New-York tribune., 1920-11-14
New Law Urged
To End Petty
Shipping Graft
Congressional Committee In
vestigating the Board May
Recommend Passage of
Statute Prohibiting Gifts
Witnesses Tell of Deals
One Firm Alleged to Have
Paid $4,000 in u Year
to Aid in Transactions

Legislation that will put an end to
the petty graft practiced in the form
OF commissions and gratuities in the
operation of the Shipping Board and
Shipping Board ships will be recon-
mended to Congress by its committee
now holding sessions in this city, in
the countrywide inquiry embracing
virtually all phases Of the boards ac-
tivities.
1ntimation Of this was given at yes
terday's hearing by Congressman JOS
cph Walsh, OF Massachusetts, chair
man Of the committee, after testi-
mony Of witnesses who revealed the
manifold varieties of "cumshaw," as
the petty graft is called; in vogue in
dealings with employees of the Ship
ping Board.
Among the witnesses were shipping
men confessed to paying, but who
pleaded that unless they had done so
they would have been driven out of
business.
Firm Admits Graft Payment
1t was revealed in testimony that one
firm alone paid out $4,000 in petty
graft within a period Of one year in
the purchase of supplies and charged
it up to "advertising."
Among those who testified was T.
Bowman Bird, president and general
manager of the rd-Archcr Company
of this city. dealers in chemicals; Miss
! Lizzie Moorehouse, financial clerk
o. the concern, and Albert W. Waycott.
sales agent.
Miss Moorehouse testified that in
1913, when her firm did much business
WITH me Shipping Board, it paid con-
s'tcrah!e sums to Waycott which he in
turn raid out to engineers, captains
az. other employees Of the Shipping
Board as commissions and gratuities,
the amounts ranging from $5 to $780,
Waycott did not attempt to deny this
testimony.
"When you obtained orders from
engineers and others, what did you
90 ?" asked Chairman Walsh.
"Wtll, sonnet mes l would do a lit
tie entertaining and sometimes give
some lnncheons or little presents" re-
piled Waycott.
Asked if there were any standards
for the payment of these gratuities, the
pay SIS on a $40 keg of chemicals and
$40 on $50 keg. This money was
paid mostly to engineers.
Mr. Waycott said that the payment
of such commiss ons and gratuities has
been in vogue for many years, and is
1ractlced on private vessels as we'll as
ships of the Shipping Board
Money Giving. Called Custom
"Do you believe that the principle is
all wrong?" asked Chairman Walsh.
Eyes, it is, but it is simply a case of
when in Rome do as the Romans do"
replied the witness.
Mr.. Waycott told the committee that
the prices charged the Shipping Board
were invariably 1923 cents less than
the retail prices charged for chemicals
in dealing with firms buying smaller
quantities.
Mr.. Bird made no attempt to deny
the payment of "cumsilaw" to en-
ployees of the Shipping Board by his
firm, but said 1--WE simply trailed along"
in the general practice.
"Wc found we were compelled to give
these gratuitics or get out of bust
ness" said Mr.. Bird
would you prefer to have legisla-
| tion passed to make this practice illegal
rather than have it continued" asked
Mr.. Walsh.
"Absolutely," replied Mr.. Bird.
Mr.. Bird said that so far as he knew
the practice was prevalent in all de-
partments of the shipping business.
Robert E. Kline, director Of GALES and
salvage in charge at Hog Island, told
the committee how the intervention
of Congressman in behalf of friend,
who was bidding on certain material,
tod cf oI 1fuU
offer to the board. Kline .estinod that
a bid on 1000 tons or iron and steel,
six months accumulation, which would
have netted the government so cents a
ton above the market price, was re-
jected by the board, probably because
Congressman James A. Gallivan, Of
Boston, threatened to make trouble f
the bid were accepted.
Long Delay Over Bids
Mr.. Kline said that bids for this
material were originally received in
April of this year, but through changes
in personnel and red tape in the supply
and sales division of the Shipping
Board no action was taken until Octo-
ber. The advantageous bid was offered
by one l.. Greenberg, of Philadelphia,
who in addition to Offering a price
above the market figure also assumed
VIC oUlBaIiou VI paying LOT carriage
of the material.
Another bid, received from L. Shan
born, of Boston, made a similar offer,
but one which placed the expense Of
carriage upon the government. All
preparations had been completed to
award the bid 70 Greenberg, Mr.. Kline
said, when telegram was received by
the supply and sales division from
Congressm Gallivan complaining that
his friend, Shanborn, chad not been
fairly treated" and asking that he be
given another opportunity to bid on
the material.
Mr.. Gallivan was informed that the
award had been made on q fair basis
and that the matter would not be re-
opened, whereupon, Mr.. Kline said, ~
second telegram from Congressman
Galiivan was received in which, ac-
cording to the witness, he threatened
to bring the matter UP on the floor Of
Congress and air it in the papers.
Mr.. Kline said that he could not
remember oil the details of what fol-
lowed, since he was testifying from
memory, but declared he had no doubt
that the missives from Mr.. Galliyan
had some influence in subsequently,
changing the mental attitude Of the
Shipping Board officials. although he
would not say whether that was tho
cole reason for the ultimate rejection
of the Greenberg bid.
Eastern District Assaulted