VOL. AA1V. iNU. loU.
SYSTEM OF GRAFT
IN WAR
ROUGHT
Thousands of Letters, With
Proofs, Received at Capital
CONTINGENT FEE BASIS
Commissions Thus Paid, 5 to
20 Per Cent, Ran Into
Millions of Dollars
PLANTS THREATENED
Gregory Plans Change-of Con
tract Not to Employ Any
Third Party in Dealing With
the Government
Washington, June 18. Several thou
sand letters and documents containing
proofs of an elaborate system of ob
taining government contracts on the
illegal contingent fee basis were re
ceived today by the department of
justice from its agents who conduct
ed raids on hundreds of contractors'
business offices late' yesterday.
The commissions paid on these con
tracts, it was disclosed, ranged from 5
to 20 per cent., and the aggregate fees
probably ran into millions of dollars.
Evidence was discovered of hundreds
of contracts made under these ar
rangements heretofore unsuspected by
the department of justice.
Manufacturers were threatened In
many cases with being deprived of
contracts if they refused to negotiate
with these agents on a commission
compensation plan. Some agents rep
resented that they had special influ
ence over members of congress.
In addition to these documents
other information came to the depart
ment from manufacturers who had
been solicited by contract commission
agents located in Washington. The
manufacturers offered the assistance
in stamping out the illegal system. '
An Immediate result of the disclo
sures was a letter sent by Attorney
Gregory to heads of all government
iepartments making war contracts,
proposing that all future carrtractB
should contafia a clause pledging the
manufacturer not to employ any third
party In negotiations with the govern
ment ,
-"A situation. which has arisen In the
matter of government contracts seems
to me to require summary action,"
said the attorney general. "Owing to
the tremendous increase in govern
ment business and the speed with
which it must be executed some man
ufacturers, because of ignorance or
misinformation, have thought it neces
sary to negotiate with the govern
ment through contract brokers ,or con
tingent fee operators. It follows that
the system requires a contractor in
making his estimate to load his bid
with the contingent fee item. The
courts have universally condemned
the contingent - fee contract The
methods employed by the contingent
fee operator . are often insidious and
reprehensible and, in view of the fact
that the average fee is five per cent,
the resulting cost to the government
is very great.
"As a means of breaking up this
practice I have prepared the follow
ing form of covenants, which the pres
ident requests shall be inserted in all
government contracts:
The contractor expressly warrants
that he has employed no third persons
to solicit or obtain this contract in his
behalf, or to cause or procure the
same to be obtained upon compensa
tion in any contingent in whole or
in part, upon such procurement, and
that he has not paid, or promised or
agreed to pay to any third persons,
la consideration of such procurement
0r in compensation for services in
connection therewith any brokerage,
commission or percentage upon the
amount receivable by him hereunder;
aad that he has not in estimating
the contract price demanded by him
included any sum by reason of any
such brokerage, commission-" or per
centage, and that all monies payable
to him hereunder are free from ob
ligation to any other person for serv
ices rendered or supposed to have
been rendered in the procurement of
ltis contract. He further agrees that
ariJ breach of this warranty shall con
stitute adequate cause for the annul
et of this contract by the United
btes, end that the United States
may retain to it3 own use from any
s.Urns due or to become due thereun
Qer an amount equal to any broker
ae, commission or percentage so paid
or agreed to be paid."
As an additional protection it is re
vested that ycur department as a
filiation the following language
Ken from section 2722, page 735, re
fill statutes, as applied to the navy
department:
'And no person shall bo received
,b a Contractor whn ?. nnt mnn.
i iacturer of
"y es WIllci lc offers to supply
offi i synchronize the action of
of th of youv department with that
me contractor i3 prohibited by the
trom transferring his contract or
(Continued on Page Nine.)
CONTRACTS
TO'LIGHT
WAila NOT MATTER
OF - I STRATEGY
Fight t;.- Principles of Right
- . . 'W
and Honor, Says Kaiser
REALIZE TRIALS OF WAR
Anglo-Saxons Aimed in Mak
. ing Peoples of World
Their Slaves
20 YEARS HARD WORK
German People and Army Are
One, Says WilheSn, and
That Fact Will Bring
Victory at Last
Amsterdam, June 18. The war v is
not a matter of strategic campaign,
but a struggle of two world views
wrestling with one another. Emperor
William declared on Saturday at the
celebration of the anniversary of his
accession at German main headquar
ters.
"Either German principles of right
freedom, honor and morality must be
upheld," he added, "or Anglo-Saxon
principles with their idolatry of mam
mon must be victorious."
The Anglo-Saxons, he asserted, aim
ed at making the peoples of the world
work as slaves for the Anglo-Saxon
ruling race and such a matter could
not be decided in days or weeks, or
even in a year.
The emperor emphasized the fact
that from the first he had realixed-
that the trials of war would be great
The first outbreak of enthusiasm has
not deceived him. Great Britain's in
tervention had meant a world strug
gle, whether he desired it or not
He said he was thankful that Field
Marshal von HIndenburg and General
Ludendorff had been placed at his
side as counsellors. Drinking to the
health of the army, and its leaders,
the emperor, said:
"The German people and army, in
deed, are now one and the same, and
look up to you with gratitude. , Every
man out there knows that he is fight
ing for, the enemy himself admits
that, and in consequence we shall gain
victory victory of the German stand
point. That is what is in question."
The emperor referred to the period
of peace which he described as "20
years of profitable but hard work,
though they could not always be re
garded as successful in a political re
spect and had brought disappoint
ments." His interests had been centered in
the work connected with the develop
ment of the army and effort to main
tain it at the level at which it had
been entrusted to him. Now, in time
of war, he could not better celebrate
the day than under the same roof with
the field marshal and his faithful,
highly-gifted generals and general
staff. The emperor continued:
"In peace time in the preparation
of my army for war my grandfather's
war comrades gradually passed away,
and as the German horizon "gradually
darkened many a German and not the
least, I hope, with assurance that God
would in this danger place the right
man at our side. Our hope- has not !
been disappointed. !
"In your excellency, and in you,
General Ludenoff , heaven bestowed
upon the German empire and the Ger
man army and staff, men who are call
ed upon in these great times to lead
the German people in arms in its de
cisive struggle for existence and the
right to live, and with its help to gain
victory."
VICTORY IS NOW
WITHIN OUR GRASP
'V.
Rome, Monday, June 17 . "With
soldiers like the Italians so heroically
bearing the brunt of the' enemy's
hordes and with an organization as
powerful as that of America's, the vic
tory of civilization against militarism
s wthin our grasp," sad Captain-Congressman
F., H. Lajjuardla, of New
York, at a mass meeting here ttonight.
His statement caused a frantic' demon
stration in favor of the United States.
Occupy West Bank.
London, June 18. The Austrians,
according to the Evening Standard,
now occupy the west bank of the
Piave from . the Congeliano railway
to the Z&ison bend, a distance of a
mile and a half. They have thrown
14 bridges across the river. These,
however, are under the Italian fixe.;
WU-MINCH
Now
Washington, June 18-The w
formally today the announcement of the fact that the 32nd
division, national guards now fighting in Alsace, German
terrUciryi Since the division has been in action its presence
has been identified by the Germans permitting the fact
to b& disclosed.
HINDENBURG WILL HAVlt TO DO SOME
V fCopyrirbt: 3r John T. MeCutcheon.1
J
jM - l
GERMAN U-BOAT AND ENTIRE
CREW WERE DESTROYED OFF
VIRGINIA BY U. S. VESSEL
92
S
USH) BYTEUTONS
Austria Has Hurled Hordes
Against Forces of Italy
WERE CHOICEST TROOPS
One Allied Aviator Lost While
44 Enemy Machines
Are Downed
Paris. June 18 Ninety-two Austrian
divisions, consisting of 80 divisons of
infantrv and 12 of cavalry, have been
hurled into the greatest battle that
Italy has yet fought, according to an
official announcement at Rome re
ceived here through the Havas
Agency. Seventy-one of these divi
sions have already been identified
The forces engaged comprise three
fourths of the whole Austrian army,
and the choicest troops under the
command !of Field Marshal Boroevic.
(The number of men in an Austrian
division is not exactly known, but the
number of divisions engaged would in
dicate that approximately one millon
Austrian soldiers have been thrown
into the battle.)
Papers found on officers show that
after forcing the passage of the Piave
the first day's objective was the Tre-viso-Montebelluna
railroad. In two
days of fighting the enemy columns
had succeeded only in realizing the
minimum assigned for the first day,
according to the official note issued
at Rome.
But one single allied aviator ha3
(Continued on Page Nine.)
DIVISION
ARE
JUNE 10, 1918.
Oh
German
Report Comes From Mem
bers of Victorious Crew
NEAR CHESAPEAKE BAY
Liner Had Gone in For Shelter
in Response to Subma
rine Warnings
An Atlantic Port, June 18. A Ger
man submarine and entire crew was
destroyed by an American submersible
off the Virginia coast several days ago
according to a report brought here to
dayy; passengers aboard an Amer
icansteamship. Officers of the vessel claimed to
have been told the story of the subma
rine combat by members of the vic
torious American undersea boat's
crew. . .; .
The Anprlcan Iiner had put into
the mouth o Chesapeake bay for shel
ter in response to submarine warnings
and there anchored near an American
submarine tender alongside which was
moored the undersea craft, which was
taking on provisions and fuel, officers
of the vessel stated. An interchange
of a wireless message . followed, in
which the submarine crew is reported
to have told of its victory.
The U-boat was sighted while
theJchine
American craft was patroling with
only her periscope visible, according
to the story the American skipper is
alleged to have told. When within
range a torpedo was released and 20
seconds later microphones recorded a
terrific explosion, he was quoted as
saying. Rising to the surface the
American subinarine circled about on
the lookout for survivors, but oil com
ing to "the surface was the only trace
found of the vanquished rairer, narra
tors of the story said they had been
told. .
No Word Received.
Washington, June 18. No word had
(Continued on Page Nine.)
Soil
TALL HURRYING
Risked Own Life That Men
Might Reach Safety
STORY THRILLING ONE
With 10 Machine' Gunners
Thrown in to Stem the
German Advance
With the American Forces on the
Marne, Monday, June 17. -Second
Lieutenant John T. Bissel, of Pitts
burgh, has been recommended for the
French legion of honor for his distin
guished gallantry displayed recently
at Chateau Thierry.
The story of his conduct offers a
thrilling example of an officer's disre
gard for his own life in order that the
men under his command might reach
safety. It was on June 2nd that Lieu
tenant Bissel with a party of 10 ma-
gunners was thrown in to help
stem the German advance.
The party was ordered into Chateau
Thierry, where they crossed to the
north bank of th Marne and set up
their guns in the streets behind what
ever protection they could gather,
using boxes, tables and stones. The
town Vas drenched with shells but
the Americans held out until the Ger
mans finally rushed the town and
some of the enemy crossed a bridge
to the southern side of the river to
one side of Bissel's position. The
bridge was then blown up. 1
Meanwhile American and French
machine gunners on the southern bank
(Continued on Page Nine.)
FRENCH LEGION OF
HONOR FOR BISSEL
AUSTRIAN
HELD M CHECK
FRONT BY
IN
18 TO 45 TO
FACE NEW ORDER
Crowder Looks For Long War
With Central Powers
MAN POWER QUESTION
Every Able-Bodied Man N?ust
Contribute Service to
Win the War
CONGRESS SOON TO ACT
Labor Shortage Is Most Seri
ous Problem Confronting
Nation Serious With
War Industries
By FRANK P. MORSE.
Washington, D. C, June 18. Every
able-bodied man in the United States
between the ages of 18 and 45 years
will soon find himself confronted by
the "work or fight" order which Pro
vost Marshal General Crowder issued
to apply only to Americans within the
original draft age.
This fact became apparent today
when Senator Chamberlain, chairman
of the senate military affairs commit
tee, got behind the Crowder request
for an amendment of the draft law to
increase the conscription age.
The Washington government re
signed to a long war with the central
powers believes that the conflict has
settled .down to a man-power proposi
tion For Chat reason, it is'deermined
that every American man capable of
aiding the nation must contribute his
Services, either in the trenches Or in
industries that directly assist the win-:
ning of the war.
The man-power question has been
made the subject of grave discussion
in government circles during the last
few weeks. It is a vital topic of con
versation at almost all sessions of the
war cabinet, the war council of the
war department, the war industries
board, and even at routine cabinet ses
sions . President Wilson and his ad
visers realize that the full strength
of the United State is not being exert
ed against the Teuton nations and
they are determined to adopt meas
ures that will steadily bring about that
necessary result
With the backing that has been
given to the Crowder request, there
can be no doubt that congress will act
favorably on the 18 to 45 proposal in
the near future. And as soon as the
law is put into effect, the government
will inaugurate an exhaustive study of
the ability disclosed under the amend
ed raft law an set to work to make a
steady diversion of this ability to
fields in which it can be utilized to the
best advantage. .
The shutting down of non-essential
industries is merely at a beginning.
The government is inclined to proceed
cautiously, because it fs realized thor
oughly that revolutionary changes in
the activities of the nation would slow
up the flow of funds to liberty loans,
war savings stamps, Red Cross sub
scriptions and .payments under the In
come and excess profits taxes. Very
gradually, however, the list of non-essentials
will be increased until lux
uries become absolutely non-existent
in America.
The labor shortage Is the most seri
ous problem that confronts the coun
try. It is so serious, indeed, that in
dustries engaged in production of
essential war materials hesitate to in
crease their plants because the. human
energy, materials and transportation
necessary for the enlargements can
not be spared while the demand for
war supplies continues as acute as at
present. It is believed, however, that
the working out of the increased draft
age will furnish a vast force of intelli
gent labor for steel plants, shipyards
and munitions actories
There is one phase of the labor sit
uation, however, that will not be ma
terially remedied even by the drafting
of Americans between the ages of 18
and 45 years. This Js the constantly
growing demand for unskilled labor
for activities that -do not need trained
ability but are languishing as a result
of the unskille labor famine.
The Washington government has
given this question close attention and
is now considering a plan which may
solve the problem. It is the importa
tion of a heavy percentage of unskill
ed labor from Mexico. President Wil
son has modified the immigration law
by suspending the head tax, the re
quirements of the literacy test and the
provisions of the contract labor law.
There is, of course, a stumbling block
in the form of Carranza's embargo on
an exodus of labor from Mexico, but
Washington - government officials are
(Continued on Page Nine.)
FIVE CENTS
ARMY
One Million Men Have Beei
Hurled Against Allied Oripo!
LOSSES ARE FRIGHTFUL!
' ; '-.- M-i.J-
Greatest Gain Made by
ers on Piave River, ' Noti
Over Three Miles.
BRITISH HOLD FIRMLY.
ON
KALIANS
, , - - . x
Heavy Firing by German Ar vf.;; j!.
txllery in Ancre Valley ahcLllJ
North to Serre Has Bebn
Reported by British
Holding their lines intact along vlr;
tually all the 90 miles of battlefrontT
from the Adriatic to the Asiago pla-f
teau, the Italian and allied armies ap , rfr:
pear to have given the Austrian arm
ies a serious setback. Approximately-
1,000,000 Austrians have been ffurledl ji I-?
against the Italian front, but hkya 'A '
gained little except along the Plate
river, where their progress is seem--ingly
too slow to be threatening to the-.
allied positions.
Losses which are described ' as ,
frightful have been inflicted upon ihe '
Austrians in the areas where the .
principal fighting has taken place." In :
the mountainous country where the?
British have been holding their posi-
tions solidly thousands of the eneiny
have perished, while they have paid; ;
heavily for every foot tney have ad-?:,
vanced along the Piave river front'' ,:
In the Montello area on the uppei?;
Piave the Austrians seem to- have ,
gained a foothold on the west bank;
4-1 : r.-ii. nr . i
uv lus river. huj lu ui euutt. juuti i
and at Capo Sile,
lower down,; they; b
Ytn-va alar? irm-vmA irftwiiffl -hut . .ttit5.
greatest gain does not exceed two QPtK
three miles. It seems that, so far, la:C;..' .
the battle, the Austrians have gained ;,-'j :
the most ground at Capo Sile, a viKr:-1 ;
i-e situated west of the Piave riverI
and surrounded by low marshy land, H i;!;t;
which in itself does not lend itself
readily to a rapid advance by the Aus- -ji
trians. '.i!,
The vital mountain sector along the
upper reaches of the Prenta has not
been broken. On the contrary,, the
British claim to have defeated the foe.1
As long as this front holds firmly, ac
cording to military experts, the stabil
ity of the Italian line is assured un
less a serious breach should be made
along the Piave river east of Treviso
and Montebelluna. There are hints of
a counter offensive in reports 1 from
Italy. The success of the Italians two
weeks ago in the mountainous country
to the west of Lake Garda, and the ", .
evident concern of ther Austrian covx-
mand over an advance there may sue
ceed if the Italians strike back, It may.
be along this part of the front. A suc
cess there would isolate the Austrian
forces east of Lake Gorda and turn
the right flank of the enemy armies.
While the gigantic Austrian attempt r
to break through to theplains of Italy . j
has occupied the center of the stage,
events-of importance in jy j?e taking
shape in the Somme battlefield.' Hea'vy
filing by the German, artillery in the : '
Ancre valley and northward to Sefre V;
is reported by -the British. It is
this part Of the front, that German atV
tack has -been expected by the allies ' .
and the Grerman bombardment may.
bjt the prelude of a resumption of ihe
enemy's offensive in France. ;r
Prisoners taken by the ' Italians,
French and British now total 5,000.4
The latest report from Vienna
makes claims of no marked gains ex
cept the capture of Capo Sile on. the;
west bank of the Piave south of Fos
salta. The number of prisoners '"la
now reported as 12,000. : V-- S
Emperor Charles is reported- to be '. "
in southern Trentino, directing the of- -fensive,
and dispatches from SwitZ3r- ; ,
land say that thousands of troops are
being sent into the Trentino. Further
Austrian efforts undoubtedly may' be
expected. !,
Activity on the front in France con-';-:
tlnues of a minor character. German" 1
efforts to drive the French fromt heir . '.'
new gains around Hautebraye, north- '
west of Soissons, were repulsed by the : '
French, which increased Ihelr cap- ;
tures to 370 prisoners.
Small raids have been carried ' out V
by the Germans against British posi
tions in Picardy and Flanders. - v
American positions- northwest of
Chateau Thierry are being bombarded '
heavily with gas shells and there are
indications that the enemy may again
try to drive the Americans from Bel-
leau wood and other territory recent-
ly gained. The enemy artillery-fixe
has Increased along the Marne also,
east of Chateau Thierry, but there"
has been no infantry activity. On
the Luneville front enemy raiders -
iiave captured a-few American prison- -
ers, wnne m the vasges, in Alsace,
American gunners broke iip: a German
raid. - ,. : .
-14
9
t . . . r. . ;i
-
his
Mf
i 1 :
r
Hi
--.--I j i
fit
, .77
-'.4 ;