board of directors, commission, or other assemblage of men designated as the head of an organization.

Mr. DOREMUS. On the question of economy, does that extend to anything beyond the salaries paid the commission?

Col. DEVOL. I wasn't thinking of salaries as a leading feature, I was thinking of what should constitute a logical and economical organization.

Mr. DOREMUS. Well, is it your opinion that the judgment of one man in a project of this kind would be better than the combined judgment of, say, five men?

Col. DEVOL. Yes, sir.

Mr. DOREMUS. You think it would?

Col. DEVOL. Yes, sir.

Mr. HAMLIN. Mr. Doremus has practically covered the point that I wanted to get at. I will ask you, however, one question in connection with his interrogations. This one-man management that you speak of, you refer to it as a local management here purely?

Col. DEVOL. I refer to it as the management of the Panama Canal on the Isthmus.

Mr. HAMLIN. You refer to having just one superintendent or general manager?

Col. DEVOL. I refer to one supreme head of the operating and maintenance force.

Mr. HAMLIN. You do not mean, then, that the management of the canal after it is completed and in operation should be conducted by Executive orders?

Col. DEVOL. I mean that the supreme head of the canal shall report directly to whatever authority in Washington is designatedthe Secretary of War, the President of the United States, or otherwise.

Mr. DRISCOLL. And that he shall be given the job?

Col. DEVOL. Yes; and he shall be held responsible for it, and be here on the job.

The CHAIRMAN. We are very much obliged to you, Colonel, for your services to this committee and to your country.

STATEMENT OF JOHN A. SMITH, GENERAL SUPERINTENDENT PANAMA RAILROAD CO.

The CHAIRMAN. Will you oblige the committee with a statement regarding your general operations, prospects, and disposition that it would be wise to make of your railroad and the steamships when the canal goes into operation.

Mr. SMITH. I have charge of the operation of the railroad on the Isthmus, subject to the orders of the president of the railroad. Do you want me to express my opinion as to——

The CHAIRMAN. I want you to tell anything you know about the job you are holding down.

Mr. SMITH. I know it is a job that requires lots of good, hard work. I don't know that I exactly follow you, Mr. Chairman.

The CHAIRMAN. I am trying to follow you. I want to know what you are here for, and want you to tell it to the committee. We would like to hear anything you know that would be of interest to the

country as to the operation of your railroad, and what shall be done with it after the canal is finished.

Mr. SMITH. My opinion as to what will become of the Panama Railroad after the canal

The CHAIRMAN. I would rather you would tell what you are doing

now.

Mr. SMITH. Do you want some idea as to the tonnage we are handling, or something of that kind? It amounted to 1,557,000 tons last year, and it is increasing monthly. We made a profit of $1,711,000 last year, and we have about reached our limit in facilities for handling tonnage across the Isthmus at the present time. Personally, I do not think it is advisable to spend much more money for additional equipment, because I do not believe that the railroad will handle much freight after the canal is put in operation. In my judgment, it will be more or less of a passenger line than a freight line. I do not think the railroad will handle any through tonnage after the canal is completed, and if the settlement of the zone is restricted there will be very little local business, so all that will be left for the Panama Railroad to do will be to haul passengers across that will not desire to go through the canal on boats, and possibly a little local business between the cities of Colon and Panama and any intermediate towns that may be permitted to exist.

The CHAIRMAN. Are the steamships under your control?

Mr. SMITII. Only so far as their handling at Colon terminal is concerned. The general operation of the steamship line is in charge of Mr. Drake, the vice president, in New York.

The CHAIRMAN. Regarding the steamships that the Panama Railroad now owns: Would there be any local advantage to the canal in the retention of those ships after the canal is put in operation?

Mr. SMITH. That depends largely upon the policy of the Govern

ment.

The CHAIRMAN. If the Government does not propose to go into competition with the balance of the world in hauling freight on steamship lines, would there be any local or particular use for those ships?

Mr. SMITH. There would not be sufficient local business to justify, in my opinion, the retention of our entire fleet after the completion of the canal. There will necessarily be quite a lot of shipping here in the way of coal and other supplies. If you include the coal and convert the ships, which we are now using in commercial service, into colliers, we could still probably maintain the line very profitably.

The CHAIRMAN. Would it be the most economical plan to haul coal here in your own ships?

Mr. SMITH. Personally I do not think so. I do not think the ships are adapted to hauling coal, and it is my opinion that if the railroad or the commission propose to furnish coal to vessels passing through the canal that ships should be built with that specific purpose in view, so as to enable their being loaded in the least possible time and the cargo discharged in the least possible time.

The CHAIRMAN. You had nothing to do with the relocation of the Panama Railroad; you only operate it as it is?

Mr. SMITH. After it is turned over to us; yes, sir.

The CHAIRMAN. Well, if there are any matters that you have in mind to state, we would be glad to hear them, on any subject of our interests here, as you understand them.

Mr. SMITH. I do not know that there is anything I can tell you that would be of interest to you. I would be glad to answer any questions, however.

The CHAIRMAN. I will turn you over to the committee; they will probe you.

Mr. KNOWLAND. As to the future functions of the Panama Railroad: Will there be any considerable tonnage due to split cargoes that would be carried over by the railroad?

Mr. SMITH. I do not think so. I do not see that the Panama Railroad or any other railroad could compete with the Panama Canal.

Mr. KNOWLAND. Well, for instance, a steamer coming to the Atlantic side had some little freight for some point on the Pacific, and there is a line of steamers running up and down the coast of the Pacific that do not come through the canal, is there any probability that there might be considerable tonnage that way, or would the expense be too great to compete with a regular line going through the canal?

Mr. SMITH. The expense would be too great to compete with a regular line going through the canal. It might be profitable to make a transfer of that kind by rail, due to the fact that there would be no steamship itinerary available to move that cargo without unusual

delay.

Mr. KNOWLAND. Has the tonnage between the Atlantic and Pacific been increasing very rapidly of late?

Mr. SMITH. Yes, sir.

Mr. KNOWLAND. You find difficulty in handling it?

Mr. SMITH. Yes. As I stated before, we have about reached the limit of our facilities.

Mr. KNOWLAND. You don't like to enlarge them at this time?
Mr. SMITH. No; I don't think-

Mr. KNOWLAND. You don't think it is a matter of good business policy?

Mr. SMITH. No; I do not.

The CHAIRMAN. Your business will be transferred to the canal after its completion?

Mr. SMITH. Yes, sir.

Mr. Escн. Could you convert the Ancon and Cristobal into colliers and make them suitable to the coal trade?

Mr. SMITH. You could convert them into colliers; it would be very expensive, however, and I question very much whether they could be converted into colliers that would make economical coal-handling ships.

Col. GOETHALS. Under existing law the Cristobal and Ancon, after they have served the purpose for which they were put into the service of the Panama Railroad, are to be transferred to the Navy Department for use as colliers. They will probably serve the purpose for which they were purchased when the cement is finally delivered on the work.

The CHAIRMAN. What we would like to know is whether it would be advisable for us to change the existing law in that respect as to those two ships.

Col. GOETHALS. I would, personally, prefer to transfer them to the Navy and take the money value and build real colliers.

Mr. ESCH. By real colliers you mean boats that have a speed of what?

Col. GOETHALS. I do not care for the speed, but so constructed that the coal could be loaded economically on the ship, and the ship could be economically unloaded.

Mr. EscH. Is it not the desire now in building colliers for the Navy to have vessels of high speed to accompany fleets?

Col. GOETHALS. I am speaking of colliers to supply the canal with coal.

Mr. EscH. Well, if you have colliers to supply the canal with coal, wouldn't it be well to have colliers of the same type as the Navy, so that these colliers could be used in an emergency?

Col. GOETHALS. Yes; and that is advocated by the Secretary of the Navy in his report, that we construct, at the expense of the canal, something like 15 colliers to supply our coal here, and in accordance with plans and specifications that would suit the Navy as colliers to accompany the fleet.

Mr. ESCH. And if a million tons of coal are required, say, the first year, how large a fleet of colliers would be required?

Col. GOETHALS. I have not estimated that. I saw his report, and I sent in for it last night, so that I could bring that question out in my testimony, taking the figures that he submits, which, I presume, were prepared by experts of the Navy Department. I can give you that information when I go on the stand.

Mr. ESCH. Mr. Smith, what do you estimate will be the cost of the operation of the Panama Railroad Co. after the canal is completed? Col. GOETHALS. That is a question of organization, and the question of organization depends upon the disposition that is to be made of the Panama Railroad after the canal is completed. Nobody can answer that question.

Mr. EscH. Well, I will ask this question, then: Would it be advisable to maintain the separate corporate entity of the Panama Railroad Co. after the canal is completed?

Mr. SMITH. That is a matter of policy.

Mr. ESCH. But to guide us in determining a policy we sometimes ask for opinions.

Col. GOETHALS. I do not think the railroad should be maintained. as an independent corporation after the canal is completed. I believe that the railroad proper, being a necessary adjunct to the canal, and since it can not rely upon making a living commercially, should become a part of the canal and the organization for the operation of the railroad reduced to a minimum consistent with the requirements or demands of the railroad.

Mr. Escн. It would result then in economy in administration?

Col. GOETHALS. Very much economy in administration and organization, and the organization would depend upon that. Under that arrangement, the purchasing department that is now maintained in connection with the railroad would disappear and be consolidated with that for the canal. The accounting which would include the cashier and the auditing would be under the same head as the canal. It would reduce the expenses that way. It would reduce the expenses

in New York in the way of office building rents and things of that kind, and concentrate everything on the Isthmus.

The CHAIRMAN. It would not be necessary to have headquarters anywhere else?

Mr. Escн. I asked Lieut. Mears a question, which I will repeat to you: If the Panama Railroad Co., after the completion of the canal, is to be devoted almost practically to local business, and there will be little through trade, what is the necessity of putting in 90-pound steel rail?

Mr. SMITH. In my opinion, the Panama Railroad will have a very heavy passenger traffic.

Mr. Escн. Both local and transient?

Mr. SMITH. There will be a heavy through travel; there will be a heavy tourist travel for a number of years. It is my understanding that there will be a lot of troops located on the Isthmus. They will travel, and the natives travel considerably.

Mr. EscH. Lieut. Mears suggested that that heavy rail in a climate with so large a rainfall, and hence softened tracks, was necessary to make the track more firm and stable. Do you concur in that view? Mr. SMITH. I do. I think 90-pound steel is the proper weight for any good railroad with any traffic to handle.

Mr. EscH. You feel that that reason alone would justify the use of heavy rail?

Mr. SMITH. Yes, sir; I would not advise putting in any lighter. Mr. Escн. They have been using the 70-pound rail?

Mr. SMITH. Yes; but it don't last long.

Col. GOETHALS. We have used the 90-pound rail on a large part of the present Panama Railroad, so that the track could stand up under the traffic that we now have. That became necessary a few years ago, and we continued the use of the 90-pound rail for that purpose.

Mr. DRISCOLL. What was the gross business of the Panama Railroad during last year? You stated that you made a profit of a million and how much?

Mr. SMITH. $1,711,000.

Mr. DRISCOLL. What was the gross tonnage?

Mr. SMITH. The gross tonnage?

Mr. DRISCOLL. Yes, sir; the freight tonnage, and then state the receipts.

Mr. SMITH. The gross tonnage was 1,557,030 tons.

Mr. DRISCOLL. Have you any record of the passenger service!
Mr. SMITH. Yes, sir.

Mr. DRISCOLL. What was that?

Mr. SMITH. $686,991.25 was our total passenger business.

Mr. DRISCOLL. And how much were the total receipts?

Mr. SMITH. $6,009,555.52.

Mr. DRISCOLL. How much of that total was received from the Isthmian Canal Commission?

Mr. SMITH. From freight, $506,606.20.

Mr. DRISCOLL. That was from the canal commission?

Mr. SMITH. Yes, sir.

Mr. DRISCOLL. What is the source of the balance of the income or receipts?

Mr. SMITH. Income from the passenger business?

Mr. DRISCOLL. I mean other than from the canal commission?