Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-11-10
Report of investigators Al
leges Nation Has Been
MuIcted of Millions.
CONTRACTORS REAPED
HARVEST BY PRACTICES
Pay Rolls Padded. Government
Agents Bought" Even Violence
Resorted to, Saws Bill.

Scathing general criticism Of the busi-
ness methods of the United States Shin
ping Board ba sed on charges of cor
ruption of employees and officials of the
Emergency Fleet Corporation, padding
OF payrous. graft in the purchase of
supplies for and repairing government
owned ships and scandalous waste Of
government moneys, are contained In &
report submitted here to the select
House committee. which is investigating
the Shipping Board.
The report is made by A M. Fisher
of the Shipping Board, who for q year
have been investigating the functions
and operations of the board for the
House committee. Of which Representa-
tive Joseph Walsh Of Massachusetts, 10
chairman. The report is to serve as a
resentative Walsh believes will lead to
abolition of the board and the transfer
OF its functions TO a distinct government
department of marine. with . cabinet
officer at its head.
"NO Personalities Dealt with,
Chairman Benson Of the Shipping
Board. refused to discuss the report, de-
claring that any statement he might
have to make would be made to the
House committee, which now 10 contin.
uing its investigation Of the boards op-
erations.
The attitude of the chairman, IL 10
understood. is that il he replied to
the charges prior his appearance be-
fore subcommittee Of the investi-
eating committee, he would give
critics of the board material on which
to base further charges whose ground
work would be his denial of the Walsh
committee charges. He prefers, il was
said today, to make his testimony un-
der oath at formal hearings.
Several officials OF the Shipping
contained in the Walsh report ore
subject to proof and that in the alb
sence of witnesses for the committee
making the charges no comment
should be made before formal hear
ings.
The report in it's criticisms deals in
no case with personalities and ia all
cases with conditions" Mr.. Fisher em-
phasises. The general subjects or
phases treated in tha report are: (l),
Repair yards and prattices.--.t2) Ship
supply suDpiy service. 1,d e. !O Allocation q
asfsefnents. go Shipbuilding con-
tracts and settlements. (s) Charters,
rates. trade routes. CD Ship sales
program. In an effort to present only
such subjects ''as can readily be dealt
with from a standpoint Of administra-
tive policies" the report admits GER
tain subjects which involve diplo-
matte questions. judicial inquiry. or
those of highly technical nature.
When the cost plus contracts were
abolished as required by law. the re-
port says. new agreements were en-
tered into which provide practically
all the advantages to the contractor
a nj
form of contract. and give him greater
profits. under a more Objectionable
system"
1t was alleged in the report that
repair work on shipping board ves-
sells was done on a basis of pay for
plus SO per cent for overhead and
profit. plus 10 per cent of material
cost to cover cost of purchase and
profit to the contractor
1t says that "overcharges continue
to be common" under the new form Of
vantage of the contractor to pad pay
rolls. slight work. put too many men
on the work, encourage loafing on the
job. corrupI inspectors and timekeep-
ers. use helpers and charge for first
class workmen, use common labor
and charge for skilled labor. drag the
work to make it last longer. find ad-
ditional work to do" etc.
Excess Profits Common
Excess profits became Immediately
common. these being reaped through
various means by many Of the con-
tractors" the report says. The tend
ency to corrupt Shipping Board
Emergency Fleet Corporation en-
ployes is discussed at length.
Usually attempts are made by con-
tractors, and. in many cases apparent
ly are successful. to secure the favor
of the port construction and repair
representative, who has the assign
tractors. and the local United States
Shipping Board Emergency Fleet Cor
poration agency auditor. who has un-
der his charge the checkers and time
keepers"
1t was charged that good men,
were "heckled. insulted or even
frightened of the work. where they
will not prove susceptible to corrup-
ton" The report declared it was q
comparatively easy matter to 'acci-
dentally" drop a bar or wrench into n
ships hold when a straight" time
keeper or inspector was standing un-
der.
The report dealt at length with the
furnishing of fuel and supplies to
Shipping Board vessels, declaring that
the expeditures OF millions of dollars
was left in the hands Of masters.
chief engineers and stewards"
In many cases, 1t was asserted. the
supplies are purchased from brokers,
who add a profit of from Is to 10 per
cent. give gratuities to masters and
stewards in the form of free lunches,
free automobiles. free liquor. free en-
tertainment, etc." and charge them
in with the price of the supplies.
The report charged that ships Of
fcers were enabled by the fuel allow
anees made for each voyage to finish
with excess fuel. that they receipted
for a full supply on rebunkering and
then get a rebate from the bunker
ing company" to the extent Of the
excess.
Superficial Inspections.
Lack of proper inspection for re-
pairs also enters largely into the ex-
cess cost of repairs to our ships" the
report points out. In illustrating how
DELAYS, demurrage and per diem
losses are mounting rapidly and AL
ready have been enormous" the re-
bort explains that lin some cases it
has involved q loss OF eight times the
cost of repairs; In other words. the
United States Shipping Board Emer-
zency Fleet Corporation has lost in
zhe ratio of $4,000 to $4,000 to get
p. 900 worth Of repairs done"
It was charged that through po1it-
cal influence ships had been assigned
10 companies in which officials of the
Shipping Board '.were or had been as
sociated," and that companies which
lid not have the standing or the
inancial responsibility to insure safe
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