The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1918-02-14
Scandal RumOrs Bring Action
From Nations Executive.
Investigate Outlay of $4,000
600 on New Shipyards.
Sc, 600, 900 PROFITS TO BUILD
Corporation Sublet Nearly En-
tire Job at GOv't's Expense.
Govt Paid All Expenses; Cost
:. Is Double Estimate.

, Washington, Feb. 1.-THE first
government investigation of graft
charges in war work was launched by
President Wilson today.
He sent a letter to Attorney Cen
eral Gregory asking an immediate
probe of conditions at the Hog Island
shipyards where large sums of gov
ernment money are alleged to have
been appropriated to private inter-
ests
Gregory will cooperate in the work
with Chairman Hurley of the ship
ping board. 1t was learned officially
that Chairman Hurley asked the pres
ident to take the action.
For weeks the work at Hog Island
has been under the searchlight of he
senate commerce committee. The
climax of testimony was reached
when George Baldwin. chairman of
the American international corpora
ton. building the yards. admitted
that approximately S6.000,000 in
profits would be forthcoming from the
project
Vanderlip and Armour Stockholders.
You cannot keep corporation
alive on patriotism" he said, when
grilled by Senator johnson, California
holders in the corporation, Frank
Vanderlip, the firm of Stone & Web
ster and ]. Ogden Armour.
Charles Piez, general manager of
the Emergency Fleet corporation.
started the expose of conditions when
he submitted reports to the senate
committee to show that the Hog
Island yard, originally estimated to
cost S21,0O 900. would at the present
rate of expenditure cost more than
twice that amount
The senate committee learned that
the government had accepted all the
estimates of the cost of the yard made
by the American International corpor-
ation. thru which the government is
building the plant. The government
itself. made no independent estimate.
Govt Pays All Costs.
Testimony also showed that the
American International Shipbuilding
corporation a subsidiary of the
American International corporation
actually building the yards. tho the
government has no contract with it.
The governments contract provid-
ed that a per cent fee was to be
paid. on al: ships built in the yard.
This fee, it has been estimated, would
yield tie corporation 100000. The
corporation is furnishing none of the
capital for building the yard, for buy
ing material or for paying salaries or
wages. The Emergency Fleet cor
poration is paying for everything.
Admiral Bowles told the committee
that the corporation is furnishing the
technical knowledge and the organi-
Zat1oE-
Let Job to Sub-Contractor.
The senate committee also devel-
oped from several sources that the
American n-IDternational ShipbuiIding
corporation had sub-let 75 per cent
of the construction work o.: a per
cent fee basis The government is
raying tk:s fee
At least one of the sub-contractors.
il was shown. is an officer of the
American Interns tional corporation.
Several witnesses told the committee
that the work or the yard was four
months behind schedule.
George J. Baldwin. chairman of the
American international ShipbuiIdiug
corporation. denied before the corn
ldittee this week that he expenditures
were excessive in view of the govern
ment order for speed. He also de-
MED that there was any delay in the
work.