work ten hours and give them no more than we are now paying them for eight?

Mr. SHONTS. Yes; at least, that is my opinion.

Senator MORGAN. Have you ever considered the question of establishing a savings bank there on the Zone for these people to put their money in and get a little interest on it?

Mr. SHONTS. No; we have not. That might be an incentive to them to work and get some money ahead.

Senator MORGAN. It is everywhere else; I do not know whether it would be there or not.

Senator SIMMONS. Did you ever hear of many of that race in this country depositing in savings banks? They do not do it in my country. Senator HOPKINS. They own over three hundred millions of property.

Senator SIMMONS. Oh, they own property; they accumulate, but they do not patronize banks, as a rule. They have never gotten into the habit of patronizing savings banks or any other kind of banks. Mr. SHONTS. That might be a very good suggestion, Senator. have not considered it, though.

We

Senator MORGAN. The negro woman in the South, the mother of the family, acts as the savings bank for different families. They put the money away in stockings and match boxes and the like of that and hide it.

Mr. SHONTS. If these laborers would work there is no reason why they should not accomplish a fair day's results. But the trouble there is just the same trouble that you gentlemen in the Southern States know about. They only seem to require a certain amount of money and when they get that they do not work. So that if we have 100 men on a roll, Mr. Stevens says that very frequently we will not get over 60 per cent of those men at work all the time. Others say as high as 70, but if we have a certain piece of work that requires a certain number of men we have to increase that number about 30 to 40 per cent in order to keep the proper number of men at work there all the time.

Senator SIMMONS. Now, Mr. Shonts, our eight-hour law obtains on the Isthmus. Do our contract laws obtain there, too?

Mr. SHONTS. I understand not, Senator.

Senator SIMMONS. Does the Chinese-exclusion law obtain there?
Mr. SHONTS. I understand not.

Senator SIMMONS. You understand they do not?
Mr. SHONTS. I understand they do not; no, sir.

Senator MORGAN. We ought to make that very clear by an act of Congress.

Mr. SHONTS. But there is a question about it. We would have gotten some proposals for Chinese labor, but in order to get it in shape for the Attorney-General to approve

Senator SIMMONS. I suppose-I do not know-that the Government might possibly disregard the contract laws, or perhaps they do not apply to the Government. The Government might disregard the Chinese exclusion act over there; it might not apply to the Government but it would apply to a private contractor. Both the contract laws and the Chinese-exclusion law would apply to a private contractor if you were to let this work out by contract, would they not? Mr. SHONTS. Well, that is a legal question.

Senator SIMMONS.

Mr. SHONTS. No.

You have not considered that?

Senator SIMMONS. Yes; it is a legal question. Now, just one other question and I will be through with you, Mr. Shonts. Practically all the houses occupied by these men, both on the gold and silver rolls, are provided by the Government?

Mr. SHONTS. Yes.

Senator SIMMONS. Some part of these are the old houses that the French left there?

Mr. SHONTS. A great many of them, for the common labor; yes; and some of the others, too, for that matter.

Senator SIMMONS. A great many of those houses that the French left there are dilapidated and out of repair, and we are not now trying to repair them?

Mr. SHONTS. Oh, yes; we are repairing them right along.

Senator SIMMONS. All of them?

Mr. SHONTS. Not all of them. The building department has a very practical housebuilder in charge.

Senator SIMMONS. Yes.

Mr. SHONTS. And he makes an examination of all these houses, and makes an actual estimate, and recommends to the chief engineer certain houses as being worth while to repair.

Senator SIMMONS. Are not some of those old French houses badly located with reference to sanitation? Are they not in swamps and bogs?

Mr. SHONTS. Oh, of course, there are some of them that we are not, for various reasons, rebuilding.

Senator SIMMONS. You are not rebuilding any that are in these unsanitary places?

Mr. SHONTS. On, no; not unless we can make the sanitary conditions healthful, by drainage, etc.

Senator SIMMONS. You are only repairing those that are in locations which you regard as relatively healthy?

Mr. SHONTS. Yes, sir.

Senator SIMMONS. Now, your new houses that you are building— you are building those all along the line?

Mr. SHONTS. All over the Isthmus; yes, sir.

Senator SIMMONS. The canal, starting at the Pacific shore, follows, until you get to Gamboa, the valley of the Chagres, does it not? Mr. SHONTS. Yes, sir.

Senator SIMMONS. How many villages have you between Colon and Gamboa?

Mr. SHONTS. Oh, there are a great many. They are very close. I think there are twenty-seven stops for our trains in going across that 47 miles.

Senator SIMMONS. Are those generally on the higher lands?

Mr. SHONTS. A good many of them are some of them. They are, of course, right beside the railroad.

Senator SIMMONS. How is it as to your camps and your quarters? Mr. SHONTS. We are locating our new quarters along the canal in the most healthful places we can select.

Senator SIMMONS. Now, is not the valley of the Chagres full of swamps or marshes of old water?

Mr. SHONTS. There are a lot of them, and those are what we are draining.

Senator SIMMONS. You are draining them?

Mr. SHONTS. Yes; around every labor camp.

Senator MORGAN. There is not much of that below Matachin, is there?

Mr. SHONTS. Not so much.

Senator SIMMONS. They are easily drained. You can easily drain them into the Chagres, can you not?

Mr. SHONTS. Yes; we are getting along well without any great difficulty in draining those places.

Senator SIMMONS. As to those marshes around Colon, where it is said that the conditions are very unhealthy, and the houses are built right in the marshes with water all around them: Those houses are not occupied at all by our laborers, are they?

Mr. SHONTS. În Colon proper there is a very small number of our laborers. Mr. Stevens said that, according to the last reports he had, it was a town of 8,000 people. They told me when I was there that there were about six or seven thousand people there. I do not suppose

that out of that six or seven or eight thousand there are over one or two or, possibly, three hundred of our employees. There are a lot of fellows coming off the work that have been discharged or quit, and they drift in there. There is a sort of a floating population of that kind.

Senator SIMMONS. There is no doubt, notwithstanding all that you have done in the way of sanitation, that a good part of the city of Colon is still in a very unsanitary condition, is there?

Mr. SHONTS. Yes; although, notwithstanding the conditions, the statistics are much more favorable than at Panama.

Senator SIMMONS. I understand that that is true.

Mr. SHONTS. It is very flat; of course it is on an island, and the island is probably not over a foot and a half or two feet above the level of the sea. Therefore it is very difficult to put in a system of drainage. I think Mr. Stevens probably told you all that we have done.

Senator HOPKINS. Yes; he did.

Senator SIMMONS. Yes; I do not want to go into that. What I was going to ask you, what I was leading up to, is whether it is not entirely practicable to fill up the swamps around there, to fill and drain them, just as we have the Potomac flats here?

Mr. SHONTS. Do you mean back of Colon?

Senator SIMMONS. Yes.

Mr. SHONTS. Why, it is practicable, but it would take an enormous amount of material and it would cost an enormous amount of money. They are so extended, and we would have to haul all the material from the cut there, as being the most available supply, that it would cost an enormous amount to go into that feature of the work.

Senator MORGAN. You never expect to do it?

Mr. SHONTS. No. The solution which the engineers have figured out, and which we think will make it reasonably healthy, consists in flooding the city twice each way every day with sea water from the main channel, and draining all the surplus water from the graded streets into it, and then having a pumping station to carry the sewage out to sea. We think that will make it reasonably healthy, considering the

fact that in its present condition the statistics show better health con ditions than you would think simply from looking at it.

Senator MORGAN. As I understand, both the reports that will be submitted to us very soon provide for getting out into the Bay of Limon by a direct cut, leaving Colon 5 miles off to the side.

Mr. SHONTS. Five miles off to the side. We took that into consideration in determining on our plan for sanatizing it, so as not to put any more money into it than would be necessary to make it reasonably healthy during the time that the canal was being constructed, if this change of location was adopted.

Senator MORGAN. The difference in the health rate between Colon and Panama is a very remarkable thing, is it not?

Mr. SHONTS. Yes. To look at the two places you would think that Colon would be a much unhealthier place; but it is not.

Senator MORGAN. Have you ever considered this proposition-that Colon is healthier than Panama, because it is surrounded by sea water and Panama is surrounded by mud, whenever the tide goes out?

Mr. SHONTS. The tide goes out, leaving the mud there.

Senator MORGAN. When the tide goes out it leaves a mile or two or three miles of mud exposed to the hot sun, and all the vegetation that is swept in from the Pacific Ocean-sometimes rotten fish, shell-fish, and everything of that kind is exposed there, and that produces a malaria there which is not produced in Colon, because it is surrounded by sea water.

(The committee thereupon went into executive session, at the close of which an adjournment was taken until to-morrow, Wednesday, January 31, 1906, at 2.30 o'clock p. m.

ISTHMIAN CANAL.

COMMITTEE ON INTEROCEANIC CANALS,

UNITED STATES SENATE, Washington, D. C., January 31, 1906.

The committee met at 2.30 o'clock, p. m., in executive session. Present: Senators Millard (chairman), Kittredge, Dryden, Knox, Ankeny, and Morgan.

At the conclusion of the executive session Mr. R. P. Schwerin appeared before the committee and was duly sworn.

The chairman being unable to remain for the session, Senator Kit tredge took the chair as acting chairman.

TESTIMONY OF R. P. SCHWERIN, ESQ., VICE-PRESIDENT AND GENERAL MANAGER OF THE PACIFIC MAIL STEAMSHIP COMPANY.

The ACTING CHAIRMAN. State your name.

Mr. SCHWERIN. R. P. Schwerin.

The ACTING CHAIRMAN. Where do you live?
Mr. SCHWERIN. San Francisco.

The ACTING CHAIRMAN. What is your business?
Mr. SCHWERIN. Steamship operation.

The ACTING CHAIRMAN. How long have you been engaged in that business, and with what company or companies?

Mr. SCHWERIN. I have been vice-president and general manager of the Pacific Mail Steamship Company since 1893; I have been president of the Occidental and Oriental Steamship Company for six years; I have been vice-president and general manager of the San Francisco and Portland Steamship Company for more than a year, and vice-president and general manager of the Portland and Asiatic Steamship Company for a little more than a year.

The ACTING CHAIRMAN. How many years have you had experience in steamship business?

Mr. SCHWERIN. Since 1879.

The ACTING CHAIRMAN. I call your attention to a statement made by Mr. Secretary Taft on the 11th day of January, 1906, and read it

to you:

Now, the Pacific Mail Steamship Company is running even worse steamers than it ran before between Panama and San Francisco. The ports where it seems to make its money are the ports in Central America and Mexico, where it has agents who are really the factors for the coffee plantations and for the other products that are raised in those countries. These agents act as bankers for the planters and advance