Evening star., 1933-09-30
LISTS %5,23Q,151 /.
i, SHIP SUBSIDIES
Senator Black Closes Hear.
ing on First so Sea Mail
Contracts.
BY the Associated Press.

BY the Associated Press.
Senator Black, Democrat, Of Alabama,
yesterday placed in the record Of the
Senate committee investigating ocean
mail contracts, list of subsidies total
ing $45,230,151, awarded the Export
Steamship Corporation during the Cool
idge and Hoover administrations.
With the placing Of the list in the
record, the hearings into the first of SO
steamship lines that have ocean mail
contracts was completed. Black also
placed in the record figures to show the
Export line bought % Shipping Board
vessels for 81 ,35l .307. that had cost the
Government S42,114,117.-
The hearings were recessed until
Monday. when r. J. Baker, secretary
treasurer Of the American Steamship
Owners Association. will be quizzed
about alleged propaganda activities Of
the organization.
Debts Disclosed.
E. v. Nevin of New York, treasurer Of
the Export Corporation, under examina-
tion said the line owed the Government
81 ,246, 1873, and that 1t WAS indebted
$l,1OO,OOO to the Central Hanover Bank
in New York and the Philadelphia Ma
tional Bank.
He said the New York Shipbuilding
Co., which was awarded the contract
for the construction of four $2,000.000
ships. had guaranteed payment to the
banks of 100000 Of the notes.
Questioned by Black the witness tes-
tilted the company was In a worse
financial condition than in 1890, when.
he said. former Secretary of Commerce
Lamont approved an extension OF a
loan to the line over the objections OF
legal and financial advisers of the Ship
ping Board that Henry Herberman.
president. had withdrawn funds from
the treasury Illegally"
The line was awarded a mail con-
tract by the Post Office Department in
1928 which called for payment by the
the construction Of four faster ships
for the Atlantic Mediterranean service.
Nevin testified former Postmaster Gen.
eral Walter Brown amended the con-
tract in 1880 to increase the annual
payment to s2,l85,000.
Subsidies Detailed.
Naming some of the subsidies. Black
said under the 10year contract
awarded in the previous administration
the Export Line would receive $l8,397,-
900 in ocean mail subsidies; that the
ships were sold to the company for So
564.694 less than the world market
value; that about $1,000. 900 was loaned
for construction Of the four new ships,
with $2853,OOO being granted as the
difference in interest rates on the loans:
and that the Shipping Board paid
S467457 for insurance for the lines
vessels.
In addition. the Alabaman said. the
Shipping Board spent 81 1851 900 IN re-
pairing ships sold to the Export Corpo-
ration. while. he added, the sale price
was but ST .35l .307.
Nevin said despite the depression.
the company was paying so per cent OF
it's construction loan payments as they
came due.
Questioned as to whether he knew
there T. been a lower bid for the
construc. n of the four new vessels
than that submitted by the New York
Shipbuilding Co., Nevin replied In the
affirmative.
Black said the Spears Engineering
Co. had underbid the New York con-
Germ by $500 900. Nevin told Black
the Shipping Board headed then by
T. v. OConnor. chairman. and not the
Export Line had rejected the other bid.
Railroads Part Explored.
do you know what connection the
Export Line?" Black asked.
Nevin said Henry Herberman. presi-
dent Of Export. formerly had worked
for the Pennsylvania.
DO YOU know that the Pennsylvania
is financially interested In the buSl-
ness?" Black pursued.
Nevin replied in the negative and
Black asked II he knew Elisha Lee,
vice president Of the Pennsylvania, and
whether Lee had helped to negotiate the
loan to the Export Corporation for the
25 per cent deposit necessary TO negoti-
ate loan for the Shipping Board for
construction of ships under the Jones'
White act.
Il do not" Nevin said. adding that
because Export used some Of the Penn
sylvania's piers and did some Of the
biggest businesses Of any American line.
the PENNSYLVANIA worked in close har-
mony" with Herberman.
LAS a matter of fact, you do know
that the Pennsylvania is actively inter-
ested In making this line a success,
Black insisted.
Nevin answered: "It was good busi-
ness
Expenditures Questioned.
Black sought to trace sums Of money
drawn out in currency by Herberman on
his visits to Washington during 1926,
1927 and 1928 during negotiations with
the Shipping Board. Other than to
state the money was sent to Herberman
by check, to be paid in currency, Nevin
said he could not explain the disposition
of the funds.
DO you know where these thousands
of dollars went?" asked Black.
Il do not. sir" replied Nevin.
"Only Herberman can tell US where
the money went them"
That's right" Nevin replied.
Nevin said in reply to questions that
Herberman's salary Of $125.000 year
had been reduced to $4,000 and that
his expenses were limited to $25 ,0G0
annually since directors from the New
York Shipbuilding Co. and the Cen
trail Hanover and Philadelphia Bank
had been placed in the Offices.
Identifies Tailor Entry.
In an effort to substantiate previous
witnesses testimony to the effect that
Herberman had ordered $50 tailor
bill for T. v. O'Connor, Shipping Board
Chairman, paid In November. 1925,
Black had Nevin identify an entry In
a cash book Of the Stears Terminal Co.
controlled by Herberman.