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6 THE MARINE REVIEW zilian port for the purpose of defraud- ing the shipping board by excessive charges for repairs, supplies and other services. He declared that an investi- gation showed that the shipping board paid from six to seven times the cost of work. One master was given $7500 by a ship repair man, byt, pecause he was too wise a bird to get caught had the repair man state that the money was received for "services ren- dered." He said that the "red ink" masters and chief engineers were the ones who generally practiced the graft- ing. The members of the ring were so anxious to rope in shipping board vessels that they met the ships with launches, he said. : Paul H. MacNeil, former plant .engi- neer for the Emergency Fleet cor- poration at Savannah, Ga., testified that: Complete equipment for four ocean- going ships, valued at about $1,500,- 000, had been left exposed to the weather for several months in the yards of the Terry Shipbuilding Corp., no effort being made to cover it, al- though there were abundant supplies of lumber nearby. More than $100,000 from funds ap- propriated by the Emergency Fleet corporation for the construction of ships at.the Terry plant was diverted and loaned, he alleged, to a_ subsid- 'fary, the Savannah Dry Dock :-& Re- pair Co., "then insolvent." After the National Shipbuilding Co.'s plant had been closed down, Mr. Mac- Neil sought to stop the future delivery of woodworking machines, valued at $25,000, which had not been shipped, but was told by officials "higher up" to keep his hands off the matter. Repair Job Irregularities William E. Morton, former agent of the bureau of |investigation of the shipping board, gave testimony con- cerning some ship repair plants at Nor- folk, Va., in 1919, naming the Union Iron Works, Norfolk, as. a com- pany which was doing repair work for the. board. This company, he alleged, had a force of but 52 persons in its employ, including stenographers. He asserted that there were instances where their accounts showed "58 men on a job." He added that the entire force was "probably paid overtime," and he asserted that he knew of in- stances where crews would be sent out to work on ships at anchor and time allowed for every hour they were away. He testified that he investigated this plant for a short time between 1919 and 1920, but was withdrawn and transferred across the continent when he made an unfavorable report. "The entire mechanical equipment The of the Union Iron Works could have been carried away in a small motor truck," said Mr. Morton, "but it man- aged to obtain enough contracts from the shipping board to keep an enor- mous plant a short distance away working full time on the work as a subcontractor." Stewart Dickson, president of Stewart Dickson & Co., Inc., claimed that the shipping board had caused a loss of $1,400,000 to be incurred by placing a contract of a year's supply of asbestos last February at prices fully 50 per cent higher than they should have been. He said there were five bidders for the contract, four of which bids were practically the same. four averaged about $1.60 a pound. His bid was $1.20. Ships Allocated to Favorites Edgar F. Luckenbach, president of the Luckenbach Steamship Co., repeat- ed stories of what he termed his "mis- treatment" by the shipping board. He declared that he had been forced to pay an "overcharge" of $3,400,000 when he repurchased from the board ships, originally contracted for by him and subsequently requisitioned by the gov- ernment, because the Emergency Fleet corporation tore up lump sum _ con- tracts which he had made with ship- builders and replaced them with "cost plus contracts." He said the Luckenbach Steamship Co. was "driven out" of the Austral- ian business because the shipping board allocated 17 vessels to the Unit- ed States & Australasia Steamship Co.--a company which "did not own a single American ship and which merely owned an interest in a foreign steamer." | Mr. Luckenbach asserted that in spite of the fact that his company had purchased more tonnage from the shipping board than any other Amer- ican company--$22,000,000 worth--re- quests for the allocation of govern- ment-owned vessel were repeatedly turned down, while other companies were favored with all the tonnage they requested. He declared that vir- tually all of the "older, experienced" steamship companies had been dis- criminated against by the shipping board's allocation department and that "those who previously had fought every effort to develop and establish an American merchant marine" stood highest in the favor of the board. It is now costing the government $24,000 a day more to feed the 60,000 men on shipping board vessels under the existing system of purchase of sup- plies than it did during the war before its ships were allocated, R. H. Greg- ory, port steward in the north Atlan- tic district testified. He said that dur- January, 1921 ing the war all supplies were pur- chased direct by the board. Now each operator purchases the supplies and "the bills are paid by the government." Mr. Gregory estimated that the basic rate per man per day is now about $1.25. During the war when the board was operating all its ships, the estimated basic rate was 83 cents. In New York, he added, there are 80 purchasing agents for as many oper- ators of shipping board vessels. They are bidding against each other for ship supplies and the government even- tually pays the bill. Peter J. Sullivan, one of the former special agents of the treasury depart- ment, who after about "a month on the job" was transferred to the desert hills of Nogales, Ariz. told of a ship- ping board purchasing agent at New York who while. on the government payroll continued to draw his salary from his former employer. Martin D. Jewell, another former treasury department agent, said he had discovered overcharges in purchases of condensed milk in which a shipping board employe had received a commis- sion of $242. The board paid $10,825 for this purchase, including an over- charge of $2450, Jewell said. Charles F. Hanes, an assistant ex- aminer for the Emefgency Fleet cor- poration in New York, declared that the shipping board is paying to com- panies in American ports $60,000,000 to $70,000,000 annually for repairs without providing proper supervision of this work. At the port of New York, he said, repair bills aggregated $2,500,000 a month. The supervisory force, in 50 per cent of the repair cases, he asserted, was not furnished with requisitions until the work had been completed and_ the ship had sailed. Tells of Overcharges Instances of overcharges and other irregularities were cited by the wit- ness whose _ observations had been made at New York, Baltimore _and Norfolk. He alleged that a bill made out by the Burton Machine Works, Norfolk, Va., for repairs on the LaKE ONTARIO, contained a charge of $47.90 for replacing a hinge, whereas the hinge, according to Hanes, could have been bought for 50 cents. He told of instances where workmen were crowd- ed aboard vessels to make repairs in places which would accommodate only one or two men at a time. Mr. Hanes alleged that a director as well as the president of the Union < Iron Works, Norfolk, Va. had ad- mitted presenting five shares of worth $100 each, to Lester a shipping board inspector at in recognition of his stock, George, Norfolk, past services.