New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-02-27
CANAL BIDS REJECTED.
NR. STEVENS RESIGNS.
Construction To Be Pat IN Charge
Of -Army Engineers.
IFrcn The Triburc bureau !

haSHllStN-l' ! eD. -O.-Ihe t2n21l2 Canal VIII
be built by army engineers; all of the bids sub
I.itted .; private contractors have been re-
iccte1; Senator Blackburn Of Kentucky. will,
af5ar iaaving the Senate or March !. be ap-
pgntod member Of the Canal Commission;
5o:.- F. Stevens, chief engineer of the Panama
Canal has resigned and his resignation has
been accepted.
These facts were announced at the White
Rouse to-day. after most exhaustive inquiry
in.o the merits Of the private contract system.
and after ample opportunity had been afforded
10 az the interested contractors 10 demonstrate
their ability % undertake a tasl, OF the mag
nitude which the enterprise on the isth1.lus s
certain TO assume.
Chief Engineer Stevens. who has carried on
the work with brilliant success during the last
eighteen months. and who heartily concu~5 with
the President in the belief that all bids should
he rejected for the best interests Of the gov
errnent, will be succeeded as chief engineer by
Major George ". Goethals, an army engineer
Of great experience and executive ability Major
Goethals viii start for the canal zone next
FRIDAY. 10 take from Mr.. Stevens the COM
clothed with all the powers now in the hands
Of Chairman shonts and Chief Engineer Stevens,
and should he at any time in the future be-
come incapacitated for the work or leave the
enterprise, he will be succeeded by other army
engineers, two of whom are designated by the
President TO go 20 the isthmus with him. and
who with him viii also become members Of
the reorganized Canal Commission
THE PRESIDENTS LETTER.
Nearly ali of these interesting facts wers
made public this afternoon at the White House,
and most of them We're found in the text of a
letter the President wrote to the chairman Of the
Isthmian Canal Commission. This letter is as
follows:
Sir: I have considered with mucn care the
question whether the commission should accept
one Of the bids for the construction of the
Panama Canal under the proposed contract, or
should reject them all. There were two bids
worthy Of consideration. The bid Of the McAr-
thur syndicate at 1912 per cent was the only
one which came within requirements The
oliver & Bangs bid AT 60 per cent was re-
jected not satisfying the specifications of the
invitation Ny. Macarthur and his associates not
Objecting. and preferring this course to an in
vitation for new bids Mr.. Oliver was allowed
TO perfect his bid and obtain new associates
and new financial responsibility; but this per-
mission did in any way change the situa-
fiOn from what IL would have been had Mr..
divers bid in its present form been presented
en- January u, the day fixed for receiving the
bids Under the invitation for bids. the re-
served power exists in the commission 70 reject
all bids, and the first question is whether II
shall do
The purpose Of the contract was TO secure. in
the building Of the canal. the services Of the
best. the most experienced and most skilled
contractors in the country, al the least risk 20
them and at the least expense to the govern
ment. An investigation into the two bids above
mentioned shows that this purpose Of The gov
foil oh -f1l rant "a q or
Of experience whose personal services in the
work are what the commission has sought, have
made arrangements TO divide the profits under
the percentage bid with bankers or others 10
whom the contra actOrs have had TO look for the
recded capital that the contractors who are
actually 10 do the work have arranged 10 &C
Cept a COmpa lively small proportion OF the
profits accruing under the contract. In otner
words, the government by TINS arrahgelhehI -
made TO pay high percentage for the use of
capital which il might itself have furnished at
much lower rate, while the percentage WElcn
the contractors are TO receive for the real benellt
they are 20 confer on the government is reduced
70 very meagre and perhaps inadequate com
lersation. No contract can ultimately operate
Contractors energy. SKIN. experience and per-
scnal supervision Of the work are not adequately
paid for
and which our investigation has made apparent
may be due 20 a defect in the invitation Tor
bids which perhaps stipulated for too heavy
bond and the investment Of too large capital |
hy the contractors, or II may be because me
bidders have taken entirely different view or
the money risk involved from mat taken Dy lne
government Mr.. Stevens, the chleI engineer
who proposed the form Of contract which with |
notifications was adopted. advises against ac-
ce1ring either bid. because acceptance Of either
would not in MS Judgment, accomplsh me me
purpose he sought. The considerations stated
are bv themselves sufficient to require rejec- |
tion Of all bids and a change in the proposed |
form Of contract.
one Of the chief reasons for adopting the con- !
tract as proposed was that in its main features |
e was formulated by Mr.. Stevens. who was eX- |
7ccted 70 supervise the work as chief engineer |
EEe had had experience with contracts or TINS |
character and he had had eighteen months |
actual experience with the work on the isthmus |
eAss than ten days ago received letter from |
Mr.. Stevens. in which he asked 10 be entirely |
relieved from work or the canal as soon as he |
could be replaced by q competent person. and |
that person could become familiar with the |
work ] have accepted his resignation The |
withdrawal Of Mr. Stevens takes away the spe-
rial reason mentioned for proceeding under the /
present form Of contract
II order to secure continuity In engineering /
control and management IN the lUtUre ndFs |
decided to request YOU 10 assign 10 the Once
Of chief engineer Major GOethals, a InefnDer |
Of the c0r,ss Of army engineers. Il IS not my |
purpose by requesting this appointment to dis |
t-rb IN ans way the present organization on the |
iefhmue. which IS very satisfactory, nor to IN |
ferfera with the admirable work now being done |
by the present assistant chief engineer Mr.. |
Piplev and the various heads Of departments |
The work Of construction IS going on well, and !
reaIv created Is Increasing the excavation each !
month ard be relied upon under competent |
leadership 70 make further ana constant iroS-
ress pcnding period within which \ new form |
Of contract can he devised by Major Goefhals /
and his associates, # Il is deemed advisable 10 /
do The york by contract. The services OF the /
same high class contractors whose bids we are (
nov rejecting. or others of similar standing.
MAJ then be invoked I'm the interest Of econ /
cr1v and speed.
qgs-rr T.gC