New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-08-20
GOVERNMENT HANDS TIED
Cannot Abrogate Pacific Mail
Panama Railroad Contract.
IrRoM raE TRIBUNE suREAC-I

Washington. Aug 19-Ths governments hands
appear 10 be tied the Isthrnus OF Panama Al
though the United States owns sixIy-ntne-scvsr-
deths OF the stock OF the Panama Railroad Com
pany IT have no voice in the management az
the road until April 10. 1905. when new board az
directors will be elected The corporate interests
behin1 the old French company viii still naaintatz
their mold the affairs OF the railroad. and. In
spite of the desire OF the government to the con-
trary. viii continue in force the old Huntington
contract with the Pacific Mail Steamship Company.
which gives that carrying firm a monopoly OF It's
Pacific freight business and incidentally. maintains
the transcontinental freight rates west and east
of the Rockies. These facts were communicated TO
he Cabinet to-day by Secretary Taft The subject
Of the relations OF the Panama Railroad with the
government consumed nearly the whole time OF
the meeting
The government appears TO be up against il.
said Secretary Taft, after the meeting There
seems to be way 70 ahrogste that contract until
the government gain control OF the majority
OF TIE directorate. and that cannot be done under
the law until the election in April"
Various plans to help the administration our OF
this uncomfortable situation have been suggested.
but 10 solve the problem with fairness
both sides. II is said that the President might
emergency measure. declare the contract
ru1 and void. and seize the property Of the rail-
road company But such drastic measures are
hardly warranted in inc OF peace. and the man
interested in the Pacific Mail Company might have
just claim against the government for the losses
government does NOT hasten take over rhs man
agement OF the railroad company the old board Of
directors may work incalcuable injury to thu ad-
ministration by some official action that would tie
up the affairs OF the company for many years in
the future. For instance. II IS believed by some
that between now and April 10 the directors could
extend the contract with Pacific Mail Steam
sup Company for twenty-five nifty years and
make another and more profitable FOR the mail
company Then. again. II - feared by rhAS
between and the time the government
surass absolute control the old directors might
oarrass the President by 1lunging the railroad deep
into debt which the United States would be called
on 70 pay
All these alarnist theories however DO not
cause serious anxiety. The government Is IN DO
5itlon 70 cneckrnats any move that would be raAdO
Tor the injury OF the railroad. and. II n
nounced with authority that the administration
VIII take fun charge OF the roads affairs naxe
APRIL the worst That can POSSIBLY happen ta
merely continuation OF the prevailing conditions.
mat these conditions continue until tbs
next election OF the board is absolutely assured
When the members OF the canal commission
turn 70 the United States the end OF this month
they may be in possession OF facts which viii
chenge the present outlook u. IN the opinion OF
Admiral Walker and the other members the gov
eminent can legitinately take possession OF tbs
road before the time stated. there will be de-
lay in doing and the Pacific Mail Steamship
Company viii be compelled do business on an
equality with all other carriers the Pacific