The New York herald., 1921-05-12
DEFAULTER ON CITY
JOB GETS ANOTHER
Lockwood Committee Told
of New Contracts Award
ed to Him.
FAILED. GOT PROFITS
Probe Into Cumberland
Hospital Case Uncovers
Several Transactions.
PYRAMIDING is ALLEGED
Untermyer Shows How Origi-
nal Cost Figures Are Increased
at Loss to the Public.

day Samuel Untermyer. chief counsel
for the Lockwood legislative commit
tee, showed that when the structure
which the city contracted for at
$751; is completed it will have cost
at least s11s9,00O
The most startling testimony came
from Albert Winternitz, the original
contractor, who defaulted, but who, by
his own admission, became partner
to an agreement by which he was to
receive half of the profits of the new
contractor. 1t was that Winternitz, al
though defaulter, has since obtained
contracts from the city aggregating
more than $4,000. and which still are
in force
In this connection the name of Pat
rick j. Carlin. once a prominent build
ing contractor. later Superintendent of
Buildings In Brooklyn and more re-
Gently Second Deputy Commissioner of
Charities (now the Department of Pub
Tic Welfare, got into the record. Win
ternitz testified that after he had gone
into bankruptcy and later organized
the Bertwin Construction Company
with capital of s. 900, and with a bar
ber bookkeeper and automobile me-
chanic as his associates. he had obtained
a contract for s33 900 for work on Ran
dalrs Island and another for sg7. 600 Oh
Blackwelps Island. In addition small
contract for 500 for work on Wards
Island had come to him.
Transferred to other Duties.
The first two of these contracts, the
witness said, had been awarded to the
Bertwin Construction Company, despite
the fact that Deputy Commissioner Car
lin knew that he had defaulted on his
$4,000 contract for the Cumberland
Street Hospital. Mr.. Carlin since has
been transferred from the Department
of Public Welfare and now Is Deputy
Commissioner in the Department of
Plant and Structures.
In reply to questions Winternitz told
the committee that after the CumDer-
land Street Hospital job had been relet
to the One Hundred and Seventy-fourth
Street Construction Company. of which
Ignatz Roth Is president, he had been
warned by Roth to keep himself away
from the Job. He sometimes disregarded
this advice and occasionally came In
contact, he said, with Deputy Commits
sioner Carlin at the hospital site. He
said: however. that Mr.. Carlin did not
know that he (Winternitz) was still
Interested in the Job. Later, however.
explaining his subsequent contracts on
Randall's and Blackwelrs Islands. Mr..
Untermyer asked:
Those contracts you got from the
Department of Public Welfare you got
Yourself. didn't your The witness re-
Piled. Yes"
"And Mr.. Carlin knew you had de-
faulted on the other contract, didn't
he?" Again the answer was Yes"
"And you think you are proper per
.on 10 be a city contractor, do your"
pursued Mr.. Unterrnyer. Yes, replied
tho witness. who later was permitted 10
explain that he had always performed
before. and that despite the increased
so.t ~ material could have finished the
work for about si3o.000 more than the
contract figure.
Calls Contracts Defective.
winternitz's testimony and subsequent
disclosures showing how several OF the
subcontractors had pyramided their ns-
ures In new bids for the portion or tne
work uncompleted when Winternitz quit
caused Mr.. Untermyer to make the toi-
lowing statement for the record:
80 far as I am able TO gather from
tha citv contracts and the existing laws
Under which these contracts are framed
the contracts seem to me quite defec-
tive and do not protect the city. Inc
Cumberland Hospital case furnishes
very concrete example OF that situa-
ton"
Henrv ID. Gombers, secretary OF inter
lacking local. state and national heating
ana mining contractors organizations
Tord of activities of the various associa-
s,,ons in watching legislation affecting
their business. He admitted having sent
out several letters and circulars stating
fhe consensus Of opinion" OF the mem
bers regarding rates to be paid 70
numbers, steamfitters and sheet metal
workers. but denied that these actiyi-
tLss could be viewed as attempts at price
fixing. since no penalty was prescribed
for noncompliance with the rules. Mr..
Combers admitted that at a meeting OF
the local association In May, 1870. T.
resolution was adopted advocating
hresking OF contracts unless the other
party to tbs contract agreed to Increase
tho contract price in cases where wages
were increased while the contract was
under consideration.
MIR. Untermyer brought out examples
of pyramiding by sub-contractors who
had performed the larger parts OF their
contracts with Winterntz. but who put
In bids for the balance of the work In
some cases four times the original fig
ure for the full job. For instance,
Daniel III. McLaury of Mount Vernon
had the original contract for the tiling
work at s17.ico When Winternitz fell
down on his Job some $4,000 worth cf
McIaury's work. X was testified. had
been compbsted. and material for 5000
more was on the job. McLaury's figure
for the remainder, amounting to 81 .40l
under the original contract. in his agree
ment with Ignatz Roth was for $1,000,
or which he already has been paid
5000. He Justified the second contract
on the ground that he would have made
some money on the original contract II
the work had not been held up and the
price of tile advanced. but that as things
turned out he stood TO loaa unless he
made the new contract.
James j. Degnon OF 40 Albany avenue
Brooklyn, Il was shown, also sought to
recoup his losses on his original con.
tract for 1870 by similar means. A bal.
ance OF sI,250 worth OF uncompleted
work existed when psgnon made a new
contract for s47oo to complete the origi.
nal iot
Mr.. tntermyer flgursd the total coat
of the Cumberland street Hospital 9s
shown by the testimony 70 be:
Ar,ount paid to wlnterultz ........ Sass, ,0ot
New contract with Roth....++...... 0e6 .00'
gepsrafe plumbing contract...+,4+. T0.0p
eeparate steamftting contr5ct..... 1fs,0e
10tai ...........ss.....s, s,.ttt.tss tllss'VV'