Located in Le Flore County, Panama is on State Highway 59, approximately nine miles north of Poteau, the county seat. The community began as a mining settlement called Red Town, because all the mining shacks were painted red. The mine was located near Buck Creek, on the south side of the present town. In 1890 there was a population of about one hundred residents.
In 1896 the Kansas City, Pittsburg and Gulf Railroad (acquired by the Kansas City Southern Railway in 1900) built tracks through the region. The first store was built in 1902 by Frank Carter, who also operated a gin. Other businesses sprang up, creating a town. In 1903-04 the Midland Valley Railroad built an east-west line, and the community moved to the junction of the two railroads. The Post Office Department established the first post office January 14, 1898, with John D. Yandell as postmaster. The order was rescinded February 23, 1898, and then reestablished February 21, 1899. Historian George Shirk and others have claimed that the name was inspired by the building of the Panama Canal in Central America, but the town of Panama had its name by 1898, and the Isthmus of Panama was not chosen as the canal's location until 1902, with construction beginning in 1906.
Panama soon developed all of the amenities of a small railroad town. The first school was a subscription school established in 1903 under a brush arbor. The 1900 population stood near 150 and by 1910 climbed to 310. In 1898 the Ozark Coal and Mining Company established itself at Panama, and by 1905 the operation annually produced 10,391 tons of coal. In 1911 the town had a bank, a hotel, a cotton compress, and all of the businesses and services offered in a burgeoning town. Local newspapers included the Free Will Baptist Banner and the Panama Canal. By 1918 the community supported four general stores and two grocers. Panama's 1930 population was 754, still mainly supported by mining.
The area around Panama had a varied economy. In 1937 a creosote plant opened, providing jobs during the next several decades as the coal mines closed one by one. As mining declined, farming and ranching expanded. The 1940 population stood at 880, climbing to 1,027 in 1950. In 1970 the U.S. Census reported 1,121 residents. In the last decades of the twentieth century the town's economy began to decline, and in 1977 the Panama Coal Company, which engaged in strip mining, declared bankruptcy. In 1991 the AES Corporation established the Shady Point AES power plant north of town, helping revive the area's finances. On Panama's outskirts, the Skullyville County Jail, built after the Civil War and used until 1907 statehood, is listed in the National Register of Historic Places (NR 80004286). The 2000 population stood at 1,362. Public school enrollment in kindergarten through high school consisted of 705 students.
BIBLIOGRAPHY: Daily Oklahoman (Oklahoma City), 28 September 1932 and 4 October 1959. Arlene LeMaster, Eastern Oklahoma Indians and Pioneers: Choctaw Nation, Indian Territory (Poteau, Okla.: Family Heritage Resources, 1994). Henry L. Peck, The Proud Heritage of LeFlore County: A History of an Oklahoma County (Van Buren, Ark.: Press Argus, 1963). Frederick Lynne Ryan, The Rehabilitation of Oklahoma Coal Mining Communities (Norman: University of Oklahoma Press, 1935).
© Oklahoma Historical Society