of three companies operating across Central American just prior to the gold rush, ran a route from London to Panama, then overland to the Pacific. Two companies, the U.S. Mail Steamship Company and the Pacific Mail Steamship Company, serviced US government contracts using a similar transport corridor. The heightened transportation demand made these enterprises highly lucrative in 1849. At the same time, demand outstripped supply in early 1849, especially on the Atlantic side, and Charles Morgan first entered this market as a major shareholder of Crescent City, which his agent J. Howard & Son dispatched to Chagres, Panama, from New York. Morgan acquired the newly built Empire City, adding to the Panama service, with the two ships forming the Empire City Line. Morgan and John T. Howard increased their investment in westbound transportation throughout 1849 and 1850, first buying the screw-steamer Sarah Sands, then four more ships of the line, three of which sailed the Pacific side from Panama to San Francisco. A business collaboration between Morgan and Cornelius Vanderbilt was spurred by a disabled ship. By accident, the two men departed New York on Morgan's Crescent City on December 14, 1849. Both were travelling in order to investigate the transportation business in Central America. A failing engine caused the steamer to limp into Charleston for repairs. Each man improvised transportation toward the Gulf of Mexico. Vanderbilt chartered a ship for Havana and carried with him eight other passengers after observing that Morgan chartered a ship for himself and several other passengers, sealing the deal by buying the ship's cargo of lumber. Nicaragua Morgan and Howard operated three steamers from the Pacific side of Panama in 1850, compared to four operated by U.S. Mail Steamship Company. Pacific Mail Steamship Company added four ships to its Pacific fleet for a total of seven, creating a competitive market for passengers in 1850. Morgan withdrew from the competition for the trade across Panama late in 1850, though he did not withdraw from the trade across the isthmus. Seeking to shorten the trip from New York to the west coast, he probed crossings several hundred miles west through a water and land route via Nicaragua. This led initially to a business alliance between Morgan and Vanderbilt, who had previously secured comprehensive right-of-way charters with the Nicaraguan government. On August 27, 1849, American Atlantic and Pacific Ship-Canal Company gained a concession for exclusive rights to