The sun., 1919-05-03
'CARSE KEEPS JOB
IN ELECTRIC BOAT
Vice-Chancellor Lane in De-
cision Assails Company's
Voting Trust.
w. g. McADOO ABSOLvED
Ex-Secretary Got None of
$4,000 His Brother Re-
ceived in Deal.

vice-Chancellor Lane decided yester-
day In Newark that Henry b. Carse
president Of the Electric Boat Company
should remain as voting trustee of the
concern. He said that much Of M.
Carse's story. particularly with regard
to the employment Of Malcolm Ross
McAdoo. seemed improbable, but that
that In itself was not sufficient to war
rant his removal. His decision was the
elimination Of n suit brought by Elihu
q Frost to Dust Carse.
Tho Vice-Chancellor said eanphatically
also that there was nothing in the testi-
mony to support any belief that William
q. McAdoo, formerly Secretary Of the
Treasury and brother Of Malcolm Ross
MoAdoo. ever got a dollar OF the sac, 00t
which Carse paid to Malcolm McAdoo
and counsel for Elihu b. Frost said that
they had never believed that William q.
McAdoo had proflted by his brother q
financial upllft.
Vice-Chancellor Lane took occasion to
criticize severely the voting trust under
which the AFFAIRS of the Electric Boat
Company were conducted after 1914.
and said that II he could get jurisdiction
over the voting trust of the Submarine
Boat Corporation. as we'll as of the Elec-
trio Boat Company. he would set the
whole thing aside.
After the completion Of the case the
Vice-Chancellor asked counsel on both
sides for recommends lions for the
vacant position of voting trustee. Mr..
Lane said he would urge the appoint
ment of Uzal H. McCarter, president OF
the Fidelity Trust Company and q
brother of Robert McCsrter, who rep
resented Mr.. Frost. Mr.. McCarter
though. protested strenuously against
the appointment of his brother. having
previously said the company had had
enough OF bankers. As a compromise
Edward d. Duhield. general solicitor OF
the Prudential Life Insurance Company
was appointed to take the place OF
Stacey Richmond, who died recently.
w. C. McAdoo Freed of Suspicion.
After the evidence for both sides was
in Vice-Chancellor Lane pointed to some
salient features of the testimony before
the summing up and said:
II might say here that there has
not been In this case a scintilla of
evidence or anything shown from which
any inference can be derived. whatever
the relations were between Mr.. Carse
and Mr.. Malcolm Ross McAdoo. that
William G. McAdoo had any knowledge
or information about At. There Is
nothing in the case which indicates or
from which an inference Of that kind
might be drawn"
One interesting point which cropped
up in the hearing was what had be-
come of the reports made by Malcolm
Ross McAdoo to Mr.. Carse. Chancellor
Lane expressed himself as interested to
know what had been done with them.
II was brought out through the tests
rony OF Russell p. Owen. n Esporter for
TIKI SUN, that Mr.. Carse had said that
the payment to Malcolm Ross McAdoo
OF $4,000 was for the reports which he
made on the condition OF the New Lon
don plant. although Mr.. Carse had testi-
fed that he lent this sum to McAdoo
that he might rehabilitate himself and
pay his debts.
Where are the reports which Nc
Adoo made?'' asked Vice Chancellor
Lane. at Is natural to assume that
there were reports. THE Sun repre-
sentative this morning said that Mr..
Carse told him that there were reports,
and there is no dispute as to Mr.. Nc
Adoo's activities in Washington"
Sought to End Domination.
Mr.. McCarter in summing up said
that there was no selfish motive on the
part Of Mr.. Frost in bringing the suit. that
he had never wanted to be and did not
now want to be the controlling infiu-
ence in the company.
mo man on our side OF the case
ever believed that William G. McAdoo
ever got a dollar" said Mr.. McCarter.
IT never have believed It. cling to the
old fashioned notion that most public
officers are conscientious and honest
men,"
He referred to Malcolm Ross McAdoo
as an "Ishmaelite from the streets"
During the summing up of John
Chancellor Lane referred to Mr.. Carse's
story OF the McAdoo incident.
THE chief thing in my mind" he
said. 'is the improbability OF Mr..
Carse's story regarding the $40. 900,
that a man, a banker with a bankers
training, should give $4,000 In cash
without security in one month sac, 900
is not to be sneezed at. ! can conceive
of a man giving his friend who was in
trouble $500 or $1,000 or even $4,000
Would a man who before he joined this
company had a salary of $22, 900 a year
give 100000 to man who was down
and out, especially a man who In his
last dealing with him had given him an
impression OF insecurity?
Coarse was so uncertain as to whether
McAdoo would ever earn anything under
his contract that he didn't make 1t a
company matter until year later. The
question is whether Carse tried to cover
up a questionable transaction"
AssaiIs the Voting Trust.
Vice-Chancellor Lane then referred to
the voting trust, and said:
II am not at all sure that II could
lay my hands on the voting trust OF
the Submarine Boat Corporation, as
we'll as the voting trust of the Electric
Boat Company, I would not set the
over the Submarine Boat"
The ubiquitous part of the voting
trust. he said. was that each voting
trustee kept himself In power by his
own vote.
In reviewing the history of the COM
pany In his opinion. the Vice. Chancel-
lor said there was no doubt that credit
for keeping the enterprise alive Is due
to no man more than Mr.. Frost. He
then took up the various charges against
Carse and said that so far as the en-
ployment OF McAdoo was concerned
there is no doubt that Frost. whatever
his first objections, ultimately acquisced
IN the arrangement.
"A fact certainly Ill advised. perhaps
criminal. In 1915. cannot be urged now in
1919 as ground for his removal" said
Lane. Even II he did
do what Is charged. II does not show a
condition OF mind that shows him unfit
to be trusted
As to the bonus agreement, the court