were picked up by a tramp steamer carrying a Japanese captain and a huge Filipino crew. They were carrying rubber - for tires - from Manila all the way over to Morocco. The captain told us he could make ten thousand bags of gold if he made the trip in two months. So he was shooting for passage through the Canal. The Canal! We thought he was crazy, especially with all the horror stories we had heard. But he knew we were both experienced sailors, so he kept us on."
According to Pegg, the Japanese captain thought he had it all figured out. He was confident he could handle any situation in the canal zone. And with seemingly good reason-the Filipino crewmen doubled as soldiers and there were no less than 150 of them. And the steamer itself was bristling with 3-inch and 5-inch deck guns, as well as a dozen heavy machine guns. It also carried a number of fast attack boats that could quickly be lowered over the side.
"They were well-armed," Pegg reported. "And the soldiers drilled and practiced on deck four hours a day and another two hours at night. They were a crack outfit by the time we made it to the islands that guard the entrance of the Canal."
The captain sent two squads of his soldiers ahead in two attack boats. The plan was for the craft to scout ahead of the steamer, checking for any hostile forces on either side of the waterway. The bonus was that the attack craft crews were also knowledgeable in the kind of water locks used in the Canal.
"A lot of people don't realize that more than half the length of the Canal is actually a lake and a river," Pegg said. "You enter a set of locks from the one side. They gradually raise you up about eighty-five feet until you are at the right level. Then you sail for about twenty-five miles until you reach the other set of locks and they lower you back down and out you go.
"The locks themselves are fairly elaborate, but the Japanese captain knew they required hardly any machinery or pumps. It's all done with gravity. He didn't believe the voodoo stories and figured that there was an even chance the locks were still working, or at least could be made to work by his attack craft guys
. . ."
The scout boats made it to the first lock, and to their surprise, found it to be in working condition, manned by no more that a half dozen sleeping guards of undetermined but apparently non-cannibalistic origin. The scouts reported back to the steamer to proceed, and within hours, the ship was through the first locks and sailing on.
"Everything was going smoothly," Pegg said. "Too smoothly. Oh, we took a few sniper rounds along the way, but the steamer gunners would just open up with those five-inch guns and that would be the end of that!
"The Japanese captain thought for sure he had outsmarted everyone, that he was making history! That is, until we were about halfway through the channel . .
."
As Pegg told it, he had just finished eating breakfast when they heard the lookout give a yell. By the time Pegg made it to the bridge, he and the others saw that one of the attack craft had just blown up.
"It was about a half mile ahead of us," Pegg said. "And the bastard just blew apart. At first the captain thought it was a mine. Then the other boat got it, and after that, we knew it wasn't no mine."
Pegg claimed that the second attack craft was shot at by hundreds of weapons, firing from both sides of the Canal.
"It was unbelievable!" the sea captain said. "They hit that boat with rockets, surface-to-surface guided missiles, big guns, little guns, heavy machine guns.
Everything but the kitchen sink. Whoever was doing the shooting was definitely trying to send a message ..."
That message was that the steamer was going no further. Soon after the attack craft were sunk, a small fleet of gunboats surrounded the steamer, and soon she was being boarded.
"They were just like the guys that had blown us up off Chile after taking the gold," Pegg said. "Same uniforms, same strange look on their faces.