New-York tribune., 1920-11-30

$500 to Boiling in the form of loan,
but actually as part of his share Of
5000 in the alleged graft Sisler, so
Sands testified, received $1,000 as his
share, also in the form Of a loan, but
tie gre..ter part Of which never was
repaid. Boiling a.d Sisler have en-
tered denials to the charges made by
sands.
Testimony was presented to the COM
mttec yesterday to the effect that 10
per cent Of the $1,000 900 repair bills
OF the Shipping Board in the South
Atlantic district was craft The charge
Wa made by Charles Banzahf, Il trav-
eng auditor for the board out Of New
orH- 1t was presented bv the Wit
ness originally IN q letter to the gen
srat CONN roller Of the board asst July.
lhs letter was read into the record.
The graft, the witness testlned. was
factcec IN various forms, such "a
lack OF inspection, failure to check UP
repair work, overch argos for materials
and labor and unnecessary work The
witness cited a case Of rcDair en-
glneer who, he said sat in a pilot
house and approved bills on repairs
~nlch ne had never examined. Ghe
"iAtS, tuc WItHeeS OCCllrCI amounted
TO thousands of dollars"
Instructions to Inspectors
inspectors, Banzahf said had been
told that costs were none Of their
business, and the general principle in
operation seemed TO be not toa cut
down repair work.
Two of the former German liners
seized by the government during the
war were brough, INTO tnc test mony
~ the witness. He asserted that he
had been instructed to audit the ac-
counts on the reconditioning Of the
former German liner Hamburg. now
the New Rochelle. This ship. he said
was sold to the Baltic Steam ship Cor
poration Tor approximately ScS5, 900,
and the sum of 100000 was advanced
by the Shipping BOARD to cover ox-
penses Of reconditioning the vessel.
The bill of repairs. however. the Wit
ness testified. amounted to S1,500,O0O
which an audit account reduced by ap-
proximately 1897 900
He could not explain the difference
between the price of the shin and the
cost of rcconditioning, he said. until
he saw the original contract He said
that efforts made by him to obtain a
copy of the contract have thus far
proved fruitless. He understood, how
ever that new contract was being
drawn up for the sale and operation
Of the ship. The reconditioning work
On the vessel. he said, was done by
the Moran Engineering Company, of
Jersey City.
Auditing Called Difficult
He said that he found it difficult to
audit the company's books because he
could not obtain certain necessary in
formation, among them labor time
cards which, he said, he was Informed
by the company had been destroyed
AS early as six or seven months ago,
the witness asserted, there were many
Irregularities in repair work in New
York yarDs. These Irregularities, he
testified, included charging OF hundreds
of hours of labor never rendered, eX-
cesses of class labor, excess in mate
rials and other abuses. One of the
bad features he said, of the existing
agreement between operators and the
Shipping Board was that port engineers
OF operating companies acted as in
spectors on work which is ultimately
paid for by the government
The wooden ship problem was en-
tered into by Eads Johnson, another
witness, who was district officer for the
Emergency Fleet Corporation in 1917
Johnson condemned the wooden ship
idea as wasteful and impracticable and
said that he resigned his post in the
fleet corporation in protest.
Describing his experience with Ger
tain contractor at Savannah who want
ed to build fifty of such ships, johnson
said that he seemed to be of the idea
that it would be advisable ito build
1000 wooden ships because it would
take 1000 German torpedoes to sink
them"
Many Eager for Contracts
The witness asserted that when the
wooden ship program was first promUI-
gated he had 155 applications for con-
tracts q week This was so, he said, as
long as the contracts were to be let on
the cost plus basis. No sooner, how
ever, than the contracts were put on a
lump sum basis, he said than the
applications fell off to very small
number.
According to the testimony Of George
Watt, manager of the Eastern division
of the sales and warehouse section of
the division Of sales and supplies, the
government is now selling surplus ma
terial to the amount Of S1,000,000 a
month. The total surplus material Oh
hand, he said, amounted to about
ppp,NOO wv, ~ tidC IL Will tdhc dDOU-
eighty months, or approximately seven
years, to dispose Of all the material
The pay roll Of the government or
these sales, he testified, amounted to
about 100000 year.
Ro' ert Laggren, head Of the depa rt-
ment, testified that he hoped to IN
crease the sales to such an extent as
to dispose OF all the material within
one wear by making sales Of entire
projects. He explained that if any loss
is suffered by this form Of sale it
would be more than overbalanced by
reduced overhead expenses Of holding
on for higher prices by sale in small
lots.
TIE hull removal contract entered
into by the Shipping Board with George
+. Rogers. upon which suspicion was
cast by the original report Of the
commsttee's Investigators was de-
tended by Mr. Leggrcn. He sale the
contract was "a fine stroke Of business
for the Shipping Board Under the
contract Rogers was paid $500 each
for removing uncompletcd Fu1ls from
private ways and was permitted to sell
them at whatever profit he could Mr..
leggren declared, that the government
could not have disposed Of the hulls in
any other way without incurring great
expense. Some bids, he said, asked
from $4,000 to $4,000 for removing
each h~'l.
Wreckage of Barge Lost