When I was a kid during the 1950s I read Frederick J. Haskin's The Panama Canal, published in 1914, still available in facsimile editions. Today, I recommend both of these more recent, but quite different histories:
The Canal Builders: Making America's Empire at the Panama Canal
by Julie Greene
Publisher: Penguin (2010)
The tens of thousands of laborers involved are the subject of Julie Greene's social history of the canal's construction, viewing this near-military mobilization through the modern lens of social justice. The project's human dimensions were as big as the great excavations required to complete the Panama Canal ahead of time and under budget.
The Path Between the Seas: The Creation of the Panama Canal, 1870-1914
by David McCullough
Publisher: Simon and Schuster (1978)
McCullough's popular history deals with the political background, engineering and construction of the canal, begun and abandoned by a French company, then completed by the US government(!). While written in the 1970s, this book is still the best and most comprehensive available.
