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Senator SIMMONS. But were you feeding them for 30 cents a day at that time?

Mr. SHONTS. If you want me to do so, I will be very glad to tell you about the Markel contract, briefly.

Senator SIMMONS. I simply want to know about that feature of it. You can go into it more fully afterwards.

Mr. SHONTS. As the result of this talk that I had there, the question arose that night whether we should undertake the task of feeding these men ourselves or whether we should contract it. It was agreed all around that in either event we would have to furnish the plant; and I contended that night that if we had to furnish the plant we ought to organize and feed them ourselves. Mr. Stevens, on account of the tremendous amount of work that he knew was involved in every other line, said that he did not want to take that responsibility if it could be helped. Governor Magoon said he did not: and the result of the conversation, which extended over several days, was that I finally agreed to undertake to contract the feeding privilege.

When I came home, with the assistance of Mr. Ross, who was with us, we prepared specifications, and we got bids from several people who are engaged in feeding large bodies of men. Some weeks elapsed, you understand, while this was going on. Before I left the Isthmus, however, the complaints became so serious in regard to the two hotels that the Commission owned that I authorized Mr. Stevens to take them over in order that we might operate them ourselves. So he had those two hotels, and we started on these mess houses.

Senator SIMMONS. What I wanted to direct your attention to was, did you begin to feed these men

Mr. SHONTS. I am just coming to that.

Senator SIMMONS (continuing). After the time you made the Markel contract!

Mr. SHONTS. Yes; I was just trying to answer that question. Mr. Stevens, the day before I left, had taken over the two hotels; and he at once began to start these mess houses, opening our commissaries, as I tell you, that we authorized while we were there.

Senator SIMMONS. Yes. Now, what did you charge the common laborer per day from that time?

Mr. SHONTS. We commenced to charge them 30 cents a day.
Senator SIMMONS. Yes.

Mr. SHONTS. And there was an old arrangement by which the gold men paid $22.50 for their food and $2.50 for their rooms, which was going along while we were down there before; but the service was so bad and the food was so bad that we took those hotels over, as I told you, the day before I left.

While I was here preparing these specifications and getting these bids conditions seemed to grow worse, and I had two or three messages from Mr. Stevens insisting that we hurry the contracts and get some one there, as conditions were reaching a critical stage. One of his messages, for instance, said that "tainted food was worse than malaria." And, under the feeling that a great exigency existed, we hurried these specifications all we could and we got these bids in and awarded the contract. By the time I cabled the prices in the contract (which was awarded to Markel, he being the lowest bidder), Mr. Stevens had made such progress in taking care of the people, both with the mess houses for the common laborer and with these two hotels for the gold

men, that he answered that he thought that the prices were too high and that they would create a great deal of dissatisfaction, particularly with the gold men.

There had been a great deal of nervousness in regard to health conditions, etc., when we went there; there was really no esprit de corps. Mr. Stevens had gotten a good following, had gotten good feeling started, and he did not want anything to happen to spoil the effect of his influence on the men, which he thought a raise from $25 to $36 to the gold men would do. Therefore he asked me not to start the contract until we reached the Isthmus; and I therefore immediately showed his message to Markel, and said to him: "I think, under these circumstances, and in view of the further fact that it will be some months before the other hotels and our cold-storage house are finished, that you had better not arrange any further than you have to enter into the performance of this contract." He was very nice about it, and said: "I will be glad to do anything you say about it." I said to him then, "Suppose you agree that in my discretion, after I get to the Isthmus, I can cancel the contract immediately, if necessary;" and he agreed to that.

When I got to the Isthmus Mr. Stevens showed me what they were doing, that we were feeding these common laborers at 30 cents each, and that he thought we were losing some on the gold men. We raised the price to the gold men from twenty-five to twenty-seven and a half, and that has since been charged them. In that connection I have asked the auditor to have made up a statement by months of the results of the operations of both the gold hotels and the silver mess houses, on two bases-first putting in the same charges that the contractor would have to pay; and second, putting in only the direct chargesso that we can have an idea, if we ever do come to the question of contracting, as to exactly what it costs.

Senator SIMMONS. Then, as I understand you, Mr. Shonts, before you entered into the contract with Markel you were feeding these common laborers at 30 cents a day?

Mr. SHONTS. Yes.

Senator SIMMONS. Then it is a fact that when you entered into this contract and agreed to pay, by its terms, 40 cents a day to Mr. Markel, you were feeding these laborers at 30 cents!

Mr. SHONTS. Yes; but we did not know it here.

Senator SIMMONS. You did not know it here?

Mr. SHONTS. No.

Senator SIMMONS. You had not received that information?

Mr. SHONTS. No; and Mr. Stevens there did not know how it was going to come out.

Senator HOPKINS. Whether the Government would make or lose on it?

Mr. SHONTS. He did not know whether the Government would make or lose on it; and we do not know yet how the Government is going to come out on the gold men.

Senator SIMMONS. When you made that contract with Mr. Markel, and when he went to the Isthmus with you in pursuance of this agreement that you had to hold the contract in abeyance until you could go down there to investigate further, did he not agree to so modify that contract that he would be allowed only 30 cents a day for feeding these laborers?

Mr. SHONTS. No; not until after he got there.
Senator SIMMONS. I say, after he got there?

Mr. SHONTS. After we got there we had a talk one morning, and we listened to Mr. Stevens's explanation that while the food he was furnishing these men was not, either in quantity or quality, what the contract had contemplated, it seemed to be good enough to suit them; that they did not ask for any better. Therefore there was no occasion, so long as the food was suitable for the sustenance of health, for charging them more and furnishing them more than they wanted; and therefore we were in a position, by reducing the amount of food and the various kinds of food, to furnish them what they wanted at 30 cents a day. Then Mr. Markel, after hearing that explanation, said that he thought that that was right, and that he could afford to furnish what they were furnishing at 30 cents a day.

Senator SIMMONS. The proposition was a change of menu?

Mr. SHONTS. Yes; that was all--a question of quantity and quality and variety of food.

Senator HOPKINS. If you are through with the food question, Mr. Shonts, I would like to have you go on and tell us the conditions that you found there for housing these people, and what you have done since?

(As Mr. Shonts was starting to answer the question of Senator Hopkins, it was announced that the hour of recess had come, and that the committee would take a recess until 2 o'clock p. m.)

Mr. SHONTS. Shall I answer that question the first thing when I come back, Senator, or wait until you come?

Senator HOPKINS. If some one else takes up some other subject, you can wait; but if they go on with this, all right. I will be in at

half-past 2.

(The committee thereupon took a recess until 2 o'clock p. m.)

AFTER RECESS.

STATEMENT OF THEODORE P. SHONTS, ESQ. Continued.

The CHAIRMAN. Proceed, Mr. Shonts, if you are at a point where you are ready to proceed, without questions.

Mr. SHONTS. Senator Hopkins asked me a question just as we took the recess, as to what we were doing in regard to furnishing additional housing for the men, I having been discussing, as you remember, the question of food.

(By request the stenographer read the question referred to, as follows:) "Senator HOPKINS. If you are through with the food question, Mr. Shonts, I would like to have you go on and tell us the conditions that you found there for housing these people, and what you have done since."

The CHAIRMAN. Senator Hopkins will be away for ten or fifteen minutes, from what he said to me, so you might as well answer the question now, and he can continue the inquiry further when he comes in, if he so desires.

Mr. SHONTS. As I recollect the figures, they had repaired about 350 of the 2,100 houses left there by the French company when we reached the Isthmus. There had been some delay in getting lumber forward, which had prevented their making more rapid progress in the repair

Lumber

ing of those old houses and the construction of new ones. began to arrive more free, however, and we stopped work in other directions and took the labor employed in other directions and employed it in distributing the lumber, and every person on the Isthmus who could wield a plane or drive a nail went to work on this housing question, with the result that, I understand, we have now about 1,000 of the 2,100, or probably a few more, of those houses repaired, and we have built a great many new houses. We are about finishing the Tivoli Hotel, which is the largest hotel we have undertaken. It is located on Ancon Hill. We have built an annex to the Culebra Hotel as large as the original hotel there. We have put another story on the Washington Hotel. If you want the exact figures as to the number of houses we have constructed new, and repaired, I can get them for you from my office. I have not got them in my mind.

Senator MORGAN. If we should change the method of constructing the canal from the present governmental plan to the contract plan, can we have these houses prepared for the contractors to take their hands into?

Mr. SHONTS. Yes, sir; all the work we have done in regard to housing and making arrangements for food supply will be useful to any contractor, and I believe the fact that we have done this work would enable us to get much more satisfactory bids for the work than we could otherwise obtain.

Senator MORGAN. There is no doubt about that. Now, looking to the possible change in the system of construction, I suppose, and I wish to ask you if you concur in the opinion, that it would be proper for the Government, in every event, to own and have the control of every building on that Zone?

Mr. SHONTS. I do believe so.

Senator MORGAN. Yes.

Mr. SHONTS. I think the Government should have control of the plant necessary to take care of the men.

Senator MORGAN. So that if we let it out by contract, we would make an arrangement with the contractors either for a lease, or to take it into the contract in some form, for furnishing and keeping in repair the necessary buildings for the accommodation of their force?

Mr. SHONTS. And hold them responsible for the proper care of the plant turned over to them.

Senator MORGAN. If we should change from the present system to the contract system, we probably would not need as many employees there as we have at present, and the hotels that you have there might be quite sufficient to maintain the future force of employees of the Government who might be there in superintendence over the affairs of the canal?

Mr. SHONTS. Yes, sir; and I think that those we have built are admirably located for that purpose. For instance, no matter what method is employed in building the canal, the Government should keep entire charge of two things-the government and the sanitation of the terri

tory.

Senator MORGAN. Yes.

Mr. SHONTS. That necessitates, of course, a governor of the Zone. Senator MORGAN. And housing?

Mr. SHONTS. And the housing of the people that we do have there. The governor of the Zone should be located at Ancon, which is next to

and practically a part of Panama, except that it is up on the hill, on account of his relations with the Panaman Republic, as a matter of convenience. The most important hotel we have built, which we are just finishing, is the Tivoli, on Ancon Hill, and, primarily, the purpose of that hotel is to give a place for the clerks and heads of the Government and sanitary departments. So that would be admirably located.

Senator MORGAN. When these hotels that you are already constructing and have constructed are completed you will have sufficient hotel accommodations for the present necessities of the canal?

Mr. SHONTS. Yes, sir.

Senator MORGAN. Concerning the cabins or shanties, whichever you please to call them, for the accommodation of the laborers, are they built in nests, or in connection, or are they single cabins?

Mr. SHONTS. They are largely single cabins.

Senator MORGAN. About what is the cost of one of those cabins for a laborer?

Mr. SHONTS. Per laborer?

Senator MORGAN. For a laborer.

those cabins?

About what is the cost of one of

Mr. SHONTS. I will have to get that for you, Senator.
Senator MORGAN. You will have to get that?

Mr. SHONTS. I will have to get that. I can describe them to you. They are wooden buildings, set up from the ground 5 feet or more, according to the lay of the ground, so as to have ventilation below. They are not all of the same size; there is no uniform standard. We took them just as we found them. In putting men in them we follow the rule of allowing 500 cubic feet of air to each occupant of each building. That is a rule laid down by the sanitary department as being as small a quantity of air as should be given them to maintain a healthy condition. We put in sanitary cots-two rows. some cases they are three rows deep, but ordinarily only two. Senator MORGAN. One above the other?

In

Mr. SHONTS. Yes, sir; one above the other. They are not all of the same type, but they have all been adopted by some of the Government Departments, and they are all thoroughly sanitary. Then we heve smaller cottages for the families.

Senator MORGAN. Have those cots metal frames?

Mr. SHONTS. Yes, sir; they have.

Senator MORGAN. Have they wire bottoms or canvas bottoms?
Mr. SHONTS. Mr. Ross, I think, can tell about that definitely.

Mr. Ross. They have galvanized-iron frames, with canvas bottoms, so that they can turn the water on them and clean them without taking the bottoms off.

Mr. SHONTS. They did start in manufacturing these with wooden uprights, but they were condemned by the sanitary officers, so we abondoned those and went into the market and bought these metal

ones.

Senator MORGAN. What sort of roofing is there on those cabins? Mr. SHONTS. The better class of houses have tiled roofing, but in the cabins it is wood.

Mr. Ross. And galvanized corrugated iron.

Mr. SHONTS. Both.

Senator MORGAN. Are any shingles used?

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