Panama has the distinction of being the first Spanish city on the Pacific, founded the day before Cortes set out from the Atlantic coast for Mexico (15 and 16 August 1519); but in the beginning its range of action was limited. As the gold and the Indians of Castilla del Oro were rapidly worked out, and Darien showed itself to be (as it still is) highly intractable,^[15] entradas probed north in 1522, the year in which Cortes first made contact with the South Sea; but in two or three years they came up against prior claimants to conquest on the marches of Guatemala. Thus shut in on the north, the Panama base had a far greater sphere for expansion to the south, but one much more difficult to take up, since it was guarded by a great expanse of unknown sea flanked by extremely inhospitable shores. Southern exploration also started in 1522, but it was ten years before the seizure of Atahualpa at Cajamarca put Castile in possession of another empire as fabulously wealthy as that of New Spain, and completely changed the geographical values of central America.

But this new empire lay on the Pacific, and the Portuguese held the entry by the Indian Ocean and, in Brazil, lay athwart or flanked any possible routes across South America, while the Magellanic passage was useless for continuous traffic. Thus to link Spain and Peru ‘America had to be crossed, involving a certainty of illegal trade. The solution finally settled upon simply crossed America at the least objectionable place and restricted trade as much as possible.’^[16]

‘Glance-at-the-map geography’, hindsight, and Panama's eventual success have focused attention on that isthmus as the pass through the barrier between Atlantic and Pacific; but there are of course several constrictions of the land between Tehuantepec and the Atrato. As we have seen, rivalry between a Nicaraguan and a Panamanian route goes back to 1522, and the precise choice of a Pacific terminal on the Isthmus itself seems to have been largely due to chance.^[17] Tehuantepec had its prospects; the summit level is not much over 200 metres. But the portage between rivers (Tehuantepec and Coatzacoalcos) is long and would have needed much labour, ports at either end were dangerous in the season of ‘Nortes’ winds (October-May) and too small for the bigger ships of the later sixteenth century, while if Vera Cruz and Guatulco were used as main terminals there would have been prohibitive breaks of bulk. The coup de grâce to Tehuantepec's chances came with the opening of the Philippines trade: not only was its port too small for the Galleons, but it was not so well placed as Acapulco for a direct Mexico-Manila link, or as Panama for a link between the Atlantic convoys and Peru. There was also agitation in the 1550s- 209 -for Juan Garcia de Hermosilla's projected route between Trujillo (Honduras) and Realejo, its long portages being supposedly compensated for by better going in a much more healthy and productive country than Panama. In 1560 such efforts seemed successful, since the Crown agreed to make Trujillo to the Gulf of Fonseca the isthmian crossing for trade with Peru; but ‘Habit was already too strong’ and the project lapsed. It was revived again in 1590, with the usual high-flown propaganda, to receive a cold douche from that objective surveyor Juan Bautista Antonelli. There were still proponents of Nicaraguan routes in the 1620s, using the only really solid argument, that sailing to Peru was much easier from Realejo than by beating out of the Bay of Panama.^[18] But the tangible and intangible investment in Panama was much too great to be shifted.

The great arguments against Panama were its climate, with high mortality from disease and much damage to goods and foodstuffs from the very humid heat, and, later on, the virtual impossibility, in such jungly terrain, of suppressing the cimarrones, the runaway black slaves who plundered—and recruited—from the requas or mule-trains of the portage. In the 1570s the cimarrones formed, in Chaunu's words, a ‘counter-colony’ of 3000 or more people, with subsistence agriculture, laws, and a mud-walled town which Drake's men found ‘kept so clean and sweet … very pleasant to behold’; in these respects at least it may have improved on Panama City. These stout recalcitrants had also, of course, a high capacity for collusion internally with the Negro muleteers of the requas, externally with any corsarios luteranos who might appear.^[19] But in the event, once Nicaragua's Desaguadero had been tried and found wanting, nothing prevailed over the shortness and low altitude of the Panama crossing; the risk of disease and plunder-age was balanced against a speedy transit, which meant fewer halts and hence fewer opportunities for illicit trade.

Pioneers from Mexico and Panama had met by 1524–5, and so disposed of the ‘doubtful strait’: there was no natural channel through the barrier; yet before the end of the decade there must have been talk of making an artificial waterway. Galvão's statement that Saavedra ‘if he had liued, meant to haue opened the land of Castillia de Oro and New Spaine from sea to sea’^[20] may be hardly solid evidence: Saavedra's name would naturally come to the mind of a Portuguese Governor of the Moluccas, and he may have merely attached it to Gomara's list, which he gives, of four possible locations for a canal to shorten Spain's route to the Spiceries. It is a good list, concentrating on Panama and the Nicaraguan lakes, but adding Uraba-San Miguel and Tehuantepec as possible but more difficult, which is objective in Cortes's secretary and biographer; Gomara indeed set the priorities for nearly three centuries of debate. Both Galvão and Gomara published in the 1550s, but the former's reference suggests at least that somebody had the idea of a canal in Saavedra's day, and this is surely demonstrated by the fact that in 1534, after three surveys of the Rio Chagres in 1527–33, Charles V directed not only the clearance of obstructions as far upstream as possible, but also a feasibility study (with analysis of benefit-costs for neighbouring provinces)- 210 -of a cut joining the Chagres and the South Sea. Pascual de Andagoya reported that this was not possible, but that a road would need only fifty Negroes to make and maintain.^[21]

Canal schemes now went into the discard, though in the mid-fifties and again in the mid-sixties interest in the Nicaraguan route was revived, and Gomara made the spirited claim that, despite the mountains, ‘For the spice trade, for the riches of the Indies, for a King of Castile, little is impossible.’ There were indeed counter-arguments, amongst others the presumed difference in sea-level between the two coasts, with unpredictable hydrodynamic implications. Fr José de Acosta SJ thought this but vain discourse, stressing rather the ‘strong and impenetrable mountaines’ placed by God himself as a rampart ‘to withstand the furie of two seas’: even were men able to pierce them, they should surely fear His vengeance for impious meddling with the divine ‘framing of this vniversall world’.^[22] This remark was passed into legend: although a tradition grew up that Philip II took a similarly devout view and forbade, on pain of death, even discussion of a canal project, this seems a caricature of his undoubtedly intense piety, and to be conflated with an actual but very local prohibition by Philip V, in 1719, of attempts to by-pass the Cartagena customs by using the Rio Atrato! The more genuine reasons for the long lapse in serious discussion of the idea are the cost of a canal and the fact that it would provide a target for attack and hence would need special defences; in 1535, Charles V actually refers to opening a door for Portuguese or Frenchmen. The mule track dignified with the name of el camino real did not obviate the need for defence, but despite the fact that until well into the eighteenth century it was notoriously bad by the low standards of its time and region, ‘18 leagues of misery and curses’,^[23] the track did after all work; while a waterway, even if technologically and economically feasible, would not have avoided the breaks of bulk at each end, and the transit would probably have taken longer than by road or road-and-river, with consequently greater hazard to life, property, and the Royal Customs.

Chaunu puts it very strikingly: before the creation of Peru, Castilla del Oro had been functionally much the same as any other local base for Indian exploitation and further forays, and so much isolated in a disjointed and sparsely-peopled land mass as to seem insular rather than Tierra Firme; after, human activity is solely devoted to the passage function. After 1530, then, it became truly an isthmus, The Isthmus.^[24] Before it could properly take up this role, it had to be repopulated, for the Peruvian rush had all but emptied it. This took six or seven years, until in 1538 Veragua and Panama were formed into the smallest Audiencia,^[25] which could muster in 1570 only some 800 Spaniards, half of them in Panama City. This administration was simply to control the passage: an index of the intense concentration of traffic, wealth, and imperial interests on a few leagues of poor river and worse road. How intense can be judged from Chaunu's reckoning: from 1538–40 to the mid-seventeenth century, the Atlantic side of- 211 -this ‘complexe portuaire’, Nombre de Dios and Puerto Bello, accounted for 55–60 per cent of the exchanges between Spanish America and the Old World; or—even including the trade of the Manila Galleon, of Brazil, and that carried on by foreign interlopers—35–40 per cent of all the external commerce of the New World. On the Pacific side, Panama ranked next to Callao in volume of trade, far ahead of any third port, and controlled 95 per cent by value of all trade between South America and Spain, though only 40 per cent by volume. These remarkable figures were of course overwhelmingly due to Peruvian silver.^[26]

The Isthmian node really began at Cartagena:^[27] a solid city, from 1570 on largely stone-built, with an excellent and easily fortified harbour: a port which was important in its own right as a commercial centre for Tierra Firme, despite water shortage and mediocre inland communications. So important was it in fact, and after 1580 so attractive to Portuguese merchants (always suspect as rivals to Seville, and as crypto-Jews), that in 1610 it was awarded its own Inquisition, which put it in the rank of Mexico City and Lima, since, as Chaunu remarks, only cosmopolitan places warranted this luxury. But its major functions were as a barbican, an outer guard to the Isthmus, and as the first stop of the galeones: significantly, its real foundation was in 1533, the year after Cajamarca. The fleet usually spent only a few days at Cartagena on the outward run before going on to Nombre de Dios or Puerto Bello, but it might spend weeks, depending on whether or not the silver fleet from Callao was on time at Panama: if it was not, the galeones waited at Cartagena, since health conditions were very bad at the Isthmus ports, and Nombre de Dios was practically defenceless and undefended. After the fair at the Isthmus, the fleet returned to Cartagena for refitting, which led to a ship-repairing industry that by the mid-seventeenth century had gone on to the building of galleons of 600 toneladas or more. Most of the legal South American trade not handled at the Isthmus itself was carried out during these stopovers, and without doubt covered a great deal of illegal trade.

Compared to Cartagena, a real city, Nombre de Dios was a dreadful place: the nearest thing to a good word that anyone ever said for it was Antonelli's remark that it would have been very well had the harbour been any good; but it was a bad and shallow haven, dangerously exposed and without good water.^[28] Although at times handling about half the exchange values between the Old and the New Worlds, the ‘town’ had only about thirty permanent residents. Defences were derisory—the place was ‘a shanty town on an open beach’, not worth spending on. There were no stone buildings: since for most of the year the town was almost deserted except for a few caretakers, and then for a couple of months a mere camp for Lima merchants or their Panama factors, there was no point in building. Above all, Nombre de Dios had the notoriety of being the most disease-and death-ridden place in a region with many contenders for this bad eminence. Antonelli strongly recommended that ‘this citie should be plucked downe and newly builded againe in Puerto Bello.’ It took the shock- 212 -of Drake's 1596 raid, when the ‘citie’, such as it was, was destroyed, to compel action; Puerto Bello was the obvious resort.

Here there was an excellent harbour, nearer the entrance to the Rio Chagres; Puerto Bello became an altogether more impressive place than its discarded rival, well fortified and with good stone buildings. As regards mortality, it was not so deadly as Nombre de Dios, but bad enough, and like that wretched settlement it really only came alive when the fleet was in. In 1637 Thomas Gage was offered lodging for nothing—until the galeones came in, when he was charged six score crowns a fortnight—perhaps about $US200, in 1946!—for a room ‘but as a mouse hole’. Food became ‘so excessive dear’ that fish and tortoises ‘though somewhat dear were the cheapest meat that I could eat’; cloths were sold not by length but by weight and paid for not in coin but in weighed silver wedges. In one day Gage counted 200 mules laden with nothing but silver ingots, which ‘lay like heaps of stone in the street, without fear or suspicion of being lost.’ A century later the town ‘en tiempo muerto’ was ‘solitary, poor, full of a perpetual silence, and infusing total melancholy’; but then at the fair-time, ‘this most abhorrent shore’ becomes ‘the Theatre and magazine of the riches of the two trades of Spain and Peru.’^[29]

Panama Viejo itself—there has always been a certain mystery about that city. To some it has been a sort of ‘Golden Goa’, a merchant princes' city of magnificent palaces—timber it is true, but mahogany and cedar, richly carved; to others, a mediocre town of some 500 to 700 huddled wooden houses. Nearly seventy years after it was founded, Antonelli officially reported that the royal buildings ‘are all of timber and bourdes, as the other houses are’—and this included treasury and prison!—while fifty years later still Thomas Gage adds that even the churches were of wood.^[30] The idea of Panama's splendour seems to derive from Exquemelin's glowing account of the city at Henry Morgan's sack of 1671, at which he ‘himself, of necessity, was present’. The genre—really on-the-spot ‘I was there’ journalism—is not unknown today; a priori, one might expect some exaggeration, and without doubt there was some inflation in the contemporary Englishing of his tale.^[31] On the other hand, timber building is quite consistent with elegance and even luxury, and when the town was rebuilt after the disastrous fire of 1644, some at least was in stone: the ruined Cathedral tower still stands. But considering that this rebirth was in a period of deep economic depression, one must agree that ‘It is tolerably clear that the city never gave the appearance of a great commercial metropolis’;^[32] a modest Phoenix.

For all that, and despite disadvantages already mentioned, on the economic plane Panama was no mean city: well over half of the silver of the Indies must have passed through its godowns. For 1607, by which time there were two official and two private houses of stone, we can even construct a sociological ‘profile’ from the Audiencia's complaint of economic decline. There were 495 Spanish householders, plus 31 Portuguese, 18 Italians, 4 others, a total of 548; of- 213 -these, 29 were wholesale merchants, 21 retailers, 35 owners of the 850 mules of the requas. The rest would be clerics, royal and municipal officials, notaries, small planters and ranchers in the food-producing umland, artisans, sailors, soldiers. Of the 548 no fewer than 333 were single or widowers; but as it is implied that in addition to 2558 male slaves (about 1000 of them muleteers or other transport workers) there were 1138 females, one must presume that these 333 unattached white males could make do with negras escravas; or as Gage more picturesquely puts it (perhaps with a tang of sour grapes?), ‘The Spaniards are in this city much given to sin, looseness and venery especially, who make the blackamoors (who are many, rich, and gallant) the chief objects of their lust.’^[33] Indians are not counted—there were 300 or 400 families surviving in 1570—nor of course were the cimarrones within the pale of the census.

Trade relations with New Spain were practically non-existent, but Nicaragua was a main supplier of mules and provisions, and of pitch and cordage for a small ship- or boat-building or repairing industry. But essentially Panama looked to the south: to Guayaquil for cacao and fibres for ships' rigging, to Paita and northern Peru for sugar, and above all to Callao. There was some minor exchange of produce—rice from the Isthmus, maize and especially wine in return—but dominantly this was the great exchange of silver for Sevillean merchandise. In effect, Panama acted as factor between Seville and Lima, in so far as her own merchants were not simply individual factors or commission agents for the Limeños. More than any other American centre, Panama was completely locked into the Sevillean monopoly. The Audiencia in 1607 attributed the city's hard times to two things: the Manila trade, and that between Mexican ports and Callao, by which silks and luxuries from China and general merchandise from Europe (and some from New Spain itself) reached Peru.^[34] The former certainly, the latter probably, cut into Sevillean exports or re-exports; but both undoubtedly by-passed the Panamanian intermediary.