The labor world. [volume] (Duluth, Minn.) 1896-current, 1921-02-05
SHIPPING BOARD
SPENT PEOPLES
MONEY LAv|SHLY
Audit Shows Waste Of From
$100,000,00o to &o0,000,-
600; SehWab Denies Waste.
Continued from Pn0e I.

ConttnNed from Page I.
data he possessed relating to previous
audits in number Of shipyards. He
made up list Of fifty items relating
to misapplied charges on government
vessels which he submitted to Colonel
Abadie. The contract to make the
audit came a short time later.
Burgess testified he had seen the
work sheet made up by his account
ants and went to Philadelphia, but
when he arrived there the auditors of
his company had been excluded from
the shipyard. After the audit was
resumed in a modified form, he paid
no further attention to the voucher,
as his company was not permitted to
investigate overhead expenditures.
Grace Fails to Clear 1t Up. =
President Grace testified that the
voucher was in payment for expenses
properly chargeable against thu
Schwab companies but which were not
charged against the government. This
voucher covered expenses incurred at
time when Schwab was believed to
be giving all his time to the govern
ment. The nature Of the service he
was rendering to his own companies
was not explained by Grace or any
other witness.
Neither has any effort been made
to bring additional light on the i'm
proper charges aggregating between
$100,000,000 and $500,000,000 re-
ferred to by Colonel Abadie, Martin J.
Gillen, executive secretary to Payne,
and the audifOrs
Discourage Further Inquiry.
The Schwab voucher apparently is
d herring that shipbuilders are drag
ging across the investigation to dis
courage further inquiry into these al
legations. No shipbuilder save Schwab
has attempted to clear his skirts, and
| Schwab has given his attention solely
to the question of personal integrity
| involved In the expense voucher.
During his testimony Colonel Aba
die stated there were a great many
| irregularities" In the dealings between
the Bethlehem company and the gov
/ eminent as q result Of Schwab's con-
| nection with the corporation and the
shipping board.
Urged Sweeping Probe.
Things had been done and al
lowed" he testified, because Of Mr..
schwab's connection which probably
would not have been allowed other
| wise, but am satisfied Mr.. Schwab
knew nothing Of them"
/ Colonel Abadie declared he had
urged a. sweeping audit upon Judge
/ Payne and selected public account
ing firm that had never been en-
| p1oyed by the Bethlehem company
II had many excellent reasons for
selecting the Bethlehem company as
the shipbuilding concern whose books
were to be first audited. Had the
audit been completed it would have
been the basis for the recovery of
upward Of $100,0e0,0oo improperly
paid to shipbui1ders by the board"
| Why Audit Was Stopped.
| The audit was proceeding in orderly
manner, Colonel Abadie continued,
until the Schwab expense voucher was
located in the Bethlehem office, with
out papers or supporting details to
indicate how the 100000 was spent.
Immediately 'insidious propaganda"
began reaching Judge Payne, criti-
Ching the expense of the audit. He
believed an anonymous letter calling
it a waste of government money was
received and then Judge Payne called
him and told him the audit should
b. suspended.
IF refused to cancel the con-
tract" said Colonel Abadie, Judge
Payne assured me he would" Payne
Immediately wired a. cancellation of
/ the audit contract
The auditing firm directed a. pro-
/ test to Judge Payne, stating that the
Investigation had revealed startling
disclosures which could not be ig-