Final Report of the Louisiana Purchase Exposition Commission Part 30

I have been a bidder at many sales of both Government and city, property, and the method employed at such sales provided for the opening of bids in public in the presence of such bidders as desired to be present.

A few days later I saw by the papers that the Exposition Company had rejected all bids. After the rejection of our first sealed bids, I learned through another bidder, with whom I was interested, that the World's Fair officials had announced that it was probable that they would wreck the exposition buildings themselves. Upon this information I dropped the matter and heard nothing further about the bidding until it was announced that the Chicago House Wrecking Company had secured the contract. When I heard that the Fair Company proposed to do its own wrecking I thought it a good plan.

The carrying on of the bidding through private negotiations, as President Francis terms it, was not, I contend, the most advantageous to the Exposition Company and its stockholders. If they had given all the bidders an equal show in the matter, and had furnished a list of the property to be sold, much higher bids would have been obtained.

The secrecy with which the contracts were handled did not give the bidders a fair opportunity, and was, I believe, an injustice to the thousands of stockholders of the exposition. The United States Government, the city of St. Louis, and the stockholders were partners in the exposition, which made the fair unquestionably a public inst.i.tution.

Why, then, were not the bids opened in public, thus securing the largest amount for the exposition and for the stockholders? This was not done.

If it had been the bidding would have been greatly stimulated, bringing results quite different. The salvage committee refused to allow the bids to be opened publicly before the contractors, but held them for their eyes only. This is not in accordance with the manner of handling bids on big public works. When the partial list of property was given out the requirements in the specifications almost made the bidding prohibitive.

The Exposition Company demanded a check for half of the amount of the bid. In all my experience I have never before been asked to meet such a requirement. In itself that was almost enough to drive off the bidders.

The Chicago House Wrecking Company put up less than one-fourth of the price to be paid, or $100,000.

I am of the opinion that had the Exposition Company properly prepared a list of its properties and holdings and furnished the prospective bidders with such lists and an opportunity for the examination of the articles mentioned therein, together with a reasonable period of time for removal of the buildings and debris, they could easily have obtained $750,000.

I have obtained a more comprehensive knowledge of the amount and character of the material and property since put into the hands of the Chicago House Wrecking Company, and am of the opinion that at the time the contract was made with the Chicago House Wrecking Company the property sold represented a value in excess of $1,000,000.

There was present in the office of Mr. Taylor, director of works, at the time the bids were to be opened the following members of the salvage committee: President Francis, Director of Works Taylor, John A. Holmes, Mr. Samuel Kennard, and Mr. John Scullin.

Had I been furnished with a list of all the properties that I have since learned was acquired by the Chicago House Wrecking Company I would have gladly submitted a bid in the amount of $500,000.

C.L. MCDONALD.

Subscribed and sworn to before me this 16th day of March, 1905. My commission expires on the 22d day of January, 1909.

[SEAL.] IRA C. MONEY, _Notary Public, City of St. Louis, Mo._

STATE OF ILLINOIS, _County of Cook, ss_:

Before me this the 28th day of March, 1905, personally appeared Mr. S.

Krug, who, being duly sworn, on his oath says:

My name is S. Krug. I am a resident of Chicago. Have resided here for the past thirty-seven years. For the past twenty-seven years I have been engaged in the excavating and sand business. During this time I have also been engaged on contracts for wrecking large buildings. I wrecked the First National Bank Building, the Metropolitan Building, the Montauk Block; Hibbard, Spencer & Bartlett store, and numerous other large buildings in Chicago.

In regard to the sale of the World's Fair salvage at St. Louis I will make the following statement:

I was told by a friend of mine that bids had been requested for wrecking and removal of certain World's Fair buildings at St. Louis, and that specifications and instructions could be obtained from Mr. Isaac S.

Taylor, director of works. For business reasons I did not wish the Exposition Company to know that I wanted to figure on the contract. I asked a friend of mine to procure a copy of the specifications for me.

It was necessary for him to deposit $10 for the specifications. He sent the specifications to me. Mr. John M. Dunphy, who is in my employ, and I went over the specifications at length and studied them pretty thoroughly. The specifications only referred to exhibit buildings, band stands, fire-department houses, live-stock barns, dairy barns, Festival Hall, fuel building, terrace of States, and toilet-room buildings. On October 24, 1904, some ten days after we read over the specifications and instructions, Mr. Dunphy, Mr. Powers, and myself went to St. Louis to look over the plans to see the nature of the material and the construction of the various buildings. We went to Mr. Taylor's office and were informed that Mr. Taylor was busy and could not see us. Mr.

Taylor's secretary, Mr. Carl Hoblitzelle, took us into an adjoining room. He did not ask our names, and we did not tell him who we were.

While we were waiting in this room--I presume we were there about five minutes--Mr. Frank Harris, a member of the Chicago House Wrecking Company, came into the room. It looked to me as if he had been posted as to our, being there and came to see who we were. Mr. Harris remained there three or four minutes and then left. We asked the clerk in charge of the office there for the plans of the various buildings to be wrecked. He handed us two sets of plans--one for the Agricultural and one for the Horticultural Building. We requested more plans of him, but he said he was too busy to take them down and immediately left the room and remained out all the time we were in there. We went to the shelves and took out the plans ourselves and looked them over. After we had looked over the plans for a couple of hours we went out on the exposition grounds, and spent the rest of that day and the next on the grounds, and on the following day we returned to Chicago. The bids were to be in Mr. Taylor's office by 12 o'clock noon Thursday, November 10, 1904. Mr. Schmitt, my bookkeeper, and myself went to St. Louis on November 9 and were present at Mr. Taylor's office in the Administration Building before the hour of 12 o'clock noon, November 10. I had prepared my bid. At this time I only bid on the stock barns, live-stock forum, Congress Hall, Agricultural and Horticultural buildings. I also had a separate bid prepared for the Transportation Building, which I submitted. I took my bids and handed them to Mr. Carl Hoblitzelle, Mr.

Taylor's private secretary. He placed them in his desk and said he would bring them to the attention of the committee when the time came to open the bids. Mr. Schmitt and I then went into an anteroom, where the other bidders were gathered. There were present at the time Mr. H.S. Albrecht, of the firm of Schoellhorn & Albrecht, St. Louis; Mr. Charles McDonald, of the St. Louis Steam Forge Company, St. Louis; Mr. W. Ware, of the Columbia Wrecking Company, St. Louis; a Mr. Schaeffer and son, of St.

Louis, and Mr. Frank and Abraham Harris, who represented the Chicago House Wrecking Company. There were one or two other gentlemen present, but I can not now recall their names. Some middle-aged man came in with the Harris Brothers. He seemed to have free access to the room where the salvage committee was in session, and ran back and forth two or three times and held a conversation with the Harris Brothers in the hall. We expected the bids to be opened at 1 o'clock. It was now some time after 1 o'clock. We were all waiting there when President Francis came in and announced that they were going to lunch, and for us to come back later on. We all left the room and I with several other gentlemen went to get a little lunch. We were back in the anteroom of Mr. Taylor's office by 2.30 p. in. We waited there until 4 o'clock when Mr. Taylor's secretary came into the room and requested all the bidders to go into the room where the salvage committee was in session. The committee met in Mr.

Taylor's office. President Francis, Mr. Taylor, Samuel Kennard, Mr.

Holmes, and some other gentleman, I can not call his name now. President Francis arose and said: "Gentlemen, the bids are all there on the table and we will open them shortly." He asked how we wished the bids handled--that is, whether we wanted them opened in our presence or in a secret session of the Committee. Mr. H.S. Albrecht, of St. Louis, immediately arose and stated that he wanted the bids opened in the presence of the bidders present, as he wanted everything to be open and above board. All the other bidders present requested that the bids be opened in their presence, except Mr. Abraham Harris, president of the Chicago House Wrecking Company, who arose and offered an objection to the bids being opened in public, and stated that he did not want his bid to be opened in public, but wanted it opened in private, for the reason that he did not want everybody to know what his bid was; that if he was the successful bidder his bid would be published and everybody would know what it was, but if he was not the successful bidder he did not want it known what amount he bid. President Francis held a whispered conversation with several members of the committee and then turned to the bidders and said: "Gentlemen, we have decided to open the bids in secret session." He thus favored Mr. Harris and ignored the demand of the other bidders. Mr. Albrecht again demanded that the bids be opened in our presence. We were then told to repair to the anteroom and wait until called for. While we were waiting in the anteroom Mr. Taylor's secretary called Mr. Abe Harris into the committee room, where the salvage committee was opening the bids. He remained in there some little time. As soon as Mr. Harris came out Mr. H.S. Albrecht was called in. He told me when he came out that he had entered a vigorous protest as to the way the bids were being handled, and that he as a stockholder and a bidder had again demanded that the bids be opened in the presence of the bidders. Mr. Schmitt and myself were next called into the room where the salvage committee was in session. Mr. Taylor asked me if I knew a Mr.

Schluetter, of Chicago. I told him that I was well acquainted with the gentleman, that I had done considerable work for him in Chicago, and that he had always paid me for it. When I made this remark President Francis looked at Mr. Taylor and laughed in rather a sneering way. I presumed from his actions that the Exposition Company had had some trouble with Mr. Schluetter. President Francis said to me, "Mr. Krug, you have some excellent recommendations here from prominent people and banks of Chicago." I told him that I was well able to carry out any contract I undertook, as I had good financial backing and understood my business. He said to me, "Mr. Krug, your bid is very satisfactory, but why have you not submitted a bid on all the buildings shown in the specifications?" I told him I had taken into consideration the insurance on the various buildings and that I was afraid I might have trouble in getting insurance on all the buildings, and therefore submitted a bid on buildings that were quite a distance apart and less liable to fire. I told President Francis at this time that I was willing to submit a bid for $76,600 on all the buildings shown in the specifications prepared by Mr. Taylor. My first bid did not include all the buildings shown in the specifications. I made this offer offhand. He asked me if I wanted to figure on wrecking the buildings for the Exposition Company on a percentage basis, they to own all the material and sell it and I to get a per cent for doing the work. I told him I would take it by contract for an agreed figure or would do the work for him on a percentage basis, and that I would be glad to do anything for him I could. President Francis said to me, "Mr. Krug, you put in your bid for $76,600 in writing and have it in this office to-morrow morning." We were then asked to wait out in the anteroom. We waited there until about 6 o'clock. At about 6 o'clock Mr. Taylor's secretary came in and announced that the meeting had adjourned until the next day. We all left the room then. At 10 o'clock the next morning, November 11, 1904, Mr. Schmitt and myself went to Mr. Taylor's office, where I filed my bid in writing for $76,600 to cover all the buildings shown in the specifications. We waited there until about 4 o'clock, expecting some decision from the salvage committee. About 4 o'clock Mr. Taylor's secretary came in and announced that the meeting of the salvage committee had adjourned until the following Monday.

The conditions embodied in the specifications as to the time allowed for removal of the wreckage were so prohibitive as to render it almost impossible to carry them out. The time limit--namely, three months--was too short. It would entail an enormous expense and waste of material to try to comply with the time conditions stated in the specifications.

The amount required by the specifications to be deposited in the form of a certified check, payable to the Exposition Company, viz, 50 per cent of the amount of bid, was very exorbitant. This check was to be forfeited to the Exposition Company in the event the successful bidder failed to enter into a contract with the salvage committee within five days after they accepted the bid. I consider the amount demanded, 50 per cent, very excessive, and it had the effect of frightening bidders away.

A 5 to 10 per cent deposit is usually the amount required by the Government and the city.

The specifications also stipulated that the full amount of the contract, less the amount of the certified check, held and to be appropriated by the Exposition Company, must be paid to the Exposition Company at the time the contract is signed. I consider this out of all reason, and in itself would have a tendency to prohibit bidding.

The time-limit clause, namely, three months, from March 1 to June 1, 1905, in which all the buildings must be torn down and the grounds cleared, was entirely too short a time, and out of all reason, as it would be physically impossible for any contractor to do the work in the time specified, and no contractor would attempt it under the terms of the specifications unless he knew he would be favored with an extension of time later on.

The specifications appear to me to have been drawn up with the intent and purpose of discouraging bidders. In all my experience I have never encountered such requirements as set forth in those specifications.

I told Mr. Taylor and President Francis that the time limit was too short, and that I would be glad to make a much higher bid if they would extend the time. They said, "We cannot extend the time one day--the grounds must be cleared by June 1, 1905."

On the following Monday, November 14, 1904, I went to Mr. Taylor's office at 10 a.m. I was informed by Mr. Taylor's private secretary that all bids had been rejected, and that I would be notified if further bids would be requested. I returned to Chicago that night, and awaited some advice from the Exposition Company as to what disposition was to be made of the property, and if new bids would be requested. For fear that something might happen that I would get slipped up on, and the contract be given to some one else, I sent my agent, Mr. John M. Dunphy, to St.

Louis, so that he would be on the ground and be in touch with what was going on, and told him to watch the papers to see if new bids were requested. Mr. Dunphy was in St. Louis from November 20 to 26, inclusive, and he informed me that during all this time he was unable to get any information as to what the Exposition Company was going to do with the property or whether new bids would be asked for. Mr. Dunphy was compelled to return to Chicago on the night of November 26. He asked a friend of his, a Mr. William H. Ranstead, who lives in St. Louis, to look out for news in regard to the wrecking of the World's Fair buildings, and if new bids were requested to notify him immediately by telephone or by telegraph. On November 28 I received a telegram from Mr.

Ranstead, as follows:

ST. Louis, _November 28._ S. KRUG and John Dunphy, _167 Dearborn street, Chicago, Ill._:

Salvage committee met at 2 p. m. At the adjournment Mr. Taylor and President Francis called me in and wished me to wire you to come on first train. Everything looks well. Meet me at the Lindell Hotel before you go to the grounds. Also wire me in care Lindell Hotel when you leave.

W.H. RANSTEAD.

This message was received by me at about 8.40 a. m. November 29. Mr.

Dunphy and I took the first train out to St. Louis. We left here at 11.03 a. m. and arrived St. Louis at 6 p. m. November 29. We met Mr.

Ranstead at the hotel and talked matters over. The next day, November 30, Mr. Ranstead, Mr. Dunphy, and myself went to the fair grounds and called at office of Mr. Stevens, secretary of the Exposition Company.

This was about 10.30 a. m. At about 11 a. m. Mr. Stevens took us to the room where the salvage committee was holding a meeting. Mr. Stevens did not remain in the room during the meeting. There were present President Francis, Mr. Taylor, Mr. Kennard, and Mr. Holmes, members of the salvage committee. After a short preliminary talk, we were told by Mr. Francis that we would have to put in our bid for all the buildings shown in the specifications, including copper wire and railroad iron, and that we would have to have the bid in by 4 o'clock that afternoon. It was then about: 12 o'clock. We protested against such short time for figuring on all the property shown by the specifications. I requested more time and told them I would be able to make an intelligent bid if granted more time. I asked President Francis to give me the figures on the steel rails and the copper wire, and stated that he should have the figures showing the amount on hand, as it was all bought by weight; that if I could get an idea of the amount of wire and rail I could get my bid in all right in time. He stated he could not give me the figures on the rail and the wire. Mr. Kennard then stated that I could put in a bid for the buildings that were shown in the specifications, including the intramural stations, the fences, and the bridges by 4 o'clock that day, and that I could have until Friday, December 2, to put in my bid on the railroad iron and the copper wire. I asked if it would be possible for me to get an extension of time in which to do the work, providing I secured the contract. President Francis stated that the time could not be extended one day. I then asked for a list of the property so I could figure on all of it. President Francis stated that they did not have any lists and that it would be necessary for us to go over the ground and get our own data. He stated to me then that there were 2,000 tons of steel rails. We then left the office and walked over the grounds and looked at the buildings, the intramural stations, the fences, and bridges, on which we were asked to submit a bid that afternoon. We did not look over the rail and the wire, as we thought we would have more time the following day for that. We went back to Mr. Taylor's office at 4 o'clock p. in. We waited there in the anteroom until about 5.30 p. in.

While we were waiting in the anteroom Mr. Frank and Mr. Abe Harris, of the Chicago House Wrecking Company were closeted with the salvage committee in Mr. Taylor's office. While we were waiting there they came out of Mr. Taylor's office without their overcoats or hats on. They had left them in the room where the salvage committee was in session. Mr.

Dunphy, Mr. Ranstead, and myself were then requested to enter the room where the salvage committee was in session. Mr. Frank and Abe Harris waited outside until we got through. The same members of the salvage committee present at the morning session were present at this meeting, including Mr. John Scullin, but Mr. Scullin only remained a few minutes after we entered the room. There was another gentleman present, but I do not know who he was. President Francis told me later that he was an insurance agent and that he held insurance on all the buildings then. I handed the bid, or rather Mr. Dunphy handed the bid to President Francis, who in turn handed it to Mr. Kennard, who opened it and read it aloud. The bid was for $101,000 for the buildings mentioned in the specifications, the intramural stations, the fence around the grounds (except the stadium fence), and the bridges. Mr. Francis held a whispered conversation with Mr. Taylor, and then turned to us and said that the committee had decided to let the contract that day, and that they would not wait until Friday for the bid on the other material, that is the rails and the copper wire, and that it would be necessary for me to put in my bid that night, as they would be in session until 11 p. m.

I stated that I could not make an intelligent bid on such short notice, unless I was furnished with figures showing amount of rail and wire purchased by them. Mr. Taylor spoke up and asked me if I knew a man by the name of Evans, of Chicago, who was in the wrecking business, I told him that I did not know a Mr. Evans, of Chicago, who was engaged in the wrecking business, and that I was well acquainted with all the prominent wrecking concerns and contractors in Chicago but had never heard of or met Mr. Evans, the gentleman referred to. Mr. Taylor asked me why I could not get in a bid in the same time that Mr. Evans got his in, and stated that Mr. Evans had submitted a bid on all the property from Chicago by wire in three hours. I stood up then and spoke to President Francis and said, "President Francis, how do you know but that this bid of Mr. Evans may be a dummy?" President Francis arose from the table and stood opposite me, and, scratching his head, said: "Well, Mr. Drug, you have got me a guessing. There may be something in that."

President Francis said to me, "Mr. Drug, I made a mistake this morning in giving you the number of tons of steel rail; there are 4,000 tons instead of 2,000 tons of rail." I then told him that it would be impossible for me to give him any kind of an intelligent bid without some kind of a list of the property to figure on. President Francis stated that the matter would be settled that night and that I had until 11 p. m. to bring in my figures on all the property to be disposed of as shown by the specifications, and including the intramural stations, the bridges, the fence around the grounds, the copper wire, and the railroad rails. We then left the room, and as we were pa.s.sing out President Francis asked our names and where we were stopping as they would call us up later on that day.

As soon as we walked out of the room Mr. Frank and Abe Harris of the Chicago House Wrecking Company went in.

We left the fair grounds immediately and went to the Lindell Hotel, where we prepared a new bid. About 7.30 p. m. we decided to put in our bid by telephone. Mr. Dunphy called up Mr. Taylor's office and was informed by the party who answered the telephone that the salvage committee had adjourned at 7 o'clock p.m. Mr. Dunphy told me that the salvage committee had adjourned, and I supposed they had adjourned to get something to eat and would be back shortly. I told him to call up again. About 8.30 p. in. Mr. Dunphy called up Mr. Taylor's office and was told that the salvage committee had adjourned at 7 p. m. and would not be back that night. About 10 p.m. he called up President Francis's residence and was inform that President Francis was not at home, and also received the same reply when he called up Mr. Taylor's house, and when he called up Mr. Holmes's residence he was informed that Mr. Holmes had gone to bed. We were unable to reach any of the salvage committee.

were not called up that evening, nor did we hear anything from the salvage committee that evening, although we waited in the corridor of the Lindell Hotel until after 12 o'clock midnight.

During our conversation with the committee nothing was said about fire engines, office furniture and furnishings, hose carriages, fire hose, horses, buggies, wagons, steam rollers, roadmaking machinery, three steel greenhouses, with plants of every description, surveying instruments, engineering tools, two hospitals complete, 2,000 folding cots, 2,500 opera chairs, 400 revolving chairs, 25,000 kitchen chairs, 200 roller-top desks, 300 flat-top desks, 200 typewriter desks, the brick in the roadways, and the various buildings, or numerous other valuable articles and pieces of property.

About 8.30 a. m. Thursday, December 1, Mr. Dunphy, my agent, called up Mr. Holmes's residence to find out what Mr. Holmes knew about the disposition of the bids. He was told by some lady who answered the telephone that Mr. Holmes was on his way to his office. He came and told me that Mr. Holmes was on his way to his office. I requested Mr. Dunphy to go to Mr. Holmes's office and try and ascertain what the committee had done about the bids. Later in the day Mr. Dunphy came to me and told me that Mr. Holmes had told him that the contract had been awarded to the Chicago House Wrecking Company between the hours of 6 and 7 p. m. of November 30.

On December 3, 1904, I addressed a letter to President Francis in which I offered him $199,000 for all railroad iron and ties and all wire in and about the exposition grounds. I also, in the same letter, offered to pay him $101,000 for the buildings, fences, bridges, and intramural stations on the exposition grounds, which would total $300,000.

On December 5 I addressed a letter to President Francis as follows:

St. Louis, _December 5, 1904._

Dear Sir: Since I have made an examination of the property belonging to the Exposition Company I find a great deal more property than was stated to me at your meeting last Wednesday.

If you will furnish me with a correct list of the property I think now that I can make you a bid of from $400,000 to $450,000 for same, half cash, balance to be paid when property is turned over. I am prepared to make my bid in three hours after I receive a list of the property. Should my proposition meet with your consideration call me up at the Lindell Hotel and I will call for the copy at once.