Evening star., 1935-02-14
S,6O1,851 PROFIT
MADE ON z SHIPS
Munitions Witness Asserts
U S. Gains by Use of
C0StIier Material.
BY the Associated Press.

Z
Testimony that his company had
made $5,601 ,851 or IS per cent profit
in 1927 on two cruisers when 1t ex-
pected only $1,sOO,OOO was given the
Senate Munitions Committee today by
Homer L. Ferguson, president Of the
Newport News Shipbuilding & Dry
dock Co. -
At the same time, he told the COM
mittee that although the cost of
cruisers had increased several million
dollars in the last six years they ac-
tually cost the Government less in the
long run because there was great
deal more material In them which
made them more valuable.
The contract price for the cruisers
with the Government was $40. .960, 900
and the net cost was $15,753,457, the
witness explained.
II was amazed we made so much,
the shipbuilder declared.
Increased Costs Alleged.
The committee Immediately intro
duced evidence that the company re-
Gently had bid $lo,500, 900 and SILL
900 900 on cruisers Ferguson insisted
the net cost was greater because of
increased cost Of design and equip
ment and therefore the profit less.
THE cost to the Government. con-
sidering the price," Ferguson said. 'fs
much less under present contracts"
The committee also was preparing
to question A. p. Homer, a Wash
ington marine architect. whose ap-
pearance on the witness stand was de-
layed recently by a doctors report that
he had high blood pressure.
Committee members planned TO ask
Homer to explain intimations Of other
witnesses that he had Washington con-
facts which enabled him to obtain
warship contracts for shipyards for "a
consideration" He has denied using
connections in such a manner.
Ickes Asked to Testify.
Secretary Ickes. the public works
administrator, also has been asked to
testify tomorrow. The committee
wants to learn from him, among other
things. the amount of P. w. A. money
which has been set aside for ship
building. Senator Nye, Republican. OF
North Dakota recently estimated the
total at nearly $500 900 900.
In the study of the Newport News
Building & Drydock Co. since 1926,
Senator Bone. Democrat, Of Washing
ton. committee member, planned a
special effort to determine If wages
in shipyards have kept step with
profits.
These companies have q system of
bonus payments and wage schedules
that defles solution" he told news men
The shipyards do not recognize the
American Federation Of Labor and
the best efforts OF that organization
TO learn what scale Of pay the yards
are on have been futile"
Bone expressed dissatisfaction with
the result Of wage questions he put to
officials of the New York Shipbuilding
Corp. when they were on the stand
recently. Officers of that company
said wages were increased after q
shipyards strike but one added the
strike had not been necessary to OBJ
tain the gaines.
Long Testimony Expected.
Excepting the testimony of Homer
and Secretary Ickes, examination of
officials of the Newport News Co. is
expected to engage the committee the
remainder Of the this week and part
of the next.
Payment of s7,o00.0 900 by the Navy
to the Newport News Co. for scyapping
wartime contracts while the company
managed nevertheless to complete a
disputed battle ship was disclosed yes
terday before the committee. Fergu-
son, defended spiritedly his receipt OF
pay for cancelling warship contracts
when hostilities in Europe ceased.
DO you think you can break S70-,
100000 in contracts and tell a cCm-
pany to 60 shake itSelf?' he flung at
Committee Counsel Stephen Raushen-
bush.
Assertions by committee members
that naval officers had been in COL
lusion with shipbuilders in deciding
bidders on naval contracts met denial
from Secretary Swason. The Navy Sec
retary said that such charges were
mot true and without the slightest
foundation"