing Secretary of State John Hay to sign an agreement with Bunau-Varilla in 1902 to hand over the area. The Colombian Parliament nonetheless rejected the treaty, citing concerns about the country’s sovereignty. This resulted in the United States resorting to other methods, and provided Panama with substantial financial support to fight for independence.

Washington was not to be disappointed. The republic of Panama became independent in November 1903 and a year later— for $10 million and then $250,000 in annual rent —  transferred the area’s concession to the United States for 99 years.

Panama Canal built in 6 years

American engineers of the Panama Canal, John Findlay Wallace, John Frank Stevens, and – after 1908 – George Washington Goethals, were then finally able to begin work; the designers adopted the Lesseps sluice concept, and using their ideas, by 1914 the 77-kilometer waterway had been completed.

At the time, the construction of the Panama Canal was one of the largest investments in U.S. history, costing more than $ 400 million. The difficulty of its construction is well illustrated by the fact that, despite the higher standard of medical care for workers, the Panama Canal wasn’t finally handed over to traffic until August 15, 1914, when the first cargo ship was allowed to pass through it.

The waterway has become one of the most important transportation hubs in the world – shortening the route between New York and San Francisco by more than 12,000 kilometres. Equally important was the simplification of transportation between the U.S. East Coast and the Far East, but the canal was also later of great use to the U.S. Navy. 

Modern-day expansions – the Third Set of Locks Project

In 2007, work began on a $5.25 billion expansion project to enable the canal to handle post-Panamax ships, whose dimensions are more than 110 feet wide and 1,000 feet long.

The Panama Canal expansion project, also known as the Third Set of Locks Project, doubled the capacity of the Panama Canal by adding a new lane of traffic. This allows for a larger number of ships, while the increase in the width and depth of the lanes and locks also means larger ships can pass. These new ships, called New Panamax, are about one and a half times the previous Panamax size, and can carry over twice as much cargo.

The expanded canal began commercial operations on 26th June 2016.

In summary, the project has:

• Built two new sets of locks, one each on the Atlantic and Pacific sides, and excavated new channels to the new locks
• Widened and deepened existing channels
• Raised the maximum operating water level of Gatun Lake

Traffic through the Panama Canal is a barometer of world trade

The development of the Panama Canal has been an essential catalyst for the boom of the global economy in the 20th century. The artificial passage through Central America reduced the sailing distance from Atlantic to Pacific and vice versa by a massive 8,000 nautical miles (approximately). Instead of 22 days of sailing, it takes only 8-10 hours to get to the other side of the American continent.

It not only saves money and time for owners and ship operators, but in fact, it helps in saving huge amounts of CO2 emissions and thus helping the shipping industry to reduce its carbon footprint.

Between 13,000 and 14,000 ships use the canal every year. Most of them are American vessels, followed by those from China, Chile, Japan, Colombia and South Korea.

The main trade routes with traffic in the Panama Canal are:

• East Coast of U.S.A. and Asia (Far East)
• East Coast of U.S.A. and West Coast of South America
• Europe and West Coast of South America
• East Coast of U.S.A. and West Coast of Central America
• Coast to Coast of the U.S.A.

Moreover, Traffic through the Panama Canal is a barometer of world trade, it rises in times of world economic prosperity and declines in times of recession, explains Britannica. From a low of 807 transits in 1916, traffic rose to a high point of 15,523 transits of all types in 1970. The cargo carried through the canal that year amounted to more than 132.5 million long tons (134.6 million metric tons).

Although the number of annual transits has decreased since then, the canal carries more freight than ever before because the average size of vessels has increased. There were nearly 210 million long tons (213 million metric tons) of cargo that sailed through the canal in 2013.

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