10 REPORT OF THE PANAMA RAILROAD COMPANY.

hereafter extended to all products of Panamanian origin, whether
natural or manufactured.

It is expected that the company’s new coal-handling plant at Cr isto-
bal, already referred to as being 75 per cent completed, will be finished
| before the end of 1906; and will provide for such discharge of colliers
employed to tr ansport coal to the Isthmus for Commission and rail-
road consumption as will effect a material reduction in cost of fuel
delivered at the Isthmus, and will permit of the necessary accumula-
tion of a stock on hand, which, because of rapid consumption, the old
method of handling has not allowed.

_ In view of the common ownership by the United States Government
of the property of the Isthmian Canal Commission and of the Panama
Railroad Company, it has been arranged, by mutual agreements
between them, so that each performs work for the other at exact cost,

plus a reasonable profit for handling, depreciation, etc. In line with
this practice the products of the electric light and ice plants of the
company have been sold to the Commission and the employ ees of the
Commission and of the railroad company at a slight increase over
cost.

The company’s water plant at Colon has been turned over to the
Commission to operate in connection with the large new plant recently
installed by the latter on the Isthmus, in return for which it is arranged
that the railroad company is to be supplied its requirements of water
at a reasonable price.

Large new machine shops at Cristobal, constructed by the Isthmian
‘Canal Commission, have been turned over to the railroad company,
under lease, to maintain and operate at an annual rental of 4 per cent
upon the cost of construction.

The facilities of the railroad company are very materially increased
in efficiency by these transfers. |

I can, perhaps, best illustrate the conditions which previously existed
and the obstacles which were met and overcome by the company’s offi-
cials during the past fiscal year by quoting liberally from a letter re-
cently received from Vice-President Stevens on the subject in which,
referring to the physical status of the railroad company’s plant on the
Isthmus at the close of the preceding fiscal year, be says:

The Panama Railroad Company had practically nothing more than a right of way
with a fair roadbed which had, however, already proven unequal to the heavy traffic
it was called upon to bear.

Its rolling stock was limited in quantity, small in capacity, and of antiquated type
and entirely unsuited to the demands put uponit. It had not the requisite sidings *
either for handling through or local business, and those that were in existence were
at the end of their lives and had to be rebuilt.

From Colon to Panama there was not a single station building which was adequate
to the requirements of the service, and not to exceed two telegraph operators between
terminals, with no telegraph lines over which a train order could be sent with any

certainty that it would reach destination inside of twenty-four hours.

Its ocean terminals were neither commodious, well arranged, nor had they been
maintained in a sate condition.

The personnel of the road, while in the main consisting of well-meaning parties,
had grown up under conditions which, instead of inducing deyeTopmecnay and progress
had practically kept it at a standstill for years.

The throwing upon the road of the immense amount of back business which resulted
from the occupancy of the Zone by the United States and the commencement of the
work of preparation for building the Panama Canal made the railroad proposition
an almost impossible and disheartening one from the start,.it being necessary in every
department, without one single exception, to build from the eround up to get the

property in shape, while handling not only the current affairs, but disposing of the
vast amount of business which had been delayed, owing to various causes, for months.