George Washington GOETHALS
1904 - June 28 - U.S. begins construction of Panama Canal

February 23 – For $10 million, the United States gains control of the Panama Canal Zone...

June 28 - A small U.S. workforce arrives in Panama to survey, plan, and continue the excavation begun by the French. They are led by Chief Engineer John Findley Wallace.

Chief Medical Officer Colonel William C. Gorgas arrives in Panama with a team of seven men. He immediately focuses on the staggering death rate the French had come across during their time on the isthmus, looking for possible causes. His studies on the local population will show that over 70% of the local Panamanian population has malaria.

www.pbs.org American Experience


FLAG HOISTED

United States Take Possession of Panama Canal Route.

WORK WIL BE UNDER DIRECTION OF MAJ. BROOKE.

Report of Transfer Proceedings at Paris Received by President.

MORGAN & CO. DESIGNATED AS AMERICAN AGENTS.

French Interests Accept the Deposit of $40,000,000 with That Firm as Equivalent to Payment. Details of the Provisions Mad for Distribution of the Money.

Panama, May 4. - The United States Canal Commission to-day took formal possession of the canal route and of the property of the Panama Canal Company. William R. Russell the retiring United States Minister to Panama, recently appointed United States Minister to Colombia, Secretary Lee of The United States Legation and Dr. Pierce, Superintendent of Sanitation, were among those present.

From to-day the canal work will be under the direction of Maj. Mark Brooke of the Engineer Corps of the United States Army, who represented the Canal Commission at the ceremony of the transfer. Immediately after the transfer the United States flag was hoisted over the legation and over the canal offices in the Cathedral Plaza.

M. Renaudin, the representative of the Panama Canal Company, called the principal employes of the company to his office and read a cable dispatch from Paris ordering him to deliver all the canal property to the United States Government. Maj. Brooke read a telegraphic message from Secretary Taft directing him to accept the property for the Government of the United States. M. Renaudin then handed the keys of the buildings to Maj. Brooke, who hoisted the American flag over the Administration building.

A document attesting to the delivery of the property, written in French, Spanish and English, was signed by Maj. Brooke and M. Renaudin.

Conditions of Transfer.

Washington, May 4. - The President has received the following report from the Attorney General on the Panama Canal transfer:

"Department of Justice. May 4, 1904:

"The President - I have the honor to report that I have made an arrangement with the New Panama Canal Company and Morgan & Co., where Morgan & Co. have been designated agents to make the transfer of money due by the United States to the Panama Canal Company.

"The $40,000,000 is to be deposited with Morgan & Co. at once upon the delivery by the canal company to the United States of all the property included in the purchase. So that the deposit of $40,000,000 with Morgan & Co. by the United States is accepted by the canal company as equivalent to a payment for the purposes of a delivery of the property to the United States.

"Owing to the fact that a part of this money is due to the liquidator of the old company under an arbitration authorized and subsequently confirmed by the French courts, all parties entitled to the money agreed that if Morgan & Co. would bind themselves to make the distribution of the funds that delivery of the property need not await actual payment.

"Morgan & Co. will make the distribution as follows.

"They will place 20,000,000 francs in the Bank of France to the credit of Jean Pierre Gautron, the liquidator of the old Panama Canal Company. This represents the value of the Panama railroad shares, the title to which was not passed to the new company until the completion of the canal, unless 20,000,000 francs were paid therefor to the liquidator of the old company.

"Five million francs will be paid to the Bank of France to the credit of the new Panama Canal Company, which under the award of the arbitrators, is due to the new company, to reimburse it for the 5,000,000 francs paid in April 1900, for the extension of the concession. Of the remainder of the 40,000,000, 40 per cent thereof is to be paid into the Bank of France to the credit of the new company and 60 per cent to the credit of the liquidator of the old company, as provided by the decree of the French courts, confirming the award of the arbitrators.

"As this arrangement was made for the accommodation of the French parties, all expenses incident thereto are borne by them, and the United States is protected from all costs whatever.

"Stated concisely, the arrangement is that the French interests accept our deposit with Morgan & Co. as equivalent to payment for all purposes of delivery of the property.

"The New Panama Canal Company in liquidation has given a mandate of power of attorney to Renaudin, their representative upon the isthmus, with complete instructions concerning the delivery of the property. This department has cabled similarly to Maj. Brooke, who was designated by the Honorable Secretary of War, for that purpose to act for the Government in accepting delivery.

"The canal company has likewise placed at the disposition of the United States the personnel of its organization upon the isthmus for the purpose of temporary service in the preservation of the works and property pending the preparations of the Canal Commission to undertake active operations.

"I have notified the Commission of the situation, and nothing now remains to be done except to take possession of the property and direct the deposit of the consideration with Morgan & Co. in accordance with the terms of the contract. Yours respectfully,

"P.C. KNOX, Attorney General."

In connection with these payments it is said at the Treasury Department that Morgan & Co. will be designated as disbursing agents of the Government, and, following the invariable rule in such cases, they will be required to deposit $40,000,000 in bonds as security to the Government. The payment will be made as soon as the bonds have been received, which probably will be in a day or two.

The Providence Journal
Providence, Rhode Island
May 5, 1904

June 28, 1904

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