Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1918-03-07
SSOO,OOO PAID
SIJB-BUILDERS
!. AT HOG ISLAND
Government Gives Five Per
Cent. Profits, Senate Com
merce Committee Hears

Washington, March THE Com
merce Committee of the Senate, in
vestigating the Hog Island shipyard
contract, made new discoveries yes
terday in the field of "know how"
and the prices it commands.
The committee learned from
Dwight P. Robinson, president of the
American International Shipbuilding
Corporation, u subsidiary of the
American International, created to
handle the Hog Island contract, that
in addition to the approximate ST.
100000 profit the government has
contracted to pay this concern for
the "know how" of shipyard and
ship construction it is also paying
100000 to subcontractors employed
by the International. This sum rep
reSentS per cent. profit agreed upon
by the International and the Subcon-
tractors, but it does not cover the
amount paid to the subcontractors
as rental fees on the equipment they
employ on the job. The total amount
of this rental fee was not brought
out.
On this, his second day as a wit
ness before the committee, Mr.. Rob-
inSon underwent n severe grilling at
the hands of Senator Johnson, of
California.
Upon his statement, in reply to
questions by Senator Johnson, that
the profit fee upon the whole con-
tract which accrueS to the American
International is separate and apart
from the profit to be paid to the sub
contractor Mr.. Robinson was asked
by Senator Jones, of Washington:
This subcontractor's fee does not
come out of your fee, but is paid
out of government funds by the
Emergency Fleet Corporation. Is that
right?"
yes" said Mr.. Robinson, that's
right" He added a few moments
later that the government is paying
us for our knowledge of the right
kind of contractors to get for the
work.
No Requests For Bids
He said that bids were not asked
from subcontractors, but that the
subcontractors were selected by the
American International and offered
the contract at profit of per cent.
on the estimated cost of the work.
Senator Johnson led Mr.. Robinson
through a long series of questions
concerning the early negotiations
with the Emergency Fleet Corpora
ton, at the conclusion of which he
asked:
Then, as / understand it. YOU
of profit that you thought you could
get, and you fought it out with the
Emergency Fleet Corporation Of
iicials until you got as much as you
possibly could Does that state the
factS2"
Yes, that might express it," ad-
mitted Mr. Robinson, who had pre-
Niously testified that he and his as
sociates in the international at first
wanted a profit fee of 10 per cent.
on the cost of the 120 ships to be
built at Hog Island. The fee they
finally agreed to take was per cent.
and this will amount to $6,O00,000 or
$1,000, 900.
Mr.. Robinson said that the COM
mittee, by criticising the high salar-
les paid at Hog Island, was taking
the heart out of the men down
there" lie thought it was doing
more harm than any enemy could
do by dynamiting the place. He said
everybody in the International was
interested from patriotic motives in
getting the work done as quickly and
as cheaply as possible.
Senator Johnson asked
Was patriotism the impelling
cause in going after the contract?"
so far as l am concerned it was,
Senator" the witness replied.
And also as far as your associates
were concerned?" the Senator asked.
YES, l am quite sure" was the
answer.
Notwithstanding the fact that
YOU wanted a 10 per cent. profit and
when you couldn't get that as big a
profit as you could get?"
That's the way things CO., said
the witness, waving his hand.