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Senator KITTREDGE. What was the general nature of the supplies procured in that manner?

Major GALLAGHER. They were usually supplies required in sanitation. Some were for the engineering department, but I think the biggest part of the purchases of that nature were made on requisitions received from the sanitary department.

Senator KITTREDGE. And of what character?

Major GALLAGHER. Well, I recall one case in which a large quantity of bronze wire mesh was purchased; also large quantities of fumigating powders.

Senator KITTREDGE. The wire mesh was for the construction of screens?

Major GALLAGHER. Yes, sir; I believe they made an effort there to screen all the buildings, to put screens around all of them, and they used very large quantities of that wire mesh.

Senator KITTREDGE. When was that purchase made?

Major GALLAGHER. That purchase was made about last summer. Some of the material was purchased in May and June of last year. Senator KITTREDGE. About the time the yellow fever trouble was on? Major GALLAGHER. Yes, sir: along about that time there were a good many calls for that material. It has all been listed.

Senator KITTREDGE. How long have you had experience in the Army in the purchasing of commissary department supplies?

Major GALLAGHER. I have been connected with the commissary department since the beginning of the Spanish war. I was appointed major of volunteers at the beginning of the Spanish war.

Senator KITTREDGE. Had you any experience in that capacity prior to that time!

Major GALLAGHER. Yes, sir; I had been post commissary at different military posts and regimental commissary when I started out with my regiment.

Senator KITTREDGE. What can you say about the prices at which the goods secured in open market were obtained? Were they obtained at fair and just prices!

Major GALLAGHER. I think so, Senator. As far as I know, the prices were all right. They were about the market prices.

Senator KITTREDGE. You say that the circular that you issued in securing goods in the open market has been construed to be an advertisement?

Major GALLAGHER. That is my impression; I think it has beenyes, sir.

Sentor KITTREDGE. And you, of course, had the right in procuring goods purchased in that way to reject any and all proposals, had you

not?

Major GALLAGHER. Yes, sir: in all those circulars the right was reserved to reject any and all proposals.

Senator KITTREDGE. And is the same true in the case of your regular advertisements?

Major GALLAGHER. Yes, sir. I have some of those here if you would like to see them; I have brought some samples of them.

Senator KITTREDGE. What do you say about the prices of material purchased under your eye under the latter form? Were they fair and just?

Major GALLAGHER. I think economy undoubtedly will result through competition; but I can not recall any case in which I think we were charged more than a fair price for anything purchased under an emergency.

Senator KITTREDGE. In what manner were these purchases to be delivered at the Isthmus?

Major GALLAGHER. In nearly all cases our circular called for bids on the articles delivered at Colon or La Boca—that is, Colon on the Atlantic side or La Boca on the Pacific side; so that the bidder, in submitting his proposal, included in his estimate what it would cost to deliver it there. In nearly all the cases of emergency purchases they were purchased for delivery either at New York or New Orleans. for immediate shipment by the Canal Commission.

Senator KITTREDGE. And when you say they were delivered for shipment at either New York or New Orleans do you mean that those places were to be designated by the Commission, or at the option of the seller?

Major GALLAGHER. No; they were designated by the Commission, sir. If we would get an emergency requisition for supplies that we thought could be advantageously purchased in New Orleans we would send the requisition to the agent there, with instructions to purchase for delivery in New Orleans and make shipment himself. That would be to insure prompt work, so that he would go out and get the material and send it from that point. The same was the case at New York. Senator KITTREDGE. Where goods were delivered at New Orleans for shipment to the Isthmus, in what manner did you secure their transfer or transportation to the Isthmus?

Major GALLAGHER. They were usually shipped by the line running from New Orleans to Colon, the United Fruit Company's line. Senator KITTREDGE. The United Fruit Company's line?

Major GALLAGHER. Yes, sir.

Senator KITTREDGE. What sort of a contract, if any, have the Government or the Commission with that company?

Major GALLAGHER. I do not think they have any, Senator. I am not aware of any contract. They have an agreement, but I do not think it has ever taken the form of a formal contract.

Senator KITTREDGE. What is that agreement, as you recollect it? Major GALLAGHER. The shipments are made at the regular rates, the same rates that they charge to ordinary shippers in similar cases. Senator HOPKINS. For the same character of goods?

Major GALLAGHER. For the same character of goods.

Senator KITTREDGE. In what manner are the ships, owned by the Panama Railway Company and plying between New York and Colon, supplied with goods for transportation?

Major GALLAGHER. All the shipments from New York for the Commission are made by the Panama Railroad Company's steamers or chartered steamers. They have been obliged to charter steamers. Senator KITTREDGE. I was going to ask about that.

Major GALLAGHER. They have been obliged to do that on occasions. Senator KITTREDGE. You have not, then, been able to carry in those steamboats all the material or supplies presented at New York for shipment to the Isthmus?

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Major GALLAGHER. No, sir. They have purchased two new steamers; and before that time they were not able to handle it at all. Since then they have not been able to handle it without chartering extra steamers. Senator KITTREDGE. Do you know anything about the purchasing of those steamships?

Major GALLAGHER. No, sir. chase was made, but it was not

ment.

I know about it-I know that the purdone through the purchasing depart

Senator KITTREDGE. You had nothing to do with the purchase of those boats?

Major GALLAGHER. No, sir.

Senator KITTREDGE. By what line were the materials and supplies sent, that were shipped from New York, where they could not be carried by the boats owned by the Panama Railroad Company?

Major GALLAGHER. Usually by chartered steamers. I do not think we made any shipments on a regular line.

Senator KITTREDGE. What do you mean by "chartered steamers?" Major GALLAGHER. They have, for instance, a great quantity of railway material, cars, or paving brick. They recently chartered some ships to carry brick. They could not handle it with their own steamships, so they chartered these special steamers to carry this material.

Senator KITTREDGE. Were they tramp steamers, or were they steamers belonging to some well-known line?

Major GALLAGHER. I think they belonged to some of the well-known lines, but I do not know which. I have not been intimately connected with that part of the work since I have been deputy general purchasing officer.

Senator KITTREDGE. Who has charge of that branch of the work?
Major GALLAGHER. Mr. Ross; he can tell you all about it.
Senator KITTREDGE. He is your superior?

Major GALLAGHER. Yes, sir; he is my superior.

Senator KITTREDGE. What can you say about the compensation paid for service of the character you have mentioned?

Major GALLAGHER. For carrying the material?

Senator KITTREDGE. Yes.

Major GALLAGHER. I think the compensation has been reasonable. so far as I know; but I am not familiar with the details of it. I would not like to try to answer that question, because I no not know, Senator.

Senator KITTREDGE. That matter has not been in your charge? Major GALLAGHER. No, sir; it has not. I would like to have that understood clearly. The Panama Railroad Company undertakes to carry all this material.

Senator KITTREDGE. That is the point I am getting at.

Major GALLAGHER. The Commission does not charter these steamers. The Panama Railroad Company charters them to carry the material. and of course the cost is eventually charged against the Commission.

Senator KITTREDGE. In other words, all material and supplies that are destined for the Isthmus to be shipped at the port of New York are turned over to the Panama Railway Company?

Major GALLAGHER. Yes, sir.

Senator KITTREDGE. Under a contract or agreement with that company?

Major GALLAGHER. Yes, sir.

Senator KITTREDGE. For their transportation to the Isthmus?
Major GALLAGHER. Yes, sir.

Senator KITTREDGE. Have you any knowledge of that contract? Major GALLAGHER. There has been an agreement that the Panama Railroad Company would carry all supplies at $5 a ton. That was the understanding with the old Commission, and it has prevailed up to a recent date. It was found, however, that to continue to do so would probably entail a loss-that is, that they could not pay expenses. There are certain classes of material that they could not carry at $5 a ton, because they take up so much space in the boat that it would entail a loss to do it; and therefore they are now going to adopt a schedule of charges on a different basis, instead of having a uniform

rate.

Senator KITTREDGE. Is the contract to which you refer in writing or is it an oral agreement?

Major GALLAGHER. I think there is no formal agreement, but there are probably letters on file that will indicate that it is understood.

Senator KITTREDGE. I think that is all I wish to ask, for the present at any rate.

Senator GORMAN. Major, you say that you were assigned to this duty when?

Major GALLAGHER. Just about one year ago the order was issued directing me to report to the chairman of the Commission, and I entered on my duties as purchasing agent on the 1st of February, 1905-just about a year ago.

Senator GORMAN. That was under the present board, was it; or was it under the Walker board?

Major GALLAGHER. It was under the Walker Commission.
Senator GORMAN. Under the Walker board?

Major GALLAGHER. Yes, sir.

Senator GORMAN. Was your assignment there simply as an army officer, or was there an additional allowance of salary or expense account?

Major GALLAGHER. I received extra pay.

Senator GORMAN. To what extent?

Major GALLAGHER. I received from the old Commission enough to make my salary $4,800 a year. My salary as a major was forty-one hundred and some. I think I received $60 a month extra from the old Commission--$720 year.

Senator GORMAN. And that continues?

Major GALLAGHER. When I was appointed deputy general purchasing agent they increased my salary; they added to it.

Senator GORMAN. To what extent?

Major GALLAGHER. To the extent of making my present salary $6,480 a year. They added sufficient to my salary as major to bring it up to its present amount.

Senator GORMAN. $6,400, you say?

Major GALLAGHER. $6,480; yes, sir.

Senator GORMAN. When you assumed duty I suppose you took an account, in a concrete form, of all the purchases that had been made up to that date, and all the material on hand?

Major GALLAGHER. Well, there was no accountability--there was no paper responsibility. That is, if I was directed to make a purchase

of material, and I ordered it and looked after the shipment of it, the responsibility ended, and there was no statement prepared or made up to that time. The work just continued right on from that period; and at the time I was relieved as general purchasing officer it just con

tinued on as it was before.

Senator GORMAN. Who was your predecessor in this position?

Major GALLAGHER. Mr. Redfern. He was chief clerk of the Commission, and had been supervising the purchases; but there was no purchasing department established until I was appointed, and of course no regular purchasing agent. As I say, he was acting in that capacity, as chief clerk, supervising purchases.

Senator GORMAN. Is there any method by which we can ascertain the entire amount of different classes of materials, rails, engines, dredges, steam-shovels, and everything else connected with the construction of the canal proper, that was ordered or contracted for by the old Commission? Are the accounts kept in that way?

Major GALLAGHER. Yes, sir: that could be ascertained. Senator GORMAN. From whom can we get the information? Major GALLAGHER. You can obtain that from the office of the general purchasing officer. In the case of a great many of the purchases, the orders were placed by my successor for material for which I had advertised. The work was simply continuous, going right along. It would be somewhat difficult to prepare such a statement as you suggest, but we could very easily prepare a statement to show the total money value of the orders I had placed up to that time, and then the total money value of the orders which Mr. Ross has placed up to the present time. But there was a great deal of material being advertised for under me for which he afterwards placed the orders.

Senator GORMAN. Do these requisitions from the Isthmus come. directly to your office now or to the chairman of the Commission? Major GALLAGHER. They come, I think, directly to the office now. Senator GORMAN. To your office?

Major GALLAGHER. I think so.

Senator GORMAN. Did they at the time you were serving under the old Commission?

Major GALLAGHER. No, sir; I used to receive them from the chairman of the Commission.

Senator GORMAN. When did the old Commission go out? I have forgotten the date; how long after your first connection with the Commission?

Major GALLAGHER. They went out about the 1st of April.
Senator GORMAN. After you entered upon your duty?
Major GALLAGHER. Yes, sir.

Senator GORMAN. During that time, from the time of your employment to the date of the expiration of the old Commission, what was the character of the complaints of failure to act upon requisitions for material on the Isthmus, made from the Isthmus? Was it very great?

Major GALLAGHER. I think there was considerable complaint that there was delay in receiving material. There was an accumulation of business there-there is no doubt about that. The gentleman who was acting, Mr. Redfern, was overwhelmed with work. He had a few clerks trying to do this work, and there was a great accumulation of these requisitions. I found requisitions there nearly four months old that had not been acted upon, and the principal work then, of course, was

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