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(I or we) make this proposal with a full knowledge of the kind, quantity, and quality of the articles required, and should (I or we) receive written notice of the acceptance of all, or any part thereof, (I or we) will, if required by the United States, or its legal representative, enter into contract within the time designated in the advertisement, with good and sufficient sureties, for the faithful performance thereof.

(Signature)

(Street and number)

(Post-office)
(State and county)

Guaranty.

State of

as

(The guarantor must be a surety company approved by the Isthmian Canal Commission. In lieu of this guaranty a certified check for an amount elsewhere specified may, at the option of the bidder, accompany the proposal.) The undersigned (name of guarantor), of hereby guarantee that in case the foregoing proposal of (name of bidder) for furnishing above made, be accepted, (he, or they) will within ten days after the receipt of notice of such acceptance execute the required contract for the same and give bond, and with good and sufficient surety, and in case the said (name of bidder) shall fail to enter into such contract and furnish said bond as aforesaid, we guarantee to make good the difference between the offer of the said (name of bidder), and that which may be accepted.

[SEAL.]

[Endorsement on back.]

General instructions to bidders.

[May be applicable in part only to this call for proposals.]

1. (a) Each proposal must be accompanied by either a certified check payable to the order of the chairman, Isthmian Canal Commission, or a proper guaranty, in a sum equal to 10 per centum of the amount of the proposal; the check to be held until the requirements of the proposal shall be complied with and as a guaranty for compliance with the same.

(b) Telegraphic bids can not be considered.

2. (a) The schedule and specifications must not be altered or interlined; any explanations that bidders deem necessary to submit should be typewritten and pasted in connection with the class to which such explanation refers; but any modification of any of the conditions or requirements will be at the risk of rendering the proposal informal, at the option of the Commission.

(b) Samples, cuts, drawings, or blueprints are to be submitted only when specially called for.

3. (a) The unit price must be written in ink.

(b) Tie bids, all others being equal, will be decided by lot.

4. Bids will not be considered for any other quantity or description of supplies than specified, nor for separate items of a class unless there should be no satisfactory bids received for the class as a whole, or the Commission should deem it to the Government's interest to make a modification.

5. The right is reserved to reject any bid for cause, or to reject all bids, if deemed for the interests of the Government; to strike out any item or items in the specifications after notice of intention, and to waive any defect or irregularity not a requirement of law.

6. (a) If more than one bid be offered by any one party, by or in the name of his or their clerk, partner or other person, all such bids may be rejected.

(b) A bidder shall not be interested in more than one bid on the same class. (e) No bids having nominal or fictitious prices shall be considered.

(d) The Commission reserves the right to reject bids on any article or articles at excessive or unreasonable prices above their fair market value.

(e) Prices bid on all articles or items must be at a fair market value, otherwise the Commission shall be at liberty to reject bids or eliminate items on which prices quoted are either above or below market value.

7. No bid will be considered unless from a manufacturer of, or a dealer in, the article offered.

8. Proposals submitted by a firm must be duly signed in the firm name by a member of the firm. Proposals submitted by a corporation shall be signed with the corporate name, by an officer thereof, and sealed with the corporate seal; if signed by any other person not an officer, evidence of authority shall be appended. Persons signing proposals as "agent" shall also file evidence of authority to do so.

9. (a) Proposals can be withdrawn only on requests received prior to the time fixed for opening the same; such requests may be made by wire when necessary. (b) The Commission will not permit changes in or withdrawal of proposals after they have been publicly opened and recorded; nor can it assume the responsibility of making alterations, changes, or corrections in proposals at the request of bidders, whether such requests are received before or after the bids are opened.

10. Neither the laws nor the regulations make any allowance for errors, either of omission or commission, on the part of bidders. It must be assumed that bidders have fully informed themselves as to all conditions, requirements, and specifications before submitting proposals; and they can not be excused or relieved from the responsibility assumed by their proposal on the plea of error.

11. The accompanying specifications, together with these instructions and the conditions of this proposal, will form part of the contract, the same as if incorporated therein.

ISTHMIAN CANAL.

COMMITTEE ON INTEROCEANIC CANALS,

UNITED STATES SENATE,

Washington, D. C., Monday, January 22, 1906.

The committee met at 2.30 o'clock p. m.

Present: Senators Millard (chairman), Kittredge, Dryden, Hopkins, Knox, Ankeny, Morgan, Taliaferro, Gorman, and Simmons.

TESTIMONY OF E. S. BENSON, ESQ., GENERAL AUDITOR OF THE ISTHMIAN CANAL COMMISSION.

Mr. BENSON was duly sworn, and testified as follows:

The CHAIRMAN. Mr. Benson, you are the auditor of the Commission?

Mr. BENSON. I have the title of general auditor of the isthmian canal affairs and the Panama Railroad Company.

The CHAIRMAN. You have charge of all the accounts, as I understand it, of the Panama Railroad Company, the Commission, and the canal?

Mr. BENSON. Yes, sir.

The CHAIRMAN. They all come under your general supervision? Mr. BENSON. Yes, sir.

The CHAIRMAN. Your headquarters are in Washington?

Mr. BENSON. In Washington.

The CHAIRMAN. And have you any assistants in New York and Colon?

Mr. BENSON. Yes, sir; we have a local auditor for the Panama Railroad in New York, one in Colon, who looks after the accounts on the Isthmus, and a local auditor for the canal construction at Panama.

The CHAIRMAN. Where is your auditor at Panama located-at Colon?

Mr. BENSON. He is at the administration building in Panama. I might read the organization of the accounting department as it is arranged, possibly, and give you, perhaps, a better idea of it. The CHAIRMAN. It would be very well to do that.

Mr. Benson thereupon read as follows:

[Circular No. 15-Exécutive Committee.]

OFFICE OF THE ISTHMIAN CANAL COMMISSION,

Washington, May 16, 1905.

The following extracts from the minutes of May 8 and 16, 1905, are published for the information and guidance of all concerned:

AUDITING ORGANIZATION OF THE ISTHMIAN CANAL, CANAL ZONE, AND PANAMA RAILROAD.

The accounts of the Isthmian Canal Commission, government of the Canal Zone, and Panama Railroad Company will be in charge of a general auditor, located at Washington, who will have full control and full authority in respect to the methods and system of accounts to be followed, and whose jurisdiction shall be exclusive, and shall extend over all departments so far as relates to the accounts of the above organizations.

There shall be the following additional accounting officers: A chief deputy to the general auditor, in charge of the auditing office at Washington, representing the general auditor as occasion may require, and performing such general duties as the general auditor may prescribe. A local auditor, in charge of the accounts of the Panama Railroad, located at New York.

A local auditor, in charge of the accounts of the Panama Railroad, located on the Isthmus, who shall report to the local auditor in New York. The accounts audited on the Isthmus will be taken up on the books of the New York office.

A local auditor, in charge of the accounts of the Isthmian Canal Commission and the accounts of the government of the Canal Zone, located on the Isthmus of Panama.

The accounts audited on the Isthmus for the Isthmian Canal Commission will be forwarded to the Washington office of the general auditor for incorporation in the reports and exhibits covering the construction of the canal.

The local auditors in charge of the accounts of the Panama Railroad and the local auditor of the Isthmian Canal Commission and government of Canal Zone are subject to the jurisdiction and instructions of the general auditor in all matters pertaining to the duties of their offices.

Original record of accounts of the government of the Canal Zone will be kept on the Isthmus, and duplicate records of all transactions in relation thereto will be kept in the office of the general auditor at Washington.

All accounts of the Isthmian Canal Commission, whether audited in Washington or on the Isthmus, will be sent to the Treasury Department through the Washington office. Necessary duplicates will be retained in the office of the general auditor.

A comprehensive system of bookkeeping and accounting methods in line with existing laws will be adopted for the construction of the Isthmian Canal.

An accounting system for the government of the Canal Zone will be provided, fashioned after that of the government of the Philippine Islands, so far as practicable.

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