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The Panama Canal Commission; Transition of the Panama Canal from U.S. Management to Panamanian Ownership

The Panama Canal Commission was the governing body of the Panama Canal between the signing of the Panama Canal Treaty between the United States and Panama in 1977 and the handing over of the Panama Canal to Panama on December 31, 1997.

Panama Canal

The Panama Canal is the system of man made channels, locks, dams, and artificial lakes that connect the Pacific Ocean to the Atlantic Ocean across the Isthmus of Panama. Since its completion in 1914 the Panama Canal has allowed shipping to cross the fifty mile wide isthmus at the narrowest part of the Americas. The Panama Canal locks allow ships to enter the system from either ocean and to be raised to the level of artificial Lake Gatun, 26 meters above sea level, to transit central Panama before being lowered to sea level on the other side.

Construction of the Panama Canal included damming the Chagras River (Gatun Dam) so that a central valley filled with runoff from Panama's tropical rains thus forming Lake Gatun. In addition a 7.8 mile long, manmade valley was blasted and dug through a ridge in the mountains of central Panama to connect Lake Gatun with the Pacific side of the canal system. This valley is known as the Gaillard Cut or Culebra Cut.

Panama Canal Treaties

In 1903 the United States signed the Hay-Bunau-Varilla Treaty that guaranteed the independence of the new country of Panama and in return received the right to build and operate a canal across the Isthmus of Panama. After its construction was completed by the United States in 1914 the Panama Canal was operated by the United States exclusively until 1977. Two new treaties, the Panama Canal Treaty and the Neutrality Treaty, were signed in 1977 and from 1977 to 1997 the US and Panamanian Panama Canal Commission jointly managed the Panama Canal. In 1997 Panama took over sole management of the Panama Canal from the Panama Canal Commission.

The Panama Canal is considered neutral and, in fact, the neutrality of the Panama Canal is guaranteed by the 1977 treaty that eventually returned sovereignty of the Panama Canal and adjacent lands to Panama. Current management is by the Panama Canal Authority (Autoridad del Canal de Panamá, ACP), which is an autonomous agency of the government of Panama charged with managing, operating, and maintaining the Panama Canal.

The Panama Canal Commission

During the years 1977 to 1997 the Panama Canal Commission ran the Panama Canal. The specific governance was by the United States with a governing board of nine members, five American members and four Panamanian members, appointed by the President of the United States.

During the twenty transition years from 1977 to 1997 Panama received from the U.S. $10 million a year in fixed annual payments as well as $10 million adjustable for inflation for public services provided by the government of Panama to the areas of the old Canal Zone. In addition Panama received a portion of tolls for boats transiting the Panama Canal with an agreement for the U.S. to pay an additional amount up to $10 million if Panama Canal Commission revenues were to exceed expenditures for a given year. Otherwise the Panama Canal Commission was an independent entity dependent upon revenues from operation of the Panama Canal.

The wording of the U.S. enabling legislation states, "the PCC [Panama Canal Commission]must be self-sustaining; its costs may not exceed its revenues, nor may U.S. taxpayer funds be used for Canal operations or payments to Panama."

When Panama took over operations of the Panama Canal in 1997 under direction of the Panama Canal Authority the Panama Canal Commission ceased to exist along with all other U.S. operations within the boundaries of the country of Panama.

PanCanal-History Records of the Panama Canal Panama Canal