The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1918-12-20
Department Of Justice Charges
Extravaganza and Gross
Mismanagement in
Construction.
INVESTIGATION ASKED
No Criminal Responsibility Fixed. But
Recommendation Made That
Further Probe be
Made.

UNITED Press Leased Wire Service.]
WASHINGTON, Dec. 90 Gross
mismanagement and extravagance
permeated affairs of the American
International corporation in building
the great Hog Island ship yard at
Philadelphia, according to findings Of
department of justice investigators,
made public at the white house to-
day. While no criminal responsibility
is fixed, recommendations were made
for examination by experts. The in
vestigators are G. Carroll Todd and
Mark Hyman, assistant attorneys
general.
The report says, officials of the
corporation attempted to justify their
position by explaining thaff they were
forced to sacrifice economics for
speed They claimed also that, in
giving them a second contract, the
United States shipping board had
waived any alleged mismanagement.
But, the increase from 321,000,000.
the first estimate of the yards cost,
to $61 100000 was not accounted for
to the full satisfaction of the inves-
tigators, says the report.
Such discrepancy must be due to
some fundamental miscalculation in
the original estimates, to supervening
conditions, including enlargement Of
plans, to mismanagement in opera
tion or to combination Of these fac
tors" the report continues. "a dis
crepancy Of this magnitude would
seem to call for clear explanation
from the corporation; but this has
not been furnished"
In ten specific charges, the investi-
gators tell the story of how SCI ,000,-
900 was expended in building the big
plant; they reveal how the govern
ment paid two or three times as
much per shipway at Hog Island" as
for building other yards which were
constructed under like contracts, and
under similar conditions.
Employees were brought from the
plants of sub-contractOrs to be placed
on the Hog Island payrolls at greatly
increased salaries. according to evi-
dence gathered by the investigators.
So many men were hired that the
effect was an organized riot" and
the entire organization was disrupted
with unsatisfactory labor conditions
resulting. In some cases, the report
says, the payrolls were so overloaded
that men stood about idle. The
labor turnover, as result ranged as
high as 100 percent a week, the data
showed.
1t is charged that although the
American International was paid "a
very substantial fee for the know
how land was expected to be equal
to the task, it allowed seven weeks
to elapse after signing it's contract
before giving attention to transporta-
tion features Of the enterprise. AS
a result, 1900 cars of freight piled
up in Philadelphia and finally an en-
barge had to be placed against all
freight shipments to that city. Con-
gestion in freight yards, due to the
careless methods, the report says,
was not confined to Philadelphia, but
extended as far as Norfolk. Va.
'In spite Of formal warnings from
the Emergency Fleet corporation and
the railroads." the report says, that
more freight was being ordered than
could be used, officials of the Ameri-
can international disregarded advice
and took the position that they were
responsible for the job and would
properly handle the situation"
When ship yard officials began to
disentangIe the freight congestion
they found that little of the material
they needed at once could be had.
Construction Of the ways, and of the
yard proper, thus was held up for
weeks, according to the report.
Elaborating further the charges of
mismanagement. the report says:
Having failed to make adequate
progress during the first twelve
weeks, when the weather was good,
the corporation sought to make up
for lost time by jamming the work