During the colonial period, Panama’s great importance to Spain was as a transshipment point for the silver, gold, pearls, and other treasures plundered from South America once the conquest spread to include the Inca Empire.
These riches were taken to Panama City, and then had to be carried over to the Caribbean coast, where Spanish ships transported them to Europe. They were carried across the isthmus by two main routes, both of which had their Pacific terminus at Panama City and were established by the Spanish in the early 16th century.
The Camino Real and the Camino de Cruces
Its name, which translates to “royal road,” was rather regal for what was essentially a mule trail, only part of which was paved. It was brutal and muddy, and where it crossed over the foothills it grew so steep that travelers had to climb through the muck on their hands and knees.
The second was the Camino de Cruces, known in English as Las Cruces Trail. This was an overland route from Panama City to Venta de Cruces, a village on the Río Chagres about a third of the way across the isthmus. The trail was wider than a man is tall during the Spanish Colonial era, and it was paved with flat stones.
From Venta de Cruces, it became a water route, with cargo moved by boat or barge up and down the Chagres, which flows into the Caribbean. Fuerte San Lorenzo was built at the mouth of the Chagres to defend it. Because this route was considerably farther west than the Camino Real, goods had to be transported by sea between the mouth of the Chagres and Nombre de Dios or Portobelo to the east. The whole trip took 1–2 weeks each way.
Though an easier and cheaper route, especially for shipping heavy loads, the Camino de Cruces was more vulnerable to pirate attack than the Camino Real, which had the natural protection of the jungle for much of its length.
The Spanish established the Camino de Cruces in 1527, and it was still being used up until the mid-19th century. The Forty-niners used it in their own hunt for treasure, as they rushed to the gold fields of California. It was finally abandoned with the building of the Panama Railroad in the 1850s. The village of Venta de Cruces is now at the bottom of the Panama Canal, but part of the Camino de Cruces is still intact and can be walked. The Camino Real was abandoned in 1826.
Gold gets all the attention in romantic tales of Caribbean pirates and Spanish galleons, but silver made up the bulk of the riches Spain looted from South America, mostly from the mines of Peru. By the end of the 17th century, Spain had tripled the amount of silver in circulation throughout the world. An estimated 60 percent of it came through Portobelo alone.
This silver, and other treasures from the New World, were traded at massive fairs held at Nombre de Dios and Portobelo. Spanish merchants from Europe and South America converged at the fairs for several weeks each year, more or less, during which they exchanged treasure for European finished goods, which included everything from nails to fine cloth. Merchant ships heading across the Atlantic to and from Spain were escorted by the Spanish navy.
The first organized fair was held in 1537. At their peak, the fairs surpassed those held anywhere else in the world. Bars of silver were stacked high in the streets, but the presence of the heavily armed Spanish fleet kept pirates away.
Not so between fairs. Despite its great importance to the Spanish Empire, the isthmus was neglected and never adequately defended against pirates. Panama was always treated as a notch below, say, Peru, a wealthy and powerful viceroyalty. Panama had the lower administrative rank of audencia and was governed by a president.
The trade fairs and treasure shipments marked the first time Panama became a crucial link in world commerce, a role it has continued to play over the years—as a route for the Forty-niners, as the site of the Panama Canal, and as an international banking capital. One can even see the Colón Free Zone, along the coast where the ruins of the Spanish fortifications still stand, as a kind of descendant of the Spanish trade fairs.
After 1628, these fairs diminished in importance along with the declining fortunes of the Spanish Empire. They were finally abandoned in 1739.
Elizabethan Pirates and Privateers
Lack of funds, poor planning, and procrastination have been blamed for the fact that Panama was constantly sacked and looted throughout the Spanish era.
Nombre de Dios was always a bad choice for a port—the harbor was shallow and exposed, and it would have been hard to defend even if it had had better fortifications. Sir Francis Drake attacked it in 1572 and would likely have sacked it then if he had not been wounded during the conflict. Still, he and his men went on to ambush a mule train on the Camino Real loaded down with so many tons of silver they couldn’t carry it away. They buried it instead and made off with some gold. The Spanish dug up the silver before Drake could return for it.
Drake’s many exploits on the isthmus as a young adventurer during this period read like something straight out of Treasure Island. As historians have pointed out, one gets a sense he had an enormously good time tweaking the Spanish. He had help in his adventures from cimarrones, escaped African slaves who lived in hidden towns in the jungle and also delighted in harrying their former Spanish masters.
Drake returned to the isthmus years later for more adventures, but he fell sick and died on January 28, 1596, and was buried at sea in a lead-lined coffin near Portobelo. Expeditions have searched for that coffin, but it has never been found.
The Spanish abandoned Nombre de Dios and moved west to Portobelo in 1597, before the fortifications were even completed. Portobelo was a far better location for an important port town. The harbor was long and narrow, surrounded by hills. The Spanish fortified it heavily, but the design was poor from the beginning and constant redesigns over the years didn’t seem to help matters much.
Portobelo was barely completed by the time the English pirate William Parker attacked and looted it in 1601. It was sacked and rebuilt several times over the next 200 years.
Morgan and the Sacking of Panama City
The Welsh buccaneer Henry Morgan took Portobelo and held it for ransom in 1668. He did so by landing his troops at night some distance from Portobelo and attacking the fortifications by land. The defenders’ cannons, pointing out to sea, were useless. Still, it was a vicious battle. At one point, Morgan’s men used Spanish priests and nuns as human shields, forcing them to erect scaling ladders against the fort walls. The Spanish governor ordered the poor hostages shot down. When Morgan captured the city, he tortured its inhabitants if they refused to reveal where they had hidden their goods. The Spanish finally paid him a ransom of 100,000 pieces of eight to get him to leave.
As this tale suggests, the buccaneers of the 17th century earned a reputation as a far crueler, bloodier, and less dashing lot than the Elizabethan privateers of the previous century.
Morgan was determined to sack and loot Panama City, and he knew where to start his raid. There was another Caribbean fort, Castillo de San Lorenzo el Real, better known today as Fuerte San Lorenzo. It was built near the mouth of the Río Chagres. An imposing cliff there overlooks the river mouth and the sea, the perfect place for a fortress. Oddly, however, the fort was made of wood and its buildings had thatched roofs. As bizarre as it sounds, even the fort’s gunpowder was stored in a thatched hut.
When Morgan invaded the isthmus, he was able to sack and destroy San Lorenzo, even though the Spanish knew he was coming, by shooting flaming arrows over the walls. He then proceeded up the Chagres by canoe and sacked Panama City. The city was burned to the ground—whether by Morgan or the Spanish is still a matter of debate—and later rebuilt at a more defensible location eight kilometers farther west. This second Panama City still stands, as a historical part of modern-day Panama City known as Casco Viejo or Casco Antiguo.
The Scottish Colony
One of the stranger and more tragic episodes during this period was the doomed Scottish colony of New Edinburgh. It was the dream of an entrepreneur named William Paterson, who convinced the Company of Scotland, an overseas trading company created by the Scottish parliament, to invest hundreds of thousands of pounds in his scheme to establish a colony on the Caribbean coast of the Darién.
He argued the colony would be ideally situated to become a trading center between Europe and Asia and would help transform Scotland’s struggling economy. In July of 1698, Paterson and 1,200 colonists set sail for the Darién. Those who survived the crossing arrived in the Darién on November 2. They built a fort, Fort Saint Andrew, on a long, narrow bay they named Calidonia, a name it retains to this day.
The colonists were completely unprepared for life in the tropical rainforest, and the colony was a debacle. The first attempt at settlement was abandoned in less than a year, and only a third of the colonists made it back to Scotland. Attempts were made to reestablish the colony, but incompetence, in-fighting, battles with the Spanish, opposition from the English, shipwrecks, and disease brought an end to New Edinburgh by 1700.
Scotland, deeply in debt, was forced in 1707 to give up dreams of independence and empire, and joined England to form Great Britain.
© William Friar from Moon Panama, 3rd Edition