New-York tribune., 1920-11-28
$2,626,500
Lost i'm Sale
OF Slnipyards
tContlnuod from page one)

charged up twenty-threc hours o day
for every man for all of his time. The
company he said. admitted that it was
physically impossible for man to
work twenty-three hours day for
seven days at stretch. Nevertheless,
he said. the bill was paid by the gov
ernment, because of the custom of the
Shipping Board to pay on the basis Of
total time, overtime and overcharge.
Depend Upon Contractors Honesty
Mr. Hanes corroborated previous tes-
timony regarding the general repair
situation, that the system prevailing
throughout the Atlantic Coast district
is for shipyards to submit to the
board rates at which they charge la
Dor and also prices OF materials. He
said that shipyards complying with
this rule were listed by the Shipping
Board as preferential repair yards. Re
QUESTIONS for work to be done on
vessel are made out, approved and are
settled when the work bill is turned
in. He said he knew of vessels being
repaired and sailing away before the
acquisitions reached the auditors Office.
This system, he said. applied to aboux
81 per cent Of the yards. He said ne
knew of no system whereby the gov
eminent could check up on these con-
tracts. The government, he said, is
compelled to rely entirely upon the
| honesty Of contractors.
/ The witness admitted the prevalence
of tie custom OF ships officers accept
ing commissions and gratutes on the
purchase Of supplcs He said re knew
OF one contractor who was to deliver
ce9tain kind of beef, the wholesale
| price of which was 18 cents a pound.
/ 10
llvered meat costing IL cents a pound
and charged the ship company "a cents.
! The witness estimated that contractors
were making profit of from 33 to rs
/ per cent above the wholesale price on
all such purchases. He said there was
no reason why the government should
! pay more than the wholesale price on
all supplies and repairs, and asserted
that system to prevent payment of
excess prices could be introduced 1t
was at this point that Representative
Kelley inserted in the record the fact
that the total supply and repair bill
| of the government amounted to be-
tween S65,O00,000 and $70,000,000 a
year.
New Contract Is No Remedy
Mr.. Hanes testified that under the
old form of contract there was no in
centlve for operators to economic on
expenditures In supplies and repairs.
He said the new contract, No. 4, which
has been in operation about a month,
and was expected to remedy the prac-
tice of overcharges, has thus far failed
20 do so. Under the new contract the
witness explained, the operators of
Shipping Board vessels, when a voyage
is completed, charge the cost Of opera
ton, including repairs and supplies
and add charge for their own serv-
ices on the gross receipts All of
these items are then totaled and
charged against the receipts of the
trip. If the receipts do not cover the
; charges presented by the operators
the Shipping Board is required to meet
the deficiency. These terms, Hanes
testified, offer 70 incentive to operators
to economize on the cost Of operation
in any way. This contract Is rctroac
tive to March /.
The committee adjourned until Mon
day morning, when it will reconven
at the Hotel Pennsylvania.
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