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.
Afro-Panamanian
In November 1903, the construction of the Panama Canal began. 50,000 workers were imported from Jamaica, Martinique, Barbados and Trinidad. The workers were referred to as Antilleans or derisively as chombos. Antilleans and other black workers were paid less than white workers. Discrimination was rampant. Most supervisors were from the southern US, and implemented a type of southern segregation. The presence of West Indians had other repercussions. Creoles and mestizos who had a social status above blacks were lumped with them. They were deeply offended and engaged in rampant discrimination of all blacks outside the general canal local. This led to great racial tension. Native blacks began to resent the West Indians, who they felt made things worse for them. In 1914, the Panama Canal was completed. 20,000 West Indians remained in the country. They generated a lot of xenophobia. In 1926, Panama passed laws decreasing immigration from the West Indies and later barring non-Spanish speaking blacks from entering the country.