Reporter's Statement of the Case XIII. On September 7, 1917, Eads Johnson, district officer of the Fleet Corporation, sent to the Standard Shipbuilding Corporation the following letter: STANDARD SHIPBUILDING CORPORATION, Shooters Island, N. Y., September 7th, 1917. Subject: Status of vessels commandeered. DEAR SIRS: In reply to your many communications' relative to the status of vessels which have been commandeered, and that you are withholding orders necessary to fulfill requirements under commandeering act, I am instructed to inform you that No change will be made in method of requisitioning and that the corporation requires you to proceed with the completion of these vessels in accordance with instructions already given without delay. Respectfully, District Officer. In reply the Standard Shipbuilding Corporation sent the Emergency Fleet Corporation the following letter: EADS JOHNSON, Esq., NEW YORK, September 10th, 1917. District Officer, United States Shipping Board 115 Broadway, New York City. DEAR SIR: We acknowledge receipt of your letter of the 7th instant. We note what you say regarding the method of requisitioning vessels and we will accordingly proceed, without delay, with the completion of these vessels following the instructions given. Of course, we must make this reservation, that unless we are paid a sum equal to the sums set out in the contract there will, of necessity, result a delay in construction; the responsibility of that, however, will rest with your principals, not with us. We would respect fully request that you give consideration to the labor situation now pending. It has been stated in meetings of the old Shipping Board that in the event of any increase in the cost of labor this increase will be added to the price of the vessels as set out in the contracts. Are we correct in assuming that if the Labor Adjustment Board now in session increases the cost of labor on any of these vessels that your board will add to the price of the Reporter's Statement of the Case vessels as determined in the contract the added cost of labor so fixed by such board? Yours very truly, STANDARD SHIPBUILDING CORPORATION, GABRIEL JUVE, First Vice President. XIV. On October 16, 1917, the Emergency Fleet Corporation and the Standard Shipbuilding Corporation entered into an agreement, as follows: UNITED STATES SHIPPING BOARD 2nd District, 115 Broadway, STANDARD SHIPBUILDING CORPORATION, 44 Whitehall Street, New York City. GENTLEMEN: Our representatives have examined your plant, have conferred with the representatives of the Guaranty Trust Company, the Equitable Trust Company, and the Columbia Trust Company in reference to amounts held by these companies in escrow guaranteeing the performance of your contracts with the parties who were the owners thereof prior to the issuance of the requisition order of August 3rd, 1917. Under the arrangements evidenced by the letters which have heretofore passed between your company and our corporation, we agree to pay an amount equal to the total amount unpaid on your contracts with the former owners. We have ascertained from an examination of these contracts that the total sum provided to be paid was $13,552,550.00. From your trial balance of September 29th, 1917, we ascertain that you have received payments on account of these contracts in the sum of $6,611,224.04. The difference between these two sums is $6,941,325.96. This total sum included, according to the statement of commissions which you have delivered to us, and which is dated September 25th, 1917, $170,988.80. This latter sum will be withheld from the total above stated, so that the total net amount to be paid to you will be $6,770,338.00. As to the commissions or brokerage charges, we request you to make no further payments, and we agree to hold you harmless from any loss occasioned to you by reason of such action. This, of course, is upon the understanding that you will deliver to us all process served upon you by any of the persons claiming such commissions, that you will provide us with Reporter's Statement of the Case full information relating thereto upon our request, and that you will take no action in connection therewith which will in any way change the present conditions of the brokerage arrangements. Fuller arrangements relating to this brokerage are to be worked out between counsel for your company and our corporation to the end that the claims of these brokers. may be properly resisted. The total net sum above stated, $6,770,338.00, is to be paid to you in the following manner: 1. We are to make a deposit in a special account in the Columbia Trust Company, in New York, of $500,000.00 in the name and to the credit of your company. 2. Sums of money are to be withdrawn from this deposit and the other sums to be placed. therein, by the checks of your company, signed in the usual manner, but upon condition that there is first obtained from Mr. C. S. Bockwalter, or his representative, and from their or his successors, on approval in writing, on a separate memorandum, which memorandum after such signature by our representative, will be forwarded to the trust company, and the trust company will be under instructions to pay no checks unless they have first received this memorandum of. approval. Upon receipt by the trust company of such memorandum of approval, the trust company will be under instructions to pay the check in the usual course of business. 3. Such approval shall be given by our district officer, or his representative, upon submission to him of proper proof in the form of bill of lading for materials or other appropriate voucher, showing that expenses have been incurred and are due to be paid in connection with the ships which have been ordered completed by our former orders. Such expenses shall include overhead expenses, but included in such overhead expense items there shall be included only the salaries to officers which are being paid at the present time. It is not our intention in making this provision to limit the number of your employees, either laborers or men drawing higher salaries. 4. The corporation will, from time to time, place other funds to the credit of this deposit, substantially a half million dollars. 5. It is understood that at this time steel for ship No. 14, to be built, and not commandeered, is beginning to arrive at the yards, and payment therefor must be made in the ordinary course of business. Arrangements will be made hereafter between your company and our corporation, to the end that these payments shall be in a manner mutually agreeable to both parties financed. Reporter's Statement of the Case It is our intention to consider promptly the question of placing orders with you for other ships, for which you have purchased certain portions of the material, and, if mutually satisfactory, arrangements can be made as to these, and the foregoing plan will be altered to suit the circumstances. The corporation will, of course, consent to the payment out of said sums so to be deposited the amount of all taxes which your company is required to pay. It is understood that no dividends shall be paid prior to June 30th, 1918. The approval of payment of dividends shall be conditioned upon your company showing that it will be financially able to complete the ships already ordered, upon receipt of the sum remaining unpaid on June 30th, 1918. It is understood that nothing provided herein shall preclude your company from extending its yards either by the increase of machinery, by other additions to the yard, or in the way of additional land or additional slips. Nothing herein contained shall be understood as limiting your company in the exercise of statutory rights in the way of increasing its capitalization, either by increase of its stock or by the issue of bonds. Very truly yours, (Signed) UNITED STATES SHIPPING BOARD By C. S. BookWALTER, District Officer. Subject to approval of the general manager. The foregoing plan is satisfactory to the officers of the Standard Shipbuilding Corporation, but subject to its ratification by its board of directors. (Signed) J. MARIMON, President Standard Shipbuilding Corporation. This letter was subsequently approved by the general manager of the Fleet Corporation and by a resolution of the board of directors of the Standard Shipbuilding Corporation at a meeting thereof on October 18, 1917. XV. Prior to August 3, 1917, installments numbered one to four had been paid by the plaintiff and its assignor, de Luca, to the Standard Shipbuilding Corporation, and the other installments were not due until the dates fixed by the contracts, which were subsequent to August 3, 1917. The plaintiff was able and willing to pay the remaining installments at all times up to and including the date on which the vessel was completed and delivered, having had sufficient credits established therefor in solvent banks in Italy. Reporter's Statement of the Case XVI. Prior to August 3, 1917, the Standard Shipbuilding Corporation had placed orders for certain materials to be used in the construction of hulls Nos. 10 and 11, and included in such materials so ordered were plates both for hulls and boilers, steel shapes, stern frames, bronze propeller blades, tank-feed pumps, horizontal duplex-piston, evaporating feed pumps, horizontal duplex patent sanitary pumps, fresh-water pumps, ballast, fire, bilge, and service pumps, corrugated furnaces, valves, derricks, anchor chains, furnace fronts, lumber, stay bolts, rivets, forged steel for the axles, small castings, marine-engine castings. Those materials were delivered to the Standard Shipbuilding Corporation after August 3, 1917, and used in the construction of hulls Nos. 10 and 11, and were purchased at prices lower than prices prevailing after August 3, 1917. XVII. Said hull No. 10 was 9.4 per cent completed on August 3, 1917, and hull No. 11 was 3.5 per cent completed on the same date, and the Standard Shipbuilding Corporation was able and willing to complete said vessels. XVIII. The said vessels were completed in accordance with the plans and specifications attached to and made a part of the contracts of April 23, 1917, with the modifications and changes so far as practicable, stated in Finding IX. The vessels were completed and delivered to the United States on January 15, 1919, and February 18, 1919, respectively. XIX. In accordance with the provisions of the hereinbefore-recited act of June 15, 1917, the plaintiff filed its claim for the payment of just compensation with the United States Shipping Board Emergency Fleet Corporation for the property which had been requisitioned. The United States Shipping Board Emergency Fleet Corporation on July 23, 1920, awarded to the plaintiff as just compensation the sum of $816,651. The said sum of $816,651 so determined by the said Fleet Corporation to be just compensation was unsatisfactory to the plaintiff, and on August 27, 1920, pursuant to the provisions of said act, it received from the Government of the United States 75 per cent of said sum, being $612,488.25. |