OFFICE OF TEMPORARY CONTROLS

CIVILIAN PRODUCTION ADMINISTRATION

Transcript of Hearing

in the matter of

Singer Sewing Machine Company

and

Newstrom-Davis and Company

both of Denver, Colorado

Before Frank B. Coleman, Compliance Commissioner

Held at offices of Civilian Production Administration,
219 Midland Savings Building, Denver, Colorado
at 10:00 a.m., January 16, 1947.

Present

CIVILIAN PRODUCTION ADMINISTRATION

  Ernest C. Andersen, Investigator in Charge
  James S. Fickel, Compliance Investigator
  Lucian Lane, Regional Attorney
 

RESPONDENT

  Sidney P. Godsman, Counsel for Newstrom-Davis and Company
  Paul M. Newstrom
  H. H. Stephens, General Agent, Singer Sewing Machine Company
  D. L. Stephenson of Singer Sewing Machine Company
  Kenneth Robinson, Counsel for Singer Sewing Machine Company

Compliance Commissioner - Frank B. Coleman
Reporter - Loretta G. Cohn

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I N D E X

Exhibits

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COMMISSIONER: These hearings are quite informal, and yet we try to keep them orderly. Witnesses are not obligated to testify, it is optional.  They are not sworn, but they testify under the same obligation with respect to truthfulness as if they were sworn; and with the same penalties if they testify falsely. Any testimony given here may be used against you hereafter in either criminal or civil proceedings. A transcript of the hearing may be had by arranging with the reporter for it. Is there anything further to add, Mr. Lane?

MR. LANE: I have nothing further.

COMMISSIONER: Then you may proceed.

MR. LANE: I want first to have marked and to offer in evidence as CPA Exhibit 1 copy of a letter dated December 27, 1946, signed by Mr. Perry N. Moore, Regional Compliance Manager, addressed to the Singer Sewing Machine Company and to Mr. Paul M. Newstrom and Mr. Warren Beaman, doing business as Newstrom-Davis and Company, both of Denver, Colorado. This letter sets out the charges of violation of VHP-1.

(Document referred to marked CPA Exhibit 1 and received in evidence).

As CPA Exhibit 2, I want to have marked and to offer the official post office return receipt showing delivery of Exhibit 1 to Singer Sewing Machine Company on December 31, 1946; and as CPA Exhibit 3, I want to have marked and to offer official post office return receipt showing delivery of Exhibit 1 to Mr. Paul M. Newstrom and Warren Beaman on December 31, 1946.

(Documents referred to marked CPA Exhibits 2 and 3 and received in evidence).

Following that, arrangements were made between Mr. Andersen of the Denver Compliance office and the representatives of both of the respondents with regard to the date of hearing. I want to have marked and to offer as Exhibit 4 copy of a letter from Mr. Andersen to Singer Sewing Machine Company dated January 10, 1947, confirming the agreement as to the date of hearing, and setting the hearing on January 16, 1947, at 10:00 a.m. As CPA Exhibit 5, I went to have marked and to offer official post office return receipt, showing delivery of Exhibit 4 to Singer Sewing Machine Company on January 10, 1947.

(Documents referred to marked CPA Exhibits 4 and 5 and received in evidence).

As CPA Exhibit 6, I want to have marked and to offer a similar letter to Exhibit 4 which was sent to Newstrom-Davis and Company on January 10; and as CPA Exhibit 7, I want to have marked and to offer official post office return receipt, showing delivery of Exhibit 6 to Newstrom-Davis on January 11, 1947.

(Documents referred to marked CPA Exhibits 6 and 7 and received in evidence).

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BY MR. LANE:

Q: Will you state your name, please.

A: James S. Fickel.

Q: What is your occupation?

A: Compliance investigator for the Civilian Production Administration.

Q: In the Denver, Colorado, office?

A: Yes, sir.

Q: Did you have occasion to examine some construction being carried on at 305 North Commercial Avenue in Trinidad, Colorado?

A: Yes, sir.

Q: What was the date of your examination of that construction?

A: October 2, 1946.

Q: Will you describe what you found in progress at the time you were there?

A: I found that a new sub-floor had been placed, with the exception of about 13 feet in the rear. Four small rooms had been partitioned off. A partition had been built around the stairway leading to the basement. Paper had been removed from the wall and some plastering had been done. The shoring of the floor had also taken place. That was about all that was done at that time.

Q: Did you make any inquiries there as to who was doing to construction?

A: Yes, Mr. A. H. A. Furu.

Q: Did you learn what Mr. Furu's relation to the premises was?

A: He was the owner.

Q: Will you describe the building which Mr. Furu owns?

A: The building has about 40 feet frontage on Commercial Avenue, and is approximately 126 feet deep. the corner 20 feet is occupied by Mr. A. H. A. Furu, realtor, number 301 Commercial Street. The other 20 feet is leased to the Singer Sewing Machine Company, number 305 Commercial Street, Trinidad.

Q: Did you determine on the date of October 2 anything as to the approximate cost of the work that was being done in number 305?

A: Yes. The work that had taken place at that time had exceeded $1,000.

End of Page 2

Q: How did you make that determination?

A: First, by my own estimate. Secondly, by getting from Mr. Newstrom of Newstrom-Davis Company, his cost estimate.

Q: Was that done on October 2?

A: No.

Q: That was done on a subsequent date?

A: Yes.

Q: Did you learn on that occasion how the work was being done, whether under general contract or by some other means?

A: Yes, it was by general contract.

Q: Who was having the work done?

A: Singer Sewing Machine Company.

Q: The lessee of the store building at number 305?

A: Yes, sir.

Q: And who was the general contractor for the Singer Sewing Machine Company?

A: Newstrom-Davis Company, Denver.

Q: Did you make any inquiries in the Field Construction office of the CPA to determine whether or not any authorization had been issued for work on the premises at 301 North Commercial, or 305 North Commercial?

A: Yes, I did.

Q: What did you learn from examination of the records at that office?

A: At the Field Construction office, under case No. 6-7-00835 was --

Q: Before getting to that case number, did you find that an application for authorization had been filed by Singer Sewing Machine Company for alterations and construction of the premises at 305 North Commercial, and withdrawn?

A: Yes.

Q: What was the number of that application?

A: That application was case No. 6-7-00513. This application was withdrawn on June 11, 1946.

Q: Do you have the filing date?

A: No.

End of Page 3

Q: Was any action taken by the CPA with reference to the application you have just designated?

A: No.

Q: Was any other application filed by Singer Sewing Machine Company?

A: Yes. the Singer Sewing Machine Company resubmitted an application under No. 6-7-00647. This application was denied.

Q: What date was that application received the the CPA?

A: On July 24, 1946.

Q: Are you sure of that date?

A: I beg your pardon. It was received on June 11, 1946.

Q: I will hand you what has been marked CPA Exhibit 8 and ask you to state whether that is a copy of the application in the files of the CPA Field Construction office?

A: Yes, it is.

Q: I offer CPA Exhibit 8 in evidence.

(Document referred to marked CPA Exhibit 8, received in evidence).

Q: I notice that CPA Exhibit 8 is stamped "Denied" on the face of it. Did you learn by your examination of the records the date of that denial?

A: That was denied, according to the records, on July 24, 1946.

Q: Did you find any other applications on file in the Field Construction office with respect to the premises at either 301 or 305 North Commercial Street, Trinidad?

A: I found an application in the name of Mr. A. H. A. Furu, case No. 6-7-00835.

Q: I will hand you what has been marked as CPA Exhibit 9 and ask you to state if that is a copy of the application you have referred to as being filed by Mr. Furu?

A: Yes, it is.

Q: What action was taken with respect to that application?

A: That application was approved in part to the extent of $2,500.00 for the rebuilding of the front of the entire two stores.

Q: That covers both 301 and 305 North Commercial Street?

A: Yes.

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Q: Now, I note on Exhibit 9 there are certain red pencil marks and certain portions of the typewritten part of the application stricken out by red pencil marks. Did you make an exact copy of the application as you found it in the files of the Construction Field office?

A: Yes, sir, that is a true and exact copy.

Q: When was the application approved, application No. 00835?

A: October 2, 1946, in the amount of $2,500.

Q: That approval covers only the work described as "remove present glass and wood front approximately 36 feet by 13 feet  - one story. Rebuild with 8 inch masonry under present plate glass"?

A: That is correct.

Q: Following your examination of October 2 of the physical premises, did you make any other examination as to the cost of the work being done inside the store building at 305 North Commercial?

A: Yes, on October 9 I talked to Mr. Newstrom, who supplied me with his cost breakdown.

Q: Did you make a copy of the figures given you by Mr. Newstrom on that occasion?

A: I did.

Q: I will hand you what has been marked as CPA Exhibit 10 and ask you to examine it and state whether or not that is a correct statement of the figures supplied to you by Mr. Newstrom?

A: It is.

Q: What is the figure of the total charges incurred to the date of your consultation with Mr. Newstrom on October 9, 1946?

A: $2,448.61, which does not include the asphalt tile, which later I received a figure of $493.76, making a grand total of $2,942.37.

Q: I offer in evidence CPA Exhibit 10; also CPA Exhibit 9, if I have not already done so.

(Documents referred to, marked Exhibit 9 and 10, received in evidence).

Q: Did you make more than one examination of the physical premises at 305 North Commercial?

A: Yes.

Q: When did you make your second inspection?

A: On October 22, 1946.

End of Page 5

Q: Was any work in progress on October 22 when you were there?

A: No.

Q: Will you tell what had been done on the interior of the premises at 305 North Commercial when you were there on October 22?

A: No more work had been done than what I found on my original trip on October 2.

Q: Will you describe that in detail again?

A: A subfloor had been laid approximately 115 feet by 20 feet. Four rooms had been partitioned off. A partition had been built around a staircase to the basement. Paper had been removed and replastered.

Q: In your consultation with Mr. Newstrom, did you get from him a sketch of the alterations and new construction being carried on in the premises at 305 North Commercial?

A: No.

Q: Did you make a sketch yourself?

A: I did.

Q: I will hand you what has been marked as CPA Exhibit 11 and ask you to state what that is.

A: That is the plan for the alterations of the building at 305 Commercial Street, Trinidad, which I prepared.

Q: Where did you get the information from which to prepare it?

A: From the original plans as submitted to the Field Construction office on the application No. 6-7-00647.

Q: That was the application of the Singer Sewing Machine Company which was denied?

A: That is correct.

Q: Have you indicated in red pencil on Exhibit 11 the work that was being carried on when you made your examination on October second?

A: Yes, sir.

Q: I offer Exhibit 11 in evidence.

(Document referred to, marked CPA Exhibit 11, received in evidence).

Q: Did you report the facts resulting from your examination of the premises, and your consultation with Mr. Newstrom, to your superiors?

A: Yes, sir.

End of Page 6

Q: I have had marked as CPA Exhibit 12 copy of telegram dated October 24, 1946, over the signature of Perry N. Moore, Regional Compliance Manager, addressed to Singer Sewing Machine Company, advising construction being carried on at 305 North Commercial was in apparent violation of CPA order VHP-1. I offer this in evidence.

(Document referred to, marked CPA Exhibit 12, received in evidence).

Q: I have had marked as CPA Exhibit 13 copy of a telegram dated October 24, 1946, signed by Mr. Perry N. Moore, Regional Compliance Manager, addressed to Newstrom-Davis and Company, Denver, Colorado, of the same effect as CPA Exhibit 12. I offer this in evidence.

(Document referred to, marked CPA Exhibit 13, received in evidence).

Q: Did you learn from any source, Mr. Fickel, what the estimated cost of completion of the work which had been begun in the premises at 305 North Commercial was?

A: Yes, I did.

Q: I will hand you what has been marked as CPA Exhibit 14 and ask you to state what it is and where you got it?

A: This is a letter signed by Mr. H. H. Stephens of Singer Sewing Machine Company as General Agent to the Civilian Production Administration at 523 Continental Oil Building requesting approval to complete the work that had been started at 305 North Commercial Street, Trinidad, Colorado. The amount of $1,057.63 is required to complete the project.

Q: Is there an application now on file by the Singer Sewing Machine Company requesting authorization to complete the work begun on those premises?

A: There is consideration on file.

Q: Of the original application which was denied?

A: That's right.

Q: I offer Exhibit 14 in evidence.

(Document referred to, marked CPA Exhibit 14, received in evidence).

Q: Now, had any work been done on the front of the premises at 301 and 305 North Commercial, on October 2?

A: No, sir.

Q: Had any work been done on the front of the premises when you were there on October 22?

A: No, sir.

Q: I believe you may examine Mr. Fickel now.

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CROSS-EXAMINATION OF JAMES S. FICKEL

BY MR. ROBINSON:

Q: How long have you lived in Colorado?

A: Sine 1934.

Q: Trinidad is one of the old portions of the state, isn't it? As a city, one of the earliest founded portions of Colorado?

A: I would imagine so. I can't say yes.

Q: This particular store or building, let's call it, is some 60 or 70 years old, isn't it, would you say from your observation?

A: I wouldn't place it that high. I'd say around 40.

Q: That is a stone foundation? At any rate, it's a very old building?

A: I would say it is ancient, yes.

Q: As I understand it, the owner of the building, Mr. Furu, made some application to remodel the outside of the premises there, 301-305 Commercial Street?

A: According to the application, that bulkhead and the front of the store had been condemned by the city of Trinidad.

Q: As unsafe?

A: Yes, and as not matching the adjoining building.

Q: Trinidad itself, the city, had condemned the outside front?

A: That was what Mr. Furu put on his application.

Q: Was not some section or portion of the material there, the lintel perhaps, sent up for the inspection of the Field office, showing it to be spongy and ancient?

A: That I don't know.

Q: At any rate, after the city of Trinidad had condemned the building, at least the outside there, the CPA gave authority, as I understood you, to remodel this store to the extent of $2,500?

A: That's right.

Q: With reference to this letter of January 6, 1947, Mr. Stephens wrote, Exhibit 14, In note in there the letter states that the work was commenced August 14, 1946, with the intention of making minor alterations, such as changing some partitions, painting, etc. However, through misunderstanding on the part of several people involved, more work was done than the thousand

End of Page 8

dollar limitation. The reason for most of this was that the building was in much worse shape than it appeared before the work had started. The wallpaper had been on the walls and ceiling for so many years, and there were so many layers that when it was removed a large portion of plaster came off, etc. You have already told us that approximately $2,900.00 in work had been done at the time that work ceased?

A: Yes.

Q: Work has ceased on the building; there has been no work done there since when -- October 2, 1946?

A: October 2, 1946, that was when I made my first examination. Work had stopped at that time.

Q: I am asking this, really for information for myself. When did the rules and regulations of the CPA come into existence?

A: March 26.

MR. LANE: March 26, 1946, was the date of the issuance of Order VHP-1 which placed limitations and restrictions on construction. Of course, the CPA succeeded the War Production Board on November 3, 1945.

Q: March 26 is when the effective regulation involved in this matter was issued?

MR. LANE: That's right.

Q: Did you have occasion to inspect the lease that Singer Sewing Machine Company had taken for this old building down there from the Furu Realty and Investment Company at Trinidad, bearing date of the 6th date of March, 1946?

A: No, I did not.

Q: Before these regulations were effective?

A: No.

Q: Have you ever seen that lease?

A: No, I haven't.

Q: I would like to offer Respondent's Exhibit 15, this lease in question.

MR. LANE: We can have a copy made of it, if you like.

Q: I will substitute a copy, if I may, of this. I would like to call your attention briefly to it. This Exhibit 15 is dated March 6, 1946, and runs from the Furu Realty and Investment Company of Trinidad, Colorado; covers the storeroom and basement known as 305 North Commercial Street in Trinidad, Las Animas County, Colorado, with the attached agreements. Then it provides in here, "It is further understood and agreed that the part of the second part (which is Singer Company) will redecorate the exterior of the premises with a Carrara Type front, and remodel the interior of the

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premises and install an additional rest room, including all necessary plumbing and lighting fixtures necessary in their business. premises for the aforesaid purposes will be available on July 1, 1946." This lease provides that the lessor shall bear part of the expense for that remodeling, and the lease runs for five years. Rent starts the first of September 1946 and is payable, $100.00 per month, $1200.00 a year. As a matter of fact, Mr. Fickel, although the Singer Company has, under the lease, been compelled to pay rent of $100.00 a month, nobody is occupying the premises, is that correct?

A: Yes, that's right.

Q: There she stands; with about $2,900.00, you say, in round figures, you feel expended to try to put it in condition?

A: $2,900.00 has been spent to date.

Q: And not spent after you went down there October 2?

A: No.

Q: And nobody is occupying it?

A: On October 22 there was no occupant.

Q: When did you tell me that the CPA approved to the extent of $2,500.00 the mere outside portion of the building?

A: October 2, 1946.

Q: The same day you went down there?

A: Yes.

Q: The application was made by Mr. Furu on what date?

A: The application was made September 3, 1946.

MR. LANE: It was received in the Construction Field office on that date. The application is dated August 28, 1946.

Q: And that covered what portion of the building?

A: The front only.

Q: Just the front?

A: Yes, sir.

Q: Leaving no approval to do anything to the inside?

A: That's right.

Q: Except as one might do it, subject to whatever regulations the CPA has,

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is that the point?

A: The Singer Sewing Machine Company had been denied their application for the remodeling of the inside.

Q: So we have a situation where we have a nice outside and no inside at the minute, is that the point?

CROSS-EXAMINATION OF MR. FICKEL IS CONTINUED BY MR. NEWSTROM AS FOLLOWS:

Q: Mr. Fickel, you said that this tile had not been laid, didn't you?

A: That's correct. It hadn't been applied. It was on the site.

Q: Was it on the site at the time you were down there?

A: On October 2 and also on October 22, yes.

Q: But it had not been laid?

A: No.

Q: No attempt had been made to lay it?

A: No.

Q: Had it been opened?

A: On October 2, none of it was opened. On October 22, several packages had been opened and several tile broken.

Q: That hadn't been opened by the contractor?

A: I couldn't say who opened it.

Q: The contractor was not on the premises at the time?

A: Mr. Furu took me in the building and we examined and noticed the tile.

Q: But you're not sure who opened the package?

A: No, I have no idea.

(MR. ROBINSON CONTINUES)

Q: I don't wish to ask any more questions.

RE-DIRECT EXAMINATION OF JAMES S. FICKEL

BY MR. LANE:

Q: Mr. Fickel, did you learn from your consultation with Mr. Newstrom, or from

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any other source, the date on which the work on the interior of the premises at 305 Commercial was begun?

A: Work was started on August 12, 1946.

Q: How did you ascertain that date?

A: By Mr. Furu as an approximate date, and also from the records of Mr. Newstrom from his payrolls.

MR. ROBINSON: When was it stopped?

A: It was voluntarily stopped approximately September 23, 1946.

MR. ROBINSON: So that we have a situation in that building where it really can't be occupied or isn't occupied by anyone at this time?

A: It isn't being occupied.

MR. ROBINSON: It would take about a thousand dollars to complete this work, would it, to make it so it could be occupied?

A: According to Mr. Newstrom, it would take $1,057.63.

MR. ROBINSON: Which would make a total investment inside the building, in order to place it ready for occupancy, of how much?

A: The total of $2,942.37 and $1,057.53.

MR. LANE: An even $4,000.

MR. ROBINSON: There is no sewing machine company down in Trinidad at this time, is there?

A: To my knowledge, no.

MR. ROBINSON: How large a city is that, Mr. Fickel?

A: I think it is 17,000.

MR. NEWSTROM: May I ask a question?

COMMISSIONER: Yes.

(MR. NEWSTROM QUESTIONS MR. FICKEL AS FOLLOWS):

Q: There are a lot of poor people down in Trinidad, aren't there?

A: I couldn't answer that.

Q: Wouldn't you think so, from going around the streets and from your general knowledge of the condition of the town?

A: Well, there are mostly Spanish-Americans and you couldn't tell if a

End of Page 12

Spanish-American had any money or not.

Q: It is a coal mining town and a division point for the C. and S. Railroad, is that right?

A: You say it is?

Q: Isn't it?

A: That I don't know.

Q: I happen to know because we did a lot of work down there for the C. and S. roundhouse.

A: My investigation wouldn't take into consideration that fact.

Q: I was just asking. Most people know conditions around in the various communities. Most any business man would know something about the general condition of the people, their welfare and all, and you as an investigator, it seems to me, would know something about that also. When there are a lot of poor people in a town, not making very much money -- and according to Mr. Lewis, the mining people are very poor indeed, underpaid and so on -- and they are not ways able to buy new clothes, are they, every time they want a new suit or dress; it is necessary for them to remodel their old clothes to a large extent. Would you agree on that?

A: In part I would, but not wholly because there are plenty of liquor stores down there and my observation on the street at night down there one evening was that these boys, these poor people as you class them, always had a bottle of something sticking out of their pocket, and it looks like whiskey.

MR. ROBINSON: That is why their wives have to remodel the clothes.

Q: You can well see how a company like the Singer Sewing Machine Company would be needed in a place like that?

A: Well, it wouldn't be a detriment to the community; it would help.

Q: The coal miners and the Spanish-Americans have large families, don't they, as a rule?

A: Well, they have families.

Q: You can see that it would be a very fine thing for those people to be able to repair their old clothes, dresses, make over the old dresses of the mother into dresses for the children, and so on?

A: Well, I imagine they would be progressive to a degree where they would use some of their old clothes.

Q: That is all I had to ask at present.

MR. ROBINSON: Nothing further.

End of Page 13

MR. LANE: Mr. Commissioner, I think I have offered sufficient evidence now, showing that the Singer Sewing Machine Company, lessee at 305 Commercial Street, after having been denied its application for $4,000.00, began construction on the interior of the  premises costing substantially over $1,000.00 without authorization from CPA, and therefore in violation of Veterans' Housing Program Order No. 1, sufficient to permit Mr. Robinson, Mr. Newstrom, and the other gentlemen here to make such explanation or offer such evidence as they may care to do.

MR. ROBINSON: We will be very happy to do so. We have nothing whatever to conceal in this matter at all. I think the position of the company is pretty well stated in this letter of January 6, 1947, which has been offered in evidence as Exhibit 14 in this case. I don't know whether, Judge, you have had an opportunity to read that letter, have you?

COMMISSIONER: No.

MR. ROBINSON: Perhaps you would care to at this time.

COMMISSIONER: Go on, I will read it later.

MR. ROBINSON: I read portions of it; it is not long. I would like to have Mr. Stephens of the Singer Company state generally how this project started and what was the general situation.

MR. STEPHENS: Oh the 6th of March we leased this building, knowing that it was not in too good shape, but I was unable to make a very good examination of it because there was another tenant in there. At that time there were no restrictions on any remodeling we could do, and we figured on going in there and putting in a first class, up-to-the-minute store a good remodeling job, and put in a store that would be a credit to us and the town. We didn't obtain possession of the building until, I believe, the first of July. When we made this application for permission, which was denied, we then went ahead with Mr. Newstrom and his company with instructions to do what they could under the law just to get us in there; to run what little partitions they could, fix the place so it would be habitable, painting, etc. I understood painting didn't come under the regulation. When we got in there, Mr. Newstrom stated here, or some one said, when we went to tear the paper off the walls, plastering came with it. I was advised plastering walls would come under repair to existing structure and not new construction. Likewise, the floor was in such bad shape, which we found out later, Mr. Mangus advised Mr. Stephenson here, and Mr. Brown, the floor was in such bad shape that they would have to put in a subfloor; but that also constituted repairs to an existing structure. We went ahead with full belief we were within the law in what we were doing.

MR. ROBINSON: In other words, when your original application was denied, you asked Mr. Newstrom to simply make such repairs as were necessary in order to get you in and comply with the law?

MR. STEPHENS: To do what could be done to make the building habitable and let us in there without violating CPA.

End of Page 14

DIRECT EXAMINATION OF H. H. STEPHENS CONTINUES:

BY MR. ROBINSON:

Q: Did you have a written contract with Mr. Newstrom, or how was it to be handled?

A: We had an agreement it was to be handled on a cost-plus-percentage basis.

Q: But there was not a general contract for a certain sum of money?

A: No, because we didn't know what it would be.

Q: It was just to be put in there so you get in and get started in this community?

A: We thought we could operate without fancy furnishings we would liked to have put in.

Q: I would like you to tell the Judge something about Trinidad, if you know the community itself down there, and the needs, etc.

A: I have never lived in Trinidad. I have just been there half a dozen times in connection with leasing this building. My observation of it is that the population is to a great extent Spanish-American, or Mexican, and they are a class of people that we always do a good volume of business with. They are good customers of ours. In fact, you can go into the average Mexican home and you will find a Singer sewing machine there, and it is worth more than all the rest of their furniture. They make clothes for all their kids. They really use it, and need it. We have always catered to that class of business. When regulations were not in effect as to financing, we would sell them on such low terms as $2.00 and $3.00 a month in order to permit them to have it. We'd give them 4 or 5 years go pay. I would say 80 percent of the Mexican homes have a Singer sewing machine.

Q: Now, this particular building, would you describe generally its age and physical condition?

A: Well, I would guess the building would be somewhere in the neighborhood of 40-50 years old at least. This particular portion of it that we expect to occupy has been used for the last number of years by a second-hand furniture store. It was kind of a junky sort of place and the whole building just needs to have the roof jacked up and run a new building under it. We have only leased it for 5 years. We would like to get in there and get some of the money back we have invested. We haven't done a single thing to it that I don't think wasn't absolutely necessary. I believe this plaster and subfloor that was put down was absolutely necessary to keep the building from falling down.

Q: Would I be correct in assuming the paper on the walls would perhaps be 8 or 10 layers thick?

A: I don't know how much, but I know it had been papered over paper.

End of Page 15

MR. NEWSTROM: I didn't inquire as to the number of times, but my workmen said when they attempted to take it off, the plaster came with it. They didn't say how many layers of paper they found.

Q: Going back to your lease here, which is in the evidence, you are paying rent, are you, on those premises?

A: Yes, since the first of September of 1946.

Q: And you are not occupying it?

A: No.

Q: And that is going along steadily, paying $100.00 a month for something you can't occupy?

A: Yes. We pay it every month. We also have incurred considerable other expense. We have hired a manager and a bookkeeper for that shop. We placed the bookkeeper in training in our Pueblo shop and we still have her there on salary, where we don't need her. She lives in Trinidad and will be our bookkeeper if and when we open. We also have a manager who is now working temporarily at the Colorado Springs shop. We are out the salaries of two people since the first of September.

COMMISSIONER: Has the Singer Company any store building, any place of business in Trinidad now?

A: No, sir, nothing in Colorado south of Pueblo.

Q: How far is Trinidad south of Pueblo?

A: About a hundred miles. It is about 90 miles, perhaps.

Q: Your nearest outlet is 90 miles away from Trinidad?

A: Yes, Pueblo to the north and Santa Fe, New Mexico, to the south.

Q: How far is Santa Fe?

A: About 300 miles.

Q: So you have -- 90 miles to the north and 300 miles to the south is the nearest outlet for your company?

A: That's right.

Q: Do you know anything about the population of Trinidad, the number of people there?

A: Only an estimate. We have it here, the closest estimate is 17,428, and the market area is 39,369. In deciding to put in a new store, we consider the market area.

Q: Has there been any work whatever done on that place after you were advised

End of Page 16

in any manner that some regulation was being violated?

A: Not to my knowledge. We stopped work on that in the latter part of September, before Mr. Fickel's visit, because somehow or other we got word we were overboard, so we stopped right now. There's been no work done, to my knowledge, since sometime a little bit before the second of October. Mr. Newstrom could tell us the exact date of the last labor charges on that.

MR. NEWSTROM: According to my records, the last payroll period was September 25. That didn't embrace the whole week.

Q: I think that is all, Judge.

MR. NEWSTROM: Here's one thing I would  like to bring out for the benefit of the Judge. Only $727.31 was spent on this partition work and then, as I mentioned, they wanted to make it look a little nicer than a square opening, so Mr. Brown asked that an arch be put in, that cost $30.08. Then the floor was uneven, as I take it, and about ready to cave in. It was unsafe for anyone to be in the building, especially if two or three people got in there and even a small amount of equipment. So they shored up the floor and the floor joists in the basement, and also made a little bit more level floor. This subflooring and shoring amounted to $745.63. The floor was so bad, a lot of splinters in it, and if there was no covering on it, and it was impossible to cover it because it was worn in spots. People coming in there, especially children barefoot, would get splinters in their feet. That, of course, would be the liability of the Singer Sewing Machine Company and many law suits might result from that condition. So I don't know who instructed our man to do it, I have never been down there myself, I have been in Trinidad but I can't even remember the location of this store; but Mr. Brown or my man between them realized they had to put in some sort of a subfloor there, if the tile was to be installed; and again there is a question as to whether asphalt tile originally was really prohibited under the regulation.

MR. LANE: I think you will find even in the original regulation it was specifically covered.

MR. NEWSTROM: Well, there's always been a question of that. Anyway, further, then the men started to take off the paper because it wouldn't have been a nice job, putting the paper on over what was already there, and the plaster came off with the old paper. They had never patched the plaster, just kept putting on new paper, so when they realized that condition, like all good workmen would do, they said, we will have to repair this damage. Can't have the Singer Sewing Machine people move in and have large amounts of plaster falling off the walls; so they spent $390.99, according to the records, on that. There is an item of shelving in the amount of $154.66. Shelving as a rule isn't under CPA. Shelving can be removed; therefore, it is part of the fixtures, but Mr. Fickel has them all under this $2,942.37. Then he wanted a little closet built in there, someplace with some more shelves to hold coats and things like that because, without casing any aspersions on the honesty of these people, they couldn't leave coats and hats and things like that out where they could be picked up by anyone entering the store. So they spent approximately $100.00 for that.

Mr. Fickel estimated $300.00 for electrical work. We haven't yet

End of Page 17

received a statement from the electrician who installed that. I can't find out how that was done, but there were 14, 15, or 16 outlets put in the walls for the sewing machines, etc. Mr. Fickel estimated $300.00; we have no figure on that. It shouldn't have been that much, with 12 or 14 or whatever it was outlets. They shouldn't be worth more than $4.00 apiece.

MR. FICKEL: You have got 21 electrical outlets; I counted them. Twenty-one new ones and conduit going to them.

MR. NEWSTROM: At any rate, the electricity was in the building, so it was simply a matter of running a few conduits to install outlets. Somebody should holler or object very strenuously if they were charged $300.00 for 21 outlets. It shouldn't be worth over $100.00

The asphalt tile, which he has there $493.76, could be shipped to some other place and used if they weren't going ahead down there. It was not installed. In fact, I think it arrived there after our workmen had left the job. I am quite certain of that, and no attempt was made to lay that tile. In other words, it resolves itself down to the fact that the partitions possibly could have been done for possibly a thousand dollars that you wanted done, if we had stopped there. But we ran into that bad floor which had to be supported and shored up. We had to protect the floor; it was in such bad shape, as I mentioned a few minutes ago, especially the risk that would be run if children came in barefoot, etc.

As I mentioned then, that asphalt tile could be used any place. You could return it even to the material dealer.

MR. STEPHENS: Yes, we could return it.

MR. LANE: May I ask Mr. Stephens a question, while we are on the subject of costs. The new partitions, of course, unquestionably are covered by the order. The subfloor unquestionably is covered by the order.

MR. STEPHENS: I have asked several people and I got various answers.

MR. LANE: As I take it, you laid a new flooring as a subfloor, and wherever needed, you shored up with new lumber the studding. I take it also that your original plan in connection with that floor, when you started reconditioning the floor, was for using the asphalt tile.

MR. STEPHENS: Yes, but we did not intend to put a new floor down.

MR. LANE: But I think unquestionably in computing your estimated cost, the asphalt tile would have to be included?

MR. STEPHENS: We always take shelving down.

MR. LANE: I would think the shelving and closet was affixed to the walls.

MR. STEPHENS: We remove that when we leave. We take the shelving with us. We consider that as fixtures.

End of Page 18

MR. LANE: The order is fairly specific as to what is included and what is not. I think the only item which might be questioned here is plastering. If that is only minor plaster repair, that, I think, is the only figure that might be questioned in connection with your expenditures up to October 9. I wanted to inquire, would you have some overhead wiring as well? Didn't you install new light fixtures?

MR. STEPHENS: No, we would if we could, but we can use those already in there.

MR. LANE: Was that not contemplated, installing new light fixtures?

MR. STEPHENS: Yes, it was contemplated in the original plan to put in new light fixtures. However, they would do until such time when restrictions are lifted.

MR. NEWSTROM: We haven't even purchased the light fixtures.

MR. ROBINSON: As a matter of fact, you haven't been paid at all by Singer, have you?

MR. NEWSTROM: No, nothing at all.

MR. LANE: In connection with the costs, these items shown on Exhibit 10 and the estimated cost of completion shown on Exhibit 14 do not include contractor's profit?

MR. NEWSTROM: That's right.

MR. LANE: Under the order, contractor's fees have to be added to the cost.

MR. STEPHENS: Is that included in the $1,000.00, for instance?

MR. LANE: Yes, that has to be included.

MR. NEWSTROM: That isn't my understanding. My understanding is that it is exclusive of contractor's or architect's fees.

MR. LANE: Architect's fees are excluded, but the contractor's profit is not. Under Supplement 3, as amended October 7, 1946, paragraph (g), How to figure cost, there is specifically included the amount paid for contractor's fee.

MR. NEWSTROM: It has always been my understanding you don't add contractor's cost.

MR. LANE: It is specifically included. What is your cost, Mr. Newstrom?

MR. NEWSTROM: 15 percent.

MR. LANE: That would have to be added in computing cost of the job.

End of Page 19

MR. ROBINSON: I think that is about all, so far as our situation is concerned. It seems to be a question of misunderstanding as to the effect of the regulation and what is included. Certainly good faith is evidenced, and I think a very real need down there for this is shown; and the thing that strikes me also as rather important is the fact that we leased this place apparently, from what the gentlemen tell me, at a time when these regulations had not been made.

MR. LANE:  There was a period from March 26 to the time you began work on August 12.

MR. ROBINSON: But our lease called for these repairs, dated March 6, 1946, and it requires us to do certain things.

MR. LANE: The Second War Powers Act and our regulations provide that where performance of a contract is made impossible because of any of these regulations, the contract is not in force.

MR. ROBINSON: We are paying a hundred dollars a month for something we can't occupy, paid since last September. It seems to me the things we wanted done were necessary in making it habitable. I don't think there is anything further to be added, is there?

MR. NEWSTROM: I want to emphasize the fact that there's been no wilful violation of any law. It was a misunderstanding pure and simple. Mr. Brown goes down there, our workmen are down there without any real supervision from our office. We sent them down to do this partition work and a workman isn't supposed to know all the laws in the United States. He'd have an awful time keeping up with the, even I would, especially the laws that have been passed since the war began. Furthermore, I don't believe, in fact, I know that he didn't even keep any costs. He didn't know what was spent on the partition. He didn't send any word up to the office and we didn't inquire as to how much had been done. The man was down there and we just left it to him to go ahead and do some work. In other words, there was no wilful violation. Just a misunderstanding on the part of men working down there as to the extent of what could be done.

MR. ROBINSON: I would like to inquire as to the necessity of that subflooring.

MR. NEWSTROM: I think I stated that a while ago.

MR. ROBINSON: You mean with reference to these splinters, etc.?

MR. NEWSTROM: Splinters, and danger of the floor giving way, should there be any number of people come into the building. In other words, it was unsafe.

COMMISSIONER: Is there anything further from either side?

MR. LANE: Nothing further.

MR. ROBINSON: Nothing further.

COMMISSIONER: Then let the records show that all exhibits introduced

End of Page 20

were received in evidence. The records will be closed.

(Whereupon the hearing was closed at 11:45 a.m., January 16, 1947).

End of Page 21

STATE OF COLORADO
CITY AND COUNTY OF DENVER     SS.

I, Loretta G. Cohn, do hereby certify that I acted as reporter in taking down in shorthand the testimony given and statements made at a hearing in regard to Singer Sewing Machine Company and Newstrom-Davis and Company, both of Denver, Colorado, which hearing took place before Compliance Commissioner Frank B. Coleman at 219 Midland Savings Building, Denver, Colorado, beginning at 10:00 a.m. January 16, 1947, and adjourning at 11:45 a.m. January 16, 1947; that the foregoing pages, 1 to 21, inclusive, is a complete transcript of all testimony given and statements made at that hearing, except such matter as was stated by the Commissioner to be "off the record".

Dated: January 27, 1947

                         s/ Loretta G. Cohn