Tag Archives: Panama Railroad Company

The Panama Railway and the Canal

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Completing construction of the Panama Railway was not the end of their problems. No one had any experience of building a railway in such tropical conditions before, indeed at the time of opening, commercial public railways services were less than 30 years old. Wooden bridges that had served in the US, quickly decayed in the tropical heat and had to be replaced with iron bridges, wooden trestles had to be replaced with gravel embankments and the original pine sleepers proved to have a life of less than a year in the Panamanian climate.

Six heavy locomotives and four lighter ones provided the initial motive-power. Trains were made up from a variety of rolling stock that included 22 passenger cars (each with a capacity of 60 passengers), 51 closed boxcars and 72 flat cars. On opening the First class passenger fare was $25 (one way), children under 12 years old travelled for $6.25, the second class fare was ‘only’ $10 and personal baggage ten cents a pound. Mail was charged at .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. From 1855 and 1867 more than $700 million in gold was carried on the railroad without the loss of a single dollar, and earning the railway’s owners 0.25% in fees.

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. By 1877 the Panama Railroad had revenues of $1,284,000 and operating expenses of $998,000, leaving a profit of just $286,000. Essentially the railroad was bankrupt. On Wall Street the stock plummeted from $369 per share in 1874 to less than $52 in 1877.

Again though, just when things were looking bleak, the railway again managed to turn things around. The existence of the railway was one of the key factors that contributed s 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. It was then used extensively to provide logistical support for the can al construction effort. When the French Canal effort failed, the value of the railway was not lost on the Americans and in 1904, the United States government under Theodore Roosevelt purchased the railway from the French canal company. At that time, railway assets included some 75 miles (121 km) of track, 35 locomotives, 30 passenger cars, and 900 freight cars.

Under the Americans, the railway enjoyed initial investment, with much of the rolling stock being replaced. However, investment was not maintained and the railway went into decline as the growth of road transport took much of its traffic.

History of the Panama Canal Railway

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History of the Panama Canal Railway

The Panama Canal Railway Company links the Atlantic Ocean to the Pacific Ocean across the width of Panama. Presently, it is jointly owned by the Kansas City Southern Railway and Mi-Jack Products. The railway has a fascinating history and holds a number of records.

The original Spanish trails and roads allowed some cargo and travelers to cross the Isthmus of Panama, but by the 19th century they were becoming inadequate and if Panama was not to lose out to other countries, where the journey from the Atlantic to Pacific might be further, but could be made faster and in more comfort. In the 1840′s, the trip across the isthmus was by native dugout boats up the often wild and dangerous Chagres River and by mule for the last remaining 20 miles over old and badly maintained trails. The trip could take around 5 days and was dangerous, with disease and jungle hazards to contend with. Although canal options had been under consideration for some time, it was still considered too expensive. The new railway technology however, seemed to offer the ideal solution.

At the time, Panama was part of La Gran Bolivia (with Venezuela, Ecuador and Colombia) and President Bolivar commissioned a study into the possibility of building a railway from Chagres to Panama City. The report was completed in 1829 and showed that such a railway might be possible. However, the idea was shelved. Further attempts to build a railway by the Americans (in 1836) and French (in 1838) also came to nothing.

Having acquired Upper California and the Oregon Territory in 1846, the United States needed a safe, reliable and speedy link between the Atlantic and Pacific oceans. In an attempt to address this issue, in the same year, the United States signed a treaty with Colombia under which the US would guarantee Colombian sovereignty over Panama in return for the rights to build a railroad or canal at the Panamanian isthmus. At the same time, Congress authorized a subsidy for steamships to operate from New York to Chagres and from San Francisco to Panama City. William H. Aspinwall, the businessman who had won the contract to build and operate the Pacific mail steamships (San Francisco to Panama City), conceived a plan to construct a railway across the isthmus. With the help of his partners he created the Panama Railroad Company registered in New York and raised $1,000,000.