HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Ancon, Canal Zone, Monday, December 18, 1911. The committee met at 8 o'clock p. m., Hon. William C. Adamson (chairman) presiding.

There were also present Col. George W. Goethals, chairman and chief engineer Isthmian Canal Commission, and Lieut. Col. Eugene T. Wilson, subsistence officer.

The CHAIRMAN. The committee will come to order.

Col. Goethals, as you are aware, the committee has come to the Isthmus to inform itself concerning the progress that is being made on the construction of the canal, and to determine what the requirements are on the Canal Zone in order that proper legislation may be enacted. The people seem to be impressed with the opinion that we are about to realize the hope of the ages in the consummation, under Providence, through the instrumentality of American brain and energy, of the greatest achievement of all times-the joining of the two oceans through the Isthmus of Panama-for the benefit, primarily, of our Army and Navy, and, secondarily, for the benefit of the commerce of the world. We are impressed with the consciousness that this is perhaps the most important hearing that has been or will be held on the subject of the Panama Canal. Mr. DRISCOLL. Is this hearing to be reported?

The CHAIRMAN. Yes; we have a stenographer at work on it now. It is important because we hope and believe that the enterprise is taking such form and shape as to indicate an early consummation by the rapid completion of the great project, and the realization of all our hopes. We would like to have full and free information and we would like to have it in such shape as will give Congress and the people a clear idea of the situation here, so that whatever action Congress may take in the matter may be wise and based upon justice, truth, and the facts in the premises. We expect you to help us in this hearing, not only by your own testimony, but by such suggestions and directions as it is in your power to give to enable us to learn all the facts in the case. We will thank you to appear before the committee, at such time as will suit your convenience, to make such statements as you can concerning the canal. In the meantime we have deemed it proper to take up our work in sections, under your direction and assistance. For instance, if we examine a particular feature of the canal to-day, we can have your expert in charge of that work to appear in the evening to testify to us about what we saw. By pursuing that course we can examine the witnesses while the matter is fresh in our minds, and we will then think of questions to put to the witnesses that might not remain in our minds if we waited until the final completion of the inspection. For instance, when we inspect a portion of the work to-day, to-night we may have it explained to us by the experts in charge of that work. This method possesses the further advantage of enabling us to keep up with our work. When we have examined all of the work and have had it explained to us, there will be nothing left but your general statement. Now, if you will suggest whom you would like to have heard to-night, we will proceed with his statement.

Col. GOETHALS. I would have suggested Col. Sibert first and Col. Wilson second, but as Col. Sibert is not here, I would suggest that you hear Col. Wilson on the subject of the commissary.

The CHAIRMAN. At all times, Col. Goethals, we will be glad for you to make such suggestions as occur to you.

Col. Wilson, will you take the chair?

Mr. Escн. In order that the testimony may be continuous and coherent, I believe that when one member takes up the questioning of a witness he should be permitted to conclude. In that way each member can exhaust his own line of inquiry, which is sometimes scattered by interjections from other members when he may have a particular line of inquiry that he wishes to pursue.

The CHAIRMAN. Then you suggest that while one member is questioning a witness no other member shall take up the witness until he ascertains whether his colleague has finished.

Mr. Escн. I think that would be the better method. We did that three years ago.

The CHAIRMAN. If it is agreeable to the committee, we may consider that as the order of procedure. I want to examine Col. Wilson upon the plants we inspected to-day. I would like to know just what these plants are, how organized, what they are intended for, what purposes they accomplish, and, if Congress should conclude, when the canal is completed, to continue the use of these institutions, I would like to know what changes would be necessary or proper to make in them to meet the changed condition. Now, Col. Wilson, if you will proceed to make some statements on that line, we will be obliged to you.

STATEMENT OF LIEUT. COL. EUGENE T. WILSON, COAST ARTILLERY CORPS, UNITED STATES ARMY, SUBSISTENCE OFFICER ISTHMIAN CANAL COMMISSION.

Col. WILSON. I will take up, first, the general organization of this department. My name is Eugene T. Wilson, lieutenant colonel, Coast Artillery Corps, United States Army, and I am the subsistence officer of the Isthmian Canal Commission, which operates the hotels, messes, and kitchens and also operates the commissary department of the Panama Railroad Co. At the present time the commissary department employs altogether 1,112 employees, of whom 869 are silver and 243 gold employees. The subsistence department employs 722 employees, of whom 607 are silver and 52 are gold employees. The commissary department of the Panama Railroad operates a line of 20 stores, running from Balboa, on the Pacific side, as far as Porto Bello, which is 17 miles from Colon, on the Atlantic coast. It operates a set of plants which we call manufacturing plants, through which you gentlemen went this morning, where we manufacture ice, operate a laundry service, make bread, ice cream, pack butter, etc. There is also a chemical laboratory which you did not see. The subsistence department operates a line of hotels, beginning with this hotel, the Tivoli. There are 20 hotels where meals are served for 30 cents apiece for the gold employee, just like you saw to-day at Gatun. There are 17 messes, which we call European laborers' messes, largely for the Spaniards and Italians, and other foreign

workmen of that type, for which we receive 40 cents per day for rations, which consist of three meals. There are 18 colored laborers kitchens for the benefit of the negro laborers on the canal, for which we receive 27 cents per day, or 9 cents per meal.

At the present time we have about 7,000 employees who patronize these hotels, messes, and kitchens, where the food is actually cooked, prepared for them, and served. There are about 1,950 gold employees, about 3,200 Spaniards, and about eighteen or nineteen hundred negroes who are thus served. As required at the present time in the organization of the commissary department, we have on the white gold rolls to carry on the organization 3 white bakers, 18 butchers, 2 chemists, 76 clerks, and 18 engineers in the plant; 15 saleswomen, 28 assistant storekeepers, and 29 storekeepers in charge of these various stores along the line. That is the personnel of the organization of the commissary department, and the subsistence department has 43 gold employees, of whom 11 are clerks operating this organization, outside of the various waiters, cooks, helpers, etc., at the various hotels. The commissary department provides such things as you saw to-day, including cold-storage provisions, general groceries, men's furnishings, a limited line of women's furnishings, a limited line of hardware and kitchen appliances, and also cigars, tobacco, etc. The stores are usually divided into departments as Í have enumerated them. The total business for the last fiscal year was $5,450,000, of which about one-third was wholesale sales to the Isthmian Canal Commission and the remainder was retail sales. The goods we get for the commissary are usually bought in the States, and the usual method of purchase is by a formal contract extended over a period of time for the imported items. Meats, for instance, are purchased on contract in the States, after advertisement in newspapers, covering a period of a year.

The staple lines in groceries are purchased after advertisement in newspapers and after putting out circular proposals, which are in this form [indicating], calling upon the various bidders to bid on them. This proposal contains staple canned goods and groceries, to be provided as far ahead as we can foresee. Small articles, where the consumption is more or less irregular or where the volume is not so important, are purchased on competitive bids, but the expense of a formal advertisement is not incurred, and memorandum advertisements are sent out. These proposals are opened in New York, New Orleans, San Francisco, Chicago, and sometimes in St. Louis. Now, as to the method of payment for these purchases, whether bought delivered f. o. b. New York or c. i. f. on the Isthmus, payment is made by the purchasing officer in New York. Payment is made for goods purchased here on the Isthmus by the cashier of the Panama Railroad. In all these dealings, the department itself handles almost no money. Sales are occasionally made for cash to people casually coming and going, like yourselves, and we have in the commissary department a commissary cashier who receives cash deposits for ice and other supplies that we send out along the line to places where there are no commissaries, and where orders must be sent in by mail. He handles a small amount of cash, probably $1,000 per month, for which he accounts to the cashier of the Panama Railroad.

We have what we call our manufacturing plants, which obtain their material to be manufactured from what is called the raw-mate

rial department, where we carry flour, milk, and various other items, which are to be manufactured into bread, ice cream, etc. The coldstorage plant and the various plants and warehouses stand on the books at $688,000. It was directed originally by the President, then the Secretary of War, that the cost of these plants should not be borne by the Panama Railroad Co., but the plants are to pay for themselves out of our sales.

The CHAIRMAN. Of course, we who saw these things have a general understanding of them, but I would like to have them explained in the record, so that the people will be able to understand them. To that end, I would like to have in the record a proper description of just what these plants are, and especially those that it is thought desirable to perpetuate.

Col. WILSON. They are now all paid for and constitute the plants of the department. First, the general cold-storage plant, with ample capacity for taking care of the people on the Isthmus at the present time in the way of cold-storage provisions. We have four large coolers for meat, of 10,000 cubic feet each, one small cooler for butter, one for eggs, one for cheese, and a large vegetable room kept at a temperature around 40° for vegetable refrigeration; in all, about 198,000 cubic feet of refrigerated space. These are cooled by the same refrigerating machinery. This cold-storage plant is an icemaking plant, where we make 100 tons of ice per day. The plant itself is in such shape that in case of any falling off of the trade on account of a large reduction in the force, any part of it can be put out of commission, so far as cold storage is concerned, and be used for general warehouse purposes. We have all of our machinery put up in such shape that it can meet the contingencies of a reduction of the force, or can accommodate itself to the personnel that will be here for the operation of the canal after it is completed. Without going into a detailed description of the laundry and machinery, it consists of a complete plant for taking care of about 7,200 people, and in addition to doing the laundry work for the ships of the Panama Railroad line and the hotel system it does the laundry work required by the Canal Commission. The machinery is so divided into units that in case of a large reduction in the present force it will not be necessary to bring in other machinery, but the present plant can be made to accommodate itself to whatever force is retained here. There will be ample capacity in the laundry to take care of the estimated personnel here and also the estimated personnel required for the operation of the canal and for ships as they pass through. The bakery in its machinery and the arrangement of its units is so arranged that it also can be made to accommodate itself to whatever force is here. It is probable that a portion of the laundry equipment will be worn out by the time the canal is completed, but there will remain ample facilities for taking care of the force required for the operation of the canal and for the other purposes I have indicated. The coffee-roasting plant is a small affair, and will take care of the operating force without any changes. In fact, in the last three years we have had to do a good deal of building on to the plants, and whenever we have enlarged them we have borne in mind the fact that there must come a time when they must be shut down or their operations reduced. For that reason the plant is

built on the unit system, and each unit can stand by itself. The only thing to do is to take out the machinery that is not required, cut out some piping, discharge a few men, and cut down the force. It can be done without any friction at almost any moment. I can decrease its capacity 50 per cent by to-morrow night and not impair its mechanical efficiency at all.

The CHAIRMAN. If it should be determined to continue any of these facilities, you have such system and discipline in each one that on a moment's notice you could eliminate the unnecessary equipment and so weed out the employees as to retain the best?

Col. WILSON. Absolutely.

The CHAIRMAN. You could reduce the force and at the same time preserve the highest efficiency in the operation of whatever may be necessary to retain?

Col. WILSON. Yes, sir. When I built it up, I had in view that very shortly it must be reduced.

The CHAIRMAN. I presume that it would have been impossible to maintain these workmen here without installing these facilities?

Col. WILSON. It would have been absolutely impossible. I was not here when the canal started, but I am told that they went away by shiploads then on account of proper quarters and food.

The CHAIRMAN. Can you give us briefly some salient reasons why the Government should continue these facilities after the canal goes into operation?

Col. WILSON. In the first place, Mr. Chairman, the Government will have to maintain here a force for the operation of the canal proper. That force is estimated by Col. Goethals at about 2,500 men on the line of the canal itself. I estimate that there will be about 2,500 other men here for a number of years at least in the operation of the docks at the terminals, handling freight, transferring freight and cargo, etc., making in all a total of about 5,000 employees. I have some carefully compiled statistics, and they show that on an average we get just $10 a month from each of the people employed, making in all an average of $120 per year for each employee. Assuming that we shall have a force of 5,000 employees, that would make $600,000 worth of business done by our plants and establishments. Last year we did a business of $100,000 with the Marine Corps, which was stationed here, and with transient ships as they came in. The Marine Corps amounted to a battalion, and I am doing business at the present time with one regiment of soldiers we have here which will amount to $75,000 per year. There will be required approximately a regiment of Coast Artillery to take care of the fortifications.

There is some discussion of the desirability of sending here an entire regiment of Infantry. The regiment of Coast Artillery would require about $75,000 worth, which would make $150,000 more for soldiers. This would make a total for soldiers and employees of $850,000. We had here three years ago the Pacific Fleet, consisting of 8 cruisers, and sold them $52,000 of cold-storage provisions and some general food supplies. There will be always about one fleet here, and we can estimate on two fleets here coming to victual, so we can figure on $100,000 as the sum for these fleets. One-third of the sales to the individuals will be to the Isthmian Canal Commission,

H. Doc. 680, 62-2-4

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