Travel Reference
In-Depth Information
Brief history
Founded by the conquistador Pedro Arias de Ávila, better known as
Pedrarias
, in 1519,
Panama City quickly flourished as the base for further Spanish conquest along the Pacific
coast, and later as the pivotal transit point for plundered treasure from South America and
traded goods from the east bound for Spain. By the mid-seventeenth century Panama City
had a population of around five thousand, its customs house, cathedral and convents compris-
ing some of the grandest constructions in the New World. The city's opulence invited numer-
ous attacks by the
pirates
then ravaging the Spanish Main, and in 1671 the Welsh buccaneer
Henry Morgan
sacked the city (see
Panama City and the Camino Real
)
, which was engulfed
in flames. Known as
Panamá Viejo
,
the ruins of Pedrarias's settlement still stand amid the
sprawling suburbs of the modern city, and have been partially restored in recent years as a
tourist attraction.
Two years after Morgan's assault, the settlement was relocated on a rocky peninsula jutting
out into the bay 8km to the southwest, a more defendable and salubrious site than its swampy
predecessor. Named
Panamá Nuevo
, the new city developed in the area known today as
Casco Viejo
.
The gold rush and the railroad
Once the Spanish had rerouted their treasure fleet around Cape Horn in 1746, Panama City's
commercial importance slowly began to decline, only substantially picking up again in the
mid-nineteenth century due to the isthmus's popularity as a transit point in the
California
Gold Rush
and the completion of the
Panama Railroad
in 1855. The railroad, and sub-
sequently the French and US canal construction efforts, brought immense prosperity and a
wealth of new cultural influences that transformed the city and its inhabitants, who by 1920
totalled almost sixty thousand.
The canal
The
canal
, completed in 1914, confirmed Panama City's importance as a global trading
centre; yet it immediately became a straightjacket for the capital, as the outbreak of World
War I, two weeks prior to the waterway's official inauguration, opened the floodgates to
large-scale
US military occupation
of the Panama Canal Zone, the 8km strip of land either
side of the waterway under US jurisdiction. During World War II, defence installations pro-
liferated and the predominantly US population topped one hundred thousand. Though other
migrants continued to pour in, the lives of the city's population were regulated by the US mil-
itary in the adjacent Canal Zone, who controlled everything from refuse collection and water
supply to construction permits, and whose affluence and spending power inevitably shaped
commercial development. No surprise then that Panama City found itself at the forefront of
increasing nationalist sentiment that periodically erupted into violence, most notably in the
flag riots of 1964 (see
The rise of nationalism
). Only after the handover of the canal had been
