before Congress and present the equitable features of its case to this committee.

The CHAIRMAN. Do you think if the contract as worded were entered into between a private individual and the Gilpin Construction Co., the private individual having made certain surveys and the Gilpin Construction Co. had been given the benefit of those surveys for its use not for its positive determination-the situation would be any different from what we have before us? Let us take the case of a man who is going to build a house. He says, "Here are my plans and specifications. I have made borings and the soil seems to be all clay. However, you must use your own judgment as to the correctness of that conclusion." Then if a man should take the contract for the construction of that house, go into the soil and find rock and bowlders, do you think he could get a judgment against the owner of the property with whom he had contracted?

Mr. KORELL. If this were a controversy between two private individuals, a court of equity, in my opinion, would afford proper relief.

The CHAIRMAN. I do not think so. I am thinking of the language of the contract.

Mr. KORELL. In the first instance, this is work that was required to be done under water.

The CHAIRMAN. Well, take the excavation for a house.

Mr. KORELL. The Government in this case called for bids on this particular work. It furnished the prospective bidders with the result of its investigations and a report. True enough, it said that it did not guarantee the conditions to be exactly as set forth in the information it furnished; but in a situation like this it would be wholly impracticable to expect that numbers of bidders could go to the enormous expense of making soundings and checking up on the data furnished. Prospective bidders could not spend the large sums of money that the Government spent in this way to get accurate findings merely upon the hope of submitting a successful bid.

The CHAIRMAN. But it would have paid the Gilpin Construction Co. to do so.

Mr. KORELL. In view of subsequent events, it certainly would have. However, it would have taken a very lengthy and an expensive effort to check up on the Government data. It is practically impossible for a private contractor to do so. A Government report imparts a degree of reliableness that a private report does not.

The CHAIRMAN. But as I was speaking about a man building a house.

Mr. KORELL. As I have said, a court of equity does not construe a contract in strict accordance with the letter of that contract. It looks, rather, to the intent of the parties. It gathers this intent from surrounding circumstances and the four corners of the instrument. Where two parties come before a court of equity and each says he had certain definite things in mind and that other things were not contemplated, especially where there is agreement between the two parties as in this instance the court will permit the contract to be reformed to set forth their real intent.

The CHAIRMAN. What further statement, if any, have you to make?

2197-29-No. 35-3

Admiral GREGORY. I have only one more statement to make. There is a little confusion that has been brought about by reason of the fact that some of this rock taken out was within the original area that called for dredging and in which there has been no change of area. Certain changes were made in the contract. The channel approach was shifted for the purpose of avoiding in one place considerable rock. The thought was that by shifting we could avoid that rock but we later discovered that if we had gone straight through we would have come out better. That change was made as a result of an examination by the contractor and the officer in charge. The contractor himself furnished or suggested that change or shift. The Government had a set of plans outlining the limits of the work, which it gave to all prospective bidders. When the bids were received the Gilpin Construction Co. put in a bid in accordance with the lines laid out and by letter outlined how certain changes could be made which would perhaps reduced the work. When the award was made it was made on plan No. 2. After the work was begun we shifted the location of the channel on two different occasions, leading up to four different plans. Those are the four plans I will ask Commander Church to explain to you to clear up those differences. Commander Church is familiar with the plans and has them well marked.

STATEMENT OF COMMANDER GAYLORD CHURCH, CIVIL
ENGINEER CORPS, UNITED STATES NAVY

The CHAIRMAN. Commander Church, the committee will be glad to hear from you at this time.

Commander CHURCH. Referring to these [indicating] prints in yellow is the original limits of the dredging and was issued on the proposal. That was issued December 18, 1922. This [indicating] is the change Mr. Gilpin recommended as an alternate in order to avoid the rock which we show in the middle of the channel here [indicating], and also to get away from rocky side slopes along the shore line. He suggested the forming of an island of surplus dredged material in the approximate location shown in yellow cross hatch, to shorten the discharge line and eliminate the necessity of maintaining a long pipe line on piling bents. He recommended that it be put to the south and all of this part of the dredging is in sand, very fine sand and very easy to move.

It was thought that the change would eliminate the breakwater and avoid expensive rock excavation and at the same time not increase the quantities to any great extent. That is why he accepted the alternate-instead of wasting it on an island 4,000 feet the other

way.

The CHAIRMAN. He had a closer dump?

Commander CHURCH. Yes. The bureau accepted that alternate and awarded the contract accordingly, exactly as shown on his drawings, except the area of the turning basin was reduced from here to here [indicating] in order to reduce the total amount of dredging and to come within the amount appropriated.

That made only 400,000 yards of dredging, omitting this [indicating channel altogether.

Mr. Gilpin in a telegram refused to accept that award, because, naturally, his 15-cent price was based on a million cubic yards, and

this was on 400,000 cubic yards, which is the hardest part of the dredging, according to the borings. This [indicating] was sand and this indicating] was shale and clay. The bureau then accepted award on his telegram for the total as shown here (indicating], including the channel, at 15 cents, but reduced the depth from 30 to 28 feet. The CHAIRMAN. Where is the Tongue Point project?

Commander CHURCH. Here [indicating] it is. Then we go through the channel and in deep water after he had started the dredging and was working in the turning basin. That gave us time to put our survey party out on the part of the channel that was different than the one we had originally estimated on, and we estimated we were going to run over some 930,000 yards instead of 800,000 yards originally estimated, and we would not have enough money to pay for the contract. That situation occurred about the time Admiral Gregory was out on the Pacific coast inspecting the work with me. I made a recommendation shortly after the admiral's return to Washington to move the channel 100 feet north so as to take advantage of the deeper water of the existing channel. That [indicating] has fairly deep water. It would reduce the amount of dredging to approximately 830,000, which we could pay for. In that case we stated that all rocks in dredging encountered due to the change would be paid for under a change order to the contract as an equity, because we knew when we shifted the channel 100 feet north we would encounter this rock and we also expected there might be a change due to the side slopes. When the dredge actually did run into the rock in March, I had already gone back to Puget Sound, thinking the contract was clear sailing, because the contractor had only a little bit of the turning basin to smooth down and the sand out in the channel. The first I knew was when I received the letter from my assistant, who was on the ground as inspector, saying that they had run into the rock. This rock was entirely unexpected. This other rock was due to the change and we expected it. All indications showed it would dip this indicating] way, but it came up for a hundred feet and then went down again. It was covered with practically 30 feet of sand and it was these areas outside of the new change of lines which would still have been in his original contract if we had not shifted that he is asking the extra for. This outside was paid for under a change order by the Government. It amounted to $8,000. The borings were taken originally on a tentative layout, and that is why they do not conform really to the actual layout of the contract. When the borings were originally taken I had laid out tentative plans, and borings are located on 300 feet squares over this [indicating] area, both for the character of the soil for dredging and also for the pile driving involved in the timber piers and bulkheads.

The CHAIRMAN. How much dredging did you do in the channel? Commander CHURCH. There were five holes, but none of them beyond the finger pier.

The CHAIRMAN. Where did most of the rock form an obstruction? Commander CHURCH. At the red mark. Boring No. 4, which is about 110 feet from the rock encountered, is one of the deepest of the shale borings that we got, going down to 42 feet before we hit rock. Within 100 feet was this outcrop, which is a pinacle that comes up there [indicating].

The CHAIRMAN. Had you made any borings north and east?

Commander CHURCH. None were made in the channel. We expected we would do all in the sand. The reason we originally did not make any channel borings was because the tentative plan I figured on called for 22 feet of water.

The CHAIRMAN. What percentage of the rock came east and north of here [indicating]-the rock for which they are expecting pay12,000 cubic yards?

Commander CHURCH. There are 7,400 here [indicating] and 5,000 out here [indicating].

Mr. KORELL. Commander Church, what has been your experience with regard to parties checking up upon data and information supplied by the Navy Department as a basis for submitting bids? Do prospective bidders generally check the data and information furnished by the Government?

Commander CHURCH. When contract plans are issued there are only about 30 days before opening of the bids, and these borings took us about 30 days to make, so that I doubt whether any contractor would have gone out there and made borings.

Mr. KORELL. Is it not a fact that considerable reliance is placed upon the information supplied by the Government to prospective bidders?

Commander CHURCH. That is true.

Admiral GREGORY. In only one case in recent years have any checks or borings been taken by a prospective bidder. That was at Pearl Harbor and it involved 10,000,000 yards of excavation.

Mr. KORELL. Would you consider the fact that the contractor did not check up on the data and borings furnished him by the Government a matter of negligence or would you regard it as a mode of procedure on the part of the Gilpin Construction Co. that was usual?

Admiral GREGORY. I would not call it negligence.

Mr. BRABSON. The Government did make soundings.
Commander CHURCH. Yes; but not borings.

The CHAIRMAN. What else, if anything, Admiral, have you to submit?

Admiral GREGORY. I have nothing further to submit.

The CHAIRMAN. Does anybody desire to ask any further questions. After a pause. Apparently not. Let us adjourn at this time to meet at the call of the chairman.

(Thereupon at 1.10 o'clock p. m., Thursday, December 13, 1928, the committee adjourned to meet at the call of the chairman.)

о

A BILL TO AMEND THE ACT OF MAY 4, 1898, AS AMENDED BY THE ACT OF MARCH 3, 1899, RELATING TO THE NUMBER OF ACTING ASSISTANT SURGEONS IN THE NAVY TO BE APPOINTED BY THE PRESIDENT (H. R. 15205)

QN/A18(280810) L.

NAVY DEPARTMENT, Washington, December 8, 1928.

The CHAIRMAN COMMITTEE ON NAVAL AFFAIRS,

House of Representatives, Washington, D. C.

MY DEAR MR. CHAIRMAN: There is inclosed herewith a copy of a letter, together with a copy of a proposed bill "To amend the act of May 4, 1898, as amended by the act of March 3, 1899, relating to the number of acting assistant surgeons in the Navy to be appointed by the President," this day forwarded to the Speaker of the House of Representatives.

Sincerely yours,

CURTIS D. WILBUR,
Secretary of the Navy.

NAVY DEPARTMENT,

Washington, December 6, 1928.

The SPEAKER OF THE HOUSE OF REPRESENTATIVES,

Washington, D. C.

MY DEAR Mr. SPEAKER: I have the honor to transmit herewith a draft of a proposed bill "To amend the act of May 4, 1898, as amended by the act of March 3, 1899, relating to the number of acting assistant surgeons in the Navy to be appointed by the President."

The purpose of the proposed legislation is to repeal that part of the law limiting the number of acting assistant surgeons to 25 and to provide instead that the number of acting assistant surgeons in the Navy to be appointed by the President for temporary service shall be such number as together with the number of regular commissioned officers will not exceed the total number authorized for commissioned officers of the Medical Corps.

The currently appropriated strength of the Medical Corps of the regular Navy is approximately 813 officers, including acting assistant surgeons, of whom there are 8 at the present time. Acting assistant surgeons are not in the regular Navy or in the Naval Reserve, but are in practically the same status as contract surgeons. They receive the pay of a lieutenant, junior grade, but are not eligible for retirement under the laws providing for the retirement of naval officers, and their appointments may be revoked at any time.

Owing to the number of vacancies created in the Medical Corps of the Navy during each year, due to resignations, deaths and other causes, it is necessary, in order to maintain the appropriated strength, to make annually about 75 appointments in the regular Navy as assistant surgeons.