Responsi-
bility for.
Loss on
Account of
-Stranding
of “Elis-
-abeth.”

Armament

26 PANAMA RAIL ROAD COMPANY.

The Dutch steamer ‘Elisabeth,’ one of the vessels allocated to our
service by the War Department under the exchange of ‘equivalent ton-
nage’’ hereinabove described ran ashore while enroute to the Isthmus at
9:50 P. M. on March 6th last off New Inlet, N. C. The ship was manned
and operated by and for account of her owners with responsibility attach-
ing to this Company only to the extent of furnishing her with necessary
coal, water and sailing directions to her Commander. ‘The accident was
inexcusable and involved a very heavy loss for the commercial consignors
of her cargo and for the Panama Canal and Rail Road whose shipments
were as customary not insured. ‘The grounding was of so serious a char-
acter that it became necessary in order to save the ship and any balance
of her load, to jettison a large quantity of her valuable cargo, but little
of which was subsequently salved and disposed of at public sale. A
General Average was resorted to to protect all interests involved: A tenta-
tive claim has been made against this Company for the very important
proportion of loss attributed under the Generali Average ‘‘to the ship.”
Liability for that claim is emphatically denied by this Company and
reference to the incident is made here only to intimate the possibility of
litigation resulting from our attitude.

The aggregate expense of arming and equipping several ships of our

_and Armed fleet referred to in last year’s report amounted to $292,388.52. The sign-

Guard.

Panama-
Saratoga
Claim.

- Bunker
Coal. —

Passenger
Traffic.

ing of the Armistice effective Nov. 11th, 1918, made it unnecessary to
similarly arm and equip our remaining ships and justified the removal of
the guns, foundations and armed guards from those already so provided
at a moderate expense; the total outlay involved may be regarded as war
risk insurance.

Negotiations for the settlement of the War Department’s claim for
upwards of $279,000 for the sinking of the U.S. A. T. “Saratoga” by our
S. S. “Panama” were continued and satisfactorily concluded during the
calendar year by a compromise settlement of the total claim on payment
of $212,500 by this Company.

After the temporary bunkering of our steamers at the Isthmus was dis-
continued we arranged to procure coal at New York through the American
Steamship Asscciation, an organization formed in New York Harbor
jointly with the Fuel Administration by the United States Shipping
Board, until later an opportunity arising we, with the approval of our
Owners, contracted on February 5th, 1919 with the Rockhill Coal & Iron
Company for our requirements during the ensuing twelve months at
$6.15 f. a. s. per ton.

Effort to effect settlement of a claim for $31,500 by an earlier contractor
based on an order of the Fuel Administrator exceptionally allowing addi-)
tional compensation for specially mined coal from a newly developed
deposit in Pennsylvania, were concluded by the payment of $17,000 by
this Company.

A large number of Panama Canal and Rail Road employees on the
Isthmus postponed availing of their vacation privileges until the cessation
of the German submarine menace, and their privileges thus lapsed until
the early part of 1919 by which time the large number entitled to trans-
portation to the United States exceeded the total capacity of our steamers
by some 350 a month, to provide for which an arrangement was entered
into with the United Fruit Company at a 25% reduction only from their
passenger tariff rates to reserve the full capacity of certain of their steamers
to be diverted to the Isthmus for the transportation between Cristobal