The CHAIRMAN. Do you know anything about the cost of ordinary black-top road, 20 feet wide?

Mr. MARTIN. That all depends on the base you put it on. You know you have got to get things down to a comparable basis. The CHAIRMAN. That is right. Suppose you put it on a chert base?

Mr. MARTIN. Say 12- or 10-inch chert.

The CHAIRMAN. Eight-inch.

Mr. MARTIN. I really know little about the price of chert, and it would be a little bit difficult for me to make an estimate of that particular thing.

The CHAIRMAN. You don't like, in other words, to make an estimate for your competitors.

Mr. MARTIN. No; I would rather he make his own estimate on that. I think we can compete mighty well with him in service for the money spent.

The CHAIRMAN. You can do it for a little less than $29,000 a mile, can't you?

Mr. MARTIN. I would hope so; yes, sir.

Senator BREWSTER. You must have to be familiar with that thing as a competing product.

Mr. MARTIN. Well, as a base, there has been very little chert used in Tennessee. I am speaking more in terms from my connection with the State highway department. In other words, I am fairly familiar with the cost involved with the State highway department because

The CHAIRMAN. Suppose you were going to build one with a 6-inch concrete base. About what would that cost under black-top? Mr. MARTIN. Six-inch base? Well, your base will run about $1.35 to $1.40 a square yard. That makes around $17,500 to $19,000 a mile, and then your top, depending on the type of asphalt top you put on it— that will run up around a third as much or a fourth as much more on that.

The CHAIRMAN. In other words, it would cost about 4 or 5 thousand dollars a mile for the top. It depends on how thick it would be, whether you make it 1, 2, or 3 inches thick.

Mr. MARTIN. That is right, depending on the thickness. It would depend on the thickness of your base. You have to get down to

definite thickness on it.

The CHAIRMAN. In other words, the Government could have saved several thousand dollars a mile if we had used a concrete base out here and put a couple or 3 inches of black-top on it.

Mr. MARTIN. I don't know what the base cost, but I know what concrete should cost.

The CHAIRMAN. It was testified that the road cost $29,000 a mile. Mr. MARTIN. I believe they could have gotten a mighty good concrete road for that money; yes, sir.

The CHAIRMAN. That is all.

Mr. Bouck? Mr. Bouck, do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, in your testimony before this committee, so help you God?

Mr. BоUCK. I do.

1

TESTIMONY OF ANTHONY W. BOUCK, CHIEF TOOL AND EQUIPMENT INSPECTOR, QUARTERMASTER CORPS, ABILENE, TEX.

The CHAIRMAN. Will you give your name and connections to the reporter?

Mr. BOUCK. Anthony W. Bouck, chief tool and equipment inspector, Quartermaster Corps.

Mr. FULTON. Mr. Bouck, you are one of the three individuals who seem to have trouble getting here. I wondered when the Army notified you for the first time that the committee wanted you to be here.

Mr. Bouck. Probably at 2 yesterday.

Mr. FULTON. Two o'clock yesterday?,
Mr. Bouck. Yes, sir.

Mr. FULTON. How did you receive that notice?

Mr. BOUCK. The constructing quartermaster at Camp Blakely, Abilene, handed me a telephonic transcription from the zone that I was to appear here today.

Mr. FULTON. You came promptly upon receiving it?

Mr. Bouck. Just as promptly as possible.

Mr. FULTON. You arrived from Texas late this morning, I take it? Mr. BOUCK. Yes, sir.

EQUIPMENT PURCHASES AND RENTAL PROCEDURES

Mr. FULTON. Will you tell us what position you held on this particular project before you were transferred from the Wolf Creek Milan project?

Mr. FULTON. I was chief tool and equipment inspector.

Mr. FULTON. And would you tell us something about the nature of that work and the difficulties, if any, which you encountered? Mr. Bouck. Well, the duties are synonymous to the duties of Mr. McCarthy, who is my successor.

Mr. FULTON. In other words, you preceded him, and then he took on the same type of duty thereafter.

Mr. Bouck. That is correct.

Mr. FULTON. After you had left, did you find any trouble in getting adequate information concerning the light and heavy equipment that was being rented on this project?

Mr. BOUCK. A great deal of trouble.

Mr. FULTON. Would you describe that to the committee as nearly as you can?

Mr. BOUCK. Mr. McCarthy has gone into the type of contract that we were operating under at that time. Specifically, equipment that was on the job over 10 days became automatically a permanent fixture. At the time when I was operating there, I had considerable difficulty in getting information within that 10-day period and having no access to the formal contracts and nothing in the line of information on a particular equipment other than that which was rendered by the contractor, we were at considerable disadvantage in evaluating equipment and establishing its rental.

Mr. FULTON. Would you tell us how long you were at the project in that position?

Mr. Bouck. March 1, 1941; I was relieved of duty July 12. I stayed at Milan until August 24 without any assignment.

Mr. FULTON. I note that that was subsequent to a request by you, yourself, made for a transfer by letter dated June 14, in which you stated that the reason that you wanted a transfer was, and I am quoting

Performance of prescribed audit functions impossible. General contractor refuses to record proper basic accounting information. Section personnel insufficient to operate as directed under Construction Division Letter No. 286. Recommend that zone auditor conduct a physical inspection of conditions is considered advisable to determine that basic defense materials are receiving proper application. Accountability must accompany expediency to avoid undue waste.

Reflection on the administration of your office is neither intended nor implied. Fullest cooperation within the limits of your local jurisdiction has been extended. Consideration of present rating and responsibilities with a view of compensatory adjustment is requested in this connection.

(The letter referred to was marked "Exhibit No. 170" and is included in the appendix on p. 3327.)

Mr. FULTON. Will you tell us what you mean by—

performance of prescribed audit functions impossible. General contractor refuses to record proper basic accounting information.

Mr. Bouck. Well, it starts with what I said immediately preceding here, and continues into the realm of being unable to determine the usage of, specifically, cars, pick-ups, station wagons, of which there were some 600 on the project.

Mr. FULTON. We have noted that many of those station wagons and cars had very few miles registered on their speedometers, and rather wondered why the Government should rent equipment in such quantities.

Mr. BOUCK. That was exactly what

Mr. FULTON (interposing). When there were so few miles. Is that one of the things you were taking up?

Mr. BOUCK. That disturbed me very greatly, and also in connection with that, I didn't know to what purpose they were being put, because I had no daily information on what they had done. I didn't know whether we had 300 too many or didn't have enough.

Mr. FULTON. It is disturbing to the committee to note that from the answers of these renters of equipment, they were borrowing these pieces of equipment largely on borrowed money, and even then renting them to the Government for sums of money aggregating in many instances a considerable fraction of the total cost, where we have some doubt by reason of the small usage that was made of it, that it was ever necessary in the first place.

Mr. BOUCK. That is a large feature, and it ties into the then existing rental contract, and also ties over into the now existing rental contract which allows an individual to put a piece of equipment on a Government project and have a contractual agreement or a lien or encumbrance against it which ultimately ties-I will give you a concrete example.

The owner of a piece of equipment may have bought it with 20 percent down. We will say it was a thousand dollars, and he has agreed to pay it out in equal monthly payments in 18 months. Now, he may have rented that to the Government so that it will be paid out in 10 months. The Government can't recapture that piece of equip

ment should the lessor die intestate without a title. In effect, it allows an individual, if he desires, to pyramid-well, unearned increment, we will say.

The CHAIRMAN. In other words, he can buy a piece of equipment on time, sell it to the Government at a profit, and put up but a very small part of the purchase price itself.

Mr. Bouck. Yes. The regulation is that not greater than 70 percent can be covered by a mortgage.

Mr. FULTON. And these prices at which the equipment was to be sold would appear from the contractor's own schedule, the equipment renter's own schedules, to be considerably higher than the cost that he was paying for the equipment, and also appears to be considerably higher than the price the Government would have had to pay for such equipment had it purchased it directly in complete car lots. Mr. BOUCK. That is unquestionably true.

Mr. FULTON. It was for reasons of that kind that you were insistent upon receiving information to make sure that at least that equipment was being used?

Mr. BOUCK. Yes. May I digress here just a moment. I have a point to make. This morning you had photographs there of equipment that wasn't used. That was heavy equipment. And the personnel got daily usage reports on that. They know definitely that this equipment wasn't used. Here were 600 items that we had no report on at all. We don't know what they were being used for. The CHAIRMAN. You don't know whether they were used or weren't? The Government still paid the rent on it.

Mr. Bouck. That is right.

Senator BREWSTER. In your endeavors to get a report on that, what steps did you take?

Mr. Bouck. My request for a transfer there culminated in considerable verbal argument on the necessity of determining the time the equipment worked.

Senator BREWSTER. And whom were those discussions with?

Mr. Bouck. I took them up with my immediate superior, T. D. Thomas, field auditor; and he and I together went to the constructing quartermaster.

The CHAIRMAN. Who was the constructing quartermaster at that time?

Mr. BOUCK. Major Brewer; and may I elaborate a little more on that please? There was a major from the inspector general's, whose name escapes me now-I believe it was Major Hill-who came out about that time and spent 4 or 5 hours with him going over exactly what I have just explained to you gentlemen. In his opinion those records should be kept. It seemed to him it was mandatory for them to be kept. However, he was gone the next day, and nothing came of that particular session.

(The report referred to was marked "Exhibit No. 171" and is included in the appendix on p. 3328.)

Senator BREWSTER. He agreed with you fully in your position? Mr. Bouck. He went to Mr. Thomas and further took it up with him.

Senator BREWSTER. Mr. Thomas is another of the gentlemen who has since been relieved here?

Mr. BOUCK. Yes, sir.

Senator BREWSTER. He is not here to testify?

Mr. Bouck. No.

VALUATION AND REPAIRS OF EQUIPMENT

Mr. FULTON. I note in the report that you made to Mr. Thomas concerning the reasons for wanting to be transferred that you refer to five Euclid trailer wagons being valued by you at $8,500, and I am quoting from the report. You say [reading from Exhibit No. 172]:

Captain Carlton, executive officer, thought we shouldn't be too hard on the owner, and assess the evaluation at $9,450 per unit.

Captain Carlton has also taken exception to the "intolerant" attitude of this section in the matter of repairs and replacements. In the presence of Stirton Oman and Quin Flowers of the Ferguson-Oman Co., and myself, he pounded the desk with his fists and stated that the inspectors of this office had absolutely no authority at the heavy equipment barn or garage, and if anything appeared wrong, a letter should be written about it.

(The report referred to was marked "Exhibit No. 172" and is included in the appendix on p. 3328.)

Mr. FULTON. Did Captain Carlton make such a statement to you? Mr. BOUCK. Yes, sir.

Mr. FULTON. And he was the executive officer to the constructing quartermaster charged with seeing that this should be done economically?

Mr. BOUCK. That is correct.

Mr. FULTON. Telling you in the presence of the contractor that you had no business being at the garage to inspect the equipment? Mr. BOUCK. In effect, that is what he meant.

Mr. FULTON. And you state here [reading]:

marked exception is taken to this particular statement because it conveyed the impression to Mr. Oman, who is a member of the general contractor's company, that this section could be ignored with the sanction of the constructing quartermaster.

As a matter of fact, all irregularities that have appeared are charged directly to this department for the reason that we are the only section actively concerned with determining that the United States Government is getting what it pays for.

You also charge here that the Ferguson-Oman Co. in effect raided. your personnel by trying to hire your men away from you.

Mr. BOUCK. That is correct, although that is second-hand evidence. Mr. FULTON. Can you tell us the fact on which you base that charge?

Mr. BOUCK. I believe the first instance was

Mr. FULTON (interposing). Well, Mr. Stanfiel is listed here as the senior inspector. You say here he was told by Ferguson-Oman : Show me your Government check and I will double it if you will go to work for us.

Mr. Bouck. That is correct.

Senator BREWSTER. Did he tell you that?

Mr. Bouck. He told me that.

Mr. FULTON. Is Mr. Pirtle another one of those instances?

Mr. Bouck. Nothing that I can state definitely.

The CHAIRMAN. Mr. Pirtle is in the room. I think he can answer

that question himself.