A settlement was found on August 15, 1519 by Pedro Arias Dávila and another 100 inhabitants. At the time, it was the first permanent European settlement on the Pacific Ocean, replacing the two cities of Santa María la Antigüa del Darién and Acla. Two years later, in 1521, the settlement was promoted to the status of city by a royal decree and was given a coat of arms by Charles V of Spain, forming a new cabildo. Shortly after its creation the city became a starting point for various expeditions in Peru and an important base where gold and silver were sent to Spain. From 1520 some Genovese merchants ruled the commerce of Old Panama on the Pacific Ocean for a century. Between 1586 and 1587 already there were 11 Italians in Panama, for naturalization and the right to stay in Panama. According to a census around 1587, Panama City had 548 inhabitants, of whom 53 were foreigners and of these 18 were Italians. In 1539 and 1563, the city suffered a number of fires which destroyed parts of it but did not impede the city's development. In 1610, the city reached a population of 5000, with 500 houses and convents, chapels, a hospital and the cathedral. At the beginning of the 17th century, the city was attacked several times by pirates and indigenous people from Darién. On 2 May 1620, an earthquake damaged many buildings in the city. On 21 February 1644, the Great Fire destroyed 83 religious buildings, including the cathedral. At this time, there were 8,000 people living in the city. In 1670, the city counted 10,000 inhabitants. On 28 January 1671, the WelshprivateerHenry Morgan attacked the city with 1,400 men, marching from the Caribbean coast across the jungle. Morgan's force defeated the city's militia then proceeded to sack Panamá. Either Morgan and his army started a fire that burned the city or the Captain General Don Juan Pérez de Guzmán ordered the gunpowder magazines exploded. Either way, the resulting fire destroyed the city. Morgan's attack caused the loss of thousands of lives and Panamá had to be rebuilt a few kilometres to the west on a new site. Henry Morgan was arrested but, after proving he knew not of the recent treaty, was freed and later rewarded.
