During his stay on the Isthmus Mr. Wallace found himself handicapped at every turn by red tape, a new thing in his experience as a construction engineer. He could buy nothing without asking for bids; every idea he sought to put into execution had to be submitted to Washington, and he found himself so harassed and handicapped that he wanted a new plan of organization. Acting in accordance with his recommendations, President Roosevelt decided to accept the resignation of the existing Canal Commission, and to appoint a new one, in which, instead of having independent departments, with the governor independent of the chief engineer, and the chief sanitary officer independent of both the governor and the chief engineer, there should be a more united relation, in which all questions were to be decided by the commission as a whole, the final authority being vested in an executive committee composed of the chairman, the governor of the Canal Zone, and the chief engineer. Under this plan, the second Isthmian Canal Commission was organized. It consisted of Theodore P. Shonts, chairman; Charles E. Magoon, Governor of the Canal Zone; John F. Wallace, chief engineer; Mordecai T. Endicott; Peter C. Hains; Oswald H. Ernst; and Benjamin A. Harrod. Following the suggestion of Chief Engineer Wallace, the control of the Panama Railroad was also vested in the new commission. While these changes were being made Chief Engineer Wallace was in Washington. There was dissatisfaction on the Isthmus with an accompanying spirit of unrest, and, to make matters worse, a yellow-fever epidemic broke out. Only a few days after Mr. Wallace reached the Isthmus, he cabled the Secretary of War that he wished to return to Washington, hinting that he might resign. Secretary Taft cabled to Governor Magoon for an opinion as to the motives which were behind this step on the part of Mr. Wallace, and was advised that it was brought about by the offer of a better salary and the fear of the yellow-fever epidemic. When Mr. Wallace reached New York he had a stormy interview with Secretary Taft, who roundly denounced him for quitting at such a critical time. Mr. Wallace declared his lack of confidence in the ability of Colonel Gorgas to control the yellow-fever epidemic, and asserted that the continual interference of red tape was so distracting to him as to make new employment attractive. President Roosevelt upheld his Secretary of War in his denunciation of Mr. Wallace, and promptly appointed John F. Stevens chief engineer at a salary of $30,000. John F. Stevens arrived on the Isthmus on July 27, 1905. He found the Panama Railroad almost in a state of collapse. He declared that the only claim heard for it was that there had been no collisions for some time. "A collision has its good points as well as its bad ones," he observed, "for it indicates that there is something moving on the railroad."