Ever since the Spaniards landed in the Isthmus of Panama for the first time in 1501, Panama has been a natural transit route for merchandise and people attempting to cross from one ocean to the other.

As early as the 1520’s the Spanish Crown explored the possibility of constructing a Canal through the Isthmus, but the idea was later abandoned. In the 19th Century, the United States also saw the opportunity of joining the two oceans, but they had a railroad in mind instead of a Canal.

In 1832, Congress sent Col. Charles Biddle to Panama to negotiate a concession for the construction of a railroad. He also inspected the country for the best route. Biddle died shortly afterward, but interest in the project continued.

In 1848 a charter was granted to the Pacific Mail Steamship Company to deliver mail between the U.S. and Panama. The incorporators were William H. Aspinwall, his uncle, Gardiner Green Howland, Henry Chauncey, and Edwin Bartlett. Three wooden paddle-wheel steamships were built; the California, the Oregon and the Panama. They would deliver mail between New York, Panama and San Francisco, but the discovery of gold in California in January 1848 took Aspinwall’s attention away from mail delivery.

Gold seekers chose the Panama route instead of the difficult, plodding journey across the plains, desert and mountains of the uncivilized, Indian-infested overland route.

Aspinwall immediately sent John L. Stevens to Colombia, which controlled Panama, to negotiate a concession for a Panama Railroad. The company would have the right to excavate a Canal or build a highway or railroad across Panama. The concession was exclusive for 49 years. They were granted 250,000 acres of land, and other government land could be used freely.

The Panama Railroad was incorporated in New York on April 7, 1849. In January 1849 the company hired Col. George W. Hughes to make a location survey. This was not an ideal location to build a railroad. From June through December there were deluges of rain in cloudbursts that often lasted as long as three days. The isthmus was covered with dense, steaming jungles, and there was no durable timber for railroad construction. The native population was unaccustomed to physical labor and was undependable. Men, materials and provisions had to be imported from thousands of miles away.

The Executive Committee of the corporation met for the first time on July 9, 1849 to ask for bids. The construction contract was awarded October 12 to a company headed by George M. Totten and John G. Trautwine.

Trautwine sent an order to New Orleans to have a small pine board shack built and shipped to him. This was the first permanent structure in what later became the town of Aspinwall (later Colon). Other shacks were soon erected for the workers.

Manzanillo Island was cleared and protected with an earthen embankment above the high-tide mark. Businessmen came, rented space and built stores, gambling halls, saloons – a typical town emerged. Docks were constructed to accommodate ships bringing supplies, materials and machinery.

In August 1850 construction began on the mainland around Monkey Hill, soon to be called Mount Hope. Struggling across four miles of swamp, the men reached the Chagres River and the native village of Gatun. Late in 1850, pile-driving equipment arrived.

The first rails used were the inverted “U” type. These rails were first used in 1835 and were called “bridge rails”. They weighed 40 lbs per yard.

By October 1, 1851 eight miles of track had been completed at a cost of more than $1 million. Expectations of quick profits disappeared and the Panama Railroad stock’s value began to fall sharply. The California gold rush had begun two years earlier, but travelers were still frantically making their way west. In December 1851, two boats arrived at the mouth of the river in Panama with a thousand passengers. They were amazed when they heard a locomotive whistle! The travelers rushed to the railroad’s office. George Totten informed them that the railroad had only seven miles of track laid, but the people wanted to ride anyway.

Taking 1,000 crazed men for a seven-mile train ride would certainly delay the construction work and bring a reprimand from officials in New York. To discourage the crowd he quoted a charge of 50 cents a mile and three dollars for each 100 pounds of baggage. The excessive charge was eagerly accepted. Totten collected nearly $7,000! The Panama Railroad was suddenly in the passenger business. Its worthless stock on Wall Street began to rise rapidly. The railroad sold $4 million worth of stock and construction proceeded in high gear.

The population of Manzanillo Island was growing steadily. To commemorate the name of one of the railroad’s originators, the place was named Aspinwall. The government of Colombia rejected the name and insisted that it should bear the name of Christopher Columbus, the man that first discovered the land. It should be known as Colon. There was great resistance and the controversy continued for 38 years. Finally, the Colombian postal department refused to deliver mail addressed to Aspinwall. Since 1890 the town has been known as Colon as it is still known today.

On May 1, 1852, the rails reached Frijoles, 18 miles from Aspinwall and by July 6, the rails reached Barbacoas where the Chagres River had to be crossed. The iron bridge across the Chagres River was completed and at 11:00 a.m. on November 26 the first train (a locomotive and nine cars full of passengers and freight) rolled across the new bridge.

In January, 1854 excavation began at the summit of the Divide, where the cut was 40 feet long. Several months were spent digging the cut. Travelers arriving at the end of the track were very surprised – instead of a jungle of wilderness, they found the new village of Culebra with about 2,000 inhabitants.

Three miles below the summit, the rails entered the high, beautiful valley known as Paraiso. It was a place of tropical beauty. The grading was completed in November 1854.

Early in the morning of January 27, 1855 two construction gangs working towards each other could see each other. Darkness came. Large lanterns with rancid whale oil in their fonts were lighted. The work gangs met and mingled, an air of anticipation and excitement surrounded the area. The last rail was set in place on pine crossties. The final spike was held in position. George Totten stood in the pouring rain with a nine-pound maul ready. He swung the hammer and the spike sank into the tie with a thud.

On Sunday, January 28, 1855 a train ran from the Atlantic Ocean all the way across the Isthmus of Panama to the Pacific Ocean for the first time. The Panama railroad was in business. It was a single-track railroad 47 miles long with a maximum grade of slightly more than one percent for four miles approaching the crest of the Divide. Rails were laid on pine crossties, which disintegrated quickly in the damp tropical heat. As a remedy, ties of lignum vitae were imported from Cartagena, New Grenada. The wood was so dense and hard that holes had to be drilled before spikes could be driven.

Side-tracks were laid at Matachin, Gatun, Barbacoas and at the Summit. There were four-yard tracks at Aspinwall and three at Panama City. A roundhouse, machine shop, car repair shop and blacksmith shop were located at Aspinwall. Stations were built about every four miles with freight houses, depots and homes for employees.

There were six heavy locomotives and four lighter ones. Rolling stock included 22 passenger cars with a capacity of 60 passengers each, as well as 51 boxcars and 72 flat cars. Wood was stacked along the road at intervals for $3.00 a cord as fuel for the locomotives.

By the time the railroad was in operation it had cost $6,564,552.95. First class passenger fare was $25, children under 12 years old $6.25; second class fare $10; personal baggage ten cents a pound, mail .22 cents a pound; coal was $5.00/ton; first class freight in boxes or bales was .50 cents a cubic foot. All freight charges were paid in gold.

The Panama Railroad was a very lucrative investment. Between 1855 and 1867 more than $700 million in gold was carried on the railroad without the loss of a single dollar.

A new contract was negotiated between the Railroad and the government of Colombia on January 30, 1875. The railroad would pay $1 million in gold plus $250,000 a year during the life of the contract (99 years). The railroad would extend its rails into the Bay of Panama so that deepwater ships could reach its wharves. Mail, officials and troops of Colombia were carried free of charge.

The completion of the Central Pacific – Union Pacific railroad at Promontory, Utah on May 10, 1869 was the turning point in the fortunes of the Panama Railroad.

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