Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-06-18
DENMAN REFUSES
TO 0. K. CONTRACTS
Open Break Comes Between
Head of Shipping Board and
General Goethals.
CLASH ON PRICE OF STEEL
Now UP to Wilson. Who Must
Designate Authority to
Expend Funds.

Dcnman. chairman Of the United states
Shipping Board. announced tonight
that he had refused 70 approve con-
tracts for stec! ships made by Cen
cral George GoetEals, general manager
Of the Emergency Elect Corporation.
lie says s95 ton for steel is an cS-
tortionate price for General Goethals
to pay. when the navy IL able to buy
it for $50.
This is the first open break between
Sir. Dennan and General Goethals since
the Shipping Board squabblc began to
come to a head a week Or more ago.
Various predictions are made tonight
regarding the widening of the breach
GROUND For ACTION Is
HIGH PRICE OF STEEL
The ground for Mr.. Dennan's action
is mainly on the price OF steel. He
says he can sec reason why the
Emergency Fleet Corporation should
pay $50 more 4 ton for steel than the
navy does The tact that General Gos-
thals has said that s95 a ION is only
L las;c price for letting contracts. in
Mr Dcnman's opinion is not sufficient
reason for approving the contracts.
Mr.. pcnman's announcement brings
tn. crisis in the affairs Of the Ship
ping Board and Emergency Fleet Cor
poration to a head. This is the FIRST
time that any member of the board
has intcrfercd in General Gcethals's
ahipbrildinG plan. When the canal
builder assumed his duties as head of
tho corporation he was told TO go
ahead and build ships. He was given
carte blanche. In tn. making of con-
tracts. approving of designs and al!
that has I" do with the building of
ships. he received a free rein. lie did
not consult with members of the board
but accepted full responsibility for the
ships. In this way he was able TO cut
the oriGinal program. which called for
] 900 wooden ships. to about one-hfth
that number, although MT. Denman al
ways has wanted the quick wooden
ships.
Now that the chairman apparently
has thrown down the gauntlet to Cen
eral Cocktails close observers here be-
lieve that IL will lead TO one OF two
alternativcs-the resignation of Cen
eral Gocthals or else his designation
rs the one authority having power to
build ships. This will mean that the
Shipping Board will confne it's work
to operating ships after they arc built.
DECISION TO BE MADE
IN FEW DAYS BY WILSON
Decision on this point probably will
hc made within the next two or three
days. when President Wilson designatcs
who shall have authority to cXpcnd
the s5oo.ooo.ooo appropriated last week
by Congress for shipbuilding purposes
The President can delegate this au-
thority TO tho Emergency Fleet Cor
noration or to the Shipping Board. In
either case the authority then would
bc vested in Mr.. Denman and his as
sociatcs. AS president of the Elmer
gency Fleet Corporation, Mr. Denman
holds % per cent of the stock of that
corporation for the government. II
President Wilson. however. wishes TO
clothc General Goethals with complete
authority he can do so only by desis
mating him as general manager. to ea-
pend ;he appropriation
1t is said tonight that it is very
unlikely that the President will fol-
low this last course. In the first place.
that would he giving full authority to
an employee. ignoring mis- board of di-
rec;orS. In the second place those in
close touch with the situation say that
the President wants ships that can be
built in the shortest possible time and
all admit the wooden ship is the quick
est ship. For this reason it is pre-
dicted the White House will name III.
Emergency Fleet Corporation as the
authority having full jurisdiction in
| the shipbuiidinG plan. and Chairman
Dcnman. IN respo nsc TO what he be-
/ iieves to he the demand of the pub-
lie and the real needs of the situa
ton. will interfere III the program
planned by General Goethals and take
/ the necessary steps to secure the quick
ships in large numbers.
There is one hope for compromise.
hut ii is not so bright to-day as It
was last week. This is that General
Gocthals will agree to set aside a por-
ton of the appropriation made by Con-
Srcss for building wooden ships. and
that this part Of the work will he
placed In the hands of scme man to
be named by the wooden ship men.
GENERAL HAS HACK UP.
AND MEANS TO FIGHT
Such prospect seemed possible last
week because II is said to have orir-
mated with friends of General Coc-
| thals and not with those considered
his enemies. Now it is said this hope
has gone because as one Of these
friends put 1t, The general has his
! back up and means TO fight. He will
not order a wooden ship eXcer, from
| those who have had shipyards for
years. Of course. that eliminates the
quick ship because the men who i,ave
wooden sbipyards are not the men who
can build them In large numbers. The
nn.x ~
on wholesale basis are the general
contractors of tho country"