UC 267 .U6 1919 Copy 2 DECISION OF THE WAR DEPARTMENT BOARD OF CONTRACT ADJUSTMENT t IN THE ACETATE OF LIME CASES V July 31, 1919 WASHINGTON GOVERNMENT PRINTING OFFICE 1919 0. of $• AUG 20 1919 1 '1 ■ CETATE OF LIME CASES. BEFORE THE BOARD OF CONTRACT ADJUSTMENT OF THE WAR DEPARTMENT. In the matter of claims for acetate of lime and Mgs of — Name. Address. Number. Barclay Chemical Co John Bartley Beerston Acetate Co Thos. Berry Chemical Co Boyne City Chemical Co Buckhannon Chemical Co Cadillac Chemical Co Charcoal Iron Co. of America. Clawson Chemical Co Corbett & Stewart Coryville Chemical Co Crossley Chemical Co Cumner- Biggins Co Custer City Chemical Co Day Chemical Co." Duck Harbor Lumber & Chemical Co. East Jordan Chemical Co Forest Chemical Co Forest Products Chemical Co Gaflney Wood Products Co Genesee Chemical Co Gray Chemical Co Heinemann Chemical Co James Manufacturing Co Keeler Chemical Co Keystone Wood Products Co Kinzua Valley Chemical Co Lackawanna Chemical Co Lamont Chemical Co Arthur Leighton Co Lewis Run Manufacturing Co Liberty Wood Products Co Luzerne Chemical Co Me Keen Chemical Co Maplewood Chemical Co Marvindale Chemical Co Maryland Wood Products Co Milanville Chemical Co Merritt Chemical Co Minard Run Chemical Co Nanson Chemical Co Newton Chemical Co Nordmont Chemical Co Nusbaum Chemical Co Olean Chemical Co Oswavo Chemical Co Otto Chemical Co C. W. Peak Penn Chemical Co E . D. Pen warden Riefler & Sons (Inc.) Ridey Lumber Co Russell Chemical Co Smethpoi t Wood Products Co Sullivan Chen ical Co Susquehanna Chemical Co Tionesta Valley Chemical Co Geo. I. Treyz G. H. Treyz & Co Tyler-Hall Chemical Co Vandalia Chemical Co Wisconsin Chemical Co Wright Chemical Co Wyman Chemical Co Williamsport, Pa... Mount Alton, Pa... Beerston, N. Y Detroit, Mich Boyne City, Mich.. Olean, N. Y Cadillac, Mich Detroit, Mich Ridgway, Pa Binghamton, N. Y. Bradford, Pa Starrueca, Pa Cadillac, M,jch Custer City, Pa Westline, Pa Lookout, Pa East Jordan, Mich. Sheffield, Pa Memphis, Term Bradford, Pa Genessee, Pa Roulette, Pa Olean, N. Y Kane, Pa Wetmore, Pa Olean, N. Y Williamsport, Pa... Olean, N. Y Kane, Pa Cook Falls, N. Y. . . Bradford, Pa Port Allegany, Pa.. Pittston, Pa Williamsport, Pa... Shinhopple, N. Y.. Bradford, Pa Maryland, N. Y Binghamton, N. Y. Shavertown, N. Y.. DeGolia, Pa Bradford, Pa Olean, N. Y PittJton. Pa Bradford, Pa Kragon, N. Y Coneville, Pa Williimsport, Pa... Peakville, N.Y.... Ridgway, Pa Car ley Brook, Pa.... Honewdale, Pa Walton, N. Y Russell, Pa Olean, N. Y Acidalia, N. Y Olean, N. Y ....do Cooks Falls, N. Y.. Binghamton, N. Y.. Hancock, N.'Y Olean, N. Y Phelps, Wi; Ridgway, Pa Port Allegany, Pa... 95 96 186 187 97 100 103, 104, 105, 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 125 126 127 128 129 130 131 190 132 133 136 134 159 135 137 138 160 191 139 140 162 141 142 143 161 144 145 146 147 148 149 150 152 153 151 154 155 156 157 130005—19 4 ACETATE OF LIME CASES. Findings or Fact. The Board finds the following to be the facts : 1. The above-enumerated claimants have filed their statements of claim, Form B, under the act of Congress approved March 2, 1919, entitled "An act to provide relief in cases of contracts con- nected wjth the prosecution of the war, and for other purposes," asking to be reimbursed for acetate of lime and bags containing same, on their hands on December 14, 1918. The circumstances upon which their claims are based are as follows : 2. On or about June 24, 1918, each claimant received an order, hereinafter designated as " compulsory order 326 B/C," of -which the following is a copy: " Pursuant to the authority of section 120 of the act of Congress approved June 3, 1916 (39 Stat., '213) entitled "An act for making further and more effectual provisions for the national defense and for other purposes," and acting under the direction of the President of the United States, Commander in Chief of the Army and Navy, an order is hereby placed with you, for purposes connected with the national security and defense, for the entire output of acetate of lime, wood alcohol, actetone and or ketone, which your plant or plants are capable of producing from July first, nineteen hundred eighteen, until December thirty-first, nineteen hundred eighteen (both dates inclusive), the said products or material being of the nature and kind usually produced or capable of being produced by " The War Industries Board through its representative herein designated, C. H. Conner, Wood Chemical Section, or any other representative which it may in future designate, is hereby authorized and empowered to accept delivery of said products or material: to take possession or to direct delivery thereof for the purposes men- tioned above, by waiver or otherwise and upon such terms and con- ditions as it may deem necessary; and to make returns to the Di- rector of Purchases, Storage, and Traffic, Washington, D. C, of all things done and proceedings had in connection therewith. "Approved by Chemicals Division, War Industries Board. "By Charles H. MacDowell. "Approved by the Office of the Judge Advocate General. "By L. W, Call, Lt. Col. J. A. N. A. "Approved bv Priorities Committee War Industries Board, 6/12McK. " By Edwin B. Parker. " This order will take precedence over all other orders and con- tracts heretofore placed with you by any person whatsoever other than prior orders by the War Department, the Xavy Department, or the Shipping Board. You are further notified that bv the said act of June 3, 1916, any refusal on your part to give to the United States such preference in the matter of execution of this order, or any refusal on your part to furnish the above products or materials at a reasonable price, as determined by the Secretary of War, is ACETATE OF LIME CASES. 5 made a felony and punishable by imprisonment for not more than three years and by a fine not exceeding $50,000. "Done at the City of Washington this fourteenth (14th) day of June, 1918. " By direction of the Secretary of War : " Hugh S. Johnson, " Brigadier General, N. A. for the. " Director of Purchase, Storage and Traffic. Claimants allege that all of the conditions of said compulsory order 326 B/C were " entered into " in good faith ; that claimants' plants were operated wholly for the purpose of producing the materials designated in said order during the period from July 1, 1918, until 7 o'clock p. m. December 14, 1918, both dates inclusive, when said order was terminated by the receipt by each claimant of a telegram from the Director of Purchase, Storage, and Traffic, read- ing as follows : " Compulsory order number three hundred twenty-six, dated June fourteenth, nineteen eighteen, for acetate of lime, wood alcohol, ace- tone and or ketone, is hereby terminated to take effect seven p. m., December fourteenth, nineteen eighteen, and further performance of this order shall cease at that date and hour. Done at the City of Washington, D. C, this fourteenth day of December, nineteen eighteen. By direction of the Secretary of War." 3. The price to be paid by the United States for the property re- quired by the foregoing compulsory order 326 B/C was fixed by the War Department Board of Appraisers in a notice issued by them on or about June 24, 1918, reading'as follows : " By direction of the Secretary of War, the War Department Board of Appraisers has considered the price to be paid by the United States for the property required by the foregoing compul- sory order (the information collected by the appropriate division of the War Industries Board and the department or corps in which the said order originates, having been submitted to us), and we have determined that four cents ($0.04) per pound for acetate of lime (on the basis of 80 per cent acetate of lime by distillation test), twenty-five and one-half cents ($0.25-|) per pound for acetone, twenty-five and one-half cents ($0.25^)' per pound for ethyl methyl ketone, fifty cents ($0.50) per gallon for crude wood alcohol 82 de- grees tralles, seventy-nine cents ($0.79) per gallon for denaturing grade wood alcohol, seventy-nine cents ($0.79) per gallon for 95 per cent refined wood alcohol, eighty-two cents ($0.82) per gallon for 97 per cent refined wood alcohol, eighty-six cents ($0.86) per gallon for pure methyl alcohol, and eighty-six cents ($0.86) per gallon for methyl acetone, are reasonable prices, and have made a preliminary award upon such basis as just compensation for the required prop- erty, when provided for and accepted by the United States. " Notice is hereby given that unless dissent to this price, as un- reasonable, is filed with this board within 15 days from the date of mailing this notice, by the person, firm, or corporation addressed therein, it shall be conclusively presumed that hearing thereon is 6 ACETATE OF LIME CASES. waived and this board will make a final award upon the terms herein stated unless, upon due notice, it is otherwise ordered. If notice of dissent to the price herein stated as reasonable is filed, as above pro- vided, the performance of the order is not thereby suspended, but a hearing upon the reasonableness of the price will be afforded upon due notice to you of time and place, and the award of this board made thereafter will be final." 4. The terms and conditions of payment agreed upon by the War Industries Board through its representative, C. H. Conner, Wood Chemical Section, in a letter addressed to said claimants dated July 23, 1918, were as follows: " TERMS AND CONDITIONS. " Payment for acetate of lime is to be made in cash subject to examination of goods at destination. ' l Bags are to be returned within GO days as per shipping instruc- tions in good condition, or if not so returned to be paid for by the consignee. " General trade conditions and terms will remain the same as at the present time. " Claims for shortage, poor quality, and damage in transit on any crude or refined products will be matters for adjustment between the consignor and consignee. " In order to facilitate the securing of waivers covering the dis- tribution of acetate of lime covered by said compulsory order the War Industries Board will permit such distribution through Wil- liam S. Gray & Co., New York, without securing individual waivers from the producer on condition that William S. Gray & Co., for the purposes of such transactions, shall be deemed the agent of the pro- ducer, with the same obligations in regard to delivery of acetate of lime so distributed as devolve upon the producer by reason of said compulsory order and with authority to make requests for shipment and to waive in the name of William S. Gray & Co. any and all claims of the producer against the United States of America and/or its representatives by reason of the placing of a compulsory order for the product involved." 5. Each claimant has filed with the board a statement showing the number of pounds of acetate of lime on hand; the price to be paid under the aforesaid notice issued by the War Department Board of Appraisers; the number of bags, and the value of each; and each claimant has, in its statement of claim, averred that it has not received payment for the property, and requests the Secretary .of War to pay the said claim upon the basis fixed by the War De- partment Board of Appraisers and the War Industries Board, Wood Chemical Section. 6. It will be noted that the aforesaid compulsory order 326 B/C was placed for purposes connected with the national security and defense for the entire output of the different claimants, not only of acetate of lime, but also of wood alcohol, acetone and ketone which ACETATE OF LIME CASES. 7 the said plants were capable of producing from July 1, 1918, until December 31, 1918, both dates inclusive, but no claims have been filed before this board for wood alcohol. 7. The Government's fixed price was automatically destroyed by the cancellation order, and some of the chemicals, to wit, acetate of lime, acetone and ketone, have decreased in value, and for those which have decreased in value, claims have been presented, but no claim has been made for alcohol, which immediately increased in price. The above-named claimants are not alcohol refiners, but are manufacturers of crude alcohol and acetate of lime simultaneously, and have shipped all of their crude alcohol manufactured up to December 14, 1918, to the various refiners as was their custom dur- ing the period named in the compulsory order, and have presented their claims to this board for the acetate of lime on hand as of December 14, 1918. The chemical auditor for this board, Mr. John Hartnett, jr., has collected the records of the War Industries Board bearing on the question of the number of pounds of acetate of lime on hand with each of the aforesaid claimants as of December 14, 1918, and from the records now in the possession of the Board of Contract Adjustment, ascertains that the following table shows the number of bags and number of pounds of acetate of lime on hand with each claimant. Some of the claimants have since December 14, 1918, shipped acetate of lime on hand on that date to the Mel- ville-Corbett Co. and to the Albany Chemical Co., but for reasons hereinafter set out, these various amounts have been credited by us to the concern shipping and deducted from the concern receiving the shipment. The table is as follows : Address. War Industries Board. Barclay Chemical Co John Bartley Beerston Acetate Co Thos. Berry Chemical Co Boyne City Chemical Co Buckhannon Chemical Co Cadillac Chemical Co Charcoal Iron Co. of America Clawson Chemical Co Corbett & Ptewart Cory ville Chemical Co Crosslcy Chemical Co Cumner-Diggins Co Custer City Chemical Co Pay Chemical Co "Duck Harbor Lumber & Chemical Co East Jordan Chemical Co Forest Chemical Co Forest Products Chemical Co Gaffney Wood Products Co Genesee Chemical Co Gray Chemical Co Heinemann Chemical Co James Manufacturing Co Keeler Chemical Co Keystone Wood Products Co Kihzua Valley Chemical Co Lackawanna Chemical Co Williamsport, Pa . . Mount Alton, Pa. . . Beerston, N. Y Detroit, Mich Bovne City, Mich.. Olean, N. Y Cadillac, Mich Detroit, Mich Ridgway, Pa Binghamton, N. Y. Bradford, Pa Starrucca, Pa Cadillac, Mich Custer City, Pa Westline, Pa Lookout, Pa Fast Jordan, Mich. Sheffield, Pa Memphis, Tenn Bradford, Pa Genesee, Pa Roulette. Pa Olean, N . Y Kane, Pa Wetmore, Pa Olean, N. Y Williamsport, Pa... Olean, N. Y 2, 114 121 330 789 3,254 940 3,447 11,568 769 1,995 704 1, 475 881 980 443 1,246 31 3,243 1,294 882 1,978 507 289 325 1,142 1,192 813 $292, 961 20, 471 47, 436 107, 897 486, 980 131, 630 258, 812 1,513,341 105, 530 299.438 101^460 35, 291 210, 925 120, 021 156,443 60,361 169, 900 4,687 504, 806 187,535 131,531 278, 767 70, 923 40, 171 48,750 171, 273 103, 000 116, 696 ACETATE OF LIME CASES. Firm. Address. Bags. War Industries Board. 225 506 1,218 405 1,527 2, 045 279 837 453 343 206 561 390 708 461 284 336 465 637 233 65 195 300 539 112 317 368 525 2,008 240 814 564 218 1,402 488 880 $31,275 Cooks Falls, N. Y 175, 893 123, 785 56,700 Pittston, Pa. 229, 074 224, 840 Shinhopple, N. Y 39, 850 121,184 70, 168 51,400 30, 979 86,011 56, 435 Olean, N. Y 84,349 Pittston Pa 69, 221 41, 750 45, 066 82,029 Otto Chemical Co.... 41,500 C. W. Peak.. .. Peakville, N. Y 35,000 Penn Chemical Co 10, 345 25, 350 40, 500 Risley Lumber Co Walton, N. Y 87,323 Russell Chemical Co 15,112 Olean, N. Y 45, 648 Sullivan Chemical Co Acidalia, N. Y 61,058 Olean, N. Y 75,075 Tionesta Valley Chemical Co Olean, N. Y 303, 758 Geo. I. Treyz." Cooks Falls, N. Y 36, 660 G. H. Trevz & Co 134, 465 Tyler-Hall Chemical Co 79,464 Vandalia Chemical Co Olean, N. Y 32,512 Wisconsin Chemical Co 195, 277 Wright Chemical Co 73, 306 Wyman Chemical Co 122, 139 8. Claims of the refiners for acetate of lime and bags do not ap- pear in this opinion, and some crude manufacturers have been omitted for later verification of the amounts on hand. 9. In respect to bags containing the acetate of lime, claimants differ in the price requested to be assumed by the Government. Some have put in claims for 16 cents each, some for 20 cents each, some for 25 cents each and others for 35 cents each. This matter is called to the attention of the Bureau of Aircraft Production to whom this case will be referred, in order that that bureau may be apprised of the difference in the claims. It is to be noted, of course, that the bags are a part of the Government's property, and in set- tlement this should be taken into account. Decision. 1. The action of the President in placing with the various com- panies the compulsory orders for their entire output, was based upon section 120 of the act of Congress approved June 30, 1916 (39 Stat., 213). Under the terms of said compulsory orders the War Industries Board was authorized and empowered to accept delivery of said products or material, to take possession of or to direct de- livery thereof for the purposes of national security and defense by ACETATE OF LIME CASES. 9 waiver or otherwise, and upon such terms and conditions as it might deem necessary. 2. We are of the opinion that the Government is obligated to take and pay for these products at the prices fixed by the War De- partment Board of Appraisers, and that settlement should be made therefor as of the time of the termination of the compulsory order, to wit, 7 o'clock p. m., December 14, 1918. The proper disposition of this property belonging to the Government, so as to recoup for the Government the largest amount possible, is a question worthy of serious consideration by the representatives of the Government. An expert for the E. I. DuPont de Nemours Co., in testifying be- fore the board, gave as his opinion that the price of acetate of lime would, in the near future, appreciate considerably, and before any disposition of the property by the Government it is recommended that said expert, Mr. Charles T. Clark, of Bay City, Mich., be con- sulted. 3. The right of the Government to recoupment on account of the increase in the value of alcohol will be considered in the cases in which the refiners, to whom the alcohol has been shipped by the producers, are asking to be reimbursed for acetate of lime. 4. As before indicated in this opinion, the claims for the bags vary in the different cases, but the board is of the opinion that the different claimants should be compensated for said bags at the actual price paid by each claimant. DISPOSITION. 1. The Board of Contract Adjustment hereby transmits its deci- sion to the Claims Board, Air Service, Washington, D. C, for recommendation to the Secretary of War of a fair and equitable basis upon which the agreements should be adjusted, paid, or dis- charged, and for further procedure in the manner provided in sub- section (c), section 5, Supply Circular IT, Purchase, Storage, and Traffic, General Staff, as revised March 26, 1919. Board or Contract Adjustment, By Christopher B. Garnett, Chairman, Colonel, U. S. A. We concur F. C. Boggs, Colonel, General /Staff. Robert H. Carruth, Lieutenant Colonel, F. A., U. S. A. Joseph Fairbanks, Lieutenant Colonel, J. A., U.S.A. Edward S. Malone, Lieutenant Colonel, U. S. A. Edgar A. Hamilton, Lieutenant Colonel, Orel. Dept., U. S. A. 10 ACETATE OF LIME CASES. A true copy : In testimony whereof I have hereunto set my hand and affixed the seal of the Board of Contract Adjustment at Washington, D. C, this — - day of , 1919. Attest WlLLARD A. DOERR, Recorder, Major, F. A., U. S. A. Christopher B. Garnett, Chairman, Colonel, U. S. A, o I: LIBRARY OF CONGRESS II III II II I ! I I 011 520 471 3