anaheim-gazette 1920-12-02

EXPOSE CORRUPTION OF SHIPPING BOARD Appalling Disclosure of Graft, Robbery and Incompetency. An astounding story of the extent to which the government and taxpayers of the United States have been the victims of wholesale and systematic corruption, graft, waste, extravagance and incompetence, is told in the preliminary report of investigations conducted by A. M. Fisher and J. F. Richardson, expert statisticians, into the operations and activities of the United States Shipping Board and its war-time subsidiary, the Emergency Fleet Corporation. Fisher and Richardson were employed for this purpose by a special house committee of which Congressman Joseph Walsh, Massachusetts, is chairman, and Congressman Patrick H. Kelley, Michigan; Lindley H. Hadley, Washington; Israel M. Foster, Ohio; Henry J. Steele, Pennsylvania, and Thomas Connally, Texas, are members. The report is to be the basis for extensive hearings which the house committee will begin as soon as congress reconvenes in December, and which may result in numerous criminal prosecutions. The report substantiates, amplifies and elaborates charges concerning conditions at Clearmont, Va., where 300 wooden ships constructed by the shipping board at a cost of $250,000,-000, are rotting in the James river looted of their high-priced nautical instruments and other valuable equip- adopted in the new contracts and the abuses continue. "Overcharges immediately became, and continue to be common under this agreement," says the report. "It is to the advantage of the contractor to pad payrolls, slight work, put too many men on the work, encourage loading on the job, corrupt inspectors and timekeepers, use helpers and charge for first-class workmen, use common labor and charge for skilled labor, drag the work to make it last longer, and find additional work to do." "Excess profits are exacted, moreover, the report continues," by contractors who employ workers at 90 cents to $1.25 an hour under a scale approved by the board and then employ common instead of skilled labor at 30 or 40 cents an hour. The contractors' profits thus run over 100 per cent. "Corruption of the United States Shipping Board and Emergency Fleet Corporation employs and officials became the tendency under this practice," says the report. "Usually attempts are made by the contractors, and in many cases successfully, to secure the favor of port construction and repair representative, who has the assignment of work to the various contractors, and the shipping board agency auditor who has under his charge the checkers and timekeepers. "Of course it is also necessary to report timekeepers and checkers in order that the work done by inferior labor may pass inspection and that loading of men or padding of payrolls may go unchallenged. This again results in good men being heckled, insulted or even frightened off the work and entertainment is now, the ship getting within 50 sale rates, on the domestic ports foreign ports, far more pernicious country." The appalling effect is only possible due to lack of cooperation from higher-rate instance, are wholesale prices which to audit. Chandlers are able goods on the Shipping their bills approve brands and qualities. The Shipping Board suffer great losses consumed fuel about Board allows a gen of coal or oil on often there are as tons of coal or m left over. "A common result of the report, "is for times in conjunction to receipt for more reaches a distant receives from the bus to the exact amount has unconsumed in then gets a rebate companies on this in a division with panies and the ma- extensive hearings which the house committee will begin as soon as congress reconvenes in December, and which may result in numerous criminal prosecutions. The report substantiates, amplifies and elaborates charges concerning conditions at Clearmont, Va., where 300 wooden ships constructed by the shipping board at a cost of $250,000,000, are rotting in the James river looted of their high-priced nautical instruments and other valuable equipment. It corroborates, moreover, the statements of Henry A. Bakor, first cousin of Secretary Baker, concerning the graft and corruption rampant among other shipyard board employees and other government officials at ports of France, while he himself was an employee of the board. Approximately three and a half billions of dollars, subscribed by holders of Liberty bonds during the war or paid to the government in war taxes, were appropriated for the work of the shipping board in meeting the war-time need of ships. By adopting the pernicious cost-plus and lump sum systems in paying for repairs and construction work, the shipping board and the Emergency Fleet Corporation are held responsible for resulting enormous overcharges and excess profits, the corruption of government employees and officials, the lack of proper inspections, and costly delays and losses. In the repair and provisioning of shipping board ships at both foreign and home ports, the report shows, practices of deliberate and systematic bribery and graft are so common and extensive that, unless checked or stopped they must bring failure to the whole American merchant marine. Much, if not all of this, the report says, could have been prevented by a proper bidding, checking and auditing systems. Gross favoritism and discrimination are shown in the allocation or assignment of ship tonnage to the various ports and routes. Interlocking ownerships in ship chandlery, repair, water, towing, stevedoring and forwarding companies resulting in overcharges and excess profits caused huge losses to the shipping board, the report says. Interlocking contracts were another medium through which the government was mulcted of large sums. Millions of dollars are shown to have been wasted in the extravagant assignment of work to the various contractors, and the shipping board agency auditor who has under his charge the checkers and timekeepers. "Of course it is also necessary to report timekeepers and checkers in order that the work done by inferior labor may pass inspection and that loading of men or padding of payrolls may go unchallenged. This again results in good men being beckled, insulted or even frightened off the work when they will not prove susceptible to corruption. "It is comparatively an easy matter 'accidently' to drop a bar or a wrench into the hold when the 'straight' timekeeper or inspector is standing under, and thus it is not long before honest men are disgusted and discouraged, and others are corrupted." One form of corruption most common is for the contractor to hire and place on his payrolls the efficient man who cannot be openly bought, this resulting not only in some employees of the government being carried on the payrolls of contractors and drawing pay from the same time the employee is drawing pay from the shipping board. In other cases it results in employees being taken from the shipping board and engaged in the service of the contractor. In still other cases promises of future lucrative positions are made the shipping board employees in an effort to tinge their judgment or sway their allegiance to their duty. "Similar graft and corruption is shown to result from the practice of awarding lump-sum contracts for repairs and the lack of efficient inspection." Many cases have come to light," reads the report, "where, under lump-sum contracts, many repairs called for in specifications have been neglected and not made, such omissions not being discovered until after the ship had come off the docks and work approved for payment, thereby necessitating a redocking and tearing out of work already done in order to permit of repairs omitted. "All of this results in loss of time for the ship with consequent per diem loss, demurrage losses, loss of earning capacity, etc. It must be kept in mind that every moment the propellers of a ship are not turning over the ship is losing money." Concerning the enormous losses from graft in commissions received by ship chandlers and other dealers for repair representative, who has the assignment of work to the various contractors, and the shipping board agency auditor who has under his charge the checkers and timekeepers. "A common result of the report, "is for times in conjunction to receipt for more reaches a distant receives from the bus to the exact amount has unconsumed in then gets a rebate companies on this in a division with two panies and the maa division only better engineer and the maa mainly the chief engineer amount. At chief engineer logs as being the amount lowed in the consummation. It is not uncommon for as much as $44,000 of fuel to be charged time on a single money divided by officers and the bus. The loss, of course, the shipping board. In the matter of signing ships to post report states that occasion "shoestring with insufficient fin inadequate experience are able to give they resuest, while enced ship operator or ships of an unreasonable type. The above are or references from Richardson report. Jects are gone in equally shocking attempt is made to city or guilt on any or officials., that House committee in SOME FACTS YOU Do you know that debt of your govermately $24,000,000,000 represents loans for? That these loansthe Treasury by doing interest at 5 percent represents loans for That these loans provision as followe will be convergent (name of f Interlocking ownerships in ship chandlery, repair, water, towing, stevedoring and forwarding companies resulting in overcharges and excess profits caused huge losses to the shipping board, the report says. Interlocking contracts were another medium through which the government was mulled of large sums. Millions of dollars are shown to have been wasted in the extravagant and inefficient expenditure of shipping board funds on the board's various housing projects. Losses by thefts from ships is declared to be so common and extensive as to demand immediate attention. Masters, mates, stewards, supercargoes, even seamen, the report says, testified that "the lack of proper checking, inspection and inventory has made the case of theft of supplies from United States shipping board boats the talk of the world in sea circles. In both domestic and foreign ports these thefts run into thousands per month, and little check is being applied to the condition by the United States shipping board. "Everything from ships' clocks' to brass, copper, oil, gasoline, fuel, food supplies, even office equipment, is sold at the various ports, and the cases are so numerous as to stamp this condition as highly menacing to the prosperity and success of the merchant marine. "The remedy, of course, lies in regulating the buying and, more important, in proper inventory to check up the unconsumed supplies and thus regulate the unexplained consumption." Abolishment of the cost-plus system in contracts for ship repairs has been ordered by the shipping board in compliance with the Jones shipping act, the report says, but a system not materially different has been "All of this results in loss of time for the ship with consequent per diem loss, demurrage losses, loss of earning capacity, etc. It must be kept in mind that every moment the propellers of a ship are not turning over the ship is losing money." Concerning the enormous losses from graft in commissions received by ship chandlers and other dealers for provisions and supplies, the reotr says: "It is not uncommon for ship chandlers supplying shipping board ships; under the practice, to carry less than $25,000 in stock and yet handle more than half a million dollars' worth of orders annually. They secure orders from managing or operating agents through the stewards, go to the wholesale houses, purchase the bulk of the order at the same prices at which the shipping board might have secured the supplies direct, have them delivered to the ship, and take off a broker's profit, usually of 25 to 40 per cent, and add still an additional percentage to cover free automobiles, gifts of gratuities, payments of commissions, etc., to stewards or masters, or both. "Included in these overcharges are the 'free launch, automobile and other services advertised' by the chandlers. Added to this again is the cost of the common practice of providing ships' officers with whisky or other forms of entertainment—all of shipping board in the prices of the supplies or taken out in the form of short deliveries—which are possible owing to the lack of proper inspection. "Wholesalers in any port of consequence in the United tates are ready to give the shipping board the benefit of wholesale rates it is entitled to if the methods of ordering, delivery, etc., are reformed and gratuities" That these loans by the Treasury by doing interest at 5 percent represents loans for that these loans provision as follow: will be conversion of (name of for if requested by the United States of America an adjustment of into an equal par cent) per cent bonds of the Government. That in spite of all in spite of the fact was made on April this ago, no conversion of accrued interest although for many Administration says ing on 'discussions' tries to that end. That further in vision there is a settlement in England broad do not really at all, but should be of America's control of the war, a sentimental strength the long notes into bonds. That up to the ee year 1920 interest w on foreign loans to imately $1,200,000. That of that sur paid up to March 13 an official report f of the Treasury, th 000. That probably interest has been paid it being the announcement Secretary to do of interest during ANAHIM GAZETTE and entertainment eliminated. As it is now, the shipping board is not getting within 50 per cent of wholesale rates, on the average, at any of the domestic ports, to say nothing of foreign ports, where the practice is far more pernicious than in this country." The appalling extent of this graft is only possible, the investigators declare, because of the lack of any system by the shipping board for inspecting and checking purchases and requiring competitive bidding. Even where competent auditors or inspectors are they are handicapped by lack of co-operation or co-ordination from higher-ups. Port auditors, for instance, are not provided with wholesale prices as the basis from which to audit. As a result ship chandlers are able to foist inferior goods on the Shipping Board and have their bills approved for the best brands and qualities. The Shipping Board is shown to suffer great losses in the theft of unconsumed fuel aboard its ships. The Board allows a generous consumption of coal or oil on each voyage and often there are as much as 50 to 100 tons of coal or many barrels of oil left over. "A common result of this", says the report, "is for the engineer, many times in conjunction with the master to receipt for more fuel when he reaches a distant port than he receives from the bunkering companies to the exact amount of the tonnage he has unconsumed in his bunkers. He then gets a rebate from the bunkering companies on this tonnage, sometimes in a division with the bunkering companies and the master; sometimes in period of two or three years from the spring of 1919. That pending the Treasury 'discussions,' and during the period of deferment, the American peoples are being taxed the full amount of the interest which foreign governments have not paid in order to meet the payment of interest on a similar amount of Liberty Bonds. That unnecessary tasation approximates $500,000,000 annually, one eighth of the total amount which the Secretary of the Treasury estimates as required to run the Government for the following year. These are facts that should be impressed on the mind of every American citizen and kept constantly before every senator, Member of Congress, and official of the incoming Republican administration. No more pressing duty confronts those men, and they can render no greater service to the people who elected them to office, than to see that the explicit provisions of these foreign notes are carried out, and at an early date. When that is done a tremendous reduction of taxation will be made possible, the future repayment of the huge principal of those notes will be assured, and an earlier liquidation of our own national debt will be achieved, through the sale either in this country or abroad, of the foreign bonds received. NO CAUSE FOR ALARM Japanese desire for real trouble with the United States is unlikely, however alarming the reports from Tokio may seem. Neither the California headstone reads the following inscription: 'FAITHFUL FRIEND' "In memory of Spot. A faithful friend. September 1903—February, 1913. M. J. and I. E. On the death of the pet dog, the keeper is notified. A Ford hearse automobile is dispatched to the home of the deceased carrying a coffin. A rough box is used. If there are no mourners the dog is brought out for a quiet burial and placed in a grave. A number and a wooden headstone is furnished as a means of identification. Such a sight as this is not at all uncommon to the neighbors. A procession of automobiles is seen off in the distance, wending its way slowly and sadly toward the cemetery. A hearse auto leads. As it passes through the gate, weeping is frequently heard from the occupants of the autos. Slowly and solemnly the procession winds its way up the steep narrow roads between rows of graves. Then it comes to a standstill. One by one the mourners file out and take their places at the grave. It is a weeping and sorrowful party that surrounds the grave as the box coffin is lowered and Fido is laid to rest. In some instances mourners have insisted on burying a bone with their pet, while others rely on their pet dreaming of bones and dog heaven. The graveyard stretching for twelve miles along Eastern Branch., is said to be one of the best constructed of its kind in the country, and the best at a cost of about $10,000. The cost of a funeral is $10.00. "A common result of this", says the report, "is for the engineer, many times in conjunction with the master to receipt for more fuel when he reaches a distant port than he receives from the bunkering companies to the exact amount of the tonnage he has unconsumed in his bunkers. He then gets a rebate from the bunkering companies on this tonnage, sometimes in a division with the bunkering companies and the master; sometimes in a division only between the chief engineer and the master and occasionally the chief engineer taking the entire amount. At the same time the chief engineer logs the fuel consumed as being the amount called for or allowed in the consumption chart." It is not uncommon, the report says for as much as $4,000 to $6000 worth of fuel to be charged for a second time on a single voyage and the money divided between the ship officers and the bunkering companies. The loss, of course, must be stood by the shipping board from public funds. In the matter of allocating or assigning ships to ports and routes the report states that on more than one occasion "shoestring" ship companies with insufficient financial backing and inadequate experience and management are able to get all the tonnage they resquest, while reputable, experienced ship operators either get none or ships of an undesirable or objectionable type. The above are only random excerpts or references from the Fisher and Richardson report. Many other subjects are gone into which indicate equally shocking indications. No attempt is made to place responsibility or guilt on any particular persons or officials, that being left for the House committee in its hearings. SOME FACTS YOU SHOULD KNOW Do you know that the entire national debt of your government is approximately $24,000,000,000 and that approximately $10,000,000,000 of that sum represents loans foreign governments? That these loans are evidenced in the Treasury by demand notes, bearing interest at 5 percent, signed by the represents loans to foreign governments. That these loans are evidenced in provision as follows: This certificate will be converted by the government of (name of foreign government) if requested by the Secretary of State now assured, and an earlier liquidation of our own national debt will be achieved through the sale either in this country or abroad, of the foreign bonds received. NO CAUSE FOR ALARM Japanese desire for real trouble with the United States is unlikely, however alarming the reports from Tokio may seem. Neither the California land law, nor the reported American proposal as to the treaty with Japan now in the making, is such as to warrant the war spirit among the Nipponese, since they would stand to gain nothing even in the impossible event of ultimate victory. The Japanese jingo may be plying his trade for domestic political purposes but his countrymen will be cannily careful to suppress him before his ostensible hopes reach fruition. Continued calm consideration of questions at issue between the two nations will bring eventual settlement without loss of anything material to either. The United States has but one principal to which it must unalterably adhere and Japanese public sentiment cannot successfully challenge its operation. That principle emphasizes American right and American intention to govern American affairs either with or without the advice and consent of any other nation. It is the American purpose to keep America, American. The question as to whether aliens shall be permitted to gain a foothold upon American soil is not debatable, even though it be raised to a haughty Orientl power with exaggerated ideas of its own importance. California is seeking to do what Japan has already done concerning allies within its borders. This state seeks to enforce an economic rule that it has come to consider as essential to its welfare, exercising its sovereign powers as it may properly do. If the California theory as to the extent of its commonwealth rights is untenable, and if the corresponding American theory of American control of American affairs is possible of practice, there never has been better time than the present to discover it. Mass meeting in Tokio to twist the tail of the American eagle may represent Japanese public sentiment and they may not. They may merely be the Oriental method of frighttning the American State Department into less rigid requirements in the treaty now The United States has new relations to establish with the greater part of the world. It has a peace to arrange. It has disputes to settle. It has trade to arrange. It has to come to terms with Germany, Russia, and Austria. It has to meet differences with Japan and to find a solution for them. It has virtually to refind its place in the world. The new Government which will undertake this believes in representing the United States and in obtaining justice for the United States. First Church of Christ, Scientist, corner of Philadelphia and Chartres streets. Sunday service at 11 a.m. Sunday school at 9:45 a.m. A meeting Wednesday at 7:45 p.m., at which testimonials of healing are given. Free reading room in the First National Bank building, rooms 304 and 305; open daily from 11:30 a.m. to 5 p.m., except Sundays and legal holidays, where the Bible and authorized Christian Science literature may be read, borrowed or purchased if desired. The public is cordially welcome. out of your government is approximately $24,000,000,000 and that approximately $10,000,000,000 of that sum represents loans foreign governments. That these loans are evidenced in the Treasury by demand notes, bearing interest at 5 percent, signed by the represents loans to foreign governments. That these loans are evidenced in provision as follows: This certificate will be converted by the government of (name of foreign government) if requested by the Secretary of the United States of America at par with an adjustment of accrued interest into an equal par amount of (rate per cent) per cent convertible gold bonds of the Government of (name of foreign government). That in spite of that provision, and in spite of the fact that the first loan was made on April, 25, 1917, 43 months ago, no conversion or adjustment of accrued interest has been made, although for many months the Wilson Administration says it has been carrying on 'discussions' with debtor countries to that end. That further in spite of that provision, there is a well grounded sentiment in England that our loans abroad do not really constitute a debt at all, but should be cancelled as part of America's contribution to the cost of the war, a sentiment that is gaining strength the longer the conversion of notes into bonds is deferred. That up to the end of the calendar year 1920 interest will have amounted on foreign loans to the sum of approximately $1,200,000,000. That of that sum there had been paid up to March 13, 1920, according to an official report from the Secretary of the Treasury, the sum of $433,000,000. That probably little if any, interest has been paid since that date, it being the announced purpose of the Secretary to defer 'the collection of interest during the reconstruction of its commonwealth rights is untenable, and if the corresponding American theory of American control of American affairs is possible of practise, there never has been better time than the present to discover it. Mass meeting in Tokio to twist the tail of the American eagle may represent Japanese public sentiment and they may not. They may merely be the Oriental method of frightening the American State Department into less rigid requirements in the treaty now being drawn. In either case, they are of little actual consequence. California has no intention of becoming Aslatic, even at the request of the United States Government, which is likely to propose nothing so foolish. DOG CEMETERY Unique is the Aspen Mill cemetery located just beyond the confines of Washington, where the pampered canine pets of the capital's aristocracy are finally laid to rest. Since this burial ground for fashionable dogs was established last June, 50 canines have been laid to rest by their masters. Let it be understood that this cemetery is no place for common dogs of the rag-tail and bob-tail variety. Of course, such dogs are permitted to stand outside the fence and look in, but that's all. It is a regular cemetery. Two keepers have charge of the grounds and their cottage is located at the entrance gate. It is their work to keep up the graves, weed them and occasionally decorate them with flowers. A walk through the grounds shows even mounds in rows with marble headstones. On some of the graves plants such as ferns have been planted, and floral offerings have been placed by loving hands. On one of WHY Everybody Eats at the Dew Drop Inn Cafe Excellent Service and Good Eating A. KLUEWER, Prop. WHO WON THE WAR? We hear a great deal about "Who won the war?" but the fact remains that nobody won it. Everybody got licked, and it will take a hundred years to heal the scars of battle. Germany does not feel that it was defeated. Coincident to Germany's celebration of the armistice anniversary. NOTICE TO TAXPAYERS Notice is hereby given that the city taxes on all personal property secured by real property, and on all real property in the City of Anaheim, will be due and payable on the first Monday in October, 1920, and will be delinquent on the last Monday in November, next thereafter, at 6 o'clock P.M. Unless said taxes are paid prior to WHO WON THE WAR? We bear a great deal about "Who won the war?" but the fact remains that nobody won it. Everybody got licked, and it will take a hundred years to heal the scars of battle. Germany does not feel that it was defeated. Coincident to Germany's celebration of the armistice anniversary and the revival of the question, "Who won the war?" with Germany's answer "We were not defeated; our civilian population lost its morale," there appears a pretentious war history to which Hindenburg, Ludendorff and a score of other leaders have written chapters. The history bears the title, "Unconquered in the field." This title aptly sums up the trend of public opinion in Germany which first blamed the British blockade, then the American participation, for the defeat, but now takes the pre-armistice view, that the crumbling rock of civilian support, the climax of which was November 9, the revolutionary outbreak and not the fresh American army, overwhelming artillery and continued Allied offensives were responsible for it. Anaheim Gazette, fifty-two weeks for $1.50. ORANGE COUNTY BUSINESS COLLEGE Santa Ana, California Enrollments now active for our fall term. We can train you in a new months for a good position paying from $75 to $160 a month. The demand for our graduates was never so great. Salaries were never so high. We cannot fill half the positions placed at our disposal. We MUST have more students this year to keep the wheels of business moving. Ask today for our FREE catalogue. J. W. McCormac, President. NOTICE TO TAXPAYERS Notice is hereby given that the city taxes on all personal property secured by real property, and on all real property in the City of Anaheim, will be due and payable on the first Monday in October, 1920, and will be delinquent on the last Monday in November, next thereafter, at 6 o'clock P.M. Unless said taxes are paid prior to the last Monday in November, 1920, at 6 o'clock P.M., 10 per cent will be added to the amount thereof. Said taxes are payable to the undersigned at his office in the City Hall, in said City of Anaheim, between the hours of 8 A.M. and 12 M., and between the hours of 1 P.M. and 5 P.M. N. F STEADMAN, Marshal and ex-officio Tax Collector of the City of Anaheim. 9-23-10t. NOTICE TO CREDITORS Estate of Martin Rasmussen deceased. Notice is hereby given, by the undersigned, Executor of the last will and testament of Martin Rasmussen deceased, to the creditors of and all persons having claims against the said deceased to file them with the necessary vouchers in the office of the Clerk of the Superior Court of the County of Orange, state of California, or to exhibit the same with the necessary vouchers to the said executor at his place of business, at the office of H. G. Ames at suite 1 Odd Fellow's Building at No. 133 West Center Street, in the City of Anaheim, in the County of Orange, within ten months after the first publication of this notice. Dated this 23rd day of October 1920. NELS P. RASMUSSFN Executor of the Last Will and Testament of Martin Rasmussen, Deceased. (Seal) 10-23-5t. J.-M. ASBESTOS ROOFING GIBBS LUMBER East Broadway ANAHEIM CAL. 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