Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-09-15
5 H0NTS' REP OR 7
Tells Why Food Contract
Went to Markell.
FEED OF employees
SAYS OMAHA BIDDERS ESTI-
MATES WERE Low.
Contractor Has Experience and the
Facility for Getting to the
Isthmus Quickly.

says. a contract LOT the Hotei dIlu SUD
sistence concession on the Panama canal
zone awarded to Jacob E. Markell OF
Omaha. Neb., by President Theodore P.
Shonts Of the Panama Railroad Company
will stand.
This, in effect, Is the decision of President
Roosevelt, who today approved a report on
the subject made to him by Mr.. Shonts.
The contract amounts in the aggregate to
many millions of dollars, but Mr. Shonts'
report indicates that it may be abrogated
at the will of the government, which actual
ly will own the permanent plant used by
Mr.. Markell in filling the terms of his con-
tract.
The President today authorized the publ
cation Of a report he had received from Mr.
Shonts, president of the Panama Rail-
road Company, regarding the protest recent
ly received by him from Hudgins & Du-
mas and H. Balfe of New York against the
award of the contract to Mr. Markell. The
report, which MI. Shonts was directed by
the President to make when the protest was
referred to him, is simple statement of the
various steps President Shonts took in the
ma tier and the reasons which impelled him
to grant the concession to Mr.. Markell.
Allegations Cleared Up.
The protest forwarded to the President by
Hudgins G. Dumas and H. Balfe alleged
that they had Eot been accorded fair treat
ment by President Shonts and that by a
leak in Mr. Shonts office, Mr. Markell had
been informed of the nature of their pro-
posal and had been enabled thereby to in
corporate in his bid the menu which Hudg
tns &, Dumas had submitted.
Mr.. Shonts' statement clears up these al
legations to the satisfac elton of the Presi-
dent. He. therefore. has approved the re-
port. and no further action concerning the
protest probably VIII be taken.
In his letter to the President Mr.. ShontS
says on his arrival at the isthmus on July
% he found most pressing necessity for
immediate arrangements for feeding the
employees, and that 1t was determined by
Governor MagOon, Mr.. Stevens and himself
that this subject should be handled by the
Panama railroad, and not by the isthmiaE
canal commission, as the commissary de-
partment was already in charge of the rail-
road company and that company al
ready operating one hotel at Colon. Con-
tinUing he says:
II found Jacob E. Markell on the isthmus,
he having gone down at the instance of Mr..
Wallace to study the situation. 1t was de-
cided while on the isthmus that the rail-
road company should furnish the plant, in
Guiding the buildings and the equipment;
that it should maintain the buildings and
the contractor maintain the equipment, so
that in the event of ii becoming necessary
for the railroad to cancel the contract we
could control the entire plant. When our
general purchasing officer, Mr.. Ross, and /
returned to the states we Immediately be-
gan the preparation of such specifications
we thought necessary to enable US to
properly receive proposals for the feeding
privilege.
Asked All to Bid
Before Mr.. Markell left the isthmus we
had told him we expected to take this step
upon our return and would like to have
him make a proposal when we got ready to
submit specifications. We later received
communications from Messrs. Hudgfns 4
Dumas and Mr.. Balfe asking for opportun-
ity to make proposals. AS soon as the
specifications were drafted we mailed to
Mr.. Markell. to Hudgins & Dumas and to
Mr.. Balfe each copy in the same form,
and invited proposals. We did not adver-
tiSe, because 1t was a railroad matter and
because of the urgency of the case. have
had several cablegrams from Mr.. Stevens
since my return asking me to expedite the
arrangement. as existing conditions were
very bad.
After we had mailed the specifications
to the firms named l came to New York
and met all these parties. 1 explained to
them that l was not a hotel man; that we
had done the best could to the speci-
fications but would be glad to receive any
suggestions from them as to the form OF
the specifications. Our specifications as
prepared had included a general menu for
establish a standard. but when Messrs
Hudgns & Dumas attended the conference
referred to they suggested the insertion of
a weekly menu in the specifications instead
of general one. / asked them for form
Of weekly menu. When they brought it TO
me | examined ii and, considering it an ex-
cellent suggestion, asked Mr. Ross to have
1t inserted as a part of our specifications,
applicable to all alike. so that all could
make proposals on the same basis.
Notified of Change.
''All were notified of our amended speci-
fcations and all submitted proposals on
that basis. or course, there is nothing
original in the menu. but by inserting II in
our specification 1t satisfied Hudgins & Du-
mas and Balfe, as well ourselves, and 1t
placed all parties upon equality.
1T was not until after this that the three
proposals were submitted. All proposals
were made upon precisely the same form of
specification. When the proposals We're re-
ceived l found that Mr.. Balfe's was so per
cent higher than Mr.. Markets in some items
and that Hudgins & Dumas were SO
much under either of the others that l
feared there was some misunderstanding on
their part as to the meaning of the speci-
fcations l thereupon wrote them let
ter simplifying the specifications. going more
into detail. and particularly calling their
flege in regard to uncooked food and other
things might have to be withdrawn be-
cause Of our treaty agreements with the
Republic of Panama lin case local prices
of the Panama merchants were again re-
duced to a reasonable basis), and. second,
that the low rates of freight we had made
by way Of our steamship line and railroad,
and also for cold storage. were limited alb
solutely to food supplies to be used by our
employees. and l gave them an opportunity
Qf they did not understand the specifica-
tions) to amend their proposal.
Amended Prices Higher.
They Immediately amended their pro-
posal, raising their prices on some items
over 100 per cent, and when they brought
the amended proposal to my office they
thanked me for having given them the ad-
ditionaI Information and FOR calling atten-
ton to the points above mentioned; also
stating that they had not thoroughly un-
derstood the situation before and had made