required delivery of the copper in six months, starting with March, 1918. The United Metals Selling Co., however, calling attention to the anticipated revision of the fixed price on the 1st of June declared itself unable to contract beyond that period, and suggested that the order be corrected to read 15,000 tons to be delivered presumptively prior to the 1st day of June, and a contemporaneous order for an additional 15,000 tons to be delivered at whatever price should be determined as applicable to the months of June, July, and August. The Ordnance Department, however, declined to accept this suggestion, but did recast its order so as to require delivery of the entire 30,000 metric tons on or before the 1st of June, 1918. This order in one form or another was the subject of correspondence and comment between the American Smelting & Refining Co. and the Ordnance Department. Deliveries under it were made from time to time, but total delivery was not completed prior to the time that a revised price had been established with the approval of the President at 26 cents per pound, with the result that there remained to be delivered, and there was delivered, the aggregate amount of 20,500,620 pounds of copper under this contract, such deliveries being subsequent to the time when the price of 26 cents per pound was in general operation. On the basis of these facts, it is contended by the American Smelting & Refining Co. that the Government of the United States was controlling the entire output of copper of the country and was fixing the price at which it might be sold and at which the Government might buy either for itself or for the Associated and Allied Government for which it was acting; that the intention of the Ordnance Department in stipulating complete delivery prior to June 1, 1918, that of a quantity of copper which in their original order they had stipulated to be delivered in six months beginning in March, was to bring the entire order under the then current price in anticipation of an increase and was not in fact due to the desire of the Ordnance Department or the French Government for which it was operating to have the delivery of the total 30,000 metric tons as early as June 1. The company further contends that it had no election or choice about acceptance of the order of the Government, since the Government was in complete control of the copper industry and was armed with the power to commandeer all the stocks of copper in the country in the event of any failure of cooperation on the part of the copper producers in the Government's demands. The effect of these contentions, therefore, compendiously stated, would be that the Government was in a position of advantage whereby it forced upon the American Smelting & Refining Co. a contract at a fixed price for a larger amount of copper than the Government needed within the period stipulated, the Government in the meantime having the power and the intention, as subsequently disclosed, to increase the price during the time within which deliveries as originally stipulated would have been expected to have been made. On the other hand, the Ordnance Department contends that it was directed by the French Government to place the order for 30,000 metric tons of copper; that deliveries were desired and would have been accepted prior to June 1, if they had been tendered; that the Ordnance Department was acting not in any profit-making connection, but purely in an effort to assist an Associated and Allied Government in matters affecting their part in the prosecution of the war; that the price of 26 cents per pound, subsequently made, was a mere maximum and had neither the effect of abrogating nor modifying existing contracts, and that it did not prohibit copper producers from making contracts at such prices as they saw fit for less than 26 cents. The record is very voluminous and I have spent much time weighing all the evidence and have consulted with those who were associated with the Copper Price-Fixing Committee in an endeavor to determine the equitable situation of the parties in this contention. I have arrived at the following conclusions: 1. The prices fixed for copper from time to time were maximum prices and contained no prohibition upon sales at less prices. 2. The Ordnance Department acted within its rights in ordering 30,000 metric tons of copper to be delivered by June 1. It would have been possible for the American Smelting & Refining Co. to have made deliveries of this amount within that time; and while I' do not hold that deliveries beyond the 1st of June were delayed for the purpose of taking advantage of a larger price yet to be fixed, I at the same time do not hold that either the acceptance of deliveries subsequent to June 1 was a waiver of price on the part of the War Department, or that the acceptance of deliveries subsequent to June 1 abrogated the contract and left the American Smelting & Refining Co. free to recover on such deliveries on the basis of the market value or fixed price subsequently determined. The fact is, that at the time the price of 23 cents per pound was fixed by the Copper Price-Fixing Committee, and received the assent of the President, it was commonly understood that the various copper-producing companies had outstanding contracts at prices in excess of 23 cents per pound and that these contracts were not disturbed or modified by the fixing of the maximum price, but were left in full force and effect and were carried out ac ording to their terms, the various copper producers receiving payment for deliveries at prices in excess of the maximum fixed by the Government, but in accordance with the terms of their preexisting contracts. Similarly, when the price of 26 cents per pound was established, it was 158396--VOL. 1-20- -11 commonly understood that it did not affect contracts existing at the time, which were to be carried out according to their terms. The price of 26 cents was established by the Price-Fixing Committee to go into effect on the 15th day of August, 1918. The minutes of the Price-Fixing Committee show that Mr. Brookings, in announcing that price, said: "The price is to be effective at once, with the understanding, however, that orders placed with the producers in good faith, based upon the Government's action, understand, should be executed, and especially are we interested in orders placed by the Government which have not been filled for some time past. The departments claim they have had orders which ought to have been filled some time ago with the producers and that those orders have been delayed. The Government has not received this and it ought to be treated in the same way as the public. In other words, that these orders, having been taken on good faith of the Government's having fixed a price until August 15, should be executed in good faith sometime before August 15. That all orders taken after to-day should be at the new price, with the understanding that any of those orders that are executed after August 15 would be subject to that." Mr. Brookings was then asked by one of the producers, "It is not quite plain to me how we should treat orders placed subject to the price fixed, which were taken July or August with no definite price except that fixed by the committee. I understand that those would be filled at the new price." To this Mr. Brookings replied, "That is a problem which we have not discussed and have not placed. We might as well discuss it now. Our feeling is that when orders that have been taken since our last meeting when we promulgated a price effective until August 15, that those orders should be filled at the price that we made * Throughout this meeting it is evident that the opinion of all present was that orders taken subsequent to the announcement of the newly fixed price for delivery subsequent to August 15, would be controlled by the maximum of 26 cents then fixed, and that outstanding contracts which did not contain a fixed or stated price, but did stipulate for subsequent deliveries, would also be controlled by the 26-cent price for deliveries subsequent to August 15, or at least such subsequent deliveries as were by the terms of the contract contemplated to be subsequent to August 15. It was, however, apparently the common understanding that existing contracts with a fixed price stated were unaffected by the new price. In the case under consideration there can be no question that there is a definite. contract as to quantity, time of delivery, and price. It is not asserted by the American Smelting & Refining Co. that these elements are not present in this contract, their contention being that the contract really was made under duress, which I do not find to be sustained by the evidence. But having thus a contract quite definite in its terms, let us, for purposes of illustration, reverse the positions of the parties. Suppose that in July, before the 26-cent price had been fixed, a 19-cent price had been stipulated. Under the terms of this contract it is perfectly clear that the Ordnance Department would have been obliged to continue to receive deliveries to the extent of 30,000 metric tons, and to pay for it at the rate of 23 cents per pound. As a matter of fact, the copper producers did deliver to the Navy Department at 23 cents per pound copper contracted to the Navy Department at that price, although deliveries were made during the period in which the 26-cent price was effective. The contracts under which these deliveries were made were, like the contract now under consideration, definite and at a fixed price. Indeed, the copper-producing companies are even now urging upon some consumers with whom they have fixed-price contracts made during the 26-cent period the obligation to take deliveries at that price, although the market is substantially lower, and the ruling effect of prices by action of the Government has been withdrawn. In the meantime, the Government of the United States has notified the French Government that it placed this contract at 23 cents per pound for the 30,000 metric tons, and an agreement has been reached with the French Government to reimburse the Government of the United States for its outlay in their behalf and at that price. In view of the contention here raised, the Government of the United States has reserved the right to carry over to the French Government any obligation which may subsequently be enforced by the American Smelting & Refining Co. for the claim herein under consideration; but the whole relation between the French Government and that of the United States has been on the basis of this contract as drawn, on the theory that it was a valid and binding contract at a fixed price, and that payment would be made in accordance with its terms. After much reflection I reach the judgment that this contract was a legal, fixed-price contract; that, at the time the new price was fixed, it was not the intention of the Government that the 26-cent price should operate to modify the price terms then outstanding in this contract, and that it was understood by the copper producers that the Government had no such intention in the price then fixed. Under these circumstances, there are no equities which require any attempt on my part to overrule or override the contract as made between the parties, and I, therefore, affirm the judgment of the Board of Contract Adjustment. NEWTON D. BAKER, |