the Lake Superior iron ore consumption for the manufacture of steel. The iron ore tonnage to be carried on the Great Lakes will be as much as $8,000,000 tons. The American fleet alone is not able to move this great tonnage of Lake Superior ore and will require the assistance of the Canadian vessels to haul this unforeseeable amount. The need is temporary; the legislation only covers the current year and is supported by the iron-ore producers of the Lake Superior region. The present need of steel was amplified by the Department of Commerce before the committee.

To cover this emergency need of transportation of iron ore on the Great Lakes, the legislation is approved by the Maritime Commission and the Department of Commerce in its administration of the antiinflation law, Public Law 395, Eightieth Congress signed by the President on December 30, 1947, to bring about a better relationship between supply and demand in several critical areas which involve the need for more steel. In addition, the Lake Carriers Association comprising the operators of the American ore-carrying fleet, did not oppose the legislation but recommended it be enacted in view of the fact that the American fleet is unable to care for this increased need. While the committee firmly believes in especially protecting the coastal and intercoastal shipping and does not desire to jeopardize American shipping, yet the great need for ore products and the fact that the American ship operators on the Great Lakes recommend this temporary suspension, the committee unanimously recommends that the legislation do pass.

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80TH CONGRESS 2d Session

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HOUSE OF REPRESENTATIVES

REPORT No. 1557

TRANSPORTATION OF IRON ORE ON GREAT LAKES BY CANADIAN VESSELS

MARCH 11, 1948.-Referred to the House Calendar and ordered to be printed

Mr. WEICHEL, from the Committee on Merchant Marine and Fisheris, submitted the following

REPORT

[To accompany H. J. Res. 338]

The Committee on Merchant Marine and Fisheries, to whom was referred the joint resolution (H. J. Res. 338) to authorize vessels of Canadian registry to tranpsort iron ore between United States ports on the Great Lakes during the period from March 15 to December 15, 1948, inclusive, having considered the same, report favorably thereon without amendment and recommend that the joint resolution do pass.

PURPOSE OF THE RESOLUTION

The purpose of the resolution is to provide needed transportation on the Great Lakes for the carrying of iron ore necessary for the manufacture of steel. The resolution would suspend the provisions. of section 27 of the act of Congress approved June 5, 1920 (41 Stat. 999), as amended by act of Congress approved April 11, 1935 (49) Stat. 154), and by act of Congress approved July 2, 1935 (49 Stat. 442), being the coastwise shipping laws which prohibits Canadian vessels from transporting between ports of the United States on the Great Lakes. The need arises because legislation enacted in 1941, which temporarily suspended the coastwise shipping laws to permit vessels of Canadian registry to carry iron ore during the season of 1941 between ports in the United States on the Great Lakes (Public Law 90, 77th Cong.), and which was extended by further legislation for the period of the war, was repealed by Senate Joint Resolution 123, Eightieth Congress. This was a general repealer, terminating wartime emergency legislation. Since the termination of such wartime legislation, it has become evident that Canadian vessels again will be needed during 1948 to carry iron-ore tonnage from the Lake Superior region. The need to transport this increased tonnage is greater than

that of 1947, to meet the Lake Superior iron-ore consumption for the manufacture of steel. The iron-ore tonnage to be carried on the Great Lakes will be as much as 88,000,000 tons. The American fleet alone is not able to move this great tonnage of Lake Superior ore and will require the assistance of the Canadian vessels to haul this unforseeable amount. The need is temporary, the legislation only covers the current year and is supported by the iron-ore producers of the Lake Superior region. The present need of steel was amplified by the Department of Commerce before the committee.

To cover this emergency need of transportation of iron ore on the Great Lakes, the legislation is approved by the Maritime Commission and the Department of Commerce in its administration of the antiinflation law, Public Law 395, Eightieth Congress, signed by the President on December 30, 1947, to bring about a better relationship between supply and demand in several critical areas which involve the need for more steel. In addition, the Lake Carriers Association comprising the operators of the American ore-carrying fleet, did not oppose the legislation but recommended it be enacted in view of the fact that the American fleet is unable to care for this increased need. While the committee firmly believes in especially protecting the coastal and intercoastal shipping and does not desire to jeopardize American shipping, yet the great need for ore products and the fact that the American ship operators on the Great Lakes recommend this temporary suspension, the committee unanimously recommends. that the legislation do pass.

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80TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

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REPORT

No. 1558

GABEL CONSTRUCTION CO.

MARCH 11, 1948.-Committed to the Committee of the Whole House and ordered to be printed

Mr. CASE of New Jersey, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany H. R. 1734]

The Committee on the Judiciary, to whom was referred the bill (H. R. 1734) for the relief of Gabel Construction Co., having considered the same, report favorably thereon with an amendment and recommend that the bill do pass.

The amendment is as follows:

Page 1, line 5, strike out "$136,121.86"; and insert in lieu thereof "$65,089.11".

The purpose of the proposed legislation is to pay the sum of $65,089.11 to Gabel Construction Co., of Orlando, Fla., in full settlement of all claims against the United States for losses sustained in carrying out contract No. NOy-9336, dated October 13, 1944, with the Navy Department, at the naval training base, Florida City, Fla.

STATEMENT OF FACTS

Louis E. Gabel, trading as the Gabel Construction Co. (hereinafter referred to as contractor) having submitted an intelligent bid which approximated the Navy's estimate on the cost of construction and which was within 5 percent of the contractors who submitted bids for the project, entered into contract No. NOy-9336 with the Navy through the Bureau of Yards and Docks for the construction of a water-treatment plant at Florida City, Fla., Naval Operating Base, Key West, Fla., for $180,000. Pursuant, however, to a directive preliminary work commenced on October 10, 1944.

The Navy Department, as part of the contract, included specifications prepared by J. E. Greiner Co., consulting engineers, of Baltimore, Md. The specifications were based upon equipment manufactured by Permutit Co., of New York City, whose proposal No. 40380 was made a part of the contract.

The contractor was at all times prepared to complete the performance of the contract; but during performance, gross errors or mistakes began to appear in drawings received by the contractor from Permutit Co. The Permutit Co.'s proposal was made a part of the contract. These errors caused delays and increased the expenses of the contractor. Further delays were caused by the Navy requiring the contract to include specifications drawn by J. E. Greiner Co. Alterations in construction became essential because of mistakes in J. E. Greiner Co.'s specifications.

Based on the correctness of J. E. Greiner Co.'s specifications, the contractor ordered, received, and paid for a freight carload of special cast iron pipes and fittings. A mistake in the J. E. Greiner Co.'s specifications caused these pipes and fittings to become useless for the project, and the contractor was forced to sell the entire freight carload as scrap. A financial adjustment was not made to compensate the contractor for this loss.

On January 5, 1945, the Navy Department directed the contractor to proceed with the installation of a new well and a pumping plant and to submit his break-down of cost for this additional work.

As directed, the contractor proceeded with the additional work and submitted his break-down of cost. The cost break-down, which did. not include overhead and profit, was not approved by the Navy; and it was not until this additional work was finished that the Navy agreed to pay the sum of $11,800, causing the contractor to lose the sum of $3,220.11 on this particular part of the project.

Mistakes similar to those set out occurred frequently. These mistakes made it impossible to follow the work schedule. As a result, construction was delayed and employees remained idle until correction could be made. These mistakes, which caused delays, therefore materially increased the contractor's expenses. The contractor was not compensated for these delays and additional expenses. The greatest single loss was due to not receiving the Permutit Co.'s machinery in 12 to 16 weeks as stipulated in its proposal, which was made a part of the contract.

The contractor's bid for the project was based upon the Permutit Co.'s delivery of machinery as stipulated in its proposal; although all machinery was ordered on November 27, 1944, under the priority rating AA-3, the first delivery of machinery was not made until July 31, 1945, 8 months after placing the order. Final delivery did not take place until March 26, 1946, a period of 1 year and 4 months from the time of ordering the machinery; whereas, all the machinery, as stated above, should have been delivered within a period of not more than 16 weeks.

The Navy compelled the contractor to keep a superintendent and a force of men on the project at all times even though they became idle when machinery was not received on time as provided in the proposal of the Permutit Co. Further losses were incurred thereby. In addition to this, the Navy refused to accept other bids from the contractor until completion of this contract; and it was not permissible to move the construction machinery either for the purpose of renting it to a third party or for the use of construction work either for other branches of the Government or for civilians. The contractor could do nothing but permit his losses to increase.