The Washington herald., 1920-11-10

TO HENDERSON,
Shameless Waste. Ineh-
cheney and Corruption"
Specified IN Report.
EMPLOYEES INCLUDED
Probe Committee Clerk and
Board Investigator Bare
Vast Alleged Wrongs.

Charges Of the most fragrant graft
and corruption are made against
some -oficisls and employer Of the
United states shipping Board. and
shameless waste. ineficiency aud
general maladministration are al
legged aaginst others in a report to-
the special walsh committee OF the
House now investigating the opera
ton of that organization. made pub
lie here yesterday. The charges
made In one instance thst ships
were even scuttled.
The magnitude Of the operations
Of the board can best be understood
when IL is stated that during the
period from 1917 TO the present time
covered by the investigation. the
Shipping Board employed almost .
quarter Of a million men and ex-
pended in the neighborhood OF
s3.5oO. 100000.
So appalling has been the general
detailed mismanage ment during that
period that the waste according 20
the Investigators is simply beyond
computation and unless the most
sweeping records are put into pra<-
tice at the earliest possible moment
Il will be useless IL Is stated for
Shipping Board vessels 20 attempt
to compete with privately owned
merchant ships throughout the
world.
Fer Fsrther Investigation
The report is the joint work OF
A. n. Fisher. clerk and statistician
~ n. n
Richards~n. formerly a member OF
the department OF investigation Of
the Shipping Board. IL will be used
by the House committee as q basis
for a further intensive investiga-
ton.
Vast as Is the scope Of the re-
port IL covers only seven phases OF
the activities OF the Shipping Board
Fourteen other general phases.
Fisher states. are left uncovered A.
they include such important opera
tions as 'fcommandeered ana re-
auixiticned tennaze. .0ersnan-knrcr1-
can deals technical errors in con-
ktruction. purchase of alien tonnage
and criticism thereof" etc.
while I desire TO give the United
States Shipping Board fun credit for
its accomplishments of having con-
structed and launched under ab-
norbal and adverse conditions such
a feet as IL did writes Fisher. Il
feel that this task 10 fully equaiIed
by the prohlera'now confronting the
Shipping Board OF creating ana
nourfshtng an American merchant
marine"
This report is not designed to
deal with any question from the
standpoint OF legislative action. but
with problems which can be solved
wholly by the Shipping Board it.
self.
@PreofsS Available.
with the assistance of Richa rd-
son, personnel OF the Shipping Board
and others. witnesses and docu-
mepts can be produced TO prove
each Of the allegations made in this
report and multiplied to prove the
alleged conditions TO be general. II
is not the intent to undertake proof
such as would be necessary in a
criminal Investigation.
Il desire to acknowledge ana to
express appreciation for the cour-
teous cooperation given me as rep
resentRtive OF this committee BY
the Shipping Board oficials and en-
ployes"
During the period covered by the
Investigation the Shipping Board has
had no fewer than four chairmen.
william Denman. of California: Ed
ward n. Hurley and John Barton
Payne, OF Chicago: and Admiral
william S. Benson. None OF them
are mentioned In connection with
the charges.
Many other oficials. however. are
accused. although no names are
mentioned. The specific statement
is made that Instances" OF favor
itism can be shown where political
influence. or influence through Of
ficials of the Shipping Board them
selves. resulted In the assignment
and the ALLEGATION of tonnage to
companies with which the offcisls
were or had been associated.
Ge.ersi Phsste Cescer.ed.
The general phases Of Shipping
Board operations treated in the re-
port are: Repair yards and practices:
ship supply service ALLEGATION OF
tonnage to private companies: man.
aging and operating agreements;
ship building contracts and settle
fneutss tne snip salet program ana
charters. rates and trade routes.
One Of the most serious situations
appears to have grown out OF the
fact that the Supreme Courts Of
Pennsylvania and Distict Of Coium-
bia have held that the Emergency
Fleet Corporation Is a private cor
porstion. This excludes the mana
gers and operators from the status
Of government agents and makes in
teriockingownership or contracts by
operating companies In repair. ship
chsndlery, stevedore. fueling and
supply companies beyond the pur-
view OF the penal code.
As a result says the report. many
Of the managing and operating COM
panies have pecuniary Interests In
and derive revenue from supply or
service companies and thus In the
operations Of shipping Board boats
make contracts with themselves. ap-
prove their own bills. and set up q
condition under which IL is not i'm
perative that the manager or opers-
tor make an actual profit from the
transportation OF csrroes. fnasmuch
as he can from his monthly agency
fees plus profits accruinr him from
the subsidiary compsnies make ex-
ceiient revenue even though the
ships operation show q loss
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