New-York tribune., 1920-11-28
Engineer Says Board Sold
$826, 600 Plant for
$37,5OO;Cot 5000 600
for $2,338,OOO Yard
Petty Graft Will
Total Millions
Federal Officials Trust
to Honesty of Contract.
ors, Declares Auditor

witnesses appearing before the Con-
grcss'onal committee investigating the
Shipping Board in this city yesterday
testified that the government is losing
millions Of dollars annually in petty
graft arising out of the purchase of
supplies and the making of repairs on
Shipping Board ships.
Representative Kelly, Of Michigan,
IN examining one of the witnesses,
brought out the fact that repair bills
submitted to the government by oper-
ators amount to between S60OO0.0O0
and $70,000,oO0 a year and that a
large part Of this is wasted because
of fraud, inefficiency and agreements
which permit the mulcting of the gov
ernment. Half Of this sum it was
brought out, is spent by operators IN
New York, from which port about 600
of the boards 1900 vessels operate.
Matthew S. Oakes, Of the Supply
Division of the Shipping Board in New
York, but formerly plant engineer
for the Fleet Corporation in charge
at Wilmington, told the committee
that huge losses have been suffered
by the government since the armis-
tice in the sale of shipbuiiding plants.
AS illustrations he cited the facts that
the plant of the Carolina Shipbuilding
Company, which, he said cost the gov
crnment $2,33S,000 to construct. was
sold for s50O,000, and the plant of the
Liberty Shipbuilding Company, which
cost S926,000 to build was sold to the
city Of Wilmington for $37 500.
Mr.. Oakes declared, however, that
he considered the Carolina bargain a
good one for the government The
plant, ne said, was worth very little
unless utilized in the production of
ships, and if an attempt had been made
to dismantle it and sell the material
the proceeds would have been far
below .S5oo,oo0. Neither the Carolina
nor the Liberty plant, he said, was
equipped for repair work.
Machinists raia si,57 an Hour
Charles F. Hanes, an assistant cx-
aminer at New York for the Emer-
Eency Feet Corporation, engaged in
the checking up of personnel on Ship
ping Board ships and the checking of
labor and repair costs. testified that
under the old agreement with private
companies machinists received 80 cents
an hour, but contractors were allowed
a profit of so cents an hour extra,
making the cost cf labor to the gov
eminent $1.20 eents an hour. Under
the present system. Mr.. Hanes testified,
the Shipping Bard is paying $1.37
cents an hour for the same work, but
he said, prevails in nearly all OF the
yards in the port Of New York.
Hanes told Of one case when he went
aboard sea going tug undergoing re-
! airs and found twelve men aboard
{ stensibly engaged in the work, when
it was physically impossible for more
than three men to be engaged The
sc vernment, he said, paid full time
wages for all the twelve men. In Nor
folk, Va, he said, he knew of a case
where hinge, worth so cents and the
work of installing, which should not
have been more than SO, was installed
AID bill for S4725 submitted to the
government. The bill was paid.
Speaking of repairs done by the
Union Iron Works on the steamship
Woyaca, lying in the Roads at Norfolk
for three months during the winter of
1919 and 1920. Mr. 1Ianos said that a
crew Of twenty-five men was sent
aboard the vessel on Monday morn
ing and remained there until the fol-
lowing Monday. The compan , he said.
(COntinued on naaa .IxtnnnN