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After the original act was passed, protests came in. So on February 4, 1943, in the Revenue Aet, competitive subcontracts in the building industry, whether of a department of the Government, were exempt retroactively to April 28, 1942, which was the date of the enactment of the law. So it wiped everything back, clear back as far as some contracts in the building industry were concerned which were competitive.
Mr. DENTON. What construction work did you do?
Mr. STEER. I have them in the complaint. I will hand it to you (handing complaint to Mr. Denton).
Mr. Denton. Now, what did your profits show for this work?
Mr. LICHTER. I don't have that data with me. They were listed in the report We gave the Price Adjustment Section, the actual amounts. I don't recall by percentage-wise, but it varies not at all from the profits we made prior to that. time and the percentages and the profits made subsequent to that time.
Mr. DENTON. I note the total receipts were $710,000. Did you have any finding any place of what your profits were?
Mr. LICHTER. There were no findings. We gaev them our records and they examined our books.
Mr. DENTON. Do you know what your books showed as to what your profits were?
Mr. LICHTER. I do not at this time.
Mr. KEATING. Do you mean you have gone all through this litigation to the Supreme Court and you cannot give us any idea what your figures showed in the proceedings?
Mr. STEER. Mr. Keating, there has not been any litigation. We haven't had a hearing at all. I haven't had an original trial and I haven't had a review of the record. It has just been a summary judgment.
Mr. KEATING. You cannot give Mr. Denton any idea of the amount of profits your books show? fr. LICHTER. I could approximate but it would be purely a guess.
Of course, I have ideas but I don't like to give approximate figures and then later find they were different.
Mr. STEER. I never got to that point in this case. The Government filed a summary motion and that was the end of it.
Mr. KEATING. I cannot understand why in negotiations it was not brought out.
Mr. KEATING. Didn't the engineers at Cincinnati when you dealt with them go over your figures?
Mr. LICHTER. They verified the statement of receipts, expenditures, and profits that were made, and they acted presumably on that information.
Mr. KEATING. Didn't they tell you you had $710,000 of receipts, your expenditures were so much, and your profits were so much, and figured you were entitled to a certain profit, and that after a certain reduction for taxes you owed the balance to the Government?
Mr. LICHTER. They did not discuss it with me. All they said was, “This is your statement, and we find you should pay us $100,000.”
Mr. KEATING. Didn't you ask what percentage?
Mr. LICHTER. They set it, and they gave the glassy stare. They brought out another man from another room. He came out and he said, "I cannot tell you."
Mr. KEATING. Didn't he tell you about these figures voluntarily? Mr. LICHTER. That it was to be a voluntary payment of $100,000 that they asked me to pay, less taxes, voluntary. I could not help it and pay "voluntarily."
Jr. DENTON. In all of these subcontracts that you had, did you have a provision in there for renegotiation?
Mr. LICHTER. No, sir, Mr. Denton; neither in the subcontract or the prime contract was there a provision for renegotiation; and furthermore, a number of the contracts were for less than $100,000, which were specifically excluded under Mr. KEATING. To the number of nine? Mr. LICHTER. Yes; they were less than $100,000, and the price adjuster insisted on including them in the figures and a portion of our funds would be refunded because the law says contracts over $100,000 would be considered. In other words, there were a number of reasons why I could not agree with that.
Mr. STEER. Technically that $100,000 thing was amended in 1942 to permit renegotiations on a group basis; but remember that the original act said all contracts under $100,000 were exempt, but we never got to that point in court. We never got there because there was no trial on the thing. The court said, “We just can't listen to it.”
Mr. DENTON. What I was rather interested in was the amount of the profits, if you had the figures, and how you arrived at it and what the over-all figure was.
Mr. Lichter. I cannot tell you how they arrived at their figure because they refused to discuss it. They said they wanted this much money.
Mr. DENTON. Who were the officers?
Mr. STEER. Originally they were assigned to the Engineer Price Adjustment Board. Subsequently there were meetings in Washington, and twice they came to Cincinnati and had meetings with me, coming from Washington at one time; an officer and civilian came in and examined the books for a few days.
Mr. Denton. Now, when you were called in before this Readjustment Board, was that in Columbus?
Mr. LICHTER. Yes, sir.
Mr. Lichter. Colonel Van Der Wert-I don't remember the names of the others. I think there was a Major Hays for one, and two civilians—two civilians whose names I don't recall. I image I have them in the record. Colonel Van Der Wert was in charge, and he was conducting the meeting. His name, of course, I recall.
Mr. STEER. I regret that we cannot furnish that. I just did not think it pertinent here.
Mr. Denton. I think it is kind of an equitable question.
Mr. KEATING. This question of the constitutionality of the act was raised in all these three cases which went up at one time?
Mr. STEER. Yes. Mr. KEATING. This specific defense was available only in your case? Mr. Steer. That is right. I know of no other person in Mr. Lichter's position. There may be, but I do not know.
Mr. KEATING. I must say that your presentation places quite a different light on the matter from reading the letter from the Secretary of the Army, because in my judgment he has not presented to us the facts at all fully or in any sufficient way that we could reach a determination in this matter.
He has talked about the constitutionality of the statute and all he says about this case is that “Mr. Lichter contended that the Renegotiation Act was unconstitutional and that, in any event, for various reasons it was not applicable to the nine subcontracts of the Southern Fireproofing Co.”
Then all the way through he talks about the constitutionality, and ends up with saying that if this claim were allowed it would constitute legislative discrimination against other contractors. Now, from your statement there are no other contractors.
Mr. LICHTER. I know of none.
Mr. KEATING. That you know of none similarly situated, and thus if that is true it would not constitute preferential treatment.
I am very favorably impressed with your presentation. The equitable case was presented, but in the face of this letter from Secretary Royall and the express statement that, “The Bureau of the Budget advises that there is no objection to the submission of this report since the enactment of this bill would not be in accordance with the program of the President," I am very fearful, whatever the Congress did, your bill would be vetoed by the President; but I am very much impressed with the presentation you gentlemen have made.
Mr. DENTON. What do you want, to bring this in the Tax Court?
Mr. STEER. I studied it for a long time. I don't see how you can let down bars to let this go to the Tax Court or Court of Claims.
Mr. KEATING. Why couldn't we confer jurisdiction on the Tax Court to handle?
Mr. STEER. Maybe you could. There is no present provision to do it. You could refer it to the Court of Claims.
Mr. KEATING. We do that; it has been done. In some instances we have conferred jurisdiction on the Court of Claims. I would be inclined to think that such a bill would be more likely to get by the White House than one which allowed the claim.
Mr. STEER. You are familiar, of course; but in regard to the Court of Claims, if I remember rightly, that new section of the district court, which is 2509, I think, provides that you have the right under that legislation to refer only claims in which the Court of Claims would otherwise have jurisdiction.
Mr. KEATING. You have paid the amount?
Mr. KEATING. You have paid the judgment; no, I suppose it would be the Court of Claims on which we would have to confer jurisdiction rather than the Tax Court.
Mr. STEER. Yes.
Mr. KEATING. But if we favorably report a bill conferring jurisdiction on the Court of Claims, that would do away with any jurisdictional question. We frequently have down that here, where there was doubt about the merits.
Mr. STEER. That is true. That section of the Judicial Code says "any department." That is right; yes, you could by a bill confer jurisdiction on the Court of Claims.
Mr. DENTON. We have been doing it.
CONFERRING JURISDICTION UPON THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN TO HEAR, DETERMINE, AND RENDER JUDGMENT UPON THE CLAIM OF EDWARD GRAY, AND OTHERS
JULY 7, 1949.—Committed to the Committee of the Whole House and ordered
to be printed
Mr. FRAZIER, from the Committee on the Judiciary, submitted the
(To accompany H. R. 7521
The Committee on the Judiciary, to whom was referred the bill (H. R. 752) to confer jurisdiction upon the United States District Court for the Eastern District of Michigan to hear, determine, and render judgment upon the claim of Edward Gray and others, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.
This bill is merely to confer jurisdiction upon the United States District Court for the Eastern District of Michigan to hear, determine, and render judgment, as if the United States were suable in court, upon the claim of Edward Gray, Sr.; Edward Gray, Jr.; Bertha Mae Gray; Bertha Patmon; and Lindsay Gardner, all of the city of Hamtramck, Wayne County, Mich., against the United States for loss and damage sustained when the automobile of Edward Gray, Sr., was struck by a truck owned by the United States at Camp Custer Military Reservation, at the corner of Gallagher and Jacob Avenues, in the city of Hamtramck, on the 28th day of June 1942.
Your committee finds circumstances and evidence in the file very conflicting and is of the opinion that these claimants should be given their chance in the courts and, therefore, recommends favorable consideration to the bill.
MAY 5, 1945. Hon Dan R. McGEHEE, Chairman, Committee on Claims,
House of Representatives. DEAR MR. McGEHEE: The War Department is opposed to the enactment of H. R. 1982, Seventy-ninth Congress, a bill conferring jurisdiction upon the United States District Court for the Eastern District of Michigan to hear, deter
H. Repts., 81-1, vol. 5—8