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GGtii Congress, 
 
 2d Session. 
 
 House Calendar No. HI. 
 
 ) HOUSE OF EEPRESENTATIVES. j ReporI 
 [ I No. 487. 
 
 IN RE THE DENT ACT. 
 
 Decembkh 10, 1919.— Referred to the House Calendar and ordered to 1 e printed. 
 
 J ^e/ 
 
 Mr. Graham of Illinois, from the^^Select Committee on Expenditures 
 in the War Department, submitted th(; foUowino; 
 
 REPOKT. 
 
 *(_)n the act of March 2, 1919, commonly known as the Dent Act. 
 
 The act of March 2, 1919, commonly known as the Dent Act, 
 provided, in part, as follows: 
 
 Be it enacted by the Senate and House of Representatives of the United States of America 
 in Congress assembled, That the Secretary of War be, and he is hereby, authorized 
 to adjust, pay, or discharge any agreement, express or implied, upcn a fair and etiui- 
 table basis that has been entered into, in gocd faith during the present emergency 
 and prior to November twelfth, nineteen hundred and eighteen, by any officer or 
 agent acting under his authority, direction, or instruction, or that of the President, 
 with any person, firm, or corporation for the acquisition of lands, or the use thereof, 
 or for damages resulting from notice by the Government of its intention to acquire 
 or use said lands, or fofthe production, manufacture, eale, acquisition, or control of 
 equipment, materials or supplies, or for services, or for facilities, or other purposes 
 connected mth the prosecution of the war, when such agreement has been performed 
 in whole or in part, or expenditures have been made or obligations incurred upon 
 the faith of the same by any such person, firm, or corporation prior to November 
 twelfth, nineteen hundred and eighteen, and such agreement has not been executed 
 in the manner prescribed by law: Provided, That in no case shall any award either 
 by the Secretary of War, or the Court of Claims include prospective or possible profits 
 on any part of the contract beyond the goods and supplies delivered to and accepted 
 by the United States and a reasonable remuneration for expenditures and obliga- 
 tions or liabilities necessarily incurred in performing or preparing to perform said 
 contract or order: Provided further, That this act shall not authorize jjayment to be 
 made of any claim presented before June thirtieth, nineteen hundred and nineteen: 
 And provided further, That the Secretary of War shall report to Congress at the begin- 
 ning of its next session following June thirtieth, nineteen hundred and nineteen, a 
 detailed statement showing the^nature, terms, and conditions of every such agree- 
 ment and the pavment or adjustment thereof: And provided further, That no settle- 
 ment of anv claini arising under any such agreement, shall bar the United States 
 Government through any of its duly aiithorized agencies, or any committee of Congress 
 hereafter duly appointed, from the right of review of such settlement, nor the right 
 of recovery of any money paid by the Government to any party under any settlement 
 entered iiito, or pavment made under the provisions of this act, if the Government 
 has been defrauded, and the right of recovery in all such cases shall exist against the 
 executors, administrators, heirs, successors, and assigns, of any party or parties: 
 And provided further, That nothing in this act shall be construed to relieve any officer 
 or any agent of the United States from criminal prosecution under the provisions of 
 any statute of the United States for any fraud or criminal conduct. 
 
2 IlSr RE THE DENT ACT. 
 
 By virtue of the {)r()visious of this act, on December 1, at the 
 cojivcning of Congress, ttie Secretary of War filed his report in the 
 House of Kepresentatives, which report was thereupon referred to 
 the Select Committee on Expenditures in the War Department. 
 The report is very voluminous, consisting of the report proper and 
 
 3 large volumes and 11 file cases of exhibits. 
 
 From time to time Subcommittee No. 5 on Ordnance has had 
 under consideration certain settlements made by the various claims 
 boards with claimants under the above-cited act. 
 
 This investigation, as shown by the hearings of said subcommittee, 
 has taken a wide range and has been incidental to its general inves- 
 tigation of war-orchiancc expenditures. It has included an investi- 
 gation of the rules that have been formulated by the War Depart- 
 ment for the settlement of such claims and the machinery that has 
 been devised. Because of the great expense, time, and labor incident 
 to a complete examination of all of said claims, the subcommittee 
 has been able to go into only a few of the great mass of claims that 
 have been adjusted; all this is incorporated in about 500 printed 
 pages of the committee hearings and is too voluminous to be even 
 briefed in this report. According to the report of the Secretary of 
 War, 4,668 claims have already been adjusted, 2,185 claims are 
 pending, and 2,700 other claims are under consideration as to their 
 legal standing. 
 
 The subcommittee, among other matters, has made a somewhat 
 extensive investigation of the following settlements of war claims 
 and contracts, to wit: American Can Co., contract for hard-bread 
 cans; Stein-Burn Camp & Field Equipment Co., contract for tireless 
 cookers, cooks' chests, and bread boxes; Henry Moss & Co., contract 
 for branding irons; Briar Hill Steel Co., contract for corrugated-steel 
 roofing; National Enameling & Stamping Co., contracts for boilers 
 and kettles; Standard Steel Car Co., contract for nine hundred and 
 sixty-four 240-millimeter howitzer carriages; Jones &, Laughlin Co., 
 contract for by-product coke ovens. In addition to this, the sub- 
 committee has investigated the settlement with the United Metals 
 Selling Co. on coj)per, which was a settlement not made under the 
 act of March 2, 1910. 
 
 In all these cases except the last two named salvage values were 
 fixed by Government agents and Army officers on special facilities 
 furnished by the Government, sometimes buildings and sometimes 
 machinery and equipment, which were, in the opinion of the com- 
 mittee, insufficient and unjust to the Government. In some of the 
 cases cited they seem to have been o':)viously taintetl with fraud. 
 Part of the blame for this condition is due to the rules ado])ted for 
 the settlement of such claims and partly due to the laxness and 
 inefficiency of the Government representatives. In the last case 
 cited, that of the United Metals Selling Co., immense profits were 
 /nade by the ])roducers of copper by virtue of a combination of the 
 low-priced copper producers, which combination was aided and en- 
 couraged l)y the Government, although in violation of the law of the 
 land. 
 
 In some of the cases cited the committee is of the opinion that 
 constructive if not actual fraud occurred, vitiating the settlements. 
 The committee is of the opinion that millions of dollars are involved 
 in these settlements which the Government might have a right to 
 recover if a pro]jer review of sacii. settlements were made. 
 
 D* Of ]l« 
 
IN RE THE DENT ACT. d 
 
 The act of March 2, heretofore cited, has never been tested in the 
 _ courts. It is manifest, however, that Congress had in consideration 
 
 w- when the act was passed the probabihty, or at least possibihty, that 
 
 some board or body might desire to review them. The Select Com- 
 mittee on Expenditures has been created since the passage of that 
 act, but there remains some doubt whether it is such a reviewing 
 "committee of Congress" as is intended by the language of such act. 
 If it is, it has no right to bring action to recover the moneys now 
 owing the Government on said settlements, if any. That duty must 
 necessarily devolve upon the War Department, which, in conjunc- 
 tioii with the Department of Justice, can institute the proper pro- 
 ceedings. 
 
 In view of the filing of the aforesaid report by the Secretary of 
 War and the evident intent of Congress to reserve to itself the right 
 to review such settlements, this committee is of the opinion that the 
 Congress should have promptly such facts as have been developed 
 by this committee, together with its observations thereon, so that 
 such action may be thereafter taken by Congress or by the proper 
 department of the Government as may seem proper. 
 
MINORITY VIEWS. 
 
 On November 11, 1919, House resolution 381 was reported by the- 
 majority of the Select Committee on Expenditures in the War 
 Department, being accompanied by Report No. 463. The minority 
 are informed that this resolution has been abandoned and that no 
 effort is to be made to secure its consideration by the House, but, 
 instead, the majority have determined simply to make a report and 
 no action upon same by the House is to be requested. 
 
 This report is in the main a restatement of the majority views I 
 expressed in Report No. 463, and the minority views as expressed inj 
 part 2 of that report constitute the minority view^s upon this. The! 
 imputations of fraud against responsible and respectable business 
 men and faithful oflicials of the War Department are not justified 
 by the evidence taken ])efore the committee, and it is gravely to be 
 regretted that the majority have again determined to cast such] 
 sinister and unjust reflections in an official report. 
 
 As was pointed out in the minority views on House resolution 381,1 
 the matter of salvage values ])resents a question upon which the 
 judgment of men will necessarily diiTer, and it must be remembered 
 that in accordance with the policy announced to Congress while the 
 Dent Act was being considered, and w^hich policy was eminently 
 sound and proper, settlements were expedited as rapidly as possible 
 consistent with the proper protection of the Government's interests. 
 The business world, those who had large sums of capital invested for 
 the purpose of filling contracts made while the war was in progress, | 
 sought, and had a right to seek, prompt adjustments. 
 
 In hundreds of cases the character of the institutions and factoriesl 
 at which these contracts had been filled had been almost completely 
 changed by reason of their war contracts. Commercial production 
 had been abandoned and every energy and facility had been bent to| 
 supplying the war needs of the Republic. The livelihood of unnum- 
 bered thousands of laboring men was involved. It v.as of supremestl 
 importance to the public w^eal that these institutions might return to 
 a peace basis and again enter commercial production, giving em- 
 ployment to labor and supplying the peace needs of the country at 
 the earliest possible moment. All these elements must be taken into 
 consideration in connection with these settlements, and it should be 
 remembered that many of them were made in the winter and spring] 
 and that conditions have since changed. In fairness, these settle- 
 ments must be judged as of the time they were made and not in the! 
 light of subsequent developments which it was not possible to fore-j 
 cast with accuracy; nor may it be reasonably expected that uni- 
 formity and exactitude has been attained in a task involving an] 
 almost infinite variety of commodities and calling for a wide range I 
 of knowledge and skill in estimating the values involved. 
 
 Finis J. Garrett. 
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