| Show DOWN ON TH THE ISTHMUS Reports of Isthmian Canal And President of Panama Ry RyCo RyCo Co Sent to Congress TAFT DISCUSSES THEM rill Clio Contract l In Indorses n Jan letter of ot the Ih secretary of ot Will war to the tha president the reports of ot the tho In m canal ranal commission and of ot the tho sent dent cf or O the Hallway com coin company pany ran with 1111 the tho reports were received by tit the two to houses houe hou es of ot today Thi Kr ft of or the tho cann commission ha hab haten b been ten n mode IT public Secy SOC Tuft Taft In Ill liH Ii letter letl r tie the president that there them themI thellIs I Is to be a majority mid find minority re retort e eort tort ort rl from roni the tho board hoard of oC en n as nil 5 to 10 the typo ol nt can II to La lo 10 o recommended and that ho he XI soon soonIa to Ia 10 locele evele by cable cabo front from len Gen Davis Dals ot of th the l o rd who will meet the je he members In III on onlan onan lan Jan an 9 u a confirmation of ot the report The minority report IH is bailiff bIng reared prepared he ho added and lie III hw fl thit the whole hole matter may he be 1 for or to 10 Congress SI by h I lIe tIo first of ot I Tho The takes on UP tho the report of or Ih the of ot tho uirt Inri ol two transactions to in n the report the Issue lesue fir rif l ond bonI mid their purchase by the company and Ind the thu market markel contract for feeding employee on en the Isthmus Of DC these tie tIC Hie R wj 1 IMPORTANT 1 S There two lo to In hi the report of oC tho the president at J t tho the railroad company CO IllIn of ot hll h mention bo he made In December tt ut t a n lime the lie creditors of ot the railroad WEre WIO urgent In lii the Ihl fIm nt of ot the tho bills und and when the thu railroad company was wu not lIot able ibie lo to meat rne t tIt lt It 1 oblivious thit corn com ml lon vero ero to 10 pay pa the tho rail I rood company what was due It the and directors director sold od if pet per cent bonds bonda which had been In Inthe Inthe the Ibe treasury of ot the tho corporation ever eor e 1 I since pluet In the Iho i t con Interest In Its tie share Tho The bond had been beeh placed there by lI tho the former nt for tor the tho purpose II of ot them In order to Improve Urn the th equipment of ot tho the road On Nov 0 oA S lut last tho tim directors authorized the executive to I HUI the bonds bonI and sifter after Invitation to several probable thoy tho were ucro ero Hold on the tho lay day Ila of November to I Com Corn Company pany bunkers blinker u 1114 the t One On hundred und and thousand dollars of the tho was va pall pallon on on November The Tho purchase lei par And a II premium of ot C per jr cent for forthe the tho bonds bondi It luLl hilt been beon that au nu the government owned flU all tim i of the railroad company onil was at In tho the owner olner of ot the road the file ile of ot tho tie company com Ian s bonds was In effect to tu In tho the to 10 which the Iho government property ini it be Uli subject subjected ed crt and In this way Indirectly to tu In Increase Increase crease tho the ii of or the tho if veni ment and that such lIch power ou ought tit not nol ti II be bo exercised without II from Crom On other hand It Itma may ma be pointed out tint that Dm thu COlli puny still preserves Its lis us is a 11 cc ce by lie tho of at I Cou Coi Kress gres anil that under tinder the th charier th directors hal had thin tho power p we to 10 l tho the bonds ant and hind the Iho company no matter incIter r who liu owned olIed tin the shares OF 01 Tho The que of o Issuing 1 tho bondi was as nit to oti or to In mo me he be before fore final action was taken by b the tho board of or Tim The policy of ot sell lIell selling selling ing the bond hond WIM WI a II doubtful one Oil not have hae been beon adopted until af at after arI ter tr I r a conference with this thle 1 I have ha e not the tho slightest doubt that thit tim president and of ot the tho company acted In entire good faith alth In III what nhat they did and Ind at as a they thoy thought for tOl the Iho be heat best t Interests of ot the thc government but It IH III regarding the and cati peculiar relations relation II between the directors coil the thu th company and the government tim Iho bonds should not hc been heun Issued without your approval or mine In III view of ot thi fact by b your authority I J In Instructed tho Iho president of ot the railroad company to proceed to ot It Once repurchase repurchase chase HIPe the bonds Tho Tim bonds hond them themselves Ih m mIe selves Ie contained n a stipulation pro providing III II viding that they might bo bl b redeemed either on the tho of October or the tho first of ot April by b the tha th payment of ot tho previous Interest the tho inn prin principal cipal and u II premium of ot 5 per cent were made with the tho purchasers by h I which the were welo ero bought back baek nt at the premium paid and accrued Interest to 10 late date of ot re no repurchase 1 purchase front from the lit 1st of October To TI Tomake make muke the o It was wai at first thought necessary ary for or the railroad corn com company pany Inn to 10 borrow horrow from tl tim the commission The acting heM hell that the commission had the authority to lend leech the money to the tho railroad com corn company pany for or that thit purpose hut but It was found that the Indebtedness 11 of ot the Iho canal com coin commission mission to 10 the railroad company was wa nuite largo large enough to supply sup I the tho rail railroad road company aIlY with the needed n funds for tor taking laking up 1111 thin the Ih bonds hond without bor her borrowing borrowing rowing train from the thu commission executive of ot the rail mil railroad railroad road company com pall have been beon advised of ot their error says as the secretary lI In hh its hi letter to the president 1 antl hereafter flue of ot this thin character ler will vIli not he ne 1 ted upon by b tie tho commission lolI or the tho of If the until otter niter conference whit ith thE proper nu flu Im mal CONTRACT Another matter railing coiling for fOI or com coin melli Secy Eec ee Tuft K Is III i the lon coil of ot the Market con colt tract and nil subsequent Bub In Its March isn u It became nn an urgent ICeS ques Lion tion how the of ot the tho Ih cn canal a commission and aiti of ot the lite runway company on the isthmus could obtain proper oct fowl to 1 nt Ut reasonable prices Chief 1 Wallace knew J R f Murkel Markel of or Omaha o ha haas as n II contractor engaged by II railroad to reel hoarding camps still and to 10 liter elton for or hotels and r anti ant Mr kel had hen been In Iii th Ihl 1 hl hitti bU II 3 for tOl 50 O rs huh hail II ml i I out large larg of fir tIti Ihl kind III In con ork done don by h the thi Ih Ill I IrIc t the he I II 1 lOt is Central cit t nt I rail rull ni II Mill rU and 11 1 other othal largo laro of t the tho west Mr Ir Wallace In III Martli last wrote to Mr Ir Markel and Invited him to tu come conic to 10 the tho Isthmus and 1111 look lok tho the over oer with n a view to 10 making an nil to In feeding rill all the em cia emun on un terms satisfactory to 10 the Iho go ov 0 em and himself The rhe latter did dill not hot reach rench Mr lr Murkel until III whets when lie answered accepting the suggestion and i ltd with vIt Ii his hl pun Pots and it Iti rind 1111 U ni Ill 11 secretary visited the about the first firt of or July JuI t tOl te thU country lifter after n it months May ti on nn It I the tho and after nn Iti of lit it something like six pix weeks The rime CUll cost contract tract tun ui awarded a to lo Mr M h Markel n nil os the Ihu lowest bidder b I on the th of lie When states notes of or the Ih contract l reached rel hell the isthmus 1 Mr dr Stevens by b cable cuble objected to 10 It as Oil fixing too high a IL I price and thereupon a n clause was wall Introduced td Into limb to the contract by hy l the I I consent of ot Mr h Markel by 11 which the company las as permitted to to cancel the contract nt at any time tirite In the tha discretion dl of or the tha president In view of ot the new cancellation clause Mr MI Markel took only tout four persons to thu Isthmus and amid others were directed to remain In Now e York until the matter In respect 1 t to the contract was os definitely settled On tho Iho of or September r Mr Ir Shouts Mr Markel sailed for tOl the Isthmus and did not nol return until tho the of or October Dining this title time lime after n II conference between he tween Mr Ir Shunts Mr Stevens and Gay Oo th the tho notice of ot cancellation In accordance with the new lIew clause was wi ap given and accepted and Mr Ir and 00 then stated that Mr Ir Markel ought to bo be and would be com coot compensated led for tor his hili loss 10 of ot time and money fOil for ret vices which hud hail Inured to 10 the Iho benefit of or the government The Tue rea ren hon boil for tho the cancellation of ot tho the con contract tract was In carrying l out Mr Ir Markeis MarkCI I recommendations the railroad company tinder Mr Stevens had been b en able to furnish turn Ish food fond to 10 Its amid thou 1100 tho o oot of ot the commission lon nt at a 1 less Irs price than that fixed In Iii the contract still Mill Insists Insl t that the tha estimate of cost coit made by b him him wan reasonable nini that the tho results obtained by h the company were ere due dill to two circumstances ono one that all nil the elements clemento of ot cost co t to the con contractor contractor contractor tractor were not slot Included In the rail tIllI railroad railroad road estimate for tOl the cost of ot first nr t class meals men I and 1111 1 the other that the tho specifications of ot the contract re no I I I for tor meals for tor the second class claim of O CH n Si 1 snore meat than th till the company was 1011 i fur till furnishing In view vict Ie of 01 the tho cancellation of the contract It Is IR t to 10 con comm consider sider this Issue further At t tIle the meeting of ot the railroad di dl directors rectors I clors on en Nov No 8 Mr Ir Markel presented Ills his ii is claim elLiOt for his Ii is a et no I outlay I a amount amounting at ing to util also a 11 claim chalet tar for forthe the tho value of ot his time lime nod and The directors at nl it I 1113 In II ot oC Mr Ir I voted to 10 allow Mr Ir Markel for tor his hili ex cx expenses x timid and service Herlee lilt tl mini of ot I II ami ito tho 1 money uis as paid 11 lot 1111 Id I This action was WilB without con COO suiting either jon oss or me nit and wits was not notI I I brought to my lily attention until ii I some sometime time otter after my Ill return train from on th of ut November Looked at from front froma Ii a purely rd and is itt strictly st lly legal standpoint si ii tiLl pal it i iI If U I f the si ito 51 t of or U f tin Ih contract I with tim e to II tilt the cancellation nt tt the die j I of the III p was wan all to 10 be bei i i strictly construed to 10 cancellation end the Ihl obligations of nf both bolh parties hurtles K un under der tier It Il and amid leave lease them Ih rn without any In claim chum for tor or damages by h b either cither against th the other ether eel and therefore Mr Ir Market would l fm to have hae ha e no claim chaise for Cor either cither Ills his expenses or his services s against a the company utter after till the right of ot nil all sOlUte cancellation hUll hud leOn been leOnLy Jean cx r by Ly b tin the president In itt other words It would appear that the tue pa 11 ment 11 by h the tho directors director was gratuitous anti ami II nil nilI without legal consideration I f MORAL tOlt I SIDi SIE On Ott time the other hand the moral and meritorious consideration arising from tho tile fact tact that Mr Ms II Markel had actually tendered valuable expert cx services to tm UK Ihl railroad company had hail made an tin ac cc actual tush outlay of oe more than Ihan alt nil In iii anticipation of it securing the tho contract and relying on the permanence of ot the tho thoI contract would Justify a 1 good business businessman man nian lIh such curls u is transaction was hud had In compensating him bins for tor his loss losi of oC money limo and services It Is h perfectly plain iticia from molts Mr Markets Markels I own that If It he lie hail hod been beem lI en permitted to carry on the contract Indeed If I ho had hod hid bid and not nut been awarded the Iho cost con contract tract he never novel would have considered the tho railroad company Indebted ell to tn him for tor anything The directors however hoetH thought that the tho which the tue final cancellation clause had been obtained and tho tue benefit which they heW had actually derived front from Mr Ir Markels Markeis services required thu thit they should make him whole That they acted In III this regard In iii good faith timid and with a n due regard to their trust I have hlo no doubt In reply rep In 10 t 0 my may criticism t Ic team und mid ti my may disapproval di so I In Imm Inthe the these o two cases CUItIS time the president of ot the railroad has haH answered that the th course cours taken was Willi plainly In the Iho corporate pow power er cr of ot tho the directors and was wall supported by b of at counsel I 1 think how however ever that these were Issues helies S of such Importance mice and im that t It a t they the t It ey should have imaL been submitted to 10 you OU or me toe ns nil your representative for approval Un Cn Undoubtedly n a board boar of ut directors acting for a n corporation with Individuals ns itt stockholders might exercise the Iha lI cra lion which was wall cx er hero here by the directors but bUI as us between time tM govern government ment the tho president anti and the tho directors III rectors of ut the Uw railroad company tho the exercise of at such discretion is s 8 only sate when ap 1111 approved apProved proved by lJ the president enl or 01 hla Imis I have hlo KO 10 o advised 1 time the president and directors of ot tho time company In order er cr prevent n II departure from this lists prin principle ciple III In future I 1 have hn deemed It my m duty In iii view vie of ot time the fact that tile the th matter wa III not mint submitted either to you or ur to me until utter the hit final nIHil action of ot the board bOll Ill to It I quite lilly fully 1111 thit III facts I hate hlll e ii a 1 Ws statement of th tim from rein Mr Ir 1 have base sub Jei J ted Mr to a 1 long lon examina examination tion Ihm have havu secured front from him nit all the cor correspondence or light on the Ih sub sull Jet t and hwe havo from Irom him hint the Ih Ii fur Cor suds HUCh of fit Isis hIli us gut ushe he will be ha able allie to In furnish The exam examination and it lid till thi I he I J ap append it p 11 pend l lo to this letter The vouchers Mi MII Murkel has hns not slot yet et been able abl to send I me mIle III Ii tf It complete tire lire not forth forthcoming coming It will trill not stat he be significant be when h expenses verL red did not suppose that they the tumid l forum form the basis I s of or a it claim dalm against ago lilt I lie government rind a it large lun part pan of ot the Ihl t iii money was VILS expended X lOt for 01 travel In III I ft for fu III which It I t Is III unusual ii to 10 obtain it seed ii t ig I 1 think t Is k no tine one tin can rend real ht I sic evidence without being convinced that tin I he claim chi un iii was nus allowed 11 by LIy thi 11 I company was meritorious ansI and moderate I have hiatt submitted tho ques queis question tion I itt I to tl the th t It e itt gen rn i you ou may flay ilia legally confirm the notion fiction of HI oft the Ih t hi railroad company and a tot milk make I Ih t hm Itt a LI legal one cite The fhe opinion ot ut the t ii 1 sit torn I In tilt the it root t i be lIl found an nn mimi appendix mOI ENDS IID 1 respectfully recommended that till the action ion of |
