bills of sale to the defendant, the defendant paid to the plaintiffs the sum of $6,788,006.70, and plaintiffs gave defendant a receipt therefor reading as follows: WASHINGTON, D. C., May 3, 1917.

Received from the United States of America the sum of six million seven hundred seventy-eight thousand six dollars and seventy cents ($6,778,006.70) in payment for the steamers Dora, Ida, Erny, Teresa, Lucia, Anna, and Clara, of a total dead weight carrying capacity of fifty-two thousand five hundred sixty-one (52,561). Bills of sale for these vessels, together with certain agreements relative thereto, were executed and delivered to the United States of America. This receipt is without prejudice to the payment of the further sum of Twenty Dollars ($20.00) per ton dead weight for the transfer of the said vessel free of restrictions in the trade thereof.

(Sgd.) GEORGE A. CARDEN. A. T. HERD.

19. At the time of the execution of the bills of sale there was also executed by Denman, the plaintiffs, and Phelps Brothers and Co. a "Memorandum of Closing," which reads as follows:

"In Re The Sale of Seven Austrian Ships
"Memorandum of Closing

"1. Closing ships' registers.—It is understood that instructions have been given by the Austrian Embassy to the Austrian Consuls at Boston, New Orleans, Pensacola, and New York City that the registers of the ships in those ports will be closed.

“(a) In Boston, on the application of Haight, Sanford, and Smith;

"(b) In New Orleans, on the application of George H. Terriberry;

"(c) In Pensacola, on the application of Haight, Sanford, and Smith, or John A. Merritt and Co.

"(d) In New York City, on the application of Phelps Brothers and Company, or Haight, Sanford, and Smith.

"The instructions to the Austrian Consuls have been turned over to the Swedish Consuls at these ports, who have been instructed to act for the Austrian officials. "Immediately upon the payment of the purchase price, Haight, Sanford, and Smith are to take appropriate steps for the closing of all registers.

"2. Price. The price to be paid today (May 3, 1917) to Messrs. Carden and Herd is $6,788,006.70, being the price covered by the original contract for restricted trade. There is a balance due from the United States Government of Twenty Dollars ($20.00) per ton on 52,651 tons, for the removal of restrictions, which balance is to be paid as soon as the funds are received from the Treasury Department, which is expected to be on or before May 5th, 1917.

"3. Steamship 'Clara,' New Orleans.-This steamer is now in the hands of the United States Marshal. Messrs. Phelps Brothers and Company agree to have bonds filed immediately for the release of the ship.

"4. Provisions, stores, supplies, bunker coal, etc.-It is agreed that all provisions, stores, supplies, bunker coal, etc., on board all ships shall be inventoried and appraised by parties to be agreed upon by Mr. Donald and owners' agents, the Government to pay to Messrs. Phelps Bros. & Co. the value of the same.

"5. Personal effects of officers and crew.-It is agreed that necessary instructions will be issued, either by the Treasury Department or by the Shipping Board, for the landing of all personal effects of officers and crew still on board the vessels; the said effects to be turned over to the agents of the Austro-Americana, as follows:

"At New York City, Phelps Brothers & Company.
"At Boston, Patterson, Wylde & Co.
"At New Orleans, A. K. Miller & Co.

"At Pensacola, Gulf Transit Company.

"6. Repairs of damages.-Phelps Brothers and Company agree to hold in this country Seven Hundred Thousand Dollars ($700,000) to cover the obligations under the sales contract, to pay the cost of repairing willful damage above Twenty-Five Thousand Dollars ($25,000) per ship. A surveyor appointed by Phelps Bros. & Co. shall be allowed to survey all repair work while being done. "7. Remittances.-Such portion of the purchase price as is to be remitted to the owners is to be deposited for remittance to the credit of the Austro-Americana Line. In the event that there shall hereafter arise any difficulty in connection

with the remittance of any part of the said Seven Hundred Thousand Dollars, held in this country as above, Mr. Denman, Chairman of the Shipping Board, agrees to use his influence to facilitate said remittance. "May 3, 1917.

20. A day or two thereafter the defendant paid to the plaintiffs the further sum of $1,053,020 for the removal of the restrictions on the ships referred to in finding 17. The plaintiffs turned this sum of money over to Phelps Brothers and Company.

21. On May 6, 1917, plaintiffs wrote a letter to Denman, the first paragraph of which reads, in part, as follows:

"To the end of carrying out our understanding that at a price such as would be fair and acceptable to other competent shipping concerns, we should have a contract for the charter or operation of the Austrian ships which have been transferred to the Government, we beg to say that in our organization among others are the following persons, etc."

The letter further contained information, which had been requested by Denman, as to the ability of plaintiffs to operate the ships and the personnel of their organization.

The operation of the seven ships was never granted to the plaintiffs, though demand therefor was made immediately after the transfer of the ships and frequently reasserted during the period of defendant's ownership.

22. The plaintiffs presented to the Secretary of War under the Act of March 2, 1919, commonly known as the Dent Act, a claim of $7,500,000 based on (1) the failure of the defendant to turn the ships over to the plaintiffs for operation, and (2) that at the time of the transfer of the ships there was no meeting of the minds between the parties to the conract, and that therefore plainiffs were entitled to the difference between the fair market value of the ships at the time of heir delivery to the defendant and what the defendant had paid to the plaintiffs. The War Department Claims Board denied relief on the ground that it did not conclusively appear from the evidence that the seven Austrian ships were required by the President for War Department purposes.

23. On February 3, 1921, plaintiff Carden sent a letter to the President in regard to plaintiffs' claim, in which he related the circumstances of defendant's acquisition of the ships and requested the President's consideration of the claim. The letter is plaintiff's exhibit 20 and made a part hereof by reference.

On February 19, 1921, the President wrote a letter to the Secretary of War, which reads as follows:

THE WHITE HOUSE,

Washington, D. C., February 19, 1921.

MY DEAR MR. BAKER: Having read the enclosed, I am myself convinced that the claim is a just one and my own recollection tallies with that of the writer in respect of everything in which I played a part in the narrative. I leave the matter to your own judgment as to what is equitable and right in the circumstances. My own wish would be that the claim could be paid.

Cordially and sincerely yours,

WOODROW WILSON.

24. On July 16, 1921, the Secretary of War, John W. Weeks, made an award in favor of the plaintiffs in the sum of $550,000. The award and acceptance of plaintiffs are as follows:

"A claim having been presented under the Act of March 2, 1919, commonly called the Dent Act, by Messrs. George A. Carden and Anderson T. Herd, based upon an agreement under which the United States acquired title to seven ships. "Now, by virtue of the authority in me vested by said Act, I do hereby award to the said Carden and Herd, in full adjustment, payment, and discharge of said claim, exclusive of prospective profits, the sum of Five Hundred Fifty Thousand Dollars ($550,000.00), and I hereby find and declare that no subcontractors are interested in said claim;

"And I hereby direct that the sum of Five Hundred Fifty Thousand Dollars ($550,000.00), awarded as aforesaid, be paid to the said Carden and Herd out of 142654-39-ser. 4- 7

the unexpended balance of any appropriation available for that purpose.

(Signed) JOHN W. WEEKS,

"Secretary of War.

GEORGE A. CARDEN.

"Dated July 16, 1921, Washington, D. C.
"Accepted at Washington, D. C., July 18, 1921.

"(Signed) "(Signed) ANDERSON T. HERD." Pursuant to the award, the sum of $550,000 was paid by defendant to the plaintiffs.

25. The seven ships cost the defendant as follows: $6,778,006.70 purchase price paid on May 3, 1917; $1,053,020 cost of removing the restrictions on the ships; $550,000 awarded to the plaintiffs by the Secretary of War; and $815,000 expended to place the ships in a seaworthy condition, or a total of $9,196,026.70. The first and third items above, to wit: $6,778,006.70 and $550,000, or a total of $7,328,006.70, were for and paid to the plaintiffs.

26. The dead-weight tonnage of the seven ships at the time of their transfer to the defendant was as follows:

27. The fair market value in the United States of the seven ships, subject to the restriction set out in the offer to purchase in finding 5, limiting the use of the ships during the World War to operation and trade only between ports of the United States and other American ports, including ports in North and South America but excluding every port in Canada and in any Colony or possession of Great Britain or any nation then in the entente alliance, was on May 3, 1917, $195 per dead-weight ton, making $10,193,625 for the total dead-weight tonnage (52,275 tons) of the seven ships. Respectfully submitted.

C. W. RAMSEYER, Commissioner.

STATEMENT OF A. PERRY OSBORN, REPRESENTING PYNE, GOELET, HECKSHIRE, AND THE COX, YOAKUM, AND LABROT ESTATES Mr. OSBORN. Mr. Chairman, we represent three living persons and two estates, the living persons being Perry P. Pyne, 2d, Robert Goelet, and August Heckscher.

We also represent the estate of Irving Cox and the estate of S. W. Labrot.

We believe that if this bill proposes to make an award to the claimants, based on the difference between the cost of the ships to the Government and the value of the ships at the time of their taking over by the Government, our clients should have an interest in such an award.

Our reason for this position is that at the time when all these events took place our clients were members of a syndicate who furnished the money for the first payment of 10 percent, or $730,302 which was a down payment upon these ships, and that thereafter, when war was declared and the President and Mr. Baruch and Mr. Denman proposed to acquire these ships they acquired certain property rights that Mr. Carden had at that time, and they also acquired certain property rights that we had at that time, and our objection does not go to the merits of the award because, after a long study of the entire situation we are certain that whoever owned these ves

sels, or had an interest in the ownership at that time, should be paid the fair value of the vessels.

It is not a legal claim, though it is a strong moral claim, recognizing the fairness which we would look to the Government for.

We do not, therefore, oppose the merit of the award, because as the committee will find out in the course of these hearings these boat owners are the only boat owners who have not received the fair value of their vessels. The Germans and all other people who owned vessels received fair value. The owners of these vessels alone have not received the value of these vessels; in fact, they have not received anything for giving up their vessels in 1917, upon the insistence of the President and the Chairman of the War Industries Board that, in our opinion, came very near to a seizure of these vessels. The influence brought to bear was so strong that our clients had nothing else to do but to surrender the property rights they had. The case has proceeded over a long period of years on two theories, one that Messrs. Carden and Herd had surrendered the right to operate these vessels, which was very valuable to them. In that, our clients have no interest whatsoever.

The case has also proceeded on the theory that Messrs. Herd and Carden the claimants were the owners of the vessels during the 2 or 3 weeks in which the matter was going on. Our clients differ with that presentation, and because they believe they can substantiate that opinion satisfactorily, that they had an interest in such ownership, if this committee wishes, we can introduce now, or later, by evidence or by memorandum, or in any way you gentlemen wish, our position with respect to our interest in this ownership.

Mr. WEAVER. Of course we will be very glad to have you furnish a definite memorandum, unless your statement will be sufficient.

Mr. OSBORN. Mr. Chairman, when the matter seemed to turn on ownership, before the Court of Claims, Senator Wagner of New York and Congressman Bacon, of New York, introduced bills in the last session permitting us to intervene in case there was an award made on the basis of ownership, and if it would serve the purpose of this committee similar bills could be introduced so as to bring our interest in this award effectively before any committee that has the matter under consideration.

Mr. CHANDLER. Would an amendment to this bill accomplish that? Mr. OSBORN. That could be done, Mr. Chandler.

There is one other statement I wish to make at this time. I think Mr. Herd, the claimants and attorneys for the claimants, and I think members of the committee and Members of Congress very properly can ask, Why have you appeared in this matter at such a late date? Why have you let this matter go on for 19 or 20 years before putting in an appearance?

Our clients had supposed that the matter before the Court of Claims was on the basis that the claimants had a right to operate these boats.

They asked Mr. Armstrong and myself, after they received former Congressman Ramseyer's favorable report made to the Court of Claims on the claim to investigate the matter for them, and we found, after a lapse of 20 years, that it was very difficult to get any real evidence bearing on the situation.

A very diligent search through many, many records has furnished a great deal of evidence relative to this problem which was not available to Mr. Herd or to Mr. Carden, or their attorneys, which we felt had a bearing on the question of our ownership. That evidence only became available to us in January of last year, and we found a great part of it quite by accident. That is the reason why we have not heretofore put in an appearance in this entire matter. In conclusion I would say there is no question in our minds whatsoever that an award should be made to the owners of these vessels. We want to have the interest of our clients in this ownership thoroughly considered.

I will be very glad to proceed in either way, either to put in a lot of evidence that we have, and summon our witnesses to appear before you, or submit a memorandum of our position to you, which would give you an indication as to how you wish to proceed further with us.

Mr. WEAVER. Let me ask you one question, Mr. Osborn. I am not thoroughly familiar with the testimony, but as I recall, it seemed that after the President directed Mr. Baruch to take over these vessels, there is some testimony somewhere that Mr. Carden and Mr. Herd secured a release from the syndicate in some way.

Mr. OSBORN. I think there is good ground for their opinion with respect to that, and I think they have been advised by their attorneys throughout this proceeding that they secured a rescission of any position the syndicate might have had before they turned the vessels over to the syndicate. I think that is their position, and I think both Carden and Herd have had reason to believe that that was a correct legal analysis of the situation.

The evidence which we have found, while it does not cast any doubts on the claims for fair value of the ships, is conclusive, to our minds, on the point that there was no rescission of the contract with the syndicate, but that the syndicate turned whatever property rights it had over the the Government, and my feeling, since I have been in this case, is not that we wish to destroy the claimant's claims, but that we wish ourselves to be recognized in this matter, because we feel that at the time they turned over their position we turned over our position.

I do not think I can put this case any more clearly than it was put in a letter which we have from Mr. Denman, who was chairman of the Shipping Board at that time and conducted the negotiations. This letter is addressed to one of our clients who is now dead.

Mr. CHANDLER. Would the Court of Claims have jurisdiction to adjudicate such a question as you have here with Messrs. Carden and Herd?

Mr. OSBORN. We looked into that very carefully and found that unless we came within the jurisdictional act of Congress, the Court of Claims had no such jurisdiction, and we could not go before the Court of Claims.

Mr. WEAVER. Suppose the Court of Claims had rendered a judgment in favor of Messrs. Carden and Herd, where would you have been?

Mr. OSBORN. I think all we could have done in that event would have been to seek to impound the proceeds of the award and bring