"Submission to the Government of the following: (2) The name of an engineer (who shall be subject to the approval of the Administrator) who it is intended shall supervise the project on behalf of the borrower and execute all certificates and other instruments pertaining to engineering details required hereunder to be delivered to the Government in connection with the construction of the project." Mr. Klauder did render services to the Tri-County Electric Co., whose financing depended solely upon the contractual law with the Rural Electrification Administration, valued by him in the amount of $1,904.80. Because of adverse action by the Massachusetts Department of Public Utilities, the company was forced to abandon the project. Not having received any advances of Federal funds, due to noncompliance with the terms of the loan contract, the company was unable to compensate Mr. Klauder. As set forth above it will be noted that paragraph 10 of the contract for engineering services provides that payment to the engineer be made by the Tri-County Electric Co. from advances under the loan. In view of the facts and circumstances in this case your committee amends the bill to appropriate the sum of $1,904.80 to Mr. Klauder. The committee recommends favorable consideration to the proposed bill, as amended. Appended hereto is the report of the Department of Agriculture, together with other pertinent evidence. DEPARTMENT OF AGRICULTURE, Hon. DAN R. McGEHEE, Chairman, Committee on Claims, House of Representatives. DEAR MR. MCGEHEE: This is in reply to your request of January 13, 1944, for a report on H. R. 3644, a bill for the relief of Louis T. Klauder. The bill authorizes the payment to Louis T. Klauder, of Moorestown, N. J., of the sum of $3,750 in satisfaction of his claim for compensation for engineering services rendered in connection with a rural electrification project in Franklin County, Mass. Mr. Klauder's services were furnished to the Tri-County Electric Co. of Greenfield, Mass., a corporation organized under Massachusetts law for the purpose of constructing and operating a rural electric distribution system to be financed by the Rural Electrification Administration pursuant to a loan contract, dated September 29, 1936. Excerpts from this loan contract indicating the Government's relationship to the project engineer and a copy of a contract for engineering services between the Tri-County Electric Co. and Mr. Klauder, dated October 9, 1936, are attached hereto. The latter contract was approved by the Rural Electrification Administration solely for the purposes and in accordance with the terms of the loan contract above referred to. Examination of both these documents discloses that the United States was not a contracting party with Mr. Klauder and that there exists no debtor-creditor relationship between the United States and Mr. Klauder. The claimant did render services to the Tri-County Electric Co. valued by him at $1,904.89, as appears from engineering statement enclosed with claimant's letter dated August 6, 1937, copies of which are attached hereto. Because of adverse action of the Massachusetts Department of Public Utilities, the company was forced to abandon the project. The loan was rescinded under Administrative Order No. 143, dated October 5, 1937, copy of which is attached. Not having received any advances of Federal funds due to noncompliance with the terms of the loan contract, the company was unable to compensate Mr. Klauder. It should be noted that paragraph (10) of the contract for engineering services provides that payment to the engineer be made by the Tri-County Electric Co. from advances under the loan contract. It appears from the foregoing that the claimant contracted with and rendered services to the Tri-County Electric Co. and not to the United States. It is accurate to state, however, that the services grew out of a project of the Rural Rehabilitation Administration, and it was anticipated by all parties that they would be compensated out of the Government loan, since the electric company had no other sources of financing. Your attention is invited to this Department's report to the Senate Committee on Claims, dated October 19, 1942, on S. 2211, Seventy-seventh Congress, second session, which is identical with H. R. 3644. The Bureau of the Budget advises that the enactment of the proposed legislation would not be in accord with the program of the President. Sincerely, CLAUDE R. WICKARD, Secretary. EXCERPTS FROM CONSTRUCTION LOAN CONTRACT BETWEEN UNITED STATES OF AMERICA AND TRI COUNTY ELECTRIC COMPANY ARTICLE I Loan, note, and mortgage SECTION 1. Subject to the terms and conditions herein set forth, the Borrower agrees to borrow and the Government agrees to lend an amount equal to the cost of the electric transmission and distribution lines or system (hereinafter called the Project) more particularly described in section 1 of article III of this agreement, to be constructed and operated by the Borrower, such cost of the Project to be determined as provided in section 5 of article X of this agreement, or the amount of two hundred fifty-five thousand dollars ($255,000), whichever of said amounts shall be the less. ARTICLE II Duties pertaining to first advance Section 1. The Borrower shall, not later than forty-five (45) days after the execution of this agreement by the Government, do or perform or cause to be done or performed the following acts and things: (b) registering, when and where required by law, with all Federal, State, county, municipal, or other authorities, and obtaining therefrom all franchises, authorizations, permits, licenses, certificates of public convenience and necessity, approvals, and orders, required or permitted by law and necessary for the performance of this agreement, and acquiring from whatever source and recording in the appropriate office or offices of record all right-of-way easements, releases, or consents necessary or advisable to be obtained from the lawful construction and operation of that portion of the Project to which the first advance by the Government hereunder is intended to be applied; and delivery to the Government of documents in evidence thereof, satisfactory in form and substance to the Administrator: (c) submission to the Government of the following: * (2) the name of an engineer (who shall be subject to the approval of the Administrator) who it is intended shall supervise the Project on behalf of the Borrower and execute all certificates and other instruments pertaining to engineering details required hereunder to be delivered to the Government in connection with the construction of the Project; * (d) delivery to the Government of the following: * (2) the plans and specifications for the construction of the Project (hereinafter called the Plans and Specifications") identified by an executive officer or authorized engineer of the Borrower, which Plans and Specifications shall be subject to the approval of the Administrator; (5) all contracts entered into by the Borrower for engineering or other services pertaining to the construction of the Project or any portion thereof; ARTICLE III Construction SECTION 1. The Borrower shall cause to be constructed under contract with a responsible contractor or contractors, the Project, consisting of approximately 232 miles of electric transmission or distribution lines in rural areas in Franklin and Hampshire and Berkshire Counties, in the State of Massachusetts along the routes indicated on the map or maps attached hereto, marked Exhibit B and made a part hereof, for the purpose of furnishing electric energy to approximately 680 customers, together with substations, secondaries, transformers, meters, and such customers' service lines as shall be required to reach the respective customers' meters from the main pole line (such service lines not to exceed, however, one pole and one span of wire in addition to a service drop not more than one hundred fifty (150) feet in length) and all other appurtenances necessary for the efficient operation thereof. IN WITNESS WHEREOF the Borrower has caused this agreement to be signed in its corporate name by its President and its corporate seal to be hereunto affixed and attested by its Secretary, and the United States of America has caused this agreement to be duly executed, all as of the day and year first above written. [CORPORATE SEAL] Attest: TRI-COUNTY ELECTRIC COMPANY, by /s/ EVERETT M. JOHNSON, President. /s/ GRAFTON L. WILSON, Secretary. UNITED STATES OF AMERICA, by /s/ MORRIS L. COOKE, Administrator of Rural Electrification Administration. LOUIS T. KLAUDER AND ASSOCIATES, Subject: H. R. bill 3634, Rural Electrification Administration claim. House of Representatives, Washington, D. C. DEAR LANE: Concerning your letter of March 21 and the report of the Department of Agriculture, may I suggest that there is nothing in this report that, in my opinion, changes the status of our claim or the fact that the work was done at the direction of a Government agency. Regardless of the departmental report, the status of the claim is well established and I trust that you may bring the necessary pressure to bear in order that the moral obligation of the Government may be liquidated. Concerning the amount of $1,904.89, this was the actual charge on our books against this account on August 6, 1937, and at that time we would have been satisfied to accept such amount in payment of the claim. In consideration of the attitude taken by the Department of Agriculture, we are making specific claim for the payment as provided for by the contract which was in due course approved by the Government. In conclusion, may I suggest that it was entirely ill advised for the Government to conclude a project after having authorized services rendered without first, in due process, satisfying the obligations created under the specific allotment. Trusting that you may concur in these thoughts and awaiting your further advices, I am Cordially yours, LOUIS T. KLauder. PHILADELPHIA, August 6, 1937. Subject: Massachusetts 3 Franklin. Administrator, Rural Electrification Administration, Washington, D. C. DEAR MR. CARMODY: There is attached a schedule of our engineering charges against the above project which I trust may accord you the information desired or that you will further instruct us accordingly. You will recall that specifications were prepared and issued for this project on two distinct occasions, resulting in a somewhat higher office engineering charge than is ordinarily the case. Sincerely, LOUIS T. KLAUDER. Massachusetts 3 Franklin, October 1937 to April 1937-Schedule of engineering charges $172. 09 131. 10 70. 72 97. 29 138. 82 37.99 53. 13 96. 85 797. 99 52.54 35. 10 87.64 142.50 37.45 16. 35 54. 90 7. 15 2.70 16. 51 106. 74 384. 30 1, 269. 93 634. 96 1, 904. 89 None RURAL ELECTRIFICATION ADMINISTRATION, ADMINISTRATIVE ORDER NO. 143 I hereby rescind the allocation of $255,000 for the project Massachusetts 3 Franklin, made by Administrative Order No. 5, dated July 28, 1936, in the amount of $200,000, and Administrative Order No. 16, dated September 3, 1936, in the amount of $55,000. This action is being taken due to the inability of the cooperative to meet the requirements of the State public service commission. JOHN M. CARMODY, Administrator. |