Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1918-12-20
HOG ISLAND YARD
COST $34,OOO,OOO
MORE ETHANPLANS
Fraud NOT Shown, Says De-
partment of Justice; Probe
to Reveal Blame
Ny .4ssOeiated Press

10Y -fSSoCidtc0 IfeSN
Washington, Dec. 2O.-The long
awaited report of the Department o.
Justice OF the governments grea'
Hog Island shipbuilding project
made public at the White House to-
day on wireless instructions from
President Wilson, says searchin in
vestigation has disclosed no rim-
inal liability. The reports com
mends that n board or arb PATTON
determine what part, If any of the
More than 60,O00,00O the plant cost
was in excess of reasonable neces-
sity and should be demanded of the
contractors by the government. In
brief the investigators report:
That the facts do not justify crim-
inal process and that no fraud or
secret profits has been established.
That the probable cost of the
plant will be about $61,000,OOO, dn-
cluding $6,000.000 for additions by
order of the Emergency Fleet Cor
poration), compared with an orig
inal estimate of S21 100000 and q
revised estimate of S27,O00,OOO.
That no clear explanation of this
discrepancy has been forthcoming
That prior to February l, last, q
condition existed at Hog Island
which "superficially at least would
impress anyone as S0 organized
riot, tangled mass or stage OF
chaos"
That the contractor or agent, the
American International Corporation,
in substance has taken the position
that since this was Il war job cost
was of minor importance; and
That the question of reasonable
ness of the expenditures should be
referred to board of arbitration
60 H.,
ceedings TO be closed If the board
finds the expenditures reasonably
necessary or. otherwise payment of
the excess to be demanded by the
governmnt.
Program Falls Behind
The report which is. dated Sep
tember IL, 1918, also stated that the
plant would be completed in Sep
tember; that the contract substanti-
ally was being complied with. and
that the controversy hinged mot so
much upon the question Of accom-
plishment but upon means, methods
and expenditures" But attached is
a letter from the investigators, dated
September 81, which the Attorney
General transmitted to the President,
referring to press reports that the
program is falling behind schedule
and calling attention to the fact that
the report was based upon conditions
as they appeared early in July.
General Manager Piez, OF the
Emergency Fleet Corporation, ap-
pearing yesterday before the Sem
ate Commerce Committee, testified
that the Hog Island yard would be
completed in about sixty days; that
cost would be about $63 800 900 and
that the plant had delivered one
ship and laid fifty keels.
Charges of Graft Nude
The Department of Justice inves-
tigation was made by two assistants
to the Attorney General, G.. Carroll
Todd and Mark Hyman. beginning
last February, when President Will
son asked the Attorney General to
get into consultation with Chairman
Hurley, of the Shipping hoard
about the whole matter with view
to instituting criminal process in
case the facts justify it," Charges of
graft and gross waste had been
made in an inquiry conducted by the
Senate Commerce Committee. q
Report Describes Contract
The report describes at the outset
the contract entered into by the
Emergency Fleet Corporation on
September 13, 1917, under which
the American International Corpo-
ration of New York. agreed to pur-
chase S+6 acres of land at Hog Is
land 10 be utilized for the purpose
of the contract upon a six per cent
rental basis; to build on this tract
with funds furnished by the Emer-
gency Fleet Corporation a shipyard
OF fifty ways, and to construct with
funds supplied from the same source
fifty or more steel cargo ships at an
estimated cost of s1,100,000 each. On
October 23 the fleet corporation
placed an order for seventy addi-
tional steel ships, estimated to cost
81 .650, 900 each, and on May Z, an