been passed successfully. They looked forward to smooth sailing with every confidence.

Their surprise and chagrin, therefore, was immeasurable when Mr. Wallace cabled Secretary Taft, on June 8th, asking that he be recalled to Washington for a conference. He intimated that the conference might result in his resignation as Chief Engineer. After a disheartened interview with the President, Secretary Taft cabled him to return. At the same time he cabled Gov. Magoon for a confidential view of Mr. Wallace's conduct. Gov. Magoon expressed the opinion that Mr. Wallace was quitting for a better salary, the yellow-fever epidemic was raging, the wife of Mr. Wallace's secretary had died from the disease, and Mr. Wallace believed that he had had an attack of it.

Without intimating that he was leaving for good, Mr. Wallace quietly packed up or sold off his household furniture and sailed from Colon on June 16th. The employees scented some important movements and the subordinate officials felt restrained from decisive action, although Mr. Wallace left authority to that effect with the engineer next in rank to him.

Gov. Magoon cabled that the working force, already shaken by the yellow-fever epidemic, were further demoralized by the belief that the Chief Engineer was seeking a softer berth. Every ship that left Panama at that time was carrying capacity passenger lists, and only the limited number of vessels prevented a wholesale exodus. It was truly a time that tried men's souls.

President Roosevelt and Secretary Taft then decided upon a drastic course toward Mr. Wallace, as a means of reviving the morale of the canal workers, and also of bringing the American people sharply to a realization that the canal project was in peril, through a display of weakness in the face of danger, that would make our experiment in Panama an international disgrace.

Secretary Taft, with William Nelson Cromwell, met Mr. Wallace at the Manhattan Hotel in New York on June 25th. Secretary Taft listened to his reason for resigning, which in the main was that he had under consideration a position that would carry with it a remuneration of approximately $65,000 a year. One of the peculiar conditions of the new employment was that under no circumstances was he to return to the Isthmus, but that he would gladly remain a member of the Commission resident in the United States. He made some side criticisms to the effect that Col. Gorgas was incapable of handling the yellow-fever epidemic, that government red tape was distracting, and conditions generally were such as to make the new employment look attractive.

Secretary Taft did not conceal his disappointment in Mr. Wallace's course. He began by reviewing how the government had taken him from a position paying $15,000 a year to make him Chief Engineer of the canal at $25,000 a year; how that the formidable obstacles to be met, the supreme necessity of a canal to the nation, made it a patriotic work for any Amer

ican and an honor to be placed at the head of the greatest enterprise of the age.

"For mere lucre," Mr. Taft continued, "you change your position overnight without thought of the embarrassing position in which you place your government by this action."

Secretary Taft then reviewed how the Commission had just been reorganized to meet Mr. Wallace's wishes, and every change had been approved by the Chief Engineer. He closed by demanding the immediate resignation of Mr. Wallace. This came the next day, and was made public on June 28th, with Secretary Taft's hot rebuke, which, in the Canal Zone, had a most salutary effect. It put an entirely new complexion on their work to be told that the nation expected every man to do his duty, that they were not down there for the money they could make, nor were they expected to leave because of the hardships they would meet, but that the object of their exile was to give the nation something vital to its welfare. The desertions began to diminish at once, and the announcement on June 30th, that John F. Stevens, a Hill man, had been appointed Chief Engineer, further strengthened the morale of the canal organization.

Theodore Roosevelt never appeared to better advantage as a supremely able executive than during this crisis in the history of the canal. Before his enemies, and the canal's enemies, could shout their glee at the demoralization of the enterprise, he had closed the breach with the selection of another great Chief En

gineer. Even if the situation had been brought about by interests with sinister designs, it could not have been met with a more magnificent courage, and the canal project was strengthened by the ordeal.

A

CHAPTER XII

THE CANAL UNDER STEVENS

NOTHER notable figure in the railroad world

had been chosen Chief Engineer of the Panama Canal. John F. Stevens in 1903 was general manager of the Great Northern Railroad Company, and of his selection as Chief Engineer, James J. Hill said that if the whole country had been ransacked no better man could be found.

Mr. Stevens was about to start to the Philippine Islands to superintend the construction of government railroads, when drafted for the canal. It is not possible to estimate the mischief that might have resulted if the selection of a successor to Mr. Wallace had been long delayed. His salary was to be $30,000 annually, or $5,000 more than that paid to Mr. Wallace. He was facing a situation in Panama that justified the figure.

The long continued "knocking" of the canal project was having its effect. Not only were the men on the ground difficult to retain, but new ones would not come unless for exceptional considerations. The yellow-fever epidemic was still uncontrolled. An invoice of the situation as left by Mr. Wallace showed that considerable pioneer work had been done, but the housing, feeding, and general preparations for the comfort of employees were unsolved problems.