New-York tribune., 1918-12-21


1t vas impossible to determine from !
the records of the company what ma
tcriai was received or what was done
with 1T when received or what was on
hand; that large crews of men were
held idle awaiting the arrival of ma
tcrials that were tied up somewhere in
the Jam; that this in turn resulted in
disorganization of the morale and ef-
hclcncy OF the labor forces and held
back the essential pier and foundation
work from the fine weather of October.
November, and part Of December and
threw it into the severe winter of the
end of December and January"
Asserted Investigators
Had Been isinformed
Then follows in the report other
charges of failure to make adequate
progress and of excessive expenditures
1T Is charged, in summary of the
whole situation, that comparing this
work with similar work ut Bristol and
Newark Bay, done under like and SIM
ultaneous contracts and under identi
cal conditions Of weather and sneed
the cost per shipway at Hog Island was
two or three times greater than at
the other yards which have finished
their construction in equal or better
time.
Ion June Is we addressed a letter to
the agent offering it an opportunity
to be heard on the questions involved
IN this investigation. The agent, to-
gether with its counsel and it's chief
officials presented themselves and gave
the statement of their position in re-
gard to these charges"
Then follows the agents explana-
tion of the unfavorable conditions he
experienced.
Continuing, the report says:
"Thc agent stated further that the
first estimate of S21 100000 for the
cost of the yard was no more than a
guess because actual conditions had
not been examined and there was no
adequate time for making a real esti-
mate; that to lesser extent the same
thing was true of their estimate of
$27 100000 of November 27; that this
estimate, though dated November q,
was, in fact prepared in the very early
part of November before they were
thoroughly familiar with the enter
prise, and that thereafter the railroad
congestion and one of the scverest win
ters in history developed throwing all
estimates out of line; that the sub
stantial fact was that all of the ma
tcrial for which the government paid
was received on Hog Island and pro-
tected by fences and guards, so nee
| essarily all of it was either used in
the construction or is on nand avail
able for use; that of the $4,000, 900
estimate of April l, $31 ,809,428 was for
material and rentals of equipment,
which necessarily were all used on the
job; that the overhead charges Of
S5,416,s56. or 10 per csnt of the total
cost, is a very small percentage Of
overhead; that the labor cost of ST.
773,716, less than one-third of the total
cost, is a lower percentage than would
be expected on job of this sort, which
is usually figured 35 to 40 per cent for
labor; that the April estimate fur
nlshes perfect proof that the Novem-
ber estimate was inaccurate, and that
in fact nobody at that time with q
job of such unknown magnitude and
with unknown winter conditions could
have made any estimate that would be
at all reliable as g basis for a judg-
ment."
Then are stated the conclusions as tc
alleged waste and mismanagement:
"1n what we have next to say VIC
do not wish TO minimize the boldness
of the plan Of the agent and the cour-
age and success of the undertaking, but
that the agent has satisfactorily &C
counted in the hearings before us for
the reasonable necessity for the ex-
penditure of SO large sum Of money
in the construction of this plant.
"Waiving all minor questions OF
controversy the outstanding fact is
that the agents summer and fall esti-
mate of $21 100000 and its November
q estimate of $27,OOO,O0O have been sc
the yard will be about $4,000, 900
Such a discrepancy must be due to some
fundamental mlscalculation in the orig
inal estimate, to supervening condi-
tions, including enlargement of the
plan, to mismanagement in operation
or to a combination of these factors
A discrepancy of this magnitude woulc
seem to call for clear explanation
from the agent, but this has not beel
furnished.
"The first estimate of $21 1,00O,0
was the prime basis of the contract, as
sufficiently appears from the letter OF
Admiral Capps, then general manager
of the Fleet Corporation, dated Angus
21, 1917, as follows:
with your letter OF July 90 to General
Goethals you inclosed preliminary memo
randum of the probable cost of ship
assembling plant at Hog Island, amount
ing to $2l 900, oO0
q" before becoming committed to
any such large expenditures this plant
entails it will be necessary TO be assured
within reasonable limits Of the maximum
! cost involved and to whether for the
purposes of this corporation all of this ex-
penditure can be justified regards stand
ards of construction
"This was followed on October II
J 1917, with detailed estimate by tn
agent likewise showing total of $21,
600, 900, which estimate was formal,
approved on November by the Flee
A Corporation in a letter to its residen
engineer, as follows:
. II beg to advise that the general plan
of the shipyard and the general outline to-
gether with the estimate of cost regards
the total of $21 900. 900. are approved. and
! you may advise the American international
Shipbuilding Corporation accordingly and
proceed in general accordance Herewith.
"This estimate was also the basis 70
the allotment by the Fleet Corporatio
TO the Hog Island yard of $21, ,191 90
from its appropriation of October
1917, for the acquisition or establish
u ment of plants suitable for shpbuild
ing or Of materials essential thereto
: admiral ROusseaus
n Memorandum Ouotet