over to a private contractor, left in the hands of the government the last word on every vital question that might arise. Viewed to-day, the terms of the invitation for bids seem to have been drawn with so much rigidity as completely to have robbed any contractor of the very flexibility of action which appeared to be the main drawback of a government enterprise. The government was to decide upon the cost and plans and the contractor was to receive a percentage of that amount for his services. Civil government and sanitation were to remain in the hands of the gov

ernment.

It is safe to assume that had the plan been adopted, it would have broken down in less than three months, because the contractor either would have settled to the mere foremanship of the job, with the government engineers the court of last resort on all issues, or he would have asserted an independence of judgment and action which the terms of the contract did not permit. Either result would have been disastrous to

the canal project.

Those who favored the contract plan had some considerations which were potent with them, but which they did not shout from the housetops. They knew that the terms of the contract on which bids were invited practically reduced the contractor to the position of superintendent, but by nominally placing the work in his hands they would get the private contractor's freedom of action as to hours of work, standard of wages, fitness of employees, and cheapness of markets for materials. In other words, so long as the

government itself built the canal, the eight-hour day, civil-service regulations, and the whole web of official procedure that enveloped the undertaking, would be operative. The contract plan offered a neat way of sidestepping these cumbersome conditions of doing business.

Mr. Wallace heartily favored the contract plan, expressing his belief in "the utter impossibility of the United States Government carrying on a constructive enterprise in a common sense, businesslike manner." Whatever his attitude at first, toward the last Mr. Stevens opposed the contract plan, as he believed that the work he had done in the Canal Zone was efficient, and if a little relaxation in red tape was indulged, the canal could be built more advantageously by the Government.

Bids for constructing the canal by private contract were opened at Washington on January 12, 1907, and rejected on the ground that they failed to meet the requirements of the government. The Oliver-Bangs syndicate was nearest in its bid to the specifications. The real reason for rejecting the bids was that both the country and the administration had undergone a change of heart as to the wisdom of the contract plan.

Another epoch in the life of the canal project was marked by the President's action in definitely committing the enterprise to direct government supervision. Chairman Shonts resigned, effective March 4, 1907. An executive order then consolidated the offices of Chairman and Chief Engineer in Mr. Stevens. On March 16th the remainder of the Commission, except

Col. Gorgas, resigned, to be followed on April 1st by the resignation of Chief Engineer Stevens. His resignation came like a sickening accident to the canal employees. "The Chief," as he was called familiarly, had established himself firmly in their minds and hearts as a thoroughly competent engineer and just administrator. No official explanation of the motive for his quitting had been made, but the general understanding is that he opposed the assignment of government engineers to the Commission as likely to create friction with civilian engineers and partly to a stiff communication he sent the President on the limitations of red tape and governmental methods generally. His departure was featured by a remarkable demonstration at Colon, when he was presented with a gold watch, a diamond ring, and a silver service by the employees, who did not restrain their emotion at his loss.

Mr. Stevens was not soured by the termination of his services as Chief Engineer. His faith in the ultimate success of the project has remained unshaken, and in the Engineering News of December 31, 1908, a year and three quarters after his resignation, he wrote that the public criticism of the locks and dams was erroneous, and advised that Col. Goethals be backed up in his admirable efforts. The greatest tribute to his work as Chief Engineer is found in the fact that the organization of employees was so thorough and the foundational work so well done that the enterprise was not harmed by a change in managing directors.

CHAPTER XIII

THE CANAL UNDER GOETHALS

RESIDENT ROOSEVELT had at last found public sentiment educated to the point where the canal could be put exclusively in the hands of government engineers, following the untimely resignation of Mr. Wallace, the belief that private interests were seeking to grab the project, and the loss of Mr. Stevens. It had taken three years to reach this attitude. The personnel of the third Commission he appointed, on April 1, 1907, was as follows:

LIEUT.-COL. GEORGE W. GOETHALS, Chairman and Chief Engineer,

MAJ. D. D. GAILLARD, U. S. A.,

MAJ. WILLIAM L. SIBERT, U. S. A.,

MR. H. H. ROUSSEAU, U. S. N.,

COL. W. C. GORGAS, U. S. A., Medical Corps,

MR. J. C. S. BLACKBURN,

MR. JACKSON SMITH,

MR. JOSEPH BUCKLIN BISHOP, Secretary.

The President also took advantage of the reorganization of the Commission to further consolidate power in the Chairman. Not only was Col. Goethals made Chairman of the Isthmian Canal Commission, and Chief Engineer of the Panama Canal, but the executive power in the Canal Zone, formerly exer

cised by the Governor, was vested in him, as well as the Presidency of the Panama Railroad Company, thus making every official and employee, and the members of the Commission, subordinate to him.

In former years the Governor had exercised extensive and supreme powers within his sphere, ranking higher than the Chief Engineer. Where the Chairman, Chief Engineer, and Governor had rival powers, friction was sure to develop, and did so develop. Under the new order the Governor was reduced to the title of Head of the Department of Civil Administration, reporting to the Chairman, as did the Chief Sanitary Officer and Division Engineers. Thus the former concentration of the power of a Commission of seven members into an Executive Committee of three, was still further concentrated into one man and so gave Col. Goethals the absolute authority he ever since has exercised in the Canal Zone, acknowledging only the Secretary of War and the President as his superiors.

Mr. Jackson Smith's appointment to the Commission is the only instance of a civilian coming to the Canal Zone as an employee and attaining to the position of Commissioner. He had shown such remarkable ability as the head of the Bureau of Labor, Quarters, and Subsistence, in recruiting workers, housing them and supplying them with food, that his services were recognized by elevation to the Commission. Mr. Blackburn, of Kentucky, was the head of the Department of Civil Administration, and Mr. Bishop was to edit a weekly Canal Record, the official Commission