30 days' grace period in which to properly equip his plant and meet the terms of his contract. However, in order that the defense project be built, it was necessary to have chert, and we were forced to buy the same on the next lowest bid, or that of the Memphis Stone & Gravel Co., at $2 per yard, during the period in which we were trying to get Cartwright to comply with his contract, and he was informed that we were buying the chert elsewhere. During the time when the Cartwright Construction Co. was not meeting their contract, the roads had been graded, but because of the spongy condition of the soil and the recurring rains, the construction work was bogging down in the mud. This created a terrific expense to the Government, which would have far exceeded the additional cost of the $2 chert from the Memphis Stone & Gravel Co. had the conditions been allowed to continue. On April 18, 1941, the Cartwright Construction Co. requested the FergusonOman Co. to assign his account to the Union Planters National Bank in Memphis, which request, upon consulting with our attorney, we were advised not to permit. This indicated that Mr. Cartwright was in further financial difficulties. I suspect that was my advice. I don't remember the sequence of this as far as dates are concerned because I made no charge for the advice I gave in this thing. I didn't make it an element of my charge and kept no records on it and so I can't be sure of when I was talked to about it, but I was at various times, and I knew then, as you know other things in the sense of personal knowledge, of his financial difficulties, because I knew that the owner of the pit, the chert pit, was having checks bounced back on him, and the drivers were having checks bouncing back on them at the plant, and that was the point of my advice. The CHAIRMAN. Why wouldn't it have been better for the contractor to take over this chert pit and handle it himself? Mr. MANIER. It required a whole lot of equipment, as I will show you, which I knew nothing about at the time, but it is very considerable investment to produce that character of chert, and it is in affidavit form here.1 On May 9, 1941, the Cartwright Construction Co. resumed deliveries and delivered approximately 156 yards. You see, there had been no cancelation of the contract. They were trying to get Cartwright to deliver for the two reasons mentioned in this affidavit, that they didn't want to be unfair to Cartwright, and that they did want to buy the chert at $1.63, and also for the additional reason that Mrs. Cartwright apparently was a very charming lady who got everybody on her side. I don't think there is any doubt about that. The CHAIRMAN. She made a good witness before this committee, I will say. Mr. MANIER. Yes.2 On May 9, 1941, the Cartwright Construction Co. resumed deliveries and delivered approximately 156 yards— not thousands, just 156 yards. In the meanwhile, the Memphis Stone & Grave Co. had been delivering up to 3,500 yards per day. In the period from March 31, 1941, through June 10, 1941, on only 1 day, June 5, did Cartwright Construction Co. exceed the 2,000-yard requirement. 1 See Affidavit No. 7, appendix, p. 3385. See also Affidavit No. 7-A, appendix, p. 3388. * Ibid. On June 18, 1941, a conference was held between Lieutenant Olsen, of the United States Ordnance Department, and Mr. Cartwright and, as a result, Lieutenant Olsen addressed a letter requesting that we give Cartwright Construction Co. one more chance on the following Monday morning, but stated that the wisest thing to do would be to terminate the contract and obtain materials from a dependable company. At some time during this period a conference was held in the office of the constructing quartermaster, attended by Lieutenant Bruce, Captain Kibler, and Lieutenant Nickelsen, all of the constructing quartermaster's office, Mr. Flowers, Mr. A. K. Ferguson, Mr. W. H. Faulk, Mr. Jack French, Mr. R. W. Kirby, and Mr. Cartwright. At this time the reasons for the necessity of canceling the order were very clearly stated. On June 23, 1941, Cartwright Construction Co. was written another letter giving them still another chance to fulfill the contract. On June 5, 1941, Mr. Jack French, chief inspector, advised that the samples of much of the material were still not meeting the specifications, as he had advised on repeated occasions before that time. The Ferguson-Oman Co. received certain information that the Cartwright Construction Co.'s checks were being returned by the bank marked insufficient funds. And that was important because all of the hauling was being done by drivers who own their own trucks and were looking for their payments. That was a big part of the difficulty.1 On July 3, 1941, the project manager, Mr. C. G. Atkin, instructed Mr. Flowers, the assistant purchasing agent of Ferguson-Oman Co., to cancel the contract order for their many and repeated failures to meet the delivery requirements, specifications, and terms of their contract. Cancelation of the order was ap proved by Capt. Charles W. Carlton, acting constructing quartermaster, and notice was properly given. On July 11, 1941, the order was reinstated by Captain Kibler of the constructing quartermaster's office, who instructed Mr. Flowers to take the original cancelation to their office, removing it from our files and turning it over to them, including copies of Mr. Flowers' letter of July 3 to Cartwright Construction Co., giving notice of cancelation. Mr. Flowers, the assistant purchasing agent, called on Mr. Atkin, the project manager, and secured from him a written directive and authorization to comply with these instructions. On July 23, 1941, we advertised for bids on base materials for the Milan ordnance depot and sent requests to 12 furnishers of material. We received only 4 bids, which were submitted to the constructing quartermaster without recommendation. We were therefore instructed by the constructing quartermaster to issue a purchase order in accordance with Cartwright Construction Co.'s bid of $1.63 per cubic yard he was again at that same figure provided Cartwright Construction Co. could comply with tre requirements for performance and payment bond as requested in our Invitation to Bid. We were further instructed not to issue purchase order until a written directive was received from the constructing quartermaster authorizing its issuance. It happens I again got into that question because I was informed about the bond. They thought he was not going to be able to make it, but he did make it, and made it in a form that I didn't think would add much to the situation. (You asked me to mention clients.) Incidentally, he made it with a surety company which I often represent in Nashville, the American Surety Co.; they made it as an agency matter. Mr. FULTON. And they made it without consulting you? Mr. MANIER. Absolutely; I knew nothing about it. Before I saw the bond, it was a matter of jest because I said it would put me in an awkward position now if they had to sue on the bond. 1 See Affidavit No. 7, appendix, p. 3385. See also Affidavit No. 7-A, appendix, p. 3388. The CHAIRMAN. You would have to represent both of them? Mr. MANIER. NO; I would have to represent Ferguson-Oman, regardless.1 On August 4, 1941, the constructing quartermaster's office was notified, following verbal repetitions, that the situation with reference to chert was extremely serious because approximately 30 miles of roadbed had been graded and opened, ready for chert, and because of serious rain, regrading and redressing would be required, costing many thousands of dollars putting them back in shape to receive the chert. As a result of this letter, we were authorized to purchase additional quantities of chert from the Memphis Stone & Gravel Co. About this time, Mr. Cartwright, with his attorney, called on the FergusonOman Co. and conferred with Mr. Atkin and Mr. A. K. Ferguson. and I am sure it was about that time, too, that John Gray sent his brother, Elliott, up to talk to me and I really intervened on their behalf; I mean, I put Gray in touch with Mr. John Oman, Jr., and tried to do what I could for them.2 The subject of specified material was discussed and Mr. Atkin and Mr. Ferguson recommended to Mr. Cartwright that he retain a recognized engineering laboratory to make test of his chert before it left his plant to avoid the expense of so many rejected loads because of failure to meet the specifications. Sometime later, Mr. Cartwright came to the Ferguson-Oman Co. office with a laboratory report from the Barrow-Agee Laboratories in Memphis to the effect that the materials had met the specifications. These reports did not agree with our reports issued by the Mississippi Testing Laboratories, who had been retained for the purpose of making tests. Mr. Cartwright had taken samples from loads of chert which we had rejected and submitted them to the Barrow-Agee Laboratories. As a matter of fact, according to Captain Kibler, you remember he testified he had taken them." The materials he sent met the specifications. It is absolutely essential, however, that a representative of the laboratory, in making tests of such materials, obtain representative samples, and since the representative of the laboratory had not obtained these samples, the report was meaningless. It will later appear in affidavits here that any test under laboratory conditions requires a representative of the laboratory to select the samples that are tested, and that anybody could go into any rejected load and pick out samples that would pass almost any test, and it doesn't mean anything-I am saying this because it is in the affidavits here and it may save my reading them-unless the representative of the laboratory selected the samples that were tested:"" In the meantime, the construction quartermaster notified Ferguson-Oman Co. to notify the Memphis Stone & Gravel Co. to cease shipments, but, thereafter, the constructing quartermaster granted authority to resume shipments from the Memphis Stone & Gravel Co. for the Milan ordnance depot, these materials being vital to the construction of the project. Shipments from both companies continued until their 95,000 yards had been secured from Memphis Stone & Gravel Co. and more than 40,000 yards from Cartwright Construction Co. Actually, as a matter of fact-and this has come to my personal attention because I was advised about this bond proposition-they required all the chert they could get due to the failure of Cartwright to deliver, and they had to keep getting it. We did write a letter 1 See Affidavit No. 7, appendix, p. 3385. See also Affidavit No. 7-A, appendix, p. 3388. 2 Ibid. • Ibid. • Ibid. notifying the bonding company, but about the only way we could hold the bonding company was to declare the contract breached, as you know, Mr. Fulton, and buy it on the open market and try to hold the bonding company for the difference. Mr. FULTON. And you would then have been subject to the defense of inspection difficulties and other charges of the type Captain Kibler mentioned, which if true would have been a defense on the bond. Mr. MANIER. But would mainly have resulted in our losing whatever chert Mr. Cartwright was delivering because we wanted all of that. We were prodding him every day to make it, and it was on that basis that I advised them I didn't think that was worth doing, they had better get what they could, because every load they got was at $1.63 as against $2, rather than hold the bonding company which I knew from representation of this and many other companies would rely on every defense they could, and I didn't want to get into that question. But incidentally, these forms of bonds didn't seem to me to well cover the subject, to tell you the truth. So I advised them to continue to take all they could get from Cartwright and not declare cancelation and hope they might recover the difference, and they did.1 With the advent of bad weather, it was important that the additional requirements be delivered at a rate of not less than 3,000 yards per day by the two available sources. In the meantime, there was a strike of the drivers of both the Memphis Stone & Gravel Co. and Cartwright Construction Co., demanding 15 cents per yard increase for raw materials hauled. Both companies, as I think it appears in the record, had trouble with the drivers who bought their trucks and did the hauling, which was a big part of it. That is the background of the story from our standpoint, plus this record showing the actual Cartwright deliveries day by day. Mr. OMAN. I would like to interject in there that this haul was from 40 to 50 miles each way, or 90 or 100 miles round trip, on this chert, which is quite a long way to haul material. The CHAIRMAN. It is quite a long haul. I drove over it. QUALITY OF ROAD CONSTRUCTION Mr. MANIER. I don't want to encumber the record by reading them, but we have affidavits from everybody connected with the Mississippi Testing Laboratory-Mr. V. D. Skipper and James I. Bush.2 The CHAIRMAN. Mr. Manier, tell me who is the Mississippi Testing Laboratory? Who are its personnel! Mr. MANIER. It is one of these affiants, and it is Mr. Bush. Mr. MANIER. The individual proprietor, and I will tell you his name after I glance at the affidavit. The CHAIRMAN. Is that a Tennessee corporation? 1 See Affidavit No. 7, appendix, p. 3385. See also Affidavit No. 7-A, appendix, p. 3388. See Affidavits Nos. 28 and 29, appendix, pp. 3435, 3437. See also Affidavits Nos. 6-A, p. 3376; 9-A, p. 3406; 9-B, p. 3406; Memorandum No. 9-C, p. 3413; Memorandum No. 24-A, p. 3422; Affidavit No. 24-B, p. 3429. Mr. MANIER. No, sir; it is an individual proprietor who does business under that name, and that is in those affidavits, but I don't recall which one it was. The CHAIRMAN. That is all right, we will get it out of the affidavit. Mr. MANIER. It is in the affidavit showing who he is, and he owns it individually, and, incidentally, he was selected on competitive bids among licensed laboratories. The CHAIRMAN. That is what I wanted to get at principally. Mr. MANIER. I know that fact, and I think it is in the affidavit. The CHAIRMAN. We won't waste time looking it up. That is the information I want. Mr. MANIER. That is a fact. Then everybody connected with the Mississippi Testing Laboratory testified to their entire disinterest in anything except determining whether the material met the specifications, and set up what I just pointed out, that a test made by BarrowAgee, or anybody else, unless they collected the material, or their representative collected it, didn't mean a thing; and all the tests they made were honestly and fairly and effectively made; and there is probably a good deal more stuff in there bearing on this general situation which will be covered in other affidavits, too, because there are a lot of them. Then we have a series of affidavits undertaking to meet the insinuation in the record that our inspectors were arbitrary with the Cartwright Co. and that we rejected it improperly, and so forth, and meeting the insinuations in some affidavits, the affiants of which are unknown to us. You remember, Mr. Fulton, you filed a bunch of affidavits without mentioning the names in the record, so we don't know whom they were by. Mr. FULTON. They were primarily by Captain Kibler, and not insinuations but charges under oath that he personally had seen loads that should not have been rejected. Mr. MANIER. Yes; he did say from personal observation. Mr. FULTON. Yes; he said he looked at the chert and could see no reason for rejecting it. Mr. KINGSLEY FERGUSON. I have seen several hundred thousand yards of this chert since I have been down in Tennessee, and I come from the same part of the country that Captain Kibler does, and I frankly do not know by observation whether one of those loads of chert meets specification or not. Mr. FULTON. I don't quite know what your specifications are. What is chert? It is nothing but a mixture Mr. KINGSLEY FERGUSON (interposing). Let me describe it to you. The chert comes in, there are some big lumps about that size [demonstrating]; there shouldn't be any much bigger than that, and then a gradation of lumps on down to the very finest portion; then in order to keep that from rolling around on the road, you have to have a lot of fine stuff in there to bind it down to the road so the traffic won't rut it up. Mr. FULTON. That is what I thought. It is simply a matter of fineness of the material, is it not, that you are concerned with, and the question of extraneous matter in it? Mr. KINGSLEY FERGUSON. No. It is a specification. You have to have certain proportions of the large, graded on down to the so-called |