After its plunder, Panama City was reestablished on a small rocky peninsula north of the original site. This area is now referred to as Casco Viejo, meaning Old Compound. Protected by a shallow bay, moat, fortified stone walls, and watchtowers, the city was never again sacked by privateers. However, the overland trade routes to Panama City were subject to constant attack, so less than 100 years after it was reestablished, the city was in decline as the Spaniards stopped using the route. Panama city again revived with the construction of a railroad in the 1850s that was an important part of the route west for the gold rush. Rather than traveling by land across the United States and risk attack by American Indians, prospectors and miners from the East Coast of the US would sail to Panama, cross the narrow isthmus via rail, and then make their way north to California. The city continued to flourish as the French attempted to build a canal starting in 1880. This attempt was abandoned 13 years later after over 22,000 workers had died from malaria and yellow fever. We spent a steamy morning strolling the narrow streets of Casco Viejo, admiring the crumbling colonial architecture. A lot of restoration and reconstruction work is underway, and we imagine that in five or ten years the dilapidated buildings of rapidly gentrifying Casco Viejo will be restored to their former glory.
After World War II, Panamanians began questioning the wisdom and legality of the indefinite lease of such a valuable commodity. Increasingly violent protests against US occupation of the Canal Zone intensified, and in 1974 a new treaty was signed between the US and Panama, granting Panama control of the Canal on December 31, 1999. Despite fears to the contrary, since Panama gained control of the canal, transit time across the canal has increased and the accident rate has decreased. Not content with making tens of thousands of dollars per ship traversing the canal, we paid the Panama Canal Authority (ACP) $8/person to get a bird's eye view of ships crossing through the Miraflores Locks. Building-sized cargo ships moved slowly through the locks, guided by small vehicles that resembled Zambonis on rails. With barely 2 feet to spare on each side of the ships, it looked like a tight squeeze.