The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-02-13
Minnesota News and
Comment
BY r. w. HITCHCOCK
ACKNOWLEDGEMENTS:

anu possible $4,000 ,O0O.
The courts decision recalls to mind
one OF the most amazing incidents in
the history of Minnesota, wherein Gov
ernor Floyd B. Olson conceived and
enforced rule of bidding in highway
contracts, which the supreme court has
denounced as IAN invitation to fraud"
and in which the district court COM
PEELED the restitution of 1892 ,980.37.
State highway bids, submitted by
favored firms under the governors rule
which limited bidding, were so high as
to arouse statewide suspicion and
criticism. Six separate suits were begun
against contractors, the suits finally
resulting in the recovery of 1892 ,980.37,
or 1880 in excess of the actual cost
Of performing the contracts plus
reasonable profit. A like overcharge on
all the 1882 contracts would have cost
the people of Minnesota 100000 more
than the work was actually done for at
prices bid after the suits at law had
established the fair and reasonable
price.
Since the state, through its attorney
general, seemed reluctant to begin suit,
the institution of the suits and the work
OF carrying them on, resulting in such
tremendous savings to the people of the
state, was done by private citizens and
attorneys, the attorney general of the
state sitting in and approving acts of
counsel but otherwise taking no part in
the proceedings. The entire matter oc-
cupied three years, during which time
the attorneys received nothing for their
services and nothing for expenses,
barring mere $3.50 advanced by the
attorney general
The value of the services of the at
torneyS in the six cases was determined
in January 1885 by jury in district
court and was set at 100000, or prac-
tically Is per cent of the amount re-
covered. The supreme court has now
affirmed this verdict
There are some interesting side lines
| in the determination of the fees for
the signal service rendered. An appro-
priation for the payment of the fees
awarded by the jury was approved by
the regular session of the legislature
last winter, in the House by 70 to 2
and in the Senate by 81 to 10, but the
bill was vetoed by the governor. The
veto in itself was peculiar, for it found
the man responsible for the threatened
loss refusing to approve payment to
those who prevented the loss and who
restored to the state treasury 1892 $50 81.
The jury, in considering the fees that
should be allowed the attorneys in the
years, listened to II expert witnesses, all
of them attorneys. Six of these expert
witnesses testified for the highway de-
partment. They were in attendance at
the trial, parts of six days, and testified
briefly. The highway department paid
each of them 500 per day or a total
Of S5,400. The six attorneys who testi-
fed for the plaintiffs counsel were
among the most eminent members of
the Minnesota bar; namely Judge
Oscar Hallam, former member of the
supreme court, the late Herbert Keller,
Judge F. M. Dickinson, James G. Otis,
John M. Bradford, and Frank Murphy,
friend, confidant and advisor of Cover
nor Olson. These truly expert witnesses
were allowed $500 for the same SER
vice for which the highway department
paid it's witnesses $1,000.
The witnesses for the highway de-
partment testified that the reasonable
value of the legal services rendered by
the plaintiffs attorneys in the six cases
was from 5 to rs per cent of the amount
recovered; the other six expert wit
nesseS testified that it was worth from
Is to SO 1-3 per cent. The jury allowed
Is per cent and the supreme court has
now upheld that allowance.
Some outstanding, but little known,
facts in regard to this most gigantic
swindle ever attempted to be per-
petrated upon the people of Minnesota:
| The governors order, the basis for
the whole attempt, was issued February
26, 1881, when he had been in Office
less than two months. The fraudulent
contracts were let November 10, 1881
The supreme court on February 10, 1888
declared that the Sitting regulations
and restrictions" enforced by the COVER
nor and the highway department were
IAN invitation to the favored contrac-
tors to get together 4. and to con-
spire to obtain the work at an ex-
orbitant profit" The district court
found against the contractors for
1892 ,980.37 on February TO- 1884. jury
in district court awarded the attorneys
for the plaintiffs 100000 for attorneys
fees in the fall of 1884, but the highway
department appealed the verdict. The
legislature of 1885 appropriated 100000
for fees but the governor vetoed the
bill. The supreme court on January "a,
1886 upheld the jury verdict for at
torney's fees in the full amount.
The governors order to the highway
department was as follows: "Henceforth
in awarding road construction contracts
you will put in force and compel COM
pliance with the following condition
precedent to be eligible to bid or be
awarded a contract or contracts to con-
struct more than 100000 square yards of
paving for the State of Minnesota, a
bidder shall have completed successfully
contracts with the Minnesota highway
department for not less than 100000
square yards of paving"
Not one contract for state highway
paving for the year 1882 was legally
awarded; all were void because of the
sitting regulations and restrictions" of
the governors order; also, the depart
ment of administration and finance
failed legally to approve any contract
made for paving in 1882.
In addition to making void contracts
for 1892 the highway department, under