Patrons used the 2-centavo stamp, the equivalent of a 1-cent US stamp, to mail postcards within Panama and to the United States. These stamps were created from the Third Panama Issue, and both of the PANAMAs on each stamp were printed either up or down (as shown on the stamp here). Refer to 'Canal Zone Stamps' for a detailed description of the printing process and list of the many Panama varieties.
Correct usage on cover is extremely difficult to find. CANAL ZONE overprint varieties include inverts, doubles, and double inverts.
Plass, Gilbert N. Canal Zone Stamps. Atlantic City, NJ: Canal Zone Study Group, 1986.