Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-12-20
Department Reeomends Board Of Arbi-
tration Be Appointed to Determine
What PaA Of 10000, coo Expenditures
Wsrs Unnecessary and Should be
Misunderstanding Made Public at
White House.

In brief the investigators report:
That the facts do not justify GRIM
inai process and that no fraud or
sc ret profits have been established.
That the probable cost of the plant
viii be about $1,000. 900 dncluding $6.-
of,Goo for additions by order Of the
pared with an original estimate Of S21,-
ofo 30 and revised estimate OF s27.-
C0t Geo.
THAI no clear explanation Of this
discrepancy has been Forthcoming.
That prior to Feb. 1. last, a condi-,
tion existed at Hog Island which
..superficialfy q least would tmpress
any one a. IN 'organi5ed riot q
tangled mass. > state Of chaos
\ That the contractor or agent the
American InterHe etional Corpots&ion. in
suhstance has taken the position that
Since this wasg . war job cost vas Of
minor importance. and.
That the question Of reasonableness
sot the expenditures should be refsrred
! 10 = board Of arhtration.- SeeysAkdTM
in the contract proceedings to be
closed II the board finds the expendi-
lures reasonably necessary. or other
wise payment Of the excess to be de-
manded BY the government.
Delivers Only One Ship.
'fhe report, which is dated Sept II.
1915, also stated that the plant would
becompleted in September: that the
contract substantially was being COM
piled with. and "that/the controversy
hinged not so much upon the question
OF accomplishment as upon means.
methods and expenditures"
General Manager Piez, of the EN- r.
gency fleet corporation. appeared yes
terday before the senate commerce COM
m:ttAand testified that the Hog Island
yard should be completed in about
sixty days, that the cost would be
about sss,soO, 600, and that the plant
had delivered one ship and laid fifty
keels.
The department Of justice investiga-
tion was made by two assistants to
the attorney general. G. Carroll Todd
and Mark Hyman. beginning last
February
Contract Complicated.
The report describes the contract
entered into by the emergency fleet
eomporation on Dec. 13, 1917 under
which the International Corporation of
New York agreed to purchase SAS
acres of land at Hog Island, to s~ue
utilized for the purpose of the contract
on a per cent rental basis, to build
on this tract a ship yard Of fifty ways
and to construct with funds supplied
by the shipping corporation fifty or
more steel cargo ships at an estimated
cost Of s1,100.000 each. The agreement
was that upon completion of the ships
The fleet corporation might purchase
the land at cost. falling which the con-
tractor might purchase the plant at a
price to be fNed by appraisal, failing
which the government would scrap the
plant and remove it.
The estimated cost Of constructing
the yard was 321,0G0,000. On Oct %
the fleet coronation placed an order
Tor seventy additional ships, estimated
10 cost 31,S5O.000 each. calling for
longer ways and piers and Also more
shop and storage capacity. On Nov. ~
She contractor revised the estimate Of
lard constructing cost. adding 2,750,-
0cO on account Of the additional seventy.
ships and 33,25O,c00 on account Of un-'
favorable suDsoli conditions. costly
labor and necessary extensions Of the
plant On May an order for sixty
more ships, to cost $1,415. COO each, was
placed. Allsof the $50 ships were to be
completed by Aug. 4, 1919.
fs Money Unaseountsd For. .s
This y the conclusion a. to crim-
4 inal liability:
In response to the question sub
mitted by the president our conclu-
sion il that the facts do not justify
criminal process: that no fraud, or se-.
cret profits on the part OF officials Of
either the agent Or the fleet CORPORA
tion has been established: that while
there were some minor frauds on the
payroll. which have been prosecuted,
the laborefs' timekeepers and payroll
supervisors were In the main honest" :" "
Az TO waste and mismanagement
the report proceeds: ats II II
I'm what We have next to- say We
do not wish to minimixe the boldness
sof the plan OF the agent and the cour-
aSe and success Of the undertaking
but we are mot able to find affirma-
lively that the agent has satisfactor-
ny aecounted In the bnsiHess before
!, ~ og ~ sxpendttsrs of - lafCs :