As far as my observation goes now, there is no reason for complaint generally in regard to the time and method of payment. The number of men and accountants might possibly be made less; I only look for

results.

In regard to construction and engineering, about all that there was going on, you might say, in the construction of the canal proper was in Culebra cut, so-called. Culebra cut extends from the little town which is called Bas Obispo to Pedro Miguel, covering about 8 miles. I think you can see it on the map there, if you are acquainted with it. Of course in the case, particularly, of a sea-level canal, it will be cut from one end to the other.

What is known as the Culebra cut is the cut through the mountain proper, which extends for about 8 miles-that is, after you leave, going south, the valley of the Chagres River, you follow a branch or a low valley of a branch of the Chagres called the Obispo, and across the summit, and then down what is known as the Rio Grande. But the heavy mountain cutting extends over these 8 miles which I have described, and the heavy part of that is near the town of Culebra; and in this vicinity I found, I believe, 11 steam shovels working. To my idea they were working apparently without very much system. The only part of the plant that was adapted for that sort of work was the shovels. They were first-class new machines first class in every respect.

They had been bought since the American régime; and with the exception of these shovels, the balance of the equipment which was being used was the old French equipment—of which, of course you are all aware, there was millions of dollars' worth on the Isthmus, principally scrap. This old equipment undoubtedly, from a continental point of view, twenty-five or thirty or forty years ago, whenever it was designed, was suited to the time-both the engines and the cars; but as far as doing economical work now is concerned, I do not think I am putting it strongly from my point of view when I say that I would take the money and throw it into the river or put it into the furnace and burn it just as quickly as I would undertake to use it in operating that plant. It is absolutely unsuited for the purpose.

Senator GORMAN. Does that apply to the whole of that equipment? Mr. STEVENS. That applies practically to the whole of the old equipment.

Senator HOPKINS. That was received by this Government from the French Company?

Mr. STEVENS. Yes, sir.

Senator DRYDEN. Have you any means of knowing how much that cost the Government?

Mr. STEVENS. I understand it cost nothing.

Senator KNOXx. We bought it all for a lump sum. The act of Congress provided that $40,000,000 should be paid for the rights and for the property that was on the Isthmus and the archives of the company. We just made it a lump sum.

Senator DRYDEN. I understand Mr. Stevens to say that this worthless machinery, which he has just alluded to, really cost the Government nothing.

Senator KNOX. Whatever the cost was, it was estimated in that forty millions when the Commission originally estimated the value of the property.

Senator GORMAN. A little over three millions.

Senator KNOX. Yes; I think they did make an estimate of that. Mr. STEVENS. I understood it was allowed nothing in the detailed estimate. However, I do not know anything about that.

Of course the question of the Culebra cut is a question of the disposition of the material. In other words, there are so many million tons of freight that must be loaded, must be transported, and must be delivered to the consignee, whether the consignee is in the ocean or whether it is in a dump on the land. That is, it is a problem of transportation. Now the great advance in railroading in the last twenty years, particularly (more than that, but more particularly the last fifteen or twenty years), has been in the direction of heavy train loads and reduction in the cost of transportation, which has been effected very largely through those means. The only way to increase train loads is to increase the weight of your carloads and to increase the weight of your engines-in other words, to increase the net of productive train load.

In the case of these so-called French engines (the majority of them are really Belgian engines, made in Belgium), I do not carry in my mind just what their power is, but I should suppose about six to eight thousand pounds drawbar pull, back tender. A heavy modern freight engine carries a drawbar pull of thirty-five to thirty-six thousand, and a heavy passenger engine, say, twenty-five to twenty-seven thousand, with grades of freight engines running to anywhere from twenty two or three for fast-freight stock trains, etc., carrying refrigerating business, up to thirty-five for the heavier ones.

In other words, these engines down there had a capacity of from one-fifth to one-sixth, say 16 to 20 per cent, of the standard of economical railroading in the United States, where I think probably we handle, and, in fact, I know we handle, freight cheaper than any country in the world.

Senator GORMAN. How many tons would that be to the train load? Mr. STEVENS. It depends entirely, Senator, on the grades and the character of the roadbed.

Senator GORMAN. I mean, comparing the two, the Belgian engines and those that you have?

Mr. STEVENS. The Belgian engines will handle, we will say, on a four-tenths grade (which is the maximum grade on a large number of our heavy freight lines in this country) probably 60 to 80 tons, possibly 100 to 125, depending entirely on the character of the road; and the other engines would handle 2,000-from 1,500 to 2,000. I handled as high as 44 cars and 100,000 pounds on each car with an engine not as heavy as I describe, on the Great Northern; but then I had better grades than that.

Senator GORMAN. What is the train load on this road in moving the dirt from the cut?

Mr. STEVENS. We have never made any test of that.
Senator GORMAN. You have not?

Mr. STEVENS. No, sir; we are not moving that class of material. Another thing in regard to the construction of these engines is that they are fitted with what are called rigid wheels. Just imagine that this desk made a box, an absolutely rigid box, not like a basket that will weave a little and give on the inequalities of the track, but a rigid box, with the axles carrying two pairs of wheels fastened on

rigidly. You know what the result of that would be on a fairly good road-you would have lots of derailments. And these cars there, something over three thousand of them, were of very small capacity, carrying from 6 to 6 or 7 yards of material. They looked like an exaggerated scoop shovel set up on top of a train, higher than a man's head. They were supposed to be side dump cars.

Those were the cars and that was the kind of equipment they were using. They had, and have yet, which I am using now in my preliminary work down there, four or five engines which were built in the United States by the old Cook and the old Rogers people, of Paterson; but they were very small engines. They were infinitely better, however, than the Belgian engines, because they could keep them on the track.

As to the tracks there, the French laid there-we do not know how many miles of track. Every time I make an expedition out into the jungle I find a new railroad. I presume it is fair to say that they had from 200 to 250 miles of tracks laid there. They used an old antiquated rail which is 5 meters (about 18 feet) long, and it is a very poorly designed rail, weighing, I should say, about 62 pounds to the yard. It is about three-quarters of an inch higher than it is wide on the base. The consequence was, particularly on tracks with no ballast, with no tie plates, and with soft ties, that those rails are continually turning over, not only on the curves, but on straight lines, on a tangent; and the net result was that I do not think over 15 per cent of the effective value of the steam shovels was being realized.

Senator KNOX. Let me ask you a question here. Are you speaking now, when you speak of the railroad and of this type of equipment and of this weight of rail, of the railroad proper?

Mr. STEVENS. Not of the Panama Railroad.

Senator KNOx. The railroad incidental to the construction of the canal?

Mr. STEVENS. I am talking about the canal tracks.

Senator KNOX. The canal tracks; not those of the Panama Railroad?

Mr. STEVENS. Not the tracks of the Panama Railroad at all. That is a different proposition.

Senator KNOX. Yes; that is what I wanted to get clear in my mind. Mr. STEVENS. This work which is going on, it seemed to me, was not being done with any view of a definite plan for work hereafter. It was simply wherever they could put a track that led to a fairly easy place to move material, to put a steam shovel in there and dump some of that material and haul it up hill to these waste banks on the side.

Senator MORGAN. Mr. Stevens, allow me to ask you right there this question: Was the condition you are now speaking of, in regard to the tracks and cars and all other matters of equipment, transportation of material out of the cut and dumps, the situation in which the French left the work, or the situation in which it was left after we had been in charge for some months?

Mr. STEVENS. It was the situation as I found it on, say, the 1st of August last. Of course, I do not know anything about the condition previous to that time, Senator.

Senator MORGAN. You do not know how that situation was brought about whether it was by the French or the American engineers? Mr. STEVENS. No, sir; I do not

Senator MORGAN. That is all.

Senator HOPKINS. But you know that what track you found there was laid by the French Company, rather than the Americans after we got control, do you not?

Mr. STEVENS. That is what I assume; I assume that the French laid them. They were called the French tracks. That is all I know about it.

Senator HOPKINS. Yes.

Mr. STEVENS. As I said, I could see no definite plan that these shovels were working on, excepting getting out a little material at very heavy expense; and after taking a few days-ten days or two weeks (I do not recollect exactly what)-to look over the general situation, I made up my mind that we were throwing money away. The thing to do was first to stop that waste of money in that work, and try and direct it along channels that would be effective at some time in the future toward some well-defined plan of taking out the cut. Senator MORGAN. Mr. Stevens, let me ask you right there whether what was taken out before you got there was carried to the same dumps that the French used?

Mr. STEVENS. Yes, sir.

Senator MORGAN. Did our engineers continue to use those dumps afterwards?

Mr. STEVENS. Yes, sir.

Senator MORGAN. After you were placed in charge, did you continue to use those dumps?

Mr. STEVENS. Yes, sir; to a certain extent I did.

Senator MORGAN. Will any of them have to be removed a second time in the construction of this canal?

Mr. STEVENS. I think to a slight extent; nothing that we have been doing lately, however. Since the Americans have been there they have been hauling the earth away back; but I think some of the old French dumps, probably going back to the time of De Lesseps, will have to be removed-depending entirely, of course, Senator, on the type of canal that is adopted.

The first thing I ran foul of in the way of trouble or difficulty was to determine what I could do in view of the fact that I did not know what was wanted. In other words, it was as though I had been told to build a house without being informed whether it was a tollhouse or a capitol. So it was very largely a matter of guesswork or judgment as to what to do, what banks to put in, how to endeavor to arrange a system of tracks for handling the cut, etc., in view of the fact that I did not know what sort of a canal was going to be built.

Senator MORGAN. Let me ask you right there whether that was because you did not know upon what plan the canal was to be builtwhether it was to be a sea-level or a lock canal?

Mr. STEVENS. Yes, sir; yes, sir.

Senator MORGAN. It was due to that fact?

Mr. STEVENS. Yes, sir; it makes a material difference, although it has been said (and very truly, too) that you can do a certain amount of work which will be applicable to either type. That is true to an extent, but only to an extent. The question looms up in almost every direction.

As soon as I could determine on a general plan, which was very quickly, I started selecting the French tracks which, in my opinion, could be used in the further construction of the canal, the final construction, taking out these old rails and ties, taking the tracks out of the mud, laying new rails, putting in new ties, and ballasting the road; and I started grading other tracks and laying them with heavier rails-70-pound rails, new rails and building new tracks. That work has continued up to this day, and the only steam-shovel work which we have done since that time, which was about the time of stopping the 11 shovels, is that I presume we have averaged from 4 to 5 and possibly 6 shovels during that time, simply doing the grading necessary to put in these new tracks and to shape up the cut, which was left in very bad shape. It is gouged here and there.

There was no continuous work being done; that is, you could not find half or three-quarters of a mile where you could lay a continuous track and have a straight face to work on. There was a little dug here and a little there. All of those irregularities will have to be smoothed out and your tracks laid, and that is the work that has been going on since the middle of August. We have made no effort to make what we call yardage to make a showing, but simply to get these tracks ready.

In regard to the method of doing the work and the amount of work, I found that the only equipment which had been bought was the steam shovels, with the exception of 300 so-called western steel scraper dump cars-a car made, I think, near Chicago somewhere, having a capacity of about 14 yards. They have standard trucks, and they are splendidly built cars. But they are what is known as side-dump cars; that is, you load the material on the top and drop the body over, and it is supposed to dump, and in wet weather we found some trouble with the twenty-four new cars that had been delivered with the wet material. We found the same trouble that we found with the French dump cars, that they would not clear. The clay will stick to those cars.

Senator KNOX. Are they steel or wooden cars?

Mr. STEVENS. They are steel cars; well-built cars that were ordered by the former chief engineer to the amount of three hundred. At the present time there have been delivered on the Isthmus 150 of those, cars knocked down-that is, parts of them. I think that up to date we have succeeded in erecting about 60 or 70 of them.

In addition to those the Commission bought or contracted for 500 flat cars, with steel underframes and with wooden floors. Of these there were being delivered, about the time that I arrived there, 250. These were all immediately placed in the service of the Panama Railroad.

The only use that the Commission has had of them has been simply through the Panama Railroad handling its supplies. Not one of them has been used in any way in the work around the canal proper. So that in effect all of the equipment which I had for transportation was simply what I found there, and it is either a question of shutting down everything and preparing no trackage for the future or using those cars.

The double-tracking of the Panama Railroad, which I will explain later, over which the great bulk of this material must go, had been commenced, and a few of the lighter cuts had been taken out, but