The Portland daily press., 1885-09-29
THE UNcoMPLETED CRUISERS.
Letter Written by the Secretary of
the Navy
For the Information and Guidance
of the Board of Appraisers.

WASHINGTON, Sept. 2S-A letter has been sent
by the Secretary OF the Navy for the Information
and guidance of the naval board recently appoint
ed to appraise the work and material of the un-
completed cruisers. The Secretary says:
In view OF the many unauthorized and erroneous
statements which have been made with reference
TO the contracts upon the Boston, Atlanta and
Chicago. and for the purpose of guarding against
any confusion in the minds of any member of the
board as to what specific province you are called
upon 10 perform, make this communication to
your board
First-The contract is your only reference for
your authority and only under your appointment.
The validity of the contracts has never been, so
far as know. by any person assailed, and know
OF no ground upon which they can be. There is
no specific requirement as to the speed of these
three ships to be found in the legislation anthor-
izing them and hence the ground upon which the
Dolphin contract was criticised by the Attorney
General does not exist in these cases. You are to
assume therefore that the terms of the contracts,
and the plans and specifications, which are part
OF them embody the record to which you will
make reference in the performance of your duty.
Second-Other misstatements have been widely
circulated to the effect that the department has
questioned the character of the work upon these
ships and deems the contract not properly per-
formed in this regard. No suggestion or intilna-
tion of this kind has ever been made by this de-
partment and you will allow no such supposition
t0pre1udice you against the contractor or ships.
You Will of course deal fairly with both the gov
ernment and contractor and as you find the facts
to be.
Thrd-You are not assisting in the carrying
out of any secret compromise or arrangement be-
tween the parties, the terms of which you are not
advised of" The work having been stopped, the
government has proceeded under the contract to
take possession and to have an inventory and ap-
praiSal made, and hereafter will doubtless find it
wise to complete the vessels where they lie But
all this Is simply carrying out the duty of the gov
ernment in the contingency which has arisen, and
calls for no consideration from you.
Fourth-The duty which the contract imposes
upon you under your appointment is to examine
the work and materials on the three ships, and
ascertain and declare the fair market value there
of, including a reasonable and customary margin
of profit on so much work as shall have been sat
isfactorily performed. 1t may simplify your pre-
liminary deliberations somewhat and enable you
to settle i'll your own minds basis upon which it
is proper for you to determine this question of
market value if state to you what seems to me
to be the course which you are to pursue. In one
sense the market value of the partially completed
naval vessels, useless for mercantile purposes,
would be almost nothing. Its saleable value might
be said to be its value for the purpose of Junk
This is, however, not the Interpretation to put
upon the words as used in the contract So far as
the government is concerned, you can treat the
work performed and material at hand as parts OF
the completed ships, and you can determine the
value by pro rating the work satisfactorily COM
pleted with the entire work required, and ascer-
tain thereby me pro rata proportion OF the con
tract price that the work represents
One of the ships is so near completion that as to
it the following method of determining the ques-
tion might be adopted: Assuming the value of
the completed ship to be the contract price, by
aseertaining the amount of expenditure necessary
for her completion up to the requirements of the
contract would leave the value of the work per-
formed, and it is possible that the same method
might be more readily adopted in the other cases.
In all these matters it is entirely proper for you to
receive suggestions from the other parties to the
contract; and in making this suggestion as to
your method of procedure may state that have
done after consultation with the counsel of the
contractor and with the assigneeS and they con
cur with me IN this matter, but you will under
stand that the method of determining their value
is for you to decide, and these suggestions are
made simply for your consideration.