The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-13
BAKERS METHODS
IN BARGAIN SALES
STIR COMMITTEE
Remarkable, Contract for
Disposal of Harness Barred
at Inquiry.
EX-OFFICER BENEFITS
Heads Company Author
lied to Act as Departments
Selling Agent.
HUGE PROFITS AT NO RISK
Stock Which Cost S13, 900
May Go for 100000
EX-OFFICER BENEFITS
HUGE PROFITS AT NO RISK
Stock Which Cost S13,O0O.OOO
May Go for 100000
House to Get Facts.

House TO GeC factS.
lhks is the eighth OF seTisS Of
,r5icles published by THE NEW York
fIErALp detailing governmental con-
.ltioas la Washington and outlining
prospective legislation TO remedy AZ
fcirs. These articles sCiH be published
rom dag TO dog until the series is
finished.
.pscial Despatch to TIE NEW YohK HERALD.
WASHINGTON, Dec. 12.-While Secre-
.lry OF War Baker was engaged yes
,.rday before the Military Affairs
committee OF the House in an attempt
10 Justify his policy OF recruiting an
army in excess of his agreement last
year with the House the committee
on expenditures of the War Depart
nent. OF which Representative w. J.
Graham OLD is chairman, was en-
-2ged in an examination Of Mr..
Bakers methods Of disposing OF sur
plus artillery harness. REORGANIZATION
disclosed some astonishing features OF
the Baker method OF awarding fat
contracts to favored individuals, who
stood a good chance OF making enor-
NOUS profits at practically no risk.
The harness contract IS small COM
3,ared with others in which Uncle sam
has drawn the short end. but 1t is en-
eaging the attention of the investigat-
ing committee because OF the cir
cumstances Of its making. There was
talk at the Capitol yesterday of court
action to prevent the sale of any Oh
the War Departments surplus har-
ness under tho terms of the contract.
on September ~. 1920. the department
. entered into a contract with the Unlteo
states Harness Company. Incorporated
IN West Virginia. vita an authorized
capital OF 100000. for the sale oil
10000 double sets Of new artillery mar
ness. which had been designated by the
department as surplus equipment. Inc
,naorporators of the United States Har-
ness Company were George 3. Goetz
formerly a Lieutensnt-Colonel in the
puartermaster Corps OF the Army presi-
dent: Azel Il. Cochran. Joseph G. Byron
and Henry w. Benke.
Bir, Per Cent. for Company.
The harness covered by the contract
which. as stated Is new artillery equip
nent. has been stored In army ware
houses since it's delivery TO the Govern
.nent. Some of 1t has become mouldy,
and a small proportion of II Is in dis
repair. but the cost of recondtionins
The bulk OF 1t, authorities say, vii be
relatively small.
The greater part OF this harness may
be sold las is" but some OF II will have
20 be reconditloned by the daubing of q
little bit OF leather dressing or by the
use of a harness stitcher here and there
The United States Harness Company, as
contractor, undertakes to pay the ex'
pense of this davbing, stitching and
other reconditioning OF that which cannot
rcadlly be sold "as IS" but in SO doing
opens the way for the extraction OF even
greater profits than Il would receive by
he sale of that portion that does not
nave to be reconditioned. Il Is an ex.
'raordinary contract.
For the sale OF new harness, untouched
by the United States Harness Company
md which does not require II TO expent
4 single cent. the company is TO receive
from Is to 80 per cent. of the gross
proceeds. The contractor in this case Is
simply "A beliluH akcHts ANU al Nuo OHAlA-
ION OF members OF the committee, the
Government may as we'll have been ii
own sales agent, as II has been In the
case OF army stores, tho value Of which
was many times the value of the equip
rnent to be sold under this contract
lust what prompted the department 70
appoint n sales agent in this case at
such an extraordinarily high commission
rate, when It had no sales agent for other
surplus materials disposed OF, Is to be
the cause of a searching inquiry by the
committee.
other Terms of Contract.
But that is not all This unusual
contract provides that where IL Is neces-
sary to "recondition" the harness in
order to make It salabe the United
States Harness Company IS 70 receive
10 per cent. OF the gross sale price. Tho
harness company, of course, agreed 70
pay tho expense of recondtioning, but
N the opinion OF officers of the Quarter
master Department this expense would
be almost negligible and would give the
company an even greater profit than II
would receive on the sale Of the har-
ness sold "as Is"
The harness to be sold under this con.
tract $4,000 sets, cost the Government
in the nCighborhood OF $40. 100000. 1t
could be sold. under the terms OF the
contract, for "a min OF about $780,
700, hut the receipts probably would run
much higher than that and could 20 as
high, perhaps, as 100000. The rake
OFF for the United States Harness Com
oany would be minimum OF about
100000. and might run as high as
100000. Tor its efforts as a Govern
ment sales agent during the two year
period or the contract In other words.
the United States Harness Company.
without risk to itself. stands 10 earn 100
Der cent. on It's capital stock In q period
or two years at the expense OF Uncle
sam. But even that Is not all
Article III. OF the contract provides
that the United States may, in It's dis
cretlon, submit from time TO time to
the contractor hereunder additional
schedules or inventories Of additional
lots or articles of leather goods Of any
Kind and of horse equipment or supplies
Or accessories TO be purchased or sold
BIZ the contractor hereunder at such
prices within SUCH periods and on such
n f,,Lt to1 L.. 4