Panama Canal Railway
The Panama Railway also operated a significant shipping line, connecting its service with New York and San Francisco. It ran a Central American line of steamships linking Nicaragua, Costa Rica, San Salvador, and Guatemala to Panama City. The shipping service was greatly expanded when canal construction began. Ships included the SS "Salvador", SS "Guatemala", SS "Cristobel", and , which became the first of the ships to cross the completed canal in 1914.
In 1904 the United States took over the license to build and operate the canal. The choice to use locks and an artificial lake (Gatun) meant that the old railway route from 1855 had to be changed because it followed the Chagres River valley, which would be flooded by the lake. Also, the railway would be extended and altered continuously for the building process. The stock of the Panama Railway Company, vital in canal construction, was entirely controlled by the United States Secretary of War.
José Manuel Marroquín
The events leading to the separation of Panamá from Colombia arise from the desires of business and strategic interests that wished to construct an interoceanic canal between the Atlantic and the Pacific oceans. The concept of such a canal through Panamá dates to the early 16th century. The first attempt to construct the Panama Canal began in 1880 under Colombian control and French leadership. But this effort had failed and another project was being considered through Nicaragua. President Marroquín vehemently opposed such idea and pushed for plan to build the canal through Panamá. Therefore, the administrations of Marroquín and Roosevelt signed the treaty “Tomás Herrán-John Hay" in January 1903. The treaty provided in part that the French company would transfer its construction rights to the US; the US would build, operate and exploit the canal for a period of 99 years; Colombia would receive a down payment of $10 million pesos and royalties of $250 thousand pesos every year until the end of the contract; and that the Colombian Congress would ratify the treaty within eight months. President Marroquín presented the treaty for Congress’ consideration and ratification. Colombian Congress rejected the treaty and Panamá proclaimed its independence.