After several years of construction managed by other countries, and two years into construction under American oversight, the United States remained undecided about whether to build the Panama Canal as a lock or sea level system. In February 1906, President Theodore Roosevelt sent this message to Congress detailing his support of a lock-based canal. He considered the advantages and disadvantages of each design, but ultimately favored a lock system: it would be cheaper to construct and maintain; it could be built faster with less risk; and it would be easier to modify if the canal needed to be enlarged in the future. “The law now on our statute books seems to contemplate a lock canal. In my judgment a lock canal as herein recommended is advisable,” Roosevelt asserted. On June 29, 1906, Congress authorized construction of the lock canal.
Almost from its discovery, the isthmus at Panama was recognized as a key location for the construction of a canal to connect the Atlantic and Pacific Oceans. Many countries pursued the idea, but France, beginning in the late 1800s, made the most significant commitment to excavation and construction. Cost and difficulties in protecting the workers from yellow fever and malaria forced the project into financial collapse in 1898. Sensing an opportunity to gain a foothold on the isthmus, Congress passed the Panama Canal Act of 1902, which allowed the United States to obtain from France the rights to build the canal, as well as to procure surveys and equipment. Additionally, it authorized negotiations for access to the land where the canal would be built. The legislation also established the Isthmian Canal Commission, a federal agency under the jurisdiction of the Secretary of War, tasked with construction of the canal. The Hay–Bunau-Varilla Treaty, signed on November 18, 1903, guaranteed the United States the right “‘in perpetuity’ to construct, maintain and defend an interoceanic waterway across the Isthmus.” In 1904, after payment of $40 million to France and $10 million to Panama, the United States assumed control over roughly 120,000 acres of what became known as the Panama Canal Zone. The early part of the project was devoted to infrastructure projects to house workers and improve sanitary conditions. Excavation and construction of the canal began in earnest in 1907. Work on the locks was completed in 1913 and the following year, on August 15, 1914, the canal officially opened to traffic.
Long-standing tensions between the United States and Panama over control of the canal zone resulted in a renegotiation of the 1903 treaty. Signed in 1977, the Panama Canal Treaty discontinued the Panama Canal Zone beginning in October 1979 and ceded control of the canal to Panama on December 31, 1999.