Panama City, one of the smaller cities on Florida's Panhandle, lies on the land side of the lagoon separating it from a strip of barrier islands on which is Panama City Beach, a 27-mile-long strip of white sand some call “the World's Most Beautiful Beach.” Though it lacks the glamour of Florida's southern beaches, it's nevertheless a favorite with southern folks, who flock to it throughout the summer.

Panama City grew as a result of the lumbering industry in the area. Its founders named it for the Panama Canal, which is on the same latitude. Eventually, the smoke from paper mills clouded the sky and the city became an industrial center. In the late nineteenth century, as people looked forward to going to the beach for fun, Panama City Beach came into existence on the barrier island 8 miles away. Today, the Hathaway Bridge connects the two.