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Gift of the Panama Can




VoLl,No. 4



Committee Is Selected
By Governor Newcomer
To Study Overall Plan

PROBLEMS concerning the formation of the new Panama Canal Company next July will be studied
here this month by a committee from the Board of Directors of the Panama Railroad Company. Gen.
R. A. Wheeler Heft) and Gen. Julian L. Schley, shown above, are members of this committee. The third
member will be T. Coleman Andrews, President of the .American Institute of .Accountants, who was recently
appointed to the Board of Directors. General Schley is spending the winter in the Canal Zone, while General
Wheeler and Mr. Andrews are scheduled to arrive February 12 to begin their deliberations.

Plans For Civil Defense

Being Rapidly Developed

For the second time within a decade
the problem of civilian defense has been
brought to the forefront in the news and
in the minds of Isthmian residents.

It was just ten years ago that the first
concerted effort was begun to provide
protection for the civilian population in
the event of an enemy attack on the
Panama Canal and its defenses. The
problem today has been highly compli-
cated by the threat of atomic and biologi-
cal warifare which might bring the num-
ber of casualties among non-combatants
to an appalling total.

However distant the threat of actual
warfare and atomic explosions coming to
the Isthmus of Panama, the necessity of
protection against such an eventuality be-
came apparent after the outbreak of hos-
tilities in Korea.

The civilian defense program in the
Canal Zone will follow in the main the
same protective measures which are being
adopted by the major cities and industrial
areas in the United States. The compre-
hensive program already devised and now
beyond the planning stage is intended not
to frighten but to educate and protect the
civilian residents.

Governor Newcomer has urged that all
Canal-Railroad employees and the adult
members of their families cooperate to the

fullest extent in civilian defense work
which is presently being done and which
may be required in the future. In his
statement the Governor stressed the im-
portance of education.

Governor's Statement

"It is of prime importance that all resi-
dents of our community inform them-
selves fully on the community-wide meas-
ures which will be taken as well as the
individual protective measures which
would be required in event of an actual
attack on the Canal," Governor New-
comer said. "The Office of Civil Defense
has recently distributed to all employees
the informative booklet officially released
by the United States Government on pro-
tective measures in atomic warfare and
an extensive first-aid training program is
presently in progress. Those who can do
so should take first-aid training, and
everyone should study in detail the book-
lets which have been distributed."

The first formal step in the present
civilian defense program in the Canal
Zone was taken last September when the
Office of Civil Defense was reinstituted
and Melvin E. Walker was appointed
Civil Defense Advisor. Since then a
Joint Advisory and Coordination Com-
mittee has been appointed with represent-
atives from the military (Seepage^)

The intricate problems involved in
the fiscal arrangements for the Panama
Canal Company after next .July 1 which
face the Canal Administration, the
Bureau of the Budget, the Secretary of
the Army, and, for that matter, the
President of the United States, will be
scrutinized by the Board of Directors
of the Panama Railroad Company prior
to a final settlement.

The problems of establishing the
Panama Canal Company and consti-
tuting the Canal Zone Government
effective July 1, 1951, in compliance
with Public Law 841, were discussed in
some detail in the previous issue of
"The Panama Canai Review." .\s was
indicated in that article, the issues
involved are fundamental ones which
vitally affect future Canal operations.

The complete future picture of what
is now The Panama Canal and the
Panama Railroad Company probably
will not be known for another two or
three months, either publicly or to
those most closely connected with the
deliberations. This is true, not because
the deliberations and discussions are
cloaked in secrecy, but by reason of the
fact that final decisions have not been

The layman in this fiscal wonderland
can perhaps best grasp the importance of
the problems in establishing the new com-
pany to operate the Panama Canal and
all its adjuncts by considering the high
Government agencies and oflicers in-
volved in seeking a solution.

The lines of the Canal Zone Govern-
ment after next July have already been
etched into the new picture, and with
comparative simplicity. The meat of the
question still under consideration is:
Which functions of The Panama Canal
are properly chargeable to Canal tolls?
In simpler (and far from exact) terms,
which functions would not be performed
if ships were not being {See page J,)


# Simple instructions on what to do in
event of an atomic explosion are given
in illustrated form on page II.

9 One little-known chapter of the Hotel
'I'ivoli's romantic history is carried In
this issue.

9 "Your Health" appears for the first
time In this issue. See page 7.

Lack of space prevented the use of the
identification contest, used »n the last
It is planned to resume this popular
feature in future issues.


February 2, 1951

Plans To Lease Tivoli 30 Years Ago

Are Recalled By Hotel's New Status

Few hotels in the world have a more
romantic glow about them than the
three-story frame structure which stands
on the east side of Ancon Hill and is
known as the Hotel Tivoli. Yesterday
its 43-year life as a commercial establish-
ment came to an end and it became a
"Government guest house."

It began life in a blaze of glory with its
first guest being "Teddy" Roosevelt. The
President and his party came to the Isth-
mus in November 1906 during the heavi-
est part of the rainy season to see the
Canal work under the worst possible con-
ditions. One wing of the new building
was rushed through to completion for its
distinguished guest under the insistent
prodding of John F. Stevens, then Chief
Engineer of the Isthmian Canal Com-

The lore of the Tivoli and its guests,
which have included the entire scale of
society from royalty down, undoubtedly
will live long since its fame as a public
hostelry has spread to every part of the

Few of the present generation know
that the Hotel Tivoli's days as a Govern-
ment-operated hotel all but ended about
30 years ago. This little remembered
fragment of the hotel's history involved
many personalities in the United States
and on the Isthmus whose names have
been intimately connected with the

Commission Recommended Lease

During the early 1920's, Secretary of
War, John W. Weeks, appointed a special
commission to investigate practically all
phases of Canal and Railroad operations.
Among the various recommendations
made by the three-man commission was
one to lease the Hotels Tivoli and Wash-
ington for private operation. In those
years of peace and lack of war talk, the
story was of nearly the same local impor-
tance as the Income Tax story in 1950.

A plan for leasing both hotels was
actually developed and bids were ac-
cepted. Only two bids were entered, both
by local hotel men, and both were rejected

New and lower rates have been
announced for the Hotel Tivoli by P.
S. Thornton, Manager, effective with
the change on February 1 from a
commercial hotel to a Government
guest house for those with Canal
Zone privileges.

Single rooms with bath range
from $3.50 to $5; double, $5 to $7;
suites, single $7 and $8, double $9
and $10; single rooms without bath,
$2.50 and $i, double $3.50 and $4. All
rates quoted are for European plan

Discounts of 25 percent are
granted on one month's basis, and
50 percent on two months or longer.
Table d'hote meals range from 50
cents for the lowest-priced breakfast
to $2 for the most expensive dinner.

Detailed information on rates
and reservations should be obtained
from the hotel management.

on the grounds that they were too low.

Andrew Johnston, then manager of the
Hotel Tivoli, offered to buy the equip-
ment of the Tivoli for $31,655 and lease
the building for $1,248 a month.

Frank Martin, a former employee in
the Supply Department and a well-known
restaurant manager of that period, made
an offer of $2,500 a month rental for the
Hotel Washington and $40,000 as the
purchase price for its equipment.

The book value of the Tivoli equipment
was then approximately $60,000 and that
of the Washington slightly over $58,000.

Bids Were Rejected

Some casual inquiries were received
from hotel interests in the United States
on the proposed lease of the two hotels
but no firm offers were ever submitted.

The death knell to the two proposals
was sounded by R. K. Morris, then Chief
Quartermaster, who made an analysis of
the bids and the prospective loss by the
continued operation of the two hotels by
the Government. His recommendation
that both bids be rejected, submitted
June 12, 1922, was approved by Colonel
M. L. Walker, then Acting Governoi',
while other recommendations on econo-
mies to be effected were postponed for a
decision by Governor Jay J. Morrow, who

was then in Washington.

Among those who were interested in
the proposed leasing of the two hotels
was John McEwen, well-known hotel
manager with two year's experience as
manager of the Washington and six years
as manager of the Tivoli before Mr.
Johnston took charge. He wrote a
lengthy letter to Secretary of War Weeks,
in which he suggested closing the Tivoli.
(He was then the proprietor of the 40-
room Hotel International).

Hotel Manager Enters Objections

After outlining all the disadvantages of
the Tivoli and complaining that its con-
tinued operation would be unfair to busi-
nessmen in the Republic of Panama, he
said in pai't: "As a modern hotel it is a
back number and a veritable fire trap.
It was said years ago that it was kept
open all the year round because there was
no other hotel in Panama fit for a man
to live in. This could not be said today
because we have a hotel in Panama with
more capacity and just as good accommo-
dations as the Tivoli can offer." He
referred to the Hotel Central which had
recently been rebuilt at a cost which Mi".
McEwen said was about $400,000.

While Mr. McEwen objected to the
continued operation of the Tivoli under
any management, the Chamber of Com-
merce entered objections to its being
leased on the grounds that this would be
inimical to its interests. This question
got slightly involved in diplomatic chan-
nels, and Narciso Garay, then Secretary
of Foreign Affairs, addressed a letter of
inquiry on the matter as a result of the
Chamber of Commerce protest. He was
furnished a copy of the form of proposal
inviting bids by C. A. Mcllvaine, Execu-
tive Secretary.

These exchanges were made during the
latter part of May of that year and the
involvement in diplomatic circles ended
when all proposals for leasing the hotels
were rejected.

The differences in the amounts offered
foi' the two hotels stemmed apparently
from the fact that a bar (Set page W)

February 2, 1951


C. Z. Civil Defense Plans
Being Rapidly Developed

iConliniietl friim page I) commands ill the

Canal Zone, the Republic of Panama, the
United States Embassy, and The Panama
Canal. Several meetings of this advisory
committee have already been held to plan
coordinated civilian defense measures on
an Isthmus-wide scale. Members of this
committee, of which Mr. Walker is Chair-
man, are Governor Antonio T. De Reuter,
of Panama, Director General of Civil De-
fense in the Republic of Panama; Albert
E. Carter, First Secretary of the U. S.
Embassy; and Lt. Col. Russell K. Brock,
representing the Armed Forces.

During the latter part of 1950 both
Mr. Walker and J. P. Smith, Sanitation
Engineer of the Health Bureau, were
given official assignments in the United
States to familiarize themselves with the
civilian defense programs.

Booklets Distributed

As a means of educating the general
public on atomic warfare and the pio-
tecti\'e measures which mav be taken

To The Employees

Mi'lvin K. Walker, ( 'ivil Defense Advisor

among civilians, the Office of Civil De-
fense reprinted and distributed to all
employees the booklet Survival Under
Atomic Attack. This information book-
let tells in lay terms the dangers and best
means of protection in atomic warfare.

Two other important steps have been
taken in the civilian defense program.
These are the first-aid training courses
which are being offered and the on-the-
job training for employees. The latter
program will be conducted on a unit basis
for the Canal-Railroad with the training
being provided by supervisors, foremen,
and school teachers as a part of their
regular duties.

An objective of at least 5,000 residents
trained in first aid within six months has
been set for the first-aid training program
which was launched in January. The
instructors are all registered Red Cross
first-aid instructors, being selected pri-
marily from the Fire Division, and sup-
plemented by volunteers from the Police
Division and others who have completed
advanced first-aid training.

It is planned to continue the first-aid
training program on an ever-expanding
scale in all communities with those in the
first classes becoming instructors.
Sirens To Be Installed

As a further civil defense measure in
the Canal Zone, it was decided in Decem-

Thc past year icas, ivithout doubt, one
(if the most eventful and significant in the
histori/ of the Panama Canal since its com-
pletion. It was a year signalized by major
changes in the Canal- Rail-
road organization; the
enactment of legislation of
far-reach ing ini portance to
the Canal and its users;
and world events which
had a profound effect on
the average individual in
the Canal Zone.

Under such conditions
it was natural to expect
that the organization and
the employees individually
would be subject to stresses
much greater than usual.
I have not been unaware
of these conditions nor of
the extra effort which has been required of
the majority of our employees.

It has been a source of great satisfaction
to me to have had loyal cooperation during
this period.

Under world conditions we face at the
outset of 1951, the responsibilities which we
will be called upon to bear will he greater
than ever before. Because of these conditions
it is a matter of utmost importance that each
employee fully realize the importance of his
or her job. In an organization as complex
as The Panama Canal the daily work ac-
complished by each employee becomes an
important factor in the efficient functioning
of the waterway itself, xaliich is the basic
reason why we all are employed here in the
Canal Zone.

Those in supervisory positions of what-
ever nature have an additional responsibil-
ity. Aside from their oivn ipork they arc
directly responsible for those whom they
supervise, whether it be one, ten, or a hun-
dred. This additional duty does not always
begin and end with the accomplishment of
the job itself. It is entirely possible for a
group of icorkers to perform a certain task
efficiently and well and yet have cause for

The foreman or supervisor who fails to
head off and rectify, whenever possible, a
justifiable complaint on the part of any of
his employees fails in the qualifications for
a supervisor. By and large
'"~^' " the average employee be-
lieves he has a jiist cmise
when he complains or
seeks an adjustment of any
nature. Even if the alleged
wrong is fancied the em-
ployee has the right to
expect a sympathetic
understanding from the
man he calls "the boss."

There are comparatively
few grievances which can-
not be satisfactorily
adjusted at the source. In
^,««=. many instances the lack

of sympathetic under-
standing on the part of the supervisor
becomes more important than the original
grievance. An attentive ear and sympathetic
attitude are the best antidotes for wrongs,
fancied or othenoise. The employee with
a real grievance has every right to expect
the support of his superior in righting the
wrong since the supervisor is the guiding
factor in his daily work.

Under present conditions everyone has
burden enough from the strai7is and stresses
imposed by world conditions. It is unrea-
sonable to expect to find loyalty and esprit
among those who fail to find sympathy and
understanding from their supervisors.

I have requested the variotis Bureau and
Division heads to give particular attention
to the attitude of the supervisors toward
their employees. It is an essential require-
ment in any good organization. Its impor-
tance in the Canal-Railroad organization
cannot be overstressed.



ber to reinstall the general air raid siren
system used during World War II.
Approximately 25 sirens are to be placed,
at strategic locations in the various Canal
Zone communities and this work is now
being done by the Building and Electrical

The sii-ens will be installed at the key
locations first and the entire system will
have a single, central control. Full in-
structions will be publicly announced
concerning the alert signal system at a
later date.

The steps which have thus far been
taken in the civilian defense program are
considered only as the primary and basic
requirements. Plans are presently being
developed to provide shelter protection
to residents of strategic areas. Vai'ious
other phases and plans for civilian pro-
tection are being studied and prepared.
The extent of the development of the
program and the time within which vari-
ous plans will be initiated will depend to
a large degree on world conditions.

Zone Problems Different

Those concerned with civilian defense
in the Canal Zone are aware of the differ-
ence in the problem here and in the
average city in the United States.

As expressed by Mr. Walker, "There

are many phases of a civil defense pro-
gram which are peculiar to the Canal
Zone. We have few massive structures,
subways, basements, or other normal
underground shelters here which can be
quickly converted into places of refuge.
The light frame construction of most
houses would offer far less protection in
event of an atomic explosion than a
masonry building.

"There are, however, in all communi-
ties public buildings which provide a
greater degree of safety and it is the duty
of each individual, with the advice and
assistance of the Civil Defense OflSce, to
determine which areas are safest in their
immediate vicinity. With such know-
ledge and only a few minutes of warning,
the number of casualties could be greatly

"It is universally recognized that in
present-day warfare little warning may
be given of an enemy attack which
might involve large numbers of civilians.
There are many simple expedients which
can be adopted to minimize the dangers
from an atomic explosion even when out
in the open. Those are explained in some
detail in the booklets which have been
widely distributed and it is a matter for
each individual to acquaint himself thor-
oughly with those instructions."


February 2, 195^

Plans For New Canal Company
StudiedJBy M Directors

[Conlinved from page 1) daily locked

through the Pmiama Canal?

No Simple Arithmetic

Governor Newcomer, Lieutenant Gov-
ernor H. D. Vogel, Arnold Bruckner, Di-
rector of Finance, and W. H. Dunlop,
Chief of the Management Division, who
have been closest to this problem, all
heartily agree that it is not a matter of
simple arithmetic. So will a battery of
Budget officials and representatives of the
Office of the Secretary of the Army who
have a part in the question and answer

The $64 question remains.

Anyone with a simple answer accept-
able to all interest^: concerned can become
a hero overnight. In making the simple
answer, however, he must be prepared to
juggle many millions of dollars in one
hand while tracing a clear, simple pattern
with the other which can be used perhaps
for the next half century to lock ships
through the Canal; provide schooling,
police and fire protection, and health serv-
ices for the Canal Zone community; filter
and furnish a pure water supply; build
and maintain roads; construct and rent
houses; generate and supply electricity;
buy and s?ll supplies; finance and accom-
plish major improvement projects; and do
the other odd chores presently retiuired in
administering the present Panama Canal
and its sister organization, the Panama
Railroad Company.

These problems were discussed in great
detail by the Governor and his advisors
with Bureau of the Budget officials on
their trip to Washington, D. C, in De-
cember. However, in accordance with the
law, the Board of Directors of the Pan-
ama Railroad Company, which will be-
come a dominant factor in future Canal-
Railroad operations, must have an oppor-
tunity to consider the many questions
posed prior to the submission of the
answers and an overall plan to the Presi-
dent for his decision, which will be final.

As a result. Governor Newcomer, as
President of the Panama Railroad Com-
pany, has appointed a committee of three
to study at first hand here in the Canal
Zone the problem.

Committee Is Appointed

This committee will be composed of
Gen. Julian L. Schley, former (Jovernor
and President of the Panama Railroad
Company; Gen. Raymond A. Wheeler,
retired Chief of Engineers and former
Engineer of Maintenance and Vice Presi-
dent of the Panama Railroad Company;
and T. Coleman Andrews, of Richmond,
Va., President of the American Institute
of Accountants, who was recently ap-
pointed a member of the Board of

General Schley is already on the Isth-
mus, while General Wheeler and Mr.
Andrews are expected to arrive February
12 to begin their deliberation. The infor-
mation they will require is presently being
assembled by the various Canal-Railroad
units under the general direction of
Lieutenant Governor Vogel.

The findings and recommendations of
this committee will be submitted to the
Board of Directors at a meeting which
will probably be called early in Mai-ch.
The Governor has notified the Bureau of
the Budget that the plan evolved by the
Board of Dii-ectors will be submitted
sometime before May 1 for President



October - November - December

Col. George W. Goethals, Chairman
and Chief Engineer of the Isthmian Canal
Commission, returned to the Isthmus
eiU'ly in October 1910 after attending the
wedding of his son, Lt. George R.
Goethals, in the United States.

"The esprit that one finds among the
Canal employee?, and the enthui^iaMic,
intelligent and patriotie leadership that
Colonel Goethals and his assistants show
at every turn and under every emer-
gency, leave no doubt that the Canal will he
fully complctel within the time guaranteed,
to wit. th\first of January 1915, and within
the estimate made by Colonel Goethals in
I9Q8 of $375,000,000."

This quotation was a part of a prepared
statement by President William Howard
Taft upon his departure after a two-day
visit in November 1910. The President's
visit was one of the notable events of the year
in the Canal Zone.

and some of the material extended past the
middle of the Canal. Several drill rigs were
wrecked when a portion of the north shoulder
of Contractor's Hill broke away and covered
about 320 feet of the main track.

The wreck of an old ship, believed to
have been a Spanish galleon, was dis-
covered buried in about 20 feet of sand
at Nombre de Dios where dredging opera-
tions were in progress to supply aggregate
for the construction of Gatun Locks.

The fall meeting of the Canal Zone Fed-
eration of Womens' Clubs ivas held in Gor-
gona. Among other business, the federation
adopted a resolution to ban the common
drinking cup in the Canal Zone.

A Tea Room on the south veranda of
the Hotel Tivoli was formally opened in

The ordinance providing for the licens-

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