New-York tribune., 1920-11-17
Investigator Tells Walsh
Committee Government
Settled with Two Firms
for the Same Contract
Colby Had Report
On Bad Conditions
Contractors Charge $25 a
Ton for Water Costing
9Oc.; SOL for Hinge


vestigating operations Of the Ship.
ping Board and the Emergency Fleet
Corporation heard further testi-
mony yesterday which revealed al
legged waste and ineffiQiency in the
management of the board. Wit
nesses testified to the deterioration
of S1,500,000 worth of Shipping
Board machinery in plant at Sa-
vannah, Ga, which they said was
due to carelessness; the double pay
ment Of bill of $623,OOO to a yard
on the Pacific Coast, and loss of hun
dreds of thousands of dollars to the
government because of Indifferent
business methods. The committee is
in session at the Federal Building.
The name of Secretary Of State
Colby was brought into the inquiry
by John T. Richardson, an investi-
gator for the committee, who
charged that Mr.. Colby, while d
trustee for the Shipping Board dur
ing the war, received a report show
ing general incompetence in the ser
vice, but failed to act upon it.
The man who charged wanton care
lessness and disregard of the govern
ment's interests in permitting deterior-
alton of valuable machinery and equip
ment was Paul H. MacNeil, formerly
resident engineer of the Shipping Board,
with headquarters at Savannah, Ga He
said he was in charge of five yards in
Savannah, among them that of the
Terry Shipbuilding Company. While
there, he said, he learned that the
Terry company was using government
funds, loaned to it by the Fleet Cor
poration, in maintaining the Savannah
Dry Dock Company, subsidiary cor
poration, which, MacNcl said, was in
solvent. The witness declared that he
repeatedly tried to stop this practice.
but each time was told to keep hands
off,"
$4,000 Used by Insolvent Firm
The Terry Company, Mr. MacNcil
said, had a contract with the Shipping
Board for the construction of its plant
and received from the board $5770Oo
for the work. When all but $1l6 900 Of
this money had been expended the
witness testified, it was found that
only 80 per cent of the work had been
completed. He also learned, he said
that the $4,000 was used by the com
pany in keeping the Savannah Dry
Dock Company going. Efforts on his
part to stop this, the witness asserted
were without avail. After consulting
with members of the legal department
Of the Emergency Fleet Corporation,
he said, he was ordered TO put the
$4,000 in charge Of board of special
control and to approve no further pay
ments to the Savannah Dry Dock Com
pany.
This ruling. however, was reversed
by L. 7. Williams, district manager OF
the Shipping Board for the Southem.
district, Mr. MacNel said, and the
Terry Company was permitted to con-
tnue payments TO its insolvent sub
sidiary. The witness added that he
brought the matter to the attention of
II. r. Dillingham;, his superior, at
Jacksonville, Fla, and was informed
by the latter that the whole matter was
the concern OF the main Office of the
Emergency Fleet Corporation Mr.
MacNei said that he made it clear to
Mr. Dillingham; that the Terry Com
pany was making loans to its sub
sidiary from government funds at q
time when it did not have enough
money to proceed with the work on its
own government contracts and was an
applicant for an additional loan OF
100000.
In all the Terry Company turned out
four composite ships and two tankers,
he said, while the National Shipbuild
ing Company, another Savannah cor
poration where he was in charge, the
witness said, had built not more than
two hulls and completed 19 per cent
of one and 80 per cent of another on
government contracts when it was
closed down.
Says Only One Contract Was Honest
1t was the opinion of the witness
; that only one of the FIVE contracts let
at Savannah for the construction of
ships for the government was abso-
lutely honest. The one exception he
named was the Southland Company.
which constructed several tugs Cor the
Emergency Fleet Corporation.
When the National Company plant
was closed down, MacNeil said, he MADE
an examination of the plant and found
it in a dasorderly condition, with huge
quantities of machinery and valuable
equipment scattered about on the sand
in the neigh borhood Of the plant, ex-
4 posed to the effects of the weather and
rapidly deteriorating. He said he es-
timated the machinery and equipment
4 to be worth between $l,50o00o and
r s2,000,000 He said he requested au.
3 thority to care for this machinery but
none was given him. MacNeil said ad
: ditional supplies arrived after ths
|. plant had been closed and efforts or
e his part to hsvs these returned were
s frustrated.
G There was half a yar3 fu,l q =.
covering two acres" said MacNeil. "Foi
all know it still may be there. That.
! the way the Fleet Corporation dis husi
ness. just imagine, I could no. .ge