INVESTIGATION OF NATIONAL DEFENSE PROGRAM WEDNESDAY, NOVEMBER 26, 1941 UNITED STATES SENATE, SPECIAL COMMITTEE TO INVESTIGATE Washington, D. C. The committee met at 10: 33 a. m., pursuant to adjournment on Tuesday, November 18, 1941, in room 318, Senate Office Building, Senator Harry S. Truman presiding. Present: Senators Harry S. Truman (chairman), James M. Mead, Joseph H. Ball, and Carl Hatch. Present also: Mr. Hugh A. Fulton, chief counsel; Mr. Charles P. Clark, associate chief counsel. The CHAIRMAN. The committee will come to order. TESTIMONY OF BRIG. GEN. BREHON SOMERVELL, CHIEF, CON- General SOMERVELL. Mr. Chairman, I merely wish to say that I think we have produced all the witnesses that you wanted to examine, and I just want to assure the committee that we wish to cooperate with you in every way possible, and if the evidence which is available this morning is not sufficient, we will, of course, be glad to do anything in our power to cooperate with you in every way we can. The CHAIRMAN. Thank you, General. Is Mr. T. D. Thomas in the room? General SOMERVELL. Major Davidson, whom you know, I think, is here, and you can call on him for anything you want. The CHAIRMAN. Thank you very much, General. Mr. Thomas, do you solemnly swear to tell the truth, the whole truth, and nothing but the truth in the testimony you are about to give before this committee? Mr. THOMAS. I do. The CHAIRMAN. Be seated and give your name and connections to the reporter, please. TESTIMONY OF THEODORE D. THOMAS, FIELD AUDITOR OF THE QUARTERMASTER CORPS, FORMERLY CHIEF FIELD AUDITOR, WOLF CREEK ORDNANCE PLANT, MILAN, TENN. Mr. THOMAS. Theodore D. Thomas, field auditor of the Quartermaster Corps. Mr. FULTON. Before starting, we might put into the record, at the request of the president of the Memphis Trades and Labor Council, Mr. Lev G. Loring, a statement that-I quote: The labor unions who have jurisdiction on the Wolf Creek ordnance plant have at all times conducted themselves in an honorable manner, and there have been no so-called rackets, and the unions are open for investigation by parties concerned. If there were any rackets in the labor movement, we would be one of the first to correct it, if brought to our attention. (The letter referred to was marked "Exhibit No. 183" and is included in the appendix on p. 3337.) The CHAIRMAN. Mr. Thomas, you were the chief project auditor on the Wolf Creek ordnance plant when construction was started, were you not? Mr. THOMAS. I arrived there shortly after construction was started. I arrived there on February 12. EQUIPMENT PURCHASE AND RENTAL PROCEDURES The CHAIRMAN. I wish you would tell this committee some of the difficulties you had in setting up the proper books and procedure on that job. Mr. THOMAS. Well, there was obviously a great deal of confusion in the offices of the contractors, and our main difficulty at the very beginning had to do with the purchase orders. It seemed to be almost impossible to get the purchase-order situation in hand. Mr. FULTON. I show you a letter, dated March 10, 1941, and ask you if it is a copy of a letter which you sent. Mr. THOMAS. Yes, sir; that is a letter I dictated. (The letter referred to was marked "Exhibit No. 184" and is included in the appendix on p. 3337.) Mr. FULTON. As a matter of fact, you might look through these papers which the committee has obtained from Memphis and tell us whether those are copies of papers known to you, keeping them in the order in which they are set forth there. Mr. THOMAS. I am familiar with all of those, and the ones that show my signature I dictated. Mr. FULTON. You were speaking about purchases and difficulties that were being had at the outset there. The first paper was an interoffice memorandum from you to the project manager of the FergusonOman Co., dated March 10, 1941, in which you point out that they have not even numbered the purchase orders. What importance did you attach to that? Mr. THOMAS. Well, the numbering of purchase orders from our point of view is very important in order that we may determine as to whether we have received copies of all the purchase orders. If there is no numerical order, we are not in position to know whether we received all of them or not, or whether there are some duplications. It is quite confusing. Mr. FULTON. The committee in Memphis noted one order which looked as though there might have been duplication; that is, payment twice on one receipt of merchandise. Was it for that purpose that you wanted to have all purchase orders numbered chronologically? Mr. THOMAS. Primarily; yes, sir. Mr. FULTON. Well, in a memorandum to Captain Horridge on March 21, I note you take up the question of the contractor's lack of understanding of the Government requirements with respect to discounts and discount periods, from which I understand that it was your opinion that the contractor was not giving you information concerning the discounts that he was receiving on materials. Mг. THOMAS. Yes; or he might be receiving or losing the discount. We felt that an important part of the contract, that the Government. was a party to the contract, and that they should know all the terms of the contract. (The memorandum referred to was marked "Exhibit No. 185" and is included in the appendix on p. 3338.) Mr. FULTON. And that would be particularly important to see to it that discounts for large orders were obtained. Mr. THOMAS. Yes, sir. Mr. FULTON. It might amount to a good many thousands of dollars. Did the contractor furnish you information on those matters, or what was the reason for your taking the position that there was a misunderstanding about it? Mr. THOMAS. Well, I may have been a little overpolite in using the word "misunderstanding." I felt that we were probably not receiving the full information that we should receive. There was quite a little juggling around that can be done with discounts. The Government might be compelled to lose discounts that they didn't know anything about, or the factory could take discounts. The Government can suffer quite extensively in that manner, the same as they can in any other manner in connection with a contract when they don't know the full terms of the contract. Mr. FULTON. Had you asked for information from the contractor which was not given to you? Mr. THOMAS. At that time; no. (A list of contracts for investigation was marked "Exhibit No. 186" and is included in the appendix on p. 3339.) Mr. FULTON. Now, with respect to the possibility of purchasing at a discount or purchasing even locally at the correct price, the committee was particularly interested in three Pontiac sedans that came on to the project about April 5, two of them being driven there from Camp Wolters, Tex., by Miss Alma Campbell and Mr. Gilbert Olson, as advance agents for the constructing quartermaster, Major Brewer, and the third being Major Brewer's own Pontiac sedan. We note that the Government recaptured those Pontiacs at $1,448, and that they could have been purchased locally at slightly in excess of $1,000. Did you notice any facts with respect to those Pontiacs at that time? Mr. THOMAS. Well, you practically have my story on that, because I believe two of them were recaptured at about $1,453 and another one at $1,448. Mr. FULTON. Yes; two for $1,448 and one for $1,395. Mr. THOMAS. I probably had them reversed. I am speaking from memory. In our investigation, the slight investigation we made at the time, we were convinced that those cars could have been purchased right at the site of our plant for approximately $1,050, I believe, new. 311932-42-pt. 9-11 PERSONNEL PROBLEMS Mr. FULTON. By what right would Miss Alma Campbell, who I understand had been a hostess in a hotel at Mineral Wells, be provided with a Pontiac at Government expense? Mr. THOMAS. I wouldn't be able to answer that question the way it is put. I don't know why she should have had any car at all. The CHAIRMAN. Who was this Miss Campbell? Mr. THOMAS. She was secretary to Major Brewer. The CHAIRMAN. Did Major Brewer bring her on the job with him? Mr. THOMAS. I believe so; yes, sir. Mr. FULTON. Who was Mr. Gilbert Olson, and by what right would he have a Pontiac assigned to him? Mr. THOMAS. Well, Gilbert Olson was on the pay roll, with the title of project coordinator, and he functioned under the title of aide to the constructing quartermaster. I would believe that if such an assignment were necessary, whoever held that assignment would really be entitled to a car-to the use of a Government car. Mr. FULTON. When you speak of the pay roll, you mean the contractor's pay roll which was reimbursed by the Government? Mr. THOMAS. Yes, sir. Mr. FULTON. I note that the contractor was authorized to place Mr. Olson on his pay roll as a project coordinator at a salary of $750 a month by Major Brewer. Mr. THOMAS. That is true. (The authorization referred to was marked "Exhibit No. 187" and is included in the appendix on p. 3339.) Mr. FULTON. The contractor already had a project manager at Government expense, did he not? Mr. THOMAS. Well, he had a project manager, but the Government did not pay the project manager's salary. Mr. FULTON. What would be the authority for having a project coordinator in addition to a project manager? Mr. THOMAS. Really, I wouldn't know. I protested that from the very beginning-the appointment of Mr. Olson. The CHAIRMAN. Did Mr. Olson have a commission in the Quartermaster Corps? Mr. THOMAS. Not to my knowledge. He was a civilian employee. Mr. FULTON. Did he issue instructions and orders with respect to various matters, this so-called project coordinator? Mr. THOMAS. Yes. His word was law around there. Mr. FULTON. For example, I note here that he specified in a directive that a Mr. Gullidge should be entered on the pay roll records as of a certain date-April 12-directing it to the timekeeping department of the ordnance plant. Were such directions common by him? Mr. THOMAS. Mr. Olson, you mean? Mr. FULTON. Yes. Mr. THOMAS. Oh, yes; that was quite usual. (The directives referred to were marked "Exhibits Nos. 188 to 190" and are included in the appendix on pp. 3339-3340.) Mr. FULTON. And other directives here indicate that he even authorized various people to make trips. In one here particularly, Mr. Bouck was directed to go to Rolla, Mo. Was Mr. Bouck an employee of the contractor? Mr. THOMAS. Mr. Bouck was the chief tool and equipment inspector under the supervision of the field auditor. Mr. FULTON. Of the Quartermaster Corps? Mr. THOMAS. Of the Quartermaster; yes, sir. (A letter regarding the assignment of personnel was marked “Exhibit No. 191" and is included in the appendix on p. 3340.) Mr. FULTON. Does that mean that Mr. Olson, an employee of the contractor, undertook to give directions and orders to the employees of the Quartermaster? Mr. THOMAS. Mr. Olson was really functioning in the Quartermaster Corps, supposedly, although he was on the contractor's pay roll. Mr. FULTON. Had he taken the oath which is required of Government employees? Mr. THOMAS. I have no knowledge of that. I assume that he had. Mr. FULTON. As we understand it, he had not, on the theory that he was a contractor's employee, and yet you say he was in the Quartermaster's office, issuing instructions to the Quartermaster personnel. Mr. THOMAS. Oh, indeed. His desk was just outside Major Brewer's office. The CHAIRMAN. Where did he come from? Did Major Brewer bring him with him? Mr. THOMAS. He arrived there in advance of Major Brewer. Both he and Alma Campbell arrived about a week before Major Brewer arrived. The CHAIRMAN. Did they come from Texas? Mг. THOMAS. Yes, sir; that is my understanding. Mr. FULTON. I note that Major Brewer also put on the pay roll a Mr. Gullidge, at $125 a week, with the title of transportation coordinator.1 Was there any such job as that at that time, or was that specially created? Mr. THOMAS. Well, my belief is that it was created; yes, sir. I would know of no reason for such an assignment. Mr. FULTON. Was transportation in fact coordinated by this Mr. Gullidge? Mr. THOMAS. NO; I don't know exactly what the duties would be of a transportation coordinator. We had a very efficient transportation and traffic department in the field audit. The contract also had a very large traffic department. Senator HATCH. Do you know just what this transportation coordinator did? Mr. THOMAS. Well, I know of a few things that he did. I don't know what he did all the time. Senator HATCH. I mean what were his duties? Generally, what sort of work did he perform? Mr. THOMAS. Well, he was out in the field a great deal, just going around, talking with the workmen. I really would be unable to tell you any duties that he performed. I know I had occasion to run into of his activities at different times. some Mr. FULTON. I note also that Major Brewer ordered the employment of a Mr. Barbee, at $60 a week, to work on historical records, and that he set up fire and police inspectors at $3,200 each-Mr. Earley and 1 See Exhibit No. 188, appendix, p. 3339. |