corner of the intersection, which no doubt prevented an overturn and possibly causing serious injuries to the occupants. I later learned the other automobile was a Chevrolet, Service No. 134080, used as an Army staff car at Brookley Field, Mobile Air Material Command, and was operated by Pvt. Harold G. Lichtenstein No. 42061454, who was attached to Brookley Field. Private Lichtenstein stated had used the car to take some officers to lunch and was returning to Brookley Field; that he had not stopped at the intersection as he had failed to observe the "Stop" signs. He notified his superior officers, who upon arriving at the scene assured me that the repairs to my wife's automobile would be cared for, and with this assurance I did not press charges for violation of local traffic laws against the driver of the Army automobile. I have since endeavored to obtain reimbursement for repairs to the car, though without success. I have read the above statement and to the best of my knowledge and belief swear that same is true and correct PAUL LARTIGUE Subscribed and sworn to before me this 16th day of February 1948. (SEAL W. A. KNOX, W. L. M. KNOX, AND FRANK C. MORRIS, OPERATING AS KNOX LUMBER SALES CO., OF THOMSON, GA. JUNE 4 (legislative day, JUNE 1), 1948.—Ordered to be printed Mr. WILEY, from the Committee on the Judiciary, submitted the following REPORT [To accompany H. R. 636) The Committee on the Judiciary, to whom was referred the bill (H. R. 636) for the relief of W. A. Knox, W. L. M. Knox, and Frank C. Morris, operating as Knox Lumber Sales Co., of Thomson, Ga., having considered the same, do now report the bill to the Senate favorably, without amendment, and recommend that the bill do pass. The purpose of the proposed legislation is to pay the sum of $10,543.85 to W. A. Knox, W. L. M. Knox, and Frank C. Morris, a partnership doing business as Knox Lumber Sales Co. The payment of such sum shall be in full settlement of any and all claims of the said W. A. Knox, W. L. M. Knox, and Frank C. Morris against the United States arising out of loss to them by reason of failure of the Central Procurement Agency of the Army Service Forces to properly advise claimants how to ship 12 cars of lumber. STATEMENT Attached hereto and made a part of this report are extracts from the House report which set forth in detail the facts in this case: On February 24, 1944, the War Department entered into a lump-sum contract (No. W. 37-018-(MSP)-187) with the Campagna Construction Corp., Easthampton, Mass., for the manufacture and delivery to the Department of a quantity of portable hospital barracks. To enable the Campagna Construction Corp. to obtain, without delay, the necessary lumber for the contract the Central Procurement Agency of the Army Service Forces in March 21, 1944, sent a list to Charlotte, N. Č., for the purchase and allocation of 4,982,900 feet of lumber, said list carrying the notation: "Sight draft with bill of lading on First National Bank, Hartford, Conn." Of this quantity 889,000 feet was allocated to the Atlanta, Ga., office, of which 655,000 feet was let through the Macon, Ga., office to Knox Lumber Sales Co., a partnership consisting of W. A. Knox, W. L. M. Knox, and Frank C. Morris. An investigation on the part of Central Procurement Agency revealed that the Campagna Construction Corp. was not in a strong financial condition, which caused the notation to ship so as to retain title in vendors until draft covering invoice had been paid. For some unexplained reason, this notation as to shipping sight draft with bill of lading attached was left off the allocation to Atlanta, which fact was admitted by Central Procurement Agency in letter to vendors from Lt. W. F. Walker, dated February 7, 1945. The Knox Lumber Sales Co. had previously furnished to the United States Government directly and to Government contractors, through the Central Procurement Agency, large quantities of lumber. Shipments had been made open with title passing immediately to consignees, which method of shipment was advantageous to both parties. Previous to the Campagna shipments there had been no loss whatever to Knox Lumber Sales Co., for the reason that only vendees sound financially had been submitted to the vendors. Had Knox Lumber Sales Co. received the information that went to other shippers of lumber on this Campagna contract, which would have been received were it not for the oversight on the part of Central Procurement Agency, shipments would have been made order notify, with sight draft attached to bill of lading, which would have fully protected vendors against the loss in question. Pursuant to this allocation 12 cars of lumber were shipped by vendors to vendee under Central Procurement Inquiry No. AE-39320-CA; Campagna Purchase Order No. 1317, the aggregate net amount of said invoices being $14,058.49. All shipments were made open, and none of invoices were paid by vendee, for the reason that before payment the Campagna Construction Corp. filed a voluntary petition in bankruptcy and arranged for a settlement with unsecured creditors, including Knox Lumber Sales Co. Upon the basis of this settlement of 25 percent of $14,058.49-$3,514.64-there was a net loss to vendors of $10.543.85 the amount of this bill. In due course the Knox Lumber Sales Co. presented a claim for this loss in the amount of $10,543.85, which was denied by the Comptroller General as follows: "Accordingly there appears to be no legal basis for the allowance of your claim; and since this Office has no authority to approve payments from public funds solely upon moral or equitable grounds. the settlement of October 23. 1945. must be, and is, sustained." The settlement of October 23, 1945, was the disallowance by the General Accounting Office of claim for $10,543.85. The Secretary of the Army, in his report to the chairman of the Committee on the Judiciary, House of Representatives, takes the same general position as that taken by the Comptroller General, but his report does set forth the facts substantially as stated by Knox Lumber Sales Co. The record shows that when financial distress overtook the prime contractor, it became necessary for the Army to make available a large sum of money so that lumber standing in the yards, and which could not be unloaded until drafts were paid, were made available for the completion of these contracts. The Knox Lumber Sales Co.'s 12 cars would have been paid for in this manner if same had been shipped order notify, with bill of lading attached to draft; but because of open shipments and title having passed when received by common carrier, these 12 cars of lumber were immediately available with only payment of freight. This was of additional advantage to the Government, as set forth in letter to vendors from Col. W. J. Truss, of district engineers, March 14, 1945. A full investigation of the facts and circumstances of this claim and the evidence adduced at a hearing before a subcommittee of this committee shows that 1. That it was the intent of the War Department through the Central Procurement Agency to give to all shippers the benefit of its investigation of financial standing of prime contractor. 2. That this information with instructions to make shipments so as to protect the shippers against loss through failure of prime contractor to pay invoices for open shipments was given to other shippers but, through inadvertence, was not given to Knox Lumber Sales Co. 3. That the United States Government, through the War Department, had to put up the money to pay for large quantities of lumber shipped according to instructions and which drafts were not paid by Campagna Construction Corp. 4. That the Government did not pay anything for the 655,000 feet of lumber shipped by Knox Lumber Sales Co., but that shipper suffered a loss of entire amount, less 25 percent received in compromise settlement with the bankrupt, his net loss being the amount of this bill-$10,543.85-the proximate cause of which loss was the failure of the Central Procurement Agency to give proper instructions as to how to ship. 5. That the 12 cars of lumber shipped by Knox Lumber Sales Co. were made available for use on this Government contract after financial failure of prime contractor without the Government having to furnish the money to pay drafts, and this was of additional advantage to the War Department in saving time ordinarily required in locating and shipping lumber to complete the new contract. Therefore your committee feel that W. A. Knox, W. L. M. Knox, and Frank C. Morris are entitled to the net loss to them caused by the oversight on the part of a Government agency and recommend the passage of H. R. 636. Hon. EARL C. MICHENER, Chairman, Committee on the Judiciary, DEPARTMENT OF THE ARMY, Washington, D. C., January 26, 1948. House of Representatives. DEAR MR. MICHENER: The Department of the Army is opposed to the enactment of H. R. 636, Eightieth Congress, a bill for the relief of Knox Lumber Sales Co., Thomson, Ga. This bill provides as follows: "That the Secretary of the Treasury is authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to Knox Lumber Sales Company, of Thomson, Georgia, the sum of $10,543.85, in full satisfaction of its claim against the United States for compensation for balance due to Knox Lumber Sales Company for lumber shipped to Campagna Construction Company, Incorporated, Easthampton, Massachusetts, as directed by the War Department, pursuant to an allocation placed with Knox Lumber Sales Company through the Central Procurement Agency, Office of the Chief of Engineers, War Department, the Central Procurement Agency having failed to advise the Knox Lumber Sales Company, prior to shipment, of the financial condition of the consignee." On February 24, 1944, the War Department entered into a lump-sum contract (No. W-37-018-Eng (MSP)-187) with the Campagna Construction Corp., Easthampton, Mass., for the manufacture and delivery to the Department of a quantity of portable hospital barracks. Thereafter, on May 25, 1944, the Government issued a purchase allocation which authorized the Knox Lumber Sales Co., Thomson, Ga., to sell 655,000 feet of lumber to the Campagna Construction Corp. This purchase allocation specifically provided that the lumber was "not for Government account," that purchase orders would be issued to the vendor, Knox Lumber Sales Co., by the prime contractor, Campagna Construction Corp., and that the lumber would be invoiced by the vendor to the prime contractor. Subsequently, the lumber was sold and delivered by Knox Lumber Sales Co. to the prime contractor, and invoices for the same were forwarded to the contractor in accordance with the purchase orders issued by it. Before payment thereon was made, the Campagna Construction Corp. filed a voluntary petition in bankruptcy, under the provision of chapter XI of the Bankruptcy Act of June 22, 1938 (52 Stat. 905; 11 U. S. C. 701), and arranged for a settlement with unsecured creditors, including Knox Lumber Sales Co., upon the basis of the payment of 25 percent of the amounts due. Pursuant to that arrangement, Knox Lumber Sales Co. received the sum of $3,514.64 of the total amount of $14,058.49 due it for lumber, thereby sustaining a loss of $10,543.85, the amount which would be awarded under this bill. The present claim is predicated upon the fact that the Central Procurement Agency, before transmitting to its branch offices the list of lumber to be procured, investigated the financial rating of the prime contractor and, not finding such rating to be satisfactory, inserted a clause in the list to the effect that terms were to be "Sight draft with bill of lading on First National Bank, Hartford, Conn."; that, through inadvertence, this information was not conveyed to the branch office at Atlanta, Ga., through which the purchase allocation was issued to Knox Lumber Sales Co.; and that, therefore, the latter was not advised by the Government of the prime contractor's straitened financial condition, had no notice thereof, and made the shipments of lumber on open account, with the resulting loss. While the purchase allocation authorized Knox Lumber Sales Co. to furnish the lumber in question to the Campagna Construction Corp., the prime_contractor, this did not result in the creation of any contractual obligation to Knox Lumber Sales Co. by the United States. The lumber was delivered by Knox Lumber Sales Co. to Campagna Construction Corp. pursuant to purchase orders issued by the latter to the former. There was no legal obligation, nor business custom, which required the United States to notify Knox Lumber Sales Co. of |