maintenance. It is capable of doing more than this; and it is not an idle prediction to state that, with proper management directed along the lines of a large business enterprise, it will within a reasonable period of normal world conditions earn an actual profit on the cost. From an analysis made under reasonable assumptions as to amortization, depreciation, obsolescence, and interest, it is estimated that with an annual revenue of three times that of 1920 the canal will make a financial return on the investment." The chief users of the canal are the United States and Great Britain, as the following table of vessels shows: Commenting on these figures in his annual report of 1920, Governor Harding says: "The revenue of the canal exceeded the current expense for its operation and maintenance by $2,387,599.14 for the fiscal year 1920, and the total current expense of operation and maintenance for the six-year period since 1914 exceeded the total revenues by the amount of $2,231,091.61. This excess will be more than overcome by the revenues of 1921. The year in which the expenses exceeded the revenues in the greatest amount was 1916, during which traffic was suspended for six months on account of the great slides at Culebra, and the expenses were increased by the cost of removing them. "The canal in its present state represents a capital expenditure by the United States of $366,650,000, exclusive of expenditures for its military and naval defense. The investment, from one point of view, may be regarded as having been made and justified in the creation of an invaluable element of national defense. If this be true, the canal has an additional value in rendering useful service in time of peace, and in returning to the Federal Treasury revenue more than sufficient to defray the expense of its operation and The one on any conception of this. Grouped upon two sides of Ancon Hill at the Pacific end are villages which are the show-places of the Isthmus. The one on the southern slope, overlooking Panama City, was the site of the French hospitals and was later made the temporary administration centre of American canal work. the northern slope, named Balboa Heights, overlooking the Pacific entrance to the canal, was selected as the permanent administration centre of canal operations, and the erection of its buildings was begun shortly before the end of canal construction. It was then virtually a barren tract. Behold the miracle that seven years have wrought! To-day both villages are nestled in groves of stately royal palms, among the most beautiful, if not the most beautiful, trees in the world. The athletic field of the model village of New Balboa during a baseball game between the navies of the Atlantic and Pacific fleets. Hedges of the ever-flowering and manyhued hibiscus and the gorgeous Bougainvillea, with its huge masses of color, hide and overrun the houses, converting the entire settlement into a tropical garden of surpassing loveliness. The photographs reproduced herewith give only a faint idea of its wonderful beauty, for they lack the vivid coloring of the tropics. At the foot of the northern slope on which the village of Balboa Heights stands, there is placed on a knoll, overlooking the port of Balboa, the permanent canal headquarters, or Administration Building, and on a plain lying 75 feet below is a model village, called New Balboa, of concrete buildings with red-tiled roofs, which are the quarters for canal employees. Through the centre of this village runs a central avenue or prado, shaded with royal palms, on either side of which the buildings are ranged. They include, besides dwellings, a police station, post-office, chief sanitary office, fire station, dispensary, telephone-building, club-house, hotel, lodge hall, church, commissary, and schoolhouse. The accompanying photographs give a good idea of the plan of the town, and show some of its principal buildings, and also the athletic field or playground. The site of this model town was originally a swamp, and was raised to a height of 75 feet above sea-level by excavated material from Culebra Cut and hydraulic fill from the inner basin at the canal entrance. The royal palms shown in the photograph have a growth of only five years. The physical beauty of the town, with the gray concrete walls of its buildings and the red tiles of its roofs, is very striking. Another marvel which confronted me after my seven years' absence was the transformation that had been wrought in the Ancon Hospital grounds. When I left the Isthmus the hospital work was carried on mainly in the old wooden buildings left by the French. To-day there stands in the place of these a collection of structures which have been declared by competent authorities to constitute the most beautiful hospital in the world and the largest in the western hemisphere. The material is the same as that used in the administration building and in the model town of New Balboa, and the style of architecture is the same in all, a modified Italian Renaissance, admirably suitable to the tropical surroundings. The hospital buildings cost about two million dollars and the equipment about one million more. There is a capacity for 838 beds which can be increased to 1,200 in emergency. The staff includes 33 physicians, 6 internes, a chief nurse, and 90 graduate nurses. The total admissions in 1920 were about 10,000 and the average number of persons treated a day is 880. The question is often asked: Have mosquitoes been banished from the Canal Zone? The answer is emphatic and unequivocal: so far as the American occupation of the zone is concerned, they have. The visitor to the canal never sees or hears a mosquito, and very rarely a fly.. On my recent visit I neither saw nor heard one of either species. The banishment is made permanent by rigid adherence to the methods put in practice at the outset of the canal construction. These are mainly-clearing of undergrowth of all kinds for a distance of 200 yards around settlements; not allowing grass in that area to grow more than a foot high; draining all marshes and swamps, and oiling all stagnant ponds to kill mosquito larvæ. The cost of making and keeping the Isthmus a healthful place of living has been and is a large item in the total expenditure. The total cost from the time of American occupation in 1904 down to the completion of the canal in 1914 was about $20,000,000. This included work done not only in the Canal Zone, but in the cities of Panama and Colon, which is ultimately to be repaid in water rates. Since 1915 the annual cost—that is, the excess of expenditures over receipts, has been about $600,000. This includes everything pertaining to health-hospitals, sanitation proper, quarantine, etc. Since 1914 army posts have been built at the Atlantic and Pacific entrances in proximity to the batteries and hangars which they serve, and two infantry posts have been built, one near the locks on the Pacific side and one near those on the Atlantic. The largest post is known as Fort Amador, which is at the Pacific entrance and occupies a space of 25 acres |