I think we should arrange for the future erection of steam shovels at Bas Matachin or Empire and take this work entirely away from Culebra in order to avoid handling material over our present Culebra track.

Engine houses should be established at once at Pedro Miguel and at some point between Empire and Culebra, and proper facilities for storing and handling coal should be provided in their vicinity.

Additional engine houses should be established in the vicinity of Bas Obispo and some point on the east side of the canal at the north end of the cut as soon as the proper location can be determined upon.

A large number of dumps should be established at accessible places along the Panama Railroad, and such places should be selected where the dumps can be established with a face varying from 10 to 20 feet in height. In no case should. our dumps exceed the latter limit except for material taken from higher level, such as level 90 meters on the east side of the cut at the north end, where it is easier to handle material on higher dumps rather than to attempt to take it down to a lower level. We should put our new flat cars in service at our present steam shovels as rapidly as we can get the track prepared for them, and put our Lidgerwood unloaders and bank spreaders in use in connection with them.

In order to handle the output from the cut rapidly and expeditiously it is going to necessitate establishing a large number of dumps that will be accessible to the Panama Railroad or other tracks leading from the shovels, and in order to work these dumps properly we are going to need a great many more Lidgerwood unloaders and bank spreaders than have now been provided. as these conveniences should be supplied at every dump.

The double tracking of the Panama Railroad should, of course, be done in connection with the plan as above outlined.

In

Our present drilling facilities are entirely inadequate to handle the work. the first place, it is necessary to have a track to within a short distance of the spot where the drills are to be worked in order to get the boilers which we are using at the present time in connection with the steam drills to the point where drilling is to be done. On account of this necessity it has been impossible for us to operate our present steam drills on higher levels, because we could not convey steam to them with our present facilities.

In addition to the drilling machinery that has been ordered we should have a number of 5-inch drills, such as are manufactured by the Star Drilling Machine Company, of Akron, Ohio. These drills are operated by a derrick in connection with a portable engine and boiler, and holes can be drilled to any depth. These machines are urgently needed for knocking down material from higher elevations, and also for drilling in isolated places between Empire and Bas Obispo in doing preparatory work in the way of laying track through the lowest portion of the cut as it now exists.

As practically all of the new steam shovels that are erected from now on will have to start work between Pedro Miguel Junction and the south end of the high portion of the cut at Culebra, and from Empire to Bas Obispo, it is imperative that most of the track work, as outlined above. will have to be done before such shovels can be installed, and as such shovels will have to work for some time in places where they will have little or no face to work upon, in order to shape the cut up for future working, the output of such shovels for some little time is going to be necessarily small, their work being entirely of a preparatory nature.

It is also going to be necessary to interfere to some extent with the output of our present shovels in order to rebuild the existing tracks and put them in proper shape for handling material; but this work must necessarily be done before we can handle material expeditiously and economically.

I think all of this wrok as outlined above should be considered as of paramount importance and the output of the shovels of secondary importance.

In other words, our whole energies should be devoted to this preparatory work rather than to a large output and small unit costs.

With regard to our organization at Culebra, I think it is of the utmost importance for the carrying on of the work not only that the men selected as heads of the different departments should have the proper qualifications, but that they should stay continuously with the work, at least until a thorough organization is perfected.

If it is necessary to pay higher salaries in order to get such men and to induce them to stay, there is no other part of the work, in my opinion, where the money could be more judiciously spent. Practically all of the time of the division

engineer for the past six months has been devoted to training heads of departments, instructing them in the methods of work, trying to enthuse them with an esprit de corps, and in endeavoring to cement the force in a working organization commensurate with the requirements of the work.

All of this work has been practically lost except in so far as it has helped increase the output for the past months, as the working force at Culebra changes so rapidly that one man has no more than gotten a fair idea of what is required of him than he is gone and an entirely new man is in his place.

The heads of departments should be men of such caliber that they will look closely after the details of the workings of their departments, watching all points where efficiency of work can be increased and costs decreased.

Heretofore all of this work has devolved upon the division engineer himself. The division engineer should have an able assistant to take general charge of the heads of departments and to oversee the carrying out of his plans, so that his time may be largely devoted to the formulating of general plans for the carrying on of the work.

In order to carry on the work as outlined above and to push it as it should be pushed, it is going to be necessary to make a large addition to our laboring forces. If we have to do all the grading and other preparatory work for laying track with picks and shovels, as we have had to do heretofore, we should have at least 5,000 men working exclusively upon this preparatory work in order to get it done within a reasonable length of time.

If the new piece of track is to be built leading from the cut to the Gamboa dam site we should have a regular large-sized grading outfit to do this work. In fact, I would strongly recommend that grading of that character be done by contract.

Respectfully, yours,

W. E. DAUCHY, Acting Chief Engineer.

Personal.]

ANCON, ISTHMIAN CANAL ZONE, May 2, 1905. MY DEAR MR. WALLACE: I have your letter of April 16, and am glad to know that you are satisfied with the situation of affairs with respect to the new Canal Commission. I hope, with all my heart, that the work will go on steadily without delay or hindrance to a successful completion.

The death of Johnson has caused a sadness throughout the community in which he was so well and favorably known, and all lament his untimely taking off. There is something in it that comes home to me with special force, for it is like the ending of many a bright young man I have seen on the battlefield.

April passed with only two cases of yellow fever until near the end of the month; then two men, working in the canal building, were taken sick-Johnson and a Mr. Wilkes. This morning Colonel Gorgas tells me that two ethers are reported as having yellow fever; one from the canal building, and the other the laundryman at the Ancon Hospital.

There seems to be no doubt that the canal building itself is infected; it is almost certain that Johnson contracted the disease there. The whole establishment has again been disinfected, making the third time, and I have asked Colonel Gorgas to put a special inspector of the sanitary department on watch in this building to see that there shall be no place whatever in the whole struc ture where mosquitoes can breed. Every opening in the building is closed, and all doers are covered with screens, and I am going to see if there is such a thing as excluding mosquitoes from the building. I have myself observed during the last two weeks special activity among mosquitoes in my office. Dauchy tells me that his experience is the same, and others have mentioned it to me. It seems certain that mosquitoes are breeding on the premises. This condition shows how eternally vigilant everybody must be to prevent these insects from infesting buildings and doing their work.

Mr.

A week ago I had an attack of malaria, which has lasted until now. I do not seem to be able to shake it off, although I have swallowed quinine by the bottle full. The fever does not go very high, but high enough to make me feel very disagreeable. This is the first sickness of any kind that I have had since I came to the Isthmus over a year ago.

I think it is a very great misfortune that you are obliged to be absent at this particular time. You must remember that this is a transition period. The old Commission is discredited and dismissed, and not one of the new Commission has as yet arrived, while you have been absent for reasons that you could not control. This leaves a state of affairs on the Isthmus that is, I think, very

much to be regretted. There is no head here to command the necessary confidence and respect, and there is a great deal of bickering and fault-finding and scolding among the employees all along the line. This situation is constantly coming to my knowledge. The character of the employees sent here from Washington leaves very much to be desired. Of course Mr. Dauchy has told you of this time and again.

I have talked with Dauchy frequently concerning the status of affairs, and I agree with him in what he has written to you of the very great desirability of not adding any more to the force here until we are better organized and better able to take care of those who come.

We are now pitching tents at Culebra for sheltering United States employees. The employees occupying the tents are naturally discontented and find fault. The death of Johnson and of the other man has almost created a panic, and I suppose a great many men will go back on this week's steamer to the United States.

I think it is of the utmost importance that you and Judge Magoon should come to the Isthmus at the earliest possible time as the representatives of the United States and the new Commission with authority to act, and be recognized as possessing that authority. I think this is a matter of very serious import, and it is because I am your friend and wish you well that I say this to you.

If Mr. Shonts could be here also for a month or two during this period of change to familiarize himself with everything on the Isthmus, I think it would also be of great benefit, but of course I know he has many other things to attend to.

I have not yet even heard of a definite date named as the time when I will be relieved, but I am counting on getting away before the end of this month. This is, however, based on hope rather than on expectation.

The delay in the receipt of timber is interfering greatly with building. Quite a number of buildings have been authorized for the health and other departments of the Zone government, and the fact of the authorization has been communicated to your department here, but nothing can be done in commencing work until the arrival of lumber.

Plumbing material is also deficient. The toilet rooms in the canal building are in the same state as when you left, for the reason that there is nothing on hand to work with. I was told the other day that a large number of plumbers on the Isthmus are practically idle because there is no material, and the same condition, I understand, is true of carpenters.

Although this is hearsay, I fear it must be true from the fact that there is no lumber on hand of the sizes necessary. A sailing ship with a cargo of lumber from San Francisco is now overdue three or four weeks. When it will arrive no one can say, as navigation by sailing vessels on the Pacific Ocean and Panama Bay is proverbially difficult.

I think I have never known of an instance where the strong directing hand of a man in power was more necessary than it is here now. Mr. Dauchy does the very best he can, and is patient and painstaking, but he is not regarded as the head" in the real sense, and I am confident that the present acting resident engineer at Culebra is entirely unequal to his task.

Very sincerely,

Mr. JOHN F. WALLACE,

Chief Engineer, Washington, D. C.

GEO. W. DAVIS, Governor.

MAY 3, 1905.

P. S. The foregoing was dictated yesterday. and since then four other cases of fever have been diagnosed as "yellow fever" and taken to the hospital. Two of these cases are light and will cause no serious sickness. The case which gives the most concern now is that of Mr. West, the auditor, who has been sick two days, and in respect to whom the prospects are that he will be very seriously sick, as I am informed by Colonel Gorgas.

How the infecting of the canal building has been accomplished it is not easy to understand. Of course a large number of nonimmune people are employed in that building than in any other in the city, and it is a wonder to me how it is that we have not had many cases, among those employees who do their work in this building, since I have been here.

An examination by an inspector yesterday disclosed the fact that in the bowls in which are kept the moistening brushes for letter-press books-eight were found in the building-in all but one were found the larvæ of mosquitoes.

There was only half a gill of water in each bowl, and only a narrow slit for access to it. I am having the screens all carefully examined, and an inspector will critically watch and examine everything in the building that could furnish a harbor for mosquitoes. All the screen doors on the balconies will have locks placed on them and the key for each placed in the hands of a designated individual, who will be held responsible to see that the doors are always shut. The trouble over the Jamaicans working in Panama under Mr. C. E. Davis, which cccurred three or four days ago, originated in a scold and complaint about food, for, as you know, these men were hired, were contracted for, to be paid and fed by the Panama Railroad. I called upon Mr. Prescott for any information he could give me concerning the status of the affair with regard to these men and the feeding contract, and he says that the feeding was done by the same contractor who had been for some time past doing this same kind of work for other gangs of men working for the railroad; that the price paid for board was 70 cents (silver) per day per man.

Mr. Claude Mallet (British consul), who was complained to in regard to the treatment of these Jamaicans, told me that he went to the barracks and examined the food which he saw served, and he was quite satisfied that what was being given to the men was entirely suitable and abundant in quantity; but since then he has written to me officially, saying that complaints have since been made which indicate that the food served is not what it should be.

I have given Captain Shanton directions to have all meals 'set out for these men examined daily-morning, noon, and night-and a record kept of what was served, what complaint may have been heard by the inspector, and what basis, if any, there was. In this way I expect to be able to collect some data on the subject. I realize that, strictly speaking, it is none of my business, but as I feel anxious that the work shall be pushed along without any hindrance or delay, and to have possible causes for complaint removed, and as the situation respecting the feeding of these laborers is very serious, and as the chief of police, under my orders, is available to make this investigation, it seems to me desirable to collect the data; and this I am having done.

The attack upon the laborers by the Panama police resulted from an appeal, or a request, made to the Panama police by Mr. Barril, who saw that there was likely to be trouble, the men having refused to go to work because it was claimed that they were insufficiently or unsuitably fed. Mr. Barril asked the police to compel them to go to work, and it was complying with this very improper request that brought about the first clash. I learn that the first blow sruck was probably by a Jamaican throwing a piece of broken stone at a policeman, then there was a general sort of a melee and three policemen were injured, the policemen using their guns and bayonets as one would use a club. Several of the injured Jamaicans at the Chiriqui Barracks went over to the administration building, together with a considerable crowd, and there Captain Shanton saw them, and he went to the place where they were congregated, about 75 to 100 in number, several of them cut and bleeding, and these he lined up separately so as to keep them out of the other crowd, intending to send for an ambulance to take them to the hospital, but just at this time a cordon of about 30 Panama police came down at double time from the police station and halted in front of the canal building.

Captain Shanton called out to them in Spanish to wait, and pointing to these men, said, "These are wounded men." One of these men started to move away from where he was standing, whereupon the lieutenant of the police squad drew his sword and struck a very severe blow at the Jamaican, knocking him down and cutting him badly. Then the whole 30 men, with their guns and bayonets proceeded to rush at these men who were waiting at the canal building, and who certainly had in no way committed any violation of the peace, or done anything that should have subjected them to an assault. The Jamaicans broke and ran in all directions, pursued by the police; but so general was the apparent purpose of the police to assail the negroes that wherever any were found at work in the trenches, whether they were half a mile away from the canal building or at the Chiriqui Barracks, they were set upon and pounded, crushed, and bruised by the police.

Mr. Mallet, the British consul, told me that he knew for certain that beyond the Caledonia railroad station some of the Jamaicans who did not even know that there was a row were set upon by the police. Mr. Mallet is naturally indignant, and has made a representation, as I understand, to the Panama Government. Mr. John Barrett, our minister, who also saw what Captain Shanton saw, made a similar representation to the Panama Government. I was

in my house on that day, by order of the doctor, and not allowed to leave it, so that my knowledge is derived only from hearsay.

I directed Captain Shanton to make a report to me of what he saw, and I sent his report to the Panama Government on the following day, with a statement to the effect that I purposed to forward to the Government in Washington a report of the occurrence, and that if they should deem it fit to inform me as to any action, or proposed action, of the Panama Government, I should be glad to forward the same to Washington; but I had no reply from the minister for foreign affairs, and I have not been able to ascertain to-day from Mr. Barrett whether he has received any response from the Panama Government.

The original fault was due to Mr. Barril's request of the police of Panama to drive these Jamaicans to work. I suppose that some of our foremen are free and unlicensed in the use of language toward these Jamaicans, just as I have seen foremen in the United States use with respect to negroes, to Italians, and to Chinese, including all Latin-Americans, Filipinos, Malays, and Sandwich Islanders-in fact, everybody with a dark skin. According to the ideas of some of our tougher class of Americans, among whom I fear are a good many of our foremen and overseers on the Isthmus, all such people are designated as niggers." They thus refer to them, usually with prefixes of oaths and obscenity. These words are let drop in the presence of men who are not accustomed to it, and they naturally resent it, and as a result a great deal of bickering and hard feeling grows up between the Jamaica laborers and the American foremen.

66

I have done all I could in every way by the exercise of moral suasion and by prosecution in the case of those who violate the law, but it is very little that one can accomplish in the face of a set determination of the low-class Americans to generally illtreat these negroes. I think that part of this trouble has grown out of that state of affairs, and I think it is likely to continue until we have a class of men here who will be more careful in the use of language, and who will treat any man who behaves himself as a man.

In talking about this plan of feeding laborers by contract Mr. Mallet remarked that in his experience among West Indian negroes it was a very bad plan indeed-that is, to make a contract for feeding these men-because, he says, it is one unending source of complaint. One man does not like rice, another does not like beans, another does not like plantains, and another does not like potatoes, and they all scold and find fault, and grow sulky over it, and make all sorts of trouble. He says that in his judgment it is far better not to attempt to feed these people. I reminded him of the conditions that exist here, stating that it was absolutely necessary that we should feed these men where we bring them to the Isthmus the way we do and where they have no permanent homes. He said that he, of course, realized that special conditions might make it necessary, but he says that it is better in the long run to pay them their wages and let them feed themselves.

I inclose herewith, from the Staf and Herald of this morning (May 3), a clipping which gives a fair notion, I think, of what is in the minds of the Panama people on this general subject about which I have been writing to you. I inclose also some letters from a couple of Jamaicans.

I am writing this long letter to you instead of to Mr. Shonts for the reason that you personally know the condition of affairs here, while Mr. Shonts does not. But I feel sure that you will bring to the attention of the chairman everything I write to you that will be of interest to him.

G. W. D.

(Inclosures not preserved with retained copy of this letter.-G. W. D.)

Hon. WILLIAM H. TAFT,

EXHIBIT 19.

[Personal.]

PANAMA, June 8, 1905.

Secretary of War, Washington, D. C'.

MY DEAR MR. SECRETARY: Upon my arrival on the Isthmus it is needless to say that the entire organization was found in a state of more or less demoralization. At the same time the spirit of disloyalty mentioned by Mr. Barrett,did not exist. The feeling was more one of depression and discouragement.