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be permitted to contract for labor anywhere--in China, in Japan, in Spain, or in the United States-then, as I understand it, under those conditions you think it could be solved reasonably well?

Mr. STEVENS. Yes, sir; I do.

Senator GORMAN. And can not be unless those restrictions are removed?

Mr. STEVENS. No; I did not say that; but I say it would be very much easier then.

Senator GORMAN. Then you say simply that it can not be done within reasonable cost; that it would cost you 20 per cent more?

Mr. STEVENS. I say, theoretically, if we can work 20 per cent more with the same money we would be saving 20 per cent.

Senator GORMAN. Yes; but actually?

Mr. STEVENS. Actually we are making a saving, but I do not know whether it would be that much or not.

Senator GORMAN. But you would be able to get better labor if these restrictions were removed?

Mr. STEVENS. I think so; yes.

Senator GORMAN. I see it stated that you are trying to get Spaniards?

Mr. STEVENS. We are making a trial toward getting some.

Senator GORMAN. On what theory-that they are better laborers? Mr. STEVENS. Yes. I have never worked them. I am taking the reports of others.

Senator GORMAN. If this work were your own what class of men would you look for?

Mr. STEVENS. I should make an experiment with Canton Chinamen. What I mean by experiment is that I would take one or two thousand there and see that they were properly housed and fed as far as I could, although, as you know, Chinamen are obstinate; they want their own way; and I would work them for a few months and see how things resulted. I might say that I am a little disposed in favor not only of the Chinaman as a laborer, but as a man, from my contact with them on the west coast. In fact, I have a very high respect and regard for Chinese of all classes whom I have ever met.

Senator TALIAFERRO. What would be the effect of taking Chinamen in there; what would be the effect on your present labor? Mr. STEVENS. You mean in the way of a clash?

Senator TALIAFERRO. Yes.

Mr. STEVENS: I do not think there would be any.

Senator MORGAN. I think I will call the attention of the committee to a matter that came before me the other day. Mr., Harris, living 15 miles outside of Los Angeles, who has had a very great amount of work in cutting the Central Pacific Railroad to the mountains and also in connection with the Southern Pacific and one of the other railroads I think perhaps the Santa Fe-has also built a road through Guatemala, or rather from the capital of Guatemala out. He was here and saw Mr. Shonts, and he came to see me.

He says that after working Chinamen and such other forces as he could get upon these other works, when he went down to Guatemala he found the natives there and employed them to do the work and he said they were the most tractable, most reliable, and best working force he had ever seen. He brought original letters from Mr. Proctor and Leland Stanford and others not only certifying to his character

and ability, but to the amount of work he had done, and he was here for the purpose of informing the authorities as to a source of labor which he thought was entirely reliable.

Mr. STEVENS. That was in Honduras?
Senator MORGAN. No, in Guatemala.

Mr. STEVENS. I have had some papers recently in regard to Indians in Honduras, which I forwarded to my agents, and asked them to investigate, to look into the question of Guatemalian labor. I have a friend who is the chief engineer, I think, of the North Guatemalian Railroad. He wrote me two or three months ago and in his letter he touched upon the question of labor. He said that he was using the natives in his work but that they were all working under stress from the Government, in other words that they were practically slaves, that they were obliged to work. They were given a few cents a day, just enough to support life, and they were forced to work. He said: "Under these conditions you can imagine my labor is very poor, and it is all we have."

Senator MORGAN. My correspondent, to whom I referred. stated this in connection with the condition of those people. He said that he went there to take a contract, and he went out to some of the camps that were being worked by his predecessor in the work. He met some of the natives (he speaks Spanish fluently), and they wanted to know what he was doing, and he told them that he was thinking about taking a contract, and he told them he was glad to talk with them about it, because he would be glad to know how it would suit them. They replied that anything would be a relief to them, and that they hoped that he would come there, as anything would be gratifying; and he did go there and made his agreement with the laborers, and be had the benefit of the best labor which he had ever worked, and never got along more peaceably or quietly with the men who worked under him. So I take it that there is a large group of people in that part of the world who would find relief in being transferred to the Panama Canal.

Mr. STEVENS. That is worth looking up, of course.

Senator SIMMONS. You say it is out of the question, in your opinion, to do this work with American labor?

Mr. STEVENS. I do not think a supply can be gotten.

Senator SIMMONS. You do not think that is practicable or feasible? Mr. STEVENS. I do not think it is practicable to get them, and therefore the question of whether they could do it is not worth while discussing.

Senator SIMMONS. So you do not think the eight-hour law there can possibly benefit the American laborer?

Mr. STEVENS. No; except if it makes the canal cost more the American laborer will be taxed to pay for it.

Senator SIMMONS. And you do not see how the importation of Chinese there could hurt the American laborer?

Mr. STEVENS. No, sir; I do not.

Senator HOPKINS. Sometime ago you were speaking about the Pacific mail steamships making a congested condition of things there, and in that connection I would like to ask what is the coffee period there?

Mr. STEVENS. It is just about commencing. I would say you might place the commencement of it about the 1st of January-that is,

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within twenty or thirty days-and it extends, as I understand it, for about three months. In fact, within the last two days I have received notice that on the 25th they propose to have a very large consignment of coffee there for us. I think that is the first heavy

movement.

Senator MORGAN. The coffee-shipping season, you mean?

Mr. STEVENS. Yes.

Senator DRYDEN. You told Senator Gorman that your commissary was in receipt of a salary of $6,000 a year.

Mr. STEVENS. Yes.

Senator DRYDEN. But I understand he has other duties besides those of providing food?

Mr. STEVENS. Yes, sir.

Senator DRYDEN. That is only a part of what he has to do?

Mr. STEVENS. The man who runs the commissary does not get any such salary as that; this is the man who is in charge of laborers and quarters. The commissary man is employed by the railroad, and I suppose gets $200 or $250 a month.

Senator DRYDEN. I think you stated that board costs, for the employees who avail themselves of the privilege, $27.50 a month. Mr. STEVENS. Yes, sir.

Senator DRYDEN. Does that include the salaries paid?

Mr. STEVENS. It includes the cost of running the hotel.
Senator DRYDEN. But not the salaries of the commissaries?
Mr. STEVENS. No.

Senator TALIAFERRO. I do not think you understand each other. Mr. Stevens does not estimate that that costs the Government $27.50; he says the Government charges that.

Senator DRYDEN. Yes; they furnish this board for $27.50 a month.
Mr. STEVENS. Yes.

Senator DRYDEN. I do not understand whether the salaries paid for Government employees in charge of that are in addition to that

or not.

Mr. STEVENS. Only the parties who are directly in charge of running the hotel.

Senator DRYDEN. It covers that?

Mr. STEVENS. Yes, with a proportion, which I can not state accurately about now, an arbitrary percentage of the cost of the general office above them.

Senator DRYDEN. Will you explain very briefly what your system is there as to employing labor and as to buying supplies with respect to protecting the Government against fraud. What is your organization, and how are you able to be certain that the Government is not defrauded as to the number of employees employed, as to their working while on the pay roll, and also as to the purchasing of supplies? Mr. STEVENS. We have timekeepers, in addition to the foremen. who go around and look at the gangs at work and take the time of the foremen in connection with the foremen. These returns are made to the different division officials, where they are checked up; and in addition the auditor has a force of time inspectors. They are like traveling auditors. They drop into any gang at any time of day and examine it and take the time book away from the foremen and check it up. They are not detectives, because they are known and their work is open, but they are to check the other men who keep the time.

Senator DRYDEN. How often do they make those inspections?
Mr. STEVENS. They are on the work all the time.

Senator DRYDEN. And the same inspector does not certify as to the same gang?

Mr. STEVENS. No; they are traveling from one to the other-they are directly under the auditor, and not under me.

Senator DRYDEN. So, under that system there could be no fraud, except by conspiracy?

Mr. STEVENS. None, except by conspiracy among a number of men. You asked about supplies?

Senator DRYDEN. Before you come to that, about how many men does one inspector look after?

Mr. STEVENS. Well, I presume that varies; that differs with the number of men in a locality. He covers as much ground as he comfortably can; I presume he goes two or three times a day to every gang.

Senator DRYDEN. What is the system of inspection? With three or four hundred negroes of course it is impossible to identify them by their personality, and you must have some check.

Mr. STEVENS. Yes; they have a check-a metal check.

Senator DRYDEN. What method is there to prove that the same man does not answer to two or three or four numbers?

Mr. STEVENS. Well, there is the foreman and the timekeeper and the inspector; they watch them. That is the only way that I know of. We have never had a case of that kind reported.

Senator DRYDEN. When they are paid off what system have you there for checking them to insure that the same men are not paid off two or three times?

Mr. STEVENS. The foremen and the timekeepers in charge of the same gang know that the right men are paid. Regarding the purchase of supplies, of course it is under the purchasing agent; Mr. Ross maintains a force of inspectors wherever he purchases goods. His contract provides for an inspection at the works, the place where the goods or material are bought or manufactured, and subject to reinspection on the Isthmus; and then there is a secondary inspection of the goods on the Isthmus when they arrive, and any defect that has gone by here is caught up there.

Senator DRYDEN. Do you know whether goods of any kind have been bought largely in excess of the reasonable needs of the Government-that is to say, goods which the Government would not, perhaps, need for five years or so?

Mr. STEVENS. I do not know; no, sir. I have heard that stated, but I have not found any yet. Of course the material is not under

me.

Senator DRYDEN. This would not come under your personal knowledge?

Mr. STEVENS. No, sir.

Senator DRYDEN. Under whose knowledge would it come?

Mr. STEVENS. Strictly under the storekeeper on the Isthmus, the general storekeeper who reports to Mr. Ross, purchasing agent. Senator DRYDEN. He would be the proper man to testify?

Senator KITTREDGE. What plans have been made and what progress has been made in the completion of the sanitary improvements at Colon?

INVESTIGATION OF PANAMA CANAL MATTERS.

Mr. STEVENS. We have had plans adopted by the Commission which are now being put into execution, involving the possible expenditure-I think the estimate was something under $300,000— it has been called $300,000 in round numbers, but it is not that much. The sanitation of Colon is a very difficult matter. land a foot and a half to 2 feet above the surface of the sea; conseIt is situated on quently there is no chance for drainage. The plan we have adopted is, first to dig a channel through one of the very wide streets clear through the town from one side to the other, I think 10 feet wide and 4 feet deep, connecting it with the salt water on both sides, so that the rise and fall of the tide twice in twenty-four hours will sweep through there. I do not think that is an experiment, because we have some small ditches of that kind there already; the railroad company built them several years ago.

Now it is proposed to do a certain amount of filling on those streets; to first establish streets and then pave the streets, that is, give them a coating of rock, which can be obtained very near Cristobal, and then a coating of gravel over the top for the working surface, and then to concrete the gutters and carry the surface water through a tidal channel through the town, with the expectation-which I think will be realized that it will clean out this water at least twice a day. Then, in addition to that, to put in a sewerage system from house to house, and drain this house sewage into what we call a sump or sewer well and pump that out to the sea. That, in general, is the plan adopted.

I will say that there is some criticism of the length of time we have taken, while we have not done anything else; but I find that while there have been several schemes, such as filling several million yards, which are practically impossible, except in the course of a very long time, that there had been no comprehensive plan at all, and as soon as my duties would admit, after studying the matter for six weeks, I came to the conclusion that there was a remedy that could be applied quicker than any other.

But I wanted the opinion of everybody, and so I appointed a committee--one of our waterworks engineers, the engineer of the railroad company, one of my general staff, one of my division engineers, and a member of the Panamanian Government who was proposed by them, and a member of my sewer engineers, which was the committee to report on sanitation for Colon. They were directed to make their studies thoroughly and report, and they did report. I can not recall the date now; but they took about six weeks with their investigations, and after some discussion I approved their report, with this addition, that while I was morally certain that the drain through the town would take care of that water, that it was not absolute, and in case it did not we would increase our pumping capacity so that we could absolutely take care of it in that way. I recommended the plan to the Commission, and since I came up here it has been approved, and we have been authorized to go ahead.

But before I came up here I started the work of cutting this channel through the town, and they have proceeded a block or two or something like that. They are well on their way. It is a simple job to do that, and we have built a small dredge for that purpose. It will do the work and will make Colon, in my opinion, sanitary. In addition to that, as fast as the Panama Railroad would do it and the water would allow it, we are hauling carload after carload of gravel and

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