CHAPTER XI
THE ORGANIZATION
When the United States finally decided to build the Panama Canal, the next question of gravity which pressed for consideration was the creation of the organization by which it was to be built. Many problems were encountered, and after repeated changes in personnel and rearrangements of duties, the situation finally resolved into an organization headed by one man, clothed with the necessary powers, and held responsible for the consequent results.
The completion of the preliminaries for the acquisition of title to the Canal Zone and to the property and rights of the New Panama Canal Company took place when Congress, on April 28, 1904, made an appropriation of $10,000,000, which was to be paid to the Republic of Panama. Six days later the United States formally took possession of the Canal Zone and of the property of the Panama Canal Company, when at 7:30 o'clock in the morning, Lieut. Mark Brooke, of the United States Army, took over the keys and raised the American flag. The following day President Roosevelt announced the appointment of John Findley Wallace, of Massachusetts, as chief engineer of the canal at a salary of $25,000 a year, the appointment to be effective on the 1st day of June.
The first ship to arrive at Panama carried Maj. Gen. George W. Davis, who was to govern the Canal Zone; Col. William C. Gorgas, who was to make it sanitary; and George R. Shanton, who was to drive out the criminal element. Governor Davis was a member of the Isthmian Canal Commission, Colonel Gorgas had proved his worth in the sanitation of Cuba, and Shanton had been a "rough rider" with Colonel Roosevelt in the Cuban campaign.
When Chief Engineer Wallace arrived on the scene he found there an all but abandoned project. There were hundreds of French houses, but nearly all of them were in the jungle and practically unfit for human habitation. He found millions of dollars' worth of French machinery, but almost none of it in condition to be put into service immediately. He knew in a general way the line of the canal, but surveys were lacking to determine its exact location at every point. With this situation in front of him, he found it necessary to concentrate his efforts upon the problem of getting ready for the work. While he was doing this the people at home began to demand that the dirt fly. Colonel Gorgas also found conditions which challenged his best efforts. Colon was a paradise of disease, Panama was no better. It was only by making both of these cities over again, from a sanitary standpoint, that any hope could be held out for reasonably healthy conditions.
During his stay on the Isthmus Mr. Wallace found himself handicapped at every turn by red tape, a new thing in his experience as a construction engineer. He could buy nothing without asking for bids; every idea he sought to put into execution had to be submitted to Washington, and he found himself so harassed and handicapped that he wanted a new plan of organization.
Acting in accordance with his recommendations, President Roosevelt decided to accept the resignation of the existing Canal Commission, and to appoint a new one, in which, instead of having independent departments, with the governor independent of the chief engineer, and the chief sanitary officer independent of both the governor and the chief engineer, there should be a more united relation, in which all questions were to be decided by the commission as a whole, the final authority being vested in an executive committee composed of the chairman, the governor of the Canal Zone, and the chief engineer.
Under this plan, the second Isthmian Canal Commission was organized. It consisted of Theodore P. Shonts, chairman; Charles E. Magoon, Governor of the Canal Zone; John F. Wallace, chief engineer; Mordecai T. Endicott; Peter C. Hains; Oswald H. Ernst; and Benjamin A. Harrod. Following the suggestion of Chief Engineer Wallace, the control of the Panama Railroad was also vested in the new commission.
While these changes were being made Chief Engineer Wallace was in Washington. There was dissatisfaction on the Isthmus with an accompanying spirit of unrest, and, to make matters worse, a yellow-fever epidemic broke out. Only a few days after Mr. Wallace reached the Isthmus, he cabled the Secretary of War that he wished to return to Washington, hinting that he might resign. Secretary Taft cabled to Governor Magoon for an opinion as to the motives which were behind this step on the part of Mr. Wallace, and was advised that it was brought about by the offer of a better salary and the fear of the yellow-fever epidemic. When Mr. Wallace reached New York he had a stormy interview with Secretary Taft, who roundly denounced him for quitting at such a critical time. Mr. Wallace declared his lack of confidence in the ability of Colonel Gorgas to control the yellow-fever epidemic, and asserted that the continual interference of red tape was so distracting to him as to make new employment attractive. President Roosevelt upheld his Secretary of War in his denunciation of Mr. Wallace, and promptly appointed John F. Stevens chief engineer at a salary of $30,000.