Panama is the principal city on the Isthmus. Its site has been once
changed. When the Spaniards first visited the Isthmus in 1512, the
spot on which the old city was afterwards built, was already occupied
by an Indian population, attracted by the abundance of fish on the
coast, and who are said to have named it "Panama" from this
circumstance, the word signifying much fish. They, however, were
speedily dispossessed; and even so early as 1521, the title and
privileges of a city were conferred on the Spanish town by the
emperor, Charles the Fifth. In the year 1670, it was sacked and
reduced to ashes by the buccaneer, Morgan, and was subsequently built
where it now stands.

The position of the present town of Panama is in latitude 8 deg. 57' N.;
longitude 79 deg. 30' W. of Greenwich, on a tongue of land, shaped nearly
like a spear head, extending a considerable distance out to sea, and
gradually swelling towards the middle. Its harbour is protected by a
number of islands, a short distance from the main land, some of which
are of considerable size, and highly cultivated.

There is good anchorage at each of these islands, and supplies of
ordinary kinds, including excellent water, which may be obtained from
several of them.[6]

The city of Panama was, in the 17th century, a place of great
importance, but has gradually sunk into comparative insignificance.
The policy of the present Government of New Granada is to restore this
city to its pristine importance, and for this reason, one terminus of
the intended Ship Canal should be at, or as near as conveniently may
be to, this position.

The natural obstacles to be overcome in forming a Canal between
Panama, and the _nearest point_ of the opposite coast, which is the
Gulph of San Blas (likewise called the Bay of Mandingo), render it
expedient to select a position west of that line, and the happy
coincidence of two navigable rivers, traversing the low lands to the
west of Porto Bello, the one falling into the Atlantic, and the other
into the Pacific Ocean, which may either form part of the navigation,
or be used to feed the Canal, renders that part of the Isthmus the
most eligible for this purpose. The rivers alluded to, are the
Chagres and the Rio Grande.

The town of Chagres, at the mouth of the river of the same name, is
about thirty-two miles west of Porto Bello (Puerto Velo); it is
situated on the north bank of the river, which falls into the
Caribbean Sea. The harb