Expensive Elephants

1917 . . . $ 100,000

1918 . . . 1,040,000,000

1919 . . . 1,806,701,000

1920 . . . 356,500,000

1921 . . . 70,000,000

1922 . . . 61,000,000

1923 . . . 100,000,000

$3,434,301,000

Those were some of the sums appropriated by Congress for the use of the Merchant Fleet Corp., a quasi-public body instituted in Wartime to build ships to carry soldiers, food and munitions overseas. When the War ceased, the corporation had to pay its bills, to settle with shipbuilders for cancelled contracts. Then its job was to operate the ships it had built until they could be disposed of to private interests.

Because of the status of the Merchant Fleet Corp. as a body responsible primarily to the U. S. Shipping Board whose officers were its managers, Congress never until last week received an audit of the corporation's books. When that audit came, from Comptroller-General John Raymond McCarl, great was the shock to watchdogs of the public treasury.

Without naming names, Mr. McCarl cited instances to show how great were the sacrifices, how shocking the business management, in some of the corporation's white elephant sales in 1922, 1923, 1924, 1925. For example:

Seven tankers under construction were sold for $16,800,000. Of this sum, $3,840,000 was in cash, the balance in first mortgage notes. Then the notes, face value $13,493,000, were sold for $2.940,000 to a company close to the purchaser of the tankers.

Another company gave $6,500,000 in notes, which the president of the company later bought in for $908,000, including $300,000 in notes of his own.

Another man bought back $1,500,000 of his own notes for $128,000.

A drydock costing $1,991,564 was sold for $600,000.

A fleet of vessels was sold for $325,000. including only $28,674 cash. Then the purchasers were given a mail contract worth between $350.000 and $450,000 per annum.

For 321 ships costing 400 million dollars in all, the U. S. has received only some 15 1/2;millions cash. Some companies which bought ships were forced to return them, being insolvent.

The McCarl report did not charge malfeasance, but President Hoover straight way ordered Attorney-General Mitchell to discover whether there had been any violation of the law. The President was careful to point out that all the instances cited were "prior to this Administration." As many citizens recall, President Coolidge was constantly prodding the U. S. Shipping Board to get rid of this floating white elephants.