would warrant singling out Mr. Burns for preferential treatment. The Department, therefore, recommends that this bill be not favorably considered. The Bureau of the Budget advises that there is no objection to the submission of this report.

Sincerely yours,

KENNETH C. ROYALL,
Secretary of the Army.

Personal statement of John E. Burns, as covered in his letter to the United States War Department, United States Army Engineers, August 29, 1946:

To Whom It May Concern:

I hereby depose and state that I did not receive payment for accrued leave which was due me when my employment at Honolulu, T. H., was terminated, the United States Army Engineers paymaster at Honolulu told me that I could not claim the payment for leave in the Territory of Hawaii. He said that payment would be made upon arrival at San Francisco, Calif., before my release from service.

Upon arrival at San Francisco, I was told by the United States Army Engineers office that the account should have been cleared while in Hawaii, but to present the claim. This was done and the attached letters constitute the correspondence in regard to the matter.

Items of my contract and advice of United States Army Engineers officials, lead me to believe that this claim was allowable before leaving the Territory of Hawaii. It was earned and the only reason it was not settled was due to misinformation. Instructions given me were followed

Respectfully yours,

STATE OF CALIFORNIA,

County of Shasta, ss:

JOHN E. BURNS, Redding, Calif.

On this 22d day of December in the year one thousand nine hundred and forty-seven before me, Roseanne Di Lullo a notary public in and for the County of Shasta, State of California, residing therein, duly commissioned and sworn, personally appeared John E. Burns, known to me to be the person whose name is subscribed to the within instrument, and acknowledge to me that he executed the

same.

In witness whereof I have hereunto set my hand and affixed my official seal in the county of Shasta the day and year in this certificate first above written. [SEAL] ROSEANNE DI LULLO,

My commission expires December 28, 1950.

Hon. CLAIR ENGLE,

House of Representatives.

Notary Public.

DEAR MR. ENGLE: Reference is made to your letter dated June 11, 1947, concerning the claim of Mr. John E. Burns, Redding, Calif., for payment of annual leave earned as an employee of the Honolulu District, Corps of Engineers, during the period July 2, 1942, to July 23, 1943, and to partial reply of this office dated June 17, 1947.

A complete report in the matter now available discloses that during the period of employment, from July 2, 1942, through July 23, 1943, Mr. Burns would have accrued 220 hours of annual leave for which he should have been paid $275 at $1.25 per hour, less Federal tax deduction of $42.20, or a net of $232.80. The rate of accumulation of leave as stated in your letter is correct.

Sincerely yours,

R. C. CRAWFORD,
Brigadier General,
Acting Chief of Engineers.

H. Repts., 81-1, vol. 4- -27

O

JANSSON GAGE CO.

JUNE 9, 1949.-Committed to the Committee of the Whole House and ordered to be printed

Mr. JENNINGS, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany H. R. 1034|

The Committee on the Judiciary, to whom was referred the bill (H. R. 1034) for the relief of Jansson Gage Co., having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

The amendment is as follows:

At the end of bill add:

: Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000.

STATEMENT OF FACTS

In 1943 the War Production Board requested the Jansson Gage Co. to enter into the manufacturing of vernier calipers and height gages. At that time there were only two manufacturers of these types of measuring tools. These two plants were located in Providence, R. I., and Athol, Mass. The armed services, because of security reasons, did not consider it good strategy to have all of the manufacturing of this type in the same locality. In addition, the deliveries from these only two sources of supply were running from a year to a vear and a half behind schedule. Because of these two principal reasons, the War Production Board prevailed upon the Jansson Gage Co. to assist in the manufacturing of these measuring tools. Jansson Gage Co. was selected for this work because of its performance on other types of measuring instruments where extreme accuracy was required. It had an organization of men trained in accurate work

The

and was furnishing all types of precision measuring instruments and gages to the aircraft and other vital war industries.

Several contracts were placed with the Jansson Gage Co. for vernier calipers and height gages. These contracts were all fixed-price contracts and were completed. Contract DA-TPS-27267 was entered into on February 6, 1943. There was some delay in completing this contract due to conditions prevailing at that time, particularly the securing of equipment and material to complete the contract. also necessary to train an additional large number of men for this particular contract.

During the period of this contract the War Labor Board increased the labor rate by a directive and this increase resulted in a considerable loss to the Jansson Gage Co. The company petitioned that the 15 percent discount applicable to the contract be eliminated from the contract terms. There was granted an amendment to the contract, dated April 16, 1945, effecting an increase with respect to shipments of material on and after March 2, 1945, but did not provide for any increases with respect to the material delivered to the Government before March 2, 1945. The Jansson Gage Co. subsequently requested an additional increase to take care of delivery of materials to the Government prior to March 2, 1945.

The Jansson Gage Co. attempted to recuperate their losses under contract DA-TPS-27267 through the use of Public Law 657, Seventyninth Congress, which had just been passed. This legislative instrument of relief could not be applied to this case.

On November 20, 1945, H. C. Maul, Jr., United States Treasury Department, made a complete report on this claim to Mr. A. J. Walsh, Assistant Director. A copy of this report is incorporated. This report states:

It appears that Mr. F. W. Stuart, Jr., made a study of the company's costs on this contract and in a memorandum dated February 27, 1945, to Mr. Flatley, recommended that the Jansson Gage Co. be released from the 15 percent discount offer and be granted an increase in price on the several items. It was estimated the increase would approximate $75,000 and would change the manufacturer's result on this contract approximately from a net loss of $66,000 to a net profit of $9,000. I have had Mr. Stuart's study verified and it is substantially correct * * * The company petitions that the 15 percent discount applicable to the contract be eliminated from the contract terms. If this is concurred in, the contract prices made effective by amendment No. 2, dated March 6, 1945, would be applicable to the respective items of the entire contract and also increase the price of item 1. Such action would involve an increase of $75,970. Of this amount $16,070.78 has been authorized, the balance remaining to be authorized, if deemed advisable, being $59,899.22. Such an authorization would change the financial result of this contract to the contractor from a very substantial net loss to a very modest profit of 1 percent.

This report further states:

In view of all the circumstances the company's petition for relief merits consideration * it is logical and in the interest of fair dealing to correct our error by eliminating the 15 percent discount so that the increase in price would be applicable to all of the deliveries made under contract DA-TPS-27267

After careful consideration of the bill by the committee, it is the opinion that the sum of $59,899.22 should be appropriated for the relief of the Jansson Gage Co. Therefore, your committee recommends favorable consideration of this bill.

Hon. EARL C. MICHENER,
Chairman, Committee on the Judiciary,

TREASURY DEPARTMENT,
Washington, March 22, 1948.

House of Representatives, Washington, D. C.

MY DEAR MR. CHAIRMAN: Reference is made to your letter of February 4, 1948, regarding H. R. 5235, Eightieth Congress, second session, a bill for the relief of Jansson Gage Co. If enacted into law, the bill would grant to the Jansson Gage Co., of Detroit, Mich., the sum of $59,899.22, representing its claim against the United States for reimbursement of losses incurred by the claimant during the performance of its contract with the Treasury Department, Procurement Division (now Bureau of Federal Supply), contract No. DA-Tps-27267. An identical bill, H. R. 5877, introduced March 25, 1946. Seventy-ninth Congress, second session, failed of enactment.

The Treasury Department, Procurement Division, on February 26, 1943, entered into contract DA-Tps-27267 with the Jansson Gage Co. It provided for the manufacture and delivery by the latter of 15,000 vernier calipers, type Starrett No. 122M, or equal, with cases. Delivery was to be effected by October 26, 1943, and the total contract price to be paid to Jansson Gage Co. for these materials was $426,880.

We were advised by the company that it encountered difficulties in production, since the calipers produced were a new product, beyond the experience of both officials and employees. Inexperience also placed the company in a position of being unable to determine with reasonable accuracy firm prices and delivery terms. The necessity for extensive training of employees and production planning caused delay in performance. The War Labor Board, by its directives after the contract was let, increased the labor cost on the contract, causing a considerable loss to the company. Although very well aware of its loss, the company performed its obligation to the Government.

On the other hand, it should be noted that had the contractor been able to adhere to the delivery schedule agreed to in the contract, the decision of the War Labor Board would not have affected its cost. It is also obvious that the United States cannot be held responsible for the lack of experience or inefficiency of any contractor.

The Jansson Gage Co. presented its request for an increase in price of $75,970 to the Treasury Department. The claimant alleged that as a result of its compliance with the request of the War Production Board, which it states exerted pressure on it to take the above contract when no other manufacturer was available, and as a result of its compliance with the directives of the War Labor Board, which required the company to increase wages of its workers, the company's financial structure was undermined. Amendment No. 2 to the contract, dated April 16, 1945, effected an increase with respect to shipments of material on and after March 2, 1945, but did not provide for any increases with respect to the material delivered to the Government before March 2, 1945. Subsequently the company requested a further increase. The Procurement Division was of the opinion, and advised the contractor, that the facts did not warrant a further increase, particularly because the action of the War Labor Board would not have affected the cost of performance if the company had adhered to the delivery schedule agreed to in the contract. The claim was subsequently submitted to the General Accounting Office, which advised the company on February 15, 1946, that it had no authority to grant relief.

The Jansson Gage Co., filed a claim with this Department under the Lucas Act (Public Law 657, 79th Cong.) on December 27, 1946, in the amount of $73,248.58. By amendment dated April 30, 1917, the company reduced its claim to $57,522. After continued correspondence, and a visit by Mr. Frank Livermore, accountant for the company, to the office of the Chief Counsel, Bureau of Federal Supply, the claim was ascertained to be defective because it did not prove or even allege, as required by section 2 (a) of the act, that the Jansson Gage Co. had suffered a net loss on all contracts and subcontracts held by it under which work, supplies, or services were furnished for the Government between September 16, 1940, and August 14, 1945. This defect was pointed out to the claimant and it was given an opportunity to amend its statement, but failed to do so. The Bureau then rejected the claim, concluding from the failure to amend that the claimant must have realized a profit on all its war contracts, taken together, and therefore under the Lucas Act relief was not authorized. The pertinent part of that act reads as follows:

"In arriving at a fair and equitable settlement of claims under this Act, the respective departments and agencies shall not allow any amount in excess of the