Evening star., 1926-12-03

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the general board of the Navy, which
had recommended the project to Sec
retary DENLY. Gregory replied that
the board was composed of 1.-The very
highest officers of the line, whose
function it is to consider all essential
features of strategy and policy"
Mr.. Hogan elected from the wit
ness that 1.-The Navy places in the
general board the highest confidence
that can be shown"
Mr. Hogan asked the witness the
need of the secret orders with which
the papers were marked. He replied
that the plans and specifications
themselves were not marked secret.
but when given to the J. G. White
Corporation and others it was with
the request that there be no publicity
on account of their confidential ma
ture.
Personnel of Board.
Mr.. Lambert, attorney for Fall,
asked about the personnel of the gen
eral board and also if any one from
the Interior Department was on it.
''Of course not" replied the witness.
In cross examination Mr. Roberts
asked whether it was known by the
general board that the Secretary of
the Interior would make the contract.
He replied that the board understood
that Secretary Fall was the business
agent in the matter.
After a few minutes of routine
examination, Admiral Gregory was
excused.
Mr.. Hogan then called Gano Dunn,
president Of the J. G. White Engineer
ing Corporation Asked about his first
meeting with Doheny. sr. The w tness
ran1lp6 fn2f it
He first met j. J. Cotter of the Do
heny company in January, 1922. and
then he explained that he recalled a
casual meeting with him some years
before
Mr.. Dunn had never had business
relations with the Pan-American Co.,
prior to this 1922 meeting, though he
said the company may possibly have
bought oil from the Doheny firm.
At present, the White Engineering
Co. has no business relations with the
Pan-American nor with Mr.. Doheny
he said.
The Pearl Harbor project was first
brought to his attention by Director
December %, 1921. Balm disclosed to
him the project at this conference.
Confidential Nature Stated.
"He first said that he wanted to
impress on me the supreme conf
Dental nature of the plan. The
Navy regarded it as so important
that the plans were brought over by
commissioned officers instead of by
the regular messengers"
Balm showed him the specifications
and plans and asked If the firm
would be interested in making a
bid. "The compensation was to be
in crude oil, as I understood it," the
witness recalled. He assured Balm
that he would talk the matter over
with his associates and come back
with an offer.
Dunn's firm was opposed to ac-
cepting Oil and the witness testified
he knew he would have to connect
up with an oil company to get the
business for his organization. He
was introduced to Mr.. Cotter of the
Pan-American Co. by Balm in Janu-
ary, 1922. There followed a series
of conferences between Dunn's COM
pany and Doheny's company, re-
sulting in Doheny submitting a lump
sum bid and employing the White
company on cost-plus basis.
Wanted Economical Work.
Mr.. Dunn resumed his testimony
after the luncheon recess. He said he
first met Secretary Fall some time
during March of 1922 and was intro
duced by Balm. The conversation was
mostly social, but they did discuss
the proposed work at Pearl Harbor.
Mr.. Fall expressed to him, the witness
testified, that he hoped to have the
work done as cheaply and economi-
cally as possible.
When did you next meet Mr..
Fall?"
To-day. at lunch" he said.
Mr.. Dunn related that he had pre-
pared A and B bids for the Pan
American Co. and that the last
touch was put on the drafts April
IA, the day before they went to
Washington to submit the bids. Mr.
Cotter had prepared another Graft,
he explained, which he worked into
his own draft. No one connected
with the Government saw the bids
before they were offered, he testi-
fed.
The question of "preferential
rights" was brought up by Mr.. Hogan,
and the witness explained that ne
had discussed this with Mr.. Cotttr
He told Cotter that such a clause
VONAu IlOI AL oplIl1OIl
the bid, but would really make j,
more attractive.
In response to questions by Mr..
Hogan, he explained that as the act
ing age mt for the Pan-American Co.
his friend had been allowed fee of
$4,000 on the April 25 contract
work. This would allow a profit of
to 10 per cent.
IT 6 RoraA+od h~ c..s,
He explained that he was asked to
put into the contract a clause under
which the Pan-American Co. would
give to the Government the benefit
of any savings made.
Attorney Hogan brought ou: that
the construction work at Pearl Harbor
savings under the estimated cost of
the work. and that the Government
got the benefit Of this.
The work on the December II con-
tract at Pearl Harbor was substan-
italy competed a year or q year and
half ago, Mr.. Dunn claimed.
ReVertlng to the opening of the bids
of the April 25 contract, Mr.. Dunn
told of conference following the
opening, at which he and Mr.. Cotter
talked the question over with Balm
and Finney. Cotter said that he
hoped the department would recon-.
mend bid A, since both Of the Pan
American bids were the lowest sub.
mitted.
"Mr. Cotter asked that the sigma
ture Of the Secretary of the Navy
as we'll as that of the Secretary Of
the Interior be put to the contract" !"
There was quite a lively scene in
the conference room and considerable
argument over this point" the wit
| ness related. "Finney said to Mr..
Cotter, Now Joe, 1 don't think that
is at all necessary He said that
Cotter replied: I feel so strongly about
| this judge, that I don't feel confident
in taking responsibility for this cor.
| tract unless the Secretary of the Navv