The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1920-11-10

Worthless SecurltleS Are
Alleged
Washington. Nov. s-(By The Assoc
lated Iress)-I'orruptlon OF employees
and officials OF the Shipping Board d
purchasing supplies for and in repair
Ing Eov@nment owned merchant ships.
and the use OF political or other intiu-
ence in obtaining contracts Tor snip
construction and the ALLEGATION Of COM
pleted vessels to operating companies
are among Il maze OF charges made In q
report submitted to the House commit
tee on shipping board operations by y.
VI. Fisher and J. r. Richardson. former
employees OF the board.
Chairman Benson. OF the shipping
board. refused tonight TO discuss the
report, declaring that any statement he
might have to make would be made to
the House committee which now Is con-
t!nuing its invest. cation of the boards
operations.
The report was made public tonight
by the committee o! which Represen-
tative, Walsh. Republican. Massachu-
setts. Is chairman. 1t covers more than
one hundred printed pages and deals eN-
haustively with many phases Of ship
ping board urerations as observed by
the committees Investigators over a
period Of more than q. year.
Review OF the Records
AIR. Fisher, who formerly was con-
nedted with the federal trade commits
sion, made survey for the shipping
board as to record keeping systems In
the office Of the lumber administration.
Mr.. Richardson, for twenty years n
newspaper man, was employed for sew
eraI years in the boards department Of
investigation.
explained that II was designed 10 deal
only with problems which could be
solved wholly by the shipping board it.
self and left untouched fourteen gem
boards operations: Among these were
enumerated organization Of the board.
technical errors in the construction
program, German-American deals, as
board officials. enforcement Of the new
merchant marine act and evasions OF
the 'selective service act.
Details Of the Charges
Taking up in detail seven phases of
the boards activities the report charged
gross waste OF government funds, i'm
properly drawn contracts which cost
the government large sums and failure
OF the various divisions Of the board to
cooperate efficiently ard the most com
plete failure Of some OF the divisions to
function properly.
Padding OF pay rolls by. firms repair
ing shipping board vessels Ownership
vessels OF stock. IN companies 1urnisa-
Inr supplies to those craft at prfcSs
ranEfnG anywhere from forty to nifty
percent above, wholesale costs, whole
sale theft OF supplies and equipment
from ships and the loss OF millions OF
dollars through improperly secured
loans made to contractors building gov
ernment vessels also were charged.
Took worthless Securities
The Investigators alleged that In
some cases the feet corporation loaned
money to contractors and accepted as
security bonds issued by companies in
corporated by the contractors which
worthless" The charge also was made
that in many cases shipbuilding plants
with materials which are going con-
;erns are turned back to contractors
as salvage propositions. and the con-
FACTORS thus~reap large profits at the
expense OF the feet corporation"
Another allegation in the report was
hat mainy firms holding construction
contracts inauGurated liberty bond sell
ng crusades in their plants and charged
% ship construction ten percent Of the
money thus secured as the cost OF sell
ing the bonds. 1t was further charged
that in some cases the fleet corporation
authorized contractors to take from
their appropriated funds" sums to pur-
chase liberty bonds and that subse-
luently In some cases these bonds were
sold or hypoe thaca.ted az a loss and tho
money thus realized used FOR plant
purposes"
They (the contractors) then put m
a claim against the United States Ship
ping Board Emergency Fleet Corpora
tlon for the losses thus incurred" de.
clared the report
As TO building contract cancellatinos
and hull removals. the report asserted
that the Shipping Board entered into q
contract with George F. Rogers to re-
move hulls which were on the ways in
an unfinished state at the time the con-
syip % , ~
builders or the owners of the land upon
which the hulls and ways rested a re-
lease from further liability.
5000 20 Give Away Hu1ls.
For some reason" said the report
''the United States Shipping BOARD saw
re to make q contract with Rogers 70
nay him $4,000 per hull for each hull
thus handled by him. The result has
been that in many cases the United
States Shipping Board has paid an ad-
ditional $1,000 per hull to have Rogers
sell the hull or give 1t away. In many
cases the cost Of the hull rcresentlng
several thousand dollars. Rogers has
found no difficulty in selling these hulls
NJ very fair price, which revenues re-
yest to Rogers. In addition to which he
collected from the United States Ship
ping Board Emergency Fleet Corporation
$4,000 per hull fee"
Question Lumber Contracts.
It was alleged In the report that re-
pair work on Shipping Board vessels was
done on q basis OF pay for workmen on
the Job at current wages plus SO per cent
for overhead and profit plus ten per
cent OF material cost TO cover cost OF
purchase and profit to the contractor
Payrolls Padded.
"Oyercharges imediately became and
continue to be common under this form
OF agreement" said the report 1T Is to
the advantage Of the contractor TO ad
payrolls slight work. put too many men
on the Job. encourage loating on the job
corrupt inspectors and time-keepers, use
helpers and charge for ttrst-class work
rnen. use common labor and charge for
skilled labor. drag the work 10 make II
last longer. find additional work TO dc
and get II specified. etc.
Corruption OF United states shipping
BOARD Emergency Fleet Corporation en-
ployes and officials became tn" ten
dency under this practice. usually at
tempts are mads by contractors. and
IN many cases apparently are successlu
TO secure the favor of the port construc'
ton and repair representative who has
the assignment Of work to the various
contractors and the local United States
Shipping Board Emergency Fleet Cor
poratlon agency auditor, who has un'
der his charge the checkers ana time
keepers"
10 which the corporation had over ad
vanced many millions Of dollars" were
unab bic 70 repay these "over advances
and that they were permitted all sorts
nr exOrbitAnt claims TO absorb them
Numerous cases wene on record. the re-
port said. where doctors, veterinary
surgeons. BARRIERS. drygoods clerks. enc
others Of similar inCpt callings were
nlaced as inspectors uv"" work con
o. hA1 MI ~