Congressional Serial Set

were all substantially alike. I declined to give a receipt in full and final settlement of all claims to the Government in New York in 1865, because I felt we had further claims, and Admiral Gregory acknowledged that we had, and stated that he would take them up very soon and have them settied; but he died.

Again on page 289 the same witness testifies :

When the bills were made up in New York, Mr. Hall, the book-keeper for the Government, made them up, and wanted to make a bill in full and final settlement of all claims, and I stated that I could not sign such a bill as that. Admiral Gregory was there and heard it, and I stated to bim that he knew we had claims upon the Government for additional material and labor and for the advance in the price of labor and material. He said that he considered we had, and that he hoped to take them up and have them properly adjusted in a very short time. He soon after died, and the claims have never been adjusted.

Question. State whether it was intended at the time you signed those receipts submitted to you by the counsel for the United States, or any other receipts for the payment of money received by you for the contractors from the United States on account of the construction of these vessels, such receipts were to be in full of all claims against the United States.

Answer. No, sir; we were then petitioning Congress for a settlement of these claims.

The Government has not treated either the payments received by these contractors on account of the extra work done by them, or the receipts in full exacted when the final payments were made, as concluding and barring the contractors from further relief through the action of Congress. With the view of just such relief the Selfridge Board was created in 1865 under a resolution of the Senate. It made examination and report upon a number of cases, but its report was never acted upon, but the discussion of its report led to the act of 1867, under which the Marchand Board was created. It is not pretended that in fact the contractors were paid in full for the extra work, or the loss arising from the delays caused by the Government in the construction of the vessels. The object of the act of 1867 was to ascertain what these losses amounted to, with a view to their payment by authority of proper acts of Congress thereafter.

Such receipts are at best never more than prima facie evidence. The Government officers who exacted them told the contractors they would not be binding against further payments. Only by signing them could the contractors get what measure of payment they obtained. They were virtually given under duress.

The Selfridge Board acted under the following resolution of the Senate:

IN THE SENATE OF THE UNITED STATES,

March 9, 1865.

Resolved, That the Secretary of the Navy be requested to organize a board of not less than three competent persons, whose duty it shall be to inquire into and determine how much the vessels of war and steam machinery contracted for by the Department in the years 1862 and 1863 cost the contractors over and above the contract price, and the allowance for extra work, and report the same to the Senate at its next session, none but those who have given satisfaction to the Department to be considered.

As the Wassuc was not accepted by the Government until November 17, 1865, the claim of George W. Lawrence was not within the jurisdiction of that board on the 9th of March, 1865, when the Senate resolution was passed, nor on the 26th of May, 1865, when the board was organized (Senate Ex. Doc. No. 18, 39th Cong., 1st sess.) That board completed its labors December 23, 1865, and there can be no doubt that George W. Lawrence justly regarded it as having been convened for the consideration of claims arising from vessels that had "given satisfaction to the Department" prior to November 17, 1865.

This claim was presented to the board of which Commodore Marchand was the president, and by it was rejected.

We think it demonstrable beyond all question that the Marchand board did not have authority to adjudicate; that it did not report the facts called for by the act of March 2, 1867, or by the letter of the Secretary of the Navy creating the board; and that it did report certain conclusions of both law and fact which it had no jurisdiction to consider, and that are contrary to the right and justice of the matter. By the act of March 2, 1867 (14 Stat., 424) the Secretary of the Navy was directed to investigate the claims of all contractors for building vessels of war and steam machinery for the same under contracts made after May 1, 1861, and prior to January 1, 1864, on the following basis. The act required him

To ascertain the additional cost which was necessarily incurred by each contractor in the completion of his work, by reason of any changes or alterations in the plans and specifications required and delays in the prosecution of the work occasioned by the Government, which were not provided for in the original contract.

The act further required the Secretary to report to Congress a tabular statement of each case which should

contain the name of the contractor, a description of the work, the contract price, the whole increased cost of the work over the contract price, and the amount of such increased cost, caused by the delay and action of the Government as aforesaid, and the amount already paid the contractor over and above the contract price.

It will be observed that by the language of this statute the Secretary of the Navy was not to adjudicate upon the rights or claim of the contractors. He was not authorized to even inquire into the legal result as to what, if anything, might be due to them. Nor did it give him authority to refer any such inquiry to a naval board or other subordi. nate tribunal. It became his simple duty under the statute to ascertain" certain facts that were prescribed in the statute in terms so explicit that they should not be misunderstood.

The main and comprehensive fact directed to be ascertained was— the additional cost which was necessarily incurred by each contractor in the completion of his work by reason of any changes or alterations in the plans or specifications required and delays in the prosecution of the work occasioned by the Government, which were not provided for in the original contract.

To come at this fact he was further required to report to Congress a tabular statement of certain other facts, and among them—

(1) the whole increased cost above the contract price

and

(2) the amount of such increased cost caused by the delay and action of the Government as aforesaid.

The Marchand board, to whom the Secretary committed this investigation, instead of ascertaining the "whole increased cost of the work over the contract price," and possibly too anxious to finish its labors to enter upon so elaborate and extended an inquiry, made no inquiry at all, but contented themselves with substituting in their tabular report (a copy of which is hereunto appended) a column entitled "whole increased cost of the work over the contract price as claimed by the contractors."

Whether the amounts thus claimed in this behalf by the contractors, as appeared, by their accounts submitted by them to the Navy Department, were correct or not the board did not even inquire.

Sitting as a court they, in this behalf, rendered no judgment, made no inquiry, but merely stated the plaintiff's claim.

In respect of the next statement required by the act, instead of ascertaining the amount of such increased cost "caused by the delay and action of the Government as aforesaid," they found the "amount of such increased cost caused by the delay and action of the Government as determined by the board to be due."

If in determining the amount "to be due" and in finding in the cases of these claimants that nothing was due the Board went upon the ground that there was in fact no increased cost incurred by the contractors by reason of "any changes or alterations in the plans and specifications required, and delays in the prosecution of the work occa sioned by the Government," the Board must virtually have found that the accounts and claims presented by the contractors were false, pretended, and were presented for work never in fact done, and for materials never expended, and wages and other expenses never incurred. But clearly the Board did not mean this by their finding.

On the other hand if their finding that nothing was "due" went upon the ground that the contracts by their terms provided for changes and alterations in the plans and specifications for the vessels, and that consequently the contractors had no remedy under the terms of the act, then they merely passed upon a question of law, as to the construction of the act of 1867 in respect of the extent of relief intended to give the contractors, and they ascertained no facts at all as to the increased cost caused by alterations and delays of the Government. In this view of the scope of their investigation, beyond inspecting the accounts filed in the Navy Department and its other records in that behalf, they had no inquiry to make and no testimony to take, and they took none.

And if such is the true view to take of the scope of the relief furnished the contractors by the act of 1867, and if the Marchand Board were concluded from inquiring into the merits of the claims, because of the provisions contained in the contracts for alterations and changes of plans and specifications, then the relief granted by that act is totally different from that asked for in the pending bill, the inquiry made by the Marchand Board was inherently and radically different from what is asked now to be inquired of by the Court of Claims; then that board never made the investigation recommended in the previous reports of this committee upon these claims. The Supreme Court in the case of Chouteau vs. The United States (5 Ottó, 61) did find that under the terms of these contracts the contractors could not recover at law for losses incurred from the changes of plans and from the delays caused by the Government. If that was the question submitted properly under the act of 1867 to the Marchand Board, then they could not have found other than or as they did find; but such finding can not be well pleaded as res adjudicata to the claims now presented, nor to the pending bill to send the administratrix of George W. Lawrence to the Court of Claims for it to investigate what increased cost was caused by the delay and action of the Government, as provided for in this bill, in which, in addition to the safeguards as they now exist in the Court of Claims for the prevention of fraud against the United States, and for the detection of misstatements or mistakes, other precautions have been adopted which seem to the committee sufficient to prevent any wrong or injustice being done to the United States.

Your committee are satisfied, from the evidence before it, that the account for such extra work was not correctly adjusted; and inasmuch as the said receipts are prima facie evidence not only of payment in full for such extras per se, but may be construed to cover the question of the extra expense caused by the delays as well, therefore deem it just to all parties that the entire matter should be considered by a legal

tribunal with competent jurisdiction to hear and determine the question involved, and in considering such receipt to treat the same as prima facie evidence, but susceptible of explanation by proofs, if any they have, showing the real indebtedness of the Government to them for such increased cost of such vessels beyond the contract price, and beyond the accounts paid by reason of such changes and alterations as evidently contemplated in the previous acts of Congress providing for an adjustment thereof, upon the principle that when the Government has by its acts caused its citizens performing labor for it to incur additional expense in its performance, such additional cost should be borne by the Government.

The committee recommend that the bill be passed.

APPENDIX.

REPORT OF THE MARCHAND BOARD,

[Senate Ex. Doc. No. 3, Fortieth Congress, second session.]

NAVY DEPARTMENT, December 4, 1867.

SIR: An act of Congress approved on the 2d of March last directs the Secretary of the Navy "to investigate the claims of all contractors for building vessels of war and steam machinery for the same, under contracts made after the first day of May, eighteen hundred and sixty-one, and prior to the first day of January, eighteen hundred and sixty-four," and to "report to Congress a tabular statement of each case, which shall contain the name of the contractor, a description of the work, the contract price, the whole increased cost of the work over the contract price, and the amount of such increased cost caused by the delay and action of the Government aforesaid, and the amount already paid the contractor over and above the contract price.

To comply with the requirements of this act, it became necessary to convene a board of officers for the examination of the several claims presented. Commodore J. B. Marchand, Chief Engineer J. W. King, and Paymaster Edward Foster were assigned to this duty, and their report is herewith transmitted.

I have the honor to be, very respectfully,

Hon. BENJ. F. WADE,

President of the Senate pro tem.

GIDEON WELLES,
Secretary of the Navy.

NAVY DEPARTMENT, November 26, 1867.

SIR: We have the honor to report that, in obedience to your order of July 6, 1867, we have carefully scrutinized each of the claims presented under the act of Congress approved March 2, 1867, "to investigate the claims of certain contractors for building vessels of war and steam machinery," and respectfully beg leave to inclose herewith the tabular statement called for by said act of Congress.

Messrs. Harlan & Hollingsworth, of Wilmington, Del., did not present a statement of their claim for delays occasioned by the Government while constructing the harbor and river monitor Saugus and light-draught monitor Napa; but in a letter to you, under date of October 12, they claim to be entitled to the same sum for the Saugus that the Board may award to the Tecumseh, and also to the same sum in case of the Napa that may be awarded to the Casco.

After examination, the Board finds that Messrs. Harlan & Hollingsworth are entitled for the Saugus to the same sum that was awarded to Mr. Harrison Loring in the case of the Canonicus, viz, $38,513, but do not find anything due in the case of the Napa.

We have the honor, sir, to be, very respectfully, your obedient servants,

J. B. MARCHAND,
Commodore and President.

J. W. KING,
Chief Engineer and Member.
EDWARD FOSTER,
Paymaster and Member.

Tabular statement showing the result of the action of the board appointed July 6, 1867, by the honorable Secretary of the Navy, to "examine the claims of certain contractors for the construction of vessels of war and steam machinery," under act of Congress approved March 2, 1867.