Final Report of the Louisiana Purchase Exposition Commission

by Louisiana Purchase Exposition Commission

S. KRUG.

Subscribed and sworn to before me this 28th day of March, 1905. My commission expires on the 15th day of October, 1905. [SEAL] HARRIET A. Dumas, Notary Public.

STATE OF ILLINOIS, County of Cook, ss:

Before me, this, the 28th day of March, 1905, personally appeared Mr.
George J. Schmitt, who, being duly sworn on his oath, says:

My name is George J. Schmitt. I reside in Chicago, Ill.; have resided here for the past thirty-five years. Am employed as clerk and bookkeeper in office of Mr. S. Krug, contractor, of Chicago. I have been in Mr. Krug's employ for the past eight years. On November 9 I left Chicago for St. Louis with Mr. Krug, to look after his bids and do any clerical work that he might want done. We arrived St. Louis on morning of November 10, 1904. Mr. Krug had his bid made up, and upon arrival at St. Louis we immediately went to the National Bank of Commerce, where Mr. Krug wanted to have his draft cashed and his check certified. We then went to the Administration Building and called at the office of Mr. Isaac S. Taylor, director of works, where Mr. Krug handed his bid to Mr. Taylor's clerk. This was about 12 o'clock noon on November 10. We were requested to go into the anteroom and wait until called for. There were present in the anteroom at the time Mr. Albrecht, Mr. McDonald, Mr. Schaeffer and son, Mr. Ware, of the Columbia Wrecking Company. One or two other gentlemen were present. I do not now recall their names. After we had been there some little time, Messrs. Frank and Abraham Harris, of the Chicago House Wrecking Company, came in. We all waited there until about 2 p. m. About this time President Francis passed through the room and went into Mr. Taylor's office. He came back shortly and said to us to come back in about an hour, as the salvage committee was going to lunch then. We went back again about 3 p. m. The same crowd of bidders present in the room. There, was some gray-haired gentleman who came in with the Harris brothers. When I first saw him I thought he was a member of the salvage committee, on account of his running back and forth into the room where the salvage committee was in session. I learned from Mr. Albrecht later on that the gentleman referred to was working for the Harris brothers. While we were waiting there to be called in he made two trips into the room where the salvage committee was in session, and came back each time and went and held a whispered conversation with the Harris brothers in the hall.

We waited in the room there until 4 o'clock, when Mr. Taylor's private secretary requested all the bidders to go into Mr. Taylor's office, where the salvage committee was in session. We all went in there. President Francis asked the bidders how they wanted the bids handled, whether opened in their presence or opened in secret session of the salvage committee. All the bidders present requested that the bids be opened in their presence, except Mr. Abe Harris, who got up and told President Francis that he did not want his bid opened in the presence of the bidders, as he did not want everybody to know what he had bid, and that if he was the successful bidder we would all know later on what he had bid, and if he was not the successful bidder he did not want his bid to be known. Mr. Albrecht got up and stated that he wanted his bid to be opened in the presence of the bidders, as he wanted everything to be open and aboveboard. President Francis then held a whispered conversation with Mr. Taylor and some other gentleman there, and then in a few minutes turned to the bidders and said, "Gentlemen, we have decided to open these bids in secret session of the salvage committee." and requested us to go into the anteroom and wait until called for. We all went back into the anteroom. In a few minutes President Francis requested the Harris brothers to come in the room where they were holding the meeting. They did so, and remained in there about ten or fifteen minutes. As soon as they came out Mr. Albrecht went in, and when Mr. Albrecht came out Mr. Krug and myself went in. President Francis spoke to Mr. Krug and said, "Mr. Krug, you seem to have some very good letters of recommendation here, and from the letters I judge you have done considerable work." Mr. Taylor asked Mr. Krug if he knew a Mr. Schluetter, of Chicago. Mr. Krug said that he was acquainted with Mr. Schluetter, had done considerable work for him, and had always been paid his money. I inferred from their actions that they had had some trouble with Mr. Schluetter. President Francis said, "Mr. Krug, your bid is very satisfactory." Mr. Krug had only submitted a bid on part of the buildings, as shown by the specifications. President Francis asked Mr. Krug if he could not put in a bid on all the buildings, and why he had not done so. Mr. Krug said that he was afraid he would have some trouble getting insurance on all the buildings, and for that reason only submitted a bid on buildings that were more isolated and less liable to fire. President Francis told him it would be an easy matter for him to get insurance, and he asked Mr. Krug what he would bid on all the buildings, according to the specifications. Mr. Krug said that he would be willing to bid $76,600 on all the buildings as shown in the specifications. President Francis asked Mr. Krug what he would wreck the buildings for on a percentage basis, or if he would take the work on a contract at a figure to be agreed upon, and they to own and dispose of all the material themselves. Mr. Krug studied awhile and said that he would be willing to do the work for President Francis, but it would take him some time to figure on the proposition so as to submit an intelligent figure. President Francis said that if they decided to wreck the buildings themselves on a contract that he would let him know when his bid would be wanted. At this time President Francis requested Mr. Krug to submit in writing his bid for $76,600 and have it in by 10 o'clock the next morning. We then left the room, and they requested us to remain in the anteroom. We were there until about 6 o'clock. During that time they called in other bidders. About 6 o'clock Mr. Taylor's secretary came into the room and announced that the salvage committee had adjourned until the next day at 2 p. m. We then left the grounds and went to the Lindell Hotel. When we reached the hotel that night we made up a revised bid. The next day we went to Mr. Taylor's office about 10 a. m. and gave to Mr. Taylor's clerk the bid in writing for $76,600, and he said he would bring it to the attention of the committee when they met. We waited there from 10 a. m. until 2 p. m. In the meantime Mr. Krug sent in his card to Mr. Taylor's office and asked if any action would be taken on the bids that afternoon. We were informed that nothing would be done with the bids that day, and that the salvage committee had adjourned until the following Monday. I left St. Louis that night for Chicago. I returned to St. Louis on Monday, November 14, 1904, arriving there at 10 a. m. Mr. Krug remained in St. Louis all the time. When I returned to St. Louis Mr. Krug and I went to Mr. Taylor's office. We reached there about 10 a. m., Monday, November 14. We waited there until about 2.30 or 3 p. m. While we were waiting in the anteroom Mr. Taylor's private secretary came in and told us that all bids had been rejected. We then left the grounds, and Mr. Krug and I returned to Chicago that night.

I never saw by the papers or otherwise where new bids were requested after the announcement that the first bids had been rejected. I watched the papers very closely, as we were desirous of submitting a new bid when called for.

From what I saw while I was in the anteroom and in the committee room I am fully convinced that the Chicago House Wrecking Company was given inside information as to what property was to be sold, and I consider that they were given privileges and favored from the beginning of the deal, in view of the fact that a majority of the bidders desired their bids opened in public, while the Harris brothers protested against such procedure, and they were sustained in their protest by the salvage committee.

I have had considerable experience in handling bids and being present when bids are opened, and I never before saw such proceedings as took place in the meeting room of the salvage committee on November 10, 1904.

I am sure that had the Exposition Company properly advertised the sale and furnished a list of the property to be disposed of, which I have since seen published in a catalogue gotten out by the Chicago House Wrecking Company and listed in the contract between the Exposition Company and the Wrecking Company, was turned over to the Chicago House Wrecking Company, that much higher bids would have been made, and considerably more money realized from the sale than they received from the Chicago House Wrecking Company.