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Senator MORGAN. Referring to this International Banking Company you have spoken of, is that the same bank that has a location in Washington ?

Mr. STEVENS. I understand it is.

Senator MORGAN. It has a bank here and that is a branch down there?

Mr. STEVENS. I think they are the same concern. I do not know which is the head, which is the bank, here or down there. It is merely an opinion; I know simply from their names. I never had anything to do with either of them except to occasionally have a draft cashed.

Senator Morgan. Do you know whether any of the employees there are paid by checks on the bank?

Mr. STEVENS. I have never known of it.
Senator MORGAN. They are all paid in money?
Mr. STEVENS. Always in money.

Senator MORGAN. So an employee of the Government is paid in
gold-the gold is counted out to him?
Mr. STEVENS. The gold is paid out to him, or the paper money; yes.
Senator MORGAN. And the same way with the silver money!

Mr. STEVENS. Yes. I have never seen any United States gold paid out there; it is all paid out in bank notes.

Senator Morgan. Which is considered the equivalent of gold?

Mr. STEVENS. Yes. I know very little of the banking business there.

Senator MORGAN. It is not Panama money?
Mr. STEVENS. Oh, no.
Senator MORGAN. Is Panama paper money in circulation ?

Mr. STEVENS. I do not know of any; I do not think there is any issue of it.

Senator Morgan. The Panama Government deals entirely in specie?

Mr. STEVENS. Yes, sir.
Senator MORGAN. It has no bank issue?
Mr. STEVENS. I do not know of any.

Senator MORGAN. Does this United States money pass current for gold throughout the Isthmus!

Mr. STEVENS. Yes, sir.

Senator GORMAN. I would like to have your estimate as to the time that it would require you to put this railroad and all the plans and the paraphernalia in condition to go to work and actually commence digging the canal-economically, I mean?

Mr. Stevens. You mean after we have provided it with equipment, etc.?

Senator GORMAN. Yes; how long a time will it require?

Mr. STEVENS. We should be able to start within two or three months, the actual work of the excavation, shortly after the arrival of this equipment, and from that on gradually increase our force until possibly a year or a year and a half from now the maximum output could be obtained, and then that ratio or rate of speed, whatever it might prove to be, would continue for several years until the area of the ground will become so small that it will gradually decrease.

Senator GORMAN. You think in six months you will be ready?
Mr. STEVENS. I think we will be ready in a less time than that.

Senator GORMAN. And that will include your buildings for laborers and other employees?

Mr. STEVENS. Yes.
Senator GORMAN. And the sanitary conditions?
Mr. STEVENS. Yes.
Senator GORMAX. The water?
Mr. STEVENS. Yes..
Senator GORMAN. And the railroad construction ?

Mr. STEVENS. Yes. You understand that a large amount of material—I can not say how many yards, but a great many—is required in the reconstructing of the road, that a great deal of that will come from the canal; in other words this material instead of going to waste will go to double trackage.

Senator GORMAN. I would like to have your statement more in detail. I notice in the report of 1904 that you have stated that thousands of yards of the material from the cut in the divide are loaded and hauled by the French equipment over these tracks, which land and dumps are improperly located and unsuited to the end in view; and following that the Secretary of War, in a report to Congress dated September 9, said that a half a million dollars had been expended by your predecessor, Mr. Wallace, in that excavation, the inference being that it was a useless experiment, and a deposit that was in the wrong place. Now, will you not please tell us something about that?

Mr. STEVENS. I can not tell you as to the amount. I can only tell you about it generally from my point of view, as I explained this morning. Veither the track nor the equipment was suitable for handling the work. Recently I gave the opinion that the dumps were improperly located because the hauls were invariably up hill and the dumps were too high, 40 or 50 feet high, and with that class of material, particularly in the rainy season, these extremely high dumps can not be kept under the tracks or, to put it the other way, the tracks can not be kept on top. Twelve or fifteen feet is about as high as you can handle a dump economically; your accidents become so prevalent after that that it is not good policy.

Senator GORMAN, Was the dirt removed, however, useful in the matter of the construction of the canal—what excavation you did ?

Mr. STEVENS. Well, not to a very great extent; not working on what we call a system looking forward to a complete plan.

Senator GORMAX. The greater part of that expenditure, then, if it was half a million, say, was practically useless, and does not count in the construction of the canal to any extent?

Mr. STEVENS. Only so many yards taken out, that is all. It is a question of judgment; I should not have done it, but it is simply one man's judgment against another's.

Senator HOPKINS. And that would have had to be taken out at some time?

Mr. STEVENS. Oh, yes.
Senator GORMAX. You do not consider it loss, then?
Mr. STEVENS. Oh, no.

Senator GORMAX. Mr. Wallace's report is that it was done at a cost very much below the estimated cost of removing it.

Mr. STEVENS. I do not know as to that. But I know what it was costing at the time I took charge of the work, and I saw it was costing a good deal more than it should cost if handled another way.

Senator GORMAN. Because that was using the old French steam shovels?

Mr. STEVENS. No, they were not using those at the time I got there, they were using new shovels; but all the other equipment was the old French equipment.

Senator GORMAN. So from that time up to now you have practically suspended the digging out of the prism of the canal and confined your work to sanitary matters, buildings, and equipment of the railroad?

Mr. STEVENS. Yes, sir; and the work of installing the shovels when the equipment is received.

Senator GORMAN. Was not that the principal work that Mr. Wallace did before you got there?

Mr. STEVENS. What is that?
Senator Gorman. Was not he engaged in the same plan precisely?

Mr. STEVENS. Well, I could not find, as far as any plan he was working to or the men working, when I got there, that there was any definite plan for putting in these tracks; that seemed to be confined to digging out the dirt regardless of whether it was being taken out in conformity to a definite plan for tracks or not. Sanitation work was going on. Building was going on slowly, owing wholly, I suppose, to the nonarrival of the material.

Senator GORMAN. You found that the material had been ordered, but not delivered?

Mr. STEVENS. Yes, sir.

Senator Gorman. Does the amount of material you ordered approximate the amount he ordered prior to your arrival ?

Mr. STEVENS. Exclusive of the equipment, no.

Senator Gorman. In summing it up in a moment, did you find the work that preceded you had advanced the construction of this canal to any extent?

Mr. STEVENS. Oh, yes; largely along sanitary lines.
Senator GORMAN. And in the ordering of material?
Mr. STEVENS. Yes.
Senator GORMAN. But in the actual work on the strip very little ?
Mr. STEVENS. In the canal prism very little.

Senator HOPKINS. Still, as I understand you, in the removal of the dirt there, that would have had to be done by you if it had not already been done?

Mr. STEVENS. I would have had to dig out a certain amount of material to prepare for my tracks. I would have taken out the same, but would not have taken it out possibly in the same place.

Senator HOPKINS. There is simply where two men might differ on judgment in detail, is it not?

Mr. STEVENS. Yes. My theory regarding any piece of work is that it is absolutely necessary, and the most important thing is to get ready-that there is nothing to gain by going ahead until you can go ahead with a fair show at it.

Senator GORMAN. Has the removal of this dirt from the wrong place added to the cost of your work—for instance, in regard to side tracks?

Mr. STEVENS. I can not say it has, Senator; no.

Senator Morgan. This canal was projected in the beginning for a sea-level canal. I suppose the opening at the top on the upper surface was wide enough to accommodate a sea-level canal; if it carried down 40 feet, for instance, I suppose that is so that it will require no trimming of the slopes above the canal?

Mr. STEVENS. That depends entirely on the width of the canal at the bottom and the slopes that are finally adopted.

Senator MORGAN. I suppose so, and therefore I want to ask you, in the event we should come to the conclusion to build a sea-level canal, what do you think is the least width that would be satisfactory in respect to the commercial necessities of the canal, the prism of the canal ?

Mr. STEVENS. Well, Senator, that is one of the details that I should like a little more time to study, but if you desire me to, of course I can give you my opinion at once.

Senator Morgan. No; I will not press it. If there should be an enlargement of the prism of the canal from 150 to 250 feet what I want to get at is whether that would involve the necessity of trimming back the slope.

Mr. STEVENS. Most emphatically.
Senator MORGAN. The whole length of the entire work?
Mr. STEVENS. Yes, sir.
Senator MORGAN. That would have to be encountered?
Mr. STEVENS. Yes, sir.

Senator Morgan. At a depth corresponding with the width of the prism?

Mr. STEVENS. Yes, sir.

Senator Morgan. Now, in trimming back the slope you would also have to include the dumps that the French had put there?

Mr. STEVENS. Parts of them are a little close; yes.

Senator MORGAN. In following the line of the canalization of the French Company along the river and across the Chagres River, I will say between Gamboa and Gatun, if the prism of the canal is increased to 150 feet, is it not necessary to remove a great deal of earth that the French have taken out and piled up there!

Mr. STEVENS. I do not think so above Gatun, or not much of it; I have never been the whole length of the canal, but I have never seen any spot where a pronounced amount would have to be removed ; at some places some will have to be removed, no doubt.

Senator Morgan. Where the work will have to be done over?
Mr. STEVENS. Yes.

Senator Morgan. Some such occurrence might happen in digging the other way, south?

Mr. STEVENS. Yes.

Senator Morgan. I want to ask you about the approach from the Caribbean Sea, whether it be a sea-lever canal or a lock canal, whether there is any advantage in having a cut made out through the Bay of Limon to the 40-foot contour (that is the contour, I believe, on both sides) to go out straight through the Bay of Limon, or by way of Colon, which, as I understand it, involves a double curve, that you leave the 40-foot contour before you get into the interior bay. What would be your judgment upon the value and uses of a canal, your choice between those two propositions; one going straight out through the Bay of Limon, and the other through Colon?

Mr. STEVENS. Well, not being a sailor, I should say that the straight channel would be a decided advantage.

Senator MORGAX. I have no doubt that you have observed that the first canal commission, what I call the Walker Commission, the Isthmian Canal Commission (I mean the one that first took up the subject and made a report, upon which we acted, and which we in fact adopted), contained a double curve in the bay at Colon, and in order to avoid the difficulties of that curve the proposition was to widen the sailing area to 500 feet, if I remember, there; so that seems to be a very serious difficulty to be overcome in giving a safe exit or a safe entrance to vessels, particularly in time of the high winds or seaway. Do you think there would be also an advantage in escaping contact with Colon. Do you think there would be any advantage to the surface of the canal to remove it, so that the canal would not be right through the city of Colon?

Mr. STEVENS. Under no project was the canal to be through the center of Colon.

Senator MORGAN. It is pretty nearly so, is it not?
Mr. STEVENS. No; it is quite ways to the west of it. I

suppose the channel at Cristobal Point must be half a mile away, or a quarter of a mile even to the outskirts of the town.

Senator MORGAN. Five hundred feet wide would not be much more than enough to cover the seaway there.

Mr. STEVENS. To get back to your first question, you asked me my opinion. It is this. I can not give the percentage, but I should say fully 98 per cent of the time, with any curve there that a ship can be navigated in perfectly still water, without any wind, is perfectly safe, but during the time of northers my opinion is that a ressel coming in straight into the mouth of that canal from the 40 or 45 foot line and then making that curve and turning almost at right angle to the northward, with the wind blowing directly behind her or astern, would have to have a pretty wide channel to make steerage way, to make the curve. That is my opinion.

Senator NlORGAN. You would therefore consider that a curve in coming in from the sea to the canal would be a danger?

Mr. STEVENS. I think it could not be as safe as a straight channel.

Senator Morgan. During your stay there have you had experience in observing a norther!

Mr. STEVENS. Only a moderate one. The day or a day or two before I left there was quite a severe wind, but not so severe that any ships could not lay up at the docks.

Senator MORGAN. Taking the reports of the Hydrographic Office (of course they are correct), I would suppose that those northers frequently become matters of great difficulty and danger to navigation of ships; it seems that they have to cast their anchors and go out to sea ?

Mr. STEVENS. They do occasionally; yes, sir.

Senator MORGAN. And many of them often say they have to cut their anchors, leaving their anchors on the bottom of the bay?

Mr. STEVENS. Yes.

Senator Morgan. That has always impressed me, I will take the liberty to say, of being a very serious objection to the Bay of Colon, through which an approach is made to the canal—the interior waterson any plan that has heretofore been projected and reported or acted upon, or it has been a very serious question with me as to whether we ought not to move the line of the canal to the westward

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