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bility of large promotions before it, friends, and the various comforts of life to live in this God-forsaken country, and to assist you and our President in carrying out this great work. If I am furnished with the men and material I have asked for, and my action is not nullified by opposing influences in the United States, this work will be completed, well, quickly, and economically, and I fail to see the necessity of a high-priced figurehead in Washington. All that is needed there, other than the Honorable Secretary of War, who is the head of the department under which this work is being conducted, is the necessary official machinery to provide men and material it may be necessary to secure from the States and to conduct the routine departmental work. If it is absolutely necessary to have a one hundred thousand dollar man in Washington, I might possibly be induced to sacrifice some of my prospects here and accept the situation, but I do not ask it, am not after it, and prefer to be on the firing line, provided I receive proper support, and an impossible situation is not created at Washington.

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.

Yours, respectfully,

JOHN F. WALLACE.

ISTHMIAN CANAL COMMISSION,
Panama, March 21, 1905.

Hon. Wм. H. TAFT,

Secretary of War, Washington, D. C.

SIR: I have received a cablegram from Mr. Drake, vice-prèsident of the Panama Railroad, announcing my election as general superintendent of that corporation on the Isthmus.

Not having received any official intimation of a probable step of this kind from the Commission, which is the source of my authority and under whose direction I act, I was naturally at a loss to know what action to take in the premises.

Immediately upon receipt of Mr. Drake's cablegram I notified Admiral Walker by cable, but, having received no reply or instructions from him, I consider it both my privilege and my duty to address you on the subject, and hope you and Admiral Walker will pardon me if I have overstepped the bounds of propriety or official etiquette in doing so.

While under ordinary circumstances I would feel it my duty to decline to assume charge of the Panama Railroad on the Isthmus as general superintendent, the present circumstances are such and the situation here is so critical that I feel it my duty to do so in the interest of the economical construction of the canal.

The situation to-day on the Panama Railroad is that it is overburdened with a larger amount of both commercial and Government business than it is able to handle with its existing organization and equipment.

That it will be impossible for any management to satisfactorily handle this business without complaints upon the part of the commercial

interests is self-evident, particularly when comparison is made with the handling of the business under the normal conditions which existed before the transportation of a large amount of Government supplies and material was injected into the problem.

This situation can only be rectified by time and the prompt provision of additional equipment and other facilities, recommendations covering which you will find contained in my various reports to the Isthmian Canal Commission and in the memorandum report which I furnished Mr. Bristow by your direction.

I find that the powers and authority heretofore granted to and exercised by the general superintendent of the Panama Railroad are not sufficient and ample to efficiently and economically control the situation here, he being required to report to and receive authority from the New York office on the most trivial matters, and that it will be impracticable to satisfactorily manage the railroad under these conditions.

In view of the responsible positions I have held in the United States in railroad circles, it would be beneath my dignity to act under the title of general superintendent of the Panama Railroad, and report to and receive instructions from the officials operating the Panama Railroad and Steamship Line in New York, the vice-president and controlling authority of which has never been on the Isthmus, and the general manager, while a man of great capabilities and reputation and an estimable gentleman in every way, for whom I have the highest respect, has only visited the Isthmus twice for short periods of time during his connection with the company.

In view of the fact that the business of the Panama Railroad in the handling of both Government and commercial freight will probably soon be five times its former capacity, and in view of the further fact that the use of the Panama Railroad in connection with the excavation of Culebra cut will cause the use of that property inside of two or three years to amount to at least twenty times its present volume, you can plainly see how impracticable it will be for the person controlling the construction of the canal and the operation of the Panama Railroad on the Isthmus (which certainly should be one) to be required to report to officials in the city of New York, who do not occupy positions of responsibility in regard to the work to be performed on the Isthmus, and who naturally will not be in a position to criticise or direct the action of the person in control here.

It also does not seem equitable that the title of the person in control on the Isthmus should be one of less dignity, or taking with it less authority, than that exercised by the highest managing officer in New York.

While the Panama Steamship Company was necessarily part and parcel of the Panama Railroad Company, was a necessary adjunct in the securing of business for the railroad, and it was perfectly proper for the railroad to participate in the expenses of the steamship line which was its principal feeder and support during that period when the only motive was the operation of the property as a commercial enterprise for the benefit of its stockholders, there is no necessity, under the changed conditions, for a continuance of this policy; and there is no reason why the operation and maintenance of the steamship line, together with its receipts and disbursements, can not be primarily separated from the operation of the Panama Railroad Company with its receipts and disbursements, and each part of the business be con

ducted under a separate management, and if it is deemed advisable and policy to continue the higher officials of the railroad and steamship company in New York as at present, their duties and control should be confined to the steamship line.

There is no reason why reports from the Panama Railroad after the close of the present fiscal year should go through or be handled by that office.

There is no reason why you could not cause to be elected as president of the railroad company the chairman of the Isthmian Canal Commission, or some member thereof, as you might deem fit, or place this matter under one of your own bureaus, allowing the vice-president and manager of the steamship company and the railroad company to make separate reports to this head as long as you desire to continue the present railroad organization.

While I will temporarily assume charge of the railroad, I hope you will see your way clear to give favorable consideration to the foregoing and that the matter will be adjusted on these or some similar lines.

I do not address you, Mr. Secretary, on this matter with any other motive than that of securing such an organization and arrangement of the railroad matters as will be clean-cut and businesslike, with a proper adjustment of authority and responsibility, to the end that this work may be conducted in an economical and efficient manner and to the credit of yourself and the Administration.

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DEAR SIR: I have your telegram of to-day, reading:

We have received following cablegram from Panama, which we do not understand. Can you explain? Drake cable appointment General Superintendent Panama Railroad Company, have received no information or instructions from you in regard to this. Wallace.

As you know, Mr. Wallace has been ad ising and urging that there be undertaken at once radical increases in our equipment and in reconstruction work, and in general conference between Secretary Taft and Mr. Cromwell recently, the Secretary heartily approved of the idea of having Mr. Wallace take charge at once instead of waiting, and desired that this be done. Knowing that this was the desire of all of you, we acted on it at our executive committee meeting of the 14th instant, and appointed Mr. Wallace so that he could take charge immediately. In the same manner we have to-day acted on your letter of March 16, inclosing Mr. Wallace's recommendation for the practical double tracking of the road, and unanimously recommended to the board of directors that this be done. At the meeting next Thursday no doubt this will be officially ratified. In the meanwhile the committee requested me to gather the material to prepare specifications so that no time will be lost.

I have just wired you as follows:

Telegram received. Notice of appointment to Wallace in accordance with executive committee action Tuesday. Letter of explanation goes to you by to-night's

mail.

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MY DEAR MR. DRAKE: I am just in receipt of a letter dated March 8 from Admiral Walker, transmitting three letters from you under date of March 4 and one from Mr. Paine under date of March 8, 1905, in regard to rates of pay of laborers. I very much appreciate what you say and will take particular pains to see that there is no disturbance in the Panama Railroad work.

By the way, I have had a rather extensive acquaintance with the new general superintendent of the Panama Railroad, and believe that by cooperating with him fully I can secure satisfactory results.

I am just as anxious to get the new rail laid on the Panama Railroad tracks as he is, and I am fully as anxious that there should be no congestion of freight traffic.

If you will kindly instruct him to confer freely with the chief engineer of the Isthmian Canal Commission at all times, I think we will have no difficulty in handling the matter satisfactorily.

I have had several conversations with him already since his appointment, and while he is rather inclined to lean too much toward the interests of the Panama Railroad Company, which I presume is due to his former experience as a railroad manager, still I feel that we will get along very satisfactorily and that the interests of both parties will be properly conserved.

Kindly excuse the odor of humor in this letter, provided you can detect any.

Very truly, yours,

JOHN F. WALLACE,
Chief Engineer.

ISTHMIAN CANAL COMMISSION,
Panama, March 24, 1905.

Rear-Admiral JOHN G. WALKER, U. S. N.,

Chairman Isthmian Canal Commission,

Washington, D. C.

SIR: If the Commission have in mind ordering me to Washington any time in the near future, in order to assist in the letting of important contracts or to confer on other matters, I hope the time will be so arranged that I can be there during the month of May or June, either at the commencement or end of my trip.

In May the International Engineering Railway Congress meets in Washington. Before I entered the service of the Commission I

assumed the obligation of preparing one of the important papers which will be presented at this convention, and while I would not go to the States for this purpose alone, if it will fit in without interference with my duties as chief engineer of the Isthmian Canal Commission it will of course be agreeable for me to do so.

I would also like to attend this convention in the interest of the Isthmian Canal Commission, as there will be exhibited in Washington at that time almost every article in the way of railway and construction appliances, and I would be given an opportunity to meet and confer with the best experts, not only from America, but from all over the world, in regard to matters of this kind.

As the principal part of the work here is more or less a railroad proposition, and the principal machinery will be steam shovels, excavators, cranes, locomotives, cars, track, and various railroad and excavating appliances, this is an opportunity that, from the standpoint of the chief engineer of the Isthmian Canal Commission, should not be missed.

I would also like to spend several days during this exposition in having Major Gallagher, or whoever is to be the purchasing agent of the Commission, go over the exhibits with me, so that I can explain to him the difference between the quality and efficiency of the various appliances and materials, as you can appreciate how we will be hampered by having the head of our purchasing department and the clerks under him entirely ignorant of the relative degrees of quality and efficiency of the machinery which will be needed in this work.

I will also desire in connection with my business trip at that time to take my annual vacation. I had first thought of eliminating this this year, but the effects of the climate and the extraordinary amount of work thrown upon me, due to organization matters, is commencing to wear, and I feel that I should not go through another summer here without taking sufficient time in the States to thoroughly recuperate, so that I will be in the best possible physical condition to push the work for the following year upon my return. I also find that the probabilities are the condition of the work will be in such shape that I can be better spared from the Isthmus during May or June than either earlier or later.

In case, however, anything should happen that my presence might be desired in Washington at an earlier date, I should desire at least two weeks' notice, so that I will have sufficient time to leave matters in proper shape during my absence.

Very respectfully,

JOHN F. WALLACE,
Chief Engineer.

HOTEL MARIE ANTOINETTE,
New York, June 23, 1905.

Hon. Wм. H. TAFT,

Secretary of War, Washington, D. C.

MY DEAR MR. SECRETARY: I arrived in New York late yesterday evening. Mr. Cromwell called this morning and advised me that he had been instructed by you to say to me that you preferred I should remain in New York and await your arrival here for an interview Sunday, instead of my going to Washington, as I had originally intended.

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