The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-30
SISLER ALSO CALLED
More Graft Revealed by
Travelling Auditor of
L. s. Board.
OVERCHARGES FOR LABOR
Witness Says S30,000.000 in
Surplus Material Still on
~, Hand Must Be Sold.

Losses to the Government at the pres
ent time through the salvage of mate
rails and because Of family methods OF
handling repairs for Shipping Board
vessels were described yesterday by
witnesses before the Walsh committee.
which resumed it's hearings at the Hotel
Pennsylvania.
About 10 per cent. Of the 100000 in
repait bills which were run up against
the Shipping Board in the South Allan
tic district alone represented graft, ac-
cording to Charles Banzhof travel
ling auditor for the board, with head
quarters in New York Banzhof said
that while some of the features of the
system under which this graft was pos
slble have been eliminated, many losses
still are going on.
The graft he said, was made lossrble
by lack of proper inspections. failure
10 check repair work. overcharges for
\ -@>terials and labor and unnecessary
ikairs. Under the present form Of
a contract with the Shipping Board
Banzhof said there is little incentive
10 economize on repairs, and there Is
an apparent spirit to make work" He
cited an Instance Of repair engineer
who. he said sat in a pilot house and
approved repair bills amounting to
thousands Of dollars without ever look
ing at the work Banzhof charged that
inspectors had been told that costs
were none of their business.
s337 900 Saved by Audit.
The name of the former German liner
L., 1attrr Tho Vow
brought into the inquiry for the first
time by Banzhof He said he had been
assigned TO check up bills for the re-
conditioning of the ship, which was sold
on o. charter purchase contract to the
Baltic Steamship Corporation. of which
Gen. Frank T. Hines is vice president.
for $9S500O. The Shipping Board, he
said,f had advanced about 100000 for
ieconditioning the ship. The contract
was awarded to the Morgan Engineering
Company OF Jersey City. The bill tor
putting the ship in condition. he said.
was $500. 900. He said that an audit
>-nf accounts reduced this amount by
y S3S7.n00. RaBzhof said he could not eX-
plain, the great difference between the
Price of the ship and the cost of recon-
ditionins without copy of the contract
OF sale.
The steamship Mercury. formerly the
Barbarosa. also was taken to the yard
OF the Morgan Engineering Company, he
said. but after S175,000 had been ex-
i, Bonded work was stopped because no
Snore funds would be advanced
Until six or seven months ago. Banzof
testified the repair work i'm the New
York yards showed many gross irregu-
larities. including the charging Of hun
dreds of hours that were not rendered,
tho substitution OF cheap labor for the
high priced labor charged against the
ri .l,a,. 20.
terials.
Banzhof read letter into the record
which he had written TO the general
auditor last July. He charged in this
letter that a. large sum OF money had
been paid out heedessly for repair work
under a system which left practically
10 bar TO graft. The principal causes
for waste. he said. lay in the making of
unauthorized and unnecessary repairs
poor supervision Of work and no check
upon the cost OF time limit for the
completion Of a job. Banzhof read a
number of letters and reports to sub
stantiate his chargers.
sso.ooo,OoO in Surplus Material.
The wooden ship construction con-
, tCaots let by the Emergency Fleet Cor
poration were discussed by Eads John
son. who was at one time district Of
ficer OF the fleet He condemned the
wooden ship idea and resigned because
he could not conform to Il. Johnson
said that in one case there was a South
ern contractor who wanted TO build such
ships with the idea that I'VE must build
100000 wooden ships that will take
100000 German torpedoes TO sink"
George u. Watt manager of the East
ern division OF the sales and warehouse
section of the Shipping Board. testified
that there is now about ssO,000,O0O Of
surplus material on hand which must be
sold. He said that sales are being ma 1e
at the rate of about s1,00O.000 a month,
though he insisted that he did not ex-
poet the job TO last eighty more months.
Mr.. Watt said he thought the Govern
ment should stay in the market AMI try
TO dispose OF the material at the most
advantageous prices, though some loss
would be inevitable. The payroll Of this
division, he said. is about $500 900
year.
Robert Laggren. head OF the depart
lnent. who testified early in the day. was
recaHed, and said he thought the entire
matter could be cleaned up in a year by
making sales OF whole projects. He
said that any loss by this form of sale
would be more than overcome by the
elimination of overhead expense. He
said that the sales force is rapidly be-
coming more efficient and that the $780,
900. 900 worth of materials should be
gone long before eighty months from
now.
Mr. Laggren took issue with the Sc
port Of A. VI Fisher and John L. Rich
ardson, which charged that the Ship
ping Board had allowed the Rogers conf
pany $4,000 per hull for the removal Of
oil wooden hulls still on the ways and
that the company Immediately sold the
hulis 20 the construction company which
owned the ways at substantial profit.
without any effort or expense.
Board OmciaIs 60 Testify
Mr.. Laggrcn insisted that the Emer-
Kency. Fleet Corporation never would
have made any profit II an attempt had
been made TO sell them direct Under
US contract, he said, the Emergency
Htct Corporation was required TO turn
back the property with ways cleared or
nay heavy storage and demurrage
charges. Most Of the amounts asked BY
contractors for removing the hulls he
said. were between $4,000 and $4,000
Tor the hull
Some members OF the board thought
Rogers was crazy whom he offered 10
move them for $1,000 EACH said
1.aRgrrn "If they hadn't taken the
nffor thoy would have been in worse