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table shows the total quantity of water sold at each of the two ports in the Canal Zone, with the total number of vessels taking water during the year:

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In the cities of Panama and Colon, in the Republic of Panama, the sum of $152,289.89 was spent for the upkeep of streets and water and sewer systems. All expense in connection with this work is repaid by water rentals, which are collected by the municipal division. The following tables show the quantity of water used in each of the two cities during the fiscal year, by quarters, together with the amount of the water rentals:

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Includes all bills rendered against Panaman Government for water consumed in public buildings in Panama City, which bills have not yet been paid. Net amount of bills.

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The following statement shows the status of the capital cost account for the municipal improvements in the cities of Panama and Colon at the close of the fiscal year. This statement also shows the status of the account on July 1, 1910, with detail of the debits and credits each year since that date according to the agreement of September 30, 1910, with the Republic of Panama, under authority of which quarterly statements of the account are made.

Status of capital-cost account for municipal improvements in Panama and Colon.

Cost or original water and sewer system within city prior to July 1, 1910..
Cost of original pavements within city prior to July 1, 1910..
Cost of extensions to water and sewer system within city prior to July 1,

1910..

Cost of extensions to pavements prior to July 1, 1910...

Interest on capital cost water and sewer systems and pavements prior to July 1, 1910..

Proportion interest on capital cost reservoirs, pumping stations, and
pipe lines prior to July 1, 1910.

Cost of maintenance water and sewer systems and pavements prior to
July 1, 1910...

Proportion cost of maintenance reservoirs, pumping stations, and pipe
lines prior to July 1, 1910..

Water rental collections prior to July 1, 1910...

Capital cost water and sewer system and pavements July 1, 1917..
Capital cost reservoirs, pipe lines, pump stations, and filter plants in
Zone July 1, 1917.

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1 Panaman Government pays a proportion of interest on these sums at 2 per cent based on relation of total quantity of water used in Panama and Colon to total quantity of water produced by system.

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Status of capital-cost account for municipal improvements in Panama and Colon-Continued.

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Under the head of new construction for the municipal division in the towns and villages occupied by Panama Canal employees in the Canal Zone a total of $488,948.81 was spent. The principal items of construction under this heading were the grading of grounds and the installation of water and sewer lines and streets and sidewalks in the new addition to the town of Balboa; making the fill and grading grounds and constructing water and sewer systems and streets and sidewalks in the new town of Cristobal; construction of roads in outlying districts; the renewal of the water distribution system in the town of Gatun; and the placing of sidewalks in a number of places in the older town sites.

Under the head of work for other divisions the following sums were expended, and the more important items of work under this heading were as listed below: United States Army.-In the construction of new posts $489,350.70 were expended. This work consisted in main of the grading, putting in water and sewer systems, the construction of streets and sidewalks at Forts Grant, Sherman, and Randolph, the construction of concrete road from Fort Randolph to Mount Hope and from Fort Grant to Balboa.

The Panama Railroad.-The sum of $126,849.40 was spent. The principal items of construction under this heading were the construction of the G Street storm sewer in Colon, the construction of a part of the Curundu River storm sewer, the construction of streets to and around the Cristobal piers, the installation of water lines for cattle pastures, and the construction of roads to a number of the plantations; construction of concrete road to the new laundry in Ancon; the improvements to the swimming pool at the Washington Hotel; improvement to the pavements in the vicinity of the passsenger station in Panama City, and various other miscellaneous construction jobs.

Other departments of the United States Government.-The total amount spent was $41,562, and the principal items of work under this charge were the construction of the roads, streets, and water and sewer lines to the new ordnance depot at Corozal and repairs to roads and streets in the camps at Culebra, Empire, Las Cascadas, and Quarry Heights.

Outsiders.-The total expenditure was $15,623.90. The work done consisted principally of that for which deposits were made and included the making of private water taps and the construction of short sections of road, repairs to the tramway company right of way in Panama City, and repairs to streets that were opened up for the gas company in Panama and Colon.

Terminals.-A total of $88,662 was spent on terminal construction work which consisted mainly of the construction of the quay wall at Balboa, the rat proofing of Piers Nos. 15 and 16, construction of retaining walls for Pier No. 18, the riprapping and grouting of banks in rear of Docks Nos. 17 and 19, the Installation of fender piles at the Balboa coal-handling plant, the grouting and riprapping of banks in the vicinity of same, the extension of oil lines for the delivery of oil at the coal-handling plant, extension of water lines on the piers, and the grading and asphalting of areas in the shops' district, Balboa.

The building division.-A total of $68,622 was spent; the work done consisted of the installation of water and sewer connections for new buildings constructed, the erection of clotheslines for new quarters, the preparing of building sites, the

installation of water line to the new ice and cold-storage plant in Balboa, the construction of road in the rear of the Colon Hospital, and various other miscellaneous jobs of work.

The health department.-The sum of $75,894 was spent for the health department on work requests, and the work done consisted of filling and draining the swamp areas in the vicinity of Mount Hope, the grading and drainage of areas in the vicinity of Balboa, the construction of concrete drains for areas in Balboa, Ancon, Corozal, Pedro Miguel, Paraiso, Gatun, and Colon. In addition to doing all new construction work, old sanitary ditches were resurfaced and maintained. Miscellaneous. For the divisions of fortifications, clubs and playgrounds, locks, electrical, marine, dredging, mechanical, and supply, there was a total of $45,510 spent. The work done consisted of miscellaneous construction jobs, and included the construction of spillway for the Rio Grande River, special roads, the driving of wells, extension of pipe lines, miscellaneous concreting work, the installation of various playground apparatus, construction of tennis courts, etc.

During the year a total of 155,137 square yards of concrete streets and roads were constructed, and 59,916 square yards of asphaltic streets and roads built, this asphalt being placed on macadam and Telford foundations; 12,046 square yards of macadam roads were constructed with Tarvia binder; making a total of 227,099 square yards of roads and streets constructed during the year. No new waterbound macadam roads were constructed, due to the fact that the maintenance and upkeep of this class of road is out of all proportion to the difference in cost between this and either concrete or asphalt construction. The average maintenance cost of old macadam roads in the Canal Zone during the year amounted to 25 cents per square yard, and it has been found from the records kept of the cost of maintenance of this class of road that the original cost of construction plus maintenance cost in keeping a macadam road in good serviceable condition for a period of nine years amounts to twice the cost of construction of a concrete road. The extremely heavy rains during the rainy season and the high winds and lack of moisture during the dry season accounts for the above.

The total cost of the work performed by the municipal division during the fiscal year, including labor and material and charges from other divisions and departments of The Panama Canal, was $2,203,878.91.

The following is a summary of the report of the work performed in connection with the operation of the water-purification plants during the year.

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The section of meteorology and hydrography continued to keep the permanent records of weather conditions on the Canal Zone, the hydrology of Gatun Lake watershed, including the operation of the spillway, and the hydrographic conditions at the Atlantic and Pacific approaches of the canal and at the locks.

The rainfall of the year was generally above the normal over the Pacific section and the southern part of the Central section, while over the northern part of the Central section and the whole of the Atlantic section, there was a marked deficiency of rainfall.

The yield of the Gatun Lake watershed for the year 1916 was 10 per cent above the six-year normal, or 6,684 cubic feet per second, against a normal of 6,092 cubic feet per second. The yield of the Gatun Lake watershed for the dry season, 1917-January to April, inclusive was 35 per cent below the seven-year dry season normal, or 1,348 cubic feet per second, against an average yield of 2,076 cubic feet per second. Only once since the formation of Gatun Lake

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