Business as usual at Gatun Locks, Panama Canal

(CNN) -- When Spanish explorer Vasco Nunez de Balboa traipsed through the tangled jungles of the Panamanian isthmus in 1513, he was thinking only of claiming the shores of the South Sea (Pacific Ocean) for Spain and thereby saving his governorship of a region on the Caribbean coast.

That ultimately didn't work -- Balboa lost first his leadership role and then a few years later his head -- but the one-time pig farmer did let Spain know just how narrow the isthmus really is.

After all, natives to the region -- who told Balboa about the previously unseen ocean to begin with -- had been using the isthmus to cross from shore to shore for millennia.

Two decades after Balboa's discovery, King Charles I of Spain (Holy Roman Emperor Charles V) -- seeking a speedier passage between the Atlantic and the Pacific -- ordered his Panamanian governor to survey the land neck for a canal. The governor's report: it cannot be done.

ALSO   • Canal Timeline

Well, maybe not in 1534. But both the Americans and the French had other ideas by the latter half of the 19th century.

NARRATIVE   • Strategic: A century's journey in Panama   • History: Troubled passageway   • Operations: Transfer heavy on symbolism, light on change   • Politics: Canal return a mixed blessing?   • Interview: Historian David McCullough   • Security: Colombia boils

The French got the first crack at digging a trench from the Atlantic Ocean to the Pacific in 1878 when a committee of the Geographical Society of Paris signed a treaty with Colombia (of which Panama was then a province) to build a canal from Limon Bay to Panama City, closely following the Panama Railroad.

In retrospect, the French effort probably was doomed from the start because Ferdinand de Lesseps, builder of the Suez Canal in 1869, insisted on a sea level canal requiring a massive 7,720-meter long tunnel through the Continental Divide at Culebra. The builders also had no idea how to cope with the frequent horrific outbreaks of malaria and yellow fever.

Ten years later and after at least 20,000 deaths from disease the French gave up, but not before one last effort was made to switch from a sea level canal to a waterway that crossed the Continental Divide along the isthmus's central highlands using a series of locks.

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Lucien N.B. Wyse, the French navy lieutenant who surveyed the canal's course and negotiated the treaty with Colombia, tried once more beginning in 1894. Wyse's company settled on a canal with a pair of lakes and eight sets of locks, but it was grossly under-capitalized and would clearly never finish the job. Enter the Americans.

In 1869, U.S. President Ulysses S. Grant, whose interest in a canal dated to 1852 when he crossed the isthmus as a U.S. Army captain, had ordered surveys for a possible canal. The surveys concentrated on three areas, including Panama and Nicaragua. Grant's surveys went for naught, however, when de Lesseps pushed his own plan to the forefront.

In 1898, Wyse's French company offered itself for sale to the United States. The rising North American power, though, did not jump at the chance to take over where the French had failed.

Abandoned French machinery, circa 1910-14

President William McKinley instead ordered a new canal commission to research other possible routes, and a previously considered track through Nicaragua emerged as the favorite. But history intervened.

McKinley was assassinated in 1901. His successor Theodore Roosevelt settled on the Panama route after some friendly persuasion by the powerful Ohio Republican senator, Mark Hanna, himself lobbied heavily by French interests whose assets were in Panama, not in Nicaragua.

When Colombia refused to sell the rights to dig the canal, Roosevelt threw U.S. power behind a Panamanian uprising and supported Panama's 1903 declaration of independence.

Roosevelt instigated a treaty with Panama that gave the United States the right to build the canal and created a 10-mile wide Canal Zone of what amounted to sovereign American territory surrounding the waterway. The United States bought the French rights and properties, and construction of a lock canal commenced in 1904.

Workers excavate with steam shovels and load French dump cars during early canal construction in 1904

The Americans took no chances. The Army dispatched surgeon Col. William Gorgas to Panama to tackle malaria and yellow fever. Gorgas was fresh from Havana where he had helped eradicate yellow fever, following discoveries by his colleague Maj. Walter Reed and others that the disease was carried by a mosquito. Malaria also had recently been discovered to be transmitted by mosquito bites.

Once Gorgas's efforts had quickly eradicated yellow fever and reduced the incidence of malaria, two principal obstacles to the canal had been removed. The third obstacle was the terrain.

The lakes and locks proved to be the right idea at the right time. Indeed. The Panama Canal was not just a magnificent feat of engineering, it was the cornerstone, in a sense, of the American Century. After 10 years, during which 70,000 people worked on the project, $400 million and 5,600 deaths, the Panama Canal officially opened on August 15, 1914, just as World War I was getting under way.

The Panama Canal officially opened August 15, 1914

The young republic of Panama was a troubled one almost from the start. Nationalists resented what they saw as an American colony splitting their country in half at the canal. U.S. supervision of elections -- and intervention in a series of riots in the mid-1920s -- only reinforced that view.

Under a cloud of economic depression, a bloody coup in 1931 led by Arnulfo Arias Madrid resulted in presidential elections the next year won by Arias's brother, Harmodio. The United States, which had begun to drift toward a nonintervention policy in the late 1920s, did not interfere.

The American presence in Panama, however, continued to fuel the nationalists' fire. Arnulfo Arias, elected president in 1940, was deposed by his own military in late 1941 in the midst of a diplomatic battle over U.S. requests for military sites inside the republic in preparation for World War II.

Arias' successor, Ricardo de la Guardia, granted the requests -- but without the 999-year leases the United States wanted. Instead, the Americans were to vacate the bases at the end of the war. When the U.S. balked and tried to negotiate a treaty to extend the occupation, thousands of Panamanians rioted, forcing the republic's legislature to reject the treaty offer.

Just after the war, National Police Commander Jose Antonio Remon won election to the presidency, negotiating a treaty with the U.S. to increase Panama's take of the canal tolls. But Remon, who for years had essentially manipulated Panamanian politics, was assassinated in 1953, two years before the treaty was enacted.

Suez Canal, circa 1894

Egypt's nationalization of the Suez Canal in 1956 -- and U.S. Secretary of State John Foster Dulles' statement that his country had "rights of sovereignty" in the Canal Zone -- brought more turmoil to Panama's relations with the United States. Student riots erupted in the 1950s.

When Panamanians threatened a "peaceful invasion" of the Canal Zone, the United States sent troops to back Panama's National Guard and canal police to repel the demonstrators. The Americans eventually built a fence around the zone.

Relations between the two countries deteriorated dramatically, hitting a low point in January 1964 when American students at Balboa High School in the Canal Zone refused with adult encouragement an agreement to fly the Panamanian flag alongside the American flag. A three-day riot broke out when Panamanian students marched into the zone with their flag; 23 Panamanians and four U.S. Marines were killed.

Panama cut diplomatic ties briefly over the incident, and U.S. President Lyndon B. Johnson agreed to draw up plans for a new canal and a completely new treaty. Negotiations for such a treaty were never completed.

In 1968, Arnulfo Arias was elected again to the presidency after a tumultuous campaign. As soon as he took office he called for the immediate transfer of the Canal Zone to Panamanian jurisdiction, but he was deposed 11 days later when he tried to change the National Guard's leadership.

In the coup's aftermath, military strongmen Omar Torrijos Herrera took charge. While he worked to solidify power, Torrijos put canal issues on the back burner, but eventually turned his attention to obtaining a new treaty.

Negotiations began anew in 1971, encouraged by a U.N. resolution calling for a "just and equitable" treaty. Watergate interrupted the talks in 1974, as did debate over the issue during the 1976 U.S. election campaign. The new president, Jimmy Carter, made the canal treaty a priority.

Carter and Torrijos at the signing of the Panama Canal Treaty in 1977

On September 7, 1977 -- nine months after Carter took office -- Carter and Torrijos signed two treaties. The first abolished the Canal Zone as of October 1, 1979, its jurisdiction reverting to Panama, and provided for the gradual transfer of canal operations to Panama by December 31, 1999. The other treaty pledged both countries to guarantee the canal's neutrality in times of peace and war.

But Torrijos, who moderated the fierce Panamanian nationalist bent, died in a plane crash in 1981, plunging Panama's government again into turmoil. Col. Manuel Noriega, a former chief of secret police and U.S. CIA operative, emerged as the country's leader, until opponents within the National Guard accused him of drug trafficking.

A U.S. federal court in Miami indicted the dictator in 1988, but Noriega moved only to strengthen his stranglehold on Panama's government. After he survived a bloody coup in 1989, U.S. President George Bush launched an invasion of Panama. Two weeks later, the invasion was over, and Noriega was behind bars in Miami.

The invasion effectively ended military control over Panama. The current president, Mireya Moscoso, took office on September 1 and is Panama's first woman in the job. Moscoso's victory in the May election had an element of revenge. Her opponent was Martin Torrijos, the son of Omar Torrijos, who helped depose Moscoso's late husband, President Arnulfo Arias, in the 1968 coup.