The Panama Railroad, completed January 29, 1855, was built by three shipping tycoons who contracted with the government of New Granada to build and operate the railroad in exchange for free and exclusive right to the railway for forty-nine years. They also obtained the contract with the U.S. Post Office to ship mail and treasure between New York and San Francisco. The land for the rail bed was provided by New Granada and private Panamanian land owners. The forty-seven mile route paralleled the Isthmus through unbelievable obstacles. Laborers endured severe heat, humidity and deluges while clearing bottomless swamps filled with mosquito swarms and disease. The line cut through thick mountain forests and spanned three hundred ravines. A high death rate took one labor force after another until finally the company imported West Indian black labor. Violence within the work force threatened completion until Ran Runnels took charge. He beat and killed the black laborers as needed. After five and a half years they carried the job to completion with enduring hatred for Runnels.
The Americans exerted control over Panama by virtue of their money, but a growing body of Panamanian activists challenged that power. The impact of the railroad on the Panama economy and culture grew more negative as time went on. Sr. Lino de Pombo, New Granada Secretary of State at Bogota, noted that the economic benefit to the population had been short lived:
"the transit route began to be frequented, and in particular since the time the gold of California held out its dazzling allurements to immigration, and to the spirit of enterprise and avarice, a number of adventurers of all countries of the earth, incessantly traversed our territory by that road; at first bestowing some benefits on the natives or inhabitants of the country, by employing and remunerating their services; but afterwards, when the railroad was established--land having been for that purpose gratuitously given, not only by the nation, but also by private individuals--the slight anterior profit was entirely lost to the population" The Secretary exposed the natives' deep animosity towards the Isthmus travelers: "[the profit was] replaced by the smoke of the locomotive, the noise of the trains, the shouts of the passengers, and the mere spectacle of animation and wealth .... And what is still worse, amongst those adventurers were, and still are, frequently men ignorant and corrupted, quarrelsome and drunkards, without any other god but money, and any other law but brute force--men who committed so many crimes and so many murders in the gold fields of the North, ... and in the filibuster expeditions which disgrace our times--and others who boast of civilization, without, however, laying aside their hostile pre-occupations, who look with scorn on the indigenous population, and even on the Spanish race, to whom every individual of African blood is a Pariah unworthy of any consideration, and whose predominant idea, in foreign countries, is that of annexation--of those passengers, some have contaminated with their crapulous vices the humane and hospitable people of the world, and have made them--though formerly peaceful by habits and submissive to the laws--inclined for some time past to insubordination and turbulence; others have been promoters of frequent riots, caused deaths and wounds, and provoked strong antipathies, and, in general, became the object of animadversion and distrust on the part of the plain and simple population."
The U.S. Foreign Minister at Bogota, James Bowlin, had been aware of this ill-feeling. He feared certain Panemeņos would continue to revolt even though a new government and constitution had just been established unifying the several provinces in Panama in 1855. In January of 1856 Bowlin wrote to U.S. Secretary of State Marcy speaking of omens of revolution. Merchants and businessmen anticipated trouble when two revolutionaries were released from prison. He referred to one of these as "Obamo," who had been acquitted of participation in the recent revolution and was demanding to be restored by Congress to the executive office from which he had been deposed the previous winter. Bowlin warned of armed revolt if the Congress turned Obamo down. Later Bowlin, wrote to U.S. Secretary of State Marcy:
"I may be pardoned for alluding to one point of controversy, which is somewhat flattering to our National vanity--that point is the abolition of the Provinces, and uniting them in clusters into States and erecting out of them a Confederation with a distribution of powers similar to our own government. The advocates of this system are now the party in power, and they do us the honor to make our Constitution the model, for illustrating their views, and for imitation."
Despite Bowlin's optimism that the U.S. style government had taken root in Panama, it appears that there was growing animosity between the working class and the Yankee tourists as well as between the government officials.