The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

September, 1921 Q0C received from all sources shows a net expenditure of $380,000,000, al- though the public records show $100,- 000,000 to be all that had been ap- propriated by congress for the year. This is an astounding case of ab- solute deception of the country and congress. I know and want to ex- plain that Admiral Benson and Mr. Tweedale had not the remotest thing to do with such gross misrepresenta- tion. They were acting in accordance with the system under which the books had been kept from the hour the institution started and they were so busy trying to straighten out the mix-up in settlements and operations. that they never had the time to try to systematize the records. The only reason this situation has become apparent now is because com- ing in as a new administrator I de- sired to find out for my own guid- ance what the loss had been. This necessitated calling in outside audi- tors before the facts could be ascer- tained. I do not guarantee the fig- ures now; they are the best we could secure from the books and we are assured that they will prove fairly reliable. It will be a shock to congress, as it was to the President; to hear that the net expenditures of this enterprise, paid out of the public funds last year was $380,000,000. To illustrate the bad condition the books are in, I will say that last year the gross operating disbursements were $410,000,000. That represents the expense of the opera-- tion of 'the: boats: 'alone: Of «that amount, there is yet no exact account- ing for $310,000,000. This resents money disbursed for the board by the operators of government owned boats who have as yet failed to make a full accounting. It is only fair to say that the operators of a boat are always on the average a few months behind in reporting the accounts, be- cause, if a boat leaves today on a four months' voyage, money is being paid out for her that can not be accounted for until she shall have finished her trip; but obviously, for 75 per cent of the year's operations to be unac- counted for demonstrates a complete breakdown and shows further that the new shipping board has inherited a collapse that will take it every effort and tremendous patience to resusci- tate. As I look into the details, I find them worse than my worst expecta- tions, Approximately $200,000,000 rep- Fesents absolute loss in operations of the fleet. There was expended $160,- item rep-. MARINE REVIEW 000,000 on construction of ships, * di- vided as follows: $149,000,000 on steel - ships and the rest on miscellaneous ships, including an item of $3,- 000,000 for wood, composite, and con- crete ships. What these newly ac- quired assets are worth is highly ques- tionable. The plans for the steamer. AMERI- CAN LeEGION were redrawn seven times No Questions Asked as Bills Are Paid B ILLS had been passed for pay- ment practically without check- mg," one commissioner told the writer. "Take this top voucher now on my desk. It carries an item of 23 days to load a steamer at a dock charge of $250 per day. I withheld approval and the company explained that cargo had been slow im arriving. But as the operator of our ships, this company was obligated to obtain the cargo as quickly as possible. In addition, the same company owned the dock to which the $250 a day charge would have been paid. When I asked whether 'such a course was fair and honorable, the company representative shrugged his shoulders and said that they had always been making these kinds of charges. "The same bill indicated this company wanted the government to pay more for handling freight than for loading, although it is obviously more difficult and expen- sive properly to sort, load and distribute cargo to secure a. cor- rectly stowed ship, than tt is to attach a sling to some goods in the hold and swing it to the dock. "Men unfamiliar with the a-b-c of shipping had apparently been allowed to pass on items aggre- gating millions of dollars with the inevitable result manifestly ex- travagant items went through to the pay window without protest." and it is easy to see how that would run up the cost. First the AMERICAN Lrecion was designed as an army transport, them as a navy transport, then as a hospital boat, then as a cattle boat, and after spending money on all these blueprints it was decided to transform her into a passenger ship--and she is a very beautiful and fine passenger ship. But she cost be- tween six and seven million dollars and that was before she sailed her first mile. Agia matter: of fact, her real 389 worth is probably half what she cost. So you can see assets such as that are pretty. sick assets. But after all there is a fléet;: It is the largest fleet many times over that the world has ever known. So our task is to make what was a liabil- ity into an asset, for of course the fleet must be operated, And if we can solve the problem of how successfully to operate these ships it will be worth all the money the war cost to put the American merchant marine back on the map. "If it had not been for the war we would not have this merchant marine, so we must turn our backs on the sad past and look constructively and patiently to the future. I must appear before congress short- ly to tell them it is possible the ship- ping board will require up to $300,- 000,000 for the present fiscal year, I fear this will throw a lot of sand in the: gear box of tax revision. The books of the board are so absolutely incomplete and incompetent that it is impossible to be sure whether that $300,000,000 represents all we may need; we may require more but it is the most intelligent wild guess we can make. The President instructed me that during his administration the public is to have the facts--and all the. facts-- and that when we show losses on op- erations of the shipping board, they shall be the actual losses. Anything realized from the sale of -assets from now on must be covered into the pub- lic treasury, and not expended as in the past. The President wants the country to get--not as in the past, a picture that shows what did not hap- pen--but even though it might show that we ourselves are incompetent, to publish all we really lose. Now it is necessary to ask congress for $300,000,000 to carry us through the coming year, though we will try the first six months to get along on $100,000,000 to $125,000,000. We will not hide our losses. When I say we may need up to $300,000,000 for the coming year, it is with the hope that from that sum we will be able to pay not only the losses of operations, but also to settle finally a part of the claims and the law suits pending against the shipping board. These lat- ter amount to more than $300,000,000 themselves, but we anticipate settling them for 50 cents on the $1.00, because many of them are padded. Congress already has appropriated $25,000,000 to finish the construction of ships. It is estimated operations will lose $150,000,000. The reason the ' ;