New-York tribune., 1920-11-18
Shipping Board
Lost 2 Billion
lin Fleet Sale
Continued from pauo ons)

chairman of the Shipping Board, in
August, 1919. the witness said. intro
duced new system providing for
weekly statements showing the finan-
cial obligations to the board of it's 176
operators. Nine hundred men were
put to work to straighten out bank ac-
counts to make the introduction of this
system possible, Mr.. Gillen said.
Where Was the Treasurer7
where was the treasurer Of the
Shipping Board during the two years
OF operation to which you refer ~
asked Representative Kelly
To this question Mr.. Gillen made the
blowing reply:
up to the entrance of Judge Payne
INTO the Shipping Board the treasure T
exercised virtually no control over
funds. The Comptroller of the Ship
ping Board and the comptroller of the
Emergency Fleet Corporation ran their
respective divisions without knowledge
OF the treasurer, with the funds run
ming into hundreds of millions of dol
lars.
"On July 1, 1919, Congress passed a
law requiring the Comptroller of the
Treasury of the United States to audit
the funds of the Shipping Board and of
the United States Fleet Corporation.
On August l, 1919, Mr.. Tweedalo was
made treasurer of the Fleet Corpora
ton, and up to that time the law had
not been complied with Mr.. Tweedale
started to get up his records cour
1919, he filed two months accounts of
the Shipping Board under the law, for
the months of July and August, 1918,
and every month thereafter he filed an
additional two months account. The
board is still sixteen months behind in
its accounts"
Mr.. Tweedale then quoted the figures
in connection with the vouchers sub
mitted to Comptroller Warrick.-
Mr.. Tweedale said that Judge Payne
established one comptroller's Office for
both the Shipping Board and the Fleet
Corporation and placed Mr.. Tweedale
in full authority of all funds, and since
then there has been a distinct and
systematic effort under way to
straighten out accounts. This work
however, has been seriously impeded
because Of the necessity of sending out
agents into the field to examine the
books OF yards, opel ators and banks,
in order that the board might obtain
basis f,t settlements.
In summing up his testimony. Mr..
Glllen sail that the basic trouble in
the administration of the Shipping
Board and the Fleet Corporation was
that the government did not get men
hlg enough to handle the finances and
establish a proper system of account
ing. The government had taken Charles
NJ. Schwab to construct ships. He got
contracts and pushed them. 1t had
taken P. \. S. Franklin to direct the
operation cf the program.
Does Not Charge Fraud
But no man with the accounting
ability to take care Of the operations
mad been found" said Mr.. Gillen. "Lf
the government had gone to JUDGE
Gary, for example, and told him it
wanted his very best comptroller. a
man with the ability and experience
necessary for its work would have been
found"
AS it was, Mr.. Gillen added, the gov
ernment permitted business twice the
SIZE OF the Steel Corporation to be run
IN an Impractical ard chaotic manner.
The witness emphasized that he did
not charge fraud against any officials
of the Shipping Board, and went so far
as to say that in his opinion most
American contractors and operators
"S'4'hs WIN tHe government dld not
attempt to defraud the government, but
that they themselves were frequently
the victims of the lack of system
Mr.. Gillen summarized his testimony
by saying his main criticism was
that proper men for proper jobs will
never be obtained until the Senate
shares equally in the responsibility Of
their appointment and does not make
confirmation of appointments in the
rerfunctory manner in which it is made
in many cases.
Congressman Kelly asked Mr.. Gillen
whether appointments to the Shipping
Board prior to that Of Judge Payne
might not have been made among men
CT higher calber. Mr.. Gillen refused
to commit himself on that point.
"Ihat isn't a fair question, Mr..
Kelly he said. 81 received my ap-
pointment from the President, and I
am an honorable gentleman and, what's
r:ore, I am Republican,"
Entering upon a detailed explanation
OF the lax methods of accounting in
vogue Mr.. Gillen said that in its con-