New-York tribune., 1919-04-30
Organizer of Electric Boat
Company Declares Carse
Said $25, 900 Was to Go
to Secretary of Treasury
Says He Called 1t Bribery
Story Is Brought Out in
Suit to End Voting Trust
to Hold Concern Together

NEWARK, N. j., April 2o.-On the
stand to-day Elihu B. Frost, of 270
Park Avenue, New York, complainant
in an action in chancery to remove
Henry r. Carse of New York, from a
voting trusteeship in the Electric Boat
Company, testified that Carse said he
paid $4,000 to Malcolm Ross McAdoo,
brother of the former Secretary of the
Treasury, to influence government con-
tracts for submarine chasers and un-
dersea boats.
The sensational part of to-day's
testimony by Frost related to q state
ment he alleged Carse made to him
that Of the 10000 paid to Malcolm Nc
Adoo, $4,000 was to 60 to Malcolm s
brother, William G. McAdoo, former
Secretary Of the Treasury.
Under examination by his own coun-
sci, Robert II. McCarter, Frost said he
had a conversation with Carse late in
1915 or early in 1916, about $4,000
supposed to have been paid to Malcolm
X. McAdoo.
Called it Large Zee
"IIo said he gave him $4,000" Frost
testified "Of course ! said: THAT is
large fee to pay man who has never
seen submarine.'"
"And what relation is Malcolm Ross
McAdoo to the then Secretary Of the
Treasury, william G. McAdoo? asked
Mr.. McCartcr.
"A brother" answered the witness.
f... IL.
said he demonstrated with Carsc about
said; "Fftecn thousand goes to relieve
him of some judgments, and $26,0 600
goes to his brother" Frost continued: ::
81 said: 'Carse, that's damned bribery,
and Pm glad | didn't know about it be-
fore you did it, Carse replied: That's
all right. | have confused the trans
action"
Frost testified that this entry Of
$4,000 didn't get on the books till
eight months afterward
Why They Fell Out
Frost said he and Carse fell out
about the manner in which the latter
attempted to interfere with the plant
Of the New London Ship and Engine
Company, at New London. A sub
sidiary of the Electric Boat Company
where the engines were built under the
direction Of Lawrence Y. Spear ana
Gregory c. Dawson, technical experts
and co-voting trustees. Frost said the
idea Of protecting the management OF
the company from outside influence
originated with the technical men who
had given their time and money to
the company in the days who it had
hard going before the Eurol. an war.
to6 TO ho IL
management would not be changed for
five years, and it was with these men
that Carse disagreed.
II tried to have Carse see the view
point ofthese men," said Frost Il told
him New London was their baby and
advised him to try to reason with these
people.
Told Other Partners
81 met Spear and Dawson at Del
monico's later the same day, and | de-
tailed what | had said to Carse and |
asked what they thought of the whole
mix up. Spear said: I wish | had the
law in my hands. I'd find out from the
life insurance companies how long you
had to live and the sentence you to
| twice that term for ever letting that
bird in the company"
DO you know anything besides the
McAGoo incident and the disagreeme mt
about the New London plant that
estranged you and Mr.. Carse?" asked
Mr.. McCarter.
ITO understand the matter I'd have
to tell you more about Mr. McAdoo. /
was seen by Carse walking on the
street and lunching with Ross Nc
fAdoo5 This was in the fall of 1916, and
Carss's attitude toward McAdoo had
changed. He had told me McAdoo
might 90 over to our competitors, the
Lake company. He called him dis
honorable. ! told Carse | was going to
see more of McAdoo and | would see if
he would do anything dishonorable
Relations between Carse and McAdoo
became so strained that McAdoo would
not go to the New York office and
Carse had to have Soear transact bust
ness with him"