The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-03-05
Minnesota NeWs and
Comment
BY r. w. HITCHCOCK

In this letter Governor Olson not
only confesses but proclaims his sole
responsibility for the Sitting regula-
lions and restrictions" which resulted
in the highway frauds of 1882 in which
the contracting participants were COM
PEELED to restore to the state nearly
100000 and were prevented by court
action from mulcting the people of the
state of a possible 100000.
The sitting regulations and restric-
tons" laid down by Governor Olson and
enforced by his order, resulted in limit
ing bidding to few contractors. These
contractors, testimony shows, held sew
eral conferences at the Minnesota Club
in St. Paul, parcelled out the work
among themselves and submitted gross
~ exorbitant bids. On November 10,
1881 they bid on seven jobs, their bids
on six of the jobs being about so per
cent higher than at previous lettings.
The seventh job was a smaller job, open
to others besides the 'conSpiring con-
tractors" To beat out these others,
one firm of the favored group, Nolan
Bros, bid "a cents per square yard on
the seventh job, although their bid on
the major job assigned to them was
$1.44 per square yard. The conditions
as to the two jobs on which Nolan
Bros bid were approximately the same
except that the overhead on the seventh
job was probably greater. AS to the six
major jobs at the letting, a different
contractor was low in each case; all six
of the low bidders were nearly so per
cent above previous lettings Of the same
year; suits at law compelled these six
contractors to restore 1892 980.37 to the
state On other lettings for 1882, re-
peated rejection of all bids finally re-
suited in breaking the ring and re-
storing the bidding to normal levels.
! 1t may hurt but it will be helpful for
| the people to consider some of the
things said by the supreme court about
| this matter:
ut could scarcely be expected that
the highway departments regulations
and limitations would result in fair
competition among the bidders
Limiting the number of bidders and
restricting the amount of construction
to be let to each during 1882 was
scarcely less than an invitation to the
favored contractors to get together and
do just what it is alleged they did do
conspire to obtain the work at an eX-
orbitant profit"
when the bids came in at a price
alleged to be approximately so per cent
above a reasonable price and nearly as
much over previous contracts under
competition, it would seem that the
most inexperienced of officials would
have comprehended the situation"
1.-The contrast was so great between
the bids on the major projects and
those on the more competitive minor
project and the previous contracts that
the failure of the department to COM
prehend the fraud being perpetrated
was in our judgment so gross a mis-
apprehension of the situation as to
amount to constructive participation in
the fraud"
1--WE therefor treat the situation al
legged as one where there was not only
conspiracy and collision among the
bidders but constructive participation
therein by state officers whose duty it
was to protect the public from the re-
suits of such a conspiracy"
The decision of the court was unani-
nous but Justice Stone took no part.
Closely allied to the fraudulent high
way contracts for 1882 paving is the
notorious Paper-Calmenson contract for
reinforcing steel by which partisan
supporter of Governor Olson, at the
Governors behest, was given contract
for all the reinforcing steel to be used
in highway construction throughout
1882 Contrary to law, this contract was
given without competitive bids; it
called for some 10000 tons of steel at an
estimated cost of more than 100000.
On october %, 20, and 80, 1881, the
highway department sent out notices to
eight dealers in steel, asking for quo
tations on approximately $500 tons of
reinforcing steel. In response to these
requests four of the dealers addressed
sent in offers. On November 9 all Of
these four dealers were notified that
their offers had been rejected. On Nov
ember 81 the highway department
signed a written contract with the