Spanish Conquistadores who first colonized Central America first saw the utility of a canal through the land, allowing passage for ships travelling between the Pacific and Atlantic. At the time, travelers had to go all the way around South America and through the Straits of Magellan. Vasco Núñez de Balboa, who established military control of the region, first proposed the idea of a canal, then Álvaro de Saavedra Cerón came along. Of the four possibilities for canals envisioned by Cerón, one compared very closely to what the United States ultimately built.

On this day, November 18, in 1903, the United States Secretary of State John Hay and Panamanian independence leader Philippe Bunau-Varilla concluded a treaty giving the United States the land necessary to build the Panama Canal.

Up until 1903 Panama as a nation did not exist, and the land was controlled by Colombia. U.S. negotiations with Colombia for the canal began in earnest in 1898, but Colombia demanded terms deemed unacceptable to Washington. In early 1903, a meeting between Hay and Bunau-Varilla led to a secret agreement that the U.S. would provide clandestine support for the Panamanian rebellion against Colombia, in exchange for the terms laid on in the later treaty.