The Washington herald., 1917-06-18
DENMAN BLOCKS
ship CONTRACTS
Chairman of Fleet Corpo-
ration Disapproves Esti-
mates for Steel Plates.

Chairman William Denman, in a
statement last night. declared he has
refused to approve certain contracts
for steel ships made by Gen. George
Goethals, general manager Of the
Emergency Fleet Corporation.
The ground for Chairman Denman's
action Is that the price asked for steel
plates, s95 a ton, - extortionate. Mr..
Denman said he could see no reason
why the Emergency Fleet Corporation
should pay 50 a ton for steel when
the navy is able to buy steel for SO.
The fact that Gen. Goethals has said
that Sg5 a ton Is only a basic price
for letting contracts, in Mr.. Denman's s
opinion, Is not sufficient reason for ap-
proving those contracts.
Attention was called to the fact last
week that the United States Steel Cor
poration would clear nearly $4,000, OOO
on steel ships II their price is al
lowed to stand. Chairman Denman's
statement followed.
The action OF Mr.. Denman brings
the dispute in the affairs of the Ship
ping Board and the Emergency Fleet
Corporation to head. This Is the
nrst time any member of the board
has interfered in Gen. Goethals' ship
building program When the canal
builder assumed his duties as head Of
the corporation, he was told to go
ahead and build ships and was given
NdEL DAdhGnE- III Lue VI NOh-
tracts, approving designs and all that
has to do with the building of ships,
he has been given a free hand. He
did not consult with members of the
board about what was to be done
but accepted full responsibility for
the ships. In this way, he was able to
cut the original program, which call
ed for one thousand wooden ships, to
about one-fifth that number.
Showdown Expected Soon.
Now that the chairman has appar-
entity thrown down the gauntlet to
Gen Goethals, close observers here
believe it will lead to one of two al
ternatives-the resignation Of Gen.
Goethals or his designation as the
one authority having power to build
ships, which would mean that the
Shipping Board would confne its
work to operating ships after they are
built.
This will be decided very quickly,
probably within the next two or three
days, when the President designates
who shall have authority to expend
the 500, 100000 appropriated last week
by Congress for shipbuilding pur-
poses
The President can designate this
authority to the Emergency Fleet
Corporation or to the Shipping Board.
In either case the authority would
then be vested in Chairman Denman
and his associates. As president OF
the Emergency Fleet Corporation
Mr.. Dsnman holds IS per cent of the
stock of that corporation for the gov
ernment. II President Wilson, how
ever, wishes to clOthe Gen. Goethals
with complete authority. he can only
do so by designating him, as general
manager, to eXpend the appropriation.
1t seems very unlikely that the
President will follow this last course.
In the first place, that would be CIV
ing full authority to an employe and
ignoring his board OF directors. In
the second place, those in close
touch with the situation say she
President wants to have ships that
can be built in the shortest possible
time For this reason it is predicted
CONTINUED ON PAGE TWO.