Valentine Democrat. (Valentine, Neb.) 1900-1930, 1906-01-18

President that there is to be a major
ity and a 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 report-the issue Of
bonds and their repurchase by the
| company and the market contract for
| feeding employees on the isthmus. Of
these the Secretary says:
''The question of issuing the bonds
was not submitted to you or to me
before final action was taken by the
| 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 company acted in en-
tire good faith in what they did, and,
as they thought, for the best interests
| of the government; but considering the
anomalous and peculiar relations be-
twsen the directors and the company
and the government, the bonds should
not have been issued without your ap-
proval or mine.
I'm 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 a stipula-
ton providing that they might be re-
deemed either Oct. 1 or April 1 upon
the payment OF the previous six
months interest, the principal, and
premium of per cent.
Arrangements were made with the
purchasers by which the bonds were
bought back at the premium paid, 1O3,
and accrued interest to date of repur-
chase from Oct. I. To make the re-
purchase it was at first thought nee
essary for the railroad company to
borrow 100000 from the canal COM
mission
In future, the Secretary says, ques-
tons of this character will not be
acted upon until after conference with
the proper authorities
Discusses Markell Contract.
Secretary Taft then discusses the
cancellation of the Markell contract for
feeding the Panama 1abOrers He
says:
1.-THE reason for the cancellation of
the contract was that, in carrying out
Mr.. Markets recommendations, the
had been able to furnish food to its
employees and those of the commission
at less price than that fixed in the
contract Mr. Markell still insists that
the estimate Of cost made by him was
reasonable and that the results OBJ
tanned by the company were due to
two circumStances-one that all the
elements of cost to the contractor
were 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 more expensive meal than
the company was actually furnish
ing"
After stating that Mr. Markell was
later allowed $1O,745 for his expenses
under the contract, Mr. Taft says:
"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 Nov. Is. Looked at from 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
ly construed, cancellation would end
the obligations of both parties under
it and leave them without any claim
for damages by either against the 9TH
or, 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
end without legal consideration
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.c4s, D. somewhat in excess of 5
per cent on the capital stock. The to-
tai earnings of the road for the trans
portation Of all kinds of traffic show
an increase of 800, 2O4, or 1877 per
cent over the corresponding ten
months Of the previous year.