South Bend news-times. (South Bend, Ind.) 1913-1938, 1918-12-20
International News Service :

International News Service
WASHINGTON. Dec. 2O.-A dis
closure Of mismanagement and ut
ter chaos in the construction OF the
Hog Island ship yard at Philadel-
phia, tending TO show a waste Of
millions Of dollars OF government
money was made in the report OF
the department Of justice in its in
vestigation of the Hog Island yard.
which was submitted to Pres't Will
son by Atty. Gen. Gregory on Sept.
21. last, and made public today.
The outstanding fact of the in
vestigation. says the report, IS that
the estimate of Emergency Ship
building Fleet corporation, builders
of the Hog Island yard, on oct. II,
1917. that the yard would cost S21.-
100000 and the corporations esti-
mate on Nov. p, 1917, Of $4,000
600 have been so far exceeded that
the probable cost of the yard viii
be about S61,0OO.OO0. The latter fig
ure includes S6,OOO,OOO additional
work authorized on the yard by the
Emergency Fleet corporation since
April /, 1918.
Fundamental MisCaIculatiOn.
Under the terms of the contra ct
made between the Emergency Fleet
corporation and the American In
ternational Shipbuilding corpora p
ton, the yard and the ships were TO
be built by the shipbuilding cor
poration with funds supplied in ad-
vance by the United States shipping
board.
Such a discrepancy must be due
to some fundamental miscalculation
in the original estimate, 10 super
vening conditions. including the en-
largement of the plant. 10 misman-
agement in operation, or TO a com
binatiOn Of these factors. A discrep-
ancy of this magnitude would seem
10 call for a clear explanation from
the American international Ship
building corporation; but this has
not been furnished, the report states.
Unwritten obligation.
Although the terms OF the con
tract for the construction of the
Hog Island yard. entered into on
Sept -. 1917. was made between
the United States shipping board
! Emergency Fleet corporation and tho
4 American International corporation
there was an unwritten obligation t'
I consider the Store and Webster CO.
and the New York Shipbuilding cor
poration az Jointly interested In the
. go
and a second corporation, the Amer
lean international Shipbuilding cor
poration was organized as tho
agency through which the yard and
/ the ships were 10 be built. the re-
port points out
However. i'm spite Of reference
by L. 8. senator's and congressmer
to the Hog Island project as a "na
tionaI scandal" II Is the conclusion
OF the report that the facts brough'
out do not Justify criminal prosecu
/ tion Of she parties concerned. as SCI
forth in the report by @ Carol
Z Todd assistant TO the attorney gen
eral. and Mark Hyman. special as
sistant 10 the attorney generl. VIII,
conducted the investigation.
No Big Fraud shown
"Our conclusion" says the repor.
"is that no fraud or secret profit
on the part Of the officials Of eithe'
the agent american Internationa
Shipbuilding corporation or th'
Emergency Fleet corporation ha
been established. that while Their
were some minor frauds on the pay
roll. which have been prosecuted
the 1aborers. laborers' time keeper
and payroll supervisors were in hi
main honest"
The report recommends that
board Of experts should SIT as a trl
bunal 20 determine whether or no
the money spent by the American
International Shiphuilding corpora
tion in the construction OF the Ho.
Island yard was necessary. with tn
view OF demanding from the Ameri
can international Shipbuilding cor
poration payment 10 the governmen