Heavy Weather Ahead

As shipbuilder for the United Nations the U.S. Maritime Commission spent $15 billion in four years. From the shipyards came bottoms aplenty and in time In their wake last week came a flood of charges--reports about how the job was done.

To the House Merchant Marine Congressional Committee now probing the Maritime Commission, Lindsay Warren's General Accounting Office made a report: Maritime Commission books had been kept so badly that GAO could not find out how the money had been spent. Apparently, there were no records on $910,494,372 worth of ships which the Commission built. GAO had uncovered no record of fraud; it was just wondering what happened.

The trouble lay in the high-handed way the Commission had been run. That meant: Emory Scott Land, onetime chairman of the Maritime Commission and War Shipping Administration (now head of the Air Transport Association) and the late Howard Vickery, Commission vice chairman. They had often told shipbuilders to go ahead and build ships, with contracts to come along later. They had shifted material, men, and contracts by phone rather than formal letter, had kept much of the bookkeeping in their heads. No one denied that it was a wasteful way to build ships and highly expensive to the taxpayer, but the methods had got ships when needed.

Figures on Fees. The Maritime Commission did have the figures on ships it chartered during the war. Last week the Chicago Sun charged that the Government had paid out in fees as much as 40 times the listed value of many ships. Ship owners claimed that the listed value was not a real value, only a book value for tax purposes." Nevertheless, the fees were enormous:

P: The S.S. Alabaman of the American Hawaiian Steamship Co., valued at $288,474, earned $1,746,108 in fees.

P: The S.S. American Press, owned by Lykes Bros. Co. Inc. and valued at $40,000, earned $1,252,800.

P: Mobile's Waterman Steamship Corp. bought a ship from the Government in 1931 for $76,320, earned $384,864 in fees, sold it to the Government in 1943 for $560,000.

P: The foreign-owned Swedish-American Lines' "mercy ship" Gripsholm had been chartered for from $1,500 to $3,500 a day, in addition to Government payment of all operating expenses. Estimated Swedish Lines' profit on the Gripsholm: $4,000,000.

P: 81 ships (owned by 19 private companies), listed as worth only $8,256,000, had earned $31,364,880 in fees.

After taking a look at these figures, the Senate's Mead Committee last week announced that it would investigate.

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