History of Panama City

One year before the start of the California Gold Rush, the Panama Railroad Company was formed, but the railroad did not begin operation until 1855. Between 1848 and 1869, the year the first transcontinental railroad was completed in the United States, about 375,000 persons crossed the isthmus from the Atlantic to the Pacific, and 225,000 in the opposite direction. That traffic greatly increased the prosperity of the city during that period.

The construction of the Panama Canal was of great benefit to the infrastructure and economy. Of particular note are the improvements in health and sanitation brought about by the American presence in the Canal Zone. These include the eradication of yellow fever and malaria and the introduction of a first-rate water supply system. However, most of the laborers for the construction of the canal were brought in from the Caribbean, which created unprecedented racial and social tensions in the city.

During World War II, construction of military bases and the presence of larger numbers of U.S. military and civilian personnel brought about unprecedented levels of prosperity to the city. Panamanians had limited access, or no access at all, to many areas in the Canal Zone neighboring the Panama City metropolitan area. Some of these areas were military bases accessible only to United States personnel. Some tensions arose between the people of Panama and the U.S. citizens living in the Panama Canal Zone. This erupted in the January 9, 1964 events, known as Martyrs' Day.

In the late 1970s through the 1980s Panama City became an international banking center, bringing a lot of undesirable attention as an international money-laundering center. In 1989 after nearly a year of tension between the United States and Panama, President George H. Bush ordered the invasion of Panama to depose the leader of