(An American Tragedy)

Donald K. Muschany


A Plea To Reduce The Fee

     Mr. McDowell, at this particular time, found himself very open to criticism. He was asked to take a reduction in his commission or percentage of take and his reply to Under Secretary of War, R. P. Patterson is hereby reproduced, followed by a letter that he sent to the unpaid landowners:

          “Mr. R. Newton McDowell
           Midland Building
           Kansas City, Missouri

Reurtel March 11 To Harry Hopkins Relative To Weldon Springs TNT Plant Near St. Louis Serious Questions Which Have Arisen Concerning This Project Including Lack Of Appraisals And Excessive Prices Resulting In Widespread Criticism of War Dept. Require That Matter Of Payments Be Submitted For Consideration Of Federal Court Authorities This Policy Adopted Only After Exhaustive And Careful Consideration Your Refusal To Accept Proposed Reduction In Amount Of Commission In No Way Influenced Determination Of Policy To Resort To Condemnation Proceedings Estimated Compensation To Owners Will Be Deposited In Court Within Few Days And Immediate Partial Distribution Can Be Made In Discretion Of Judge The War Dept. Will Welcome Any Offer On Your Part To Cooperate On Renegotiation Of Options At Prices Which Will Warrant Closings On Acquisitions By Direct Purchase And Will Consider Any Offer From Owners Prior To Conclusion Of Condemnation Proceedings.”

“Honorable R. P. Patterson
Under Secretary of War
Washington, D. C.

Reference Your Last Nights Wire Weldon Springs Project. Know Nothing In Law Or Authorizations Requiring Appraisals. Would Appreciate Citation To Requirement. You Will Recall OBriens Investigating Appraisers Reported Would Require Three Months To Appraise Fifty Tracts. I Was Acting According To Written Instructions And Policies Approved By War Department Emphasizing Necessity Of Speed And Expressed Desire Avoidance Condemnation And I Persuaded Landowners In Mass Meeting At Outset To Execute Options With Full Approval Justice Department And War Department Representatives Against Opposition Some Fourteen St. Louis Lawyers Agitating Landowners Hold Out For Condemnation. My Average Option Prices Including All Cost To Government Of $114 Per Acre For Agricultural Land And $159 For Entire Project Including Towns Schools And Church Property Compare Favorably With Any Other Projects Handled By Any Governmental Agencies Or Condemnations. Glad To Note That My Commission Which Was Fully Discussed With Everybody Concerned Including Some Eight Hundred Landowners Attending Mass Meeting At Outset As Well As All Governmental Representatives Had Nothing To Do With Present Intention To Resort To Condemnation. As To Possible Renegotiation Of Options Must Adhere To My Original Recommendations That Option Prices Fair And Reasonable. If Our Governments Signed Original Contracts Openly And Fairly Negotiated Are Lightly Repudiated As Mere Scraps Of Paper How Can You Expect Citizens To Negotiate Further Contracts. Obviously They Would Require Ample Margin To Cover Similar Contingencies. I Used Argument Of Patriotism Strongly But It Is Now A Bit Tarnished. Some Lands Held By Fiduciaries Who Can Not Relinquish Binding Contracts And Take Less. Numerous Landowners Have Made Commitments On New Homesites To Which They Were Forced And Now Cannot Meet Payments. They Are Not Sympathetic To Being Made Refugees In Furtherance Of Governments Seven Billion Dollar Program To Prevent European Peoples Becoming Refugees. Sincerely Regret Embarrassment To You Occasioned By Fact Your Subordinates Took Ill Advised Snap Judgment That Because Abuses May Have Occurred In Other Projects Elsewhere They Occurred In Mine Which Was Clean As A Whistle And I Have At All Times Welcomed Fullest Investigation By Impartial Competent Investigator. Suggest Most Satisfactory And Honorable Solution For War Department To Announce That Its Written Contracts With Its Own People Are Binding And Dependable And Will Be Honored Not Repudiated. I Am At All Times Anxious To Cooperate With War Department.


Midland Building
Kansas City, Missouri

          Land Optioner for                                                                                                                              126 South Main
          United States War Department                                                                                                 St. Charles, Missouri


     I enclose herewith copy of a wire I received from Under Secretary of War Patterson and my reply.
     I negotiated your option in good faith and it was accepted by the War Department. I could make a speech for hours on the subject of the Government repudiating its obligations but apparently the powers that be are not impressed with this line of reasoning.
     I have been wondering whether or to what extent some of you would suffer by reason of condemnation proceedings which have been announced by the Under Secretary of War. Obviously this will impose on you the burden and expense of lawyers’ fees, expert witness fees and possible appeals by the Government—also Government counsel claims that no disturbance damages will be allowed if the condemnation proceedings go through. All this is of course utterly unjust and a matter for which neither you nor I is responsible.
     You will note that the Under Secretary of War has asked me to cooperate in renegotiating lower prices on accepted options and you will note my reply. Therefore I am not urging you to do anything. You know the state of your own affairs. You know how badly you need money immediately. It may be better for you to take a realistic view of this thing and determine in your own mind whether or not you can afford to carry on this legal fight or whether it would be advisable for you to offer to the Government a reduction of 10% or 20% or whatever percent you are willing to take on your present option price providing the Government will pay you the cash within ten days. This is not a trading affair. You will have to determine your percent and stand on it.
     I understand condemnation proceedings are to be filed immediately and time is the essence—whether or when they will be I do not know. Therefore I authorize you to wire me collect as follows:

     Pursuant to your letter of March 20 you are authorized to transmit to War Department that I will agree to a        % reduction in my option contract price previously accepted by the War Department.

Signed ______________________________

     I repeat I am not urging you to do anything and I have exhausted myself on the subject of repudiation of obligations by the Government.

Yours very truly,
R. Newton McDowell”


     Plans for a mass meeting of landowners whose property has been optioned to the War Department for the proposed TNT plant at Weldon Springs were canceled yesterday as sentiment appeared unanimous against the suggestion of R. Newton McDowell that they consider lowering their sale prices as a means of speeding government payment.
     McDowell, Kansas City real estate man who contracted with the government to assemble options on the 16,300 acres at a 5 per cent commission, last week wrote the 146 unpaid owners they might emerge with more profit if they cut prices rather than bear the expense of going through the threatened government condemnation proceedings.
     He requested his St. Charles office be notified of any reduced figures acceptable. Yesterday that office had received only eight replies, all negative. Among the eight were several telegrams bearing only ‘0.’ St. Charles spokesmen said others had decided merely to ignore the request.


     McDowell Informs U. S. Office 144 Others Have
     Refused to Accept Less.

     Only two of the 146 unpaid landowners who sold their property to the War Department for the TNT plant site at Weldon Spring will accept a reduction in the price previously agreed on. R. Newton McDowell, Kansas City contractor who acted as the department’s agent in obtaining options for the 16,300-acre tract yesterday informed J. J. O’Brien, chief of the real estate section of the Quartermaster General’s office at Washington.
     McDowell, in a telegram to O’Brien said he had sent letters to all of the landowners and had seen most of them in person or reached them by phone and that all except two refused to accept reductions.
     The owners were consulted by McDowell after he received a telegram last week from Undersecretary of War Robert M. Patterson in which Patterson said the department had decided to start condemnation proceedings on the land on which it had not exercised its options.”

     The St. Louis Star Times newspaper, under dateline of April 1, 1941, printed the following article under the headlines, “Purchase of TNT Site To Be Probed By House Group:”
     “The House Military Affairs Committee, after a lively session today in which R. Newton McDowell was sharply criticized, decided to make a full investigation of the purchase of the 16,300-acre tract of land in St. Charles County, Mo., for the government-owned TNT plant.
     The committee, following testimony by Brig. Gen. Brehon Somervell and John J. O’Brine (sic), attorney in the land division of the war department, recessed until Thursday. Somervell, who is in charge of construction for the army quartermasters’ corps, and O’Brine were instructed to return and Col. R. D. Valliant, who negotiated the contract with McDowell for acquisition of the TNT plant site, also is likely to be summoned.
     An unsuccessful effort was made today by the committee to determine who handed McDowell the ‘fat plum’ through which he stood to obtain a $150,000 fee, plus a $40,000 fee for the Kansas City Title Insurance Co., which he personally selected to abstract the tracts on the site.

Went to Washington.
     Somervell and O’Brine testified their inquiry had established only that McDowell came to Washington early last fall, contacted the ordnance division of the War Department and was advised of the plan to construct the TNT plant. They said McDowell was advised to see Col. Valliant. This he did and the signing of the contract followed.
     Valliant, the witnesses said, declared he didn’t know McDowell before but had established that he was favorably known by War Department engineers before entering the contract.
     Chairman Andrew J. May and Congressman Charles Faddis observed that ‘entree for McDowell at the War Department must have been much easier than for congressmen or senators.’ Faddis pressed O’Brine as to McDowell’s explanation of whom he contacted in the ordnance division.
     ‘We tried to find out, but McDowell said he couldn’t remember,’ O’brine replied.
     ‘He had a rather convenient memory,’ remarked Faddis.
     Congressman Charles Elston interrupted to ask the witness:
     ‘Do you think anybody who had heard this story is so gullible as to believe it?’
     O’Brine said he couldn’t answer.
     Gen. Somervell, disclosing the department’s displeasure over its dealings with McDowell, revealed for the first time that it will furnish counsel to any landowners who decline to pay the 5 per cent commission to McDowell which was fixed under terms of his contract entered with Col. Valliant as the government’s sole representative in the transaction.
     Somervell placed McDowell’s fees at $50,000, explaining that he didn’t expect the contractor to collect fees on the 10,000 acres in the tract the government is now seeking to acquire by condemnation.

$1,000,000 Already Spent.
     Approximately $1,000,000 already has been paid to 121 landowners. Most all payments, Somervell said, were approved by Col. Valliant before he was transferred to a quartermaster depot in New York.
     Somerville said he asked Valliant’s transfer because he thought the work could be handled better by someone else. He testified that McDowell admitted at a conference with O’Brine and others that $50 to $75 an acre was a fair price for land in St. Charles County, whereas he bargained to pay an average of $159 an acre for the plant site in the interest of speed.
     Chairman May declared the letter McDowell sent landowners last October informing them of his appointment as agent to acquire the land ‘was an invitation to hold the government up.’
     Somervell agreed with committee members that it was ‘a most regrettable situation’ under which some owners were paid, while others were forced to go through condemnation proceedings, but insisted there was no alternative unless the government was to pay ‘unreasonable and unjust prices’ for the land.

‘Mistake Made.’
     ‘I don’t want to pay out twice as much as the land is worth,’ Somervell said. ‘A mistake has been made, either through carelessness or intent, and higher prices than justified have been fixed. We’ve elected to go into courts to get a fair determination of land prices. It would be dishonorable to do otherwise.’
     Several members, including Congressmen Faddis and Dow Harter, remarked that it was difficult to reconcile the different treatment accorded part of the landowners. They felt such a course worked an undue hardship on farmers not yet paid, but Somervell insisted he felt the department had elected to pursue the only feasible course under the circumstances.
     Chairman May agreed, saying, ‘There was established here a relationship of principal and agent between the government and McDowell. It turns out a confidence was betrayed and the government was soaked. I think you (Somervell) have followed proper procedure. You may be able to establish that a fraud was perpetrated on the government.’

U.S. Takes Title to Five Tracts.
     Owners of five parcels of land in the TNT plant area at Weldon Springs, title to which was taken by the government yesterday, have ten days in which to file exceptions to the prices paid into federal court registry for the land by the government, it was explained today at the office of United States District Attorney Harry C. Blanton.
     Altogether, the government paid in $27,559 for 487.78 acres of land in the five tracts when it filed declarations of taking title. The declarations were filed by Blanton on instructions from the Department of Justice at Washington, and were signed by Secretary of War Henry L. Stimson.
     Taking of the title to the land, however, is absolute and final, it was said. The only recourse to the owners now is to contest the prices paid into the court.
     Following are the owners of the five tracts, their acreage, and the prices paid into the court by the government:

     Grover Cleveland Silvey, and others, ten acres, $1,875.
     Oscar L. Snyder and others, 170 acres, $7,604.
     Mertia Callaway and others, 94.68 acres, $3,860.
     Tarlton Woodson and others, 160.99 acres, $9,120.
     George C. Willson and others, 52.11 acres, $5,100.”

     The newspapers were having a hey-day trying to keep up with the events that were taking place. One can image the bewilderment of the people of the area.
     The St. Louis Globe Democrat ran an editorial on Thursday, April 3, 1941, and expressed the opinion of a big city newspaper. Here’s what they said:

     The unpaid landowners in St. Charles County who surrendered their property to the government to make possible the erection of a TNT plant are in an angry mood, and no one should blame them. They have been left ‘holding the bag’ and they don’t relish it. Consider the steps:
     As an emergency defense project, the government decided to build an explosives manufacturing plant in the Weldon Springs area in St. Charles County. The residents’ first objection is that they weren’t consulted, were not permitted a voice in the matter. They were first aware of the proposed building when a Kansas City real estate agent appeared in their midst and announced he was there to appraise their property for immediate sale to the War Department. Their second objection was that an ‘outsider’ from Kansas City had been sent in to make the appraisals when there were several agents in St. Charles better equipped because of their acquaintance with property values in the area.
     The ‘outsider’ went ahead with his appraisals, which were unusually high. One explanation of the excessive figures is that the agent was paid a 5 percent commission on every sale made to the government. Many sales were made under protest, as numerous properties had been in single families for generations. Cemetery removal was another item. But after much palaver and signing of contracts the area was acquired in toto by the War Department and promises to pay given. So the residents sought new home sites. Most of them purchased other farms, others small business properties. Some gave down payment. Others showed their bill of sale to the government and employed it as earnest on new property. In all, 250 landowners pulled up stakes—and awaited their checks from Washington.
     But not all the checks arrived. Some 120 landowners were paid in full or in part, but 149 are still ‘holding the bag.’ The War Department suddenly decided the appraisals were too high. repudiated in effect all previous agreements and has now resorted to condemnation proceedings. All of which leaves the landowners with nothing to show for their transfer and the prospect of eventually selling to the government at a reduced figure via the condemnation route. And many of them are about to lose their down payments elsewhere because they cannot complete the sales.
     It’s pretty dreary business all around in which sympathy goes to the St. Charles County folks who didn’t want a TNT plant in the first place. The War Department’s belated discovery that it had contracted to pay an excessive price for various properties does not nullify the fact that the landowners dealt with one of its appointed agents. The matter has been discussed in Congress and something may be done. It certainly should be.”