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Gen. SHARPE. Yes, sir; he travels around with them; if they want to go anywhere they take him with them.

Mr. GILLETT. They are glad to have his cooperation?

Gen. SHARPE. Yes; and they insist that they should have him. Now, I was answering in a very general way. We send a letter that we need certain articles and they arrive at the price and where the orders shall be placed in cooperation with Col. Hirsh, and he enters into a contract after we have instructed the Philadelphia depot to enter into a contract at those prices. As I say, Col. Hirsh deals more particularly with clothing than anything else. Then, as far as the other items are concerned, like harness, Col. Wood would be consulted as to them, because he is in charge of the depot where the harness has been made, and Col. Hirsh has not any special knowledge of that work; in the same way Col. Wood was brought on, in cooperation with the Council of National Defense, in connection with the manufacture of wagons, and another committee of the Council of National Defense handled that matter. That involved the question of going in and arranging for the cutting of the wood in the forests, the kiln drying of that wood, and so on. Have I explained it to you now, sir?

The CHAIRMAN. Whenever anybody inquires from you personally about the purchase of certain materials you need, your reply is that your department has nothing to do with the matter, but that it is under the control of the Council of National Defense?

Gen. SHARPE. We refer them to the Council of National Defense.

The CHAIRMAN. You have made such statements to me personally, and I want to find out what the procedure is. Let us take this harness business: Suppose I called you up and said that there was some harness maker in the city who wished to confer with you about a contract for harness, your answer would be that that was a matter handled by the advisory committee of the Council of National Defense?

Gen. SHARPE. Yes, that the orders were placed through them.

The CHAIRMAN. This committee has detailed to it—not as a member of the committee but detailed to work with it—some officer from your department for such investigations as they make and for such information as he can furnish. This committee makes its recommendations to you?

Gen. SHARPE. Yes, sir.

The CHAIRMAN. After that is done, so far as your department is concerned, there is no further attempt to exercise any discretion?

Gen. SHARPE. We enter into a contract then ordinarily.

Mr. GILLETT. You say “ordinarily,” but do you not do that invariably?

Gen. SHARPE. We do enter into contracts.

The CHAIRMAN. Has there been any instance where that has not been done?

Gen. SHARPE. I do not recall any instance at all.
Mr. GILLETT. You say you do it under orders, as I understand it!

Gen. SHARPE. That method of placing orders has been directed by the Secretary.

Mr. GILLETT. So you have no discretion.

The CHAIRMAN. Now, there is a certain officer in your department familiar with certain lines of activities or with certain purchases who

is detailed with these various committees of the Council of National Defense? Gen. SHARPE. Yes, sir.

The CHAIRMAN. Is anyone who is seeking information about contracts in your department referred to that particular officer, or is he referred to the committee !

Gen. SHARPE. He is referred to the committee.

The CHAIRMAN. So that he can not get to anybody in your department familiar with these matters to talk about them?

Gen. SHARPE. Yes, sir.
The CHAIRMAN. How?

Gen. SHARPE. By coming on here. If he came on here to see me, I would see him.

The CHAIRMAN. But, as a matter of fact, while he sees you, your statement to him is that the matter is one that is wholly in the hands of this committee. Is not that the fact ?

Gen. SHARPE. That is the fact in ordinary cases, but if he wanted to present something to me, of course I would hear him and take the matter up.

The CHAIRMAX. I am not now complaining about your department, but I want to see whether there is any misunderstanding of the system. Now, after you have heard him, if he wants to have anything accomplished or attempts to bring on negotiations, he must go to this particular subcommittee that has charge of the matter?

Gen. SHARPE. Yes, sir.

The CHAIRMAN. And it is upon what they determine that the action is taken?

Gen. SHARPE. Yes, sir.

Mr. SHERLEY. Do you know whether or not the quartermaster officers who are detailed to and work with the particular committees under the Council of National Defense have full knowledge of all of the action that is taken by the council in determining to whom and at what prices and in what quantities contracts shall be let?

Gen. SHARPE. I believe he is consulted fully.

Mr. SHERLEY. Do you know what instructions are given them touching their duties when they meet with the Council of National Defense?

Gen. SHARPE. I do not recall that any instructions were given, except to assist the Council of National Defense in the matter.

Mr. SHERLEY. That might make a very great difference. They might be there simply to give such advice or information as they might have, when asked, or they might be there to really have a dominating and controlling voice in what was determined. What the chairman is interested in, I think, and what all of us are interested in, is this: If a would-be contractor comes to your office with a proposal, and he is then referred to the Council of National Defense, unless some officer of your department, of necessity and as a part of his duty in working with the committee dealing with that subject matter, knows of that offer and is in a position to have it considered, it might be that the man would be excluded from consideration and contracts awarded that might not have been awarded otherwise. Now, it is important that we should understand whether the Quartermaster Department is acting simply as advisory agents of the Council of National Defense, or whether the Council of National

Defense is acting as an advisory agent of the Quartermaster Department.

Gen. SHARPE. I assume that they are acting as advisory agents of the Quartermaster Department.

Mr. SHERLEY. That depends on the facts. Mr. Cannon. Suppose you ask him this question: Suppose the advisory council advises you to make a contract to-day at a certain price, and the quartermaster officer who has been consulted says,

No; I am not going to consent to that,” and so it comes to you. Would you make the contract !

Gen. SHARPE. The contract is made through the officer who is on the board, or who is on the council. He executes the contract.

Mr. CANNON. But suppose his judgment is the other way?
Gen. SHARPE. I suppose he would notify us about it.

Mr. CANNON. Then what would happen under the order that you are to contract?

Gen. SHARPE. Then we would take the matter up with the council.

Mr. GILLETT. Suppose they persisted and still advised you to make the contract?

Gen. SHARPE. Then, naturally, the matter would go to the Secretary of War. I can not imagine that the officer assigned to duty on the council would do a thing against his judgment.

Mr. GILLETT. As you say, if the council advises, you are ordered to make such contracts as the council approves. If that is the order, would you not have to do so, or would you go to the Secretary and ask him to revoke the order?

Gen. SHARPE. No, sir. I do not think that any officer acting with the Council of National Defense would feel that he would have to enter into a contract when his better judgment indicated that he should not do so. I think he would bring the matter to our attention, and we would bring it to the attention of the Secretary.

Mr. GILLETT. You would have no right to refuse to do it?

Gen. SHARPE. No, sir; but my duty to the Secretary would be to bring the matter to his attention.

Mr. SHERLEY. I would like to ask Capt. Fair about that. He has been actually at work with one of those committees. Captain, what is your understanding of your duty in connection with the awarding of contracts? For instance, a matter comes up before the council, and we will assume that the conclusion of the council is contrary to your judgment. You may think that the price is not right or that the contract ought not to go to that particular person, or that some other person is prepared to do equally well or better. What would you do under those conditions?

Capt. Fair. I would refuse to consent to the arrangement and report the matter to the Quartermaster General. Mr. GILLETT. Has that case ever arisen? Capt. Fair. It has not.

The CHAIRMAN. Let me ask you this, Captain: This officer who is detailed does not sit as a member of the committee in deciding matters, but he is consulted and advised with. Now, if the committee were to make a determination upon some matter concerning which there was some difference of opinion, would you feel that you were under obligations, because your judgment did not coincide with that of the committee, to make a report to the Quartermaster General

that in your opinion their conclusion was erroneous, or would you feel that the determination of that particular question rested upon them, and that you were bound by it?

Capt. Fair. No, sir. If you will allow me, I will explain what has been done. They first asked me how many sets of harness we needed, and then they asked me the average price of harness, not only for this year, but during past years. Then they presented figures to show the price of leather now and the price of leather during the preceding year. The whole matter of the prices to be paid was discussed openly before me in that committee, and before Col. Wood. Then, in determining what the price should be, they showed us step by step how they arrived at their conclusion as to the price. We did not bother about looking into the people who were making this leather. That committee had the names of reputable manufacturers, and they assigned that amount to reputable manufacturers with the understanding, expressed openly in the meeting, that if any contractor came in and demanded the right to manufacture the harness at the same price for the Government, they would give him a chance. That did not happen in the case of harness, but it did happen in the case of wagons. In the case of wagons, they came in and said, “What kind of a monopoly is this that you have created ?" Col. Wood listened to these men, and then turned and said, “There are three dealers here.” He said to one of them, "How many would you like to make?” and he said he would like to make 500.' Then Col. Wood said to another one, “How many would you like to make?” He said he would like to make 300, and the other man said he would like to make 500. “Now," said Col. Wood, "the men who are willing to make these wagons are willing for you to make, not only the amount you have stated, but they are willing for you to make twice as much as you say you are willing to make.” That is the way the business was done so far as I had anything to do with it.

Mr. SHERLEY. Suppose this had occurred: Suppose a man had come in and said, “I am not only prepared to make wagons at the price you figure on, but I will make them at a less price.”

Capt. Fair. The men who made the wagons were here before the committee, and I will say as to the prices that there would never be an offer made like that under the arrangement they have at the present time.

Mr. SHERLEY. Would you exercise any independent judgment as to the allotments that should be made to these various manufacturers?

Capt. Fair. No, sir; I would not, because I do not know what the capacity of the various plants is.

Mr. SHERLEY. Well, assuming that you did have knowledge of a factory of that kind, would you feel that it was your duty to insist upon your view as against the view of the council

Capt. Fair. They called upon me to express my opinion about everything that came up.

Mr. SHERLEY. I understand they did, but suppose they did not agree with your opinion? Capt. Fair. They would outvote me. Mr. SHERLEY. What would you do?

Capt. Fair. If it was something that manifestly was clearly against the best interests of the Government, I would take the matter up officially with the Quartermaster General. I would consider it my duty to do so.

Mr. SHERLEY. Suppose it was a matter of judgment; suppose they were figuring on a price and decided that $24 was the right price for a certain character of harness, and you thought that $22 was all that should be paid for it; what would you feel it was your duty to do under those circumstances!

Capt. Fair. If I thought that, and if they had not shown me that it was right, it would become my duty to report that to the Quartermaster General.

Mr. SHERLEY. After they agree, you then enter into the contract ! Capt. FAIR. The Quartermaster enters into the contract.

Mr. SHERLEY. Is it not true that the man who is consulted by and agrees with the council on the price is the officer who subsequently lets the formal legal contract !

Capt. Fair. In the case of harness it is, and in the case of wagons it is, although Col. Wood could not be present. As that was my branch, I handled it for him and gave him the result of the conference. He and I were generally both present at the conference.

Mr. SHERLEY. In entering into a contract do you consider that you have, as a responsible officer of the Government, and upon your own responsibility, determined on that contract, or do you feel that your responsibility has been removed by virtue of the fact that it has been made upon the recommendation of the Council of National Defense?

Capt. Fair. A certain amount of my responsibility has been taken off my shoulders.

Mr. GILLETT. You say that the Secretary has ordered you to make the contracts that the advisory board recommends?

Gen. SHARPE. No, sir. I say that the Secretary has directed us to place orders, or, rather, to request the Council of National Defense to indicate to us where contracts should be made and the prices that should be paid.

Mr. GILLETT. Has he not ordered you to make the contracts they recommend !

Gen. SHARPE. I do not understand it that way.
Mr. GILLETT. Have you got his order?
Gen. SHARPE. Yes, sir.
Mr. GILLETT. Is there any objection to showing it?
Gen. Sharpe. It is not here, but I have no objection to showing it.

The CHAIRMAN. So far as you are concerned, the fact is that the recommendations are followed ?

Gen. SHARPE. Yes, sir.

The CHAIRMAN. And the investigations that would ordinarily be conducted under your direction are conducted by this committee?

Gen. SHARPE. We have a representative on the board.

The CHAIRMAN. The investigations are conducted by them, and when they have finished, if I understand the situation, they have done the work necessary to determine these questions, and you acquiesce in their determinations. You do not make any independent investigations?

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