Part 18

GENTLEMEN: Noticing in the daily papers that you will sell the entire property owned by the Louisiana Purchase Exposition, including railway tracks, exhibit and other buildings, fencing, furniture, wiring, lamps, piping, plumbing, machinery, etc.--in fact, everything owned by the company. If this is the fact we can pay you about $400,000 and perhaps more. Will you kindly furnish us a complete list of everything that you have for sale and specified time of removal, so we can give you an intelligent bid or proposition?

Very respectfully, SCHOELLHORN-ALBRECHT REAL ESTATE CO., Per H.S. ALBRECHT, _President_.

President D.R. FRANCIS and BOARD OF DIRECTORS ON SALVAGE, _Louisiana Purchase Exposition, St. Louis._

I failed to receive a reply to the above letter or to receive a list of the property to be sold, and was not notified that further bids would be received therefor. As far as I know, none of the former bidders, nor any one else, for that matter, were given the slightest opportunity to bid on the whole property, except the Chicago House Wrecking Company.

There seemed to be a disposition on the part of the salvage committee to observe the greatest secrecy in procuring the bids and the awarding of the contract. The property was not properly advertised and lists were not furnished to bidders, as is customary in public sales, where large amounts of valuable property is to be sold.

From the contract between the Exposition Company and the Chicago House Wrecking Company, now a matter of record here, I have noticed the nature of the material and property sold to the Chicago House Wrecking Company, and had I been furnished a list of that property I would have bid $750,000, all cash, and would have made a great profit on it at that price. If the property had been properly listed and widely advertised, much higher bids would have been made. If the property had been properly advertised and had been sold at public auction, in detail, I am safe in saying that the Exposition Company would have realized more than $1,000,000 out of the salvage. In my opinion the property delivered to the Chicago House Wrecking Company was of the market value of fully $1,500,000.

H.S. ALBRECHT.

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

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

STATE OF MISSOURI, _City of St. Louis, ss:_

Before me, this the 16th day of March, 1905, personally appeared Charles L. McDonald, who, being duly sworn, on his oath says:

My name is Charles L. McDonald. I reside in the city of St. Louis. Am connected with the St. Louis Steam Forge and Iron works. I saw by the St. Louis Globe-Democrat of October 17, 1904, that Mr. Isaac S. Taylor, director of works of the Louisiana Purchase Exposition, had requested sealed proposals addressed to the "Committee on Salvage and Sale of Buildings," for the wrecking and removal of certain exhibit buildings now on the World's Fair grounds, and that specifications and instructions for the above-mentioned work and drawings and specifications of the buildings to be wrecked could be seen at the office of Mr. Taylor. All bids were to be in Mr. Taylor's office by 12 o'clock noon of Thursday, November 10, 1904.

The specifications and instructions as prepared by Mr. Taylor for the wrecking of the buildings, and for which sealed proposals were requested, only applied to the following buildings: Mines and Metallurgy; Liberal Arts; Education and Social Economy; Manufactures; Electricity; Varied Industries; Machinery; Transportation; Forestry, Fish, and Game; Agriculture; Horticulture; four dairy barns, octagonal; live stock forum; Live Stock Congress Hall; stock barns; steam, gas, and fuel buildings and cooling towers; Festival Hall; terrace of States, including pedestals and statuary; two pagoda restaurant buildings on Art Hill; four fire-engine houses; five toilet-room buildings; five band stands; and excluded, or rather did not include, all electrical wiring, piping, plumbing, roadmaking machinery, fire hose in the various buildings, two hospitals complete, Jefferson Guards' uniforms and accouterments, railroad tracks in the various buildings, the Intramural Railway, which included all the equipment (except the cars), hothouses, horses, wagons, and vehicles of all kinds, and many other valuable items.

I submitted a bid on one of the buildings only. However, I was associated with Mr. Albrecht and others when he submitted a bid on all the buildings as shown by the printed list, and was also concerned with him in his proposition of December 5, wherein he offered $400,000 cash for the property, and more if a list of all the property could be secured.

The conditions embodied in the specifications and contract, with reference to the time limit for the removal of all the debris from day to day as the work progressed were too exacting, in that they did not allow sufficient time, and if the same were strictly enforced by Director of Works Taylor would materially add to the expense of the contractor. The time was too short for the amount of work to be done.

On November 10, at the hour called for the opening of the bids, I was present and appeared with other bidders before the committee on salvage. I, with a number of other bidders, waited until after 3 o'clock for the committee to get together and open the bids, and was very much surprised when President Francis announced that all bids would be opened in secret by the committee. This procedure was not in accordance with the custom of the Government and city in the handling of its property when same is for sale under bids. Mr. Albrecht objected to the bids being opened in secret session and demanded that they be opened before the bidders. President Francis asked me what I had to say about the way in which the bids were to be handled, and I answered that I could do nothing more than emphasize the protests of Mr. Albrecht.

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 institution. 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 u