The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-10

eoast, ne said, custom exists under
which all marine repair firms make
charge OF IS per cent of the total bill
for "exigencies Of God and uuforeseei
circumstances" In addition to the o.
Ger cent. allowed FOR overhead and prof.
and the 10 per cent. allowed for the pus-
chase OF materials needed in making the
repairs This form OF excess profits. ne
said. has been done away Wits on the
Pacific coast since the revelations OF the
scandals existing there.
Mr. Rich rdson made II clear that the
conditions ne described not only existed
more than a yeal ago but that they are
becoming worse every day. Inspectors
who have made reports tending Ia show
that the system was shot throf sh with
corruption have been forced ont OF the
scrvice. he said. and incompetent assist
ants have been kept
There was one auditor" he said
whose only bookkeeping experience was
gained when he once kept set OF books
for a bartender in Texas town. This
individual is still in the employ OF the
Shipping Board and is drawing u salary
OF Sc. 900 a year
AR Richardson testified that the re-
ports of his investiga tons were called
10 the attention Of members OF the Ship
ping Board and TO Edward ~ Hurley.
John Barton Payne and Admiral W. ;.
Benson during their terms as chairmen,
Some OF the reports he said. were made
in person TO Mr.. Hurley and Admiral
Benson. Many of his reports. he said,
cited instances of fraud in the relations
between contractors and the shipping
Board.
Some of these cases were prosecuted"
he said. but many OF them were lost
because they were not brought to trial
on proper charges There are several
cases pending against private con-
tractors"
Defective Forging CamounaGed.
foundry company in the middle
West. he said, was under contract to
furnish the Shipping Board with forg-
ings. These forgings were to have been
put through a test by drilling hole
one-baIf inch In diameter and 1--WE inches
deeT When this contractor was placed
on trial in Cleveland a few months ago
II was revealed in the evidence that a
hole two inches in circumference and six
inches deep would be bored in defective
forgings and in this hole would be in
serted steel plug. The plug would be
treated and the test hole bored in it's
centre with ease. The forging would
De passed as good and put into n Ship
ping Board ship.
iHlS Hrm, MT. 1tichArdSOn said. was
haled into court on n charge of sabot-
age and the charges We're dismissed The
case. he pointed out, was clearly one OF
fraud, and a conviction could have been
obtained on that charge Incidentally.
he said that the Shipping Board is still
doing business with the company which
practised this deception
To show the danger from defective
forgings Mr.. Richardson said that al
most every day Shipping Board vessel
loses its propeller at sea-
The witness told of another instance
where contractor had strip of steel
forging bearing the stamps OF the in
spectors. These would be cut " and
the approval stamps would be welded 10
the defective forgings and put into ships.
Much of this type of fraud" he said,
rs carried on because of lack Of co.
operation between agents in the field.
the contractors and the home Office Of
the Shipping Board.
"In boiler scaling ease negro BOYS
were employed at ninety cents an hour
by the company which operated in
Charleston and Norfolk. by MIR,
Dewey. These wages were approved
and paid. II the Carolina COMPANY had
been asked to pay these wages out OF
their own money 20 the negro boys they
would have protested =.