if they buy for the support and maintenance of these eating houses. Doing all this business we have in sight and accepting the facts as I see them will make at least $1,150,000 worth of business.

The CHAIRMAN. That statement will appeal to a great many people who regard only the commercial considerations involved, but there is also a large and respectable body of people who would like to know whether the continuing of these facilities will promote the operation and maintenance of the canal.

Col. WILSON. It will unquestionably, in my opinion, promote the efficient operation of the canal. Ships coming from Europe and ships bound for the United States must undoubtedly renew their meat supplies and ice supplies somewhere. It takes up to much expensive room that could be used for cargo for refrigerating space, and many of them have no refrigerating space or ice machines to bring large amounts of these things with them. They must know when they come here that they will find such supplies at reasonable prices. If it is important to know, they can cable ahead and find out what they can obtain and the prices at which they can purchase, so there will be no uncertainty about the food supplies for their ships. A steamship coming in here will have no time to send a steward around town to find out where he can obtain supplies. In this case we can ship the material here in cargo lots and deliver it to the ships as they tie up for passage through the locks. In the matter of cold-storage supplies there is no room here for two concerns; it would not pay two concerns to operate cold-storage plants here and divide the business. There is only business enough for one.

The CHAIRMAN. Now, you come to a point we will have to consider. Some people insist that this is something we should not do unless it is absolutely necessary.

Col. WILSON. It will result that there will be but one concern doing business here eventually. Then, if there must be one concern to do that business, it had better be kept in the hands of the Government, because it could be so handled by the canal authorities as to make it an inducement to bring commerce by this route rather than by competitive routes and make the canal successful. I know from my own experience in this market that there is not enough business for two or three people to go into business. There is no room here for a concessionaire. If we have a concessionaire, it will be handled just as such things have been handled in the past. It would become a stench to the shipping interests all over the world, whereas if we keep it in benevolent hands and have the proper attitude toward them it will certainly tend to bring ships here. In the next place, we have heard a great deal about the cost of coal.

The figures I have as to the cost of coal are from the Pacific Mail, on the other side, and the cost for the maintenance of passengers and members of the crew is about half the cost of the coal. This constitutes the second largest item in the material consumed-that is, the food service. Now, you know that we can not ordinarily vary the price of coal more than 5 per cent, but if you put the food supply where the prices may shoot up 50 per cent, then the cost of victualing the ship will control the question of whether it shall come here or take another route to destination. Another powerful

reason in favor of this proposition is that it is now in working operation, and can be let go at any time. There are many other questions to be considered in this connection. It has required a long time to build this plant up, but if we let it go we can not get it back. Other people will acquire vested interests, and when people acquire vested interests, it is hard to get rid of them. They claim them as rights.

Col. GOETHALS. There is another point to be considered in that connection. The merchants of Colon and Panama are anxious to take steps to prevent the United States authorities from trading with ships, desiring to secure that trade for themselves. Panama imposes a duty on all supplies that are brought through either to Colon or Panama. They also require duties on similar materials brought into the zone under our existing agreement, and merchants are taxed according to the amount of business they do.

The CHAIRMAN. It is only a temporary executive agreement, is it not?

Col. GOETHALS. That is all. So that they will not be in a condition to add to that the profits they expect to make on their supplies and sell within reason to ships; and if they can not do this business, somebody must do it or the ships will use routes that will be most advantageous for them from the money point of view, including foodstuffs.

The CHAIRMAN. Then, you regard it as necessary for the successful operation of the canal that these facilities should be continued?

Col. GOETHALS. Yes, sir; it is absolutely one of the essentials to make this an attractive route.

The CHAIRMAN. The members of the committee are at liberty to ask any questions they desire.

Mr. SIMS. In case the Government should abandon this business, would it not run a great risk in getting anything like a competent subsistence department conducted simply for profit by individuals who might put in their own money, and would it not be more or less an experiment from the point of view of individuals or corporations, even though they might have the advantage of knowing how you conducted it?

Col. WILSON. Yes, sir; for the reason that this organization is a unique one. First, from the climatic point of view. Nothing of the kind ever existed before in the Tropics, and we have had to work out a great many problems. We have spent time and money in trying to learn to do it right, and it would be largely a matter of experiment for anyone else.

Mr. SIMS. And one that might prove disastrous?

Col. WILSON. Yes, sir.

Mr. SIMS. Not only to the individuals involved, but to the successful operation of the canal?

Col. WILSON. Yes, sir. I think these facilities are absolutely necessary for the successful operation of the canal, particularly at the present time, when it is new and untried.

Mr. SIMS. You do not think there is any way to dispose of these facilities to a purchaser except at great relative loss?

Col. WILSON. No, sir. We must do a business here of $1,200,000 a year with the Navy and with the people here on the zone. That is a big business to start on, and we ought to keep it for that beyond all doubt, even if we do not do any outside business at all.

Mr. SIMS. If you had to keep out opposition

Col. WILSON (interposing). Supplying ships is a mere adjunct to other requirements. Whether you aid the ships or do not aid the ships is an important question for the success of the canal, but a vital one for the operatives of the canal is the continuance of our present food supplies at present prices. A white man would not stay here five minutes without continuance of a system of supply such as we now have.

Mr. COVINGTON. Do you consider it possible, based on your own experience, to maintain a force to operate the canal and the troops necessary to police it, and the other Government forces that are here, and have them to depend on a subsistence department purely the result of private enterprise after the completion of the canal?

Col. WILSON. No, sir; we will have to keep it.

Mr. COVINGTON. Then you will have to keep the entire plant, in so far as the Government forces are concerned?

Col. WILSON. Yes, sir. Then, suppose you have a scrap sometimes, and the other fellow owned the plant-you would be in a nice fix.

Mr. COVINGTON. Then you think the existence of that plant is an absolute necessity for the maintenance of the canal; and this makes it possible for you, as a mere adjunct to that business, to furnish ships that may come through here food supplies, and thus offer an inducement for them to come through here that no private individual would offer them?

Col. WILSON. Yes, sir; absolutely.

Mr. SABATH. You say you have done a business of $100,000 with ships. Were they foreign ships?

Col. WILSON. They were our own warships.

Mr. SABATH. You have not been doing business with any foreign ships?

Col. WILSON. No, sir; these were United States ships.

Mr. SABATH. When you made the statement that you had been selling goods to ships, you meant to our own ships?

Col. WILSON. Yes, sir; the United States Navy. They are classified in our accounts as sales to the United States Government. We also sold to the Marine Corps, the Pacific Fleet of eight first-class cruisers, and ships engaged in the survey and patrol work.

Mr. SABATH. Up to this time you have not been doing any business with foreign ships?

Col. WILSON. No, sir; except we do the laundry work for the United Fruit Co.

Mr. ESCH. You say that the laundry would be a desirable adjunct to retain on the Isthmus?

Col. WILSON. Yes, sir.

Mr. Escн. It will take 11 or 12 hours for a ship to pass through! Col. WILSON. About 10 hours.

Mr. Escп. Can your laundry take the ship's laundry and finish the work and deliver it before it goes out through the further terminus?

Col. WILSON. Yes, sir.

Mr. Escн. You have an equipment now that will enable you to do a steamer's work of that kind?

Col. WILSON. Yes, sir.

Mr. ESCH. As well as doing the work that is normal?

Col. WILSON. Yes, sir. Every year the Hamburg line runs some excursion boats that come here. The Royal Mail also has a boat, the steamer New York. For the accommodation of these excursion boats we took their laundry at 8 or 9 o'clock in the morning and finished the work by 4 o'clock in the afternoon.

Mr. Escн. How necessary do you consider the retention of the laundry feature?

Col. WILSON. I regard it as absolutely necessary for our own people for sanitary reasons. The laundresses here are Jamaica negresses and they dry the clothes on the grass. Now, the germs of itch are in the grass, and I am informed that this itch fell off fully 60 per cent after the establishment of our steam laundry, where clothing is boiled and sterilized. In addition, we should do this work for the ships, because they must have some place at which it can be done promptly. The reason we do it for the ships now is to prevent the clothes from spoiling by mold while going through this climate.

Mr. ESCH. When the lake is filled and these towns along the line are abolished it will enable you to reduce the number of hotels in the zone?

Col. WILSON. Yes, sir.

Mr. Escн. How many of the hotels would you retain?

Col. WILSON. That is pretty hard to say. We will have hotels at the terminals, and hotels at Gatun, Pedro Miguel, and Miraflores, where the locks are. We would have these, certainly. We would close up the hotels and commissaries where the lake is now, and, in fact, we have closed them out already. We have closed out the commissary at San Pablo.

Mr. Escн. You would reduce the number of commissaries and the number of hotels, and the commissaries and hotels retained would be placed at the points of population?

Col. WILSON. Yes, sir; where the employees will be concentrated; over here in the vicinity of Balboa, for instance, where the shops and docks are located.

Mr. Escн. You say that you would like to take care of the Army located here and of such naval vessels as would make these ports? Col. WILSON. Yes, sir.

Mr. Escн. And you would supply them with commissary supplies? Col. WILSON. Yes, sir.

Mr. EscH. What system of accounting would you have for the Army and Navy in view of the fact that the Army and Navy appropriation bills appropriate specific sums for commissary supplies in their particular appropriation bills?

Col. WILSON. It appropriates for the purchase of commissary supplies.

Mr. Escн. Then, if they purchased supplies from you, it would be the same, so far as their bookkeeping is concerned, as though bought in the States?

Col. WILSON. Yes, sir; the same thing.

Mr. Escн. We allow the Army a ration. The ration here would. probably be the tropic ration used in the Philippines?

Col. WILSON. Probably so.

Mr. Escн. It is less than in the States?

Col. WILSON. Probably so.

Mr. Escн. And they will be charged against the Army at that rate?

Col. WILSON. Yes, sir.

Mr. ESCH. So the system of bookkeeping would be simple?

Col. WILSON. Yes, sir. In addition to that, on my recommendation to the appropriations committee two years ago, there was enacted in the sundry civil bill a law so that certain contracts can be made with the Panama Railroad so as not to require bonds. Government departments can now make contracts with us in the ordinary manner of business men. So that the Panama Railroad is practically a part of the Government, as far as contracts are concerned. It would not change their system of accounting at all.

Mr. EscH. Now, suppose we made a reduction in the commissary department. We will have a part of the Army here, and our Navy will make these ports. Without the commissary our Army would have to be supplied from the States. Would it or would it not be a matter of economy for your own department to supply the Army and Navy as against the method of bringing their supplies from the States?

Col. WILSON. It would be in the interest of economy to supply them here, and, besides, we have facilities for supplying things that they could not get elsewhere.

Mr. ESCH. You get your stock in cargo lots?

Col. WILSON. No, sir; hardly that. We purchase anywhere from 4 to 30 carloads.

Mr. Escн. If this department should be retained, the supplies that you get from the States would come in larger volume than the supplies coming from the States for the Army and Navy without your department?

Col. WILSON. Yes, sir.

Mr. ESCH. Therefore their rate would be greater.

Col. WILSON. Yes, sir.

Mr. Escн. And that, in your opinion, is another inducement for the retention of the commissary department?

Col. WILSON. Yes, sir.

Mr. Escн. Have you any notion of what that advantage in money would be?

Col. WILSON. It would be 3 or 4 per cent.

Mr. EscH. And they would purchase annually of you about how much?

Col. WILSON. About $450,000 worth, approximately. It would be at least that.

Mr. Escн. There would be a saving, then, of 3 or 4 per cent of that amount?

Col. WILSON. Yes. sir. In addition to that, I can do it better in larger quantities. We scatter these proposals all over the United States.

Mr. EscH. And then they would not be getting the ice?

Col. WILSON. No, sir; the local price for ice is $1.50 per hundred pounds at the factory; ours is 40 cents, delivered anywhere on the Isthmus in the customer's ice chest.