The Six Companies of California, the consortium of companies that had such great success in building the Boulder Dam (now called the Hoover Dam), was in big trouble.
It had lost a couple of million dollars already on the construction of the Broadway Low Level Tunnel, which would link Alameda and Contra Costa counties, and the job was only 70 percent done.
The tunnel was supposed to have been completed May 24, 1936. And the Joint Highway District 13 had started penalizing the contractor $500 a day for the delay.
The district sent a progress payment to the Six Companies on June 10 from which it deducted $3,500. The company refused the check. On June 13, 1936, the company halted work and rescinded its contract with Joint Highway District No. 13.
The problem had been brewing for more than a year. The contractors claimed they were sustaining a loss on the job and that the district engineers hadn't done sufficient engineering. The ground was too unstable. The contractor finally decided to install a permanent concrete liner to prevent a cave-in. It stopped the digging Aug. 21 and laid off 600 men. Seven days later three members of a small crew left to make emergency repairs on the timbering in the north bore were trapped and killed.
For the next 11 months the contractors insisted that they needed a time extension and more money to complete the job and that the district geologist had misrepresented the facts about the soil
Alameda County Supervisor Thomas E. Caldecott said that despite Six Companies no longer being on the job, the work on the tunnel would go forward with the funds on hand.
He contended that the contractors were wrong and that the soil condition in the vicinity of the tunnel digging was well-known and either the company "had this information or was remiss in failing to obtain it," in a statement published June 15 in the Oakland Tribune.
On July 1, 1936, the Six Companies went to court and sued the district for $3,259,605.
Henry J. Kaiser, who had taken over from S.D. Bechtel as president of the Six Companies, issued a statement published in the Tribune on the same day.
He again accused the district engineers of providing misleading information. He said the district board refused to cooperate when he went to Washington, D.C., to try to secure more money for the project.
Work didn't resume on the tunnel until November, when new contractors Clifford and Pollack took over. On Dec. 5, 1937, the tunnel was opened to the public in a great ceremony.
On May 31, 1938, the U.S. District Court ruled that the Six Companies had no right to abandon work that was only 71 percent complete. It had breached the contract and was not entitled to the $3,259,605 it demanded.
The case went on to the U.S. Supreme Court, which gave the Six Companies a bit of relief.
On Dec. 9, 1940, the Supreme Court said the district could not collect punitive damages of $142,000 from the Six Companies. The district had to refund the payments it had deducted.
In the end, the Broadway Low Level Tunnel cost close to $4 million, which sounds like pretty much of a bargain compared with the $420 million tunnel project now under way in the Oakland-Berkeley hills.
Days Gone By appears on Sundays. Contact Nilda Rego at email@example.com.