One only has to look at a map to understand why an isthmian canal was   considered so important. For the Spanish conquistadors, uniting the Atlantic   and Pacific oceans at the American continent’s narrowest point would enable   the easy passage of silver and gold from Incan territory. Similarly, during   the 19th-century gold rush, Americans saw the opportunity of swift transfer   between West Coast and East, at a time when much of America was still   wilderness.

A canal would cut days – and 8,000 miles – off voyages around the southern tip   of the Americas, at Cape Horn. In short, the notion of cutting the continent   in half attracted capitalists from generation after generation. From Britain   alone, Sir Francis Drake and Henry Morgan both tried to seize Panama from   Spanish hands.

Most infamously, in 1698, Scottish entrepreneur William Paterson convinced his   government to invest half the national savings into setting up an isthmian   colony at Darien. A coast-to-coast canal would, he said, yield “the gates to   the Pacific and keys to the universe”. Yet, within months, his 1,200-strong   expedition had been defeated by the twin enemy of tropical disease and   Spanish defence forces – one crucial consequence being the decision of   impoverished Scots to sign the Act of Union with England.

^{Original dreamer: Vasco Núñez de Balboa discovers the Pacific in 1513}

It wasn’t until the 19th century, though, that technology finally caught up   with aspiration. This was the peak of the “canal age”, as man-made waterways   – such as the Erie, joining New York to the Great Lakes – slashed journey   times and transport costs in Europe and North America.

Perhaps the key canal of all, however, was the Suez, in Egypt, which from 1869   allowed ships to travel between Europe and east Asia without navigating   around South Africa. Its pioneer was Frenchman Ferdinand de Lesseps, who,   riding a wave of confidence in Victorian technological progress, soon set   his sights on Panama. His aim? To build “a bridge across the Americas”.

Parisians queued around the block of their stock exchange, the Bourse, to   invest in the scheme. But, despite the task – creating a waterway just 48   miles in length – looking relatively simple, it was anything but. De Lesseps   had insisted on a sea-level canal, just like at Suez, rather than a   lock-operated one – failing to appreciate the unique geography of Panama,   not least the mighty Cordillera, the range of mountains that runs down the   country’s spine.

In part, this was a hubristic belief in man’s power to tame nature; in part,   it was a commercial decision, believing that a sea-level transit would be   both swifter and more profitable. However, at the notorious Culebra pass,   through the Cordillera, depths of around 300 ft had to be dug – for nine   miles – and de Lesseps’s men and machines just weren’t up to it, especially   in rainy season when mudslides and flooding kept returning all the earth   they’d just removed.

The heat blazed too, and the soil – with its 17 different rock formations –   was like nothing geologists had ever seen. There seemed no solution either   to yellow fever and malaria, diseases which were killing off workers at a   terrifying rate. During the eight years of French excavation from 1881, more   than 20,000 workers died, most of them drafted in for a pittance from the   West Indies.

^{Workers, such as the ones pictured above in 1909, laboured on the Panama   Canal project for nine years}

Against such odds, the project was doomed to failure, though de Lesseps   periodically served up false, optimistic reports to keep investor confidence   high. The crash of his Compagnie Universelle du Canal Interocéanique was the   biggest of the 19th century. The savings of 800,000 private investors   (totalling 1 billion francs) were completely wiped out.

It’s testament to the sheer power of the canal as a concept that anyone would   want to tackle the Herculean task again so quickly. Yet that is exactly what   America would do, flexing its muscles beyond its borders for the first time.   Having gained independence from Spain in 1821, Panama was now part of   Colombia. Yet, rather than cooperate with Bogota, President Theodore   Roosevelt opted to incite a nationalist insurrection, and gave crucial   support to Panamanian rebels fighting for independence. The Republic of   Panama was born in 1903, though a slender “Canal Zone” was handed over to   America in perpetuity.

For Roosevelt, control over both the Atlantic and Pacific grew increasingly   important – for which an isthmian canal would be crucial – and he asked   William Taft (his eventual successor as president) to oversee the project.   Learning from the French debacle, Taft backed a lock-canal system, and   thanks to the healthy wages on offer, there was no shortage of construction   workers, many from Europe. One of them was Pedro Hernandez, an olive-picker   from northern Spain. “Opportunities at home were scarce,” says his   great-grandson Jaime Massot, 55, a hydrologist at the canal today. “The   Panama Canal represented a bold, new start for him.”

Yet, Roosevelt’s chief medical officer, Dr William Gorgas, knew that success   could only be achieved if yellow fever was eliminated first. “Trouble was,   no one knew what caused it,” recalls Massot. “Some attributed it to dirty   water, others to poisonous airs,” some even to the debauched, late-night   pursuits in Panama City.

Working at Culebra, 10 hours a day, six days a week, Hernandez caught yellow   fever and “became so lifeless, the hospital doctors thought he’d died”, says   Massot. “They placed him in a coffin. Thank goodness, though, one of the   nurses heard a knocking sound on the wood – somehow my grandfather had found   the energy to let them know he was alive, and they let him out.” Hernandez   made a full recovery and ended up settling in Panama for the rest of his   long life. The less fortunate had their cadavers sold to medical schools in   America for dissection classes.

^{William Taft (holding umbrella), top left, oversaw the building of the   Panama Canal}

Gorgas was adamant that mosquitoes were the disease carriers. Given a blank   cheque by Roosevelt, his tactic of fumigating cities and persuading   Panamanians to stop storing water in open containers proved a masterstroke.   Within six months, yellow fever had been eradicated and malaria sent into   steep decline, meaning the engineers could now, at last, concentrate on the   task at hand.

For starters, Roosevelt’s chief engineer, John Stevens (the man behind   America’s Great Northern Railway), installed an efficient railroad. By   coordinating steam-shovel and train movements, he kept the soil moving out   and away with the efficiency of a conveyor belt.

The blasting and excavation of the Culebra Cut – aka Hell’s Gorge – would   still prove a construction headache, involving, as it did, the   transformation of a mountain into a valley. Mercifully, the lock-based   system – in which the canal rises 280ft on the way up from one coast,   crosses the Cordillera, then drops back down 280ft towards the other – meant   much less digging than a sea-level system. The Americans also had the   advantage of bulldozers, steam-powered cranes and hydraulic rock-crushers to   make their job easier – all newly pioneered in America in the Second   Industrial Revolution. Back home, the press gleefully reported on every   breakthrough.

The engineering genius of the canal lies in its sheer simplicity – with no   pumps, just a reliance on gravity and climate. At 110 ft wide and 41 deep,   the canal’s three sets of locks were the largest in the world, their filling   achieved through the abundant Panamanian rainfall and culverts which channel   water from damned lakes. The largest lake of all, Gatun, was created by   damming the temperamental River Chagres, using the soil and rock excavated   from Culebra. In rainy season, a flooding Chagres was lethal – and so the   engineers made the cute decision to exploit the river rather than battle it.

After nine years’ labour the canal finally opened, and man’s greatest victory   over nature until the moon landings was complete. World trade was opened up   and transformed forever. It also confirmed the rise of America as the   world’s pre-eminent power in the very month that Europe descended into   carnage. With the Panama Canal, the American century had truly begun.

^{The successful transit of the first ship in 1914}

The opening-day celebrations were largely subdued, as it was less than a   fortnight after the declaration of the First World War. No international   dignitaries came and news was barely reported: “The Panama Canal is open to   the commerce of the world,” announced The New York Times, almost   apologetically, on page 14.

The first trading ship to travel from San Francisco to New York via the canal,   the Pleiades, arrived on August 24 1914. The isthmus would remain of major   economic and geopolitical importance to America for the next 85 years – not   to mention an imperial symbol through which American power and prosperity   flowed. It linked their navy’s Atlantic and Pacific fleets, ferrying men and   resources during the Second World, Korean and Vietnam wars. However, with   the tailing off of the Cold War, America agreed to hand over control of the   canal to Panama, on December 31 1999.

The transition was seamless. The autonomous government agency, the Panama   Canal Authority (PCA), has proved a steady hand on the tiller. The canal   largely functions as it did a century ago, a typical crossing taking between   eight and 10 hours, and remains a vital avenue of world trade, connecting   1,700 ports in 160 countries. An average of 40 ships cross daily, each one   earning Panama approximately £30,000 (which, altogether, makes Panama £800m   a year).

In many ways, the canal has been a victim of its own success. In a bid to cash   in, China is now investing $50 billion to construct a waterway across   Nicaragua. And there are talks of other projects across Honduras and   Guatemala.

What’s more, time waits for no man. At the turn of the 20th century, the canal   could easily accommodate any vessel yet built (the mighty Titanic, at 90ft   wide, could fit with plenty of room to spare). Now, however, companies are   building ships a quarter-of-a-mile long, wider than a motorway and capable   of carrying up to 18,000 containers. Known as “Post-Panamax”, they are too   big for the canal as it stands, so the PCA is expanding the waterway to   double its capacity.

“It was no good resting on our laurels,” says Diego Miguez, the PCA’s vice   president of finance. “The canal was a masterpiece of engineering, but it   gives us no divine right to future trade. We’re an entirely commercial   operation, and must keep up with the developments in 21st-century shipping   and commerce.”

Expansion work, to the tune of £3 billion, was approved in a national   referendum in 2007, to accommodate the new Post-Panamax ship. However, just   like a century or so previously, progress hasn’t been straightforward.   First, the workers downed tools to strike for better wages; then the Spanish   firm contracted to provide the new locks, Sacyr, refused to foot the bill   for £1 billion cost overruns. Jorge Quijano, the PCA’s CEO, responded by   accusing Sacyr of racism, disrespect and treating Panamanians “like a bunch   of American Indians still wearing feathers on our heads”. All disputes seem   to have been resolved now, and the work is 80 per cent complete, but the   opening date has been put back to January 2016.

^{Today, the canal is being expanded to accommodate larger ships}

Other challenges remain too. How long, for instance, can Panama afford to keep   widening its canal as ships get bigger and bigger? Certain vessels are   already too big even for the new locks. What’s more, climate change experts   question whether the rainfall in Panama will persist at levels to keep the   canal operational and also whether the melting of polar ice caps might   enable a new, rival navigational route through the Arctic to open up.

Miguez, however, is optimistic. “We have a long-successful operation and a   strong, satisfied customer base,” he says. “Our aim is to continue to be   major players in maritime trade worldwide.” Certainly, many of the canal’s   trade routes are still booming: raw materials like coal and iron ore from   Latin America – and liquefied natural gas from America – head to China and   its fast-industrialising neighbours, just as manufactured goods are heading   back in the other direction.

It remains one of history’s tragic coincidences that the Panama Canal   should open just as Europeans were deploying new technologies for mass   slaughter, thus shattering faith in progress and mechanisation. For, if the   First World War marked the end of an era, the Panama Canal represented its   final, brilliant hurrah – an age of manned flight, submarines and the   Kinetoscope, of confidence and can-do, when nothing seemed impossible. Not   even a bridge across the world.