The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-18
for the financial management was

for the financial management was
found.
You took Charles NJ schwab to con-
struct ships. He was a driver of men
and not an accountant. He got con-
tracts and pushed them. leaving the
accounting TO the proper division. Sim
ilarly you took =. a. S. Franklin to d.
rect the operation OF the programme.
Here, again. was a man familiar with
his work, able TO lay down fundamental
principles and a safe working pro-
Sramme, but no man with the account
ing ability TO take care Of the huge sums
appropriated had been found This could
and should have been done. II the Gov
eminent had gore 10 Judge Gary and
told HIM the Government was at war
and wanted. not Judge Gary himself. but
his very best comptroller, then man
With the experience and the ability
would have been produced"
Huge Profits Permitted.
Mr.. Glllen testified that owners Of
ships requisitioned by the Government
in 1917 were allowed to make profits far
In excess OF what this country allowed
other industries 10 make and far in ex-
cess of what Great Britain allowed her
ship owners whose ships were COM
Wandered in the emergency.
Under the present valuation of ton
mage, he said. IL is Impossible for this
country TO operate an efficient merchant
marine. He said the price OF ships
should be cut 10 l25 a dead weight ton
and sound investment market for ship
ping organizations created by establish
ing fair value for tonnage. The pres
ent rates were fixed by Congress and
not by the Shipping Board. i.
The American people fail to realize"
said Mr.. Gillen, that they have amor
tied more than 100000 900 of the
value OF these ships built as a war
emergency when a bridge OF ships was
demanded. A loss must be accepted
due TO the emergency under which they
were built. the same as it Is for unused
powder.
THE market for ships is not what it
was In December. Al that time II they
could have been sold at d fair price be-
tween 800 and 500 ships would have
been absorbed by the American market
This Government must bravely meet
the conditions and sell the ships at mar
ket prices, the same as Secretary Hous-
ton is advising Americans to do with
other commodities"
The Government also faces loss, Mr..
Gillen said. on the ships which were
sold shortly after the armistice to
pioneers" for about 5000 per dead
weight ton. Since then these owners
have made no profit because of the fall
in freight rates, and the Government
has sold othet ships for s125 per ton.
The pioneer opera tors face ruin and
the Government faces a loss because the
ships were not sold outright. but on the
instalment plan, and II the firms ar.
bankrupt the Government will have the
old ships thrown back upon its hands.
Found Funds i'm Eight y. Y. Banks
Mr. Gillen described himself as an ex-
pert in the reorganization OF large BUSH
ness enterprises until the war started.
He Joined the War Industries Board
then he said, and furnished the basic
principles OF industrial mobilization
which were instituted by Bernard NJ.
Baruch. After g year he accepted a po-
sition with Judge Payne on condition
that he would be unhampered in his
work and answerable only TO the CHAIR
man.
In the fall OF last year, Mr.. Gillen
said. he discovered that of the 5000
voyage accounts only eight had been au-
,lited since the beginning of the war;
and that there were no data by which
the Shipping Board could determine how
much of it's funds was in the hands OF
ship operators or where those FUNDS
were. He made a hurried trip TO New
York in October. he said. and found
that eight banks held S21,25ooOO OIL
Shipping Board funds. He learned that
many ship operators were maintaining
bank accounts with Shipping Board
money in their own names. He esti-
mated that these accounts would total
five or six millions more.
Upon learning these facts. he said, he
recommended to Judge Payne that
changes should be made in the account
ing system. II was then that the force
of 800 accountants was put TO work TO
trace the funds. BY February l. 1920.
more than 1000 of these accounts had
been audited They showed that the ex-
cess funds In the hands OF the ship
operators were s120.0O0.0G0, none OF
which was shown by any records until
the work Of bringing the accounts up TO
date was undertaken.
Since then, Mr.. tiilien said. the Ship
ping Board has maintained a central
fund of $4,000, 600 for emergency uses
Of the 176 ship operators throughout the
country.
Mr.. Gillen testified that since its in
ception the Shipping Board has handled
approximately $3.50 100000. This rep
resents Congressional appropriations of
s3,i50, 100000 and s400.0o0,oo0 collected
for wartime cargoes. or this total. he
said, some s50.000,000 remains in the
hands Of the Shipping Board.
Defects Revealed by Claims.
The witness said the Emergency Fleet
Corporation had to take care of and
disburse appropriations from Congress
amounting to s3.204 900, 900. He said It
MAS necessary to have accounts of cash
advanced 10 shipbuilders money paid TO
ship owners on requisitiored vessels AMI
separate accounts for lgoor and al
classes of material.
Shortly after the books were opened.
he said, they We're all taken 10 Phil l.
dephia. Meanwhile final contracts
we're being entered into at Washington
while an enormous constructio.. pro-
gremme was going on at Philadelphia.
looks also were opened In the thirteeh