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The correct answer to this question is C. The only other one that would make any sense at all is D.
The Panama Canal belonged to the United States from the time that the US built it in the early 1900s. The US owned the canal as well as an area on both sides of the canal known as the Panama Canal Zone. This state of affairs continued until 1977. At that point, Jimmy Carter negotiated a settlement in which the canal would be given back to Panama. Carter did this because he wanted a foreign policy based more on idealism than on raw power. The handover of the canal became complete in 1999. From then on, Panama has run the canal.
The correct answer is "C" the United States. Panama regained control of the canal after 1999 and still controls it today, though America has military bases there and has treaty rights to protect the canal in times of war.
The United States got permission to build the Panama Canal when it helped Panamanian rebels gain their independence from Columbia. Part of the deal of receiving this American aid was to let America build the canal through Panama. There were earlier attempts by the French to build the canal through Nicaragua, but these failed due to costs and malaria. In 1914, after annulling the Clay-Bulwer Treaty (1850) under which Britain and America agreed to not build a canal through Latin America and replacing it with the Hay-Pauncefote Treaty (1900) which gave the United States the right to build the canal, the waterway was opened. Under the Carter administration, the United States would give the waterway back to Panama; in his attempt to improve relations with Latin America, Carter gave the Republican party (led by rising star Ronald Reagan) fuel to criticize America's perceived weakness. In 1999, the Canal reverted back to Panamanian control, though America still has a military base there.
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