States to increase their taxes to 15 per cent, limiting, if possible, the tax to 12.5 per cent on necessaries. When they took up that proposition in the way of a concession from the United States, we asked a concession on their part in the elimination of the clause in the agreement which restricted the use of our commissary to all but those unaccustomed to tropical climates. The Panaman Government finally acceded to that, and, in exchange for the concession we made relative to taxation, under the present agreement we are authorized to sell to laborers employed by the commission and the Panama Railroad. There is no agreement with Panama which restricts the sale of commissary supplies to anybody, but we have of our own volition stated to the merchants of Panama that we would restrict the trade to Panama Railroad employees and commission employees, as it was not our intention to intrench upon the prerogatives of the Panama merchants that covers the sale of supplies to the laborers. In 1904 the treaty provided that a strip 10 miles wide, 5 miles on either side, should be turned over to the United States, exclusive of the eities of Colon and Panama and their adjacent harbors. At that time the adjacent harbors included all the waters around Colon and at Balboa. In other words, the Panaman Government controlled the entrance to the canal or the harbors at the two ends of the canal. Panama had not joined the Postal Union, so it required a 5-cent stamp to carry a letter from Panama to the United States and from the United States to Panama.

In order to secure the harbors, a concession was made to the Panaman Government by which they were allowed to collect import duties on everything brought in at the two ends of the canal when consigned to others than the Panama Railroad and the canal commission, reserving the right to relieve all imports by employees of the commission and the Panama Railroad from the duties in the case of articles which were required for their individual use. At the same time an agreement was entered into with the Republic of Panama that the Republic of Panama would use 2-cent postage rates between Panama and the United States and return, provided the canal authorities would purchase their stamps from the Panaman Government and pay for these stamps 40 per cent of their face value. These are the agreements covered by your question.

Mr. STEVENS. Under that agreement, if the government of the canal, whatever form it may be, continues the operation of the plant described by Col. Wilson, would the importation of articles from the United States by that government for the purpose of supplying its own employees, the military and naval forces of the United States and such traffic as may come through the canal operated by the Government, be subject to taxation by the Panaman Government?

Col. GOETHALS. No, sir; it would not be covered by that privilege. We would be exempt from that taxation under that agreement.

Mr. STEVENS. Under that agreement the United States or its authority would have the right to sell to anybody whom it may in the operation of the canal?

Col. GOETHALS. Yes, sir.

Mr. EscH. Col. Wilson, what is the distance between Cardiff and Port Said, on the Suez Canal?

Col. WILSON. It is 1,050 miles to Gibraltar-it is about 2,200 or 2,300 miles.

Mr. Escн. What is the distance between Cardiff and Colon?
Col. WILSON. About 4,500 miles.

Mr. Escн. What is the cost of Cardiff coal laid down at Port Said? Col. WILSON. My impression is about $6.50.

Mr. EscH. What can you put coal down at Colon for from the United States ports?

Col. WILSON. At $4.50 for Pocahontas coal in ship's bunkers.

Col. GOETHALS. Coal from the Gulf ports costs more because the ships can not get a return cargo, so we are not able to buy coal from the Gulf States as economically as from Newport News, for instance. Mr. Escн. Then there would be a difference of at least $2 in favor of Colon?

Col. WILSON. Yes, sir; coal was $5.60 per ton at Port Said last March. The difference then would be about $1.35 per ton. Cardiff coal is much higher now.

Mr. Escн. In favor of the Panama route?

Col. WILSON. Yes, sir. These prices I have were given last March, and there has been a rise in the price of coal since then at Cardiff and Port Said.

Mr. Escн. And the Pocahontas coal has the same steaming value as the Cardiff coal?

Col. WILSON. No. 1 Pocahontas and No. 1 Cardiff are about the same, with the advantage slightly in favor of Cardiff for natural draft.

Mr. Escн. So, as to the question of coal, the advantage is in favor of the Panama route?

Col. WILSON. Yes, sir.

Mr. EscH. What is the quality of Birmingham coal as compared with Pocahontas coal?

Col. WILSON. It is not quite so good.

Col. GOETHALS. I believe they get a variety of coal from Alabama that shows up as well as Pocahontas coal, but the cost of hauling the coal from the mines to tidewater and the transportation by water to Colon makes the price about $1.50 higher than the other coal. Mr. Escн. That is under existing conditions?

Col. GOETHALS. Yes, sir.

Mr. EscH. If the transportation of that coal could be made by way of the Black Warrior and Tombigbee Rivers, then it might be possible, with a return cargo, to bring the Birmingham coal to Colon more cheaply than the Pocahontas coal?

Col. GOETHALS. Yes, sir; but that condition does not now exist. At the present time Pocahontas coal is cheaper for us to get. It is cheaper to get Pocahontas coal than Pittsburgh coal. We can make contracts to bring that coal down by steamship lines that get return cargoes from Cuba.

Mr. Escн. Mr. Johnson in his report says that it may be possible to get Birmingham coal if ocean-going barges could be constructed, and that coal could be brought to Colon at a rate, I think of $2.50 per ton.

Col. GOETHALS. There would have to be a return cargo to get it down for that sum.

Mr. EscH. What possible return cargo could there be?

Col. GOETHALS. None except cargoes from ships passing through

the canal.

H. Doc. 680, 62-26

Mr. STEVENS. But that would not equal the volume of the coal. Col. GOETHALS. No, sir; it would be very small.

Mr. Escн. Under existing conditions, the advantage is in favor of the Panama route as against the Suez route on the question of coal?

Col. GOETHALS. Yes, sir.

Mr. STEVENS. Perhaps it would be well to have the statement of Dr. Johnson. It does not quite indicate that fact.

Col. GOETHALS. I do not know anything about his figures, nor anything about these figures of Col. Wilson's.

Mr. STEVENS. Dr. Johnson has recently obtained the last figures as to the Suez situation and your figures as to the Panama situation, and shows there is not much difference.

Col. GOETHALS. I understand that at Suez there are a number of firms in competition-selling different varieties of coal.

Mr. STEVENS. Would there be any advantage in handling the coal situation here if the tariff on Cardiff coal imported into the zone for the purpose of supplying this traffic could be eliminated-that is, the tariff on Cardiff coal imported here to compete with our own coal?

Col. GOETHALS. I can not answer that, because I do not know anything about Cardiff coal. We require, according to the statement of the Navy Department, 100,000 tons of coal in storage at Colon to meet their needs. As the canal must be regarded as more or less a military necessity, we must provide at the canal for the needs of the Navy. The Navy is now using almost exclusively Pocahontas coal. If we keep that 100,000 tons in storage, it will be better for the Navy if we can keep that supply of coal turned over and thus keep the supply relatively fresh. Such being the case, I feel that the United States ought to deal in coal; that it should exercise the exclusive right in selling coal here I have never claimed, but that we ought to deal in coal, and in that way we can regulate the prices. We should do that, because we must have coal for the use of the Navy. That is the ground I have taken, and the character of coal the Navy requires should be the quality of coal we keep here in storage and for sale. If the Navy Department would be satisfied with Cardiff coal, as they are now with Pocahontas coal, and we could get Cardiff coal here at less cost than the Pocahontas coal, I would be in favor of getting Cardiff coal.

Col. WILSON. The last quotation on No. 1 Cardiff coal was 17 shillings. That was the lowest price for No. 1 Cardiff, at 2.5 per cent discount at 30 days. That would be $4.25 per ton. I can have full data on this subject inserted in the record.

Mr. STEVENS. Is this quotation on Cardiff coal a quotation on screened coal, while your quotation on Pocahontas coal is run-of-themine?

Col. GOETHALS. Run-of-the-mine is our quotation.

Mr. STEVENS. What is the quotation on Cardiff screened coal? Col. GOETHALS. I do not know.

Mr. STEVENS. There is this suggestion I would like to make: Before we finally conclude the hearings we ought to have from Col. Wilson or Col. Goethals a statement as to the effect of maintaining the Panama steamers with their cold-storage capacity in the operation of the plant at present, and what would be the effect on the future operation of the plant if the Panama steamers were discontinued.

Col. WILSON. There is one question that occurs to me: If these hotels are rented to some private person he must get cold-storage supplies from somewhere. He will have to have commissary privileges or he will have no food.

The CHAIRMAN. I am inclined to think, as a matter of convenience, that it would be well to ask those questions while here.

REFERENCE TO LINES OF REFRIGERATING STEAMERS.

Col. WILSON. There is another phase of the question that has not occurred to anybody; because we have no refrigerator service on the Pacific coast, it is probable that the Pacific coast people can ship their fruit through by refrigerated steamer much cheaper than by any other means, and, of course, if they bring their fruits through here we can secure refrigeration service for supplies for ourselves from the Pacific coast. That is one phase of it, but the whole question of maintaining a steamship line is much broader than my department.

The CHAIRMAN. I want to refer to one other matter. In answering Mr. Stevens and Mr. Esch, you admitted the possibility that at Tehuantepec and the Suez Canal our facilities might be duplicated. I will ask you whether the large force which must be maintained here in the operation of the canal and the plants for our own use, and the other conditions incident to the operation and maintenance of this canal, exist at all at either of these places, so as to afford them that much additional help or inducement in the duplication of these facilities?

Col. WILSON. No, sir.

(Thereupon, at 11.15 o'clock p. m., the committee adjourned to meet at 3 o'clock p. m. to-morrow.)

APPENDICES TO HEARINGS OF COL. EUGENE T. WILSON.

A. Blue print of comparative sea routes for full-powered vessels.

B. Commissary Bulletin, edition of December 18, 1911.

C. Letter to Col. Goethals, November 25, 1911. Subject: Suez Canal statistics. D. Letter to the chairman Isthmian Canal Commission, December 5, 1911. Subject: International Tonnage Commission, Constantinople.

E. Letter to the chairman Isthmian Canal Commission, December 9, 1911. Subject: Basis of tolls for canal.

F. Letter to Col. Goethals, December 13, 1911. Subject: Conclusions of International Tonnage Commission at Constantinople.

G. Letter to Col. Goethals, December 14, 1911. Subject: Cost of Cardiff coal and freights on same to various ports of the world.

H. Letter to Col. Goethals, December 15, 1911. Subject: Suez Canal statistics for September, 1910 and 1911.

I. Letter to Col. Goethals, December 21, 1911. Subject: British orders in council relative to measurement of ships of various nations.

J. Letter to Col. Goethals, December 21, 1911. Subject: Cape of Good Hope competition with Suez Canal.

K. Letter to Col. Goethals, December 23, 1911. Subject: Cost of Cardiff coal in ships' bunkers at various ports of the world.

L. Letter to the chairman Isthmian Canal Commission, December 30, 1911. Subject: Various methods of basing freight rates on ships' tonnage. M. Letter to Col. Goethals, January 6, 1912. Subject: Commenting on letter of Prof. Johnson, wherein he states that average price of coal from New York via Suez to eastern ports approximately the same as via Panama, with appendix thereto of prices for coal at various ports in the world.

N. Letter to the chairman Isthmian Canal Commission, January 18, 1912. Subject: Data as to tramp steamers and percentage net register tonnage to gross register tonnage.

O. Letter to the chairman and chief engineer Isthmian Canal Commission, January 19, 1912. Subject: Mathematical formula, giving comparisons between an open sea route and a toll route for ships.

P. Letter to the chairman and chief engineer Isthmian Canal Commission, January 19, 1912. Subject: Tonnage through the Suez Canal, by commodities and by districts.

Q. Notes on the Suez Canal rate and tonnage controversy prior to the Constantinople convention of 1874.

R. Memorandum, January 25, 1912. Subject: Notes on English coal.

S. English text Suez Canal Regulations, edition January, 1911.

T. Dispatch from the British delegates on tonnage at Constantinople, together with the report and recommendations of the commission as to international tonnage and the Suez Canal dues.

EXHIBIT B.

COMMISSARY BULLETIN.

[Vol. II. Cristobal, Canal Zone, Dec. 18, 1911. No. 7. Issued monthly by the commissary department, Panama Railroad Co. Press of the Isthmian Canal Commission, Quartermaster's Department. Entered at Cristobal, Canal Zone, post office as secondclass matter. This Bulletin is issued by the commissary department, Panama Railroad Co., on the 15th day of each month. It contains such information as may be of mutual interest to the department and purchasers. Through its columns patrons will be notified of the arrival of new goods and changes in prices. The Bulletin contains a current price list of groceries, cold storage, confectionery, and tobaccos on sale in the commissaries, with the understanding that prices quoted are subject to change without notice. All communications with reference to this publication should be addressed to the subsistence officer, Cristobal, Canal Zone.]

COMMISSARY DEPARTMENT, OFFICIAL BOSTER.

Headquarters, Cristobal, Canal Zone.

Lieut. Col. Eugene T. Wilson, United States Army, subsistence officer; Capt. Frank O. Whitlock, United States Army, assistant subsistence officer; John Burke, manager; William F. Shipley, chief clerk; W. T. McCormack, assistant chief clerk; J. B. Williams, accountant; D. W. MacCormack, traveling accountant; B. E. McKeever, cashier; Ernest Bradford, chemist; J. H. Keefe, local buyer, Panama.

Wholesale department.-C. B. Austin, storekeeper, cold storage department; Theo. Hart, storekeeper, warehouse; J. T. Coughlin, storekeeper, wholesale dry goods department; A. J. Billett, storekeeper, wholesale boot and shoe department; Lincoln Delgado, storekeeper, packing grocery department.

Manufacturing plants.-S. M. White, superintendent; P. W. Reese, electrician; H. S. Newcomb, superintendent laundry: William Brugge, superintendent, bakery; H. G. Sivell, storekeeper, raw material department.

Retail stores.-Frank Floyd, inspector, Cristobal; F. B. Bielaski, storekeeper, Cristobal; H. P. Stevens, storekeeper, Gatun; J. H. Jansen, storekeeper, Empire; V. T. Cornwell, storekeeper, Balboa; S. Byrne, storekeeper, Gorgona; H. C. Smith, storekeeper, Culebra; W. F. Van Dame, storekeeper, Las Cascadas; L. H. Crafts, storekeeper, Corozal; J. H. Timpany, storekeeper, Pedro Miguel; Frederick Meister, storekeeper, Paraiso; H. H. Barlow, storekeeper, Bas Obispo; H. G. Stahlmann, storekeeper, Miraflores; R. M. McKenna, storekeeper, Rio Grande; J. T. Coughlin, storekeeper, women's department, Cristobal; A. W. Wright, storekeeper, Porto Bello; Lee Wheat, storekeeper, Ancon; E. H. Carter, storekeeper, boot and shoe department, Cristobal; Emil de Brucq, storekeeper, Monte Lirio; R. C. Thatcher, storekeeper, Toro Point; Russell Epply, storekeeper, Camp Totten.

NOTE. These stores are arranged from top to bottom in the order of the sales made by each during the month.

THE COMMISSARY DEPARTMENT-A DETAILED STATEMENT OF ITS OPERATIONS AND SCOPE.

For the information of Panama Railroad and Isthmian Canal Commission employees, the commissary department devotes considerable space in this issue of the Bulletin to a résumé of its operations for the past year, together with an account of the manner of supplying the vast quantity of commodities which the magnitude of the work on the Isthmus requires. Besides furnishing matter of importance to employees as well as any others interested, this résumé affords