Senator MORGAN. But the purchasing department has no control over that matter?

Major GALLAGHER. No, sir.

Senator MORGAN. If they want to buy five years' supply, and they order you to do it, you have got to do it? That is the point I want to get at.

Major GALLAGHER. Yes, sir.

Senator MORGAN. I want to show that your department had no connection with that at all.

Major GALLAGHER. No, sir; we had nothing to do with it.

Senator MORGAN. I do not think I have any more questions.

Senator TALIAFERRO. Major, I understood you to say that when you were appointed purchasing agent for the Cominission there was a large accumulation of requisitions in the office?

Major GALLAGHER. Yes, sir.

Senator TALIAFERRO. What did you do with those, Major?

Major GALLAGHER. I immediately got them out; as soon as I could I got advertisements out asking for bids for the material called for in those requisitions.

Senator TALIAFERRO. You did not first inquire whether this delay in filling the requisitions had done away with the desire for the goods? Major GALLAGHER. No, sir; I did not.

Senator TALIAFERRO. You simply took it for granted that the goods were still wanted?

Major GALLAGHER. The requisitions were sent to the chairman of the Commission, and my business was to make the purchases as soon as possible; and I proceeded to do that.

Senator TALIAFERRO. Have you bought a good deal of lumber at San Francisco and Tacoma and Portland?

Major GALLAGHER. Yes, sir; there has been a great deal of lumber purchased out on the Pacific coast. The great bulk of the lumber has been purchased out there.

Senator TALIAFERRO. That lumber was bought under inspection on delivery?

Major GALLAGHER. Under inspection at the place of shipment.
Senator TALIAFERRO. Not at delivery on the Isthmus?

Major GALLAGHER. No, sir; the inspection was made at the place of shipment.

Senator TALIAFERRO. The lumber was accepted at the place of ship

ment?

Major GALLAGHER. Yes, sir.

Senator TALIAFERRO. Do you reinspect it at the Isthmus?
Major GALLAGHER. I suppose it is looked over there.

Senator TALIAFERRO. It is checked up, I fancy?

Major GALLAGHER. It is checked up. They check it to see that the quantity specified is delivered and that the dimensions are as required; but they do not make any inspection at the Isthmus in the case of lumber. I think that under the recent circular proposals there is a clause to the effect that all material will be subject to inspection at the place of manufacture or point of shipment and also at the Isthmus. Senator TALIAFERRO. A double inspection?

Major GALLAGHER. Yes, sir; that is the recent system. Formerly, however, the course was to have inspection at the point of shipment,

and that ended it, excepting the checking as to quantity and condition on arrival.

Senator TALIAFERRO. Do you mean to say, Major, that you have had no complaints from the Isthmus that there was more stuff there in the way of supplies or material than was needed for current use? Major GALLAGHER. We have had no complaints that I recall-not for a long time.

Senator TALIAFERRO. You say "for a long time"?

Major GALLAGHER. Yes, sir.

Senator TALIAFERRO. Have you ever had any complaints from the Isthmus?

Major GALLAGHER. I do not know that we have ever had any complaints. I recall one or two occasions where some material that was purchased for use down there was found to be in excess, through error. I know of one case where an order was placed, prior to my going into the office, for some material, and the clerk in writing it out made an error, so that there was a good deal more sent down than was required. That is one case that I recall. In another case, where we sent down some rope, there was a misunderstanding about the specifications; and that rope, when it went down, was found to be not exactly what was wanted. It was sent back to this country, and they have tried to exchange it for other rope. I do not know what success they have had in that, but as to any other cases I can not recall them.

Senator TALIAFERRO. In making contracts for the delivering of supplies and material on the Isthmus, is there a penalty clause in the contract for nondelivery or delay?

Major GALLAGHER. Yes, sir.

Senator TALIAFERRO. Have you ever had occasion to enforce that clause?

Major GALLAGHER. No, sir; not that I know of.

Senator TALIAFERRO. Would such a matter come to you?

Major GALLAGHER. As I say, for the last six months, Senator, I have not been closely indentified with that particular part of the office. My work has been what was assigned to me, and during Mr. Ross's absence I do not recall any case where we have had to enforce the penalty clause.

Senator MORGAN. If I will not interrupt you, may I ask you the name of the purchasing agent for the Panama Railroad Company? Major GALLAGHER. Mr. Alfred Anderson.

Senator MORGAN. He lives in New York?

Major GALLAGHER. Yes, sir.

Senator MORGAN. Is he the one that used to buy for the railroad company?

Major GALLAGHER. Yes, sir.

Senator MORGAN. The same man?

Major GALLAGHER. Yes, sir.

Senator TALIAFERRO. The Commission makes no purchases for the railroad company, I understand you to say?

Major GALLAGHER. No, sir.

Senator TALIAFERRO. What do they want with these ties that they are advertising for?

Major GALLAGHER. They are for use in the construction of tracks for removing the earth from the excavation.

Senator TALIAFERRO. These lateral tracks?

Major GALLAGHER. Lateral tracks; yes, sir. I understand that there is to be a large quantity of trackage, a good many miles. Mr. Wallace told me at one time that there would probably be 300 miles of extra trackage put down there on the construction work for carrying away the material, and these ties were required for that purpose.

Senator TALIAFERRO. So far as you know, Major, the work down there is getting along pretty well?

Major GALLAGHER. I think everything is running very, very smoothly now; yes, sir.

Senator TALIAFERRO. Most of the complaints are disappearing?
Major GALLAGHER. Yes, sir.

Senator TALIAFERRO. I have no further questions.

Senator HOPKINS.. What was the date of your employment as purchasing agent, or the date of your original employment with the Commission?

Major GALLAGHER. The 1st of February of last year.

Senator HOPKINS. Of 1905?

Major GALLAGHER. Of 1905; yes, sir.

Senator HOPKINS. Who preceded you in that office?

Major GALLAGHER. Mr. Redfern was acting as purchasing agent. He was chief clerk of the Commission.

Senator HOPKINS. He acted in that capacity from the time of the organization of the Commission up to the time you were appointed? Major GALLAGHER. Yes, sir; I understand so.

Senator HOPKINS. How long did you serve in the capacity of pur chasing agent?

Major GALLAGHER. Four months.

Senator HOPKINS. Then who took the position of purchasing agent?

Major GALLAGHER. Mr. D. W. Ross, of Chicago.

Senator HOPKINS. What has been your position since?
Major GALLAGHER. Deputy general purchasing officer.

Senator HOPKINS. I have not clearly in my mind how you and Mr. Ross have divided your duties since his appointment as chief and your appointment as deputy purchasing agent, and I would like to have you explain that fully to the committee.

Major GALLAGHER. When Mr. Ross was appointed he assigned me certain work. He would give me a certain amount of work, certain papers to handle. The work in the office was very great,.and he could not handle it all. He would turn over some of it to me to do; and when he was absent-he had to go down to the Isthmus on two occa sions-I acted in his stead as purchasing officer.

Senator HOPKINS. In answering the questions propounded to you by Senator Gorman, you said a number of times that you were not familiar with that; that Mr. Ross had done that.

Major GALLAGHER. Yes, sir.

Senator HOPKINS. What I would like to know is as to whether there is a division of labor as between you and your chief, where you are responsible for one class of purchases and he for another?

Major GALLAGHER. No, sir; there is no such division. I do what he tells me. If he gives me a certain subject to handle, I handle it; if he does not give me anything I do not have anything to do with it. In the case of these big matters, being a railroad purchasing officer, he handled them altogether, and very properly, I thought.

Senator HOPKINS. So that as to all those matters you would have no pecial knowledge?

Major GALLAGHER. No, sir.

Senator HOPKINS. You said, in answer to one of the questions propounded to you, that in one instance, by the error of a clerk, an excessive quantity of material was sent down there.

Major GALLAGHER. Yes, sir.

Senator HOPKINS. What was done in that instance? Was the excessive quantity returned?

Major GALLAGHER. It was returned to the United States, part of it. Senator HOPKINS. So that there was no loss to the Government? Major GALLAGHER. I think there will be a small loss to the Government, Senator. The firm that sold us that material recognized that an error had been made, and agreed to take some of it back, and then an effort was made to sell the balance of it. But that was recent work; and as I have been preparing to go away, I do not know just what was the outcome of that transaction. But I think there will be a loss.

Senator HOPKINS. That is the only instance you now recall, during the entire period you have been connected with the Commission, where such a mistake has occurred?

Major GALLAGHER. That is the only case that I recall at present; yes, sir.

Senator HOPKINS. Senator Morgan asked you something about why you did not buy steel rails abroad. As I understand you, you have had nothing to do with the purchase of iron or rails. That has been done by Mr. Ross?

Major GALLAGHER. I have had practically nothing to do with the purchase of rails.

Senator HOPKINS. You do not know whether they can be bought in a foreign market any cheaper than they have been bought here, do you? Major GALLAGHER. I do not, Senator; I do not know.

Senator HOPKINS. But you do know that these foreign houses have agents in New York and that the advertising for steel rails has been open and notorious, so that the foreign houses have known what the Commission wanted and have had an opportunity to bid if they saw fit? Major GALLAGHER. Yes, sir; I think that is the case in these latter purchases. As to those that were purchased by the Panama Railroad Company, Senator, I do not know whether they were advertised or

The original purchase was really made before I went in there; and then an additional order was given for 2,500 tons of rails. Senator HOPKINS. Yes.

Major GLLAGHER. But these latter purchases of steel rails made by Mr. Ross were made under advertisement in the usual way.

Senator HOPKINS. Yes. Now, Senator Morgan asked you also something about purchasing in foreign countries-whether you could not get the articles abroad cheaper than you could in this country. You do not know that you can get them cheaper abroad than they have been purchased here, do you?

Major GALLAGHER. No, sir; I do not know that.

Senator HOPKINS. But do you know the fact that all of these purchases have been open and public?

Major GALLAGHER. Yes, sir.

Senator HOPKINS. And have been made by competitive bids?
Major GALLAGHER. Yes, sir.

Senator HOPKINS. And you do know that these foreign houses have had their agents in New York, where they could have bid for these articles, the same as the American houses?

Major GALLAGHER. Yes, sir; they have had that opportunity. Senator HOPKINS. And in each instance the bid has been received that was the lowest?

Major GALLAGHER. Yes; well, I explained that we did not always make the award to the lowest bidder, but I presume that in all such

cases

Senator HOPKINS. But, Major, if I understood your evidence correctly, you did always give it to the lowest bidder for the article if it complied with the specifications?

Major GALLAGHER. That is right, yes, sir; that is correct.
Senator MORGAN. You do know about cement purchases?

Major GALLAGHER. Yes, sir; the cement was purchased in foreign countries; it was supplied from abroad. I think the bid was submitted, as I said, by an American firm or agents.

Senator HOPKINS. As to whether the tariff that we have has any effect upon this, that is not a matter that you would want to testify on one way or the other, is it?

Major GALLAGHER. Why, Senator, I would not feel competent to testify about that.

Senator HOPKINS. No; that is what I supposed. In regard to the labor we have down there, you as purchasing agent of material have no more to do with the labor there than a member of this committee, have you?

Major GALLAGHER. No, sir.

Senator HOPKINS. And as to whether the Martinique or Jamaica colored man can work better than the American colored man, you do not know?

Major GALLAGHER. Not from my experience with them there. I have seen those laborers in Martinique.

Senator HOPKINS. You were also questioned in regard to the purchase of coal. The coal that has been sent to the Isthmus is coal that has been purchased by competitive bids, is it not?

Major GALLAGHER. There was some, Senator, that was not; but all those purchases were made by the Panama Railroad Company. Senator HOPKINS. Has it not been done by competitive bids? Major GALLAGHER. I do not know about that; I think so. Senator HOPKINS. Then what you mean to say is that in so far as the coal that has been sent to the Isthmus is concerned, you do not know how it has been purchased, or anything about it? Is that it? Major GALLAGHER. I do not know how it has been purchased by the Panama Railroad Company. We got out advertisements for a large quantity of coal purchased by the Commission; but after considering the whole transaction-they tried that coal down there and the results were not satisfactory-the chairman of the Commission decided to have the Panama Railroad Company handle the whole matter of the purchase of that coal.

Senator HOPKINS. But why did they decide to have the railroad company do it?

Major GALLAGHER. I presume because the railroad company had facilities for handling it down there better, perhaps, than the Commission. What Mr. Shonts's reasons were, I do not know.