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Dr. CREEL. Would you say, Mr. Chairman, that we could disregard that so far as proposing an increase or decrease of fees at New York is concerned?
The CHAIRMAN. I do not think you could increase or decrease the fees under the present law.
Dr. CREEL. Under the preceding law?
The schedule of fees and rates of charges in effect at the New York quarantine station at the time of the transfer of the title thereto to the United States shall be adopted and promulgated by the Secretary of the Treasury as the schedule of fees and rates of charges for the operation of the said station under the jurisdiction of the United St:tes.
That was a part of the agreement in taking the station over. I do not understand that that was intended to be made forever. Mr. KELLEY. Congress has the power, but not the department.
Dr. CREEL. That is what I a:sume. For instance, they have a system of charging so much for the fumigation of each compartmentthat is to say, $2. Perhaps that is rather extortionate where in general we charge so much per thousand cubic feet. That includes the estimated cost of the chemicals. Then we charge so much per hour for the labor.
Mr. Sisson. At the New York office?
Dr. CREEL. In general. In the port of New York, as far as the holds of the vessels are concerned, but when you come to fumigating a large number of staterooms they charge $2 for each stateroom, which, in comparison with the other service rendered, is exorbitant. It is not fair.
Mr. Sisson. How are the fees running up there as compared with your expenses in New York?
Dr. CREEL. For the first three months of current fiscal year they ran over $100,000.
Mr. Sisson. You told us that. How are they running now?
Dr. CREEL. I previously said that for the first four months of the last fiscal year the fees were $350,000.
Mr. Sisson. You have had no reports submitted to you?
Dr. CREEL. For the first three months of this year it has been something over $100,000.
PREVENTION OF EPIDEMICS.
The CHAIRMAN. The next item is a deficiency of $1,000 for 1920. Tell us how that occurred.
Mr. HUDDLESON. The entire item is for freight and express charges; $690.52 has been settled by the auditor, and is in the Division of Bookkeeping and Warrants ready to be settled by warrant when money is available; $7.20 worth of bills are in the bureau.
The CHAIRMAN. And so far as you know that is all there will be?
Mr. HUDDLESON. So far as I know, that is all there will be, although others may come in later. · We can not tell a thing about it. This expense is for laboratory supplies; guinea pigs; rat traps, steam hose, and things of that kind used in epidemic work.
The CHAIRMAN. For experimental purposes?
The CHAIRMAN. And the total amount of that is how much?
The CHAIRMAN. And if we appropriate that amount it will cover everything you actually know about at this time?
Mr. HUDDLESON. Yes, sir. Mr. Chairman, I would like to correct one impression. I made the statement a while ago that we were charging $3.50 per day per patient for hospital care.
The CHAIRMAN. To the Veterans' Bureau. It is more than that? Mr. HUDDLESON. Yes. The actual per diem cost less capital expenses is about $3.66 a day, but the $3.50 to which I referred is the figure we use for adjusting purposes. We charge them $3.50 per day for their patients treated in the old marine hospitals, and we pay them $3.50 a day for marine patients treated in public health hospitals.
MONDAY, NOVEMBER 14, 1921.
OFFICE OF THE SUPERVISING ARCHITECT
STATEMENTS OF MR. JAMES A. WETMORE, ACTING SUPERVIS
ING ARCHITECT, AND MR. JOHN H. SCHAEFER, ACTING SUPERINTENDENT MAINTENANCE DIVISION.
POST OFFICE AT SANTA FE, N. MEX.
The CHAIRMAN. For the post office at Santa Fe, N. Mex., you are asking $61,500. That is “for continuation (site and building)." What is the limit of cost on this building and when was it authorized? Has the site been purchased ?
Mr. WETMORE. The site is purchased and the contract for the building is in force. The limit of cost is $295,000.
The CHAIRATAN. How much has been appropriated ? Mr. WETMORE. $190,500 has been appropriated. The CHAIRMAN. Will you build it within the limit of cost? Mr. WETMORE. We are within the limit. The total contract will run about $239,000.
The CHAIRMÁN. Will this complete the work? Mr. WETMORE. Yes, sir. The contract should be at this time 59 per cent done, and the contract is 70 per cent completed. The contractor is ahead of his time. The contract time for completion is February, and this money will be needed in order to pay all the obligations.
The CHAIRMAN. Will he finish by February?
The CHAIRMAN. You would not mind if we said here “completion" instead of “continuation"?
Mr. WETMORE. No, sir.
PAYMENT OF CLAIMS. OF CONTRACTORS.
The CHAIRMAN. For an additional amount for the payment of claims of contractors, etc., under the act of August 25, 1919, as. amended, you are asking $250,000. You have had $2,000,000 for this purpose.
Mr. W'ETMORE. Yes, sir.
The ('HAIRMAN. What amount is involved in the settlement of these contracts now, and what was the amount claimed originally? ..Mr. W'ETMORE. As near as we could estimate, by taking it up in advance of the filing of the claims at the request of the committee of Congress, we found claims filed running about $2,750,000, without, any information as to the amount that would be involved in claims of subcontractors, because we had had no contractual relations with the subcontractors.
The CHAIRMAN. How much was that?
Mr. WETMORE. $2,750,000 is what the Secretary of the Treasury estimated to the Committee on Public Buildings and Grounds when. they had the legislation before them. He estimated that the ap-. : propriation that would be required to settle all of the claims would be about $2,750,000.
The CHAIRMAN. That would be on the basis of settling at 100 cents, on the dollar?
Mr. WETMORE. It would be except for the claims of the subcontractors, and he did not know what they would be, but he estimated them. However, it is the opinion of the employees in my office handling these claims that this $250,000 will clean up the claims.
NUMBER AND AMOUNT OF CLAIMS FILED-NUMBER SETTLED, DISALLOWED, AND)
The CHAIRMAX. How many of the claims have been adjusted? Mr. WET MORE. There were 332 claims filed for amounts aggregating $3,145,964.85; 124 claims have been settled with an obligation of $2,128,181.27; and 61 claims have been disallowed or withdrawn, involving $431,792.79. There are 40 claims, with the sustaining evidence now on hand, awaiting examination, the amount claimed aggregating $226,000. We are satisfied, from the present indications, that this $250,000 will complete it.
The CHAIRMAN. What is the state of the appropriation now? Mr. WETMORE. If we paid all of the audited claims, that would exhaust the appropriation, and we would have an actual deficit.
The CHAIRMAN. Of how much. Mr. WETMORE. Of $128,000.
The CHAIRMAN. What percentage of the face of the claims was allowed in the settlements?
Mr. WETMORE. I can not state that offhand. We have allowed 124 claims totaling $2,128,000, in round numbers, and the disallowed claims, together with the claims that have been withdrawn, amount to $431,000. I do not know what proportion of this amount represents withdrawn claims.
Mr. Byrns. When do you expect to clean up the balance of the claims?
Mr. WETMORE. We could clean them up rapidly except for the fact that we have not had help enough in the office to do this work.
The CHAIRMAN. It looks to me as if you have been allowing a large percentage of the face of the claims in settlement. These are war claims, are they not?
Mr. WETMORE. Yes, sir. The total amount claimed was $3,145,000, and we are asking to complete all of these claims $2,250,000.
The CHAIRMAX. That would be about 66 per cent.
The CHAIRMAN. They tell me that the claims that have been allowed in other departments have been settled on the basis of about 14 per cent.
Mr. WETMORE. The legislation finally enacted in connection with this class of claims was pretty liberal. It started out first with legislation that restricted the claims to three classes: First, for the increased cost of labor and material due to the war; second, damages or losses sustained by reason of the direct acts of the Government agencies, as for instance, where a contractors' help was all hired away from him on Saturday night and he was left with no force on Monday morning; and, third, where the plants in which the con. tractors were carrying on their work or having material prepared were commandeered by the Government. Those were the only classes that could come in, but in the following year the appropriations committee in the sundry civil bill changed the language so as to provide that the Secretary of the Treasury was anthorized to allow any and all losses sustained by these contractors in completing their contracts over and above the amount of the contract price. The language "any and all losses ” is going pretty far. That was the rule provided it was due to war conditions.
The CHAIRMAN. Did the department take that as a mandate of Congress?
· Mr. W'ETMORE. Yes, sir. That was authority to allow any and all losses sustained by reason of war conditions. Those claims required a very different kind of audit from what would have been required under the first act. It virtually meant in that case that we had to audit the books of every contractor, and we have had their books here and have audited their expenditures. A hearing has been had in regard to that by Congressman Zihlman's committee, and a report covering that information has been published. That report carries information concerning the methods of the audit and the facts up to a certain date, or up to the date of that hearing. There was a larger percentage of allowance, naturally, under this more liberal legislation than there would have been under the first legi-lation.
The C'HAIRMAN. Was there any way of checking up to show whether the charges made on the books were legitimate ones, against which losses should be allowed ?
Mr. WETMORE. We had the paid or canceled checks and bills for material and the estimate sheets of the contractors,
The CHAIRMAN. When they made estimates of what the work would cost at the time of making the bids?
Mr. WET MORE. Yes, sir; and we checked against that, of cours. our own estimates of the cost. If we were satisfied that the con
tractor stood for a loss anyway because he had an improvident contract, that was taken into consideration. If we were satisfied that a man's bid was too low, either by improvidence or anything of that kind, we added to that man's estimate of his cost what we considered would have been a fair price, because that part of the loss was not due to war conditions.
The CHAIRMAN. You did not make a calculation of the amount due and then add something to it, did you? The determination of the claim did not have anything to do with the size of the bid, did it?
Mr. WETMORE. I mean this: We did not just simply take the fact that the man's expenditures under the contract on account of the building showed a certain amount and allow that because it was more than the contract price, but we first considered whether he had a contract at a fair price. If our estimates showed that his bid was too low, we took that into consideration and added that in before we commenced to allow him anything,
The CHAIRMAN. You added that to his bid?
Mr. Wood. You deducted that from what his award would have been?
Mr. WET MORE. Yes, sir; because that part of his loss was something that was not due to the war.
Mr. Sisson. Even if the war had not come on he would have had that loss anyway? Mr. WETMORE. Yes, sir.
The CHAIRMAN. Is there any assurance that this $250,000 will pay all the claims?
Mr. WETMORE. We believe that it will pay all the claims, provided there is no further legislation by Congress that will make a drain on the Treasury. There is legislation now pending that would let in a very few claims. There was a limitation in the original act that the claims must be filed within a certain time. They had to be filed within 90 days after the passage of the act, but as a matter of fact some claims were filed after the close of business on the ninetieth day. Some three or four claims came in that way. Some of them came in 24 hours late, and there was one claim that came in probably 20 days after the time. The Comptroller of the Treasury threw all of those claims out. Now there is pending legislation authorizing those claims that were filed to be considered by the Secretary under the original provision of the act, and the aggregate amount of them, I think, is about $14,000. Therefore, I believe that even if that legislation passes, this $250,000 will be sufficient to take care of all claims. But if the doors are thrown open any further to take in the cases of contractors whose bids were invited after war was declared, there is no telling where it would go to. That, however, is a matter for Congress to handle. Under the present legislation and under the pending legislation I think that $250,000 will cover all the claims.
The CHAIRMAN. How soon do you expect to complete the adjudication of these claims?
Mr. WETMORE. That depends on whether we can get the right to bring into the office temporarily some superintendents in the field to help on this work. When we first started on this claims matter, I