The Panama Canal was built because it provided a much needed shortcut for ships to travel between the Atlantic and Pacific Oceans.
Before the canal was built, ships had to sail around the southern tip of South America, taking them thousands of miles out of their way through dangerous waters.
The Panama Canal connects the Caribbean and the North Pacific Ocean, making it possible for ships to go from the Atlantic to the Pacific without rounding the southern tip of South America.
The concept of a canal near Panama dates to the early 16th century.
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