History of the Panama Canal In 1825, a group of American businesspeople announced the formation of a canal building company, with interests in constructing a canal system across the Isthmus. This project was to take place in an area now called Panama. The endeavor was filled with controversy. Though the canal itself was not built until the early 1900's every step toward the building and ownership, was saturated with difficulty. Walter LaFeber illustrates the dilemmas in a historical analysis. In his work he states five questions that address the significance of the Panama Canal to United State