22 



HARDWOOD RECORD 



April 10, 1918 



prominent firm in Memphis liad cancelled contracts for green oak 

 plank at the alleged instigation of the so-called "vehicle com- 

 mittee," a-nd in which they roundly scored that body for its alleged 

 interference in such contracts. 



The committee assured General Goethals of its complete satis- 

 faction with his ruling that "the price to be paid for raw materials 

 by vehicle manufacturers was the price which the wagon manu- 

 facturers had used as their cost in obtaining government contracts," 

 and advised him that the lumbermen were willing to accept that 

 price. It informed this official, however, that it felt "that the 

 figures for 2% to 4-inch FAS and No. 1 common red and white oak 

 green plank delivered on Chicago rate, as given in his letter of 

 March 8 to Senator McKellar, were not the figures used by the 

 vehicle manufacturers as their cost in obtaining their wagon con- 

 tracts." 



General Goethals thereupon voluntarily gave the committee 

 authority to examine the original records and satisfy itself as to 

 the correctness of the prices and dictated a letter to Col. W. S. 

 Wood, depot quartermaster at Jeflfersonville, Ind., who was in 

 Washington at the branch office opened by him, instructing him 

 to "please let Messrs. Pritchard, McClure and Jurden have access 

 to all figures furnished by the manufacturers for the finished 

 products." 



The committee called on Colonel Wood and presented its memo- 

 randum from General Goethals. Its investigation of the files devel- 

 oped the fact that "different prices from those stated in General 

 Goethal's letter of March S to Senator McKellar had been used 

 by the vehicle manufacturers as their cost of raw materials in 

 obtaining their contracts." 



The committee then gave a copy of "prices for materials," 

 already quoted, "as used by vehicle manufacturers as of Nov. 2G, 

 1917, as their costs." The committee made the explanation, how- 

 ever, that "this list of prices on raw materials does not state, 

 neither did the original copy in the file show, whether or not these 

 prices were f. o. b. mill or f. o. b. wagon factories; neither did the 

 original files show whether or not the prices were for green or dry 

 materials." 



A. B. Thielens was present at the interview in Colonel Wood's 

 office and, upon direct question, stated "that the prices certified to 

 by Colonel Wood were based on Chicago rate of delivery," and 

 also stated specifically "that they were intended to cover 'par- 

 tially dry ' stock. ' ' 



A conference was arranged with General Goethals after the com- 

 mittee had obtained the list certified to by Colonel Wood and the 

 latter was called into the meeting. General Goethals asked Colonel 

 Wood to explain the difference in the two lists of prices — the one 

 contained in his letter of the eighth and the one contained in the 

 list that he had himself certified as correct. Colonel Wood sug- 

 gested that General Goethals had copied the wrong list from the 

 confidential information furnished him by Colonel Wood. 



Following this conference General Goethals told the committee 

 he would write another letter to Senator McKellar. This he did 

 under date of March 22. Copy of the letter is given in the report 

 of the committee, as follows 



Washington, March 22, 191S. 

 Hon. K. D. McKellar, 



United States Senate. 

 My dear Senator McKellar : 



Referring further to the prices for the raw materials entering in the 

 construction of vehicles, I append hereto the prices which will govern 

 for the raw materials. 



I regret exceedingly the discovery of the misinformation on which my 

 letter to you, to be tran.smitted to Mr. Ewing, was based. 



Your sincerely, 



(Signed) Geo. W. Goethals, 

 Acting Quartermaster General. 

 Attached to this letter was the certified list prepared by Colonel 

 Wood of Nov. 26, 1917. 



While the committee was making every effort to unearth the 

 cost figures actually used by the vehicle manufacturers, Mr. Thielens 

 tried, in the presence of General Goethals, to make it appear that 

 the two different lists used in the two letters written by that official 



were the same. He was flatly contradicted by General Goethals, 

 according to the committee. 



The committee, following the receipt of the last letter of General 

 Goethals, prepared to return to Memphis, but it was advised by 

 W. E. Chamberlain, hardwood expert on the staff of Col. E. H. 

 Downman, director of lumber, that he had received a call from 

 E. E. Parsonage, attached to the vehicle section of the war indus- 

 tries board, and that the latter wished a conference with the com- 

 mittee, with a view to negotiations leading to a satisfactory adjust- 

 ment of the matters in controversy. The committee advised Mr. 

 Parsonage that it was ready and willing to enter into such negotia- 

 tions, that it desired to be wholly fair and that it wished to make 

 a sincere effort to reach a satisfactory solution. It further advised 

 him that "if such a conclusion could be reached, it would gladly 

 recommend to the hardwood industry the adoption of such an agree- 

 ment and could assure him of the whole-hearted support and co-oper- 

 ation of the hardwood industry." 



Mr. Parsonage then, according to the report of the committee, 

 admitted that the "prices used by the vehicle manufacturers as 

 contained in the list certified to by Colonel Wood were the prices 

 which the vehicle manufacturers had represented to the government 

 would be their cost of such raw materials." He qualified this, how- 

 ever, by saying that "it was understood that these prices were for 

 stock twenty-four months or older, or kiln-dried, ready for factory 

 use." 



The committee immediately recalled the statement of A. B. 

 Thielens, already quoted, that these prices were for "partially 

 dry" stock, and called attention of the members of the association, 

 in its report, to the direct contradiction between the statements of 

 Mr. Parsonage and Mr. Thielens. 



In addition to giving the certified list of cost prices. Colonel Wood 

 attached several extracts from correspondence between his office 

 and the wagon and vehicle purchasing committee, from which it was 

 made clear that "the dry materials for the wagons were not in 

 stock," that the "materials were then in the growing trees," that 

 the contractors did not have sufficient kiln capacity and that a 

 recommendation was made that the cost of additional kilns to be 

 erected should be equally divided between the contractors and the 

 government. These were quoted in the report of the committee, 

 and the latter added, in this connection: "The files show that 

 this recommendation was approved and that an allowance of $10 

 per wagon was granted to the contractors on those specific eon- 

 tracts. ' ' 



It also added the following; "Your committee therefore is not 

 willing to accept the mere statement that the differential in price is 

 due to the twenty-four-months' old or dryer stock or kiln-dried stock, 

 and feels that it is not in position to accept such a statement, and 

 will only do so upon concrete evidence being presented from the 

 original figures filed with the government showing this to be so." 



The report concludes thus: 



Your committee has the recommendation to make that the members of 

 this association devote every energy toward any problem that has for its 

 purpose the successful prosecution of the war, and your committee has 

 advised the wagon and vehicle purchasing committee that the members 

 of this association vie with all American citizens in patriotism. In high- 

 purpose and in willingness to mal<e sacrifice, but certainly there is na 

 reason why the producers of a raw material should furnish same to a 

 contract at a less price than the contractor has figured as his cost. 



General Goethals has made his ruling on this theory. It is our further 

 idea that, if the hardwood producer is to receive a less price for his 

 material than that price used by the vehicle contractor, then the differ- 

 ence between these prices should accrue to the government and not to 

 the vehicle manufacturer." 



Further developments in this matter will be promptly placed before the 

 membership. 



Effect of Demand for Cars 



Where a shipper of lumber makes a demand upon a railway 

 company for cars, it will be presumed, in the absence of a showing 

 of mutual understanding to the contrary, that the ears were in- 

 tended to be furnished at the station where the demand was made, 

 and the company will not be permitted to escape liability for fail- 

 ing to furnish them because no place was specified. 



