Daily Kennebec journal., 1906-01-09
THE CANAL REPORT.
Continued from Page One)

| Continued from Page oIe''
not have been adopted until after a
authority. / have not the shShteSt
doubt that the president and directors
Of the Company acted in entire good
| faith in what they did, and as thcy
| thought for the best interests ol the
government: but considering the an
omAlous and pe, uliar relations between
| the directors and the company ana The
! government. the bonds should not nave
been issued without your approval or
mine. IN view Of this fact, by your an
| thority. | instructed the president Of
| the railroad company 10 proceed at
once to rc-purchaSe the bonds. The
| bonds themselves contained Stipula-
ton providing that they might be re-
| deemed either on the first Of October or
| the first OF April by the payment of the
previous six months interest. the prin-
| cipal. and premium of fiEt peg cent.
| Arrangements were made with tn"
purchasers by which the bonds were
bought back at the premium pald, 100,
ard accrued interest IL date Of re-pur-
| chase from the first of October. To
make the rCpurchase. it was at first
| thought nee essary for the railroad COM
rany to borrow 100000 from the canal
| commission"
The acting attorney general held that
the commission had the authority to
lend the money to the railroad COM
| pany for that purpose. but 1t was
found that tho Indebtedness of the ca
nal commission to the railroad compa-
| ny was quite large enough to supply
| the railroad company with the needed
funds for taking to the bonds without
borrowing from the commission.
| "The executive officers Of the rail-
road company have been advised of
their error" says the secretary in his
letter to the President, "and hereafter
| questions of this character will nos be
acted upon finally by the commission
| or the directors Of the railroad COM
pany until after conference with the
proper authorities.''
| "Another matter calling for COM
ment." Sec. Taft says. sis the cancel
| lation of the sO-callcd Markell contract
| and subsequent settlement" The secre-
tary relates how the contract for fur
| nshing food to canal employees was
awarded to j. f. Markell of Omaha, as
| Tie lowest DltlCtI OIl liz itll VI 1'tpiSlh-
| Der. The reason for the subsequent
! cancellation of the contract. says the
| secretary, was that, in carrying out Mr..
| Markets recommendations. the rail-
| road company under Mr.. Stevens, had
| been able To furnish food to its en-
ployes at n lower price than that fixed
| i'm the contract.
The report adds:
"At a meeting of the railroad direc-
tors Nov. S. Mr.. Markell presented his
claim for his actual outlay, amounting
to s5-i5.97 and also a claim for the val
re of his time and services. The direc-
tors at the instance of Mr.. Shonts Vot-
| ed to allow Mr.. Market for his expenses
| and service the sum of SO. 4J.97 and
the money was paid at once.
| "1his action was taken without con-
| Sulting either you or me. and was not
| brought to my attention until sometime
after rly return from Panama Oh the
| 18th of November
| The secretary then denounced at
| some length the question whether the
directors had the legal right to vote
this award to Mr.. Markell. although it
is admitted that they acted in this re-
gard in good faith and with due re-
! gard to the trust in compensating Mr..
| Markell for his loss of money, time and
services.
| The secretary says:
81 think, however, that these were is
sues of much Importance and doubt
tina, they should have been submitted
| TO you or TO me. as your representa-
| tiveS, for approval"
The secretary says that he has called
for Il full report from Mr.. Shonts and
complete vouchers from Mr. Markell
and adds:
Il have submitted the question to
the attorney general whether you may
legally confirm the action of the rail
road company and make the payment
4 logical one. Tho opinion of the at
torney general in the affirmative will
be found as an appendix.
| Il respectfully recommend that the
action of the commission in settling
with Mr.. Market now have your formal
confirmation. further request that tho
two reports and this letter of transmit
tai with its appendices be submitted to
Congress"
| In conclusion the secretary says:
"Tnose who are responsible for the
work of the canal commission court in
vcstig:.tiOn of the most thorough char
actcr into everything which has been
donc under its authority.''
The Presidents letter to the secretary
follows:
'"The White House, Washington, Jan.
| A. 1906.
'''To the Secretary Of War:
| 81 have received your letter of Jan.
.. transmitting the annual report Of the
iathmian Canal Commission and the
Panama Railroad Co. I hereby formal
ly approve Your action ana recommcn-
iationS as therein set forth.
| THEODORE ROOSEVELT"