EXHIBIT No. 166 Under date of September 4, 1941, the Mills-Morris Company of Memphis. Tennessee, submitted a letter to the C. Q. M. at the request of the Supervising Auditor of Tool and Equipment for C. Q. M., setting forth in the letter an agreement to establish and stock an organization in the city of Milan, Tennessee, for the purpose of filling emergency orders for repair parts for motorized vehicles. Copy of the aforesaid letter is attached hereto. The organization states that such parts as pistons, pins, valves, timing gears, timing chains, gaskets, and numerous other parts for Chevrolet, GMC, Ford, and International vehicles were carrying a discount of 40% from the manufacturer's list price, fob, job-site. Such heavier replacement parts as gears, transmissions, and differential for Chevrolet, GMC, Ford, and International would carry discount of 33% %. Such items as brake linings, and sets or rollers molded or woven for Chevrolet, GMC, Ford, or International as well as Tractors and Draglines could be furnished at a 50% discount. Such items as Generators for Ford and Chevrolet could be exchanged ranging from $5.25 to $6.00. This organization agreed to set up a stock room in Milan, Tennessee, adequate to fill the needs for emergency orders for motorized equipment. This organization states that at the termination of the Ferguson-Oman Company contract that they would be willing to repurchase all of the parts that they had on hand provided these parts are in salable condition and in the original boxes. This organization handles a nationally known product and they carry the same guarantee as those furnished by the various car dealers who are, at the present time, furnishing supplies. Therefore, the Tool and Equipment Division of the C. Q. M. feels this organization is offering standard merchandise, adequate service, and the largest discount of the other five or six Vendors now servicing Wolf Creek Ordnance Plant, and we feel that this organization should be given the blanket order the same as the other Vendors not to exceed $2,000.00 and to be used to fill the requirements for emergency parts. No discrimination should be shown this organization. THE MILLS-MORRIS COMPANY, Memphis, Tennessee, September 4, 1941. Milan, Tenn. CONSTRUCTION QUARTERMASTER CORPS, As GENTLEMEN: In May I endeavored to enter into a contract with the FergusonOman Company 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 Lieut. Bruce's office, and one for Mr. Quinn Flowers' office. Our proposition was that this was to be covered by a blanket order from the Ferguson-Oman Company for $2,000 for emergency parts, as well as others. I learned later from Mr. Flowers, C. Q. M. 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, GMC, Ford and International trucks. The above items carried a discount of 40% from the manufacturers list price fob job-site. Gears, Transmission and Differential for Chevrolet, GMC, Ford and International, also rear axle shafts. The above merchandise carried discounts of 33%. Brake lining, sets or rolls, molded or woven, for Chevrolet, GMC, Ford and International trucks as well as tractors and drag lines, also piston rings, less 50%. Generators, Ford $6.00, 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 $56.00 Chevrolet, with heads, 1939 to 1941 inclusive $64.50 Overhaul motor International D30-D35 and GMC $85.00 net fob job-site. Fan Belts 45% off manufacturers' list, radiator hose 45% off list, brake hose, "24¢ per foot, " 30¢ per foot, clamps for brake hose 5¢ each. Bimetallic facings such as steering clutch, master clutch, brake lining and cones for Caterpillar Trucks, AC Tractors, LeTourneau and Wooldridge Scrapers. According to the TPS schedule we also agreed to keep a stock of merchandise in our Milan Tennessee 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 Ferguson Oman Company two sets of catalog pages to be changed by the C. Q. M. and Mr. Grissom in Mr. Quinn 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. We I believe we can give you quicker service than you can get elsewhere. think we carry one of the largest lines of replacement parts in the entire South, and up to the present time have been very successful in getting the merchandise needed from the various factories. 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 Company's contract, we, The MillsMorris Company will take back any of the parts that we might sell you that the Procter & Gamble Company 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 Company will give Ferguson Oman Company 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 Company, 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, Yours very truly, Under date of March 25, Le Tourneau, Tournapull, condition new, was received on the reservation at Wolf Creek Ordanance Plant, Milan, Tennessee. This piece of equipment carried engine number IN3178SP, Control Unit number P15280TE, serial number 3T2152CIA, Scraper serial number TS8491 LSF. Official records of the Tool and Equipment Division show that the owners of the aforesaid piece of equipment are Taylor-Hale Machinery Company of Memphis, Tennessee, and that the Lien Holder is the Union Planters National Bank and Trust Company of Memphis, Tennessee. This piece of equipment was shipped from Peoria, Illinois, on March 20, 1941, with freight being paid by the United States Government. The aforesaid piece of equipment was valued at $10,990.00, carrying a rental rate of $1,495 per month. On file therewith Photostatic copy of same. Attached hereto is a telegram dated September 13, 1941, signed by the Fischer, R. G. LeTourneau, Incorporated, of Peoria, Illinois, stating that the Model "C" Tournapull or a duplication of the aforesaid piece of equipment there is a purchase price f. o. b. Peoria, Illinois, of $10,175.00. Therefore, this Audit Division feels that this piece of equipment has been submitted for rental of approximately $815.00 over-priced. ITEM NO. 2 The LeTourneau, Tournapull, serial number IM318057, carrying Power Unit number P14897TE, serial number 3T-2131CIA, owned by Taylor-Hale Machinery Company of Memphis, Tennessee, and shipped from Peoria, Illinois, on March 18 with freight rate being paid by the United States Government and showing a value of $10,990.00 with a rent rate per month of $1,495. According to Photostatic copy of the telegrams attached hereto, this piece of equipment should have been rented with a value of $10,175. Consequently this piece of equipment has been recieved and rented with an excessive value of $815. ITEM NO. 3 The LeTourneau, Tournapull, serial number 3T-2144-CIA, engine number 1N3185SP, owned by Walters and Prater of Morristown, Tennessee, received at Wolf Creek Ordnance Plant March 12, 1941, carrying a value of $10,990.00 and a monthly rental rate of $1,250. Could have been rented for a value of $10,175.00 as per attached Photostatic copy of telegram. Therefore, this piece of equipment was placed under rental contract at an excessive value of $815.00. The aforesaid LeTourneau, Tournapull was shipped from Peoria, Illinois, f. o. b., with the United States Government paying the freight rate. ITEM NO. 4 LeTourneau, Tournapull, received March 12, 1941, at Wolf Creek Ordnance Plant, carrying engine number 1N320SP, serial number 3T2145CIA, owned by Walters and Prater of Morristown, Tennessee, was received with a value of $10,990.00, carrying a monthly rental rate of $1,250. Should have been rented at a figure not to exceed $10,175.00 as per Photostatic copy of telegram attached hereto. Therefore, the aforesaid peice of equipment is rented with an excessive valuation of $815.00. In conclusion, if the aforesaid piece of equipment had been received at the correct rental value of $10,175.00 each, it would have created a savings for the United States Government of approximately $3,260.00. Footnote: See Photostatic Illinois Central Railroad Company's freight bills attached hereto. WU 17. TWS Paid 3 Peoria, Ill. Sept. 13, 1941. 901A. Retel model C Tournapull with two 21 x 24 and two 15 x 20 tires or four 13.50 x 20 tires $10,175.00 With two 18 x 24 and two 15 x 20 or four 13.50 x 20 tires $9,975.00. Prices are as of March sixth and FOB Peoria. Mailing price lists requested. See Photostatic copy in original files FISCHER R. G. LETOURNEAU, Inc. On September 22, at approximately 12:30 P. M., a telegram was received by The Tool and Equipment Department from the Fischer R G LeTourneau Incorporated Company which stated: Quote "Refer our wire September 13 price as quoted wrong. Regret our error." End of quote. Should be $10,990. It is our belief that an organization as efficient and capable as the Fischer R G LeTourneau Incorporated, producing pieces of heavy equipment running into thousands of dollars could not possible make an error to an extent of over $800 per unit. We think it advisable that the Fischer R G LeTourneau Incorporated show printed price list as of March 6 from their official records so that positive price quotations can be determined. Attached hereto is a copy of the telegram received which telegram is on file in the Tool and Equipment Division of the C. Q. M. WU21. 17/15. SER-WUX Peoria, Ill. 22. 911A. Refer our wire September 13 price as quoted wrong should be $10,990 regret our error. FISCHER R. G. LETOURNEAU, INC. |