Panama: the cost of sanitation

When completed in 1915 the Canal will have cost approximately 350 million dollars, of which 20 million will have been spent by the Sanitary Department; that is, about 51/2 percent of the total will have been spent on sanitation. Ten percent of the total cost is allowed for contingencies in most engineering estimates, and the cost of sanitation at Panama has come well within that allowance. The expenditure on sanitation has led to saving in many directions; but the actual return may be stated briefly as follows:

The Canal has been constructed. Without the Sanitary Department the Canal could not have been made, for it would not have been possible to assemble the large labour force of both whites and blacks necessary for so great a work, had yellow fever and malaria existed in the terrible epidemic form in which these diseases are seen, when large numbers of susceptible people are continually being introduced to an endemic area. Even had it been possible to obtain the labour, the costs would have mounted up to far beyond 5 percent of the present total. It is well within the truth to say that, had there been no Department of Sanitation, and had neither money, men, nor time been of account, the Canal would have cost three times as much in money, ten times as much in lives, and would not have been completed in three times as many years. We will, however, miss the chief lesson the Sanitary Department of Panama teaches, if we content ourselves with these figures; for an analysis of the expenditure brings out in a remarkable way how much cheaper it is to prevent than to cure disease.

Before going into details it must be explained what the functions of the Sanitary Department are; and that, as Colonel Gorgas says:78

Much the larger part of the expenses of the Department of Sanitation for the Isthmus has no relation to sanitation. This came about gradually. During the first two years of preparatory work on the Isthmus there were only three departments—Government, Engineering, and Sanitary. All functions that did not manifestly fall under the head of government or engineering were assigned to the Sanitary Department. If we compare the functions performed by the Sanitary Department of the Isthmus with those performed by a city government in the United States we will find that the Sanitary Department on the Isthmus performs the same functions as the city government of New York City, with the exception of the accounting system, the judiciary, and the police.

The ordinary man, in speaking of the Sanitary Department, has in mind a department such as the Health Department of New York. Besides performing such functions as the Health Department of New York performs, the Sanitary Department on the Isthmus cares for all the sick, both in the hospitals and in the dispensaries, administers the national quarantine, does the street cleaning and garbage collecting, fills in and reclaims waste lands, pays the salaries of some fifteen ministers of the gospel, cares for all the cemeteries, does a general under- taking and embalming business for some 80,000 people, and besides all this, pays directly to the Engineering Department some $200,000 per year.

Colonel Gorgas then goes on to explain how the actual appropriations are expended, and shows that the appropriation for sanitation has been at the rate of $3.38 per capita per annum or 28 cents a month. Then he adds:79

But these figures could be still further reduced if we were an independent Sanitary Department here on the Isthmus, with the object simply of doing the work we are at present doing. But sanitation is not our primary object. We are here as a part of a great organization for building a canal, and we have to fit into this organization, irrespective of whether it is advantageous for the Sanitary Department or not.

For instance we find a piece of swamp land belonging to the Panama railroad. As the Panama railroad is owned by the Government we cannot make them abate this nuisance. So in order to preserve health conditions we have to ask Congress for $100,000 with which to fill it in. We do this, and the day after the work is finished the Panama railroad rents the land on a rental basis of $200,000. Of course this is an excellent business for the United States. It spends $100,000 and immediately clears 100 percent. But it calls the work ‘sanitation,’ makes the Sanitary Department pay for it, but pockets all the profits that arise therefrom. If the Sanitary Department on the Isthmus were the ordinary Health Department of one of our home cities there would be no expense involved in abating the above nuisance. A transaction in just about the circumstances and figures as described above has occurred to the Sanitary Department on the Isthmus.

I was much interested to find that in Panama enterprising officers contrived to make profits for their own departments at the expense of the Sanitary Department. Exactly the same thing has occurred in the Federated Malay States time and again, and soon after the Malaria Advisory Board came into existence, I drew attention to the heavy expenditure for “filling” in order to convert a swamp into a building site, when for a mere fraction of the money spent, the swamp could have been drained sufficiently well to prevent it being a public danger. A government can often afford a small sum for draining, when it cannot meet the heavy charge for filling; and it is essential that the sanitary officer should be on his guard to prevent his department from being so exploited that his proposals are rejected to the great loss of the community.


The Department of Municipal Engineering

When the Americans came to the Isthmus, they found that in neither the city of Panama nor Colon was there any sanitary organization whatever, and the first thing they did was to create a Department of Municipal Engineering. It existed until August 1908, when its work was taken over by various divisions of the Construction Department.

During the four years of its activity it expended nearly $6,000,000, of which about $2,250,000 was for waterworks, sewers, and pavements in the city of Panama and Colon, and about $3,500,000 for work in the Canal zone. Subsequent expenditures in Colon and Panama brought the total cost of improvements made in them by the Commission up to nearly $3,500,000. All of this, in accordance with the treaty between the United States and Panama, will be paid back to the United States through water and sewerage rates, within a period of fifty years, at the expiration of which the system of waterworks and sewers within city limits will revert to the cities, and the use of water will be free to their inhabitants, with the exception of a sufficient water rate necessary for maintenance and operation.

Through these expenditures pure water was supplied to the cities of Panama and Colon, and all settlements in the Canal zone, the cities were converted from hotbeds of disease—without water supplies or decent pavements or sewers—into the best-paved, best-watered, and best-sewered cities in Central or South America.80

From this it will be seen that almost one-third of the whole amount debited to the Sanitary Department was expended on permanent works, most of which will be a great asset to the Republic of Panama, long after the construction force on the Canal has disappeared; and it is absurd to debit the construction force with the whole of this expenditure; the most that ought to be charged is such a sum as will pay an ordinary rate of interest on a proportionate share of the capital and the sinking fund.

While, of course, the whole sum expended by the Municipal Engineering Department was necessary for the public health, in an ordinary community it would appear not in the accounts of the Sanitary Department but in those of the Municipal Engineer. Personally I think it perfectly legitimate to charge it to the Sanitary Department, as has been done in Panama; nor need the Department shrink from the responsibility for the expenditure, for no money spent on the Isthmus has given a better return; but when comparisons with the costs of other sanitary departments are being made, it is important to keep this point in view.



To the Sanitary Department is also charged the cost of the collection and disposal of garbage, and this alone up to 1912 amounted to more than half a million of dollars.


Buildings and Quarantine

The cost of the buildings used by all engaged in the work of the Sanitary Department is also debited to the Department: so, too, is the money spent on repairs. These items amount to over a million dollars, while quarantine amounts to over $300,000.



Under this heading there is a sum close on $800,000, which certainly has no parallel in the accounts of any other Sanitary Department. Through this account sanitation is charged with such curious items as a share of the Isthmian Canal Commission Band, the Y.M.C.A. clubhouses, and the official newspaper called the Canal Record. Referring to this subject Colonel Gorgas says:81

The overhead charges consist of such items as expenses of accounting, division, expenses of Pay Department, expenses of quarters, salaries of higher officials not connected with the Sanitary Department. While these charges may be just, they are not customary. In discussing the expense of the Health Department of New York, no one would think of including in it a charge for the Auditing Department, a charge for the Pay Department, a charge for the Mayor’s salary, a charge for the Governor’s salary, etc.



The care of the sick is also paid for by the Sanitary Department. Up to 1912, over $7,000,000 had been spent on hospitals, and when the Canal is opened the total sum will be close on $9,000,000, or almost one-half of the grand total expenditure of the Department of Sanitation in the ten and a half years of its existence. However useful the hospitals may have been, they have very little claim to be considered essential expenditure in the prevention of disease, even in the case of diseases like yellow fever or malaria.

Of course public opinion in America demanded the sick should be looked after as well as if they had been in the United States, and the splendid hospitals on the zone are the result. Had they not existed the cost of the Department would have been almost halved, while the total death rate of the zone would have been comparatively little higher. Colonel Gorgas himself points out that while sanitation cost them only 28 cents a month, the medical and hospital care of the employees and their families cost 2.6 cents per day, that is, 78 cents a month. It is important that this should be made clear, for when a government has only a limited sum to spend on hospitals and sanitation, it will do more good to the community by spending on prevention than on cure. It may seem brutal to put it so bluntly, but as a matter of fact the choice is made every year by every government, and one of the great lessons of Panama has been the demonstration to the whole world that it is not only better but actually cheaper to prevent disease than to cure it.


Sanitation proper

To come to sanitation proper now, almost suggests it is the Cinderella of the family; and indeed we find that, including the water supplies, sewers, etc., the total cost of this will not exceed $5,000,000, or just over one-quarter of the total expenditure. Lest some should imagine I represent the cost of the prevention of disease as less than it really is, I reproduce, from the Annual Report for the Fiscal year ending 30th June 1912, Table 5, Appendix 1 (Department of Examination of Accounts), the total expenditure to that date (see Table 16.1).

Table 16.1: Detailed statement of the classified expenditures of the Department of Sanitation, from the beginning of the work until June 30th 1912. All amounts are in $U.S.
    Total fiscal year 1912 Total to June 30th 1912
Administration 86,378.11 776,451.27
Hospitals and asylums
xxx Medical storehouses, Colon 9,360.33 31,564,14
  Ancon Hospital 426,383.65 3,291,621.41
  Colon Hospital 195,558.90 1,718,234.40
  Tobago Sanatorium 33,869.50 100,356.88
  Santo Tomas Hospital 10,601.51 50,622.16
  Other hospitals, dispensaries, and sick camps 194,093.01 1,885,178.75
Quarantine 35,861.36 324,966.27
Sanitation, Panama and Colon
  Sanitation proper, Panama 38,960.58 769,255.23
  Disposal of garbage, street cleaning, etc., Panama 10,627.34 70,374.05
  Sanitation proper, Colon 29,007.61 528,891.00
  Disposal of garbage, street cleaning, Colon 8,045.16 36,619.93
Zone Sanitation
  Sanitation proper 409,205.84 3,644,222.39
  Disposal of garbage, street cleaning, etc. 100,762.20 421,072.01
Construction of buildings 8,409.44 1,033,891.46
Repair of buildings 23,236.58 77,472.62
Total department of sanitation 620,391.12 14,814,793.97

From the table we see that, while hospitals cost $7,077,577.74, sanitation proper in Colon, Panama, and the Canal zone up to the 30th June 1912 cost only the sum of $4,966,368.62; or at the rate of $624,548.07 per annum. The population during that period has averaged approximately 115,000, so that the cost per head for sanitation proper works out at $5.43 per annum, 45.2 cents a month, or 11/2 cents a day. To many it may appear that the cost of sanitation is very high, and that a rate of over £1 sterling per head per annum would be prohibitive for other lands; but the conversion of dollars into other currencies is entirely misleading in a matter like this. In the first place the lowest paid labourer gets 10 cents an hour and usually earns a dollar a day, so that to him the tax would probably amount to less than 2 percent of his annual salary. To put it another way, if he denies himself each month two bottles of Balboa beer—“The Best Beer Brewed”—he would save sufficient for his sanitation. I admit it would be a self-denying ordinance, for the beer was excellent; but perhaps this humble illustration will serve to show how necessary it is to consider a person’s income when trying to estimate the weight of a tax.

There is another way of viewing this expenditure, and it would be one which might occur to the agriculturist: it is to regard it as so much per acre. This can be found very simply. In the ten years sanitation proper will have cost approximately $6,000,000 or $600,000 per annum. The area under control is 50 square miles or 32,000 acres, so the cost per acre per annum is $18.75 or about £3,10s sterling. No tropical product, unless it contrived to produce an everlasting “boom,” could afford to spend so much on sanitation. But to think of it in this way is to overlook the peculiar conditions which exist in the Isthmus as described in Chapter 11, and to which I shall in a moment again refer. These conditions are such that they could not possibly exist in an agricultural community, and to discuss this way of regarding the expenditure is therefore a waste of time.

In the second place a very large part—almost a half—of the expenditure on sanitation has gone in wages. Had wages been lower, the cost of sanitation would also have been lower; almost an instance of tempering the wind. Thirdly, I have explained already that the water supplies, sewers, etc., will remain as assets for many years, and that it is absurd to debit the rates with the whole capital cost in the space of eight or ten years.

In the foregoing I have tried to show how the expenditure has been incurred, and I have attempted to answer on their own lines the arguments which have been used by those who accuse the Department of Sanitation of extravagance. All such arguments miss the real point. Of a truth the critics have lost the saving sense of humour when they accuse Colonel Gorgas of extravagance. Have they entirely forgotten that he has done what in the history of the whole world has never been done before, and he has done what perhaps only half a dozen men in the world believe could possibly be done? When a man does what to the world is a miracle, it ill becomes the world to grumble at the cost; least of all have they an excuse when the money spent has enabled an undertaking of unparalleled magnitude to be carried out at a fraction of what otherwise it would have cost in both money and lives. If every cent spent by the Department of Sanitation had been expended on the prevention of disease, the Department could still claim its place as the most important cost-reducing factor on the zone; nor could any one dispute its right to the supreme position among labour-saving appliances even in this great engineering work, where the last invention of human ingenuity finds full employment.

It is only the simplest justice to Colonel Gorgas and his staff to remember that he did not go to the Isthmus to work out the most economical way of freeing the tropics in general from the pestilences which make them so fatal to the human race. He went to assist in the construction of the greatest engineering work hitherto attempted. His task was one in many ways absolutely unique. It is true he was not hampered by want of money; in every other respect the difficulties with which he had to contend have no parallel in the ordinary conditions met with either in towns or villages in the tropics. In places which were occupied only for a short time, and in others where the engineers were continually creating new mosquito breeding places, it was impossible for him to lay down permanent drainage systems which are, in the end, both the cheapest and most effectual. What he did was to surmount every obstacle in his path, by devising and developing other methods when prevented from employing the best he knew. In this way he did what those who sent him to the Isthmus asked him to try to do—namely, he made it possible to establish the large labour force without which the Canal could not be constructed. No impartial or reasonable person can for a moment object to costs which have reached only 5 percent of the total cost of the undertaking, and without which the undertaking would surely have ended in the failure from which it so narrowly escaped in 1906, when for a time work had to be abandoned, and when, as Mr Bishop has so graphically described, “nothing except lack of sailing accommodation prevented the scattering" of the entire force.”

Colonel Gorgas has done something more than what he was sent to do, important though the great Canal is to the commerce of both the New and the Old Worlds. Although he went to construct a canal, he has also conducted a School of Applied Sanitation whose lesson will benefit the world—I say with confidence—for all time.

I believe, indeed, that because the conditions were unique, the lesson of Panama has its limitations; and that, because the value of agriculture in controlling malaria, under certain conditions, did not come within the experience of the sanitarian in Panama, he did not emphasise it. Of supreme and last importance is the great lesson of Panama that, when everything else fails, and when all the conditions are most adverse, the adoption of one of the subsidiary methods which they have evolved will enable people to live, if not completely free from disease, at least with far greater freedom than we ever imagined could ever be possible; and that where large masses of tropical labour are employed, the appalling mortality of the past need not recur in the future.