File No. 819.77/147.
I may note that every effort has been made to expedite this report on
account of the approaching end of the session of the National Assembly.
A slight delay was caused by the fact that the Acting Chairman of the
Isthmian Canal Commission only received his instructions from the War
Department on the 24th instant, and that it was impossible for Lt.
Colonel Gaillard and Lieutenant Mears to meet before today.
As stated in my telegram of the present date, I have just been informed
by President Porras that he has now decided to prolong the present extra
session of the Assembly for a period of twenty days from tomorrow.
[Inclosure.]
Report of a board appointed by the Secretaries of
State and War to pass upon the technical merits of a contract
for the construction of a railway signed by the Panaman
Secretary of Public Works and Mr. Basil Burns Duncan and
approved by the President of Panama on December 30,
1912.2
In accordance with the telegraphic instructions of January 21 and 23,
1913, of the Secretaries of State and War, a Board composed of the
American Minister at Panama, a member of the Isthmian Canal
Commission and the Chief Engineer of the Panama Railroad met at the
American Legation in the city of Panama, at 8:15 a.m., on January
27, 1913, to pass upon the technical merits of a proposed railway
contract (in pursuance with the instructions of the above-mentioned
telegram). The Board was composed of the following members: the Hon.
Percival Dodge, American Minister, Chairman; Lieut. Col. D. D.
Gaillard, Corps of Engineers, U. S. A., (designated by the Chairman
of the Isthmian Canal Commission) and Lieut. Frederick Mears, U. S.
A., Chief Engineer of the Panama Railroad.
The Board carefully considered the said proposed Contract No. 70,
between Señor Ramon F. Acevedo, Secretary of Public Works, on the
one part, and Mr. Basil Burns Duncan on the other part, which
contract was signed on the 30th of December, 1912, by the aforesaid
Secretary of Public Works and Mr. Basil
[Page 1089]
Burns Duncan and approved on the same date by
the President of the Republic of Panama.
The Board finds it impracticable to discuss properly the technical
merits of the proposed contract for the reason that neither the
location of the main line of the proposed railroad nor the location
of any of its branches is shown either in the text or by
accompanying maps, Art. 1 of the contract simply specifying that the
railroad shall start from the mouth of the Chagres River on the west
bank of the same river and run in a direction more or less southwest
and that the length of the main line shall be of at least fifty
kilometers. This indefinite description is further modified by the
statement that the general direction may be changed by the
topographic conditions, nor are there any definite stipulations as
to the number of tracks, or limiting grade or degree of curvature.
The method of construction is not mentioned, nor is any definite
terminal point given at the vaguely located southwest extremity of
the line.
The contract contains no stipulations as to the quantity or character
of the rolling stock to be provided for the operation of said road,
nor in regard to station buildings, water tanks, etc., nor does it
provide for the submission to the Government of any maps, profiles
or plans until eighteen months after the approval of the contract by
the National Assembly (Article 13, Para. 2).
So far as the Board has been able to ascertain, there would be little
or no business for such a railroad at present in the general
locality mentioned and it is therefore presumed that the sole
purpose of the project is the exploitation and development of the
Government lands as the various sections of the railroad are
completed.
The Board is further of the opinion that the sums mentioned in
Article 13, Paragraph 4, to be deposited by the contractor are
inadequate to properly protect the Government in a contract of this
nature, which is so indefinite and where so many necessary details
are lacking.
The Board is of the opinion that to comply properly with the
requirements of Art. 5, Page. 2, would require the expenditure of a
sum largely in excess of that needed for the construction of the
proposed railroad alone. The Board also notes that no description of
the character of the works proposed for the improvement of the mouth
of the Chagres River is submitted, as should be done, for the
information and protection of the Government.
The Board believes it proper to invite the attention of officials of
the War Department to the fact that the proposed terminus of the
railroad at the mouth of the Chagres River will be but a few hundred
feet from the boundary of the Canal Zone and will afford additional
facilities to enable a hostile force to land on the coast to the
southwest of this terminus and reach, by means of the railroad and
the Chagres River, the locks and dam at Gatún.
The Board has no assurances from evidence furnished it that the
contractor possesses the financial resources requisite for the
proper prosecution of the work of constructing the railroad. It
bases this opinion to a large extent upon the fact that he took over
a contract in December, 1910, between Lewellyn Swain and the
Isthmian Canal Commission (see page 158, Report of the Isthmian
Canal Commission for the fiscal year ending June 30, 1912) for the
excavation of certain material in the Canal Prison aggregating, as
was estimated, 108,992 cubic yards at 21½¢ per cubic yard, and on
May 16, 1912, signified his inability to complete the contract for
lack of financial resources. The total amount involved in the
contract was less than $25,000 and as monthly payments on same were
made for a period of sixteen months, it will be seen that the amount
of capital required for this contract was not large.
In order that a project of the nature of that proposed should be
intelligently considered as to its technical merits it would be
necessary to have definite maps, plans and profiles, accompanied by
complete specifications for the construction and final acceptance of
the railroad, with accurate description of the rolling stock, water
stations, station buildings, etc.
In order to permit any contractor to bid intelligently on a project
of this character the Board believes it essential that some means
should be provided by which the topographic features of the area in
question could be properly determined in advance of the drawing of a
contract.
In view of the foregoing the Board has the honor to recommend that
this contract be not approved.
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H. Percival Dodge.
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D. D. Gaillard.
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F. Mears.
