United States recover of I. Stanton Carter $11,454.18 for an amount of the trust fund received by him and not accounted for. Other provisions of the decree do not require mention, except that matters of allowances to be made were reserved to be passed upon at the foot of the decree. The decree of April 14th awards allowances out of the fund, and, in so far as error is assigned thereupon, the provisions are sufficiently described in the ensuing opinion. Cross-appeals are taken on behalf of Oberlin M. Carter and each of the other parties named in the title in respect of provisions affecting them severally.

The testimony upon which the cause was heard and decided in the trial court makes a printed and exhibit record, referred to in the opinion below as containing over 50,000 pages, which is burdensome in its volume and contradictory in a multitude of details. Many of the printed volumes, under stipulations of the parties for their reception of evidence, embrace full reports of testimony and proceedings in other cases or hearings, in reference to the transactions in controversy, namely: (1) In a court-martial record, upon trial of the defendant Oberlin M. Carter, under War Department order of December 2, 1897; (2) in the record of a board of inquiry of 1897; (3) in a proceeding before Commissioner Shields, in New York, for arrest and removal of the contractors mentioned in the bill, for trial under indictments in the Georgia district. As the hearing of the issues was not referred to a master, except upon one issue relating to investments averred in the bill, the trial court received this mass of testimony in the various forms of submission-including examination in open court, examiners' reports of testimony, and matters stipulated in evidence for determination of all questions of fact, as well as law, in controversy under the pleadings. No special findings upon the ultimate facts thus involved (aside from the master's report upon the above-mentioned subsidiary issue) appear in the record, and the only aid which is furnished to that end, for the purpose of review, appears in the references to the testimony and conclusions of fact stated in two written opinions filed by the trial judge -one filed January 9, 1908, and the other March 17, 1908-both made part of the record by an order entered April 14, 1908, when the decree was completed. For brevity, these recitals in the main opinion referred to (of January 9th) are thus summarized:

The transactions in controversy were for harbor improvements made by the United States in the Savannah river and contiguous places within the "Savannah district," placed in charge of Capt. Oberlin M. Carter. Capt. Carter entered upon this charge in 1885, under Gen. Gilmore, as chief engineer, continuing therein until the death of Gen. Gilmore in 1888, when Gen. Craighill became his superior; and Capt. Carter thus remained in local charge until relieved in July, 1897, by Capt. Gillette, when he voluntarily retired for other service. Prior to 1892 Capt. Carter had been quite intimate with Messrs. Greene and Gaynor, who became contractors for harbor work, as hereinafter referred to, and had contemplated at times private business relations with them. Of the several contracts for work in controversy, the opinion expressly mentions two, one let October 22, 1892, for expenditures estimated at $3,000,000 in the Savannah river, and the other of October 8, 1896, for improvements in Cumberland Sound, involving $2,000,000. Referring to the method of advertising adopted by Capt. Carter for letting these contracts, the opinion refers to the testimony of the various officers called in reference to the usual time for such advertising, and concludes that there was no departure "from the usual course obtaining in like case," and that there was "nothing inherent in the matter of notice which suggests any fraudulent intent." The specifications called for three different styles of mats to be employed in the work in quantities to be fixed by the engineer in charge. Mat No. 1 was composed of logs laid parallel to each other, fastened together, and covered with several inches of brush, and then bound together by poles to the required dimensions. No. 2 consisted of artificial logs, made of brush bundles (fascines), laid in alignment, tightly bound and choked at regular intervals, placed side by side, as in No. 1. Across these were placed transversely long brush logs, one on each edge and one down the middle, and all bound together by grillage poles. No. 3 consisted of brush logs firmly united by grillage poles as in No. 2, but lacking the transverse brush logs, with double sets of gril

lage poles, however. In performance of the work this design No. 3 was employed throughout, and the complainant contends that this was much cheaper to construct, and that, by reason of an understanding between the contractors and Carter that No. 3 should be used, the contractors-Greene and Gaynor, operating under the name of the Atlantic Contracting Company-were able to underbid other contractors and so obtained the contracts.

The opinion reviews the testimony of various witnesses upon the question of difference in cost, and concludes that there was "nothing unusual or improper in Carter's action in treating the case of the three designs as practically the same, when considered with reference to the fact that different kinds of work might require different designs on the same contract"; that "of itself it discloses no evidence of a conspiracy to defraud, nor does it tend so to do." The contention of the government that Carter embarrassed other bidders by this method of including the three designs as of one price is, in effect, stated to be unsupported by evidence. In reference to contentions that Carter discouraged other bidders by refusing to furnish specifications, or sending one copy only when three were required, and other complaints mentioned, the opinion states that several mistakes do appear, but not any "sinister motive" therein, and that nothing appears in evidence upon the opening and letting of bids "calculated to cast suspicion upon Carter's conduct." The contract of 1892 for Savannah river work, and other subsequent contracts referred to, called for bids for mats by the square yard, and it is contended that prior to these transactions "mats had always been purchased by the cubic yard"; but it is stated that this is not supported by the evidence, and that like terms appear in numerous instances of prior contracts, and that no reason appears why "this class of work should not have been dealt with by the square yard," and that fraud can appear only in the price paid or the character of work accepted thereunder. "Substantially all the fascines used in the several improvements under consideration were made up into mats. These fascines are required by the specifications to 'be made of live brush of cedar, water oak, myrtle, sweet gum, or any other variety of wood approved by the engineer officer in charge. The fascines will be from twelve (12) to one hundred (100) feet in length [contract of 1892, and 30 to 100 feet in contract of 1896], and must be compressed tightly by an approved form of choker to a diameter of 9 inches at intervals of two (2) feet, where they must be bound firmly with wire or tarred rope of approved strength. The brush used shall be as straight and well trimmed as can be obtained. The fascines shall be carefully and thoroughly made and handled with care. They shall be piled on shore or on barges for measurement in such way as the engineer officer in charge may direct.'"

The contract of 1892 assumed the quantities of different materials to be used as: Square yards of mattresses, 350,000; cubic yards of fascines, 300,000; sawn timber (feet), 800,000; riprap stone, cubic yards, 200,000. “Under the power reserved in the contract, authorizing the engineer to vary the relative amount of each, Carter increased the amount of mattresses to 1,363,572 square yards, to the practical exclusion of the other materials above enumerated. He was thus able to keep within the estimate of the cost of the whole and within the appropriation, while at the same time he accomplished the results sought for. Conceding the power of the engineer in charge to make such a radical change, some of the expert witnesses were of the opinion that the proposed change should have been submitted to the War Office for approval, in view of its radical nature. For defendant it is insisted that the frequent reports showing the progress of the work advised the department of what was being done, which was all that was required. It is not denied that the substitution appears fully in these reports. In and of itself no improper motive can be deduced on Carter's part from his course in this respect. The failure of the department to call attention to the change might fairly be assumed to indicate approval."

"The specifications provide that the third design mattress-i. e., the one actually used-'will consist of a bottom grillage of poles of live saplings, of pine or other timber of a kind approved by the engineer officer in charge. The pole must be straight, of slight taper, of an average diameter of from four (4) to five (5) inches, and not less than three (3) inches at the small end,

and must be placed from four (4) to eight (8) feet apart between centers, both longitudinally and transversely, and spliced together with long scarf joints in a manner satisfactory to the engineer officer in charge. Upon the grillage will be placed a layer of closely compacted fascines, surmounted by a top grillage similar in design to the one at the bottom. The poles of each grillage will be securely fastened together by suitable wire or rope lashings, and the upper and lower grillages will also be securely fastened together in such manner as the engineer officer in charge may approve.' It is further provided therein that: "The size of the mattresses will be fixed by the engineer officer in charge from time to time. In general they will be from twenty (20) to one hundred (100) feet in width, have such lengths as may be convenient for handling,' etc. It is also provided therein that: 'As a general rule all material will be measured by the engineer officer in charge, or his representative, after their arrival upon the ground, and just before being placed in the work. The mattresses may also be inspected as made.'"

The bid of Greene & Gaynor for mattresses per square yard was 95 cents, and for fascines per cubic yard $1.60, and the government contends that the fascines should have been procured and measured by the cubic yard, and when required made into mats without additional cost, as shown in prior contracts, where it appears, however, "that the amount of mattresses required was nominal." It appears from the evidence that, while small quantities of brush fascines can be readily obtained in most localities, "large quantities are hard to get," and the testimony of Capt. Carter is accepted that it would take about nine of the fascines made from the brush found on that coast and "choked to nine inches and one yard long to make a cubic yard," while "the same fascines put into the form of a brush mattress would compress so that four to the square yard would be required, and when subjected to the pressure and weight of an eight-course multiple mattress it would take six fascines to make a square yard, as against nine in a cubic yard, or perhaps ten," so each square yard would require six-tenths of a cubic yard of fascines, or 96 cents, and with grillage poles added the cost of one square yard of fascines in multiple form mat would thus amount to $1.19.

In September, 1893, the contractors began under the 1892 contract to construct what are termed multiple mats or mattresses, for which no provision was made in the contracts, specifically. These "consist of one mattress imposed upon another, varying from 2. to as many as 16, according to the needs of the construction. They were built upon the deck of a barge, especially prepared for the purpose, with facilities for sliding them from the deck into the positions desired. It is claimed by Carter, and seems to be conceded, that this method of planting the brush mats was found to be very desirable, in order to prevent the undermining which preceded the laying of single mattresses or stone work. The scouring produced by the resistance of the single stone-loaded mats to the currents had a tendency to cause the currents to work around the outer end of the single mat and stone work and undermine it. By the use of the multiple mats the construction proceeded so rapidly and so affected the currents as to prevent the bottom wash, whereby a more even foundation and other good results were obtained. In addition, it seems the single mat, when separately loaded with stone for ballast, was apt to sink into the soft bottom of the river, sometimes to the depth of 70 feet. By the use of multiple mats, it was possible to sink eight courses of mattresses with the same amount of stone as is required by the specification in sinking one mattress. Thus seven courses of stone were saved, while at the same time the construction was laid rapidly and made less liable to sink into the muddy and sandy bottom of the river. To build these multiple mattresses without making the openings between the different layers too large, the double grillage was omitted from all the mattresses except the lower side of the lower mattress and the top of the upper mattress. There would be only a half grillage between the intermediate tiers of fascines. The multiple mat was firmly bound together with wire and by other prescribed methods, so that the whole formed a compact body of large dimensions, often 100 and more feet wide and 50 feet long, weighing sometimes 200 tons. The barge was then towed out to the place where the mat was to be placed, and by means of a lowering adjustment, located on the side of the barge next to the

destined place, the mat was slid off into the water and into position, and weighed with stone sufficient to sink it and hold it in place. Complainant insists that thus a large saving was made to the contractors both in material and labor, in that they were saved the trouble of planting each mattress separately and the cost of the unused grillage poles. The saving in stone accrued to the government, except so far as it was otherwise expended, more particularly in paying for the extra fascine work. The use of multiple mats on the Savannah river work is warmly approved by most of the experts and is fully justified by the evidence. It is also clear that for the purposes of that work it was desirable that the grillages be made single, except at the bottom and on the top of the multiple mattress." After recapitulation of the conflicting testimony as to the advantages of this plan of multiple mattresses, the opinion states that "there seems to be little ground for questioning the good judgment and skill of the engineer in charge in causing the mats to be put together and used in the multiple form, nor is it apparent that there was anything suspicious in his not insisting on a reduction in price per square yard for mats laid in multiple form, as against individual mats, provided they came up to the specifications."

The opinion comments on the want of specific testimony from which "to ascertain just what was the construction of the mattresses, multiple and single, under the 1892 contract," but that it seems to be conceded that they were substantially like those in evidence under the 1896 contract, except that "they contained something more of grillage." The government's contentions in respect thereof are then stated in substance: (1) That they were accepted “in lengths varying from 12 to 18 feet, instead of 12 to 100 feet, as required under the 1892 contract, and 30 to 100 feet, as required under the 1896 contract, according to Carter, to facilitate hauling from camp to barge, saving to contractor 25 per cent. of cost"; (2) that they were not well trimmed; (3) did not contain the quantity and quality of material required; and (4) were not arranged and tied according to the specification. The opinion states that the provision of design No. 2 that brush is to be "carefully laid in the fascines so as to break joints and to make a continuous fascine, extending completely across the mattress," is not expressed in the specification of design No. 3 used by Carter in this work, but "that no reason appears under the evidence why it should not be required in one as well as the other, and it does appear that fascines 100 feet long were difficult to transport from the camp to the barge." No continuous fascines were required by Carter, and he claims that the work was thereby hastened without injury to the government; nor does it appear that continuous fascines "added anything to the merits of the mats." Allowance, therefore, of the short fascines, is not deemed such departure from the contract as would authorize the engineer to require the contractor to reduce the price therefor, and, while the latitude thus left with the engineer "might easily be abused," it is not "per se evidence of a misuse of it to waive the more expensive construction when no disadvantage would thereby accrue to the work in hand." The contract provided that "the brush used- should be as straight and well trimmed as can be obtained," and the question is discussed whether this provision intends what are known as "military fascines," consisting of "trimmed rods or poles so bound together as to constitute a compact bundle," or the ordinary fascines made of live brush mentioned in another part of the contract; and considerable of the testimony is reviewed in reference to such contention, with the deduction that the evidence does not sustain the contention that military fascines were intended. Upon the contention, however, that the fascines furnished under the 1892 contract were not well trimmed, so that the bulk was increased for measurement, while the mattress was not made "sufficiently solid" for the work, the conflicting evidence is referred to with this conclusion stated: "The evidence leaves the court with the impression that there was carelessness in the manner in which some of the work was done, indeed carelessness for which Carter was justly entitled to be criticised; but considering the material results, the magnitude of the work, and assuming the absence of any mercenary or any other ulterior motive on Carter's part, except such as might justly be deduced from the facts so considered, Carter's course in the premises was not necessarily in abuse of the discretion vested in him, nor seri

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ously inconsistent with his claim that he discharged his duty to the government, so that the government has failed to maintain its case" in this particular. Comment is also made in reference to the numerous eminent engineers testifying in favor of the work as constructed that "it is an impressive fact in this case that the defendant is so emphatically indorsed by these men, who are above suspicion." The opinion proceeds, however, to consideration of the circumstantial evidence offered by the government as tending to support the charge of fraudulent conduct on the part of Carter in the letting of these contracts and acceptance of work thereunder, namely: The great volume of evidence introduced in support of the charge that the profits thus realized by the contractors were divided between such contractors and one Westcott, the father-in-law of Carter, and were paid over for the benefit of Carter, and invested in real estate and securities which are now traced to Carter's possession, exceeding $400,000 in amount.

After commenting on the "ingenuity and patience" on the part of the complainant, which had resulted in tracing the actual divisions of the amounts paid to the contractors month by month to the bank account of R. F. Westcott, together with proof of the investment of like amounts in various securlties and real estate from time to time and of subsequent transfer thereof by Westcott to Carter, and that such facts are so well established that they are substantially uncontroverted by counsel for Carter, except in reference to certain of the securities which are claimed to have arisen from other sources, and then referring to the contentions of Carter that such divisions and sources of the investments were unknown to him and not even suspected, and the securities were received by him upon the understanding that they were a gift for reasons stated, the opinion remarks that "there is no legal presumption here that Carter knew what was going on and had been a party to it," but that, nevertheless, the burden was cast upon him to explain "very many items shown in the accounts in evidence." It then states that the transactions in suit "cover the period from December, 1891, to 1897, during which period a number of contracts were let, and that, even though Carter was not in actual conspiracy with the contractors, yet, if he knew of their vast profits on the prices allowed them on the earlier work, it was his duty to investigate thoroughly the situation and see to it that the government thereafter paid no more than was fair and just. Even negligence under such circumstances would have amounted to fraud. If, therefore, Carter was cognizant of the fact that the contractors were reaping an abnormal profit from the 1892 work, and that Westcott was interested in that profit and was turning it over to him under any kind of a cover as and for his share of said profit, he was false to his trust and should be held liable to make good to the government all the fruits of his fraudulent acts. This, of course, presupposes that such profits, if any, accrued out of fraud upon the government in the matters of letting or accepting the contracts in question, or both. If the government lost nothing by the transaction, there is nothing due to it."

The opinion then concludes as follows: "The evidence discloses a shameful course of treatment of the workmen employed by the contractors in cutting and otherwise handling the brush used in these constructions. They were paid little or nothing over and above their living, and that, too, of the worst. No doubt some shameful part of the profit reaped from these harbor constructions came in this way. How much can never be ascertained; certainly not all of it, nor even, relatively speaking, a considerable portion thereof. It is also claimed that some of the saving to the contractors arose from the fact that they or some of them claimed a patent or patents upon the methods for handling multiple mats. The record discloses no basis upon which to estimate that saving, if, indeed, it resulted in any saving, so that it is without moment at this time. Undoubtedly, constructions of the character now involved afford, when held down to a fair advance on actual cost, little or no inducement to contractors, because of the element of chance growing out of the weather and water conditions. Liberal allowance should, under the evidence, be made to cover such contingencies; but, when all these considerations are borne in mind and given due weight, it is still beyond controversy from the record that a great wrong was practiced upon the government by the contractors. The evidence to be found in the record with regard to the