The Birmingham age-herald., 1918-06-21
Methods of Wartime Sharks Shown to Be of Worst
 Character By Probe
BOTH UNCLE SAM AND MANUFACTURERS ARE CHAPTERS VICTIMS
Manipulation of Bids and Suppression of Competi- ton Being Uncovered In
 Federal Investigation

Washington, June 2O.-Methods by which contingent fee contract agents in Washington suppressed competition in bidding on government war orders, inflated prices, manipulated bids and even "doubie-crossed" their own cii- ents by representing competing com tractors, were uncovered today by the department of justice in examining correspondence seized raids on the contract brokers offices.
 Some manufacturers priced thousands of dollars for purely imaginary ser vices," of the contract agents, who often turned over confidential information of bids to their clients or used them to enter lower bids in their own names, said a review of the findings issued by Assistant Attorney General Huston Thompson, in charge of the prosecu tions By representing several eompeti- tive bidders at the same time. agents sometimes boosted prices in the same way conspiracy would have done, EYADED REGULATIONS
 To eyade government regulations in- tended to eliminate middlemen in bid ding, the agents sought to have manu-
 lecturers consider the brokers offices | branches of the manufacturers busi- ness, supply the agent with letter heads and authority to represent the contrac- tor direct.
 Some letters to favored clients" said
 the department of justice announce
 ment. contained promises not to put in bids for certain other concerns rep
 resented by the agent, nor put them in touch with the business if the favored client desired to bid.
 ANOTHER SCHEME Another favorite scheme was to get quotations or options from several man
 ufacturers, who were thus eliminated | from direct government bidding. The agent, with the advantage of this price knowledge would then bid in his own name and if awarded the contract pro- ceeded to fill it by exercising the option | given by the manufacturer who quoted | the lowest price to him. The benefits of
 competition were thus appropriated by
 the agents instead of resulting in low prices to the government.
 | Under another plan the agent pro. cured bids addressed to the government
 from several concerns. These prices | 1 bidder, who presumably paid the arg- est commission, so that he could revise ! his bid before 1t was submitted to the
 government by the agent along with I those of the competing clients. "In some instances the agents ara
 said to have put in their own bid in
 competition with their clients, thus
 playing sure for either profit or 1 commission.
 NO SPLITTING" l "One out of town concern wrote to | their agent that they would pay him a the understanding that he would not
 give the government lower price than Stipulated In other words, there was
 to be no commission splitting in favor l of the government.
 1 Letters sent to manufacturers by | the agents recite the governments de- l sire that all contracts De made directly with manufacturers and say that of hcials are frowning upon dealers job Ders,' and mddlemen ana fur this req son we are gradually discontinuing the practice of bidding in our own name. J They suggest that the brokers of- flee be made a branch of the factory, handle all business in the manufac- tures name but on commission basis, the business to be transacted on the
 manufactures stationary by the com mission concern, and all mail for the manufacturer to be addressed to him at the brokers office,
 They ask for supply of the manu- facturer's letterheads and state that one of the first things they will do will be to circulariZe government purchasing officers, with whom we are in touch.