court's findings. Although the opinion relies upon the Tort Act's "discretionary function exemption (28 U. S. C. 2680 (a)), it is clear that these three judges. rejected the district court's basic finding that the fertilizer was an inherently dangerous explosive substance of whose qualities the Government's employees. were or should have been so aware that the fertilizer program should not have been undertaken as it was. The opinion prefaced its reliance upon the existence of an area for discretionary action with the categorical statement, contrary to the findings of the district court (R. 895), that "it can hardly be argued that the dangers of explosion from FGAN were so well known prior to the disasterthat judgment or discretion were not called into exercise as to whether it should be manufactured at all and under what safeguards and warnings it should be distributed" (R. 27806). This factual conclusion that ammonium nitrate fertilizer was not known as such a dangerous explosive, upon which the whole opinion is premised, may itself vitiate all the findings of negligence with respect to notice, labeling, coating, packing, loading, handling, and stowing-all of which appear to have been based upon the contrary view of the district court as to the commodity's dangerous nature.

Later, the three-judge opinion uses language which suggests that the judges' examination of the record had convinced them that the evidence did not support other findings of negligence. Judge Rives emphasized that from the judges' own "examination of the record, we are of the opinion that the proof does not establish a case within the scope of the Federal Tort Claims Act, and that it would serve no useful purpose to remand this case for the taking of additional evidence" (R. 27810). The ultimate reliance upon "the proof" in the record, together with the opinion's declarations that "many if not all" of the alleged acts fell under the statutory exemptions (R. 27806, 27807), indicates that the opinion was founded not only on legal considerations but also on a full appraisal of the evidence.

In short, (a) all the judges of the court of appeals rejected at least the trial. court's fundamental finding that the fertilizer was so inherently dangerous a commodity that the program should not have been undertaken as it was; (b) three judges explicitly rejected all of the findings; (c) and none of the judges accepted any of the findings.

The majority opinion of the Supreme Court (346 U. S. 15), also indicates serious reservations with respect to the district court's findings of negligence. It expressed agreement with the characterization of the findings in the court of appeals as "profuse, prolific, and sweeping" and stated that "no proper review could be exercised by taking the 'fact' findings of 'negligence' at face value" (p. 24, fn. 8).

It refers to the Government's manufacture and shipment of the commodity "for more than 3 years without even minor accidents," its investigation and experiments, and the availability and reliance upon TVA and private industry practice and experience (p. 28). It points out that:

"The basic 'plan' *** was drawn up in the light of prior experience by private enterprise and the TVA. In fact it was, as we have pointed out, based on the latter agency's engineering techniques, and specifically adopted the TVA process description and specifications (pp. 38-39)."

The lack of control by the Government of the FGAN after it left the manufacturing plants, and the evidence of negligence of agents not under Government control, contrary to the findings of the district court, is underlined by the following excerpts from the Supreme Court's opinion:

"As well, serious judgment was involved in the specification of the bag labels and bills of lading. The importance of this rests on the fact that it is the latest point in time and geography when the Government did anything directly related to the fire, for after bagging the FGAN was of course physically in the hands of various nongovernmental agents. * * * there was serious room for speculation that the most direct operative fact causing the immediate fire on the Grandcamp arose from errors that the French Council, longshoremen, or ship staff committed *** (p. 41)."

The opinion also stresses complete compliance with applicable regulations of the Interstate Commerce Commission in shipping the material:

"The plan had been prepared in this regard by the transportation officer of the Director's Office. His decision in the matter was dictated by the ICC regulations. These did not provide for a specific classification for the material other than as fertilizer. Labeling it as anything but 'oxidizing material' was not required—indeed was probably forbidden-and even this requirement was waived for bags of less than 200 pounds. To the extent, then, that the Army had a

choice in the matter, its decision not to seek to list its FGAN in any other fashion was within the exception. The immunity of a decision as to labeling, in fact, is quite clearly shown by the fact that the ICC's regulations, for instance, could not be attacked *** (pp. 41-42)."

Finally, in the following language, the opinion gives the clearest indication that on the basis of foreseeability-the universal test of negligence-there was no failure to exercise due care:

"The entirety of the evidence compels the view that FGAN was a material that former experience showed could be handled safely in the manner it was handled here. Even now no one has suggested that the ignition of FGAN was anything but a complex result of the interacting factors of mass, heat, pressure, and composition [p. 42]."

In the light of the clear rejection of findings of negligence in the language quoted from the various opinions of the court of appeals and the majority opinion of the Supreme Court, the suggestion that the correctness of the district court's findings should be assumed by Congress is nothing short of fantastic.

The Department submits that the proposed legislation cannot be properly considered on any assumption of the negligence of the United States and that the overwhelming weight of the evidence of record establishes beyond question that the United States was not negligent. Although it is not believed that a congressional subcommittee has the time or facilities to make a determination of negligence in a matter of this complexity-the printed record alone in the Supreme Court exceeds 30,000 pages-the evidence is discussed hereafter at some length to demonstrate the gross error or assuming the negligence of the United States.

III. MANUFACTURE AND OWNERSHIP OF THE FERTILIZER AT TEXAS CITY

The ammonium nitrate fertilizer which exploded at Texas City had been manufactured for the United States by an independent contractor, pursuant to an emergency program to increase the food supply in enemy-occupied territories following the devastation of World War II. The program contemplated the reactivation of idle wartime ordnance plants to produce ammonium nitrate fertilizer. But fertilizer was urgently needed before these plants could be brought back into production. To meet this problem, in view of world shortages and the allocation controls applicable to food-producing materials, the program called for borrowing immediate fertilizer requirements from regular commercial manufacturers and returning the borrowed fertilizer when the reactivated plants came into production. The fertilizer involved in the present case had been returned to a commercial producer under this arrangement, and at the time of the explosion had been disposed of by that producer in the same manner as its own production.

A. THE FERTILIZER PROGRAM

An acute world food shortage existed at the conclusion of World War II and the problem of increasing the food supply was an integral part of the occupation and administration of enemy territories (R. 25977). The use of fertilizer to increase the indigenous production of foodstuffs (R. 26024) in areas threatened with famine presented an obvious means of avoiding widespread disease and unrest (R. 25977-25978).

Because of acute shortages of nitrogen fertilizer throughout the world (R. 13984, 14024, 14011) and the allocation of existing production under international agreements (R. 13984-13985, 14045-14069, 26121), the availability of a number of the wartime ordnance plants, readily covertible to the manufacture of ammonium nitrate fertilizer, afforded the only practical possibility of meeting the needs of the occupied areas (R. 14052-14053, 14017, 25984, 13986–13987).

Accordingly, in May 1946, the wartime plants were ordered released to the Secretary of War to provide facilities for the production, through independent contractors, of some 70,000 tons of fertilizer grade ammonium nitrate per month (R. 20001, 14009, 26121, 26393, 26682). "The discretionary authority of the Secretary of War was delegated down to" the Chief of Ordnance who was directed to carry the program into effect (R. 14083-14084, 14080, 26393). Transportation and distribution functions under the program were delegated to the Transportation Corps and the Office of the Quartermaster General (R. 23107, 24057).

B. FERTILIZER MANUFACTURED BY INDEPENDENT CONTRACTOR

Following long-established policies, the War Department did not itself become a manufacturer of fertilizer, but drew upon the resources of private industry for the necessary production. Both the rehabilitation of Government plants for the manufacture of fertilizer under the program, and the actual manufacturing operations in those plants, were conducted under the conventional cost-plusa-fixed-fee arrangements with private industrial concerns (R. 23333). The independent contractors for the program were E. I. du Pont de Nemours & Co., Emergency Export Corp., Silas Mason Co., Atmospheric Nitrogen Corp., Hercules Powder Co., Heyden Chemical Co., Liberty Powder Co. (R. 23130). The fertilizer shipped to Texas City was manufactured for the United States under such a contract by Emergency Export Corp., a wholly owned subsidiary of Spencer Chemical Co. (R. 12493, 23332, 26555, 22988, 25802-25803, 27472 et seq.), an experienced commercial manufacturer of the commodity (R. 6479, 6652).

The purpose of these arrangements was to enable the United States to obtain the benefit of the knowledge and experience of private industry. As the record of this case makes clear, the Ordnance Department, primarily responsible for the task, necessarily relied upon the know-how of its private contractors, incorporating the experience of the industry and TVA, and adopted the contractors' tested practices as standard operating procedures (R. 8274, 6479, 6556, 6652, 6738, 6871). Government personnel at the plants performed housekeeping and inspection functions to protect the plants and assure compliance with the contract. "These incidents of the program did not, however, prevent the placing of managerial responsibility upon independent contractors" (Powell v. U. S. Cartridge Co., 339 U. S. 497, 507). General Hughes, Chief of Ordnance, testified (R. 4561) that "the contractors have the prime responsibility. The commanding officers of these plants are in effect housekeepers. They take care of the plant. It is just a plain housekeeping arrangement, maintenance of roads, maintenance of buildings. and things of that kind."

Major Starr, commanding officer of the Nebraska ordnance plant, testified (R. 6869-6870) that it is his responsibility "to see that the contractor is living up to the terms of his contract." But he made clear (R. 6871) that this overall supervision does not entail minute scrutiny of "all phases and details," pointing out: "Our supervision here is merely to determine to our satisfaction that the contractor is living up to the terms of his contract. The contractor is hired for his know-how. We do not in any way whatsoever try to tell them how to perform the normal functions of their work. That is what they are hired for." [Emphasis added.]

These circumstances obviously do not make the United States a manufacturer. Rather, they reflect "the fundamental policy of the Government to refrain, as much as possible" from doing its own manufacturing and to rely upon "the experience in mass production and the genius for organization that had made American industry outstanding in the world. The essence of this policy called for private, rather that public, operation of war production plants" (Powell v. U. S. Cartridge Co., 339 U. S. at 506).

Assigning "managerial duties" to private industry as "a vital part of the Government's general production policy" (Powell v. U. S. Cartridge Co., 339 U. S. 497, 508), the War Department's responsible officials were presumably under a duty to select with care the contractors to whom such assignments were to be made. But it has not been suggested that there was any lack of due care in this respect. It is undisputed that the contractor producing the Texas City fertilizer was a large, experienced, responsible manufacturer.

C. FERTILIZER AT TEXAS CITY NOT UNDER CONTROL OF UNITED STATES

The fertilizer at Texas City had been manufactured under the program by Emergency Export Corp., a wholly owned subsidiary of Spencer Chemical Co. (R. 12493). But it had been sold to the Lion Oil Co. immediately upon its manufacture.

This came about as an integral part of the operation of the program. When the plan to reactivate idle ordnance plants was conceived, it was apparent that fertilizer would be needed before adequate production could be obtained under the Government's plan for its military requirements. It was estimated that 75,000 tons would be required for each of the first three quarters and 15,000 tons for the last quarter of the fertilizer year 1946-47, and that the War Department would not be able to meet any appreciable amount of these requirements

during the first quarter and only a fraction of them during the second quarter (R. 13991-13992, 25804-25805).

Since the world supply of fertilizer was very short, the War Department requested an allocation by the Combined Food Board, established by international agreement, of sufficient fertilizer from commercial sources to meet its early needs, to be replaced out of the subsequent production under the program (R. 13992, 14047-14049, 25805). The Board approved this arrangement and authorized the acquisition of fertilizer already allocated on condition that it be returned in kind out of future production under the program (R. 13998-13999, 13989-13993, 14017-14018, 14048-14051, 25807, 25815, 15819, 14008, 14012). The commecial suppliers preferred to sell the fertilizer to the United States with the understanding that they would buy it back at the same price out of the future production under the program (R. 14018, 14064, 14067), and the arrangement was carried out in this manner (R. 14018-14019, 23456, 25675-25677, 26059). Lion Oil Co. was one of the commercial producers from which the United States had acquired ammonium nitrate fertilizer to meet the early requirements of the program (R. 25679, 25683, 25687, 25705-25711, 25712-25714, 25717-25719). The fertilizer shipped to Texas City had prior thereto been sold to Lion Oil Co. and at Lion's request had been delivered to rail carriers for Lion at the manufacturing plants (R. 25774, et seq.) to replace fertilizer previously purchased (R. 2577407, 25720–3, 25750-3, 25773). The Government had purchased from Lion PRP or wax-coated grained ammonium nitrate containing 32.5 percent nitrogen (R. 23471, 25687, 25705, 25708, 25712) packaged in 6-ply asphalt laminated paper bags (R. 25705, 25689), and returned the identical product (R. 26040, 26403-26404, 2516405, 13574, 13691-13696, 13781-13782, 14533, 14538, 13799-13800, 21223, 4521-4522).

Lion resold the fertilizer to Walsen Consolidated Mercantile Co. (R. 2486224866) for the account of the French Supply Council (R. 9505-9510), an agency of France acting for private French interests (R. 9516-9517, 9521-9522). In accordance with contract requirements (R. 25774, 25758), the fertilizer was shipped by rail from ordnance plants in Nebraska and Iowa to Texas City at the direction of Lion and the French Supply Council (R. 24891-24894, 9520, 22202, 24862-24863, 24865-24866, 25800-25803). When the Government returned the fertilizer to Lion, by delivery to rail carriers at Lion's request, it completely divested itself of all ownership, possession, and control, and of any connection with its handling at Texas City or with its ocean shipment.

The incidents of the sale transaction establish beyond question the assumption by all parties that title to the fertilizer passed when shipped from the manufacturing plant. The sell-back program contemplated payment "to the Government after the delivery of the manufactured product" (R. 25754). The contract provided that title to the fertilizer was to pass upon payment "against actual deliveries as made" and that the "method of payment will be by certified check or bank draft, or cashier's check payable to the Treasurer of the United States and mailed to the * Quartermaster Purchasing Office, New York" (R. 25776). However shipping instructions from the Quartermaster Purchasing Office to the manufacturing plants directed that, without waiting for payment, they "airmail on date of shipment original and copy of bills of lading to: Lion Oil Co., El Dorado, Ark.” (R. 25800-25802).

Pursuant to written instructions of Lion and of Walsen (R. 9508-9510), acting for the French Supply Council (R. 9586), the Texas City fertilizer was shipped under straight bills of lading naming J. D. Latta, agent of the French Supply Council at Texas City, as consignee (R. 25800-25803, 24865, 24891-24894). Immediately on shipment, the United States forwarded the Government form rail bills of lading to Lion (R. 25800-25802). Payment by Lion to the United States was actually made in May, August, and November 1947.

Lion's contract of sale with Walsen Consolidated Mercantile Co. (R. 24862, 24865, 20781-20783, 22131, 22310), for account of the French Supply Council, obviously assumed passage of title to Lion at the manufacturing plant. It provided for shipment of fertilizer "packed in 100-pound capacity moisture-repellent multiwalled paper bags" in carload lots "from the plant of the United States at which delivery*** to Lion is made by the United States, f. o. b. the plant" (R. 24862-24864).

Payment by Walsen to Lion was to be made at a designated bank in El Dorado, Ark., on presentation of draft with documents attached, including straight railway bill of lading on Government form, naming Walsen (French Supply Council) as consignee, evidencing shipment to Texas City, Tex. (R. 24863). Texas City was designated by the French Supply Council as the port of export

(R. 9509, 9520, 24862–24864). The contract between Lion and the United States provided that transportation charges were to be paid by the United States from the manufacturing plants to any point "within the same geographical radium" as the purchaser's own plant, "to be agreed upon by the contractor and the contracting officer" (R. 25775).

It is this provision relating to payment of freight charges which has on occasion been referred to in an attempt to establish that the Government was responsible for the shipment of the fertilizer to Texas City since it had to approve the destination. Manifestly, the approval related only to the question of appropriate transportation charges, so that the United States would be certain it was not compelled to pay transportation charges in excess of the rate to Lion's plant. Payment for the fertilizer was made promptly by the French Supply Council on surrender of documents by Lion to the El Dorado Bank (R. 24817-24819). The French Supply Council insured the fertilizer for its own account from the moment it was loaded into cars at the manufacturing plants (R. 9516–9517), 24915). The underwriters paid the losses to the French Supply Council as owner of the goods (R. 9517-9518), and when a dispute arose between Walsen and the French Supply Council as to damage to some of the fertilizer, no suggestion was made as to any possible ownership of the goods by the United States or by Lion. As far as Walsen was concerned, the owners of the material were "the French principles" (R. 9552).

When the fertilizer reached Texas City, it was stored, on instructions of Latta (acting for the French Supply Council), in shipside warehouses awaiting delivery to ocean carrier (R. 12633-12634). On arrival of the vessels, Latta paid warehouse charges, and the fertilizer was loaded, again under instructions of Latta, from warehouse to ship's stowage by independent stevedores in the employ of the vessel (R. 12076-12077, 12087, 12489-12490, 12512, 12562, 12605-12607, 12634, 12640, 12648, 12692, 12839-12849). The Texas City Terminal Railway Co., warehouseman designated by Latta for the French Supply Council (R. 1248912490, 12561-12562, 12566), sent invoices for rebagging costs to the council through Latta as its agent (R. 12490, 12495).

Ocean bills of lading named the French Supply Council, not the United States, as shipper of the fertilizer from Texas City to France (R. 20104A, 20106A-M). Ocean freight on the Grandcamp consignments was "payable at [French] destination" (R. 20106-A), and the Highflyer bills of lading were noted: "Freight To be Prepaid by French Supply Council" (R. 20104A). All ocean freight was actually to be collected from the consignees in France (R. 9521-9522).

These circumstances established beyond question that transfer of ownership of the fertilizer took place upon loading into cars at the manufacturing plants, and certainly that the United States had neither ownership, possession, nor control after the fertilizer reached Texas City. The ocean shipper, as indicated in the ocean bills of lading, was the French Supply Council, purchaser from Lion, which was itself a regular, commercial manufacturer of fertilizer grade ammonium nitrate.

In this connection, it is well to note again the statement in the Supreme Court opinion relating to absence of control by the United States after completion of manufacture (p. 41):

As well, serious judgment was involved in the specification of the bag labels and bills of lading. The importance of this rests on the fact that it is the latest point in time and geography when the Government did anything directly related to the fire, for after bagging the FGAN was of course physically in the hands of various nongovernmental agents.

IV. TEXAS CITY DISASTER NOT RESULT OF NEGLIGENCE OF UNITED STATES Claimants have testified that the United States, if a private party, would have been liable for negligence because it was the manufacturer of a new product and shipped it to Texas City without making adequate tests and without giving warning of the characteristics which it is contended those tests would have disclosed. It has already been shown that the United States was not the manufacturer of the product and was not responsible for its shipment to Texas City. The evidence also establishes: (a) The material shipped to Texas City was not in any sense a new product when it was manufactured in 1947; (b) it was shipped in strict compliance with applicable Interstate Commerce Commission regulations; and (c) the United States exercised appropriate care in the light of accepted scientific knowledge.