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and use our judgment in making recommendations, as to whether or not the price that is submitted is fair.
The CHAIRMAN. Take, for instance, this subcommittee on cotton cloth. They furnish information as to the available places where it can be obtained and submit the price. Now, that recommendation is made to whom?
Mr. ROSENWALD. To Mr. Eisenman, who is in charge of this particular line of work.
The CHAIRMAN. Mr. Eisenman's position is what?
Mr. ROSENWALD. He is my representative on this committee. The CHAIRMAN. He is a member of the committee on supplies? Mr. ROSEN WALD. Yes. He is not in business himself at all; he is a retired manufacturer and has for the last several years been out of business.
The CHAIRMAN. I want to get his position in the organization. Mr. ROSENWALD. He is vice chairman.
The CHAIRMAN. That information is reported to him and then he makes a report on that recommendation?
Mr. ROSENWALD. They furnish samples of this material, according to the specifications of the Quartermaster, and he decides whether or not, in his opinion, he can recommend to the Quartermaster to purchase these goods in accordance with the recommendations, but if not he sends for the manufacturer and says, "Now, this price is too high; we are able to buy this from other manufacturers at such a price.
The CHAIRMAN. You can not do that where the demand is greater than the supply?
Mr. ROSENWALD. Yes; we do that even when the demand is greater than the supply. We send for these people and tell them that notwithstanding the fact that we know there is a shortage and that everybody knows that they can get all the business they want we still want them to know that they must make these goods for the Government at a reasonable price, and a reasonable price is determined upon the basis of costs of the best manufacturers. It sometimes happens that some people are able to produce a little cheaper than some other people, on account of location, on account of labor conditions, etc., and that has to be taken into consideration, so that everybody is not paid exactly the same price. But to the best of the ability of the committee and our representatives we get this man to furnish these goods at the lowest possible price.
The CHAIRMAN. For instance, as to the cotton cloth, where the Government is in the market for the entire output, instead of a flat rate per yard being fixed, is the price fixed for each concern that furnishes a part of the cloth?
Mr. ROSEN WALD. Each concern has its own price, although many of them are the same. Where we can not make as good a deal with one as we can with others we have sometimes to pay a little more. The CHAIRMAN. I say, instead of fixing a flat or uniform rate the rate must be fixed with each concern?
Mr. ROSENWALD. Yes.
The CHAIRMAN. With the exception, probably, of shoes
Mr. ROSENWALD (interposing). The next item is wool drawers; but before going on with the different articles enumerated may Í
just say this: That the quartermaster is well informed as to values, and he is there to protect the Government's interests. When we are willing to recommend a purchase at a price which, in our judgment, would be all right, taking into consideration the conditions as they are and the needs of the Government, he might say, "Now, that is more than I think we ought to pay, and we will either try to get along without these or we will compel them to make them at a lower price."
The CHAIRMAN. Does that ever happen? Mr. ROSENWALD. Oh, yes; it does happen. The quartermaster is a well-informed buyer. He has been connected with the Philadelphia Arsenal for a number of years and is very keen.
The CHAIRMAN. You mean Col. Hirsh?
Mr. ROSENWALD. Yes; he is one of the best traders I ever knew. The CHAIRMAN. Is he in the regular service?
Mr. ROSENWALD. Yes; he is an exceptionally able officer.
Mr. SHERLEY. Does he not only exercise a judgment as to the price, but does he exercise an independent judgment as to the allotments that shall be given to different manufacturers?
Mr. ROSENWALD. In many of these cases, like cotton duck and cotton cloth, there is no argument about the allotments, because we give every man all he can take.
Mr. SHERLEY. I understand; but there is some judgment as to what he can take. What I mean by that is this: A man might offer to furnish more than he could, having in mind to sublet the contract. That might not aply to cloth, but it has been stated it does apply to a number of things that are manufactured, and in some instances it has been claimed that men who were making goods for a contractor with the Government at a less price than the contractor was getting had undertaken to get a direct contract with the Government but had not succeeded.
Mr. ROSENWALD. That could hardly be possible where we require the services of everybody and they can get the order direct. Under such circumstances there would be no incentive for them to pay a commission to somebody in order to get business that we are anxious to place.
Mr. SHERLEY. I am not speaking of paying a commission. For instance, a man gets an order to make up so many shirts?
Mr. ROSENWALD. My statement refers to piece goods; that is, yardage goods.
Mr. SHERLEY. I understand it is; but I am branching for a mo
Mr. ROSENWALD. We do not go into the manufacture; we do not have anything to do with the making of the cloth into garments. In no instance do we have anything to do with the making of these khaki uniforms; that is entirely in the hands of the Quartermaster.
Mr. SHERLEY. All right. So there is no use in taking up that phase of it with you. Have you, in the matter of cloth, supplied every responsible person who offered to furnish this cloth with information as to the amount of cloth that the Government wanted, the quality, etc., in order that he might submit bids, or have you undertaken to confine such information to men that you considered were manufacturers of cloth?
Mr. ROSENWALD. I do not think there has been any effort to conceal the requirements of the Government in any sense, but we have made it a point to deal directly with the manufacturers.
Mr. SHERLEY. Suppose a man came to the committee and said, “I am in the business of getting this kind of cloth and making it into shirts, coats, trousers, etc., and I am prepared to furnish the Government with the finished article or with the cloth," would the committee afford him facilities for submitting bids, and go into the question of how much he could supply, etc., or would the committee take the position that in regard to cloth they would deal only with the man who actually made it?
Mr. ROSENWALD. We have no authority to deal with anyone for finished garments. Our order from the Quartermaster provides for yardage, so that if any man came and made a statement such as you make we would refer him to the quartermaster at Philadelphia.
Mr. SHERLEY. Suppose he offered to furnish cloth, would you consider his offer if he were not a manufacturer of cloth?
Mr. ROSENWALD. We have made it a rule that we will deal only, so far as our committee is concerned, with the manufacturers. That does not mean that if we found a man had a quantity of goods on hand that we might use, that it was absolutely positive we would not deal with him, but we have deprecated the custom of people going to the mills and trying to come between the Government and the manufacturers. We have tried as much as possible to cut out the middleman and have refused, in many cases, to deal with commission men, jobbers, or retailers. If they wanted to go to the Quartermaster there would be no objection to that, and the Quartermaster would be at perfect liberty to buy those goods if he wanted to do so, but as far as our committee is concerned we would not entertain any such proposition.
The CHAIRMAN. In the matter of uniforms and shirtings made from flannel, you have been dealing entirely with the acquisition of the material?
Mr. ROSENWALD. Entirely with the acquisition of material for the uniforms; we had nothing to do with their making.
The CHAIRMAN. Take the item of underwear. Suppose some big concern, not a manufacturing concern, had a large stock of underwear on hand, would your committee then deal with that concern?
Mr. ROSENWALD. No; I do not think we would. It is not fair to presume that such a concern would have the specification article that we were supposed to deal with, because it must be made in accordance with certain rules which, in most cases, are not commercial.
The CHAIRMAN. Suppose a representative came in and said he had such a stock, would he still be eliminated?
Mr. ROSENWALD. Well, I do not think he would. If he came in with a sample and said "I have exactly what the Government is buying"
The CHAIRMAN (interposing). Let me ask you something on another line. The statement has been made that houses like Wanamaker, Gimbel Bros., and Marshall Field were refused information on the ground that they were not manufacturers but occupied the position of middlemen, and that the Wanamaker concern had offered to supply a number of articles which it was believed the Government
required but that they had been shut out. Are you familiar with any matter of that kind?
Mr. ROSENWALD. Yes, sir; I am very familiar with it.
The CHAIRMAN. State what the facts are.
Mr. ROSENWALD. The facts are these, so far as one instance is concerned; there may have been others with which I am not familiar, but I am quite familiar with this instance. Two of Wanamaker's men came into my office and they had samples of certain kinds of material.
The CHAIRMAN. Of what?
Mr. ROSEN WALD. Of wool, olive-drab cloth, which they said was suitable for shirting flannel, as I remember it, for the Government's requirements. I looked at those samples and they were not suitable; they were of a very much coarser quality than the Government specifications called for. I took the opportunity of saying to those men that we did not do business with middlemen; that if Mr. Wanamaker had an opportunity to secure goods which he thought the Government could use we felt his duty would have been to say to that man, "You submit that to the Government direct, because I can not render the Government any service by buying from you and then going and selling to the Government at a profit; I can only benefit myself and not render a service to the Government, but you simply act as a go-between to buy something that you think the Government wants and then take it to the Government and ask them a profit on it," and so far as our committee is concerned we will not encourage that way of trading.
The CHAIRMAN. In the case of this flannel shirting, or whatever it is, did they claim to have a quantity of it or that they were in a position to acquire it?
Mr. ROSENWALD. They claimed to own it.
The CHAIRMAN. There has been trouble in obtaining sufficient shirting material for the number of men required-is not that so? Mr. ROSENWALD. Yes, sir; that is so, as regards the particular kind wanted by the Government.
The CHAIRMAN. Are we getting all that is needed?
Mr. ROSEN WALD. Not of the exact kind that the Government wants. The CHAIRMAN. But are we, in the absence of that, getting other materials to be used in the meantime?
Mr. ROSENWALD. Yes.
Mr. SHERLEY. There was a certain amount of equipment required for the number of men called into the service. In some lines it was impossible to obtain the required equipment of the materials specified by the Government. In that situation was every effort made to obtain materials which, while not conforming to the Government's specifications, would yet be suitable temporarily while the other articles could be produced?
Mr. ROSEN WALD. I should say, yes.
Mr. SHERLEY. I do not know whether that comes under you?
Mr. ROSENWALD. Yes, sir. The nearest that could be had in an emergency were secured.
Mr. SHERLEY. In securing them--they were manufactured articles-how did you secure them?
Mr. ROSEN WALD. I am speaking of cloth now.
Mr. SHERLEY. We were speaking for the moment of underwear.
The CHAIRMAN. We were speaking particularly about flannel shirting. For instance, the statement was made about the shortage of blankets. Someone stated that there was a concern that had several hundred thousand blankets which it wanted to sell to the Government, and, while they did not conform to the Government's specifications, were yet a very satisfactory blanket. Are you familiar with
Mr. ROSENWALD. Yes, sir. I know that we have recommended the purchase of some blankets that did not conform to the Government's specifications, because it was impossible to get a sufficient quantity of the specification blankets.
Mr. SHERLEY. What would be the practice as to obtaining such blankets?
Mr. ROSENWALD. The practice would be to get from the millssome of the mills could not make the specification blankets-go to the mills and get them to make the nearest thing that they could to the specification blankets.
Mr. SHERLEY. Suppose there were men who had in stock blankets that were serviceable, though not of the kind specified by the Government, were they given a chance to sell those blankets to the Government?
Mr. ROSENWALD. They were not, so far as our committee is concerned. There may have been cases where they were, but there are comparatively few blankets in the market that would answer the purpose, in the judgment of the quartermaster and ourselves. I think there were some blankets bought by various depot quartermasters that did come near enough to the specifications, but to what extent, I am not sure. Maj. Wonson, are you familiar with that?
Maj. WONSON. Yes; several depots have made emergency pur
Mr. ROSENWALD. But, so far as our committee is concerned? Maj. WONSON. No, sir; unless some have been recently purchased by Mr. Eisenman, of which I am not aware.
Mr. SHERLEY. I may be altogether wrong in my idea, because I know nothing technically about it, but in the matter of blankets, underwear, and the ordinary things that Americans use, it would seem in a Nation of 100,000,000 people there should be available a considerable number of supplies, though not of the kind that the Government uses ordinarily and would prefer-but that scattered over the country there should be actually in existence enough serviceable blankets to supply 500,000 men.
Mr. ROSENWALD. To answer your question, in the first place, if we had bought every blanket that we could have bought, regardless of whether it complied with the specifications and regardless of the price it cost, we might have accumulated all of the blankets that we needed in less time.
Mr. SHERLEY. You, perhaps, would not have had to go to that extreme. You might have been able to get from some people, who had large stocks and who furnish retailers blankets, sufficient to help out what you could not get from the mills. But, here is one of the things that is worrying some of us. It is apparent that you are not going to be able to equip more than a limited number of men on the 5th of September, and instead of the Army being called out all at