Senator ANKENY. That amount would be how much? Mr. Ross. I presume that from February 1, 1905, to February 1, 1906, it would probably run about $350,000. Now, I say, that is probably about 4 per cent of the purchases. Of that 4 per cent at least half is material that we could not buy in any other way. It is repair material for machinery that we already have down there, for steam shovels, cars, locomotives, or equipment of that kind, where we have to buy the repair parts from the people who originally made such equipment. We do not always have to do so. We can sometimes buy repair parts for such equipment from people other than those who originally furnished it. Senator ANKENY. These are what you call extras for special machinery? Mr. Ross. Yes, sir. There are, however, a great many things that have to be bought from the people from whom you originally bought the machinery; and at least half of our open purchases are made in that way, because we can not buy the material in any other way and it would be a perfect farce to advertise for bids on it. Senator TALIAFERRO. Did you say you had a statement in your pocket of the purchases from February to October? Mr. Ross. Yes, sir; I have it here, and I will give it to you [producing statement]. This is gotten up to show just what was done with each requisition, in what papers it was advertised, the number of days it was advertised, and whether or not the award was made to the lowest bidder; if it was not made to the lowest bidder, the reason for not making it to the lowest bidder; and at the end is a statement showing the materials purchased in the open market without advertising, and the reasons for so purchasing them. The CHAIRMAN. Does that statement show all the purchases made in that time? Mr. Ross. In that time; yes, sir. The CHAIRMAN. There is a good deal to that statement. Had it better go in the record? Senator TALIAFERRO. I do not think the whole of it should go in the record. Mr. Ross. That was prepared for use when we asked for the appropriation, and a copy of it was given to the Senate Committee on Appropriations. The CHAIRMAN. They probably have a copy of it there. Mr. Ross. They have a copy of it; yes, sir. The total purchases from February 1, 1905, to February 1, 1906, were about $7,600,000; and the material purchased in the open market without advertising in that time was about $350,000. You will note this statement does not cover that whole period. The CHAIRMAN. That covers all purchases of every nature-locomotives, rails, and everything? Mr. Ross. Yes, sir; it covers everything. The CHAIRMAN. And you do the buying-you buy everything? Mr. Ross. Yes, sir. When we get the requisitions in we get them out in this form. I have here a copy of each of the circulars gotten out since I have been with the Commission. At the head is shown the advertisement that we insert in the newspapers throughout the country in all the large cities-Boston, New York, Philadelphia, Mr. Ross. General purchasing officer of the Commission. The CHAIRMAN. You do all the buying for the Commission? The CHAIRMAN. Do you buy for the Panama Railway also? Mr. Ross. I am also general purchasing officer of the Panama Railroad; yes, sir. The CHAIRMAN. You are the general purchasing agent for both? Mr. Ross. Yes, sir. The CHAIRMAN. Now will you go on and state to the committee in a general way what your duties are? Mr. Ross. I might state, in the first place, the conditions as I found them when I came here. The CHAIRMAN. Yes. Mr. Ross. Major Gallagher had been purchasing agent from February 1 until June 1, 1905, when I came with the Commission. He found quite a large lot of accumulated requisitions, and had done good work in getting them advertised and in opening bids. But when I came here there were a great many bids that had been opened on which they had not had time to award the contracts, and I spent nearly all of my time from the 1st of June until I went to the Isthmus with Mr. Shonts and Mr. Stevens, on the 20th of July, in getting awards made on the bids that had been opened. By the time I left to go to the Isthmus in July we were pretty well up to date. I went to the Isthmus on the 20th of July, and while down there the material and supply division on the Isthmus was placed in my charge. That is the same as the store department on railroads. It had been under the chief engineer, but Mr. Stevens said he did not want it, and that he preferred Senator ANKENY. Mr. Ross, do you advertise for all the purchases made there? Mr. Ross. Made here? Senator ANKENY. No; for the Panama Commission, wherever they are made. Mr. Ross. Yes, sir; practically all. The requisitions, of course, are all made on the Isthmus. They come up to this office. If we have enough to warrant advertising, we always advertise. Sometimes we get in on a steamer a requisition for only thirty-five or forty or fifty dollars' worth of stuff; and in that event it would not pay to advertise. We do buy a small amount of little stuff in that way without advertising. Under the President's instructions we have authority to purchase up to $1,000 worth of material without advertising, but we practically pay no attention to that provision, because if we get in a lot of different requisitions on a steamer we get out an advertisement for all of the material called for without trying to pick out something that we could buy under that authority without advertising. Our total purchases in the open market from February 1 to October 1, as shown in a statement which was prepared for the Secretary of War, and of which I have a copy with me, were about $280,000; and I think from February 1 up to date the total purchases in the open market, without advertising, will not exceed about 4 per cent of the material purchased, and at least half of that 4 per cent is ma terial that we could not buy in any other way. Senator ANKENY. That amount would be how much? Mr. Ross. I presume that from February 1, 1905, to February 1, 1906, it would probably run about $350,000. Now, I say, that is probably about 4 per cent of the purchases. Of that 4 per cent at least half is material that we could not buy in any other way. It is repair material for machinery that we already have down there, for steam shovels, cars, locomotives, or equipment of that kind, where we have to buy the repair parts from the people who originally made such equipment. We do not always have to do so. We can sometimes buy repair parts for such equipment from people other than those who originally furnished it. Senator ANKENY. These are what you call extras for special machinery? Mr. Ross. Yes, sir. There are, however, a great many things that have to be bought from the people from whom you originally bought the machinery; and at least half of our open purchases are made in that way, because we can not buy the material in any other way and it would be a perfect farce to advertise for bids on it. Senator TALIAFERRO. Did you say you had a statement in your pocket of the purchases from February to October? Mr. Ross. Yes, sir; I have it here, and I will give it to you [producing statement]. This is gotten up to show just what was done with each requisition, in what papers it was advertised, the number of days it was advertised, and whether or not the award was made to the lowest bidder; if it was not made to the lowest bidder, the reason for not making it to the lowest bidder; and at the end is a statement showing the materials purchased in the open market without advertising, and the reasons for so purchasing them. The CHAIRMAN. Does that statement show all the purchases made in that time? Mr. Ross. In that time; yes, sir. The CHAIRMAN. There is a good deal to that statement. Had it better go in the record? Senator TALIAFERRO. I do not think the whole of it should go in the record. Mr. Ross. That was prepared for use when we asked for the appropriation, and a copy of it was given to the Senate Committee on Appropriations. The CHAIRMAN. They probably have a copy of it there. Mr. Ross. They have a copy of it; yes, sir. The total purchases from February 1, 1905, to February 1, 1906, were about $7,600,000; and the material purchased in the open market without advertising in that time was about $350,000. You will note this statement does not cover that whole period. The CHAIRMAN. That covers all purchases of every nature-locomotives, rails, and everything? Mr. Ross. Yes, sir; it covers everything. The CHAIRMAN. And you do the buying-you buy everything? Mr. Ross. Yes, sir. When we get the requisitions in we get them out in this form. I have here a copy of each of the circulars gotten out since I have been with the Commission. At the head is shown the advertisement that we insert in the newspapers throughout the country in all the large cities-Boston, New York, Philadelphia, Baltimore, Pittsburg, Cleveland, Chicago, St. Louis, Louisville, Cincinnati, Atlanta, New Orleans, San Francisco, and Portland or Tacoma, sometimes one and sometimes the other. Senator DRYDEN. Do you, in addition to that, bring the matter to the particular attention of the dealer or the manufacturer of the particular article that you are soliciting bids for? Mr. Ross. We do in the large purchases. Senator DRYDEN. By direct communication? Mr. Ross. Yes, sir. Now, this advertisement shows the articles that we are in the market for. It also shows where these circulars may be obtained. I will, show you what it says about that. After reciting that we are in the market for certain things, it contains this clause: "Blanks and full information may be obtained from this office or the offices of the assistant purchasing agents, 24 State street, New York City; custom-house, New Orleans; 36 New Montgomery street, San Francisco, Cal., and 410 Chamber of Commerce Building, Tacoma. Also from chief quartermaster, Department of the Lakes, Chicago; depot quartermaster, St. Louis; depot quartermaster, Jeffersonville, Ind.; chief quartermaster, Department of the Gulf, Atlanta, Ga., and the Commercial Club, Mobile, Ala.” Originally, when I first came here, the circulars were only being distributed through the offices of the assistant purchasing agents; there was no means of distributing them in Chicago, for instance, or St. Louis, or any of the other places just mentioned. Bidders located there had to send to Washington, or to New York, or to New Orleans for the circulars which show the quantities and descriptions of the materials wanted; so I had the matter taken up through Quartermaster-General Humphrey's office, and he issued authority for the quartermasters I mentioned to distribute our circulars for us. Senator ANKENY. Army quartermasters? Mr. Ross. Yes, sir. They distribute for us, by mail or otherwise, these circulars to anybody who applies for them in response to the advertisements. They do good work for us. The CHAIRMAN. Those bids are all sent here? Mr. Ross. They are all opened here. The CHAIRMAN. Yes; they are all mailed to this office. Mr. Ross. The idea in that is this: That when we get our requisitions in here, if we were to send some of them to New York and some to New Orleans and some to San Francisco we would be paying a great variety of prices for the same thing; while by having them all opened in Washington we get the lowest price that we can get in any of the sections of the country. We get competition from all over the country on the same thing, and get the lowest price that we can get. I will give an instance of what might happen if we were to send part of our requisitions to one place to be purchased and part to another. Senator ANKENY. Do these bids contemplate delivery on the Isthmus or in Washington? Mr. Ross. We request all bids to be based on delivery at the Isthmus, either at the Atlantic port or the Pacific port. Just to show you the advantage of having the bids opened in one place, I will state that we advertised three or four months ago for some forage, and the prices obtained on the Gulf coast, as compared with the Pacific coast, were just about one-half-a trifle more than one-half. If we had sent the requisitions out to the Pacific coast and only advertised there we would have paid nearly twice as much as we did pay by advertising all over the country and getting the lowest bid we could get. Of course that is just an instance. It might be true to the same extent about anything else, and on some other things the bids might be much lower on the Pacific coast than on the Gulf coast. But all of the bids are opened here, except that once in a while we get a cablegram from the Isthmus asking for something they wanted to go down on the next steamer, perhaps. In that event, if there is a steamer sailing from New York or New Orleans in a few days, and it is something that does not amount to much, we buy it in the open market, as I have said before. We send out and get bids from everybody we know anything about and can reach in time and we post a circular in a public place, so that anybody that wants to can see it; and a great many people make a habit of going around to the offices and looking up those things. Even in the case of these so-called emergency purchases we do that. But, as I said before, the emergency purchases do not amount to very much now. I thought it might be well to call the attention of the committee to the difference in the situation as to purchases for the Canal Commission and purchases for most of the other departments, or for railroads. There is quite a difference, for this reason: The Canal. Commission, six or eight months ago, at least, had practically no stock of anything on hand, and nearly everything they wanted they wanted badly, because they were waiting for it. They had nothing to go on until they got it. So that nearly everything we have been buying is really emergency material, although we have been advertising for it. Before I went to the Isthmus the first time we were advertising thirty days for nearly everything; but after I got down there and got to talking with the heads of the departments and others, heard what they had to say about delay in getting material and found out the necessity for it, I thought possibly we might cut down the time of advertising a little, and when I got back here I looked into the matter, and, as a rule, now we advertise about twenty days, unless it is for something on which it requires more time than that to prepare bids. The CHAIRMAN. Does twenty days give ample time for you to hear from people from one side of the country to the other? Mr. Ross. It does. We telegraph our advertisements out to the coast, as a rule, and get the circulars out there as soon as we can. It allows them, as a rule, at the extreme points out in California and Washington and Oregon, about ten days to prepare bids. The CHAIRMAN. You can reach any point that you want to in about four days, can you not? Mr. Ross. Yes; but about twenty days is as little as we ought to advertise, I think, as a rule. That is about what we have been doing ever since I got back from the Isthmus the first time, except in the case of large items, where people need more time in order to prepare their bids, and where they have to get up specifications and plans themselves; then we allow more time. Once in a while, on one or two occasions, I have not allowed as much time as bidders thought they ought to have in order to bid intelligently and I have extended the time first fixed for opening. |