Fridley page 40

[St. Louis Globe-Democrat, February 26, 1941]

U. S. to Probe TNT Land Deal
FBI Agent to Come Here to Check on Appraisal Values

            WASHINGTON, February 26.—The Department of Justice will make an investigation of the acquisition by the War Department of the land for the TNT plant near Weldon Springs, Mo., it was learned here today.
            An agent of the department will go to St. Louis within the next few days to make a thorough inquiry into the appraisals of the 123 parcels of land which make up the explosive plant site. The property was acquired on behalf of the government by R. Newton McDowell, Kansas City contractor, who was allowed a fee of 5 per cent on the total purchase price.
            Land owners in St. Charles County who sold their property to the government for the proposed TNT plant at Weldon Springs will be paid in full, regardless of the outcome of any federal investigation, according to C. H. Ewald, in charge of the St. Charles office of the Kansas City Title Company, which is proving the titles to the land for the government.
            Ewald made his statement after property owners expressed fear they would not be paid the amount of money stipulated in the options because of the inquiry. He cited a United States Supreme Court decision in a Southeast Missouri land case as a precedent.
            United States District Attorney Harry C. Blanton declined to make any statement relative to a Department of Justice investigator being assigned to the St. Charles project.
            Already $1,073,802 has been paid for 6729 acres and 19 town lots, but further payments are being held up pending the government’s investigation.
            Meanwhile R. Newton McDowell, Kansas City contractor who was assigned to acquire the 16,000-acre site for the government for a 5 per cent commission, defended the appraisal he and his staff made of the land in a lengthy statement issued here yesterday, declaring he saved the government $1,000,000.
            Criticism has been leveled at McDowell “in 40 different languages,” he says for paying about $2,500,000 for land appraised at about $1,000,000, but the contractor claimed he was forced to operate under two requirements: Speed in acquiring the land and maintenance of good will among the residents.
            McDowell said be disregarded the assessed valuation of the land because the last valuation was made in 1927 and because of his instructions from the War Department.
            [one or more lines missing] on the bluffs overlooking the Missouri River have been cited in particular by critics of McDowell, but the contractor claims the amounts were necessary because of the improvements made by wealthy St. Louisans who intended to establish large country estates there.
            McDowell said he personally negotiated with Birch O. Mahaffey, St. Louis capitalist who owned 630 acres assessed at $4600. McDowell paid Mahaffey $200 an acre for the land, adding that had this case gone to condemnation proceedings the government would have had to pay $500 an acre.
            “Agriculturally speaking, Mahaffy’s land is probably not worth $25 an acre, but Mahaffey’s purpose for it made it worth $200,” added McDowell.
            McDowell defended the 5 per cent commission he is getting. This commission is paid by the landowner and will approximate $150,000 for the entire site for McDowell, but the contractor claims he has had to employ 16 men, maintain an office of six rooms and has even had to pay $14,000 for a map.
            But he said he has suggested to the government that on such projects as these a flat fee be paid to the agent negotiating for the land instead of a commission. He contends this method would prevent the public from learning what amount goes to the agent and thus preclude unfavorable comment and gossip. For example, he explained, a farmer, who had been offered $8000 for his land, asked for $20,000, telling the contractor he had no reason to complain, as he was getting his commission on the amount of money involved. McDowell said he ordered the man from his office.
            McDowell denied he had been asked to reduce his commission, saying such a request “would be tantamount to saying I had a dishonest, immoral contract.”


—Staff Photo
            R. Newton McDowell, Kansas City contractor who acquired the 16,000-acre site for the proposed TNT plant in St. County, shown yesterday as he dictated a lengthy statement defending the appraisal he and his staff made of the land.