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enormous quantity of freight on the wharf at Colon, piled to the rafters. He made the statement himself, which our agents have advised me of for months.

Not only was this difficulty encountered there, but it got worse in New York. That is to say, a steamer was loading on the berth and the New York agent had engaged freight for that steamer and a rush order would come for canal material, and a certain amount of the commercial freight that was to go into the ship was cut out, and the space filled with canal material, and the ship would go forward to Colon, and we would get the ship's papers, and there would be no notice whatever of the amount of tonnage cut out of the ship in New York. We would order the freight forward, and when we would get it we would find that we did not have it all. And when we would try to make up our papers, we were short shipped. So that in one port alone I have correspondence from that government to the effect that, I think it was, 50 per cent of some 5,400 packages received in that port during a period of six months were short-shipped packages; that is to say, just half of what they had received was coming under short-shipped papers.

I think it is very evident that if a man is shipping freight and he expects to get his entire consignment-for instance, of machinery-and a part of the consignment comes stringing along in short shift papers he can not do anything with that portion of it. If he gets only a portion of his consignment, he does not know how to check his invoices, because the bills of lading and the invoices will not check up. If he is shipping a large quantity of material, like bar-iron or steel, with a common mark, and it is coming forward without any identification of the original shipment so that it can be tallied with the original bill of lading, it is absolutely impossible for him to identify the freight at destination.

Senator DRYDEN. Was it the result of this confusion that your vessels went only partially loaded?

Mr. SCHWERIN, I will come to that. The result of this confusion was the delay in sorting this freight, the difficulty of getting it across the Isthmus, on account of the rolling stock being occupied by canal material, some of it running sixty or seventy to ninety days, strung out all along the Isthmus, that when this freight reached Panama we found that it was all mixed up there again. That is to say, cars would come over with freight destined for San Jose and Guatemala, and we would open that and find that there were two or three packages of Guatemalan freight and the rest of that was mixed freight for ports all along the coast. In some cases we found where the freight was destined for South American ports not belonging to our line at all. In one case they switched 7 cars on the dock to us for La Libertad freight. Out of the 7 cars we got only 14 packages of La Libertad freight. That means that those cars had to be switched out again, to try to find the proper cars. Meanwhile, our day days at Panama were going by.

In this schedule, giving the dates of connection with the Atlantic carriers, we provide from nine to eleven lav days there for the ship to lie to unload and get out. That is ample time, not only for discharging and loading, but ample time to give us, at the terminal point, an opportunity to make up any time that might be lost in this long run of 3,500 miles, stopping at 11 or 12 ports on the way. Instead of the Panama Railroad people helping us to get the freight on the ships, our ships, during the year 1905, had one hundred and thirty-seven days, and since last June, in addition to the lay days (from nine to eleven days), were one hundred and eleven days lying idle in the port of Ancon, waiting for cargo, or waiting to be discharged, or waiting for coal, which the Panama Railroad was under contract to give us.

The round voyage between San Francisco and Panama is fifty-five days. So that, practically, we lost the entire earning capacity of two round voyages, and lost the opportunity to carry the freight for two full round voyages, through the inability and inefficiency of the operating officers of the Panama Railroad Company. And I say that because, in times gone by, the railroad officials were able to operate that properly and able to discharge there on time. These are absolute matters of record, gentlemen, which I have here, and which I shall be very glad to turn over to the committee.

I should like very much to be permitted to read a letter of one of our captains, who has been for many years running on that coast. This letter was written January 16, 1906, by Capt. W. J. Russell, commander of the Nerport. I suppose he must bave been on that coast fully thirty years. [Reading:]

“I beg to say that the principal reason for the delay in discharging and loading our ships at Ancon, Canal Zone, is the poor quality of labor employed by the Panama Railroad Company. All labor employed by the Panama Railroad Company at La Boca are contract laborers from Jamaica and Fortune Island. These negroes are under six months' contract, and in my opinion are the poorest and laziest laborers in the world. The greatest delay in the work is caused from the condition in which cars are loaded and sent over the road. For example, the stevedore on the dock will order a switch to be made at 1 p. m. with cargo for three or, perhaps, four destinations. When the car doors are opened the stevedore finds that they contain cargo for entirely different destinations to what he ordered, or perhaps just a few packages of destinations wanted will be in each car. The consequences of this will be that the entire car will have to be unloaded just to get at these few packages.

“In the meantime while this is going on, the ship's employees, perhaps 4 gangs of men, 15 to a gang, are sitting down in the ship's hold waiting for cargo. At other times, when a train of cars in such condition as I have mentioned gets on the dock, it becomes necessary to run them out and reswitch, in which case a great deal of time is lost. To the interested observer, in regard to handling cargo on the Isthmus, the chief fault seems to lie, to a great extent, in the lack of system. Everything seems to be mixed up. I was in the Central Ameri

I can service during all the busy years of the French canal, and I never saw any such congestion as prevails at present or since the United States Government took charge. The French took hold at once and equipped the road with plenty of rolling stock, and, although we had tive steamers sailing every month, there was very little delay in their being received and dispatched on schedule time. At the same time large cargoes of canal material were arriving at each side of the Isthmus and was being promptly handled, and at that time there was only one dock on the Panama side which merchandise passed over, so it shows that there must be something very radically wrong in the present management. Even the small amount of coal that we received last voyage only 200 tons--the last of it did not get alongside until the day before sailing, and we had ten days in port, which is a proof that there is

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something very slack in that department of the management of the railroad affairs.”

The Acting CHAIRMAN. If I may interrupt you here, what are the conditions to-day as compared with those that you have stated and as indicated in the letter that you have just read?

Mr. SCHWERIN. Captain Russel just came up from the Isthmus when he wrote that letter. The letter is dated January 6, 1906—this January.

The ACTING CHAIRMAN. Have you any later word regarding conditions at Panama or on the Isthmus?

Mr. SCHWERIN. Here is a cable received from the Isthmus, dated Panama, January 26, 1906:

“PANAMA, January 26, 1906. SCHWERIN, San Francisco:

“Steamships City of Para and Hounslow. Will be some delay; P. R. R. Co. can not supply coal. Part of the cargo aboard Hounslow, Corinto, Salvador. Steamship Aztec half discharged.

• PEARNE. * Memorandum: Para scheduled to sail from Ancon January 23. Aztec arrived January 22." I asked him then:

WASHINGTON, D. C., January 29, 1906. “PEARNE, Panama: “Why can not Para get coal?

* SCHWERIN." Mr. Pearne cabled me on the 29th:

“ PANAMA, January 29, 1906. “SCHWERIN, Washington:

Hounslow, 41,250. Finish discharging to-day. Have not sufficient coal. Meanwhile have not commenced loading. Will sail on 1st.

Aztec, 45,000. Only 12,000 remains. Will sail on 2d. Para. Will sail on 29th. “San Juan arrived January 24. Commence discharging January 30.

" PEARNE." Six days, and not a package touched. The ACTING CHAIRMAN. Why was that delay!

Mr. Schwerin. They were unable to handle them. I can not tell you any more. That has been the same story, right straight along.

Senator Knox. When did you get that cable?
Mr. SCHWERIN. This cable is dated Panama, January 29, 1906.

Senator Knox. What do you mean by commencing to discharge January 30? That is a surmise, is it not?

Mr. SCHWERIN (reading). “Commence discharging January 30. I suppose it is.

Senator Knox. That was only yesterday. They could hardly tell you on the 29th that they would commence discharging on the 30th.

Mr. SCHWERIN. It may be the 29th or it may be a bull in the telegram.

The Acting Chairman. You may proceed, Mr. Schwerin.

Mr. SCHWERIN. We would get our ships into San Francisco late, and we would work them day and night to get them out. Our sched


ule has a steamer departing every Saturday. We have gotten steamers in there on Tuesday and Wednesday and gotten them out on Saturday at noon in order to try to keep the schedule up.

This report here, showing the lay days of steamers on the Pacific Mail at Ancon, 1905, shows that although we have been promised hetter service right along it seems to steadily grow worse. As I said, while the first six months of the past year there were only 26 lay days, the last six months, in addition to the regular lay days, there were 111.

The ACTING CHAIRMAN. You mean the first six months beginning January 1, 1905 ?

Mr. SCHWERIN. Beginning January 1, 1905.

The Acting CHAIRMAX. And the first six months, how many lay days were there?

Mr. SCHWERIN. Twenty-six.

The ACTING CHAIRMAN. And from July 1, 1905, to January 1, 1906, how many?

Mr. SCHWERIN. Closing with the last departure, December 16, there were 111. For instance, the Acapulco, in November, laid there six days; the Aztec, in July, laid there twelve days, and in October twelve days; the Pekin, in August, twelve days, and in November eight days; the Sydney laid there for four days; the Para for nine days; the Punaina for four days; the Peru, in July, lay there twelve days, etc.

The ACTING CHAIRMAN. From what reports are you reading ?

Mr. SCHWERIN. These are statements that are made up from the commander's report of the voyage.

The Acting CHAIRMAN. Where were these boats during the delay?
Mr. SCHWERIN. They were lying in the harbor of Panama.
The ACTING CHAIRMAX. And waiting for what?
Mr. SCHWERIN. Waiting to be discharged or to get a cargo.

In reply to the question if any of our ships left Panama without cargo, I want to say that it would be a very silly. proposition for a steamship line operating out of a port to leave a port with cargo on shore, as long as they were in the business of handling cargo and they wanted a full ship, because it is a fundamental principle of any ocean carrier to get the bulk of the cargo that you can get into the ship.

The only occasion on which we would have to leave Panama without cargo would be where it was absolutely impossible for us to get it. An illustration of tbat would be this: Suppose a ship arrived in Ancon and was discharged and began to load, and she was lying there upon this loading, and a second ship, following her, arrives. Still the first ship is not loaded. Would it be proper for that ship to go to sea and leave the balance of the cargo for the succeeding ship to take, or would it be proper for the ship to remain there until her full cargo was received, delaying the discharge of the second ship? And meanwhile all along that coast-the 3,500 miles- passengers are waiting under the terms of this printed schedule for the steamer to come and take them away, mails are expected to be carried away, and people are expecting to deliver their cargo which they have received advices should arrive by a certain ship.

To carry that on you could keep your ships and each succeeding ship lying there until your entire fleet was tied up in one of the terminal ports. It is absolutely essential that the railroad company should use every possible endeavor to get the commercial freight across the Isth

mus, to load the ship and dispatch her on schedule time, and that is the only way that that congestion at the Isthmus can be relieved.

Senator Knox. Let me ask you this: Does your contract with the governments to which you carry mail and freights require you to leave on the sailing dates named in your schedule?

Mr. SCHWERIN. The Mexican Government does; yes. This schedule has to be approved by the Mexican Government, and unless the ships arrive and depart upon these dates we suffer penalties.

Senator Knox. Are there no exceptions to that rule, where you are unable to obtain a cargo or where you are detained by circumstances over which you have no control? Would not that excuse you?

Mr. SCHWERIN. We have made those excuses to the Mexican Government, but we are not advised as to what action they will take. We have used that excuse to endeavor to escape the penalties.

Senator Knox. But I understand the fact is that your engagement with those governments that control the ports north of Panama requires you to sail on the dates fixed in your schedule?

Mr. SCHWERIN. Yes, sir; is the only way that that line can be operated; the only possible way. Previous to the régime of the present operating officials, wben a ship arrived in Colon the freight was taken out of the ship and was distributed to a string of cars, and each one of those cars was marked for the destination. For instance, as the ships were discharged, the car was marked La Libertad, Acajutla, or San Jose, and as the freight came out the callers would call out the freight and it would be put right into that car.

Senator Knox. I want to ask you this additional question. Does that obligation require you, and is it your practice when the day for sailing according to your schedule arrives, to put out if you are only partially loaded, and if there is freight on the dock that you can get by remaining a day or two or three days longer? Mr. SCHWERIN. Absolutely no.

Senator Kyox. I do not understand the answer. Do you mean absolutely no--that you do not wait, or that you do wait?

Mr. SCHWERIN. We do wait. That is what causes these lay days.

Senator Knox. Then, you do not observe your contract to sail on your sailing dates?

Mr. SCHWERIN. We have thrown everything aside to assist the Panama Railroad Company in the operation of the Isthmus.

Senator Knox. That is all.

Mr. SCHWERIN. I might add here that our contract obligations with these Central American countries call for so many calls a month, and, of course, the continued interruption of the schedule there may make conditions so that we make four calls one month and two the other, where we should have had three calls each month.

The ACTING CHAIRMAN. You spoke of the carrying of the mails. Do you carry mail for the United States?

Mr. SCHWERIN. Yes, sir; we carry mails up the coast and down the coast. We carry also mails for the Central American governmentsinterport business.

The Acting CHAIRMAN. Under contract?

Mr. SCHWERIN. No, sir; except the interport business of the Central American governments.

The Acting CHAIRMAN. What compensation do you receive for that service!

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