The History of the Panama Canal & Railroad

The Panama Canal was one of the most important and impactful construction projects in the history of the modern age. The basic premise of the canal was to build a waterway that connected the Atlantic and Pacific Oceans. The isthmus of Panama was the ideal spot, located between the North and South American continents. It also happens to be the narrowest section of the Americas.

Prior to completion of the canal in 1914, ships sailing from the Atlantic to the Pacific Ocean needed to sail the roughly 8,000 mile journey around the tip of South America (Cape Horn). It was a cumbersome process, and Americans and Europeans longed for a shorter route to aid in global trade. After the Spanish American war in 1898, the shortened route became even more essential for the US Navy’s defense of the western and eastern coast lines.

The history of the Panama Canal dates back to some of the earliest European explorers. Some of the first Spanish settlers in the region in the early 1500s recognized the strategic value of the isthmus. King Charles V of Spain even ordered a survey done to see if it was possible to build a canal across the isthmus. The surveyors deemed the task impossible at the time.

Interest in a canal remained, with several prominent members of the 19th century expressing their desire for a canal. This included Simon Bolivar, and US Presidents Andrew Jackson and Ulysses S Grant.

Before the Panama Canal, the US experienced the region firsthand during the construction of the Panama Railroad.

The Panama Railroad

While the Panama Canal was deemed unfeasible for a time, a railroad across the isthmus appeared to be a more worthwhile venture. As early as 1845 American businessmen including WIlliam Aspinwall and John L Stephens, among others, obtained the rights to build a railroad.

The Panama Railroad Company was thus formed in 1849 to great fanfare over its prospects. The discovery of gold in California that same year led to a sizable demand for a cheaper, faster and easier method of traveling to the Pacific Coast. 

Existing methods included sailing around Cape Horn, or traveling across land via the Oregon Trail. The railway across the Panama isthmus could entice settlers and prospectors to sail to Panama, take the short rail trip to the Pacific coast, and then sail up to California and the Oregon territories.

The trip would drastically reduce travel times and increase the settlement of the American West. The railroad played an outsized role in the California population boom following the 1849 Gold Rush.

When the project broke ground in 1850 the railway was expected to cost about 1 million dollars; a large sum for the time. Enthusiasm was high, though challenges soon arose. The construction of the Panama railroad was much more complicated than anticipated, with logistical challenges arising from building across multiple different terrains including swamp and mountains. Hundreds of bridges were also required in support.

1915, Panama Canal, Panama — Gallegos Living in Railroad Camp Cars — Image by © CORBIS

Laborers were brought in from all around the world to help complete the railroad, though the project was plagued at times with labor shortages. Before the railroad was even completed it saw a significant volume from travelers. Mule trains were hired to bridge the gap between completed sections.

The project finally completed in 1855 though only after ballooning in cost to over 8 million dollars. It was the costliest railroad ever built on a per mile basis at the time, though proved to be immensely profitable from its beginnings. The Panama Railroad was also the first ever transcontinental railroad built across the Americas, beating the United States transcontinental railroad by 14 years.

The French Panama Canal

While the railroad served its purpose, the lure of a canal was still strong. The ability for ships to sail directly through and avoid offloading cargo would be critical to global trade. The French obtained the rights to build a canal in 1878 and chose a route closely to the existing railroad that ran parallel to it.

Ferdinand de Lesseps was brought on to complete the job. De Lesseps was considered a hero in France for his success in directing the construction of the ~120 mile Suez Canal two decades earlier. With the shorter distance, de Lesseps thought he could replicate his success in Panama for a fraction of the cost and shorter period of time.

Construction broke ground on a sea level canal in 1880. This one decision proved to be fatal to the French canal effort. Panama’s rugged terrain of mountains and swamp proved much too difficult for a sea level canal. De Lesseps was too resistant to changing course to the more reasonable elevated canal with locks.

By the time the French shifted course in 1887, it was too late. The French Canal Company was beset with financial difficulties. In addition, the French engineering suffered setbacks and delays that impeded progress. Disease was also rampant, and thousands died in the construction effort.

The project was also at the center of one of the largest corruption scandals in the 19th century. French government officials were found to have accepted bribes to hide the financial difficulties of the French Canal Company. The Company eventually went bankrupt in 1889, bringing to an end the French attempt at building the Panama Canal.

The project was only about 40% complete when it was terminated, and spent over 287 million dollars; a staggering sum at the time. Some of this would be recouped when selling the land rights and equipment to the United States.

The History of United States Panama Canal

When was the Panama Canal officially built and completed? The United States took over the project in 1904. After 10 long years it was finally completed in 1914. Then President Theodore Roosevelt was a noted champion of the canal, believing it would be crucial to US strategic interests in the near future.

First the United States had to deal with obtaining the rights to build on the land. Colombia (which owned Panama at the time) was unwilling to allow the US this right. In turn, the US backed Panamanian rebels in their bid for independence. The US Navy supported the rebels during their 1 day revolution in a bout of what is referred to as “gun-boat diplomacy”. A new treaty was signed with the new Panama nation giving the US access to build their canal.

The US learned from some of the French mistakes and knew that a lock based canal needed to be constructed. They also recognized that livable working conditions needed to be organized and something had to be done to control the rampant tropical diseases such as malaria and yellow fever.

William Gorgas was named the Chief Sanitary Engineer, and he is credited with learning that yellow fever is contracted from mosquitoes. His efforts in combating the mosquitos in the construction zone led to the eradication of yellow fever in the camps by 1906. With disease relatively under control, the focus could remain on the engineering and logistical challenges.

The Panama Canal was finally completed in 1914. Remarkable, this was a year ahead of schedule and the project came in 23 million dollars under budget. Despite this, the total cost for the canal was 375 million dollars, by far the costliest construction project in US history at the time.

Deaths in the Construction of the Panama Canal and Railroad

The Panama Canal iss an engineering marvel and was a testament to American construction prowess at the time. It is currently named one of the “Seven Wonders of the Modern World” by the American Society of Civil Engineers.

One topic that is routinely ignored by champions of the canal is the devastating toll that the construction took on the workers. Thousands died during each of the separate construction projects.

Total Deaths building Panama Canal and Railway chart

The most costly in terms of lives was the French construction of the canal, with an estimated ~22,000 deaths. The true figure will never be known as the French official statistics only included the people that died in hospitals. Yellow Fever and Malaria were rampant, and were the primary cause of the deaths in the disastrous attempt of the French.

The Panama Railroad is estimated to have cost about ~12,000 lives during construction. Similarly, the railroad construction workers were plagued by disease, including cholera outbreaks that proved equally as devastating as the other tropical diseases.

The United States’ construction of the Panama Canal had the lowest fatality count. The official statistics show that 5,609 workers were killed in the effort, though experts believe the number could be higher. In any case, the number killed from disease was drastically lower, thanks to the efforts of William Gorgas.

However, the deaths from construction were still enormous. The reliance on dynamite for blasting through the mountains proved extremely deadly to the workers. Of those who survived, thousands more were maimed in the effort.

In all three construction projects, the deaths and injuries were overwhelmingly among the cheap contract labor hired from locations such as the British and French West Indies. Financiers of the projects were not as concerned with worker safely at the time, so long as the project could be completed on schedule.

While the Panama Canal and Railroad are certainly engineering marvels, history must remember the price the world had to pay in the process.

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