The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-17
Report of Investigators Is
Upheld in Essentials by
Testimony.
ABUSES STILL EXIST
Firms Proved Dishonest Al
lowed to Take Up Gov
ernment Contracts.
COMPLAINTS SQUELCHED
Bolts and Rivets Dropped on
Inspectors Who Tried to
Stop Bad Work.

Disclosures made yesterday before
the Walsh committee dispelled what
ever doubts may have remained as
to the existence OF widespread graft,
collusive bidding which caused enor-
NOUS losses to the Government ruin
Gus overcharges, waste, careless and
disastrous business Judgment and
dozen minor abuses which have
marked the operations of the United
States Shipping Board.
Five witnesses testified, each of
them making a substantial contribu-
ton to the story Of mismanagement.
The charges contained in the report
made to the committee by A. NJ.
Fisher and John T. Richardson. in
vestigators who spent more than a
year digging into conditions past and
present, were upheld and amplified at
every essential point. 1t appears from
the testimony that the evils were not
sporadic. but general, existing IN prac-
tically every shipyard on both the
Atlantic and Pacific coasts.
Moreover, testimony was brought
out to show that the Shipping Board
has not corrected many features of it's
faulty system of operation; that waste
is still going on and materials and
ships still rotting because Of inef-
ficiency, and that the Government
even to-day allows firms which have
been proved dishonest to make bids
and accept contracts involving large
sums of money.
why ships Came slowly.
Perhaps the most important testl.
niony was given by Paul H. Ma Nell, "a
deck engineer, whose home is at 65S
Fifteenth street, College Point TIE
National Shipbuilding Corporation and
the Terry Shipbuilding Corporation.
bDth of which have been discussed By
other witnesses. were discussed by Mac
Neil. He said that while he was resi-
dent plant engineer at Savannah, Ga.
he learned that the Terry firrn. which
! ad two contracts for the construction
% vessels. was lending Shipping Board
funds to a subsidiary corporation, the
Savannah Dry Dock Company This
c,mpany had a contract with the Boa. !
for the construction of its plant and
had received a loan of S577,00o. All
hut $4,000 of this sum had been eX-
uended. MacNeil said. when he arrived
ut Savannah, though only about one
third of the dock was completed. Ho
learned also, he said, that the company
was tnsolvent.
MacNeil said that, after consulting
with members of the legal department
&c tho Emergency Fleet Corporation, ne
was instructed to have the remaining
$4,000 put into a special control fund
sbd to approve no more payments %
inc Savannah Dry Dock Company. This
rrlng. he said, was later reversed by
t. T. williams. district manager for ths
Shipping Board at Savannah. The
Terry company vas permitted TO con-
true paying over to it's insolvent sub
s'oiary money which 1t had received to
bc used in the con..truction of ships.
These facts. which appeared to Mac
Nell to be wrong OH their face. were re-
rcrted to his supe.ior, H. r. Dilling-
ham, at Jacksonv lie, Ella. He was
tod, he testified. that the entire matter
vas up to the main office of the Emer-
gency Fleet Corporation. He told Mr.
Dillingham; of the To- tns which were be-
ing made by the Ts~ry company to its
Subsidiary at n time when 1t did no
rave enough money to carry out the
work IT had agreed to do. He further
rointed out, he said, that the Terry
company was an applicant then for
lean OF 100000.
Nothing was done. MacNell said, TO
correct this situation. and all the thanks
ne got for his effort to help the Gov
ernment was reminder that II was not
exactly within his duties as resident en-
xineer to pay any attention to these
things.
The ending OF the war, MacNcil testi-
fled. brought even worse conditions
After the building programme at the
yards of the Terry shipbuilding Cor
poration was abandoned machinery and
shipbuilding equipment for five ships
valued at between Si,500.000 and
s2.00o.o0O. was left to rot and rust on
the sand.
NacNeil said that he made every ef-
fort TO get authority from his superior
20 care properly for this material, but
no authority ever was given. lie could
not even purchase sleepers to place be-
tween the valuable mechanical equip
ment and the ground he was denied
the money to buy tarpaulin to protect
Il from the weather.
'1t may be there now. for all know"
said MacNell 1T was there In Septcm-
her. when | saw II last There are two
acres piled high with the stuff"
says Contracts Were Dishonest.
When he became custodian OF the
vard OF the National Shipbulldng Com
many, he said he attempted to obtain
authority from the Emergency Fleet
Corporation to cancel orders for plant
machinery which was still being deliv-
cred This plant had been shut down
before n single ship was completed. lie
was told. he said. to keep a strict policy
of hands OFF, on matters like that
AFTER that he put the plant and ma.
Continued OF Second Pare.