The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1918-12-20
HOG ISLAND SHIP YARD
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press reports that the program IS Iali>
ing behind schedule and calling atten-
ton to the fact that the report was
based upon conditions as they appear
ed early in July.
General Manager Piez, of the Emer-
gency Fleet corporation, appearing
Thursday before the senate commerce
committee testified that the Hog Is
land yard would be competed IN ABOUT ut
sixty days; that the cost would De
about $63,300,000 and that the plant
had delivered one ship and laid fifty
keels.
The department of justice investiga-
ton was made by two assistants to
the attorney general, G. Carroll Todd
and Mark Lyman, beginning last
February when President Wilson ask
ed the attorney general to get into
consultation with Chairman Hurley of
the shipping board about the whole
matter with a view to instituting
criminal proceedings in case the facts
Charged Graft and Waste.
Charges of graft and gross waste
had been made in an inquiry con-
Quoted by the senate commerce COM
mittee, and Mr.. Hurley had written to
the president and to Mr.. Gregory say
ing there was Serious disorganization
and negligence at Hog Island" and
that he desired the aid of the attorney
general in investigating conditions
The two assistants with the aid of two
naval technical advisers, Civil Engi-
neer Archibald L. Parsons and Naval
Constructor S. NJ. Henry and a force
OF special agents investigated from
February until July and then prepared
their report, which was sent to the
attorney general under date of Sep
TENDER II. Mr.. Gregory's letter of
transmittal to the president is dated
September 81. Since then there have
been demands in congress for publica-
ton of the report. The understanding
has been that publication was delayed
pending an agreement between the de-
Hurley as to the causes of delay as
shown by the inquiry.
The report describes at the outset
the contract entered into by the Elmer
gency Fleet corporation on September
IS, 1917, under which the American
International Corporation of New
York agreed to purchase SAG acres of
| land at Hog Island to be utilized for
the purpose of the contract upon a
6 per cent rental basis, to build on
this tract with funds furnished by the
Emergency Fleet corporation, a ship
yard OF fifty ways and to construct
| with funds supplied from the same
source fifty or more steel cargo ships
at an estimated cost of s1,1O0,O0O
each. The agreement was. that upon
completion of the ships the fleet cor
| poration might purchase the land at
cost, failing which the contractor
| might purchase the plant at a value
to be fixed by appraisal, falling which
| the government would scrap the plant
! and remove it.. The estimated cost OF
constructing the yard was 21,000,000
| On October 23, the fleet corporation
| placed an order for seventy additional
steel ships. estimated to cost $3.50
900 each. calling for longer ways and
piers and also more shop and storage
| capacity.
| On November 81 the contractor re-
| vised the estimate of yard construc-
ton cost. adding $2,750,000 on &C.
count of unfavorable subsoil condi.
lions. costly labor and necessary ex-
| tensions of the plant. On May ar
order for sixty more ships to scost
$13.425,000 each was placed. All OF
the 1870 ships were to be completed
| by August 4, 1919.
Build on a Per Cent.
| The contracting company's com
pensation for building both the yard
and the ships was fixed at a percent
age of the estimated cost of the ships
| with premiums for early deliveries OF
savings in cost and penalties for de-
! layed deliveries or increased cost
The maximum fee under this arrange
ment would be $14,440,000 and the
minimum $s,910.O00 Mr.. Piez testi-
| fled that to date the company had
! been paid nothing.
Altho the contract was made with
the American international company
| the report says there was an I'M
written obligation publicly admitted
by all parties to consider the engin-
eering firm of Stone and Webster and
the New York Ship Building corpora
ton as Jointly interested in the bene
fits and burdens. A separate corpor-
Tx,*@
Ship Building corporation was organ
lied as the agency thru which the
yard and ships actually were to be
built.
One Great Big Dream.
In a section on the status of the
yard later modified by the letter t.
the attorney general the report say.
in Jess than a year after the date o.
the contract 846 acres of marsh lane
without railroad facilities will be &
complete Industrial city of thirt,
thousand men. served by two trunl
lines of railroad and equipped to de
liver to the government two com
each week" Speaking of difficultie
encountered blockade of car
loaded with material extending from
Philadelphia to Norfolk, is described
The report tells in detail of the vas
work involved in the investigation. o
the questioning of everybody from
high officials to axi-drivers, and o
the examination of thousands of books
bills. diaries and other papers. It re
cites at length the charges mad
against the,contractors and answers O,
which the investigators do not attemp
to pass judgment.
As to Criminal Liability.
This is the conclusion as to Grim
inal liability:
I'm response to the question sub
mitted by the president our conclusion
is that the facts do not Justify Grim
inal process; that no fraud or secre
profits on the part Of the officials O
either the agent or the fleet corpora
ton has been established; that Will
there were some minor frauds on tn
pay roll, which have been prosecuted
the laborers, laborers' timekeeper
and pay roll supervisors were in tn