sanitary department. Many instances might be quoted-a few will suffice. The principal large requisition for medicine and medical supplies was made about the 1st of last August; at this date, February 8, not one item has been received. Other large requisitions made subsequently to this have met the same fate. The governor, General Davis, tells me that these requisitions were approved by him and went forward promptly, and that he has done all in his power to get them filled; what the trouble is he does not know. Meantime, he has bought what was most urgently needed through the local markets. Even articles produced in the local market have sometimes required nearly or quite a month for delivery.a The estimate for repairs to Ancon hospital was made in July last. Those repairs are not yet completed; to-day, after seven months, only one ward has been screened. But these points are well covered in the letter of the chief sanitary officer, already referred to as appended and marked “A.” I think it may be taken as generally accepted that to dig the canal quickly, economically, and with as little sickness and loss of life as possible, it is necessary that the sanitary work shall be thorough and efficient, and shall accomplish results. If it fails, if the death rate becomes high, especially for yellow fever, it will increase the cost of the canal by millions of dollars and delay its completion by years. I have no doubt that the present small outbreak of yellow fever will add many hundreds of thousands to the cost of the work and materially delay its construction, because there will be a greater unwillingness to come here and higher salaries will be demanded. There is already apparent a panicky feeling widespread among the employees, and this will be reflected in an exaggerated form in the States. The work of the sanitary department is primarily preventive and only secondarily to meet indications as they arise. The important part of that work should have been done before the arrival of the great mass of employees. The defects of the present system and the delays and imperfections of sanitary accomplishment which have resulted therefrom have been pointed out in the foregoing pages. It seems to me that if the work of the sanitary department is to be successful--and the success of the canal project depends on it-the Commission having selected a chief sanitary officer in whom they have confidence, should accept his plans for sanitation as final, give him a free hand and their earnest support in carrying them out, and hold him strictly responsible for results. What if the chief sanitary officer does spend $50,000 or $100,000 that could have been saved under a slower and more restricted method of procedure? The prevention and suppression of epidemic diseases often depend upon quick action, and a week's delay may often cost many hundreds of thousands and delay the work of the canal for long periods. While the figures show that the rate of sickness among canal employees is not excessive at present, there is no reason to hope that such a condition will continue. On the contrary, unless the plans of the sanitary department are more quickly and completely carried out than at present there is every reason to believe that sickness and mortality will increase as the work goes on and time passes, until health conditions not far different from those under the French régime will obtain. In view of the President's message on the subject of the Commission, and not knowing what the ultimate plan of reorganization may be, I can only make these broad suggestions as to the work of the sanitary department. A scheme suggested by the chief sanitary officer and hereto appended, marked "B," appears to be an excellent one if it can be made to fit into the general plan. In any case, the scheme should be such that measures recommended and requisitions made by the chief sanitary officer may be acted on promptly and executed without delay. To effect this it would seem to be necessary that the final authority should reside on the Isthmus and not in Washington. Very respectfully, CHAS. F. MASON, Major, Surgeon, U. S. Army. a Requisition of Doctor La Garde, dated December 12, 1904. EXHIBIT 15. [Confidential. Memorandum for the Secretary of War.] Hon. WILLIAM H. TAFT, Secretary of War. PANAMA, December 5, 1904. MY DEAR MR. SECRETARY: Referring to our recent conversations during your stay on the Isthmus, and in compliance with your request for my views in regard to, first, the control of the Panama Railroad Company; second, the traffic agreement between the Panama Railroad Company and the Pacific Mail Steamship Company; third, commission organization-I have the honor to forward herewith memoranda on these subjects numbered 1, 2, and 3, respectively. Very respectfully, J. F. WALLACE, Chief Engineer. No. 1. PANAMA RAILROAD. While it is necessary that the chief engineer should have full and complete control of the operation of the Panama Railroad, to the end that the greatest possible use may be obtained therefrom, and the facilities connected therewith in the construction work of the canal, the interest of the minority stockholders of course can not in equity be overlooked, and it is suggested, first, that this stock be purchased in the open market if it can be obtained at a fair price, second, that if it can not, legal advice be secured as to the possibility of the condemnation of this property. Should the stock be retained by its present owners the Commission will of course be subjected to criticism and possibly legal proceedings upon the part of any dissatisfied minority stockholder at any time. The equity of the present situation in regard to the minority stock holdings in the Panama Railroad Company seems to be that these stockholders are entitled to the full value of their holdings as indicated by the earnings of the Panama Railroad Company during a term of years prior to the transfer of this property to the United States Government, and that if their present holdings are retained they are entitled in equity to such earning capacity as they would have received if the Government had not undertaken the construction of the Panama Canal. In case of doubt as to equity, liberality should govern. On the other hand, it does not seem equitable that the minority stockholders should be entitled to exorbitant dividends on their stock, due to rates which the railroad company might charge the United States for the transportation of men and material required in the construction of the Panama Canal. Pending the elimination of minority holdings of stock it would seem necessary to maintain a separate corporate existence for the Panama Railroad Company, but unnecessary to maintain the large organization that has heretofore controlled its management. There is no reason why the proper handling of the road for traffic purposes could not be maintained and a much larger and freer use of the property secured for the purposes connected with the construction of the canal, without the one unduly or improperly interfering with the other. No. 2. TRAFFIC AGREEMENT BETWEEN THE PANAMA RAILROAD COMPANY AND THE PACIFIC MAIL STEAMSHIP COMPANY. It is suggested that the traffic contract between the Panama Railroad and the Pacific Mail Steamship Company be given a thorough investigation, which should be made by the chairman of the Commission, assisted by Judge Magoon, or some person of similar legal attainments, and by some American railway traffic official, if it is possible to secure the services of such a person; that in the investigation of this subject a hearing be held at which the officials of the Panama Railroad Company and the Pacific Mail Steamship Company be asked to appear and to present in writing their reasons for the continuance of such traffic arrangements, and that at this hearing any persons who may be interested, or who may desire to suggest the abrogation of the contract, be invited to appear and submit in writing their views and opinions. If desired, this hearing should also be supplemented by verbal statements, of which stenographic reports should be taken, and at its conclusion the chairman of the Commission and the gentlemen associated with him in the conduct of the hearing should submit a complete record thereof, together with their views and recommendations, to the Secretary of War. It is also suggested that it might be advisable and of assistance to the Secretary of War to have the record and report of this hearing submitted to the chairman of the Interstate Commerce Commission for his views after a careful examination thereof. Whatever decision might be reached by the Secretary after a thorough treatment of the matter in this manner would undoubtedly be fair, just, and equitable to all the interests concerned. It does not seem advisable that the United States Government should continue in the steamship business, provided economical and satisfactory transportation arrangements can be furnished by private sources and a continuance of economical service secured. No. 3. COMMISSION ORGANIZATION. If a personal recommendation as to the constitution and assignment to duties of the Isthmian Canal Commission is at all permissible, the following suggestions are made: It would seem evident that satisfactory results can not be obtained in a speedy and economical construction of the Panama Canal through a commission of seven men exercising executive function. While in a multitude of counsel there is undoubtedly wisdom, proper executive action can not be secured through such a medium; and while it may be impracticable to change the form of the present Commission as established under the Spooner Act, it could be kept intact and its functions so modified as to secure the benefit of the advice and counsel of its members without such weakening of the executive function as now exists, the administrative and executive control of the work on the Isthmus being placed in the hands of the chief engineer, as per his suggestion and understanding with the Commission at the time of his engagement. The chief engineer should be given as free a hand as possible consistent with a proper control of the work in accordance with existing laws and with sound business principles. This is particularly necessary when the fact is considered that this work is to be conducted in a tropical climate 2,000 miles away from the seat of government and is an undertaking requiring prompt executive action by the chief engineer situated on the grounds. In this connection it is suggested that the functions of the four members of the Commission who are civil engineers be confined to the technical study and consideration of such general plans as may be submitted by the chief engineer, or such additional plans as may be called for by the Commission; that they act in a consulting and advisory capacity, and that these gentlemen be not burdened with matters of detail in elaboration of these plans or in their execution, which should be left with the chief engineer and his staff. While they should make such visits to the Isthmus as will enable them to keep in touch with the progress of the work and give them a prior knowledge of the general situation, it should not be necessary that any of them should permanently or regularly reside on the Isthmus. It is evident that the general business of the Commission connected with the governmental departments and the general public, as well as the supervision of the securing of material, must be conducted at the seat of government. As the work progresses, the securing of the necessary material upon requisitions of the chief engineer, the letting of contracts, and other proper business matters of a general nature would prove to be a very important factor in the successful conduct of the work. It is suggested that, with the chairman having general charge of the executive functions of the Commission, the routine work be divided as follows: (1) One member of the Commission acting as a committee on purchases of materials and supplies, to be assisted by a first-class competent business man as purchasing agent, supported by a clerical staff competent and sufficient to properly look after all matters connected with purchases and the letting of contracts for materials and supplies. (2) One member of the Commission acting as a committee to have charge of the shipment, general custody, and care of material and supplies after purchase, collaborating with the chief engineer in the supervision and inspection thereof, assisted by the chief of material and supplies department on the Isthmus. This latter department, however, should be under the chief engineer and subject to his direction and control so far as the care, distribution, and use of material on the Isthmus is concerned. (3) One member of the Commission, acting as a committee, to have supervision over appointments and the securing of such labor as it may be necessary to engage in the States, collaborating with the chief engineer in this respect. He should not, however, have arbitrary control over appointments, but rather should assist the chief engineer in his selections. (4) Three members of the Commission, who are civil engineers, acting as a committee, to pass on the general features of all plans, giving its time to the consideration of the larger engineering problems, but whose functions should cease after reporting to the Commission in favor of or against, or recommending modifications of, the various plans recommended by the chief engineer. This committee should also be charged with investigations of such questions as the chief engineer may submit to it for advice and counsel. It should not, however, be burdened with the consideration of detailed plans or with the execution of same after their final adoption by the Commission. The plans adopted by the Commission should only be general, as the chief engineer should have authority to make necessary changes as to details, so as not to be unduly hampered should contingencies arise in the conduct of the work the submission of which to the Commission would delay its progress. [Copy of memorandum by Wm. Barclay Parsons.] THE NEW WILLARD, Washington, D. C. The law provides a commission of seven members, of whom one shall be an army officer, one a navy officer, two engineers from civil life, and three to be chosen without restriction. It is essential for success that the executive functions should be restricted to as few men as possible, and that no one should have executive functions except as coupled with specific duties of high order. There are three such positions, viz, chairman, governor, and chief engineer. Can not advantage be taken of the requirements of the act which divides the Commission into two parts, professional and nonprofessional, and differentiate between their duties, functions, powers, and compensation? Assuming that it is your intention, as you have stated, to make changes in the office of chairman and governor, the realization is simple. Appoint a good business or corporation man as chairman and a lawyer as governor, and the chief engineer a member of the Commission, those three, and those three only, being charged with full functions, including the power of legislation. Give these men a suitable salary of fixed amount without per diem extras. The other four Commissioners, consisting of the two military officers and two engineers, to form an engineering board. These Commissioners, with the chief engineer, to decide upon the type of canal, upon its dimensions, and from time to time upon the various plans for major details, and to act as an advisory board to the chief engineer to pass upon such questions as he may refer to it. These latter Commissioners would not be expected to reside in Washington or on the Isthmus, nor would they be expected to give their whole time to the work, but only as needed. Their compensation might be made $5,000 or $6,000, with a per diem allowance and all traveling expenses when absent from the United States. This is substantially your own scheme, except utilizing the present law. The differentiation in powers could be openly stated in a letter of appointment by the President. It makes a small working body with definite duties for each Commissioner. A resident Commissioner, either on the Isthmus or in Washington, without specific and engrossing functions, is to be avoided at all costs. (Personal.) ANCON, ISTHMIAN CANAL ZONE, MY DEAR GOVERNOR: The newspapers have stated that in the special report which you have recently submitted to the President a recommendation is contained for a reduction of the number of members of the Isthmian Canal Commission. I hope the report is true, for I am satisfied that the present body is far and away too cumbersome and ineffective. Of course I have no knowledge concerning the intentions of the President and of yourself respecting the personnel of a reorganized Commission, should Congress direct that there be one, and I shall do nothing whatever in respect to the matter. If I should be chosen as a member of it, I would be glad; if I should not be chosen, I would not be broken hearted. It has been suggested as a possibility, or even a probability, that in the new legislation that Congress may enact the governor of the Zone would be divorced from the Commission, and that the person holding the office of governor would have no connection with the Canal Commission. I hope that the legislation will not take this shape. Instead, the governor-a member of the Commission— should also be the American minister to the Republic. A secretary of legation and a clerk, with allowance for an office and stationery from the State Department, is all that would be required. Yesterday, in conversation with Mr. Barrett, he told me that while you were here he had stated to you his conviction that the office of American minister and the functions of the governor of the Zone ought to be exercised by one and the same person; that this would be the inevitable logical result he was informed by Mr. Buchanan, whom he saw in London while en route from Argentina to the United States, and that ever since then the conviction had been growing that this course ought to be pursued. Mr. Barrett also said that he had heard from Mr. Francis Loomis, of the State Department, to the effect that the legislative, executive, and judicial bill as passed by the House contained the usual appropriation for the Panama legation, including a minister, and that Mr. Loomis also stated that he thought it was hardly likely that at this session of Congress anything would be done respecting the change, believing that in the short session Congress would not have time to act. Two days ago I received a copy of the minutes of the proceedings of the Isthmian Canal Commission, covering the period from September 7, 1904 when the Commission left here up to December 15, 1904. The records sent to me were those for the thirteen meetings that had taken place in that interval, not a word of which had been previously forwarded to me, and were not received until after I had protested against the neglect. I observe by the proceedings that the Commission has adopted something slightly resembling the recommendation which I made and on which I asked for a vote on August 31, that looked to the appointment of an executive committee to be permanently resident here, with power to act. The new plan contemplates a visit to the Isthmus from time to time of the standing committees of the Commission, one at a time. There are five of these committees, each consisting of two members, and when such standing committee of two visits the Isthmus the governor of the Canal Zone is to be ex officio a member of the committee then present; but I can not find from the records of the action taken that any authority to act, or that any power of direction, is to be vested in such local visiting committee. Whenever the two members visit the Isthmus it will be for observation only, to report back to Washington. Questions are arising here constantly with the chief engineer, the chief of materials, the disbursing officer, and with the governor, all of which must be submitted for the action of the Commission in Washington, and all of them ought to be disposed of on the spot. The governor and the two visiting members will not make a quorum, and so nothing can be disposed of, for all these questions will have to go up as before. Only when more than three members visit the Isthmus can there be a quorum present, and as the recent resolutions that have been adopted make no provision for the visit of the larger number, it necessarily results that one member of the Commission, who is permanently a resident of the Isthmus, will never be able to meet with his colleagues and sit as a member of the Commission. This resident member of the Commission is also a member of the board of directors of the Panama Railroad, but as this board always holds its meetings in New York the Panama member will never be able to take any part in the |