Title Bar: Put the Money Under the Rubber, The Texas Highway Department 1917-1968, from the Texas State Library and Archives Commission


Dan Moody to Hal Moseley, March 20, 1926

Page 4 of 5

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Dan Moody to Hal Moseley, March 1926

Hon. Hal Moseley --4-- 3-20-26

not too high.

The situation has no precedent in Texas, and I do not know
whether the people of this State have an adequate remedy in the
processes of the law for the prevention of what appears to be an
extravagant expenditure of the Highway funds.  If I conclude that
there is such a remedy you may rest assured that it will be invoked.
In the mean while, the responsibility rests upon you and those with
whom you have counseled.

If, as I believed on March 4th and now believe, one of the
purposes of this advertising and these contracts was to justify the
prices paid to the American Road Company and the Hoffman Construction
Company, then it must be evident that the effort has failed.  The
futility of such an attempt must be apparent.  The Court in his
judgment, after hearing the facts, found that the price fixed in the
American Road Company contract was both unreasonable and uncon-
scionable.  You are sufficiently informed, and if you are not you
ought to be, to know that the price of 30 cents a square yard was
out of all reason.  When the amount of force account paid by the
State and the cost of the covering material furnished by the State
is added to the 30 cents per square yard paid to the American Road
Company, the total cost to the State was approximately 45 cents
per square yard.  The slightest investigation on your part would
convince you that such a price is unreasonable and high enough to
shock the conscience of all men who inform themselves upon values.
The representatives of the American Road Company testified that they
never expected to put a second application on more than one-third to
one-half of the yardage treated, and the fact that they had been paid
the full contract price upon completion of the first application
casts grave doubt upon the good faith of any supposed obligation to
re-treat any part of the highways embraced in their contract.  Their
expectation appears to be supported by the report recently made by
the Acting State Highway Engineer before his removal from that posi-
tion, for it clearly appears to have been his opinion that not more
than 20 to 25 per cent of these highways should be given a second
application at this time.   Mr. Lanham, the man who let the contracts,
and Mr. Cox, the Maintenance Engineer, have each testified under oath
that it was never within the contemplation of the parties that all of
this work would be treated with a second course application.  I under-
stand that the contracts recently awarded cover almost the entire
mileage treated by the American Road Company.  On more than one-third
of this mileage the contract price, notwithstanding the vastly great-
er obligation which you concede to have been imposed upon the con-
tractor, is only 12 cents, and the average cost per square yard for
the entire surfacing is 13.6 cents.  If the contracts were performed
and the contractors paid upon this basis, the payments to them will
total about $545,000.00, or considerably less than the $600.000.00
recovered from the American Road Company.  It thus appears that no
substantial consolation can come to the individuals who may have
counseled these contracts.  On the contrary, it appears that both
the filing of the suits and the results in the trial of the American
Road Company case have been fully justified.

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Dan Moody to Hal Moseley, March 20, 1926. Attorney General to Mr. Moseley, 1925-1926, Texas Highway Department Records, Archives and Information Services Division, Texas State Library and Archives Commission.


Page last modified: November 14, 2011