II.-Qualifications of bidders.

1. Any association of American contractors in whatever form organized, legally competent to contract, and having an available capital over all debts and liabilities except those reasonably assumed to furnish the bonds hereafter required to be given, of five million ($5,000,000) dollars, is qualified to submit proposals.

2. Each proposal must be accompanied by a certified check on or certificate of deposit in a bank or trust company of the United States acceptable to the Isthmian Canal Commission, and made payable to the order of the chairman thereof, or by bond, in good security, in form attached, for the amount of two hundred thousand ($200,000) dollars. Such checks or certificates may be held, deposited, or collected by the Commission in its discretion. The same, or their proceeds, will be returned to unsuccessful bidders upon the rejection of their bids, and to the successful bidder upon the formal execution of a contract with the Commission in the form hereto annexed, secured by bond with approved security in the sum of two million ($2,000,000) dollars, for the faithful performance thereof. Should the successful bidder fail to enter into such contract within fifteen days after the acceptance of his bid, such check, certificate of deposit, or the proceeds thereof, shall be forfeited, or the bond substituted therefor shall become forthwith payable, as liquidated damages for said failure.

III.-Bonds.

1. The bidder shall submit with his proposal the names of the surety or sureties whom he proposes to give upon the bond to secure the performance of his contract, accompanied by a statement from them that, should the award be made to the said bidder, they will execute the bond for the performance of the contract in the form hereto annexed. Among the conditions contained in said bond shall be a provision that the surety shall not be discharged by reason of any failure of the Commission to give the contractor or the surety any notice provided for under the proposed contract; a provision that the surety shall not be released by reason of any change in the terms of the said contract, but that any such change shall only be a ground for reducing the liability of the surety under the contract to the extent to which the surety can show that the damages for which it is answerable have been enhanced thereby; and a provision that, in any suit on the bond, any award or assessment of damages by the Chief Engineer shall have the same effect against the surety as against the contractor.

2. If for any cause or at any time the surety or sureties given by the contractor should be deemed insufficient by the Commission, sureties satisfactory to the Commission shall be substituted within thirty days after notice to that effect by the chairman of the Commission.

IV.-General directions to bidders.

The Commission in selecting the bidder to whom it will award the contract hereunder, will exercise its discretion for the purpose of securing a contractor who shall be capable in its judgment to properly and efficiently fulfill the conditions and requirements of the proposed contract. To aid the Commission in the selection of such contractor, each bidder must fully state what organization, facilities and experience he commands for undertaking the work, and with what organizations and credit or means of credit he will carry out such contract. The names and addresses of all persons interested with the bidder in his proposal shall be submitted with his proposal. If partnerships are interested, the names and addresses of the firm members shall be given. If corporations are interested, a certificate showing the place of organization of the corporation, the amount of capital stock paid in, the excess of its assets over all liabilities and the names and addresses of its officers and directors shall be furnished. The proposal shall also state that it is made without connection with any other bidder; that it is in all respects fair and free from collusion, and that no Member of Congress, official, or employee of the Government of the United States, of the Canal Zone, or of the Isthmian Canal Commission is interested therein; and it must also be sworn to in the form annexed before a notary public or other officer authorized to administer oaths.

V.-Information furnished by Commission.

Plans and specifications, in so far as they have been adopted, will be supplied prospective bidders upon demand, but must be regarded as a general guide only and not as conclusively binding upon the Commission. The Commission will also afford the freest opportunities, both in the United States and on the Isthmus, for the investiga

tion of the Commission's working force and the terms under which each member thereof is employed, for the inspection of all contracts entered into or obligations assumed by the Commission, and for the examination of the state of the work and the conditions upon which it may be expected to be carried on.

VI.-Rejection of bids.

The Commission reserves the right to reject any bid. In case none of the bids is satisfactory the Commission will reject all and either throw open the proposals to foreign competition or proceed with the work without contract.

T. P. SHONTS, Chairman.

PROPOSAL.

The ISTHMIAN CANAL COMMISSION,

Washington, D. C.

SIRS: hereby propose to complete the construction of a ship canal upon the Isthmus of Panama, between the Caribbean Sea and the Pacific Ocean, subject to all the conditions and requirements contained in the circular invitation of the Isthmian Canal Commission, as reissued December 15, 1906, and the terms and conditions contained in the form of contract thereto annexed, which are made a part of this proposal, for - per centum upon the estimated cost of the construction to be fixed as in said contract provided; and agree that if this proposal should be accepted, will, within fifteen (15) days thereafter, enter into a contract for the completion of the said canal secured by bond as in the forms annexed.

The following representations are made in compliance with the requirements of your invitation for proposals, and are warranted to be correct:

(1) Names and addresses of all persons interested in this proposal.

[If partnerships are interested, give the names and addresses of the firm members; if corporations are interested, give the names and addresses of the officers and directors.]

(2) Financial standing, credits, and means of credit of individuals, partnerships, and corporations interested in this proposal.

[If a corporation is interested, a copy of the articles of association should be attached, together with a certificate showing the amount of capital stock paid in and the excess of assets over all liabilities. If a partnership is interested, a certificate should be attached showing the capital of the partnership and the excess of its assets over all liabilities. Similar detailed information should also be furnished as to individuals interested in the bid.]

(3) The facilities for prosecuting work commanded by individuals, firms, or partnerships interested in this proposal and their past experience in carrying out substantial construction contracts.

This proposal is made without connection with any other bidder, is in all respects fair and free from collusion, and no Member of Congress, official or employee of the Government of the United States, of the Canal Zone, or of the Isthmian Canal Commission is interested herein.

This day, before me, a notary public for

appeared

to

me personally known, and known by me to be the individual whose signature is annexed to the foregoing proposal, and said that the statements therein contained are Witness my hand and seal this

true.

day of

1907.

(When surety company is surety.)

BOND ON PROPOSALS.

N. P.

as principal-, and

Know all men by these presents, That we (name of surety company) a corporation existing under the laws of the State of as surety, are held and firmly bound unto the United States of America,

in the sum of two hundred thousand dollars ($200,000), for which payment, well and truly to be made, we bind ourselves, our heirs, executors, administrators, and successors, jointly and severally, firmly by these presents.

CONDITIONS.

The conditions of the above obligation are such, that any award made by the Isthmian Canal Commission to the above-bounden principal, under a public invitation for completing the construction of a ship canal upon the Isthmus of Panama, shall be accepted by said principal forthwith, and the said principal shall enter into a contract for the completion of the construction of said canal, and give bond with good and sufficient sureties, to be approved by the Commission, for the faithful performance thereof in the forms annexed to said invitation. And the undersigned bind themselves, their heirs, executors, administrators, and successors, in case the said principal shalĺ fail to enter into such contract and furnish such bond within fifteen (15) days after such award, to pay the said Isthmian Canal Commission for and on behalf of the United States of America two hundred thousand ($200,000) dollars as liquidated damages for such failure.

In witness whereof, the principal hereto has caused the same to be executed by its proper officer thereto duly authorized under a of its a dated the day of 190-, and the surety hereto has caused the same to be executed by its proper officer thereto duly authorized under a dated the Executed in triplicate this Attest:

[SEAL.]

[SEAL.]

of its a

day of

190-.

day of

190-.

By

as its

(Principal.)

By as its

(Surety.)

a Board of Directors or other governing body of the principal. A copy of the by-law or of the record of proceedings of the governing body of the corporation, showing the authority of the officer or officers executing the bond for the principal, must accompany or be attached to the bond-the same to be certified by the custodian of such records under the corporate seal, to be a true copy. If the authority was given by resolution, enough of the records will be copied along with the resolution to show that it was adopted, and the entire matter copied (not simply the resolution) will be certified to be a true copy. If the authority is a by-law, the wording of the executing clause will be altered accordingly.

b President or other officer authorized to sign for the principal. A copy of the record of the selection of the officer or officers executing the bond for the principal, certified by the custodian of such records, under the corporate seal, to be a true copy, must accompany or be attached to the bond, unless the resolution authorizing its execution gives the names of the officer or officers, in which case no other evidence of their official character is required.

FORM OF CONTRACT.

An agreement for the construction of a lock-level ship canal upon the Isthmus of Panama between deep water in the Caribbean Sea and deep water in the Pacific Ocean, entered into this - day of 1907, between the United States of America by and through the Isthmian Canal Commission, hereinafter called the Commission, and the accepted bidder, under a public invitation for proposals to complete the construction of the said canal, hereinafter called the Contractor.

ARTICLE I.-Work to be done by the Contractor.

The work to be done by the contractor shall be construction work proper, and shall comprise the following items and all work of actual construction necessarily connected therewith:

1. Dredging, clearing, and excavating canal from the locks at either end of the canal to deep water.

2. Construction of the proposed dam at Gatun and of the dam or dams at or near the southern or Pacific end of the canal.

3. Construction of all locks and regulating works at either end of the canal and wherever located.

4. Dredging, clearing, and excavating canal from the dams at either end to the Culebra Cut.

5. Excavation and completion of the Culebra Cut and revetments and the approaches thereto.

6. Removal and reconstruction of the Panama Railroad upon lines of relocation to be fixed by chief engineer of the Commission.

7. Removal and transportation of all spoil of whatsoever character, whether by land or water, to such points or places, and the disposition thereof in such manner, as may be designated by the said chief engineer.

8. The quarrying, transportation, and dressing of all stone required for masonry work, the manufacture and transportation on the Isthmus of concrete, the transportation and preparation on the Isthmus of timber, or other materials, except finished metallic parts, used in the proper execution of the above work and constituting a part of the completed structure and the appliances adjunct thereto and necessary to the proper maintenance and operation thereof.

9. All work herein required to be done shall be performed according to the plans and specifications furnished by the chief engineer of the Commission; but said plans and specifications will be subject at any time to such alterations and changes as may be deemed advisable by the chief engineer or the Commission.

ARTICLE II.-Extra work.

Should the Commission, prior to the completion of the canal, decide to construct breakwaters at either end of the canal, additional reservoirs or dams, or additional auxiliary works of any character, the Contractor shall have the right to and, if required, shall construct the same upon the terms upon which he agrees hereunder to perform the work upon the canal proper; but a supplemental estimate of the cost and time for the completion of the said additional works shall be made by an engineering committee, such as is hereinafter provided for, in the same manner as the estimate is provided to be made by the original engineering committee of the cost and time required for the construction of the canal proper.

ARTICLE III.—Plant and facilities furnished by the Commission.

The Commission agrees to furnish, free of cost to the Contractor, plant, facilities, and means as follows:

1. All locomotives, cars, steam shovels, drills, cranes, dredges, tugs, scows, dumps, rails, ties, and track materials, electric light or power plants, and other machinery of a substantial character required to efficiently carry on the construction work, and necessary work animals and equipment; but not hand tools or machinery of a minor character usually carried in stock, save through its department of materials and supplies as hereinafter provided.

2. All raw materials put into the work, the machinery and appliances necessary for the operation and protection of the locks or other parts of the canal, but not the treatment, shaping, finishing, transportation upon the Isthmus, or incorporation into the work of such materials, nor the erection or assembling of such machinery upon the Isthmus; cement, explosives, oil, coal, fuel, and, at the election of the Commission, electricity for the proper operation of any rolling or floating stock or other machinery used by the Contractor in the performance of his work upon the Isthmus: Provided, however, That the Commission may, in its discretion, transfer to the Contractor the manufacture of cement or explosives, if it should be found that either can be properly made upon the Isthmus, and the manufacture upon the Isthmus of metallic parts of the locks and auxiliary works of the canal, the cost of such manufacture to be added in such case to the total estimated cost of the canal as hereinafter provided to be arrived at.

3. Construction tracks already built in a condition not less efficient than now existing; but additional construction tracks, including the relocation of those turned over to the Contractor, must be built by the Contractor.

4. Quarters for the proper housing of all necessary employees of the Contractor; but the Commission shall be allowed reasonable time for the construction of quarters additional to those now existing.

5. Warehouses for the storage of the Contractor's tools and supplies.

6. Hospitals and hospital service for sick smployees of the contractor.

7. Office buildings for the accommodation of the Contractor's clerical and administrative force actually employed upon the Isthmus in connection with the construction of the canal.

8. Transportation of the Contractor's employees, employees' families, and supplies over the Panama Railroad, and employees and employees' families over the Panama Railroad Steamship lines at rates not greater than one-half the regular published

tariff rates. The Contractor shall also be at liberty in all cases, where the transportation facilities afforded by the Panama Railroad Steamship Line are not sufficient for the needs of the Contractor's business, to employ such other lines of transportation as he sees fit, until such time as the Panama Railroad Steamship Line is in condition to resume or furnish sufficient service to the Contractor.

9. Free telegraph and telephone service upon the Isthmus necessary to the actual efficient discharge of the Contractor's business.

10. Free trackage rights over the Panama Railroad Company's tracks for the work trains of the Contractor, from canal cuttings to dump grounds, or docks when necessary, and return; and as a part of this obligation the Commission will assume the cost of constructing such additional trackage, yards, or other facilities of the Panama Railroad as may be essential to the proper execution by the Contractor of the work herein provided for, the amount and character of such work being always subject to the direction and approval of the chief engineer of the Commission.

11. Water for offices, engines, shovels, drills, dredges, and other purposes for which it is reasonably required for the prosecution of the work.

12. Commissary stores, which will be open to the Contractor and his employees upon the same terms as to the Commission's own employees. The Commission will also supply from its other departments, so far as it may have the same available, tools and supplies which it is not the duty of the Commission to furnish free hereunder upon the terms of cost plus the usual handling charges.

13. Mess-house privileges for Contractor's employees equal to those at any time extended to the employees of the Commission. The Contractor shall also have the privilege of taking over and operating upon his own account such mess houses, either directly or by contract with a third party, subject in all cases to the direction and approval of the chief engineer with respect to prices, privileges, and general methods, and subject to the duty to furnish to the Commission's employees accommodations in all respects equal to those furnished to the Contractor's own employees. Mess or lodging houses furnished by the Commission to the Contractor, or any subcontractor, shall be subject to daily inspection by the chief engineer or his agents, and all directions and modifications which the chief engineer may deem necessary for the proper housing and feeding of such employees shall at once be carried into effect by the Contractor. Any profit or loss arising from the operation by the Contractor of mess houses, shall be debited against or credited to the Contractor.

14. The equipment which the Commission under this article agrees to supply it will also maintain; and it will to that end operate and properly furnish and supply such machine and other shops as may be necessary, but this obligation shall not extend to the making of repairs which are ordinarily known as outside, yard, or running repairs, which must be made by the Contractor.

15. The Commission, to the extent to which its machine shops may be adequate, will manufacture or repair for the Contractor such minor machinery and tools as can be economically and conveniently manufactured or repaired at the said shops, charging the Contractor therefor actual cost plus 15 per cent.

16. The judgment of the chief engineer of the Commission shall in all cases be controlling as to the extent and character of the facilities to be supplied by the Commission under this article.

ARTICLE IV.-Functions reserved to the Commission.

The Commission will retain control of

1..All engineering work in connection with the construction of the canal, including surveys and the general direction and control of the construction work to be done by the Contractor with the right to fully inspect same.

2. Municipal engineering, including the construction of waterworks, sewers, roads,

and streets wherever located.

3. The governmental and police department.

4. The sanitary and hospital department.

5. The commissary department.

6. Mess houses, except in so far as the same may be taken over by the Contractor as herein before provided for, and the inspection of the same in that event.

7. Quarters.

8. The construction and maintenance of buildings.

9. The operation of the Panama Railroad.

10. An auditing department, which shall have control over the books and accounts of the Contractor, with authority to direct the manner in which all accounts relating to expenditure upon the canal construction by the Contractor shall be kept and to which department the books and accounts of the Contractor shall at all times be open.