Evening Star Newspaper, September 20, 1929, Page 5

THE EVENING STAR, WASHINGTON. D. C., FRIDAY, SEPTEMBER 20, SHEARER HIRED AS OBSERVERONLY Head of New York Concern Tells Senate Probers He Had No Other Duties. (Continued From First Page.) Shearer. “If any statement is to be | made it will be made after consultation with my attorney.” Jude Cohalan said there was no statement at present. He sald that no summons had yet bernl received by Mr. Shearer himself for Shearer’s appearance. Chairman Shortridge of the subcom- mittee outlined the scope of the investi- gation before calling any witnesses. He read from the Senate resolution direct- ing the inquiry, showing that the in- vestigation was limited to the alleged activities at the Geneva naval confer- ence and the preparatory conference in 1927 and 1926, respectively. of Wil- liam B. Shearer and the shipbuilding compani The first witness called to the stand was Clinton L. Bardo of Camden, presi- dent of the New York Shipbuilding Co.. which is owned by the American Brown Boveri Electrical Cerporation. Asks Shearer Be Heard. Before Mr. Bardo's testimony was be- gun, Judge Daniel F. Cohalan, attorney 3ur Mr. Shearer, addressed the com- mittee, and strongly urged that, as a matter of fair play, that Shearer be heard first. Judge Cohalan said that he was the attorney for Shearer in the suit brought by him in the Supreme Court of New York for compensation alleged to be due Shearer from the shipbuilding companies. “The resolution of the Senate,” sald Judge Cohalan, “directs the subcom- mittee to find out what Mr. Shearer did, at whose instance he did it, and what reports, iIf any, he made. I sub- mit that a long line of precedents show that the man who makes charges should be called in order to say what he did and what his instructions were. Mr. Shearer should be asked first what he did and what his instructions were from these companies at Geneva and else- where. “This man's rights, in a sense, are being invaded by this procedure. We understand that the committee cannot try the issue involved in the suit which must be determined in New York courts. However, at the instance of the Presi- dent largely, this man has been charged wiht having opposed his Government. He has been given no opportunity to make a statement in any form. I have brought him here and he is ready to answer questions if the committee de- sires to hear him. In all fairness to & man who has fought in two wars and as a matter of fair play he should be heard.” Opportunity to State Case. Senator Shortridge interrupted Judge Cohalan. “The committee,” said Senator Shori- ridge, “has deemed it proper to pro- ceed in the manner which it has se- lected. Mr. Shearer will be called in all probability to testify before the committee in due order. He will be given full opportunity to state his case.” Judge Cohalan contended that in a long line of precedents which he nad examined he found only one in which a witness was heard before the man bringing the charges had been heard. “Mr. Shearer is here,” continued Judge Cahalan, “prepared to answer any questions, He insists that he should not be heard at the close of a long investigation. He did nothing the Geneva conference but uphold the ad- miinistration then existing in this coun- try and his country.” The interrogation of Mr. Bardo by Chairman Shortridge followed. Mr. Bardo explained to the committee the organization of the American Brown |, - Boveri Electrical Corporation and of the New York Shipbuilding Co. and his own connection with both. For many years, he said, he had been an official of the New York, New Haven & Hartford Railroad, but he became vice president in 1925 of the American Brown Boveri Electrical Corporation. In October, 1928, he said, the New York Shipbuilding Co. had been segregated from the Brown corporation and he had been made president of that company. Nothing to Hold Back. He told the committee that his company had nothing to reveal or to hold back in any way: that the books of the company could be examined if neces- sary. “Does your company have any con- tract to build ships for the Govern- ment?” asked Senator Shortridge. “The Salt Lake City cruiser,” an- ewered Mr. Bardo, “and the machinery for the Pensacola. ancther cruiser, which is being constructed in the New York Navy Yard.” Mr. Bardo told the committee how the contract for constructing the Salt Lake City had been turned over to his com- pany by the Cram Co., which originally obtained the contract. The latter col pany, he said, was in financial dim- culties and approached his company in the matter. . Bardo said that the Cramp Co. de- faulted in its contract for building the cruiser Salt Lake City, and that his company took over the contract as a new one. This cruiser, he added, is nearing completion and _the official trial is to be held within a few weeks. The company's other cruiser contract is about 70 per cent completed, Bardo sald. In addition to these contracts, the company has new contracts award- ed it in connection with the building of the last group of cruisers. Informed Through Press., In reply to questions from the chair, Bardo testified that in January, 1926, he was in Camden, N. J., and there learned from the newspapers of conference at Geneva between United States and other countries. sald he learned of the purposes objectives of the conference through the press. d “What were those pui as_you learned them?” Senator shortrldn1 asked, “The limitation of armaments,” the witness replied. # “Did not those purposes arouse your interest?” asked the chairman. “No, I wasn't greatly interested, be- cause 1 was too busy at that time with the affairs of the shipbuilding com- any. B A:ked if he had discussed the 1926 preparatory conference with the direc- tors or other officials of his company, Bardo said he had no recollection of having done this and insisted he had no great interest in the conference at that time. The witness explained that there were provisions already in the cruiser contract under which the Government could discontinue work on the vessels| at any time, and that he felt there was hothing “we could do about it.” “You say you were not interested in the 1926 conference. But were you not an officer or a stockholder of your com- pany?” said the chairman. Denies Representative. Bardo repeated that he was too busy with the affairs of his corporation also ke,any interest in the preparatory| tontérenc insisted that the only | ronference. He information his company obtained from the 1926 preparatory conference camc ' from the news columns of the press. In ' to several questions, response Cardo mfid emphatically that be there as an observer.” Bardo ex- plained, i’ “Did you employ him by contract? Shortridge asked. “There was no written contract— fust a verbal, oral agreement.” Requested by the committee for de- tails of this agreement, the shipping official declared it was entered into on March 17, 1927, in New York at a con- ference attended by a “Mr. Hunter” described as counsel of American sh'p- builders on the East Coast; F. B. Whalen of the Newport News Ship- building & Drydock Co.; 8. W. Wake- man of the Bethlehem Shipbuilding Co., and Bardo, representing the Amer- n Brown-Boveri Electric Corporation and the New York Shipbuilding Co., a subsidiary. K Tells of Meeting Shearer. “I was invited by letter to be there.” Bardo testified. “Prior to that I had never met Shearer. I went into the room and I was introduced to him. The meeting was called to order and Mr. Shearer proceeded in his own way to tell of his long interest in the question of sea power.” Chairman Shortridge cut the answer short by requesting the witness to con- fine his answer to an explanation of the agreement which was entered into. “The agreement was that he should g0 to Geneva as an observer and re- porter of the trend of events and give us information not contained in news. paper accounts that would be of inter: est *to shipbuilders in their work,” Bardo stated. Bardo was permitted at this point to explain the “situation” his own com- pany was confronted with at the time which induced it to enter into the agreement. He pointed out the Brown- Boveri Co. was about to take over the Cramp contract and about to bid on the cruiser which now is 70 per cent com- pleted. He sald the corporation was ships or to change to manufacturing electrict equipment. “What had this situation to do with Genev: the chairman asked. “It had everything to do with Ge- neva,” Bardo replied. “We wanted to know whether the Cramp and the new contracts were to be discontinued. We were deeply interested in the trend of events at the conference for that rea- son.” “And in the results?” asked Senator Shortridge. Only Interested in Trend. “No, only in the trend of the con- ference. We were not interested in the negotiations for or against guns or tons, for those functions belong to the gov- ernments. We were interested only in the trend.” “But if you were interested in the trend, how s it you were not interested in the results? Did not the trend in- dicate what the results would be?" Bardo insisted he was concerned only with the trend, and sald this trend aroused their curiosity because of the contract problems which were confront- ing his company. In reply to a question by Senator Allen of Kan: as to whether the ship- builders were amply protected in their contracts against = discontinuance of work on the cruisers, the witness said there was no protection provided. Ship- building, he added, is a highly scien- tific business, and cessation of work on the contracts would have prostrated the 1}\uu,m'y and dissipated the organiza- tion. “What authority, what instructions did you give Shearer?” Chairman Short- i continued. 'We told him to go as an observer and recorder. He had no other dutfes.” “What was provided in your contract with him in the way of compensation?” “We agreed to pay him $25,000 to be divided equally among the three ship- building companies at the rate of $8,- 333.33 each, to be used as a Jump sum for his compensation and expenses.” Services to Cover Conference. Asked about the length of Shearer’s services, Bardo said he understood the services covered cnly the duration of the Geneva conference and that it was Shearer’s “look out” if the conference was long or short. He said his com- pany paid Shearer a check for $2,500 -at the New York meeting, another $2,- 500 by check in the June following and the balance, amounting to $3,333.33, December. All the payments were made through Attorney Hunter, the witness asserted. Mr. Bardo agreed to submit to the committee a list of all ‘moneys paid Shearer by his company and for what urpose. Senator Allen asked if Bardo would also submit a report of moneys paid to any other persons or lobby work at Washington, Geneva or elsewnere, “Is that covered in the scope of this investigation?” asked Bardo. He agreed, however, to furnish this information. Robinson Cross-Examines Bardo. Senator Robinson of Arkansas began a searching cross-examination of the witness regarding the employment of Shearer. Bardo testified that he did not know the purpose of the conference summoned by Hunter at which Shearer was employed until he arrived at the conference. The witness testified that Shearer had made an impression on him by his apparent knowledge of the subject of seapower and shipping. “Did Shearer represent himself as an advocate of strong seapower at this conference”? asked Robinson. The witness replied that he had not represented himself as an advocate of anything and that he had been hired as an observer and reporter. “Did he say anything about the strength of the Navy?” asked Robin- son. “He did not.” “What was the objech of discus- sing seapower?” asked Senator Robin- 50 n. . “He brought it up.” “The primary purpose,” said Senator Robinson, “was to see what could e 0 done to build up the shipbullding indus- try.” “It was of great interest to us. said Mr. Bardo, “to know whether the United nclose Your PORCH We have all the necessary ma- ierial, including window frames, windows, Celotex, Sheetrock, paint and hardware Small Orders Given C: : No Delivery J. Frank Kelly, Inc. 2101 Georgia Ave. N. 1343 lwork_— Du_Pont Hardware — ful Attention 3 Telep.aone Stand and Bench his company \ .had no representative at the mfi.‘-fl nary ley. whgfm!u asked if his company had | any one represent! it at the confer- eng'e in 1927, Bardo replied in the negative. “No one representing you at the 1927 conference?” Chairman Shortridge de- manded. “No one to speak a word for you?” “We employed some one verbally to finished in mahogany. Regularly 8780, Peter Grogan & Soms Co. 817-823 Seventh SCN.W. “Homefurnishers 1860 undecided whether to go on buildirg | W States was going to abandon its con- tracts.” “You did want to prevent the advoca- ton of those contracts,” said Senator Robinson. “No," replied the witness, “we only wanted to find out what the Govern- ment would do.” e /PIY Held Too Much. “Why ‘was he l%:‘l'd 80 large a lum"?l asked Senator inson, referring to the $25.000 compensation of Shearer. "It was too much,” said the witness. 1 thought so at the time.” ‘Why did you enter into it then?" asked Senator Robinson. “Because of the judgement of the others.” - Mr. Bardo sald that the amount had been suggested by Mr. Palen of the Newport News Shipbuilding & Dry Dock ; Corporation. He sald that he himself had made the comment $25,000 was more than the job was worth. Senator Robinson asked the witness it he had made any attempt to find out about Shearer and what he could do. The witness said that he had not. “Did you receive any reports of what he was doing at the conference?” asked Senator Robinson. “Yes, they are here,” sald Mr. Barbo, submitting cog!ea of Shearer’s reports. He said that he himself had only read some of them and did not know of the existence of others until after Shearer had brought suit recently to compel the shipbuilding companies to pay him an- other $250,000 for his services. Mr. Bardo said the report had been put in the files by his secretary, who “just thought they were some more cheap talk.” . Didn’t Tell Secretary. “Did your secretary know you were paying Shearer $25,000"? asked Senator Robinson. “No, I don't tell him all my business,” | s the answer. | ‘The witness said that he didn’t con- | sider any of the reports of Shearer im- | portant. The press reports, he sald, clearly indicated the trend of the con- ference and what was likely to happen —a_disagreement. “That's what you were interested in,” suggested Senator Robinson. “No, I was interested in the trend of the conference and not in a disagree- ment,” was the reply! “My poor mind cannot grasp the dif- ference,” said Senator Robinson. “Was not the real subject of the conference a failure?” he asked. “Certainly not,” replied the witness, who said as matters turned out the shipbuilding companies did not need an observer at Geneva. Bardo testified that he first informed Shearer that his services were to be considered terminated in a letter sent through Attorney Hunter on December 17, 1927. The decision to dispense with Shearer’s services was reached at a regular meeting of the board of direc- tors of Bardo's company, it was stated. Additional $5,000, In the cross-examination it was/| brought out that an additional $5.000 was paid Shearer in 1828 by the Trans- oceanic Co., organized by former Presi- dent Wilder of the Brown Boveri Cor- poration. Bardo said that the Trans- oceanic Co. had no direct connection with the Brown Boveri Corporaticn, but under questioning said he had talked with Mr. Wilder about the em- ployment of Shearer. The Transoceanic Co., the committee was told, was to project a four-day liner service across the Atlantic and Shearer's employment was for the purpose of having him go to California and attempt to interest William Randolph Hearst in the finan- cial end of the plan. ‘The same company also financed & trip of Shearer to Washington to at- tend a merchant marine hearing, Bardo stated. The witness stressed that the $5,000 paid Shearer by the Trans- Oceanic Co. had no connection whatever with the services at Geneva. Senator Robinson asked why it was Shearer was employed by the Trans- Oceanic Co. in 1928 if his previous serv- ices with the shipbuilding companies had proved to be so unsatisfactory as evidenced by his discharge. Bardo te- plied that he-had remonstrated with Mr. Wilder over the latter's plan to em- ploy Shearer. “I told Wilder I regarded Shearer Listen Fellers— When a man begins to dress well—he com- mences to improve in It's easy on my Kaufman Budgzt Plan. fourth in cash, balance other directions. Pay a in 10 weekly or 5 semi- monthly payments. Fall Hats Beau - Geste, $6 Stetson, $8,50 up Fall Suits— $25 to $60 Sharp Topcoa.ts $19.75 to $40 as an unreliable ma; “He wouldn't stay puf “What did you mean by that ex- pression?” Senator Robinson asked. “I meant he was the sort of man, who, if you employed him to tend the cows, would go further and shoot the farmer's pigs.” v Charges Double Cross. “It became reasonably apparent to me,” Bardo continued, “that Shearer had double-crossed us at Geneva. He was represented in the newspapers as saying he was in the pay of patriotic socleties. I don't know whether .he was or not. He had no authority to say he represented us. His was confidential employment.” Asked if he had had any corre- spondence with Shearer since the termi- nation of his employment, Bardo pre- sented the committee with a copy of a letter he had written Shearer under date of February 20, 1928, addressed to the Hamilton Hotel here. The letter was read to the committee by Senator Rob- inson. In it Bardo referred to a com- munication from Shearer in which the matter of continuation of the latter's employment was fliscussed. Bardo's re- ply contained the statement that Shearer was not authorized to serve other than as an observer at Geneva and Bardo denied in it that there was any agreement “as to continuation of your services beyond one year.” Senator Robinson asked Bardo why his letter stated twice that Shearer’s Bardo explained o ro /m AVEN contract was for one year, whereas the | witness, under direct examination, hadi declared Shearer was employed only for the duration of the conference, whether the parley was short or long. Bardo_explained that his understand- ing when Shearer was first employed was that he was fo serve only during the conference, but that since Shearer was raising the contention that his em- ployment was for a year, he saw no reason for entering into a controversy with the man. in view of the fact that Bardo's company considered its con- tract with Shearer at an end. “Nothing was to be gained by a con- troversy with him,” Bardo sald. “The term of his employment has nothing to do with the matter now. We were through with him. Food Sale Phnn:d for ‘Chnrch. OAKTON, Va.,, September 20 (Spe- cial).—The ladies of the Oakton Meth- odist Church will give a food sale and ice cream festival tomorrow evening at the home of Mrs. Norman A. Speer, beginning at 7 o'clock. Mrs. 8. E. Smith is chairman, assisted by Mrs. Hattie Bell and Mrs. Charles Rinker. 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