HJALMAR M. SEBY NOVEMBER 28, 1940.-Committed to the Committee of the Whole House and ordered to be printed Mr. KEOGH, from the Committee on Claims, submitted the following REPORT [To accompany S. 3729] The Committee on Claims, to whom was referred the bill (S. 3729) for the relief of Hjalmar M. Seby, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass. The amendments are as follows: Page 1, line 8, after the word "him", strike out the language "at the hands of representatives of the United States Government through (1) unjust cancelation of contract numbered 4646, United States Government form numbered P. W. A. 51, for" and insert in lieu thereof "as the result of his entering into a Government contract, No. TLSA-4646, dated November 28, 1933, in connection with the". Page 1, line 12, after the word "remodeling", insert the word "of". Page 2, line 2, after the figure "41", strike out all of the language down to the colon in line 9. The purpose of the proposed legislation is to provide for the payment of $14,369.61 to Hjalmar M. Seby, general contractor, of Abilene, Tex., in full settlement of all claims against the United States for damages and losses sustained by him as the result of his entering into a Government contract, No. TLSA-4646, dated November 28, 1933, in connection with the extension and remodeling of a United States post-office building, Vernon, Tex. Appended hereto and made part of this report is Senate Report No. 2013, Seventy-sixth Congress, third session. Your committee, after considering the evidence contained in the attached report, concur in the Senate recommendation and ask that the bill, as amended, do pass. [S. Rept. No. 2013, 76th Cong., 3d sess.] The Committee on Claims, to whom was referred the bill (S. 3729) for the relief of Hjalmar M. Seby, having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendments: On page 1, line 5, strike out the figures "$31,000" and insert in lieu thereof "$14,369.61." On page 1, line 7, strike out the words "on account of" and insert "in full settlement of all claims against the United States for". On page 2, line 7, before the figure "(4)", insert the word "and". On page 2, line 9, strike out the semicolon after the name "Seby", insert a period, and strike out the remainder of the bill. At the end of the bill add the following: ": Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000." The bill, as amended, provides for the payment of $14,369.61 to Hjalmar M. Seby, general contractor, of Abilene, Tex., in full settlement of all claims against the United States for damages and losses sustained by him at the hands of representatives of the United States Government through (1) unjust cancelation of contract No. 4646, United States Government form No. P. W. A. 51, for extension and remodeling United States post-office building, Vernon, Tex., known as Public Works Administration project No. 41; (2) failure of United States Government representative to pay him for work done and materials furnished; (3) improper interference by United States Government representatives with him in the performance of his functions and duties as contractor under contract before-mentioned; and (4) confiscation by United States Government representatives of materials and tools belonging to said Hjalmar M. Seby. Hjalmar Seby, a general contractor of Abilene, Tex., contracted with the United States to rebuild and remodel the post-office building at Vernon, Tex. Mr. Seby was awarded the contract on November 28, 1933. He was then living in Abilene, Tex., was 54 years of age, and had been in the general contracting business for upward of 30 years. He had an excellent reputation for honesty and ability in his chosen profession; he had constructed, on contract, many fine buildings in Texas, including the Fine Arts Building of Simmons University and the administration building of Abilene Christian College, both of which involved much larger constructions than did the Vernon post-office contract. He also, among other buildings, had constructed a girls' dormitory at the McMurray College in Texas. His bankers, neighbors, and people for whom he had constructed buildings all gave him the highest recommendation as to ability and integrity. He never before had had a Government contract. Mr. Seby was by birth a Norwegian, coming to this country in 1902 and becoming a naturalized citizen on the 20th of June 1910. He enlisted and served in the armed forces of the United States in the first World War. Mr. Seby commenced work on the Vernon, Tex., post office in February 1934. At that time the National Industrial Relations Act (N. I. R. A.) was in effect. The Government sent Mr. Barnet Brezner as its construction engineer on to the project. Mr. Seby was the subject of apparent attempted bribery by Construction Engineer Brezner, and Brezner in an attempt to force Seby to pay him money or give him property-such as free gasoline or an automobile-continually interfered with and seriously delayed Mr. Seby in his construction of this post-office building. Mr. Brezner caused changes to be made in the construction of the building that were contrary to the contract specifications. Indeed, it is hard to escape the bribery conclusion, particularly when one reads the two letters dated July 28, 1934, that were typed by Mr. Brezner for the signature of Mr. Seby, one of which Mr. Seby did sign and the other which he refused to sign. In this report are included copies of these two letters. On August 15, 1934, shortly after Brezner attempted to have Seby sign these two letters, one of which Seby did sign, Mr. I. D. Porter from the Dallas, Tex., office, who was Mr. Brezner's immediate superior, and a Mr. R. A. Gallimore, an inspector engineer, came to Vernon, Tex., to check on the construction work, and at that time Mr. Seby disclosed Mr. Brezner's attempts to secure additional money from him; it then also appeared that Mr. Seby had in fact paid Brezner for doing some secretarial work, amounts totaling $247. Mr. Porter tried to scare Seby out of making this charge against Brezner and from thenceforth did all he could to embarrass Seby. From that time on the evidence discloses a systematic attempt to drive Mr. Seby out of this contract. Mr. Seby and a Miss Millbaeur, who worked for Mr. Seby, both claim to have overheard Mr. Porter tell Mr. Brezner on the evening of the day that Mr. Brezner's acts were disclosed by Mr. Seby that “We'll fix that big Swede for squealing on us.” On or about August 16, 1934, a Mr. Leo. J. Kriz, special agent of the Public Works Administration, commenced investigating Mr. Seby on Seby's alleged violations of the then existence N. I. R. A. with regard to the hours he allowed labor to work. A few days later Mr. Seby was arrested by virtue of a warrant issued on an affidavit made by said Kriz, and Seby was forced to absent himself from his work for several days. The Federal grand jury, however, refused an indictment against Mr. Seby. Even when Seby was about to be deprived of his contract, and, thereafter, Engineer McGarry and Special Agent Kriz of P. W. A. tried to secure further affidavits from Seby and used threats and duress in this attempt. On August 15, 1934, Brezner was relieved of his duties as construction engineer, and placed on a furlough. On August 28 a construction engineer by the name of R. A. McGarry was sent on to the job. McGarry carried on where Brezner had left off, requiring Seby to change the alterations Brezner had insisted upon. McGarry also caused newspaper items to appear in Vernon that Seby had been arrested on this labor charge, and, worst of all, McGarry telegraphed the companies supplying the materials to Mr. Seby, intimating that Seby was financially insolvent, and they had best be careful in dealings with him, and told them of Mr. Seby's arrest, and said that he was facing a loss of his contract. As a natural result of this, Seby had trouble securing credit from these companies and securing the materials necessary for the completion of the construction. In September Mr. Porter again came to Vernon and joined with McGarry in their attempts to force Seby to lose his contract. Also in September Seby was unable to secure his certificates of payments in accordance with the contract. For that reason he became very short of cash. On September 28 McGarry and Porter requested Seby to sign a certificate of payment, but without showing him the certificate amount. This he refused to do. Although he had over $4,000 due him for work done and materials furnished under the contract, Seby couldn't secure a certificate of payment, and so was unable to meet his pay roll on September 30. Furthermore, McGarry had talked so much about Seby's arrest and Seby's losing his contract that the bank in Vernon would not longer loan him money. Accordingly, on or about October 2 McGarry and Porter, without any legal authority, seized all of Seby's equipment and materials, refused to let him into his office, and about 3 days later he received a written notice that he was losing the contract. When McGarry and Porter took over Seby's materials and equipment at a time at which they had no right to do so, there was equipment and material there of $9,864.90 value, none of which has been returned to Mr. Seby, but the value of $1,714.19 worth of materials was credited to Mr. Seby by the Comptroller General's Office in its final adjustment with the bonding company. In addition, Mr. Seby had rightfully due him for completed work $6,218.90. Mr. Seby also claimed an item due him for the increase in material prices due to the N. I. R. A. However, payment of increased cost incurred by Government contractors due to the operation of that act was expressly limited to contracts entered into prior to August 10, 1933, and this contract was not entered into until November 28, 1933. It is to be noted that the Comptroller General of the United States and the Federal Works Agency both disapprove of this bill. Both disapprovals, however, are based upon statements of various Federal employees, as shown by the Government records, and disregard affidavits and statements of workmen and Mr. Seby. Had Mr. Seby had more experience, and undoubtedly if he had forcibly complained to the proper authorities earlier, he might have saved this terrible loss. Mr. Seby's one experience with a Government contract has cost him all he had saved throughout his life, has darkened his name in his home community, and has physically broken his health. After considering all the facts in this case your committee recommend that Mr. Seby receive payment in the amount of $14,369.61. This amount represents $8,150.71 for tools, materials, etc., which were never returned to Mr. Seby, and the sum of $6,218.90, which was rightfully due him for completed work under the contract. The facts are fully set forth in the following correspondence, which is appended hereto and made a part of this report. Mr. BARNET BREZNER, EXHIBIT B HJALMAR M. SEBY, GENERAL CONTRACtor, Construction Engineer, Vernon, Tex. MY DEAR MR. BREZNER: In spite of the fact that we have had some small differences of opinion in the past as to the manner in which the work on the post-office job should be conducted, I want you to know that I greatly appreciate the cooperation you have given me all the way through the job. This being my first Government job, I was not fully acquainted with all the details involved in Federal work, and your counsel and advice has been of great help to me. I appreciate this all the more since you have never been under any obligations whatsoever to me, for any reasons, and have only cooperated with me from the friendliest of motives. MY DEAR MR. BREZNER: Of my own volition and without any coercion I want to go on record at this time to the effect that I have never offered you, nor have you ever accepted from me, any gratuities, borrowed money, or placed yourself under any obligations to me whatsoever. Our past relations have been quite harmonious and it is my desire to cooperate with you in getting the Vernon post-office job finished satisfactorily within the contract time. Yours very truly, COMPTROLLER GENERAL OF THE UNITED STATES, Hon. EDWARD R. BURKE, United States Senate. MY DEAR MR. CHAIRMAN: Further reference is made to your letter of April 11, 1940, acknowledged April 12, requesting a report on the bill S. 3729, (76th Cong., 3d sess.), entitled, "A bill for the relief of Hjalmar M. Scby," which bill provides as follows: "That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, the sum of $31,000 to Hjalmar M. Seby, general contractor, of Abilene, Texas, on account of damages and losses sustained by him at the hands of representatives of the United States Government through (1) unjust cancelation of contract numbered 4646, United States Government form numbered P. W. A. 51, for extension and remodeling United States post office building, Vernon, Tex. known as Public Works Administration project numbered 41; (2) failure of United States Government representatives to pay him for work done and materials furnished; (3) improper interference by United States Government representatives with him in the performance of his functions and duties as contractor under contract beforementioned; (4) confiscation by United States Government representatives of materials and tools belonging to said Hjalmer M. Seby; and (5) failure of United States Government representatives to accord him, the said Hjalmar M. Seby, credit for increased prices of materials under the terms of the National Recovery Act." It appears that under the terms of contract No. Tlsa-4646, dated November 28, 1933, Hjalmar M. Seby, Abilene, Tex., agreed to furnish all labor and materials and perform all work required for the extension and remodeling, including mechanical equipment and all changes and repairs incident thereto, of the post office and approaches at Vernon, Tex., for the consideration of $42,000. The work was to be performed in strict accordance with certain specifications, schedules, and drawings made a part thereof, and was to be commenced as soon as practicable after receipt of notice to proceed and was to have been completed within 250 calendar days after the date of receipt of such notice. It appears further that notice to proceed was received by the contractor on February 8, 1934, thereby fixing October 16, 1934, as the date for completion. However, due to unsatisfactory progress, the contractor's right to proceed was terminated on October 4, 1934, and on December 1, 1934, the Standard Accident Insurance Co., surety on the defaulted contractor's bond, was authorized to complete the work, which was substantially finished by the surety on February 15, 1935. By letter of July 1, 1936, the Treasury Department, Procurement Division, forwarded the final payment voucher in favor of the Standard Accident Insurance Co. in the net amount of $12,180.68 to this office for settlement. After consideration and development of the matter here it was determined that the entire contract balance of $12,180.68 was due the surety, and allowance of such amount to it was authorized. The bill described above now proposes to pay the sum of $31,000 to the defaulted contractor on account of damages and losses alleged to have been sustained by him due to various acts on the part of representatives of the Government as set forth therein. Among the actions on the part of Government representatives stated in the bill as having caused loss or damage to the contractor are the alleged unjust cancellation of the contract, and the improper interference by representatives of the United States with the contractor in the performance of his duties. With respect thereto, the record shows that the contract was not canceled by the Government, but merely that the right of the contractor to proceed with work thereunder was terminated due to unsatisfactory progress, the work remaining to be done thereunder being completed by the contractor's surety. Such action was taken pursuant to article 9 of the contract which provided in pertinent part as follows: "If the contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in article 1, or any extension thereof, or fails to complete said work within such time, the Government may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which there has been delay. In such event the Government may take over the work and prosecute the same to completion, by contract or otherwise, and the contractor and his sureties shall be liable to the Government for any excess cost occasioned the Government thereby. If the contractor's right to proceed is so terminated, the |