TUESDAY, March 3, 1908. The committee met at 2 o'clock p. m., Hon. John J. Gardner (chairman) in the chair.

STATEMENT OF MR. JAMES B. KELLY, REPRESENTING THE THOMPSON-STARRETT COMPANY.

Mr. KELLY. The Thompson-Starrett Company is without doubt one of the largest construction companies in the United States, and we have offices all over in the different parts of the country, our home office being in New York. We have offices in New York, Chicago, Philadelphia, Salt Lake City, and San Francisco. Our work with the Government in Washington has been rather limited. At present we are furnishing the granite work for the National Museum.

Mr. EMERY. Will you state, for the benefit of the committee, some of the largest structures in Washington which your company has erected.

Mr. KELLY. In Washington we have the Union Station, which as you all know is quite a large contract.

Mr. EMERY. Do you know approximately what the cost of it is? Mr. KELLY. Approximately about $17,000,000. Then we have the Kenesaw Apartment, the Benedict Apartment, $150,000, the Metropolitan Citizens Bank, which has just been finished, about $400,000, and so on.

Mr. EMERY. Did you speak of the Masonic Temple?

Mr. KELLY. Yes; we have the Masonic Temple, which is in course of erection. It amounts to $344,000. Some of the larger buildings around the country are the Delta Building in Boston, the Marine Conservatory of Music in New York, the St. Regis Hotel, the United States Express Building, and the Cresent Atlantic Club. Do you want any more in New York?

Mr. EMERY, No; I just want enough to give an idea of the extent of your experience.

Mr. KELLY. In Philadelphia we have the Wanamaker Building and the Alpha Theater.

Mr. EMERY. You are engaged very largely, in the reconstruction work in San Francisco?

Mr. KELLY. Yes; we have at the present time eighteen jobs in San Francisco, and of course we depend largely on our subcontractors for all our work. We take a contract, and we generally figure on letting some 25 of the sublines in the building, such as the fireproofing and the stonework, the brickwork, and miscellaneous contracts for heating, and that sort of work; and our men are employed on the buildings that is, union men are employed eight hours. The laborers, of course, are employed just as we need them.

Mr. EMERY. You are almost exclusively an employer of union men, are you not?

Mr. KELLY. Union men throughout the country; that is our policy, to use union men.

Mr. EMERY. Can you state approximately how many men are in your employ to-day?

Mr. KELLY. At the present time there are probably between 9,000 and 10,000 men, and we are not as busy as we have been at other times. We probably employ 20,000 men when we are busy.

Mr. EMERY. When you say that these men are employed on an eight-hour schedule, you mean that is the standard workday?

Mr. KELLY. That is the standard workday agreed to by the unions. Mr. EMERY. In your agreement with them is provision made for overtime?

Mr. KELLY. For overtime, and they get time and a half on week days and double time on Sundays, and we have found it to be customary among union men to be very anxious to work overtime and double time on Sundays. They seem very anxious to work to get the extra money, and we have never had any difficulty. In fact, they have come to us and asked us if they could work overtime. Mr. EMERY. Then you have never, in your dealings with the unions, found the unions objecting to making arrangements for overtime?

Mr. KELLY. Not in the slightest; they are very conservative about that.

Mr. EMERY. They have never attempted to inhibit you to an eight-hour day?

Mr. KELLY. No, sir; never at all.

Mr. EMERY. Did you state to the committee the number of subcontracts you probably make?

Mr. KELLY. We make probably about 25 subcontracts in our work.

Mr. EMERY. Do you find, as a practicable matter, within the range of your experience in this large construction work, that those materials. that must be made to carry out a contract of this character, any large contract for construction, can be purchased in the open market, or are they usually made to order, and is that particularly true of Government contracts?

Mr. KELLY. We find that there is very little work we can purchase in the open market. The main thing in the building is the common brick, and that, of course, can be purchased in the open market; but when it comes to the face brick and things of that sort in a great many cases we have to have that made specially.

Mr. EMERY. Do I understand that you know of many cases where even the brick has to be specially made?

Mr. KELLY. Yes; at the present time, in the Masonic Temple, we have a case where the brick is made specially to match the limestone that is used; and also where we have molded work; and our terra cotta is the same way. No two buildings are ever designed the same way. The steel work is not designed the same way, and certainly we have to have the terra cotta and our fireproofing all made special, and we find that these kilns do not employ union men, and they work probably nine and ten hour shifts.

Mr. EMERY. Can you state for the benefit of the committee what the practical objections would be to undertaking Government contracts by your company under the conditions fixed by this bill?

Mr. KELLY. Well, if this bill were to pass we would find that there would be a great objection from the Thompson-Starrett Company, and I think from other companies, to taking this Government work, and consequently the better contractors would be shy, they would fight shy, of bidding on this work, and it would leave it to smaller contractors, more irresponsible contractors, instead of the larger and more responsible contractors doing it as it is now. The Thompson

Starrett Company of course have figured on a great deal of the Government work in this city, but have not been fortunate enough to get much of it.

Mr. EMERY. Do you find that the conditions of Government contracting are somewhat onerous now?

Mr. KELLY. Yes; they are very rigid at the present time, and I think that if anything like this were brought up it would make it almost impossible to get a Government building built in the city.

Mr. EMERY. Can you say whether or not the Thompson-Starrett Company, if this bill became a law, would undertake to carry out Government contracts under such conditions?

Mr. KELLY. I will say right now, offhand, that they would not undertake to build any of these buildings. That is my impression at the present time. I have been to a number of these stone quarries all over the country, and I find that we have to depend on them for marble, limestone, and granite, and none of them that I know of have any unions or any special time for working; that is, they would probably work a ten-hour shift, and maybe work a twelve-hour shift. The CHAIRMAN. One moment. You are examining the gentleman with regard to brick and terra cotta, and as to whether they are in the trade manufactured to conform to particular specifications or not. Section 2 of the act as it stands reads:

SEC. 2. That nothing in this act shall apply to contracts for transportation by land or water, or for the transmission of intelligence, or for such materials or articles as may usually be bought in open market, whether made to conform to particular specifications or not.

Now, what is the idea? Is it contended that brick does not come within that exception? Is it contended that a brick being an article such as can usually be bought in the open market, when made to conform to a particular specification it is not flatly within the exception? Mr. EMERY. Mr. Chairman, the attention of this particular witness was called to that for the purpose of opening to you a new line of testimony with respect to that particular thing; that is, while it is generally true that brick for construction purposes may be bought in the open market, and frequently is, yet the brick required on public structures is often of such kind, is often of such special manufacture and kind, that it has to be manufactured according to particular specification.

The CHAIRMAN. And is not that precisely what is meant by the exception?

Mr. EMERY. The words "whether made to conform to particular specifications or not" are conditioned by the phrase "usually bought in open market." You can not get these kinds of brick in the open market. They are not in stock. They can not be kept, and they have to be made to conform to the particular specifications in each

case.

The CHAIRMAN. Pardon me; do not let us grow prejudiced. The gentleman who formulated that language was a pretty fair lawyer. Now, the thought was this, if I have ever understood it. Brick are such articles as can usually be bought in the open market. Now, that is brick; that is the foundation of the thing. They remain excepted, even though made to conform to any particular specification. That would certainly cover the color, the size, even the shape. That was the intention; that was the construction. That language

is not mine, but I think it is fair to Judge McComas to give his language consideration before we say he has absolutely failed to do what he attempted to do.

Mr. DAVENPORT. Suppose the words "usually be bought in open market were stricken out, would it alter the sense at all?

The CHAIRMAN. It reads "or for such materials or articles as may usually be bought in open market, whether made to conform to particular specifications or not." It would mean something supplied or it would not mean anything.

Mr. DAVENPORT. The words "in open market" have a meaning there. Is that language "whether made to conform to particular specifications or not" supposed to be descriptive of the class of things that can be bought in open market?

The CHAIRMAN. The meaning of it was that it should not apply to brick, because they can be usually bought in open market.

Mr. DAVENPORT. We often use language which has a very different meaning from what we intended.

The CHAIRMAN. That may be true. The idea was, in the development of the discussion, that it should not apply to brick or stone, or should not apply to sundry other things.

Mr. HASKINS. Stone? You can not buy granite or marble in the open market anywhere.

The CHAIRMAN. You can buy a good many stones in the open

market.

Mr. DAVENPORT. What meaning did Judge McComas ever attach to the term "open market?"

The CHAIRMAN. Any material, as I understood it, or articles that were made for a commercial purpose and offered generally for sale. Now, that particular thing, or kind of article, brick, for instance, might be manufactured to conform to any sort of a specification, but it remained a material that was usually purchasable in the open market. For instance, he found you could go to the brick yards in Baltimore and purchase any amount of brick. Now, the idea was that they were a thing to be bought in the open market. That phrase is used somewhere, in some judicial decision; I can not recall it at this time. The idea was that you could go to the brickyards at Baltimore and buy brick in any amount. Somebody wants them pale and somebody else wants them salmon colored, and somebody else wants them with some particular sort of coloring matter in them; they want them with smooth surface like the Philadelphia press brick, and so on. The idea was that that being a brick, a thing that was usually to be bought in the open market, by adding those words "whether made to conform to particular specifications or not," the entire brick family was eliminated from the bill.

Mr. DAVENPORT. The word "articles" was inserted by him so that it would cover articles as well as raw material. Adopting that construction, how broad would it be? Anything that a man can go and buy, is that excepted? Would not that almost take in a ship itself? The CHAIRMAN. Not the ship, I think. That point was raised. Somebody, I do not know who now, raised that point. They said, "You insert that phraseology 'whether made to conform to particular specifications or not,' and you have excepted the ship," but I do not think that is true. I do not think the court would give it that broad a construction.

Mr. HAYDEN. Mr. Chairman, let us take a parellel case to that of brick. Ship plate is purchasable in the open market always. Now, would that apply to armor plate? That is a mere ship plate, and the mere fact that it is made a certain number of inches thick and to certain sizes and specifications makes the difference there.

The CHAIRMAN. That is not my language, and I did not suggest it, primarily. It was accepted by the advocates of the bill.

Mr. DAVENPORT. It was not accepted as it came out from Mr. McComas's committee, because they were very much opposed to it. The CHAIRMAN. At a later stage, I think the record shows when the McComas bill became the Hitt bill, it was the same in that phraseology. I think the record shows that that was accepted.

Mr. EMERY. I called your attention to this in particular because Mr. Kelly, for instance, represents the thought of the contractor as to entering into contract with the Government and bound under penalty to carry out this contract, subjecting himself to the penalties which are here provided, the moment this language is put in there. The moment he has any doubt as to whether such articles as he purchases for use within that contract come within the language or not, he finds himself not only in conflict with the author of the bill and possibly the chairman of this committee, but between the law officers of the Government themselves and the author of the bill, because I will call your attention to the fact that the Secretary of the Department of Commerce and Labor pointed out these very phrases as ambiguous, indefinite, and uncertain, and suggested that they be changed and obliterated.

The CHAIRMAN. Is it desired to have them obliterated? Is that what is desired? There has been a great deal of evidence directed against their indefiniteness and ambiguity. They were not put in at the instance of the advocates of the bill.

Mr. DAVENPORT. It seems to be thought they are very bad if they are in, and very much worse if they are out.

Mr. EMERY. The objection seems to be, outside of the legal meaning of the bill, that the contractors have to take an uncertain risk, and therefore the Government is discouraging competition for its contracts instead of encouraging it.

The CHAIRMAN. If it is doubtful whether these phrases fail to accomplish the purpose for which they are intended, why not do away with that doubt?

Mr. EMERY. We are not offering this bill, and if it becomes a necessary stipulation for the contract, then the contractor must have this phrase in there or else under the statute he makes an invalid contract, for which he can not collect. The contractor is therefore asked to gamble in litigation, assuming the risk while the Government supplies the interpretation. I wanted to show further, Mr. Chairman, by this witness that in a particular instance, in the public buildings at Annapolis, they have used types of brick not found on the open market, and not even found in the ordinary stock of the ordinary brick sampler, and these bricks had to be made in particular molds for that purpose. We do not want to be specious about this, but it is one of the ordinary difficulties that the contractor must face. The Government invites him to do its work, and then discourages him from doing so by the character of the contract it forces him to make, so that the Government has the choice of confining itself to the larg