Mr. SCHWERIN. The United States Government paid us last year for all the mails we handled on that coast $2,880.35. That is the total amount that we got from the United States Government. I believe that during that time the Panama Railroad got between $150,000 and $200,000 compensation from the United States Government.

The Panama Railroad Company have their obligations of the mails, which they are paid for; they have their obligations as a common carrier just as much as we have, for which they are paid; they have a service of 1,900 miles from New York to Ancon and 48 miles to La Boca, against our 3,500 miles. They have no ports of call between New York and Ancon. It is dead straight business. On some of our schedules we have 11 ports of call and on some of them we have 12 ports of call; and yet the divisions are 50 per cent to each line on the freight-that is, on the haul from New York to San Francisco on $11 freight, which is about the average, they get $5.50 and we get $5.50 and they charge us 80 cents a ton for wharfage at La Boca and 10 cents a ton for cranage, making 90 cents out of our proportion, so that with a service very much shorter than ours and very much less arduous than ours they get a greater net profit. They get coal in New York for about $3 a ton, and we pay the Panama Railroad between $7 and $8-$7.50; and it costs us $8 a ton in the ship.

We have sacrificed our interests, we have stood up under the abuse of the Central American people and the San Francisco merchants and papers, we have kept out of the papers, we have not said a word, but have taken our medicine and tried to help out under the idea and promises that the conditions would be improved very speedily, and steadily it seems to grow worse, until Mr. Bierd tells our agent there that he is a stone man or something like that and that he does not propose to be moved.

The ACTING CHAIRMAN. Who is Mr. Bierd?

Mr. SCHWERIN. The superintendent of the Panama Railroad Company, sir.

The ACTING CHAIRMAN. And who is your agent?

Mr. SCHWERIN. Mr. Pearne. Mr. Pearne tried to get satisfaction from Mr. Hunt

The ACTING CHAIRMAN. Who is Mr. Hunt?

Mr. SCHWERIN. He is the terminal agent of the Panama Railroad Company at Ancon. And he can not get any satisfaction. Then he goes to Mr. Bierd, and Mr. Bierd is displeased because he did not take it up with Mr. Hunt. Then he explains to Mr. Bierd why he is forced to take it up with him, and that is not satisfactory.

In one case, where Mr. Walker was on the Isthmus-the traffic manager of the Panama Railroad Company-our agent found out that there was a large lot of lumber coming to Panama, and they proposed to take the terminal at Panama and discharge the lumber shipping at this terminal. He went to Mr. Walker and explained that the Aztec and the City of Peking, ships that aggregate about 8,500 tons of space, were to be there about the same time, when they were cleaning the Isthmus. And Mr. Walker and Mr. Bierd and Mr. Hunt all agreed that these two ships should have the right of way, to get the stuff away from the Isthmus. They were making strenuous efforts to clean up the Isthmus, and we were cooperating with them. That was the old accumulation that was down there. When the lumber ship appeared on the scene she was taken to the dock, and we were left in the bay. Mr.

Pearne protested, but could get no satisfaction, and he finally went to Mr. Stevens. Mr. Stevens looked into the thing, and as Mr. Stevens is a pretty cool, keen business man he gave orders that the ships should have the dock, and so the ships did get the dock; and while it is true that they were loaded and discharged they were there an interminable number of days.

Now, that we can not get our cargo out is bad enough, but when the Panama Railroad people themselves get their own tonnage there and can not get it out, and they will not help us to get ours out at that time, there is something queer in the operation.

I have here a statement of these lumber ships which bothered us in discharge at Panama, covering a period of arrival at Ancon from August 1 to November 30.

The Como arrived there on September 7 and she sailed October 24. She had 4,250,890 feet of lumber on board. She had nineteen days. demurrage, at $265 a day, or $5,035.

The ACTING CHAIRMAN. Do I understand that that was the ship in which Government lumber was transported?

Mr. SCHWERIN. Yes, sir; it was delivered at Ancon under contract, and we were trying to get our ships handled and discharged at that time, when this ship was in there, and the Government paid that ship $5,035.

The ACTING CHAIRMAN. Who paid that sum?

Mr. SCHWERIN. The United States Government must have paid it. I consider the Panama

Senator KNOX. The railroad paid it?

Mr. SCHWERIN. I consider, as a citizen of the United States, that the Government is responsible for all the conduct of affairs so far as the Panama Railroad is concerned

Senator KNOx. Without reference to your view of it, you mean that the railroad paid that, do you not?

Mr. SCHWERIN. No, sir; I understand that that was contracted under bids to the Isthmian Canal Commission.

Senator KNOX. Who paid the demurrage?

Mr. SCHWERIN. Whoever contracted for it, whether it was the railroad or the Isthmian Commission-one or the other. If the Canal Commission contracted for it they paid the demurrage. If the contract was in the name of the railroad they paid it.

The ACTING CHAIRMAN. Do you know that the demurrage was paid? Mr. SCHWERIN. I know it was agreed to be paid. I doubt very much whether the money has been paid yet, because I have heard that lumber delivered last summer was not paid for in December.

The Wyneric had 3,267,548 feet of lumber. She had twenty-four
days demurrage, and the Commission allowed $261 a day, or $4,959.
The Henley had thirteen days demurrage at $168, or a total of $2,184.
The Elleric had twenty-three days demurrage at $185, or $4,255. The
Chiswick had eight days demurrage at $165, making $1,320.
The ACTING CHAIRMAN. What is the aggregate amount?

Mr. SCHWERIN. Here it is: Total demurrage, $18,617.
Senator DRYDEN. What period did that cover?

Mr. SCHWERIN. The first ship arrived in Ancon August 1, and the last ship November 30.

The ACTING CHAIRMAN. How much lumber was in the cargoes? Have you any means of telling us that?

Mr. SCHWERIN. The totals are here, if they were totaled up, sir. I can have them totaled up, as my secretary is here, if you care to have it done.

The ACTING CHAIRMAN. How much in each ship?

Mr. SCHWERIN. That is all here; ves.

The ACTING CHAIRMAN. I should like to hear that.

Mr. SCHWERIN. It is as follows: The Elleric, 215,536 feet of creosoted lumber, 1,170,250 feet of rough lumber, 921,621 feet of piles, making a total of 2,307,407 feet; the Como, 4.250,890 feet of dressed lumber; the Wyneric, 3,075,626 feet of rough lumber, 191,922 feet of creosoted lumber, making a total of 3,267,548 feet; the Henley, 2,716,000 feet of dressed lumber; the Elleric, 2,454,000 feet of rough lumber; the Chiswick-I do not know how much she had; the E. B. Jackson, 893,087 feet of rough lumber; the Elwell, 535,879 feet of redwood, 593,681 feet of Oregon, making a total of 1,129,560 feet; the Pass of Melfort, 1,982,512 feet of rough lumber; the General Fairchild, 972,373 feet of rough lumber. There was also 2,000,000 feet delivered by the Kosmos Line in the early part of 1905. That is before this freight got there. The ACTING CHAIRMAN. Before I forget it, I would like to ask you about the contract with the Panama Railway Company which your company has for the the supply of coal.

Mr. SCHWERIN. The Panama Railway Company contracted to supply us with coal at Ancon as we require it.

The ACTING CHAIRMAN. When was that contract made?

Mr. SCHWERIN. We began to buy coal from them shortly after we made the last contract, the last traffic agreement with them.

The ACTING CHAIRMAN. And for what term was the contract ! Mr. SCHWERIN. I do not think there was any particular term stated. It could be canceled under reasonable notice to either side.

The ACTING CHAIRMAN. Is that a binding obligation on the part of the railway company and your company until it is terminated?" Mr. SCHWERIN. Yes, sir.

The ACTING CHAIRMAN. In accordance with its terms?

Mr. SCHWERIN. Yes, sir. They obligated themselves to always have the coal on hand and furnish it promptly to our vessels.

The ACTING CHAIRMAN. In what manner may that contract be terminated?

Mr. SCHWERIN. The Panama Railroad could terminate that contract by serving notice on us that after a certain date they would expect us to supply our own coal; and we would have to import Australian coal. The ACTING CHAIRMAN. Has any notice of that character been served?

Mr. SCHWERIN. No, sir.

The ACTING CHAIRMAN. How long have you been troubled on account of the failure of the railway company to supply you with coal in accordance with the contract you mention?

Mr. SCHWERIN. Ever since this congestion of freight on the Isthmus the handling of material across the Isthmus has been slower and slower. Our agent serves notice on Mr. Hunt as to the amount of coal that he wants and when he wants it, and he has had occasion to complain that he can not get his ships away because he can not get the coal in the ships for them to sail with. One ship, the Newport, had to lie there. a whole day after she was loaded because she did not have coal on

board. Mr. Hunt's excuse is that he has to take it up to higher quarters and then can not get the coal over, and that he has done all that he could do. That is one of the cases again where, when Mr. Pearne complains to the superintendent, he is referred back to the agent.

The ACTING CHAIRMAN. The statement was made by Mr. Stevens, perhaps, or by some witness before the committee, that your ships sailed away from Panama leaving quantities of freight in the warehouse at La Boca that ought to have gone upon the ships so sailing.

Mr. SCHWERIN. I sent a letter on to our attorney here, Mr. Chambers, requesting him to lay before Mr. Shonts a complaint of the Central American people, and ask if he could not find some relief for us, so that our ships could get proper treatment at Panama. And Mr. Chambers received a letter from Mr. Shonts, which he forwarded to me, in which Mr. Shonts stated that the. congestion on the Isthmus was cleared up. That was about the last of November, and we had no intimation that there was any further difficulty on the Isthmus until I received cable advices, one from Mr. Bierd at the Isthmus, and a telegram from Mr. Shonts, and a telegram from Mr. Walker, to the effect that there was an enormous quantity of freight at the Isthmus, and asking that help be furnished to get it out. I immediately took steps to accommodate them on that.

We having two large freighters on the coast, I sent instructions down. to Central America to hustle the Aztec down to Panama, and an arrangement was made to get the vessels down there just as quick as we could; and as a matter of fact the Aztec did arrive there, I believe, on the 22d, and the Hounslow on the 19th. These are the vessels we are talking about that came in with coffee to take the freight out. As a matter of fact, the question of 5,000 or 6,000 tons of freight on the Isthmus. is a mere bagatelle, anyway. We have had, in connection with our transport steamers, as high as 50,000 or 60,000 tons of freight at the terminus in the railroad yard in San Francisco, and we would take it up in twelve or fourteen days and think nothing of it. The steamers were coming to get the freight while the railroad was accumulating the freight ready to meet the steamer. If we had to let the steamer come in empty and guess where we would get the freight the demurrage on the ships would eat up the profits.

You could not run a steamship line on any such basis as that. The. fact claimed that on all occasions we should have a steamer ready to take the freight that happens to be on the Isthmus is unimportant, because one steamer might be at Ancon when there was nothing coming in at the Atlantic port; then there might be a Hamburg-American packet steamer, a Royal Mail, a La Veloce, and a Leyland Line steamer all come tumbling in with a mass of freight that would tax the capacity of any steamship organization to have steamers waiting there (Ancon) while any such congestion of freight might accidentally develop. As a common carrier, it is proper that the railroad company should have had facilities there to handle these conditions and to assort the freight and store the freight for the steamship company to take it away. is also essential for the steamship company, when a sudden congestion of freight occurs that will delay the tonnage, to attempt to provide extra tonnage to assist the steamers that are regularly scheduled to sail in taking that freight away. We have always done that.

The ACTING CHAIRMAN. Let me ask you. You state that it is proper or essential that the railroad company should do this. Is it its duty?

Mr. SCHWERIN. It is its duty. Why should it not be? It gets the largest revenues of anybody that operates with the Isthmus, and under its obligations as a common carrier, in return for that revenue, it is due to the people whose freight it takes and to whom it issues bills of lading, or to its cocarriers from whom it accepts bills of lading, to maintain its proper obligations.

The ACTING CHAIRMAN. What I am trying to ascertain is whether it is your duty-that is, the duty of your company or the duty of the railway company-to take care of the freight conditions you have described.

Mr. SCHWERIN. Well, all my experience in connection with steamship connection and rail connection is that the railway company is expected to store their freight and to complete a bill of lading before the steamship company accepts it.

The ACTING CHAIRMAN. Then it is the duty of the railroad?

Mr. SCHWERIN. Yes, sir; it is the duty of the railroad to give it to the ship in that condition, absolutely. Even though we had only one port of call, and that was San Francisco, it would be the obligation of the railroad company there, as is customary all over the world, to complete shipments according to the accountable receipts of that ship and deliver that freight to us under those actual conditions.

The ACTING CHAIRMAN. Do all of your ships plying between Panama and San Francisco stop at the same ports along the coast?

Mr. SCHWERIN. No, sir; they do not. The schedule provides that certain ships shall stop at certain ports. at certain ports. It would be absolutely impossible for all our ships to stop at all the ports. It was the desire of the Panama Railroad people, when we were operating for commercial business alone, as well as of ourselves, not to exceed thirty-five days between New York and San Francisco in the competition for cargo. You can understand that if you are too long on the route, either east bound or west bound, it is a detriment to your line.

We were just as keen competitors for what business we could get by that route as the Cape Horn or any trans-Atlantic route. If we lengthened our time of passage out to forty-five or fifty days it meant that shippers could afford to send their freight around the Horn and still get it with equal dispatch as if it had been sent by our line. The result was that we tried to keep our passage always within thirty-six days, and that is the schedule. If we were to stop at every one of the ports we could not possibly perform the schedule. At some of the ports we would go there for a ton of freight, or a minimum shipment of $5 bill of lading. A peculiar illustration of that is that the Mexican consul at Panama required $25 gold for the signing of a Mexican manifest. We got $2 a ton on freight to the Mexican port, and it would take 12 tons to make up the cost of signing that manifest, outside of the cost of stevedoring and handling between Ancon and that Mexican port.

The trouble is, in my opinion, that Mr. Shonts is entirely too busy to bother with this condition. Mr. Stevens is entirely too busy to bother with this condition, and Mr. Bierd, the superintendent of the railroad company, has got all he can swing in trying to handle the canal material, and the subordinate officials are left hanging in the air. Senator DRYDEN. Has there been a general change of the management of the road? I do not mean the superiors, the Commission, etc., but the practical operators of the road.

Mr. SCHWERIN. Well, Mr. Prescott went out he was the superin