On December 31, 1999, the United States gave the Panama Canal (and its adjacent land called the Panama Canal Zone) to Panama based on the 1977 Torrijos-Carter Treaties. In effect, the United States gave Panama a canal that had cost thousands of American lives and trillions of dollars to build and maintain since its inception in 1903.

In the 1840s, the United States and France looked to construct transportation across Central America to shorten trans-ocean travel and increase economic development and trade.

In 1846, the United States and New Granada signed the Bidlack-Mallarino Treaty, which granted the U.S. rights to build railroads through Panama. In 1855, the world's first transcontinental railroad, the Panama Railway, was completed across the Isthmus from Aspinwall/Colón to Panama City. And the idea to build a canal for ships continued to grow.

By the 1880s, the French attempted to build a canal, but failed. The French Compagnie Universelle du Canal Interocéanique, which had successfully built the Suez Canal, could not overcome the overwhelming engineering challenges coupled with the problems of disease faced by its workers. The Isthmus of Panama proved too difficult for the French with its complex terrain including deep jungles and swamps, mountains, torrential rains, unyielding sun, high humidity, and other unique land formations.

In 1902, U.S. President Theodore Roosevelt urged the U.S. to fill in where the French went wrong and build the canal.

In November 1903, the United States and Panama signed the Hay-Bunau Varilla Treaty. The treaty provided for the construction of a canal from the Atlantic to the Pacific Oceans along a strip of land 10 miles wide by 50 miles long. The U.S. retained sovereignty over the land to build a canal and administer, protect, and maintain it "in perpetuity."

From 1904 to 1914, the U.S. Army Corps of Engineers built the 50-mile Panama Canal. And even to this day, the Panama Canal is hailed as one of the world’s greatest engineering marvels in the world.

In 1977, President Jimmy Carter took control of the White House and set one of his first priorities to improve U.S. – Latin America relations. Carter believed that if the U.S. gave the Panama Canal back to Panama it would improve U.S. – Latin American relations.

In September 1977, President Carter and General Torrijos of Panama signed the Torrijos-Carter Treaties. These treaties provided for the complete transfer of the Panama Canal, the Panama Zone (i.e. land by the canal), and U.S. army bases from the U.S. to Panama by 1999.

On this day, December 31, 1999, the U.S. gave away the Panama Canal to Panama based on the treaties signed by President Carter.

The giveaway of the Panama Canal marks one of the most expensive gifts that the American taxpayer has given. Statistics, as listed by the U.S. Department of Historical Statistics and others, shows that Americans spent over $6 trillion dollars (adjusted for inflation) during the course of building, maintaining, defending, and leasing rights from the canal since its inception.

A summary of some of those statistics shows the U.S. spent: $10 million to purchase the land, $380 million to construct the canal, expensive annual payments to the Panama government to use the canal (from $250,000/yr in 1903 to $2.3 million/year in 1965), royalties to Panama for all ships (regardless of national origin) that passed through the canal, and over $201 million for building airfields. Overall, these costs and others amounted to approximately $18 billion dollars or around $6 trillion dollars adjusted for inflation!