uc DECISION OF THE APPEAL SECTION WAR DEPARTMENT CLAIMS BOARD In re CLAIM OF WOOL GROWERS CENTRAL STORAGE CO. Case No. 2621 AUGUST 25, 1920 WASHINGTON GOVERNMENT PRINTING OFFICE 1920 *> \9 \ > H. *f J. BEFORE THE WAR DEPARTMENT CLAIMS BOARD APPEAL SECTION. August 25, 1920. Case No. 2621. In (he mailer of the CLAIM OF WOOL GROWERS CENTRAL STORAGE CO., SAN ANGELO, TEX. (Re WOOL.) FINDINGS OF FACT. 1. This case arises under the act of March 2, 1919. Statement of claim Form B has been filed under Purchase, Storage, and Traffic Division Supply Circular No. 17, 1919, for $247,203.88 by reason of an agreement alleged to have been entered into between the claimant corporation and the United States. 2. As the result of the success of the German drive in the spring of 1918 it was decided by the General Staff not only to increase in number and accelerate the movement of troops to France, but to increase the number of troops held in reserve in the United States. This resulted in the sending of very heavy requisitions for woolen clothing of all kinds to the (them Supply and Equipment Division, afterwards called the Clothing and Equipage Division, of the Quarter- master Corps, and orders were issued that the new supplies were needed in the shortest possible time. The quantity of wool eon- trolled by the Government was inadequate to supply the require- ment of the greatly increased army and it was necessary to take some steps to insure a supply adequate to meet the demands of the Clothing and Equipage Division. 3. Thereafter on or about the 4th day of April, 1918, Mr. A. L Scott, chief of the Supply and Equipment Division of the Quarter- master Corps, called on Mr. II. S. Bookings, chairman of the price fixing committee of the War Industries Board, the result of which was that a series of meetings were held between representatives of the Quartermaster Department, the War Industries Board, and the wool dealers and growers of the United States. Finally on the morning of April 2.1, 1918, at a conference held in Washington, D. C, by mu- tual agreement, the price of the 1918 clip was fixed on the basis of prices prevailing on July 30, 1917, and it was arranged that the War Department was to have a prior right to obtain all or such portion of the domestic clip as the War Department might require. 9330—20 1 (3) 4. The details For taking over the wool under option of the wool trade and the regulations for handling the domestic clip were to be arranged by the office of the Acting Quartermaster General in con- junction with the wool section of the War Industries Board. 5. The War Industries Board then proceeded to work out the neces- sary regulations and schedule of prices, and under date of May 2i T 1 9 1 S , issued the following pamphlet: GOVERNMENT REGULATIONS Foil HAN W.IXO WOOL CLIP OF L918. The War Industries Board has fixed the prices of the 1918 clip of wool as established by valuation committees and approved by the Government as those established on July 30, 11)17. at Atlantic sea- hoard markets. These values are figured on scoured basis. (See table on p. 7.) Ri>/ growers is adt ised. Growers who desire to do so will be allowed to pool their clips in quantities of not less than minimum carloads of 10, ()()() pounds and consign the wools so pooled as one account to any approved dealer in any approved distributing center. Growers are urged to adopt this latter course through county agents or others, thus eliminating tie' profits d one middle man. Government price. — Approved dealers in approved distributing centers will be required to open and grade all their purchases or con- signments as rapidly as possible after the arrival of wool at point of distribution. Prices on all wools, as soon, as graded, will be fixed by a Government valuation committee appointed for that purpose hi the different distributing centers. Prices to be paid by the Gov- ernment at distributing centers for such wool as it may require are to be those established as of July 30, 1917, at the Atla itic seaboard markets. In addition to said prices the Government is to pay a further sum equal to 4 per cent of the selling prices to cover compen- sation o] - commission to approved dealers for their services in col- lecting and distributing wool. On wool not taken by the Govern- ment for its own use and which may be allocated for other uses, prices will also be fixed hi accordance with July •'!(), 1917, values at Atlantic seaboard markets, and on such wool approved dealers shall be entitled to a commission or compensation of a sum equal to 4 per cent of the selling price, and this commission or compensation shall be a charge against said wool and shall be collected from the manu- facturer to whom said wool is allocated. Profiteering is prohibited. ■>: * * * * * * Distributing centers. -Trie approved distributing centers for fleece wools are: Boston, Mass. TERRITORY WOOL REGULATIONS. Exceptions. — :|: * * * * * * Distributing centers. For the reasons before stated, in order that the 1918 wool clip may be properly concentrated near the manufac- turing centers a id to make use of every available agency for storing and grading, all territory wools must be consigned to one of the designated distributing centers, which are as follows: Poil laud. Oreg. New York, X. Y. Boston, Mass. Chicago, III. St. Louis, Mo. Philadelphia, Pa. * * :j: * * * * Shipping.- -As soon as possible after wool reaches the railroad, the owner should load it and consign it to any approved dealer he may select in one of the designated distributing centers, who will there deliver the wool to the Government or to some manufacturer to whom the Government may allot the wool. These approved dealers will store, insure, handle, aid deliver the wool under Government regulation. The grower should procure two copies of the shipping invoice and of the railroad bill of lading, aid forward the original invoice and bill of lading to the dealer whom he has selected to handle his wool, retaining the duplicate in his own possession. Advances, interest and freight. — The grower shall be entitled to receive an advance up to but not exceeding 75 per cent of the fair estimated market value of his wool. He shall pay interest on this advance at the rate of 6 per cent per annum from the date he receives such advance until his wool arrives at the distributing center as shown by the railroad receipt. It is not intended that the grower shall pay interest on advances after the date of arrival as shown by the railroad receipt, and he shall be entitled to receive interest on the selling value of his wool after freight has been deducted from date of arrival. The Government is fixing the price of the 1918 clip on a basis delivered at Atlantic seaboard points. It is therefore incumbent on the grower to deliver his wool at the designated dis- tributing centers, and the expense of delivering the wool at such centers will be charged against the wool, on a basis of the freight rate from point of origin to the Atlantic seaboard. Valuing and grading. As soon as possible 1 after the arrival of the wool at a distributing center, if the wool is to be taken in the original bags, it shall be valued by the Government valuation committee. If the wool is to be graded it shall be valued in the piles by the Govern- ment valuation committee as soon as the piles are graded and ready for delivery. All grading will be conducted under Government supervision. The grades out of each clip will be weighed separately and the hooks of the dealer, as far as they pertain to any grower's wool, shall be open to him. Tags, bucks, 'black or other recognized discount fleeces will be paid for at prices fixed by the Government. Bags will be paid for in the same manner. Payments to growers. — Growers shall be entitled to payment on a basis of the date of the arrival of the wool as shown by the railroad receipt. However, as it would be impossible for obvious reasons to make settlement on each clip on the date of its arrival, in order that the grower may lose nothing by any delay in settlement, he shall he entitled to draw interest on the selling price of his wool less freight from the date of the wool's arrival until the date of final sett lenient. Final returns will be made as promptly as possible in all cases. Commissions. — The grower does not pay the commission or com- pensation for handling wools in the designated distributing centers. This commission or compensation for handling will be added to selling price of the wool and paid by the buyer." If sold in the original bags, the commission or compensation shall be 3 per cent of the selling price. Tf the wool is graded, the com- mission or compensation shall he 3| per cent of the selling price. This commission or compensation includes drayage, storage, and insurance for a period not exceeding, o 1 any lot, six months after arrival. On any lot remaining unsold in his possession for a longer period than six months the dealer shall be entitled to charge storage and insurance at the market rate, and this additional charge shall be added to the price of the wool. MtUs located in wool-growing districts. — ■ ******* Permits to dealt rs. * * Lewis Penwell, Chief of Wool Division. War Industries Board. VALUATIONS AS OF JULY 30, 1017. ***** 7V.m.s-. Basis clean scoured. ('Inure Average. Inferior. 12 months $1.75 1 55 $1.70 1.50 1.45 $1. 65 Good 8 months Good (i months 1.50 1.40 ****** :f; Under the foregoing regulations the United States Government proceeded to handle the wool clip of 1918. (). On or about March 1, 1918, Mr. Charles J. Nichols, of Boston, was appointed Wool Administrator and at the time of the taking over the control of the 1918 wool by the War Department under fch ■ auspices of I he War Industries Board, Mr. Nichols, as Wool Admin- istrator, was placed in charge of the operating and organizing with the wool purchasing quartermaster to look after the accounting, warehousing, and financing of the handling of the 1918 wool clip. 7. Thereafter Mr. Nichols proceeded to appoint the Government valuation committees provided for in the regulations for the handling of the 1918 wool clip, whose duty it was to visit the various wool warehouses and there grade the wool exhibited to them by the operators of the warehouses. 8. The Wool Growers Central Storage Co. (Inc.), of San Angel o, Tex., a cooperative association, had been in business a good many years receiving from its clients shipments of wool which were in turn stored in its warehouse where the various wool buyers were in the habit of coming and bidding on and buying the wool. This association did not itself buy wool but handled the woo! on a solely commission basis, as well as made loans to its various clients up to a certain percentage of the value of the wool, asset, by the selling com- mittee of ? ool Grow* rs Central Storage Association. After the wool had been sold by this association, the amount of money advanced, as well as the commission, would be deducted from the amount re- il from the sale of the wool and the client would be paid the dif- ference. The wool shipped to this companv came ebieilv from the counties of Tom Green, Sterling, and Concho and other counties which were either adjacent to San Angelo or within 100 or 200 miles of the same. While this company received most of the wool thai was grown in these counties and territory adjacent to San Angelo, certain growers did not ship to them, but shipped (heir woo! directly to Boston or other woo! dealers in Texas. 9. Wool as it comes from the sheep's back is designated as being in the grease, which means thai it contains a large quantity of yolk or natural grease, and also, besides dust and vegetable matter, a considerable amount of dried perspiration, or suint, sand, and other dirt that is (licked ur> and sticks to the wool. The wool to be made usable has to be washed a, id scoured (hiring winch process all of the foreign matter and the grease is washed out. The amount of weight lost through the removal of these substances when tin 1 wool is washed or scoured is termed shrinkage, and the percentage of shrinkage varies from 20 to SO per cent. In addition to the regular scouring process it would sometimes become necessary, for the purpose ol entirely removing all foreign matter from the wool, to put it through a process known as carbonizing. This method causes a shrinkage of from 1 to .'! ner cent greater than the scouring method. A good buyer is usually able to estimate within 1 or 2 per cent of the shrink- age. The factors to be considered in this connection are the breed, 9 the soil, the climate, and the care with which the sheep are raised, as well as the diligence with which the fleeces are put up. Fine wools always shrink more heavily than coarse; and pulled wools, since they are washed and brushed during the process, show a much less shrink- age than the fleece wools. 10. Texas wools were designated as 12 months wool, which means wool sheared from sheep once a year: good 8 months wool, which is wool sheared at the end of eight months growth; and good 6 months wool, which means wool that is sheared every six months. During the shearing season the sheep are rounded up and are driven into pens from which shoots lead off to smaller pens, which hold about 10 sheep each. Each pen has a Mexican shearer and assistant. The sheep are sheared one at a time and the wool or fleece which comes from each individual sheep is tied up separately and in turn placed in a wool sack which holds on an average of 220 pounds of wool. The quality of wool coming from each sheep varies in that the wool that comes from certain portions of the sheep is more valuable than others. The part immediately over the shoulder blades being cleaner and more free from dirt than the part that comes from the stomach or from the hind legs, where the wool is often discolored and has attached to it more or less particles of manure. The buyer of wool must therefore necessarily be able to estimate the portion of good wool in each fleece as well as the amount of dirt and grease and he places his estimate on it in the grease, estimating that when it is washed there will be so many pounds of clean wool secured from each 100 pounds in the clip. 11. When a wool buyer goes to a warehouse for the purpose of buying wool the representative of the warehouse gets down a certain number of bags out of each clip amounting to from 5 to 7^ per cent of the weight of the clip. These bags are then opened at the top and slit down, the side so that the individual fleeces making up the bag are exposed and can be readily handled by the buyer. The buyer usually handles each fleece in the bags so exposed, examining them for weight, length of staple and amount of dirt and grease, and from this examination makes an estimate of the amount the wool will shrink when scoured. 12. The committee that was sent to San Angelo to grade the wool in the warehouses of the Wool Growers Central Storage Co. was com- posed of Mr. Cardwell-Palmer, the Texas representative and purchasing agent of Texas wools for the firm of Jeremiah Williams & Co., of Boston, Mass.; Mr. C. D. Stokes, banker and merchant of Texas and the Texas representative of Winslow & Co.; Mr. H. M. Cummings of Boston, a member of the firm of Brown & Adams, of Boston, and a wool buyer familiar with Texas and western wools generally; and 9330— 20 2 10 Albert S. Baker, who was formerly connected with Studley & Emory, of Boston, Mass., all expert judges of wool. 13. On the 17th day of September, 1918, the committee as herein- above named arrived at San Angelo and proceeded to examine the wool in the warehouse of the claimant. The Government valuation committee was met ami accompanied in its inspection of the wool in the warehouse of the Wool Growers Central Storage Co. by Mr. J. S. Allison, Mr. Robert Massie, and Mr. E. S. Couch, who with the nec- essary assistants took down from the various clips that had previously been weighed (and each bag numbered and marked with its weight and lot number) and exposed to the committee a number of bags equal to from 5 to 71 per cent of each clip. Each member of the committee handled this wool and made his own estimate of the shrinkage. After each individual clip had thusly been examined, the committee compared the results of their individual examination and the average was set down as the shrinkage of that lot of wool. The committee spent 10 days in the claimant's warehouse and placed values on all wool therein, except approximately 100,000 pounds designated by the committee as scouring wool. 14. After the committee had completed their examination of the wool of the claimant, at the request of claimant's Mr. Alhson, of its selling committee, they went back and reexamined four lots of wool on which Mr. Allison had alleged they had placed too high a shrink- age. Upon reexamination in the opinion of the committee no change was found necessary. 15. Mr. Albert S. Baker acted as secretary to this committee and after completion of the examination of the wool and prior to his departure left with the claimant a list of the wool examined by the committee and the shrinkage placed on each lot. He at the same time prepared and handed claimant an individual acceptance card for each lot of wool examined by the committee, which showed the Government and claimant's lot number and the price per pound. Each of these cards were signed by W. B. Savers, secretary of claim- ant company, and by him mailed to the Government Wool Admin- istrator at Boston, Mass., and. with the exception of the quantity and the price of the wool and lot number, were identical with the following: September 28, 1918. We accept the Government valuation of 65] per lb. on depart- ment lot No. S. A. 3588, out lot 108, stored as city San Angelo, State Texas. Wooi. Growers Central Storage Co., W. B. Sayers, Secty. 10. After this committee had left and after the cards had been signed and mailed by said secretary of the claimant, it became dis- satisfied with the shrinkage that had been placed on the wool. Com- 11 plaint was made by the Wool Growers ('(Mitral Storage Co. to Mr. Lewis Penwell, chief of the wool division of the War Industries Board, Washington, D. C, and to Charles J. Nichols, Government Wool Administrator, that the Government valuation committee had placed an erroneous valuation on the .aid wool. 17. On October 7, 1918, Mr. Nichols addressed the following lettei to the claimant: Boston, Mass., October 7, 1918. Wool Growers Central Storage Co., San Angelo, Tex. Gentlemen: We are receipt of a letter from the War Industries Board in regard to the matter of scouring some of the Texas wools on which there is a question of shrinkage, and in reply would say that if you will communicate with this office advising us of the situa- tion with the growers in question as to the amount and description of wool, also how much and to whom they wish to ship for scouring, we will go into the matter carefully and advise you in regard to same. Quite a percentage of the Texas wool is going to be used for a partic- ular purpose, and in making the tests for the growers we should also endeavor to interfere as little as possible with the plans for the ulti- mate use of this wool. Yours, truly, (Signed) Charles J. Nichols, Government Wool Administrator. CJN/W. IS. On October 14, 1918, the following telegram was sent claimant: [Western Union Telegram.] October 14, 1918. C. W. Hemphill, Coleman. Tex.: We have no objection your having Wool Growers Central Storage Co. forward wool direct to public scouring nr.ll Boston to be scoured, growers to pay charges. Government will then revalue scoured product. Same valuation committee appraised Texas wools Boston and San Angelo. See letter. Lewis Penwell, Chief of Wool Section, War Industries Board. MCK/NBB. Washington, D. C, 4.44 p. m., November JO, 1918. Sam Hill, President Wool Growers Central Storage Co., Sim Amnio, Tex.: Can send new valuation committee to revalue Central Storage Wools, but must be with understanding that new valuation is final and must be accepted by all growers whether better or worse than original valuation. Wire us wishes wool growers who consigned to you. We are sending copy of this telegram to Jeff D. Ayers and Coleman County Wool Growers Association. Lewis Penwell, Chief Wool Section, War Industries Hoard. 6.20 p. m. 12 19. The result of this letter and these telegrams, and various others that are not quoted, was that a second valuation committee, com- posed of Mr. ('harles F. Angell, Jackson Salter, and Joseph Farquhar, was sent to San Angelo, Tex., for the purpose of revaluing the wool of the Wool Growers Central Storage Co. This committee received certain definite instructions from the United States Wool Adminis- trator, \vhi< h instructions were the same that had been given to other committees who had revalued wool where there had been a dispute. The said committee had in its possession a report of the findings of the first committee and Mr. C. D. Stokes, a member of the first com- mittee, was to accompany the second committee for the purpose of seeing that the wool exhil ited to the revaluing committee was the sanie wool that had been exhibited to the first committee. 20. This revaluing committee reached San Angelo on or about the 9th day of December, 1918, and proceeded to the warehouse of claimant in company with Mr. C. 1). Stokes and stated that their purpose was. and Mr. Stokes in turn stated that his instructions were, to see that the same wool was displayed to this committee that had been displayed to his. Thereupon certain growers of wool who had shipped their wool to the claimant and were interested in the out- come of the revaluation, along with the claimant, protested against any examination by this committee, alleging that the same did not meet with their approval, owing to the fact that Mr. Stokes was a member and this committee was bound under its instructions to accept the findings of the first committee, in the event their findings differed from the findings of the first committee. The revaluation committee only examined about four lots and then quit, and on the 9th day of Dec-ember, 1918, the following telegram was sent to Mr. Nichols by the directors of the claimant company: C: 11. Nichols, Govt. Wool Admn., loo Summer St., Boston, Mass.: We, the directors of the Wool Growers Central Storage Co., after full discussion with the wool growers find they are not willing to accept the valuations of tl is new committee as final unless satisfac- tory to them. Do not care to go to the expense of handling these wools again unless absolutely final. Wire us instructions quick. (Signed) Robert Massie. J. S. Allison. S\m H. Hill. W. B. Save i:x. S. E. Cough. 21. Mr. Nichols answered this on December 10, 1918, as follows: "Telegram received. Committee must proceed in customary man- ner as outlined. Letter instructions given Stokes. Revaluation as outlined is final. If revaluation not desired, Government will ac- cept wool basis first valuation or relinquish prior right to wools involved and release same." 13 22. On December 13, 1918, Mr. C. F. Angell, member of the second valuation committee wired Mr. Nichols as follows: "Have revalued a few more 'lips, but found no reason to change original valuation. The Coleman County Growers, who protested to Washington, left for home without asking revaluation, claim- ing that they would not he satisfied unless they chose one member of the valuation committee; therefore they would accept original valua- tion. Central Storage say will not be necessary to revalue any more wool, so will leave for Boston Saturday afternoon." 23. Other than the few clips examined, referred to in the telegram last quoted, the revaluation committee examined no further wool. The claimant company proceeded to ship to the depot quartermaster at Boston, Mass., in October, November, December, and January, 1918 and 1919, the wool in question, for which settlement has been made by the Government on the basis of the valuation and shrink- ages placed by the first committee. 24. The evidence shows 332 bags, containing 92,822 pounds of the wool in claimant's warehouse, designated by the first, committee as heavy wool, which they stated would shrink 80 per cent, was sold by the Government at a public auction and purchased by the Centre- dale Worsted Mill, of Centerdale, R. I., and that, at request of Col. Gracy, when the wool in question was scoured, an accurate account of the shrinkage of same was kept which shows that the shrinkage of the wool in question was 79.89 per cent. 25. The claimant alleges as follows: First. — That in the instructions issued by the War Industries Board hereinbefore quoted the Government agreed to pay them SI. 75 for choice 12 months, $1.70 for average 12 months, and $1.65 for inferior 12 months, but that, notwithstanding this, the valuation committee placed a value of $1.72 on a portion of their 12 months choice, $1.68 on some of their average 12 months, and $1.60 on some of their infe- rior 12 months; that the prices as set forth in the said regulations of May 21, 1918, were conclusive on the valuation committee, and the said valuation committee had no right or authority to place an} T less value on any of the wool falling under any of the aforesaid classes; and that the committee erroneously classed as short wool 27,600 net pounds of 12 months wool and allowed a price of only $1.55, or $27,600 less than the price should have been; and that the committee placed a higher price on some of their short wool than they did on their long wool, and that the short wool is far less valuable than long wool, as shown by the difference in the prices of the two articles fixed by the War Industries Board, where the highest price for short wool is $1.55, while the highest price for long wool is $1.75; that the committee allowed 9 cents per pound more for some of the short wool than it did for a portion of the long wool; that the estimate of shrink- 14 age made by the valuation committee is wrong; that the claimant sent to the United States Conditioning & Testing Co., of Philadelphia, Pa., 250 pounds of claimant's lot No. 339, Government lot No. 3569, and reports show it shrank only 68.92 per cent, while the valuation committee estimated that it would shrink 75 per cent; that 200 pounds of claimant's lot No. 301, Government lot No. 3562, shrank 67.50 per cent, while the committee estimated its shrinkage at 74 per cent; that 24 pounds of claimant's lot No. 315, Government lot No. 3575, showed a shrinkage of 6S. 71, while the committee estimated the shrinkage at 78 per cent; that 22 pounds of claimant's lot No. 205, Government lot No. 3569, showed a shrinkage of 66.29, while the Government estimated it at 75 per cent; that 26 pounds of claim- ant's lot No. 1S7X, Government lot No. 3570, showed a shrinkage of 67.09, while the committee estimated the shrinkage at 77 per cent; that in arriving at the value of practically every lot in the claimant's warehouse the valuation committee made gross mistakes in its estimate of the shrinkage, amounts of dirt and grease in the said lots. Second. — That the United States forced and compelled claimant corporation to deliver to it the wool in its warehouse at the value placed thereon by the first valuation committee. Third. — That Mr. Sam Hill, vice president of the claimant cor- poration, entered into an arrangement and agreement with Mr. Lewis Penwell, chief of the wool division, War Industries Board, some time in May, 191s, that the freight they were to pay on their wool from San Angelo to Boston should lie based on the water rate from Galveston, Tex., which is cheaper than the all -rail rate to Boston, hut that notwithstanding this agreement they were compelled to ship their wool by the all-rail route, resulting in a loss or damage to it of $16,000; that they had an arrangement with the Santa Fe Rail- road known as concentrating privilege, under which when wool was shipped from a point in Texas to Galveston and from thence to Boston by ship, a certain rebate was made to the shipper, which amount was lost to it, and in addition it was forced to pay the differ- ence between the rail and ship rate and the all-rail rate from San Angelo to Boston. Decision. A careful analysis of the claimant's petition ami the evidence pro- duced presents to this Board for decision only three questions: First. — (a) Did the first Government valuation committee in placing the value on the wool of the claimant make any error in judg- ment and thereby place the value of the wool at a less figure than its true value ( 15 (6) Did the value placed on the said wool by the said com- mittee conform to the prices as set forth in the Government reg- ulations of May 21, 1918? Second. — Did the signing of the cards known as acceptance cards (claimant's Exhibit No. 14), and thereafter the shipping of the wool described on the said cards, at the prices therein set forth, and the acceptance by the said claimant of payment of the wool so shipped at the said prices, constitute an agreement or contract between the claimant and the United States, and is the claimant bound by the terms and the conditions of the said agreement, thereby precluding any award by this Board '. Third. — Was there any agreement entered into between Mr. Sam Hill, vice president of the claimant company, and Mr. Lewis Penwell, chief of the wool division of the War Industries Board, whereby the claimant was to be allowed to ship its wool by rail and water route. or, in lieu thereof, the claimant be allowed the difference, in freight between the all-rail route and the cheaper rail and water route 1 ? Fint. — (a) Did tin first Government valuation commiitex in placing the value on t/i< wool of the claimant make (in;/ error in judgment and thereby plaa the mint cftht wool at a less figure than its true value '. The burden of proof is on the claimant to prove by a preponderance of the evidence that the Government valuation committee made an error in judgment or a gross mistake, and placed a wrong shrinkage on the wool of the claimant. This the claimant, in the opinion of this Board, has failed to do. The committee appointed by the chief of the wool division of the War Industries Board consisted of four expert wool buyers, two of whom were representative men of Texas, conversant with conditions in the San Angelo district, familiar with the wool handled by the claimant, from which company they had often purchased wool for their houses. Mr. C. D. Stokes, of Lampasas, Tex., is a wool buyer of more than 15 years' experience; a man who not only buys for himself but who is also the Texas representative of the firm of Win-low & Co., of Boston (the wool center of the United States), and one of the largesl buyers of Texas wools, who testified that he each year purchased for his firm millions of pounds of Texas wool. Mr. C. D. Stokes was so well thought of by the officers of the claimant company that on May 16, 10 IS, Mr. Hill, the vice president of claimant company sent the following telegram to Mr. Penwell, chief of the wool division of the War Industries Board: "I have known Stokes Bros., of Lampasas, Tex., for 30 years. C. D. Stokes intimately. They are bankers and merchants having considerable money out on wool. Have the confidence of every one that knows them. High-class honorable business men. Plenty strength financially. 16 Again on May 22, 1918, March Bros., G. T. Cynn, and S. H. Hill, claimant's vice president, forwarded the following telegram to Mr. Lewis Penwell: "We respectfully recommend C. D. Stokes, of Lampasas, and in our opinion he is one of the best judges of shrinkage of wool than any man in Texas or as good as any in Boston." Mr. Cardwell Palmer, of San Antonio, Tex., another member of this committee, is also an expert Texas wool buyer, conversant with the conditions in the San Angelo district and familiar with the wool handled by the claimant. Mr. Albert S. Baker, at that time a buyer for the firm of Studley & Baker, of Boston, by whom he. had been employed for 17 years, had a general knowledge of Texas and other wools, and he yearly bought for his clients large quantities of Texas wool. Mr. H. M. Cummings, the fourth member of the com- mittee and a member of the firm of Brown & Adams, of Boston, is a man whose experience as a wool buyer was second to none, and who was not only familiar with Texas wools, but was a buyer of wools in States adjacent thereto and the West. The livelihood of a wool buyer depends upon his ability to judge the shrinkage of wool. The evidence shows that a buyer of wool must be able to judge within 1 to 2 per cent of its actual shrinkage value, that if he fails to judge within this percentage of its actual shrinkage, his firm in a course of a year would lose large amounts of money. The committee appointed by the Wool Administrator and sent to Texas for the purpose of valuing the wool of the claimant was com- posed of high-class men. In fact, the greatest experts in the employ of the larger wool houses of Boston. Not only this, but one of the members of that committee was placed thereon at the request of the claimant, whose telegram of recommendation we have quoted. Suggestions were made during the taking of the evidence, and in the argument, that Mr. Stokes had failed to properly judge the wool in question, and great stress was laid upon certain alleged alterations of a personal memorandum he kept on the shrinkages at the time this committee examined. This Board is of the opinion that this contention is without merit, as the average estimate of the whole committee was the value placed on the wool. Against the opinion of men of this caliber the claimant offers the evidence of Mr. Sam Hill, their vice president, who frankly admitted that he was not an experienced judge of wool, but was a wool grower; and the opinion of Mr. Allison, that his experiences of judging wool was limited to the immediate section adjacent to San Angelo; and Mr. J. M. Jones, employed as teacher in an agriculture school, whose testimony was to the effect that he had been associated with some wool experts, had been in wool houses, had helped shear some sheep, 17 but that he had never on his own examination purchased any woo! (p. 462 of the Record). The claimant has laid great stress on the result of a scouring tesl of the wool described in claimant's Exhibit No. 4. which consisted of a scouring test on one lot of 250 pounds, one lot of 200 pounds, and three lots of 20 pounds each, on which the report showed a shrinkage of 68.92, 67. .10. 68.81, 66.20. and 67.00, respectively, and they have strenuously argued that this scouring report shows conclusively that the shrinkage placed on their wool by the valuation committee was erroneous. They produced Mr. Jos. H. Shinn, of the United States Conditioning cv_ Testing Co., who testified to the method of the scouring of the samples referred to in the said exhibit, and who was unable to state whether or not the wool presented to him for this scouring test consisted of a better quality of the wool than the average run of the lot (p. .'500), and that he did not remember whether there was any dirt or dun locks attached to the wool; who further testified that out of lot No. 1S7X, Government lot No. 3570, he scoured 20 pounds out of 6.020 pounds, and that his house would require for an accurate test at least 21 per cent of the lot, which, in this instance, would be about 175 pounds. On page 403 he testified: "Q. In other words your rule- were not complied with '. "A. If it came out of 6,020 pounds I did not know that until 1 saw the figures here. "Q. Then you would not say that the test made by yon was an accurate test \ "A. As applying to the whole lot '. "Q. As applied to the whole lot. "A. As applied to the whole lot I would have to say no." Claimant through its attorney (p. 404) admitted that the last three lots on the bottom of the memorandum containing 20 pounds each, were not 2 A- per cent of the wool they were supposed to be representative samples of. The Government produced Mr. George M. Kerr, of Philadelphia, a wool buyer and salesman, who testified he had been in the wool business for 36 years and was connected with the Chas. J. Webb & Co., of Philadelphia, who bought a million or two million pounds of wool in the West each year, that he was familiar with Texas wools, that he had a conversation with Air. Shinn, of the United States Conditioning & Testing Co., and that Mr. Shinn showed him a 250-pound test which showed a shrinkage, according to his opinion, of 68.92 percent, and that in addition to this, that there 1 were three or four or five other tests that he (Shinn) was making for Texas wool growers, and that he made an examination of the samples in question, and in his opinion the samples had not been properly scoured, but had in them from 5 to 10 per cent of grease or dirt that had not been removed (pp. 615, 18 618) ; that his object in going in to see the samples was to clot ermine whether or not he would buy any of the wool, and that his estimate of the samples that he saw in the grease would shrink around 70, 73, or 74 per cent. The Government also produced Mr. Wra H. Lister, who testified he was in the business of making worsted yarn, that lie scoured wool, that he bought at the Government catalog auction sale No. 20, series No. 74, lot No. 150, S. A. 3576, at 27 cents and that the quantity of won! delivered under this was 92,872 pounds of wool, and was scoured at Centerdale, R. I., scouring mill, and at the request of Col. Gracey, an accurate scouring test was made of this wool and that the same showed a shrinkage figure of over 7!>l per cent (p. 937). The evidence further establishes the fact that this wool was a portion of the wool shipped to the Government warehouse in Boston by claimant, and was some of the wool that the Government valuation committee stated would shrink 80 per cent. Prior to the introduction of Mr. Lister, the Government produced Mr. Schofield, of Centerdale Worsted Mills, the man who had direct charge of washing or scouring the wool in question and who testified that it was the dirtiest and heaviest wool that he had ever washed (p. 790). This Board, at the earnest solicitation of claimant's attorney, per- sonally made an examination of the mill in question and the method employed by it in scouring this wool and its method of arriving at the percentage of shrinkage, and while the claimant in its argument has suggested that certain waste from the wool was not properly accounted for, this Board, from the evidence and its personal examination of said scouring mill, is of tin 1 opinion that this contention is without merit, and that the test as reported by this mill is a true test, and shrinkage placed on the 1 said wool by said mill is correct. The evidence that has been produced clearly establishes the fact that the year 1917-18, during which time the 1918 wool was growing, was one of the dry est years that has ever been experienced in Texas, and that during dry years the growth of the wool of a sheep is seriously interfered with and the staple is shorter than in the ordinary year. Not only this but (he wool is dirtier and has more sand and grit in it due to the dry and dusty season and the shrinkage of the wool is therefore greater. The evidence shows further that the wool handled by the claimant came from counties that were seriously affected by the drought. Taking into consideration all that has been stated above and the other evidence before this Board, this Board is of the opinion that the claimant has failed to produce any evidence that would justify it in reaching the conclusion that the valuation placed on its wool by the said Government valuation committee was erroneous, and 19 believes that the shrinkage placed on the said wool by the said Gov- ernment valuation committee was proper and correct. First. — (b) Did the valuation placed on the said wool by the said com- mittee conform to the prices as set forth in the Government regulations of May 21, 1918? Claimant has contended in its petition and strenuously alleged in Hs opening statement and argument to this Board, that the placing of the value on its said wools in any sum other than the specific figures set forth in the Government regulations of May 21, 1918, of $1.75, SI. 70, and $l!65 was erroneous and beyond the authority or power of the committee. The testimony establishes the fact that where wool was offered to the committee for valuation having a length of staple that did not justify the price of SI. 75 but was worth more than Si. 70, that instead of placing a value on it of SI. 75 the committee valued it at between $1.75 and SI. 70, and that where it examined wool that was not worth $1.70 but was worth more than $1.65, it placed a valuation on the said wool between these figures, and that where in its examina- tion of claimant's inferior 12 months wool it was apparent to the said committee that all wool in the said lot was not of a staple justifying a class as inferior 12 months wool, yet had in it sufficient wool of that length of staple to make it unfair to the claimant to give it a grade as short wool, that the committee took into account the various amounts of different staple in the said lot, and placed a value on each proportion, or grade, or staple, and averaged the same, thereby arriving at the price they placed on the wool. The custom of the wool trade in buying wool is that when it pur- chases a 12 months wool, the same is supposed to consist of wool of a length of staple that justifies it taking that class, and if there is mixed in it any wool of a different staple or length, the buyer at- tempts to make an average estimate of the amount or quality of the different grades or staple, and thus arrives at the average price per pound for (lie whole lot. This is the universal custom in the wool buying trade and was the practice followed by this valuation com- mittee in placing the value on the wool of the claimant. The regulations adopted by the War Industries Board were prepared by practical wool men, who had in mind the practices, uses and cus- toms of the wool trade, and this Board is of the opinion that when the said War Industries Board adopted the regulations of August 21, 1918, the members of the valuation committee appointed under the provisions of the said regulations, were not thereby deprived of their individual knowledge of the uses and customs of the trade, nor were they precluded from placing on the wool examined by them t he- value they honestly considered the same to have, and that they were 20 the solo judges as to whether or not the wool exhibited to them for examination and valuation, wore fair samples of the grade, or class, they purported to be, and that if in their examination of any lot of wool exhibited to them purporting to be of any certain class, the same turned out to contain wool of a length of staple that did not justify it in taking that class, that this committee had the sole au- thority to estimate the various classes or grades in said lot, and to place on the same a price per pound different from the maximum price set forth in the regulations. This Board is therefore of the opinion that the valuation com- mittee in setting a price on certain of the claimant's wool at a different figure from that set forth in the Government regulations of May 21, L918, were wholly within their rights, and that the claimant has failed to produce any evidence that will justify this Hoard in revers- ing or setting aside the valuation placed on the said wool by the said committee, or will justify this board in reaching a conclusion that the said valuation was in any way erroneous or improper, and this Board believes that the valuation placed on the said wool by the said valuation committee violated none of the provisions of the said regulation of May 21 , 1918, and that the same wools of the claimanl were properly and fairly valued by the said committee. Second.— Did the signing of the cards known as acceptabh cards (claimant's Exhibit No. 14) and thereafter the shipping of the wool described <>n flu said cards, at tht prices therein set forth, and the ac- ceptance by the said claimant of payment of the wool so shipped at the said'prices, constitute an agreement or contract between the claimant and the United States, and is the claimant hound by the teems and the condi- tions oj tin said agreement thereby precluding any award by this hoard? At the time the valuation committee appeared at the warehouse of the claimant for the purpose of valuing its wools, every lot of wool in the warehouse with the exception of certain wools designated as scouring were valued by the committee and before their departure Mr. Albert S. Baker, their secretary made out and delivered to the said claimant cards known as acceptance cards (claimant's Exhibit No. 14). These cards were later signed by W. B. Savers, secretary of the claimant, in form as follows: September 28, 1918. We accept the Government valuation of 65^ pen- pound on depart- ment lot No. S. A. 3588, our lot, 108, stored at , city San Angelo, State Texas. Wool Growers Central Storage Co., W. B. SAYERS, Secretary/' 21 Each and every one of these cards specifically stated thai the Government valuation therein staled was accepted, and not until after the receipt by the Government of the cards accepting the prices of the valuation committee did the claimant complain. Thereafter the claimant protested and the second valuation committee being sent claimant refused to allow them to revalue its wools. On the 14th day of August, 1918, claimant was sent the following telegram: C. W. Hemphill, Coleman, Tex.: We have no objection to your having Wool Growers' Central Storage Co\ forward wool direct to public scouring mill, Boston, to be scoured, growers to pay charges. Government will then revalue scoured product. Same valuation committee appraised Texas wools Boston and San Angelo. See letter. Lewis Penwell, Chief of Wool Section, War Industries Board. MCK/XBB Thereafter on the 10th day of December, 1918, a telegram was forwarded to claimant advising if the Government would release the wool m question and allow the claimant to dispose of same in the open market, a.s follows: Telegram received. Committee must proceed in customary man- ner as outlined letter instructions given Stokes. Revaluation as outlined is final, [f revaluation not desired Government will accept wool basis first valuation or relinquish prior right to wools involved and release same. The claimant therefore had the option of doing one of the three things: First, send the wool to Boston to have it scoured and the price fixed on scoured basis. Second, have the Government release the wool to it for sale in open market. Third, accept the value placed on its woo! by the first valuation committee. Claimant was in a position to elect what it would do under the circumstances, and it elected to ship to the Government in accordance with its first acceptance, and having so elected did ship and has received from the Government every cent called for in the cards of acceptance. This Board is therefore of the opinion that the claimant by the signing of the said acceptance cards and the shipping in accordance therewith and the acceptance of the amount called for thereon, is estopped from asserting any further claim on account of the selling price of the wool in question, and that this Board is precluded from granting to claimant any relief on account of a transaction that has been completed by performance and payment. Third.— Was then ami agreement entered into between Mr. Son, Hill, via president of th( claimant company, and Mr. Lewis Penwell, chief oj wool division of the Mar Industries Hoard, whereby the claimant was 22 to fa allowed to ship its wool hi/ rail and miter route, or in lieu ther of, tht claimant be allowed the difference in freight between the all-rail route ami the cheaper rail and mater route. The evidence shows that some time in May, 1918, Mr. Sam Hill, vice president of (he claimant corporation, was in Washington and e tiled on Mr. Lewis Penwell, chief of the wool division, War Indus- tries Board, who went with him to the Director General of Railroads in an effort to get authority to ship the claimant's wool by boat from Galveston instead of by the all-rail route. Mr. Hill returned to Texas about the 22d of May, an. I on the 6th of dune, 1918, Mr. Pen- well addressed the following letter to claimant: " I have your letter of May 22d regarding the shipment of wool by water to the Atlantic seaboard distributing center. 1 note that you have taken the matter up with the Shipping Board and I shall be glad to see if there is anvthing further that can be done. However, I understand that the shipping situation is still very acute, and there- fore assume that it is extremely doubtful whether they will allow boats to be used in this cast 1 ." On September 13th Mr. II. M. Cummings, of the valuation com- mittee, in addressing Mr. Nichols, the Wool Administrator, has the following to say as to the freight: "* * * Mr. Sam Hill, of the Wool Growers' Central Storage Co., was here last evening, and told Mr. Schreiner that Mr. Penwell told him while he. was in Washington last week that the freight rate should be figured based on the rail and water rate. As instructed by you, we have figured the rate here 228, which is the all-rail rate, and shall figure the Angelo wool the same way unless otherwise instructed. As you know, all the Texas wool which was shipped direct to either Boston or Philadelphia, was shipped all rail. The rate of 228 is 25 per cent more than the rate the other wools carried on account of the increase in all railroad rates. The rail-and-watef rate is, of course, cheaper than either of the above all-rail rates." Under date of September 18, 1918, Mr. Charles J. Nichols wired Mr. Lewis Penwell as follows: "Our valuation committee in Texas have valued ovev thousand lots giving grower the net Texas price for his wool deducting two twenty-eight on our instruction, as all Texas wools shipped east so far this year have moved on this rate. Understand Sam Hill, of the Growers Central Storage Co., quotes you as authorizing deduction of the rail and water rate which is less. Which rate should be used ?" Under date of September is Mr. Sam Hill addressed a letter to Mr. Lewis Penwell and in the said letter made the following reference to the said water rate: "Have not received wire from you as to instructing your water routing wool as was agreed on when I was in Washington." To which Mr. Penwell replied on September IS) as follows: "There is hitch with Railroad Administration regarding water rate. Have had matter up with them for two days, expect final 23 show-down to-day, will wire you. Have \vi ed Nichols revaluing you eight thousand pounds medium and Mexican wool." Under date of Septembe: 19 Mr. Lewis Penwell advised Charles N. Nichols as follows: "Have wire from Hill. San Angelo. requesting valuation committee pass on their medium and Mexican wool about eighty thousand pounds. Railroad Administration not yet advised' in rega ding water rate, hut hope I'o: final answer today." Under date of September 23 Mr. Lewis Penwell wrote Mr. Sam Hill as follows: "We received the following telegram from you this morning: Telegram received wool committee are working right along and will be he e at least anothe ■ week. Would prefer that you get final answer from Railway Administration by the end of next week or soone and then so instruct wool committee he e a. to routing wool by water. Wire answer;' and we wired you this ai'te noon as follows: 'While it is desired by all inte'ested that wool from Texas concentra- tion points move via rail and water we deem it necessary that ap- praisal committee value on basis on all-rail delivery. Government Wool Administrator will then rebate difference in freight to growers if and when their wool moves via rail and wate . Rail oad Adminis- tration hopes it possible to have all these wools moved rail and water but, as can give no positive assurance, it is necessary that valuation be made on all- ail ba^is. ' "It is the desire of the United States Railroad Administration, the wool section, and the Quartermaster Department to have the wools from Texas concentration points move via the rail-and-water route whenever possible, and we trust there will be sufficient bottoms avail- able to have your wools move via the water route. However, as it is necessary that the Government Wool Administrator have these wools appraised, valued, and paid for without any unnecessary delay, we believe that it is necessary to assess the all-rail rate against the wool in order to avoid any delays in settlement. As we wired you to-day, if the growers are unable to ship the wool via water route the Quartermaster's Department will then rebate them the difference be- tween the all-rail rate as assessed and the rail-and-water rate under which the wool might move. You can readily undersl and that should the Government make freight deductions from Texas points on the basis of rail-and-water rates and later on would find it was impossible to have the wools move that way that it would be vrvy difficult to collect from the individual glowers the difference in freight rates. "We trust that the arrangements as outlined in our telegram to you to-day will be satisfactory to all concerned." Under date of September 23, 1918, Mr. Penwell wrote a letter to Mr. A. H. Barnard, Assistant Wool Administrator, in which he makes the following reference to the shipment of wool by the claimant: "I have your letter of September 18, and replying will state that the situation regarding the freight rate from Texas is as follows: "While Mr. Hill was here he asked me to go with him to the Director General of Railroads, which I did. We were there directed to see a Mir Buxton, who told us that it was the desire of the United States Railroad Administration to have the Texas wool come via water v< thai we Id have i 1 on file in our office. Mr. Hill immediately lef 1 for - and I have not seen e d from him .:d by ■ fina ly ad- ith Raihvav Administration. The foregoing sugg nade ro expedite settlement. If this is - . Nichols at Bi -ion. where Mr. RUiol la\ ' : . es from il of wool v. : e by boal oul tna suggestion to expedite settlement." •■ I have jusl re< eived the following answer from Hill: '• 'Telegram received. Wool committee working right along. Will be here at least another week. Would prefer that you gel final an wcr from Railway Administration by end of week, or sooner, and then so instruct wool committee here as to routing wool by water. Wire answer,' and 1 have replied to him as follows: hile it is desired by all interested that wool from Texas con- centration points move via rail and water, we deem necessary that raisal committee value on basis of all-rail delivery. - Govern- ment Wool Administrator will then rebate difference in freight to growers if and when their vool moves via rail and water. Railroad Administration hopes il possible to 'nave all these wools moved rail and water but as can give no positive assurance it is necessary that valuation be made on all rail basis.' * : ' : ::: " Under date of October 26, L918, Mr. Penwell telegraphed Mr. A. W. Elliott as follows: " We telegraphed Central Storage Co. to send certain 8 months wool forward all rail. These wools belong to the Quartermaster Corps, and our instructions given San Angelo dealer- must be exe- cuted promptly. Any controversy arising in regard to all rail or water freight the rate can be adjusted later. Kindly wire Central Storage Co. at San Angelo to immediately ship forward wools as in- structed by Wool Administrator: otherwise important Government work w ill be delayed." Immediately upon receipt of the above message by the chief of the wool section. Mr. Sam Hill was telegraphed in care of the Wool Growers Central Storage Co. as follows: "Urgent Government requirements for gas defense make- it nec- essary that certain 8 month-' wool in your warehouse must move immediately via all rail. Kindly arrange to have these wools for- warded immediately all rail in accordance with instructions sent you by Government Wool Administrator. Boston, as important Govern- ment work must not be delayed." L'.> The foregoing letters and telegrams simply indicate an attempl on the part of the claimant to make arrangements with Mr. Lewis Pen- well for the shipment by claimant of its wool by the rail and water route, but, in our opinion, the same never resulted in any agreement, express or implied, that the Secretary of War, under the provisions of the act of March 2. 1919, is authorized to adjust or settle. Elliott on Contracts defines an agreement as follows: "Agreement, in the legal sense as here understood, is the union of t\\o_or more persons in a common expression of will, either by words or conduct, or both, affecting their legal relations. There must be a meeting of at least two minds in the same intention — an aggregatio mentium. As often said in common parlance, 'it takes two to mala 1 a bargain.' And the common intention must be expressed, for a mere mental undisclosed intention or assent to an offer is insufficient and does not constitute an acceptance. As said by an English writer, 'An agreement is an act in the law whereby two or more persons declare their consent as to any act or thing to be done or for- borne by some or one of those persons for the use of the others or other of them." * * *." And again on page 25, paragraph 26: "In order to supply this requisite there must be a meeting of the minds as to all essential elements. Both parties must understand the same thing in the same sense and both parties must be bound or neither. There must be a meeting of minds on the subject-matter, relative to which the proposal and acceptance were in fact made aid entered into." The telegram under date of September 23 from Mr. Penwell to Mr. Sam Hill and letter of the same date from Mr. Penwell to Mr. J. H. Barnard, shows conclusively that there was never any meeting of the minds, or any agreement entered into between Mr. Sam Hill and Mr. Lewis Penwell for the movement of the wool of claimant by rail and water route. It is true that Mr. Penwell did use his best efforts to secure for the claimant the rail and water route, but it is also equally true that none of the negotiations ever resulted in any agreement. There is some evidence in the record of an alleged conversation between Mr. Hill and Mr. Penwell that occurred in the presence of the Hon. C. B. Hudspeth, Congressman from Texas. This ; lleged conversation occurred long after the negotiations between Mr. Pen- well and Mr. Hill and after the wools in question had been shipped to the Government and paid for. and in oui opinion the letters and te e- grams exchanged between Mr. Penwell and Mr. Hill, at and during the time of the negotiations, are the best and most conclusive evidence. An agreement to be binding must be positive and certain and both parties to it must understand the same thing and each party must be bound or neither, and this Board believes from the foregoing evidence that there never was any meeting of the minds and there no agreement could have or did result from the negotiations and the 26 exchange of telegrams and letters between Mr. Pern* ell and Mr. Sam Hill. For the foregoing reasons all relief asked for by the claimani both as to the payment to it on account of the alleged erroneous and wrong valuation of its wool and on account of the alleged agreement for the shipment of its wool by rail and water route is denied. Disposition. Final order denying relief will issue. War Department Claims Board, By R. R. Farr, Miior, Judye Advoc te, Member, Appeal Section. We concur. F. A. Morgan, Captain, Infantry, Associate Member, Appeal Section. Geo. L. McKeeby, Lt. Colon'!, Infantry, Acting Chairman, Appeal Section. Approved, August 20, 1920. Miller 1). Steever, Member, War Department Claims Board. Approved by order of the War Department Claims Board August 28, 1920. A. L. Lansdale, Recorder. o