The Washington herald., 1918-02-09
U. S. SHIPPING
BOARD FACES
new SHAKE-UP
Amazing Revelations Of Lax
Methods Bring Announce
ment from Hurley.

Senate Commerce Committee, at a
secret session late yesterday. 1t
has. he said. the approval Of the
President.
Declining to make public details,
Chairman Hurley said the principal
innovation would be bringing new
shipbuilding experts into the or
ganization.
He left the committee to hurry
to an appointment, he said. with the
men whom he has asked to help
him.
Planning Details.
Announcements of names and
plans are to come today.
Hurley saw the President Tues
day night of this week, following
the Cabinet meeting, and laid his
plan before the Executive. Its gen.
eraI outline having been approved,
he worked out details, and laid the
whole proposition before the Senate
Committee yesterday. No legisla-
tion or Congressional action is
necessary.
1t is understood that half a dozen
zones" will be created, with the
leading builders of the various dis
tricts having large powers of super
vision. Districts probably will be;
New England. Central Atlantic
States, Great Lakes. Gulf States
and the Pacific Coast. A separate
control may be provided for the
extensive wooden shipyards Of the
North Pacific Coast region.
Hurley caught the committee COM
pletely by surprise. All day long
they had probed into the Hog Is
land contracts. exposing half a
dozen new leakages of money, and
developing that only five Of the
fifty ways there are even approach
ing a condition where ships can be
built on them.
At the Bristol, Pa, yard. it was
testified. none of the ships can be
launched because they draw twenty
feet of water, and there is but
twelve feet depth in the Delaware
River. Dredging operations Are
under way.
Commander Paul L. Reed. a navy
officer assigned as government super
fntsndent of the works, was another
witness.
He declared he had instructions not
TO interfere with the contracting COM
pGny oftener than necessary. He said
not one contract which the company
He admitted that the government had
accepted the company's estimates Of
81, ,OOO.OOO without preparing one Of
its own. Inspection or piling and other
materials, he testified, was left ''rIain-
Iy'' to the contractors employees.
Asked the theory of what Senator
Harding called this remarkable ar
rangement." he said the government
had believed it could get best results
by giving wide authority to private
concerns, and holding them to respon-
sibiIity.
No Fixed Responsibility.
He admitted that no responsibility
had been fixed, however. which would
prevent the government from vast
money losses His estimate was that
the yard would be completed for S42,-
10000. as against half that originally
estimated.
Senator Vardaman-"The govern
ment paid all bills and there was no
attempt at economy"
Reed-''It is true that economy was
always a secondary consideration"
Nelson-''You tied up thousands OF
cars of freight; you employed hun
dreds of men you couldn't use. Now,
why2''
Nelson-"I didn't ask about we
What did you do to stop it?''
Reed did not answer.
Hired Everybody.
Senator Fletcher-when did too
many men begin to be hired?
Reed-At once. They hired all who
came They ordered material far in
advance. 1 didn't feel in a position to
stop them. The government wished
to leave the job to them.
Esrdaman-Many were absolutely
unframed?
Reed-Yes. but much work was
common labor.
He said a macadam road had to be
built to the island. the rough piles of
dumped gravel graded. and plank
roadways laid. To Senator Johnson's
insistent queries as to what interests
the American International Company
no answer. The government, he said,
is paying per cent rent annually on
its S1.7O6.OOO valuation.
Senator VardamaR asked il its
whole value did not depend on a gov-
eTnment shipyard being located there
Reed answered Delaware River prop
eTty was increasing in value.
Due to a policy of starting fifty
shipways all at once, he said, the
whole plant was thrown into confu-
SION He admitted there are today
only fve Of the fifty ways even near
ing completion. He said there were
twelve on which nothing had been
done. and the Shipping Board had or
dered work on them stopped.
Can you tell if material was
largely bought from firms which
have interlocking directorates with
the contracting company"
Bids were always asked"
They selected thes ffrms?''
We made suggestions. We could
and did"
Who made original estimates OF
eost?"
The shipbuiIding company
Ne Government Estimates.
The government made none it,
self. separately
NO"
Let me have you repeat that
The government. called on to pay
all bills. made no estimates of its
own"
True"
Can yoa name one instance whese
original estimates were spproximated
h final costs?"
cosrSuED On PAGE TWO.