President Jimmy Carter and Panamanian Chief of Government Omar Torrijos signed the Panama Canal Treaty and Neutrality Treaty on September 7, 1977. Also known as the Carter-Torrijos Treaty, this agreement relinquished American control over the canal and transferred authority to the Panama Canal Authority on December 31, 1999.
On May 4, 1904, Panama granted the United States the right to build and operate the canal and control the five miles of land on either side of the water passage in exchange for annual payments. President Theodore Roosevelt viewed building the canal as indispensable for securing U.S. military and commercial power.
Construction on the canal began in 1904 and the canal opened to traffic on August 15, 1914. Ships passing through the lakes and locks travel approximately 51 miles between the Atlantic Ocean entrance and the Pacific Ocean entrance, eliminating the lengthy and often precarious 8,000-nautical-mile trip around South America's Cape Horn.