Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1906-01-19

letter advised lle
President that there is to be Il major
ity and Il minority report from the
board of consulting engineers as to
the type of canal to be recommended.
and he hopes that the whole matter
may be presented for submission to
Congress by Feb. I.
The Secretary takes up the report
of the president of the railroad COM
pany and discusses two transactions
referred to in the rcport-the issue Of
bonds and their repurchase by the
company and the market contract for
feeding employees on tho isthmus. or
these the Secretary says: 80.
1.-THE question of Issuing the bonds
was not submitted to you or to me
board of directors. The policy of sell
ing the bonds was a doubtful one and
should not have been adopted until
after a conference with higher govern
mental authority. I have not the
slightest doubt that the president and
directors of the co:.pany acted i'll en-
tire good faith in what they did, and,
tS lLSS iouShl iol ~ pSoI
of the government; but considering the
anomalous and peculiar relations be-
tween the directors n the company
and the government, the bonds should
not have been issued without your APP
prevail or mine.
"In view of this fact, by your au-
thOrity, l instructed the president Of
the railroad company to proceed at
once to repurchase the bonds. The
bonds themselves contained Il stipula-
ton providing that they might be re-
deemed either Oct. 1 or April 1 upon
the payment Of the previous six
tmonths' interest, he principal, and Il
premium of 5 per cent.
arrangements were made with the
purchasers by which the bonds were
bought back at the premium paid, 1O5,
and accrued interest to date of repur-
chase from Oct. 1. To make the. re-
purchase it was at first thought nee
essary for The railroad company to
borrow $500, 600 from the canal COM
mission" ~
w. In future, the Secretary says, ques-
tons Of this character Twill not be
acted upon, until after conference with
the proper authorities" . .
as Discusses Markell Contract.
Secretary Taft then discusses the
cancellation Of the Markell contract for
feeding the Panama laborers. He
says: 49,, >,
THE reason for the cancellation of
the contract was that, In carrying out.
Mr.. Markets. recommendations, the
railroad company, under Mr.. Stevens,
had been able to furnish food to its
employees and those of the commission
at 4 less price than that fixed in the
contract. Mr.. Markell still insists that
the estimate Of cost made by him was
reasonable and hat the results OBJ
tanned by the company were due to
two circumstances-one that all the
elements of cost to the contractor
We're not included in the railroad COM
pany's estimate for the cost Of first
class meats, and the other that the
specifications Of the contract required
for meals for the second class Of en-
playes a more expensive meal than
the company was actually furnish
ing" .
After stating hat Mr.. Markell was
later allowed $40, 745 for his expenses
under the contract, Mr.. Taft says:
This action was taken without con-
sulting either you or me, and was not
time after my return from Panama
on Nov. Is. Looked at from q purely
and strictly legal standpoint, if the
amendment of the contract with re-
spect to the cancellation at the discre-
ton Of the President was to be strict
Iy construed. d cancellation would end
the obligations Of both parties under
it and leave them without any claim
for damages by either against the 9TH
er, and therefore Mr.. Markell would
seem to have no claim against the rail
road company after the right Of abso-
lutte cancellation had been exercised
by the president. In other words, it
would appear that the payment or
dered by the directors was gratuitous
and without legal consideration"
Mr.. Taft says as the Markell claim,
aLtCi iSa huo oSSh approved
by the Attorney General, he asks the
President to approve the transaction.
Panama Railway Report.
The annual report of the Panama
Railroad Company for the ten months
ended Oct. 81 last, submitted to Con-
gress, shows that after payment Of all
fixed charges and cost of operation for
the period covered there remains
S354,24S, or somewhat in Excess of )
per cen on the capital stock. The to-
tai earnings of the road for the trans
p%ortation of all kinds of traffic show
an increase of $500, 204, Or 1877 per
cent over the corresponding ten
months of the previous year. Pas.
senger earnings increased $40. G91 and
mail earnings decreased $2,434. The
total revenue freight traffic for the
period of the report, including both
merchandise and coal, was 4O6,S4O
tons, increase of 2673 per cent, and
yielded a venue of s1,3GG, 145, an in
crease of 17-93 per cent.
1t is the understanding in Washing
ton that Madrid has practically been set
tied upon as the meeting place of the
Moroccan conference.