"2 / 60 th (.t 2d Congress \ Session / HOUSE OF REPRESENTATIVES Document No. 1213 ^ 5 SSI SPECIAL MESSAGE OF THE PRESIDENT OF THE UNITED STATES • COMMUNICATED TO THE TWO HOUSES OF CONGRESS DECEMBER i 5> 1908 SECOND SESSION OF THE SIXTIETH CONGRESS December 15, 1908.— Read; referred to the Committee on Interstate and Foreign Commerce and ordered to be printed WASHINGTON GOVERNMENT PRINTING OFFICE 1908 SPECIAL MESSAGE. £ To the Senate and House of Representatives : In view of tlie constant reiteration of the assertion that there was some corrupt action by or on behalf of the United States Govern- ment in connection with the acquisition of the title of the French Company to the Panama Canal, and of the repetition of the story that a syndicate of American citizens owned either one or both of the Panama companies, I deem it wise to submit to the Congress all the information I have on the subject. These stories were first brought to my attention as published in a paper in Indianapolis, called “The News,” edited by Mr. Delavan Smith. The stories were scurrilous and libelous in character and false in every essential particular. Mr. Smith shelters himself behind the excuse that he merely accepted the statements which had appeared in a paper published in New York, “The World,” owned by Mr. Joseph Pulitzer. It is idle to say that the known character of Mr. Pulitzer and his newspaper are such that the statements in that paper will be believed by nobody ; unfortunately, thousands of persons are ill informed in this respect and believe the statements they see in print, even though they appear in a newspaper published by Mr. Pulitzer. A Member of the Congress has actually introduced a resolution in reference to these charges. I therefore lay all the facts before you. The story repeated at various times by the World and by its fol- lowers in the newspaper press is substantially as follows: That there was corruption by or on behalf of the Government of the United States in the transaction by which the Panama Canal property was acquired from its French owners; that there were improper dealings of some kind between agents of the Government and outside per- sons, representing or acting for an American syndicate, who had gotten possession of the French Company; that among these persons, who it was alleged made “huge profits,” were Mr. Charles P. Taft, a brother of Mr. William H. Taft, then candidate for the Presidency, and Mr. Douglas Robinson, my brother-in-law; that Mr. Cromwell, the counsel for the Panama Canal Company in the negotiations, was in some way implicated with the United States governmental ( 3 ) ■ ' ? 301 52 4 V authorities in these improper transactions; that the Government has concealed the true facts, and has destroyed, or procured or agreed to the destruction of, certain documents; that Mr. W. H. Taft was Secretary of War at the time that by an agreement between the United States Government and the beneficiaries of the deal all traces thereof were “ wiped out ” by transferring all the archives and “ secrets ” to the American Government, just before the holding of the convention last June at which Mr. Taft was nominated. These statements sometimes appeared in the editorials, sometimes in the news columns, sometimes in the shape of contributions from individuals either unknown or known to be of bad character. They are false in every particular from beginning to end. The wicked- ness of the slanders is only surpassed by their fatuity. So utterly baseless are the stories that apparently they represent in part merely, material collected for campaign purposes and in part stories origi nally concocted with a view of possible blackmail. The invento of the story about Mr. Charles P. Taft, for instance, evidently sup posed that at some period of the Panama purchase Mr. W. H. Taft was Secretary of War, whereas in reality Mr. W. H. Taft neveri became Secretary of War until long after the whole transaction ini question had been closed. The inventor of the story about Mr. Douglas Robinson had not taken the trouble to find out the fact that Mr. Robinson had not had the slightest connection, directly or indirectly, of any kind or sort with any phase of the Panama trans- action from beginning to end. The men who attacked Mr. Root in the matter had not taken the trouble to read the public documents which would have informed them that Mr. Root had nothing to do with the purchase, which was entirely arranged through the Depart- ment of Justice under the then Attorney-General, Mr. Knox. Now, these stories as a matter of fact need no investigation what- ever. No shadow of proof has been, or can be, produced in behalf of any of them. They consist simply of a string of infamous libels. In form, they are in part libels upon individuals, upon Mr. Taft and Mr. Robinson for instance. But they are in fact wholly, and in form partly, a libel upon the United States Gov- ernment. I do not believe we should concern ourselves with the; particular individuals who wrote the lying and libelous editorials; articles from correspondents, or articles in the news columns. The real offender is Mr. Joseph Pulitzer, editor and proprietor of tint World. While the criminal offense of which Mr. Pulitzer has beeh guilty is in form a libel upon individuals, the great injury done i< in blackening the good name of the American people. It should 5 not be left to a private citizen to sue Mr. Pulitzer for libel. He should be prosecuted for libel by the governmental authorities. In point of encouragement of iniquity, in point of infamy, of wrong- doing, there is nothing to choose between a public servant who betrays his trust, a public servant who is guilty of blackmail, or theft, or financial dishonesty of any kind, and a man guilty as Mr. Joseph Pulitzer has been guilty in this instance. It is therefore a high national duty to bring to justice this vilifier of the American people, this man who wantonly and wickedly and without one shadow of justification seeks to blacken the character of reputable private citizens and to convict the Government of his own country in the eyes of the civilized world of wrongdoing of the basest and foulest kind, when he has not one shadow of justification of any sort or description for the charge he has made. The Attorney-General has under consideration the form in which the proceedings against Mr. Pulitzer shall be brought. Meanwhile I submit to you all the accompanying papers, so that you may have before you complete information on the subject. I pall your attention to my communications in my messages to the Congress of January 20, 1902, March 11, 1903, December 7, 1903, January 4, 1904, and December 17, 1906, in which I set forth at length the history of various phases of the whole transaction. I recall your attention to the report and opinion of the Attorney- General rendered to me, dated October 25, 1902, with the accompany- ing documents and exhibits. I call your attention to the correspond- ence of the officers and agents of the Panama Canal Company with the President and other officers of the United States printed in Sen- ate Document No. 34, December 10, 1902 ; also to the copy of the official proceedings of the New Panama Canal Company at Paris on the 30th of December, 1903, together with a report of the Council of Administration of that company, printed in Senate Document No. 133, January 28, 1904; and to the copy of the general convey- ance by the New Panama Canal Company to the United States, also copies of certain telegrams from the president of the company mak- ing an offer of sale, and Attorney-General Knox’s cablegram in re- sponse printed in Senate Document No. 285, March 23, 1906. I call your attention furthermore to the exhaustive testimony recorded in public document (Sen. Doc. No, 41 1, 59th Cong., 2nd sess.), which contains the searching investigation into the whole transaction made by the Congress for its information and fully considered by the Con- gress before it took action. 6 In the Act approved June 28, 1902, “To provide for the con- struction of a canal connecting the waters of the Atlantic and Pacific oceans,” the Congress provided as follows : “ That the President of the United States is hereby authorized to acquire, for and on behalf of the United States, at a cost not exceed- ing forty millions of dollars, the rights, privileges, franchises, con- cessions, grants of land, right of way, unfinished work, plants, and other property, real, personal, and mixed, of every name and nature, owned by the New Panama Canal Company, of France, on the Isthmus of Panama, and all its maps, plans, drawings, records on the Isthmus of Panama, and in Paris, including all the capital stock, not less, however, than sixty-eight thousand eight hundred and sixty- three shares of the Panama Railroad Company, owned by or held for the use of said Canal Company, provided a satisfactory title to all of said property can be obtained.” It thereupon became the duty of the President, in execution of this statute, to purchase the property specified from the New Pan- ama Canal Company, of France, provided he could obtain a satis- factory title. The Department of Justice was instructed to examine the title, and after such an examination Attorney-General Knox reported that a satisfactory title could be obtained. Payment of the purchase price was thereupon made to the New Panama Canal Com- pany, in accordance with the act of the Congress, and the property was conveyed by that company to the United States. It was no concert of the President, or of any officer of the Executive Department, t( > inquire as to what the New Panama Canal Company did with the - money which it received. As a matter of fact, the New Panama Canal Company did distribute the money between its shareholders and the shareholders of the preceding Panama Canal Company in accordance with the decree of a French court, aud the records of the French court show who were the shareholders who received the money; but that is no concern of ours. I call your attention to the accompanying statement as to the attempt to- form an American company in 1899 for the purpose of taking over the property of the French company. This attempt proved abortive. There was no concealment in its effort to put through this plan; its complete failure and abandonment being known to everyone. The important points set forth in the accompanying papers, andj in the papers to which I have referred you, are as follows: j The investigation of the history, physical condition, and existing' value of the enterprise by the Congress, resulting in the enactment j of the law of 1902 authorizing the President to acquire the property 1 for the sum of $40,000,000 upon securing a satisfactory title and thereupon to undertake the work of construction ; the failure of the Americanization of the enterprise in 1899; the transmission by me to the Congress from time to time of full information and advice as to the relations of this Government to transit across the Isthmus and under the treaties, as to the negotiations and final acquisition of the title, and later as to the progress and condition of the work of construction ; the previous authorization of the sale to the United States by the stockholders of the new company and their subsequent ratification ; the examination and approval of the title by Mr. Knox; the arrangements for payment through J. P. Morgan & Company as the fiscal agents of this Government, and the payment accordingly at the Bank of France upon proper official receipts to the liquidators acting under the decree of the French court, the French govern- mental body having jurisdiction in the matter; and, finally, the sub- sequent apportionment and distribution of the fund to the creditors and stockholders of the two companies under that decree. The Panama Canal transaction was actually carried through not by either the then Secretary of State, Mr. John Hay, or the then Secretary of War, Mr. Elihu Root, both of whom, however, were cognizant of all the essential features; but by the then Attorney- General, Mr. P. C. Knox, at present Senator from Pennsylvania. I directed or approved every action, and am responsible for all that was done in carrying out the will of the Congress ; and the provisions of the law, enacted by Congress after exhaustive examination and discussion, were scrupulously complied with by the Executive, While the transaction was pending I saw Mr. Cromwell but two or three times, and my communications with him were limited to the exchange of purely formal courtesies. Secretary Hay occasionally saw him, in the same manner; I doubt whether Mr. Root held any conversation with him. The Attorney-General saw him fre- quently, as he was counsel for the Panama Company; their com- munications were official, as representing the two sides. I enclose copies of my correspondence with Mr. Win. Dudley Foulke, who first brought these scandalous stories to my attention, and with Senator Knox and Mr. Cromwell, to whom I wrote in response to the request of a gentleman who wished to know about the stock- holders in the Panama Canal Company. The title to the Panama Canal properties was vested in the New Panama Canal Company of France, which was the legal owner thereof, and the old or so-called De Lesseps Company had a large 8 , equity therein. The title was not in a New Jersey company nor in any other American company, nor did this Government have any deal- ings with any American company throughout the affair. The exact legal status, to the most minute detail, appears in the exhaustive opinion of Attorney-General Knox approving the title to be given to the United States, which clearly establishes that the only party dealt with was the New Panama Canal Company of France (with the concurrence of the liquidator of the old company) and not any American corporation or syndicate. The action of the United States Government was, of course, wholly uninfluenced by, and had nothing whatever to do with, any question as to who were, or who had been, the security- holders of either the new or the old company. Who such security-holders were was not our affair. If, as a matter of fact, the Canal com- panies, either or both, had been owned by American citizens or by citizens of any other nationality, it would not have altered in the slightest degree the action taken by this Government. Our concern was to get the canal property which was owned by the French Company, and to see that the title was clear. Our transactions were carried on openly, and were published in detail, and we dealt solely (so far as the interests of the old Panama Company were concerned) with the liquidator appointed by the proper French governmental body, the Civil Tribunal of the Seine, and in accordance with the decree of this same tribunal, with the New Panama Canal Com- pany, which also went into liquidation upon the sale to the United States. All our transactions were carried on openly, and were pub- lished in detail. The distribution of our payment of $40,000,000 follows the award of arbitrators chosen by the new company and the liquidator, authorized by the decree of this same Civil Tribunal of the Seine, and providing for a determination of the proportionate division between the new and old companies. We paid the money through the New York banking house of Messrs. J. P. Morgan & Company, acting as fiscal agents of this Government, into the Bank of France in Paris. The receipts and accounts of our Treasury Department show the payment of the money into the Bank of France and account for the money being paid over to the liquidator appointed by the Civil Tribunal of the Seine and to the New Panama Canal Com- pany of France, the proportion of the forty million dollars being 128.600.000 francs to the liquidator of the old company and 77.400.000 francs to the New Panama Canal Company of France in 9 liquidation. In these payments we followed to the letter the decree of the governmental tribunal of France which had the authority to make such a decree, the Civil Tribunal of the Seine. We had neither desire nor authority to go behind this decree of this proper governmental body, as all the conflicting rights of the security- holders of both companies had been settled by the decree of said court by ratification of the arbitration which resulted in that division. I wish to make as clear as possible, and as emphatic as possible, the statement that we did not have anything to do with the distri- bution of a dollar of the $40,000,000 we paid as regards any stock- holder or bondholder of the French Companies, save that we fol- lowed out the award of the arbitrators appointed in accordance with the decree of the French court which had dealt with the sub- ject in awarding a certain proportion to the old company and a cer- tain proportion to the new company. Any question concerning the stockholders, bondholders, or other beneficiaries of the proceeds of sale was purely a question for the Civil Tribunal of the Seine, the French governmental body, with which this Nation had nothing whatever to do. Under these circumstances there was not the slightest need for Mr. Cromwell to give any information on the subject of the com- panies for which he had been counsel. This Government has no concern with Mr. Cromwell’s relation to these companies, or either of them, or with the amount of his professional compensation ; it was not the affair of this Government to inquire who were the security holders of the companies. Nevertheless, Mr. Cromwell, of his own accord, has submitted to me, together with a copy of his statement published on the nth instant, and which I transmit herewith, a full list of the stockholders of the New Panama Canal Company of France on January 15, 1900 (numbering over 6,000), and a list of all stockholders who were present at a special meeting of the company held February 28, 1902, immediately after the cable offer of the company was made to the United States (January 9— 11, 1902), to accept the appraisement of $40,000,000 made by the Isthmian Canal Commission, and to sell for said sum the Panama Canal, concessions, and other property, and the shares of the Panama Railroad Company. He has also furnished me a certified copy of the final report of the liquidator of the old company, which was filed on June 25th last and formally approved by the Civil Tri- bunal of the Seine, together with a summary account prepared and signed by said liquidator as late as the 24th ultimo. I also transmit I IO a translation of the two resolutions, with the vote upon them, adopted at a meeting of the stockholders of the new company held on April 23, 1904, for the purpose of finally ratifying the sale. All these documents I herewith transmit as a part of this mes- sage. It appears from them that the creditors of the old company number 226,296 parties who have received dividends out of the funds in the hands of the liquidator, who, in his letter, states that in this present month of December the second and last distribution to the creditors will be begun, and that the average dividend here- tofore paid to each individual was 782 francs, or $156. No pay- ment whatever was or will be made upon the stock of the old com- pany, as it was worthless from the day De Lesseps failed, and this cuts out from consideration all misleading statements regarding a possible purchase by anybody of the stock of the old Panama Canal Company. It has not received, and will not receive, a penny. Even upon the bonded indebtedness the dividend, I am thus in- formed, will amount, in the aggregate, to only about ten per centum. It likewise plainly appears that this distribution by the liquidator of the old company has been. openly conducted at his office in Paris, No. 50 Rue Etienne Marcel, where all the receipts, accounts, and records of his payments are on file. The New Panama Canal Company of France is in liquidation. As the accompanying papers set forth, this liquidated company received as its proportion of the $40,000,000 the sum of 77,400,000 francs, and this amount was distributed by the liquidation in three payments through four leading banks of Paris, covering a period of the past four years, and to shareholders numbering about 6.000. Every step of the transaction was not only taken publicly, but was, contemporaneously therewith, advertised in the legal and financial papers of France, and the banks making the payments took proper receipts from all the parties to whom payments were made, as is customary in such cases. The capital of the New Panama Canal Company of France was 65.000. 000 francs, and the distribution thus made amounted to about 130 francs on each share of 100 francs. No dividends were paid during the ten years of the company’s existence. It therefore resulted that the shareholders only recovered their original invest- ment with annual interest of about three per cent. The accounts and records of this liquidation, which was concluded in June last, are 011 deposit with the Credit Eyonnaise of Paris as a proper custodian of the same, appointed upon such liquidation. Recently a request was made by a private individual to inspect the records of these payments, but answer was made by the custodians that they saw no proper reason for granting such request by a stranger, and, inasmuch as there is not the slightest ground for suspicion of any bad faith in the transaction, it hardly seems worth while to make the request ; but if the Congress desires, I have no doubt that on the request of our Ambassador in Paris, the lists of individuals will be shown him. As a matter of fact, there is nothing whatever, in which this Gov- ernment is interested, to investigate about this transaction. So far as this Government is concerned, every step of the slightest impor- tance has been made public by its Executive, and every step taken in France has there been made public by the proper officials. The Congress took the action it did take after the most minute and exhaustive examination and discussion, and the Executive carried out the direction of the Congress to the letter. Every act of this Government, every act for which this Government had the slightest responsibility, was in pursuance of the act of the Congress here, and following out the decree of the Civil Tribunal of the Seine in France. Furthermore, through the entirely voluntary act of Mr. Crom- well, I am now able to present to you full information as to these actions in France with which this Government did not have any concern, and which are set forth in the accompanying papers. It may be well to recall that the New Panama Canal Company of France did not itself propose or fix the figure $40,000,000 as the valuation of the canal and railroad properties. That sum was first fixed by our Isthmian Canal Commission in its reports to the Con- gress after two years of investigation and personal inspection of all the properties and work already done, whereby the properties and the work done were in detail appraised at that sum as their value to the United States. The French company steadily refused for over two years to make any offer whatever in answer to the many written requests of the Isthmian Canal Commission; and when its president did approach the question of price, it was on the basis of $109,000,000. Eater, under conditions not necessary now to rehearse, the company, by cable, accepted the appraisement of $40,000,000 made by our Commission. This Government, therefore, acquired all the proper- ties and concessions, both of canal and railroad, at its own valuation and price, the Congress approving the price, and authorizing the expenditure of the money, after the most exhaustive examination and discussion. I transmit herewith lists of the documents in the possession of the Department of State, the Department of Justice, and the Department of War, so that, if the Congress sees fit, it may direct that they be printed. They are, and always have been, open to the examina- tion of any Member of the Congress. There is no object in printing them, but there is also no objection to printing them, save that it is a useless expense. I also transmit a list of the documents furnished by Mr. Crom- well. Theodore Roosevelt. The White House, December 75, 1908 . APPENDIX. Hot Springs, Va., November 29 , 1908. The President. Sir : The Indianapolis News, not only during the campaign but even after its close, has been repeatedly and continually making serious charges against your Administration as well as against Mr. Taft in connection with the Panama purchase, as, for example, the following : “THE PANAMA MATTER. M The campaign is over and the people will have to vote to-morrow without any official knowledge concerning the Panama Canal deal. It has been charged that the United States bought from Ameri- can citizens for $40,000,000 property that cost those citizens only $12,000,000. Mr. Taft was Secretary of War at the time the negotiation was closed. There is no doubt that the Government paid $40,000,000 for the property. But who got the money? We are not to know. The Administration and Mr. Taft do not think it right that the people should know. The President’s brother-in-law is involved in the scandal, but he has nothing to say. The candi- date’s brother has been charged with being a member of the syndi- cate. He has, it is true, denied it. But he refuses to appeal to the evidence , all of which is in the possession of the Administration and wholly inaccessible to outsiders. For weeks this scandal has been before the people. The records are in Washington, and they are public records. But the people are not to see them — till after elec- tion, if then.” Even after the election this has been continued, it being said that Mr. Taft’s “ weakness ” in Indiana (where he ran many thousands ahead of any other Republican candidate) was due in great measure to this alleged scandal, and as late as November 18th another edi- torial appears which I enclose. What are the facts, may I ask, in regard to these charges? Where are these “inaccessible” records? When did they come into possession of the Government, and what do they contain? If the statements of the News are true, our peo- ple ought to know it ; if they are not true, they ought to have some just means of estimating what credit should be given in other mat- ters to a journal which thus disseminates falsehoods. Yours, faithfully, (Signed) Wm. Dudeey Foueke. (13) The White House, Washington , December /, 1908. My Dear Mr. Foulke : I have received your letter of the 29th ultimo and have read it in connection with your previous letters enclosing quotations from the Indianapolis News, a paper edited by Mr. Delavan Smith. As Mr. Smith certainly knew that all the statements he made were false, both as to this Panama matter and as to the other matters of which yon enclosed me clippings, and inasmuch, therefore, as the exposure of the falsity will not affect his future statements, I am not very clear what good will result from such exposure. But inasmuch as you evidently earnestly desire some answer to be made, and inasmuch as you say that some reputable people appear to believe the falsehoods of the News and Mr. Smith, and inasmuch as you seem to think that his falsehoods as regards the Panama matter are the most prominent, I will answer them. The News states in one of its issues that probably some of the documents dealing with the matter have been destroyed. This is false. Not one has been destroyed. It states that the last docu- ments were sent over in June of this year, the object of this partic- ular falsehood being, apparently, to connect the matter in some way with the nomination of Mr. Taft. As a matter of fact, the last papers that we have received of any kind were sent over to us in May, 1904, and they have been accessible to every human being who cared to look at them ever since, and are accessible now. Any reputable man within or without the Congress, Republican or Democrat, has now and always has had the opportunity to examine any of these documents. You quote the News as stating that “the people have no official knowledge concerning the Panama Canal deal.” The fact is that the people have had the most minute official knowledge; that every important step in the transaction and every important document have been made public in communications to the Congress and through the daily press, and the whole matter has been threshed over in all its details again and again and again. The News gives currency to the charge that “the United States bought from American citizens for forty million dollars property that cost these citizens only twelve million dollars.” The statement is false. The United States did not pay a cent of the forty million dollars to any American citizen. The News says that there is no doubt that the Government paid forty million dollars for the prop- erty, and continues — “But who got the money? We are not to know. The Administration and Mr. Taft do not think it right that the people should know.” Really, this is so ludicrous as to make one feel a little impatient at having to answer it. The fact has been officially published again and again that the Government paid forty million dollars, and that it paid this forty million dollars direct to the French Government, getting the receipt of the liquidator appointed by the French Government to receive the same. The United States Government has not the slightest knowledge as to the *5 particular individuals among whom the French Government distrib- uted the sum. This was the business of the French Government. The mere supposition that any American received from the French Government a “ rake off ” is too absurd to be discussed. It is an abominable falsehood, and it is a slander not against the American Government but against the French Government. The News continues, saying that “The President’s brother-in-law is involved in the scandal, but he has nothing to say.” The Presi- dent’s brother-in-law was involved in no scandal. Mr. Delavan Smith and the other people who repeated this falsehood lied about the President’s brother-in-law ; but why the fact that Mr. Smith lied should be held to involve Mr. Robinson in a “scandal” is difficult to understand. The scandal affects no one but Mr. Smith ; and his conduct has been not merely scandalous but infamous. Mr. Rob- inson had not the slightest connection of any kind, sort, or descrip- tion at any time or under any circumstances with the Panama matter. Neither did Mr. Charles Taft. The News says that Mr. Taft was a member of the “syndicate.” So far as I know there was no syndicate; there certainly was no syndicate in the United States that to my knowledge had any dealings with the Government, directly or indi- rectly ; and inasmuch as there was no syndicate, Mr. Taft naturally could not belong to it. The News demands that Mr. Taft “appeal to the evidence,” by which it means what it calls “the records” — that is, the mass of papers, which are stored in the War Department, save such as, because of their technical character and their usefulness in the current work of the canal, it has been found advisable to send to the Isthmus. All of these documents that possessed any importance as illustrat- ing any feature of the transaction have already been made public. There remains a great mass of documents of little or no importance which the administration is entirely willing to have published, but which because of their mass and pointlessness, nobody has ever cared to publish. Any reputable man can have full access to these documents. If you or Mr. Swift, or Mr. Booth Tarkington, or Mr. George Ade — in short, if any reputable man — will come on here, he shall have free access to the documents and can look over everything for himself. Congress can have them all printed if it wishes; but no Congressman has ever so far intimated any desire that this should be done; I suppose because to print such a mass of docu- ments would be a great expense, and, moreover, an entirely useless expense, unless, which is not the case, there was some object in printing them. Now, my dear Mr. Foulke, I have answered in detail your ques- tions and the statements of the News. You are quite welcome to print my answer ; but I must frankly add that I don’t think any good will come from doing so. Mr. Delavan Smith is a conspicu- ous offender against the laws of honesty and truthfulness; but he does not stand alone. He occupies, for instance, the same evil emi- nence with such men as Mr. Uaffan of the New York Sun, editorials i6 of whose paper you or others have from time to time called to my attention, just as you have called to my attention these editorials of the Indianapolis News. I never see an editorial in anyone of these or similar papers unless for some reason it is sent to me by you or by some one else; and of the editorials thus sent me there is hardly one which does not contain some willful and deliberate perversion of the truth. For example, I have just made public the following statement concerning a tissue of utterly false statements which appeared in Mr. Laffan’s paper, the Sun : •“As the New York Sun story entitled ‘Roosevelt and Prairie Oil’ has seemed to deceive a number of people, the following statement is made public about it : “ As soon as the story was brought to President Roosevelt’s atten- tion he not only called for reports concerning the statements from the Department of Justice and the Department of the Interior, but also communicated with ex-Secretary Hitchcock so as to be sure that the President’s recollection was not at fault. The story is false in every particular, from beginning to end. Not only is there no such report in the Department of Justice and never has been, but no such report was ever made. In granting the franchise of the Prairie Oil and Gas Company the President simply approved the recom- mendation of Secretary Hitchcock submitted to him precisely as all other recommendations were submitted. Moreover, in every case referring to the granting of franchises or the adoption of regulations as regards oil and gas franchises in Oklahoma and the Indian Terri- tory, the President approved the recommendation of Secretary Hitch- cock, with the exception of one small and unimportant grant to a Delaware Indian to whom the Delaware Indians, in recognition of eight years of service to the tribe, had voted in council a fee of $50,000, which he had declined to accept, and who was given twice the usual amount of land. The statement about the alleged promise to a western Senator is as ridiculous a falsehood as the re'st of the story.” The fact is that these particular newspapers, habitually and con- tinually and as a matter of business, practice every form of mendacity known to man, from the suppression of the truth and the suggestion of the false, to the lie direct. Those who write or procure others to write these articles are engaged in the practice of mendacity for hire; and surely there can be no lower form of gaining a livelihood. Whether they are paid by outsiders to say what is false, or whether their profit comes from the circulation of the falsehoods, is a matter of small consequence. It is utterly impossible to attempt to answer all of their falsehoods. When any given falsehood is exposed, they simply repeat it and circulate another. If they were mistaken in the facts, if they possessed in their make-up any shred of honesty, it would be worth while to set them right. But there is no question at all as to any “ mistake ” or “ misunderstanding ” on their part. They state what they either know to be untrue, or could by the slightest inquiry find out to be untrue. 1 7 I doubt if they themselves remember their own falsehoods for more than a very brief period ; and I doubt still more whether any- body else does. Under these circumstances it seems hardly worth while to single out for special mention one or two given falsehoods or one particular paper, the moral standard of which is as low as, but no lower than, that of certain other papers. Of course now and then I am willing to denounce a given falsehood, as, for instance, as regards this case of the Indianapolis News, or the case I have quoted of the New York Sun, simply because it appears that some worthy people are misled or puzzled by the direct shameless- ness of the untruth. But ordinarily I do not and can not pay heed to these falsehoods. If I did I would not be able to do my work. My plan has been to go ahead, to do the work, and to let these peo- ple and those like them yell ; and then to trust with abiding confi- dence to the good sense of the American people in the assured conviction that the yells will die out, the falsehoods be forgotten, and the work remain. Therefore, as far as I am concerned I would rather make no answer whatever in this case. But I have much confidence in your judgment, and if you feel that these men ought to be exposed, why you are welcome to publish this letter. There is no higher and more honorable calling than that of the men connected with an upright, fearless, and truthful newspaper; no calling in which a man can render greater service to his fellow-countrymen. The best and ablest editors and writers in the daily press render a service to the community which can hardly be paralleled by the service rendered by the best and ablest of the men in public life, or of the men in business. But the converse of this proposition is also true. The most corrupt financiers, the most corrupt politicians, are no greater menace to this country than the newspaper men of the type I have above discussed. Whether they belong to the yellow press or to the purchased press, whatever may be the stimulating cause of their slanderous mendacity, and whatever the cloak it may wear, matters but little. In any event they represent one of the potent forces for evil in the community. Yours, very truly, Theodore Roosevelt. Hon. William Dudley Foulke, Richmond , Ind. December 8, 1908. My Dear Senator: Mr. * * * is trying to look into that Panama Canal transaction, and he has asked me for information that I am not able to furnish. I do not know whether it can be furnished at all, but if it can be I suppose you would know more about it than anyone else. He wants to get at the stock books of the Panama Canal companies, old and. new, if possible, to find out H. Doc. 1213, 60-2 2 i8 the votes by which the stockholders agreed to the various transac- tions with the United States Government. Did this Government obtain those stock books, or any records which would show who the stockholders were? If not, have you any idea where we could obtain any information about such records? Sincerely yours, Theodore Roosevelt. Hon. P. C. Knox, United States Senate. Senate of the United States, Committee on Rules, Dece7nber 8. Dear Mr. President : This Government did not get the stock books of either the old or new Panama Canal company. We did not buy the corporations or their stocks ; we only bought the property. We had no dealings with the old company at all. That company and the new company adjusted their equities in the French courts. All I cared for was to see that they did adjust them in such a way as to protect this Government. In the absence of any suggestion of irregularity — and there was no such suggestion — it was a matter of indifference to the United States who owned the stock of the new com- pany. The only question was, did we want the property at the price. Congress decided that we did, and all you had to do was to deter- mine if you could get a good title to it, and then go ahead and make the purchase. If there was any question as to our desire for the property at the price depending upon the personnel of the stock- holders, that was one for the Congress, which decided that we would take it. You executed the law directing the purchase, and that is all there is to it so far as you are concerned. My recollection is that the final ratification of the sale was almost unanimous by the stockholders of the new company; not more than four or five small dissenting votes. Sincerely, yours, (Signed) P. C. Knox. December 8, 1908. My Dear Mr. Cromwell: A friend of mine has asked me for certain facts about the Panama Canal transaction, as to which I should be obliged for any information you can give me. Is there any way of getting at the stock books of the Panama Canal Companies, old and new, or any official record of the votes of the stockholders on the different proposals made to them for enter- ing into agreement with thp United States for the sale of their rights in Panama? Did the United States Government ever get possession of any of these data? If not, can you tell me where they can be obtained, if in private possession here in America, or where they can be looked up in France? With regards, sincerely yours, Theodore Rooseveet. William Nelson Cromwell, Esq., 49 Wall Street , New York. [Mr. Cromwell, in reply, sent a copy of the following statement.] Mr. William Nelson Cromwell, at his office, to-day authorized the following statement: u My attention has been called to a statement issued by the edi- tor of the Indianapolis News in which he attempts to reply to the charge made by President Roosevelt that certain statements made in the Indianapolis News, both before and since the recent election and relating to the purchase of the Panama Canal by the United States, were false and untrue.” The President said: “The News gives currency to the charge that ‘the United States bought from American citizens for $40,000,000 property that cost these citizens only $12,000,000.’ The statement is false. The United States did not pay a cent of the $40,000,000 to any Ameri- can citizen, etc.” From the statement issued in reply by the editor of the News, I quote the following : “ The only man who paid any attention to them (that is, the criticisms referred to, etc.) was Mr. Charles P. Taft, who did deny that he was in any way related to the affair. We "had no word from the President or Mr. Taft. The other men, such as Cromwell and Morgan, who were believed to have full information in regard to the business, said nothing.” And he attempts to justify the publication of the false statements appearing in his paper by saying that they “ were based largely on statements of the New York World, criticisms which were made over and over again during the campaign, were utterly ignored until to-day.” The reply of the editor of the News furnishes another proof of the justice of the President’s characterizations, for in the very jour- nal under whose sheets it now takes refuge, namely, in the New York World of October 3, 1908, appears an explicit and unqualified denial by me of the story referred to and in which I used the fol- lowing language : “We may expect during a heated political contest all kinds of stories which are not worthy of notice, but this one I wish to denounce in the strongest terms as a lying fabrication without a shadow of truth in it. Neither I nor anyone allied with me, either 20 directly or indirectly, at any time or in any place in America or abroad, ever bought, sold, dealt in, or ever made a penny of profit out of any stocks, bonds, or other securities of either the old Panama Canal Company or the New Panama Canal Company, or ever received for the same a single dollar of the forty millions paid by the United States. I make this the most sweeping statement that language can convey. “As everybody connected with the affair knows, I abstained from receiving the forty millions in my own hands at Washington or New York as the general counsel of the company, and myself ar- ranged for the payment of the entire forty millions direct from the Treasury of the United States through the bankers of the Govern- ment into the Bank of France at Paris to the credit of the liquida- tors of the two companies. There it remained subject to the order of the liquidators until distributed by them to the hundreds of thou- sands of beneficiaries, and not one dollar of it ever came to me or anyone in anywise connected with me. Of course I do not refer to our regular compensation as counsel.” I wish to call attention to the fact that upon the first day of the hearings before the Committee on Interoceanic Canals of the Senate of the United States in February, 1906, I voluntarily made an explicit and detailed statement showing how the $40,000,000 was paid by the United States through Messrs. J. P. Morgan & Co. as their agents to the Bank of France at Paris for account of the New Pan- ama Canal Company, and also explaining the subsequent payment of the full amount to the liquidators of the New Panama Canal Company and to the liquidator of the old Panama Canal Company, who in turn distributed the same to their respective stock and bond holders, numbering hundreds of thousands of persons. I further submitted to the Senate Committee, with the permission of the Panama Government, a detailed statement of the disposition by the Republic of Panama of the $10,000,000 paid by the United States to Panama in 1904, accounting for the payment of the whole amount and showing the investments and disposition by the Panama Government of every dollar. Upon the same public inquiry, I further stated with reference to the proposed Americanization of the Panama Canal Company in the year 1899 and the proposed formation of a syndicate for that pur- pose in that year, that the proposed plan “ never matured into any- thing. It was never consummated either by subscription or by assent, and it is obsolete and an impracticable thing — proved so to be. It has no life or force of being, did not exist and never has existed, and is as dead as a doornail. That was a fruitless sug- gestion of the company which came to naught and under which I acted as their counsel solely.” The testimony taken by the Senate committee is a public record and was available to the editors of the News and the World, and had either of them been as interested in publishing the truth as 21 they were to create a political sensation, they doubtless would have taken the pains to have published the above facts which I quote. I again denounce the statement wherever published or by whom- soever made that there was a syndicate formed by American citi- zens to purchase the Panama Canal and to sell it to the United States as absolutely and unqualifiedly false and untrue. The Americaniza- tion plan was an entirely different matter. It was a project proposed by the company to the Rivers and Harbors Committee of the House and to President McKinley on February 27, 1899, and was formally authorized by the board of directors October 10, 1899, subject to the necessary approval of the stockholders. The initial steps were taken by me in October, November, and December, 1899, an d a company formed for the purpose under the laws of New Jersey for . carrying out the instructions of my client. While the certificate of incorpo- ration of the Panama Canal Company of America was filed in New Jersey, no capital stock, except the nominal capital of $5,000 set forth in the certificate of incorporation was ever issued and nothing further was ever done by that company, as the records in the office of the secretary of state of New Jersey will show. The project adopted by the board of directors failed of approval by the stock- holders in December, 1899; the board of directors in consequence resigned in a body, and the plan then and there forever ended. The period covered by this project was less than three months; not a dollar was paid in under it nor a transaction conducted by the New Jersey company for the reason stated. The plan was dead and abandoned over two years before the company finally yielded to the pressure of the American Government to sell at $40,000,000. Now with regard to the distribution of the $40,000,000, it has been made to appear in newspaper comments that there was some mystery connected with the disposition of this money. There is no mystery and never has been. The fund in question paid into the Bank of France by the United States produced the net sum of 206,000,000 francs, the sum of 128,600,000 francs being placed to the credit of the liquidator of the old Panama Canal Company, and 77,400,000 francs to the credit of the New Panama Canal Company in liquidation, and by said bank paid over to said liquidators, respectively, pursuant to a decision of arbitration at Paris Febru- ary 11, 1902, confirmed by the Civil Tribunal of the Seine. , To the Senate committee I stated that I did not know what dis- tribution of the fund had been made and that I was in no way con- cerned or interested therein. That statement by me was true. I had no pecuniary interest in the canal, and it was none of my busi- ness, personally or professionally, who were the stockholders or bond- holders of the company. 1 Since the recent publications I have made inquiries in Paris, and im informed that the distribution of these moneys is a matter of pub- lic record; that the amount received by the liquidator of the old Panama Canal Company has been distributed by him as an officer of 22 as :o- ■y- of is ;e. the court to the holders of the obligations of the old company; that these persons appeared in person at the office of the liquidator to receipt for the moneys paid to them; that they numbered 226,2^6, the laigest number of individuals probably ever appearing in person upon a single business affair, and that the average amount paid J $1:56. The complete and detailed record of these payments, t gether with the names and receipts of every person to whom pa ment was made and the amount of such payment, is in the hands^ the liquidator at his offices at 50 Rue Etienne Marcel, Paris, which in a prominent and frequented part of the city, near the Bour^ easily found by anyone desirous of doing so. As to the fund paid to the New Panama Canal Company: Thiat company at the time of the sale of its property to the United States went into liquidation, and I am likewise recently informed that the distribution of its assets amongst its shareholders was made through four leading banks of Paris, the Credit Lyonnaise, Societe Generale, Comptoir National d’Escompte de Paris, and Credit Industriel et Commercial, in three separate payments (July 15, 1904, February 3, 1908, and June 15, 1908), covering a period of four years, and was completed in June, 1908. This liquidation took place at the regular offices of the company, 19 Rue Louis le Grand, Paris, readily found by anybody who honestly sought to find them. The facts concern- ing the liquidation are a matter of public report to the shareholders of the company (this company has no bond issues) and were the sub- ject of official publications from time to time covering a period of four years in the official papers under direction of the "courts. The amount so paid to the shareholders of the New Panama Canal Com- pany, as I am informed by the liquidators, is approximately 129.78 francs on each share of the par value of 100 francs— that is, they received back only the capital originally invested with interest, less than 3 per cent per annum. I am informed by the liquidators 5 that the shareholders to whom distribution was made numbered 6,796. Neither I nor my law firm nor anyone connected with me ever owned, directly or indirectly, any share of stock in the New Panama Canal Company, nor any of the obligations or securities of the old Panama Canal Company, nor ever bought or sold any of the shares or securities of either one of said companies, nor were directly or indirectly interested in them. I am also positive that not a man in public life in America, in or out of Congress, ever had the least pecuniary interest in the Par - ama Canal. I do not know and never have known of any American citize 1 who has ever dealt in any of the shares of the New Panama Cana 1 Company or the shares or bonds of the old company. A further instance of the unwarranted attitude of the Indianapo- lis News and of other journals repeating the statements is furnished with respect to Mr. C. P. Taft and Mr. Douglas Robinson. In thr it could not be more impossible. All this except the dragging of jew names was threshed out before the United States Senate mirmtee by the late Senator Morgan. Out of respect for the ad, I [refrain from comment upon that proceeding, but I feel war- nted In saving that it was pursued with unparalleled energy and dii. ?t was, however, completely exploded and refuted by the cts-iii' the case, and ended in complete discomfiture. There is not word (of truth in it, and I would not notice it at this time if it did t concern others.” The Introduction of these gentlemen in the Panama affair is like le creation of a character in a work of fiction. They did not exist ill the sense of having any relation to the canal matter. Neither of tllem ever had the least pecuniary interest in the business. It is a ulatter of public history that the President-elect never had any official cjmnection with the canal until months after it had been acquired this Government. He was in the Philippines as governor iringffl.ll the years in question. Equally perverted is the fact concerning the records and accounts the two companies. They were not delivered to the United States :ause they were records of the companies’ transactions with which United States had no concern. But as a matter of fact the 3 rds and files of the liquidation of the old company are in the ds of [the liquidators at 50 Rue Etienne Marcel, Paris, and those ic new company were, on the final payment in June, 1908, depos- with the Credit Eyonnaise, Boulevard des Italiens, to be pre- \ d, in accordance with French custom, for a period of twenty ars. That corporation has the custody of the records as is well fgiown t