[New York Times, May 15, 1905.]

Pittsburg, May 14.- "Tell the boys to stay at home if they get only a dollar a day," is the advice of a McKeesport boy now working with the construction gang on the Panama Canal.

Chas. L. Carroll, son of Mrs. Sadie Carroll, of 604 Ridge avenue, McKeesport, was one of the first to go to the Isthmus to work. In a letter to his mother received yesterday he says he is thoroughly sick of the country and everything connected with the canal, and will be home in a month.

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Every person is afflicted with running sores all over the body," the letter goes on. We are compelled to sleep in an old shed, six in a room, on cots. Rain water is drunk more than the river water, because it is the better. The meals provided would sicken a dog."

[New York Herald, May 21, 1905.]

PANAMA, May 15, 1905. EDITOR OF THE HERALD: I am a reader of the New York Herald, and as such would like to do justice to its readers in the States. I have reference to an article published in the Herald in which Mr. F. G. Carpenter gives an account of attractive homes for canal workers.

In the first place, the bachelors' quarters at Culebra can not be of any use except for those living or working in that vicinity. These are very few, as one white man has charge of perhaps 50 negroes. As there are only about 300 men all told employed at Culebra, it is plain to be seen that only a very few can take advantage of these quarters.

At Ancon there is a large building which they call "workingmen's quarters." Half the men who have been assigned to quarters there have left and rented quarters elsewhere at their own expense.

Mr. Carpenter further states that the fruit is delicious and very cheap. He had the good fortune of getting a pineapple for 7 cents. The pineapples are mostly shipped here from the coast, and sell anywhere from 30 to 50 cents in gold, a much higher price and an inferior fruit to that which is sold in the States.

Mr. Carpenter finally concludes with his statement that servants can be had for $5 per month for doing a half day's work each day. Such is not the case. Servants' wages are high and are equal sometimes to those of mechanics employed on the canal. If Mr. Carpenter should happen to be in New York when 1 come home and wishes an interview with one who knows and would say more if he dared to speak, why, he will be accommodated with proof which will convince him that he has been badly fooled in regard to Panama and its attractive

ness.

[New York Herald, May 21, 1905.]

X. Y. Z.

[Extract from an article entitled "Panama problems, labor, and fever," being in part an interview with United States Minister John Barrett upon his return from Panama to New York.]

"The problem of the hour at Panama," he said, "is sanitation or improvement of health conditions. The second problem is that of labor, while difficulties of administration and construction come third, except as they include the first two. "Despite the efforts of the present sanitary staff under the skillful guidance of Colonel Gorgas, yellow fever seems no nearer being stamped out than it was about a year ago. We have had more cases of the dread disease during the last thirty days than during any other corresponding period for ten months."

[Washington Times, May 29, 1905.]

New York, May 29.-Eight former employees of the Panama Canal Commission, who arrived here to-day on the steamer Orizaba from Colon, said they resigned their positions on the Isthmus because of the high cost of living and the health conditions there. They said that several other employees, who had resigned for similar reasons, would come to the United States on later steamers.

[Cincinnati Enquirer, June 2, 1905.

In a letter to John J. Wenner, clerk of the county board of control, a friend, a former Cincinnatian, who has a position on the Government work in the Canal Zone, Panama, sends some interesting facts regarding the country and what the United States has to contend with there. Speaking of the construction of the

canal, he says that at the rate that the work is now progressing it may be open by 1950. The reason for this, he says, is that there are too many bosses, with high-sounding titles."

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"There are no walking bosses," he says. "They are all supervisors and superintendents of dumps, and such high falutin' titles." He declares that the quarters assigned to the men are poor, and not what was promised, while the food is miserable, and board costs $25 per month.

"The great trouble is in getting men to stay," he writes, "and those who have been working steadily for two months are called 'old employees.' Pay day will arrive the early part of next month," he contiunes, "and then look out for an exodus to the States."

He has been located at Culebra, but expected to move to Empire. At both of these places, he states, the health of the people is good, and Colon is also comparatively healthy, but Panama, he declares, is a cesspool," and the yellow fever there claims victims on an average of one every ten days.

[New York Globe, June 9, 1905.]

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The Seguranca brought nearly 150 passengers, many of whom had resigned their positions on the Panama Canal because of the conditions on the Isthmus. [New York Sun, June 13, 1905.]

The steamship Advance, in yesterday from Colon, had many passengers aboard who said that they had left the Isthmus because of yellow fever there. George A. Heath, of Massachusetts, a general foreman of construction of the Panama Canal, was taken ill a few days after the Advance sailed from Colon. His temperature was abnormally high when he was examined yesterday by Health Officer Doty, and he was sent to Hoffman Island for observation. Up to last night he had shown no symptoms of yellow fever. All the other passengers were in good condition, and after a thorough examination they were permitted to go with the ship to her pier.

[New York Herald, June 25, 1905.]

Colon, June 24.-Since June 17 there have been 5 new cases of yellow fever in the Colon Hospital and 1 death, and 4 cases are now under treatment.

The Seguranca sailed for New York yesterday evening, crowded with passengers, including a large number of canal employees who are leaving the Isthmus on leave of absence, but who are not expected to return.

[New York Tribune, July 1, 1905.]

More than one hundred passengers arrived here Friday morning from Panama on the steamship Seguranca. Many of them are discontented Americans who have been working for the Government in the Canal Zone. They are coming north either on account of climatic conditions or because of dissatisfaction with conditions on the Isthmus.

As a result of an examination by the quarantine officers a man and a boy were removed to Hoffman Island.

Arthur Paquette, a passenger, speaking of the sanitary conditions on the Isthmus, said that the first week he was down there there were 43 cases taken to the hospital at Ancon.

C. R. Littlejohn, of Wilston, Ohio, who was in Panama three months, said that he did not sleep in a bed the whole time. He criticised severely the Government's arrangement with an isthmian hotel.

George Land told of conditions at Culebra cut. He said there was plenty of incompetence displayed, and denounced the system of blacklisting, which he stated was employed there.

Others told stories of the sanitary conditions and of the spread of the fever. The Seguranca brought up the body of Samuel G. Davis, a detective sergeant, who went to Panama last March to organize the local police. Mrs. Davis was a passenger on the vessel.

[New York Herald, June 29, 1905.]

Mr. Wallace's resignation and yellow fever are factors in causing uneasiness among canal employees. In the wake of the abrupt resignation of John F. Wallace, chief engineer of the Panama Canal, which, there appears to be no doubt

has been accepted, the Government finds itself confronted with the problem of checking a growing demoralization in the great army of workmen employed in building the canal. Reports have come to Washington that when Mr. Wallace sailed from Colon it was felt he would not come back, and because there is no firm engineering hand to take the helm the work is more demoralized than

ever.

To check this uneasiness, which is accentuated by the yellow fever, is the problem the Canal Commission is now facing

Nearly every employee who goes to the Isthmus comes home and tells a dire tale of "yellow jack" lurking behind every corner, of poor food, of inadequate accommodations, of inertia, and of confusion in Government methods. Officials here stoutly maintain that conditions are by no means so bad as painted, but the stories of those who have been there have created a sentiment which renders it almost impossible for the Administration to get artisans to go to Panama, even if they are offered higher wages than they can earn in the United States. Mr. Wallace's departure brought things to a standstill.

EXHIBIT 22.

Mr. John F. Wallace was on May 5, 1904, appointed chief engineer of the isthmian canal, under action of the Commission as follows:

"The Commission reconvened and the chairman reported that he had had a conference with Mr. Wallace, who had declared himself ready to accept the position of chief engineer at a salary of $25,000 per year and a residence on the Isthmus, and had stated that he would be prepared to enter upon the duties of chief engineer on June 1."

Reorganization of the then Isthmian Canal Commission being under consideration, Mr. Wallace wrote the Secretary of War on December 20, 1904, as follows:

"If you will kindly pardon me for doing so, I would like to make a personal suggestion that if the President and yourself should decide at any time to reduce the Commission to three members, resident on the Isthmus, the governor of the Zone and the chief engineer should be members of this Commission ex officio.

"An organization of this kind, with the chairman of the Commission resident in Washington to look after general departmental matters, would no doubt work satisfactorily and be much less cumbersome than the present one."

And again on March 15, 1905, he wrote the Secretary :

"I hope you will not consider me presumptive if I respectfully ask that I be granted a personal interview before any radical change is decided upon in the governmental organization which would affect me unfavorably.

"I am not requesting additional emoluments of any nature whatever, but simply that no condition of affairs be created which will unnecessarily interfere with my efficiency here.

On March 24, 1905, the Secretary submitted to Mr. Wallace in detail, by cable, the plan of reorganization which the President proposed to make (substantially as embodied in the subsequent Executive order of April 1), and on the folloiwng day Mr. Wallace cabled the Secretary as follows: "Plan excellent. Satisfactory. Gracias [thanks]."

Thereafter the President issued his Executive order of April 1, creating a new Commission and defining their duties; among other things, that of the chief engineer, as follows:

"The head of the third department shall be the chief engineer. He shall have full charge on the Isthmus :

"1. Of all the actual work of construction carried on by the Commission on the Isthmus.

"2. The custody of all of the supplies and plant of the Commission upon the Isthmus other than all supplies needed for sanitary purposes.

"3. The practical operation of the railroad on the Isthmus with the special view to its utilization in canal construction work.

"4. He shall reside upon the Isthmus, devote his entire time to the service, except when granted leave of absence by the Secretary of War."

Mr. Wallace expressed his unequivocal approval of the distribution and powers as above defined by the Executive order, especially those relating to the office of the chief engineer; and during his subsequent stay of six weeks in

the United States daily participated with his associates in carrying out the same. To the President, Secretary of War, members of the Commission, and its counsel he frequently expressed his unqualified approval and acceptance of the distribution of duties and powers as in the order embodied, and particularly those relating to himself, which required the performance by him of the duties of constructive engineer upon the Isthmus.

Mr. Wallace sailed for the Isthmus on May 17, accompanied by his family, and as late as May 26 wrote Mr. Cromwell from the Isthmus as follows:

"In looking back over the events of the last few months, I become more and more impressed with the wisdom underlying the action of the President and the Secretary of War and the manner in which matters have

*

**

been guided over the troubled waters of the sea of complication which has surrounded the situation."

He reached the Isthmus May 24, but within twelve days thereafter cabled the Secretary of War as follows:

SECRETARY OF WAR, Washington:

PANAMA, June 5, 1905.

Important complicated business matters which can not be arranged by correspondence, and which may affect my relations as chief engineer of Commission, necessitate immediate return to the United States to confer with you and others. An order from you to return for official consultation will prevent apprehension on the part of employees. Suggest Shonts remain until my arrival. Please

answer.

WALLACE.

To this reply was sent the following day, as follows:

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Secretary of War and Shonts, in accordance with your request and without knowledge of circumstances that justify, approve your return for consultation with them at Washington."

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By letter of June 4, addressed to the Secretary of War, Mr. Wallace states: Certain complications are arising in my personal affairs which may render it necessary for me to go to the States on receipt of a cablegram at any time. Will you kindly cable me permission to do so? It is needless for me to say that I will not do this unless I consider it absolutely necessary."

On June 8, a few days before he sailed for New York, Mr. Wallace wrote the Secretary of War a letter, in which he referred to his intended visit to the United States, but gave no explanation of his personal plans.

Mr. Wallace arrived at New York the evening of the 22d instant, and the Secretary made an appointment for a conference on Sunday morning, the 25th instant, at the Manhattan Hotel, in New York City, the Secretary being then en route to New Haven and Boston.

The conference took place at the Manhattan Hotel as arranged. There were present the Secretary of War, Mr. Wallace, and Mr. Cromwell, who for some time has been charged by the President and Secretary with general advisory duties in all Panama Canal affairs.

Mr. Wallace stated that part of the interview would be personal to himself and part would concern the general canal work on the Isthmus. The Secretary referred to the foregoing cables, and acquiesced in Mr. Wallace's suggestion that he first speak of the personal matters.

Mr. Wallace then said that a few days before he sent the above cable to the Secretary he had received a cable from prominent business men in New York, asking if he would consider an offer to accept an important position in New York, and that he had cabled in reply that it was "simply a question of terms and conditions," and that he had requested particulars; that the particulars came, and it proved to be a definite offer of a position as president of a large holding company, controlling several other corporations, with certain stock benefits and other advantages to himself, which, with the salary, made it equivalent to $50,000 per year; that he did not at once accept the offer, but delayed it a few days in order to cable the Secretary of War, during which the parties increased their proposal between ten and fifteen thousand dollars a year, making it equivalent to $60,000 or $65,000.

He stated that the position was an especially attractive one, and such as he had only hoped to obtain after the completion of the canal, and thus only after years of further service on the Isthmus; that the duties of the new position were especially agreeable and afforded opportunities to make money through investments, etc.; further, that the position was such a good one that he did

not consider that he could decline it; that the life on the Isthmus was lonely and accompanied with risk to himself and wife, and was another reason for accepting a better offer, but that his new duties would not require all of his attention for the next two months, and that the parties had agreed that he could close up his canal work in the meantime, always provided that it did not take him from New York to the Isthmus. He referred to the President's order appointing the original Commission, and in which the President had stated that the Commissioners would hold office subject to the due fulfillment of their duties, and he stated that this made the office subject to termination by the President, and that consequently he (Mr. Wallace) considered that the holder of the office had an equal right to retire from it at his option at any time.

Concluding he stated that while he was thus severing his connection with the canal work he was willing to make up his annual report, and he would, if desired by the Government, continue to serve as a Commissioner, but not as chief engineer in charge of the construction work on the Isthmus.

Mr. Wallace said that this was all he had to say in regard to his personal relation to the work, and that he would then proceed to discuss generally the conditions on the Isthmus, if the Secretary desired. Secretary Taft said he wished Mr. Wallace would continue his general statement.

Mr. Wallace then discussed conditions on the Isthmus and the work, impersonally, for half an hour. At the conclusion of Mr. Wallace's general statement the Secretary of War said, in substance, as follows:

"Mr. Wallace, I am inexpressibly disappointed, not only because you have taken this step, but because you seem so utterly insensible of the significance of your conduct. You come with the bald announcement that you quit your task at a critical moment, on the eve of important work, and in the midst of reorganization plans under which you accepted your position, with your department unperfected in organization, and when you know, too, that my public duties call me to the Philippines for several months. I must be allowed to remind you that when you were employed by the Commission a little over a year ago you were only receiving $15,000 per annum under your former position, and that your salary was fixed at the sum demanded by yourself, $25,000. That was for constant service on the Isthmus, where the construction work was to be performed and your services were required. You knew the risks to yourself and to your family, if they went with you, in the work you assumed an obligation to do. If you had not desired the position, you need not have sought nor accepted it, but I understand that quite the contrary was the case. I can refer more positively to recent events within my own knowledge. When the President found it necessary to make a reorganization of the former Commission, you were consulted in the frankest manner about every feature of the reorganization, and were encouraged freely to express your opinions. Indeed, your voluntary suggestions from the Isthmus embraced the proposal that you yourself be made a member of the Commission and chief engineer on the Isthmus.

The substance of the plan of reorganization, as afterwards embodied in the President's executive order of April 1, was cabled to you by me and you cabled me your fullest approval of it and your thanks, for it included the appointment of yourself as a Commissioner, as you had solicited, and a member of the executive committee. The new plan of organization was warmly accepted and indorsed by you when you arrived in Washington, and you expressed your hearty approval of it in the most unequivocal manner not only to the President and myself, but to members of the Commission and its counsel, and just before sailing for the Isthmus you called upon us and voluntarily thanked me in the warmest terms for what had been done in the reorganization of the canal work and in the positions which had been given you. You cooperated for all these weeks in the work of reorganization and accepted the position assigned you under the President's order of April 1. The President and myself relied upon this fact in making up the plans, and the other members were selected with that in view. Now, within twelve days after your arrival upon the Isthmus you send me a cable which, read in the light of what you say to-day, signifies your practical acceptance of an offer of another position inconsistent with the performance of your duties on the Isthmus. I am astonished that you should be so disregardful of the splendid opportunities of the position, which would have made you famous the world over by the honorable performance of your duties of chief engineer.

For mere lucre you change your position over night without thought of the embarrassing position in which you place your Government by this action,