Senator GORMAN. That was the 7th day of January, 1905. You went in in April? Mr. SHONTS. I went in in April. Senator GORMAN. Yes. From that order it would appear that the old Canal Commission, through the governor of the Zone, had made provision for furnishing supplies to the ordinary laborers, and that there was complaint on the part of the Panama authorities that that was a stretch of interpretation of the original treaty that has just been read to you. So that it appears that the President directed the Secretary of War to go to the Isthmus, and after consultation and negotiations he issued the order to which vou refer, which is addressed to the chairman of your Commission, and the third clause of which says: This order contemplates the exclusion from benefits of the commissaries established" (that the old Commission had established) "and maintained by the Commission of all employees and workmen who are natives of tropical countries wherein prevail climatic conditions similar to those prevailing on the Isthmus of Panama, and who therefore may be presumed to be able to secure the articles of food, clothing, household goods and furnishings, of the kind and character to which they are accustomed, from the merchants of Panama, Colon, and the . towns of the Canal Zone, and whose ordinary needs may be supplied without recourse to the Government commissaries." Now, was it not that order, issued by the Secretary of War and approved by the President, and also approved by Admiral Walker, the former chairman, that produced the conditions which you have described-of utter failure to provide for your men? Mr. SHONTS. Possibly so. That is the matter that I knew nothing about until I got there. I only know that there were no commissaries opened locally across the Isthmus until after we opened them. Senator HOPKINS. You can only testify to conditions as you saw them there? Mr. SHONTS. As I found them there on July 26. Senator GORMAN. But I assume that Mr. Shonts is familiar with all the orders that have been issued in this regard. Mr. SHONTS. Yes; but I am not familiar with what was done under those orders. Senator GORMAN. Yes. Now you have abandoned that order, and are furnishing supplies under whose direction and by what authority? Mr. SHONTS. By what authority did I open those commissaries? Senator GORMAN. Yes. Mr. SHONTS. I assumed that the Commission, having brought those men there, and finding the prices unreasonable, had authority to open its commissaries and sell its supplies to the common labor until such time as the prices of those supplies would again become reasonable, and I acted on that assumption. Senator GORMAN. By submitting it to the Secretary of War or on your own authority? Mr. SHONTS. I acted immediately there, because the matter was very pressing, but it was all afterwards reported to the Secretary of War and to the President. Senator GORMAN. And approved? Mr. SHONTS. I do not remember of any formal approval. It has not been disapproved. I presume it was formally approved. Senator GORMAN. Are orders of that sort issued by the chairman without the action of the Commission? Mr. SHONTS. The executive committee of the Commission has power to act on everything that comes within its scope under the law, and those acts are passed on by the Commission at their next full meeting. Governor Magoon and I were on the ground, and we were the majority of the executive committee, and the governor entirely agreed with me as to the necessity of the action taken; and our action was afterwards approved by the full Commission. We also had General Ernst with us as a member of the Commission, and he was in entire sympathy with our action; and all the members of the Commission afterwards approved of it. Senator GORMAN. And then, as I understood, you reported to the Secretary of War, who had issued this order prohibiting it? Mr. SHONTS. We report everything that we do to the Secretary of War, copies of all of our minutes and of all our acts as an executive committee, and afterwards of our full Commission are sent to the Secretary of War. Senator GORMAN. But I mean in view of the fact that the Secretary of War, by the order of the President, entered into this contract with the Government of Panama, was special attention called to your abrogation of it? Mr. SHONTS. I do not know that I made any formal report to the Secretary of War. I do not remember. But I did make a report of everything, and it went to him in that shape. I do not remember of making a special feature of it in the nature of a special report. In fact, I think the Secretary of War was in the Philippines when I returned, and that I did include it in a special report that I made to the President. That is as I recollect it. Senator DRYDEN. Mr. Shonts, in the letter of the Secretary of War to the President, or the report to the President of January 12, 1905, the Secretary seems to have taken a precautionary step to protect these laborers under the very condition which did arise and which he anticipated as possibly to arise, for he says, in the quotation which Senator Kittredge has already read: "The Commission should, however, hold in terrorem over the merchants of the Republic and the Zone the possibility that a commissary for the sale of food and other merchandise to the common laborers may be established if the merchants do not furnish food and clothing to such laborers at a reasonable rate." Mr. SHONTS. It was the "reasonable rate"--that was the protection that I undertook to take advantage of to protect the laborers, in anticipation of which the Secretary had, no doubt, used that language. Senator DRYDEN. Yes. So that the Secretary of War never at any time expected to leave these laborers to the mercy of these speculators and their exorbitant charges, but he held this power in abeyance in case such a condition should arise, and you found that condition was there when you got there, and took steps to remedy it? Mr. SHONTS. You have stated it exactly as I understand it. The Secretary of War wanted to recognize all the wishes of the Panamanian people so far as he could do so in justice to our own employees. Senator SIMMONS. Mr. Shonts, I want to ask you one question. I understood you to say that the very night that you arrived upon the Isthmus you ascertained from Governor Magoon that these conditions that you have stated with reference to food supplies existed upon the Isthmus? Mr. SHONTS. Yes, sir. Senator SIMMONS. Did you inquire of Governor Magoon or of anybody else, and did you ascertain through those inquiries how long the conditions which you' found then existing had been in existence, and whether there had been any steps taken to remedy them? Mr. SHONTS. The governor told me that these conditions had been growing worse for some time, and that he was getting very anxious about the situation, and had made thorough investigations all along the line in regard to the conditions that existed everywhere. Wallace having resigned and gone, and Mr. Stevens not having reached there, Governor Magoon was the only one in authority. Senator SIMMONS. How long did he say these conditions had been bad? Mr. SHONTS. He did not say how long they had been bad. Mr. SHONTS. Oh, I ascertained from talking with our various men on the Isthmus, all along the line, that these conditions were about as the governor had said, and that they were growing worse and worse with the increase of the population and no corresponding increase in supplies. Senator SIMMONS. How many unskilled laborers were employed there at that time? Mr. SHONTS. I think in July we had about 12,000 men on the roll; or 11,000, was it not? Mr. BENSON. In October, 13,000; I do not know how it was in Julv. Mr. Ross. When you went down there, there were about 10,000 laborers. Mr. SHONTS. I mean, all told, were there not about 12,000? Mr. Ross. About 12,000 all told. Mr. SHONTS (to the committee). There were about 10,000 laborers, as I recollect the figures, about that time. Senator SIMMONS. There had been something near that number there for several months before you went down there, had there not? Mr. SHONTS. No; I think not. Ithink that there had been an increase of about six or seven hundred a month right along. I think there was a gradual increase from people coming in. Senator SIMMONS. From the information that you got, how long do you think these conditions that you have described had existed there in a greater or less degree? Mr. SHONTS. I inferred that they had been existing for two or three months, and that they had been getting worse. Senator SIMMONS. And that during those two or three months nothing had been done for the relief of these people? Mr. SHONTS. No. Now, I am speaking only of food stuffs. They had been working on the houses. Senator SIMMONS. Yes; I am not talking about the houses. Mr. SHONTS. No; there were two questions--one of feeding and one of housing. Senator SIMMONS. Did the records of the Commission or any other circumstance that came to your knowledge indicate that this subject had been up for investigation and inquiry, and that any effort had been made to relieve this condition? Mr. SHONTS. Governor Magoon had had it very close to his mind for quite a little while. Senator SIMMONS. But had he done anything? Mr. SHONTS. He had not done anything; he had not taken any active steps. Senator GORMAN. Well, that was not any part of Governor Magoon's duty. Mr. SHONTS. No. You see, there was really an interim there, Senator. Wallace had left, and Mr. Stevens had not gotten there. Magoon had charge of government and sanitation, and Wallace had charge, independent of Magoon, of construction and engineering; and it was in the construction and engineering department that the bulk of this labor was employed. So that it really was not the governor's duty, except as a member of the executive committee, and he was there alone; and knowing that we were coming just as soon as Mr. Wallace's place could be filled, and that I would take the new man down there, he let it run along. Senator SIMMONS. But was it not his duty, if he found conditions of this character there, to apprise the Department here or the Commission of the fact, so that the party or persons who were charged with this responsibility might act? Mr. SHONTS. Well, I think it was a question of judgment; he knew that we were coming, and they were getting along the best they could until we got there. Senator KITTREDGE. When did Mr. Waliace leave the Isthmus? Mr. SHONTS. Wallace left the Isthmus on the 12th of June. Mr. BENSON. The 12th or 13th of June. Mr. SHONTS. And we arrived there the 26th of July. I had arranged, as I said, to sail on the 20th of June, prior to the receipt of Wallace's cablegram. Senator SIMMONS. Governor Magoon was a member of the Commission at that time? Mr. SHONTS. He was a member of the Commission at that time, and a member of the executive committee. Senator SIMMONS. Was he the only member of the Commission there? Mr. SHONTS. Yes, sir. Senator SIMMONS. Wallace was a member of the Commission also? Mr. SHONTS. Wallace was a member of the Commission. Senator SIMMONS. Do you know whether either he or Mr. Wallace had apprised the War Department of this condition of things, which you have described as having existed there for two or three months prior to your entrance on the Isthmus? Mr. SHONTS. No; I do not know whether they had or not. Senator DRYDEN. 1 suppose your attention was directed not so much to the length of time that this condition may have possibly existed as to the fact that it did exist when you got there? Mr. SHONTS. Yes; and it was an exigency. Senator DRYDEN. The fact that it might possibly have existed a shorter or a longer time did not receive your particular attention. This is an impression of yours, as I understand, without your having made a special investigation as to the duration of this state of affairs? Mr. SHONTS: That is it. We were confronted with this condition when we reached there; and the question was, What should we do? I did not make inquiries as to how long it had lasted, but I did infer that it had been gradually growing worse. It was not simply bad all the time, but it had been growing gradually worse as the people came in, and as food supplies got scarcer the prices went up; and the governor thought it could wait until we got on the ground and studied the situation, and then we could take such action as we thought necessary. I think his judgment on the subject was all right. I do not think any great damage was done. Senator HOPKINS. Since that action of yours, as I understand you, there has been no trouble about the question of reasonable prices for all food products? Mr. SHONTS. No. If there have been any complaints, they have not reached us. I have not heard of it. And the very best evidence that there is no complaint is this fact: We did not make the patronage of our commissaries compulsory, you understand; all we sought to do was to give the opportunity to all classes of labor to get good food at reasonable prices, and that we did. The result is that our commissaries are being patronized very little by the common laborer. Now, one of two results must follow: Either they are not eating as much as they should (and if they do not it is their own fault, for the prices are reasonable), or else they are getting what they want at outside places at even cheaper prices than we are selling for. Senator SIMMONS. With reference to the cost of the articles that are chiefly consumed by the common laborers there and in this country, what are the prices there relatively to the prices in this country for the same articles? Mr. SHONTS. I was told the last time I was on the Isthmus that there were many things that we were selling there cheaper than they could be gotten at retail prices in our own stores at home. Those people use yuccas and yams and rice, and our people buy those things down in that country sometimes very much cheaper than they can be bought here. Senator SIMMONS. That is a potato, is it not? Mr. SHONTS. Yes; and we buy them also in Jamaica and surrounding territories, and get them in there at very reasonable figures. I have not heard any complaints at all in regard to the prices. Senator SIMMONS. Taking into consideration the cost of rents and of food supplies down there, is living higher upon the Isthmus for the common laborer than it is in this country? Mr. SHONTS. I do not think so. I think it is cheaper. You see, we offered to Senator SIMMONS. You think it is cheaper now? Mr. SHONTS. I think it is cheaper now. board those people at 30 cents per day, and they do not patronize us. As I say, they must therefore be getting their food and cooking it, and getting along at less than 30 cents a day. Senator SIMMONS. I notice that the Markel contract provided for 40 cents a day. Mr. SHONTS. No; 30 cents a day for the common laborers. Mr. SHONTS. The Markel contract as originally made was for 40 cents; yes. |