Evening star., 1940-03-02
Carmody Defers
Ruling on U. 5.
Cdfeterias

SS~SsAsSs
Trustees to Reply r
To Legal Questions
Federal Works Administrator Car.
mody has deferred ruling on the
future status Of the Welfare and
Recreational Association in the op-
Grafton Of Federal-building cafe
terias until such time as the trustees
can file with him answers to all the
legal questions raised in the long
controversy.
With some doubts in his own mind
as to the position he should take,
Mr.. Carmody readily agreed to a
postponement when he learned at
a public hearing late yesterday that
the trustees were preparing a formal
reply to the allegations made against
the association in the recent report
of Acting Controller General r. N.
Elliott. Their reply will be made
some time next week and will be
transmitted through Mr.. Carmody
to the acting Controller General
The hearing for the trustees was
conducted by Mr.. Carmody to throw
more light on the questions involved
IN the controversy and was attended
by number of private restaurateurs
as unofficial observers.
The trustees refused to bulge
from the former position taken by
them in resolution spurning the
proposal Of Mr.. Carmody that the
Public Buildings Administration,
which is under his control, take
over the operation of cafeterias,
Through their own attorney, John
Cross, the trustees also refused to
accept the contention of Alan
Johnstone, general counsel for the
Federal Works Agency, that the as
ISOLATION was Government instru.
mentality subject to Mr.. Carmody s
control.
Ownership Dispute.
Mr.. Johnstone said it was impor-
tant to decide to whom the prop
erty of the Welfare Association be.
longs, since it would help the ad-
ministrator to consider the pro.
priety of making a demand on you"
to pay the $4,000 which the act
ing controller general claimed is
still due the Government from the
associations profits. He claimed
that the agreement entered into by
Col. U. S. Grant, III, some years ago
on behalf of the association was not
legal contract, but merely license
to operate concessions on Federal
property.
Il don't think Col. Grant or any
one else had the authority to permit
the use of Government property
for profit" Mr.. Johnstone con.
tended.
Mr.. Cross defended the so-called
Grant agreement under which the
association is operating. He quoted
from letter from Col. Grant, who
set up the association in 1927, in
which the former Director of Pub
Tic Buildings and Public Parks said
he had inherited" the Secretary
OF Wars right to grant license.
Use for Profit.
Repeatedly, the Government s
counsel asserted that there was no
legal authority for any Government
employe or other persons to use
Government property for profit.
His remarks were taken in by the
private restaurateurs, some of whom
were charged recently by Interior
Secretary Ickes as being desirous
OF taking over the operation of the
Government cafeterias. Since they
had not been invited to testify they
took no part in the proceedings.
The acting controller general
questioning of the amount he al
leges is due the Government from
the association entered into tn,
situation. The trustees contended
chiefly through Samuel Goodacre
president of the board, that Mr.
Elliott's ruling on the activitie,
Of the association involved "ques
tions of accounting" more than any
thing else. They contended his rul
ing was based chiefly on the dis.
crepancies ironed out several year.
ago during a prior auditing of &C.
counts held by Secretary Ickes. A
that time it was decided that som,
$1,000 should be returned to tn,
Government.
Mr.. Goodacre complained that tn,
General Accounting Office had no
given the association the "protec
ton" that had been promised Col
Grant when Former Controller Gen
McCarl persuaded him the accounts
should be handled through tina
Office.
TOO Long in the Dark"
Called into the hearing on shor
notice, the trustees put the ques
tion of the next move clearly up Il
Mr.. Carmody. 1t was his responsi.
bility, they contended, to decid,
whether he wished the association t,
continue operation of the cafeteris
or to take steps toward its dis
solution. In the latter determine,
ton, they said, the law required 81,
months notice.
Mr.. Carmody remarked during tn,
hearing that it was time more ligh
was being shed on the question!
involved and asserted the associa.
ton had been operating too loni
lin the dark" In deciding to with.
hold a decision until the trustee.
could make a full report of theil
views, the administrator said he
did not wish to add to the confu.
sion already enveloping the associ.
atoms affairs.
Counter-V Views Heard.
Counter-views on the operation
of the association were heard from
Milton Freeman, representative ol
the United Federal Workers Dis.
trict Council, and Antonio Bitonti