Why was the Panama Canal built through Panama, and not through Nicaragua, as previously planned?

Construction of a canal along the route using the San Juan River, was proposed in the early colonial era, due to the favourable geography of the area, since this river empties the lake into the Caribbean. Louis Napoleon wrote an article about its feasibility in the early 19th century. Plans by the United States to build such a canal were abandoned only in the early 20th century, after the purchase of the French interests in the Panama Canal at a reasonable cost.

Speculation on a new canal continues, however; the steady increase in world shipping, together with the possibility of establishing shorter shipping routes, may make this a viable project. Alternatively, a railway, or a combined railway and oil pipeline, could be built to link ports on the Atlantic and Pacific coasts. http://en.wikipedia.

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