The Washington times., 1906-01-08


chase the bonds. The bonds were bought
back at los, and accrued interest 10
date of repurchase from the LIST of Oc-
tober. To make the repurchase 1t was
at first thought necessary to borrow
S400 90 from the Canal Commission. and
the opinion of the Attorney General was
asked as to whether the commission had
authority to lend money TO the railroad
company. Il subsequently appeared that
the indebtedness of the commission 10
the railroad was enough TO supply the
railroad company funds 10 take up the
bonds. without borrowing
The Markell Case.
The facts in the Markell case are set
forth at considerable length by Secre-
tary Taft. He says, in substance:
IN March. 1905. il became an urgent
question how the employees of the canal
and railway could obtain food al reason
able prices. Engineer Wallace knew J.
E. Markell, OF Omaha as q contractor
engaged by railroads to iced boarding
| camps and to cater for railroad hotels
and restaurants. Mr.. Wallace in March
wrote Markell and invited him TO come
To the Isthmus with a view to an ar
rangement TO feed employees. The latter
did not reach Mr.. Markell until May,
when he answered accepting the sug-
gestion, and, with his son. partner and
secretary, visited the IsthmUs, returning
10 this country after an absence Of six
weeks
Mr.. Stevens and Governor MagoOn He
had brought plans for Tefrigerators,
laundTies. and for ali the equipment,
| and he discussed the subject and the
/ proper course to be taken with members
of the commission, leaving with them
plans and specifications obtained in this
country from provision houses, laundry
manufacturing establishments and 9TH
1 er sources. He returned TO New York
1 on the Sth OF August Mr.. Shonts re-
! turned On August II, and at once pre-
pared specifications upon which bids
/ were invited The contract was award
I ed 10 Mr. Markell as the lowest bidder
on the It'll Of September. When news
! Of the contract reached the lsthmus,
/ Mr. Stevens by cable objected, as fixing
! too high price. and thereupOn a clause
was introduced into the contract, by the
consent of Mr.. Markell. by which the
company was permitted TO cancel the
/ contract at any time in the discretion of
/ the president.
! Therefore. the provision had been that
after thirty days notice il might be can
celed If the contractor was not discharg
1 ing his duty TO the satisfaction OF the
company. Mr.. Markell in anticipation OF
! fulfilling the contract. and before the
/ introduction Of this new cancellation
clause, had brought to New York twelve
/ eXperts-cooks. hotel superintendent
clerks, and others-with whom to begin
at once the work contracted for. IN
view of the new cancellation clause. he
took only four persons TO the isthmus.
and the others We're directed 10 remain
in New York until the matter was set
! tied. On the I'D of September Mr..
| Shonts and Mr.. Markell sailed for the
/ isthmus. and did not return until the
| 18th OF October. During this time after
/ a conference between Air. ShOnts, Mr..
Stevens, and Governor Magoon, the no
/ tice of cancellation was given and &C
| cepted, Mr.. Shonts and Governor Ma
COON stating that Mr.. Markell would be
| compensated for his loss OF time and
money, and for services to the Govern
ment The reason for the cancellation
was that carrying out Mr.. Markell 5
| recommendations the railroad company
/ had been able to furnish food TO its en-
plOYeS and those or the commission at
less price than that fixed IN the con-
| tract. Markell still insists that the csu-
mate OF cost made by him was reason
| able and that the results obtained by
the company were due to two clrculn-
| stances-one that all the elements or
| cost to the contractor were not included
! i'm the railroad coHnpany's estima te for
the cost of first-class meals, and the
| other that the specifications OF the con-
tract required for meals for the second
class of employees more expensive meal
| than the company was actually FURNISH
| ing. In view of the cancellation of the
contract II is necessary to consider this
/ issue further.
| At a meeting of the railroad directors
! November s. Markell presented his claim
| for actual outlay S5745.91, and also
claim for his time and services; tt
| directors at the instance OF Mr.. Shonts
voted TO allow Mr. Markell $40, 1885, and
| the money was paid a once
Unknown to Taft.
This action was taken without con-
sulting either you or me and was not
/ brought TO my attention until some
time after my return from Panama on
the 18th of November. Looked at from
legal standpoint If the amendment OF
/ the contract with respect to the can
| collation. at the discretion of the Presi-
dent was TO be strictly construed, a
cancellation would end the obligations
of both parties. In other words. il
would appear that the -1yment ordered
/ by the directors was gratutous and
without legal consideration.
On the other hand. the moral and mer-
itorious consideration arising from the
fact that Mr. Markell had actually
| rendered valuable expert services to the
railroad company. had made an actual
outlay OF more than s.. 600. all in antici-
patton of securing the contract and re-
/ lying on the permanence of the con-
| tract would Justify compensating him
| for his loss. X is perfectly plain
| Mr. Markets own evidence that If he
| had been permitted TO carry on the con-
! tract indeed II he had bic and not been
| awarded the contract, ne neve. would
have considered the railroad comm
| indebted TO him for anything, The di-
| rectors. however. thought that the cir
/ eumstances under which the final can
] collation. clause had been obtained ard