Front Cover
 Title Page
 Table of Contents
 Section I: Canal operation and...
 Section II: Business operation...
 Section III: Government
 Section IV: Administration
 Section V: Financial and statistical...
 Back Cover

Title: Annual report of the Governor of the Panama Canal for the fiscal year ended ..
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00097365/00011
 Material Information
Title: Annual report of the Governor of the Panama Canal for the fiscal year ended ..
Alternate Title: Report of Governor of the Panama Canal
Physical Description: 36 v. : ill. ; 23 cm.
Language: English
Creator: Canal Zone -- Office of the Governor
Publisher: U.S. G.P.O.
Place of Publication: Washington
Publication Date: 1926
Frequency: annual
Subject: Politics and government -- Periodicals -- Canal Zone   ( lcsh )
Genre: federal government publication   ( marcgt )
Spatial Coverage: Panama
Dates or Sequential Designation: June 30, 1915-June 30, 1951.
Numbering Peculiarities: Report year ends June 30.
General Note: Some vols. issued in the congressional series as House document.
General Note: Reports for 1914/15-1915/16 each accompanied by portfolio of maps and diagrams.
 Record Information
Bibliographic ID: UF00097365
Volume ID: VID00011
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 02454300
lccn - 15026761
oclc - 2454300
 Related Items
Preceded by: Annual report of the Isthmian Canal Commission for the year ending ...
Succeeded by: Annual reports of the Panama Canal Company and the Canal Zone Government for the fiscal year ended ...


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Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Title Page
        Page i
        Page ii
    Table of Contents
        Page iii
        Page iv
        Page v
        Page vi
        Page vii
        Page viii
        Page 1
        Page 2
        Page 3
        Page 4
    Section I: Canal operation and trade via Panama
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
    Section II: Business operations
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
    Section III: Government
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
    Section IV: Administration
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
        Page 62a
        Page 62b
        Page 62c
        Page 62d
        Page 62e
        Page 62f
        Page 62g
        Page 62h
    Section V: Financial and statistical statements
        Page 63
        Page 64
        Page 65
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
        Page 76
        Page 77
        Page 78
        Page 79
        Page 80
        Page 81
        Page 82
        Page 83
        Page 84
        Page 85
        Page 86
        Page 87
        Page 88
        Page 89
        Page 90
        Page 91
        Page 92
        Page 93
        Page 94
        Page 95
        Page 96
        Page 97
        Page 98
        Page 99
        Page 100
        Page 101
        Page 102
        Page 103
        Page 104
        Page 105
        Page 106
        Page 107
        Page 108
        Page 109
        Page 110
        Page 111
        Page 112
        Page 113
        Page 114
        Page 115
        Page 116
        Page 117
        Page 118
        Page 119
        Page 120
        Page 121
        Page 122
    Back Cover
        Page 123
        Page 124
Full Text













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Introduction---------------------- .----------------------------- 1
Operation and maintenance of the canal -----------..------------- I
Business operations.. ----------------------------------------- 2
Administration--Government:- _--_ ----------------------------- 3
Net revenue of the canal and its auxiliaries----------------------- 3
Services rendered by the canal to shipping----------------------- 4


Traffic in 1926.--------------------------------------------------- 5
Proportion of tanker traffic--- ------------------- ---------------- 7
Tanker cargoes---------------------------------------------- 7
Nationality of vessels----------------------------------------- &
Commercial traffic through the canal during the fiscal year 1926,
segregated by flags------------------------------------------ f
Vessels entitled to free transit and launches of less than 20 tons net
measurement-------- ------------------------------------ 9
'Trade routes and cargo 10
Trade routes and cargo------------------------------------- 10
Comparative cargo statistics for past four fiscal years by principal
trade routes through canal ---------------------------------- 11
Principal commodities----------------------------------------- 11
Commodity movement:
Atlantic to Pacific-- ------------------------------------------ 12
Pacific to Atlantic-------------------------------------------- 12
Classification of vessels---------------------------------------- 13
Details of the trade------------------------------------------- 13
Dual measurement system---------------------------------------- 14
Hours of operation..-- ------------------------------------------- 15
Lockages and lock maintenance------------------------------------- 17
Power for canal operAtion---------------------------------------- 18
Water supply----------------------------------------------------- 19
Additional storage at Alhajuela------------------------------------ 20
Seismology-. ----------- ----------------- -------- --------------- 21
Maintenance of channel-------------------------------------------- 21
Slides---.---------------------------------------------------- 22
Improvement projects ------------------------------------------- 23
Aids to navigation------------- --------------------------------- 24
Accidents. . ------------------ 91M 2
Accidents-------------------------------------------------------- 24
Rules and regulations------------------------------------------- 27
Salvage operations------------------------------------------------ 27


Mechanical and marine work ------------------------------ -------- 28
Marine work---------------------------------------------- 29'
Other work----------------------- ----------------------- 29'
Dry docks----------------7------ ---------------.--- 30
Plant-----.----------------------------------------------- 30
Financial------.----------------------------_--------------- 30

6 7/6 7


Coal-------------------------------------------------------- -----... 30
Fuel oil, Diesel oil, gasoline-------------.------------.............--------------... 31
Ship chandlery and other supplies-storehouse operations -- ------------ 32
Native lumber operations---------------------------------------- 33
Harbor terminals--------------------------------------- .-------- 33
Canal Zone for orders-------------- ----------------------------- .. 34
Commissary------------------------------------_ ---------------34
Purchases-----------------------------------------------.. 34
Sales ----------------------------------------------------- 35
H-otels and restaurants----------- ------------------------------- 35
Building construction ------------------------------------- ------ 36
Animal and motor transportation---------- ------------------------ 36
Printing------------------------------------------------- ---- 36
Panama Railroad ----------------------------------------- ----- 37
Telephones----------------------- ------------- --------------- 37
Lands and buildings----------------------------------------------- 38
Alhajuela basin--------------------------------------------- 38
Plant introduction garden and experimental station ----------------- ---39
Quarters--------------------------------------------------------- 39
Clubhouses--- ----------------------------------------- -------40
Farm industries-------------------------------------------------- 40
Operation with Panama Railroad company's funds-------------------- 41
Panama Railroad Steamship Line---------------------------------- 41

Population------------------------------------------------------- 42
Public health------------------ --------------------------------42
Malaria------------------------------------------------------ 42
Canal Zone------------------------------------------------- 43
Panama--------------------------------------- ------------- 43
Colon-------------------- --------------------------------44
Canal hospitals--------------------------------------------- 44
Quarantine Division ---------------------------------------- 44
Municipal engineering ------------------------------ ----------- 45
Water supply------------------------------------------------ 45
Sewers------------------------------------------------------ 46
Roads, streets, and sidewalks-Canal Zone ---------------------- 46
Garbage disposal---------------------------------------------- 46
Cities of Panama and Colon------------------------------------ 46
Army and Navy---------------------------------------------- 46
Miscellaneous----------------------------------------------- 46
Public order-------- ------------------------------------------- 47
Office of the district attorney--------------------------------------- 48
Districtcourt--------------------------------------------------- 48
Marshal----------------------------------------------------- 49
Magistrates' courts----------------------------------------------- -49
Balboa--------------------------------------------------- 49
Cristobal------------------------------------------------- 49
Fire protection--------------- --------------------------------- 49
Public-school system -------------------------------------------- 50
Otis classification test -------------------------------- -------- 51


Postal system-------------------------------------------------.. 51
Customs-----------------------------------------------------....-___- 53
Shipping commissioner-seamen-------- --------------------------- 54
Prohibited aliens------------------------------------------------ 54
Administration of estates--------------------------------------------_____. 54
Licenses and taxes----------------------------------------------____ 55
Immigration visas----------------------------------------------...._-__ 55
Relations with Panama---------------- --------- -----_------------_ 55


Changes in organization and personnel.. ------------_-___.----------------_ 56
Force employed. ---------------------------.---------------------- 56
Wage adjustments:
Gold employees-------------------------------------------- ........... 57
Alien employees on silver roll- --------------------------------- 58
Grievance board ----------------------------------------------- 59
Recruiting and turnover of force------------------------------------ 60
Gold employees-------------------------------------------- 60
Silver employees----------------------------------- --------- 60
Public amusements and recreations----------------------------..... 60
Purchases and sales in the United States.-----------------------------._ 61
Tacna-Arica Plebiscite-----------------------------------------__ ----- 62


For list of tables see------------------------------------____---------------_ 63


FRONTISPIECE: Map of Canal Zone showing Alhajuela basin.
PLATE 1. View from Ancon Hill, March, 1926, showing part of village of Balboa,
with part of shops, docks, and inner harbor, Pacific entrance to
Canal. Administration building in foreground.
2. Stoney gate valve, upstream side, center wall culvert, Miraflores Lock.
Interior view of lock tunnel taken at time of overhaul.
3. Aliraflores power plant. New Diesel electric generating station in
course of erection; estimated cost $290,000.
4. Launching of improved 1,000-yard scow, constructed at Balboa shops
for dredging division. March 15, 1926.
5. Hull of buoy tender (Coco Solo No. 2) 65 feet long by 15 feet 6 inches
beam, built at Balboa shops for lighthouse subdivision, being lowered
into dock by dry-dock crane.
6. New (revised) type-17 cottage erected for housing of American em-
ployees. New Cristobal.
7. New telephone exchange buildrig at Cristubal erected to house auto-
matic equipment installed during fiscal year 1926. Ground floor to
be used for district offices of electrical and municipal engineering



Reports for the fiscal year 1926 have been made as follows and may be con-
sulted at the Washington office of The Panama Canal or at the office of the
Governor, Balboa Heights, Canal Zone:
Engineer of maintenance:
Assistant engineer of maintenance, report of.
Pacific locks, report of superintendent.
Atlantic locks, report of superintendent.
Electrical division, report of electrical engineer.
Municipal engineering division, report of municipal engineer.
Dredging division, report of superintendent.
Office engineer, report of.
Meteorology and hydrography, report of chief hydrographer.
Surveys, report of assistant engineer.
Gatun dam and backfills, report of general foreman.
Marine division, report of superintendent.
Mechanical division, report of superintendent.
Supply department, report of chief quartermaster.
Executive department:
Division of civil affairs, report of chief of division.
Police and fire division, report of chief of division.
Division of schools, report of superintendent of schools.
Bureau of clubs and playgrounds, report of general secretary.
District attorney, report of.
Accounting department, report of the auditor.
Land agent, The Panama Canal and Panama Railroad Co., report of.
Purchasing department, report of the general purchasing officer and chief of
Washington office.

Digiqized by the Internet Archive
in 2010 with funding tom
University ol Florida, George A. Smathers Libraries with ELuppolI from Lyrasis and the Sloan Foundation



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Hours Dec. No. 5011 69tBr Cong.. 2 San.




August 26, 1926.
Washington, D. 0.
SIR: Herewith is the report of the Governor of The Panama Canal
for the fiscal year ended June 30, 1926.
M. L. WALKER, Governor.

Administration of The Panama Canal involves three main elements,
(a) the operation and maintenance of the canal proper, which includes
activities in putting ships through the canal and maintaining the
waterway, (b) operation of auxiliary business enterprises necessary
for shipping and the canal force, such as coal and oil stations, store-
houses for foodstuffs and supplies, including chandlery, marine and
railway repair shops, quarters for the working force, terminal
facilities for transhipment of cargo and passengers, operation of the
Panama Railroad on the isthmus and the Panama Railroad Steam-
ship Line between New York and the isthmus,"and other enterprises
which are commonly conducted by private organizations, and (c)
administration of government for the Canal Zone, populated by
8,000 American civilians, 9,000 Americans in military and naval,
forces, and 20,000 natives and West Indians, in which administra-
tion are embraced education, sanitation and hospital service, post
offices, police and fire protection, customs and quarantine services,
etc. The conduct of these works is under nine major departments
or divisions reporting to the Governor, in whom are centralized
responsibility and control for the entire organization.
The primary function of the canal is the dispatch of vessels through
the waterway with safety and a minimum of delay. No inter-
ruptions to traffic, due to slides or other causes, occurred throughout


the year. Including public vessels of the United States, Panama,
and Colombia, a total of 5,749 sea-going vessels, or an average of
approximately 16 per day throughout the year, passed through the
canal. Of these, 1,786 stopped at the terminal ports for the purpose
of loading and discharging passengers and cargo, for necessary
repairs, or to secure fuel or other necessary supplies.
In the handling of this traffic in the restricted waters of the canal
and the harbors of the two terminal ports, a total of 83 accidents
occurred, the majority being of a trivial nature, and the most serious
of which (other than a fire involving a loss of $29,350, not incidental
to the vessel's transit of the canal) resulted in damages to the vessel
estimated at $19,575.
The scouting fleet and control force of the United States Navy
passed through the canal southbound during February, and returned
northbound in March, making the transit in both directions without
interference to commercial traffic, and without circumstance except
the necessary overtime work incidental thereto on the part of the
operating forces.
The necessary maintenance work and various improvement projects
were carried forward without interruption to commerce.

Commerce requires and has a right to expect at the canal certain
conveniences, such as coaling stations, fuel oil plants, repair shops,
dry docks, adequate terminal facilities for the transshipment of
cargo, storehouses for the purchases of ships' chandlery, and other
essential supplies. Employees must be housed and fed, and assured
of transportation for themselves and families to and from the United
States at reasonable prices. To meet these requirements, the business
enterprises auxiliary to the canal were established. Some of them-
for instance the coaling plants, the commissaries, and the steamship
line-are operated by the Panama Railroad Co. and with railroad
* funds, but except for purposes of accounting the distinction is unim-
portant. The Governor of the Panama Canal is president of the
Panama Railroad Co., and all the business units operated by the
railroad company are integral parts of the Panama Canal organization.
By furnishing fuel and other supplies to shipping at reasonable
rates and in providing facilities for making essential operating repairs,
the operation of these business units directly promotes shipping
through the canal; by providing food, clothing, and steamer trans-
portation to employees at a minimum of cost and red tape, they are
instrumental in keeping a contented and efficient working force; and
in the event of war these subsidiary business enterprises would be
invaluable in helping to meet the military and naval demands of the
United States upon the Isthmus.



The carrying out of the usual functions of government, such as
construction and maintenance of streets, water supply, sewers,
quarantine, immigration service, public health, posts, customs, schools,
police and fire protection, aids to navigation, steamboat inspection,
hydrographic and meteorological work, etc., which in the United
States are directed by various officers of the National, State, and
municipal governments, are here intrusted to the governor, and are
executed under his authority and responsibility. This concentration
of governmental activities under one responsible head simplifies the
problem of economical and efficient administration since it has been
found in many instances to be practicable to assign governmental
functions to department heads and their subordinates. The cost of
government is thus merged with that of administration, and complete
cooperation as well as greater efficiency in the primary work of putting
vessels through the canal is thus assured.


For the fiscal year 1926 the net income from tolls and other mis-
cellaneous receipts grouped under the head of "Transit revenue"
was $15,151,668.06, as compared with $13,465,924.72 in 1925 and
$16,307,948.50 in 1924.
The net profits on auxiliary business operations conducted directly
by The Panama Canal, of which the most important are the mechan-
ical shops, material storehouses, and fuel oil plants, totaled $841,-
310.29, as compared with $765,916.85 in 1925, and $901,624.12 in
1924; while those conducted by the Panama Railroad Co., exclusive
of the Panama Railroad Steamship Line, but including commis-
saries, docks, coaling plants, and cattle industry, showed a profit of
$1,347,887.33, as compared with $1,525,910.13 in 1925, and $1,044,-
887.04 in 1924. The total net revenue of the year from all sources,
exclusive of the Panama Railroad Steamship Line, was $17,340,865.68,
as compared with $15,757,751.70 for 1925, and $18,254,459.66 in 1924.
In tabulated form the financial results of the operation of the
canal and its auxiliaries on the Isthmus were:

1926 1925
Net transit revenue................................................ $15. 151,668.06 $13,465, 924.72
Net revenue on Panama Canal business operations. .................... 841,310.29 765,916.85
Total net revenue, Panama Canal....... ........................ 15,992,978.35 14,231.841.57
Net revenue on Panama Railroad business operations................... ----------------1,347,887.33 1,525,910.13
Combined net revenue-............................................ 17,340,865.68 15,757,751.70




In terms of service to shipping, the main items accomplished
during the past fiscal year, as compared with 1925, were:

1926 1925

Transits of the canal by ships paying tolls.----------------------------- 5,197 4,673
Free transits. ------ ---------------------------------------------- 552 386
Calls at canal ports by ships not transiting canal----- ------------------- 963 791
Cargo handled at ports (tons)-..-----. ----------------------------- 1,089,244 994,245
Coal sales and issues (tons)----------------------------------------- 347,619 340,966
Coal-number of ships served other than vessels operated by The Pan-
ama Canal------------------------------------------------------- 902 755
Fuel oil pumped (barrels) ------------------------------- 12,562,146 11,142,357
Fuel oil-number of ships served other than vessels operated by The
Panama Canal --- -------------------------------- ---------- 2,064 1,908
Ships repaired, other than Panama Canal equipment-----. --------------- 836 874
Ships drydocked, other than Panama Canal equipment.--- ---------------- 109 97
Provisions sold to ships (commissary sales).-- --- ....--------------- $1,174,478.46 $932,471.30
Chandlery sold to ships (storehouse sales)--------------------------- $109,590.58 $94,898.67



For the year ended June 30, 1926, commercial traffic through the
canal was greater than for the preceding 12 months but was less than
in 1924, a record year.
As compared with 1925, the number of vessels transiting the canal
(exclusive of public vessels of the United States and other ships ex-
empt from the payment of tolls) increased from 4,673 to 5,197; and
gross revenue from tolls rose from $21,400,523.51 to $22,931,055.98,
an increase of more than one and one-half million dollars.
The decline in mineral-oil shipments, commented upon in the last
two annual reports, apparently reached its ebb during the early part
of the fiscal year, as for the last nine months the trend of oil shipments
for the year was slightly upward, and the aggregate shipments for
the year were approximately the same as for 1925. With oil ship-
ments stabilized, the normal growth of traffic in other lines resulted
in an increase in the volume of tonnage passing through the canal
from 23,958,836 tons in 1925 to 26,037,448 tons during the past year.
With tankers excluded, the volume of tonnage passing through the
canal has increased steadily the past four years as may be seen"by
the following table:

Panama Canal net

General Tntal
Tankships carriers,
ships. vie

Fiscal year 1923 ------------------------------------------- 5,374. 34 13.211.4101 18.605.786
Ficalw year 1924 ------------------------------------------------ in.21.._IH7 IS.ei;. s3l 2t;, 14S, 879
Fisc.il year 1925------------------- ------------------------------ 4. I '.. 4 *',u. 2'.- 2, A55, 151
Fiscal year 1926 ----------- --- ----- --------------------------6.,124. 240 18,450,351 21,774, "11

As compared with the fiscal year 1924, the aggregate tonnage of /
general cargo carriers passing through the canal in 1926 was greater
by more than two and one-half million net tons, but this gain was
not sufficient to offset the decline in tanker tonnage. With tankers


excluded, 1926 traffic shows increases of 12 per cent over the preceding
year and 16 per cent over 1924 with respect to net tonnage. For
the 12 months ended June 30, 1926, tanker tonnage through the
canal comprised approximately 25 per cent of the total as compared
with 39 per cent in 1924, the peak year for mineral-oil shipments.
Traffic figures for each fiscal year since the canal was opened to
navigation are shown in the table below:

Number Panama Tons of
Fiscal year ending June 30- of Canal net Tolls oc o
transits tonnage cargo

1915 1----------------------------------------------- 1,075 3,792,572 $4,367,550.19 4,888,454
1916 ------------------------------------------- 758 2,396,162 2,408,089.62 3.094. 114
1917 ------------------------------------------ 1,803 5,798,557 5, 627,463.05 7,058,563
1918. ----------------------------------------- 2,069 6,574,073 6,438,853. 15 7, 532,031
1919-------------------------------------------- 2, O 4 6,124,990 6,172,828.59 6,916,621
1920 ------------------------------------------- 2,478 8,546,044 8,513,933.15 9,374,499
1921-------------------------------------------- 2,892 11,415,876 11,276,889.91 11,599,214
1922------------------------------------------- 2,736 11,417,459 11,197,832.41 10,884,910
1923------------------------------------------- 3,967 18,605,786 17,508,414.85 19,567,875
1924-----------------.-------------------------- 5,230 26,148,878 24,290,963.54 26,994,710
1925-------------------------------------------- 4,673 22,855,151 21,400,523.51 23,958,836
1926-------------------------------------------- 5,197 24,774,591 22,931,055.98 26,037,448
Totals----------------------------------- 34,902 148,450,139 142,134,397.95 157,907,275

I Canal opened to traffic August 15, 1914.
2 Canal closed to traffic approximately seven months of fiscal year by slides.

With the exception of the first four months of the fiscal year, both
net tonnage and cargo tonnage figures for 1926 show an increase over
the corresponding month in the fiscal year 1925. Comparative
traffic statistics for the two years are shown in the following tabula-


July..... .......---------------.
August------- --------------
October-------- -------------
November -------------------

Fiscal year-----------------

Number of






Panama Canal net

1924 1925

2,036,097 1,951,295
1,901,895 1,779,627
1, 976,213 1,831,039
1,923,950 1,955,485
1,872,531 2,028,034
1 989.196 2.257 409

1926 1925





5,197 22,855,151 24,774,591

Tons of cargo




1, S39, Iil9


1, 960, 654



I ,


Traffic for the last six months of the fiscal year exceeded the traffic
from January 1 to June 30 during any preceding year, being greater
even than for the corresponding months in the record year of 1924:

Number Panama Tn o
Six months' period from- of Canal net Tolls Tons of
transits tonnage cargo

Jan. 1 to June 30-
1923---------......................................... -----------------------2,327 11,300,437 $10,506,371.47 11,644,812
1924.......................................... ------------------------------------2,520 12,711,878 11,830,496.83 13,478,977
1925----------..---------------------...................... 2,300 11,155,269 10,421,604.00 11,545,679
1926.....--------------------...--........----------.... 2,723 12.971,702 11,971,900.28 13,881,850


The number of ocean-going vessels transiting the canal daily
averaged 14.2 throughout the year, exclusive of public vessels of the
United States and other ships exempt from the payment of tolls.
Tank ships averaged 3 transits daily, and the remaining 11.2 transits
were made up of general cargo carriers, passenger ships, warships of
foreign nations, etc. In the table below the number of commercial
vessels transiting the canal is shown by months, segregated to show
the proportion of tankers to the total traffic:

Proportion of tankers to total traffic

Total commercial transits Average daily transits

Tankers General Total Tankers General Total

July---------.---..------------------------............... 87 331 418 2.8 10.7 13.5
August.................................... ---------------------------- 71 301 372 2.3 9.7 12.0
September-- ---------------------..............................-- 63 325 388 2.1 10.8 12.9
October--------------------------................................... 73 337 410 2.4 10.9 13.2
November..--- --------------------...........................--i 90 334 424 3.0 11.1 14.1
December--.. --------------------............................ 96 366 462 3.1 11.8 14.9
January--------------------------------...................................- 100 379 479 3.2 12.2 15.4
February.................................. 85 339 424 3.0 12.1 15.1
March................................... 104 402 506 3.4 13.0 16.3
April...................................... -------------------------------- 102 323 425 3.4 10.8 14.2
May.............. ............-----------------------------------.... 118 352 470 3.8 11.4 15.2
June-------------------------------................................. ---.. 101 318 419 3.3 10.6 13.9
Fiscal year-
1926................................... -------------------------------1,090 4,107 5,197 3.0 11.2 14.2
1925-.................................. 1,079 3,594 4,673 2.9 9.8 12.8
1924....-------........................... 1,704 3,526 5.230 4.6 9.6 14.2
1923................................... --------------------------------913 3.054 3,967 2.5 8.3 10.8


Tanker cargoes through the canal during the last six months of the
fiscal year were greater by more than three-fourths of a million tons
than for the first half, the gain being principally in the Californian
crude. For the entire year, however, shipments of Californian crude
were some 750,000 tons under last year and this loss, combined with
the decreased shipments of Mexican crude, slightly more than offset


the net gains for the year in shipments of lubricating and refined
mineral oils from California and of crude petroleum from Peru.
The table below shows the origin of the bulk of tanker cargoes passing
through the canal during the past four years:

Tanker Cargoes 1

-------------- IPeruvian Mexican -t
i Lubri- crude crude Total
Crude Refined eating

July----------------.------------- 163,369 239,408 10,137 45,612 9,120 467,646
August--.----------------- -------164,060 217,893 9,936 29,774 0 421,663
September------------------------ 179,273 99,812 0 37,283 9,915 326,283
October --------------------------....... .. 131,640 134,953 10,049 102,201 0 378,843
November----.......--.--------------.---- 161,537 171,995 0 57,540 0 391,072
December...----------.-------------- 367,494 160,965 12,770 39,275 0 580,504
January-..-------.----------.. -------- 254,125 147,632 62,375 86,109 0 550,241
February--------.-------.. ----------274,956 139,742 12,551 17,000 0 444,249
March---------------------------- 301,888 150,800 0 55,056 0 507,744
April-------------- --------------. 301,877 201,535 17,452 86,917 0 607,781
May---------- ------------------ 391,427 193,576 0 72,615 0 657,618
June--------- ------------------- 402,597 117,880 9,953 56,028 0 586,458
Fiscal year-
1926-------------------------- 3,094,243 1,976,191 145,223 685,410 19,035 5,920,102
1925-----------------.------- 3,840,347 1,570,545 104,781 468,930 145,546 6,130,.149
1924-------------------------- 8,501,010 782,588 49,652 371,512 257,776 9,962,538
1923-----...-------.-..------------ 3,689,049 249,840 113,802 239,751 261,877 4,554,319

1 This table shows the important oil shipments in tank steamers through the canal, but it is complete
.only for the headings shown. Occasional shipments of refined oil from Mexico and Peru and other tanker
.cargoes of miscellaneous origin are not included.

Mineral-oil shipments from the east coast of the United States
totaled approximately 650,000 tons during the year, but as much of
this was refined oil in cases, transported by general cargo carriers, it
has been omitted from the tabulation above.
The development of the Colombian and Venezuelan fields may
have considerable bearing on the future trend of mineral-oil ship-
mnents through the canal.


Twenty-four flags were represented in the traffic passing through
the canal, with vessels of United States registry comprising a larger
share of the whole than those of any other nation. With respect to
cargoes routed through the canal, vessels of United States registry
carried approximately 53 per cent of the total; British vessels, 26
per cent; Norwegian vessels, 4 per cent; German vessels, 32 per
cent; Japanese vessels, 22 per cent; and Swedish vessels, 22
per cent. Combined, the vessels of these six countries carried 91
per cent of all the cargo that passed through the canal.
As compared with the preceding year, cargo passing through the
canal was greater by 2,078,612 long tons. By flags, the principal
increases were as follows: British, 833,785 tons; United States,
630,756 tons; Swedish, 353,819 tons; Norwegian, 208,568 tons; and


Italian, 142,174 tons. The cargo carried in Japanese bottoms was
less by 278,934 tons, or a decline of 29 per cent; vessels of other coun-
tries showing an appreciable loss in cargo tonnage as compared with
the preceding year were those of France with 83,133 tons and Holland
with 66,276 tons.
Complete statistics for all flags contributing to the 1926 traffic
through the canal appear in the table below:

Commercial traffic through the canal during fiscal year ended June 30, 1926, segregated
by flags

Number United Panama Regis
Flag Of States cana t ered Regis Tolls Tons
transits eqtuva- n thered net S rgo

Belgian---.....-....-----....------------ 19 67,604 81,774 106,315 67,396 $78, 052.62 87,829
British-----------------..................--- 1,423 5,492,171 7,039,542 8,822,954 5,493,568 6,569,712.05 6,750,843
Chilean..................... --------------------- 26 90,883 121,901 189,976 103,016 113,603.75 82,695
Colombian.--------...--.------- 46 4,514 4,897 7,733 4,120 5,195.40 5,378
Danish.--.--.....-----------------..... 63 187,344 234,753 284,425 183,749 223,595.27 295,.530
Danzig..................... --------------------- 15 84,021 105,460 131,091 75,258 89,852.25 95,604
Dutch...................... ----------------------93 393,3171 530,652 635,315 393,065 489,405.80 552,741
Ecuadorian................ ----------------- 3 448 453 847 464 477.90 340
Finnish-----............---------------- 2 3,6021 3,632 3,930 3,526 4,358.40 6.,600
French..................... ---------------------90 339,262 421,752 548,514 338,555 414, 556.96 398,393
German.................... --------------------163 526,769 726,340 855,602 523,723 658,858.12 8.5,007
Greek...................... 8 25,858 32,076 41,995 25,833 28,996.52 35,432
Honduran------------------............ 20 20,730, 28,443 34,580 20,746 25,541.40 6,126
Italian----------------------................... 90 326,139 379,990 519,376 316,967 405,031.30 322,236
Japanese ................... 131 555,976 649,028 826,503 541,667 671,071.35 667,982
Yugoslav................... 33 102,081 133,028 160,277 101,609 127,601.25 231,994
Mexican.................... 1 1,689 2,025 2,890 2,183 2,111.25 1,064
Norwegian................. ---------------306 761,444 987,040 1,216,120 752,397 875,812.99 1,051,276
Panaman..... ------------------- 53 52,089 84,295 109,044 70,310 64,187.40 63,922
Peruvian................... 64 89,421 149,162 231,676 122,329 111,618.67 94,778
Portuguese-....------..----------. 1 2,116 2,360 3,825 2,611 2,645.00 4,500
Spanish .................... 31 95,523 121,461 167,761 102,977 117,786.81 49,956
Swedish.................... R84 272.064 369,272 786, 996 326,400 311,174.14 636,266
United States............... 2,432 9,957,763 12,565,255 15,.984,873 9,976,412 11,539,809.38 13,710,956
Total, 1926------------ 5,197 19, 452, 828 21,774,591 31,672,618 19, 548, 881 22,931,055.9826,037,448


Naval and other public vessels of the United States, Panama, and
Colombia, and vessels sent through the canal solely for repair at the
Balboa shops, are exempt from the payment of tolls, and such vessels
are not included in the transit statistics of the preceding sections.
They accounted for the following additional transits: Public vessels
of the United States, 534; public vessels of the Republic of Panama,
5; of Colombia, 1; vessels for repairs, 12; or a total of 552. Launches
of less than 20 tons net measurement are also excluded from the
traffic statistics, although they are not exempt from the payment of
tolls. They numbered 177 during the fiscal year 1926 and paid
tolls aggregating $706.25.
If charges at commercial rates had been made against the 534
public vessels of the United States that transited the canal without
payment of tolls, the revenue from tolls would have been increased
by approximately $926,863.04 during the year.



The table next below shows the volume of cargo moving through
the canal during the past four years over the principal trade routes.
As in the past several years, the most important of these was the
trade between the Atlantic and Pacific coasts of the United States.
During the fiscal year ended June 30, 1926, more than 10,000,000
tons of cargo passed through the canal in the United States inter-
coastal trade, exceeding the tonnage of any previous year excepting
1924, when the mineral-oil shipments brought the cargo moving
between United States intercoastal ports up to 13,527,378 tons, or
an even 50 per cent of all the cargo passing through the canal that
year. With respect to the total volume of cargo moving through
the canal during 1926, the United States intercoastal trade comprised
38.7 per cent of the whole, as compared with 39.6 per cent in the
year 1925.
The trade between the east coast of the United States and the
west coast of South America ranked second in volume, the tonnage for
1926 being higher than for any preceding year and comprised 12.4
per cent of all cargo moving through the canal. This was largely
a one-way movement, the volume of the northbound tonnage being
more than six and one-half times the southbound.
Third in volume was the trade between Europe and the west
coast of South America, and this is the only important trade showing
a lower cargo movement for 1926 than for 1925. The decline was
in the European-bound tonnage and the shrinkage was less than
100,000 tons.
The trade between Europe and the Pacific coast of North America
showed gains over the preceding year. In the table following separate
statistics are given in this trade for Canada and the United States,
but the same steamship lines serve both countries, and the trade
between the Pacific northwest and Europe should be considered as
a unit. Combining the two trades, the cargo movement exceeded
that of any previous year.
Trade between the east coast of the United States and the Far
East showed an increase over the preceding year, but was less than
in 1923 or 1924. Returning cargoes over this route aggregated less
than one-third the volume of the outbound tonnage.
Trade between Europe and Australasia and between the east coast
of the United States and Australasia in point of cargo tonnage was
greater than the trade for any preceding year. Although not
shown separately in the table below, Canadian trade with Australasia
was also important, totaling 152,281 tons for the'year.


Comparative cargo statistics for past four fiscal years, by principal trade routes
through canal

Tons of cargo
Trade routes
1923 1924 1925 1926

United States.intercoastal:
Atlantic to Pacific ..........................---------------------------- 2,608,307 2,719,240 2,213,603 2,435,748
Pacific to Atlantic---........-----------------........----------- 5,460,246 10,808,138 7,282,656 7,633,856
Total-----------.---------------------------- 8,068,553 13,527,378 9,496,.259 10,069,604
East coast United States-west coast South America:
Atlantic to Pacific .--------------------.--------- 275,313 373,348 377,864 423,730
Pacific to Atlantic---------...........---......--------------.. 1,779,210 2,329,281 2,661, 756 2,.816,346
Total...----------------.............---..----------------- 2,054,523 2,702,629 3,039,620 3,240,076
Europe-west coast South America:
Atlantic to Pacific ----. -----------------..--------... 486,952 627,356 776,388 783,007
Pacific to Atlantic.------- --...-.....----....----------.. 1,263,034 1,378,501 1,708,626 1,612,733
Total.--------------. ------------------------- 1,749,986 2,005,857 2,485,014 2,395,740
Europe-west coast Canada:
Atlanticto Pacific .................................. 230,331 242,279 361.792 377,446
PacifictoAtlantic...--...---.........---.......-......... 885,670 1,211,535 1,409,277 1,681,663
Total.---------.----------..-----------..------ 1,116,001 1,453,814 1,771.069 2,059,109
United States-Far East:
Atlantic to Pacific----------.... ------..------------... 1,466,013 1,504,275 1,234,608 1,421.214
Pacific toAtlantic-----........-----.....-----.----..----------.. 443,272 294,003 266,269 333,834
Total----------------..-- ------------------- 1,900,285 1,798,278 1, 500, 877' 1, 755, fl48
Europe-west coast United States:
Atlantic to Pacific ................................. 375,700 427,992 334,761 324,540
Pacific to Atlantic----.--------........----------------.. 1,020,090 1,231,230 1,157,556 1,331,662
Total---------..--------...-...------.-----..--------- 1,395,790 I 1,659,222 1,492,317 1, 656,202
Atlantic to Pacific --------------------------..................... 415,861 509,477 518,406 543,825
Pacific to Atlantic---------...... -----.. ---------.. 306,404 304,370 420,356 556,871
Total.---------......--.....-------.----..--------------- 722,265 813,847 938,762 1,100,696
East coast United States-west coast Canada:
Atlanticto Pacifle------------------------------- 168,140 130,364 178,110 199,175
Pacific to Atlantic------------.----------------- 347,407 356,223 501,623 651,969
Total-..--...--------------------------------- 515,547 486,587 679,733 861,144
United States-Australasia:
Atlantic to Pacific .--------------------..---------........... 462,057 587,481 663,619 727,406
Pacific to Atlantic----------.-------------------- 72,534 47,777 28,195 33,087
Total.------.. -------...-------....-------.----------- 534,591 635,258 691,814 760,493
Miscellaneous routes and sailings:
Atlantic to Pacific.--.--------------------------- 597,585 738,288 739,246 801,008
Pacific to Atlantic....----------------------------- 903,749 1,173,552 1,124,125 1,348,330
Total. --.-----------------------------------.........................1 1,501,334 1,911,840 i 1.863,371 2, 149,336
Total traffic, all routes:
Atlanticto Pacific...---------..-----.-------------- 7,086,259 7,860,100 7,398,397 8,037.097
Pacific to Atlantic.--.------. ---.--------...--.----- 12,481,616 19,134,610 16,560,439 18,000,351
Total..------------------------------------............. 19,567,875 26,994,710 23,958,836 26,037,448


Complete manifests of cargo are not required of vessels transiting
the canal. In lieu thereof, at the time of transit a briefly itemized
statement, listing the origin and destination of the principal commodi-
ties carried, is submitted by the master. These itemized statements


are the basis of the statistics compiled on commodities passing
through the canal, and, except for the items commonly carried in bulk,
such as mineral oils, wheat, nitrate, and lumber, actual shipments of
commodities are likely to be in excess of the tonnage reported by the
vessels and shown in the annual summaries, since there is a natural
tendency on the part of masters of vessels to classify small miscella-
neous shipments under the head of "General cargo." Subject to
errors arising from this source, the tonnage of the principal commodi-
ties shipped through the canal the past three years has been as fol-
Commodity movement


Fiscal year ended June 30-

1926 1925 1924

Manufactures of iron and steel ------------------------------- 1,525,280 1,416,135 1,691,712
Refined petroleum--- -------------------------------..-------- 566,075 690,770 648,750
Cement ------. -------------------------------------.------ 283,328 359,831 303,724
Cotton........................ ...............--------------------------------------------------- 226,092 145,604 100,925
Coal------------- ----------------------------------------.. 222,288 159,231 191,488
Tin---....................................................---------------------------------------------------... 202,773 145,188 191,733
Sulphur -.......................................................-------------------------------------------------- 188,889 165,925 146,712
Phosphates-...------------------------------------------------................................. 162,254 67,206 25,473
Sugar------....--.............................................--------------------------------------------... 158,997 91,461 32,952
Railroad materials----...--.-------.---....------------------------............... 150,993 138,740 192,537
Machinery --- ------------------------ ----------. 134,411 133,024 181,112
Automobiles (exclusive of accessories)--- .-.-..........-.. .....- 125,820 124,972 110,351
Ammonia------ ----------------------------------------------- 108,104 88,199 78,813
Lubricating oils ---......................................-----------------------------------------.. 106,575 75,049 110,835
Paper ----------------------------------------------------------......................... ................ 101,493 101,827 90,885
Coke-- ------------------------------------------------------.................. 93,344 96,114 90,447
Textiles--- ----------------------------------------------------.......... 78,770 94,132 90,207
Tobacco----------- --- ------------------------------------- 65,174 68,472 71,550
Crude petroleum-- -------------------------------- ---- ......--------- 49,167 182,632 319,552


Crude petroleum -------------------------------------------.............................. 3,807,689 4,311,411 8,872,540
Lumber-------------------------------------------------........................................................... 3,200,311 2,255,421 1,824,438
Refined petroleum.-------------------...-.....--------------------..._......... 1,977,543 1,573,430 799,234
Nitrates------------------..............---------------------------.................... 1,878,050 2,155,814 1,744,580
Ironore-------------.......-- .............-- ....------------------------------- 1,334,408 1,045,383 888,198
Wheat-----------------------------------------------------------.................................... 1,187,384 1,078,844 1,352,388
Canned fruit --- -- -------------------------------------------- 356,609 255,688 229,691
Sugar-- ---- ------------------------------------------------- .......... 318,032 300,465 286,782
Copper (metal)---------------------------------------------........... ............. 319,045 211,168 270,688
Barley- -----------------------------------.--- .......-------------. 313,535 236,115 266,859
Food products in cold storage 1... -- ----------------------------- ... .. 221,068 202,781 142,830
Canned fish......... ... ----------------------------------------------- 168,701 165, 071 151,201
Driedfruit---.....---------------------------------------------........................................ 150,229 135,832 103,469
Wool-----....................................................------------------------------------------------.... 146,092 91,586 84,696
Lubricating oils................................................-------------------------------------------- 145,484 104,781 49,672
Coffee................................................ ----------------------------------------------------104,739 81,881 102,451
Lead.................... ----------------------------------------------------- 79,734 76,343 29,916
Copper ore----. ---------------------------------------------.................. 79,104 100,289 85,947
Copra--.-----------------------------------------------------........................................ 76,223 90,125 51,115
Cotton........... ...............------------------------------------.---------------- 65,850 75,358 54,253
Flour-------------------------------------------..............................---------- 64,391 82,402 36,943
Fresh fruit------------------------------------------------........................ 63,495 45,376 25,063
Phosphates-- ---------------- . ... -------------------------- 58,585 38,483 39,032
Beans-----------.................--...--------------------------------------...................... 54,565 101,218 60,030
Borax......... --------------------------------------........--------------.- 51,951 50,428 46,791
Tin ore----..----------.. .---------.--------------------------- 51,325 27,955 24,677
Skins and hides. ---------------------...---------......--------------- 48,479 46,875 51,595

1 Does not include fruit.


In the Atlantic-to-Pacific cargo movement, reported shipments of
crude and refined mineral oils and of cement were lower than for the
preceding year, while shipments of iron and steel, cotton, coal, phos-
phates, and sugar include the more important increases.
In the Pacific-to-Atlantic cargo movement, six commodities
accounted for 14,000,000 out of a total of 18,000,000 tons of cargo
passing through the canal. Of these six commodities, four show
increases and two decreases as compared with 1925. As compared
with the preceding year, lumber shipments were greater by almost
a million tons, refined mineral oils by 400,000 tons, and iron ore by
300,000 tons. Shipments of crude petroleum declined 500,000 tons
and nitrate cargoes were lower by 275,000 tons. Shipments of wheat,
canned fruit, copper, and barley show increases of approximately
100,000 tons each.

Of the 5,197 vessels which made the transit of the canal during
the fiscal year 1926, 4,633 were steamers, 443 were motor ships, 64
were motor schooners, and the remaining 41 were sailing ships, tugs,
etc. For the past three years the proportion of each class was as

1924 1925 1926

Per cent Per cent Per cent
Steamers -------.------------------------------------------------..... 94.4 92.0 89.2
Motor ship...................... ............... ........ .......... 3.9 6.0 8.5
M otor schooners..............--.... --........ --- .....--- 1.0 1.1 1.2
M iscellaneous..... .......... ......------------------------------------------ ---- .7 .9 1.1
100. 0 100.0 100.0

Of the 4,633 steamers, 3,070 burned oil, 1,538 burned coal, and 25
were reported as fitted for either fuel. For the past three years the
proportion of each class was as follows:

1924 1925 1926

Per cent Per cent Per cent
Oil-burning.............. ............ .......................... 69.1 69.4 66.2
Coal-burninm ............................................................ 30.1 30.1 33.2
Eitber coal or oil................................---...-.............--- ......-- .... .8 .5 .6
100.0 100.0 100.0


Further details of the trade through the canal will be found in the
following tables in Section V of this report:
Table 67. Number of commercial transits by nationality, 1915-


Tables 68-A and 68-B. Origin and destination of cargo, 1924-
Table 69. Net tonnage of commercial vessels by nationality,
Table 70. Cargo passing through canal, 1915-1926, segregated by
nationality of vessels.

For a number of years the administration has been endeavoring
to have legislation enacted establishing the Panama Canal rules of
measurement as the sole basis for computing tolls, thus removing
the difficulties brought about by the necessity of having to use the
above rules and also the United States rules for this purpose.
With a view to securing the cooperation and support of shipping
interests in obtaining the passage of remedial legislation, the Gover-
nor of The Panama Canal attended two conferences of officials of
American flag steamship lines. The representatives of the steamship
companies placed themselves on record, however, that unless a toll
rate not to exceed 80 cents per net ton for loaded ships and a pro-
portionate rate for ships in ballast, based on Panama Canal measure-
ment rules, were to be authorized they would oppose any change in
the present system of measurements and toll rates at the canal.
Reducing the toll rate for laden vessels to 80 cents per net ton,
Panama Canal measurement, with a corresponding reduction in the
rate for ships in ballast, would reduce the revenue from tolls approxi-
mately 20 per cent, or, stated in terms of revenue, between four and
five million dollars per annum based on the present volume of
From an administrative viewpoint, the authorization of the Panama
Canal rules of measurement as the sole basis for the computation of
tolls would be advantageous, but the present dual system of measure-
ment is not so onerous, nor the advantages accruing from a single
standard of measurement so great, as to justify any appreciable
lowering of tolls in order to win over the support of the steamship
interests who have opposed the enactment of this remedial legislation
since it was first proposed.
The request for lower toll rates was made coincident with demands
for 24-hour operation of the canal.. Opposed to the request of
intercoastal shippers for lower toll rates, protests have been made by
the railroads, alleging that freight rates by water are so low that
transcontinental rail carriers are unable to meet the competition of
intercoastal steamship lines operating through the canal.



For the past several years a system of dispatching vessels through
The Panama Canal on a prearranged time schedule has been followed,
and experience has confirmed the effectiveness of the schedule in
achieving safe and economical handling of shipping with slight delays.
In October, 1925, regulations were issued to the effect that vessels
loaded with gasoline or naphtha will not be permitted to move about
in canal waters during darkness or to transit the canal on such
schedule as may cause them to encounter other vessels in Gaillard
Cut, but they are permitted to clear from harbors for sea during
darkness. To put this in effect, transit of such vessels is ordinarily
restricted to places Nos. 1 and 2 on the northbound schedule.
Certain steamship interests having requested that the canal be
placed under 24-hour operation, an analysis of the cost of lengthen-
ing the schedule for dispatching vessels through the canal was begun
during the fiscal year 1925, and this study continued into the fiscal
year 1926.
Under present operating conditions, for vessels at the Pacific
entrance awaiting transit, the ship on No. 1 schedule is dispatched
through the canal so as to reach the Miraflores Locks at 7 a. m.
Subsequent dispatches are made at approximately 30-minute inter-
vals until all awaiting traffic is disposed of, except that no vessel is
permitted to begin the northbound transit unless she can be dis-
patched so as to reach Miraflores Locks by 3.30 p. m.
For vessels awaiting transit at the Atlantic entrance, the first
two ships are dispatched so as to reach the Atlantic Locks at 7.15
a. m. and 7.25 a. m., respectively. Subsequent dispatches, averaging
approximately two per hour, are made by schedule until all awaiting
traffic is disposed of, except that no vessel is permitted to begin
southbound transit unless she can be dispatched so as to reach Gatun
Locks by 2.20 p. m.
The schedules outlined above for dispatching vessels through the
canal require the Atlantic Locks to be operated from 7 a. m. to 11
p. min. daily and the Pacific Locks from 6.50 a. m. to 10.50 p. m. daily.
Lengthening the hours of transit necessarily would prolong the hours
of lock operation, which would mean added difficulties and increased
costs of operation not only at the locks, but for other divisions of
the canal as well.
Under present schedules for dispatching vessels, ships may begin
transit of the canal approximately but 8 hours out of the 24. Theo-
retically, assuming that arrivals of ships at the canal entrances were
evenly spaced throughout the 24 hours, two-thirds of the vessels
arriving for transit would be delayed due to the present limited
hours for beginning transit, and the delay awaiting transit would
average about eight hours per vessel. By actual check of vessels


calling at the canal solely for the purpose of transit (i. e., not loading
or discharging cargo, taking fuel, etc.), the average delay for
the months of December, 1924, and May, 1925, was found to be
approximately five hours per vessel. The average delay would
have been greater, no doubt, except that the hour of arrival was
timed somewhat to conform to canal operating hours by regulating
the speed at sea, time of departure from last port of call, etc. One
passenger line, using the canal regularly, stated that its vessels had
never been delayed at canal ports due to the present limited dispatch-
ing hours.
Roughly speaking, one out of every three vessels transiting the
canal berths at one of the terminal ports prior to transiting the
canal. Not infrequently it is possible for these ships to utilize part
or all of the time between the hour of arrival and the hour for begin-
ning transit of the canal in loading or discharging cargo, taking fuel
and water, or in making necessary repairs, so that the net delay for
these vessels is less even than for those vessels whose sole object in
calling is to make the transit of the canal.
After a thorough study of the question it was found that the addi-
tional costs resulting from 24-hour operation would be greatly in
excess of the saving resulting to shipping through continuous opera-
tion. Further, that with the present volume of traffic any length-
ening of the present hours of operation would be unwarranted, since
the saving resulting to shipping would be offset through increased
costs of operation.
When the volume of traffic reaches a point where the added costs
resulting from the lengthening of hours of operation are offset by
the resulting saving to shipping, the lengthening of the present dis-
patching schedule should receive serious consideration. For the
present and for several years to come, it is highly desirable that for
at least 8 hours during each 24 the Cut be clear of shipping, so that
dredging operations in or near midchannel can be carried on without
danger to life and equipment. This consideration is not so vital
as to make 24-hour operation out of the question, if it were otherwise
necessary, but it merits serious consideration, and militates strongly
against the adoption of continuous operation with the present
volume of traffic.
For the average vessel the time required to transit the canal is
approximately eight hours. Assuming an average delay of five
hours off the entrance awaiting transit, the total time required for a
vessel transitting the canal, from deep-water Atlantic Ocean to
deep-water Pacific Ocean (or vice versa), averages about 13 hours
per vessel. It is understood that the average transit time at the Suez
Canal is about 162% hours, exclusive of time lost at entrance awaiting
admittance to channel.


Twenty-four-hour operation has not been requested by all oper-
ators. There are some who prefer that the handling of their vessels
in the canal during darkness, especially in the Out, be minimized,
for the reason that, regardless of aids to navigation, the calculation of
distances at night is uncertain and navigation in narrow waters is
attended by some danger.
At Gatun Locks there were no changes in the operating schedule
during the year, three shifts being employed to cover the hours from
7 a. m. to 11 p. m., the second shift overlapping the first and third
during the period of heaviest traffic. At Pedro Miguel and Mira-
flores the normal shifts remained the same as during the preceding
year-7.30 a. m. to 9 p. m. at Pedro Miguel and 6.50 a. m. to 10.50
p. m. at Miraflores. The shifts overlap for the purpose of making
double lockages from 9.30 a. m. to 5.30 p. m. at Pedro Miguel and at
Miraflores from 9.20 a. m. t6 5.20 p. m. During the overhaul period
the shifts covered from 7 a. m. to 2 a. m. at Pedro Miguel and 6.50
a. m. to 3 a. m. at Miraflores.
The authorized force at all locks remained the same as at the close
of the last fiscal year, one authorized position at Gatun Locks,
vacant June 30, 1925, being filled. Very few changes in personnel
The average number of lockages per day was 14.3 at Gatun, 14.8
at Pedro Miguel, and 14.7 at Miraflores. The total number of lock-
ages at all locks was 15,970, as compared with 14,480 in the fiscal
year 1925, an increase of 10 per cent.
There were no accidents of any moment to vessels in the locks and
no serious delays due to faulty operation or mechanical defects. In
this connection the following are considered worthy of mention:
At Gatun 14 ships during the year were delayed for more than five
minutes due to faulty operation and accidents. But four of these
were delayed for more than 20 minutes, the total delay for the four
aggregating 2 hours and 21 minutes.
The east chamber at Pedro MIiguel was out of commission from
8 p. m., October 26 to 11.30 a. m., October 29, due to opening the
upper valves and letting water into the chamber while the lower
gates were closing, causing them to slam together, breaking the strut
bolts and bending one gear and shaft.
On December 18, while tying up at the south approach wall at
Miraflores, the United States submarine S-42, through confusion of
signals in the engine room, ran under the fender chain, causing con-
siderable damage to her forward deck, including the breaking of
the gun mount. No damage was done to lock walls or mechanism


The periodical overhaul of submerged parts at Pedro Miguel was
completed between January 4 and March 4, 1926, the west chamber
being out of commission 31 days and the east chamber 25 days.
With the exception of 22 days in February, 1926, when the west
chamber of Gatun Locks was drained to sea level to install a new
type of cylindrical valve, all other chambers were available for use
throughout the year, only the usual routine maintenance work
being done.
On March 20, 1926, Gatun Locks handled 27 toll-paying vessels
and 1 United States Government vessel. This established a new
record for one day's commercial traffic.
Lockages during the year are summarized in the following table:

Gatun Pedro Miguel Miraflores Total
Lock- Vessels Lock Vessels Lock- Vessels Lock- Vessels
ages ages ages ages

July----------------------------- 428 525 435 516 431 513 1,294 1,554
August--------------------------- 373 452 396 465 390 464 1,159 1,381
September------------------------ 393 462 410 479 406 480 1,209 1,421
October-------------------------- 421 513 436 489 433 492 1,290 1,494
November------------------------ 418 499 438 506 434 511 1,290 1,516
December------------------------- 465 553 487 552 483 547 1,435 1,652
January-------------------------- 481 573 460 551 475 554 1,416 1,678
February------------------------- 434 579 447 596 456 592 1,337 1,767
March.---------------------------- 509 643 547 672 536 659 1,592 1,974
April----------------------------- 424 547 444 548 434 546 1,302 1,641
May----------------------------- 460 567 475 582 464 570 1,399 1,719
June----------------------------- 407 473 423 478 417 475 1,247 1,426
Fiscal year:
1926------------------------- 5,213 6,386 5,398 6,434 5,359 6,403 15,970 19,223
1925--------------------------- 4,644 5,485 4,977 5,703 4,859 5,689 14,480 16,877
1924------------.-------------- 5,260 6,205 5,572 6,297 5,520 6,277 16,352 18,779
1923------------------------- 4,011 4,638 4,267 5,017 4,273 4,960 12,551 14,615


As in previous years, electric power for the operation of the canal
was derived from a hydroelectric plant at Gatun and a reserve steam-
generating plant at Miraflores. The combined generator output of
the two plants averaged 5,031,756 kilowatt-hours per month, as
compared with 5,409,357 kilowatt-hours per month last year. An
average of 4,231,127 kilowatt-hours per month was distributed from
substations during the past year, as compared with a corresponding
figure of 4,235,057 kilowatt-hours per month for the preceding year.
These figures show a transmission and distribution loss of 15.91 per
cent for 1926 as compared with corresponding losses of 21.7 per cent
in 1925 and 14.5 per cent in 1924. The higher system losses in
1925 were due primarily to the fact that the electro-steam boiler
at the Miraflores steam plant was kept in service practically the
entire dry season of that year, while its use was discontinued during
the past dry season.


The plant at Miraflores was maintained on a stand-by basis during
the greater part of the year. Due to the prolonged dry season and
the resulting low level of Gatun Lake, the Miraflores plant was
required to carry part of the power load from January 28 to June 7
in order to reduce the water consumption at the hydroelectric station
at Gatun. The Miraflores plant carried about one-thirtieth of the
total load in January and about one-fourth through the rest of the
season until the first week in June, when normal hydroelectric opera-
tions were resumed.
At the Miraflores plant there were no interruptions to service during
the year and but one at the Gatun hydroelectric station. On the
44,000-volt transmission line, there were 19 interruptions, all of
which were of short duration.
At the close of the year work on the building being erected for the
new Diesel electric generating station at Miraflores was about 90
per cent completed; one of the three new Diesel engines, complete
with generator, together with the main switchboard, had been re-
ceived on the isthmus; a second engine had passed satisfactory tests
in the contractor's plant and was being prepared for shipment to the
isthmus; and the construction of the third engine was underway.


Comparative data showing the inflow of water into Gatun Lake
from all sources, utilization, and losses, for the fiscal years 1925 and
1926 are shown in the following table:

Per cent of total, Billion cubic feet,
fiscal year fiscal year

1925 1926 1925 1926

Run-off above Albajuela...-----------------------------------................................. 35.4 35.0 69.54 55.01
Yield from land area below Albajuela.-------------------------.................. 45.5 41.7 89.24 65.46
Direct rainfall on lake surface--------.-----------------------........ 19.1 23.3 37.49 36.66
Total--------------------------------------------..................................... 100.0o 100.0 196.27 157.13
Evaporation from lake surface---------------.. ... --- -------------.......... 4.4 13.3 18.35 20.97
Gatun Lake lockages--------------------------------------......................................... f16. O 19.8 31.30 31. 14
Hydroelectric power-----....---------------------------------............................ 24.9 26.4 48.96 41.52
Spillway waste----. -- -----------------------------------.................... 53.1 39.5 104.31 62.07
Leakageand municipal water------------------------...- -------........... .8 1.0 1.61 1.53
Decrease in storage--------------.--..---------------------................. -4.2 ---------- -8.26 -0.10
Total---------------------------------------------------.......................... 100.0 100.0 196. 27 157.13

From a water-supply standpoint, the dry season's duration was
from December 17, 1925, to May 24, 1926, a period of 159 days.
The season was the second dryest since the formation of the lake,
the dryest being that of 1919-20. At Alhajuela, the Chagres River
discharge was 55 per cent below the 25-year four months (January to
April, inclusive) dry season average, or 547 cubic foot-seconds against
a mean of 1,223 cubic foot-seconds.


At the beginning of the dry season the elevation of Gatun Lake
was 87.05 feet above sea level, from which height it fell continuously
until the low elevation of 81.39 feet was reached on May 24. This
represented a loss in storage of 25.83 billion cubic feet, as compared
with 20.67 billion cubic feet for 1925 and 24.42 billion cubic feet in
Considering the period January 1 to May 24, 1926, approximately
1.15 feet of water storage on Gatun Lake was saved by the economical
use of water at the locks and 1.25 feet by the transfer of load from the
the Gatun hydroelectric station to the Miraflores steam plant. At
the locks the best water-saving record to date was made during this
season. Considering the five-month period (January to May,
inclusive) the water requirements per through lockage per 24 hours
were 52 cubic foot-seconds, as compared with 80 cubic foot-seconds
during the same months in 1920; and for May, 1926, the require-
ments were brought to a new low mark of 45.7 cubic foot-seconds
per through lockage per day.
The flow at the hydroelectric station was reduced in January from
the normal rate of approximately 1,500 cubic feet per second to 1,306
cubic foot-seconds by taking off the load of the electrically heated
boiler at Miraflores, and for the rest of the dry season was reduced
still further, to approximately 1,000 cubic foot-seconds by also shut-
ting down some of the turbines and placing the equivalent load on
the steam plant.
Without these savings of water the elevation of Gatun Lake on
May 24 would have been approximately 79.00 feet, or about 2.4
feet below the minimum stage of 81.39 feet actually recorded on that
The low level reached by Gatun Lake during the past dry season,
in spite of economies of water effected by cross filling and other expe-
dients at the locks and by partly shutting down the hydroelectric
station, emphasizes the need of promptly beginning the work on the
Alhajuela project, damming the upper Chagres to create additional
storage of approximately 22,310,000,000 cubic feet. The extra
storage would have facilitated operations during the past dry season,
and with the growth of traffic which seems probable in the next five
years the need will become imperative. As our plans provide for
two years' road building to connect the site of the dam with the rail-
road and three years to build the dam after the road is completed,
the importance of initiating the road construction without delay is
obvious. The sums of $50,000 for the preparation of plans and
$500,000 for the first year's work on the road-were included in the
estimate for the fiscal years 1926 and 1927 but eliminated by the



Bureau of the Budget. Similar provision has been made in the pre-
liminary estimates for 1928; and, since the work should have been
started two years ago it is expected that this year it will pass.
The depopulation of the area which will be flooded by the lake at
Albhajuela was completed during the year, and practically all claims
for land and improvements have been settled. Survey of the route
of the road, from Paraiso to Alhajuela, was completed with respect
to field work and consolidating and compiling the data was in progress
at the end of the year.
Thirty-six seismic disturbances were recorded at Balboa Heights
during the fiscal year 1926. Of these about 50 per cent were of local
origin, 22 per cent of distant origin, and 28 per cent were so slight
that no estimate of the distance of the epicenter could be made. No
damage was reported.
For the maintenance and improvement of the channel, the follow-
ing floating equipment was employed or held in reserve during the
fiscal year: Three 15-yard dipper dredges, operated for nine and one-
half, seven and one-half, and seven months, respectively; two 20-
inch pipe-line suction dredges, employed for eight and one-half and
five months, respectively; a relay pump barge, in service about four
months; two drill boats, employed continuously throughout the year
in subaqueous mining operations in Gaillard Cut and at the Pacific
entrance; a hydraulic grader, operated for four months in grading
banks, sluicing material, and filling in low areas; a ladder dredge and
a floating air compressor were held in reserve but were not used dur-
ing the fiscal year. Other equipment included 5 large and 2 small
tugs, 11 launches, a crane boat, and two 250-ton floating cranes.
A statement of all material removed from the canal prism and
auxiliary projects during the past year follows:
From the canal prism: Cubic yards
Atlantic entrance ----------------------------------------- 0
Gatun Lake------------------------------------------ ---- 578,400
Caillard Cut--------------------------------------------- 1, 170, 400
Pacific entrance (maintenance)----------------------------- 468, 750
Pacific entrance (improvement project No. 1)---------------- 391,850
Total------------------------------------------------- 2,609,400
Balboa inner harbor (maintenance) -------------------------- 282, 150
Balboa inner harbor (improvement project No. 1)------------- 248, 700
Dredging for Panama Railroad and U. S. Navy --------_--_ ------261, 100
Total.. ..-------------.---------------.---..------...----- ------ 791. 950
Grand total------------------------------------------- 3,401,350
Of the grand total, 2,021,550 cubic yards were classified as earth
and 1,379,800 cubic yards as rock.


A resume of the slide movements during the year, in order of their
importance, is as follows:
On April 18, 1926, at 5.30 a. min., a slide occurred between stations
1619 and 1624, in what has been designated as the old East Powder-
house area, carrying some 35,000 cubic yards of material into the
canal prism, nearly all of which was composed of very hard rock.
The channel was affected for a distance of 130 feet from the east prism
line. The total amount of material involved in this movement was
about 250,000 cubic yards, and the break occurred some 400 feet
back from the east prism line. This slide was again active on May
14, May 28, June 7, June 17, and June 25, carrying additional mate-
rial into the canal. On account of the large quantity of unbroken
rock involved in this movement, it was necessary to mine and dredge
alternately, which greatly retarded progress in restoring the channel
to its normal width and depth. Between April 18 and June 30,
118,200 cubic yards of material were removed from this area, of which
111,200 cubic yards were rock.
At West Culebra slide, a slow general movement and settlement
continued intermittently throughout the year, the horizontal move-
ment toward the canal between stations 1770 and 1795 averaging
about 16 feet. On the night of November 1, 1925, a settlement
occurred in a portion of the bank at the northern end of East Culebra
slide, between stations 1762 and 1764, pushing material into the prism
to a point 100 feet west of the east prism line. From these two
slides dredges removed 129,750 cubic yards of material during the
year, bringing the total excavation from this area up to 27,640,360
cubic yards to the end of the year.
On the nights of August 4 and 5, 1925, the West Lirio slide again
became active between stations 1729.50 and 1737.50, pushing material
out to a point 80 feet east of the west prism line and necessitating
the removal of 116,400 cubic yards of material to restore the original
channel widths. Up to June 30 last the total excavation at West
Lirio slide amounted to 1,745,770 cubic yards.
During the period from September to December, 1925, the slide at
Cucaracha Signal Station showed some surface movement, with a
slight shoaling on the prism line between stations 1816+50 and
1820 + 50. During October 18,900 cubic yards of material were re-
moved and an additional 17,300 cubic yards had to be dredged out when
the high bank between stations 1819.50 and 1821.50 broke off on May
1 and settled into the channel for a distance of 60 feet from the west
prism line. In June an additional quantity of 4,750 yards was
removed, making the amount excavated from this slide 40,950 cubic
yards during the fiscal year, and a total of 115,850 cubic yards up to
June 30, 1926.


On July 22, 1925, the high bank between stations 1742+50 and
1747 + 00 broke off, pushing material into the prism to a point 70 feet
west of the east prism line. During the fiscal year 32,000 cubic yards
of material were removed from this point, bringing the total excava-
tion to June 30, 1926, up to 368,450 cubic yards.
The slide at Cucaracha Village, which covers approximately 5
acres, showed slight movements in October and November. During
the year 16,650 cubic yards of material were removed from this area.
Small slides occurred at stations 1160 east, at 1674 west, and at
various other points throughout the cut, but the amount of material
involved was relatively small.
There was no interference with shipping on account of slides
during the year.
Work on the deepening of the Pacific entrance channel, from
Miraflores Locks to the sea buoys, and the inner harbor at Balboa
from 45 feet to a ruling depth of 50 feet, which is known as improve-
ment project No. 1 and was begun in July, 1924, was continued
throughout the year without interruption.
From the inner harbor at Balboa a total of 530,850 cubic yards of
material was dredged during the year, of which all except 2,500
cubic yards was soft material removed by pipe-line suction dredges.
Of the total of 530,850 cubic yards, 282,150 were chargeable to main-
tenance and 248,700 to construction and improvement project No. 1.
In the Pacific sea level channel much harder material prevailed.
Two drill boats were employed, one throughout the year, the other
for the last 10 months, breaking up an estimated total of 347,007
cubic yards of rock by drilling and blasting. Dipper and pipe-line
suction dredges removed 394,050 cubic yards of rock and 466,550
cubic yards of earth, a total of 860,600 cubic yards. Of this total,
468,750 cubic yards were chargeable to maintenance of the existing
channel and 391,850 cubic yards to improvement project No. 1.
The total excavation, other than maintenance, accomplished to
date on improvement project No. 1, is 1,272,250 cubic yards. The
estimated total construction excavation involved in the project is
6,500,000 cubic yards, leaving 5,227,750 cubic yards yet to be
At the United States naval submarine base and air station at Coco
Solo 192,100 cubic yards of coral and blue rock and 56,700 cubic
yards of mud and silt were removed in necessary maintenance work
and in deepening and widening the channel.
In order to provide wharfage for ships of 30 feet draft, 12,300 cubic
yards of blue rock and earth were removed from in front of the Mindi
unloading dock for the Panama Railroad Co.


During the year a systematic clean-up program was begun in
Gaillard Cut, the need for which became more acute during the past
dry season when the level of Gatun Lake dropped to slightly over
81 feet above mean sea level. During January and February a
complete drag survey of Gaillard Cut was made as a check upon lead
line soundings and several shoal spots and lumps were disclosed. Two
15-yard dipper dredges and a drill boat were assigned to the task of
cleaning up these spots and the work was completed in May. This
clean-up work resulted in decreased output of the dredges, with
correspondingly higher unit cost as compared with former years.
With the completion of this clean-up program, it will be possible to
handle future maintenance work in the cut almost entirely with
suction dredges, excepting the removal of material resulting from
slides and breaks in the bank of the cut.

The maintenance of lights, buoys, and beacons established in the
canal and adjacent waters was continued throughout the year. The
Isla Grande Lighthouse, located at latitude 90 38' 32" north, longitude
790 33' 38" west, known as Point Manzanillo Lighthouse, which had
been operated by private interests, was taken over by The Panama
Canal as of October 1, 1925, by agreement with the Republic of
An unwatched light was established at Farallon Sucio, latitude 90
38' 38" north, longitude 7938' 22" west, on October 30, 1925;
visibility, 10 miles. A combination gas and whistling buoy established
9 miles off the Atlantic entrance to the canal at latitude 90 32' 09"
north, longitude 790 55' 022" west, on October 30, 1925, sank
shortly afterward, and was replaced in June, 1926; this buoy has
been seen at a distance of 16 miles. The San Jose light, Pearl
Islands, Gulf of Panama, at latitude 80 12' 50" north, longitude
790 07' 55" west, was increased to 1,500 candle power, thereby giving
a visibility of 20 miles.
A radio compass station at Cape Mala, constructed by The Panama
Canal and equipped by the Navy, was placed in commission on
August 4, 1925, operating under the commandant of the fifteenth
naval district.

Investigations were conducted and reports submitted by the
board of local inspectors on 83 accidents to vessels in transit through
the canal or using its terminal ports, as compared with 50 in the
preceding year. The majority of these were of a trivial nature, only
21 resulting in damage estimated at $1,000 or over. They are


classified as follows: Collisions between ships, 5; grounded in canal,
1; struck bank, 12; struck lock wall, 21; docking accidents, 10;
miscellaneous, 34.
The following is a brief description of the more serious accidents
of the year:
On July 20, 1925, the steamship Mineola northbound through the
canal with a cargo of 3,630 tons of nitrates, was in collision with' the
motor schooner San. Luis in the vicinity of Darien. The Mineola
was not damaged but the San Luis was badly stove in and had to be
beached. Estimated damage to San Luis, including drydocking
On September 25, 1925, the Agwismith, northbound through the
canal with a cargo of 14,500 tons of crude oil, grounded on the west
bank of the canal near buoy 76. It was not practicable to estimate
the cost of repairs but chocks and a part of the rail valued at about
$1,500 were carried away in an endeavor to pull her off.
On November 13, 1925, the Oroya, southbound through the canal,
struck the north center wall fender at Pedro Miguel with a great
deal of force, causing damage to herself estimated at $2,600.
On November 18, 1925, the Australien, northbound through the
canal, collided with the Panama Canal drill barge Terrier, causing
estimated damages of $19,575 to the Terrier; no damage to herself.
On November 17, 1925, the launch Adair, belonging to the fortifica-
tions division of The Panama Canal, caught fire in Balboa Harbor
due to a gasoline leak, An estimated damage of $1,000 was done
before the fire was extinguished.
On December 23, 1925, the survey ship Niagara, belonging to the
United States Navy, was damaged to the extent of $1,332 while being
moved from dock 6 to dock 14 in Cristobal Harbor.
On December 18, 1925, the United States submarine 8-42 in transit
of the canal northbound struck the fender chain at the south approach
to Miraflores Locks, damaging herself to an estimated amount of
$3,185. No damage to canal machinery or apparatus.
Early in the morning of January 20, 1926, fire was discovered in
the hold of the Julia Luckenbach, then lying at dock 6, Cristobal.
Before the fire was extinguished by the Panama Canal fire department
a total estimated damage of $29,350 was done.
On Januray 20, 1926, the Georgian, while refueling the Panama
Canal tug Gorgona at sea, suffered an estimated damage of $2,275,
caused by the vessels rolling together.
On January 30, 1926, the J. R. Gordon, northbound through the
canal with a cargo of 6,500 tons of lumber, struck the east bank of
Gaillard Cut with an estimated damage to herself of $15,000.

* fc I


On February 5, 1926, the Dinteldyk, northbound through the canal
with a cargo of 10,000 tons of grain and general merchandise, struck
the north center wall at Pedro Miguel Locks with a resulting damage
to herself estimated at $2,000.
On February 6, 1926, the United States minesweeper Robin ran into
the pipe line of Panama Canal suction dredge No. 86, damaging it to
the extent of $1,000.
March 14, 1926, the Corinthic, southbound through the canal,
struck the west wing wall and center wall at Miraflores Locks,
resulting in damage to the ship of $2,100 and to the walls of the
locks, $100.
March 13, 1926, the Wolhandel, southbound through the canal,
struck the fender on the north approach wall of Miraflores Locks,
demolishing it. The fender was old and badly worm-eaten, and
the damages were estimated at $1,028.20, or 10 per cent of the
cost of a new fender.
March 15, 1926, the cruiser Trenton, belonging to the United
States Navy, touched the walls at Miraflores and Pedro Miguel
locks with her propeller with an estimated damage to the propeller of
February 6, 1926, the Mystic, entering Balboa Harbor from sea,
fouled a Panama Canal pipe-line suction dredge and mooring "A,"
with an estimated damage to the dredge of $150 and to the mooring
of $1,300.
March 16, 1926, the Panama Canal tug Tavernilla rammed the
United States battleship New York while assisting her to dock,
causing an estimated damage of $3,900.
March 30, 1926, the Finland, docking under her own power,
struck dock 6, Balboa Harbor, with a resulting estimated damage to
herself of $1,400 and to the dock of $1,781.98.
March 27, 1926, the Steel Age, through the canal southbound,
touched the center wall hardwood fender in Pedro Miguel Locks
with a resulting estimated damage to the vessel of $1,500.
April 22, 1926, the Peter Kerr, transiting the canal southbound,
fouled a pipe line across the canal with damage to the line estimated
at $1,200.
On May 2, 1926, the Benicia, transiting the canal southbound,
struck the bank of the canal and fouled the Las Cascadas pipe line
with her anchor. Estimated damage to the ship $3,000 and to the
pipe line $1,090.35.
The Panama Canal was held to be responsible in the accidents to
the Corinthic, New York, Steel Age, and Peter Kerr. In the other
accidents outlined above the canal was held not to be responsible.
With respect to the total of 83 investigated accidents, the canal was
found responsible for 21.


The President signed an Executive order on September 25, 1925,
to establish rules governing the navigation of The Panama Canal
and adjacent waters, to become effective January 1, 1926, and under
this authority rules and regulations have been issued in pamphlet
form. The order made no radical changes. Its principal object
was to codify and clarify existing orders, with the superscssioni of
any which might no longer be applicable, concerning transit and
harbors, maritime quarantine, exclusion of undesirables, exclusion
of Chinese, steamboat inspection service, and customs service. A
secondary purpose was to remove from the field of Executive orders
subordinate matters which may be handled better by regulations
issued by the governor. With few exceptions only rules the violation
of which should properly make the offender liable to fine or imprison-
ment were included in the Executive order. Matters of subordinate
regulations, violations of which should properly involve the ship only
in delay, were left to the governor. The order establishes rules which
serve as the basic law, and the issuance of supplementary regulations
to make the law effective is intrusted to the governor. The first
edition of the revised rules and regulations was distributed in January,
1926, and several supplements were issued later. In future editions
these supplements will be embraced in the one booklet.
Owing to the establishment of commercial salvage companies in
the Caribbean area, the salvage operations of the Panama Canal
wrecking tug Favorite were greatly curtailed as compared with former
years. The Favorite was dispatched to the assistance of the steam-
ship Steel Scientist, which grounded on the Farallon Sucio Shoals,
approximately 25 miles from Colon, at 11.30 p. m. on April 14, 1926,
and gave such assistance as was possible until the arrival of a com-
mercial salvage tug. The Favorite was also dispatched to assist the
steamer Virginia, which had grounded in Mandinga Harbor off the
San Blas coast, but this vessel succeeded in getting off the reef
undamaged prior to the arrival of the canal wrecking tug. The
motor schooner San. Luis, which was beached in Gat un Lake following
a collision with the steamship Mineola, was assisted to the dry dock
by the Favorite. In other instances Panama Canal tugs were dis-
patched to the assistance of disabled vessels requiring towing into port.
Shipping interests were advised on May 19, 1926, that The Panama
Canal would no longer undertake salvage operations in other than
Canal Zone waters except where lives are endangered or great emer-
gency exists. However, The Panama Canal will continue to dis-
patch towboats for the purpose of bringing disabled vessels into port,
provided they are not disabled at a greater distance than 1,000 miles
from either terminal by the nearest sea route.



A detailed statement of the expenses (including depreciation),
revenues, and profit or loss on the various subsidiary business oper-
ations conducted by The Panama Canal will be found in Table No.
26, Section V, of this report. The total net profit on these operations
was $702,873.27, as compared with $765,916.85 in the preceding year.
The business operations of the Panama Railroad Co. on the isthmus
yielded an additional net revenue of $1,347,887.33. In 1925 this
revenue was $1,525,910.13. Details of operation pertaining to the
major business units of both The Panama Canal and Panama Railroad
are briefly discussed in the following paragraphs:


The volume of shop and marine work during the past fiscal year
decreased as compared with the preceding year. The smaller volume
of work resulted in a slight decrease of force as compared with 1925,
and a further decrease is indicated in the spring of 1927 unless work
not now in view materializes. So far as expedient, the repairs to
canal and Panama Railroad equipment, the manufacture of spares
for the locks, etc., are so distributed throughout the year as to provide
employment for the mechanical force during the periods when the
outside work declines appreciably. In this way it has been possible
to maintain a highly skilled and well organized force throughout the
year at comparatively steady employment.
The value and class of work done, and the source of the same,
for 1926, as compared with the two preceding years, are shown in
the following tables:

Class 1926 1925 1924

Marine..----------------------------------------- $2,123,956.45 $2,245,522.56 $1,787,869.78
Railroad ---- --.----.------------------------------- 629,478.27 526,149.75 488,324.86
Sundries ----------------------------------------- 382,422.45 531,758.96 374,498.57
Stock materials...------------------------------ 383,866.90 316,787.36 301,098.04
Total. -------------------------------------- 3,519,724.07 3,620,218.63 2,951,791.25


Individuals and companies 1. ------------------------- $1, 001. 586. 00 $1.229,868. 37 $1,097,250.48
The Panama Canal---------------------------------- 1,473,071.54 1,481,476.19 1,106,576.84
The Panama Railroad Co--.-------------------------- 731,251.52 516,156.08 513,165.34
Other departments of United States Government---- 313, 815.01 392,719.99 234,798.59
Total.------------------------------------------ 3,519,724.07 3,620.218.63 2,951,791.25

1 Includes Panama Railroad Steamship Line.


Marine work.-No especially large or feature jobs covering repairs
to marine shipping were handled during the fiscal year ended June
30,1926. The bulk of the work performed was emergency repair work
necessary to enable the ship to reach its home port. In a few instances
heavy running repairs in the machine, deck, and steward's depart-
minents were made on small tankers operating to the south of the canal.
The three 1,000-yard barges for the dredging division under con-
struction at the beginning of the fiscal year were completed and now
are in service. The work of remodeling the ends and sides of the
older canal barges was under way at the close of the year.
Routine operating repairs to the United States Navy submarines.
stationed at the naval base at Coco Solo were performed as authorized
by the Navy Department, as well as miscellaneous small jobs cover-
ing repairs and material for the special service squadron stationed
at Balboa. Operating repairs to tugs, mine planters, and launches.
stationed in local waters were handled for the Army.
Other worc.-A large number and variety of spare parts were made.
for use in the annual overhaul of the locks, and considerable shop
work was performed upon parts removed and replaced during the-
overhaul. A considerable quantity of dredge pipe was made for
The Panama Canal and for interests in Colombia. The usual heavy
run of work on dredge buckets, spuds, and dipper sticks was performed
for the dredging division, and a number of spuds were altered at the
suspension and lengthened 5 feet for work in deepening Balboa
Harbor and approaches. Material has been ordered for converting
another locomotive of the Panama Railroad into a superheater loco-
motive for use as a steam weed killer, as the locomotive so converted
last year has not only proved effective for killing weeds but when not
so required has been very satisfactory in passenger service. The
program of converting the old 61-foot poplar passenger coaches into,
mahogany coaches was continued, and at the end of the fiscal year
there was but one 61-foot poplar body left in the service. Work on.
the f&ar new towing locomotives for the locks, under way at the?
beginning of the year, was carried forward, and during the year one
was completed and put into service.
Plans were prepared for the construction of two tugboats for canal
service to replace two now in operation nearing the end of their
usefulness. These tugboats will be 125 feet. in length, with Diesel.
electric drive and pilot-house control. The hulls are to be constructed.
at the Balboa shops, the machinery to be purchased in the United
States and installed on the Isthmus. Project plans were prepared.
for a Diesel electric pipeline suction dredge. Also, plans were pre-
pared for the new Cristobal roundhouse, and the steel for this structure:
and for the new tugboats has been ordered.


Dry docks.-A total of 142 dry dockings was made during the year,
69 at Balboa and 73 at Cristobal. Of those at Balboa, 24 were ,
canal or Panama Railroad equipment and 45 other vessels; at
Cristobal, the corresponding figures were 20 and 53.
Plant.-Failures in the air compressor equipment at the Balboa
shops due to long-continued service necessitated the install tion of
a new compressor, and at the close of the fiscal year the foundation
for the new machine was completed. When the new equipment is
installed, the smallest compressor, which is a relatively new machine,
will be removed to the new Cristobal roundhouse. A special form
of storage battery automobile truck, carrying a light crane, was pur-
chased, and has proven very useful, permitting the transfer of a
steam locomotive crane to another division and dispensing with
the services of about five laborers. Two dry kilns for lumber, the
use of which has been discontinued in favor of air seasoning on
account of the excessive cost of steam for the kilns, have been con-
verted at small expense into chambers for spray painting.
Financial.-The mechanical division earned net profits of
$182,732.09 after providing funds for extraordinary repairs and
replacements totaling $45,000. Local reserves as of June 30, 1926,
including reserve for employees' accrued leave, totaled $616,427.32.

The sales of coal from the plants at Cristobal and Balboa totaled
347,619 tons during the fiscal year, as compared with 340,966 tons
during 1925 and 222,734 tons during 1924. There was no change in
the sales price of coal during the year. Gross receipts from coal
operations amounted to $3,081,238.60, resulting in net profits for
the year of $507,663.47, as compared with $510,108.27 for 1925 and
$161,502.28 for 1924. Approximately $216,000 of additional profits
for the year were set aside as a reserve for the repair and replacement
of Panama Railroad colliers and barges, which charges were not in
effect during 1924 and 1925.
Purchases totaled 365,276 tons, as compared with 296,612 tons
during 1925. While total sales were approximately the same as for
the preceding year, commercial sales were greater by approximately
50,000 tons, and this resulted in a considerable increase in operating
expenses as compared with 1925 when 46,000 tons were sold to the
United States Navy but did not involve any handling charges since
that quantity was already in the pile and was not disturbed.
At the close of the fiscal year 1925, tentative arrangements had been
made with the Ore Steamship Co. for the transportation of coal to the
isthmus at a rate of $1.15 per ton until such time as the transit
delays and expense of discharging their various types of vessels had


been carefully analyzed. These factors having been definitely de-
termined, a contract was signed with them during the current fiscal
year whereby they transport coal to the isthmus at a flat rate of $0.90
per ton, with agreed penalties for exceptional delays in transit. This
arrangement has materially reduced the cost of bringing coal to the
isthmus as compared with the expense of transporting it with our own
equipment and is a major factor in lowering the cost of coal in the
plants. The Ore Steamship Co. vessels are employed in the trans-
portation of iron ore from the west coast of South America to the east
coast of the United States and the return voyages southbound were
being made in ballast, which accounts for the advantageous arrange-
ment whereby the plant secures its coal at a transportation cost of
but 90 cents per ton.
Practically all deliveries were made through the Cristobal plant;
at the Balboa plant the operating force has been reduced to a skeleton
organization and only emergency orders from commercial vessels and
small deliveries to the Navy and Panama Canal equipment are
handled from this depot.


During the year an additional fuel-oil tank, with a capacity of
80,000 barrels, was erected at the Balboa tank farm by the Arrow Oil
Co. The total storage capacity for fuel and Diesel oil at the Balboa
and Mount Hope tank farms now is 2,066,040 barrels, made up as

Bal-oa Iu t Total

Panama Canal.---.------------------------------.--------- 194,540 24%. 500 444,040
West India Oil Co ------------------------------------------ 84,000 110, 000 194,000
Arrow Oil Co-.--.----------------------------------------- 105,000 110,000 215,000
Asiatic Petroleumn Storage Co----------------------------------- 190,000 110,000 300,000
Union Oil Co.------------------------------------------------- 228,000 ------------ 228,000
United States Navy..----------.------------------------------- 150,000 1 ,(0,000 300,000
TexasCo ---------------------------------------------- ----- ------------ 1. 000 110,000
HuastecaOil Co-----------------------------------------------------1i. 000 165.000
United Fruit Co...-----------------------------------------------------110,000 110,000
Total.-- ------------------------------.------------- 951,540 1,114,500 2,066,040

All oil deliveries to and from the tanks, for private companies
as well as for The Panama Canal and the United States Navy, were
handled through the pipe lines and pumping plants of The Panama


Issues of fuel and Diesel oil are summarized in the following

Balboa Mount Total

Fuel oil sold to steamships by The Panama Canal (barrels).--------- 1, 167 2,682 3,849
Fuel oil sold to steamships by companies (barrels)----------------- 2,041, 462 3,432,455 5,473,917
Number of ships supplied by The Panama Canal------------------- 2 5 7
Number of ships supplied by companies-----..---.----...-----..----------- 735 980 1,715
Diesel oil sold to steamships by The Panama Canal (barrels) ------- 0 3,740 3,740
Diesel oil sold to steamships by companies (barrels)---..------------- 342,891 2,082 344,973
Number of ships supplied by The Panama Canal------------------- 0 39 39
Number of ships supplied by companies---------------------------- 185 1 186

As compared with the fiscal year 1925, issues of fuel oil increased
651,213 barrels or 13 per cent and issues of Diesel oil increased 77,550
barrels or 28 per cent.
Gasoline.-During the fiscal year 1,520,842 gallons of gasoline
were received by The Panama Canal for bulk storage, of which
454,150 gallons were stored in the tanks at Mount Hope and 1,066,692
in the tanks at Balboa. The total storage capacity for bulk gaso-
line at the Isthmus is 2,086,000 gallons, made up as follows:

Balboa Mount Total

The Panama Canal-------------------------------------------- 391,000 225,000 616,000
West India Oil Co- ----------------- ------------------------ 1,470,000 ------------ 1,470,000
Total------------------------------------.-------- 1,861,000 225,000 2,086,000

There were no sales of bulk gasoline to ships during the year.
The handling of fuel oil resulted in net profits of $180,964.88 for
the year after deduction of fixed capital charges.


The general storehouse at Balboa and the branch storehouses at
Paraiso and Cristobal handled a total of 130,308 requisitions and
foremen's orders during the year, covering issues of all classes of
material and supplies to the various departments and divisions of
The Panama Canal and Panama Railroad. From these storehouses
gross sales aggregating $1,140,019.79 in value and involving a total
of 43,364 separate transactions were made to the Army and Navy,
to steamships, individuals, and companies. Gross sales to steamships
totaled $109,590.58.
Consistent efforts were made to keep the amount of stock on hand
at the minimum deemed prudent to meet possible needs, but, due to
increased construe action activities which require a larger amount of
construction material immediately available, the value of the material
on hand at the close of the fiscal year was greater by $308,787.55
than at the end of 1925.


The value of the material and supplies on hand at the several stores
at the close of the past two fiscal years is given in Table No. 21,
Section V, of this report; while purchases, issues, and sales for the
fiscal year 1926 are given in Table No. 22.


Operations were conducted on the Gatun Lake area under the super-
vision of the general storekeeper to procure native hardwood logs
to be used in substitution for high-priced northern hardwoods. A
total of 80,000 board feet of lumber was obtained, of which 70,000
feet cost $35 and 10,000 cost $20 per thousand board feet in the log.
The purchase of native hardwood ties was conmmnienced during this
period, 1,500 being secured, at $1.50 each, as compared with the ties
purchased in the States at approximately $2.09 each.


A total of 2,456 vessels utilized the terminal facilities of the canal
in loading, discharging, and interchanging cargoes at the terminal
ports, as compared with 2,227 vessels for the preceding year. A
comparison of cargo tonnage handled, gross and net revenue from
terminal activities, etc., for the past three years is given in the
tabulation following:

1926 1925 1924

Tons of cargo stevedored..---..-----------.----------------- 372. 710 327,237 334, 242
Revenue per ton stevedored-----------------.---------- .i. 35711 $0.3504 $0.3543
Cost per ton stevedored--------....----------.....-------------- $0.2543 $0.2345 $0.2265
Tons of cargo handled and transferred ---....--------------- 1,089.244 94. 245 933.092
Revenue per ton handled----------..............---...----------------- $0.9708 $( 9630 $0.'.9901
Cost per ton handled-----------------..................-..---.--...------------... $0.7412 $0. S6812 $0.6890
Gross operating revenue ..--------------------------- $1,381,375.58 $1,233,984.77 $1. 11fi. 39 34
Gross operate ing expense--------------..------------- $1,066,376.07 $913,242.01 ,Ft7. 749 46
Net revenue-------......------------------------------- $314,999.51 $320,742.76 $2?4, 09 88
Per cent of expense to gross revenue -------------------- 77.20 74.01 74.69

The distribution of business between the Cristobal and Balboa
terminals is indicated below:

CristnhKil Balboa

Numbhir of vessels dischargping or iking c.airgo..................................... ,7151 741
Tons of cargo received....- .. ........................................ 2,----------------- 20 68 756
Tons of cargo delivered.--------.........-....-------------------------------------- '529 20,936
Tons of cargo stevedored by Panama Railroid......................... ......-. 1.845 21,915

In addition to the above business, agency duties were undertaken
for various commercial steamship lines which do not maintain their
own agencies on the isthmus, and this service was furnished 331) ships
transiting the canal, at the nominal agency fee of $25 per ship.



The system of receiving shipments consigned to "Canal Zone for
orders" for storage and forwarding according to subsequent direc-
tions, which was inaugurated by the Panama Railroad Co. on April 1,
1925, was continued through the past year with satisfactory results
and an increase in the number of packages received for such handling.


Gross receipts from the sale of commissary supplies amounted to
$8,731,841.00 as compared with $7,944,101.65 during 1925, an increase
of approximately 10 per cent. Profits from operations totaled
$251,046.56 for the year, a decrease of $141,023.92 as compared with
1925, due to an effort to reduce the profit to an average of 2 per cent
of the gross sales.
Extensive alterations were made to the Balboa retail store, and at
the end of the fiscal year the construction of a new retail store at
La Boca, to cost approximately $116,000 was under way.
The number of wholesale units, retail stores, manufacturing plants,
etc., remained the same as in 1925, and the total capital investment
at the end of the year was estimated at $4,209,404.36, made up
as follows:
Plants and stores ------------------------------------- $2,328,343.79
Equipment----------------------------------------------- 147,901. 54
Supplies on hand----------------------------------------- 1, 233, 159. 03
Floating capital------------------------------------------ 500,000. 00
4, 209, 404. 36
Purchases during the year aggregated $6,567,946.18; segregated
among the various classes of supplies, the quantities bought as com-
pared with the two preceding years were as follows:

1924 1925 1926

Groceries----------------- ----------------------- $1,165,601.38 $1, 31, 059.33 $1,428,138.67
Hardware..------------------- --------------------- 349,166.82 o."1, 436.39 613,123.67
Dry goods------------------------------------------ 843,994.34 1,134,196.45 1,035,508.32
Shoes.----.----------------- --------- -169,517.15 245,272.02 199,873.72
Cold storage-------------- ----------------------- 1,121,741,.11 1,250,231.94 1,498,313.07
Tobacco ------------------------------------------ 366,643.95 412,567.67 382,528.94
Cattle and hogs--------- ------------------ 430,463.47 473,229.49 550,711.25
1Milkand cream-------------------- --------- ------- 88,025.31 98,027.88 101,499.55
Eggs----.---------------------------------------- 172,618.22 249,398.85 237,233.74
Butter------------------ ------------------------- 171,539.20 230,415.72 237,872.44
Rawmaterial--------------. ---------------------- 280,218.72 303,878.64 283,142.81
E Total------------------ ---------------------- 5,159,529.67 6,334,714.38 6,567,946.18

During 1926 purchases were made as follows: In the United States
$4,877,886.32; in Europe and the Orient, $551,756.09; in Central and
South America, $234,280.61; from the cattle industry on the isthmus,
$596,971.70; from the Panama Canal storehouses, $90,993.77; other
local purchases, $216,057.69.


The revenue from sales was approximately $800,000 greater than
in 1925. The distribution of sales, as compared with the two pre-
ceding years, was as follows:

1924 1925 1926

United States Government, Army iiandl Navy-........... $1,001,572.10 $1, ';2.589.02 $1,370,929.81
The Panama Canal --------------------------------- 7;7.026. 83 74 1, 594. 24 685.894.65
Steamships........................................... 468,291.68 604,656.09 7'.i,9,89.50
Panama Railroad and Steamship Linm.................. 230,285.10 249,774.64 192.,360.29
Individuals and companis... .......................... 598,549.69 731,675.58 I.i). 0,336.75
Employees ...................................... 4,419,007.40 4,909,983.00 5,41, 106.19

Gross sales -------------------------------- 7, 484, 732.80
Deducting discounts and credits------.----------------- 160,529.04
Revenue from sales------------- -------------- 7, 324, 203. 76

Supplies for expense and equipment:
Retail commissaries and warehouse-----------
Total...... ----------------------------------
Loss by condemnation, shrinkage, clerical errors, pil-
ferage, etc-------...--------------.-------------

8,302,272.57 9,133, 617.19
..!".. 170.92 421,776. 19
7,944,101.65 8,731,841.00

100, 459. 98 43,070. 90 42,527.73
1,429.34 1,499.93 1,231.70
19,005.58 20,165.80 15,827.28
120,894. 90 64,736. 63 59,586.71

103,255.97 128, 232. 60 195,113.84

Grand total--...----------------. --------------- 7,548,354.63 8,137,070.88 8,986,541.55

Products to the value of $204,803.42 were manufactured in the
industrial laboratory during the year; the bakery turned out 3,975,000
loaves of bread, 1,175,000 rolls, and 253,000 pounds of crackers,
in addition to cakes, pies, and doughnuts, with a total value of
$267,687.52. The coffee-roasting plant produced 196,000 pounds of
coffee, and including roasted peanuts, almonds, etc., the total out-
put was valued at $102,000. The ice plant manufactured 40,975
tons of ice, valued at $209,000. The dressed value of cattle and
hogs slaughtered at the abattoir was $372,725.66, and the value of
sausages and other by-products totaled $148,500. Sales of ice cream,
milk, and Eskimo pies totaled over $200,000, and the laundry handled
over 4,500,000 pieces during the year, producing a gross revenue of
more than $185,000.


The restaurants and silver messes were operated under contract
during the fiscal year and satisfactory service at fair prices was
rendered. The Hotel Tivoli at Ancon and the Hotel Washington
at Colon continued under the operation of the supply department
and were essential adjuncts to the canal in affording neacconmmnodations
to visiting Government officials, persons having business to transact
with the canal, American tourists, and others.
The Hotel Tivoli made a net profit of $23,086.45 during the year,
after deduction of capital charges of $7,547.40 and of operating
expenses. At the Hotel Washington a balance of $2,562.46 of revenue
over operating expenses was earned, but capital charges of $19,865.08
reduced the net result to a deficit of $17,302.62 for the year.



In addition to the ordinary maintenance and repair work on Canal
Zone buildings, a number of new construction projects were under-
taken during the year. Work on the new power plant at Miraflores,
estimated to cost $290,000, was 80 per cent completed at the close
of the year. Construction work on the new commissary building
to be erected at La Boca, at an estimated cost of $115,000, was 50
per cent completed. The erection of a gravel washing and screening
plant at Gamboa was 50 per cent completed at the close of the year.
At Balboa alterations to the commissary building were practically
completed and have resulted in greatly improved facilities for hand-
ling the large increase in trade. At La Boca eight barracks were
converted into quarters for alien colored employees. At Gatun,
where the demand for quarters for alien colored employees at the
locks was particularly urgent, 12 new 12-family standard type silver
family quarters were practically completed during the year, and two
surplus gold bachelor quarters were moved to the silver section and
converted into a 20-family house. Two additional four-family
apartments were provided through the conversion of other surplus
buildings, and a 48-room building was moved from the quarantine
reservation at Cristobal and converted into silver bachelor quarters.


During the year transportation for the fortifications section, which
heretofore had been operated independently, was taken over by the
transportation division and resulted in practically all motor and
animal transportation for the various departments and divisions of
The Panama Canal and Panama Railroad being consolidated under
one operating head. This tends to economy in that the centraliza-
tion of activities permits the reducing of both employees and equip-
ment to the minimum necessary to meet transportation demands.
At the close of the year the equipment consisted of 244 cars and
trucks, 9 trailers, 21 motor cycles, 7 mowing machines and rakes,
and 10 mules. The operating force as of June 30 was 27 gold em-
ployees and 154 silver employees, and the maintenance force em-
ployed at the motor car repair shops was 20 gold and 47 silver em-
The division is required to operate on a self-sustaining basis and for
the year the revenue exceeded the expeniises by $30,722.48.


Besides printing The Panama Canal Record (an official bulletin
published weekly for the dissemination of information, statistics, etc.,
of interest to the shipping world), the coupon books used by employees


in making purchases at the Canal Zone commissaries, and the various
pamphlets, circulars, tariffs, folders, etc., issued by The Panama
Canal, the printing plant carries in stock and manufactures such
stationery as is required on the isthmus in connection with canal
During 1926 the manufacturing output of the plant, was valued at
$174,769.92, as compared with $155,645.51 for the preceding year.
Issues and sales from the stationery stock aggregated $146,363.93,
and the inventory value of all stationery and stock on hand at the
close of the fiscal year totaled $95,983.81. The plant operates on a
self-sustaining basis, and it is the established policy to curtail all
classes of printing work as much as possible. The year's operations
showed an excess of revenue over expenses and fixed capital charges
of $941.43.

The gross revenues from the operations of the railroad proper
amounted to $1,564,074.30; the gross operating expenses were
$1,433,263.08, leaving a net revenue of $130,811.22 for the fiscal
year. This is a decrease of $51,257.06 in net revenue as compared
with 1925, due mainly to extensive repairs to equipment held in
The following table shows statistics covering various phases of
operation during the past three years:

Averaae miles opcratl'l, Colon-Pnan.i--.....--...--....-
Oros operrtin rv i------------------. .. .
Operatiiir x'prin.- -- --------------------------------
Not oper tiing revenue .- ---------------------------
Per cent of \pensi.-- In revenrii -.... ......... -...
Gross revenue per mile of road ---.-----........-
Operaiting expenses per iiile of road-.-......-..---...-..-
Net revenue per mile of road. --- --------------
Number of passengers carried:
First class---........................-----.......-----------.-
Second class... -- .----..---------.------.-
Passenper revenue:
First class.. -------------------------------
Second class --------------------------
Revenue per p:is-ngti'r train-mile ----------------
Revenue per freivia traiun-mile -------------------
Tot -il revenue tr i iiil ig i. .------ -------------
Railronnl revenue per traiin-imilq'.. ..
Ti:ilromI niperaingi expenses per revenue trin-n 111. ....
Net rnlrrj.]'1 r'-veir.ur- per revenue ir iun-niil*......... .
Fiei-ht |-iJ un- g'r, inii Is iti i Il o orii tive it.ain inil' I i- .
W ork-i r ii n iliea e ..... -... -.-.-.-..... - ... .-.
P ass(iie-r-tr n Ti .i . . . . . . . . . . . . . . . .
Freigh-tranin iini]ae. -----------------------------------

$1. 4 "n, 263.08
176. 611
3S4, 652
V2R 943.70
194. 564.59
$8. 69

$31, 684. 56
$3. 824.17
$17.i, -, W 11
$178, 524.00
73. 265


$76, 698.17
2'4-. 315
$206.743. 25
$172, 165. 22
$17 4. 694.00
$8. 12
1I3. 624


The gross revenue from the operation of telephone-, electric clocks,
and electric typewriting machines was $216,8s1.17 for the fiscal
year, and the operating expenses were 8201,211.07, resulting in a net
revenue of $15,650.10 for the year.


The new telephone exchange buildings at Cristobal, Gatun, and
Pedro Miguel were completed during the year at a total cost of
$80,000. Alterations to the exchange in the administration building
at Balboa Heights were made, costing approximately $10,000, and
new automatic equipment was purchased and installed in the main
exchanges at Balboa Heights, Cristobal, Gatun, and Pedro Miguel
at a total cost of $550,000. The change from manual to automatic
operation was made at midnight on January 23, 1926, and the new
system has been operating satisfactorily since that date.
During the year 784 telephones were installed and 646 telephones
were removed from service. There was a total of 2,888 telephones
in service at the close of the fiscal year.
Four additional electric printing machines were purchased during
the year, two of which were installed for the fifteenth naval district,
for communication with the Balboa radio station. Two are on hand
for reserve.
The gross revenue from Panama Railroad real-estate operations
totaled $184,574.30 for the year, representing an increase of $21,385.15
as compared with 1925. Operating expenses totaled $56,453.03,
leaving a net revenue of $128,121.27 as compared with $103,233.90
for the preceding year.
On June 30, 1926, there were in effect 1,273 leases and 13 licenses
granted by the Panama Railroad Co., covering the use of its prop-
erty in the cities of Panama and Colon. The income derived from
these leases and licenses accounted for $179,303.50 of the gross
revenue shown above.
At the close of the fiscal year 2,012 licenses were in force covering
7,277 hectares of agricultural and other lands in the Canal Zone,
representing an average holding of 3.6 hectares per person. Rentals
from this source totaled $36,630.20 during the year.
Alhajuela Basin.-During the year a total of 183 claims for land
and improvements in the Alhajuela Basin, aggregating $83,422.55,
were settled direct with claimants, except in three instances where
settlers were represented by counsel. In connection with the depopu-
lation of this basin, the United States acquired 300 hectares of banana
land in various stages of production. The former owners were per-
mitted to market the fruit from their original holdings upon payment
to The Panama Canal of 10 to 15 cents on each stem of bananas cut,
and additional revenue from this source totaled $5,274.53 during
the year.



The work at the plant introduction gardens and experimental
station, begun in June, 1923, was carried forward under the direc-
tion of the agronomist. A large number and variety of useful and
ornamental plants from all parts of the world have been acquired
gradually and set out for experimental and test purposes, with a
view of determining their value for general propagation on the Isth-
mus of Panama. Many additions to the plant collections were
added during the past year through exchange of plants and seeds
with other botanical gardens and agricultural experimental stations.
Particular attention has been given to the propagation and dis-
tribution of plants valuable for their edible fruits. Numnierous
varieties of bananas, pineapples, papayas, avocados, mangiioes,
oranges, grapefruit, limes, and other tropical fruits, including the
mangosteen, are being propagated and cultivated with a view to-
determining the varieties best adapted to local soils; and plantings
of cotton, sugar cane, rice, coffee, rubber, abaca, forage, and other
plants have been made for the purpose of determining the possi-
bilities of conmnercial development.
Although the work is in its infancy, during the-year a great many
people from the Canal Zone, Panama, and neighboring Republics of
Central and South Ameriien visited the gardens to obtain plants and
to secure information concerning the propagation and cultivation of
the same. It is believed that the experimental work being carried
out at this station will prove invaluable to future agricultural devel-
opment in the American Tropics.


The work which was begun last year on the replacement of dete-
riorated asphalt shingle roofs with standing seam galvanized iron on
quarters of gold employees was continued, and at the close of the
year was about 75 per cent, completed. Considerable work also was
done on interior and exterior painting of quarters that had not been
painted for three or more years. Exterior woodwork in the Tropics
should be repainted about every two years but sufficient funds have
not been available to do this.
Rent was paid for all quarters occupied at established rental rates.
Charges also were made for fuel, water, light, care of grounds, etc.
The demand for quarters from American employees was somewhat
in excess of the supply, particularly at Cristobal. For alien colored
employees there is not now, nor has there ever been, nearly enough
quarters to meet the demand. While the receipts for rent from
silver quarters have not covered maintenance cost at any time in


the past, the advantages accruing to the canal organization through
having these employees reside in the Zone near their work has more
than justified the appropriation necessary to cover the deficit.
The maintenance costs for many of the older wooden buildings
are gradually increasing to a point where it will be no longer eco-
nomical to maintain them. Funds should be provided for the inau-
guration of a continuous building program, to be carried forward
from year to year, for the replacement of old, cheaply constructed,
frame quarters with permanent buildings.
The Panama Canal collected from employees and others the sum
of $591,227.83. Not including an expenditure of $94,873.80 for the
maintenance of laborers' quarters, rental charges exceeded mainte-
nance expenses by $66.84.

To the maintenance of clubs and playgrounds for American and
West Indian employees and their families, The Pannma Canal
contributed $100,000. The additional expenses defrayed from cur-
rent revenue were $529,686.12, and the income from moving pictures,
soda fountains, candy and cigar counters, swimming pools, tennis
courts, and other activities promoted was $537,687.55. The accumu-
lated surplus of clubhouse funds on June 30, 1926, was $154,150.80.
Additional detail of income and operating expenses may be obtained
from Table 42, Section V, of this report.


Plantations.-The net loss from the operation of the plantations for
the fiscal year amounted to $3,905.73, as compared with a loss of
$2,064.73 in 192'5. Revenue from the sale of products decreased
$3,600, while the decrease in operating expenses was only $1,800.
Dairy farm.-The operations of the dairy farm for the fiscal year
show a net loss of $3,654.61, as compared with a loss of $1,436.78 in
1925, the larger deficit resulting from an increase in operating expenses
and to losses on cattle turned in for slaughter.
Cattle.-The net profit from the operations of the cattle industry
N$16,971.47 last year. During the year 6,449 fat cattle were purchased
and 8,233 head were turned in to the commissary division for slaugh-
ter. Sales to the commissary division and to outsiders, including
miscellaneous products, amounted to $565,010.92. The cost of
production was $543,463.88. There were 187 births and 270 deaths
during the year, leaving 5,952 head of cattle on hand June 30, 1926.
The operating expenses for the fiscal year were $146,411.36 as
compared with $137,405.23 in 1925, an increase of $9,006.13 for the



Only a brief review of the operations of the coaling plants, harbor
terminals, commissaries, and other business activities carried on with
Panama Railroad Co.'s funds are given in this report. Detailed
statements of revenue, expenses, and statistics of all railroad indus-
tries, changes in the capital account, and the results from the opera-
tions of the steamship line, will appear in the regular annual report
of the Panama Railroad.
The operations of the railroad proper, harbor terminals, coaling
plants, stables, and baggage transfer were continued throughout the
fiscal year under the direction of the superintendent of the railroad;
the telephone system under the electrical engineer of The Panama
Canal; renting of lands and buildings under the land agent; and the
commissaries, Hotel Washington, plantations, dairy farm, and cattle
industry, under the chief quartermaster of The Panama Canal.

The gross operating revenue of the steamship line for the fiscal
year ended June 30, 1926, amounted to $2,210,775.29, and the total
operating expenses to $2,496,124.55, resulting in a net deficit from
operation of $285,349.26. This operating deficit compared with that
for the fiscal year ended June 30, 1925, of $198,568, shows an increase
in deficit of $86,781.26.
The steamship line carried all freight and passengers for account
of the United States Government during the year at material reduc-
tions from tariff rates, which amounted to the important sum of
$504,962.08. Had tariff rates been charged by the line for such
services rendered to the Government, its operating deficit of $285,-
349.26 would have been reversed and a profit of $219,612.82 shown.
For the year ended June 30, 1926, the tonnage carried amounted
to 258,448 tons as against. 221,999 tons for the previous year, an in-
crease of 36,449 tons. The increase in deficit of $86,781.26 as com-
pared with the previous year-notwithstanding the increase in ton-
nage transported-is attributable to increases in stevedoring rates
and in the cost of fuel oil, as well as to increases in wages and other
items due to the operation of the S. S. Ancon in place of the S. S.
General W. C. Gorgas, retired from service in May, 1925.



The civil government of the Canal Zone has been conducted as
prescribed in the Panama Canal act of August 24, 1912, and other
acts and Executive orders made applicable to the Canal Zone.
Wherever it has been found practicable to assign governmental func-
tions to department heads in the organization for the operation and
maintenance of the canal and to the personnel under them, this has
been done. Complete cooperation as well as greater economy and
efficiency is thus assured.
Data on the cost and revenue of various branches of the government
may be obtained from the financial statements in Section V.


A census of the civil population of the Canal Zone was taken by the
police force during the month of June, 1926, a summary of which is
given below:

Americans All others
I Grand
Total Em- Total Em- Chil- Total Em- Total Em- Chil- total
men ploy- womr- ploy- dren men ploy- wom- ploy- dren
ees en ees ees en ees

Balboa district.------- 1,739 1,586 2,004 326 2,269 3,734 2,269 2,437 35 4,539 16,722
Cristobal district------ 555 501 660 27 741 3,049 2,106 1,932 11 3,910 10,847
Prisoners-------------- 22 --------------------------- 97 ------ 4 -------------- 123.
Fiscal year 1926 -- 2,316 2,087 2,664 353 3,010 6,880 4,375 4,373 46 8,449 1 27,692:
Fiscal year 1925 -. 2,301 1,989 2,413 315 2,399 6,928 4,322 4,563 191 8,547 27,151

1 Includes 91 civilian employees of the Army and Navy.

In addition to the civilian population listed above, the military
population in the Canal Zone in June, 1926, numbered 9,296, making
a grand total of 36,998.

Mailaria.-The total number of malaria cases reported from the
Canal Zone and terminal cities duriing the year, compared with the
five previous years, is as follows:


1926 1925 1924 1923 1922 1921

Employees............................................ 1312 180 208 216 176 325
Military and naval personnel...............--........... 854 762 894 870 828 810
Nonemnployoes........................................ ----------------------------------445 494 521 657 243 459
Total........................................... 11,611 1,436 1,623 1,743 1,247 I, 5-94

1 Omitting the cases from Bruja Point, where a gang of men was eng igel in construction work for the
Army and housed in a ternmproriry cinmp outside the sanitated areas, the number of employees reported with
malaria was but 188, ail t hot i.t il number of cases 1,487. Over half of the men empinloyr .t Briijia Point
developed m.iltrii within 5 months, and this furnished a very good example of what would .jr-ur througliQuu
all the vdilages and settlcrnemits in the Canal Zone should our sanitary measures be relaxed.
There were no deaths among employees from malaria during the
Canal Zone.-The average population of the Canal Zone (civil and
military) for the fiscal year 1926 was 35,971, and this figure has been
used as a base for vital statistics. From this population 297 deaths
occurred during the year, 247 of which were from dis-ase, giving a
rate of 6.87 for disease alone, as compared with 7.17 for 1925, and
7.48 for 1924.
There were 592 live births reported during the year, and 35 still-
births. Including stillbirths, this is equivalent to an annual birth
rate of 17.43 per 1,000 population. The infant mortality rate, based
on the number of live births reported for the year, was 30.61 for
white children and 98.48 for colored children, with a general average
of 76.01. Of the total births reported 6 per cent were stillbirths. Of
the total deaths reported, 26 per cent occurred among children under
5 years of age.
The maternal mortality rate (from conditions due to the puerperal
state) was 7.97 per thousand births, stillbirths included.
Panram.-The population of the city of Pananii for the year was
59,635. Fromn this population, 1,133 deaths occurred during the
year, of which 1,09:3 were from diea-ie, giving a ruite of 18.33 for
disease alone, as compared with 18.25 for the preceding year.
The principal causes of death, compared with the past few years,
were as follows:

1920 1925 1924 1923 1922

Tuboi'rtil'is 1varioui- or in .... ... ... ...... ... ..... ....... 211 1 1 1 -1, "3I
Pneumonia .hrip w lu l.l.ii.......................................... 154 187 276 128 225
Dinrrl i and enteritis........-.........................................------------------------------------------ 85 90 121 11441 176

There were 2,085 live births reported during the year and 127
stillbirths. Including stillbirths, this is equivalent to an annual birth
rate of of 37.09 per 1,000 population. The infant mortality rate,
based on the number of live births reported, was 123.26. Of the
total number of births reported, 6 per cent were stillbirths. Of the
total deaths reported, 31 per cent occurred among children under 5


years of age. The maternal mortality rate (from conditions due to
the puerperal state) was 5.42 per thousand births, stillbirths included.
Colon.-The population of the city for the year was 31,285. From
this population 426 deaths occurred during the year, of which 391
were from disease, giving a rate of 12.50 for disease, as compared with
13.81 for 1925.
The principal causes of death, as compared with the past few years
were as follows:

1926 1925 1924 1923 1922

Tuberculosis (various organs)--------------------------------------- 71 87 57 79 70
Pneumonia (broncho and lobar) ----------------------------------- 36 54 42 40 32
Diarrhea and enteritis --------------------------------------------- 26 27 33 26 46

There were 760 live births reported during the year and 40 still-
births. Including stillbirths, this is equivalent to an annual birth
rate of 25.57 per 1,000 population. The infant mortality rate, based
on the number of live births, was 101.32. Of the total births re-
ported, 5 per cent were stillbirths. Of the total deaths, 27 per cent
occurred among children under five years of age. The maternal
mortality rate (from conditions due to the puerperal state) was 8.75
per thousand births, stillbirths included.
Canal hospitals.-Patients treated in Panama Canal Hospitals,
fiscal year 1926:

Number in
hospital Admitted Died Discharged Transferred Remaining
July 1, 1925 June 30,1926

0Q .as S 0 .3 03 d 0 _g S c f <

Ancon ------------------- 180 194 4,365 3,442 71 189 4,274 3,218 26 62 174 167
Colon--------------------- 12 26 870 1,153 19 61 699 954 151 140 13 34
Insane ..---------------- 101 297 66 117 3 23 52 66 2 10 110 315
Cripples-..------------- 3 28 4 9 0 0 1 4 2 8 4 25
Chronics --------------- 3 31 1 46 0 5 1 36 0 1 3 35
Palo Seco leper colony---- 6 89 1 12 1 9 0 0 0 0 6 92
Total--------------- 305 665 5,307 4,779 94 277 5,027 4,278 181 221 310 668

Q iaranulne division.-As in former years, an efficient quarantine
has been maintained with the usual minimum delay to shipping. It
is worthy of note that no quarantinable disease was introduced into
the Canal Zone, and that only four ships out of the total 6,483 were
held on account of suspicious quarantinable disease and their deten-
tion was but three days.
The quarantine embargo prohibiting the introduction of animals
and articles that are carriers of foot-and-mouth disease remained in
force against all of the countries of South America except Colombia,


Venezuela, British Guiana, Dutch Guiana, and French Guiana.
A special study relative to existence or nonexistence of foot-and-
mouth disease in Ecuador was made by the chief quarantine officer
during a trip to that country. He also visited Colombia during
the year, continuing the study of sanitary conditions at ports and to
encourage relations with sanitary officials. On account of smallpox
in the United States, especially on the west coast, particular care
was taken to prevent its introduction.
In the performance of their duties as quarantine officers, the physi-
cians employed in the quarantine division acted also as immigration
The following table shows transactions of the quarantine division
for the year 1926:
Vessels detained in quarantine- ------------------------------------ 4
Vessels inspected and passed----------------------------------- 4, 198
Vessels granted pratique by radio--------------------------------- 347
Vessels passed on sworn declarations---------------------------- 2, 063
Total vessels entering ----------------------------------- 6, 483
Supplementary inspections of vessels----------------------------- 4, 925
Vessels fumigated----------_------------------------------------ 157
Crew inspected and passed ---------------------------- -------234, 406
Crew passed on declarations of medical officers-------------------- 100, 937
Crew passed by radio pratique------------------------------------ 28, 253
Passengers inspected and passed---------------------------------- 96, 269
Passengers passed on declaration of medical officers----------------- 24, 631
Passengers passed by radio pratique------------------------------- 3,063
Total persons entering at canal ports ---------------------- 481, 321
Persons vaccinated in passing through quarantine------------------- 1, 098
Persons deported under immigration laws -------------------------- 967
Persons detained on account of immigration laws-------------------- 1, 212
Persons held for investigation and later landed --------------------- 1, 105

Water supply.-Other than the routine maintenance work on pipe
lines, reservoirs, filtration plants, and pumping stations, a number of
projects were carried out for the improvement and enlargement of the
Canal Zone water system, the more important of which were as
follows: Construction of a 30-inch pipe line from Gatun Lake to
Mount Hope; the reclaiming of the existing 20-inch lines from
Brazos Brook to Mount Hope; the construction of a 500,000-gallon
clear-water well at the Mount Hope filtration plant; the construction
of a 12-inch water line from Mount Hope to the cold-storage plant;
changes in the layout of water lines necessitated by the construction
of the new Miraflores power plant; the construction of a roof over
the wash water tank at the Miraflores filtration plant; together
with numerous smaller jobs.


The amount of water consumed during 1926, as compared with the
preceding fiscal year, is shown in the following table:

1926 1925

Gallons Gallons
CanalZone----------------------------------------------------- 3,000,372,000 3,140,009,765
City of Panama---------------------.----------------------------- 1,163,545,000 1,117,982,000
City of Colon----------------------------------------------------- 575,429,000 586,325,000
Sales to ships------------------------------------------------------ 144,191,672 132,942,685
Total.-------------------------------------------------- 4,883,537,672 4,977,259,450

Sewers.-In addition to the usual maintenance work performed
during the year, a 20-inch storm drain was constructed to eliminate
flooding in the area south of the Hotel Washington. Storm drains
also were constructed to take care of the excess surface water in the.
vicinity of the laundry at Ancon. A number of culverts, drains, and
additional catch basins were constructed in the Balboa-Quarry
Heights area, and the sanitary sewer along Balboa Road was rebuilt.
Roads, streets, and sidewalks, Canal Zone.-Other than the usual
maintenance and repair work, a section of the Bolivar Highway
between Cristobal and Gatun was reconstructed; the roadway near
Gatun Dispensary was straightened; the Camp Bierd Road was re-
surfaced; the section of Amador Road between Empire Street and
Balboa Road was widened; and a number of other new construction
and improvement jobs were carried out.
Garbage disposal.-In the northern district, the incinerator at
Mount Hope was operated throughout the year, disposing of 21,924
tons of garbage. In the southern district the garbage was dumped on
waste land and buried by the health department, as has been the
practice for the past several years.
Cities of Panama and Colon.-The following is a summary of the
more important work handled during the year in addition to the
necessary maintenance work on the sewer and water systems and on
the streets: Paving of D Street, Colon, from intersection with Broad-
way to Second Street, Colon, at cost of $41,942.80; installing water
and sewer lines and concreting streets in the Thirty-fourth Street
section, exposition grounds, Panama City, $21,731.22; reconstruction
of Caledonia Road, Panama City, $41,942.80.
Army and Navy.-Various jobs, such as the laying of water lines,
resurfacing of roads, construction of sea walls, etc., were performed
for the Army and Navy during the year.
Miscellaneous.-Among the more important miscellaneous work
handled during the year was the construction of a swimming pool at
Pedro Miguel, the installation of a recirculating system at the Balboa
swimming pool, the excavation work necessary in connection with the
erection of the new Miraflores power plant, the municipal work in


connection with the erection of new quarters for colored employees at
Camp Bierd and at Gatun, and the construction of approaches and
slabs for new garage stalls at various points.

The number of arrests during the year was 3,008, the lowest number
made during any year since 1905. The average number of prisoners
in the common jails at the close of each month was 52, as compared
with 58 in 1925, 63 in 1924, and 73 in 1923. In the persons arrested,
natives of 84 countries and territories were represented, which is in-
dicative of the cosmopolitan nature of the population it is necessary to
handle, many of whom are seamen, travelers, or other transients
arriving at the local ports. The resident population of the Canal
Zone, consisting almost entirely of civilian employees of The Panama
Canal and the military and naval forces with their families and de-
pendents, is law abiding as a whole and represents a comparatively
simple problem in so far as police control is concerned.
The persons arrested included rperesentatives of 194 trades and
professions, operators of motor cars being the most frequent offenders
and accounting for 777 of the arrests. The more common causes of
arrest were violations of the motor vehicle regulations, with 781
cases; violations of the immigration regulations, 337; disorderly con-
duct, 289; violations of the traffic regulations, 189; loitering, 153; vio-
lations of the national prohibition act, 134; violations of license regu-
lations, 157; assault and battery, 108; petit larceny, 107. Nine
arrests were made for violations of the narcotic drugs import and
export act, all of which resulted in convictions. Two arrests were
made for violation of the white slave traffic act, one of which resulted
in conviction.
In addition to the routine police work in the Canal Zone villages, a
continuous patrol of the harbors of Balboa and Cristobal was main-
tained throughout the year, principally for the enforcement of the
navigation laws and for the prevention of smuggling and irregular
traffic. Police launches were maintained also for the patrol of the
Chagres River and Gatun Lake, and details of police officers were
continued at all canal locks and at the spillway at Gatun.
For the enforcement of the vehicle traffic regulations and for special
emergency police service, motor-cycle patrols were continued through-
out the year at Balboa, Pedro Miguel, Cristobal, and Gatun.
Monthly patrols of the interior sections of the Canal Zone were
continued throughout the year to ascertain if any unauthorized
clearings or cultivations were being made.
There were nine homicides during the year, three of which were
due to automobile accidents. In two of these accidents the drivers
of the cars were exonerated by the coroners' juries, while in the third


the driver was convicted on a charge of manslaughter and sentenced
to 18 months' imprisonment. Of the remaining six homicides, one
a-Saitlunt received a sentence of 10 years after conviction on a charge
of second. degree murder; two others received sentences of five years
and 2 years, respectively, after conviction on charges of voluntary
manslaughter; two were acquitted; and the sixth died as a result of
a gunshot wound self-inflicted before being taken into custody for
his crime. There were four cases of suicide during the year.
Coroner investigations were made in 68 cases of death during the
year. Of these, 25 were due to accidental drowning, 16 to acci-
dental traumatism, 10 to natural causes, 5 to homicides, 4 to suicides,
3 to accidental burns, 2 to snake bite, 1 to accidental gunshot wound,
and 2 undetermined.
There was a total of 301 traffic accidents on the Canal Zone during
the year, resulting in four persons being killed and 77 injured. Prac-
tically all of these accidents were avoidable and were caused by care-
less and reckless operation of vehicles.
During the year 46 convicts were admitted to the Canal Zone
penitentiary, with sentences aggregating 101 years, 7 months, and
7 days. Fifty-four convicts completed their terms of imprisonment
and were discharged; included in these were two pardoned and four
paroled by the governor. The average number of convicts in custody
during the year was 71.67. At the close of the fiscal year 68 convicts
remained in custody, 16 of whom were citizens of the United States.
So far as practicable, convicts were employed on road and municipal
improvements, maintenance of prison grounds and buildings, manu-
facture of prison clothing, raising of vegetables, etc., the value of
their labor at prevailing local rates being estimated at $33,194.69.


The district attorney and his assistant prosecuted 177 criminal
cases before the district court, with 151 convictions, 21 acquittals,
and 5 cases dismissed. There were 17 criminal cases pending at the
close of the fiscal year. Of the criminal cases prosecuted, 77 were
for violations of the national prohibition act.
The district attorney represented The Panama Canal or the United
States Government in eight civil actions, three of which were still
pending at the close of the year.

Sessions of the district court were held at Ancon and Cristobal,
and the following business transacted during the year:
Cases pending at the beginning of the fiscal year: Civil, 36; pro-
bate, 68; criminal, 22. Cases filed during the year: Civil, 110;


probate, 213; criminal, 173. Cases settled during the year: Civil
118; probate, 197; criminal, 168. Cases pending at the end of the
year: Civil, 28; probate, 84; criminal, 27.
Of the civil cases settled, 81 were decided, 9 transferred, and 28
dismissed. Of the criminal cases settled, 10 resulted in acquittal,
133 in conviction, 8 were dismissed, 1 was nol pressed, 15 were
transferred between the Balbon and Cristobal divisions of the court,
and 1 was forfeited.
Marriage licenses issued numbered 577, deeds recorded numbered
22, and collections from fines, fees, licenses, etc., totaled $6,552.19.

During the year writs of process received in the office of the United
States marshal numbered 725. Of these 681 were served and 44
could not be accomplished since the parties could not be located
within the Canal Zone. Fees collected totaled $388.10; fees paid to
witnesses, jurors, interpreters, etc., amounted to $180; trust funds
handled during the year aggregated $66,345.75; and surety bonds
handled totaled $309,950.

In the magistrate's court at Balboa 12 cases were pending at the
beginning of the year, 1,576 cases were docketed, 1,581 cases dis-
posed of, leaving 7 cases pending at the close of the year. Of the
criminal cases settled, 24 resulted in acquittal, 1,212 in conviction,
251 were dismissed, and 49 held to the district court. Fines and other
collections during the year totaled $10,819.05.
As provided in the Executive order of May 10, 1911, petitions were
made to the district judge for the commitment of 63 persons to the
Corozal Hospital for observation.
In the magistrate's court at Cristobal, 10 cases were pending at the
beginning of the fiscal year, 1,144 cases were docketed, 1,148 cases
were disposed of, leaving 6 cases pending at the close of the year.
Of the criminal cases settled, 83 resulted in acquittal, 856 in con-
viction, 56 were dismissed, and 105 held to the district court. Fines,
forfeitures, and other collections totaled $8,436.60 during the year.


During the year, 161 fires, 5 emergency calls, and 6 false alarms
were reported. Of the fires, 114 occurred in property of The Panama
Canal, 26 in property of thb Panama Railroad Co., 3 in property of
the United States Army, 2 in property of the United States Navy,
and 16 in private property.


Property losses by fire during the year aggregated $71,575.15,
distributed as follows: Panama Canal, $325.65; Panama Railroad
Co., $672.50; United States Army, $31,410; United States Navy,
$65; private property, $39,102. The total value of the property
involved was $3,851,456.90.
No changes were made in the organization or in the number and
locations of fire stations during the past fiscal year. Inspections of
all Government buildings, docks, storehouses, yards, etc., were
conducted periodically, and all hose, extinguishers, and other equip-
ment were maintained in good condition throughout the year.
Additions to apparatus and equipment included 31 fire extinguishers
and 4,000 feet of fire hose, the greater part of which was used to
replace unservicable equipment.
In addition to the paid firemen, who numbered 44 at the close of
the year, a number of volunteer fire companies were maintained
during the year, the personnel of which numbered 197 on June 30 last.


During the past year six elementary and two high schools for
white children, and eight elementary schools for colored children
were maintained. The net enrollment in the white schools was
2,426 and in the colored schools 2,302; corresponding figures for 1925
were 2,274 and 2,314. The growth in school population has been
steady during the past five years, and the increasing number of pupils
has resulted in an overcrowded condition in a number of the grades.
At the close of the school year, in some of the colored schools the
number of pupils per teacher was 50, and notwithstanding that this
number is entirely too high for efficient teaching, there still remained
700 colored children of school age for whom no educational facilities
were provided. Even in some of the white schools, with any growth
at all next year new rooms must be opened and additional teachers
employed, else it will be necessary to exclude children from school.
From the two high schools there were 53 graduates at the close of
the school year. During the year 87 teachers were employed in the
white schools and 47 in the colored schools.
In the white schools the educational qualifications of the teachers
compare most favorably with those in the States. In addition to
the preliminary training in elementary and high schools, the minimum
qualifications for grammar school teachers are two years of training
in a recognized normal school or teachers' college; while for high-
school teachers, four years of training (with a diploma) in a recognized
State teachers' college or university are required. These are the
minimum requirements but actually much higher standards have
been set up, as owing to the number and high qualifications of appli-
cants it has been possible to appoint grammar grade teachers from


among those who have had actual training and experience in these
grades and, in addition thereto, have earned a B. A. degree; and in the
case of high school teachers, applicants with an M. A. degree are
given preference in appointment.
Otis classification test.-In order to make a comparison with
respect to intelligence and achievement, in school work with pupils
in corresponding grades in the United States, the Otis classification
test was given to the children of Grades VII and VIII in the white
schools, and Grades VI, VII, and VIII in the colored schools. This
classification test has been given to approximately 100,000 school
children in the United States and the average results obtained by
this test have furnished a standard whereby the intelligence and
achievement of pupils may be fairly measured. Owing to the effects
of an enervating climate, the comparatively rapid turnover of
teachers and pupils, and the fact that the pupil's school year is often
disrupted by vacations, it was thought that the pupils in the Canal
Zone schools would fall somewhat below the average for children in
corresponding grades in States' schools. However, it is most gratify-
ing to report that the average achievement of the pupils in the white
schools was decidedly superior to the average achievement of pupils
in corresponding grades in the States. The achievement of the
colored pupils was considerably below that of pupils in the white
schools and was inferior to that of children in corresponding grades
in the States' schools, but when it is remembered that these children
frequently lack textbooks, and that the school-rooms are overcrowded,
the results obtained are considered very good, and it is remarkable
that as much can be accomplished as has been done in these schools.
There is an urgent need for additional funds for Canal Zone schools
in order to provide educational facilities for the several hundred
colored children not now in school, to provide text-books to meet
the demands made by the present courses of study, and to effect
repairs to place the present school buildings in first-class condition.

Thirteen post offices were in operation on June 30, 1926, there
having been no change during the year in the number or location of
offices. Owing to the evacuation of villages in the Alhajuela Basin,
the postal service for this area, which had been provided by special
messenger since early in 1924, was discontinued on February 15, 1926.
The total receipts of the postal service were $178,324.02, as com-
pared with $168,958.22 for the year preceding, an increase of 5%Y per
cent. The total disbursements were $177,241.27, leaving a surplus
of $1,082.75 for the year. Since it is estimated that 60 per cent of
all mail handled locally is dispatched under official frank, from which


the bureau of posts derives no revenue, the fact that the postal system
operated on a self-sustaining basis during the past year is deemed
highly creditable.
The sale of United States postage stamps and postal cards sur-
charged "Canal Zone" was continued throughout the year, but
stamped envelopes were manufactured at the Panama Canal press.
As soon as funds are available for obtaining the required dies for the
printing of a distinctive series of Canal Zone postage stamps and other
stamped paper, it is proposed to discontinue the use of the surcharged
United States stamps.
There were 142,047 money orders issued during the year, amount-
ing to $2,777,603.61, on which fees amounting to $12,999.09 were
collected. During the year 41,211 money orders, amounting to
$1,244,683.19, were paid. The total amount on deposit at all post
offices on June 30, 1926, including deposit money orders, old postal
savings accounts, and unpaid fee money orders in favor of the
remitter, was $466,996.65, as compared with $536,939.68 at the close
of the previous fiscal year.
In the registry division of the post offices 261,195 letters and
parcels were handled, of which 44,396 were official mail under frank
and accepted for registration without fee.
During the year a total of 2,688 dispatches of mail were made to
various foreign post offices by the office at Cristobal as compared with
2,353 dispatches during the preceding fiscal year. Dispatches of
mail received from foreign exchange post offices by the Cristobal office
numbered 3,158, as against 2,275 for the previous year. The Balboa
post office, which dispatches mail to the west coast of Central and
South America and the United States, made 1,583 dispatches to
foreign post offices and received 788 dispatches from foreign offices
during the year, as compared with corresponding figures of 1,631 and
606 for the preceding year.
Throughout the year United States and foreign transit mail
destined to the west coast of Central and South America, as well as
mail exchanged between Cuba, Jamaica, and other insular govern-
ments with Colombia, Costa Rica, Venezuela, etc., was handled
under the supervision of the director of posts. Mail from European
countries, routed via the isthmus for transshipment, is handled by
the director of posts in behalf of the United States Post Office Depart-
ment, whereas direct agreements are in effect between the director
of posts and the postal authorities of Costa Rica, Australia, and
New Zealand for the handling of their mails routed via the isthmus.
Effective February 1, 1926, at the request of the Director General
of Posts of Peru, the service formerly performed by the Peruvian
postal agent in Panama and Colon was transferred to the office of
the director of posts of the Canal Zone. The new arrangement has


afforded more expeditious dispatch of Peruvian mails and has resulted
in economy to the Peruvian postal administration. It would ble more
satisfactory, as well as more economical, for the postal administra-
tions of all Central and South American countries to discontinue their
local postal agencies and to agree to the establishment of one central
agency under the supervision of the director of posts of the Canal
Zone. The existing agencies were established before the opening of
the canal when it was necessary to receive and dispatch mail in both
directions, but the necessity for separate agencies ceased about 10
years ago.
During August, 1925, two German hydroplanes made a pioneer
flight from Colombia, via the Canal Zone, Costa Rica, Nicaragua,
Salvador, Honduras, Guatemala, and Cuba, to the United States in
the interest of a proposed air mail route to be established with the
cooperation of the governments concerned.

Vessels entering and clearing Canal Zone terminal ports numbered
11,694 and 11,698, respectively, an increase of about 12 per cent
as compared with the previous fiscal year.
All merchandise discharged at Cristobal or Balboa for local con-
signees not connected with The Panama Canal, the Panama Rail-
road, or the United States Army or Navy, is in the custody of the
Canal Zone customs until submission of the necessary papers from
Panaman officials showing that duty has been paid. Permits for
8,948 releases were authorized during the year. A total of 2,560
free-entry requests were approved for employees of The Panama
Canal or the Panama Railroad Co. and members of the United States
Army and Navy, who have the privilege of importing articles for
their personal use without payment of duty.
Customs duty was paid to the Republic of Panama to the amount of
$101,993.45 on 35,279 mail parcels for nonemployees and on dutiable
articles for employees imported through the Canal Zone post offices.
No arrests were made for violations of the customs regulations
during the year. At each port, however, numerous attempts to
smuggle small quantities of merchandise of various classes were
frustrated, and such merchandise was confiscated and delivered to
the proper authorities of the Republic of Panama. Appreciable
progress has been made in arresting the traffic in narcotic drugs.
During the year nine arrests were made by police and customs
officers, and convictions were secured in each case.
During the year 750 vessels requested the detail of customs
inspectors for the examination of passengers' baggage after the usual
working hours, and the sum of $6,089.67 was collected for this
special service.



The shipping commissioner and his deputies have the same powers
with respect to American seamen as shipping commissioners in the
United States and American consuls in foreign ports. During
the fiscal year 2,882 seamen shipped on American vessels and 2,611
were discharged at Canal Zone ports. There were 125 American
seamen lodged and subsisted at the expense of the United States
Government. Destitute seamen returned to the United States at
the expense of the appropriation for the relief of destitute American
seamen numbered 190, and 81 were signed on vessels as seamen or
workaways and returned to the United States without expense to
the Government.
The wages earned by seamen discharged at Canal Zone ports
aggregated $72,959.84; the total approved for deduction on account
of advances, allotments, fines, slop chest account, etc., was $17,287.05;
and the balance of $55,672.79 was either paid to seamen under the
supervision of the deputy shipping commissioners or received on
deposit for their account. The wages and effects of 12 American
seamen who died in Canal Zone hospitals during the year were
handled by the shipping commissioner as provided by law.


During the fiscal year 799 Chinese subjects arrived at Canal Zone
ports on incoming passenger vessels, in addition to 25 that remained
on July 1, 1925, awaiting transit to the Republic of Panama and other
countries. Of this number, 449 were admitted to the Republic of
Panama by authority of that Government, and the others, with the
exception of 46 awaiting transportation at the end of the year, either
proceeded on their journey or were returned to the port of embar-
Chinese crews also were checked upon arrival and again upon the
vessel's departure in order to see that no illegal landings were made,
and crews of 534 vessels were so checked during the year.
Cash bonds were accepted for the temporary release in the Canal
Zone of 24 Chinese subjects in transit.


During the year 100 estates of deceased and insane employees of
The Panama Canal and the Panama Railroad Co. were administered,
and there were 31 estates in course of administration on June 30, 1926.



Motor vehicle, bicycle, and animal-drawn vehicle licenses, as well
as permits for the peddling of foodstuffs, the vending of merchandise,
ships' runners, and similar licenses and permits were issued, number-
ing in all 6,286 for the year. License fees, taxes, etc., aggregated
$30,126.90 for the year.

By Executive order of the President, dated January 12, 1925, the
executive secretary was designated to issue immigration visas to
alien residents of the Canal Zone going to the United States. This
designation was made in accordance with the provisions of section
28 (e) of the immigration act of 1924.
During the fiscal year ended June 30, 1926, a total of 101 visas
were issued, of which 49 were quota, 34 nonquota, and 18 were
nonimmigrant visas. The fees collected for the visas amounted
to $940.

There was direct correspondence between the Government of the
Canal Zone and the Republic of Panama on various questions,
largely routine. The negotiations for a general revision of the
existing agreements between the United States and the Republic
of Panama, which have been pending for several years, were con-
tinued, and at the close of the year an agreement between the two
governments on practically all points at issue had been reached.




There were no changes in the organization of The Panama Canal
during the fiscal year 1926.
Capt. John Downes, United States Navy, was appointed marine
superintendent, effective April 12, 1926, relieving Capt. James H.
Tomb, United States Navy.
Commander Elmer W. Tod, United States Navy, was appointed
captain of the port, Balboa, effective July 13, 1925, relieving Com-
mander Mathias E. Manly, United States Navy.
Mr. Irvin M. Lieser was appointed by the President as marshal for
the Canal Zone, effective August 14, 1925, to succeed Mr. Horace
D. Ridenour.

The force employed by The Panama Canal and the Panama
Railroad Co. on the Isthmus increased from 12,270 in June, 1925, to
12,819 in June, 1926, or 4.47 per cent. The distribution of the
personnel on the third Wednesday in June of both years is shown in
the following table, from which it may be noted that the gross in-
crease in the number of employees was confined to the silver roll, and
the total number of American or gold employees, comprising the-
supervisory, technical, higher clerical, and highly skilled mechanical
force remained practically stationary:

Operation and maintenance:
Office ---- -----------------
Electrical division---------------------
Municipal engineering ----------------
Lock operation--------..----.-------
Dredging division---------------------
Mechanical division.-----------------
Marine division-----------------------
Fortifications-----..------- ...--------
Supply Department:
Quartermaster ------------------------
Commissary division-----------------
Cattle industry and plantations -------
Hotel Washington --------------------
Health.- .----- ..--------------.--------
Executive ---------------------------------
Panama -iilio.iid
Receiving and forwarding agent-------
Coaling stations----------------------

June, 1925

Gold roll





June, 1926

Gold roll

_______________________ __________ _______- I- --'












The larger number of employees on the rolls of some of the divi-
sions at. the end of the fiscal year, as compared with June, 1925, was
due partly to increased construction work and in part to increased
business in the units concerned. Explanations of the larger increI.ses
are given below:
Office engineer.-Increase in drafting force due to new building
Municipal engineering.-Increase in work due to enlarging the
water system in the northern district, road construction work at
Balboa, and work being carried out for the United States Navy and
the Panaman government.
Lock operations.9.-Temporary increase due to special maintenance
work on lock machinery.
Dredging division.-Increase due to placing a second shift on drill
barge and to increased survey work.
Marine division.-Increase in number of pilots and in employees
handling lines on ships transiting canal, due to increased number of
Constructing quartermaster.-Increase in building construction
Coinmmnissary division.-Increase in sales, particularly at enlarged
Cristobal commissary.
Cattle industry.-Temporary increase due to clearing of pasture
Motor transportation.-Transportation for fortifications section
taken over.
Health department.-Most of increase is due to installation of
permanent ditching and other work. Temporary increase.
Executive.-Small increase due to greater volume of business in the
division of posts and at the clubhouses.
Receiving and forwarding agent.-Greater numniber of vessels and
larger volume of cargo handled at piers as compared with preceding
Coaling plants.-Slight increase made in order to facilitate the
discharge of coal from ore vessels.

Gold employees.-The policy of compensating American employees
at, 25 per cent above rates paid by the Government for similar em-
ploymnient in the United States was continued in so far as appropria-
tions would permit. In all cases the granting of the 25 per cent
increment for tropical service is limited by the requirements of
suitable coordination within the Panama Canal organization, the
full 25 per cent not being allowed for isolated groups or individuals


if its application would result. in rates not properly commensurate
with the service performed in comparison with authorized rates of
pay for other employees.
The board on rates of pay, gold roll, composed. of the assistant
engineer of maintenance and a representative selected by the organ-
ized employees, held 24 meetings during the year. Wage matters
considered by this board primarily are rates for mechanical and related
classes of employees not corining under the classified service. Follow-
ing the trend of warve in the States, adjustments of rates for these
employees during the year was slightly upward. The most important
wage matter considered by this board was the annual adjustment of
rates for mechanical and allied employees whose rates of pay are
determined by ratv" authorized for similar classes of service in the
navy yards in the United States.
The board on clerical and allied rates of pay, composed of the
heads of the nine major departments and divisions of The Panama
Canal and Panama Railroad, held meetings in December and June.
This board acts in an advisory capacity to the governor primarily
in the mat ter of rates of pay for clerks and other employees whose
rate of compensation is baied on the classified service in the United
States, or having no hiose, must be adjusted administratively. The
board meets semiannually to consider all requests made for the re-
grading of classified positions, maket-; recommendations to the gover-
nor concerning the rnite of pay for employees whose duties with the
canal are such that no comparable employment can be found in the
United States, and acts as a coordinating board in maintaining
standard rates of pay throu'hliout all the departments and divisions
of The Panama Canal and Panama Railroad Co. for approximately
equal classes of work.
Alien employees on silver roll.-As a check on existing canal rates
of pay for alien employees on the silver roll, data regarding prevailing
rates of pay and living conditions pertaining to tropical labor in the
adjacent countries in the Caribbean area were obtained through
questionnaires sent out to United States consuls and large business
interests in this aican These data showed little change in rates as
compared with a similar survey made in 1924. The two checks
justify the following conclusions:
(a) The average worker in the Caribbean area receives in the aggregate more
pay than the average alien eemplvic of The Panama Canal, due largely to the
longer number of hours worked per day in other countries.
(b) Occupations requiring little skill or training are better paid on The Panama
Canal. The average alien employee working for the canal is better off than the
average ciiipli ce perforihinn a corresponding class of work in the adjacent
countries, but for the man of more than average ability, the pay and opportunities
elsewhere are greater than in the canal service, where the positions requiring a
considerable degree of aptitlde, training, and skill are not open to the alien
employee as they are elsewhere in the Caribbean area.


(c) Living conditions on the Canal Zone for the alien employee are superior to
those for corresponding classes of employees in adjacent countries. Retail
prices of food and clothing are lower on the isthmus than in the neighboring
countries, and a higher standard of living prevails on the isthmus.
During the year there was no general revision of the schedules of
rates of pay for alien employees, but small increases in the schedule
were authorized for individual groups and classes where rates appeared
to be out of line with rates paid by private interests and difficulty was
being experienced in holding competent employees. The basic rate
for unskilled labor remains at 20 cents an hour, and the maximum
authorized rates for alien employees remains at 40 cents an hour or
$80 per month.
The index of cost of living, using costs in July, 1914, as a base,
declined from 142.44 as of July 1, 1925, to 140.37 as of July 1, 1926.
At the end of the year there was practically no voluntary unemploy-
ment among capable West Indians, and the general condition of this
class was bet ter than at any time in recent years. Licensing of land
in additional areas in the Canal Zone for settlement was discontinued
on April 24, 1925, but at the same time a ruling was made that
individual holdings might be increased to 5 hectares. During the
past fiscal year a number took advantage of this, and at the end of
the year 7,277/1hectares were under license to 2,012 licensees. This
system absorbs surplus labor and at the same time provides a reserve
of labor which can be drawn upon for temporary employment.
Objection to its further extension lies principally in the cost of sanita-
tion and public services in general which become obligatory after the
establishment of communities, alike as a need of the West Indians and
as .a protection to the rest of the Canal Zone against communicable
disease, principally malaria.


Upon requests of employees or of labor organizations, six griev-
ance cases or complaints of American employees concerning working
conditions were referred to the board for investigation and recom-
mendation. This board is composed of the assistant engineer of
maintenance, the head of the division in which the complaint origi-
nates, and two representatives of the employees, nominated by the
central body of the employees' organizations. Efficiency ratings,
seniority, and like questions are frequently the basis of these com-
plaints, since they are a determining factor in making reductions
of force.
The small number of complaints brought before the grievance
board during the 12 months is indicative of the continuance of the
satisfactory conditions of employment that have existed on the
isthmus the past few years.



Gold einployees.-The number of persons tendered employment
through the Washington office of The Panama Canal was 401, of
whom 167 accepted tenders and were appointed. Corresponding
figures for 1925 were 512 and 234, and for 1924 they were 973 and 436.
The smaller number employed in the United States during the past
year was due to a greater stability of force, absence of special recruit-
ing for temporary service during lock overhaul, and ability to fill
vacancies by employment on the isthmus. Including the 167
employed in the United States and 366 employment on the isthmus,
total additions to the gold roll were 533. Separations numbered 504.
Based on a force of 2,885 gold employees at the beginning of the year,
this gives a turnover rate of 17.5 per cent per year from all causes.
In many instances the break in service was temporary and the indi-
vidual accepted reemployment in another department or division.
Over two-thirds of all appointments made during the year were from
the local register of applications, and of those sent from the United
States many were former employees.
After a number of years' service in the Tropics employees are fre-
quently reluctant to return to the States and, therefore, when the
services of an employee are no longer required in one department
every effort is made to provide a place for him in another department
in preference to bringing a new employee from the States. This
policy has reduced greatly the number of requisitions placed for new
employees and has proved very profitable to the canal in that not
only are the effort and expenses incurred in bringing new employees
to the Isthmus eliminated but also the experience and knowledge
obtained by the employee in one department often are of value to
him in his new work; moreover the canal retains the services of a
worker accustomed to tropical living conditions.
Silver employees.-No figures are available concerning the number
of separations and employment among the alien personnel comprising
the silver roll, but no difficulty was experienced in maintaining an
adequate force, and the percentage of turnover was fairly low for
this class of labor.
In connection with provisions for retirement under the national law
for employees of the United States Government, considerable sta-
tistical information, including a card (Form 2500) for each gold
employee, was compiled for the use of the United States Civil Service
Commission and congressional committees working on retirement.

Ten clubhouses, five for white and five for colored employees of the
canal, were operated continuously throughout the year under the
auspices of the bureau of clubs and playgrounds. These clubhouses


were open daily, including Sundays and holidays, from 7 a. in. until
11 p. in., and provided central meeting places in each of the larger
settlements where employees and their families could find wholesome
amusement and recreation. The clubhouses operate soda fountains
and lunch counters, deal in candy, tobacco, souvenirs, photographic
and athletic supplies, exhibit moving pictures, maintain bowling
alleys, pool and billiard tables, and promote a variety of entertain-
ments. The bureau promotes, and in part supervises, such athletic
sports as swimming, boxing, wrestling, baseball, handball, and tennis.
Kindergartens and playgrounds are also maintained for the children
of employees. Free reading rooms and branch libraries were main-
tained at. the clubhouses, and musical, vaudeville, and other enter-
tainments were staged from time to time. At some of the clubhouses
for colored employees, classes in shorthand, typewriting, and grammar.
school subjects were held several nights weekly.
At Pedro Miguel work was begun on a swimming pool in September,
and by December construction had advanced sufficiently to permit
the water to be turned in, and since that time the pool has been in
constant use.
Some of these activities are carried on at a profit; others are not
self-sustaining, and the deficit resulting therefrom is made up from
appropriations. The justification for their continuance is that they
add materially to the morale of the organization and to the physical
and moral health of the community. Clubhouse finances for the
fiscal year are taken up in the section on business operations.


The total number of orders placed by the Washington office of
The Panama Canal for the purchase of supplies was 6,674, as
compared with 6,731 in the preceding year, and the value of supplies
purchased amounted to $4,236,313.10, as against $4,695,632.29 in
1925. The offices of the assistant purchasing agents at Neiv York,
New Orleans, and San Francisco were maintained through the year.
The amount of material purchased through these offices was relatively
small and the personnel thereof acted principally as receiving and
forwarding agencies for supplies purchased by the Washington office
for shipment to the isthmus through their respective ports. Medical
and hospital supplies for use on the isthmus, for the greater part,
were purchased through The Panama Canal, medical section, New
York general intermediate depot, United States Army, Brooklyn,
N. Y. Decisions of the Comptroller General, affecting the methods
of purchase of supplies and settlementsin connection there-with, made
considerable extra work and required the maximum effort of the per-
sonnel of the purchasing department to handle the same properly.


The sale of surplus canal material during the year by the purchasing
department in Washington amounted to $76,357.94, as compared
with $45,914.98 during the fiscal year 1925.
As in previous years, considerable time and attention of the higher
officials of the Washington office was spent in serving on various
Government boards and coordinating committees.


At the request of Gen. Johlin J. Pershing, president, Tacna-Arica
Plebiscitary Commission, and Gen. Jay J. Morrow, American com-
missioner, Special Commission on Boundaries, Tacna-Arica Arbitra-
tion, The Panama Canal acted as agent for the two commissions,
both on the isthmus and in Washington, D. C., in making purchases
and shipments of supplies and in the employing and dispatching of
personnel for duty in the plebiscitary area. The cost of this service
was billed against thlie respective commissions.
From thle large number of applications received for duty with the
two commissions, it was possible to select men of excellent character,
high qualifications, and with a good working knowledge of the Spanish
language. Among the personnel recruited were 61 employees of
The Panama Canal and Panama Railroad, leave of absence from their
regular duties being granted in order that they might assist in the
work of the plebiscite. At the end of the year two employees of the
canal were still absent on this detail, working with the Commission
on Boundaries.











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This section contains financial statements of The Panama Canal
(Tables 1 to 66) and statistical statements of canal traffic (Tables
67 to 70). For convenience of cross reference, the original numbering
of the financial statements quoted from the annual report of the
auditor of The Panama Canal has been preserved, although Tables
Nos. 23, 35, 40, 41, and 45 to 66, inclusive, have not been printed.
A complete list of the tables, including those omitted, follows:
Table No.-
1. General balance sheets.
2. Balances in appropriation and fund accounting.
3. Appropriations by Congress.
4. Status of authorized bond issue.
5. Cash receipts and disbursements for account of the 1United States.
6. Payments made by the paymaster.
7. Receipts and disbursements by the collector.
S. Collections repaid to appropriations and to individmiilk and companies.
9. Collector's special depnos-it account.
10. Audited pay rolls.
11. .Accounts receivable registered and outstanding.
12. Comparative statement of accounts receivable.
13. Comparative statement of accounts payable.
14. Statement of defense capital expenditures to June 30. 1926.
15. Details of canal fixed property.
16. Detail of canal transit equipment..
17. Business property, equipment, etc., Iy divisions.
18. Business fixed property.
19. Canal business equipment.
20. Status of public works in Panama and Colon.
21. Canal transit material and supplies.
22. Receipts, issues, and transfers of stores.
23. Comparative statement of store balance.-.
24. Statement of canal earnings, expenses, and net expniie.
25. Canal revenues.
26. Business expenses, revenues, and net revenues.
27. Comparison of expenses and revenues and surplus liy I. r.r to date.
28. Pay-roll deduction, from employees for rent, rec.
29. Reserves for depreciation.
30. Reserves for repairs.
31. Reserves for gratuity.
32. Cost of production and distribution of electric curre-nt.
33. Cost of production and distribution of water.
34. Dredging operations (channel maintenance).
35. Money orders issued and paid by Canal Zone and Canal Zuloneu! orders paid
by other administ rations, fiscal years 1907 to 1926, inclusive.


Table No.-


36. Monthly money order business of Canal Zone postal service.
37. Postal service-Audited revenues, fiscal years 1907 to 1926, inclusive.
38. Postal revenues, fiscal year 1926.
39. Postal savings and deposit money order transactions, fiscal year 1926.
40. Income, bureau of clubs and playgrounds, fiscal year 1926.
41. Expenses, bureau of clubs and playgrounds, fiscal year 1926.
42. Income and expenses, bureau of clubs and playgrounds, fiscal year 1926.
43. Balance sheet, bureau of clubs and playgrounds, June 30, 1926.
44. Coupon books issued, sold, etc., fiscal year 1926.
45. Amounts of injury payments made during the period August 1, 1908, to
June 30, 1926.
46. Injury and death payments, September 7, 1916, to June 30, 1926.
47. Number of injuries by extent of disability for each division or depart mnient.
48. Nature of nonfatal cases, by department or division.
49. Number of cases and compensation paid, classed by injury.
50. Class of work being performed by employees at time of injury, by depart-
ments and divisions.
51. Cause of injuries, by departments and divisions.
52. Cost of commissary supplies purchased and sold during fiscal year 1926.
53. Collections from other than employees.
54. Collections, Panama Railroad land rents.
55. Rental of silver (laborers') quarters.
56. Panama Canal accounts payable vouchers registered.
57. Panama Railroad accounts payih;bl vouchers registered.
58. Emiployvees' bonds.
59. Report of the accounting bureau (general and cost accounts).
60. Report of the pay roll section (claims bureau).
61. Report of the claim officer-personal injury claims.
62. Report of the claim clerk-freight and cargo claims.
63. Report of rent and other collections from silver employees.
64. Report of the general inspection bureau.
65. Report of the time inspection bureau.
66. Report of the property inspection bureau.
67. Number of commercial vessels of various niiatiuiialitie-. pa.;-ing through
The Panama Canal, 1915-1926.
68-A, 68--B. Origin and destination of cargo passing through the canal, 1924 -
69. Net tonnage, Panama Canal measurement, of commercial vessels pass-
ing through the canal, 1915-1926, segregated by flags.
70. Tons of cargo passing through the canal 1915-1926, .scegregate-il by flag
under which carried.


A brief explanation of Tables Nos. 1 to 70, inclusive, follows:
Table No. 1-General balance sheet.-No change was made in the
general accounts during the past year. The credit and debit items
are analyzed and explained in subsequent tables.
Table No. 2-Appropriation and fund accountiny.-This table
shows the balance of appropriated and available funds in the United
States Treasury and in the hands of the Panama Canal fiscal officers
as of June 30, 1926. The fiscal officers-i. e., the disbursing clerk in


Washington, and the paymaster and collector on the Isthmus-
had cash on hand amounting to $2,S90,455.56, of which $535,363.78
were miscellaneous receipts and trust funds, leaving an actual work-
ing cash balance of $2,355,091.78.
The balance available for expenditure, after providing for direct
liabilities, obligations, and reserves, was $2,263,259.34. Most of this
balance is allotted forexpenditure during the fiscal year 1927 on projects
which were not completed during the fiscal year 1926, such as the
Miraflores power plant., Gatun-Colon waterworks, towing locomotives,
etc. Any balance remaining after providing for the cash require-
ments in the fiscal year 1927 will be carried forward to be used in the
fiscal year 1928. This amount will be estimated and deducted from
the total estimates for 1928, as has been done for a number of years.
The amount shown under the heading of work in process and sus-
pense represents expenditures which have been made but which have
not been charged off or set up in the capital account on the books.
The $5,983,154.54 shown under the heading of reserves represents
the actual cash available for repairs and replacements of property
and equipment and for the payment of gratuity earned by employees.
The difference between this figure and the total reserves shown in
the general balance sheet covers theoretical amortization, deprecia-
tion and interest for which no cash is held in reserve. Out of this
reserve the sum of $1,100,000 has been obligated and allotted for
expenditure during the fiscal year 1927, the amount required for
operation during 1927 having been reduced, and Congress appro-
priated only the balance.
From the balance available June 30, 1926, the sum of $785,238.42
is immediately payable to Miscellaneous Receipts, representing the
profits on business operations during the fiscal year 1926.
Table No. 3-Appropriations by Congress.-There has been no
change in the appropriations for canal construction. The various
acts are shown in detail in Table No. 3 of the annual report for 1924.
The total amount appropriated to date for the annual payments to
the Republic of Panama for the use of the Canal Zone is $3,750,000.
The total amount appropriated to June 30, 1926, for the operation
and maintenance, sanitation, and civil government of The Panama
Canal and Canal Zone is $89,259,007.88. The sum of $7,627.62 from
appropriations for increased compensation, has been returned to the
surplus fund ($33.32 during the fiscal year 1926),leaving$89,251,380.26
expended or available for expenditure.
The appropriations for the fiscal year 1927 not included in the above
figures are as follows:
Operation and maintenance -------- --------------------------- 5, 086, 094
Sanitation.-----..------------------------------------------- 070, 000
Civil government------------------------------------------- 999, 980
Total. -------------------------------------------- 7, 656,074


In addition to this amount, there is obligated for expenditure dur-
ing 1927 an unexpended balance of $258,440 brought forward fromni the
fiscal year 1925, and the $1,100,000 from the depreciation reserve
fund referred to above.
Table No. 4.-Status of autliorized bond issue.-The authorized
bond issue was $375,200,900, of which all but $2,215,782.62 was
appropriated for canal construction.
Table No. 5-Cash receipts and disburseenints.-This table shows
that the Treasurer of the United States advanced to the fiscal officers
of The Panama Canal during the fiscal year 1926 the sum of $8,170,000
and disbursed directly from the Treasury $420,245.80, a total dis-
bursement of $8,590,245.80. Against this amount, the fiscal officers
of The Panama Canal remitted to the Treasury the sum of $455,688.64
and direct collections by the Treasurer amounted to $385,016.69,
a total of $840,705.33, resulting in a net withdrawal from the United
States Treasury of appropriated funds amounting to $7,749,540.47
for the fiscal year 1926. The net amount withdrawn during the
fiscal year 1925 was $8,223,412.01.
Table No. 6-Disbursements by the paynmaster.-Disbursemients to
the amount of $19,584,192.80 were made during the year by the
paymaster. Of this amount, the sum of $7,487,274.21 was for the
account of The Panama Railroad Co. Employees on the gold rolls
were paid $6,602,699.58 and those on the silver rolls, $4,120,087.15.
The amount of $1,374,131.86 was paid on miscellaneous vouchers.
Collections on the pay rolls amounted to $3,667,523.57. Of this
amount the sum of $2,922,647.21 was collected for coupon books,
the remainder for miscellaneous items. Of the total collections, the
sum of $2,953,589.94 was disbursed by the paymaster, the balance,
$713,933.63, being transferred to the collector's accounts.
The Chase National Bank of New York, Panama branch, was
continued as a Government depositary. The International Banking
Corporation was taken over by the National City Bank of New York
and the business continued as a branch of the National City Bank.
During the year the sum of $8,117,700 Panama Railroad funds was
transferred to the Treasurer, New York. This sum includes $2,217,-
700 cash transfer, of which $1,117,700 was mutilated currency, due
to deterioration of paper money through climatic conditions. Very
little new currency was put into circulation during the year. The
paymaster requisitioned $2,660,000 from the Treasurer of the United
States during the year. Of this amount, $660,000 was sent to the
isthmus in cash. The gold reserve on the isthmus is approximately
$350,000 and is held by the banks. The cash situation hlias continued
satisfactory as a whole. There has been a shortage of American
change at times which has been adjusted by the paymaster importing
the required denominations.


Tables Nos. 7, 8, and 9-Receipt. and disbursemients by the collector.-
The miscellaneous receipts collections amounted to $23,241,075.05
of which $22,927,456.03 was for tolls and the balance for postal
receipts, taxes, fees, fines, etc., and amortization and interest on the
investment in public works in the cities of Panama and Colon.
Collections repaid to appropriations amounted to $9,849,800.73.
The amount handled through the security deposit accounts totaled
$29,497,255.64, as shown in Table No. 5. In addition to these
amounts, the collector handled independent funds consisting of club-
house funds, trust funds, postal savings funds, money order funds,
interest, Treasury savings certificates, as shown in Table No. 7,
amounting to over $2,000,000. Collections for account of the Pana-
ma Railroad Co. amounted to $14,832,348.83, making a total cash
turn over, exclusive of the security deposit funds, of approximately
Table No. 10-Salaries and wagex.-The amount of money earned
by Panama Canal employees during the fiscal year 1926 was $10,801,-
686.46. Of this amount, $6,655,846.56 was earned by gold employees
and $4,145,839.90 by employees on the silver rolls. The total pay
roll for the fiscal year 1925 was $10,615,412.92. Of the amount paid
for salaries and wages during the fiscal year 1926, $9,081,691.60 was
from the appropriation for operation and maintenance; $829,086.82
from the sanitation appropriation; and $890,908.04 from the ap-
propriation for civil government. These figures include the em-
ployees of the business divisions, the outlay for which is collected
back and repaid to the appropriation. The net expenditures for
salaries and wages from appropriated funds are considerably less
than the figures shown in this table.
Table No. 11-Accounts receivable.-The number of bills registered
during the year was 37,425, covering $31,033,890.68, compared with
33,637 and $29,561,896.31 during the fiscal year 1925, an increase of
3,788 bills covering $1,471,994.37. This table shows in detail the
bills registered for tolls by months during the fiscal year, the largest
amount being in the month of December, 1925, $2,111,995.11, and
the smallest amount in August, 1925, $1,658,161.70. The total
amount of tolls bills registered was $22,931,979.78, an increase of
$1,530,987.54 over the fiscal year 1925.
Table No. 12-Comparatire statement of accounts receirable.-The
uncollected bills at the end of the fiscal year 1926 amounted to
$795,926.04, compared with $1,181,913.83 the previous fiscal year,
a reduction of $385,987.79.
Table ANot). 13-Comirparat ice statement of accou nt.- pa yiable.-Bills
payable at the end of the fiscal year amounted to $1,522,114.10
compared with $1,410,914.82 the previous year, an increase of
$111,199.28. The unpaid bills exceed the accounts receivable by


Table No. 14-National defense expenditures.-This table shows the
individual items which were charged off as an arbitrary proportion
of the cost of constructing The Panama Canal, representing its value
from a national defense standpoint. The difference between the
amount so charged off and the total cost of constructing the canal is
carried in the accounts as the commercial value of the canal, on which
a return on the investment is expected. This account was increased
during the fiscal year by $8,737.51, of which $3,651.71 was additional
expense in connection with the armor plates for the spillways, and
$5,085.80 in connection with the depopulation of the Canal Zone
covering some old land claims at Mindi. The total amount now
charged to national defense is $112,662,732.60.
Table No. 15-Canal fixed property.-The book value of fixed
property used in connection with the transiting of vessels amounts
to $236,115,089.01. There were no removals during the year but
additional property was set up amounting to $139,755.27. Of this
amount $84,506.37 was for expenditures on the Alhajuela Dam pro-
ject, $16,912.63 for street improvements, $1,100 for the hydrographic
building at Gamboa, $11,629.68 for fairway buoy No. 76, and
$25,606.59 for aids to navigation, including a radio compass station
at Cape Malai, $1,590.07; Isla Grande light, $3,741.34; keeper's
quarters at Isla Grande light, $13,791.38; Farallon Sucio light,
Table No. 16-Canal transit equipment.-The amount invested in
equipment used in connection with the transiting of vessels and
channel maintenance was $4,140,923.88, an increase of $1,116.56.
There were a number of reductions by transfer of equipment and re-
duction in book value amounting to $228,364.79. The machinery
and tools in use by the salvage section, valued at $5,725.29, were
transferred to business equipment. The coal hoist barge valued at
$2,112, was sold and the book value of dredging division barges was
reduced by $211,250 in order to make depreciation funds available
for the construction of new steel barges. The balance represents
This account was increased by $229,481.35, the largest item of
which represents the cost of two new 1,000-yard steel barges manu-
factured at the Balboa shops for the dredging division at a cost of
$209,500. Three of these barges were constructed. One was com-
pleted and set up in the accounts last year. The balance of the
increase represents capital improvements on various items of equip-
Table No. 17-Bus.inesx property.-This table shows the entire
investment in the business activities of the canal, consisting of fixed
property, equipment, material and supplies, cash, work in process,
and undistributed business capital, separated according to the


divisions using same. The undistributed business capital charge
against the divisions is made up of a portion of the general store stock
(representing the value of standard material and supplies held in
reserve for the business divisions); cash; and accounts receivable
registered in the transit accounts for account of the business units.
The capitalization of these business units amounted to $30,341,290.56,
an increase of approximately $1,000,000 over the previous year.
These increases are principally in connection with additional fixed
property and equipment which are explained under Tables 18 and 19.
Table No. 18- ui.sinsm. jfired propprty.-The total aminount of
fixed property in use by the business divisions as shown in Table No.
17 was reduced by $96,339.61 and increased by new itemnis amounting
to $1,036,406.69. The principal reductions arc made up of the
amortization of public works in the cities of Panama and Colon,
approximately $S36,000; transfer of a crane from the hydroelectric
plant, 89,000; and buildings transferred and sold, $11,465. There
was also a reduction of $19,485.99 in the capitalization of garage
stalls in order to release deprecintion funds for the construction of
new stalls.
Thlie largest increase was in connection with the new \Miraflores
power plant, $967,314.58. Improvements were made to the water
system animounting to '33,377.90; a new kerosene tank was con-
st.ruicted at Balboa at a cost of $11,834.61; and additional garage
stalls were built at a cost of $20,187.93, and a 10-ton auxiliary
hoist installed at the hydroelectric plant, Gatun, at cost of $3,691.67.
Tabb No. 19-Bu.xine-..: equipinenit.-The value of equipment in
use by the business divisions of The Panama Canal was $897,538.93.
The book value of motor equipment was reduced by $116,387.12 in
order to release that amount of depreciation funds for the purchase
ofreplaceequipmnent. The total reductions and withdrawals amounted
to $126,382.41 and the additions to $201,159.01. The main items
added were new automobiles and trucks, $114,981 .S3; truck loaders
for the municipal engineering division, $10,344.18; tractors, $10,830;
pumps, $13,520.85; atnd new concrete mixers, $17,138.12.
Table No. 20-Water Pcork.s, .y /. anld nipurinents in the cities of
Panama and (Colon.-The amount invested in water works, sewers,
and paveniments in the cities of Colon and Paiinima, reimbiiursable to
the United States on June 30, 1926, was $1,769,331.50, of which
$963,427.89 was in the city of Panama and $805,903.61 in Colon.
The Pananin Cianal supplies water to these two cities from the
Canal Zone system and maintains the sewers and pavements under
a contract entered into in 1907 between The Panama Canil and the
Republic of Parinaatun. The Panama Canal collects the water rentals
from the residents of thewe two cities and uses the funds to cover the
cost of the water and maintenance of sewers and streets, interest on


the investment at 2 per cent per annum, and amniortization based on
50 years from 1907 on. During the term of the contract The Panama
Canal has used approximately $3,000,000 for maintenance, operation
and repairs of the water system, sewers, and streets; approximately
$1,000,000 has been withheld from water rent collections as interest
on the investment, and approximately $880,000 has been repair on
the original cost.
Table No. 21-Material and supplies.-This table shows the value
of material and supplies in the general store stock on June 30, 1926,
compared with the prior fiscal year. The amount on hand on June
30, 1926, was $4,565,769.63, which is $308,787.55 more than the value
on hand at the end of the previous year. This increase is due to
increased construction activities which require a larger amount, of
construction material immediately available.
There is held in reserve for inventory adjustment from a fund
created during the war for war price reductions subsequent thereto
the amount of $457,173.85. During the year there were certain
inventory adjustments in the general store stock which increased
this amount, principally in the gasoline stock, which showed a sur-
plus due to charging it out at a price somewhat above cost. The
$520,238.96 shown in the table includes the value of dynamite secured
for the dredging division through the chief coordinator without cost,
Tflble No. 22--iaterial atid supplies received and issued.-The form
of this table has been changed. The amount of stores purchased for
stock during the year was $4,200,2 10.07. In addition to this, material
and supplies were purchased for direct delivery to divisions at a cost
of $1,564,417.25, making the total purchases during the year
$5,764,627.32. There were also produced by local manufacture
material and supplies taken into stock at a value of $639,099.89.
Besides the direct purchases for divisions the transit divisions drew
from the general store stock to the extent of $1,536,677.15 and busi-
ness divisions, $3,311,060.88. The sales amounted to $1,099,642.28,
which includes sales to the departments and divisions of the Panama
Railroad Co. The total turnover during the year was in excess of
seven and a half million dollars, leaving a balance on hand at the end
of the year of approximately $5,000,000.
Table No. 23-Comparative statement of material and supplies, by
commodities.-This table shows the classification of store stock, by
commodities, in comparative columns for the last two fiscal years.
The value of fuel oil on hand at the end of the year was $184,405.40;
medical stores, $67,592.87; Panama Canil press stock of paper, sta-
tionery, etc., $95,983.81; lock parts at Corozal ;tnre, $437,157.01;
gravel in the Gamboa gravel pile, $138,086.43.


Table No. 24-Canal transit expenses and earnings.-Under the pres-
ent system of accounting the gross operating expenses of the divisions
engaged in the transiting of vessels, together with the cost of sanita-
tion and civil government, are first reduced by the earnings in those
units and the net expense is then compared with the revenues from
tolls and other miscellaneous receipts.
The net cost of operation and maintenance, sanitation, and civil
government of The Panama Canal and Canal Zone, exclusive of the
theoretical amortization and depreciation charge, was $7,293,945.97,
compared with $7,461,315.94 the previous year. The net expense is
divided as follows:
Civil government---------------------------------- -------------. $99S, 406. 58
Sanitation, hospitalization, and medical attention -------------- 653, 509. 43
Operation and maintenance-------------------------------- 5, 642, 029. 96
These figures do not include expenditures for improvements and
construction enumerated in Tables No. 14 to 19, inclusive.
The gross operating costs, including the amortization and deprecia-
tion charges, were $11,038,613.93, but these were reduced by earnings
amounting to $3,045,145.46, covering all kinds of supplies and serv-
ices furnished employees for which the employees are required to
pay, for pilotage, tug and launch service, handling lines for vessels,
and for charges made to business divisions which, in turn, make
collections for the supplies and services to the credit of the
Under this heading are grouped the salaries and office supplies and
expenses of the governor, engineer of maintenance, executive secre-
tary, correspondence bureau, personnel bureau, record bureau, etc.,
the shipping commissioner, cost of publishing the Canal Record, land
office and law book expenses, official railroad motor cars, and clubs
and playgrounds. The net executive expenses amounted to
$203,989.67. Expenses in connection with the shipping commis-
sioner's work amounted to $40,236.96. The cost of printing the
Canal Record, $13,069.64. More than one-third of .the strictly execu-
tive expenses are charged off to business divisions as overhead, which
is reimbursed to The Panama Canal through the business activities
by adding surcharges to direct costs.
The Government's contribution toward the operation of clubs and
playgrounds has been limited to $100,000 a year for a number of years,
and everything over and above that is paid from the receipts and
profits from operation of the clubhouses. The business activities of
the Panama Canal clubhouses, from which revenues are derived, are
shown in Tables 40 to 43, inclusive. The total net expenses of the
executive department for the year amounted to $363.049.80, which is
$5,000 less than the preceding year.


The gross expenses of the accounting department on the Isthmus,
including the collector's and paymaster's offices, was $510,751.24.
Of this amount, $330,842.90 was charged off to business divisions and
the Panama Railroad for clerical and accounting work performed for
them and was absorbed in those operations in the form of overhead
recovered through surcharges. This left the net expense of the
department chargeable to appropriations, $179,908.34. Some of the
bureaus of the accounting department, such as the railroad accounts
bureau, commniissary accounts and commissary coupon accounts, are
entirely chargeable to the Panama Railroad.
The net expenses of the Washington office, including the chief of
office, the purchase and inspection bureau, the assistant auditor, and
the disbursing clerk, were $218,352.75, which is approximately $2,000
less than last year. From the gross expense of the purchasing bureau
the sum of $41,308.33 was charged off to business storehouse opera-
tions on the Isthmus, representing the proportion of purchasing and
inspection expenses chargeable to material and supplies purchased
for use in business activities and for sale.
The gross expense of all activities under the heading of civil gov-
ernment mounted to $1,059,480.25, of which $61,073.67 was charged
off or collected from other interests, leaving the net amount
$998,406.58. The net expense for the administration of estates and
other civil affairs was slightly more than $16,000, approximately the
same as last year. In the customs service, certain collections are
made for inspection of household goods and personal effects for
shipment to the States. The gross post office expenses were reduced
by approximately $11,000 collected for the handling and transferring
of mails other than Canal Zone. The net cost of operating the
school system, including the two high schools, was $258,944.77. The
earnings for school tuition and proceeds from the sale of school books
and supplies amounted to $8,166.76. The gross expenses of the police
department, including the prisons and penitentiary, were $392,741.66,
of which $41,193.56 was recovered for police services furnished the
Panama Railroad.
The gross cost of operating all hospitals, asylums, quarantine
and public health service, sanitation and street cleaning, was
$1,376,935.17, and the earnings amounted to $723,425.74, leaving
the net appropriation expenditure $653,509.43. The largest amount


of revenue was derived from the operation of Ancon Hospital,
$345,321.01. The gross expenses of operating the Corozal Farm
and the insane asylum amounted to $147,153.03, of which $122,382.72
was recovered from the Republic of Panama for its insane, and from
the sale of produce off the farm, leaving the net expense to the
Government only $24,770.31. The Government's contribution
toward the operation of the Santo Tomas Hospital was discontinued
the previous fiscal year, and the credit itemni under this account repre-
sents the return of the portion of the former superintendent's salary
extending over several years in lieu of his Army allowance which was
paid to him from Army appropriations. The net expenses were
approximately $40,000 greater than the year before, which is almost
entirely made up of an increase in the cost of sanitary work repre-
senting expenditures for permanent concrete ditches and other per-
manent sanitary measures which had been carried on temporarily
from year to year. After these permannent installations are complete,
there should be a considerable reduction in the annual cost of sanita-
The gross expenses of planning and drafting, blue printing, etc.,
were $63,836.27, of which $50,175.47 was churgeaible to business
operations and construction work, leaving the net expense from
appropriation $13,660.80.
The net expense of the division of meteorology and hydrography
was $36,228.18, which was $1,000 less than last year.
The net expense of survey work was $24,321.90.

The gross cost of operating the general storehouses, including the
handling and transportation of material and supplies on the isthmus,
was $527,560.38, which was $34,000 less than the previous fiscal
year. This reduction was caused by reduction in the handling of
Chame sand, logging operations, and the handling of armor plate
which was included in the previous year. The reduction in the cost
of operating the Paraiso storehouse was due to the transfer of the
dynamite storage. From the gross operating expense the sum of
$209,123.73 was charged to business storehouse operations, the
results of which are shown in Table No. 26.

The gross expense of the chief quartermaster, including the four
district quartermasters, was $383,791.46. This expense is reduced
by $223,447.56 covering services and supplies charged to employees,


business divisions, the Panama Railroad, etc., for general utility
services, janitor service, care of grounds chargeable to employees,
sale of gasoline, mattress factory operations, etc. The net expense
payable from appropriation for care of buildings and grounds was
$160,343.90, of which a large share was the cost of operating and
maintaining the Administration Building at Balboa Heights, which
was greater than last year on account of painting the woodwork.
The cost of lighting streets and roads on the Canal Zone during the
year was $18,868.68, which was approximately $4,000 more than
last year due to the extension of the lighting system to formerly
unlighted roads.
The item of $23,400 for water for municipal purposes is a fixed
figure credited to the municipal engineering division for watering
public grounds, flushing sewers, and for water supplied to swimming
The cost of maintaining roads, streets, and sidewalks was $98,341.13.
The sum of $120,000 was available by appropriation, but the differ-
ence between the cost of maintenance and the amount available is
used for certain improvements in roads which will be set up as capital
additions rather than current operating expenses.
The expenditure on storm sewers for the proper drainage of town
sites was $18,838.42.
The cost of maintaining Panama Canal tracks was $30,223.43.
Last year this item included the cost of maintenance and preserva-
tion of reserve equipment, especially a number of railroad cars which
were transferred to the Panama Railroad and the maintenance
assumed by that company.
The cost of recruiting and repatriating employees was $15,314.18.
The lump sum paid the Panama Railroad for the transportation of
Panama Canal employees on the isthmus has been $120,000 for a
number of years, although the actual transportation furnished
usually exceeds this amount. A large part of this expense represents
the cost of transporting ships' line handlers to their home stations
after bringing vessels through the canal.
The sum of $95,000 was available for extraordinary repairs to
laborers' quarters, and the expenditures were limited to this amount
although considerable heavy repairs, such as reroofing, are immedi-
ately necessary on these quarters. Against the ordinary cost of
operation of laborers' quarters, as shown on Table No. 26, the rent
collections from silver employees are first applied and any deficit
is paid from this appropriation.


The gross expense of the marine, division, including the port
captains' offices, dispatching vessels through the canal, board of
admeasurement, board of local inspectors, pilots, tugs, launches,
handling lines, and aids to navigation, all of which have to do with
the transitinig of vessels through the canal, amounted to $1,436,130.81.
Against this expense, the marine division's earnings amounted to
$1,008,361.36, leaving a net expense of $427,775.45 payable from
appropriation. The collections from vessels for harbor pilotage
amounted to approximately $292,000 and almost offset the entire
pilotage cost. The gross expense of operating tugs and launches at
both ends of the canal amounted to approximately $474,000. All but
$37,000 of this was charged off or collected back. The collections
from vessels for handling lines through the locks exceeded the actual
expense by approximately $19,000.
During the prior fiscal year the cost of operating and maintaining
the salvage section of The Panama Canal, including the operations
of the salvage boat Firorite, was included under the marine division's
operations as aids to navigation and the revenues derived from this
service shown as earnings of this division. It was found that this
stand-by service, however, resulted in a considerable lo;s to the canal
and the salvage operations were therefore transferred to the heading
of business operations, leaving the net expense under the marine
division for strictly aids to navigation. This is the reason for the
reduction in the cost of aids to navigation from $242,911.96 in the
fiscal year 1925, to $171,885.26 in 1926.
The cost of operating and maintaining the Gatun Locks was
$477,601.67 compared with $443,154.49 the previous year. The cost
of operating, maintaining and overhauling the Pedro Miguel Locks
was $537,551.80, of which $177,932.86 was for the periodic overhaul.
The cost of operating and maintaining the Miraflores Locks was
$431,741.69. Last year this expense was shown as $692,602.05, which
included the overhaul expenses during that year. The cost of oper-
ating the Corozal storehouse for lock spares for all locks was $8,428.91
The net cost of operating and maintaining all locks was $1,456,755.79.
The amount actually expended during the year in connection with
damages to vessels in the locks was $4,101.59, and in the canal
$573.53. The largest amount was paid to the Tidewater Oil Co. for
damages to the steamship Robert E. Hopkin.-, $3,550. A cash settle-
ment of $250 was also made for damages to the steamship Adren-
ture.-. There were a total of s85 accidents to vessels during the
year, out of which The Panama Canal was held responsible for 21.


Besides the amounts paid, there are a number of claims on which the
board of local inspection has found The Panama Canal responsible
and on which settlement will be made with the owners or operators
when the actual costs of repairs are determined the next time the
vessels go in dry dock for general overhauling.
The total cost of operating the dredging division payable from the
appropriation was $1,967,479.22. This includes $28,612.79 for re-
moving floating obstructions in the lake, and $66,505.75 for main-
taining the two large floating derricks, Ajax and Hercules. The bal-
ance is for channel and harbor maintenance, including a considerable
expense for deepening the Pacific entrance. Up to this time, it has
not been possible to take deep-draft vessels from the Pacific entrance
to Miranflores Locks at low tide, which is being overcome by deep-
ening the channel. The yardage excavated, the class of equipment
used, locations, and unit costs per yard are shown in Table No. 34.
Tible No. 25-Canal revenue.-This table shows a comparison of
the amounts deposited in the United States Treasury as miscel-
laneous receipts during the fiscal years 1925 and 1926. The amount
of tolls earned during the fiscal year 1926 was $22,927,456.03, which
exceeds the previous year by $1,552,791.91. The taxes, fees, and
fines collected amounted to $64,128.48, an increase of $7,376.56 over
the previous year. The postal receipts from the sale of stamps, etc.,
amounted to $143,037.90, and were $6,490.50 greater than last year,
the details of which are shown in Table No. 38. The total canal
revenues which will be covered in as miscellaneous receipts, amounted
to $23,145,136.53, which is exclusive of the profits from business opera-
tions, amounting to $841,310.29, shown in Table No. 26, and exclu-
sive of the $3,045,145.46 earnings shown in Table No. 24, which were
repaid to appropriations. The $514.12 miscellaneous receipts con-
sist of pay-car overages, $1.01; overage in cash of shipping com-
missioner, Cristobal, $4.77; sale of mail matter, $22.86; interest on
judgment, steamship Nordfarer, $485.48.
Table No. 26-Business. expenses and revenues.-This table shows
the business operations of The Panama Canal as separate and dis-
tinct from the operation and maintenance activities directly con-
nected with the transiting of vessels. Under the annual appropria-
tion act The Panama Canal is authorized to use funds appropriated
for the operation and maintenance of The Panama Canal in con-
ducting auxiliary business enterprises with the provision that funds
so used will be recovered and repaid to the appropriation to be used
for the purposes for which they were originally appropriated, and
with the further provision that any profits derived from such business
activities be covered into the United States Treasury as miscellaneous
receipts annually.


The electric light and power system includes the operation of the
Gatun hydroelectric plant, the Miraflores steam electric plant,
operation of substations, transmission lines, and distribution system,
detailed cost of which is shown in Table No. 32. The basic rate for
electric current to departments and divisions of The Pannma Canal,
Panama Railroad, and other departments of the Government, re-
mained 1% cents per kilowatt-hour during the year. The basic
rate to outsiders is 4 cents per kilowatt-hour. The total cost of
producing and distributing electric light and power was $518,316.67
and the profit, $221,176.91. On account of the extreme dry season
and in order to save water for lockages,the Miraflores steam power
plant was operated as an auxiliary from January 28 to June 7.
During the previous year it was not necessary to operate this aux-
iliary plant, and in that year the stand-by expense was $58,291.81.
The stand-by expense plus the cost of operation during the dry
season during the fiscal year 1926 was $112,828.39, the difference of
$54,536.58 being principally for additional fuel oil required during
full operation.
The other operations of the electrical division, including electrical
installation and repair work not chargeable to the production and
distribution of electric light and power, amounted to $1,411,336.64,
which includes the value of the equipment installed.
The cost of operating and maintaining the telephone, telegraph,
and automatic-signal systems for the Panama Railroad was $248,-
842.80, an increase of $17,733.99 over the previous year.
The water system involves the operation of pump stations, filtra-
tion plants, reservoirs, and pipe lines for the production, filtration,
and distribution of water throughout the Canal Zone and in the
cities of Colon and Panama, including water delivered to vessels
using the terminals and transiting the canal. The rate for water to
departments and divisions of The Panama Canal, Panama Railroad,
and other departments of government was maintained at 12 cents
per thousand gallons during the entire fiscal year, which represents
the actual cost of production and distribution. The rate for water
delivered to vessels is 50 cents per thousand gallons. The total cost
of operating the system was $491,574.87. The net revenue of
$33,854.46 includes an item of $23,400 to cover the value of water
used for municipal purposes and the balance represents an excess
over the actual cost of production. This net revenue lacks approxi-
mately $44,000 of covering 3 per cent on the investment, which rep-
resents the water and water facilities provided by the municipal


engineering division for fire protection for which that division receives
no book credit.
The cost of municipal engineering work performed outside of the ,
cost of water amounted to $756,214.85. This includes the cost of
operating the incinerator at Cristobal and excavation, filling, concrete
work, and street work performed for the various departments and
divisions of the canal, railroad, and other departments of government,
and the Panaman Government.
The expenditures, revenues, and return on the investment in public
works in the cities of Panama and Colon are explained under Table
No. 20.
The total expense of shop and dry dock operations amounted to
$3,336,913.68 and the revenues, $3,519,645.77, leaving a net profit of
$182,732.09. The expense and revenue figures include the cost of
work performed for departments and divisions of The Panama Canal,
Panama Railroad and other departments of government, including
the maintenance of Panama Railroad rolling stock, which service is
performed at cost, and the profit represents the excess of revenues
over expenses for work performed for outsiders, including repairs to
vessels. The surcharge on direct labor was fixed at 35 per cent on
July 1, 1925, and remained the same during the fiscal year. In
addition to the custoniary charges into operating expenses to pro-
vide reserves for replacement, the sum of $10,000 was charged in to
cover the cost of road and track changes in the mechanical division
yard and $45,000 for an extension to the pattern shop.
The chlirges. against vessels for the use of pier 6, Cristobal, and
pier 18, Balboa, amounted to $53,638.74. The actual cost of pier
maintenance was $74,446.27, resulting in a loss of $20,807.53. The
foundations under pier 18, Balboa, are giving way and a consider-
able amount of money will be required in the near future for work
on the substructure of this pier.
The cost of operating the pumping plants at Balboa and Mount
Hope was $324,468.80, and the revenues from pumping amounted
to $505,433.68, resulting in a profit of $180,964.88. The rate charged
for pumping oil into and out of tanks is 4 cents per barrel, and during
the year 5,431,000 barrels were pumped in an out at Balboa and
6,933,000 barrels at Mount Hope. The revenues include $4,800 for
tank rentals. The value of fuel oil used by the canal itself is included
in business store operations.


The value of general store material and supplies, including fuel
oil issued to the business divisions of The Panama Canal together
with the value of the material sold directly to outsiders, and the
storehouse expense chargeable against such material, amounted to
$3,860,447.08. The net profits of $99,562.79 include approximately
$40,000 profit on the sale of scrap material, and the balance repre-
sents the difference between the operating expenses charged to this
account and the surcharge added to the price of the material to cover
same. The surcharge to departments and divisions is 10 per cent,
and on material sold to outsiders, 25 per cent. The value of fuel
oil included in this account was $533,055.42, nearly all issued to
divisions, only very small quantities being sold. The fuel oil fur-
nished to vessels is handled by outside companies from their own
The cost of operating the motor transportation division was
The motor car repair shop did a business amounting to $170,683.86.
The operating costs of the building division, including the con-
struction and maintenance of buildings, amounted to $1,243,967.85.
The operating cost of the Panama Canal press was $281,757.82,
which includes an item of $20,000 charged in to create a reserve for
the replacement of printing minachinery.
The expenses of operating and maintaining gold quarters were
limited to the amount paid by the occupants. During the year
considerable amounts were expended for interior painting and
reroofing. This work is not complete and will be continued during
the fiscal year 1927 from rental revenues received.
The cost of operating and maintaining silver quarters exceeded the
rent collections from silver employees by $17,120.69. This deficit
was charged to maintenance of laborers' quarters referred to under
Table No. 24.
Under the heading of building rentals are included the rentals
from garages, boat houses, restaurants, and markets.
District quartermasters' supplies and services show a loss of
$30,604.23. This account includes material, supplies, and services
furnished to employees, such as gasoline, coal and kindling wood,
furniture, etc. About $10,000 of this loss is occasioned by the pur-
chase and installation of capital additions, including air compressors
and motors and gasoline pumps at the service stations, mattress
filling machine, boiler, and fuel oil tank.
The cost of operating the Hotel Tivoli was $233,599.91 and the
profits amounted to $30,633.85, compared with $13,685.59 last year.


The expenses under the heading of farm bureau and land rentals
include the expenses of the agronomist, experimental farm, and plant
introduction. The revenues include the rentals from fuel-oil tank
sites, building sites, agricultural licenses, and the proceeds from the
sale of produce. Effective July 1, 1926, the fuel-oil tank site rentals
will be included under the heading of fuel-oil operations and the
building site rentals under the heading of building and building site
rentals, leaving only the agricultural rentals and receipts from the
sale of produce in this account, against the operating expenses of the
The salvage section, which was formerly carried under the heading
of aids to navigation in Table No. 24, shows a loss of $61,083.68.
This is due to the fact that an up-to-date salvage unit was maintained
during the year to give assistance to ships in distress at sea, but no
large salvage jobs became available for The Panama Canal, all such
work being performed by outside salvage companies. The recent
policy of The Panama Canal is to maintain the salvage section only
for salvage work in or near The Panama Canal, and the operating
expenses should reduce considerably during the current fiscal year.
The loss of $15,928.15 shown under the heading of sand and gravel
is not an actual loss, simply representing a charge to departments and
divisions of the canal below actual cost of this material in the Gamboa
gravel pile. The pile is getting low, and during the year 1926 it has
become necessary to separate the sand from the gravel and to wash
the sand which is an expensive process. Arrangements have been
made to replenish the stock during the coming fiscal year.
Under the heading of sale of Government property are included
the proceeds from the sale of some cars to Ulen & Co., Colombia, for
$25,952.89, sale of a coal hoist for $2,000, barge No. 47, $1,250, and a
number of small items. The charges to this account represent the
book value of this equipment.
Nautical charts and publications were sold to vessels for the sum
of $2,454.80.
The gross revenues from all business operations amounted to
$15,874,478.01, compared with $14,564,114.93 last year. The profits
to be covered in as miscellaneous receipts amounted to $841,310.29,
compared with $765,916.85 the previous year, and exceed somewhat
3 per cent on the investment in these business activities.
Table No. 27-Surplus.-The gross canal transit revenues since
the opening of the canal amount to $144,473,111.99, and the cor-
responding expenses, $86,079,929.52, showing a surplus of $58,-
393,182.47 to date. During the same period the revenues from
business operations totaled $133,487,151.03 and the corresponding
expenses, $128,414,088.57, making a total business profit to June 30,
1926, of $5,073,062.46.


Table No. 28-Collections from gold emnployees.-The total amount
collected from employees for house rent, supplies and services, was
$676,279.37, of which $365,301.76 was for rent, $52,207.15 for electric
current, $27,457.12 for water, $24,670.18 for telephones, $28,711.72
for garage stall rentals, $49,647.19 for hospital charges, and
$128,284.25 for other miscellaneous supplies and services furnished to
gold employees.
Table No. 29-Depreciation.-The total amount of depreciation
written into the operating costs to date is $5,667,204.16. This in-
cludes theoretical depreciation amounting to $1,521,428.40 and
theoretical interest on the depreciation fund amounting to $504,-
985.36, a total of $2,026,413.76. Deducting this theoretical amount
from the gross depreciation leaves the net amount of cash in reserve
for the replacement of property and equipment at $3,640,790.40.
During the fiscal year 1926 approximately $350,000 of the deprecia-
tion funds was used for the necessary replacements of equipment,
such as barges and automobiles and trucks. Out of the balance on
hand June 30, 1926, the sum of $1,100,000 has been obligated for
expenditure in maintenance and operation during the fiscal year 1927.
This amount was deducted by the Bureau of the Budget from the
gross requirements for 1927 and only the balance appropriated.
Table No. 30-Rserre for extraordinary repairs.-The total amount
of cash in reserve and available for extraordinary repairs to prop-
erty and equipment in daily use as of June 30, 1926, was $1,803,731.42.
Table No. 31-Re.sen'rre for gratuity.-The amount of cash held in
reserve for vacation pay due the employees of the four principal
business divisions was $538,632.72.e This fund is created by adding
a percentage to the gold labor charges for work performed by busi-
ness divisions and represents a live liability, being immediately
payable when the employees take their vacations or leave the service.
Table No. 32-Electric current.-The cost of operating the hydro-
electric plant at Gatun was $76,829.25; Miraflores power plant.,
$112,828.39; substations, $143,338.56; transmission lines, $58,944.69;
distribution lines, $126,375.78; making a total cost of production
and distribution of $518,316.67. The total kilowatt-hours' production
was 56,177,590, and the unit cost. $0.0092. This cost, is exclusive of
the fixed capital charge.
Table No. 33-Water.-The total cost of operating the pump sta-
tions, filtration plants, reservoirs, and pipe lines in the Pacific system
during the fiscal year, including the overhead expenses, was $272,-
594.31 on a production of 2,905,637,000 gallons, resulting in a cost
of 50.0938 per thousand gallons, compared with $0.1040 last year.
The total operating cost in the Atlantic system was $170,759.81
on 1,875,095,000 gallons, resulting in a cost of $0.0911 per thousand
gallons, which is exactly the same as last year.


The average cost for the year for pumping, filtering and distri-
buting water in the Canal Zone and in the cities of Panama and
Colon was $0.0927 per thousand gallons.
This table shows the proportion chargeable for water delivered in
the cities of Panama and Colon, separated from that chargeable for
water used in the Canal Zone, the average cost of water delivered
in Panama and Colon being $0.0671 per thousand gallons and the
average cost of water used in the Canal Zone, $0.1073 per thousand
Table No. 34-Dredging.-The dipper dredges excavated earth and
rock in Gaillard Cut and the Pacific entrance to the extent of 1,432,650
yards at a unit cost of $0.8874 per cubic yard. Suction dredges
removed 1,707,600 yards of earth from Gaillard Cut, Pacific entrance
and Balboa harbor at a unit cost of $0.2139. The total cost of dredg-
ing was $1,636,559.67 on a total yardage of 3,140,250, or an average
of $0.5212 per cubic yard.
Tables Nos. 35 and 36-Money orders.-During the fiscal year,
143,559 money orders were issued amounting to $2,789,535.40.
Money orders, including deposits money orders, cashed by the Canal
Zone post offices amounted to $1,244,670.73. Canal Zone money
orders paid in the United States amounted to $1,787,756.16. Interest
paid on deposit money orders amounted to $15,438.82.
Tables Nos. 37 and 38-Postal service reren iues.-The revenue from
money-order fees, stamp sales, post office box rent and newspaper
postage was $142,324.34. The stamp sales alone amounted to
$113,657.74. Interest earned on money-order funds on deposit
amounted to $23,988.30. *
Table No. 39-Postal savings.-Postal savings money orders were
issued in the amount of $726,825. The amount paid was $796,280,
and the amount remaining on deposit June 30, 1926, was $465,815.
Tables Nos. 40 to 43 inclusive-Panama Canal clubhouses.-Table
No. 40 shows the income in detail from clubhouse operations, amount-
ing to $537,687.55.
Table No. 41 shows the expenses of operating the cloubhouses,
$529,686.12. This statement shows capital addition expenditures
made from clubhouse surplus last year. In the annual report for last
year a considerable amount invested in improvements was included
in the operating expenses, which resulted in a loss in operation and
gave a wrong impression as to the net results from operation.
Table No. 42 shows the net result of operation at each clubhouse,
the total net profit being $5,500.33.
Table No. 43 shows the current assets and liabilities, the stock of
material and supplies on hand amounting to $20,062.34, and bills
collectible, $11,222.12. Against this there were bills payable at the
end of the year amounting to $70,020.73. The accumulated surplus
to June 30, 1926, was $154,150.80.

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