had made a recommendation on May 4 and had sent in a letter. I have the text of the letter here. I will read it to you if you care to listen to it.

Mr. FULTON. Take it up in its entirety if you think it relates to that subject.

Mr. MCCARTHY [Reading from Exhibit No. 166]:

Under date of September 4, 1941, the Mills-Morris Co., of Memphis, Tenn., submitted a letter to the constructing quartermaster at the request of the supervising auditor of tools and equipment for constructing quartermaster, setting forth in the letter an agreement to establish and stock an organization in the city of Milan, Tenn., for the purpose of filling emergency orders for repair parts for motorized vehicles. Copy of the aforesaid letter is attched hereto.

That is addressed to the Construction Quartermaster Corps, Milan, Tenn., from the Mills-Morris Co., Memphis, Tenn., September 4.

GENTLEMEN: In May I endeavored to enter into a contract with the FergusonOman Co. to furnish parts for your several cars and trucks that are now being used in the construction of the Wolf Creek ordnance plant. There were several different discounts carried on the various lines that we have, and we built two catalogs, one for Lieutenant Bruce's office and one for Mr. Quin Flowers' office. Our proposition was that this was to be covered by a blanket order from the Ferguson-Oman Co. for $2,000 for emergency parts, as well as others. As I learned later from Mr. Flowers, constructing quartermaster turned this proposition down.

The parts covered in the contract were as follows: Piston, pins, valves, timing gears, timing chains, gaskets, tie rod ends, shackle bolts, and bushings, and lug bolts, Federal Mogul connecting rod, bearings, also main bearings, clutch facings and plates, pressure plates, springs, mufflers and tail pipe, ignition cable and small parts such as ignition rotors, caps, condensers, and points. These were for Chevrolet, General Motors Corporation, Ford and International trucks. The above items carried a discount of 40 percent from the manufacturers' list price free on board job-site.

Gears, transmission and differential for Chevrolet, General Motors Corporation, Ford and International, also rear axle shafts. The above merchandise carried discounts of 33% percent. Brake lining, sets or rolls, molded or woven, for Chevrolet, General Motors Corporation, Ford and International trucks as well as tractors and drag lines, also piston rings, less 50 percent. Generators, Ford, $6; Chevrolet, $5.25 on an exchange basis. Motor exchange, provided crank shaft is not broken and no holes are in the block.

Fords, 1939 to 1941, inclusive, $53.50.

Chevrolet, less heads, 1939 to 1941, inclusive, $56.

Chevrolet, with heads, 1931 to 1941, inclusive, $64.50.

Overhaul motor International D30-D35 and General Motors Corporation, $85 net free on board job-site.

Sleeves for D35 International $4.45, if complete.

Pontiac, 1939, $95 complete.

Plymouth, 1941. $70-complete overhaul.

Dodge, 1941. $90 complete overhaul.

Fan belts, 45 percent off manufacturers' list; radiator hose, 45 percent off list; brake hose, 1⁄2 inch, 24 cents per foot; 4 inch, 30 cents per foot; clamps for brake hose 5 cents each. Bimetallic facings, such as steering clutch, master clutch, brake lining and cones for caterpillar trucks, Allis-Chalmers tractors, LeTourneau, and Wooldridge scrapers.

According to the Treasury Procurement Service schedule, we also agreed to keep a stock of merchandise in our Milan, Tenn., branch to take care of any emergency that you may not have in your stock, and to send out and check your stock from your Kardex system and not let you get low on any of the above merchandise. Since this contract was drawn in May, there have been some slight changes on some of the merchandise in price. We have continued to send to the FergusonOman Co. two sets of catalog pages to be changed by the constructing quartermaster and Mr. Grissom in Mr. Quin Flowers' office, but our branch manager in Milan advises us that these pages have not been put into the catalog, and for us to discontinue sending them.

I believe we can give you quicker service than you can get elsewhere. We think we carry one of the largest lines of replacement parts in the entire South, and up 311932-42-pt. 9-9

to the present time have been very successful in getting the merchandise needed from the various factors.

I will appreciate it if you would check into this again and see if we can enter into a contract with you.

At the termination of the Ferguson-Oman Co.'s contract, we, the Mills-Morris Co., will take back any of the parts that we might sell you that the Procter & Gamble Co. does not take off your hands for the further upkeep of their individually owned trucks, provided these parts are in salable condition, and in the original boxes.

We, the Mills-Morris Co., will give Ferguson-Oman Co. a check for the parts returned, but we will not take from you, and of course, we know that you would not expect us to, any parts purchased from the car distributor or from other

sources.

I might add in this letter that the parts that we furnish you are as much genuine parts as you can purchase anywhere, such as the pistons, pins, valves, are made by the Thompson Products Co., Cleveland, Ohio, and if you will check over these catalogs you will find that all the manufacturers represented in the catalog are of the highest type, and it is the writer's belief that the different manufacturers draw a big supply of their own merchandise from these manufacturers, but we will guarantee our parts just as much as the car dealer guarantees them to you. Hoping that this is the information you want, and hoping that you will give us the opportunity of discussing this further with you, I am,

(The document referred to was marked "Exhibit No. 166" and is included in the appendix on p. 3322.)

Mr. FULTON. Was that company's facilities used?

Mr. McCARTHY. Very little that I know of. As to this company, Mills-Morris, Mr. Pirtle came to me when I got here, about 2 or 3 weeks after I arrived, and said that he couldn't see why the MillsMorris company and the Hull-Dobbs Co. were not entitled to get some of this business. I said, "I can't see any reason for it. Maybe their discounts are rather low compared to the other discounts." He said, "No; on various parts Mills-Morris and Hull-Dobbs can give better discounts." So I tried to get an idea of the why and wherefores that certain companies were getting the business. I have been very unsuccessful in getting that, but I have recommended at various times that they give the Mills-Morris and the Hull-Dobbs Co. and any company that could give the Government better discounts a chance to bid. And later on they gave a small order to both companies. Mr. FULTON. How about the Taylor-Hale Co.?

Mr. MCCARTHY. Taylor-Hale?

Mr. FULTON. Yes.

Mr. MCCARTHY. Taylor-Hale was doing business with FergusonOman prior to my arriving there, and I didn't have anything to do with them, but I do know that they had a man who was working for Taylor-Hale by the name of Mr. Pace who was later taken over and worked for Ferguson-Oman, but who spent about three-quarters of his time at Taylor-Hale's place outside the Graball gate.

The CHAIRMAN. Is he on the Government pay roll?

Mr. MCCARTHY. He is on the Ferguson-Oman pay roll, reimbursable by the Government.

Mr. FULTON. In other words, working for Taylor-Hale, running their parts place at Graball?

Mr. MCCARTHY. That is right.

Mr. FULTON. And after working for them for some time, he was released from their employment and immediately put on the contractor's pay roll?

Mr. MCCARTHY. That is the way I have understood their conversation to be when I went into it a little bit.

Mr. FULTON. Did you find there was any change in his functions? Mr. McCARTHY. None whatsoever that I know of.

Mr. FULTON. Do you know Mr. Clifford Jessup, the United States inspector?

Mr. MCCARTHY. Mr. Jessup worked for me up until about 2 weeks ago, I believe it was, and I was informed that he has been taken over by the operations officer.

Mr. FULTON. Did you ever see this report by Mr. Jessup to Mr. Booth with respect to this Taylor-Hale situation?

Mr. MCCARTHY. No; I have never seen this particular letter because there was no letter like that in the files of my office.

Mr. FULTON. It is addressed to Mr. Bouck, who will be a witness directly after you.

Mr. MCCARTHY. He was there prior to my arriving.

Mr. FULTON. And it relates to this same Mr. Pace, of TaylorHale?

Mr. McCARTHY. That is right.

Mr. FULTON. Now, do you know Mr. Greig Oman who appeared this morning?

Mr. MCCARTHY. Yes; I know Mr. Oman. I have had dealings with him at the plant.

Mr. FULTON. Do you know whether Mr. Oman resided in the warehouse?

Mr. MCCARTHY. I was informed by several people that he lived in the back or in some part of the place, but I didn't check that because I thought that was the intelligence officers' duty to check into matters of that type, if such a case existed. And I don't know whether he lived there or not. I couldn't substantiate it because I didn't go out to find out myself. I didn't think it was part of my job.

Mr. FULTON. Mr. McCarthy, is there anything else that you could add that would be of interest on the points you have been raising? Mr. MCCARTHY. There is nothing I can add except on the overevaluation of several pieces of equipment on which I made recommendations to the C. Q. M. about in the same form as you see I have it here. I sent this over to the chief project auditor's office, copies of this to be given to the C. Q. M. to have him read every page in this particular report, which was an investigation report I made of

the books.

Under date of March 25, LeTourneau pulls, condition new, were received at the Wolf Creek ordnance plant, carriage No. 1N3178SP, control unit No. P15280TE, serial No. 3T2152C1A. These pieces of equipment came in at $10,990. They were brought to my attention by Mr. Jones and Mr. Jessup, who were then in my department. We sent out a telegram to the LeTourneau people, asking them to quote us prices on those two particular pieces of equipment. fact, there were four

In

Mr. FULTON (interposing). Would you try to give us the highlights of it, Mr. McCarthy?

Mr. MCCARTHY. A telegram came back and stated that with different sized shoes on and different things there were different prices. One was $9,975, and another was $10,175.

(The document referred to was marked "Exhibit No. 167" and is included in the appendix on p. 3323.).

Mr. FULTON. Do you have any situation where equipment was put in at-I think it related to these wagons-very high valuation and where you succeeded in checking up and found that they had been purchased at a sheriff's sale at very much less?

Mr. MCCARTHY. Well, that happened prior to my arriving. I understand that Oman Construction Co. had tried to put in 50 Euclids, which is heavy equipment they use in muddy grounds, mostly, very big tires on it, and these happen to be different types. I understood they were supposed to be asked $9,000, or approximately that figure, around that figure, on contract value, and they turned them down because somebody said they bought them at a sheriff's sale for around $800, but I don't know much about it. I am just going by what I heard, and I can't substantiate that.

Mr. FULTON. Which witness would know about that?

Mr. MCCARTHY. Why, Mr. Bouck would be the only one who would know. It was during his time there and he would be the only one to tell you about that. I couldn't.

Mr. FULTON. Mr. McCarthy, you have been very frank in answering these questions. I suppose you have borne in mind that nearly every other official of the constructing quartermaster's office who has put down the facts with respect to these transactions has been transferred. Mr. MCCARTHY. I have nothing to hold back because I am a Government employee. I was put here by the Government to protect the Government's interest, and if the people working with me, above me, and as my superior officers cannot protect them, I still protect them at the cost of my job.

The CHAIRMAN. I commend you for that. It looks to me as though every one of these fellows who has been looking after the Government's interest has been eventually transferred. If the same procedure is followed in your case I would like for this committee to be informed on that subject.

Mr. MCCARTHY. I asked to be relieved through the project auditor as of the 1st of November. I asked for a raise of salary and I asked if the raise wasn't intended for me I wanted to be relieved of the duty as of the 1st of November and I haven't heard any more about it.

The CHAIRMAN. Well, Mr. Thomas was transferred; Mr. Bouck was transferred.

Senator BREWSTER. Mr. Harrison was dismissed.

The CHAIRMAN. Mr. Helzel was transferred. It looks like whenever a fellow was trying to do his job on this project for the benefit of the Government he got notice through some means that his services were no longer needed. We are going to find out what the cause of that was. So if you get that, this committee wants to know about it. That will be all, Mr. McCarthy.

Mr. MCCARTHY. Thank you.
The CHAIRMAN. Mr. Harrison.

TESTIMONY OF PHILIP W. HARRISON, TRANSPORTATION INSPECTOR, QUARTERMASTER CORPS, WOLF CREEK ORDNANCE PLANT, MILAN, TENN.-Resumed

COST TO GOVERNMENT FOR TRANSPORTATION OF PROJECT EMPLOYEES

Mr. FULTON. Mr. Harrison, you have already been sworn, have you not?

Mr. HARRISON. Yes, sir.

Mr. FULTON. I understand that you were hired in the light-equipment division of the contractor's office originally on this project. Mr. HARRISON. Yes, sir; that was in February.

Mr. FULTON. Who hired you there and what were your instructions as to your duties?

Mr. HARRISON. I was at that time, prior to that time, working at Camp Blanding, Fla., in the Personnel Transportation Division. I received a long-distance telephone call from Mr. Miller asking me to report to Wolf Creek ordnance plant.

Mr. FULTON. That is this Oscar Miller who was referred to yesterday?

Mr. HARRISON. Yes, sir; and I reported to him, and my first assignment was to organize a personnel transportation system, that is, for the transportation of employees from the various time clocks, and so forth, to job locations, which we did, and then later on I organized a bus system

Mr. FULTON (interposing). That assignment was to organize records and check-ups in such a way that you would be able to ascertain whether the equipment was actually being used, and

Mr. HARRISON (interposing). Yes, sir; that was a regular transportation department.

Mr. FULTON. And did you start to put into effect the system of records for the contractor that would have given him that information?

Mr. HARRISON. Yes, sir.

Mr. FULTON. What happened?

Mr. HARRISON. I set up a record system which the Government required, and at a later date I was told to cease making that type of record.

Mr. FULTON. By whom were you told that?

Mr. HARRISON. My superior, Mr. John Taylor.

Mr. FULTON. Does he have anything to do with this Taylor-Hale concern, or is that just a coincidence of names?

it?

Mr. HARRISON. That I don't know, sir.

Mr. FULTON. Did you cease doing that or did you continue doing

Mr. HARRISON. I continued to do it, sir.

Mr. FULTON. Then what happened?

Mr. HARRISON. I was told again to stop, and I continued to do it, and I received my discharge.

Mr. FULTON. In other words, the contractor fired you.

Mr. HARRISON. Yes, sir.