United States. Dept. of Justice.

Annual report of the Attorney General of the United States online

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tion for carrving the mails, including parcel-post matter, involve
millions of dollars. During the year there were med 19 of the so-called
Divisor cases, which are of this class, claiming $576,108.61. These
are known as Divisor cases by reason of the fact that the principal
issue is the controversy respecting the divisor which shall be used in
arriving at the average daily wei^t of mail carried and which shall
form the basis of computation in fixing the amount of compensation
the railroads shall receive^ This htigation involves in the neighbor-
hood of $36,000,000.

Since the last annual report 61 suits, claiming an aggregate of
$1,264,698.53, have been filed to recover the proceeds of cotton taken

18197*^— ATTY GEN 1917 ^28



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434 BEPORT OP THE ATTORNEY GENERAL.

and sold by United States authorities after June 1, 1865, and theo-
retically in the United States Treasury. This increases the total
amoimt involved in the approximately 1,000 pending cotton cases
to $6,000,000. In the six test cases of this classTieretofore decided in
favor of the Government, notices of appeal from the decisions of the
Court of Claims to the Supreme Court are still pending. Of the
cotton litigation unaflfected by these decisions demurrers were filed by
the Government in some 300 cases. The court sustained these
demurrers but granted leave to plaintiflFs to amend their petitions.

Many millions of dollars are involved in cases which arise from
dealing with the Indians through treaties, agreements, and acts of
Congress, growing out of tribal rdations with 9ie Government.

Among the many other classes of cases filed in the Court of Claims
during the fiscal year^ there were 52 cases claiming $27,727.76
involving the constanetion of statutes fixing the pay of ofllcers and
enlisted men of the Army, Navy, and Marine Corps, and of civil
employees of the United States; 5 custom-inspector cases aggre^ting
more than $10,000; 11 militia transportation cases ag^^atmg in
the neighborhood of $35,000; 4 legacy-tax cases cuunung over
$100,000; and 15 personal-property transportation cases cmiming
$83,746.60.

Tliere are now pending in the Court of Claims 1,193 general jurisdic-
tion cases exclusive of a large nimaber of petitions subniunbered imder
general docket numbers.

Since the last report petitions have been filed in 180 cases, the
aggre^te amoimt claimed being, approximately, $19,079,095.36.

During the year tiie court passed upon 605 cases, involving, as far
as can be ascertained from the petitions, $16,900,874.71.

In 518 of these, claiming $14,333,986.78, judgments were in favor
of the Government. In 18 of tne cases decided in favor of the Gov-
ernment the costs were assessed against the plaintiffs in the sum of
$3,241.69. In one case judgment was rendered in favor of the Gov-
ernment on a counterclaim in the sum of $441.42. In 87 cases,
claiming $2,566,887.93, there were awards for^plaintiffs in the sum
of $1,271,665.89. ,

Cases disposed of during the year 605

Amount claimed $16,900,874.71

Amount recovered by plaintiffs $1, 271, 665. 89

Cases filed during the year : 180

Approximate amount claimed^ exclusive of petitions in which

no amount is stated $19, 079, 095. 36

Number of cases now pending, exclusive of subnumbered petitions. . * 1, 193

DEPARTMENTAL CASES.

Departmental cases involve questions referred by the heads of the
various executive departments under authority of section 148 of the
Judicial Code, wherein they desire opinions of the court for their
information and guidance.

Under this jurisdiction 21 cases were decided during the year, the
amoimt claimed being approximately $107,985. In 20 of these cases,
claiming $102,835, findings favorable to plaintiffs were filed for
$19,118.60. One case, claiming $5,150, was decided in favor of the
Government. There are now pending 9 of these cases.



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BUSINESS IN THE COURT OF CLAIMS — ^EXHIBIT 15. 435

GONOBESSIONAL CASES.

Congressional cases are before the court by reference of Congress
under the acts of March 3, 1883, and March 3, 1887, commonly
known as the Bowman and Tucker Acts, and authority of section 151
of the Judicial Code of March 3, 1911.

Since the last report there have been transmitted to the court two
congressional cases, in one of which the amount claimed is $33,555.33,
the amount claimed not being set out in the other reference.

During the year the court disposed of 770 cases, involving a total
of $6,968,047.65, findings in which have been or will be reported to
Congress.

There were dismissed for failure to prosecute 316 cases of this
character, the amounts claimed in those wherein petitions had been
filed aggregating $6,152,885.44.

There are now pending 3,384 of these cases.

INDIAN DEPREDATION CASES.



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Indian depredation cases are those brought imder the jurisdictional
act of Marcn 3, 1891 (26 Stat., 851), in which claims are made for
property of citizens of the United States taken or destroyed by
ndians belonging to any band, tribe, or nation in amity with the
United States. The act of January 11, 1915 (38 Stat., 791), amended
the act of March 3, 1891, and enlarged the jurisdiction of the Court
of Claims so as to include also *' claims for property of inhabitants of
the United States taken or destroyed by Indians belonging to any
tribe in amitv witii the United States."

Prior to tnis amendatory act the jurisdiction of the court was
limited to ^'claims for property of citizens of the United States.''

The act also provides lor the r^nstatement of " all cases * * *
whfch have been xlismissed by the court for want of proof of the citi-
zendiip of the claimant."

Dmrmg the year there have been 208 cases disposed of, aggregating
$697,446.71 in amount claimed. In 55 cases judgments were for
plaintiffs and 153 were decided in favor of the United States.

Total number of cases filed 10,841

Amount claimed $43,515,867.06

Oasee reinstated since July 1, 1916 24

Amount claimed $168,969.45

Judgments for plaintiffs from July 1, 1916, to June 30, 1917, inclusive. . 55

Amount claimed - $243, 151 . 85

Amount of judgments for plaintiffs $60, 838. 50

Judgments for def e^ant from J uly 1 , 1916, to June 30, 1917, inclusive . 1 53

Amount claimed $454,294.86

Total number of cases reduced to judgment from July 1, 1916, to June

30, 1917, inclusive , 208

Amount claimed $697,446.71

Number of cases now pending 32

Amount claimed $239,857.95

AU of the 32 cases yet pending have been set by the court for trial
next October. Eleven of these cases are now ready for trial; the
plaintiffs' briefs have been filed in 5 others, and the defendants'
replies thereto will be filed during the summer. In the remaining 1 6
cases the plaintiffs have not yet filed their briefs, but I have urged



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436 BEPOBT OF THE ATTORNEY GENERAL.

upon them the necessity of doinff so promptly so that the Government
may have sufficient time in which to answer without delaying the
trials.

To date approximately 285 cases have been reinstated under \h&
terms of the act of January 11, 1915, referred to above. As that act
is now more than 2 years old, it is reasonable to presume that prac-
tically all reinstatements thereunder have been made. In that event,
with the trial and determination next fall of the 32 cases yet pending,
the Indian depredation jurisdiction of the Court of Chuins will have
been terminated.

UNFTED STATES DISTRICT COURTS.

This bureau is charged with the general supervision of the defense
of suits brouffht against the Government in the various district
courts of the United States under the act entitled ''An act to provide
for the bringing of suits against the Government of the United States"
(1 Supp. R. S., 559), as amended by the Judicial Code of March 3,
1911 (38 Stat. 1087). During the year 35 suits were brought in the
district courts throughout the United States, involving in tne aggre-
gate the sum of $282,440.31 .

Under this jurisdiction 7 cases went to judgment against the
United States during this fiscal year. In satisfaction of these,
Congress at its last session aj)propriated the sum of $9,443.66, and
for 13 judgments rendered m prior years the sum of $13,832.94.
Four cases were dismissed, 2 stand on error, and 1 on certiorari U)
the Superme Court.

Since the jurisdiction was created 1,708 suits have been brought
against the Government, of which 102 are now pending in the district
courts.

APPEALS TO THE SUPREME COURT FROM THE COURT OP CLAIMS.

During the year 7 cases appealed from the Court of Claims were

? resented to the Supreme Court, 2 of which were appealed by the
Inited States and 5 by plaintiffs. Decisions in 4 of tnese cases were
in favor of the Government, 1 against it, and 2 remain to be deter-
mined. In 3 other cases briefs on behalf of the United States ^^ere
prepared by this bureau. There are now pending in the Supreme
Court 33 appeals from the Court of Claims.

In addition to the cases appealed from the Court of Claims which
were presented to the Supreme Court during the fiscal year, two cases
brought to that court by the United States from decisions against it
in the District Court lor the Eastern District of Kentucky were
briefed and argued. The lower court was reversed and judgmeDts
entered in favor of the Government.

CASES OF SPECIAL IMPORTANCE.

It is impossible to convey in a document of this kind any adequf^
idea of the important and intricate questions of law and fact which
are presented to the Court of Claims for determination, or the great
responsibiUty resting upon the court. Thorough familiarity witn the
work is the only means by which the scope of the litigation defended
by this bureau can be comprehended. 1 have, however, selected a
few classes of cases for a somewhat detailed discussion.



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BUSINESS IN THE COURT OF CLAIMS — ^EXHIBIT 15. 437

BATTLESHIP AND CRUISER CASES.

Fore Hiver Shipbuildiiig Co. v. U. S., No. 30224, U. S. 8. Rhode Island,
Fore River Shipbuilding Co. v, U. S., No. 30226, U. S. S. New Jersey,
Newport News Bhipbnilding & Drydock Co. i;. U. S., No. 30372 U. 8. S. Virginia,
Newport News Shipbuildiiig <fe Diydock Co. v. U. 8., No. 30373, U. S. S. West

Vtrainw,
Newport News Shipbuilding & Drydock Co. v, U. 8., No. 30374, U. S. 8. Maryland,
Newport News Shipbuilding & Drydock Co. v. U. S., No. 30376, U. 8. 8. Charleston,
Moran Bros, Co. v. U. 8., No. 30498, U. 8. 8. Nebraska,
The Wm. Cramp & Sons Ship & Engine Building Co. v. V. S., No. 32024, U. 8. 8.

Tennessee,

Of the ntunerous pending suits which have grown out of the con-
struction of naval vessels me foregoing battleship and cruiser cases
are mentioned as of particular interest at this time. These cases
arose from the activities of the Navy soon after the War with Spain.
This conflict demonstrated the need of a navy of greatly increased
strength, and Congress appropriated for a large building program.
Simultaneously there occurred great activity in all engineering and
building lines throughout the country. An overburdened market for
material and labor in all the metal trades resulted and great difficulty
was encountered by the shipbuilders in obtaining their orders from the
steel mills and securing sufficient labor. The Navy Department made
chanffe9 in the plans of the vessels after the contracts for the same
were let. Delays were encountered in the construction of most of the
vessels, varying from about one to three years over the contract
periods.

The claimants seek to place the responsibility for the delay on the
changes made by the Government and on alleged delay in the deh very
of armor and armament, and the major part of the amounts involved
is for the delay claimed to be due to changes. In round numbers
there will be about 150 for each vessel. The cost already awarded
for same will vary from approximately $150,000 to $300,000. Changes
had been usual on naval vessels and were recognized as necessary
to keep pace with the advancing art of naval architectiure, of gunnery,
and of^ marine engineering. Tnese changes enter into many parts of
the vessels and present questions of a highly technical natiure.

Each of the various acts of Congress authorizing these vessels pro-
vides for a vessel "carrying the heaviest armor and most powerful
ordnance for vessels of their class" and "to have the highest prac-
ticable speed and greatest radius of action."

The contractsprovide for changes when directed by the Secretary
of the Navy. They also provide, as required by law, that the cost
of such changes whether for an addition or an omission, shall be
actual cost, which shall be adjudicated by a board of naval officers.
This board is known as the Board on Changes. The claimants seek
to avoid the effects of the awards of the Board on Changes, one of
whom at times refused on invitation to appear and to present its
side of the case, as had been usual with all other contractors, and in
accordance with the practice in such cases. This claimant had
sought whDe the vessel in suit was building to have a civilian board
appointed to adjudicate the cost of the changes. The Secretary of
tne Navy refused, and pointed out that the board as constituted was
in accordance with the contract and the law, and even though he
were so disposed he had no power to provide for other adjudicatio^^i—
of the cost than by this board of naval officers. ^^



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438 REPORT OP THE ATTORNEY GENERAL.

Anotliei- claim relates to sheathing. Sheathing was originally
required for the under-water bodies of the U. S. S. Nebraska, Vir-
ginia, and West Virginia, The purpose of wooden sheathing was to
* provide a base for a covering of copi>er plates which exfoliate marine
growths — a detriment to speed. Sheathing, however, had objection-
able features and was omitted as a change in the contract, and the
estimated cost of the same deducted. The contractors seek to
recover the deducted cost.

A claim common to all the cases is that relating to the 6-inch gun
foundations. A gun with a longer barrel, which thus confined the
force of the powder behind the projectile for a longer time and gave
greater power to the gun, was required in the specifications which
formed a part of the contracts for the various vessels. The Navy
Department required the contractors to install adequate foundations
to take the recoil of the guns. The contractors claim that the f oimda-
tions required were stronger than they had expected to supply and
seek to recover what they claim was an increase in cost.

Due to the compUcated features entering the construction of a
naval vessel (which must be a fighting macnine capable of moving
itself to all waters and capable of housing, clothing, and feeding its
force of about 1,000 men) a mass of plans and correspondence is
necessary in its building. All of this must be scrutinized and the
pertinent parts of the correspondence collated to present to the court.

In one case, U. S. S. Virginia, the selected correspondence com-
prised 1,003 printed pages, and the testimony of the 54 witnesses
already oflFered by the claimants has brought tnis record up to 2,867
printed pages ana 611 exhibits. The claimant will resume the taking
of testimony in October.

In the case of the Nebraska the record of the selected correspond-
ence runs to 3,508 printed pages, and the testimony of the 46 wit-
nesses of the claimant already examined has extended this record to
5,016 printed pages. There are also 713 exhibits in the case to dat^.
The claimant in this case closed its testimony in the spring of tlje
present year, and the Government during the summer recess of the
court will examine 25 to 30 witnesses on uie west coast.

In the case of the New Jersey and Rhode Island the property of the
first contractor was sold under foreclosure proceedings and a con-
tract was made with a new company to complete the vessel. The
new company sued on various claims antedating its contract, as well
as claims arising thereafter. The Government demurred to the

{>etition and the court inhibited the claimant from taking testimony
or claims antedating its contract. Claimant will close its case at
an early date and preparations are now being made to take testi-
mony on behalf of the Government.

The petitions in the suits on the West Virginia, Maryland, and
Charleston are similar to those filed in the suits specifically reierred
to. Tlie compilation of the records in these cases has been advanced,
but the taking of testimony has not commenced.

In addition to the technical and legal points involved in all the
cases, questions of accounting, real estate values, rental values of tools
and machinery, etc., have been presented. Many of the witnesses ex-
amined are experts in the various lines. Other witnesses are presi-



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BUSINESS IN THE CQUBT OF CLAIMS — ^EXHIBIT 16. 439

dents of corporations, engineers, draftsmen, bookkeepers, machinists,
ship fitters, riveters, and artisans of various other trades.

The contracts for these vessels provide that in case the vessels are
not completed within the contract time, deductions shall be made
from the price stipulated in the contract for each and every day
(except Simdays) during the continuance of such delav until the
vessels shall be complete to the extent of $300 a day for the first
month and $600 a day for each month thereafter that the vessels
shall be delayed. The Secretary of the Navy relieved the contractors
in every case of all such deductions, granting extensions of the con-
tract time to provide against such deductions.

The amount claimed in the case of the Tervnessee is only $6,998.
That involved in the other cases varies from $199,039.96 for the
lowest to $910,212.13 for the highest.

The cases are important in that they present the following issues:

(a) The power and authority of a cabmet officer, the Secretary of
the Navy.

(J) T6e vahdity of naval contracts.

(c) The provision of law limiting a price set by Congress.

let) The functions of the Board on Changes and the finality of its
findings, including, according to the contractors' theory, capital plant
values, indirect expenses and other overhead charges, questions of
accounting, etc.

STOCKTON FLOOI> CASES.

What are commonly designated as Stockton flood pases are com-
posed of a great many suits against the Government to recover dam-
ages alleged to have been caused by tJie construction of the diverting
canal carrying water from the Mormon Slough to the Calaveras River
and thence mto the San Joaquin Kiver. The amoimts involved
total approximately $3,000,000. Previous to 1911 the Stockton
Channel at Stockton, Cal., owing to the silt carried down from the
Sierra Nevada Mountains through the Mormon Slough, had been
threatened with destruction as a port. In order to overcome this
the War Department built a divertmg canal from the Mormon Slough
and carried the water over to the Calaveras River and thence into the
San Joaquin River. In order to protect the city of Stockton, which

Erevious to 1911 had suffered annually great dam^e from floods, a
igh levee was built along the south bcmk of the diverting canal.
During the winter season tne run-off from the mountains which ^ad
flooded th^ area in question in years previous was to a great extent
held in check by this diverting canal and levee and the city of Stock-
ton relieved of floods. The water backed up and out over the farms
in the vicinity to a greater depth than previous to the construction
of the canal. The country flooded consists of highly cultivated fruit
and grain farms.

The several plaintiffs allege that the floods destroyed the value of
their farms from 25 to 40 per cent, and that this destruction being
continuous and the floods recurrent amount to a taking to that extent
under the fifth amendment of the Constitution.

Five cases were selected and are in the course of preparation to be
tried as test cases.



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440 REPORT OF THE ATTORNEY GENERAL.

THE NATRON SODA CO. V. THE UNITED STATES — ^JOHN HORSTMAN 4 CO.
V, THE UNITED STATES.

Th^e cases present several of the most interesting, important, and
unique questions that have ever been raised in siiits against the
Government. They grow out of a remarkable geological conditicm
in the State of Nevada that has been effected hj the construction of
the Truckee-Carson reclamation project. This project was con-
structed for the piupose of reclaiming desert lanos which were fo^
merly the bed of the prehistoric Lake La Hontan. a body of water
that was some 800 miles long and 1,000 feet deep. In this prehistonc
lake bed are the remains of two volcanic cones, which are about one-
ouarter of a mile apart. The laiger one has a depth from the rim of
tne cone to the lake surface in the crater of 150 feet. The water is
another 160 feet in depth. These volcanoes, which were active when
the water of Lake La Hontan stood above tnem, are now within the
area of the land being reclaimed iinder the Truckeo-Carson projeci
For many years there nas been an industry in operation at these lake
beds by which the waters have been evaporatea and the residuum of
soda gathered up and shipped. In 1906 the Government had by a
canal carried the waters of the Truckee River over into the Carson
River bed and constructed an enormous reservoir. From this
reservoir the water was brought down through the Carson River to a
diverting dam^ and from thence was taken by canals out on the desert
and used for irrigation. These canals practically surround the vol-
canic cones, whicn are known as the Soda Lakes. Several years after
the canals were filled the water in the soda lakes began to rise, and
has continued until their depth has increased over 20 feet or more.
This has entirely destroyed the plants of the plaintiff compamcs
and prevented them from continuing their business. Plamtiffs
brougnt suit imder the fifth amendment, alleging that the Govern-
ment had thus taken their property witnout compensation. Tber
contend through expert testimony that the water in the canafe
seeped down to a distance of approximately 14 feet, where it came
into contact with a continuous tenacious clay bed that sloped
toward the lakes and was impervious to water; tnat this clay was the
bed of the prehistoric Lake La Hontan; that the water coming into
contact witn this bed ran directly into the lakes and filled them up
and hence there was a direct cause that produced the destruction ol
their property. In order to prove then* theory ^hey sank welb
and attempted to show the continuous clay bed. The Govemm^t'a
theory is that the water from the canals seeped practically perpen-
dicularly down for 76 or more feet until it came in contact with the
groimd waters of that area; that this water and the water used for
private irrigation and water from the Carson River diuring certain
seasons mingled with the ground waters of that coimtry and caused
the ground water plane of that area to pile up and thus raised the
waters in the lakes, and hence there could be no direct connection
between the water seeping from the canals and that which was in
the lakes themselves for which the Government could be charged.
In order to prove its theory the Government sank 150 wells. Some
of them were driven at points immediately contiguous to the canab,
and then continued in a series up to the lakes. It was thus demon-



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BUSINESS TN THE COURT OP CLAIMS — EXHIBIT 15. 441

strated that there was no direct seepage from the canals to the lakes.
After several thousand pages of testimony had been taken, plaintiffs
conceded that their first theory was incorrect and that the Govern-
ment's contention ^th respect to the water from the canals mingling
with the gromid waters was correct. They, however, asserted, first,
that the Qovemment had no ri^ht to take the water from one river
and watershed over to another nver and watershed and use it in such
a way as to destroy their property, even though it did mingle with the
ground waters in the first instance- and, second, that the only water
which caused the lakes to rise was tnat from the Uovemment's canals,
therebv excluding any water which might have seeped into the
ground from irrigation or from underflow of the Carson Kiver.

The decision in these cases will have a far-reaching effect because
of its applicability to practically all Government projects involving
the diverting or stor^e of wat^r.

THE ATCHISON, TOPBKA A SANTA FE RAILROAD CO. V. THE UNITED



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