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been able to find in the last year on this question, and we will put that in. We would like to introduce it and have it before your committee, because we represent six of the seven members of the syndicate. Mr. Yoakum's executors gave me authority to represent them, so we represent six of the seven members of the syndicate, and the seventh man is sitting right over there. The representative of Mr. Carpenter is sitting right over there. So you have before you all the people who were in that syndicate and who put up the money.

We merely want an opportunity to present our claim, and it comes down to a question of title, a determination as to what was turned over to the Government. Under our theory, what was turned over to the Government was our right to buy.

Mr. WEAVER. How much money did the syndicate put into it?

Mr. OSBORN. They put up $730,302. They put up cash $105,302 and a note. There have been some remarks made here to the effect that a note is not money, but I would like to point out that while that note was up

Mr. HERD. (interposing). I do not think there is any question about that.

Mr. OSBORN. If anybody had sabotaged those boats or if the Government could have gotten title, our syndicate members would have had to pay that note. They had no recourse.

Mr. WEAVER. How was the note paid?

Mr. OSBORN. The note was paid by the United States Government through Herd and Carden.

Mr. HERD. I paid the note.

Mr. OSBORN. It was paid to Mr. Herd and Mr. Carden for payment to us. No other person could pay it.

Mr. ALVORD. In order to save the time of the committee I suggest to Mr. Osborn that I would be very glad to stipulate with him that the record which they presented to the Senate committee be filed here and incorporated as a part of the record here.

Mr. WEAVER. Yes; I understood the other day that Mr. Osborn was going to present that.

Mr. CHANDLER. Present that with any additional evidence you may want to present. If you have anything further we would like to have it.

Mr. OSBORN. Yes; Mr. Weaver and Mr. Chairman and members of the committee, we want to put in everything we have. There are some letters which can be quoted, that indicate that maybe some members of the syndicate wanted to withdraw. There are other letters that indicate that right up to the end of this thing two members of the syndicate were in direct negotiation down here, insisting that they be paid the value of the boats. So you cannot just pick one piece out here and another one over there. You have got to take the whole thing and base your judgment on the facts as to whether or not there was a rescission, and whether or not the syndicate was out of it. If the syndicate was out of it, we do not want to have anything to do with it.

Mr. MASSINGALE. Are we not more directly concerned, as members of this committee, with determining whether or not we want to ask the Claims Committee to take up this claim and adjudicate it and leave the matter of who gets it for subsequent consideration? You can fight out your interest down there.

Mr. ROBSION. Mr. Herd then will have the right to rebut.

Mr. OSBORN. Oh, yes; we want him to have that right. We have nothing against Mr. Herd.

Mr. ALVORD. In connection with my agreement with Mr. Osborn, I just want to say, Mr. Osborn's record includes Mr. Speir's letter. Mr. Speir was counsel for the syndicate.

Mr. OSBORN. Put it all in.

Mr. ALVORD. Let me be specific. There is a letter from Mr. Speir to Mr. Tomlinson, dated May 7, 1917, in which Mr. Speir says:

The syndicate that I represent had no interest in the seven Austrian steamers, other than an agreement to purchase them from Messrs. Carden and Herd.

For some reason, Mr. Osborn failed to present this letter to the Senate subcommittee, although it was in his possession. I presume he will not hesitate to present it here.

Mr. OSBORN. Read the whole letter.

Mr. WEAVER. Let us hear the whole letter.

Mr. ALVORD. I will be very glad to read the whole letter:

I received your letter of May 5 on Saturday, just as I was leaving the office. This is the sentence that I particularly wanted to call to your attention:

The syndicate that I represent had no interest in the seven Austrian steamers, other than an agreement to purchase them from Messrs. Carden and Herd, and any arrangement as to commissions to be paid by the latter to you,

And so forth, and so forth—

the syndicate has no concern. The syndicate's interest in the transaction terminated with the inability of Herd and Carden to sell these ships to them, purchase of the steamships by the Government and the return of the syndicate's deposit, as agreed, in such contingency.

I just wanted to be sure that letter is in the record.
Mr. OSBORN. That letter will be in the record.

Mr. ROBSION. It was provided in the contract between Herd and Carden with the syndicate that if the Government interfered, that ended the syndicate.

Mr. CHANDLER. Will you put into the record, if you have not already done so, the distribution of the $738,000, or thereabouts, that the Government paid?

Mr. ALVORD. Yes.

Mr. HERD. In answer to your question, I submit the following

statement:

STATEMENT OF RECEIPTS AND DISBURSEMENTS OF MESSRS. CARDEN AND HERD IN CONNECTION WITH THE ACQUISITION AND TRANSFER TO THE UNITED STATES GOVERNMENT OF THE 7 FORMER AUSTRIAN SHIPS

(1) The initial payment by the Government on May 3, 1907, for the purchase of the ships, amounted to $6,778,006.70. The Government's exhibits 16 and 17 introduced in evidence before the War Department Claims Board and the Court of Claims (Ct. Cls., tr. 979-981), being a letter of April 29, 1917, from Mr. Baruch to Mr. Denman, and a pencilled memorandum from the files of the Shipping Board, show how this amount was computed. Copies of these documents are attached hereto as exhibits A and B. The difference between the total amount shown in the pencilled memorandum and the amount actually paid to us is due to an interest adjustment. Mr. Baruch's letter to Mr. Denman shows that we had incurred expenses in the amount of $228,000 for which no allowance was made in computing the purchase price of the ships to the United States. (2) On July 16, 1921, the Secretary of War Weeks awarded $550,000 which we received shortly thereafter. This amount represented the difference between the cash price of the ships to the Government and the cash price of the ships

to the syndicate. The net amount of the award received by us after deducting expenses of $225,000 which were incurred in the prosecution of the claim before the War Department Claims Board was $275,000.

(3) Allowing for the expenses of $228,000 which we incurred in connection with the sale of the ships and for which we received no reimbursement, the total amounts which we had received from the Government after the payment of the award was only $47,000 in excess of our actual expenses. In view of the expenses which we have incurred since that time in the further prosecution of our claim, it is obvious that we have received no profits from the Government. On the contrary, we are still considerably out of pocket.

(4) It has been stated before this subcommittee and in the opinion of the Court of Claims that we received $738,000 of profits from the Government. In computing these so-called profits (1) no allowance has been made for the expenses shown above, and (2) there has been included the amount of $188,000 received from Phelps Bros. & Co. There is obviously no justification for ignoring the above expenses. Furthermore, the sum of $188,000, which we received from Phelps Bros. & Co. was not paid to us by the Government and had no relation to the acquisition of the ships here involved.

In addition to the seven ships which are involved in this proceeding, our contract with Phelps Bros. & Co. gave us the right to purchase three other Austrian ships. In spite of our contract, these ships were sold to others. In order to compensate us in part for the failure to deliver these ships to us, Phelps Bros. & Co. paid us the $188,000 referred to above.

EXHIBIT A

(Government Exhibit No. 16.)

GEORGE A. CARDEN,
ANDERSON T. HERD.

THE ADVISORY COMMISSION OF THE COUNCIL OF NATIONAL DEFENSE

MUNSEY BUILDING.

Washington, D. C., April 29, 1917.

Address reply to Committee on Raw Materials, Minerals and Metals.
Mr. WILLIAM DENMAN,

Chairman, U. S. Shipping Board,

Washington, D. C.

DEAR SIR: Mr. Carden has been in New York sometime and advised with his associates and has given me the enclosed statement, which speaks for itself. According to this you will see that you receive the ships at what I understand to be the contract price to him, plus expenses as you will see detailed therein at $5,000 and $84,000 which he says has been already paid out in case in connection with the purchase.

You will also see by this statement, that there are further outstanding commitments, aggregating $208,000 and attorneys fees for $20,000.

In his desire to meet the President's wishes in the matter, he is willing to waive the item of $208,000 and so much of the attorneys' fees as it may be possible to save.

He is willing to close this matter up on this basis. This is along the lines of our talk last night.

Very truly yours,

EXHIBIT B

B. M. BARUCH.

(Government Exhibit No. 17)

Copy of pencilled memorandum on file with Disbursing Officer's records regarding purchase of S. S. Dora, Ida, Erny, Teresa, Lucia, Anna, Clara.

Paid and contracted to pay for the 7 Austrian ships__
Cash paid out in connection with purchase_--

Expenses of investigation, hotel bill, travelling expenses, and
incidentals (estimated) _-

Attorneys' fees..

$6,670, 355. 19

84, 000, 00

5,000.00

6,759, 355, 19 15,000. 00

6,774, 355. 19

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Mr. CHANDLER. Suppose that this committee reports this bill out and it gets on the floor. Mr. Cochran, for example, who is a very careful student of claims, sends over here and gets the hearings, and you have got just the hearings referred to back in 1933. Now nobody is ever going to put them all together. You should put them all in one cover here and make up a record so that we can pass on the thing once and for all.

Mr. WEAVER. That is what we want. We want to get it all in one publication.

Mr. ROBSION. Before you adjourn, Judge, I made a statement here' the other day, and I thought I would like to boil it down. I do not want to cover too much space, and I do not want to eliminate anything. Mr. WEAVER. Yes; that will be all right.

Mr. ARMSTRONG. May I now put in some evidence, Mr. Chairman? Mr. WEAVER. Yes.

STATEMENT OF WILLIAM CAMPBELL ARMSTRONG, REPRESENTING EXECUTORS OF THE ESTATE OF IRVING COX, AND OTHERS, IN SUPPORT OF THEIR CLAIMS

Mr. ARMSTRONG. Mr. Chairman, I file with the committee a record: containing letters written by Mr. Speir, who represented this syndıcate in negotiation with Messrs. Herd and Carden between April 8 and May 1, 1917; also letters which passed between all the various members of the syndicate to Herd and Carden, from all the different. people who participated in this proceedings; also letters which were written by Mr. Labrot, one of the syndicate members, to Mr. Crawford who was his agent in Washington and who negotiated directly with Mr. Baruch; also letters written at other times by Mr. Baruch and Mr. Crawford to Mr. Denman, Mr. Denman to Mr. Crawford, and by Mr. Labrot to Mr. Baruch. Not a single one of those letters, so far as I know, has been in the record before the War Claims Board: or before the Congress in 1933 and 1934.

We have also produced a copy of the receipt given to Messrs. Herd: and Carden by Phelps Bros., the agents for the Austrian owners, dated April 6, 1917. We understand-and I would like to be corrected if I am wrong-that that receipt has never been in the record before. It contains a modification, as we read it-and we leave it to

the committee of the original offer by Herd and Carden to the Austrian agents, and the acceptance by the Austrian agents of the offer. The original offer of Herd and Carden stated that they would agree to pay $123 a ton for the boats; that the offer must be accepted by 5 p. m. on April 6, 1917, and that 10 percent of the purchase price was to be paid at the time the offer was accepted.

The offer was accepted by the agents on April 5, but on April 6 the agents gave Herd and Carden a receipt for an uncertified check of Mr. Herd's for $647,000, and that receipt stated that if that check was presented-pardon me-that check should not be presented until April 7, 1917, and that if, when it was presented on April 7, 1917, it was not paid, the entire deal would be canceled. I understand that that receipt has not been in the record before.

I do not wish to describe all these others, but I ask that these letters and documents, all of which, with the exception of three, are new, be put in this record because we feel that it will assist the committee, namely: The three that were in the record before are the original offer to buy and the acceptance and a copy of the telegram from the Secretary of State to Judge Carden stating that he had no objection to the purchase of the ships. We believe that all these other documents have never been in evidence in any of these proceedings; and I might state that the members of the syndicate have never been represented, were not represented before the War Department Claims Board, were not before Congress in 1934, and were not parties, of course, to the suit in the Court of Claims because they had no standing, as Congress had not authorized them to appear.

I ask that all these papers be included in the record, if the committee will be so kind as to do so.

Mr. KNOWLES. Mr. Chairman, I just want to make a statement in connection with the statements which have been made. I represent the estate of John H. Carpenter, who was a member of the original syndicate. Mr. Carpenter died in January 1938. I have been his counsel for a great many years, and Mr. Carpenter during his life always considered that the syndicate was canceled and that, as a member of the syndicate, he had no interest at all in the claim made against the United States in connection with it. He did have stock in the National Shipping Corporation, which was organized by Carden and Herd with the idea that the National Shipping Corporation would be the one that would do the actual operating of the ships. Mr. Carpenter accepted stock in that company and he considered that that was his only interest in the matter; that the syndicate was dissolved, was at an end, and was canceled, just as Mr. Speir states in his letter. Mr. WEAVER. But he had no interest in the actual purchase? Mr. KNOWLES. No interest at all.

Mr. ROBSION. You gentlemen represent the estate of Mr. Cox?
Mr. ARMSTRONG. Yes.

Mr. ROBSION. I want to ask Mr. Armstrong this question: Back some years ago in the proceeding in New York, did you not file a statement and swear to it, to the effect that Mr. Cox was not in the syndicate?

Mr. ARMSTRONG. No, sir. I filed an affidavit in which I stated that I had been informed that he was not.

Mr. ROBSION. When did you make that affidavit?

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