New-York tribune., 1921-02-07
House Committee Finds
Supplies Now i'm Ware
houses Would Equip an
Army of ], 900, 600 Men
Huge Abuses in
Leather Revealed
Two Ex-OGicers Get Con-
tract Worth Millions; !;
Prosecution Demanded
Fron The Tribune,s Waahinnto. nur.a..

WAoulNGlON, Feb. 6;-Surplus war
materials amounting in value to more
than s6,oooooO,OO0 are packed into
every army warehouse and depot in the
country. Little of this is reaching the
pubic after more than two years of
peace. This information was made
public here tonight by the House
Committee on Expenditures in the War
Department in connection with it's re-
port on the investigation of leather
goods purchased by the government
during the war.
The committees investigation has
revealed, according to it's report, that
two former army officers stationed in
Washington have obtained control of
the disposition of surplus leather
goods amounting to more than s2o.-
100000, on which they are realizing q
profit of 40 per cent. The report has
been sent to the Department of Justice
with the recommendation "for such ac-
tion as that department may deem
proper under the circumstances"
Besides asking for prosecutions, the
report also calls upon the War Depart
ment to make declaration of all sur
plus materials and to place them on
the market.
Producers Controlled Prices
The conclusions set forth in the
committees report follow:
"The purchase of leather and leather
equipment and the fixing of prices
therefor during the war were largely
controlled by the leather tanners and
producers and their representatives."
"Their attitude the report says in
part, "was grasping and unfair tc the
country, and Congress is able to ascer-
tain for the first time the sordid de-
tails of these transactions; they reflect
no credit upon the country"
"Ihe amounts of leather and leather
equipment purchased were excessive
and far beyond the reasonable. needs
of the government" continues the
report.
"The prices paid for such supplies
were exorbitant and unnecessary.
"The shortage of leather and the
high prices paia by the consumers in
IOIo cilh lV1O WClS largely SduSSu DY
the large purchases of leather and
high prices paid by the War Depart
ment.
"No real effective efforts were made
by the surplus property division of the
War Department or by the director of
sales to dispose of the suplus leather
goods to the consuming public
"The practice Of permitting former
military officers of the United States,
upon going out Of the service, to buy
surplus supplies which they had to deal
with while in the service is vicious
and is apt to lead TO great abuses"
Prohibitory Law Demanded
The committee demands that Con-
gress enact law prohibiting purchases
of surplus supplies by officers or en-
listed men of the army, navy or Ma
rine Corps, except through commissa-
ries or retail stores.
The two former army officers mentioned
in the report are Colonel George B. Goetz,
and Major Joseph C. Byron. They or
ganized the United States Harness
Company, with 100000 stock, and on
September / or 8 last obtained an op-
tion, in violation of War Department
rules, on practically all surplus leather
goods, says the report.
"The contract made with the COM
pany is obviously unfair to the gov
ernment," the report states. "It COW
ers all harness, saddles, leather, spare
parts for harness and saddles, hard
ware and accessories for harness and
saddles, and cut leather stock on hand
September %, 1920, or declared surplus
within one year thereafter. Various
estimates of the cost value of goods
covered by the contract have been
made, the last being in the neighbor-
hood of SA0,000,000.
"If the property covered by the con-
tract is sold for more than the mini
mum prices fixed in the contract the
contractors shall receive from Is to 40
per cent of selling price for selling.
On the harness alone the 40 per
cent will amount to approximately
$1,000,000.
Government to Get Is Per Cent
at is admitted by both Goetz and
Byron that what the United States
Harness Company is now doing the
War Department could have done
equally we'll without the payment of
the 40 per cent commission. The prob
abilities are that the government will
not receive to exceed 15 per cent of
the cost value of its surplus leather
poodSo