Chapter XXI
The Canal Under Wallace


When one comes to write the story of a great project successfully carried to completion there is temptation to pass by that era of unsightly chaos which marks the laying of the foundations and to begin with the completed undertaking and the days when it began to take shape.

And so it has been with every historian of the Panama Canal. The administration of John F Wallace is passed over lightly, and that of John F. Stevens is given but little more attention.  And yet the work that was done by these men was so essential to the ultimate success of the canal, and the steps then taken so illuminative of what was required for the triumph of the American canal diggers, that he who would know and appreciate the full story of the construction of the big waterway must go back further than the Goethals administration.

It was on the morning of the 4th of May, 1904, that, the formalities of the sale of the French property to the United States having been perfected, Lieutenant Mark Brooke, of the United States Army, took possession of this property.  There was comparatively little ceremony about it, but the keys were delivered, and immediately the work of getting under way was begun.  The first step was to reengage all the employees of the New Panama Canal Company and continue the work just as it had been going on.   This did not mean a great deal, for the French company was merely keeping enough men at work to justify its title to the concession.

The next step was to begin the work of "unscrambling" the chaotic pile of French property that had been acquired.  From one side of the isthmus to the other there was an almost unbroken row of houses and machinery, material and junk, and to extricate all this and classify it was a task whose proportions were enhanced by the wreck and ruin and tropic growth of some fifteen years.  The railroad was a mere spectre of rust and decay, running through a fifty-mile canyon of tropical jungle.  The rolling stock had degenerated, and even the steamship line had become a byword up and down the Spanish Main.

There were 2,148 French buildings acquired, many of them standing out in the jungle and infested by all sorts of tropical pests.  The force that was to prepare the isthmus for the canal diggers had to occupy thee houses until new ones could be built, and it was nearly impossible to make many of them habitable.

The best machinery and supplies had been gathered into several great parks and storehouses, and the rolling stock in the main had been kept well painted, the same being true of the floating equipment.  It took many weeks to card-index the French equipment so that it could be found when needed, but the results amply justified the trouble.  For whatever the French did on the isthmus was done well.  Tiny Belgian locomotives bustled over the works as if they were fresh from the factory instead of rehabilitated mechanical waifs which had been exposed to the rust and ruin of fifteen rainy seasons.  With a new cab to replace one that had rotted away, with a new pipe here and a new piece of brass there, they hustled around, handling concrete trains as proudly as though they were strong Baldwins drawing the huge dirt trains to the dumps.

What was found to be true of the engines was equally true of the dredges and other floating equipment.  when we compare it with our canal-digging equipment of a quarter of a century ago, it becomes evident that the very latest word in excavating machinery that had been spoken at that time was incorporated in the French equipment at Panama.

Much was said at the time of the acquisition of the property of the new Panama Canal Company to the effect that the United States had paid too much for it.  This statement has been amply disproven by experience and by more recent inventories of what actually was acquired.  To begin with, the profits of the Panama Railroad operations have been large enough to amortize the entire outlay made on its account.  the usable excavations of the French were worth $25,000,000; maps, drawings, and records, $2,000,000; lands, Pacific ship channel, and roads, $1,750,000; and the Panama Railroad, upward of $9,500,000.  According to a careful estimate in 1911, the total value of the property amounted to nearly $43,000,000.

The first Isthmian Canal Commission appointed for the building of the canal, in accordance with the terms of the Spooner law, under which the waterway has been built, was composed of Rear Admiral John G. Walker, Major General George W. Davis, William Barclay Parsons, William H. Burr, Benjamin M. Harrod, Carl E. Grunsky and Frank J. Hecker.  In appointing them President Roosevelt declared that "What this nation will insist upon is that results be achieved."

The commission arrived on the isthmus on April 5, 1904, and after three weeks of study of the problems to be met, decided that they needed more information than the French records disclosed.  So they returned to the States and began to organize surveying parties.   Meanwhile Major William C. Gorgas, fresh from his sanitation successes in Cuba, after accompanying the Commission to the isthmus, at the direction of President Roosevelt, was engaged in drafting the plans of the sanitary campaign that was to clean up the isthmus and make it habitable for the canal-digging army soon to invade that territory.

When the surveying parties returned to the isthmus they had to go out into the jungle, and supplies were so scarce that they were compelled to live almost like aborigines.  The only way they could get fresh meat was to kill monkeys, and some of them declared that the outlines of a skinned monkey so closely resembled those of a baby that monkey meat did not make a very delectable dish.

Major General Davis and Colonel Gorgas returned to the isthmus with the surveying parties, and the former set out to organize the civil government of the Canal Zone.  He first issued a proclamation announcing his assumption of the Governorship of the Canal Zone, and then negotiated an agreement with the Panamanian Government concerning the relations that would have to exist between them.  He then created the Sanitary Department and set Colonel Gorgas to work carrying out his plans.

John Findley Wallace was elected chief engineer of the canal, May 6, and assumed the duties of the office June 1, 1904.  He arrived on the isthmus the last of that month.   His first undertaking was to get the equipment already on the isthmus into shape.   The insistent demand that the chief engineer "make the dirt fly" was heard by him and heeded, and by equipping the machine ships he was able to repair about five or six of the French locomotives a month and about a hundred French dump cars, sending them to Culebra Cut at once.  It was his intention also to install a new American steam shovel, with its equipment of three locomotives and a hundred big cars, every week.

But it was not long until Mr. Wallace was a cross purposes with his commission.  With an auditing system in Washington that made it next to impossible to get action, he found himself so handicapped that it was but natural that he should have become impatient.   Up to August `, `904, Major General Davis was the managing representative of the Commission on the isthmus, and Mr. Wallace was under his immediate direction.  At that date General Davis was relieved of the duties of managing director, and the chief engineer was directed to report to and receive orders from the Chairman of the Commission.   Something of the feeling that existed between Wallace and the Commission crops out in the annual report of the Commission for 1904, in which it was somewhat sarcastically stated that "while the orders give the chief engineer entire independence as respecting the resident member of the Commission, he is required to furnish the said member with copies of his reports to the chairman.  Up to the present time, October 1, no such such reports have been received, but this circumstance is perhaps due to the fact that Mr. Wallace has been absent from the isthmus since Sept. 14th."

Under the cumbersome administrative machinery then provided, coupled with the internal dissentions of the Commission, Mr. Wallace and Colonel Gorgas were in the plight of the little girl who obtained her mother's consent to go in to swim, but who was, in the same breath, forbidden to go near the water.  They were authorized to clean up the Canal Zone and Panama and Colon, and to construct the necessary waterworks and sewers in the terminal cities, but delay and red tape met them at every turn.  They might have had the water turned on in Panama six months sooner if they had been given proper support.   Colonel Gorgas begged for screen wire to shut out the mosquitoes, but he might as well have kept silent.  In disgust Wallace declared that red tape was "system gone to seed."  He said a child could break a single hemp fiber, that many strands woven together would hold in leash the biggest ship that floats; and that by the same token enough red tape could prevent the building of the Panama Canal.  He concluded that it would take infinitely longer to build a lock canal under such a system than to build a sea-level canal under contract.

Under these conditions, the situation on the isthmus was most unsatisfactory during the latter part of 1904.  There were no acceptable quarters, no suitable food supplies, and no attempt to make conditions attractive.  But for the high wages the white employees would have left.

At this juncture Mr. Wallace visited Washington.  The result of his visit was that the Commission was asked to resign and a new one was appointed.  President Roosevelt called the attention of Congress to the fact that building a canal with a seven-member commission was a failure and asked that it be reduced to five, or, preferably, to three.   The House granted his request, but the Senate ignored it.

The result was that Mr. Roosevelt decided to take one of his famous short cuts around a legislative obstacle.  He created an executive committee of three members of the second commission, with powers almost coextensive with those of the entire body -- the other members having few other duties than to agree to what the executive committee did.   The Commission 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 M. Harrod.  At the same time the Panama Railroad was reorganized, and placed under the virtual control of the chief engineer.   Under the new arrangement Mr Wallace seemed to have obtained all the authority he needed.  He returned to the isthmus, content with the revised organization, arriving there June 2.  An epidemic of yellow fever was raging, and the wife of his secretary had died.  Six days later he cabled for permission to return to the States.   Governor Magoon, it is said, privately cabled to Secretary Taft that Mr. Wallace thought he had a slight attack of yellow fever, and that this, coupled with the prospect of a better salary, was responsible for his desire to return home.  Secretary Taft granted his request.  Mr. Wallace prepared to leave, and when the canal force learned what was transpiring a rush for shipboard followed.  It looked as if nothing could prevent a yellow fever panic.

When Mr. Wallace told Secretary Taft of his disgust with red tape, of his promise to his family to consider well before accepting a permanent residence on the isthmus, and of his prospective employment in a better-paying position, Mr. Taft was furious.  He ordered Mr. Wallace to present his resignation at once, and it was immediately accepted.  In a later chapter of this work the reader will find Mr. Wallace's own story of his experience on the canal.

It seems, at this distance, and with Mr. Wallace's statement to a congressional committee before us, that the conditions that led up to his resignation were cumulative.  That he was afraid of yellow fever, as was his family, he himself admitted.  That he was disgusted with red tape hindrances he frequently declared, both before and after his resignation; that he found a better engagement in New York an attraction under these conditions needs only to be stated to be believed.  But it is probable that greater than all these reasons was his conclusion that service under Chairman Shonts, to whom the President had promised a "free rein," would not be conducive to success.

The retirement of Mr. Wallace was a blow to the work,, undeniably.  It came at a critical time in the history of the canal; and it came in a way that demoralized the force on the isthmus and shook public confidence at home.  But it was, under the circumstances, the natural result of trying to execute a complex undertaking under a mistaken plan of divided authority.

It may be best to take the estimate of the situation that confronted both Wallace and Stevens, as expressed by their successor, Colonel Goethals.  "I think," said he, "tat either of these engineers might have built the canal had he been given a free rein.  They had been engaged in a field where all that was asked of them was results.  They laid out their plans, submitted them to their boards of directors, with accompanying estimates of cost, and then were told to go ahead.  They went ahead, responsible only for the final result, and that result was satisfactory.  They never knew anything of the irksomeness of red tape, had no patience with interference by the Commission and by the Government  They were men whose whole training had fitted them for exercising a 'free rein' and had unfitted them for the hampering restrictions of red tape.

"Army men are familiar from their youth with other conditions  They know that it is their duty to adjust themselves to the doing of things in the way their Government directs, and it is their acquiescence that makes possible successful work by them.   That is why the army succeeded."

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from:  The History of the Panama Canal
by Ira E. Bennett, 1915

CZBrats

March 24, 1999
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