New-York tribune., 1920-11-13
McAdOo Named
With Morse in
Ship Inquiry
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chasing department, presenting num-
Der Of letters Of recommendation,
among them one purporting to be from
MIR. Tumulty
Other Investigations, Mr.. Meehan
said, revealed the presence Of en-
ployces who were drawing salaries
without performing any work. Among
these cases he mentioned a brother of
Governor Edward |. Edwards of New
Jersey. The witness said that all per-
sons involved in such cases were sum
marlly dismissed from the Shipping
Beard.
Mr.. Mechan said that the difficulties
in running down offenders in connec-
ton with Shipping Board operations
nave been increased with the recent
reduction of his force from sixty to
twentyfour men.
Sl,500,0o0 Fraud Blocked
Perhaps the most striking case of
alleged attempts to defraud the GOV
crnmcnt, narrated by Mr. Meehan, was
one involving j. X. Fawcett, formerly
head of the lumber purchasing depart
ment IN New York, who, the witness
said, confessed to deal which, had it
not been frustrated by agents of the
board, would have dcfrauded the gov
ernment oil $1,500.000 and netted the
government official S62,5OO. In this
case, Mr.. Meehan said. the use Of
photograph thwarted the efforts of the
conspiratOrs.
According to the testimony the deal
involved the sale of 1000, 900 feet Of
lumber in July, 1919. Investigation, the
witness said, disclosed that on a bid
of $3.90O000 for the lumber made to
the government the latter would have
received only $2,aO0,0O0. The bid was
made by Harris Brothers, Inc, a Chi
cago wrecking firm. Government agents
became suspicious, according to the
witness. and instituted a close watch
upon 4. S. Kigcr, formerly employed as
chief traffic engineer by the Shipping
Board and, according to Mr.. Mechan
dismissed because it was revealed that
lie was a confidence man of national
reputation, had served at least one Jail
term and lived under many aliases. BY
means OF a dlctograph and careful
shadowing, Mr.. Meehan said, it was re-
vealed that Kiger had been in COM
munication VIII Fawcctt, as an EN-
Brothers. on the proposed deal. 1t was
learned, testimony continued, that Faw
cett had agreed to give the bid 10
Harris Brothers, in return for which
Fawcett was to receive $G2 900 outright
and the two men, with Assistant Cen
eral Auditor Mckinley, were to or
ganizc an export company in New
\ ork to handle he export sales Of The
lumber. The Harris Company sub
mittcd certified check to indicate a
bid Of Sc 800 900, although the bid in
reality totaled only So 100000. The bid
vas rejected and Kiger and Fawcett
complete Confession The bid finally
went to the American Lumber Sales
Ccjnpany at a price which yielded the
government some S1,600,000 over the
Harris Brothers bid
Clears Higher Board Officials
Mr. Meehan emphasized that no
irregularities had been discovered
among the higher officers attached to
the central administration of the board
itself, but he involved in his test-
.Aony department heads, particularly in
shipyards in the Southern district.
where dismissals had taken place at his
rt rtcommendation. One Of these di.ms-
sails, he said, was due to what he termed
criminal delay and exorbtant expense
in the repair of ship. The final repair
b.ll on this ship, he said, amounted to
$500, 600, and the ship could not be sold
to-day for $4,000.
Detailing alleged graft among ships
officers, Mir. Meehan told of the case
cf Captain Rye Of the steamship Dio
and three of its officers, who had man
aged to conceal the presence Of 400
tons OF fuel oil when the vessel arrived
from Rotterdam. At Norfolk the ship
tD0S NJ, 70,
.'aneilo. At this port, Mr.. Meehan said
the officers paid for the delivery of
900 tons of oil additional, and with
tHc connivancc of a Standard Oil Com
pany employee had only 600 tons dc
lsvered. The difference in the value be-
tween the 600 and 900 tons paid for
amounting to moro than $9,00O-was
split am9ng the men involved in the
fraud, he testified
In addition the witness said the Of
tcers Of the ship took the usual per-
centagc OF 25 cents a ton on the trans
action and conNived with a repair com
pany for certain alterations to the
ship, for which a bill of Sl1 900 was
submitted and on which they made So
0J0 additional
Captain Rye, Mr.. Meehan said. re-
ceived $500 as his "bit' on this bill.
Afterward it was ascertained that the
repairs made to the ship amounted to
rot more than $4,000. Before sailing.
the witness said, the ship took aboard