whatever it might be, that should be done; the bill could be amended and you could be awarded by Congress the amount of money that Congress thinks would be fair. Is that correct?

Mr. ALVORD. That is very true.

Mr. CHANDLER. Then you would not have the question of going back to the Court of Claims.

Mr. WEAVER. This case is before the Senate, is it not?

Mr. HERD. Yes.

Mr. WEAVER. But it is before the Committee on Claims over there, is it not?

Mr. HERD. That is the way it was before. It always goes to the Claims Committee of the Senate.

Mr. ALVORD. The reason for that was beyond our control, Mr. Chairman. The original bill came to this committee. I do not know why, but it came to this committee. It was at a time when the Parliamentarian used to go about 50-50 on bills conferring jurisdiction on the courts. About half of them would go to the Committee on Claims and about half to this committee. Ours happened to come to this committee. In the Senate they invariably go to the Committee on Claims.

Mr. HERD. The Parliamentarian said they had concurrent jurisdiction, the Judiciary Committee and the Claims Committee, on account of conferring jurisdiction.

Mr. WEAVER. I think that is true.

Mr. MASSINGALE. Are you asking an alternative in this claim? Are you asking Congress to either make the award or to send it to the Court of Claims?

Mr. ALVORD. No, sir; we are asking in the bill before you that it be sent back to the Court of Claims for a decision on the existing record before the court, based upon the value of the ships on the date on which the United States acquired them, less what has been paid the claimants.

Mr. ROBSION. But you are asking the Court of Claims to do a thing that this committee, as Mr. Chandler suggested, can do itself.

Mr. WEAVER. That is why I say this is really a claims committee. Mr. ALVORD. The only problem which you gentlemen would have to decide, were you to enter a judgment yourselves and recommend appropriation, would be the fair value of the ships.

Mr. MASSINGALE. You would rather risk action by a few members of the Court of Claims than 435 Members of Congress, would you not?

Mr. ALVORD. No; I would rather risk Congress.

Mr. HERD. We said in this bill-we might as well make ourselves clear that we thought the Court of Claims and the War Claims Adjustment Board were not of our selection; they were people that were fair and were selected by the Government, and they found a value on this, a minimum and a maximum value, and we thought you ought to follow that value.

Mr. CHANDLER. Can it be said fairly that this question is res adjudicata, by your having had a day in court and having had an adjudication against you, and that the matter is settled?

Mr. ALVORD. Yes, sir; I think that is a perfectly proper statement to make. Legally, we are out, and have no recourse except to Congress.

Mr. HERD. We never had any decision on the merits in the Court of Claims.

Mr. ALVORD. Your committee in 1934 said that these claimants were entitled to their day in court, to have their claims determined on the merits.

Mr. ROBSION. Either legal or equitable.

Mr. ALVORD. Either legal or equitable. That has not yet been done.

Mr. CHANDLER. Now, for the information of the committee and the House, can you just put in the record a few of the cases in which Congress has reversed the Court of Claims and sent the matters back to the court? I am asking for the benefit of the record.

Mr. HERD. I can give you 20 or 30 of them.

Mr. ALVORD. You do it every session. I present the following examples:

Cases referred back to the Court of Claims by Congress after an adverse decision from the court

1. New York & Baltimore Transportation Line, Inc.: Private, No. 527, Seventyfifth Congress, approved May 18, 1938. (See H. Rept. No. 102, 75th Cong., 1st sess.)

2. George Lawley & Son Corporation: Private, No. 502, Seventy-fourth Congress, approved May 5, 1936. (See H. Rept. No. 217, 74th Cong., 1st sess.) 3. John L. Alcock (74 C. Cls. 308).

4. Export Oil Corporation (64 C. Cls. 348).

5. Thomas L. Livingston (64 C. Cls. 314).

6. Henry W. Goodrich, Receiver (51 C. Cls).

7. Anastatia Murphy, Administratrix (35 C. Cls. 494).

8. John Finn (26 C. Cls. 435).

9. Sophia B. Duffy (24 C. Cls. 380).

10. Albert Grant (18 C. Cls. 732).

Mr. ROBSION. Here is a statement of eight cases in which Congress either directed the Court of Claims to change its findings, or the court by its action made it possible for it to continue the original findings, and it was necessary to change its action.

Mr. DEMPSEY. This is all set forth in a letter from Mr. Ramsay, of West Virginia, to me.

Mr. ROBSION. It is in the Congressional Record. Mr. HERD. We have a good many more cases. was only decided last year.

The DeLuca case

Mr. KNOWLES. As I see it, the particular situation is this: President Wilson had been given an appropriation of $100,000,000, which he was authorized to use for the purposes of promoting the war. He was buying the boats. Nobody knew where they were going to land, in what department of the Government, but it was the President that really bought these boats with the $100,000,000 which was appropriated by Congress to him for that purpose. That was why there was this conflict between Mr. Baruch and Mr. Denman. Mr. Baruch was trying to get it for the Shipping Board, of which he was the chairman; and of course, the War Department wanted them for War Department purposes, and everybody wanted them because they all

wanted them.

There is a very interesting letter that recently appeared in the publication of the Letters of President Wilson. It appears in volume 7, page 55, and is a letter to Colonel House, who reported a talk

with General Goethals regarding the shipping program. The letter reads as follows:

MY DEAR HOUSE: My whole day, nearly, has been devoted to the shipping problem, or, rather, to the shipbuilding problem. Denman has stated it to me, together with the views of General Goethals, several times, in a series of conferences. It will not be possible to follow General Goethals' program in all its length, but I have had Denman on "the Hill" today laying the whole situation before the men up there upon whom we shall have to depend, and I am arranging for conferences in which I shall take part and use my influence in this all-important matter to the utmost. I think that General Goethals may rest assured that substantially the program he outlines in the memorandum just received in your letter of yesterday will be adopted by the Congress and carried out.

The Shipping Board have prepared a bill which is now ready for introduction, and upon it, I think, we can build action which will enable us to do the utmost that our shipyards can do now and can be expanded to do and can be assisted by the structural-steel men to accomplish with steel and workmen taken for the time being from bridgework and work on skyscrapers, with a steady output of standardized freighters.

The English representatives have already agreed to let their contracts with the yards be taken over or thrust aside, and the way is clearing.

This is only a line to say that General Goethals may be sure that I am on the job and that the way will be cleared as fast as possible for what I realize to be immediately and imperatively necessary. I have recently bought some 80,000 tons of Austrian shipping and hope soon to buy as much more; and we are getting the German ships in repair as fast as the shops can repair them.

By the way, we are going to name the two German raiders which were interned here and which have naturally fallen into our possession the Steuben and the DeKalb. That seemed to me to have a poetic propriety about it. Faithfully yours,

All of us unite in the most affectionate messages.

WOODROW WILSON.

Mr. CHANDLER. Has that appeared in the record so far?

W. W.

Mr. KNOWLES. No; that has not appeared in any of the records so far. This is just a recent publication. It came out in the last volume of the Life Letters of Woodrow Wilson, volume 7, page 55.

Mr. MASSINGALE. How many of these Austrian ships were there? Mr. HERD. We bought 10 of them, but we got 7.

Mr. MASSINGALE. Do you know the total number that were over here? Mr. HERD. There were 10 that we had. I think there were 5 more brought over here. And some of them were in China and other places. I do not know how many there were in the United States.

Mr. KNOWLES. The tonnage that we bought was 52,000 tons.

Mr. HERD. The other three boats made practically 80,000 tons. That is what President Wilson was referring to in his letter.

Mr. MASSINGALE. In other words, your ships were bound to be included in what the President was talking to Mr. House about? Mr. HERD. Yes.

Mr. ROBSION. If you will bear in mind, the Balfour dinner was referred to in that letter. That was on the night of April 23, and the President wrote that letter after the dinner, when he was impressed with the importance of getting ships. He told Baruch that night to get the ships, and then the next day Baruch got in touch with Carden & Herd, on the 24th of April.

Mr. KNOWLES. And 9 days thereafter they had the ships.

Mr. MASSINGALE. It seems to me you have got a very valuable piece of evidence there.

Mr. CHANDLER. I think the authenticity of that letter ought to be established beyond any doubt.

Mr. HERD. It is in his book.

Mr. KNOWLES. I have read from a photostatic copy of it as printed. in the book.

Mr. MASSINGALE. Mr. Tumulty wrote the book, did he not?

Mr. O'NEILL. No; Ray Stannard Baker wrote it.

Mr. CHANDLER. This seems to me to be a matter of equity and right and simple justice, as I look at it.

Mr. KNOWLES. That is the way I feel about it.

Mr. CHANDLER. And whatever is fair and reasonable, you people ought to have. You ought not to be ruled out on technicalities and lose by reason of the fact that you have no resistance to a sovereign. Mr. ALVORD. That is the way we feel about it.

Mr. ROBSION. No agency of the Government that has heard this case, beginning with President Wilson, but what has declared that they had a just claim.

Mr. CHANDLER. Somebody spoke about scandals in connection with ship purchases and things like that.

Mr. WEAVER. That was in the Spanish-American War.

Mr. ALVORD. The President wanted to avoid a repetition of that. Mr. CHANDLER. I did not know anything about that. I went to France myself pretty early and left this country and stayed over there constantly, and I did not know anything about what was going on

here.

Mr. ROBSION. It was not developed here, but this 5 percent for operating ships on the gross receipts, that was the going rate, well established in all these other cases that came before the War Claims Adjustment Board?

Mr. ALVORD. And was established in our own records and confirmed by the records of the Shipping Board.

Mr. WEAVER. As I understand it, Mr. Chandler, President Wilson did not want to get into any of these unhappy things that occurred during the Spanish-American War.

Mr. HERD. That is right.

Mr. CHANDLER. Now, we have got this question of these gentlemen who claim an interest in this recovery, whatever it may be, and their side of it has been presented. I think we ought to finish up this proof.

Mr. WEAVER. I think Mr. Osborn put in a statement about his claim.

Mr. ROBSION. Before we conclude the case I hope that the record made here previously, before the Judiciary Committee and the War Board-you have got copies of those available, all these findings and so on-those ought to be available for this committee.

Mr. HERD. We will give them all a copy of this record.

Mr. O'NEILL. You mean this printed booklet?

Mr. KNOWLES. I have handed Mr. Chandler a copy of it.

Mr. HERD. That is a reprint of all the official documents to date. Mr. ALVORD. I would like to file a memorandum, Mr. Chandler, together with such other documents as you may desire.

Mr. WEAVER. Yes; we want to make a complete record of this

matter.

142654-39-ser. 4-4

Mr. CHANDLER. Take the essential documents and the essential evidence to establish your claim, and also the interest of the intervenors, and put them all under one cover where we can sit down-all the members of this committee are lawyers-so we can sit down and study it and reach the real merits ourselves, and if we decide that the best thing to do is to submit it to the Court of Claims again, with instructions not to ignore this claim which has not been adjudicated already, and ask them to settle that question, then you will have a final decision of the matter.

MEMORANDUM ON BEHALF OF MESSRS. CARDEN AND HERD BEFORE THE SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, UNITED STATES HOUSE OF REPRESENT

ATIVES

INTRODUCTORY STATEMENT

On March 23, 1939, hearings were held before the subcommittee of the Committee on the Judiciary in connection with the bill (H. R. 3356) to amend the act entitled "An act conferring jurisdiction upon the Court of Claims of the United States to hear, consider, and render judgment on certain claims of George A. Carden and Anderson T. Herd against the United States," approved June 13, 1934. This memorandum is filed pursuant to leave granted by the Honorable Zebulon Weaver, chairman of the subcommittee, which sets forth the position of the claimants with respect to the merits of the pending bill.

HISTORY OF THE CLAIM

Origin of the claim.-On April 5, 1917, the claimants, Messrs. Carden and Herd, entered into a contract for the purchase of seven Austrian ships from the Austrian owners for $6,476,073. Thereafter, on April 6, 1917, the claimants entered into a contract for the resale of the ships to a syndicate which had been formed for that purpose. The price of the ships to the syndicate was $7,371,141 cash plus the right to operate the ships at the going rate of 5 percent of the gross freight receipts.

Before the transfer of the ships to the syndicate had been completed the United States Government sought to purchase the ships from the claimants for use in the prosecution of the war with Germany. As a result the contract with the syndicate was terminated, the syndicate was abandoned, and on May 3, 1917, the claimants transferred the ships to the United States.

The cash consideration paid to the claimants by the United States amounted to $6,778,006.70, which was based on the amount for which the claimants had acquired the ships from the Austrian owners plus certain expenses. It was further understood by the claimants that as an additional consideration they were to be given the operation of the ships for the Government at the same going rate of 5 percent of the gross freight receipts.

This claim arises out of the failure of the Government, despite repeated demands, to give the claimants the operation of the ships in accordance with their understanding of the transaction.

War Department Claims Board.—On May 6, 1920, the claimants filed a petition before the War Department Claims Board, Appeals Section, in case No. 2664, to recover 5 percent of the estimated gross earnings of the ships pursuant to an alleged contract for their operation (Ct. Cls., Tr. 59-63). At the hearing before that Board the Government took the position that there was no contract for the operation of the ships. Anticipating that, as a result thereof the Board might find a contract implied in law, the claimants duly amended their petition as follows:

"As a second count the claimants represent that prior to the 10th day of April 1917 they became the owners of the before-mentioned seven ships known as the Ida, Anna, Teresa, Clara, Dora, Erny, and Lucia, of an aggregate tonnage of 52,651 tons; that on or about the 3d day of May 1917, during the emergency arising from the declaration of war against the German Empire, said ships were transferred to the United States at the request of its duly authorized officers and agents; that they were used for war purposes and in large part for War Department purposes; that the fair and reasonable value of said ships was the sum of $14,000,000, which the United States became bound to pay under an implied contract arising prior to November 12, 1918; that the United States has