During the first year of American operations in Panama, the problem of food and merchandise supply for the army of workers was not worked out.  The Panama Railroad long had maintained a commissary for its employees, but its facilities totally were inadequate, as they existed in 1904, for satisfactory service to the increased thousands of employees and their families.

Chief Engineer Stevens, in 1905, turned his attention to this problem as one, upon the proper solution of which would depend satisfactory conditions of living for the canal workers.  By April, 1907, when he resigned, the present commissary and hotel systems, as well as the system of housing the employees, which challenge the admiration of the tourist, had been created, and all that was left to Col. Goethals to do, in this phase of the task, was to enlarge the systems as the organization expanded.

Under Mr. Stevens the Department of Labor, Quarters, and Subsistence covered the whole ground.  In 1908, Col. Goethals modified the organization by creating a Quartermaster's Department along Army lines, which had charge of all buildings and the accountability for all physical property of the Commission, the recruiting of labor, storage of material and supplies, collection of garbage, distribution of commissary merchandise to employees, and the cutting of grass as directed by the Sanitary Department.  A Subsistence Department then was created, which in addition to operating the hotels, kitchens, and messes, was given supervision over the Panama Railroad Commissary.  The bookkeeping for the commissary, however, is done by the railroad company and the profits go into its accounts, but as the government owns the railroad, the distinction only is one of bookkeeping.

Merchants in Panama and Colon objected to a government commissary on the idea that it would be a competition not contemplated when the Canal Zone was ceded, and they made overtures to the Commission for taking over the business of supplying canal employees with the necessaries of life.  Had this been done an inconceivable amount of dissatisfaction would have resulted, through the ruinously high prices the employees would have been compelled to pay for the privately owned merchandise.

The government has made a profit from the commissary operations because it arbitrarily has fixed the price of commodities at a point which would pay for the construction of storehouses, and the usual expenses of merchandising two thousand miles from the markets of the world.  But, owing to the immense quantities in which all articles are bought, and the absence of a grasping policy as to profits, the canal employees customarily buy almost everything more cheaply than the same merchandise sells for in the United States.

For one reason, there is no tariff in the Canal Zone.  Foreign made goods are imported without the expense to the consumer that the high protective duties at home necessitate.  Irish linens, English and Scotch cloth, French perfumery, Swiss and Scandinavian dairy products, and a wide variety of other European manufactures, make the commissary, with the American merchandise in stock, a great department store which in the fiscal year 1912 did a business amounting to $6,702,355.68

General headquarters are at Cristobal, on the Atlantic side.  The steamships of the Panama Railroad Line every week replenish the food supplies with seasonable offerings from the American markets.  The scope of the operations include a laundry, bakery, ice cream plant, ice factory, cold storage, coffee roasting plant, and laboratory for making extracts.

The year 1911 is typical of the scale on which the commissary has been operated since 1906.  Importations of principal commodities were as follows:

Dry Goods
Boots & Shoes
Cold Storage Supplies
Raw Materials
Paper, Stationery, etc.






These importations do not represent the total transactions of the commissary for that year, as the stock on hand, and bought on the Isthmus, ran the volume of business to $5,754,955.69.  Of this amount the Commission paid $1,625,348.77 for supplies used in the hotels, messes, kitchens, and elsewhere; and $3,609,358.01 represents the amount of the total which was paid by employees using coupon books.  Nineteen stores were operated in as many settlements and towns and the average monthly business was $479,579.69.

No cash sales are made at the Commissary.  Employees are issued coupon books in value from $2.50 to $15.00 and containing coupons ranging in face value from one cent to twenty-five cents.  Enough coupons are torn out by the clerks to cover each purchase.   At the end of each month the value of the coupon books is deducted from the employee's salary.  In 1912 the practice of selling coupon books for cash was extended to the employees.  Formerly no books would be issued after the 28th nor before the 4th of each month, and a gold employee could only ask for books to the extent of 66 2/3 per cent of his salary, or a silver employee for not more than $15 in any one month.  While the old method still is in vogue, by selling books for cash the employees who thoughtlessly failed to provide books to run them through the month may supply their needs.  The books are not transferable.

The quantities of various articles handled by the commissary in the year being reviewed were as follows:  Eggs, 692,060 dozen; butter, 429,267 pounds; meats, 9,241,858 pounds; poultry, 554,028 pounds; milk and cream, 86,466 gallons; coffee, 320,491 pounds; flour, 16,638 barrels; ice, 33,267 tons; ice cream, 110,208 gallons.  At 4:30 o'clock each morning a special train of from fourteen to eighteen cars leaves Cristobal with fresh supplies for the towns in the Canal Zone.  The branch stores usually have small cold storage facilities to preserve such meats and perishable goods as may be necessary for the day's operations.  Once a month the Commissary Bulletin is issued, with price lists and announcements of special sales on various articles.  The feminine instinct for bargains thus is not atrophied by residence in the Canal Zone.

While the cost of living has been a rampant issue in the United States, the canal employees have enjoyed comparatively lower prices, as well as a greater purchasing power because of higher pay.

One central laundry is operated for the white, or gold, employees.  In 1911 there were 7,260 patrons and 3,581,923 pieces were laundered.  Patrons deposit their bundles at the branch commissaries in the respective towns and they are collected for shipment over the railroad to Cristobal.  By this centralization of work the cost is from 30 to 50 per cent lower than for similar work in American cities.  Cleaning and pressing are done for both men and women's clothes at correspondingly low rates.

Panama hats are not as extensively worn by the Americans as one might imagine, and they are not a great deal cheaper than in the United States.  Contrary to popular belief, Panama hats are not made in Panama.  They are made in Colombia, Ecuador, and Peru, the finest coming from Montecristi, Ecuador.  Years ago traders from those countries were in the habit of bringing the hats to Panama to sell to ships bound for the United States or Europe, and so they came to be known as Panama hats.  Imitations are made in Jamaica and Puerto Rico and many frauds are perpetrated upon the American people by dealers who profess to have genuine Panama hats at prices sometimes lower than our tariff would be on the real article.  Prices vary according to the length of the fibers used in their manufacture, the finest ones being without any seams, and cost as high as $150.


Early in 1905, the Commission advertised free quarters to both married and bachelor employees as a special inducement to come to the Canal Zone.  Thus, in addition to high pay the employees have no house or room rent to pay.  This alone constitutes a sharp increase in an employee's income over what he could earn in the United States for similar work, but this is not all he receives gratis.

It has been figured that in six years the Commission grants to each married employee gratuities that cost it $3,000; and to a bachelor employee gratuities that cost $750.   The monthly service, such as commissary, fuel, and distilled water deliveries, removal of garbage, etc., to a married employee costs $12; and janitor service, and other service to a bachelor employee costs $2.25 monthly.  In six years an average force of 5,000 employees has been entitled to these gratuities and it is figured that the total investment by the Commission in that period for all free service and gratuities runs between ten and twenty million dollars.

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To a married employee the free allowance is as follows:  An individual house, or an apartment in a building with two or four families; a range, a double bed, two pillows, six dining chairs, two kitchen chairs, one chiffonier, two center tables, a mosquito bar, a refrigerator, a double dresser, a double mattress, a kitchen table, a dining table, sideboard, bedroom mat, and three wicker porch chairs.

The Quartermaster's Department delivers purchases from the commissary and ice; the fuel used in the kitchen stove is free, as are electricity and hydrant and bathroom water.   Telephones are free if the employee needs one in connection with his duties.   Housekeepers must buy their own tableware, bedclothes, light furniture and bric-a-brac.

Married quarters were assigned, in 1905 and 1906, on the basis of one square foot for each dollar of salary, with extra allowances for the wife and children.  This method was abandoned and quarters are assigned without regard to salary, except that officials receive first consideration.  There are one, two, and four family houses, entirely screened on the outside.  As a rule there has been a scarcity of married quarters and occasionally of bachelor quarters.  Every house, or apartment, has its shower bath, tubs not being used, and each town has a complete sewer system.

Bachelors, whether men or women, are treated correspondingly well.  Quarters with two, three, or four in a room, and janitor service are free.  In the early days there was unpleasant crowding because of the scarcity of buildings, but only occasionally has there been congestion in late years.  These buildings shelter from a dozen to sixty men and like the married quarters are screened on the outside.  A war was waged until vermin practically was eradicated.  They are electrically lighted and have the usual shower bath and sanitary arrangements.  Barracks of a less pretentious architecture are provided for the silver employees.

Hotels operated by the Commission are the boarding places for the bachelor employees.   The wide verandas are screened and tables here are reserved for the bachelor girls, and for the men who wear coats at meal time.  Inside the employees may eat in their shirt sleeves.  The meals cost thirty cents each and are paid for by coupons that come fifty to the book.  These books cost $15, and the amount is deducted from the employee's salary at the end of the month, so that no cash is handled at the hotels, except from nonemployees, who must pay fifty cents for a meal.

The fare could not be duplicated in the United States for seventy-five cents a meal.   A typical thirty-cent menu includes soup, two kinds of meat, four kinds of vegetables, hot rolls or light bread, a salad, tea, coffee, or cocoa, and for dessert, ice cream or pie.  On every table are fruit, olives, preserves, condiments—and for several years in the early stages, an open bowl of quinine as a malarial antidote.  To even up with the free goods given to married employees, the Commission furnishes the hotels their stoves, furniture and fuel and does not include these items in figuring the cost of operation.

The hotels for the gold employees usually have been operated at a slight loss, while the European laborers' messes and the colored laborers' kitchens have shown a profit.  At the messes for the Europeans, principally Spaniards and Italians, the cost of three meals is forty cents, while the kitchens where the West Indian laborers get their food cooked, to take away and eat, the cost is thirty cents for three meals.  The food is always wholesome and plentiful and the tastes of the various nationalities are studied to give them that to which they are accustomed.   The West Indians consume more than 100 tons of rice monthly, the Italians want macaroni, and the Spaniards eat vast quantities of bread.

Stewards at the hotels for the gold employees found that each man averaged only two meals a day.  The saving to an employee by cutting out one meal is $9 a month.  They substitute fruit, or a sandwich from the clubhouse, for the third meal and in the two they do eat, stow away enough to satisfy their needs.   Three meals a day at thirty cents each would cost $27 a month.  Two meals a day, or sixty for the month, cost $18.  Some of the employees cut out breakfast and some lunch, sot the stewards prepare food for an average of two meals per employee.

The Tivoli Hotel at Ancon, on the Pacific side, is the tourist hotel operated by the Commission.  Its rates, American plan, are $5.50 a day and up.  During the dry season it is crowded with guests, in 1912 about 14,000 tourists having visited the Canal Zone.  There are 218 rooms and a dining room that will seat 750 persons.  An addition was finished in 1912 at a cost of $57,000.   At Colon, on the Atlantic side the Commission is building the Washington Hotel, to cost $500,000, for the use of visitors to the Canal Zone.

In 1911, the hotels for American employees showed a loss of $20,905.44; European messes, a profit of $39,236.63; colored laborers' kitchens, a profit of $14,461.95; and the Tivoli Hotel, a profit of $26,227.05.

Still another factor that makes living in the Canal Zone cheaper than in the United States is the result of the climate.  With a uniformly warm temperature, the quality of clothes does not vary the year round.  For the women, light summery goods, largely white; for the men, duck or linen suits or light staple cloths.  The saving from not having to buy new clothes with the change of seasons is important, and the employees generally try to arrange their vacations so as to be in the United States in mild weather.  Class distinctions are drawn rigidly, so that there is not a furious competition in dressing or keeping up appearances, but there decidedly is no "slouch" in the Canal Zone.

A bride starts out life there on a basis that means a rude jolt to her when the canal is finished and she returns to the United States.  Young couples who have been treading the easy path of high salary, free rent, free water, light and fuel, cheaper food, clothes and furniture, elastic class distinctions and plentiful though not efficient servants, must every look back upon their Canal Zone experience as the particularly bright period in their careers.  The withering blasts of social competition, high cost of living, and salaries from one to two thirds lower in the United States, will make the easy-going, over-generous life at Panama seem the "temps de luxe" in their lives.

Transient writers visiting the canal dilate on the happy demeanor of the employees.  A perusal of the foregoing conditions of employment would suggest that a good many million dollars of government money have been spent to buy that joyousness.  The employees have a very happy time at the expense of the American people, yet it has been a better way of investing money than maintaining useless navy yards, or $100,000 Federal buildings at Western prairie hamlets?