Because the Atlantic lies east and the Pacific west of the United States, one is likely to imagine the canal as a huge ditch cut straight across a neck of land from east to west. But it must be remembered that South America lies eastward from North America, and that the Isthmus connecting the two has its axis east and west. The canal, therefore, is cut from the Atlantic south-eastward to the Pacific. It lies directly south of Pittsburgh, Pa., and it brings Peru and Chile closer to New York than California and Oregon. The first 7 miles of the canal, beginning at the Atlantic end, run directly south and from thence to the Pacific it pursues a serpentine course in a southeasterly direction. At the northern, or Atlantic, terminus are the twin cities of Colon and Cristobal, Colon dating from the middle of the nineteenth century when the railroad was built across the Isthmus, and Cristobal having its beginnings with the French attempt in 1880. At the southern, or Pacific, terminus are the twin cities of Panama and Balboa. Panama was founded in 1673 after the destruction by Morgan, the buccaneer, of an elder city established in 1519. The ruins of the old city stand 5 miles east of the new, and, since their story is one, it may be said that Panama is the oldest city of the Western World. Balboa is yet in its swaddling clothes, for it is the new American town destined to be the capital of the American territory encompassing the canal. The waterway is cut through a strip of territory called the Canal Zone, which to all intents and purposes is a territory of the United States. This zone is 10 miles wide and follows the irregular line of the canal, extending 5 miles on either side from the axis of the channel. This Canal Zone traverses and separates the territory of the Republic of Panama, which includes the whole of the Isthmus, and has an area about equal to that of Indiana and a population of 350,000 or about that of Washington City. The two chief Panaman cities, Panama and Colon, lie within the limits of the Canal Zone, but, by the treaty, they are excepted from its government and are an integral part of the Republic of Panama, of which the city of Panama is the capital. Cristobal and Balboa, although immediately contiguous to Colon and Panama, are American towns under the American flag. The Canal Zone historically and commercially has a record of interest and importance longer and more continuous than any other part of the New World. Columbus himself founded a settlement here at Nombre de Dios; Balboa here discovered the Pacific Ocean; across this narrow neck was transported the spoil of the devastated Empire of the Incas; here were the ports of call for the Spanish gold-carrying galleons; and here centered the activities of the pirates and buccaneers that were wont to prey on the commerce of the Spanish Main.