the railroad accepts the same pro rata freights (45 per cent), so that there is no discrimination. When we reduced the rates from New York to Panama the steamship lines from Europe to Colon also reduced their through rates to Panama, following the pace which our steamship line enabled us to set for the benefit of the people of the Isthmus. The local passenger fares on the Isthmus have also been reduced to 5 cents: per mile for first-class passengers and 3 cents per mile for second-class passengers, the former rates having been 83 to 10 cents per mile first class and 41⁄2 to 5 cents second class. The material reductions in the local freight rates for staple articles shown in the letter to Mr. Pepperman have left the average earnings on local freight $3.89 per ton. The average cost per ton for the transportation is $3.06, thus leaving but a small margin of profit. Very respectfully, The SECRETARY OF WAR. R. L. WALKER, PANAMA RAILROAD COMPANY, DEAR SIR Referring to our conversation this morning, I beg to advise that our freight rates from New York to Central America and Mexico on cargo billed by weight were reduced about 10 per cent last December, in order to make our rates as low as those from Europe via the Isthmus to the same territory. No material change was made in the rates for cargo billed by measurement from New York, because they were already as low as the measurement rates from Europe to Central America and Mexico. Roughly speaking, the cargo billed by weight to those destinations may be 25 per cent of the whole. I have pointed out to Mr. Schwerin that his proportion of the reduction can not be anything like the $30,000 which he mentioned when giving testimony to the Senate Committee on Interoceanic Canals January 31. (Page 510 of the printed hearings.) Very respectfully, The SECRETARY OF WAR. R. L. WALKER, PANAMA RAILROAD COMPANY, SIR Regarding the flat rate of $2 per ton recommended by Mr. Wallace, such an arrangement would be unfair to all interests. First. The average cost for hauling freight on the Isthmus is $3.06 per ton, to which must be added for through steamship freight 70 cents per ton terminal expenses a total cost of $3.76 per ton. Second. No steamship line operating to the Isthmus would be willing to pay the railroad a flat rate on all cargo to cover our cost. They are obliged to make through rates, low for cheap goods of a dense character and average up by higher rates for more valuable goods requiring more room for stowage and care in handling. Steamships would not accept the low-class freight and pay us a high arbitrary rate, and low-class freight would thus be denied the benefit of isthmian transit. Our present practice of sharing pro rata with the steamship lines, thus receiving a higher revenue on some classes of goods than on others, is the system desired by the steamship lines connecting with our railroad. There is no demand for a flat rate. Third. I understand that Mr. Wallace has a theory that a flat rate would approximate conditions that will become effective when commerce moves through the canal. As a matter of fact, conditions will differ totally. The tolls to be charged a vessel passing through the canal will naturally be fixed on the principle that prevails at Suez, a fixed rate per ton on the carrying capacity of the vessel. Each vessel will thus pay a lump sum for passing through the canal, whether she be fully or only partially loaded, whether she be filled with few tons of light cargo or many tons of heavy cargo; and the lump sum paid by the vessel distributed over the cargo laden on board will make a different average rate per ton on a mixed cargo every time the vessel goes. through the canal. Very respectfully, The SECRETARY OF WAR. R. L. WALKER, NEW YORK, January 18, 1906. Mr. W. LEON PEPPERMAN, Washington, D. C. DEAR SIR: Referring to our conversation by telephone this afternoon, I beg to advise that our class rates are as follows per ton weight or measurement, at our option, New York to Colon: These rates went into effect September 15, 1903, and I inclose copy of the tariff (Exhibit A), which will show some special rates should you need to consult it. The bulk of the business moves under fourth-class rate, which is about the same as for coarse goods from Europe to Colon, and sailing vessels from here want nearly as much. New York to Panama, July 20, 1905, the rates were made, at our option: First class, 56 cents per cubic foot, or $1.12 per 100 pounds. Second class, 32 cents per cubic foot, or 64 cents per 100 pounds. Third class, 28 cents per cubic foot, or 56 cents per 100 pounds. Fourth class, 22 cents per cubic foot, or 44 cents per 100 pounds. I also inclose tariff showing the above and exceptions (Exhibit B). Prior to July 20 last the rates from New York to Panama were, at our option: First class, 70 cents per cubic foot, or $1.40 per 100 pounds. Special class (on 10-ton lots of fourth-class freight), 33 cents per cubic foot, or 66 cents per 100 pounds. You will note that the rates on third-class goods have been cut nearly in half, while on fourth-class goods, which formerly paid different rates according to whether the lots were 10 tons or less, the present rate for any quantity is from 33 per cent to 39 per cent less. Europe followed our lead in reducing rates correspondingly to Panama. The entire classification for the Isthmus transit has been changed, so that comparisons can only be made article by article. The reductions may be seen by comparing the following staples: Considering that when any of the articles shipped are the produce of the Isthmus, we must carry them at one-half of the tariff rates in accordance with the contract between Colombia and her assigns, and considering that we are called upon to pay a franchise tax of $5,000 per mile per annum to the assigns or successors of Colombia, which was equivalent to about 67 cents a ton on the commercial freight carried on the road last year, it was not thought that we could make the rates, even on the low-class goods, any less than shown above-rates which, for distances not in excess of 10 miles, show a very material reduction. I have omitted the rates for intermediate distances of 20, 30, and 40 miles, so as not to burden the illustration. R. L. WALKER, Traffic Manager. Yours, truly, Mr. JOHN F. WALLACE, EXHIBIT 18. PANAMA, April 4, 1905. Chief Engineer, Isthmian Canal Commission, Washington, D. C. DEAR SIR: I submit herewith the following report of operations for the week ending April 1: [Mr. Charles List, resident engineer, Cristobal.] Two parties have been doing topographical work from Mindi to Gatuncillo, with very good results, this work being almost completed. One party has been assisting the engineers of the U. S. Geodetic Survey steamer Bache on their base line, and arranging signals for triangulating the country between Cristobal and Bohio. The boring party has been occupied with the topographical party, and no boring has been done. At wharf No. 14 a few piles have been driven, and what decking remained on hand has been placed. The wharf house adjoining 14 has been partly taken down to make room for two tracks parallel to the wharf. The surroundings of that wharf have been cleaned up as a precaution against fire. Nothing has been done to wharf No. 11. A portion of the men engaged upon this work have been sent to Culebra for the purpose of extending the culverts for double tracking between Cucuracha and Pedro Miguel. Considerable has been done in the way of track repairs, and a provisional track has been laid into the old locomotive shed near wharf No. 3, in order to get at the locomotives stored there. [A. B. Nichols, assistant engineer, Gatun.] Surveys have been made near K. 10 and in the region northeast of Lion Hill station The survey of the Panama Railroad between bridges 12 and 29 has been completed. Center lines have been run for borings in the neighborhood of K. 10 and the west diversion. Test borings have been completed with the exception of No. 75 and an additional hole to be put down at Gatun Island to locate the rock surface at that point. It is known that this rock surface is below -172, and by fixing it definitely the rock section across the valley can be shown approximately. [Mr. H. F. Dose, resident engineer, Bohio, and Mr. Boyd Ehle, resident engineer, Bas Obispo.] Mr. Ehle having been transferred to Culebra to act as division engineer during my absence, Mr. Dose has been placed in charge of the work at that point, which he will carry on in connection with the work that he has been doing. He has continued the borings that were being carried on by his own party and also those that were being done under the direction of Mr. Ehle. Borings have been started in the vicinity of Pedro Miguel, and the party at that point has commenced work toward Culebra, taking borings at first at every kilometer. CULEBRA. Mr. Boyd Ehle has been appointed acting division engineer to take charge of work at Culebra during my absence. During the week 30,138.2 cubic yards have been taken out of the cut, making a daily average of 5,026 cubic yards. A department of mining has been established and put in charge of Mr. Frederick Bennett as superintendent of mining. Track work is being pushed as rapidly as the lack of proper track foremen will permit. Surveys and technical work. The survey of ground at Miraflores that is to be used for shops has been nearly completed. The plat of the valley between Paraiso and Pedro Miguel, which was not surveyed the week previous, has been completed. Markers indicating extreme canal slopes at points about Paraiso have been placed, and map has been prepared of the tracks between the Panama Railroad and Lirio, with a view of establishing new dumps on the west side of the canal near the village of Lirio. A survey has been started to get the location of buildings in the village of Culebra that will fall within the proposed line of canal excavation. Surveys for the new line for the Gamboa track have been renewed. Cross sections for monthly estimate of quantities excavated have been taken. The work of extension of culverts along the old Panama Railroad, between Paraiso and Pedro Miguel, has been carried on, and preparations are being made to continue this work for double tracking the Panama Railroad from Pedro Miguel to La Boca "Y." A detail from the engineering force has been made to inspect the bridges of the Panama Railroad, and this work has been begun. [C. E. Davis, engineer, waterworks and sewers.] The waste pipe from the Rio Grande dam, which had been opened for the purpose of lowering the surface of the water in the reservoir, has been closed, and the water is now at elevation 227. On the supply line from Rio Grande reservoir to Panama connection has been made between the 20-inch galvanized pipe and the 16-inch cast-iron pipe. Specials have been laid for crossing under the tracks of the Panama Railroad at the upper end of the line. At the Ancon section the 6-inch cast-iron pipe has been completed. In the streets of Panama about 600 feet of cast-iron pipe has been laid. About 250 feet of 8-inch sewer pipe has been laid at Panama, and 8 manholes completed. At Culebra the collection reservoir and pump well have been completed, and a 6-inch main has been laid as far as the hotel. About 400 feet of 6-inch cast-iron pipe has been laid for the water supply at Culebra cut. At Gorgona work has been commenced upon the new reservoir made necessary by the authorization of the hotel building at that point. Commencement has also been made on a 6-inch fire line for Bas Matachin shops. At Colon a Decauville track for Mindi division has been extended about 1,500 feet toward the Brazos Brook reservoir, and the gang has been engaged in clearing and grubbing at the reservoir site. [M. O. Johnson, supervising architect.] At La Boca wharf 864 feet of piling has been driven and 2,160 feet of lumber put in place. At Ancon Hospital a force of 282 men of all kinds have been employed during the week. At Corozal a force of 50 carpenters have been working during the week, making fair progress. At Culebra a force of 79 carpenters have been working on the bachelor quarters, and also a force of 26 painters. All of the upper story of this building is occupied and a portion of the second story, and in about a week the remainder of the building will be ready for use. The usual force has been engaged in repairs to buildings at La Boca, Ancon. Corozal, Miraflores, Paraiso, Bas Matachin, Gorgona, and Cristobal. [C. A. Strom, mechanical engineer.] Bas Matachin shop.-Locomotive No. 31 was completely overhauled and re paired. Continued repairs to two locomotives. Twenty-two French dump cars completely overhauled, 22 of which had the wheels spread to 5-foot gauge. Completed the construction of one brake car for use of trains at Culebra. Foundry. The following castings have been made: Two pile-driver hammers for La Boca; 3 corbells, 9 strutts, and 21 plates for Gorgona bachelor quarters; 21 covers and 12 manhole heads for Panama sewers, and various smaller castings. Empire shops.-Completely overhauled 3 locomotives, Nos. 92, 158, and 200. Continued overhauling 8 locomotives, and commenced work upon 2 others, Nos. 72 and 182. Special repairs to two locomotives received from Culebra have been completed. General repairs have been continued on two locomotives received from Culebra. Fifteen French dump cars have been overhauled. Fifty-five French dump cars near Culebra have been prepared for removal to shops. The pile driver which was converted from an Osgood steam shovel has been completed. One old French lathe 16 inches by 10 feet has been installed and put in operation in machine shop. In the woodworking shop the placing of shafting and machinery has been continued. Cristobal shops.-The overhauling of engine and boiler for tie-boring machine has been begun. The work on screens for Ancon and Rio Grande reservoirs has continued. The shafting and woodworking tools for temporary wood shop have been overhauled and installed. Several forges have been completed and installed for temporary blacksmith shop. EMPLOYEES. The number of men at work on March 29, as shown by the daily force report of that date, was as follows: Chief Engineer, Isthmian Canal Commission, Washington, D. C. DEAR SIR: I submit herewith the following brief report of operations in the engineering and construction department for the week ending April 8, 1905: [F. B. Maltby, division engineer, Cristobal.] The work of making topographical surveys and the new location for the Panama Railroad between Monkey Hill and Gatun has been continued, and also a selection of sites for triangulation points and the erection of monuments for same. Work on wharf 14 has been practically suspended. The work of repairing existing tracks in the vicinity of wharf 14 has been continued, and some work done on the yard tracks at Fox River. The party under Mr. Nichols spent a part of the week developing the topography along the canal near K. 10 and is working on maps and tabulated statements to accompany his final report. Mr. List, resident engineer at Cristobal, resigned April 8, and his resignation was accepted. |