Evening star., 1942-11-24
Curb on Exorbitant
Shipbui|ding Profits
Urged by House Unit
Commission Justified
In ConceIing Higgins
Contract, Report Says

BY the Associated Press.
A House Merchant Marine
Subcommittee formally reported
today that the Maritime Com
mission needed to tighten up
the terms of it's standard ship
building contract form to pre-
vent exhorbitant profits in the
shipbuilding program.
The subcommittee appointed pri-
marily to investigate cancellation of
contract with the Higgins Corp.
New Orleans. to build 200 cargo
ships. found that the commission
was justified in making the cancel
lation.
1t urged, however. in a report to
the full committee, that before final
adjustment and settlement of this
or other contracts for shipbuildine
be made that careful audit ano
investigation of the expenditures in
CURED be made"
Urging the Maritime Commission
to "restudy its present form of con-
tract with a view to preventing
exorbitant profits in the shipbuild-
ing program" the subcommittee
said it appeared that the present
contract form lis such that waste
and extravaganza can very easily
result therefron"
Would Cancel Another Contract.
Meanwhile. the full committee de-
manded cancellation of a Maritime
Commission contract with the South
Portland Maine) Shipyard, in a re-
port to the House. The committee
described the yards record as the
worst of any company engaged in
the construction OF Liberty Ships"
Reporting on months of investiga-
ton, the committee said 'the newt
able conclusion is that South Port
land Shipyard is receiving a fee for
the trouble of incorporating a COM
pany, choosing a name for that
company, holding an occasional di-
rectors' meeting and delegating the
performance of its contract duties. y
The question presented, the com.
mittee report said, "is whether or
not the performance by South Port
land Shipyard has been such as to
warrant the payment of fees of not
less than $5,040,000.
ITO. summarize the relevant facts
in which an answer to this question
must be framed, South Portland
Ship contributed substantially moth
ing to the performance of the facili-
ties contract other than the layout
OF the yard, and the layout is bad"
The subcommittee said its attitude
on the Higgins contract was mot
due to any lack of confidence in
the ability" of the Higgins firm. 1t
became apparent in July, the group
said, that existing yards would be
able to meet the entire ship pro-
gram and there was still much ma
terial and money yet to 60 into the
Higgins plant.
The subcommittee also urged that
the.Higgins property be used in the
war program "at the earliest possi-
BILE date and that every effort be
made to utilize this property to
prevent unnecessary loss to the
Government"
The group criticized as unwar-
ranted the expenditure of large
sums between July 10. when final
decision was made by the commits
sion to cancel the contract, and
July %, when the cancellation be-
came effective.
In the interim, the report said,
"the Higgins Corp. and their sub
contractors, Brown 81 Root, with the
approval Of the representatives of
the Maritime Commission in New
Orleans, continued to make con-
tracts and incur obligations {"
amounting to $l,318,14S.3S for pay
rolls and rentals and 5000 to
$4,000 a day for equipment rentals.