Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-12-20

VI thO iloiC tHthh VoOyOOOSO0O thC
plant cost was in excess of reasonable
necessity and should be demanded of
tn" contractors by the government.
The Findings in Brief.
In brief the investigators report:
That the facts do not justify GRIM
fnal process, and that no fraud or
secret profits has been established;
That the probable cost of the plant
will be about 100000 Gncluding
S6,000.000 for additions by order of
the Emergency Fleet Corporation).
compared with an original estimate of
s21,000.000 and a revised estimate of
$27.000.0 900;
That no clear explanation of this
discrepancy has been forthcoming;
That prior to February l last a con-
dition existed at Hog Island which
"superfcially at least would impress
amy one as an organized riot tan
gled mass or stage of chaos
That the contractor or agent. the
American International Corporation,
in substance has taken the position
that since this was war job cost was
of minor Importance; and
That the question of reasonableness
of the expenditures should be referred
to board of arbitration provided for
in the contract, proceedings to be
closed if the board finds the expendi-
lures reasonably necessary, or other
wise payment of the excess to be de-
manded by the government
Conditions in July Basis.
Nhe report. which is dated Septem-
Der IL, 1913. also stated that the plant
would be completed in September;
that the contract substantially was
troversy hinged not so much upon
the question of accomplishment, but
upon means, methods and expendi-
tures," but attached is letter from
the Investigators, dated September 21,
which the Attorney General trans
mitted 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 Emer-
gency Fleet Corporation, appearing
yesterday before the Senate COM
merge committee, testified that. the
Hog Island yard would be complet ed
in about sixty days; that the cost
the plant had delivered one ship and
laid fifty keels.
The Department of Justice investi-
cation was made by two assistants
10 the Attorney General-G Carroll
Todd and Mark MISUNDERSTANDING
last February. when President Will
son asked the Attorney General to
get into consultation with Chairman
Hurley of the Shipping Board about
the whole matter with view to in
stituting criminal process in case the
facts Justify it." Charges of graft
and gross waste had been made in an
inquiry conducted by the Senate COM
merce committee. and Mr.. Hurley had
written to the President and to Mr..
Gregory saying there was Serious
Reorganization and negligence at
Hog Island" and that he desired the
aid of the Attorney General in inves-
tigating conditions.
Investigation Covered Months.
The two assistants, with the aid of
two naval technical advisers, Civil
Engineer Archibald l.. Parsons and
Naval Constructor :. NJ. Henry, and a
force of special agents, Investigated
from February until July, and then
prepared their report. which was sent
To the Attorney General under date
of September L. Mr.. Gregory's let
ter of transmittal to the President is
have been demands in Congress for
publication of the report. The un-
derstandinS has been that publication
was delayed pending an agreement
between the Department of Justice
ard Chairman Hurley as to the causes
g delay as shown by the inquiry
The report describes at the outset
fhe contract entered into by the
Emergency Fleet Corporation on Sep
tc,nher 13. 1917. under which the
American International Corporation
ri New York agreed to purchase SAG
acres of land at Hog Island, to be
utilized for the purpose of the contract
Turn . per cent rental basis, to
luild on this tract with funds fur
Iishcd by the Emergency Fleet Cor
pnration a shipyard of fifty ways and
L. construct with funds supplied from
the same source fifty or more steel
cargo ships at an estimated cost of
.lIG0.000 each. The agreement was
TAT upon complexion of the ships the
! ct corporation might purchase the
J. nj at cost. failing which the con-
/ actor might purchase the plant at
:, value to be fixed by appraisal fail
iH;s which the government would scrap
IL plant and remove it. The esti-
J ted cost of constructing the yard
N.ss S2l o0o,000
Estimates Are Revised.
on October % the fleet corporation
y is,ced an order for seventy additional
.tCcl Srips. estimated to cost S1,65o. 600
each, calling for longer ways and
I..ers and also more shop and storage
. pacity. On November % the con-
Tractor revised the estimate of yard
construction cost, adding s2,75o,0 900 on
..rcount of the additional seventy ships
AID S3,250.000 on account of unfavor-
ale subsoil conditions, costly labor
and necessary extensions of the plant.
ON May an order for sixty more
ships. to cost s1.425.0O0. was placed.
All of the $50 ships were to be com
;,,,ted by August 4. 1919.
l.,nsat,on for building both the yard
I'D the ships was fixed at a per-
o-ntage of the estimated cost of the
ships. with premiums for early de-
cries or savings in cost and PEN
ftss for DELAYED deliveries or in
4 L.. Ia.