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.
List of former United States military installations in Panama
In 1903, the Hay–Bunau-Varilla Treaty was signed between Panama and the United States. It created the Panama Canal Zone as a U.S. governed region, and allowed the U.S. to build the Panama Canal. In 1977, the "Panama Canal Treaty" (also called "Torrijos–Carter Treaties") was signed by Commander of Panama's National Guard, General Omar Torrijos and U.S. President Jimmy Carter. Over time, it would replace and absolve the 1903 treaty.