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The CHAIRMAN. With the information that the leather would be furnished at a certain price?

Capt. Fair. No, sir; this was before the matter was taken up in connection with the Council of National Defense. Those bids were submitted, and the Government reserved the right to reject all of them and did reject all of them. The question was then taken up at to how this should be supplied, and those figures were used in a determination of the price that should be paid.

Mr. SHERLEY. Who made that determination?

Capt. FAIR. The committee on leather of the Council of National Defense.

Mr. SHERLEY. Was their decision reviewed by the Quartermaster Department or anybody in it?

Capt. FAIR. Yes.
Mr. SHERLEY. By whom?

Capt. Fair. By the purchasing quartermaster, Col. Wood, at Jeffersonville, and by Col. Baker, and again by the Quartermaster General. The prices were reviewed by all of those men.

The CHAIRMAN. Do you mean that the recommendation of this advisory committee was passed on by these gentlemen ?

Capt. FAIR. Yes.

The CHAIRMAN. Is it not a fact, Gen. Sharpe, that when this advisory committee recommends that a certain price be paid for a certain article you accept that without any question and feel bound by it?

Gen. SHARPE. Yes; we place the order and

The CHAIRMAN (interposing). When the advisory committee reaches a determination and recommends that certain prices be paid for leather you never question that at all but you follow it?

Gen. SHARPE. Yes.

Mr. SHERLEY. I think that is going to lead to a misunderstanding. Let us stick to the actual concrete case. If I understand the captain, the Council of National Defense ascertained at what price leather could be furnished to these harness makers; it also determined what would be a proper price to be paid for the harness, the harness makers being supplied with the leather necessary at a price that had already been determined upon.

Gen. SHARPE. Yes, sir.

Mr. SHERLEY. If I also understand the captain, after a determination was made as to the proper cost of this harness to the Government there was an independent determination by officers of the Quartermaster Department as to whether that cost was a proper cost or not; is that true?

Gen. SHARPE. Col. Wood reported to me, as I recall, a certain price per square foot for the leather, it requiring so many feet to make the harness, and the price it would cost to produce the harness, That is it, is it not?

Capt. Fair. Yes, sir. Then either Col. Baker or I, or some other representative of the Quartermaster General's office, was at the meeting of this leather committee when the question of price was determined. and all the phases of the situation were discussed with us. They notified us, and whenever we had the time we met with them in their committee room for a discussion of the manufacture of leather goods, as well as other things.

Mr. SHERLEY. In point of fact what happened was that they fixer a price, did they not?

Capt. Fair. Well, it had to be a price that we were informed by our manufacturers at Jeffersonville, our depot quartermaster at Jeferson ville, was a reasonable price and what we thought to be a reasonable price.

Mr. SHERLEY. Were you in consultation with them prior to the determination of a price?

Capt. FAIR. Yes, sir.

Mr. SHERLEY. When a price was determined upon was it determined as the consensus of judgment of the members of this leather committee and the officers of the Quartermaster Department !

Capt. FAIR. Yes.

Mr. SHERLEY. After a determination of that price was there any independent review by officers of the quartermaster service of that price?

Capt. Fair. If Col. Wood did not happen to be present, as the general says, the whole matter was submitted to him for a decision as to the prices to be paid and as to whether or not those prices were reasonable. The matter was referred to him in the name of the Quartermaster General for decision. That is what you are referring to?

Gen. SHARPE. Yes, sir.

Mr. SHERLEY. Was that done after the leather committee of the Council of National Defense determined on what should be the price to be paid for a particular kind of harness?

Capt. FAIR. Yes.

Mr. SHERLEY. That determination was then sent to Col. Wood at the Jeffersonville depot?

Capt. Fair. Yes.
Mr. SHERLEY. In order to secure a report from him?
Capt. Fair. Yes.
Mr. SHERLEY. And did he report?
Capt. FAIR. Yes.
Mr. SHERLEY. Was that report acted upon by you, General?
Gen. SHARPE. Yes, sir; I was informed of it.

Mr. SHERLEY. What, in point of fact, was his report? Did it result in a modification or acceptance of the figures stated by the leather committee?

Capt. Fair. There was no modification, because Col. Wood frequently had been in consultation with the members of the leather committee before they took any action and they knew his view. He sometimes came on to Washington to meet with them in consultation with other representatives of the Quartermaster General's office.

Mr. SHERLEY. In point of fact, then, what was really done was about this, was it not: The leather committee of the Council of National Defense, meeting with Col. Wood. Col. Baker, yourself, and other officers of the Quartermaster's Department, discussed the question of prices until they came to what amounted to a consensus of opinion?

Capt. FAIR. Yes.

Mr. SHERLEY. And after coming to that consensus of opinion it was then acquiesced in by the Quartermaster Department?

Capt. Fair. Yes; that is exactly what took place, and when Col. Wood could not be obtained for consultation the matter was referred to him.

Mr. SHERLEY. Before it was finally determined !
Capt. FAIR. Yes, sir.

Mr. SHERLEY. In other words, whenever representatives of the Quartermaster Department were not present as a part of the conference as to the price that should be determined, the decision arrived at by the leather committee of the Council of National Defense would be submitted to some quartermaster officer before final determination?

Capt. FAIR. Yes.

Mr. SHERLEY. So that in every instance the Government, through the Quartermaster Department, had a representative who was consulted in determining the price that should be paid ?

Capt. FAIR. Yes, sir.

The CHAIRMAN. I want to get this very clear in the record. In fixing these prices, the advisory committee of the Council of National Defense confers with officers of your corps; is that a fact !

Capt. FAIR. Yes.

The CHAIRMAN. We will take leather or any other article that is bought and where the prices are fixed upon the recommendation of the advisory committee. If I understand the practice, it is that they first confer with officers of your corps familiar with the subject; is that correct?

Gen. SHARPE. No, Mr. Chairman. The CHAIRMAN. Then state what happens. I want you to state what happens in connection with the purchases made by your corps where the prices are fixed upon the recommendation of this committee.

Gen. SHARPE. When we desire to purchase certain articles, the supervision of which has been given to the Council of National Defense, like leather, cotton, and wool, we notify them of the quantities and the articles we wish purchased; we request them to indicate to us where the order should be placed and the prices at which we can buy the articles; they then report to us where the orders shall be placed and the prices at which we can obtain the articles; then a contract is made for delivery through the Philadelphia depot.

The CHAIRMAN. After their recommendation comes to you, do you ever have any investigation made as to the reasonableness of the prices they recommend?

Gen. SHARPE. No; we do not.

The CHAIRMAN. Do you ever fail to follow the recommendation they make ?

Gen. SHARPE. No; we place the orders and

The CHAIRMAN (interposing). Do you not go upon the theory that that is practically conclusive upon you as to where your orders shall be placed and the prices you shall pay? Gen. SHARPE. Well, what we do is

The CHAIRMAN (interposing). I am asking you what your practice is and I would like you to answer that.

Gen. SHARPE. The practice is that we have followed their indications.

Mr. GILLETT. Have you received orders to accept their recommendations? It seems to me that is the point.

Gen. SHARPE. We were instructed to place our orders through the Council of National Defense.

The CHAIRMAN. By whom were those orders issued ? Gen. SHARPE. By the Secretary. Mr. SHERLEY. Here is what I want to understand, General Gen. SHARPE (interposing). Understand, gentlemen, I say that we place our orders; we request them to indicate where we are to place the orders and the prices to be paid, but they have nothing to do with making the contract at all.

The CHAIRMAN. I know; but if they determine everything for you, tell you where your orders are to be placed and the prices you are to pay for a certain number of commodities, the formal making of the contract amounts to nothing; and yet I understand that is the practice you have followed ?

Gen. SHARPE. Yes.

Mr. GILLETT. You say you are instructed by the Secretary to follow their advice?

Gen. SHARPE. We are instructed to ask them where the orders are to be placed and the prices to be paid, and then we make the contracts.

Mr. GILLETT. Then you are to follow their advice?
Gen. SHARPE. Yes.

Mr. SHERLEY. You see, we are getting away from the concrete case we have been discussing. You just heard the testimony of Capt. Fair?

Gen. SHARPE. Yes.

Mr. SHERLEY. Is it your understanding that what he has testified to, as to the way the Council of National Defense complies with your requests as to the placing of orders and the prices to be paid, is accurate?

Gen. SHARPE. Yes; I understand that is so.

Mr. SHERLEY. If that is accurate, then your statement that you make a request upon the Council of National Defense for a determination as to the place, the person from whom, and the price at which goods are to be bought should be qualified by the statement that the particular body of the Council of National Defense in arriving at that determination has meetings with representatives of the Quartermaster Department, who express an independent judgment touching such matters; is that true or not?

Gen. SHARPE. Yes, sir. Col. Wood was on here several times as to harness, but I do not know how often. Col. Hirsh is associated with the Council of National Defense and has been associated with them during the placing of all these orders, or whenever they are considering such matters. He is from the Philadelphia depot, and he is associated with the Council of National Defense in arriving at a determination as to where the orders shall be placed and the prices at which they shall be placed.

Mr. SHERLEY. Have you or have you not known about the actual method being pursued by these boards under the Council of Vational Defense and who has detailed, if anybody, the officers of the Quartermaster Corps for work with them?

Gen. SHARPE. (b). Hirsh was detailed from our cffice-I mean. from the War Department--for that purpose.

Mr. SUELCY. Dons he detail men under him?

Gen. SHARPE. No; he comes over here constantly and goes around with the Council of National Defense.

Mr. SHERLEY. How did Col. Hirsh, Col. Wood, and these other officers meet with these boards of the Council of National Defense?

Gen. SHARPE, Col. Wood came on here, as I say
Mr. SHERLEY (interposing). Under whose instructions?
Gen. SHARPE. Under instructions from the War Department.
Mr. SHERLEY. Under your instructions?
Gen. SHARPE. Well, they came from my office, Mr. Sherley,
Mr. SHERLEY. Who sent for him or suggested that he come!

Gen, SHARPE. They indicated that they desired he be here, and those matters go to the personnel branch of my office, and it is from there that such an order would be issued. I do not know how it happened in this case, but as it would ordinarily happen, that particular matter being handled by the transportation division and the remount branch of that division, they would state that they desired to have Col. Wood on here; that branch would take it up with the head of the division, and he would take it up with the personnel branch and have him ordered on here.

Mr. GILLETT. Whom do you mean by "they "?

Gen. SHARPE. Officers in my office. You are asking how he was ordered on here, and an officer may be ordered on without my knowing anything about it. The branch concerned will state that they want to have him here; they refer that request to the officer in charge of the division, and if he approves of it some one of those officers will go over to the personnel branch and express the desire that that officer should be ordered on here, and he may come on without my knowledge.

Mr. SHERLEY. Here is the important fact that I think the committee and Congress is interested in: Your answers to the chairman's inquiries, taken by themselves, would lead to the bald conclusion that you sent a letter to the Council of National Defense asking them to designate the place, the person, and the price at which quartermaster's supplies were to be furnished; that they subsequently advised you the place, the person, and the price, and that you accepted their advice; in other words, that the Quartermaster Department as such acted simply mechanically in complying with the law and actually made a contract about which they had no opinion or judgment. Is that so?

Gen. SHARPE. No, Mr. Sherley; I did not understand the point at which you were trying to arrive.

Mr. SHERLEY. I am not trying to arrive at any point, except to ascertain what is the actual fact.

Gen. SHARPE. Let us get right down to it. We have associated with the Council of National Defense an officer in the person of Col. Hirsh; he meets with the council as the representative of the Quartermaster Department; he comes here from the Philadelphia depot; he is an expert on these matters; and he goes into the question of where the orders shall be placed, orders for clothing more particularly than anything else.

Mr. GILLETT. Then he practically acts as a member of the Council of National Defense ?

4400—17-30

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