Final Report of the Louisiana Purchase Exposition Commission Part 22

On the 10th of November bids were opened by the committee on salvage. They were of very unsatisfactory character. Most of the bidders selected single exhibit buildings or small groups of minor buildings. The highest bid for all of the exhibit buildings opened that date was $50,000. One bid of $325,000 was made for "buildings, structures, salvage of all kinds, and all property owned by the Exposition Company." On the 12th of November the salvage committee rejected all bids. During the following two weeks the salvage committee held frequent meetings. Hearings were given by officers of the exposition to all persons desiring to negotiate for salvage. By wire and by mail persons and firms who might be interested were advised that the property was being offered for sale. Proposals were invited for all physical property of the company, except the intramural cars and equipments and the general service outfit.

The salvage committee waited for proposals in response to this invitation, covering the physical property generally, until nearly the end of November. Three bids were received. The highest was $420,000; the next highest was $300,000. After careful consideration and much negotiation with the various bidders, the salvage committee proposed to the highest bidder, namely, the Chicago House Wrecking Company, which had bid $420,000, to recommend the sale of the physical property to the board of directors, with the exceptions mentioned, for $450,000.

This, after some delay, was accepted by the Chicago House Wrecking Company on the 30th of November, and was reported to the board of directors on the 13th of December, and was ratified unanimously.

The records and correspondence showing the proceedings throughout are on file in the office of the secretary, and are ready for inspection and investigation.

The allegations set forth in the letter of the National Commission as having been made to that body and the answers to be given to such allegations are:

First. That secrecy was observed in handling the bids for the wrecking of buildings.

Answer. It was the judgment of the salvage committee that better results could be obtained if secrecy was observed, in so far that the amounts of bids were not made public until the sale was accomplished. The wisdom of this judgment was vindicated in the amount realized for the salvage when compared with the lower bids.

Second. That the Chicago House Wrecking Company was favored from the beginning.

Answer. This is utterly false.

Third. That the exposition officials rejected higher bids than that of the Chicago House Wrecking Company, so that the latter might have further opportunity to raise its figures.

Answer. No higher bid was received either before or after the sum of $450,000 had been agreed upon to be recommended by the committee on salvage.

Fourth. That only a partial list of the property, which did not include many valuable articles, was submitted to bidders outside of the Chicago House Wrecking Company, and that a complete list was refused other bidders.

Answer. No complete list was submitted to the Chicago House Wrecking Company or to any other bidder. The Exposition Company, through the salvage committee and the executive committee, with deliberate intent refused to furnish any list purporting to be complete.

Fifth. That a written offer of $400,000 cash, and more, if lists could be secured, was ignored.

Answer. No such offer was received.

Sixth. That a bid of $450,000, half cash, was presented to the Exposition Company after the announcement of the sale of the salvage to the Chicago House Wrecking Company for $386,000.

Answer. No such bid of $450,000 was received; the Chicago House Wrecking Company did not make a bid for $386,000.

Seventh. That the contract was eventually given to the Chicago House Wrecking Company for $450,000, with contract provisions inferior to the former $450,000 bid made by a party outside the Chicago House Wrecking Company.

Answer. This statement is not true. There had been no bid of $450,000 on any terms when the sale was closed. The contract provisions were superior to any made in the bids.

Eighth. That the contract with the Chicago House Wrecking Company does not adequately protect the Government, the city of St. Louis, and the stockholders, the $40,000 bond being out of all proportion to the size of the sale.

Answer. The bond of $40,000 was not taken to secure the payment of the $450,000, or any part of it. The first payment of $100,000 was made on the signing of the contract of sale. The remaining $350,000 was secured adequately by a mortgage on the property covered by the bill of sale. The $40,000 bond was required to enforce other conditions of the contract, namely, those relative to the wrecking and removal of the property under conditions of leases upon which the property stood. A part of the contract required that property be kept insured for the benefit of the Exposition Company until all payments were made.

The bond covered these provisions. The Chicago House Wrecking Company made its second payment of $100,000 on February 1. The third payment will be due March 15. The company holds a mortgage on the property to secure the remaining payments, and only releases the property to the Chicago House Wrecking Company as the payments are made.

Ninth. That the sale of the salvage to the Chicago House Wrecking Company was consummated over the protests of some of the directors of the Exposition Company.

Answer. On the contrary, as the records show, the board was unanimous in approval of the contract of the sale and, as stated, there is no record anywhere of objection on the part of any director.

Tenth. That the specifications were misleading, in that one item of copper wire, valued at $650,000, was omitted; also 5,000 electric lights, 5,000 tons of iron piping, 3,500 tons of other piping, the railway system on the exposition grounds, the fire apparatus, etc., were omitted.

Answer. The first specifications, probably those referred to in this paragraph, related only to exhibit buildings. Subsequently the salvage committee informed bidders when bids were taken on all of the physical property that the intramural cars and equipments were to be excepted, and also the property of the General Service Company, which was owned by the Exposition Company. Quant.i.ties of wire had been purchased under the contracts permitting return on a percentage of the price paid.

As regards the iron piping, bidders were informed of the clause in the ordinance authorizing the use of Forest Park which declared that "sewers, drains, conduits, pipes, and fixtures shall become and be the property of the city." By reference to the contract of sale to the Chicago House Wrecking Company it will be observed that the company sells "subject to whatever rights the city of St. Louis may be ent.i.tled to in certain underground pipes, sewers, and conduits in Forest Park." Some of the fire apparatus was loaned or rented to the Exposition Company, and was not owned by it. Many things used by the Exposition Company were sold to it with the privilege of return, or with a contract to return at stipulated amounts or percentages. The exposition officers and the salvage committee answered inquiries, as far as were in their power, made by bidders regarding the property, but from first to last refused to furnish an itemized list. By reference to the contract of sale it will be observed that no list is contained therein, but that the company sells and transfers "the interest, or right, or owners.h.i.+p in or to any and all physical property purchased, constructed, or acquired by the said Exposition Company, excepting as hereinafter mentioned."

Eleventh. That according to an estimate made by several reputable contractors the property sold was of the reasonable value of $1,955,000.

Answer. The Exposition Company has no knowledge of such estimates. If contractors did place such estimates upon the value of the physical property they were singularly lacking in enterprise when they did not come forward with higher bids. The amount realized was the highest bid made for the property.

Twelfth. That the Chicago House Wrecking Company, through undue advantage, obtained inside information as to the extent and value of the property to be sold, and thereby to the material injury of the United States secured a contract with the Exposition Company insuring a profit of more than $1,000,000.

Answer. The Chicago House Wrecking Company obtained no information that was not accessible to and obtainable by any other bidder.

Very respectfully, WALTER B. STEVENS, _Secretary_.

Hon. THOMAS H. CARTER, _President National Commission, _Louisiana Purchase Exposition_.

ST. LOUIS, _March 7, 1905_.

MY DEAR SENATOR: I send herewith, by direction of the executive committee, a reply to the letter from the Commission of February 28. President Francis is absent from the city, having gone last week to New Orleans. I think I should add something from my personal knowledge. Mr. Richey is well known to me, and has been for years. He must have been badly misinformed to have made such allegations as are contained in the letter. I have all of the minutes of the various meetings and a collection of correspondence which go to show that many of these allegations are without foundation. Some of them, I can see, are inferences drawn from misstatements of the facts and from misunderstandings of the real situation.

I have never so much as heard an intimation that any director of the company, or anyone else who knew of the transactions, protested against the sale or adversely criticised the amount realized. On the other hand, the general impression among directors and on the part of the public seems to be that the Exposition Company realized more than was to be expected. The salvage of the World's Fair in Chicago sold for $80,000, that of Omaha for $37,500, and that of Buffalo for $67,000.

Before the exposition closed the management had begun to dispose of salvage in a small way, but the results were very discouraging. It looked much as if the property of this exposition would go as had that of previous expositions, for a very small fraction of the cost. At one time the directors of the company thought it might be necessary to organize a company and carry the salvage through a series of years in order to realize on it. But the best that could be figured from such a course was from $300,000 to $350,000 for the same property sold to the Chicago House Wrecking Company for $450,000.

The only persons who raised any question about the sale and the amount realized were two disappointed bidders. These bidders were given all of the time they asked. They were furnished information in reply to their inquiries. They could not be given lists of the property of the exposition because, after careful consideration of such lists, it was deemed inadvisable by the exposition to attempt a sale on that basis. It was the conclusion that more could be realized by selling all right and t.i.tle to the physical property of the exposition. I believe that more was realized than would have been obtained on bids if an inventory had been furnished.

The Chicago House Wrecking Company was doing business on the grounds during the exposition and previous thereto. The officers of that company have been in the wrecking business for years.

Looking forward to the time, they saved, as I happened to learn, clippings from the newspapers showing contracts let by the exposition; also clippings showing purchases of various kinds.

In fact, for months they were gathering through outside sources all the information they could as to the character of the company's property. In this way they obtained their information as to this property. They were given no list from the company.

They were given no advantage over other bidders. I know it to be a fact that the Exposition Company did all in its power to induce other bidders to come from other cities, and stimulated compet.i.tion. The correspondence and telegrams pa.s.sing through my hands show this. There was a great deal of property that the exposition had the use of and did not own. This applied to fire apparatus, to electric switch boards, to machinery, to street sweepers, to watering carts, and to a great variety of things that were of utility and were loaned by the manufacturers or dealers, who wished to have them in service for the advertising to be gained thereby.

The city is claiming, under the ordinance from which I have quoted in the other letter, the piping on that part of the ground included in Forest Park, and only to-day wrote asking to know when this pipe could be taken up by the city.

It will afford me pleasure to answer any inquiry or to forward to you any doc.u.ment relating to this salvage matter which you may desire to see.

Can you advise me how long you expect to remain in Was.h.i.+ngton?

Very truly, yours, WALTER B. STEVENS, _Secretary_.

Hon. THOMAS H. CARTER, _President National Commission, Louisiana Purchase Exposition_.

Having been elected a Senator of the United States from the State of Montana, Mr. Thomas H. Carter, president of the Commission, resigned his office as member of the Commission on March 9, 1905. At a meeting of the Commission held on March 20, 1905, the following letter was received from Mr. Carter, and his resignation as president of the Commission was duly accepted:

WAs.h.i.+NGTON, D.C., _March 9, 1905_.

GENTLEMEN: Finding that my duties as United States Senator, a.s.sumed on the 4th of this month, will so far require my attention as to render it difficult to longer continue a member of the Commission, I have determined to hand my resignation to the president, and preliminary thereto I respectfully resign the position of president of the Commission.

In tendering my resignation I can not refrain from expressing to the Commission jointly, and to the members separately, my grateful appreciation of the unfailing confidence and cordial support with which I have been favored at all times by the members of the Commission, without exception.

It is questionable whether any like body of men, selected from the country at large, has ever acted more harmoniously in the discharge of any public duty.

With deep regret, and only from a sense of duty, I sever my relations with the Commission, and in doing so wish each of my a.s.sociates on the Commission long life and prosperity.