On December 4, 1904, an executive order was issued by the Secretary announcing the terms of an agreement reached with President Amador. The order The Taft Settlement.

provides that no trade for the canal zone or the Republic of Panama can enter the ports established by the United States at either end of the canal, supplies for the construction of the canal and articles in transit being excepted. This turns the customs receipts of these ports over to the government of Panama, Panama agrees to reduce her tariff from 15 per cent ad valorem to 10 per cent. applies to all goods except wines, liquors, alcohol and opium. agrees to reduce her consular fees and port charges to 60 per cent of the rates at present charged.

This reduction
Panama also

Absolute free trade is to apply between the canal zone and the Republic of Panama. Vessels entering the canal ports have free entry to the ports of Colon and Panama, and vessels entering the latter ports have the same privileges in the canal ports. Complete jurisdiction is granted to the United States in the harbors

of Colon and Panama as to sanitation and quarantine regulations.

Panama reduces her rate of postage to two cents, and is to furnish all stamps in the republic and in the canal zone. The zone authorities are to purchase stamps from Panama at 40 per cent of their face value. The order became effective December 12, 1904.

Reorganization of 1905.

In giving instructions to a new Commission, the President wrote on April 1, 1905: "The Commission will hold quarterly sessions the first of January, April, July and October of each year, at the office of the Governor of the Isthmus of Panama. Under the supervision and direction of the Secretary of War and subject to the approval of the President it is charged with the general duty of the adoption of the plans for the construction and maintenance of the canal and with the execution of the work of the same; with the purchase and delivery of supplies, machinery and necessary plant; the employment of the necessary officers, employes and laborers and with the fixing of their salaries and wages; with the commercial operation of the Panama Railroad Company and its steamship lines as common carriers; with the utilization of the railroad as a means of constructing the canal; with the making of contracts for construction and excavation and with all other matters incident and necessary to the building of a waterway across the Isthmus of Panama as provided by the act of Congress of June 28, 1902."'

Under the reorganization of 1995 three executive departments were created, one headed by the chairman of the commission, one by the Governor of the Canal Zone and one by the chief engineer. By an order signed November 19, Reorganization 1906, this triple control was abolished. The office of Governor was of 1906. left vacant, Governor Magoon having been transferred to Cuba, and seven departments were created, all under the supervision of and reporting to the chairman of the Canal Commission. The heads of the seven departments were: Chief engineer, John F. Stevers; general counsel, Richard R. Rodgers; chief sanitary officer, William C. Gorgas; chief purchasing officer, D. W. Ross; general auditor, E. S. Benson; disbursing officer, J. Williams; manager of labor and quarters, Jackson Smith.

Bids were asked from contractors in 1906 for the work of excavating the canal, but after long delays and much friction all were rejected early in 1907 and the administration turned to the idea of having the enterprise managed Reorganization by government engineers. Theodore P. Shonts, the chairman of the of 1907. commission, resigned in January, the resignation to take effect on March 4, 1907, and he was succeeded temporarily by John F. Stevens. Mr. Stevens had also resigned as chief engineer, when the plans for construction by private contract were changed, and early in March a new commission was appointed, Col. Gorgas and Jackson Smith alone remaining on the commission of 1906. Under the reorganization the departments were thus assigned: Construction and Engineering, Lieutenant Colonel Goethals; Excavation and Dredging, Major Gaillard; Lock and Dam Construction, Major Sibert; Municipal Engineering, Motive Power and Machinery, Lieutenant Rousseau; Civil Administration, J. C. S. Blackburn; Sanitation, Colonel Gorgas; Labor, Quarters and Subsistence, Jackson Smith. A highly satisfactory increase in the rate of excavation was made under the new commission.

An Advisory Board of Engineers met in Washington on September 1, 1905, and later made a visit to the isthmus. It reported early in 1906 in favor of the construction of a sea level canal. But the sea level plan was abandoned by the administration as impracticable and the 59th Congress at its first session passed an act directing the construction of a lock canal. President Roosevelt paid a visit to the canal strip in November, 1906. The Secretary of the Treasury on July 2, 1906, invited bids for $30,000,000 of 2 per cent, ten year-thirty year Panama bonds and the issue was subscribed for to the amount of $445,000,000. The average price bid for the $30,000,000 awarded was 103.95. A sale of $50,000,000 of bonds was advertised in November, 1907, but the issue was subsequently limited to $25,000,000.

The Panama canal cost the American government $84,449,000 up to December 31, 1906, according to a statement of the audited expenditures made as of that date. The bulk of this expenditure was the payment of $50,000,000 to the French company and the Panama government for canal property, right of way and franchises, and $3,449,022 went for material and supplies. For general administration there was expended $1,124,226; government and sanitation, $4,381,089, and construction and engineering, $9,729,554. Other expenditures include $12,188,852 under the head of plant, which includes rolling stock, machinery, second main track on isthmus, buildings, zone waterworks, etc.

PRESIDENTIAL AND VICE-PRESIDENTIAL CANDIDATES, 1904.

Republican June 21.

THEODORE ROOSEVELT, of New York. | CHARLES W. FAIRBANKS, of Indiana. Democratic-July 6,

ALTON B. PARKER, of New-York.

HENRY G. DAVIS. of West Virginia. Populist-July 4,

THOMAS E. WATSON, of Georgia.

| THOMAS H. TIBBLES, of Nebraska. Prohibitionist-June 29.

SILAS C. SWALLOW, of Pennsylvania. | GEORGE W. CARROLL, of Texas.
Socialist-May 4.

EUGENE V. DEBS. of Indiana.

| BENJAMIN HANFORD, of New-York.

Socialist Labor July 3.

CHARLES H. CORREGAN, of New-York. WILLIAM W. COX, of Illinois.

CONVENTION PROCEEDINGS.

Republican.

The Republican National Convention was held in Chicago, June 21-23. Nine hundred and ninety-four delegates-including two from the Philippines and two from Porto Rico were put on the convention roll. Elihu Root, of New York, was chosen temporary chairman on June 21, and Joseph G. Cannon permanent chairman on June 22. The first day's session was devoted chiefly to the delivery of Mr. Root's speech. On the second day Mr. Cannon made a speech and the platform was reported and adopted. Balloting for Presidential and Vice-Presidential candidates occurred on June 23. Theodore Roosevelt, of New-York,_was nominated for President on the first ballot, receiving 994 votes. Charles W. Fairbanks, of Indiana, was nominated for Vice-President by acclamation and without a rollcall. The convention then adjourned.

The Platform.

The platform, adopted unanimously on June 22, was as follows:

Fifty years ago the Republican party came into existence, dedicated, among other purposes, to the great task of arresting the extension of human slavery. In 1860 it elected its first President. During twenty-four of the Party forty-four years which have elapsed since the election of Lincoln Achievements. the Republican party has held complete control of the government. For eighteen more of the forty-four years it has held partial control through the possession of one or two branches of the government, while the Democratic party during the same period has had complete control for only two years. This long tenure of power by the Republican party is not due to chance. It is a demonstration that the Republican party has commanded the confidence of the American people for nearly two generations to a degree never equalled in our history, and has displayed a high capacity for rule and government which has been made even more conspicuous by the incapacity and infirmity of purpose shown by its opponents.

The Republican party entered upon its present period of complete supremacy In 1897. We have every right to congratulate ourselves upon the work since then Returning Prosperity.

accomplished, for it has added lustre even to the traditions of the party which carried the government through the storms of civil war. We then found the country, after four years of Democratic rule, in evil plight, oppressed with misfortune and doubtful of the future. Public credit had been lowered, the revenues were declining, the debt was growing, the administration's attitude toward Spain was feeble and mortifying, the standard of values was threatened and uncertain, labor was unemployed, business was sunk in the depression which had succeeded the panic of 1893, hope was faint and confidence was gone

We

We met these unhappy conditions vigorously, effectively and at once. replaced a Democratic tariff law based on free trade principles and garnished with sectional protection by a consistent protective tariff, and industry, freed from oppression and stimulated by the encouragement of wise laws, has expanded to a degree never before known, has conquered new markets and has created a volume of exports which has surpassed imagination. Under the Dingley tariff labor has been fully employed, wages have risen and all industries have revived and prospered.

National Credit

We firmly established the gold standard, which was then menaced with destruction. Confidence returned to business, and with confidence an unexampled prosperity. For deficient revenues supplemented by improvident issues of bonds we gave the country an income which produced a large surplus, and which enabled us only four years after the Spanish war had closed to remove over $100,000,000 of annual war taxes, reduce the public debt and lower the interest charges of the government.

Re-established.

The public credit, which had been so lowered that in time of peace a Democratic administration made large loans at extravagant rates of interest in order to pay current expenditures, rose under Republican administration to its highest point, and enabled us to borrow at 2 per cent, even in time of war.

We refused to palter longer with the miseries of Cuba. We fought a quick and victorious war with Spain. We set Cuba free, governed the island for three years,

Wise Foreign
Policies.

and then gave it to the Cuban people with order restored, with ample revenues, with education and public health established, free from debt, and connected with the United States by wise provisions for our mutual interests. We have organized the government of Porto Rico, and its people now enjoy peace, freedom, order and prosperity.

In the Philippines we have suppressed insurrection, established order, and We have organgiven to life and property a security never known there before. ized civil government, made it effective and strong in administration, and have conferred upon the people of those islands the largest civil liberty they have ever enjoyed. By our possession of the Philippines we were enabled to take prompt and effective action in the relief of the legations at Peking and a decisive part in preventing the partition and preserving the integrity of China.

The possession of a route for an isthmian canal, so long the dream of American statesmanship, is now an accomplished fact. The great work of connecting the Pacific and Atlantic by a canal is at last begun, and it is due to the Republican party.

We have passed laws which will bring the arid lands of the United States within the area of cultivation. We have reorganized the army and put it in the highest state of efficiency. We have passed laws for the improveDomestic ment and support of the militia. We have pushed forward thej Problems Met. building of the navy, the defence and protection of our honor and our interests. Our administration of the great departments of the government has been honest and efficient, and wherever wrongdoing has been discovered the Republican administration has not hesitated to probe the evil and bring the offenders to justice without regard to art or political ties.

Laws enacted by the Republican party which the Democratic party failed to enforce, and which were intended for the protection of the public against the unjust discrimination or the illegal encroachment of vast aggregations of capital, have been fearlessly enforced by a Republican President, and new laws insuring reasonable publicity as to the operations of great corporations and providing additional remedies for the prevention of discrimination in freight rates have been passed by a Republican Congress.

In this record of achievement during the last eight years may be read the We promise to continue these pledges which the Republican party has fulfilled. policies and we declare our constant adherence to the following principles:

Party Pledges,
Protection.

Protection, which guards and develops our industries, is a cardinal policy of the Republican party. The measure of protection should always at least equal the difference in the cost of production at We insist upon the maintenance of the principles of protec home and abroad. tion, and therefore rates of duty should be readjusted only when conditions have so changed that the public interest demands their alteration, but this work cannot safely be committed to any other hands than those of the Republican party. To intrust it to the Democratic party is to invite disaster.

be

Whether, as in 1892, the Democratic party declares the protective tariff unconstitutional, or whether it demands tariff reform or tariff revision, its real object is always the destruction of the protective system. However specious the A Democratic tariff has always been folname, the purpose is ever the same. a Republican tariff by business prosperity. To a lowed by business adversity; Republican Congress and a Republican President this great question can be safely intrusted. When the only free trade country among the great nations agitates a return to protection, the chief protective country should not falter in maintaining it. We have extended widely our foreign markets, and we believe in the adoption of all practicable methods for their further extension, including Reciprocity. commercial reciprocity wherever reciprocal arrangements can effected consistent with the principles of protection, and without injury to American agriculture, American labor or any American industry. We believe it to be the duty of the Republican party to uphold the gold standard and the integrity and value of our national currency. Gold Standard. The maintenance of the gold standard, established by the Republican party, cannot safely be committed to the Democratic party, which resisted its adoption, and has never given any proof since that time of belief in it or fidelity to it. While every other industry has prospered under the fostering aid of Republican legislation, American shipping engaged in foreign trade, in competition with the low cost of construction, low wages and heavy subsidies of Shipping, Navy. foreign governments, has not for many years received from the government of the United States adequate encouragement of any kind. We therefore favor legislation which will encourage and build up the American merchant marine, and we cordially approve the legislation of the last Congress, which created the Merchant Marine Commission to investigate and report upon this subject.

A navy powerful enough to defend the United States against any attack, to uphold the Monroe Doctrine and to watch over our commerce is essential to the safety and the welfare of the American people. To maintain such a navy is the fixed policy of the Republican party.

We cordially approve the attitude of President Roosevelt and Congress in regard to the exclusion of Chinese labor and promise a continuance of the Republican policy in that direction.

Civil. Service,

Pensions.

enforced.

The Civil Service law was placed on the statute books by the Republican party, which has always sustained it, and we renew our former declarations that it shall be thoroughly and honestly We are always mindful of the country's debt to the soldiers and sailors of the United States, and we believe in making ample provision for them and in the liberal administration of the pension laws.

We favor the peaceful settlement of international differences by arbitration. We commend the vigorous efforts made by the administration to protect American citizens in foreign lands, and pledge ourselves to insist upon the just and equal protection of all our citizens abroad. It is the unRights Abroad. questioned duty of the government to procure for all our citizens, without distinction, the rights to travel and sojourn in friendly countries, and we declare ourselves in favor of all proper efforts tending to that end. Our great interests and our growing commerce in the Orient render the condition of China of high importance to the United States. We cordially commend the policy pursued in that direction by the administrations of President McKinley and President Roosevelt.

We favor such Congressional action as shall determine whether by special discriminations the elective franchise in any State has been Disfranchisement. unconstitutionally limited, and if such is the case, we demand that representation in Congress and in the electoral colleges shall be proportionally reduced as directed by the Constitution of the United States. Combinations of capital and of labor are the results of the economic movement of the age, but neither must be permitted to infringe upon the Trusts. rights and interests of the people. Such combinations, when lawfully formed for lawful purposes, are alike entitled to the protection of the laws, but both are subject to the laws, and neither can be permitted to break them. The great statesman and patriotic American, William McKinley, who was re-elected by the Republican party to the Presidency four years ago, was assas

sinated just at the threshold of his second term. The entire nation McKinley and mourned his untimely death, and did that justice to his great Roosevelt. qualities of mind and character which history will confirm and repeat.

The American people were fortunate in his successor, to whom they turned with a trust and confidence which have been fully justified. President Roosevelt brought to the great responsibilities thus sadly forced upon him a clear head, a brave heart, an earnest patriotism and high ideals of public duty and public service. True to the principles of the Republican party and to the policies which that party had declared, he has also shown himself ready for every emergency, and has met new and vital questions with ability and with success.

The confidence of the people in his justice, inspired by his public career, enabled him to render personally an inestimable service to the country by bringing about a settlement of the coal strike which threatened such disastrous results at the opening of winter in 1902.

The Roosevelt
Administration.

Our foreign policy under his administration has not only been able, vigorous and dignified, but in the highest degree successful. The complicated questions which arose in Venezuela were settled in such a way by President Roosevelt that the Monroe Doctrine was signally vindicated, and the cause of peace and arbitration greatly advanced. His prompt and vigorous action in Panama, which we commend in the highest terms, not only secured to us the canal route, but avoided foreign complications which might have been of a very serious character.

He has continued the policy of President McKinley in the Orient, and our position in China, signalized by our recent commercial treaty with that empire, has never been so high.

He secured the tribunal by which the vexed and perilous question of the Alaskan boundary was finally settled.

Whenever crimes against humanity have been perpetrated which have shocked our people, his protest has been made and our good offices have been tendered, but always with due regard to international obligations.

Under his guidance we find ourselves at peace with all the world, and never were we more respected or our wishes more regarded by foreign nations.

Pre-eminently successful in regard to our foreign relations, he has been equally fortunate in dealing with domestic questions. The country has known that the public credit and the national currency were absolutely safe in the hands of his administration. In the enforcement of the laws he has shown not only courage, but the wisdom which understands that to permit laws to be violated or disregarded opens the door to anarchy, while the just enforcement of the law is the soundest conservatism. He has held firmly to the fundamental American doctrine that all men must obey the law; that there must be no distinction between rich and poor, between strong and weak; but that justice and equal protection

under the law must be secured to every citizen without regard to race, creed or condition.

His administration has been throughout vigorous and honorable, high mindeo and patriotic. We commend it without reservation to the considerate judgmen:

of the American people.

Democratic.

The Democratic National Convention met in St. Louis on July 6. Nine hundred and ninety-eight delegates were admitted to seats, including six from Porto Rico. No delegates were admitted from the Philippine Islands. John Sharp Williams, of Mississippi, was chosen temporary chairman, and Champ Clark, of Missouri, permanent chairman. The first day's session on July 6 was devoted chiefly to the delivery of Mr. Williams's speech. On the second day a fight was made by W. J. Bryan against the seating of the Hopkins delegation from Illinois, but the report of the Committee on Credentials, confirming the title of that delegation, was approved by a vote of 647 to 299. The Committee on Resolutions failed to come to an agreement until the evening of July 8, when a platform was! reported and adopted unanimously. Candidates for the Presidential nomination were presented and voting began at about 4 a. m., July 9. Alton B. Parker, of New-York, was chosen on the first ballot. On the rollcall he received 658 votes, to 204 for William R. Hearst, 42 for Francis M. Cockrell, 38 for Richard Olney, 27 for Edward C. Wall, 8 for George Gray, 8 for John S. Williams, 3 for George B. McClellan, 3 for Nelson A. Miles, 2 for Charles A. Towne, 2 for Arthur P. Gorman, 1 for Robert E. Pattison, and 1 for Bird W. Coler. Idaho and Nevada, with 12 votes, changed from Hearst to Parker, and the latter's nomination was then made unanimous. Early in the morning of July 10 Henry G. Davis, of West Virginia, was nominated for Vice-President. He received on the first ballot 652 votes, against 165 for James R. Williams, of Illinois, 100 for George Turner, of Washington, and 58 for W. A. Harris, of Kansas.

The Platform.

The platform of 1904 can be properly interpreted only in the light of certain events which led up to and followed its adoption. As approved it contained no declaration on the money question. A sub-committee of the Committee on Resolutions, of which John W. Daniel, Benjamin F. Shively, Henry G. Davis, Fred. T. Dubois, Francis G. Newlands, John S. Williams, Robert E. Pattison, Ben. T. Cable, Charles S. Hamlin, William J. Bryan, John P. Poe and David B. Hill were members, submitted the following declaration:

The discoveries of gold within the last few years and the great increase in the production thereof, adding two thousand million dollars to the world's supply, of which seven hundred millions falls to the share of the United States, have contributed to the maintenance of a money standard of value no longer open to question, removing that issue from the field of political contention."

The full committee, by a vote of 35 to 15, struck out this plank and agreed to ignore the money and currency issue entirely, and the convention unanimously

ratified this decision.

Twelve hours after Judge Parker had been nominated, and on the eve of adjournment, the convention received this notice by telegraph from its Presidential

candidate:

"I regard the gold standard as firmly and irrevocably established, and shall act accordingly if the action of the convention to-day shall be ratified by the people. As the platform is silent on the subject, my view should be made known to the convention, and if it is proved to be unsatisfactory to the majority. I request you to decline the nomination for me at once, so that another may be nominated before adjournment."

This message provoked an excited debate, contravening, as it did, assurances previously given by Judge Parker's sponsors and managers. The convention, finally approved by a vote of 774 to 191 this answer to Judge Parker's telegram:

The platform adopted by this convention is silent on the question of a monetary standard because it is not regarded by us as a possible issue in this campaign, and only campaign issues were mentioned in the platform. Therefore, there is nothing in the views expressed by you in the telegram just received which would preclude a man entertaining them from accepting a nomination on said platform."

The text of the platform follows:

The Democratic party of the United States, in national convention assembled, declares its devotion to the essential principles of the Democratic faith which brings us together in party communion."

Fundamental
Principles.

Under them, local self-government and national unity and prosperity were alike established. They underlaid our independence, the structure of our free Republic, and every Democratic extension from Louisiana to California and Texas to Oregon, which preserved faithfully in all the States the tie between taxation and representation. They yet inspire the masses of our people, guarding jealously their rights and liberties and cherishing their fraternity, peace and orderly development. They remind us of our duties and responsibilities as citizens and impress upon us, particularly at this time, the necessity of reform and the rescue of the administration of government from the headstrong, arbitrary and spasmodic methods which distract business by uncertainty, and pervade the public mind with dread distrust and perturbation.