The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-18
Witness at Inquiry Tells OF
Finding $4,000, 900 Ex-
cess Funds in Hands of
Ship Operators.
NO RECORD OF MONEY
Check Up Reveals S21, ,2o0.-
900 in 8 \. Y. Banks, S240,-
100000 Securities
in a Vault.
HUGE PROFITS PAID OUT
Martin Gillen Charges Lack of
System in AccOunts-TOO
Much Politics-Paync
Saved Millions.

saved MIliIOllS.
The United States Shipping Board
in it's programme has thrown away,
forever beyond recovery. $4,000. 1000 900
OF the $3.50, 900 900 which has passed
through It's hands. according to testi-
mony given yesterday before the Con-
gress select committee by Martin j.
Gillen, who was a special executive
assistant to the chairman Of the Ship
ping Board under the administration
Of John Barton Payne, and for a time
came chairman.
The estimate Of $4,000 600 900 which
Mr.. Gillen placed upon the cost OF
amortization represents money that Is
gone not only as a result of the natu
raj depreciation OF tonnage values, but
because OF losses in settlements with
Norwegian and Japanese ship gam
blers, and in material-estimated at
$500. 900. .0O0-which is lost, without
trace, somewhere in the hands OF con-
tractors.
Testimony Amnzes Committee.
Mr.. Gillen told the committee that
the Shipping Board vessels not only
are not making q profit for the Gov
ornment to-day but that on account OF
! the drop in freight rates they are not
even making depreciation and in
! terest upon the ships themselves. Tnc
I shipping Board is operating between
! 1900 and 140o ships. and in Mr.. Gill
I LENS opinion other losses are bound TO
come even now in addition 10 the
| 50 600. 100000 which already has been
wiped out
The three members Of the committee
who were present. Representative Jo-
| seph Walsh Of Massachusetts. Henry
! steele of Pennsylvania and Patrick II.
] Kelley OF Michigan, sat astounded as
NIr. Gillen told them the facts for which
| they have been cropping for the last
| week They heard OF losses. not Of a
| few thousands. or even Of millions but
| Of hundreds OF millions and OF billions
Of dollars. Mr. Gillen who was ac>on-
panied by his secretary. supported his
/ testimony with an enormous mass of
I figures taken from reports, accounts
and other documents
"a complete lack of an adequate ac-
counting SYSTEM in the handling OF
Shipping Board funds was described by
Mr.. Gilen as the basic trouble. There
was complete breakdown. he said. OF
the accounting system. Among the first
acts OF Judge Payne when he became
| chairman. Mr.. Gillen said was to OBJ
tain from the Secretary OF the Treasury
| the services of Alonzo Tweedale. whom
/ he made treasurer OF the Shipping
/ Board. This was In August 1919.
Before Tweedales time Mr. Gillen
said the treasurer had been merely an
! issuer OF checks. often without support
/ ing claim vouchers lie testified that
among the conditions disclosed by the
/ new treasurer were the following
! There was no balance sheet showing
! what funds the board possessed or in
/ what banks its funds were deposited.
There was no record in the hands OF
4 the board OF securities valued at more
than s2i0 0.Oco. 900 which the board held
/ These securities later were found in the
vaults OF trust company in Phlladel-
| phia, where they had been placed for
I safekeeping
\ There was no record showing in de-
tail how s2OOo. 10000 had been expended
up TO that time.
There was no record Of accounting
with operators OF shipping Board ves-
/ sells. and no way of determining how
much money belonging to the Govern
1 th.,s b,d fr th,Ir
Mr.. Gillen said that on November
OF this year Of the sum Of s3.S00 0oo.-
900 expended there had been submitted
70 the treasurer vouchers to cover only
S2.70O 900 900. Vouchers representing
disbursements OF $sOo.oo0.OOO had been
excepted 70" by the treasurer because
% lack OF sufficient supporting data.
Vouchers for Sl.iO0. 600 00O are yet TO be
presented. The Shipping Board now he's
about $50. 900. 600 in the treasury.
No Evidence OF Dishonesty.
The witness testified tnat vouchers
and data TO make possible the account
ing go far completed had been obtained
by going out into the field. starting with
bank accounts OF various firms and por-
sons with whom the board and the
Emergency Fleet Corporation had
transactions and tracing the accounts
back 20 the Shipping Board a force Of
800 has been engaged In this work.
Mr. Gnlen. IN summing up hts evil
dence. said the shipping Board had the
best possible men 20 handle the ship
construction and It's operating divisions,
but IL had failed 90 get a bank DIS
enough 90 establish and carry out a de-
partinent of efficient accountlng. He
made Il clear that he had found no evil
deriro OF dishonesty or fraud on the part
Of any official Of the shipping Board
'"rhc fatal defect is not yet cured
declared Mr.. Gillcn with great emphasis
In an undertaking three times as great
as that of the United States steel Cor
poration no man big enough 20 handle