New-York tribune., 1921-01-21
Huge Sum Lost
RyGOVernInent
In Selling Brass
Three Bidders Default and
After Delays a Fourth Gets
5000, 600 Pounds From
Army on Falling Market
Years Wait Cuts Price
Had Certified Checks Been
Required These Would Be
Forfeited to Treasury

s,en TAs Trioune's Washington Bureau
WASHINGTON, Jan. 20.-Federal
ooeratives are working secretly on an
Investigation Of bids submitted to the
Var Department for the purchase os
about 56,200,000 pounds of brass.
The three bidders considered the
highest, it is said, have already fallen
down. and the government is now said
10 be negotiating with fourth, with a
promising prospect that the brass will
be given to the Buffalo House Wreck
ing Company, whose bid of $5.171s
cents hundred pounds was at first
thought to be very low indeed.
This remarkable situation was
brought about bv the fact that the de-
partment, in calling for bids, did not
resort to the ordinary precaution of
requiring the bidders to submit certi-
fed checks as an evidence of good
faith, and as a guaranty to the gov
ernment that if their BIDS were ac-
ecpted they would eithey carry them
out or else forfeit to tns government
the sums represented by the checks.
As a result there is u suspicion in
the minds of some government officials
which has resulted in the present in
yestigation.
The first high bidder to whom the
contract was awarded was former
major In the ordnance department. He
put In bid fur the brass, which was
oxArtrad liz, hx, Eo
with view to manufacturing shells,
with the specification that he would
take the brass within a year. paying as
he took the material at the regular
market price, less two cents a pound
for refining.
Bankers Withheld Funds
1t is learned that the major discov-
cred that while his proposition sounded
we'll, the bankers did not like the looks
OF it IN view of present market condi-
tions. They recognized, it is said, that
while the profit which might be made
on the two cents pound allowance for
refining might be very good in normal
times, l. did not compensate for being
compelled to pay the market price dur
ing 9 period of falling prices, when it
might be very difficult to obtain what
might be considered the market price
for anything.
Therefore, apparently, the major
failed to o3tain the financial backing
necessary to carry or deal involving
millions, SO that he was compelled to
forfeit his bid. Under normal circum-
stances the government would have
Oeen ahead just the amount of his cer-
timed check to compensate it for the
delay, but, not having called for GER
uhed checks when the bids were re-
luested, the government was compelled
. go on down the list of bidders.
A great many members O. Congress
would like to know just why the gov
eminent, or Secretary of War Baker
Q be specific, held this brass for two
sears after it vas known that it would
not be needed and thus let pass
,sried Of real shortage just following
me armistice. 1t is considered, how
eyer. to be in line with the general
policy Of the department in such mat
'efs, the aim apparently having been
e desperate effort to hold up prices at
Time when prices were sky high, fol-
lewea py an attempt to realize cash
after the bottom had dropped cut.
An instance is cited of where a New
!ork concern made bid on some mil
IONS Of pounds of castor oil at four
teen and fraction cents pound 1t
vas refused by the War Department..
Later the department called on the
concern and asked for bid. The con-
Germ then offered 10 cents a pound.
After another delay the departm ent has
asgain asked this concern for bid and
oeen offered FIVE and fraction cents.
Belief on Capitol Hill is that the
losses to the Federal Treasury result
ing from such sales and attempted
sales as this have run way up on into
the millions of dollars, and Congress
s'onai inquiry is being considered.
large contractor told The Tribune
correspondent to-day that if it were
possible his concern would like to pay
eiUoooo0 bonus to company which
was awarded a contract recently by the
mar Department and take the contract
on the successful bidders hands. This
particular contract was awarded some
s'ne after the bids had been opened,
nlen the successful contractor was
permitted to interpret" his bid, the
mterpretation," according to The
!a.noune's informant. actuallr changing
ne bid made by millions Of dollars.