to California in 49 and the lack of a safe and rapid means of transit across the Isthmus, about which much complaint was made at the time, induced a group of American capitalists to interest themselves in the project. In this year a company was formed by William H. Aspinwall, John L. Stephens and Henry Chauncy of New York City under the name of the Panama Railroad Company. This company secured a concession from the Republic of New Granada giving it the exclusive privilege of constructing a railroad on the Isthmus in which was incorporated a provision that no negotiations looking to the building and operation of a ship canal could be concluded without the consent of the railroad. The concession was made for a period of forty-nine years dating from the completion of the road. The time given for completion was six years from the date of signing the contract In 1867 when the name of the Republic of New Granada was changed to that of Colombia the concession was extended for a period of ninety-nine years, thus making the entire term of the grant 118 years from the date of completion. At the expiration of this time, the concession provided that the railroad and appurtenances should be turned over to the Colombian Government in fee simple, with no rights for ceding or selling to any foreigu govern

ment.

When the French canal company sought from the Colombian Government a concession to construct.a canal across the Isthmus, it found that the consent of the Panama Railroad was necessary, and after some negotiations concluded to buy the railroad, and in that way to secure the advantage of its concession, rather than to undertake to purchase its consent, which would have to be approved by the Colombian authorities. After repeated efforts they finally, in August 1881, secured possession of sixty-eight seventieths of the stock, paying $250 per share, and in addition permitted the American stockholders to strip the company of all the cash and: accumulated sur

plus, so that the actual amount received by the American shareholders was about $291 per share for stock the commercial value of which at that time was only a little above par. When the United States bought the property of the French canal company, among its assets were the sixtyeight seventieths of the stock of the Panama Railroad.

Road Pays $250,000 Indemnity Yearly.

The railroad has been bonded for various amounts since 1851. In 1897 however, all bonds were retired and a new issue of 4,000 first mortgage 4 1/2 per cent. twenty year gold bonds of $1,000 each was made. Of these bonds 3,374 were sold and 626 were retained in the treasury of the company. At the time the property was acquired by the United States Government 1,002 of the outstanding bonds had been redeemed.

Under the terms of the concession the railroad was compelled to pay to the Colombian Government an annual indemnity of $250,000. The railroad therefore, has not only been required to pay from its earnings interest on its bonded indebtedness, and its operating expenses, but also the annual indemnity of more than $5,000 per mile. In 1880 the railroad company at the request of the Colombian Government converted this indemnity into bonds for a period of twenty-seven and one-half years. These bonds were afterwards sold by the Colombian Government to private capitalists, so that this indemuity is now being, and will continue to be until 1908, paid to the purIchasers of these bonds. After that, or in 1913 as the treaty under which the canal is being constructed stipulates, that amount will be paid by the United States Government to the Republic of Panama.

In preparing for the work, the company engaged the services of two eminent American engineers, George H. Totten and John C. Trautwine, both of whom had been previously employed on important engineering undertakings

Road Pays $250,000 Indemnity Yearly.

139

both at home and abroad. One of these was the construction of a canal from Cartagena to the Magdalena River in Colombia by which they acquired some knowledge of the Spanish language, and an insight into the manner of working the native laborers.

Active work on the road began in the fall of 1849. The first three months were devoted to establishing a depot at Gorgona for material and supplies, it having been the original intention to build the section of the road from Gorgona to Panama first. This plan necessitated the transfer of all material from ocean steamers to smaller crafts and the voyaging of the latter around Point Toro to the mouth of the Chagres and up this stream to Gorgona. So many difficulties at once developed to this method that it was shortly abandoned and Aspinwall (1) made the northern terminus of the line.

One Way of Getting a Job.

The laborers employed in the construction of the road came from every part of the world. There were natives, East Indians, West Indians, Chinese, Europeans and Americans, as motley a crowd as ever assembled under the sun. The trial given the Chinese proved a

dismal failure.

One of the leading spirits of the time was James L. Baldwin, a civil engineer to whom, by common consent, the early completion of the road was largely due. Baldwin was a good judge of men, and he knew as if by intuition just what he could do with the worse than Falstaffian mob with which he was surrounded. His tact was seconded by an off-hand manner of utter fearlessness and personal daring.

One day he had a difficulty at Frijoles with an immense Irishman whom he had previously placed in charge Named after W. H. Aspinwall,

(1). Former name of Colon. one of the founders of the P. R. R.

PANAMA.

Bill Posting.

EMPIRE.

COLON.

Bulletins.

S. T. JONES

Distributing. Siqús. Tacking. Commercial Sign Painting.

NO, 61, FIFTH STREET, PANAMA.

the

of that station in which language frequently and painfully free was used. The subordinate was well skilled in art of self-defence and was always ready to come to the scratch. The irate chief though headstrong had reached the years of discretion, and the matter passed up for the time being.

Baldwin went to Colon the morning following to inspect a detachment of employes newly arrived. His quick eye picked out a man of a thick-set stature, dark complexion and bull-dog look, and calling him before him this dialogue ensued:-

Can you read and write?

I can.

Do you want a good easy job with good pay?
I do.

Have you ever been in a prize fight?

One, or two.

Were you whipped?

Not much.