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It was a fierce southwesterly storm off the Caribbean coast of the Isthmus that saved the railroad project. In December 1851, two ships from Georgia and Philadelphia, filled with over a thousand hopeful gold hunters bound for the Chagres River, found themselves in serious trouble and were driven to take shelter in Limón Bay. The impatient passengers swarmed onshore and demanded to be taken inland by rail. The railroad engineers protested that there were no passenger cars, but the prospectors eagerly piled into wooden cattle trucks and were transported the eight miles to Gatún. It cut a precious day off the transit and after that everyone demanded the same. The railway never looked back; and from then on, as fast as the beleaguered workers pushed on across the Isthmus, the California-bound passengers were right behind them. What's more, they were prepared to pay huge sums, sometimes more than $25, for their tickets. The initial rates set by the railway managers were, one admitted, “intended to be, to a certain extent prohibitory, until we could get things in shape,” but there were plenty of takers and the planned reduction in fares was never necessary. So from that day on, the “goose began to lay golden eggs with astonishing extravagance.”

Early the following year, the Panama Railroad Company formally inaugurated the growing town on Manzanillo Island, the Atlantic terminus of the route. They named it Aspinwall, after the company's American boss, but the locals were having none of this, passing a law calling the town Colón, after Christopher Columbus. For a while confusion reigned, as the local post service refused to deliver mail addressed to Aspinwall, and eventually the American name was dropped. Up the coast, the town of Chagres at the river mouth quickly lost its previous importance, declined, and then disappeared altogether. Colón was now the key port and town on Panama's Atlantic coast. For the hundreds of thousands of men and women who would come to Panama over the next sixty years for the railway or to build the canal, it would be their first sight of the Isthmus.

For almost all, it was a hugely dispiriting experience. Although streets and squares were laid out, there were neither paved roads nor sewers. The town was separated from the mainland by a small channel, known as Folks River, slightly above the tide level, where vultures hovered, attracted by the offensive and rotten stench that circulated with the breeze coming from the swamps. When travelers arrived from Panama or New York, the population of eight hundred would be doubled, and the town would come to life of a sort. An account published in 1855 describes how “the hotels—great, straggling, wooden houses—gape here with their wide open doors, and catch California travelers, who are sent away with fever as a memento of the place, and shops, groggeries, billiard rooms, and drinking saloons thrust out their flaring signs to entice the passer-by.” All the buildings, with the exception of the Railroad office and the “British consul's precarious corrugated iron dwelling,” were of wood, and many were on rickety stilts over the stinking morass that almost surrounded the island.

“I thought I had never seen a more luckless, dreary spot,” wrote one visitor in the 1850s. “It seemed as capital a nursery for ague and fever as Death could hit upon anywhere.” Colón, the wettest and filthiest place on the Isthmus, was indeed a death trap for the workers the company imported to push the railway project along. A huge recruitment drive saw arrivals from all over the world. Among the Europeans were Englishmen, Irishmen, French, Germans, and Aus-trians. In 1852, one thousand Africans were brought in, and the following year some eight hundred Chinese workers were contracted. A number died on the way from Canton, on transport, according to a historian of the railway, “as filthy and odorous as any slavers.” The terms of the contract were not far removed from slavery, either. The contractor was paid $25 per man per month, of which the workers saw about $4, with food and clothing thrown in. The men were expected to labor up to eighty hours a week, even in the drenching rain. Right from the start the Chinese proved particularly susceptible to the local strains of malaria. After less than a year, only some two hundred of the original intake had survived and these shattered remnants were shipped off to Jamaica.

It was to this island that the Railroad Company now looked to solve its labor crisis. Jamaica, along with the other sugar islands, was in a chronically depressed state. Malnutrition was rife, worsening the effects of the devastating cholera epidemic of 1850. Thus there was a great response when the Railroad Company's recruiting agent, Hutchins and Company of Kingston, starting advertising for workers, promising food and doctors, and wages of 3s 2d per day minimum.

By July 1854 two to three thousand adult males had left Kingston for Panama, and by the end of the following year almost five thousand had made the journey One newspaper editor claimed: “We could name many persons who were walking the streets of the City for a long period of time,—literally starving because they could not get employment,—who are now doing well in Chagres.” The West Indians quickly acquired a reputation for being the best pick-and-shovel men and the hardiest of the imported workers.

A large proportion of the Jamaicans were more or less resistant to yellow fever, the disease most dreaded by Europeans on the Isthmus. Like Panamanians, many would have had a mild dose during childhood, thus becoming immune. But they readily succumbed to malaria and especially to environmental diseases such as pulmonary infections, tuberculosis, and pneumonia, and many contracted these complaints on arrival, partly because they turned up in a malnourished state and thus had no resistance.

Typhoid, dysentery, smallpox, hookworm, and cutaneous infections were also endemic on the Isthmus. No record was kept of the number of workers who died during the railroad construction, but estimates are from six to twelve thousand. The worst year was 1852, when a cholera epidemic killed unnumbered workers and all but two of the fifty American technicians then on-site. One railroad historian reckoned that on average over the five years of construction one in five of the workers died every month. An account written in 1912 describes how “workers who toppled over in the jungle [and] managed to drag themselves to the tracks… were picked up and taken to the hospital in Aspinwall… Others swallowed by the sinkholes or eaten alive by ants and land crabs, disappeared without a trace.”

Food was scarce and expensive. Although strips of dried jerked beef were a staple, workers and whites alike ate monkey, iguana, or snake stew to survive. Often it was best not to ask what was put in front of you in the so-called hotels. Water was also hard to come by. In Panama it came from a spring about a mile outside the city, and was carried in earthen crocks holding three gallons, and sold for ten cents a crock, which was almost a fifth of the daily wage for a worker. Alcohol, in contrast, was cheap and plentiful. American technicians drank champagne cocktails for breakfast, with quinine instead of bitters. According to a local newspaper, it was this intemperance that led to many falling ill. “In most cases,” the paper wrote, “sickness and death have occurred from imprudence in drinking spirituous liquors, gluttony and a careless exposure to wet weather.”

The lawlessness of the gold trail was also a real problem for the railway construction. Finding the local police inadequate, the Railroad Company bosses made a secret deal with the provincial governor to set up their own force. In 1852 they imported a notorious Indian fighter and former Texas Ranger called Ran Runnels to lead a small but heavily armed company of about forty men, described by a contemporary as “a bare-footed, coatless, harum-scarum looking set.” Brushing aside the local police force, they had the power of life and death on the Isthmus, liberally engaging in whipping, imprisonment, and shooting. On several occasions dozens of men were hanged along the seawall in Panama City. In 1853 the vigilante force broke up a strike by railway workers, in the process publicly flogging the Panamanian official who had been instrumental in organizing the action. The force was also useful for providing surveillance of their contracted workers, to prevent them from taking up agricultural plots or going to work in the better-paid transit business. As well as withholding wages, the Railroad Company authorized lashings by overseers and the use of stocks to keep men on the job.

All the time the railway, tiny in length, but a massive undertaking considering the conditions, was steadily lengthening. By July 1852, the track had reached Barbacoas, about halfway across the Isthmus, where it was to cross the Chagres River. At this point the work was returned to a contractor, whose first job was the construction of a bridge there, where the Chagres flowed through a rocky channel, some three hundred feet wide.

It was the first taste of the power and unpredictability of the Chagres. A bridge was built, then promptly destroyed when a freshet swept away one of its spans. The Railroad Company was once again compelled to take the enterprise into its own hands.

The bridge was rebuilt and in May 1854 the track reached Gorgona, and work started in Panama City heading up the Río Grande Valley. Although incomplete, the railway was by now making serious money. In 1854, with thirty-one miles in operation, 32,000 were transported, and the outfit's gross income exceeded a million dollars. This was in spite of a falling off of the stream of gold prospectors; by now the Isthmus was one of the major passenger routes of the world, and still the best way to get from the East to the West Coast of the United States, whoever you were. The Bishop of California crossed in December 1853 and left a vivid account of the “pale and miserable” Irish workers, and the “oaths and imprecations” of the “ruffians” and “women of the baser sort” he encountered at Las Cruces.

Setbacks continued even as the line neared completion. A forty-foot-deep cut was dug near Paraíso high in the mountains. When the first rain came, the surface became saturated and the greasy soil moved into the cut, burying the railroad to a depth of some twenty feet. In December 1854 a hurricane from the northeast exposed the weakness of Limón Bay, destroying every ship anchored in the port. Nevertheless, at midnight on January 27, 1855, under a torrential tropical rain, two work crews met, bringing into existence the first railroad that crossed a continent. In many ways it was a heroic achievement, and that is certainly how it was viewed in the international press. The project was officially inaugurated on February 15, 1855, with elaborate celebrations. The Aspinwall Daily Courier described the whistles blowing from the heights to the Pacific lowlands, while for another English-language paper, the Star and Herald, originally established in 1849, it was first and foremost a triumph of Yankee entrepreneurship ability.

Indeed, a precedent had been set of American engineering ingenuity and success in the tropics. More than that, Panama was now the site of an internationally important transport breakthrough. In an age where commerce and progress were the drumbeats of the world, the excitement was irresistible. The official history of the railroad construction, published in 1862, eulogized that “no one work … has accomplished so much, and … promises for the future so great benefit to the commercial interests of the world as the present railroad thoroughfare between the Atlantic and Pacific Oceans at the Isthmus of Panama… it forms a natural culminating point for the great commercial travel of the globe.”

Because of the railroad, the prospect of a canal had improved almost immeasurably. It was a giant step forward. Not only had the lowest pass in the entire Continental Divide outside Nicaragua been discovered at Culebra, but also the railway, with its “slender feeler of progress,” had opened up the interior. The railroad would serve as the right hand of the canal builders, and it would offer a great advantage to Panama when the “battle of the routes” would be fought with Nicaragua.

But the greatest lure that the railroad presented to those who dreamt of a trans-Isthmian canal was financial. It had cost a fortune to build—estimates are as high as $7 to $9 million, or $170,000 per mile—but for those who had put up the money, the payback was huge. Even before it was finished, a third of the cost had been recouped. In a single month, March 1855, receipts topped $120,000. Fares remained incredibly high and steamship companies happily paid huge sums—one-half of their entire freight costs—to unload onto the railway and then reload at the other end.

Panama was not the only trans-Isthmian transit route. In Nicaragua, the American entrepreneur Cornelius Vanderbilt had established a transit for passengers, which involved flat-bottomed craft sailing up the San Juan River and across the lake where they were transferred to carriages for the trip to the Pacific. He also commissioned a detailed canal survey in Nicaragua, but was unable to raise the capital to start work. Although many thousands chose Vanderbilt's route, it didn't hurt the business at Panama. In the first six years after it was finished, the Railroad Company made profits in excess of $7 million. Dividends were 15 percent on average and went as high as 44 percent. At one time, Panama Railroad stock was the highest-priced on the New York Exchange. Panama seemed indeed the golden Isthmus once again.

But amidst the euphoria there were plenty of lessons that later canal builders could have learned—had they not been blinded by the financial and heroic success of the railroad. The appalling death rates, the political instability and labor troubles, the dangers of the Chagres River and landslides would be the bitter enemies of the next generations of West Indians, Americans, and Europeans who went to “the golden Isthmus” to build a canal. The experience of nonwhites at the hands of the prospectors and U.S. bosses also looks forward to the confused and unfortunate racial attitudes of the American construction period. Indeed, the railroad, which had put Panama on the map as never before, was to turn out, for the people of the country, to be something of a mixed blessing.

In effect, the transit route had become a company town. Panama was the railway. The Company kept for itself the arrangement of accommodation and food for its employees, and everything was imported, just as all the expertise, labor, capital, materials, and tools for the railway construction had been. In effect, the local businessmen lost their control of cross-Isthmian freightage and storage—Panama's primary resource—and the entire transit zone came under the control and ownership of British or American interests. In the same way the New Grenadan authorities found themselves outmanned and outgunned by the railway's men, and deferred to the foreigners. The dollar replaced the peso as the common currency and English became almost as common as Spanish. Attempts to impose a toll for the local economy on tonnage on the railroad were defeated. The railroad and foreign interests, backed by the almost continual presence of the U.S. Navy, under the terms of the 1846 Bidlack Treaty to keep the transit open, were just too strong.

In the early 1850s Panamanian landowners had made small fortunes renting or selling properties for hugely inflated sums. But with the opening of the railway and the falling away of the gold rush, demand for accommodation and other services collapsed and the Panamanian economy went into a deep slump, even as the railway prospered.

It was boom and bust for the poor of the country as well. The demands of the gold rush had led to a bonanza for the country's muleteers, oarsmen, and porters, but the opening of the railway had ended those trades forever. In the meantime, thousands of men had flooded to the two terminal cities looking for work, causing chronic overcrowding and attendant filth and disease. Between 1842 and 1864, the population of Panama City had swollen from five thousand to thirteen thousand and a massive slum had grown up outside the city walls. With the completion of the railway, there was widespread unemployment. In fact, the lot of the majority of Panamanian citizens had actually worsened.

The huge influx of black workers also caused a great challenge to the region's delicate social structure and narrow, class-based political system, and hopeful laborers were still arriving from Jamaica even after the main construction work was finished, leading to calls for migrants without work to be turned away at Colón. The previously loose social stratification based on color had been magnified and solidified by the advent of the Americans. One observer described the situation in Colón in the mid-1850s: all the railroad officials, hotel and barkeepers were white, mainly American; the “better class of shopkeepers are Mulattoes from Jamaica,” while “dispensers of cheap grog, and hucksters of fruit and small wares are chiefly negroes.”

Influenced by the spread of European liberalism, and inflamed by the exclusion of local people from the prosperity of the railway, there was growing popular opposition to the foreign presence in Panama. In many ways Washington replaced Bogotá not just as the real power in Panama, but also as the focus of growing nationalist efforts to rid the Isthmus of empire-building foreigners.

Panama was now essentially an American protectorate. This did not go unnoticed around the world, and in 1857 Britain suggested that this new state of affairs was in violation of the Clayton-Bulwer Treaty, offering instead to be one of a triumvirate of “protecting powers” alongside the United States and France. Showing early signs of the abandonment of the idea of a “neutral canal,” the Americans rejected the solution, citing the Bidlack Treaty as taking precedence.

New Grenada's rule on the Isthmus weakened further during its six-year civil war beginning in 1857, essentially a struggle between federalist, secular liberals and centrist, clerical conservatives, complicated by the regional rivalries of the scattered population. Together with economic depression, the 1860s in Panama saw constant turmoil or revolts, coups d'etat, and revolutionary conspiracies that so depleted the treasury that at one point mid-decade many public schools were forced to close through lack of funds. In response to separatist convulsions, as well as the “mob” threatening the railroad (or, more precisely, foreign or white elite Panamanian interests), U.S. troops were landed five times during the decade, sometimes at the request of Bogotá, sometimes not.

Between 1861 and 1865, the United States was, of course, fighting its own civil war, and the Panama route was used several times for moving troops, materials, and bullion from coast to coast. In the buildup to the war, and during the armed conflict itself, America's European rivals were quick to take advantage. The French emperor, Napoléon III, had long been obsessed with Central America, dreaming of control of a canal, and of a buffer against the alarming expansion of the United States. In 1861 and the following year, there were expeditions to Mexico from Spain, Britain, and France to demand payment of debt. But for France it was more than that. Troops were landed, and control established over much of the country. An Austrian Habsburg, Maximilian, was established as emperor. Never recognized by the United States, he was overthrown in 1867 after the withdrawal of French troops decimated by disease. But a legacy of deep distrust of French activities in the region had been firmly established in the United States. This would have profound effects on later canal efforts.

The United States leadership emerged from the Civil War determined to reverse creeping European intervention in their backyard and to point the United States in an outward-looking and expansionist direction. The vague aspirations of the Monroe Doctrine now became national dogma, and from being a defensive strategy it became a license for U.S. intervention throughout the hemisphere.

The directions of the expansion of American influence and interest—southward to Peru and Chile, producers of valuable raw materials such as nitrate of soda, copper and tin; and westward to the newly opened up markets of China and Japan—focused attention on the need for a trans-Isthmian canal. It was now becoming a cornerstone of American strategic ambitions, and part and parcel of the country's Manifest Destiny.

In 1866, the Senate requested that the Navy report on possible canal sites. Rear Admiral Charles H. Davis, having consulted the mishmash of Spanish, French, and other sources, came back with nineteen possibilities, including six in Panama and three in Darién, in modern-day Colombia, based on the Atrato River.

Late the same year, the U.S. minister in Bogotá negotiated a concession with Colombia for the exclusive right to build a canal, but the treaty, and further efforts over the next three years, never satisfied both sides. The Americans demanded a large measure of control and freedom of action in the transit zone, while Bogotá was fearful of further loss of sovereignty on the Isthmus, and tried to limit the number of U.S. employees or troops in Panama at any one time. On the Isthmus itself, the failure of these efforts was dismaying and further fueled secessionist temperament.

As the civil war raged in Colombia, sometimes sweeping into its northernmost province, then sweeping out again, Panama faced the prospect that even its key business (albeit foreign owned and controlled), the railroad, had seen its best days. The opening of the transcontinental railroad in the United States on May 10, 1869, ended the Panama Railroad (PRR)'s monopoly almost overnight. The previous year had seen record revenue for the business, but after that the line on the graph heads ever southward. Arrogant mismanagement of the railroad did not help, either. Panama sank further into poverty and sporadic anarchy, with U.S. troops landing twice more in the 1870s and Colombian soldiers in 1875.

However, the opening of the transcontinental railway did nothing to quiet calls in the United States for a trans-Isthmian canal. Never before had it been so plain that the United States was now truly a continental power, with two oceans separated by an enormous but, on paper, highly avoidable distance. The inauguration in 1869 of Ulysses S. Grant as the eighteenth American president brought further new momentum to U.S. canal policy. For one thing, Grant had actually been on the Isthmus. In his first address to Congress, the new president laid out his canal ambitions and soon established a new Inter-Oceanic Canal Commission—headed by Admiral Daniel Am-men—to investigate possibilities, and conduct and weigh new surveys of all the possible routes.

So for the first time, every possibility, however remote, was to be meticulously and systematically explored. What's more, the methodology would be the same everywhere so real comparisons would now be possible. At last myth would be separated from reality about the true prospects of an interoceanic canal.

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