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Senator MORGAN. And before you returned to the Isthmus?
Mr. WALLACE. Yes, sir.

Senator MORGAN. Who was assisting in arranging this new organization?

Mr. WALLACE. I always understood that the whole scheme, the organization, was discussed by Mr. Cromwell and the Secretary and was practically worked out by Mr. Cromwell, but that is simply hearsay. I was not here at that time.

Senator MORGAN. Was he engaged there as an employed counsel, or employed agent to do that work, or was he doing it pro bono publico?

Mr. WALLACE. I do not know. His only official position that I knew of was his position as general counsel for the Panama Railroad, and he wrote up the resolutions and attended all the meetings of the executive committee of the railroad and board of directors of the railroad, and seemed to direct its affairs entirely, as far as the records were concerned.

Senator TALIAFERRO. Was he not a railroad director at that time?

Mr. WALLACE. Yes, sir. He was a member of the new board of the Panama Railroad.

Senator MORGAN. During that time of the reorganization, or before that time or after that time, as long as communications were open between you and Mr. Cromwell, did you have any knowledge of a claim that he presented as the counsel of the New Panama Canal Company against the Government of the United States amounting to more than two millions of dollars?

Mr. WALLACE. Yes, sir.

Senator MORGAN. A claim of two million and two or three hundred thousand dollars for the work that had been done by the French company after their first proposition to sell to the United States and up to the time of the turning over? Did you hear about it?

Mr. WALLACE. Yes, sir; I was present when he presented that to the Walker Commission to pass on as to the facts contained in it, and that matter is a record of the second Walker Commission. It is spread on their records.

Senator Morgan. Yes; I have it all here. That claim was first brought before the first Walker Commission?

Mr. WALLACE. The first thing I knew about it was when I was present at a meeting of that Commission, when Mr. Cromwell and another lawyer and Mr. Choron, the chief engineer of the New Panama Canal Company, and an interpreter came before the Walker Commission, in June, 1904, and stated that the President had been asked to arbitrate that claim, and that the question of law had been referred to the Attorney-General and the question of fact had been referred to the Isthmian Canal Commission, and Mr. Cromwell and these men were here to present these facts for the Isthmian Canal Commission to pass upon as to their reliability--I mean as to what were facts and what were not facts and ready to offer any explanation of their figures that they desired to ask the gentlemen that were present, naming his colleagues.

Senator MORGAN. Did the Commission have any order from the President of the United States that they should perform the duty as arbitrators for settling the fact in regard to the claim?

Mr. WALLACE. They were not to act as arbitrators. Mr. Cromwell stated that the President was to act as an arbitrator and that the Com

mission was to pass on the facts, the Attorney-General on the law, and then the President would take the question up and pass on the equity. That was what I understood was Mr. Cromwell's statement that he verbally made before the Isthmian Canal Commission when he presented these papers to them.

Senator MORGAN. You were then chief engineer, but you were not a Commissioner?

Mr. WALLACE. I was not a Commissioner, but I just happened to be present at the interview.

Senator MORGAN. Had Cromwell talked to you about it?
Mr. WALLACE. No, sir.
Senator MORGAN. He had never explained it to you?
Mr. WALLACE. No, sir. That was the first time I ever met him.

Senator MORGAN. What was this other lawyer's name that was there?

Mr. WALLACE. I do not remember.
Senator MORGAN. Was he an American or a Spaniard?
Mr. WALLACE. He was an American.
Senator MORGAN. Was he named Curtis?

Mr. WALLACE. I think that was his name. He was a square-jawed man, a little younger than Mr. Cromwell.

Senator MORGAN. Was he a tall, slender man?

Mr. WALLACE. I do not remember his description. He was sitting at the table when I saw him.

Senator MORGAN. Was Mr. Farnham there at that time?
Mr. WALLACE. He was not at the meeting.
Senator MORGAN. He was on the Isthmus?

Mr. WALLACE. No, sir; I do not know where he was. He was not at the meeting

Senator MORGAN. Did Mr. Cromwell lay before that Commission any orders of the President or directions of the President that they should find the facts in regard to this matter?

Mr. WALLACE. I do not know.
Senator MORGAN. You saw no such paper?
Mr. WALLACE. I saw no such paper.

Senator MORGAN. And no such paper, within your knowledge, has ever been put upon record ?

Mr. WALLACE. No, sir.
Senator MORGAN. It was Cromwell's statement?

Mr. WALLACE. That is as I recollect it. There might have been a letter.

Senator MORGAN. Of course. We want your recollection. We know it is honest, and we just want that. So he appeared before that Com. mission and informed them that the President had authorized them to find the facts?

Mr. WALLACE. Yes, sir.

Senator MORGAN. And that the Attorney-General was to ascertain the law and the President was to determine the equity of the claim?

Mr. WALLACE. Yes, sir; that is the way I understand it.
Senator MORGAN. Was the claim earnestly pressed?
Mr. WALLACE. Well, rather.
Senator MORGAN. Did Mr. Cromwell make a statement about it?

Mr. WALLACE. Yes, sir; he made quite an extended statement in regard to it, and he seemed to be very anxious that it should be given attention in the near future.

Senator MORGAN. In what way did the old Commission receive that proposition?

Mr. WALLACE. I would have to go behind the motives in their bosoms to tell you that. They did not seem to be very enthusiastic over it.

Senator MORGAN. Did they seem opposed to it or to question it?

Mr. WALLACE. That was the impression it created on me, listening to the presentation and hearing their discussion of it.

Senator MORGAN. Did they question it severely, like a judge on the bench?

Mr. WALLACE. There was a great deal of comment made, but the matter was explained to them that it was not for them to criticise its equity; that their function was to determine whether this money had been spent or not, and that that was all that they were to do, although the impression that was created on my mind was that they were, most of them, disposed to criticise the equity of the claim.

Senator MORGAN. Was the claim afterwards presented, within your knowledge, to the old Commission?

Mr. WALLACE. To the new Commission?
Senator MORGAN. The old Commission, the first Walker Commission.

Mr. WALLACE. This was the construction Walker Commission that I am talking about.

Senator MORGAN. I know. Was it afterwards, within your knowledge, presented to that Commission?

Mr. WALLACE. Again?
Senator MORGAN. Yes.
Mr. WALLACE. I never heard of it after that.

Senator MORGAN. Until you got on the new Commission. You heard of it then, did you not?

Mr. WALLACE. I never heard of it then.

Senator MORGAN. The records show that it was very much discussed by the new Commission.

Mr. WALLACE. Yes.
Senator MORGAN. That claim is still pending.

Mr. WALLACE. I do not know anything about it. That is, except since that date.

Senator MORGAN. And it was after that that Mr. Cromwell took a very decided interest in your being made a commissioner?

Mr. WALLACE. Well, I do not know that he did.

Senator MORGAN. The correspondence that he had presented to this committee, a letter written by you to him, and also an extract from a letter of a confidential character that Mr. Shonts submitted to him would show that your relations were very confidential, so much so that one of your letters Mr. Cromwell characterized as being fulsome. You have read all of his testimony?

Mr. WALLACE. Yes, sir.

Senator MORGAN. And he spoke of being ashamed to present it on that account?

Mr. WALLACE. Yes, sir.

Senator MORGAN. Taking his description of his relations to you as he gave them in his testimony, all of which you have read, and taking

You are

your knowledge of your relations to him, did he give a fair account of your relations?

Mr. WALLACE. Not from my standpoint.

Senator MORGAN. Your standpoint is the one we want. the only man in the world that knows about it.

Mr. WALLACE. My personal relations with Mr. Cromwell were very friendly.

Senator MORGAX. Yes.

Mr. WALLACE. But I would have to go into quite a long explanation as to why I wrote that letter that would involve a great many things, and that is one of the reasons why I did not want to be asked about it.

Senator MORGAN. I have only asked you what he has put upon the record. I have not gone into anything else, and you are entirely at liberty to state or not to state anything beyond that by way of explanation as you may choose.

Mr. WALLACE. The last night before I sailed I was a guest at Mr. Cromwell's house. There were quite a number there--the members of the Commission were there as guests--and Mr. Cromwell pressed on me some of his views, and he did it in a way that I took very strong exceptions to, not due to the nature of what he said, because the ideas that he gave me were perfectly proper in themselves, but I took it as an interference with my conduct of my business, and we had rather an animated discussion over it; that is, so warm on my part and I felt so keenly over it that I felt as if I had rather exceeded the bounds of propriety.

Senator MORGAN. In your reply to him?

Mr. WALLACE. In my reply to him; yes. And I did not want to incur his ill will, particularly at that time. I wanted to keep on good terms with everybody, as far as I consistently could. So I made up my mind that I ought to in some way try to smooth this over. So, just as soon as I got back to the Isthmus again, where I had time enough to write, I wrote him that letter, in order to make things just as smooth between us as I possibly could.

Senator MORGAN. In that conversation at his house before you sailed --- it was the night before you sailed, was it?

Mr. WALLACE. Yes, sir.
Senator MORGAN. And Mrs. Wallace was with you?
Mr. WALLACE. No, sir.
Senator MORGAN. Did she not go to the Isthmus with you, then?

Mr. WALLACE. Yes; but there were no ladies at this dinner except Mrs. Cromwell.

Senator MORGAN. On that night, if I understand you correctly, Mr. Cromwell undertook to give you advice that you interpreted even as instructions in regard to your business?

Mr. WALLACE. Yes, sir.
Senator MORGAN. As chief engineer of the Commission?
Mr. WALLACE. Yes, sir.
Senator MORGAN. And you resented it?
Mr. WALLACE. Yes, sir.

Senator MORGAN. And you did it in such words as to lead you to think afterwards that perhaps you had abused his hospitality?

Mr. WALLACE. Yes, sir.

Senator MORGAN. And when you got to the Isthmus you wrote that letter that he styled fulsome?

Mr. WALLACE. Yes, sir.

Senator MORGAN. For the purpose of preventing him from considering that you had made any personal attack upon him, and to let him understand that you wished to “let bygones be bygones" between you, as I understand it? Is that the fact?

Mr. WALLACE. Yes, sir.
Senator MORGAN. That is the situation?
Mr. WALLACE. Yes, sir.

Senator Morgan. So that he never mentioned to you, after you were a Commissioner, this $2,250,000 claim?

Mr. WALLACE. No, sir.

Senator MORGAN. Do you know of his ever having mentioned it to anybody else!

Mr. WALLACE. No, sir.

Senator MORGAN. You have heard no Commissioner say that he had presented it to them?

Mr. WALLACE. No, sir. I might have heard that, but I have no recollection of it.

Senator MORGAN. He is still pressing that claim, so far as you know? Mr. WALLACE. I have absolutely no knowledge on the subject.

Senator MORGAN. Do you know of any facts, Mr. Wallace, that you think indicate an interference on the part of Mr. Cromwell for the purpose of getting rid of the old Commission or any members of the old Commission?

Mr. WALLACE. I was on the Isthmus during that time.
Senator MORGAN. Yes.

Mr. WALLACE. And anything of that kind that would have been done, of course, would have been confined to the United States; and I bad no knowledge of his doing anything of that kind, although I have an impression that some of the Commission themselves thought there might be something in that.

Senator MORGAN. That was it. Some of the Commissioners at the time, in trying to account for the fact of their removal, associated his efforts with the fact of their removal?

Mr. WALLACE. That is the impression I received. I am not able to say, or to give you positive details of how I acquired it; but that was the impression that I had.

Senator Morgan. You would not have known anything about it unless it had been discussed in your presence, would you?

Mr. WALLACE. I presume not.

Senator MORGAN. Do you recall what were the subjects that were presented to you in an unpleasant way at that dinner the night before you left, by Mr. Cromwell?

Mr. WALLACE. I do not remember exactly. I think it had something to do with my organization. I think he was rather impressing on me the employment of more high-priced men than I had.

Senator Morgan. Higher priced men?
Mr. WALLACE. Yes.
Senator MORGAN. Did he name anybody?

Mr. WALLACE. He did not give any special names of anyone. It did not get that far alony.

Senator MORGAN. You did not understand to whom he referred?

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