Senator MORGAN. Can you give the committee an idea of the situation of that canal at the time this property and this Zone were turned over to the possession of the United States-the situation in which the French left the canal?

Mr. WALLACE. As far as the situation was concerned, it was simply that it was a jungle.

Senator MORGAN. Chaos.

Mr. WALLACE. Just simply chaos from one end of the Isthmus to the other, and grown up with a jungle, except the small amount of work on which four or five hundred men were employed at Culebra, and they were doing all their work there by hand.

Senator MORGAN. They did not even have any of these little French scoops or shovels?

Mr. WALLACE. No; they were doing their work entirely by hand. Senator MORGAN. Entirely by hand?

Mr. WALLACE. Yes; hand drilling and everything else.

Senator MORGAN. How many hundred years would it have taken them to have completed that canal with the force that they had on hand then, working by hand?

Mr. WALLACE. Oh, I suppose from two to three hundred.
Senator MORGAN. From two to three hundred years?

Mr. WALLACE. Yes, sir.

Senator MORGAN. I do not suppose that you consider that the work that they were doing there was being done with an earnest effort to complete the canal, or with an expectation that it could be completed at that rate of work?

Mr. WALLACE. Oh, no; that was utterly impossible. It seemed more like a case of their simply spending the least possible amount of money in order to retain possession of the franchise. That was the

way that it impressed me.

Senator MORGAN. They were working just enough to keep Colombia from forfeiting the franchise?

Mr. WALLACE. That is the way it impressed me; yes.

Senator MORGAN. As to the machinery that you found there in the jungle and about in different places along the railroad track and along the canal work, what condition was that in?

Mr. WALLACE. The machinery that had not been issued to contractors, but was housed, was in first-rate condition. The machinery that had been issued to contractors and had been put in use was scattered in a heterogeneous mass all over that canal, and was out in the jungle, and was just as they had left it at the time they went into liquidation.

Senator MORGAN. There is a good deal of it that has not been discovered yet, is there not?

Mr. WALLACE. I presume there is.

Senator MORGAN. Is it not a fact that when they want to get certain descriptions of machinery down there that they are not immediately supplied with, they go out into the jungle and hunt it up?

Mr. WALLACE. Oh, that is frequently the case; yes, sir.

Senator MORGAN. That was frequently the case?

Mr. WALLACE. Yes.

Senator MORGAN. Like a man hunting a venison down with a pack

of dogs?

Mr. WALLACE. Yes; they had a complete record of everything they had on hand.

Senator MORGAN. They had it on paper?

Mr. WALLACE. It was all on paper; yes.

But the material in their

Senator MORGAN. But it was out in the woods? Mr. WALLACE. It was out in the woods. storehouses was admirably arranged and was well taken care of. Senator MORGAN. The part of it that was under the control of the railway was pretty well managed, was it not?

Mr. WALLACE. Yes. While I think the railroad's policy was radically wrong, the carrying out of that policy, as far as the maintenance and operation of the railroad on the Isthmus was concerned, was admirably done. That is, Colonel Shaler, the general superintendent, and Mr. Prescott, the assistant superintendent, and the staff under them did the very best they could with the facilities they had at hand.

Senator MORGAN. Now, Mr. Wallace, at the time this first commission of construction, the Walker commission, took charge there, was it possible to prepare that commission for proper work such as the American Government expects to do inside of a period of two years?

Mr. WALLACE. In my first conference with the commission after I was appointed chief engineer I asked for two years in which to make preparatory arrangements; and I thought then, and I think now, that two years was little enough.

Senator MORGAN. It has proved to be too little, has it not?
Mr. WALLACE. Yes.

Senator MORGAN. Very much too little?

Mr. WALLACE. Yes; little enough to get things together and build up an organization and get a good start at the real work in a real way. Senator MORGAN. Under both Davis and Magoon, and also under Shonts, have not the officers of the Government who have been on the Isthmus, practically engaged in the work there, employed all possible diligence, in your opinion, to clean up this mass of waste and chapparal, or whatever it is? Have not these officers, all that have been there, dutifully employed themselves in strenuous efforts to accomplish this task of cleaning up?

Mr. WALLACE. I think they have; but, of course, since I left there. the only means I have of judging is what I have seen in the newspapers, and what I have seen in the testimony before this committee.

Senator MORGAN. Leaving out of view, now, all the reports, was it your observation, as long as you stayed on the Isthmus there, that both the Commissions, the first one and the second one, did, through the men who remained on the Isthmus and devoted themselves to work, all that could practically be done in cleaning up and making preparation far the real work of digging the canal?

Mr. WALLACE. I think so; yes.

Senator MORGAN. You know of no criticism upon their operations that would show any suspicion of delinquency on the part of any of them?

Mr. WALLACE. From such knowledge as I have I do not know of any; no.

Senator MORGAN. When the new organization took place, and its labors were divided up in the manner in which you have indicated, and which is shown upon these records, was there any additional spur put into the work greater than had been employed before under the first

Walker Commission? Was there any greater success in the operations after the new Commission got in than there was before, during the time that you remained there?

Mr. WALLACE. Well, the furnishing of materials was slightly expedited, and I looked upon the new organization as an improvement of the old organization.

Senator MORGAN. As an organization?

Mr. WALLACE. As an organization.

Senator MORGAN. I am speaking of the execution of it.

Mr. WALLACE. The time was so short and was so interlaced with what had been done before that it would be a very difficult matter to tell.

Senator MORGAN. Did you have to undo anything, or anything of importance, that the first Commission had done?

Mr. WALLACE. Nothing of any importance. The work was in expediting the getting of material down there and things of that sort. Senator MORGAN. Yes. Did that first Commission do any work or have any work done there that had to be thrown away?

Mr. WALLACE. Not an item that I know of.

Senator MORGAN. Not an item that you know of?

Mr. WALLACE. No, sir.

Senator MORGAN. There is some story going around that in your work there as chief engineer you had fixed your dumps at places where they would hereafter have to be removed. Is that true?

Mr. WALLACE. That is not true, and Mr. Stevens, the present chief engineer, in his examination went on record as saying that it is not true.

Senator MORGAN. So that no work has been done in vain there, so far as you know?

Mr. WALLACE. Not a dollar's worth, as far as I know.

Senator MORGAN. And, so far as you know, an observance of duty and diligence and earnest interest in the work have been manifested and exhibited by all who were concerned in that work in the higher ranks of office?

Mr. WALLACE. I think so.

Senator MORGAN. In the new organization there appear here to have been a great many appointments made. They were made by the heads of these departments into which the work was divided. There was one grand division in the separation into departments; one consisted of four engineers and the other consisted of three men, who formed an executive committee. The four engineers appear to have had charge of all the subjects connected with engineering proper and the conduct of the engineering work. Is that right?

Mr. WALLACE. No, sir; they were not supposed to have any direction, up to the time that I left, over the engineering work on the Isthmus.

Senator MORGAN. Who had it?

Mr. WALLACE. That is, I mean except so far as their votes went at the quarterly meetings of the Commission on such questions as might be submitted to them by the executive committee.

Senator MORGAN. By the executive committee?

Mr. WALLACE. By the executive committee; yes, sir.

Senator MORGAN. So that engineering work had first to undergo the approval of the executive committee?

Mr. WALLACE. Yes, sir.

Senator MORGAN. And then that had to undergo the criticism and approval or disapproval of the quarterly meetings of the full board? Mr. WALLACE. Yes; that is the way I understand it.

Senator MORGAN. During that period and up to the date of and more particularly after the reorganization there was. this very long list of appointments to office?

Mr. WALLACE. Yes, sir.

Senator MORGAN. These men that were appointed assembled there on the Isthmus?

Mr. WALLACE. I only know of those in whose appointment I was instrumental.

Senator MORGAN. Yes.

Mr. WALLACE. I do not know anything about anything that has occurred since I left there.

Senator MORGAN. I know; not since you left there, but while you were there, these men were assembling to fill the places given them under each of these chiefs of departments?

Mr. WALLACE. Yes, sir.

Senator MORGAN. Corresponding in some sense to the heads of departments here in the Government?

Mr. WALLACE. Yes, sir.

Senator MORGAN. The appointments were made by the heads of the departments?

Mr. WALLACE. Yes, sir.

Senator MORGAN. But the Commission, as a body, had the right to overrule and strike out any that they did not approve of. They ratified and confirmed them, every one of them, by resolution?

Mr. WALLACE. Yes, sir.

Senator MORGAN. With perhaps one or two exceptions. Did not that produce a very sudden and great influx of gold men upon the Isthmus?

Mr. WALLACE. The increase in the gold men, I think, was more rapid after the 1st of April than it was before. I have not at hand the list, but there are records that show exactly how many came down each month.

Senator MORGAN. And they came down there without any preparation of an important character having been made for their accommodation in the way of houses?

Mr. WALLACE. No, sir. I never saw any white men that came to the Isthmus at the time I was there that were not just as well or better provided for than they would have been if they had gone out on a piece of railroad work in the United States. Of course this was true: There were not buildings or accommodations enough to take care of the men the way the men would like to be taken care of that intended to bring their families and stay ten years on a piece of work—that is very true; but the men that came down there were comfortably housed, and while they had to put up with some inconvenience, as I said before, the inconveniences were not as great as they would have had to put up with if they had gone out into Iowa or Illinois on the construction of a new railroad line in this country.

Senator MORGAN. Those accommodations had been provided for them by the repair of houses and the building of houses by the first Walker commission?

Mr. WALLACE. Yes, sir.

Senator MORGAN. They had made all that preliminary preparation? Mr. WALLACE. Yes, sir; and we had built two hotels. I do not think any large hotels have been built since. I have not heard of any. But at the time I left there the large hotel at Corozal and the large hotel at Culebra were in actual service.

Senator MORGAN. Yes.

Mr. WALLACE. And other buildings were being put up just as fast as the material could arrive on the Isthmus to put them up. My recollection is that we had a force of about 1,700 or 1,800 men whose sole duty was the repair and erection of houses for the rest of the men to live in.

Senator MORGAN. There was also a very rapid influx of labor into the Zone?

Mr. WALLACE. It has been increasing right along. From the 1st of July, 1904, until the 1st of July, 1905, my recollection is that between 9,000 and 10,000 men arrived on the Isthmus.

Senator MORGAN. Silver men?

Mr. WALLACE. Silver and gold, altogether.

Senator MORGAN. So that influx was comparatively very rapid? Mr. WALLACE. Some of them returned. I do not remember how many were actually on the rolls.

Senator MORGAN. Of course, providing food and quarters for those men was an embarrassing and difficult proposition?

Mr. WALLACE. It was.

Senator MORGAN. In the meantime, what interest had the first Walker commission bestowed upon sanitation? Had they been very active in trying to provide for the santitation of the Isthmus?

Mr. WALLACE. The sanitation of the Isthmus was put under the control of Colonel Gorgas, and that went on, I understand, in a continuous manner from the time I went down there in June, 1904-we went down on the same boat together-up to the time that I left there. He was going right along with his organization regularly, and he had an organization of his own engaged in draining the swamps and in various sanitary operations.

Senator MORGAN. Had the first Walker commission participated in the preparations necessary for the sanitation of the Isthmus?

Mr. WALLACE. That was the source of authority-the first Walker Commission-up to the 1st of April.

Senator MORGAN. That was the first great point to be attained?
Mr. WALLACE. Yes, sir.

Senator MORGAN. To produce a reasonable degree of health in the Isthmus?

Mr. WALLACE. Yes, sir.

Senator MORGAN. Who was present besides the Commission in the planning of this reorganization?

Mr. WALLACE. The railroad organization?

Senator MORGAN. I mean the reorganization of the railroad and the canal.

Mr. WALLACE. I only recollect one conversation in regard to the organization of the railroad, and the Secretary and Mr. Shonts and Mr. Magoon and myself had that conference.

Senator MORGAN. That was after you were made a Commissioner? Mr. WALLACE. That was after I was made a Commissioner.