Government then, in settling, made the claimants scale down the statements. These claims are not inflated. The adjusters scaled them down to rock-bottom and judgment was entered in the amount to which the claims had been scaled. The 50 percent was based upon the judgment agreed to by the Government as being the actual amount due these people. The liability was clearly established in each case.

These claims stand upon the same basis as if I had a claim against your chairman. We will say that he is a financial bloat, like so many other good people in Chicago, and I have nothing; that my children are in distress; my family is in want; I have nothing; and I want about $1,000 that Mr. Sabath owes me. I go to him and he says, “Yes, I admit that I owe you a thousand dollars. There is no question about that. That has been clearly established, but I have you in a hell of a fix. You need the money and need it at once, and I am protected so that you cannot reach my money, the regulations preventing a sheriff levying on my money. You cannot get to me, though I do owe you a thousand dollars." Mr. Sabath finally says, "I will settle with you for $500 ", and he gives me $500 and I give him a receipt for $1,000. Could such be called a fair settlement in Heaven or earth before any judge with a fair conscience? That was the situation in the State of Minnesota.

Mr. MAPES. As I understand, those people were paid between $12,000,000 and $13,000,000 when settlement was made with them, and that was on the basis of 50 percent of their damage, which would mean a full damage of $24,000,000 or $26,000,000. There were 8,000 sufferers, and that would make an average claim of something more than $3,000. True, there were doubtless some large losses; but that $3,000 average is large for an area of that kind.

Mr. HOIDALE. There were larger claims in the city of Cloquet, which is a place, or was a place, of 8,000. It contained fairly large business enterprises and their claims were high. The same is true of other villages. The average farmer would have only $1,000 or $15,000 but these claims from the villages raised the average of claims.

You asked about the $8,000,000 and $13,000,000. The discrepancy there comes from the fact that there was included in the $13,000,000 insurance money that was paid and deducted from the settlement. If it was found they owed me $1,000 and that I got $500 insurance, they paid me only $500. That was included in this, and this bill provides that no further money shall go to insurance companies. They got 50 cents on the dollar. That accounts for the $3,000,000 or $4,000,0000 difference.

Mr. MAPES. How much depreciation was there in the agricultural land after the fire?

Mr. HOIDALE. Depreciation?

Mr. MAPES. Yes.

Mr. HOIDALE. Because of the fire?

Mr. MAPES. Yes.

Mr. HOIDALE. I do not think that I could say. This is up in northern Minnesota where the soil is good. It is cut-over land, clearings; and it became at that time a scene of desolation and devastation. After that catastrophe the people of that vicinity very largely left that country and they may now be found all over the

United States. Several hundred of them are in Wisconsin; several hundred of them are in California. They are scattered all over the United States. Perhaps not one-half of the people who lived in that neighborhood in October 1918 are there now. This fire had an injurious effect upon land values in that area.

Mr. GREENWOOD. You have based this bill upon half that was determined to be due at the time the settlement was made, and you have not included interest from that time.

Mr. HOIDALE. Yes. If we should include interest since 1918, the amount would be doubled. As I have stated, each claim is listed and carefully itemized in the office of the United States Railroad Administration.

Mr. GREENWOOD. And you are asking for the unpaid balance, as shown by that record?

Mr. HOIDALE. Yes. There is not a court in any civilized country of world, with a conscience, that would stand for the sort of settlement accorded these fire sufferers.

Mr. SABATH. If I am not mistaken, the gentleman from Michigan (Mr. Mapes) wants information as to whether in making these settlements, anything was allowed for damage to the land itself.

Mr. HOIDALE. No; there was not, except as to the buildings that were destroyed. Damage to the land itself was not taken into. consideration. I have not seen anything in connection with timber that was destroyed, but I do not believe that was taken into consideration. I would want to look it up before answering that question positively.

Judge Devaney, now Chief Justice of the Supreme Court of Minnesota, was in the city the other day attending a conference of a body that is looking toward the revision of laws, and, knowing that he had something to do with these cases in the early days, I asked him whether he would not come here and appear as a witness. He said that he would gladly do so; but, unfortunately, we did not have an opportunity while he was in the city for him to be heard. He had to go home, but he left a letter that I should like to have made a part of the record.

Mr. SABATH. Without objection, the letter will be made a part of the record.

Mr. HOIDALE. It says:.

Hon. EINAR HOIDALE, M.C.,

House Office Building,

Washington, D.C.

MAY 11, 1934.

MY DEAR CONGRESSMAN: In response to your letter of the 10th instant, in which you request me to make a brief statement of the fact concerning the Minnesota forest fire cases of October 1918 a bill for the relief of claimants is now pending before Congress, I will say:

It gives me great pleasure to relate to you the facts within my knowledge concerning this great catastrophe. Early in the year 1919 I became associated with other attorneys in representing a large group of claimants in the Moose Lake Lawler Soo Line area.

We tried the Anderson case in this district in the fall of 1919 and secured a jury verdict in favor of the plaintiff. The case was taken to the Supreme Court and was there affirmed. The rule of law applicable to the fire cases there laid down was never disturbed.

In the spring of 1920 the so-called Cloquet cases were grouped under a stipulation for a trial before five district judges on the question of liability and at about the same time a group of between eight hundred and a thousand cases in

the Moose Lake area was agreed to be tried under a similar stipulation before the same district judge.

The Cloquet cases were determined by the judges about the middle of September and by that determination liability was fixed upon the Railroad Administration for the destruction of the city of Cloquet and this case was later affirmed in the Supreme Court.

Following the Cloquet judge decision and on September 20, 1920, we began the trial of the Moose Lake cases. This trial continued with a few short intermissions until May 1921. The evidence was then concluded but because of the great number of witnesses, the amount of territory covered, and the enormous amount of detail work necessary to analyze the various cases, decision was not made by the judges.

I feel safe in saying that in the great majority of these cases there was little question but that the plaintiffs would recover the full amount of their loss.

In July 1921, the Cloquet case was decided in the Supreme Court and considerable effort was made to secure an adjustment not only of adjudicated cases but those not yet concluded where it was safe to say liability would be established.

One can hardly appreciate the condition of these claimants. Their homes and all their personal belongings, except what they had on their backs at the time of the fire, was destroyed. They had neither property, money, nor credit. Money had to be raised to meet the necessary expenses of the witnesses, and plaintiffs were literally glutted with actions. Many thousands were pending. It was humanly impossible to determine all of these cases separately within any reasonable time. After the determination in the Clokuet case, the Railroad Administration announced that it would be their policy from then on to insist upon the trial of each case to a jury and to a final determination in the Supreme Court and that no cases would be permitted to be grouped. This policy of the Administration, in view of the then conditions, amounted to a denial of justice, for they well knew that the claimants in their destitute condition were powerless to continue such an unequal fight against the United States Government.

Prior to the grouping of these cases, it was specifically announced that the Administration wanted some determinative adjudication-something that would be outstanding, and for that reason the Cloquet cases were grouped because they afforded an excellent opportunity to determine a large amount of damages and broad scope of territory and so afforded as good a defense as the Administration had hoped to present in any case. We were also advised that if the claimants succeeded in that case they would be paid 100 cents on the dollar for their losses, but if they were defeated, the Government would pay nothing, and it would practically determine the controversy.

We found a reversal of announced policy and a change of attitude on the part of the Administration when they were defeated in the Cloquet cases. The Railroad Administration's subsequent conduct indicated very clearly that it was intent upon making as small a settlement as possible with the claimants. They were in a position to force such settlement and proceeded to do so. When judgments were entered in the various cases demand was made for payment and payment was refused. Under the Federal statutes, the Director General was instructed to promptly pay final judgments. This he refused to do.

In the fall of 1921, after final determination in the Cloquet case, the Director General proposed a somewhat general settlement in which he insisted that all determined cases be included and offered 50 percent of the net loss, provided everybody accepted the settlement; otherwise no one was to be paid. In this proposal he stipulated further that each claimant must prepare and file with him an itemized, verified statement setting forth in great detail each item of loss.

As I have indicated, claimants were in great distress-many were living on charity. They knew that the Government could continue litigation indefinitely and any settlement that would give them partial relief, they were compelled to accept.

The fact that they were not permitted to levy an execution to enforce payment of their judgments was a determining factor in compelling this settlement. After their acceptance of the proposal, they filed verified statements of loss, and the railroad claim agents and investigators carefully examined and scrutinized the claims, and the Administration itself, contrary to the desire and wishes of the claimant, fixed and determined the amount of the amount of the loss.

Then they applied the 50 percent to such determined amount. The result was that in practically every instance claimant did not receive in excess of 25 percent of his actual loss.

What your bill proposes to do, as I understand it, is to provide for the payment to these claimants whose losses were absolutely adjudicated, the remainder of the amount the Government determined they lost. It is not a case of the ordinary railroad settlement where a claimant insists upon a large amount and a compromise amount is agreed upon and then paid in full.

These claimants were first compelled to itemize and verify their loss, then the railroad, ofter a complete investigation, arbitrarily determined the amount of the loss and then paid them only half of that determined amount.

I know that it is hard for anybody who did not actually go through this litigation and know the terrible conditions that existed to understand the nature of this transaction. I do not hesitate in saying that, in my judgment, this amounts to coercion and duress arising from necessity and poverty and the unequal position of the litigants. The Railroad Administration had a revolving fund of $300,000,000 out of which these claims could be paid. They spent in the neighborhood of a million dollars defending the cases. The litigation continued over a period of about 7 years. The Administration absolutely refused to even make an offer of settlement in any district where adjudication was not had and liability fixed.

It is difficult to make a brief statement of the facts touching these cases. The fire extended over some 1,500 square miles of territory-more than 7,000 homes were destroyed-more than 500 persons lost their lives; upwards of 2,000 persons were so badly injured that they needed medical attention.

No one who knows the facts can fail to sympathize with these people and their cause.

When they come before Congress asking for the remainder of their loss, as determined by the Railroad Administration officials, they are only asking for justice. When this amount is paid in full, the Government will have made a fair settlement of these losses.

The thing that appeals to me particularly in this situation is that in the first instance the Railroad Administration invited a determination by the district judges and the courts of Minnesota, of the question of liability, and when that question was determined they absolutely ignored the findings of courts of our State.

I do hope this statement may be of service to you in bringing this just cause to the attention of the Congress in the interest of the people of Minnesota.

Respectfully yours,

JOHN P. DEVANEY, Chief Justice Minnesota Supreme Court.

Mr. HOIDALE. I submit to you that where the Senate Committee on Claims favorably reported this bill and it was afterward passed by the Senate; where the House Committee on Claims conducted a most exhaustive hearing of this matter, making a record of more than 400 printed pages, and rendered a favorable report; where the Attorney General of the United States, after careful investigation, reported that the bill is meritorious, although he did say that there is not legal claim, in which opinion of the Attorney General the President himself concurs, there may be some question in your mind as to why the Attorney General of the United States went into this subject. It came about in this way: This question has been a sore one and has been a heavy load for the people of northern Minnesota, who have always felt that they have been abused and ill treated, and had justice denied them. The people went to the Governor of Minnesota and asked him to help them, and the Governor wrote to the President and asked him if he would not please look into this matter, and explained that all the people of Minnesota asked was a fair and full investigation of the actual facts. We very much want the Members of the Congress to understand the facts involved. Our Governor asked the President to do that, and the President

turned the matter over to the Attorney General, who made an investigation. And, as I have stated, carefully-kept records of these claims are now in the office of the United States Railroad Administration.

Mr. MAPES. Did a representative of the Department of Justice appear before the Committee on Claims in connection with this case? Mr. HOIDALE. No; those hearings were held years ago. The investigation by the Department of Justice was conducted last December. Mr. MAPES. What is there to this rumor on the floor of the House when this matter was up on suspension of the rules that there were some fellows involved as lobbyists in connection with this bill?

Mr. HOIDALE. I do not know anything about that, except that these fire sufferers organized a fire-sufferers' association in Minnesota, and representatives of that association have been here in every Congress since 1918 trying to get this bill through. Those representatives have been here this year trying to get this bill through.

Mr. GREENWOOD. Are any attorneys' fees involved in the remainder of these claims?

Mr. HOIDALE. The usual provision regarding attorneys' fees is in this bill. It provides that not to exceed 10 percentum of the amount of the claim actually paid under this act shall go to attorneys.

I will leave with the committee these [indicating] records from the United States Railroad Administration, and pictures, and pamphlets. There are other members of the Minnesota delegation who wish to be heard at this time. Mr. Knutson is first.

STATEMENT OF HON. HAROLD KNUTSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

The CHAIRMAN. We shall be glad to hear Mr. Knutson.

Mr. KNUTSON. The gentleman from Michigan (Mr. Mapes) asked Mr. Hoidale as to the amount of individual claims filed by these farmers. I have here [indicating] a number of claims that have been selected at random, which give an idea of some of the individual amounts involved. One claim is for $13,134; another is for $23,976; another is for $20.429; another is for $12,000; and still another is for $11.000. And there are a number for $9,000, $8,000, and $7,000, and $6,000.

Mr. Hoidale called attention to the fact that the insurance companies will not recover anything if this legislation is enacted into law.

Mr. Cox. Would the insurance companies not come here after the enactment of this bill and demand relief.

Mr. KNUTSON. They have passed their losses on, and no Congress would entertain a proposal of that kind. If the insurance companies had any thought of that kind they would have been here long ago to prosecute their claims, because they amounted to a very considerable sum in the aggregate, several million dollars.

We

I very well remember that fire, that holocaust, and that period was, perhaps, the darkest one in the history of Minnesota. had not only that disastrous fire, but we had the "flu" epidemic also. These important considerations were added to the fact that we were then engaged in war. We were hard hit, so to speak, all round.