The Washington herald., 1908-03-20

Yesterday the committee received let
te. from Mr.. Dalles from New York, in
which he said the statement OF Mr.. Lilley
had been brought TO his attention. and
there was no justification for il. as far as
he was concerned. He denied any knowI-
edge Of any corrupt practices on the part
Of the company
The committee went on a fishing ex-
eursion into the Navy Department at the
opening OF the inquiry 1t delved into
contracts let for submarine boats and ex-
amined acts Of Congress authorizing
them. Secretary Of the Navy Metcaif was
on the witness stand and Chief construc-
tor Rear Admiral Capps sat behind him.
ready with documents and figures on
hand Mr. Oimsted OF the committee.
conducted the examination.
Reports for Three Years.
Inquiry led up 10 the reports OF the
Naval Committee Of the House favoring
the construction Of submarines in 1906.
1900 and 1903. The Secretary OF the Navy
was Of the opinion that the report OF the
Naval Committee was more binding on
the department than the reports OF the
previous years.
Il seemed 10 him 10 limit the Secretary
OF the Navy 10 the selection Of one type
Of boat. Mr. Olmsted read from the act
OF Congress. Of 1897. which directed the
Secretary 70 build submarines OF a tvpe
equal 20 the best type OF the Newport
trials. He also read the recomn1enda-
tions of the Naval Committee OF the
House this year. which started the pres
ent investigation.
His recommendation was for the con
struction OF eight submarines OF the Oc-
tCpus type. provided another type equal
10 II was not constructed by October :
Mr.. Metcalf was asked IL there was any
difference in the suggestions OF those two
years. He thought so. The Attorney
General had decided that the act OF 1867
did not commit the Navy Department TO
any particular kind OF boat II seemed
at first glance as Il specified the boat
should equal the best OF the Newport
trials, and since the Octopus was the
best. in the Judgment OF the navy's trial
board. the appropriation might have been
used for the construction Of that type Of
boat exclusively.
In the opinion OF the Attorney General.
however. such was not the intention OF
the act. Under the Attorney Generals
opinion the Secretary OF the Navy had
entered into a contract with the Lake
boat people to build one boat II utilized
the bulk OF the appropriation in a con-
tract with the Electric Boat Company
for building seven boats Eight sub
marines were now under construction.
Il had long been thought advisable by
the department 20 have more than one
company bidding on It's submarines. The
department had made an unusual con-
tract with the Lake Boat Company. The
company had offered TO build a l6l-foOt
boat. meeting all requirements Of the test.
for S515,ooo, and no pay until IT was fin
ished and no pay II It did not prove equal
70 the best IN its trials. Finally the de-
partment made an offer OF $4,000 and the
Lake Company accepted H.
Asked About Boat Company.
Secretary. Metcalf was asked II the de-
partment had fgursd on the Electric
Boat Company's bids. and he said Il had
and had reduced the bid an average OF
$4,000 boat. The departments figures
became the contract price.
Mr.. Metcalf was asked concerning Mr..
Lilley's statement that the contracts
awarded thus far TO the Electric Boat
Company were sl.O00Oo0 IN excess Of a fair
profit lie said he would prefer to let the
department experts answer this question.
He thought the committee might readily
obtain the facts by having the builders OF
either type OF boat appear with their con-
tracts
Neither OF the boa companies built
their own boats. In the viewsof the Sec
retary. the department. would not be jus
tined in now ordering built submarines
according 70 the Naval Committees idea
The prOviso that the best type OF the
Newport trials should be provided unless
something as good were offered before
October 1 would restrain the department
from doing anything until October, as il
was possible that the Lake Company
might perfect one OF its designs before
that time.
do you think it advisable 10 build
these submarines at once?" Mr.. OImsted
inquired.
II think II we are going to build them.
we should do it at once" Mr.. Metcalf
answered.
Mr.. Metcaf was asked BY Mr.. Olnsted
II the admiral of admiraIs had approved
the contract for the Lake boat
Mr. Metcalf thought Admiral Dewey was
referred 10. and started 10 explain, when
Mr.. Olmstead interrupted TO say he
meant "the admiral Of all the admirals.
the Commander In Chief Of the Army
and Navy"
"Oh, you mean the President" said
Mr.. Metcalf. Il do not know"
Admiral CRpps on stand.
Rear Admiral Caps, Chief Constructor
OF the Navy, was asked 20 state II he
knew the cost OF building submarines, so
that he could say whether or not the
Electric Boat Company had made an un-
due profit on the contract or had charged a
million dollars In excess of what was a
fair profit
He said II was extremely difficult to ar
rive at an accurate estimate OF the cost
Of building submarines. The total sum
10 be paid the Electric Company fer IT'S
seven boats was s212OO0O: If there were
an excess OF million dollars over a fair
profit in the contract that was some
thing entirely beyond his knowledge.
Admiral Capps said that from what ne
knew Of the Secretary Of the Navy and
other officials, he did not believe a contrct
would be awarded to any contractor
which woHid give him a million dollars In
profits.
Bouteii-Either through ig-
orruption?
{ through ignorance, and
rough corruption"
Carnson. secretary to Rep
Iobson gave supporting fes-