treaty, and whose functions will partake of the character of an international police, having supervision over the properties of the railroad to secure its neutrality.

Whenever the neutrality of the railway is in danger of being violated by an enemy from without or within, in any of the countries who are a party to the treaty, the General Staff of the Railway Guard is to be in full charge of any operation necessary to protect and defend the railway against violations of its neutrality, for which purpose it may, through the Commission, call upon the various Governments for any additional contingent of force deemed

necessary.

The railway is not to be used for the transportation of war materials or military forces, except when they are consigned as through freight or passage, or when they are consigned to a regularly constituted, lawful, and recognized Government of the high contracting parties. By a recognized Government is meant here, a Government whose duly appointed representative as a member of the said Pan-American Railway Commission, has been accepted and admitted as such by the unanimous vote of the Commission.

Sixth. In order not to encumber the enterprise from the start with extraordinary overhead charges, such as would be caused by the necessary expenditures for the organization and maintenance of the Railway Commission and the Railway Guard, it is proposed that these expenses are met by direct pro-rata contributions from the various Governments of the high contracting parties.

The following table of distances is given to furnish data on which to base a calculation for the financial requirements of the enterprise. It will be seen that the entire length of the railway would be 3000 miles. Estimating the cost of the roadbed as defined in the foregoing paragraphs at $25,000 per mile, and the equipment of the line as much again, brings the total cost up to $50,000 per mile, making the grand total amount of capital involved, $150,000,000, of which one-half or $75,000,000 would be furnished by the several countries through which the railway line passes and the other half, $75,000,000 by the operating company.

Pan-American Railway, Mexico, Central American Division, Table of Distances in Miles

It is but proper that something be said on the business outlook of the undertaking. While the complete data for a forecast of prospective earnings of the proposed railway as a whole is not available, "Poors Manual," furnishes data of the net earnings of the National railways of Mexico as follows:

* The falling off in the net earnings for 1910-1911 was undoubtedly due to the Revolutionary Movement.

Additional data on net earnings of some Central American railroads has been obtained from the United Fruit Company, which company is operating the railway systems of Guatemala under the name of the International Railways of Central America; also the combined railways of Costa Rica.

The net earnings per mile of both systems are as follows: International Railways of Central America: For the year 1911, 403.04 or $1,961.39 Am. Gold, a total of 466.4 miles being operated.

The International Railways of Central America are extending their system from Guatemala into Salvador, their objective point being the Gulf of Fonseca. This done, will give an all rail connection between the United States and the Gulf of Fonseca, on the shores of which our Government proposes to construct a naval base.

Costa Rican Railways: For the year 1911, $2688.37 Am. Gold, a total of 375 miles being operated.

As initial showings of net earning power, these figures indicate a remarkable robust vitality in these comparatively young railway systems and hold out the promise that under normal peaceful conditions, they will grow with the orderly development of their countries into strong properties. With the additional stimulus due to the operation of a through line, well administered, a new interstate traffic will be created, which added to the through traffic sure to be developed, will further enhance the earning power of the proposed rai way.

It will thus be seen that the prospective earning power of the proposed railway line rests on a good sound and substantial basis.

The early completion of the construction of the PanAmerican Railway to the City of Panama, with its neutralization and operation controlled by an International Railroad Commission, as above outlined, would be a proper complement to the great work of building the Panama Canal, and worthy of the ideals for which this great nation stands. It would for the present, conserve the integral character of each of the Central American Countries, so dear to each of them. It would offer free and more frequent intercommunication with one another, establish closer commercial and social relations, and in due time would bring them to the point where they would recognize the utility of a closer political and economic union among themselves and thus proclaim the true spirit of the Monroe Doctrine.

ORIGIN AND PRECEDENT OF THE PLAN

The organization plan proposed in the preceding pages for the construction and operation of the Pan-American railway is not at all chimerical, new, untried or complicated. It is modelled in a degree after the plan upon which the original system of Rapid Transit subways in the City of New York was built, and is being operated with remark

able success. The fundamental feature in the New York Subway plan, is the coöperation between the city and private enterprise. This combination was brought about by circumstances somewhat analagous to the ones which surround the Pan-American railway project, namely: The timidity of private capital to venture singlehanded in an undertaking of great expense and comparatively new in character. On the other hand, the city needed the transit lines badly enough for its own development, but was prevented from assuming the entire expenditure required for the project, by constitutional impediments; hence the coöperative plan. Under this plan, the city constructed for its own account the subway structure corresponding to an ordinary railway as to the graded roadbed with its bridges, tunnels and all other works pertaining to the stability thereof. The cost of this construction was met by the city by a special issue of bonds (Rapid Transit Construction Bonds), the interest and amortization of which was to be paid from the earnings of the railway.

The subway structure, so constructed and owned by the city was leased to an operating company for a term of fifty years. The company to equip for its own account, the railway complete in its entirety, which included construction and installation of power stations for furnishing the electric motive power, rolling stock, repair shops, and all other necessary appurtenances for operation. The operating company met this cost by its own issue of bonds (Equipment Bonds).

A Public Service Commission appointed by the Governor of the State is in full control of all operations which begin with the laying out of the routes, planning the construction, letting of contracts for the construction, supervising the construction of the same, approving the operator's plans for the equipment and finally of all the essential features of operating the railway, which concern the safety and convenience of the travelling public.

It is thus seen that the principal business features which go to make up the framework of the organization plan for the proposed Pan-American railway, are founded on actual and successful business practices in the American metropolis.

SOME ADVANTAGES OF THE PLAN

The feature of coöperation which has been applied to the project is real, not nominal; it calls for a material and constantly active participation by all the nations involved in all the affairs of the railway from its first stages of its existence, through all the subsequent stages of organization, surveys, location and construction, to the last act of operating.

The community of interest which will thus be established among all of these nations, will bear good fruit in that it will bring them together with great frequency in conference on matters relating to the railway, an object of common interest to all. They will learn of other views on vital points in one's life, get to know one another better, and learn to respect and tolerate their neighbors' views, and thus the sessions of the Railway Commission in themselves will exercise a wholesome educational influence on all.

The proposed railway will be under the mutual cooperative Protectorate of all in preserving its character of neutrality, thereby assuring an uninterrupted service, placing it beyond the bane of foes of law and order. The railway thus becomes the guarantor of peace throughout the countries traversed.

The railway will be a great factor in the development of the resources of the Central American Countries, indeed it will prove to be the key to what Humboldt so aptly called the "Storehouse of the World."

In its location through the Republics of Salvador, Honduras and Nicaragua, the railway runs along the border of the Gulf of Fonseca in its entire extent. To appreciate fully what this means, the following description of the gulf, is quoted from the Report of the Intercontinental Railroad Commission of 1898:

The Gulf of Fonseca is without question the finest harbor on the Pacific Coast of America. Its extreme length is from 50 to 60 miles, and its average width about 30 miles. It contains a number of islands, is well protected and its extent is such that it is capable of sheltering the combined navies of the world.