Findings of Fact 145 C. Cls. of an attorney in Ecuador to study the Von Buchwald titles to the lands in question. In June 1951, Emery and the Von Buchwald interests entered into a formal agreement which, in effect, gave Emery an option until December 22, 1951 to purchase the Von Buchwald lands in the Camarones area, together with the abacá planting material at the San José and Ana Maria plantations, for $105,000. This option was later extended from time to time, and it was in effect during the events related in subsequent findings. Emery had no need for these lands, except in connection with the possible establishment of an abacá plantation for the RFC, and it intended to make the lands available to the RFC at cost in the event of the establishment of the plantation. 14. (a) The comprehensive survey of the Camarones area was begun in July 1951. The Camarones area is divided by the Quevedo River into an eastern portion and a western portion. It was soon apparent that an efficient abacá plantation in that area should consist of contiguous lands; and, accordingly, attention was concentrated on the portion of the Camarones area lying west of the Quevedo River. As the survey progressed, it was discovered that the Von Buchwald lands lying west of the Quevedo River were insufficient to provide the acreage for an 8,000-acre abacá plantation. This information was made known to Mr. Hanes, who thereupon requested Emery to obtain in its own name options on or rights in other contiguous lands within the area, so that a plantation of suitable size could be established in the event of a final determination to proceed with the establishment of a Government-owned abacá plantation in the Camarones area. Emery agreed to do so, and then proceeded to obtain options on or rights in other lands contiguous to the Von Buchwald holdings, with the result that Emery ultimately had the right to acquire a total of approximately 35,000 acres. (b) The RFC has not compensated Emery for its services. in connection with the acquisition of the options and rights referred to in paragraph (a) of this finding, or reimbursed Emery for its expenses incurred in carrying out this program. (Emery's out-of-pocket expenses relative to this program are included in the figure set out in finding 41 (a).) 71 Findings of Fact (c) The evidence does not show how much time was devoted by personnel representing Emery to the program of acquiring options on or rights in lands, as outlined in paragraph (a) of this finding, or the amounts (if any) paid by Emery to such personnel as salary or otherwise (except to the extent that these amounts may be included in the outof-pocket expenses referred to in finding 41 (a)), or the value of such services to the RFC. 15. (a) The field activities in connection with the comprehensive survey of the Camarones area were completed in December 1951, but the final report and supplementary maps were not completed until January 1952. During the course of the survey, Emery was requested by the RFC in October of 1951 to take over the administrative details involved in conducting the survey. Emery agreed to do so, and sent an employee to Ecuador for such purpose. In November 1951, Mr. Ford went to Ecuador in order to help in expediting the survey. (b) The RFC reimbursed Emery for the expenses which it incurred in rendering the various services requested by the RFC in connection with the survey, as outlined in paragraph (a) of this finding and in finding 12.1 No compensation was paid to Emery for such services. (c) The evidence does not show the value to the RFC of the services rendered by Emery in connection with the survey. 16. The final report by the agricultural experts on the Camarones area as a prospective site for an abacá plantation was highly favorable. The report indicated that in the portion of the Camarones area lying west of the Quevedo River there was available sufficient land suitable for the growing of abacá to permit the establishment and operation of an 8,000-acre plantation. Contract Negotiations Between RFC and Emery 17. Prior to October 19, 1951, representatives of the RFC had not disclosed to Emery, and representatives of Emery 'Mr. Ford's trip to Ecuador was not made at the request of the RFC, and the RFC did not reimburse Emery for the expense of that trip. Such expenses are included in the figures set out in paragraphs (a) and (c) of finding 41. 574580-61-7 Findings of Fact 145 C. Cls. had not disclosed to the RFC, any details regarding the provisions that would be considered essential or desirable for inclusion in a contract governing the management by Emery for the RFC of an abacá plantation in Ecuador. On October 19, 1951, a conference between representatives of the parties was held at the RFC for the purpose of affording Emery an opportunity to outline its views relative to provisions which such a contract ought to contain. Emery was represented at the conference by Messrs. Ford and Harmel, and the RFC was represented by Mr. Hanes and others. The following proposals were made on behalf of Emery: (1) During the period of the development of the plantation, beginning with the signing of the contract and extending for 3 years, the RFC would pay Emery a management fee calculated on the basis of $28 per acre per year on 8,000 acres. (2) After the end of the development period, RFC would pay Emery a management fee calculated on the basis of 2 cents per pound for each pound of fiber produced or 20 percent of the gross operating profit (exclusive of interest, depreciation, and development expenses), whichever might be greater. A minimum management fee of $20 per acre per year would be guaranteed. (3) Each party would have the discretionary right to cancel the contract on 90 days' notice; and, in addition, the RFC would have the right to cancel for cause on 30 days' notice. (4) In the event that the United States should decide to dispose of the plantation, Emery would have an option to purchase it on the basis of the capital cost less reasonable depreciation. (5) The other provisions of the contract between Emery and the RFC would be adopted from a contract which the RFC was then in the process of negotiating with the United Fruit Company relative to the management of additional proposed abacá plantations in Central America. 18. (a) On February 18, 1952, a conference was held between representatives of the RFC and of Emery for the purpose of endeavoring to reach a tentative agreement regarding a proposed management contract. Emery was repre 71 Findings of Fact sented at this conference by Messrs. Ford and Harmel. The RFC was represented by Mr. Hanes, by Edwin A. Harris (who was then Mr. Hanes' immediate superior), and by others. The following tentative proposals were suggested by the RFC representatives to Emery: (1) The parties would sign a letter of intent, under which Emery would immediately undertake to recruit the necessary personnel and perfect an organization for the management of the proposed plantation. The letter of intent would extend for a maximum period of 90 days. During this period, Emery would not be paid any fee, but would be reimbursed for the salaries paid and the other expenses incurred by it under the letter of intent. (2) Negotiations for a contract would be completed and the contract would be signed by the parties within the 90day period previously mentioned. (3) Under the contract, the planting of the plantation to abacá would be completed within 1 year after the signing of the contract. In this connection, the representatives of the RFC emphasized the necessity for the planting of the plantation to be completed within a maximum period of 15 months from the date of the signing of the letter of intent. (4) The contract would provide for a development period (including the planting period previously mentioned) that would begin with the signing of the contract and continue until the production of abacá fiber on the plantation began, but there would be a proviso that the development period could not extend longer than 3 years from the date of the letter of intent. During the development period, Emery would be paid a management fee calculated on the basis of $24 per acre per year. (5) The contract would provide that from and after the first production of abacá fiber on the plantation, Emery would be paid a management fee calculated on the basis of $18 per acre per year, plus 10 percent of the net operating profit. (6) Under the contract, the RFC would not reimburse Emery for any of its "stateside" expenses, but would pay a 3 percent fee on any procurement by Emery in the United States of equipment, etc., needed for the plantation. Findings of Fact 145 C. Cls. (7) The contract would give the RFC a right of cancellation on 30 days' notice, but Emery would not have a reciprocal right of cancellation. (8) The contract would contain a realistic provision on depreciation, it being suggested that the period of depreciation be 10 years from the time when the plantation should come into bearing. (9) The contract would provide that if the United States should decide to dispose of the plantation, Emery would have an option to purchase it at its "fair value," to be determined at the time of sale. (b) After the RFC proposals had been outlined at the conference on February 18, 1952, Mr. Ford stated that the suggestion of the RFC with respect to the post-development management fee was not acceptable to Emery. Mr. Ford said that, in lieu of the proposal made by the RFC on this point, the annual management fee per acre after the development period should be calculated as follows: 2 cents per pound on the first 1,000 pounds of fiber pro- 14 cents per pound on the next 250 pounds of fiber produced; 12 cents per pound on all production over 1,250 pounds. The representatives of the RFC indicated that Mr. Ford's counter-proposal on this point was unsatisfactory, and the conference adjourned on that note, without any tentative agreement having been reached on any of the provisions of a proposed contract. 19. On February 27, 1952, Mr. Harmel telephoned Mr. Harris and indicated that Emery had reconsidered the position taken by Mr. Ford at the conference on February 18, 1952 (see finding 18), and would be willing to accept a contract providing for a post-development management fee calculated on the basis of $18 per acre per year, plus 10 percent of the net operating profit, as proposed by the RFC. Mr. Harris passed this information on to Mr. Hanes, and suggested that the latter get in touch with Mr. Harmel as soon as possible with a view to working out a letter of intent and then concluding the contract negotiations with Emery. 20. Promptly after the events mentioned in finding 19, Mr. Hanes got in touch with Mr. Harmel and proposed that |