The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-17
ASKS U.s.. FOR EARLY
CLAIM SETTLEMENT
Adjustment Of War Contracts
Should BE Prompt, Says
Hepburn.
CITES CIVIL WAR CASE
Payment Delayed for Thirty
Years After Close of
Conflict.
CITES CIVIL WAR CASE

Tho protection OF those industries
which the Government has virtually
taken over during the period OF the war
and the immediate settlement Of claims
O. such business interests as have suf-
f.red by cancellation OF Government
contracts IS demanded by A. Barton
Hepburn. chairman OF the advisory
board Of the Chase National Bank. IN
an article In the November issue Of the
chase, the offieial organ OF that institu-
ton. Mr.. Hepburn considers the early
cancellation OF Government contracts for
war materials which are no longer nee.
essary beneht to the country Eeaer-
ally, but insists that the industries whose
contracts have been thus abrorated re-
oeive compensation ~ those contracts
call for az the eerliss, possible moment
Mr.. Hepbbrn's article, entitled Cancel
lstion Of Government Contracts" says:
The Government has already can
celled number OF contracts for vessels,
FOR enlarged plants In which to manufsc.
ture war materials, and for the supply
ing Of needful goods for the prosecution
OF the war. With the war ended the
Government will cancel all contracts
a. soon as may be. except for such ma
terial as may be needed for the army
and navy on a peace basis. This they
have q right to do by a reservation in
their contracts. and this they ouRht to
DO In the interest OF the whole country,
but II should be done In q way to pro-
tect those business interests which the
oovernment has virtually coJnmandeered
and controlled, and for whose products
they have been in many cases the only
customer. and In many more cases the
principal customer.
Civil War Case.
IN the interest OF labor, In the in
terests Of commerce, In the interests Of
the general welfare. everything should
30 done to facilitate a reimbursement
upon a peace basis without loss. at
least without unavoidable loss, to the
various parties concerned. Each BUSH
ness will require all its capital, all its
resources, in order 70 seek new Gus
toners and md new channels for It's
product, and nothing would be more
fatal than protracted delay on the part
Of the Government in making a settle
ment with these various interests in
accordance with the terms of their con-
tracts.
in studying this problem recall
an instance that came under my no.
tee with reference to a Government
contract In connection with the civil
war In 1887 was National Dlnk Elk
aniner for the port of New York found
that the Continental National Bank and
the Broadway National Bank each hsG
loan OF an amount approximate ting
100000 made to a shipbu.lder by the
name of Secor. As collateral to the
loan there was assigned to these banks
4 contract between the said Secor and
Gideon welles. Lineoin's Secretary OF
the Navy. for the construction OF iron
clad warships
The civil war ended in 1855, when
theee vessels were about two-th!rds COM
peted When tho war closed the Gov
ernment sold many completed armored
vessels, wanted no more vessels, and Con-
gress neglected to mako appropriation for
the completion of these ships nOtwith-
Standing the solemn contractual obliGa-
tions OF the Government. The work done
under these contracts by Mr.. Secor was
duly certified by the Government inspec-
tors and entitled him to be paid large
amounts. and because of these facts
loans were made TO Seoor by these
two banks. Still Congress failed to APP
proprlate money to pay It's contract OBJ
legations Year after year the appro-
priation failed. until the vessels rotted
Oh the way2
Business Needs Capital.
there were ascertained amounts due
upon these contracts certified by Gov
eminent inspectors. An Individual or
corporation could have been sued and
forced TO pay, but the Government could
not bs sued. Secor spent all he had and
all he could borrow In the effort to COM
plete his contract. He haunted the halls
OF Congress in wearying efforts to get
what was owing him by tho Government
and finally died of a broken heart, bank
rupt, because Of tho lack Of common
honesty in the treatment OF his claim.
New mark what happened! A Court
OF Claims was subsequently established
TO enable parties having claims against
the Government to present the same for
adjudication. These two banll% the
Broadway and the Continental National
went to the Court OF Claims. Their evil
dence was complete and conclusive and
their claims were allowed with per
cent interest thirty years after they
shoull have been paid. the added inter-
est swelling these two claims to about
H,l00 600. These banks were paid long
after Secor had turned TO dust, with his
claim utterly refused because Of the con-
tinued neglect OF Congress.
at the present time with very many cor.
porations. involving hundreds Of millions
Of dollars and embracing all lines OF
goods needful in supporting an army and
navy and the various activities incident
10 the prosecution Of the war. In an
Nc!pation of peace the Government
wisely reserved tho right to cancel con-
tracts by making certain compensatory
Adjustments. by paying money to onset
the unavoidable losses which must re-
tul, from the sudden stopping OF the
Governments activities, leaving concerns
without customers and in possession OF
large amounts OF goods not perhaps
available for the demands OF peace
With the war over, the continued max
Ing Of products. except upon the basis OF
peace requirements, would be altogether
wrong. but the canceilinR OF these con.
tracts deprives the corporations, at least
temporarily, OF a market"