Col. WILSON. Everything; yes, sir. Mr. SABATH. And that includes your meats? Col. WILSON. It includes all meats in cold storage. Last year the distribution of our sales was as follows: Mr. SABATH. You have been buying these in the open market? Col. WILSON. In the United States. Proprietary articles are bought from the people who have them. Some of them are bought here. Mr. SABATH. The contract you stated is let in New York City. Is that true? Col. WILSON. Yes, sir; the purchasing officer's office is there. Col. WILSON. By the commissary purchasing agent, who is a part of the Panama Railroad. He is an Army officer, Col. Wendell L. Simpson. It is not made under the direction of the Secretary of War at all. Mr. SABATH. Do you know whether the contracts are let to the lowest bidder? Col. WILSON. Yes, sir; they are let to the lowest bidder for the most suitable articles. Mr. SABATH. Are these bids submitted to you? I get Col. WILSON. No, sir; not usually; but sometimes they are. an abstract of the bids and proposals for the large schedules. The meat schedules I make up myself after consultation with Col. Goethals. Mr. SABATH. And they are made every year? Col. WILSON. The meat contracts are. Mr. SABATH. What was the last meat contract you have made-at what price? Col. WILSON. We buy meats on a sliding scale. The contract is made annually for fresh meat on a basis of a percentage above or below a basing price determined from the bona fide sales of live animals in the Chicago Stock Yards, as reported in the 5-o'clock edition of the Drovers' Journal of Chicago. For all meats except veal the prices are computed from sales on Monday, while the sales on Tuesday determine the price on veal, these two days being the restrictive market days. Mr. SABATH. That brings it last month to what price, about? Col. WILSON. To $11.91 per hundred pounds for choice corn-fed native steers. Mr. SABATH. Eleven dollars and ninety-one and one-fourth cents. per hundred pounds? Col. WILSON. Yes, sir; for choice corn-fed native steers. Mr. SABATH. And what is the price you are selling meats for here? Col. WILSON. I am getting 20 cents per pound for porterhouse steak and 12 cents for chuck and 19 cents for sirloin. Mr. SABATH. Have you the last price list? Col. WILSON. Yes, sir; I have one right here. Mr. SABATH. Where have you been buying sugar? Col. WILSON. In New York, from the American Sugar Refining Co., the most of it. Mr. SABATH. Have you let the contract yourself? Col. WILSON. No, sir; that is let in New York. Mr. SABATH. By whom? Col. WILSON. By the commissary purchasing agent. Mr. SABATH. Is that done every time you send in orders? Col. WILSON. No, sir; I put in requisitions for sugar for three months. Mr. SABATH. What was the lowest price you paid for sugar? Col. WILSON. $4.85. By an act of Congress this is a foreign country, and consequently this export sugar has a drawback on it. Mr. SABATH. You have paid $4.85? Col. WILSON. Yes, sir. Mr. SABATH. How much have you been selling sugar here for? Col. WILSON. For fine granulated sugar the selling price has been as low as 20 cents and as high as 35 cents for a 5-pound bag. Mr. SABATH. You mean the Sugar Trust has increased its price of sugar by 2 or 3 cents per pound? Col. WILSON. I do not know who did it; I know the price goes up and down. Mr. SABATH. What is the usual price of sugar? Col. WILSON. It varies; it is around $5.15, with the drawback off $3.75 to $3.80. Mr. SABATH. What is the lowest price you have sold sugar for? Col. WILSON. Four cents a pound in 5-pound cotton bags. Mr. SABATH. Have you been making any profit at that price? Col. WILSON. A small profit, yes. Mr. SABATH. What is the average profit you make on these various articles? Col. WILSON. About 2.5 per cent net on the sales. Mr. SABATH. How much does it cost to maintain your plant? Col. WILSON. It takes about 16 per cent of the sales to do the business-that is, for the retail business-and 13 per cent average for the retail and wholesale business together. Mr. SABATH. So you add about 18 per cent? Col. WILSON. Yes, sir; approximately that. Mr. SABATH. Do you handle linens? Col. WILSON. Yes, sir. Mr. SABATH. Where do you purchase them? Col. WILSON. In Belfast. Mr. SABATH. What grades of linen do you mostly sell here? Col. WILSON. Well, we sell the cheap grades of linen and fine linen. sheeting for something like 80 cents per yard, and we sell a finer grade for $1.25 a yard. Mr. SABATH. What do you mean by sheeting? Col. WILSON. I mean linen for sheets. Mr. SABATH. How wide is that? Col. WILSON. About 80 inches wide, I think. Mr. SABATH. What would be the price of such sheeting in the States, about? Col. WILSON. It would be a great deal higher for linen of that kind in the States, Mr. SABATH. Why? Col. WILSON. It is alleged by a large number of people that it is because the United States collects a duty on it. Mr. SABATH. And there is no duty on linen here? Col. WILSON. No, sir. Mr. SABATH. And, that being the fact, it gives you an opportunity to sell linen and everything else at a much lower price to the people; that is, such articles as those on which there is a duty in the States? Col. WILSON. Not necessarily; there are a great many articles on which there is a duty in the States which are produced more cheaply in the States than anywhere else in the world. Mr. SABATH. Well, we will see about linen. Col. WILSON. Well, I can sell linen a good deal cheaper here than in the States, because we do not manufacture that particular class of linen in the States. Mr. SABATH. Where do you buy coffee? Col. WILSON. Well, we buy some in Amsterdam, some in Columbia, some in New York, and some in London. Mr. SABATH. What coffee do you buy? Col. WILSON. Santos, Rio, and several kinds. Mr. SABATH. How much do you pay for Santos? Col. WILSON. Around 17 and 18 cents. Mr. SABATH. Coffee is much higher now? Col. WILSON. Yes, sir. Mr. SABATH. How much do you sell it for? Col. WILSON. I get 20 cents. That is below cost of roasting and handling at present prices for raw coffee. Mr. SABATH. For Santos? Col. WILSON. Yes, sir. Mr. SABATH. It costs much more in the States, does it not? Col. WILSON. I am informed that it does. Mr. SABATH. It costs more in the States for the same reason that you have assigned as to linen? Col. WILSON. There is no duty on coffee. They have had two short crops in coffee. The Santos district can produce all the world wants, if they want to. This valorization scheme now in force down there affects the price. They valorize it like some people have been trying to valorize cotton recently. There has been a general shortage of crops all over the world this season; there has been a deficiency of rainfall and prices are abnormally high everywhere. Mr. SABATH. How are all these things checked up? Are they checked up here and in New York, all of the purchases that are made? Col. WILSON. The auditor checks them up in New York; then I check them up down here, and we receipt for them just as soon as we get a bill for the goods, and we charge them to the men who handle the goods. The man who handles the goods inspects them and sees that they are there. Every month we inventory the commissary from end to end to see that merchandise charged has been accounted for. Every three months the auditor takes an inde pendent force and goes from one end of the line to the other and has an inventory made. Mr. SABATH. And in that way you can ascertain whether the proper amount of stock is on hand? Col. WILSON. Yes, sir; the unaccounted for loss in business last year, including leakage, wastage, pilfering, etc., was four-tenths of 1 per cent of the sales. Mr. HAMILTON. What hotels, messes, and kitchens would you expect to permanently retain? Now, you purpose to retain this hotel and the hotel which is in course of construction at Colon. What other eating establishments would you retain? Col. WILSON. The hotel, mess, and kitchen at Cristobal; the hotel, mess, and kitchen at Gatun; the hotel, mess, and kitchen at Pedro Miguel; the hotel, mess, and kitchen at Miraflores; and the hotel at Balboa. Certainly these, and any others necessary at populous points. Mr. HAMILTON. What would be the total valuation of these establishments? Col. WILSON. Do you mean in buildings and equipment? Col. WILSON. It would be a mere guess on my part, because the buildings do not come within my department. I should say that the hotels proper would cost around $150,000, but that would be a mere guess. The actual cost of the buildings could be determined by the quartermaster. Mr. HAMILTON. Can you estimate the present value of the refrigerating plaint and the other establishments connected with the commissary business? Col. WILSON. Do you mean the upset value after the canal is finished? Mr. HAMILTON. Yes, sir. Col. WILSON. They cost $668,000. Mr. HAMILTON. What would be the scrap value? Col. WILSON. I should say not above $200,000. Mr. HAMILTON. That would not be because of any deterioration in the plant, but simply because of the fact that you had gone out of business? Col. WILSON. Yes, sir. The plants are in better condition than they ever were physically. Mr. HAMILTON. If you should go out of business there would be a considerable loss involved in that way? Col. WILSON. Yes, sir; a very material loss. They are in perfect condition at the present time. Mr. HAMILTON. If the Government did not go on with the business it would be necessary for the Government to hunt up a purchaser? Col. WILSON. If they wanted to put it in the hands of a concessionaire it would be necessary to do that. Mr. HAMILTON. If the Government did not want to do that, then it would involve practically a total loss of this investment? Col. WILSON. Yes, sir. Mr. HAMILTON. I believe you stated that you did laundry business for certain ships of the Hamburg-American Line? Col. WILSON. Yes, sir. Mr. HAMILTON. Did they buy any commissary supplies? Mr. HAMILTON. Where did they procure such supplies? Mr. HAMILTON. They bought none here? Col. WILSON. No, sir. The ships that come here buy nothing except a few fresh fruits and very little of that. Mr. DRISCOLL. Have you a monopoly in all lines of business in which you are engaged on the Canal Zone? Col. WILSON. No, sir; there are other business concerns. Mr. DRISCOLL. You have a monopoly in cold-storage supplies, have you not? Col. WILSON. Yes, sir. Mr. DRISCOLL. And you sell it for cost? Col. WILSON. Yes, sir. Mr. DRISCOLL. Do you get through the year without losing money? Col. WILSON. Yes, sir. We have made money, because we have paid for these plants. Mr. DRISCOLL. Do you aim and endeavor to make a profit, or is your object just to make expenses? Col. WILSON. It is not the aim to make profit. The principal thing is not to lose any money, and we have not done so. Mr. DRISCOLL. In determining that question do you take into account the cost of the buildings? Col. WILSON. For the cold-storage plants we do; for the line commissaries, no; I pay no rent for these, but I pay for their maintenance and upkeep. Mr. DRISCOLL. You pay no rent for the stores? Col. WILSON. No, sir. Col. WILSON. Yes, sir; for repairs of every kind; I pay for those. Mr. DRISCOLL. Out of the profits of the business? Col. WILSON. Yes, sir. Mr. DRISCOLL. But nothing on the cost of these plants and no insurance or taxes? Col. WILSON. No, sir. Mr. DRISCOLL. Do you know how much higher percentage you would have to charge for your goods if you had to pay all these expenses that private concerns have to pay? Col. WILSON. No, sir. I know the people in the States have to pay these expenses, but we have to pay $20,000 of ocean freight, and that would make an outlay of $240,000 a year. Mr. DRISCOLL. But the man who competes with you has to pay ocean freight also, and the overhead expenses, interest on money invested in goods and buildings and equipment of all kinds, and you have that much advantage over him in business? Col. WILSON. Yes, sir. Mr. DRISCOLL. How could he compete with you on the zone? Col. WILSON. Well, he does not have any eight-hour law, and he does not have any vacation law. His labor expenses are much less than |