The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1920-11-17
Board Had No System Of Book
keeping, According to
Investigator.
COULD NOT TRACE MONEY
Officials Unable to Determine
Whether Profit or Loss
Resulted.
BY FLOYD MacGRIFF.
international News Service.

NEW YORK, Nov. II. The
United States Shipping Board ex-
pended nearly $4,000, 100000 on
Americas shipbuilding program and
earned nearly 100000, 900 by its
operation Of Government-owned ves-
sells, but it had no system Of account
ing for these stupendous sums and,
up to February 27, 1920, never knew
where it stood financially, according
to the testimony offered the Con-
gressional investigating committee
today by Martin J. Gillen, of Racine,
Wis.
ACCOUNTS WERE LOST.
Gillen was formerly associated
with the War Industries Board and
was special assistant to John Barton
Payne. when he was bead of the
Shipping Board. --
la qif1en cited one instance Of where
fiAyate shipping companies derived
FN4zA0o.000 from the operation of
GoS6fnment-owned ships which he
said became lost" so that there was
no record Of 1t at Washington.
Private shipping companies so tam
gled their accounts that the Ship
ping Board had no accurate idea of
whether there had been a profit or
loss on the operation of it's ships,
Gillen testified.
ION October 8, 1919" he continued.
1--WE started a drive to ascertain
where the Shipping Board stood.
Some 900 clerks were put to work
disentangling Government accounts
from private shipping firms books.
NO ACCOUNTING SYSTEM.
"There was no record at Washing
ton of the excess monies received by
private ship operations from Govern
ment ships, amounting, we ascer-
tanned, to 3120.0O0,00O.
"There was no system OF account
ing at Washington on October ]. 1919,
to show where the money was, and no
system whereby information regard
ing this money could be traced"
STARTLING TESTIMONY.
Startling testimony as to the lax
methods of handling huge sums was
placed before the committee by Gill;
len.
eve found" he continued. chat Of
5000 voyages made by Government
ships, there had been audits on only
eight of these.
1--WE know there were vast sums
from these voyages belonging to the
Government. but there was no reco'd
Of them in the United States Treasury
or the accounting department Of the
Shipping Board.
81 came to New York. and at eight
Of the twenty-seven banks where
shipping board funds were supposed
to be deposited found there was sell
CT 90 hinh rria
private accounts, and not in the Ship
ping Boards name; and that interest
varying from . to 81 per cent was
being paid.
Later we found that in all tho
New York banks there was about
S35 100000 being carried OF shipping
board funds. One tenth of this sum
would be sufficient.
S25.oOO,O0O FOR ONE FIRM.
Our audit showed that one shipping
firm had on it's hand S25OO0, 900 OF
the Shipping Boards money.
Gillen said that $4,000 600 900 had
been appropriated for the Govern
ment's shipbuilding program and
that to this amount should be added
the s40O, 600. 900 receipts from OPP
Grafton of the ships built.
"All of this $4,000 000,0 900 except
Gillen said.
Concerning the item of tho s1o0 600 q.
900 which became lost" Gillen said
John Barton Payne instituted a
search for 1t, found II and then es-
tablshed a weekly auditing system
whereby some track was kept OF tho
Shipping Boards vessels, which were
operated by 127 companies.
THREATENED PROBERs.
Threats Of death were made
against Investigators of Shipping
Board operations. This was testified
yesterday by william II. Morton.
Morton was an agent of the boards
depa rtment OF Investigation. A mere
mention Of the fact was made by him.
but he named as one who had been
threatened John L. Richardson, n
committee Investigator, who had
part in making the long report OF
corruption.
Richardson was a department OF
Investigation man when the threats
were made. While he was engaged
In raking over deals in Charleston.
s. C., to collect evidence OF fraud
ana graft, there were reports that
he would DE done away with" II he
went on with any "clean-up."