as they w^re sent from one job to another.
Mr. Lea. What was the largest number of soldiers engaged in the
operations at any one timet
Col. Stearns. That figure there.
Mr. Lea. On November 1 ?
CoL Stearns. On November 1.
Mr. Lea. What was the litest number of these 28,000 men who
were under the Seims-Carey-Kerbaugh Gat
Col. Stearns. Approximately 4,000 men.
Mr. Lea. And in whose employment were the other men, so far as
losing operations were concerned?
Col. SrasARNB. They were with cost-plus operators in the woods,
and with private operators in the woods. I can get you the exact
figures of how that distribution was made. The spruce operators had
the first call.
Mr. Lea. The spruce operators outside of the cost-plus contractors.
Col. Stearns. Outside of the cost-plus contracts.
Mr. Lea. Now, at the present time, have vou a complete statement
of the cost of the railroad, that is, of No. 1 1
Col. Stearns. I expect to get that to-night, sir.
Mr. Lea. I will not ask anything further about that at present.
You haven't the data as to the items on which Siems-Carey-Kerbaugh
were allowed cost plus at the time of settlement, or up to this time?
Col. Stearns. No.
Mt. Lea. You will get that, will you?
Col. Stearns. I will get that.
Mr. Lea. Was there aiw other transcontinental railroad on thia
peninsula, other than the Milwaukee & St. Paul ?
Col. Stearns. No, sir.
^ Mr. Lea. And, therefore, it is true, isn't it, that any railroad opera-
tion tiiat went there, to have a connection with the East, would be a
contributor to that particular railroad?
Col. Stearns. Yes, sir.
Mr. Lea. And it meant that the United States must refrain from
developing this country, or else it would make a contribution to the
Col. Stearns. Yes, sir.
Mr. Lea. Now, do you think that the fact that the Milwaukee
would be benefited, was anj reason why the United States should
refrain from developing this spruce?
Col. Stearns. I say make contribution to the Milwaukee. I qual-
ify that by stating: Frobably indirectly, not directly.
Mr. Lea. Well, they had to pay the Milwaukee to get their freight,
out of there, didn't they, if it went by rail?
Col. Stearns. Either that or, if satisfactory traffic arrangements
could not have been made, it was our intention to construct that line
down to the coast and put our logs right into the water ; and that line,
as you probably saw, or have noted, has been surveyed with that
Mr. Lea. But that would involve water transportation to some
other railroad oflF the peninsula, wouldn't it?
Col. Stearns. Yes.
Mr. Lea. The only possible railroad with which the United States
could connect upon that peninsula, for transcontinental traffic, was
Col. Stearns. Yes.
Mr. Lea. Were you there at the time that investigations were in
process, in reference to the construction of this railroad ?
Col. Stearns. Yes; I was here, but my duties didn't bring me into
connection with the details in any way, either of the formation of"
that contract or its execution.
766 WAK EXPBNDITUBBS.
Mr. Lea. If you know, what engineers were advising upon the
Col. Stearns. I know that a disinterested engineer was called in;
that a letter was written by Gen. Disque to the Union Pacific — vice
president of the Union Pacific — requesting the services of a disinter:
asted engineer, to advise him. A man by the name of Mr. Boberts
was selected by the vice president of the Union Pacific for that duty.
Mr. Roberts was then sent by Gen. Disque to the peninsula to make
an investigation and give his opinion of what he considered the
proper route for our purpose. That opinion was given — and we can
either get Mr. Eoberts's report or have him appear before the com-
mittee — in which he advises — unbiasedly advises
Mr. Frear. What is that word?
Col. Stearns. Unbiasedly advises that we take the route that was
taken through the Lyre River canyon.
Mr. Lea. W^ho were on the board of directors of the Spruce Pro-
duction Corporation at that time?
Col. Stearns. That was before the corporation was formed.
Mr. Lea. That was under the Spruce Production Division?
Col. Stearns. That was under the Spruce Production Division^
Mr. Lea. Do you know when negotiations, or, rather, when the
consideration of the construction of this railroad, first began?
Col. Stearns. Gen. Disque talked to me about that railroad, as
far back as December or January, 1917 or 1918, and discussed the
matter with several people when 1 was in his office.
It was always his idea that if it became necessary to get more
spruce, that we ought to go to the place where the spruce was, and
there was no place that our cruises showed where there was as
much spruce, of the kind that we wanted, as right there in Clallum
County, and it was awav back in early days of the division that he
had made up his mind tnat if any railroad construction were needed
to get this out, that there was the place that he would go^ to it I
talked with him about it, and others have talked with him aboot
it. It was no new scheme, and when our requirements became in-
creased, and as soon as weather conditions permitted, he went right
ahead with the arrangements for that construction.
Mr. Lea. What was the source of information on which the
Spruce Production Corporation and the Spruce Division acted, in
determining the location of suitable spruce?
Col. Stearns. We got all the county cruisers together, we got all
the private cruisers together that we could get hold of, the maps show-
ing the cruises ; we consulted with operators who were in a pobition
to know — ^loggers. And then, having by such means gotten a gen-
eral idea, we then sent our own investigators out to find out thtt
facts, just what was there and what was not there, before the final
step was taken.
Mr. Lea. And what was the duty of those investigators?
Col. Stearns. Those investigators were to go out and cruise the
timber and make a report on the availability of the timber for air-
plane purposes, the amount there for airplane purposes, and collected
all the necessary information pertaining to it that we should kw>w.
Mr. Lea. Can you give a statement of the facts that were preamteJ
to the Spruce Production Corporation, or the Spruce Production I>i-
vision, in the spring of 1918, which led to the determination for this
railway expansion for the production of spruce.
Col. Stearns. I only know that
Mr. Lea. What I mean: I would like to get the estimates. You
have already stated the source of the estimates, as I understand. Now,
I would like to get the estimates and the information as to the avail-
ability of spruce that was already accessible — ^that is, accessible in
Col. Stearns. Yes. i
Mr. Lea. If you have those figures and haven't them here now
Col. Stearns. I haven't them here, but I will endeavor to get them
Mr. Lea. Well, perhaps it would be better to take it up in the morn-
ing, or will you have them in the morning?
Col. Stearns. No, sir; it will take some time to compile those
Mr. Lea. I would like it if we could get those when we go down to
Col. Stearns. There is this much that was very evident, from a
cursory knowledge of those figures, that there would be a great drop
off of production in the industry the last part of 1918 and the first
part of 1919.
Mr. Lea. Well, I suppose we had better go into that at the same
time. What is the name of this engineer of the Union Pacific?
Col. Stearns. The name was Roberts. His fuH name I am n^*^
familiar with. I think it was Eoberts, though.
Mr. Lea. Do you know anything about his particular work or
Col. Stearns. I can get that information for you.
Mr. Lea. Well, very well. Now, to what extent was Col. or Gen.
Disque surrounded by men of practical experience, to what extent
did he have their cooperation and advice in conducting the spruce
Col. Stearns. He made no move of importance to the industry
without — of a lar^e nature, no important policy of a large nature
was decided on without very careful consultation with their influ-
ential men in the industry, not one, not two, but dozens. Night after
night we were down at the oflSce from eleven until twelve o'clock in
conference with loggers and millmen of the Northwest, from Wash-
ington and from Oregon, all over, trying to get all they could give us
on these different questions and it was really they who gave the in-
formation on which these policies were shaped, and it was from their
opinions in general that these policies were drawn ; taking those who,
as I say, had the best grasp of the situation, of the problems that
confronted us, the immediate requirements, and of the difficulties at
hand, weighing all those things carefully; those men who did that
were the men whose advice iii the particular case the general fol-
lowed, and he was a very successful reader of men.
Mr. Lea. Now, in a little more specific way, what were the func
tions of the directors of the Spruce Production Corporation, in prac-
tice, what were their functions?
Col. Stearns. The directors of the corporation only came into,
office during the latter few months. Those same men were his ad-
768 WAK EXPENDITURES.
visers in an official capacity, however, before the corporation was
formed. The Aircraft Board in Washington appointed an advisory
committee, in the nature of a subsidiary Aircraft Board en th^
Pacific coast. Those men were such men as Mr. Ladd^ president of
the Ladd & Tilton Bank in Portland, Mr. Yeon — ^no, not that — ^he
was later. Mr. Benson, of Portland, and Mr, Mark Reed, a Wash-
ington logger, of Shelton, Wash. Those three men acted as his
official advisors. In addition to that
*Mr. Lea. How many were there on that advisory committee?
Col. Stearns. Those three.
Mr. Lea. Yes.
Col. Stearns. That was the official advisory committee. Then, in
addition to that, when he wanted to discuss matters vital to the log-
gers and pertaining to logging, he called in the log£;ers from Oregon
and from Washington, and when it was a matter of prices — ^a matter
of prices for lumber, he called in mill men from Oregon and from
Washington. I can ^ve you a nimiber of names of men who were
then in his office, and it will include most of the successful men of the
industry who have been there one time or another in consultation
with him, some of these men time after time. I guess that covers the
Mr. Lea. As to those men on the advisory commission, who I un-
derstand acted with Col. Disque up to the time the Spruce Production
Col. Stearns. iTes.
Mr. Lea. Mr. Ladd, who is he, what is his business?
Col. Stearns. Mr. Ladd is president of Ladd & Tilton bank, or
was president of the Ladd & Tilton bank in Portland at the tima be
was acting as adviser.
Mr. Lea. And who is Mr. Benson ?
Col. Stearns. Mr. Benson is a very well-known man in PorUand,
owner of the Benson Hotel, and very prominent in the history of
Portland. He is one of their most prominent citizena
Mr. Lea. What is his business?
Col. Stearns. He now has retired. No; that is, the old man —
this is his son ; I would like to have you correct that. I was think-
ing of old Mr. Benson when I spoke. His son, as I understand —
he was not adviser — is carrying on the estate of his father now, and
was an experienced logger oef ore his present occupation — an active
logger of great experience.
Mr. Reed has large lumber holdings — ^lumber operations, I should
say — in Washington, and is one of the ablest loggers, I suppose^ in
this State; that is the general impression that I have heard coo*
Mr. Lea. Is he a mill operator also?
Col. Stearns. I say operator; he is a lumber operator.
Mr. Lea. You mean both logging and milling?
Col. Stearns. A mill operator. I am not positive about whether
he is in the mill business or not.
Mr. Lea. When the Spruce Production Corporatiwi was orgia-
ized, who were chosen as its board of directors?
Col. 'Stearns. The advisory board, men who had been on the olB-
cial advisory board were chosen as the board of directors; and, i»
addition, Mr. Donovan, of Bloefel-Donovan Lumber Co,, of Belling-
ham, Wash., and Mr. Bevis, representative of the Loyal Legion or-
ganization; Gren. Disque, and myself.
Mr. Lea. Only five?
Col. Stearns. No; the three advisers, Donovan, Bevis, Gen.
Disque, and myself.
Mr. Lea. When did Mr. Yeon become a member?
Col. Stearns. Yeon?
Mr. Lea. Yes, Yeon.
Col. Stearns. Mr. Yeon was not a director. He was supervisor
of the cost-plus operations in Clapsop district.
Mr. Lea. What experience had he had in the lumber business be-
fore he became connected with these operations?
Col. Stearns. He worked his way from the very bottom up to his
present status; and he is considered a very influential man in Port-
land; built the Yeon building; successful; has been a logger all his
Mr. Lea. In what country did he have charge?
Col. Stearns. In Clatsop district.
Mr. Lea. Who is Mr. Donovan?
Col. Stearns. Mr. Donovan is a member of the firm of Bloedel-
Donovan Lumber Co. They have large holdings in the State of
Washington. He actively manages the mills of that plant at Belling-
Mr. Lea. Is that firm a logger as well as a miller?
Col. Stearns. Yes; and logging, they have logging operations, as
well as milling operations.
Mr. Lea. How long has he been engaged in the lumber industry?
Col. Stearns. He has been engaged in the lumber industry ever
since he came out here. He was a civil engineer on the Northern
Pacific Bailroad and settled out here — I don't know exactly. I think
it was somewhere probably 20 or more years ago.
Mr. Lea. How old a man is he?
Col. Stearns. Mr. Donovan is a man, I should say, about 58.
Mr. Lea. What was the business of Mr. Bevis?
Col. Stearns. Mr. Bevis was a logger, not an owner. He was
selected to be on the board of directors because it was our desire to
have the Loyal Legion organization, which was one of our strongest
agents in stabilizinff the lumber industry — desired to have that organ-
ization represented in the division, connecting the two in that way.
After the signing of the armistice, then he left.
Mr. Lea. Was the board of directors changed after that any — ^the
Col. Stearns. After the armistice?
Mr. Lea. After the board was organized.
Col. Stearns. It has been changed from time to time.
Mr. Lea. Did it change anv before the armistice?
Col. Stearns. Not before the armistice. Yes, it changed in one re-
spect: I left the board when my duties were getting very arduous
in the military end of it, and turned over my position as director to
Maj. Eamen, who came out and was gradually taking over the duties
at the head of the production end of the office.
770 WAR BrPBNDITTJRES.
Mr. Lea. Do you remember about what date that was?
Col. Stearns. That was probably about just before the armistice
was simedj about a month before.
Mr. Lea. Are you operating under the same character of organiza-
tion to-day, a board of directors?
Col. Stearns. No — ^yes.
Mr. Lea. You have a board still?
Col. Stearns. We still have a board of directors. We have cfaanged
our organization within the corporation^ but our board of directcHS
is still operating.
Mr. Lea. Generally speaking, what has been the change?
Col. Stearns. The change has been to cut down all — to conaolidaie
all the departments that we could into one, so that one experienced
man could take over the work of winding up the various other depart-
Mr. Lea. In eflFect reducing the organization?
Col. Stearns. In effect reducing the organization as much as
Mr. Lea. Who are the members on the board at the present time!
Col. Stearns. The board at the present time are Mr. Donovan—
or Mr. Ladd, Mr. Donovan, Mr. Grammer.
Mr. Lea. What is that name?
Col. Stearns. Grammer, G-r-a-m-m-e-r. Mr. Griggs, Mr. Ernst-
Mr. Lea. How do you spell his name?
Col. Stearns. E-a-s-t-m-a-n. Capt. Massey — ^not Mr. Massej, he
had left the service — and myself.
Mr. Lea. And who was Mr. Grammer and what was his former
Col. Stearns. Mr. Grammer is a very successful logger in Wash-
ington, in charge of the Admiralty Logging Co. When we came oat
here, he was president of the West Coast Lumbermen's Associatioiu
and he has been a constant adviser and help throughout all our
Mr. Lea. What was Mr. Griggs's occupation?
Col. Stearns. Mr. Griggs was president of the St. Paul A Taooma
Lumber Co., one of the most successful and larger milling opermtioit&
Mr. Lea. Where is that company operating?
Col. Stearns. At Tocoma, Wash.
Mr. Lea. Mr. Eastman, what was his business before?
Col. SoiEARNS. Mr. Eastman is president of the Western Coopermg©
Co., a company that logs — ^makes its product out of the raw material
An experienced logger.
Mr. Lea. And Capt. Massey, who was he?
Col. Stearns. Capt. Massey is my assistant and acts in that
Mr. Lea. AVas he in the Regular Army before he was iu th*—
Col. Stearns. No.
Mr. Lea. A temporary officer, was he?
Col. Stearns. He was a temporary officer.
Mr. Lea. And what was his business before coming into the serrice ?
Col. Steakns. He was in the Army, but not as a commissioned
ofiicer. I should correct myself. He worked his way up.
Mr. Lea. In the Regular Army!
Col. Stearns. In the Regular Army.
Mr. Lea. Now, you referred to the Loyal Legion. I wish you would
briefly teU us about the organization of that legion, and why, and
what, if anything, was accomplished by it.
Col. Stearns. It was very obvious, when we first came out here, that
one of the first problems to be solved was to stabilize the labor condi-
tions in the industry. The outcome of that was the organization of
this Loyal Legion society. It was a patriotic societv for the purpose
of preaching Americanism to the men in the woods. After several
meeting with different men and different operators who had views on
the subject, and getting their idea, we* started this society, and had a
telegram of approval from Secretary Baker. The outcome was that
it took like wildfire in the woods, and in three or four months' time
we had something like 80,000 members on the west coast and probably
50,000 or thereaoouts in the inland empire — ^that is, across the
mountains. We went in there at the request of the War Department,
because the effort had been so successful on the west coast. The total
membership of that organization during the war was approximately
130,000 members. After its organization there were no strikes;
sabotage, which had been rampant, gradually died out; the I. W. W.
element was practically stamped out ; it laid dormant in one or two
camps and, in f act^ in those it was finally practically blotted out. It
was a very interesting and quite a remarkable success.
Mr. Lea. At what date was that accomplished ?
Col. Stearns. The effects of it were felt within a month after — it
is pretty soon to put it that much — I would say within six weeks —
from a month to two months after the supervisor — after the organiz-
ers went out. We took young officers, some score or more of them,
assigned them to districts to organize the men in the camps and mills,
into this sciety, sent them out, tried to pick out men who were good
talkers and had a good presence and could inspire enthusiasm. They
were very suceessfiil, with the results I have stated. In addition to
that, we "sent sanitation officei-s throughout the whole Northwest, to
inspect the logging camps and mills and see where we could improve
living conditions under which the men were working. There was so
much talk of the living conditions. Reports that we have indicate
that great improvement was made in those living conditions. Also,
that organization became the medium through which Gen. Disque
spoke to the laboring men of the lumber industry. The operators,
that is, the members of the West Coast Lumbermen's Association,
unanimously agreed to turn over the conditions of work, wages, and
hours of work, to the decision of Gen. Disque. The employees did
the same thing, in the convention held in Portland and the conven-
tion held in Spokane. It was on that very unanimous desire on the
part of the employers and the employees that the action concerning
the wages and hours and conditions was gone into. We had the sup-
port of the entire industry in all such matters.
(Thereupon, at 5.80 o'clock p. m., the committee adjourned until
tomorrow, Thursday, August 21, 1919, at 10 o'clock a. m.)
772 WAB EXPBNDITUEES.
SXTBCOMMITTEE No. 1 (AvIATION)
or THE Select Committee ox
EXPENDITURBS IN THE WaR DePABTMENT,
House of Representatives,
Thursday^ August 21, 1919,
The subcommittee met at 10 o'clock a. m. in the court room of the
TFnited States district court, Seattle, Wash., Hon. James A. Fretr
Mr, Frbar. Mr. Lea, do you wish to ask any more questions!
Mr. Lea. I have some questions I would like to ask at this time.
TESTIMOinr OF IIEVT. COL. CXrTHBE&T POWXIX STEAEHS, HHXED
Mr. Lea. Colonel, you stated that there was a correction you de-
sired to make in your testimony with reference to soldiers' pav.
What is that?
Col. Stearns. I am afraid I led the committee to believe that ope
dollar was the pay that was allowed to men in the woods until their
-efficiency proved that they could earn more. That should be cor-
rected. They were allowed sufficient pay from the operator to pay
for all their expenses, and they were under imusual expense in the
woods for clothmg and food ; and it was only in a very few cases that
the man did not get full pay. I do not think there were more than
possibly 50 men at any one time who were not getting the going
wage for their work in the woods.
Mr. Lea. What was the amount allowed for board ?
Col. Stearns. A little over $7 a week, I think it was; $7.35 a week,
Mr. Lea. And what was the unusual expense on account of doth-
Col. Stearns. They had to provide their own clothing out of the
pa^ that they got from the operators just in the same wa^ that the
civilian employees had to supply th^r own clothing; that is, mactd-
naws, loggers' boots, what they call tin pants, necessair heavy under-
wear, and all of those things put them at a great deal of expense.
Mr. Lea. Was there any specific sum allowed to cover that addi-
Col. Stearns. Not by the Government. That was one of the neces-
sities of having extra compensation.
Mr. Lea. Was there any specific sum allowed to cover these addi-
Col. Stearns. From the Government?
Mr. Lea. Yes.
Col. Stearns. No.
Mr. Lea. Was there any sum agreed on that the contractor was u>
Col. Stearns. Only a sufficient sum to cover what expense a mas
was up against.
Mr. Lea. Based on actual expenses?
Col. Stearns. Yes. There was no definite figure stated.
Mr. Lea. In reference to the question of paying soldiers civilian
wages, there was shipping carried on here at little, was there noL
Col. Steakns. Yes sir.
Mr. Lea. For the Government?
Col. Stearns, Yes sir.
Mr. Lea. Do you know of any reason why a man in the United
States Army engaged in civilian work in producing lumber was not
entitled to pay as much as a civilian engaged in shipbuilding?
Col. Stearns. Of course everybody felt that where they did mili-
tary duty, and if that duty was commercial in nature and they came
in contact with nobody but soldiers, they were entitled to soldier pay
only; but where they were in competition with civilian labor it was
not fair either to the Government to allow them to work free of
charge to the operator, nor was it fair to anybody concerned to have
a dual system of wages for the same work, one for civilians, and one
Mr. Lea. You mentioned the fact that you desired to make a cor-
rection in your testimony of yesterday with reference to the per-
centage of spruce produced on the Pacific Coast. What is the cor-
rection you wish to make ?
Col. Stearns. The chairman of the committee made an estimate of