Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1918-12-21
ing for longer ways and piers and al
so more shop and storage capacity.

SO more shop and storage capacity.
On Nov q the contractor revised
the estimates of yard construction
cost, adding $2.250,0 900 on account Of
the additional 20 ships and $3.250,o00
| on account Of unfavorable- sub-son
conditions, costly labor and necessary
extensions of the plant. On May
an order for 60 more ships to cost
! 81, 425, 900 each was placed. All of the
| 1870 ships were to be completed by
! Aug. 4. 1919
| The contracting company's COM
pensation for building both the yard
and the ships was fixed at percent
age Of the estimate cost of the ships,
! with premiums for early deliveries or
savings in cost and penalties for de-
! layed deliveries or increased cost.
| The maximum fee under this ar
rangement would be $14, 100000 and
the minimum fee Ss,91o,000. Mr.. Piez
testified yesterday that to date the
company had been paid nothing.
| Although the contract was made
with the American International Co..
| the report says. there was an I'M
| written obligation publicly admitted,
| by all parties to consider the engi-
| neering firm of Stone & Webster
and the New York Shipbuilding Cor
poratior as jointly interested in the
benefits and burdens. A separate cor
poration, the American International
! Ship5uilding Corporation. was or
! organized as the agency through
| which the yard and ships actually
were to be built.
/ In a section on the status Of the
| wards, later modified by the Letter to
/ the attorney general, the report says
; in less than 4 year after the dale Of
! the contract SAC acres of marsh land
without railroad facilities will lpe a
complete industrial city of 10000 men.
served by two trunk lines
and equipped to deliver to the gov
ernmens two completed 7500-ton steel
{ cargo vessels each week" In refer
ence to difficulties encountered. a
blockade of cars loaded with mate
rial extending from Philadelphia TO
! Norfolk, Va, is described.
The report tells in detail Of the
vast work involved in the investisa-
ton, of the questioning of everybody
from high officials to taxi drivers and
of the examination of thousands or
hooks. accounts. bills, diaries and
other papers 1t recites at length the
| charges made against the contractors
and the answers on which the in
/ yestieators do not attempt to pass
! judgment.
, This is the conclusion as to crimi-
nal liability:
"In response to the question sub
mitted by the President our conclu
sion is that the facts do not justify
criminal process: that no fraud or
secret profits on the part of the Off
/ Gals of either the agent or the feet
/ CORPORATION have been established;
that while there were some minor
frauds on the payroll which have
been prosecuted the laborers, labor
ers' timekeepers and payroll super
| Visors. were in the main honest.
One of the accountants employed
! by our chief accountant criticized the
latter's methods as inadequate. These
criticisms, were submitted to TWO
leading firms of certified account
ants-Messrs. Haskins and Sells and
Messrs Touche, Niven & Co. who
reported in writing that the crit
icisms We're unfounded and that the
/ methods and scope Of the accounting
taken in conjunction with other lines
of inquiry were so laid out as 10
bring to light eXtravag ances and ir7
resularitics if any such existed.
This investigation was conducted
by us in the midst of either official la
bors. 1t was given precedence until
we were satisfied that excepting GER
tain minor frauds no grounds exist
ed for criminal process and that there
would probably be no delay in the
delivery of ships if steel and labor
were Forthcoming. These being the vi
tai points we reported orally our con-
illusions in regard to them and there
after proceeded in the normal course
10 consider the issues of fact and law
involved in this complicated record.
Stating conclusions as TO alleged
waste and mismanagemen the report
proceeds:
TN what We have next to say we
90 not wish TO minimize the boldness
Of the plan OF the agent and the cCur-
age and success of the undertaking,
bat we are not able to find afflrma
lively that the agent has SatiSfac-
torily accounted in the hearings be-
foro us for the expenditure Of so large
a sum of money in the construction OF
this plant.
Waving all minor questions of
controversy, the outstanding fact is
that the agents summer and tall es-
Inmates of S2i,0C0,000 and its Novem-
Der estimate of ;$2",000.000 have been
so far exceeded that the probable cost
of the yard will be about $61,D00,000
tincluding $4,000, 900 for recent addi-
tions made by order of the fleet cor
poration}. Such discrepancy must
be due to some fundamental miscal-
culaton in the original estimate, to
supervening conditions including en-
largenrent Of the plant, to misman-
fasement or importation, or a ccmbin-
alton OF these factors. A discrepancy
of such magnitude would seem to call
for clear explanation from the
agent. but this has not been fur
nished.
considerable effort has been made
by the agent in the hearing to stulti-
fy its own estimates by claiming that
they were mere guesses that nobody
could rely upon. But the feet cor
poration did rely upon them: and
there is no contcmporaneous evidence
justifying the agents present posi-
!, ton. The letter of the agent trans
hitting the revised estimate Of Nov.
81 made after two and half months
of actual contract with the work in