A post office was established at Panama, Indian Territory on January 14, 1898. At the time of its founding, Panama was located in Skullyville County, part of the Moshulatubbee District of the Choctaw Nation. This town began as a coal mining community named Red Town because all of the miners' shacks were painted red. The origin of the town name is uncertain. Some historians claim that the name was inspired by the building of the Panama Canal, but the town was already called Panama by 1898. The French attempted construction of the canal in 1881 and ceased in 1889, so this claim could be valid. In 1896 the Kansas City, Pittsburg and Gulf Railroad built a north–south line through the region. The Midland Valley Railroad built an east–west line through the region in 1903–1904. The town of Panama moved to the crossing of the two railroads. The Panama post office first opened January 14, 1898, but the order was rescinded for some unknown reason on February 23, 1898. The post office reopened February 21, 1899. Panama was still supported by coal mining in 1930. The Ozark Coal and Mining Company had established itself there in 1898, however the coal mines began to close in the 1930s. A creosote plant, established in 1937, provided some jobs for the former miners. The Panama Coal Company, which had engaged in strip mining, went bankrupt in 1977.
Geography
Panama is located at . It is north of Poteau on Highway 59. According to the United States Census Bureau, the town has a total area of, of which 0.66% is water.
Demographics
As of the census of 2010, there were 1,413 people, 530 households, and 364 families residing in the town. The population density was 903.0 people per square mile. There were 626 housing units at an average density of 415.1 per square mile. The racial makeup of the town was 78.27% White, 13.09% Native American, 0.35% Asian, 2.12% from other races, and 5.52% from two or more races. Hispanic or Latino of any race were 4.53% of the population. There were 530 households, of which 34.7% had children under the age of 18 living with them, 49.6% were married couples living together, 15.5% had a female head of family, and 31.3% were non-families. 26.4% of all households were made up of individuals and 12.5% had a person 65 years of age or older living alone. The average household size was 2.57 people; the average family size was 3.12 people. In the town, the population was spread out with 29.1% under the age of 18, 9.3% from 18 to 24, 26.9% from 25 to 44, 21.3% from 45 to 64, and 14.93% 65 years of age or older. The median agewas 34 years. For every 100 females, there were 90.0 males. For every 100 females age 18 and over, there were 90.2 males. The median income for a household in the town was $23,385, and the median income for a family was $29,500. Males had a median income of $27,260 versus $17,679 for females. The per capita income for the town was $12,878. About 19.2% of families and 24.3% of the population were below the poverty line, including 30.8% of those under age 18 and 18.8% of those age 65 or over.
