Panama Canal Railway
The Panama Canal Railway is a railway line linking the Atlantic Ocean to the Pacific Ocean in Central America. Opened in 1855, the route today stretches across the Isthmus of Panama from Colón to Balboa.
The construction of the railroad, under difficult physical conditions and with the day's limited technology, was hailed as an international engineering achievement—one that cost US$8 million and the lives of an estimated 5,000 to 10,000 workers. The railway was vital to the early 1900s construction of the Panama Canal, and its route was altered to accommodate the creation of the canal's Gatun Lake. After World War II, the railroad's importance declined and much of it fell into a state of neglect. It was reopened in 2001 after a three-year effort to rebuild it to haul intermodal traffic.
The original line was built by the United States and the principal incentive was the vast increase in passenger and freight traffic from the Eastern United States to California following the 1849 California Gold Rush. The United States Congress had provided subsidies to companies to operate mail and passenger steamships on the coasts, and supported some funds for construction of the railroad, which began in 1850; the first revenue train ran over the full length on January 28, 1855. Referred to as an inter-oceanic railroad when it opened, it was later also described by some as representing a "transcontinental" railroad, despite traversing only the narrow isthmus connecting the North and South American continents. For a time the Panama Railroad also owned and operated ocean-going ships that provided mail and passenger service to a few major US East Coast and West Coast cities, respectively.
Known as the Panama Railroad Company when founded in the 19th century, today it is operated as Panama Canal Railway Company. From 1998 to 2025, it was jointly owned by then Kansas City Southern, now Canadian Pacific Kansas City, and Mi-Jack Products and leased to the government of Panama. On April 2, 2025, Canadian Pacific Kansas City and Mi-Jack Products sold the railway to APM Terminals, which is owned by Maersk. The Panama Canal Railway is primarily dedicated to freight transport, but it has also operated a passenger service between Panama City and Colón.
History of earlier isthmus crossings and plans
The Spanish improved what they called the Camino Real, and later the Las Cruces trail, built and maintained for transportation of cargo and passengers across the Isthmus of Panama. These were the main routes across the isthmus for more than three centuries. By the 19th century businessmen thought it was time to develop a cheaper, safer, and faster alternative. Railroad technology had developed in the early 19th century. Given the cost and difficulty of constructing a canal with the available technology, a railway seemed the ideal solution.President Bolívar of La Gran Colombia commissioned a study into the possibility of building a railway from Chagres to the town of Panama City. This study was carried out between 1827 and 1829, just as locomotives were being invented. Previously railroads used horses for motive power. The report stated that such a railway might be possible. However, the idea was shelved.
In 1836, United States President Andrew Jackson commissioned a study of proposed routes for inter-oceanic communication in order to protect the interests of Americans traveling between the oceans and those living in the developing Oregon Country of the Pacific Northwest. The United States acquired a franchise for a trans-Isthmian railroad; however, the scheme was disrupted by the economic downturn after the business panic of 1837, and came to nothing.
In 1838 a French company was given a concession for the construction of a road, rail, or canal route across the isthmus. An initial engineering study recommended a sea-level canal from Bahía Limón to the bay of Boca del Monte, west of Panama City. The proposed project collapsed for lack of technology and funding needed.
In the 1840s, the United States again turned its attention to securing a safe, reliable, and speedy link between the Atlantic and Pacific oceans. In 1846, the United States signed a treaty with Colombia by which the United States guaranteed Colombian sovereignty over Panama and was authorized to build a railroad or canal at the Panamanian isthmus, guaranteeing its open transit. Several developments would presage the movement of American settlers to and from the West Coast, including the 1846 acquisition of Alta California and, in 1848, the acquisition of the Oregon Territory and the discovery of gold in California.
In 1847, the east–west transit across the isthmus was by native dugout canoe up the often dangerous Chagres River. Travelers had to go overland by mules for the final over the old Spanish trails. The trails had fallen into serious disrepair after some 50 years of little or no maintenance; the of rain each year in the April–December rainy season also made the trails hard to maintain. A transit from the Atlantic to the Pacific or vice versa would usually take four to eight days by dugout canoe and mule. The transit was fraught with dangers, and travelers were subject to contracting tropical diseases along the way.
William H. Aspinwall, the man who had won the bid for the building and operating the Pacific mail steamships, conceived a plan to construct a railway across the isthmus. He and his partners created a company registered in New York, the Panama Railroad Company, raised $1,000,000 from the sale of stock, and hired companies to conduct engineering and route studies. Their venture happened to be well-timed, as the discovery of gold in California in January 1848 created a rush of emigrants wanting to cross the Isthmus of Panama to go to California.
The first steamship used on the Pacific run was the $200,000 three-mast, dual-paddle steamer. It was in length, in beam, and deep, with a draft of, and grossed 1,057 tons. When it sailed around the Cape Horn of South America, it was the first steamship on the west coast of South and North America. When it stopped at Panama City on January 17, 1849, it was besieged by about 700 desperate gold seekers. Eventually, it departed Panama City for California on January 31, 1849, with almost 400 passengers, and entered San Francisco Bay, a distance of about, on February 28, 1849 – 145 days after leaving New York. In San Francisco nearly all its crew except the captain deserted to seek their fortunes in the city and the gold fields. The ship was stranded for about four months until the company could buy a new supply of coal and hire a new – and much more expensive – crew.
The route between California and Panama was soon frequently traveled, as it provided one of the fastest links between San Francisco, California, and the East Coast cities, about 40 days' transit in total. Nearly all the gold that was shipped out of California went by the fast Panama route. Several new and larger paddle steamers were soon plying this new route.
1855 Panama Railroad
Construction
In January 1849, Aspinwall hired Colonel George W. Hughes to lead a survey party and pick a proposed Panama Railroad roadbed to Panama City. The eventual survey turned out to be full of errors, omissions, and optimistic forecasts, which made it of little use. In April 1849, William Henry Aspinwall was chosen head of the Panama Railroad company, which was incorporated in the State of New York and initially raised $1,000,000 in capital.In early 1850, George Law, owner of the Pacific Mail Steamship Company, bought up the options of the land from the mouth of the Chagres River to the end of Navy Bay in order to force the directors of the new Panama Railroad to give him a position on the board of the company. Since there were no harbor facilities on the Atlantic side of the isthmus, they needed to create a town with docking facilities to unload their railroad supplies there. Refusing to allow Law onto the board, the directors decided to start building harbor facilities, an Atlantic terminus, and their railroad from the vacant site of Manzanillo Island. Starting in May 1850, what would become the city of Aspinwall was founded on on the western end of Manzanillo Island, a treacherously marshy islet covered with mangrove trees.
The board solicited bids from construction companies in the United States to build the railroad. George M. Totten and John Trautwine initially submitted one of the winning bids. After surveying the railroad's proposed course and the probable construction difficulties and uncertainties, they withdrew their bid. Totten agreed to become the chief engineer on the railroad construction project, working for a salary instead of as a general contractor.
A new town on the Atlantic end of the railroad would have to be built on swampy ground that was often awash at high tide. The mangrove, palms, and poisonous manchineel trees and other jungle vegetation had to be felled, and many of the buildings in the new town had to be built on stilts to keep them above the water. As more worker housing was needed, abandoned ships brought to the mouth of the Chagres River as part of the California Gold Rush were towed near the island and used for temporary housing. A steam-powered pile driver was brought from New York. Docks were constructed on pile-driven timbers, more of the island was stripped of vegetation, and elevated living spaces, docks, warehouses, and the like were constructed.
Before the railroad construction could get fully started, the island was connected to the Panamanian mainland by a causeway supported by pile-driven timbers. The first rolling stock, consisting of a steam locomotive built by William Sellers & Co., and several gondola cars, arrived in February 1851. The required steam locomotives, railroad cars, ties, rails, and other equipment were unloaded at the newly constructed docks and driven across the track laid across the about causeway separating the island from the mainland. This causeway connected the Atlantic terminus to the railroad and allowed the ties, iron rails, steam engines, workers, backfill, and other construction material to be hauled onto the mainland. Later, passengers and freight would go the same way. As the railroad progressed, more of the island was filled in, and the causeway was expanded to permanently connect the island to the mainland; its island status disappeared and the town of Aspinwall was created.
In May 1850, the first preparations were begun on Manzanillo Island, and the start of the roadway was partially cleared of trees and jungle on the mainland. Quickly, the difficulty of the scheme became apparent. The initial of the proposed route passed through a jungle of gelatinous swamps infested with alligators, the heat was stifling, mosquitoes and sandflies were everywhere, and deluges of up to of rain for almost half the year required some workers to work in swamp water up to four feet deep. When they tried to build a railroad near Aspinwall, the swamps were apparently deep, often requiring over 200 feet of gravel backfill to secure a roadbed. Fortunately, they had found a quarry near Porto Bello, Panama, so they could load sandstone onto barges and tow it to Aspinwall to get the backfill needed to build the roadbed.
Built as the steam revolution was just starting, the only power equipment was a steam-driven pile driver, steam tugs, and steam locomotives equipped with gondola and dump cars for carrying fill material; the rest of the work had to be done by laborers wielding machete, axe, pick, shovel, black powder, and mule cart. As more track was laid, the workers had to continually add backfill to the roadbed, as it continued to slowly sink into the swamp. Once about of track were laid, the first solid ground was reached, at what was then called Monkey Hill. This was soon converted to a cemetery that accepted nearly continuous burials.
Cholera, yellow fever, and malaria took a deadly toll on workers. Despite the company's constant importation of high numbers of new workers, there were times when progress stalled for simple lack of workers. The worst year was 1852. Cholera swept along the line after the arrival of a boat from New Orleans. Nearly all of chief engineer George Totten's staff died, 51 in total, including engineers, surveyors, and draftsmen. Founding owner John Lloyd Stephens, the only one of the founders who spent time in Panama, died of malaria. Thirty-year old Army Captain Ulysses S. Grant was leading his 4th Infantry regiment, consisting of several hundred soldiers and their wives and children, across the isthmus to California for garrison duty, when they were struck by cholera. More than 150 of his party died of the disease in the crossing. In later years he would talk more of the horrors he had seen in Panama than any of the battles he had fought in.
All supplies and nearly all foodstuffs had to be imported from thousands of miles away, greatly adding to the cost of construction. Laborers came from the United States, the Caribbean Islands, and as far away as Ireland, India, China, and Australia.
After almost 20 months of work, the Panama Railroad had laid about of track and had spent about $1,000,000 to cross the swamps to Gatún. The project's fortunes turned in November 1851 – just as they were running out of the original $1,000,000 – when two large paddle steamers, the SS Georgia and the SS Philadelphia, with about 1,000 passengers, were forced to shelter in Bahía Limón, Panama, owing to a hurricane in the Caribbean. Since the railroad's docks had been completed by this time and rail had been laid up to Gatún on the Chagres River, it was possible to unload the ships' cargoes of emigrants and their luggage and transport them by rail, using flatcars and gondolas, for at least the first part of their journey up the Chagres River on their way to Panama City. Desperate to get off the ships and across the isthmus, the gold seekers paid $0.50 per mile and $3.00 per 100 pounds of luggage to be hauled to the end of the track. This infusion of money saved the company and made it possible to raise more capital to make it an ongoing moneymaker. The company's directors immediately ordered passenger cars, and the railway began passenger and freight operations with about of track still to be laid. Each year it added more and more track and charged more for its services. This greatly boosted the value of the company's franchise, enabling it to sell more stock to finance the remainder of the project, which took more than $8,000,000 and cost 5,000 to 10,000 workers' lives to complete.
By July 1852, the company had finished of track and reached the Chagres River, where an enormous bridge was to be built. The first wooden bridge failed when the Chagres rose by over in a day and washed it away. Work was begun on a much higher,, hefty iron bridge, which took more than a year to finish. In all, the company built more than 170 bridges and culverts.
In January 1854, excavation began at the summit of the Continental Divide at the Culebra Cut, where the earth had to be cut from to deep over a distance of about. Several months were spent digging. In March 1854, 700 Chinese laborers arrived to work for the Panama Railroad Company. Decades later, the Panama Canal project required years to cut through this area deeply enough for a canal. The road over the crest of the continental divide at Culebra was completed from the Atlantic side in January 1855; 37 miles of track having been laid from Aspinwall. A second team, working under less harsh conditions with railroad track, ties, railroad cars, steam locomotives, and other supplies brought around Cape Horn by ship, completed its of track from Panama City to the summit from the Pacific side of the isthmus at the same time.
On a rainy midnight on January 27, 1855, lit by sputtering whale oil lamps, the last rail was set in place on pine crossties. Chief engineer George M. Totten, in pouring rain with a nine-pound maul, drove the spike that completed the railroad. The next day the first locomotive with freight and passenger cars passed from sea to sea. The huge project was completed.
Upon completion the railroad stretched 47 miles, 3,020 feet, with a maximum grade of 60 feet to the mile. The summit grade, located from the Atlantic and from the Pacific, was above the assumed grade at the Atlantic terminus and above that at the Pacific, being above the mean tide of the Atlantic Ocean and the summit ridge above the same level. The gauge was in, Ω-shaped rail. This gauge was that of the southern United States railway companies at the time. This gauge was converted to standard in the United States in May 1886 after the American Civil War, and remained in use in Panama until the railroad was rebuilt in 2001.
The next step was making things permanent and upgrading the railway. Hastily erected wooden bridges that quickly rotted in the tropical heat and often torrential rain had to be replaced with iron bridges. Wooden trestles had to be converted to gravel embankments before they rotted away. The original pine railroad ties lasted only about a year, and had to be replaced with ties made of lignum vitae, a wood so hard that they had to drill the ties before driving in the screw spikes. The line was eventually built as double track.
The railroad became one of the most profitable in the world. Upon completion, the railway was proclaimed an engineering marvel of the era. Until the opening of the Panama Canal, it carried the heaviest volume of freight per unit length of any railroad in the world. The existence of the railway was one of the keys to the selection of Panama as the site of the canal.
In 1881 the French Compagnie Universelle du Canal Interocéanique purchased controlling interest in the Panama Railway Company. In 1904, the United States government under Theodore Roosevelt purchased the railway from the French canal company. At the time, railway assets included some of track, 35 locomotives, 30 passenger cars, and 900 freight cars. Much of this equipment was worn out or obsolete and had to be scrapped.