EIGHTH DAY.

Friday, March 1st, 1907.

The Senate met, pursuant to adjournment, at 10 o'clock. After prayer by the Chaplain, the roll was called showing Senators Dowsett and Hewitt absent.

The Journal of the Seventh Day was read and, upon motion of Senator Lane, seconded by Senator Brown, approved as read. A communication (No. 10) from the House of Representatives transmitting House Bill No. 4 was read by the Clerk as follows:

THE HOUSE OF REPRESENTATIVES,

Honolulu, T. H., Feb. 28, 1907.

To the Honorable President and

Members of the Senate of the

Territory of Hawaii.

I have the honor to transmit herewith House Bill No. 4, which this day passed Third Reading in the House of Representatives of the Territory of Hawaii.

Respectfully,

JOHN H. WISE,

Clerk, House of Representatives.

The communication was ordered received and placed on file. First Reading of House Bill No. 4 entitled "An Act to Amend Sections 1412 and 1418 of the Revised Laws of Hawaii." At 10:07 o'clock a Message (No. 5) from the Governor relating to the Nuuanu Dam was received and read by the Clerk as

follows:

A MESSAGE.

TO THE SENATE AND HOUSE OF REPRESENTATIVES:

As stated in my Message to you at the opening of your session, I consider the question of Nuuanu Dam of importance, and herewith hand you a separate Message on that subject.

Executive Chamber, March 1.

1907.

G. R. CARTER,

Governor.

A MESSAGE.

TO THE SENATE AND HOUSE OF REPRESENTATIVES:

NUUANU DAM.

The estimated cost of this project was $180,000.00; the time required for its completion thirteen months.

There may possibly be opportunity for honest differences of opinion as to the better water service-that pumped from deep wells, or mountain water by gravity. The cost of the former is a constant drain on the taxpayer, while the gravity system, once installed, is bound to be more satisfactory; and in the latter case it will not only furaish power for lighting purposes, but also for running the sewer pumps. Thus the wisdom of conserving a large water supply at a high altitude will not finally be questioned.

The method to be used in the construction of the Nuuanu Dam presented indeed a problem. How it has been met and handled is a matter purely administrative, yet no honest official can object to Legislative investigation impartially conducted, showing neither fear nor favor, dealing with facts, searching for the truth and pointing out the best future course.

After the project had met the approval of a previous Legislature and the first appropriation was passed, those responsible discussed the problem, and finally concluded to let a modified contract.

In constructing a work of this nature, it is impossible to be certain of conditions that exist under the surface. It is not like building a structure above ground, where risks are well defined. Unforeseen contingencies may arise, necessitating a change of details. Estimates may prove incorrect. If a contractor is to bid a total amount to complete within a specified time, work of such a character, he must necessarily figure with a wide margin of profit. He must protect himself against all possible unknown circumstances. It is not a question of ordinary profits, with simply the risks of weather and markets. In the case in point, if conditions are not disappointing, the cost is excessive, while if the unexpected is encountered, the contractor can usually sustain a claim for extra work at a profit on which there is no competitive bid. Such contracts are thus often built by day labor, under competent super

vision. This gives a method sufficiently elastic to meet all contingencies, and is usually followed by individuals or corporations.

Public opinion does not, as a rule, approve of such course for public work. There is fear of political favoritism, extravagance or graft. It is between these two extremes that modern practice in public works meets on a plan by which the contractor is relieved from the unknown risks in that he does not bid a lump sum. The different kinds of work are classified, and he bids on a unit for each class, wherever there is a Lossibility of uncertainty. The contract called for a lump sum only where there was no unusual risk.

Mr. L. M. Whitehouse was the lowest bidder, and the contract was signed by him on June 23, 1905. By the terms of this instrument, the contractor was to furnish the tools, material and labor, doing the work as directed, and was to complete the structure by October 1, 1906. Work not mentioned was to be done at a reasonable cost, with 15 per cent added. The contractor began his operations on July 29, 1905. The records of the engineer's office show the manner in which the work progressed; the attitude of the contractor; his compliance with instructions.

The whole structure as When explanations were

During June, 1906, sensational statements in regard to the dam were started in the press; the engineer was charged with accepting defective work; conclusions were reached by many without knowledge of the siutation. planned was condemned as unsafe. made, lack of confidence was expressed; when defense was of fered, ulterior motives were intimated. Leading men and the press insisted that, irrespective of cost, the community was entitled to the best and safest structure possible. Human lives and property were supposed to be in danger. The taxpayer would not tolerate economy in so grave a matter.

Resistance to public opinion on such occasions is useless. The administration offered in vain to submit the whole matter to any expert which the press or public bodies would name, confident that the final result would prove a great public benefit. Certain that without public confidence or support the plan would have to be abandoned, the administration sent for that expert available who, it believed, would command the greatest public confidence.

Meanwhile, the contractor claimed that blame for defective work was due to the officials in charge. Those in charge asserted that for months it had been evident that the contractor would not do the work as instructed. Not only was

there defective work, but unnecessary delay had occurred at that season when it should have been rushed, in order to avoid winter rains.

The officials claimed to have exhausted every remedy except that of cancelling the contract. Resort to such a course meant lawsuits and the lapse of the appropriation held out June 30, 1905, to meet this particular contract and which could not be applied to this work in any other manner than through this contract.

Public interest was aroused, and failure to stop the work called forth accusations of a desire to cover up and conceal the supposed defects. Therefore, on July 1, 1906, the work was stopped, pending the examination by the expert. On his arrival, the public were invited to present to him all complaints and charges, prior to any statement by those in charge. The plans, specifications and contract were handed to him, with these requests:

First. Please examine the structure provided for in these documents and report if in your opinion it is safe; and if not, what would make it so;

Second. Examine the work on the ground and report if it is in accordance with these plans; report any work accepted which is defective; uncover any that may be necessary to a thorough investigation, and spare no person.

Ver

Pits were sunk and an exhaustive examination made. bally, the expert stated that in view of the location and the material at hand, both of which were good, the structure planned, as a whole, was within the usual factor of safety.

There were certain details which the expert could not approve. He stated that every engineer would differ on details, due to his own individuality and experience; that he was a special advocate of a particular type of dam—a dirt dam with a back fill of rock.

He stated that the work was in accordance with the plans, and that no work had been accepted which was defective. Some had properly been rejected.

He went on, that evidently an engineer was not so much needed as some one to settle the differences between the contractor and those in charge, or to combat the attitude of the public; that he was not that kind of an expert, and had he known the situation, he would not have left his work in Cali fornia to respond to the call.

On being asked if the structure could be made safer, he stated that in his opinion it undoubtedly could be made so

without too great additional expense, and the gain he thought would justify the outlay. Other engineers might not agree with him. To illustrate how they differed, he told of one in California who had lately designed and built an earth dam the slope of which was far less than that usually accepted as safe, yet the structure had withstood all tests, and the capitalists back of the engineer had ordered a second structure of the same design, involving a larger outlay. Thus time and experience may demonstrate that heretofore engineers have made earth dams more solid than need be.

The cause of failure of earth dams, he thought, was more often due to lack of drainage than to any other feature, and it was this that made him an advocate of a dirt dam with a back fill of rock, for this, in his opinion, gave the very best drainage.

In regard to the changes that he considered advisable, his time was too short to design them or figure accurately on the cost, but he offered to do both, in writing, after his return to California. The final report speaks for itself.

The administration determined to make one more attempt with the contractor, and to accept the suggestions of the expert, in the hope that it would restore public confidence. Thus the Superintendent of Public Works and the contractor were called in conference, and informed that unless all difficulties could be satisfactorily settled and future progress assured, the contract would be cancelled and the appropriation forfeited; that new bids would be asked for under a new contract, using the second loan appropriation, and the question as to which party had violated the old contract left to the decision of the courts; that not more than ten days would be allowed for the discussions necessary to reach a determination of the difficulties.

During January last, the contractor was asked if the Nuuanu Dam, with the proposed changes, would be finished before the end of the calendar year. He replied that he did not see how it was possible, for he could not afford to put in money getting ready for different kinds of work, until he knew just how much of each class of work was to be doneand this statement the officials refused to furnish him.

Clearly a contract calling for bids on classified kinds of work illustrates that the officials intended to avoid all reponsibility as to the exact amount of each class, but proposed to pay for the full amount done. It is to be presumed that those who originally bid on this work expected to take some risk, otherwise the letting of a contract would be of