The Republic of Panama is one of the smallest countries in the world, its territory being about equal to that of the State of Indiana. It has no national debt, and has $7,000,000 invested in mortgages, on real estate in New York City.

When it received $10,000,000 from the United States, in payment for the rights under which the Panama Canal was built, it immediately invested about 75 per cent of it, using the remainder for paying the expenses of the revolution, and for setting the new government on its feet. It now receives $250,000 a year from the United States as rental for the Canal Zone, and this, with the $350,000 received as interest from its real estate mortgages in New York, gives it an annual income of $600,000 outside of money raised by the usual processes of taxation.

Under the treaty with the United States, Panama has its independence guaranteed, and recognizes the right of the United States to maintain order within its boundaries. This entirely does away with the necessity of maintaining an army and navy. The result is that with no appropriations required for military purposes, and with a $600,000 income from the Canal Zone, it enjoys one of the lowest tax rates in the world.

Although the Republic of Panama has its Declaration of Independence and its Glorious Fourth, the former was written by a foreigner, and the latter occurs in November. There is some dispute as to who wrote the declaration of independence, but the best information points either to Philippe Bunau-Varilla, a Frenchman, or to William Nelson Cromwell, an American. These two gentlemen differ upon this subject, each claiming that he was the Thomas Jefferson of Panama.

When the $10,000,000 was paid to Panama by the United States, one of the first things done was to build a university, locally known as the National Institute. Some $800,000 was spent in the construction of the buildings, which are located near the line of the Canal Zone. But it so happens that Panama has few teachers qualified to hold university chairs, and fewer students qualified to pursue university courses; and the result is that the university is more a place of buildings than a seat of learning.

No other country in the world calls in another nation to superintend its elections. When the first presidential election was held the United States took the initiative and demanded the right to supervise the balloting. Before the second election was held the President became ambitious to succeed himself, although the constitution provided that he could not do so. He thereupon decided to resign for a period of six months, in favor of one of his partisans, thinking that this would allow him to live up to the letter of the constitution even though he were violating its spirit in becoming a candidate for reelection. This situation was brought to the attention of the United States, and the President was politely but firmly informed that the subterfuge would not be permitted. When the election approached each side thought that the other was trying to win by fraud, and the United States was asked to referee the political battle.

The City of Panama is famous for its wickedness. Men who have seen the seamy side of life in all of the big cities of the world declare that Panama is as bad as the worst of them. Until a few years ago bull-fighting was permitted, but the bulls were so poor and the fighters were such butchers that the Government finally outlawed this form of entertainment. Cock-fighting persists, and numerous cock pits are popular resorts every Sunday. Nowhere else can one witness a greater frenzy in betting than at one of these cocking mains. The backers of the rival birds nod their heads and place their bets so rapidly that it is more bewildering to the onlooker than the bidding at an auctioneer's junk sale.

The prize ring has succeeded the bull ring in gratifying the Spaniard's thirst for gore, and scarcely a Sunday passes that there is not a prize fight in Panama. Few Americans who attend them come away without a feeling of disgust over the poor fighting, the brutality, and the trickery resorted to.

While the Americans have done so much for public cleanliness in Panama and Colon, the masses seem to know little more about sanitary living today than before the Americans came. The stenches which greet the visitor in the native quarters are no less odorous than those encountered in other cities of tropical America. The bathtub is an unknown quantity among the masses. Most of the natives who live in the cities are engaged in some line of small trade. It may be that a shop has only a platter of sweetmeats and a few bottles of soda on ice, and that another has only a bushel of different kinds of tropical fruits, but out of the small sales large families manage in some way to exist. The markets open early in the morning. There is no spirit of rivalry among the market men, and they act usually as if they were conferring a favor upon the buyer. At the markets many Indians are encountered who bring their wares from the interior and offer them for sale. These usually consist of pottery, net bags, charcoal and the like.

Life among the Panamans in the jungle is simple indeed. With his machete the householder may provide a thatched roof for his mud-floored hut, and he can raise enough beans, plantains and yams, and burn enough charcoal, and catch enough fish to meet all of his needs. In the kitchen the principal utensils are gourds and cocoanut shells. The most tempting morsel that the Panaman can get is the iguana, a lizard as big as a cat, whose meat is said to taste like spring chicken. It is about the ugliest creature in the animal world, and yet it means more to the native Panaman than does possum meat to the cotton-field darky of the South.

The unconscious cruelty of the average native is remarked by almost every visitor. He is usually too lazy to be conscious of cruelty, for that would require exertion. When he catches the iguana, for instance, he takes it alive so that it may be fattened before being killed. Its short legs are twisted and crossed above its back, and the sharp claw of one foot is thrust through the fleshy part of the other, so as to hold them together without other fastening. The tail, being useless for food, is chopped off with the machete, and thus mutilated and unable to move, the lizard is kept captive until fat enough to eat.

The fruits of Panama are neither so numerous nor so plentiful as those of Nicaragua or Jamaica. The mamei is a curious pulpy fruit the size of a peach, with a skin like chamois and with a smooth pit the size of a peach-stone. The sapodilla is a plum-colored fruit with seeds in a gelatinous mass. One is usually introduced to the sapodilla with the remark that, although the seeds are eaten, they have never been known to cause appendicitis.

Cedar is preferred to mahogany in Panama. The Indians make their cayucas out of mahogany logs, and it is not uncommon to see bridges 40 feet long and 5 feet thick, made of mahogany logs which would be worth several thousands of dollars in an American furniture factory.

Panama is famous for its tropical flowers. Many of them are beautiful, but few are sweet smelling. Orchids abound, especially on the Atlantic side, and while the waters of the Chagres were being impounded in Gatun Lake, native boatmen would go out in their cayucas and gather orchids from the trees. One of the most beautiful of the orchids of Panama is the Holy Ghost orchid. It blooms biennially, and when its petals fold back they reveal a likeness to a dove.Some of the American Women on the Canal Zone became enthusiastic collectors of tropical flowers. Among these were Mrs. David Du Bose Gaillard and Mrs. Harry Harwood Rousseau. Both of these ladies spent much time hunting orchids and other flowers for the verandas of their houses and for their gardens. Mrs. Rousseau made trips into several of the other countries of Central America in her quest for new orchids. The collections made by these two ladies represent the finest on the whole Isthmus of Panama.

The animal life of the Isthmus is not abundant, although some deer and a few tapirs are to be found. Alligators abound in the Chagres River and other streams of the Zone. Perhaps the most interesting form of animal life to be found on the Isthmus is the leaf-cutting ant. This ant seems to be nature's original fungus grower. As one walks around the American settlements, he frequently comes upon a long path filled with ants, passing back and forth. They resemble a sort of miniature yacht under full sail, except that the sails are green instead of white. Upon closer examination it is found that what seemed to be a sail is a triangular piece of leaf carried on the back of the ant, with its edges to the wind so as to overcome air resistance. The ants do not gather these leaves for food, but they store them in such a way that a fungus grows upon them. They eat the fungus, and when the leaves are no longer useful they are thrown out and new supplies brought in.

The native remedies used by the Panamans are many and interesting. For stomach troubles, which are very rare, they eat papaya. The papaya is a sort of fruit which might be a cross between a cantaloupe, a watermelon and a pumpkin, except that it grows on trees. It has the rind of a green pumpkin, the meat of a cantaloupe, and the seeds of a watermelon. It is probably richer in vegetable pepsin than any other plant in existence—a pepsin which neutralizes either alkaline or acid conditions in the stomach. It is said that a tough steak, wrapped in the leaf of the papaya tree overnight, becomes tender as the result of the digestive action of the pepsin in it.

The Indians and Panamans who live in the jungle use the wood of the cacique, or "monkey cocoanut," to stop any flow of blood. In their materia medica they have a large number of tropical plants which they use for their ailments.

The way in which sanitary instruction may be made efficient is illustrated among some of the people of Panama. Upon one occasion the Canal Record carried a small diagram of how to make a sanitary drinking cup out of a sheet of paper. After that there were many Panamans who, although in a hundred ways indifferent to contagion, would no longer drink from common drinking cups, but would make their own sanitary cups. Even the Jamaican negroes employed around the offices of the commission in many instances would not think of using the common drinking glass at the office water-cooler.

Two tribes of Indians on the Isthmus have not mixed with the Caucasians or the negroes. They are the Chucunoques and the San Blas Indians. The latter tribe has never been known to allow a white man to remain in its territory after sundown. Even the higher officials of the Panaman Government are forced to respect this tradition when they treat with the San Blas chiefs.

Government land in Panama can be bought at the rate of $49.60 for 247 acres, with reductions for larger areas. The Government invites foreign capital, declaring that the United States stands as a perpetual guarantee against revolutions within and aggressions without.

The story of the early days in Panaman history is a strange admixture of romance and cruelty. The Isthmus was discovered in 1500, and first settled by an adventurer who had been the Royal Carver in the king's household at Madrid. Balboa, carrying with him a small force of men and a lot of bloodhounds, one of them a dog of mighty prowess, known as Lioncico, or "Little Lion," which drew a captain's pay because of its fighting qualities, crossed the Isthmus in 1513 and discovered the Pacific Ocean. After him came a new governor of the Isthmus, who put Balboa to death.

The Spaniards were unspeakably cruel to the Indians. Even those who received them kindly were tortured and roasted to death, because they did not produce enough gold. One governor rode a mule, which was noted for the frequency of its braying. The Indians were taught that the mule was asking for gold, and in meeting these demands they not only had to give what they possessed, but were forced to rob the graves of their ancestors as well. Upon one occasion the Indians, having captured a number of Spaniards, melted a lot of the yellow metal and poured it down their throats, telling them to drink until their thirst for gold was quenched.

After the Spaniards had established themselves upon the Isthmus, the English buccaneers, Drake and Morgan, fell upon their cities and despoiled them. The ruins at Old Panama, which once was a city of 30,000 inhabitants, to-day tell the story of the effective work of Henry Morgan when he raided it and captured its treasure.

While the Spanish conquerors, the French filibusters, and the English buccaneers, who took their turns in pillaging Panama, were cruel beyond imagination, they were always famous for their outward evidences of religion and piety. The Spanish were always chanting hymns and honoring the saints; the French would shoot down their own soldiers for irreverent behavior during mass; the English pirate captains never failed to hold divine services on Sunday, and often prohibited profanity and gambling.

Where once Spaniards tortured Indians and British buccaneers raided Spaniards, where once revolution after revolution left a poor and desolate country, to-day the gates of Panama are open to the world, and its trade is invited again to pass that way. The people of the Isthmus believe that the glory which departed when Morgan sacked Old Panama, forcing the Pacific trade to seek the Strait of Magellan, will return with the opening of the Panama Canal, and that their capital, whose walls cost so much that the Spanish king thought he could see them from his chamber window in Madrid, will retrieve its ancient glory.