Panama as seen from space.
Panama is the westernmost province of the nation of New Granada, occupying the Isthmus of Panama connecting Central America to South America. Panama is bordered by the Republic of Guatemala to the west, the Caribbean Sea to the north, the Pacific Ocean to the west, and the New Granadan province of Cundinamarca to the east.
Vasco Núñez de Balboa discovered in 1513 that Panama was the narrowest point between the Caribbean Sea and the Pacific Ocean. After the Spanish conquest of the Inca Empire, Panama became the main transshipment point between Spain's Pacific and Caribbean dominions. When the Viceroyalty of New Granada was created in 1717, Panama was placed under its jurisdiction. By this time, it was becoming commonplace for ships to sail south around Cape Horn, so that Panama's status as a transshipment point diminished in importance.
After the end of the Trans-Oceanic War in 1799, the Spanish colonies in Latin America rose in revolt and gained their independence. Panama remained part of the independent nation of New Granada, but became a frequent battleground in the wars between New Granada and Guatemala. By the mid-1860s the wealthy Mexican businessman Bernard Kramer became interested in building an interoceanic canal in Central America. Kramer initially sought to build a canal across the Isthmus of Panama, but the mining engineer Courtney Wymess convinced him that Panama's status as disputed territory made it unsuitable, and that a better site for a canal would be through Guatemala. In the end, Kramer chose to build the Kinkaid Canal in Guatemala.
In For All Nails the Sendero Fernandino, a supposedly covert supply road running from Mexico to New Granada, runs through Panama.