The canvas enlargement will normally be the colour selected in your background swatch in the toolbox.
I have saved "the" and "Inventors" as two different files.
What on earth for?
Open your image (the one you want to put text onto). Check that it has the image>mode of RGB and change to that if it is not.
Use the text tool to type the Word THE
Select any other tool, then reselect text tool, and type the second word. Each word will be a layer and can be resized, moved, colored, etc independently of the other.
If you need to move the two together, link the two layers.
"Select any other tool, then reselect text tool…"
Ummm…why select another tool, the reselect the Type Tool?
Just stab the "Enter" key after typing "The". Then click again on the canvas with the Type Tool cursor to initiate a second text layer.
TIP: If you need to start a second text layer really close to the first one, and you can’t seem to click near the first word without selecting it, just hold the SHIFT key when you click again near the first word. This will force Photoshop to start a new text layer.