New-York tribune., 1920-11-19
Payne Aid Says 81 Vessels
Were Idle, Lacking Oil,
While Private Firms
Used American Tankers
Witness Charges
Pull i'm Contracts
Assails Hines and Foley.
but Benson Is Praised:
Cost-Plus Waste Great

More details Of the alleged inefficient
tunctioning of the United States Ship
ping Board were revealed to the Con-
eressional investigating committee
yesterday by Martin ]. Gllen. former
~ executive assistant to John Barton
Payne, chairman of the board, and to
It's present head, Admiral William S.
Benson
The witness said fifty-four Shipping
Board vessels were tied up alon the
Atlantic seaboard eating their heads
off at the rate of $3,OOOO0O a month
Tor lack of fuel, at the very time that
Shipping Board tankers were plying
the Seven Seas in the service of oil
corporations to which they had been
allocated by the board.
Quite without the knowledge Of the
Shipping Board. the witness continued,
40 per cent of its operators were buy
ing fuel oil in the open market at
from 50 to IS q barrel at the very time
hat the board was furnishing fuel of
the same quality at $207 barrel.
" 'NiPP'iS Do@iu, ne Sdiu, nRO TO
reimburse its operators for the oil
bought in the open market, with the
result that 100000 barrels, so pur-
chased, were charged up to the govern
ment. The total amount Of fuel oil
used by tie Shipping Board fleet Mr.
Gillen placed at 100000 barrels.
Payne Was Chairman
This blind management Of the mer-
chant marine, Mr.. Gillen said, occurred
while Mr. Payne was chairman of the
Shipping Board. Captain Paul Foley,
he said, was the man who had charge
of the tankers Of the Shipping Board
feet. There had been no change in
methods, he asserted, up to May 20 Of
this year.
Mr.. Gillen testified that the crisis
provoked by the tying up of scores Of
vessels for lack Of fuel induced hin,
to make an investigation which re-
suited in the discovery of the fore
going facts. Upon his recommends
ton, he said, Judge Payne relieved
Captain Foley of the operation of the
tankers and placed it in charge Of Mr.
Bowen. Captain Foley, he said, is still
in charge of the Division of Opera
tions, however, and directs the opera
tion of 100 vessels.
Mr.. Gillen also told the committee
that, because of lack Of protection
against contractors under the so-called
cost-plus system of construction, the
government lost scores of millions of
dollars. There is no way of computing
the losses, he said, nor can the gov
ernment recover any of them.
He attributed these losses to the
total lack of understanding of the cost
plus system by government officials ir
charge Of claims on contracts, amorti
zation settlements and the payment o.
damages.
"There is no way of telling what the
government overpaid on these cost-plu
contracts" said Mr.. Gillcn. at is i'm
possible to estimate the amount of ex
cess profits paid by the government or
increased freight payments, or through
the abuse of overcharges. 1t woult
take the entire force of government &C
countants to determine just how mucl
has been overpaid. If the simple pro
tective provisions as practiced in Amer
lean business had been adopted and pu
into practice on contracts of the army
navy. the Aircraft Department and tn
Shipping Board, untold millions woulc
have been saved to tho government"
Complaints Reveal Scandal
The investigation which led to tht
discovery of the tanker scandal, Mr.
Gillen said. was prompted by the com
plants Of two operators. In making
(ContInued on next uaqe)