The people's voice. [volume] (Helena, Mont.) 1939-1969, 1942-08-07
THE
WASHINGTON
SCENE
By HENRY ION

The Higgins shipyard case is fas
becoming the most sensational storJ
yet of big business manipulation tt
increase its profits and destroy com
petition at the expense of the nations
war effort Two house committees
and one senate committee are probing
to find out why the u. S. Maritime
Commission suddenly cancelled an
order with Higgins Industries Inc. OF
New Orleans for 200 Liberty ships.
The Investigations were hardly UNI
der way before the finger OF suspicion
began oscillating in the direction of
dollar-a-year men whose business con-
nections are direct competitors of An
drew Jackson Higgins, described by
Labor, railroad brotherhood newspa-
per, as "a colorful, two-fisted ship
builder, operating with 1000 AFL I'M
ion labor, who has been doing mir
acles in construction of torpedo
boats"
Higgins pulled no punches in his
appearance before the house maritime
subcommittee. Quite bluntly, he ac-
cused Bethlehem Steel Corp. of using
its influence with the maritime com
mission to get his order cancelled be-
cause his assembly line methods could
produce Liberty ships at a much fast
er and much cheaper rate than Beth
lehem with its old-fashioned methods.
Bethlehem's man in the government
is one Joseph w. Powell, who served
for years as its vice president and
who is now the so-called expediter of
ship production for the Navy depart
ment. Maritime Commission Chair
man Emory S. Land, in his best quar-
ter deck buster with which he has
tried to intimidate maritime unions
for years, shouted denials, but had to
admit he consulted with Powell on
various problems"
Powell is probably most famous, or
notorious If you prefer, as the origi-
nator of the half savings" contract
clause by which Bethlehem made un-
heard-of-profits during the last war
and which Supreme Court Justice
Felix Frankfurter called daylight
Powells clause netted Bethlehem
S30,000000 in excessive profits which |
the government spent more than 20
years in federal courts trying to get
back. 1t is a foolproof method of |
gouging. Under it Bethlehem got |
profits equaling one half of the diff |
ference between estimated and actual |
costs of ships which it built for the |
government in 1918. The method was
simple. Bethlehem, making its own |
estimates, naturally placed them sky
high. Then it built the ships as
cheaply as it could so there would be
a tremendous difference on which to
base its 500 take.
Powell also had what the boys in
The pool rooms might call a side
racket, according to evidence given by
Higgins. 1t seems that ION old
friend" of Powell's is ]. E. Otterson,
president of the New Jersey Ship
building Co. which received 100000
200 to build Liberty ships just before
he Higgins contract was cancelled.
These ships, Higgins says, are to be
built with the same methods and
plans as those which he originated
This is admitted by Land, under
whom Otterson serves as a dollar-a-
year man with the title of co-ordina-
or of ship repair and conversion on
he Atlantic coast
Lurking in the background is the
sinister figure of Torkild Richer, who
vas forced to resign last year as
PRESIDENT of the Texas Oil Co. be-
'ause he was shipping oil to Nazi