THE RAPE OF
HOWELL AND HAMBURG, MISSOURI
(An American Tragedy)
by
Donald
K. Muschany
COPYRIGHT © 1978 BY DONALD K. MUSCHANY. ALL
RIGHTS RESERVED.
4. RESORT TO THE COURTS
Trial Testimony
There was no question that test cases
would be tried in the Federal District Court. Three cases were selected. You
may rightfully assume that the Government selected the three in which they
thought they could win a favorable decision.
The appellant in all three cases, of
course, was the United States of America. The attorneys representing same were
Harry C. Blanton, United States Attorney; Russell Vandivort, Assistant U.S.
Attorney; and Drake Watson, Special Assistant. The appellees were (1) James
Karl Muschany & Vera Muschany; (2) William M. Andrews & Bertha L.
Andrews; and (3) Mertie Callaway. The attorneys for the defendants, the
Muschanys, was William R. Gentry; the Andrews and Callaway were Samuel M.
Watson, Webster R. Karrenbrock, Redick O’Bryan, James E. Carroll, C. Coburn,
Robert V. Niedner and R. D. Fitzgibbon. The Judges in the District Court were
George H. Moore, Charles B. Davis, and John C. Collet.
The following pages are the findings and
some of the testimony in the District Trial Court which found that the Land
Option Contracts were valid. The U.S. Circuit Court of Appeals, of the Eighth
District, reversed the District Trial Court and its position is herein set
forth.
The reader should know that the U. S.
Circuit Court of Appeals of the Seventh District in which the United States v.
Grace Evangelical Church, a contract identical with the contract in question
here except as to purchase price, description, and names of owners was held valid
by a majority opinion while the opinion in the Eighth Circuit held the same
kind of contract invalid. Who Knows?
Three years later the U.S. Supreme Court
agreed the District Court had made a proper finding, the Land Option Contracts
were indeed valid, and the Government of the United States should be required
to pay the price stipulated in the option agreements. The highest court in the
land had spoken with authority and fairness.
These simple facts as stated above had
their beginning on December 3, 1940 when James Karl and Vera Muschany signed
the Option Agreement. Only after five years was the issue settled.
It was not until the October term of 1944
that the Supreme Court of the U.S. heard the appeal and rendered a conclusion
on this matter on February 5, 1945. My uncle Karl and aunt Vera did not receive
payment for their land until the year of 1945, and this was two days after the
Ordnance Plant had been informed to stop production and close the TNT Plant. It
was a rotten, stinking deal for the landowners.
I have endeavored to present the position
of the landowner, the position of the Purchasing Agent, R. Newton McDowell and
now I am privileged to present from the court transcript the testimony of Col.
R. D. Valliant.
As the transcript is read, you will know a
great deal more about the acquisition than the landowners did at the time they
were asked to sign their land options.
“Col. R. D. Valliant of lawful age, produced, sworn and examined, testified on behalf of the Government as follows:Direct ExaminationBy Mr. Blanton:Q. State your name, please.A. (Col.) R. D. Valliant, Colonel Quartermaster Corps, U. S. Army.Q. Where is your business or duty at this time, Colonel?A. Washington, D.C.Q. How long have you been in the Quartermaster General Department?A. Since about July 1, 1920.Q. During the year 1940, were you connected with that department, and particularly with the department charged with the acquisition of real estate?A. I was. I was Chief of the Real Estate Branch.Q. How long did you remain in that capacity with that title?A. From February 17, 1937, until February 4, 1941.Q. Among the projects which were handed to you for handling, was the Weldon Spring among them?A. The Weldon Spring Project was one of them.Q. How long had you known Mr. McDowell before this contract was given to him, Colonel?A. About three weeks.Q. Did you send for Mr. McDowell, or did he look you up?A. He looked me up; he was referred to me.Q. This Government’s Exhibit M-5 which has been offered in evidence here, that is the contract that you entered into with McDowell, is it Colonel?A. That is.Q. At least, that is a photostatic copy of it, I should say?A. That is a photostatic copy of it, bearing Mr. McDowell’s signature and mine on the last page thereof.Q. Now, Colonel, I will ask you if at the time you entered into this contract with McDowell, if the Department had any appraisals of this Weldon Spring property?Mr. S. Watson: If the Court please, object to that; it is entirely irrelevant, incompetent and immaterial whether or not there were many appraisals made of Weldon Spring properties, on the ground that the Secretary of War had the discretion to purchase this property under law providing for the transactions.Judge Collet: Overruled.A. They had no appraisals of the property prior to that time.Q. I wish you would state what procedure was followed in this Department when one of these options was received.Mr. S. Watson: If the Court please, I object to that on the ground that it has been shown here in the evidence that the documents were signed, the contracts were signed by Col. Valliant. The procedure that was followed in the Department is entirely irrelevant and immaterial, it not being competent to go behind a signature on the contract.Judge Collet: Overruled.Q. What procedure was followed by your Department when one of these options would be received in the Department?A. We had under way, in connection with the expediting of the National defense, about 108 separate projects totalling about fifty million dollars worth of property to be acquired. I had at my disposal three commissioned officers and about forty-one civilian employees, and the work was apportioned among certain ones of these employees. In the Acquisition Section there were seven men who were experts in their line of work, and to one of these the particular option would be assigned, depending on whether that was his case or not. His instructions were to examine it, to examine the papers that accompanied it and, if it appeared to him to be in accordance with the project and with the amounts that we expected we would have to pay for it in that region, to approve it and send it to me for signature.Q. I hand you the option in this Mertia Callaway case which seems to be 2596, and ask you if that is your signature on the acceptance on the bottom of that, Colonel?A. That appears to be my signature.Q. I also hand you Government’s Exhibit 765-1, which seems to be a letter accompanying that option, signed by Mr. McDowell and addressed to you.Mr. S. Watson: Object to that on the ground that it is improper and immaterial to go behind a signature of Col. Valliant on this contract. That is the only thing material in the case.Judge Collet: Overruled.Q. Were similar letters forwarded with each of these options, by Mr. McDowell, recommending the price set forth as the fair value to the United States?A. There were, but unless there was something unusual connected with the letter or with the case, the correspondence was not attached to the option, when it was presented to me for signature.Q. Did you have any independent knowledge of your own, other than what had been recommended to you, by Mr. McDowell, at the time these options were signed on these individual parcels, as to the value of this property?A. We were relying largely, but not entirely, upon the recommendations of Mr. McDowell in each particular case; but we had under way projects numbering about 2,000 individual parcels in this particular section of the country, and we were able to compare the price of one with the price of another.Q. When you say ‘in this particular section of the country,’ you didn’t have any more in the immediate vicinity of St. Louis, did you?A. I referred to the agricultural center of the country—Ohio, Indiana, Illinois, Iowa, and Missouri.Q. The only other one in Missouri was the one up here near Kansas City, was it not, Colonel, at Lake City?A. The only agricultural one; there was a City project in St. Louis.Q. That is the Small Arms Cartridge Plant?A. Small Arms Cartridge Plant, a City project.Q. How much under the original setup that you estimated this cost would be in dollars, had been allocated to this project?Mr. S. Watson: Object to that as entirely irrelevant and immaterial, the amount that had been allocated to this particular project having no bearing on this contract.Judge Collet: Overruled.A. No amount was estimated by my office for the cost of this project. The estimate was made by the representatives of the Ordnance Department, and the funds of their estimate were the ones that were allocated to us.Q. And what did that amount to originally when it was first selected?A. Without having any files in front of me to refer to I could only say my recollection on that. I think $1,800,000.Judge Collet: Will you speak louder? I could not hear that.A. I think it was one million eight hundred thousand dollars.Q. When these options did come in, what did they total, Colonel?Mr. S. Watson: Object to that as entirely irrelevant and immaterial what all these options totaled.Judge Collet: Overruled.A. Again I have to rely only on memory; I think it was something over two million dollars.Q. Wasn’t it approximately three million?A. It might have been somewhere between two and a half and three million dollars.Q. Colonel, did you reject any of these options other than this one which has been referred to as the Koldozey option, which you had already approved for $4500, and later submitted to you for $10,000?Mr. S. Watson: Object on the ground, whether he objected to any of these other options is entirely immaterial to the issues in the Callaway case.Mr. Blanton: It is pertinent for the reason, Your Honor, to show he was relying on the recommendations that he had and he had accepted those recommendations without question.Mr. S. Watson: The witness had already testified to the effect that he relied to some extent on these recommendations. He has testified to the extent to which he relied, and there this —Judge Collet: Overruled.A. We estimated there were between twelve and fifteen thousand individual parcels to be acquired under the various projects.Q. I am not asking you about the various parcels. Direct your answer to this project.A. This project covered about 270 parcels. My recollection is 121 were accepted and paid for, that 149 parcels were accepted but not cleared through. I do not remember the details of how many were rejected.Q. Do you remember of having rejected a single one of them, other than this Koldozey one which was rejected:A. I don’t remember that, no, sir.Q. Colonel, at the time you signed this contract with McDowell on the 23rd of October, 1940, had you ever been in that area of the Weldon Spring out in St. Charles County?A. I had not.Q. Had you ever seen it?A. I had not.Q. Did you have any knowledge, any independent knowledge of your own, as to values out there in the Weldon Spring area at the time you approved these options, except what McDowell had written to you and this general knowledge you say you had about projects all over the country in this Central area?A. Making the exceptions which I have included in that answer, I had no detailed knowledge of the prices in connection with the individual parcels out there.Q. Now, Colonel, I will ask you if you had issued any orders prohibiting removal of the buildings or other removable improvements from the land which you were purchasing?A. I had.Q. When did you issue those orders?A. They were part of the general instructions that were given to the various agents, where such details were discussed, that buildings on the land might be needed by the constructor or by the Ordnance Department representatives, and, if so, they must remain. Those buildings which were not needed by the constructer or the Ordnance officers in charge could be removed, provided an equitable amount representing the cost was taken off the option price.Q. So that, so far as you were concerned, would chicken-houses and brooders be removable if the price on the land was accordingly reduced?Mr. O’Bryan: If Your Honor please, I want to object to the wording and the verbiage of that question.Here, Col. Valliant is offered by Mr. Blanton as a witness in this case, and here Mr. Blanton, ever since he has got on the stand, has been couching his language in such verbiage as to try to lead forth and lead Col. Valliant in his line of testimony that he is going to give here. We object for that reason—for leading.Judge Collet: Overruled.Mr. S. Watson: I would like to ask that that question be reread. I had in mind an objection that slipped my mind.The Court: All right, the reporter may read the question.(The last preceding question is read)Mr. S. Watson: I object to that on the ground that the Colonel had already testified to the effect that such buildings were removable only as were not needed by the Construction Department and that the Colonel was not in a position to know what buildings were not needed by the Construction Department at that time, and, therefore, he could not intelligently answer the question.Mr. Blanton: He was as to whether or not the brooders were needed for a TNT plant.Judge Collet: Overruled.A. That was a matter left to the decision of the officer in charge.Q. If that had been left to you, you would not have objected to it, would you, Colonel?A. Not the slightest.Q. You were not asked about it, were you? that particular transaction?A. I do not recall any such incident.Q. Now, Colonel, when you approved these various options, which I believe you stated occurred in every instance except one, according to your recollection, did you approve them on the theory the amount named in the options was the reasonable value of the property?Mr. S. Watson: Object to that on the ground the Colonel was exercising administrative discretion there and that the Government at this time is not permitted to go into that question; that is not a matter for judicial review and the witness should not be permitted to answer the question.The Court: Overruled.A. I did, or else I would not have approved them.Q. That was the theory on which you approved them, was it not?A. It was.Q. And by that approval you relied upon the recommendation of McDowell, as stated in those letters, plus whatever general information you may have had from your survey of all the projects in this Central Area?A. That plus whatever recommendations were made to me by my office associates, particularly the ones who were directly charged with handling each project.Q. Were there anywhere in your Department appraisals on any of this Weldon Spring property at the time and prior to the time you approved these options?Mr. S. Watson: Object to that question because it makes no difference whether there were appraisals or not; it is a matter of administrative discretion and the Colonel was exercising that discretion, and it cannot be gone into by this Court.Judge Collet: Overruled.A. Assuming that the definition of appraisal is that of one by a licensee or qualified appraisers, there were not.Q. Now, Colonel, there was offered in evidence here this morning, and afterwards identified by Mr. Mehaffy, a letter written to him by McDowell, dated October 26, 1940, in which McDowell makes this statement: ‘I am more in particular representing Col. R. D. Valliant, Chief Procurement Officer, Real Estate Section, Quartermaster Corps, War Department, and Col. Valliant remarked to me that he was in your class at West Point, and to tell you that he disliked to have to disturb your holdings, but this was an urgent military matter and he was quite sure you would appreciate the circumstances. He added, he was anxious to see that you got out whole on the transaction and was hopeful that you would be thoroughly satisfied.’Did you make any such statement as that to McDowell? That last sentence particularly, that he was anxious to see that you got out whole on the transaction and was hopeful that you would be thoroughly satisfied?A. That is an answer that I cannot give in Yes or No.Q. Why can’t you, Colonel?A. Because there was a long conversation had between us.Q. Did you tell McDowell anything like that?A. I told McDowell that Mehaffy was my classmate at the Military Academy in West Point; that somewhere between 1928 and 1932 I had had to take over some property that he owned down in Florida; I think it was on Santa Rosa Island, and here I was again going to have to disturb him in another place.Q. If I may interrupt, how did you know that he had property out in this Weldon Spring area?A. Mr. McDowell said to me—this was in Washington in the early stages of the proceedings—that they were being hampered in getting started on the Weldon Spring project because of the efforts that were being made to convince the people that that project was going to be put there, that it might be put in another place, and, furthermore, the Government could not condemn the land; that if they could convince a few of the larger landowners who were prominent in the City or in the County, it would be of great value to them in getting the project started; that, if the big fellow came along, the little fellow would follow in his tracks. He mentioned, he said ‘One particularly large holding out there on the Bluff belongs to a man named Mehaffy,’ and it was then that I asked if it was V. Mehaffy, and the rest of the conversation followed.Q. With respect to the time you signed that contract with McDowell, when did that conversation occur?A. I think it was after, undoubtedly after.Mr. S. Watson: Object to the time when he signed the contract with McDowell. The thing that the District is interrogating about is this letter which McDowell wrote to Mehaffy and the representations made in that letter. He is not interrogating him at this point about the contract.The Witness: May I examine the letter?The Court: Yes, sir.The Witness: The letter is dated three days after I executed the contract with McDowell.By Mr. Blanton:Q. Does that refresh your recollection as to whether the conversation with McDowell was before or after the contract was executed?A. It does.Q. Now, what is your answer?A. That letter was written and my conversation was after the contract was executed with McDowell.Q. Do you know how long McDowell stayed in the City? Did you see him any more on that particular occasion after he had signed the contract?Mr. S. Watson: Object to that as entirely irrelevant and immaterial how long McDowell stayed in Washington.Judge Collet: Overruled.A. He told me he was going to an airport and take the first plane out.Q. Now, I interrupted you when you were relating your contacts with Mr. Mehaffy, when I interrupted you.A. May I see the letter again?Mr. Blanton: Certainly (handing a paper to the witness).A. I do not recall any exact expression that I used with him. I am not sure that the subject of remuneration or compensation or payment for the Mehaffy holdings came up at that time. The only statement I recall having been made regarding any price to be paid for the Mehaffy holdings was made to Captain Mehaffy himself in the presence of Mr. McDowell and one or two others, and that was in the hotel in St. Louis.Q. And what was that?A. I told him that I would not discuss any prices with him, but if his lawyers would get together with Mr. McDowell I was sure that whatever price they agreed on would be acceptable.Q. Irrespective of what your information might have been about the Central Area about which you speak? Is that right?Mr. S. Watson: Object to that.The Court: Overruled.The Witness: I did not understand the question.Q. Well, you stated in reply to some of my questions a while ago that you approved these contracts because McDowell recommended them and because of your general knowledge about the Central Area conditions and the values of the Central Area including lands from Ohio on the east. Now, if I understand you correctly, you stated that you told Mr. Mehaffy that if McDowell and Mehaffy’s lawyer would agree on a valuation, you would approve it?A. No, sir.Q. What did you say?Mr. S. Watson: Object for the reason the District Attorney has placed Col. Valliant on the stand, he is his witness, and the District Attorney insists upon cross-examining his own witness.Judge Collet: Overruled.A. No. That if his attorney could satisfy my agent as to the price that should be paid for that, ‘I am sure that there will be no dispute regarding it.’Q. Well, do I gather from that, that if your agent McDowell approved the option, that your approval automatically followed?A. No, sir.Q. It did, however, did it not, Colonel?Mr. S. Watson: If the Court please, object for the reason he is arguing with his own witness.Judge Collet: Overruled.A. I do not remember the details of any of the particular options that I signed. I must have signed some on the Mehaffy tract among the two hundred odd that I signed.Q. And you signed all of them, too, didn’t you Colonel?A. Either I or one of the other of my assistants.Q. Either you or Major Harrold?A. Or, later on, Lieutenant-Colonel Gebhart was authorized to sign.Q. Now, Colonel, why was this provision in this contract you made with McDowell and in the option contract to be signed by the owner, to the effect that the property owner was to pay this 5% commission, inserted in these contracts and this option?Mr. S. Watson: Object to that question for the reason that whatever provision Col. Valliant approved in that contract is immaterial at this time, it having been within his discretion as an administrative officer of the Government exercising the administrative power of the Secretary of War to determine that thing, and it cannot be gone behind. It is not a matter for judicial review.Judge Collet: Overruled.A. The method adopted was one taken up under the emergency conditions that prevailed, and it was thought to be the simplest and most expeditious way of reaching a conclusion.Q. I know, but why did you provide the landowner was to pay the 5% commission instead of the Government?Mr. S. Watson: Object because it speaks for itself.Judge Collet: Overruled.Mr. O’Bryan: Further object for the reason he is trying to go back into all the administrative things that were there and trying to get his witness to impeach his own contracts that he entered into.Judge Collet: Overruled.A. Because in one single voucher we would provide for the payment of a number of different services.Q. It wasn’t because the section of the Statute which had been adopted just two or three months before, being Public No. 703, which prohibited the Government from entering into a contract by which the Government agreed to pay cost, plus a percentage of the cost contract, was it?A. No, sir.Q. You were familiar with that section of the Statute which at that time prohibited the Government paying a percentage of the cost, were you not?A. That provision of the Public Law No. 703 came to our attention.Q. That was on the books at the time the contract was entered into with McDowell, was it not?A. It was.Q. That is at page 712 of the Statutes at Large, Volume 54 of the 76th Congress, second and third sessions, which does provide on the face of it; it says, ‘also the purchase of lands upon which plants are to be erected contrary to the statement of Counsel to the contrary.’A. The opinion given me was, that applied to construction only, not to the real estate.Judge Moore: I wish the witness would speak louder. I can’t hear him.A. The opinion given me was, Public Law 703 applied to construction contracts and not to contracts for the purchase of land.Judge Collet: Will you ask the witness about other contracts?Q. Did you enter into any other contracts like this, and if so, how many others?A. Eight in all I think, on a fee basis, and two a lump sum basis.Q. In other words, two on a fixed fee basis, rather than a percentage of cost basis, if I understand you, when you pay the lump sum basis?Mr. S. Watson: Object to that on the ground the question assumes this was on a percentage of cost basis.Mr. Blanton: The contract shows on its face it was.Judge Collet: Overruled.Q. As I understand it, there were eight whereby the property owner was to pay the commission on land that the Government was buying on a percentage basis, and two where the Government was to pay a fixed sum for his services?A. Right.Q. And all the others, you say you had over 100 of them, on what basis were those contracts handled?A. Some were handled by myself personally, or by other officers in my office; some were handled by other agencies of the Government, such as Soil Conservation Service, and Forestry Service, and Home Owners Loan Corporation.Mr. Blanton: I think you may take the witness. Wait. May I ask just one more question?By Mr. Blanton:Q. These regulations to which you refer, the Army regulations, were all written or printed were they not? or mimeographed, were they not, Colonel?A. Pretty nearly all of them are printed; some came out in mimeograph form and later on are superseded by the printed copy.Mr. Blanton: Yes, sir; that is all right.Cross-Examination.By Mr. S. Watson:Q. Colonel, I believe you testified that at the time that you signed the contract with Mr. McDowell, which was shown you by the District Attorney, that you had never been here at this area?A. That I had never been at the Weldon Spring site.Q. Were you at the Weldon Spring site at a subsequent date?A. I was.Q. What time, about, was that date?A. About November 8, 1940.Q. What was your purpose in going to the Weldon Spring area at that time?A. To familiarize myself as well as I could, in a quick trip, of the nature of the country, the topography, the surroundings, and the general condition of affairs there.Q. Now, I believe you testified that you were in charge of quite a number of other land acquisition projects at that time?A. I was.Q. Did you visit any of these other projects?A. I visited a great many of them.Q. Can you state what projects you visited, or state some of them that you can remember of?A. By referring to some notes I can tell you almost completely.Q. Have you those notes available, Colonel?Mr. Blanton: I don’t want to keep anything out that touches the case even side, edge or bottom.Mr. S. Watson: The purpose is to show that it was a policy of the Colonel, or whether or not it was a policy of the Colonel, to familiarize himself with the land in the areas under his charge.Mr. Blanton: The question he was about to ask him, if he had some notes on these trips to these hundreds of projects he had in charge. I am objecting to any evidence about that; but any evidence he can offer that shows his familiarity with or knowledge of this site, we have no objection; but the other is incompetent.Mr. S. Watson: Anything that shows his general policy about the land.The Court: I do not see that we are really concerned about the question, but do you have such notes?The Witness: I have such notes.The Court: It is material, then. If he didn’t have, it would settle it. What do you want to know, Mr. Watson?Mr. Watson: The question of his exercise of his administrative functions has been gone into?The Court: Yes, sir; now if you have in mind the extent of his information as to values, following out Mr. Blanton’s inquiry, that is all right, I should think; but if you have in mind a detailed scrutiny of his information about these other plants, the chances are that a great part of that is confidential, is it not, Colonel?A. I think it could be made public in a court or lawsuit.The Court: We will come to that when we get to it. Direct his attention to some specific matter.Q. Col. Valliant, did you go to the Wilmington, Illinois, area?A. I did.Q. What was your purpose in going there?Mr. Blanton: We think it makes no difference what this purpose in going to the Wilmington, Illinois, area was.Mr. S. Watson: I think it is material for the purpose of showing whether or not it was a practice of Col. Valliant to familiarize himself to some extent with the areas under his charge for purchase, and this type of contract.Mr. Blanton: If he can show he did that in connection with this property, I will not object, but going to some other project would not familiarize him with this project.Mr. Watson: It shows the policy the man adopted.The Court: All right; the question is whether you went to Wilmington, Illinois?The Witness: I did, on two or three different occasions.By Mr. Watson:Q. What was your purpose in going to Wilmington, Illinois, Colonel?A. To examine the proposed site and familiarize myself with its topography and condition, agriculturally, especially, and anything else that might be of value to me in considering the price that would be fair to pay for the land.Q. Did you go to a project in Iowa?A. I visited the project at Burlington, Iowa, before coming to Weldon Spring, and, after leaving Weldon Spring, I went to Indianapolis, and then to Washington.Q. When you went to St. Louis to the Weldon Spring area, describe what you did with reference to visiting the area, with reference to familiarizing yourself with the area?A. I was accompanied on that trip by one of the assistants in my office, an attorney named C. C. Bickford. We arrived in St. Louis from Burlington on the early morning train, and, after having had breakfast, we went to the Park Plaza Hotel.Q. You said ‘Burlington,’ you don’t mean ‘Burlington?’A. No, sir; from Burlington, Iowa. We there met Mr. McDowell, and in his room we afterwards met Mr. A. C. Ringland, and a representative of the Missouri Agricultural Department, whose name I have forgotten—Morin, I think it was. Later on, Captain Mehaffy came in for a few minutes. We spent the morning discussing various matters connected with the acquisition of the Weldon Spring site, and, after lunch, went to St. Charles, Missouri, to Mr. McDowell’s office and met some of his employees there, and then drove around and over and crisscrossed throughout the site, returning to St. Louis just about in time, to catch a six o’clock train.Q. Now, you spoke of Mr. Ringland; you say you met Mr. Ringland?A. I did.Q. Where did you meet him?A. On that particular day in Mr. McDowell’s room in the hotel.Q. Did you meet Mr. Ringland on any other day?A. On many other occasions I met Mr. Ringland.Q. I mean on the occasion of these trips, did you meet him at any other time?A. No, sir; he was leaving that same night, I think, for Burlington, Iowa.Q. Did you discuss matters relating to the project with Mr. Ringland at that time?A. I did.Q. Who was Mr. Ringland?A. Mr. Ringland was an assistant to the Deputy Commissioner of the Advisory Commission of Council of National Defense in Washington, D. C.Q. Who was his superior, immediate superior?A. Mr. Ringland’s immediate superior was the deputy, Mr. Hutson—J. B., I think the initials are; and his immediate superior was the deputy himself, Mr. Chester Davis.Q. Is that the Chester Davis who is now at the Federal Reserve Bank in St. Louis, or do you know, Colonel?A. I know that it is; he told me so himself.Q. 1 believe you testified that you discussed matters pertaining to this project with this Mr. Ringland?A. I did.Q. What matters did you discuss?A. We discussed especially the matters connected with the mass meeting that had been held at one of the school houses on the site, about two nights before, something that had come up there, that was especially bothering Mr. Ringland, and that was statements which had been made by lawyers that there was no law under which the Federal Government could condemn that property and take it away from the landowners; and he asked me if there were such a law, and we told him that there was. He asked us if we could give him citations about it, and we said we could, and we did. He said he wanted to incorporate that in a letter which he was assisting in drafting, that could be circularized among the landowners in the Weldon Spring project, to convince them, first, that the project was going to be carried through, and, second, that if any negotiations were not concluded with our agents, that the Government could and would condemn the property. Mr. Bickford hastily wrote out references and citations, and I think they were quoted verbatim later on in a three or four page circular letter that was sent out by a Committee to the landowners.Q. You speak of Mr. Bickford, who was Mr. Bickford?A. Mr. Bickford is a civilian employee of the War Department, who was one of my assistants in the Real Estate Branch, an attorney by training and an employee of long service in that particular office.Q. You say he referred to some citation of laws relating to condemnation?A. Yes, sir.Q. Now, did you speak of a letter a while ago, in your testimony? I think you did?A. I did.Q. Would you recognize the phraseology of that letter, if it were presented to you?A. I would recognize the part that pertains to the information that we drafted. The letter as a complete whole was not in existence then.Q. It was not in existence?A. No, sir.Q. What was it that you drafted, substantially? I will ask you if you find any paragraph or language or phraseology in that letter there (handing letter to the witness) that you recognize?Mr. O’Bryan: Mr. Blanton has had that letter identified. You have had this letter identified?Judge Collet: Exhibit 11Mr. S. Watson: May I have Exhibit 11?Mr. Blanton: Yes, sir; we will be glad to give it to you.Mr. Watson: Colonel, I beg your pardon for interrupting you there. I had rather you look at Exhibit 11 and see whether you recognize any of the phraseology in that letter?A. The quotation on the second page following paragraph 5 and continuing over on the third page to paragraph 6, all in quotation marks, appear to be exactly as drafted by Mr. Bickford, at my direction.Mr. Blanton: Does that refer to the right of condemnation, Colonel?A. Yes, sir.Mr. Blanton: That is all that refers to?A. That is all that refers to, and it contains also statement that the right of eminent domain has been exercised by the War Department throughout the United States in acquiring the land for agricultural purposes in at least forty or fifty cases during the last three and a half years during which I, Col. Valliant, have been on duty in Washington as Chief of the Real Estate Branch of the Quartermaster Corps of the War Department.Mr. Blanton: That is the only portion of the letter you recognize as having been prepared while you were there?A. The portion in quotation marks in there; but other matters in this were discussed.Q. (Mr. Watson) What was discussed, Colonel? Keep the exhibit, now. You say other matters were discussed, what was the general tenor of the matters that were discussed?A. It was the fee situation as presented by Mr. McDowell that was discussed. And particularly, though, it was the right of the Federal Government to institute condemnation proceedings.The Court: Are you at a convenient stopping place?Mr. Watson: Yes, Your Honor.Judge Collet: Recess for ten minutes.Thereupon, at 3:30 P.M. April 1, 1942, a recess of ten minutes was announced; the proceedings then continued as follows:Q. (Mr. Watson) Colonel, at the time of the recess, I believe you had just testified that the matter of McDowell’s commission was discussed on the occasion of this meeting, had you not?A. The subject was mentioned that that was discussed or presented at the mass meeting that was held a couple of nights before.Q. Oh, the subject had been mentioned that that was discussed at the mass meeting?A. Yes sir.Q. Well, was there any discussion of that matter beyond that?A. No, sir; that was not a matter for discussion between ourselves; that was a fact.Mr. Blanton: What was a fact, Colonel?A. That there was a commission that was to be paid to Mr. McDowell by the landowner.Q. (Mr. Watson) That was embodied in the contract?A. That was embodied in the form of option contract that drawn up in my office.The Court: I wish you would have the witness explain a little bit more about that contract, the form of the contract.Mr. Watson: Very well, Your Honor.Q. How did you happen to enter into a contract which provided for the payment of a commission by the vendor?A. In order to go fully into that subject, I might have to cover the entire situation as it existed in my office during the latter half of the calendar year 1940.Q. 1 would like you do that, Colonel, insofar as you think it is necessary to cover that situation in going into that question.Judge Moore: I would like to hear a little more about that. It is an unusual thing to require the landowners, to make it a provision they have to pay somebody a commission of that sort. I would like to hear a little more explanation about that. I am going to have to try one of these cases on stipulation before me, and I would like very much to hear a thorough explanation of that.A. Prior to the fiscal year 1941, there were about thirty-two projects for land acquisition being handled by my office, covering about six and a half million dollars worth of land. The session of Congress —Judge Collet: Excuse me, Colonel, tell us on what basis that figure was fixed, six and a half million dollars worth of land?A. Money appropriated and allotted to us for the purchase. With that number of projects and that amount of money, we were able to handle the projects within our own office and with our normal setup; but when we had 108 projects dumped in our lap, covering over fifty million dollars worth of land to be acquired, it was beyond the scope of our organization, and we could not expand fast enough in order to carry the load and to meet the urgent demand that was being made upon us by higher authority to obtain possession of these lands in order that camps, cantonments, target ranges, (manufacturing) ammunition plants might begin to be considered; we then reached out to use the facilities of the other Government agencies, such as the Soil Conservation Service, the Forestry Service, the Home Owners Loan Corporation. In one project in Kansas City we used a Corps of Engineers, but, with these agencies, we were not obtaining fast enough progress to meet the demand for use in the power plants and in the manufacturing plants, and it was in connection with the acquisition of these tracts of land that, through a series of developments or gradations from one scheme to another, we did hit upon the Agency method of acquiring the land. As I tried to explain before, the simplest way of covering the entire payments that would be necessary was to have a single voucher to be drawn up that would cover all the payments that would be called on to be made and that would cover the net value of the land to the owner, any taxes that were outstanding that would have to be paid, registration fees, revenue stamps, and whatever other legitimate expenses that were outstanding against the property; and it also would cover the fee of the man who was doing this work for us.Judge Moore: Who originated this particular plan of payment, Colonel? Who suggested that originally?A. It followed, I think, upon suggestions made by the Atlas Powder Company in the acquisition of a site near Akron, Ohio, the Ravenna Iron Works, and it resulted from requesting that we take over from them the burden of securing that land. Their first agreement with the War Department was that they would buy, construct the plant, and then bill the Government for the entire cost of it, including the land. That system had been adopted by the DuPont Powder Works in their contract at Charlestown, Indiana. At both places difficulties were met with, some of them being excessive demands of the landowners for the costs, and others it was necessary to condemn in order to clear all difficulties on the title, and so many difficulties were encountered that DuPont said they would never again undertake to buy land for the Government; they would build the plant all right, and operate it, but if we wanted a site, we would have to get it; and the Atlas put up the sort of a complaint at Ravenna, Ohio, and asked us to take over the job which they partially started.Judge Moore: And you did that in that case?A. Yes, sir.Judge Moore: How long was that before this contract?A. That was sometime in September. I can refer to my notes and tell you exactly. I think it was sometime in September.Judge Moore: A few months?A. About two months before.Judge Moore: Do I understand that there had been a Statute passed only a short time before, that prohibited the Government from paying a commission for this service?The Witness: The Statute has been referred to, and I would like to have a copy of it and read it to you.(A book is handed to the witness).Mr. Blanton: Here is where the Statute begins, Colonel; that is the cost-plus.A. It provides that ‘Out of any moneys appropriated by the War Department to provide for the necessary construction, rehabilitation, conversion and installation at military posts, depots, stations, or other localities, of plants, buildings, facilities, utilities, and appurtenances thereto, including Government-owned facilities at privately owned plants and the expansion of such plants, and the acquisition of such land, and the purchase or lease of such structures as may be necessary for the development, manufacture, maintenance and storage of military equipment, ammunitions and supplies. Provided further, that the cost-plus-a-percentage-of-a-cost system of contracting shall not be used under this section; but this proviso shall not be construed to prohibit the use of the cost-plus-a-fixed-fee form of contract when such use is deemed necessary by the Secretary of War.’Judge Collet: When was that passed?A. July 2, 1940.Mr. Blanton: Approximately four or five months before the time this contract with McDowell was entered into.Judge Collet: Was that Statute the Appropriation Act that carried that?Mr. Blanton: This Act entitled, To expedite the strengthening of the national defense.The Witness: The procedure at Ravenna, Ohio, by the Atlas Powder people had been started on the basis of a 5% commission basis to the agent that they were employing, and that provided for a great many more things than the mere securing of an option. Also, those things were provided for by us in the subsequent contracts that we made. It provided for the handling of all the details or curing defects that might be found by the Attorney-General’s office in the chain of title, or seeing the deed was drawn up, or seeing it was signed, recorded and registered, and that the final settlement was made, and that all outstanding claims were settled, and that everything was free and clear, so that there would be no subsequent come-back, no subsequent basis for disputes or dissensions. All of those were to be covered in the fee that the agent was to receive.Mr. Blanton: I do not want to interrupt, but, under the Statutes, the Department of Justice is charged with responsibility of seeing that these things are closed properly by examining the deed, and they have the hired personnel to do that.Judge Moore: Did you understand it when you entered into this with McDowell, that he was to get 5%, and the Title Company was to get 1½% from the vendors in all cases? You understood that?A. That was understood.Judge Moore: And was it your understanding that he was to get an amount equal to 5%, and they were to get an amount equal to 1½% of the gross payment? Did you understand that it was to be done that way?A. We learned as we progressed, or at least we do not progress unless we do learn; and the wording was so drawn up that it provided for a percentage on the amount of the gross figure appearing in the option.Judge Collet: Was it understood by you or by the Department, as far as you know, as to whether or not that 5% was to be added to the property owner’s valuation, or whether the property owner was to fix the value and then pay the 5%?A. It was to be added to the amount, the 1½% for the title covered what practically amounted to an insurance policy on the title to the extent of the amount that the Government was paying.Judge Collet: That Title Company’s commission, was it treated as—as you referred to it—as an assurance proposition? They were a title guaranty company, as I understand it? Did you so understand it?A. I required it.Judge Collet: So it was, then, a title bond?A. It was equivalent to an insurance policy, that they guaranteed that title to the extent of the amount that the Government was paying; and, if it was the thousand dollars, they were entitled to one fee; if it was fifty thousand dollars, they were entitled to a larger fee, based on the scale of charges for such services, or for such policy of insurance.Judge Collet: Naturally, this next question occurs to me; I expect to build it up. That being the understanding, why was the contract so drawn that the owner was stated to be paying 5%? Do you know about that? I do not assume you drew the contract.A. I did not draw the contracts, but I signed them and read them over, and the object was to obtain a wording that would enable all necessary payments to be made from the one check that would be drawn by the Finance Department.Judge Collet: Then are we to understand that, insofar as you understood the situation, that the practice to be followed was that the 5% was to be added to the value, and 1½% was to be added to the value, then it was to be included in the total option price, and the reason for doing it that way was in order to authorize or permit the payment of all these amounts in one voucher?A. And in order to expedite, it was.Judge Moore: And you understood Mr. McDowell’s 5% and the Title Company’s 1½% were figured on the gross sum, did you?A. Yes, sir.Judge Moore: You understood it was not to be figured on the net sum to the vendor, but on the gross? You understood that?A. We understood that; but the difficulty is that there is an arithmetical problem that comes into the situation, that we had not taken into consideration, and, as soon as it developed, as soon as they had brought it to our attention, the practice was ordered changed.Judge Collet: You had not contemplated the result of making the calculation of the 6½% interest on the total not leaving to the property owner the full amount he agreed to take?A. No, sir; that got by us. Now, that system was followed I think in eight cases, and as soon as the emergency was over, as soon as we had enough land under our control to meet the urgent demands that were made, I say the system was stopped.Q. (Mr. S. Watson) Was that system used in Burlington, Iowa?Mr. Blanton: Your Honor, we object to what system might have been used in some other project.Mr. Watson: I think it is material, Your Honor.The Court: Overruled.Mr. Blanton: Note our exception.A. It was.By Mr. S. Watson:Q. Did you O.K. the options in Burlington, Iowa?A. The first options that were sent in from Burlington, Iowa, were all rejected by me.Q. By you?A. Yes, sir.Q. Why did you reject them, Colonel?A. Because they looked to me to be too high.Q. Why did they look too high to you?Mr. Blanton: Your Honor, we are going to again renew our objection to going into the details of these other projects. I do not see how it can shed any light on whether they were too high here because they were too high somewhere else.The Court: One possible purpose occurs to me, if the question is to his knowledge of values there, or method of acquainting himself with values there as compared to here at Weldon Spring. I think, in so far as it may have a bearing on that, that the Colonel should answer the question.Mr. S. Watson: That is the matter I had in mind, Your Honor—not so ably expressed as by Your Honor.A. I was comparing that with the values at Weldon Spring and at other places in the states that I previously mentioned.Q. (Mr. Watson) Now, you mentioned the fact, I believe you gave as your recollection that about $1,800,000 had been the estimate of the cost of the land acquisition at Weldon Spring, did you not?A. I did.Q. Now, I will ask you if, when that estimate was made, if the plan contemplated taking of the area that was finally taken in?A. It contemplated much less.Q. Much less?A. It did.Q. Well, can you state to the Court anything about how much less, or what the portion was?A. The original project as conceived for the Weldon Spring site was to cover about 6,000 acres of land, lying wholly south, and I think, east of Highway No. 94. Before we had even gotten started on the project, it was almost doubled, and then before it was finally completed, it was almost trebled in size; somewhere around 17,000 acres was the final amount of acreage to be acquired. The original estimate made by the Ordnance Department officials did not really cover or might not even have been intended to cover the entire project as it was.Mr. Blanton: I understand, but somebody else, those around, wouldn’t know what they were to cover.A. I talked it over with them.Mr. Blanton: It is hearsay, then, and we object to it on that ground.Judge Collet: The only propriety that I see, if this is in connection with the direct testimony that the estimated cost was a given amount, and that the optioned cost was a larger amount, for that reason I think he should be permitted to say at least who made the estimate, if he knows.Mr. Blanton: He has already said that, Your Honor.The Court: The War Department.Mr. Blanton: He said the Ordnance.The Witness: Officials of the Ordnance Department.The Court: Do you know of your own knowledge what the estimate was for, originally?A. My recollection is it was a million eight hundred thousand dollars.The Court: I mean the size of the tract?A. It was over, I am sure it was over 6,000, but it was much less than seventeen. I think it might have been, for the second would have brought it up between ten and twelve thousand.The Court: The total amount finally taken was 17,000 acres, approximately?A. Yes, sir.Judge Collet: All right.By Mr. S. Watson:Q. All right. Now, Colonel, you spoke of the demands that were made for acquisition in emergency that exceeded the thing that was involved. What, if anything, have you to say in support of that, that there was a great demand for speed?A. I can say a whole lot; it depends on how far —Mr. Blanton: We will concede there was need for speed; we will not raise any issue about that.Q. Did anyone in the War Department tell you to hurry these things? hurry this acquisition?A. A number of them did, and the number of the ones in high authority in the War Department urged me to expedite the procuring of these tracts of land, not only for manufacturing and ammunition plants, but for the camps, cantonments, and target ranges.Q. Can you mention someone that did?Mr. Blanton: If he did, the records will speak for themselves. He already testified they made everything by order—let him produce the order.The Court: Yes, sir; I think the admission covers the subject, the admission Mr. Blanton made that it is conceded there was need for speed.Mr. S. Watson: I think that is all, Your Honor.Redirect-Examination.By Mr. Blanton:Q. Colonel, I believe you said on cross examination that you had made as many as three trips on this project over in Wilmington, Illinois, to inspect it. Now, how much time did you devote to each of those trips?A. Either a day or a part of a day.Q. On three different occasions?A. On three different occasions.Q. You were here in the St. Louis area, though, just one time, were you not?A. Yes, sir.Q. And, if I understand you correctly, you came in from Burlington, Iowa, one morning, spent all morning in the hotel room, and had lunch—am I correct so far?A. Correct.Q. Then you went out to St. Charles and went to McDowell’s office in St. Charles and met his office organization, and what else did you do in St. Charles?A. Stopped by the Abstract Company and saw what the plant looked like, and then rode for two or three hours around, across, up, and down over the city.Mr. Watson: If the Court please, the witness has testified to that. If this were cross examination, it might be permissible for the District Attorney to ask him to repeat it, but this is his own witness, and I object to this line of questioning.The Court: Overruled.Q. How far is it from St. Charles over to the Weldon Spring area?A. I think about fourteen miles.Q. Over what kind of a road?A. We didn’t drive directly out there. I think I went out No. 61, which is a three or four mile, new, paved highway, and then went around the outer limits and came into it over rough, broken, and partly unimproved roads.Q. How did you get from St. Charles to the Weldon Spring area itself? what road did you go over?A. I am not sufficiently familiar with the area to describe it.Q. What kind of road was it you went over?A. Either a paved or macadamized road, as I recall it.Q. You didn’t spend over two hours in this entire area, did you? out there where this 17,000 acres of land is located?A. Two or three hours at the most.Q. And undertook to go through the entire area in that period of time?A. The outer rim of it, and back and forth across it.Q. What kind of roads were they within this area?A. No. 94, as I remember it, was a fair road; the others were country roads, some of them macadamized, and others in very poor condition.Q. Can you tell us about any of the parcels out there except possibly the one where there was a small orchard on it, and maybe one where there was a pumping station?A. I noticed the high schools, I noticed the villages there, and I did pay particular attention to the Ajax Pumping Company plant.Q. That is a subsidiary of the Shell Oil Company?A. It may be so; I don’t know.Q. It is not involved in this condemnation because there was a direct acquisition made of that, was there not?A. So I am told.Q. Now, Colonel, I will ask you if that was the only time you were ever out there in that area?A. It was.Q. Now, where did you hold these conferences with Col. Ringling?A. In a room in the Park Plaza Hotel.Q. Is that the room where Mr. McDowell was?A. In Mr. McDowell’s room of that hotel.Q. Is that where Mr. Mehaffy came?A. Yes, sir; Mehaffy came there.Q. And this conference was held in the morning before you went to the area?A. It was.Q. And did you ever buy or sell any land out there in the area?Mr. O’Bryan: If the Court please, we renew our objection at this time because the Court understands —The Court: What objection is that?Mr. O’Bryan: We renew our objection to Mr. Blanton cross examining his own witness.The Court: That objection is overruled.A. Not prior to this time.Q. Did you have any records before you, when you approved these options, dealing with sales that had been made recently in that area?A. I think in some of his correspondence with us, Mr. McDowell had referred to some such matters in a few instances, but, as a general rule, you may say No.Q. This contract which has been identified as ‘Government’s Exhibit M-5,’ and which you stated you signed after McDowell submitted it to you, where was that prepared? That was prepared in your office, was it not (handing a paper to the witness)?A. This was prepared in my office by assistants.Q. And under your supervision?A. Yes, sir.Q. And it incorporates into this option, does it not? and there is a copy of this option, that was prepared in your office, attached to this contract, is there not?A. There is.Q. And in neither of those forms is there any statement made as to what the fee to be paid the Kansas City Title Company, is there?A. The fee to be paid was their standard fee for such service.Q. Why didn’t you put it in the contract?A. I don’t know whether that particular point came up or not.Q. Were you going to pay any fee they wanted to charge?A. We were willing to approve the standard fee as shown in their schedule of rates for such services they performed.Q. Irrespective of what that might be?A. If it was the standard scale, we accepted it.Q. What do you mean by ‘standard scale?’ Do you mean the scale fixed by the Kansas City Title Company?A. The scale that would be fixed by them for the certificates they were to prepare and guarantee.Q. And you were not going to make any distinction whether on this 1½% or whether it was for a thousand-dollar contract or a twenty-five thousand dollar title certificate?Mr. O’Bryan: Object, because what he is referring to is the American Title Association standard fee that is charged by all these title companies in issuing certificates of title.The Court: He didn’t say so—overruled.Mr. Blanton: We object to Mr. O’Bryan’s speech.Q. The Court says you may answer.A. My answer is, the certificates required to be furnished by the Title Company were to guarantee the title to the full amount of the payment that the Government was to make to the landowner. If that called for $10,000, we expected it to be at his fee for that amount; if it was $50,000 we expected it to be a larger fee, but we expected the fee to be in accordance with the standard scale for such services and for such guarantee.Q. Did you expect it to be a graduated fee, or did you expect the 1½% to run whether for one thousand or twenty-five thousand?A. I think the standard fee was 1½% throughout the country for that.Q. Why didn’t you put that in this contract, if you were going to pay it?A. You will note that the option does not have in it the clause relating to the interest of a Member of Congress; that was an oversight. This other might have been an oversight, too.Q. You put that phrase relating to a Member of Congress in the contract with McDowell, though, didn’t you?A. That was put in there.Q. But you left it out in the option?A. It was overlooked in the option; yes, sir.Q. You put the amount of the commission to be paid McDowell in the contract, did you not?A. Yes; if it is in there, it is there.Q. Now, Colonel, I want you to tell the Court why it was you put in this option and contract with McDowell that the property owner was to pay both the Title Company’s fee and McDowell’s fee, if you understood the Government was going to pay it?A. Because it was an arrangement whereby the quickest results could be obtained by means of a single document or of a single check.Q. In other words, you had an understanding with them just contrary to the phraseology of the contract you signed with McDowell?A. The understanding was that the fee would be charged and that it would be added to the amount that the landowner was to receive.Q. Now, don’t you know that this fee of the Title Company was not even fixed until long after this contract was signed, and was fixed by Mr. Ewald of the Title Company, with the Emmons Title Company at St. Charles, after you had already signed this contract with McDowell?A. I didn’t know that.Q. You are telling the Court, notwithstanding the terms of the contract you signed with McDowell, which required the property owner to pay the 5% commission, that you expected the Government to pay it and to be added to the value placed on the property by the landowner?Mr. S. Watson: Object to that on the ground it is cross-examination of his own witness and argument with the witness and highly objectionable.The Court: Overruled.A. I did.Q. Now, Colonel, I will ask you if you didn’t put it in that (phraseology) because you knew this law approved by the President in July of 1940, which prohibited the Government paying the cost plus a percentage of the cost—that that act prohibited your putting that in this contract?A. I will answer that by saying, No; and I would like to further say that I did not personally draft either the contract or the option; it was done by my legal advisers.Q. You signed it, though, and approved it?A. Yes, sir.Q. And you read it?A. Yes, sir, I read it, and I am responsible for it.Q. And you knew it provided that the landowner was to pay the fee, but you had that agreement with McDowell that the Government was to pay it. Is that right?A. That is right.Mr. Blanton: That is all.Recross Examination.By Mr. S. Watson:Q. Colonel, where was this contract with the landowner prepared? Where was that form prepared?A. The option form of contract?(A.) Yes, sir.A. It was prepared in my office in Washington, in the Railroad Retirement Building.Mr. Watson: I think that is all.The Court: Any further questions, gentlemen?Mr. Blanton: No; Your Honor.”“(Government Exhibit S-1.)Mr. Blanton: Your Honor, I am not quite sure whether this exhibit, I think Mr. Watson asked for it and I gave him a copy of the President’s letter addressed to the Secretary of War, which has been marked ‘Government’s Exhibit S-1,’ but I have not heretofore offered it. I do not know whether Mr. Watson offered it, but if he didn’t, to be safe I would like to offer this letter which reads as follows:‘The White HouseWashingtonOct. 17, 1940‘My dear Mr. Secretary:‘Under the provision of the Act of September 9, 1940, (Public No. 781, 76th Congress) and upon the recommendation of the Council of National Defense and the Advisory Commission thereof, I hereby give my approval to the following project under the War Department program for expediting production in connection with the existing National Defense Programs:
‘Construction of a TNT and DNT Plant at Weldon Springs, Missouri . . . . . . . . . . . . . . . . . . . $14,500,000.Sincerely yours,FRANKLIN D. ROOSEVELT.’Addressed to the Hon. Secretary of War.(Amendment of Reply, Substance of, Colloquy as to andAllowed to be Filed.)Thereupon, at 5:00 P.M. an adjournment was announced until 10 A.M., April 2, 1942. The proceedings then continued as follows:Mr. Blanton: Before proceeding with further testimony in this matter, the Government would like to ask leave to file further amendments, of which I have furnished a copy to opposing counsel, to take care of the testimony that was developed here yesterday.The Court: Can you give us the substance?Mr. O’Bryan: If the Court please, we object.Mr. Blanton: The substance of that amendment is, I have added to paragraph 3 of the original charge, R. Newton McDowell and R. D. Valliant fabricated and contrived and schemed to defraud, and I state here particularly, beginning with paragraphs n, o, p, q and r, beginning on pages 5, 5a, and b, setting up particulars wherein Valliant participated in this matter in accordance with the testimony that was produced here yesterday. Then in other places in the answer where I formerly used the name McDowell, I add the name McDowell and R. D. Valliant.Mr. O’Bryan: If the Court please, we object to the amending of the reply in this case at this time for the reason that the pleas were all made up prior to each side announcing ready for trial, and the issues were made up, and the issues are now being presented to the Court on evidence, and the attorney for the Government is not entitled at this time to amend his pleadings.The Court: Is the draft of the amendment in the form of amended (—)?Mr. Blanton: Yes, Your Honor.Mr. O’Bryan: If the Court please, it changes the cause of action absolutely; it takes a Colonel in the Quartermaster Corps of the United States Army and charges him with a crime for which he could be courtmartialed before the War Department of the United States; it makes him a criminal in the language—I have sat here and read it—in the language of this reply, what he has inserted here shows that Col. R. D. Valliant has practiced criminal acts in the rush to get this land for the Government, so it could prepare itself to defend itself. It is a grave attack upon the reputation of an officer of the United States Army, the grossest attack that I have ever heard coming from the lips or the pen of any man, and we object to any amendment which charges Col. R. D. Valliant with fraud and conspiracy to cheat his Government.Judge Collet: Mr. Blanton, the question has occurred to me to be on the problem of whether the request is timely as to whether the information on which this requested amendment is based came to you prior to the testimony of Colonel Valliant.Mr. Blanton: It did not, Your Honor. In fact, it was a very great surprise to us and was contrary to the statement Col. Valliant made to us in our office when we interviewed him last December, in two particulars, and I am satisfied the record ought to further show Col. Valliant is sitting in the courtroom here and is available for further examination, if Your Honor desires to have him testify further, and I might further state, so far as the Government is concerned, if the owner desires in this case that we complete our discussion and recess, and time to meet it, we will have no objection for them to recess to do so.Mr. O’Bryan: It might be necessary to have to go clear to Washington to get witnesses to testify in this case to uphold the (attach) that the United States District Attorney, the plaintiff in this case, is making upon one of its own officers and one of its own servants who was in charge of this. Here it comes at this hour right at the last or the close of the plaintiff’s case in rebuttal and they are asking to make charges. Has the Court seen the charges?The Court: Do they differ from the substance as stated by Mr. Blanton?Mr. O’Bryan: No, sir; they do not.The Court: All right. What is the necessity for the amendment, Mr. Blanton? I will explain the reason for the question: It occurs to me that the proffered amendment shall not change the issues at all. We might liken it to a situation where a conspiracy is charged without naming all of the conspirators, and in the progress of the trial, another name becomes known, then it is not necessary that all conspirators be named to start with; it isn’t necessary that they be named at the end.Mr. Blanton: Correct, Your Honor, except that in these conspiracies where there is a crimnial (sic) offense charged the indictment invariably uses names of firms or people and says ‘others to the grand jurors unknown.’ This reply that was limited to McDowell and to the participation and benefits thereof on the part of the land owners, was not known to us until yesterday afternoon when Col. Valliant told his story, and this pleading is made to conform to the testimony that was produced by Col. Valliant in reply to questions brought out. The issue of fraud remains the same, the difference is that it makes allegation that Valliant participated in it and specifies wherein he participated in it.The Court: I am not sure that I follow your understanding, your reason for the necessity for the amendment. Merely because the reply doesn’t use language, ‘and others unknown?’Mr. Blanton: That is correct, Your Honor.The Court: Would it eliminate the objection that the defendants are making if you simply amended your pleading by the addition of your more or less customary clause, ‘and other parties?’ Do you see what I mean?Mr. Blanton: We have no objection to the amendment.The Court: We are loath to inject into the case the issues of a more or less technical nature, unless it is necessary to do so in order to preserve the rights of either parties.Mr. Blanton: Our reply had been drafted on the information we received, which was to the effect Valliant didn’t know the commission and title fees were included in the amount. We relied on the information we had to the effect they were to be paid by the property owner; and, here, he testified yesterday to the contrary of the written contract which he had approved. It is to meet that testimony which was developed yesterday. If the property owner feels that he wants further time to meet this, if he is surprised by the testimony he developed himself, we have no objection to a recess to let him meet that.Mr. O’Bryan: We are not surprised at the testimony; we are surprised that you at that time tried to charge any of the officers of the United States Government with fraud and conspiracy; that is the surprise. We do not want it to go out to Japan and Germany, and everywhere else, the United States Government is standing here fighting among themselves as to what it is going to do and what it should do.The Court: Well, will the Court’s action have any bearing whatever upon that?Mr. Blanton: The facts speak for themselves here.The Court: The request for the amendment will be as much a part of the Court file, whether allowed or rejected.Mr. O’Bryan: That is true; that is why I am criticizing.The Court: Why did you object for the reason the Court, in granting the request, you thought it would have an effect upon Japan and Germany? I ask that question seriously because I am concerned about that; if it will have an effect, I want to know what effect you think it will have.Mr. O’Bryan: That is all surmise. It might, we don’t know.The Court: I mean what different effect, from the court’s permitting it to be filed, as from the Court’s refusal?Mr. O’Bryan: I am objecting to him asking it, even.The Court: That is a matter over which the Court has no control.Mr. O’Bryan: That is true.The Court: Gentlemen, the requested amendment may be filed subject to any appropriate request in the nature of a claim of surprise that may come from the defendant; and, of course, in permitting the filing of the amended reply, the action of the Court should not be understood or construed to be an approval or rejection, of course, of the matters contained therein. Is that clear?Mr. O’Bryan: That is clear, Your Honor. May we have to two o’clock then? We want to consider this, because Mr. Blanton has asked for this amendment, and we want to do a little thinking.Mr. Blanton: I will suggest we proceed with the offering of our expert testimony on valuation, and they can consider that later.The Court: Yes, sir; I think we can go ahead with the question of valuation. There are two reasons for that: It will be necessary for me to suspend the hearing of this case, tonight, until Monday. It is desirable to get as far along with it as we can.(Here occurred a discussion between Court and Counsel concerning approximate time that would be necessary to complete the hearing)Here the Government offered additional evidence as to the question of valuation, testified to by David C. Fetsch, Dave Thompson, John F. Briscoe, Charles Cardwell, Forrest Hughes, Roscoe Murphy.* * * * * * *The Court: Declare a recess until 2 o’clock.Thereupon, at 12:30 P.M., April 2, 1942, a recess was announced until 2 o’clock.”
