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Senator Morgan. That is a year apart, nearly?

Secretary Taft. Yes; quite a year apart, because as to the currency agreement, for the reasons that I have stated, growing out of the issuance of the Dingley Act order of June 24, 1904, nothing was done until we went down in December, 1904.

Senator MORGAN. Well, did Mr. Cromwell represent any interest in either of those negotiations about the currency or the banking agreement?

Secretary Taft. Not that I know of, sir.

Senator MORGAN. He was at that time also the attorney of the Panama Canal Company?

Secretary TAFT. He was. Senator MORGAN. Yes. Well, who was Mr. Farnham, that went with him?

Secretary TAFT. He was Mr. Cromwell's assistant.
Senator MORGAN. What do you mean by “assistant?"
Secretary Tart. I mean he was in his office and under his employ.
Senator MORGAN. A clerk?

Secretary Taft. Yes; I understand that perhaps that would describe him, though he receives $3,000 a year, I think Mr. Cromwell stated.

Senator MORGAN. Well, he is probably, then, a head clerk. Was he at that time a director in the railroad?

Secretary TAFT. No, sir.
Senator MORGAN. He had no connection with it?

Secretary Taft. No, sir; except as he was in the employ of Mr. Cromwell, who was general counsel for the railroad.

Senator MORGAN. Yes. Well, he had no actual connection with it, any more than a scrub woman would have, except by Mr. Cromwell's direction?

Secretary TAFT. That is all.
Senator MORGAN. Who else went?

Secretary TAFT. There was Admiral Walker, Judge Magoon, and I think I took an aid, Captain Coleman, and either one or two stenographers, I have forgotten which-perhaps one, or perhaps my private secretary. I think that was it.

Senator MORGAN. At that time was Mr. Magoon governor of the Zone?

Secretary Taft. No, sir.
Senator MORGAN. Was he a Commissioner?

Secretary TAFT. No, sir; he was general counsel of the Canal Commission.

Senator MORGAN. He has since been made Commissioner and also governor of the Zone?

Secretary TAFT. Yes, sir.
Senator MORGAN. And holds those two offices?
Secretary TAFT. He does; and minister.
Senator MORGAN. And also minister, to-day?
Secretary Taft. Yes, sir.
Senator MORGAN. To Panama?
Secretary TAFT. Yes, sir.
Senator MORGAN. In place of Mr. Barrett?
Secretary TAFT. Yes, sir.
Senator TALIAFERRO. Ile receives no salary as minister, does he?
Secretary Tatt. No, sir.

Senator MORGAN. We have not got to that. He could not do it. Secretary Taft. He does not, whether he could or not.

Senator MORGAN. But that is because of the incompatibility of the offices, that he does not receive any salary, and can not do it.

Secretary Taft. Is that a question, Senator?
Senator MORGAN. Yes, sir.
Secretary Taft. I do not think that is the reason.
Senator MORGAN. What is it?

Secretary Taft. It is in order that there shall not be too much salary paid. That is all.

Senator MORGAN. Well, I always thought that if a man held one office under the United States Government he was obliged to stick to that until Congress or some authority of Congress gave him another.

Secretary TAFT. There has to be authority of Congress, but the authority-at least if there is no exclusion there is no law preventing it. You see, with reference to the Philippines, with reference to the Canal Zone, with reference to, I think, Porto Rico, it has been the legislative custom and the executive custom to unite offices of that sort. In the very Spooner Act there is a provision by which army engineers and army officers are to fill two positions.

Senator MORGAN. Retired officers of the Army?
Secretary Tart. Retired and active.

Senator Morgan. That is by assignment of the President, not by appointment to an office.

Secretary Taft. I do not recognize any difference between designation and appointment.

Senator MORGAN. I am a little surprised at that statement, because in that difference, I think, rests the whole doctrine that forbids the accumulation of a multiplicity of offices in the hands of one man. The President of the United States has the right to designate a military officer to any military service or any service connected with the military that he chooses to do, but that is because he holds an office, and he makes the duty appurtenant to it; but he has no right to appoint a major-general of the United States Army to a court as a judge, and have him qualified to enter upon both duties at the same time. They are dissimilar and belong to different departments of the Government.

Secretary Tart. Of course, the positions are such that they ought not to conflict with each other; but the custom has been, since the beginning, to appoint to two offices, if the law does not prohibit it, where the public interest would be served. I think you can find instance after instance where that has occurred, and it certainly has occurred in the administration of the dependent possessions of the United States.

Senator MORGAN. Well, I think it was when we got to having dependent possessions, as they are called, that are partly in and partly out of the United States, that we found it necessary to qualify officers of the United States to hold offices in the dependent possessions.

Secretary Taft. Yes, sir.

Senator MORGAN. And therefore to burden them, if we may so speak of it-not so much against their will, I suppose

Secretary Taft. Not if it was accompanied by additional salary. (Laughter.)

Senator MORGAN (continuing). With the discharge of duties in both places, under different authority, provided the salary would justify it.

While we are upon the question of salary, Mr. Secretary—and this investigation leads naturally and necessarily up to that—what is the reason for the sudden and very great extension or expansion of the salaries under the new organization, as we call it, the one that is now in existence, of the Isthmian Canal Commission, beyond those that were conferred upon the old Commission?

Secretary Taft. As a matter of fact, the salaries paid to the old Commission exceeded those paid to the new, but they were differently distributed. The salaries paid to the executive officers of the new Commission were proportioned to salaries paid in ordinary corporate practice for men of the experience and skill and ability that are required for great corporate enterprises, and that are necessarily required in this.

Senator MORGAN. As a matter of fact, you say that the salaries of the old Commission exceeded those that are conferred upon the new Commission?

Secretary Taft. Yes, sir.
Senator MORGAN. You mean in the aggregate?
Secretary TAFT. Yes, sir.

Senator MORGAN. But they were distributed equally among all the members of the Commission!

Secretary Taft. Yes, sir.

Senator MORGAN. Then the change that was made was to reduce the salaries of some and raise the salaries of others?

Secretary Taft. Yes, sir. Senator MORGAN. Can you point out any actual necessity for that discrimination?

Secretary Taft. Yes, sir.
Senator MORGAN. I shall be glad if you will do so.

Secretary Taft. The one thing of all others that was needed in reorganizing the Commission was a head in this country who should be familiar with preparing for great constructive enterprises like the building of a railroad or the building of a canal. The one great defect of the old Commission was the defect of not getting competent employees, or not pushing and pressing and getting to the Isthmus the necessary machinery and equipment, and of not making the plans needed for the preliminary plant which was absolutely required on the Isthmus. Therefore it was needed to secure a man who was used to organizing a great bureau of supply and of pushing those supplies forward under conditions resembling quite nearly the construction of a great railroad. We were not able to get such a man unless we paid a salary equal to that which prevails in circles of that kind. Therefore we paid Mr. Shonts $30,000.

Senator KITTREDGE. It is $35,000, is it not?
Secretary TAFT. Thirty thousand dollars.

Senator Morgan. You mean not that such men were not in the country, but that they did not have the reputation to justify their employment in the work?

Secretary Taft. They did not have the reputation, the skill, and experience, unless you paid them such a salary.

Senator MORGAN. Was not a difficulty, if not the real difficulty in the first year's operations in dealing with the Panama Canal, the public demand responded to by the administration, or the demand of the

administration responded to by the public, one or the other, that you should at once commence the work of digging?

Secretary Taft. I do not think that there was any pressure to commence the work of digging. That was suggested by Mr. Wallace, not really for the purpose of excavation, but for the purpose of experiment. Of course it may have satisfied a public demand, when questions were put such as have been put here at this board or before the Appropriations Committee: “Well, are you doing any digging?” The truth is that unless that excavation was justified for experimental purposes, it was not justitied at all; because the only proper method of doing a great constructive work like this is to make proper preliminaries before the work of digging begins at all.

Senator Morgan. When did Mr. Shonts enter upon his duties? Secretary TAFT. The 1st of April. Senator MORGAN. Nineteen hundred and five? Secretary TAFT. Yes, sir. Senator Morgan. Did he not find at that time a very great influx of material going in there for all kinds of work that was required to be done, and machinery and everything of that sort, that even overtaxed the powers of transportation that the Government had?

Secretary Tatt. No, sir; he did not. He took action which did bring about the pushing of that, because, for nineteen days succeeding the 3d of April he opened and awarded bids which had been unopened and unawarded under the old Commission; and he sent men to the various establishments where the supplies were to be furnished to press them forward. That work, in addition to the organization of the bureau and getting competent employees for the bureau, took him until the latter part of June.

Senator MORGAN. Whose duty was it to have those bids opened and answered ?

Secretary Taft. The duty of the old Commission.
Senator MORGAN. What member of the old Commission?
Secretary Taft. Well, Admiral Walker was the chairman.
The CHAIRMAN. And it was his duty ?
Secretary TAFT. Yes, sir; I assume so. He was responsible.

Senator MORGAN. And it was his failure, then, to perform that duty that prevented the incoming of material into the canal that was needed for the work?

Secretary Taft. Perhaps it is putting too much on Admiral Walker to say that. I have no doubt the Admiral worked hard, but they had turned over to Mr. Redefern, who began as a secretary or assistant secretary or clerk, the work when it was easy of attending to requisitions; and while he worked hard, he became swamped with the number of requisitions that came in. The immediate duty was that of Mr. Redfern's, I presume. The defect was in not providing a larger organization.

Senator MORGAN. Well, we have had a very remarkable congestion, according to the statements that have been made here, of freights between Colon and La Boca, across the railroad. Did that occur before Mr. Shonts went there or after he took these active and strenuous steps to assemble material ?

Secretary TAFT. It occurred before Mr. Shonts went there. Mr. Shonts did not go there until

Senator MORGAN. I mean before his appointment.
Secretary TAFT. Oh, you mean-
Senator MORGAN. The congestion.

Secretary Tart. I do not think that there was any. There may have been some congestion in the commercial transportation before the 1st of April or earlier.

Senator MORGAN. I do not think we have had any account it if it existed.

Secretary Tatt. I think Mr. Schwerin testified that there were some articles that had not been delivered for a year, but I think those were clearly exceptions.

Senator MORGAN. Yes.

Secretary Taft. The great congestion occurred after the 1st of April, between that time and the time when Mr. Stevens went there, and arose from the concentration of the filling of all the requisitions that had been sent down there for upward of a year.

Senator MORGAN. Then Mr. Shonts, with his vigor and energy and ability, appears to be the man who was responsible for the rapid influx of material into the Isthmus?

Secretary Taft. Yes, sir; he and his employees.
Senator MORGAN. It was under his direction?

Secretary Taft. Yes, sir; that is, he was pushing what had been previously ordered.

Senator MORGAN. Had he ever been on the Isthmus when he gave these orders?

Secretary TAFT. No, sir.
Senator MORGAN. He had not seen it at all ?
Secretary Tart. No, sir.

Senator MORGAN. So that he was acting without personal knowledge of the conditions that actually existed there?

Secretary TAFT. Without personal knowledge; yes. Senator MORGAN. Without personal knowledge; that is what I say. Secretary Taft. He had Mr. Wallace here to assist him from the 3d of April until the 17th of May, from whom, doubtless, he got all the information that he needed on that subject.

Senator MORGAN. Well, it looks to me a good deal like a general assembling his troops on the battlefield and having them arranged by his orders, without ever having been on the field himself.

Secretary Taft. Not at all. The place for the general is where the work is to be done; and the work was to be done here. Mr. Shonts relied on Mr. Wallace to look after the taking care of the goods when they got there.

Senator MORGAN. That duty was performed, was it not?
Secretary TAFT. No, sir.
Senator MORGAN. It was not?
Secretary Taft. No, sir.
Senator MORGAN. In what respect was it neglected?

Secretary TAFT. It was left to congestion. The control was left in the hands of Mr. Dauchy, who was not a railroad man, and in the hands of the assistant superintendent, who had subsequently to be discharged because he was not equal to the situation.

Senator KITTREDGE. 'Had the health conditions anything to do with the congestion?

PAVOL 3–06

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