equipment, buildings, and engineering records, to be $42,799,826, or nearly $3,000,000 more than was paid. At the same time it was a good sale for the French company because the United States was the only prospective buyer.

The item of largest value to the United States, as estimated in the report, was the excavation of 29,908,ooo cubic yards, valued at $25,389,240. This mainly was in the Culebra cut. Next in importance was the Panama Railroad and subsidiary trackage in the Canal Zone, and the remainder was for quarters, hospitals, storehouses, machine shops, canal equipment, itemized in part as follows:

Three 2,000-ton steamers of the Panama Railroad Steamship Line; 30,000 acres of land comprising practically all the real estate in the city of Colon and a valuable part of the city of Panama; 625,000 acres of land with the canal concession; 2,265 buildings of all descriptions; 212 Belgian locomotives; 34 American locomotives; barges, yawls, launches, dredges, cranes, drills, dump cars, and vast quantities of steel rails, machinery parts, pumps, steam winches, and other equipment in profusion.

Much of the mechanical equipment and whole villages of houses used by the French employees were covered with a dense growth of jungle after years of idleness, but the machinery had been oiled and painted carefully before abandonment, and so was preserved in good condition when the Americans came. Had not the French buildings been available and capable of being speedily repaired for use, the early Ameri

can employees would have suffered more hardships than they did. Of these buildings, the Americans repaired and used 1,536, their value being estimated at $1,879,203.80.

ment.

Construction work was carried on the first year of American occupation largely with old French equipThe closing days of the canal find a considerable amount of it still in use. A great deal of light work by locomotives was done by the Belgian engines that the heavy American types could not handle economically. That part of the equipment which could not be utilized was used as ballast on the Panama Steamship liners to the extent of 27,000 tons, and sold as scrap on the New York market, and in 1911 the Chicago House Wrecking Company bid in the remainder for the lump sum of $215,000.

In the sale, the United States received 68,888 shares of the capital stock of the Panama Railroad Company, and later bought from individuals 1,112 shares for $157,118.24, giving the government complete control; and while the railroad has been operated separately from the Commission, it has been officered by members of the Commission or its employees, and in all points made subordinate to canal construction.

The value of the French engineering records and surveys, and especially of the records kept of the flow of the Chagres River, is incalculable because they could not be duplicated. It was on French records that the estimate of the amount of water to expect from the Isthmian rivers for use in the Gatun Lake was based.

Congress, on April 28, 1904, appropriated the $10,000,000 which had been promised in the treaty to the Republic of Panama for the Canal Zone. This, with the consummation of the sale by the French company, cleared the title to the Canal Zone, and at 7.30 o'clock in the morning of May 4th, Lieut. Mark Brooke, of the United States Army, formally took over the property and the territory in the name of his government.

The day following, President Roosevelt announced the appointment of John F. Wallace, general manager of the Illinois Central Railroad, as Chief Engineer of the Panama Canal, effective on June 1st. He had acknowledged the national disbelief in governmental efficiency by going into private industrial life for a canal builder. Mr. Wallace's salary was to be $25,ooo annually, and the country recognized the selection as a good one.

Upon their return to the United States, the Commission began organizing surveying and engineering parties for pioneer work in the Canal Zone. The first ship to arrive with such a party was on May 17th, the party having at its head Maj.-Gen. Davis, of the Commission, and including Col. W. C. Gorgas, chief sanitary officer, and George R. Shanton, who personally was selected by President Roosevelt to head the police of the Canal Zone.

Maj.-Gen. Davis was in charge pending the arrival of Mr. Wallace, who reached Colon on June 24th. The President designated Maj.-Gen. Davis as Governor of the Canal Zone, on June 8th, and for the first

two months he had his residence on Culebra Hill, then in Panama. Operations were continued just as the French left them, until Mr. Wallace's arrival definitely marked the beginning of real construction.

A

CHAPTER XI

THE CANAL UNDER WALLACE

NXIETY to dig dirt, the usual American desire

to get things done right off, was the dominating idea in 1904. So, while Mr. Wallace kept up the surveying which would aid in determining the center line of the canal, as well as the choice of a type, he also pushed excavation operations in the Culebra cut, rehabilitating old French excavators and increasing the working force.

He had found 746 men at work with hand tools in the Culebra cut. His first inspection convinced him that the French machinery should be abandoned as fast as modern American equipment could be secured, and he expressed the opinion that two years would be required for preparations. At that time the main track and sidings of the Panama Railroad totaled 78.82 miles, while the trackage left by the French in the cut and elsewhere was 176.2 miles. The immediate substitution of heavy American rails for the Belgian type, and the double-tracking of the main line, were among Mr. Wallace's first decisions. Rolling stock and locomotives were ancient in design, and in a bad state of repair, but he rescued from the jungle and overhauled 58 locomotives and 980 dump cars.

It required stout hearts not to quail before the Isthmus of 1904. Not only the traditional unhealthfulness,