time tho armistice was signed, isn't that the fact!
Col. Stearns. Let me look at the date on that. (Witness cxaniinei
docimient). That is a fact, yes, sir.
Mr. Lea. When were tho other cost plus contracts entered into, ^tn
you recall?
Col. Stearns. The other cost plus contracts were entered into in
the early spring, in the early part of 1918. Most of them startwi is
riving contracts.
Mr. Lea. But as a logging proposition to what extent had they
kept up with their program, if there was a program ?
Col. Stearns. They had logs down in the woods ready to brin^:
out as soon as the. railroads run to their destinations.
Mr. Lea. The figures that you gave this morning on production
does not include logs in the timber then?
Col. Stearns. No sir.
Mr. Lea. What was the name of the comptroller who made out the
estimates that was placed in evidence this morning?
Col. Stearns. Major C. C. Campbell.
Mr. Lea. Was he also the District Manager of Finance?
Col. Stearns. Yes sir.
Mr. Lea. With an office located at Portland ?
Col. Stearns. Yes sir.
Mr. Lea. Did you have anything to do with negotiating the ale
to England?
Col. Stearns. No. sir.
Mr. Lea. That was not part of your duties at that time?
Col. Stearns. No sir.
Mr. Lea. Now, is there evidence available at Portland to show t!)^
communications that passed between the Spruce Producti<Hi Ci»r-
poration and the English Government in negotiating that settle-
ment?
Col. Stearns. Not between our corporation — ^I do not know of my
between oup corporation and the English Government.
Mr. Lea. Communications between the Spruce Production Cor-
poration and Washington ?
Col. Stearns. And Washington, yes sir.
Mr. Lea. That will contain the representations
Col. Stearns. There were some wires on that point, and in our
first reply we stated to the effect that
Mr. Lea. Well, if you can produce those when we get to Portlind
I think that will be more satisfactory.
Col. Stearns. Will you make a note of that, Mr. Walker?
Mr. Lea. I understand the facts to be somewhat different from
what you stated them this morning in reference to the settlement
with Italy and France, and I would like to get this clear in th*
record. As I understand it, England made a proposition that •»$»
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would settle on an estimate and remove herself from any doubt as to
what the actual value of the salvage would be.
Col. Stearns. That is true, as I understand it, sir.
Mr. Lea. Now, do you know of any misrepresentation or decep-
tion that was practiced with England in reference to that?
Col. Stearns. No sir, absolutely none.
Mr. Lea. As I understand this, as to France and Italy they are
indicating a desire to wait until the salvage value is realized and
settle on a basis of actual results instead of an estimate, is that true?
Col. Stearns. I know they are waiting. Whether they are wait-
ing for that I am not in a position to say, but they held off longer
than Great Britain. I stated simplv what was my opinion when I
stated that probably they would settle on the same basis.
Mr. Lea. Who is the intermediary between the Spruce Division
and the allies in making settlements?
Col. Stearns. The Finance Division in Washington, the Finance
Division of the Air Service.
Mr. Lea. Then the Finance Division at Portland is subordinate
to the Finance Division at Washington?
Col. Stearns. Yes, sir ; in that respect.
Mr. Lea. As I understand it, part of these soldiers that were
provided for the Spruce Production Corporation were assigned to
work in private mills, were they not?
Col. Stearns. Yes sir.
Mr. Lea. And was that true of mills that performed work for com-
mercial purposes as well as for the Government?
Col. Stearns. Practically all the mills had some commercial work
in addition to their Governmental work.
Mr. Lea. Were there any mills devoted solely to the production of
spruce outside of Government mills?
Col. Stearns. None that were devoted solely to that, that I can
recall.
Mr. Lea. In reference to the Erickson contract, what, if anything,
does Erickson pay for transporting his logs over the Government
railroad ?
Col. Stearns. Let me get those figures.
Mr. Lea. I simply want to know, does he pay so much a thousand
for transporting them ?
Col. Stearns. Yes, sir.
Mr. Lea. How much ?
Col. Stearns. That is what I want to get at, the amount per 1,000
paid for transporting logs. It was 50 cents a thousand.
Mr. Lea. But no such payment is required of Government owned
logs, I suppose?
Col. Stearns. No, sir. He is removing those under contract.
Mr. Lea. Now, on what terms was the use of the railroad, the other
railroad, permitted by private parties at the present time. You spoke
of a railroad some place south that is leased to a private party.
Now, on what terms?
Col. Stearns. The amount they are getting?
Mr. Lea. Yes.
Col. Stearns. A minimum of $700 a month.
Mr. Lea. What is the extent of that operation ?
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Col. Stearns. That is a logging operation, where they are opening
up new timber tracts upon the Nemsfti River.
Mr. Lea. How long is the Government railroad that is used by this
lessee?
Col. Stearns. We have the right of cancellation of those m ♦>•
days.
Mr. Lea. But what I meant was, how long is the right of waj that
the lessee uses?
Col. Stearns. About 7 miles, approximately.
Mr. Lea. That is near enough. What was the reason for permit-
ting Erickson to use the Government road for transporting privtte
logs?
Col. Stearns. His private logs?
Mr. Lea. Yes.
Col. Stearns. It was part compensation for his services, and in-
cluded in the contract. The main idea of the contract was to gH
those logs out of the right of way.
Mr. Lea. Well, I mean in reference to his private logs; why was
the right given him to transport his logs acquired from other source??
I simply want an explanation of the facts.
Col. Stearns. As I say, that was part of his compensation, a
request on his part to go into the tract, and it was acceded to br the
corporation under the circumstances. I can give you the whole
history of that.
Mr. Lea. I do not want that. Isn't the fact simply this, that he
owned a small body of private logs in unmediate contact with the
Government right of way?
Col. Stearns. That is true, yes.
Mr. Lea. And in going upon the. Government right-of-way and
removing its logs he desired to remove a small quantity of his own
logs?
Col. Stearns. That is true, yes.
Mr. Lea. That is all, I think.
Mr. Magee. Just a question there. If you gave him this right there
would be no reason for denying the right to any other applicanU
would there ?
Col. Stearns. No, sir.
Mr. Magee. And if the right was generally exercised
Col. Stearns. Unless it became too generally exercis^l.
Mr. Magee. If too generally exercised it might result in great
damage to other property holdings in that locality and also mijfht
destroy the forests if the Government desired an extension of the
forest preserve, perhaps, to take in these lands and preserve them f<»r
the benefit of the country. That is right, isn't it ?
Col. Stearns. Yes, sir.
Mr. Magee. It was in view of those propositions that I called Tf>"ir
attention to the question of authority. In other words* it seemed t^
jne that the question to the State of Washington and the countrv it
large was important enough that the Government should determine
the policy rather than to have the policy determined here. That wi-
the point in my mind.
Col. Stearns. Yes.
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Mr. Magee. It has been suggested, do you know whether Mr. Erick-
son bought this land upon which h6 has been shipping the logs over
this railroad of the Government since the building of the railroad?
Col. Steakns. I do not know definitely on that point, sir.
Mr. Magee. Have you any understanding about it. Colonel, or do
you know anythinc about it?
Col. Stearns. No, sir; I do not know anything about it.
Mr. Magee. That is all.
Mr. Frear. That is all.
Mr. Lea. That is all.
(Witness excused.)
TESTIKONT OF MB. JOHN E. FBOST.
(The witness was sworn by Mr. Frear.)
Mr. Frear. Your full name, Mr. Frost.
Mr. Frost. John E. Frost.
Mr. Frear. And where do you live?
Mr. Frost. I live in Seattle.
Mr. Frear. What is your business?
Mr. Frost. Logger.
Mr. Frear. How long have you lived here in Seattle?
Mr. Frost. I have lived in the State of Washington a little more
than thirty years ; in Seattle, going on seven.
Mr. Frear. What has been your business since you came to the
State of Washington ?
Mr. Frost. I have been engaged in the practice of law, in the con-
struction of irrigating canals and ditches, in the public service for a
short time; for the last seven years, in lodging.
Mr. Frear. You are in the log^g business at the present time?
Mr. Frost. In the logging business at the present time.
Mr. Frear. You know the conditions whicn were developed in this
part of the State during the period of the war, you are familiar with
them?
Mr. Frost. Yes; I think so.
Mr. Frear. You have heard some of the testimony, have you, that
has been given here before the committee, in regard to the Siems-
Carey-Kerbaugh road?
Mr. Frost. No, sir ; very little of it ; not enough to be at all familiar
with it.
Mr. Frear. Well, briefly, you are familiar with the road itself,
you know where it lies?
Mr. Frost. I know where the road lies, am familiar with the
country.
Mr. Frear. You are familiar with that country over there?
Mr. Frost. Yes, very familiar with it.
Mr. Frear. Whereabouts do you log?
Mr. Frost. I log at the present time about 40 miles east of Seattle,
on the Milwaukee.
Mr. Frear. Have you ever logged over in that part of the country?
Mr. Frost. No, sir.
Mr. Trear. Have you ever been engaged in any kind of business
over in that part of the country, that is, over on the peninsula ?
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Mr. Frost. Well, I had occasion to make some very thorough b-
vestigations concerning the character and topography of that coun-
ti-y, and the kind, character, and quality of the timber there.
Mr. Frear. What was the occasion of that!
Mr. Frost. Well, I was employed as special counsel for Clallam
County.
Mr. Frear. For the county ?
Mr. Frost. For the county of Clallam, in the defense of certain
suits that were brought to set aside certain taxes imposed upon large
tracts of timber in the west end of Clallam County.
Mr. Frear. Who brought the suits?
Mr. Frost. The suits were brought by J. D. Lacey & Co. — ^well. I
beg pardon — they were brought by what is known as the Lacey hold-
ings, by the Clallam Lumber Co. and Ruddock & McCarty.
Mr. Frear. The Clallam I<umber Co. has probably the largest hold*
ings in the county, has it not ?
Mr. Frost. Yes; they are known as the Lacey holdings.
Mr. Frear. When was that, that you had your investigations?
Mr. Frost. I think I — I spent a good deal of time in that timber in
that locality, I think early m 1915, and I had a number of cmi^rs
in there for a long time.
Mr. Frear. State, briefly, just what you did, so that the committee
will know about your information.
Mr. Frost. We made a very careful examination of the timber and
of the ways and means to get it out of the Solduc and Calawah River
basins.
Mr. Frear. To be used as a basis for taxation purposes?
Mr. Frost. I might say that one of the strong allegations bj the
plaintiffs in this suit that was brought was to the effect that the tim-
ber had no market value, because it was inaccessible and could not \r
put in the market, and, desiring to show that the timber could U
reached in a convenient proper way, we made investigations as to thr
best method of removing that timber, and, as a matter of fact, I hid i
party of engineers in the field, who made a survey, located a roia
from the mouth of the Pycht to what is generally called Lake Pleasant
I believe.
Mr. Frear. Let me get that in the record clearly- The mouth o{
the Pysht is about 5 miles west of Deep Creek — 5 or 6 miles, or what
distance?
Mr. Frost. Yes; I should say 5 or 6 miles west of Deep Creek
Mr. Frear, And Pleasant Lake is what is shown on the map as
Lake Tyee.
Mr. Frost. Lake Tyee.
Mr. Frear. That is situated near to this large body of spruce thai
has been spoken of in the testimony?
Mr. Frost. Yes. We had, as I say, these surveys made, caref-j'
estimates made of the cost of the building of the road. I personal!'
went over the route, I think I was over it twice or three times, an :
after having had the surveys made, we discovered, by accident thit
Mr. R. H. Thomson, a member of the city council of Seattle and for-
merly city engineer of this city, had, sometime before that, surv^v»«»!
or made several surveys through there, and made a written report
upon the cost of building a road from the mouth of the Pysht IP'*"
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AVIATION. 821
this big body of timber that lies in the valleys of the Solduc and
Calawah Rivers, and we used his report that he had made several
years before, and had him as a witness upon the witness stand, to
testify as to the cost of building a road in there.
Mr. Frear. That is, the county used his report?
Mr. Fkost. Yes.
Mr. Frxvar. In its
Mr. Frost. We used his testimony in
Mr. Frear. In the action that was held at that time. You were
familiar with this route as well?
Mr. Frost. Yes, sir. I investigated it personally, went over it a
number of times personally.
Mr. Frear. And for the purpose of inspecting, I assume, at that
time — that is, inspecting for iniormation in this suit that was on?
Mr. Frost. For the purpose of inspecting it and determiniBg in my
own mind its feasibility and probable cost.
Mr. Frear. Mr. Thomson is here in the city, I presume?
Mr. Frost. I presume so.
Mr. Frear. He made a report to you, substantially the report that
is contained here in the bill of exceptions, is it?
Mr. Frost. His testimony — ^his sworn testimony is contained in
this record.
Mr. Frear. Unless there will be some point made about it — ^we can
call him, if it is necessary, for cross-examination — it is a brief state-
ment, isn't it
Mr. Frost. Yes.
Mr. Frear (continuing). In regard to the road. And you might,
if you will, read from that his sworn statement that went to the Su-
preme Court, I take it.
Mr. Lea. Well, suppose, if you want to offer it later, you give me a
chance to look over it and see whether or not we require Mr. Thomson
to be here.
Mr. Frear. Just hand it to Mr. Lea — ^that part you were going to
read.
(The record referred to was handed to Mr. Lea by Mr. Frost.)
Mr. Frost. I might say that Mr. Thomson's testimony will be
found, beginning on page 301, the testimony of Engineer Bemp on
400, and I think Engineer Walker is on 894.
Mr. Frear. Who was Mr. Kemp?
Mr. Frost. Mr. Kemp was the engineer that we employed to make
the surveys.
Mr. Frear. The engineer employed by the county?
Mr. Frost. Yes. Mr. Walker was another engmeer employed.
Mr. Lea. You purpose reading the statements of the three men
mentioned, or just this one?
Mr. Frear. Well, we can offer that and then you can see whether
there is any materiality. I think one or two is sufficient there, unless
it covers some other nver. These all relate to this one route up the
Pysht River, do they?
Mr. Frost. They were all relating, as I recall it, to the route up
the Pysht Kiver, but Mr. Thomson's survey was one that was made a
number of years before this time. The surveys made by Mr. Kemp
and Mr. Walker were made at my instance.
147155— 19— VOL 1 54
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Mr. Fbear. Oh, I see. (Mr. Lea examining court record.)
Mr. Lea. I think it would be satisfactory to let this go in the
record, and, if we deem it desirable to have the witness here, that he
could be called later.
Mr. Freab. Certainly. I didn't know whether he was accessible.
Mr. Lea. I will consent to the reporter putting it ri^ht in.
Mr. Frear. I thought he might read it, because it is information.
I haven't gone over it myself, excepting as it was just handed me %
moment ago. So that we will have an imderstanding of the general
character of it.
Mr. Fkost. This testimony was taken in the trial of the suit of
the Clallam Lumber Co., a corporation, plaintiff, and Kuddock and
McCarthy, plaintiffs, against Clallam County, State of Wa^ngtoa,
before Judge Cushman, in the United States District Court of the
Western District of Washington.
"R. H. Thompson, witness on behalf, of the defendants, being
sworn, testified substantially as follows :"
Mr. Frear. Just read.
Mr. Frost. I might say that this is the record on the appeal of
these suits to the United States Circuit Court of Appeals, and that
both cases were consolidated and tried as one case.
Mr. Frear. Just read his testimony, so far as it relates to that
Pysht River route, please.
Mr. Frost. Mr. Thompson testifies :
I found the possibility of building a road on several different rates of irrs**
depended on the cost per mile which the parties might be wilUng to expeotl
I reported to the company for whom I did the work on two routes, one oC
which was to have a maximum grade of 2 per cent, and the other which
was to have a maximum of 3 per cent The following is a general coorw
of the road. The mouth of the Pysht River is in section 10, township 31 north,
range 11 west. In a line which I had planned I made the same cut-off that i5
shown on this map in the green line.
Mr. Frear. What was that cut-off, briefly?
Mr. Frost (referring to Eemp's map, exhibit 25). That wa? t
short cut-off from the mouth of the Pysht, instead of following the
course of the river, I think. I haven^t the map. I have the map. if
you desire it.
Mr. Frbar. I wanted to make it intelligible what it meant by the
cut-off. It was a cut-off across what?
Mr. Frost. Across the flats near the mouth of the Pysht River.
Mr. Frear. Oh, yes.
Mr. Frost (continuing reading) :
Through section 10, going to the section line on a course to the west 5i«V
of the river, and followed on the west side of the river for about two idI)»»<
and then followed up along near the east margin of section 17, and then cu:
across and came toward the south branch of the Fork and continued up »«*
distance on the south branch of the Fork through section 29, coming up to tV
summit —
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AVIATION". 823
this reads "and," but it should be "of "—
the summit of the Pysht River, In section 35, township 31, range 12, and
then from there I followed down Beaver Creek practically as shown in this
ja-een line on this map into section 29. This line was 21 miles in length and
had a maximum grade of 2 per cent. I took another line which had a con-
siderable amount of 3 per cent on the Pysht River. I followed Into sections
9 and 8 and Into section 7, and then crossed the river and followed very close
into the green line which is shown, which crosses into section 13 and Into sec-
tion 24, and through to the Solduc River, with a grade of 3 per cent.
Three per cent grade is not a difficult grade for logging purposes with a
geared engine. From the summit of the Pysht River down to the Solduc River
i plaimed making a short section of li per cent grade, just after crossing the
summit coming down toward Beaver Lake, but the long detour would reduce
that to less than 1 per cent. This road would be about 17 miles. The cost ot
these roads — _^ . i
Mr. Frxulr. That is, 17 miles from where?
Mr. Frost. Seventeen miles from where he started, the mouth
of the Pysht.
Mr. Frear. Up to this lake?
Mr. Frost. To the Solduc River.
Mr. Frear. To the Solduc River.
Mr. Frost. Which was right near the lake. (Continuing read-
ing) :
The cost of these roads would be, of the 21-mUe road, $320,000 ; of the 161-
Uille road, $210,000. The witness says that his estimate was for the year 1891.
If he were building the road to-day he would not hesitate to use a 16 or 18
degree curvature as against a 12-degree curvature in the original estimate —
Mr. Frear. That is, explain to the conmiittee what that means,
the difference between the degrees of the curvature — ^I think we
understand, but to make sure — ^between a 12 and 16 curvature.
Mr. Frost. Twelve or 16, or 12 and 18, it means using a much
sharper curve, shorter curve, sharper curve.
Mr. Frear. Yes.
Mr. Frost, I will read that again :
If he were building the road to-day he would not hesitate to use a 16 or
18 degree curvature as against a 12-degree curvature in the original estimate
as against a 12-degree curvature and a grade of 5 to 6 per cent, which would
make the road cost now ?9,500 per mile as against over $12,000 per mile for
the 3 per cent grade, and over $16,000 for the 2 per cent grade of the road
as then contemplated.
Mr. Frear. Is that the end of it ?
Mr. Frost. That is the end of his direct testimony. Then here is
considerable
Mr. Frear. When was that testimony ^ven?
Mr. Frost. That testimony was given m the fall of 1915.
Mr. Frear. 1915?
Mr. Frost. Yes.
Mr. Frear. Can you give substantially the increase in the cost of
building from 1915 to the year 1918 ? That is, you have built other
roads, have you, or had connection with the building of other roads?
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Mr. Frost. Yes, sir ; I am constantly building railroads.
Mr. Frbar. Just give the committee^
Mr. Frost. That is, logging roads.
Mr. Frbar. Yes.
Mr. Frost. The cost in my own work in 1918, compared with 1915,
increased 123 per cent.
Mr. Frbar. 123 per cent?
Mr. Frost. Yes.
Mr. Frear. And that would make substantially what, in tixese
figures that you have given, as nearly as you can determine, what
rate per mile ?
Mr. Frost. That would make the cost, on Mr. Thomson's estimat**.
$21,375 per mile.
Mr. Frear. Of which road would that be, now?
Mr. Frost. That is the present cost of 1915.
Mr. Frear. Of which branch? There is one branch that he had
there.
Mr. Frost. That was the logging road, short branch.
Mr. Frear. That is the 17-imle road?
Mr. Frost. Yes.
Mr. Frear. $21,375 per mile, in 1918?
Mr. Frost. Yes, sir; that would be according to my
Mr. Lea. 1918 or 1915?
Mr. Frost. That is 1918 as compared with 1915. I have ju5t
testified that the increased cost to me, in my own operation, in 19b
my cost had increased 123 per cent over my cost of 1915, and, taking
Mr. Thomson's estimate of $9,500 per mile, and figuring that other
railroads would increase 123 per cent in the cost of construction, it
would make his estimate, as given here, $21,375 per mile.
Mr. Frear. You were building roads in 1918 1
Mr. Frost. Yes, sir.
Mr. Frear. Whereabouts ?
Mr. Frost. In King County, State of Washington.
Mr. Frear. WiU you make an estimate, please, Mr. Frost, of the
comparative cost per mile on the — what was the 21-mile road. ih*t
is the lower
Mr. Frost. Yes, 21 miles.
Mr. Frear. A lower or lesser grade.
Mr. Frost. It will be necessary to do some figuring here.
Mr. Frear. Take time. We have lots of time.
Mr. Frost. The 21-mile road he said would cost $320,000. (Wit-
ness figuring). That would make the cost of the 21-miIe rwJ
increasmg at 123 per cent, $693,600.
Mr. Frear. What would it be per mile?
Mr. Frost. Well, I will have to make another division here (fig-
uring). Just 11 trifle over $33,000.
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Mr. Frear. The reason for the higher cost on the lower grades
would be due to what?
Mr. Frost. To more difficult construction — very much more
difficult.
Mr. Frear. That is, to more difficult excavations, cuttings, bridges,
etc.
Mr. Frost. Yes.
Mr. Frear. That would come with increased construction for the
purpose of getting a reduced grade?
Mr. Frost. Yes.
Mr. Frear. But without going into difficult construction, on the
17-mile basis, the cost would have been $363,375, or approximately
that^ at the rate of $21,375 a mile; is that right?
Mr. Frost. I think so; yes. I have not followed your figures.
Mr. Frear. You have furnished some figures here, giving brief
data of the separate items of increase which go to make up the
total of 123 per cent increase, and I ask as to the statement on the
margin "the 123 per cent" — you say "increase is inclusive of
freight " — I can read part of the shorthand, but I can't get all of it.
Mr. Frost. That is not mine. It is something I dictated to the