New-York tribune., 1920-06-24
Three Others Accused bv
Alinirall Grand Jury of
Effort to Defraud L. S.
of $500. 900 Profit Tax
81, 900 Bail Fixed:
Hearing on Monday
Also Charged With Trying
10 Force $l75,OOOPay-
ment in Glucose Case

Niiti iSs +. NluTpnN. dmNdny
boss, and James F.. Smith, Assistant
District Attorney. are charged with
conspiracy to defraud the United
States government Of excess profit
taxes estimated at from $780,
600 to SSO0,0O0, in an Indictment
made public yesterday in the Crimi-
nal Branch Of the Supreme Court.
Their co-defendants are Arthur J.
BALDWIN, prominent lawyer; John A.
Efishhooks") Mccarthy. con-
tractor Ernest b. Walden, vice
president of the Corn Products Re-
timing Company. and the company
itself.
The defendants also are accused
OF endeavorlng by threat of prosecu-
ton to coerce Louis \. iIartog. with
whom Murphy was associated in the
manufacture of -dextrine, to
comply with Murphy's demand for
payment Of a royalty on every bar
rel of glucose Hartog obtained
through Baldwin from the Corn
Produces Company. and to refund to
the Tannnany leader SIZE, 900 he had
invested IN the enterprise.
None OF the defendants was presen.
but all were represented bv counsel
IN Justice Wecks's courtroom at 2:3o
ID. 10.
falgnment. A plea Of not guilty was
entered IN behalf Of each of them. and
Justice Weeks set bail in the sum of
$1,000.
Face Prison and Fine
Conspiracy is q misdemeanor The
maximum penalty upon conviction "a
one year IN the penitentiary, 900
fine or both.
=, Murphy IS in California, heading the
lammany delegation to the Demo
cratic National Convention With him
is Governor Alfred f. Smith. who
Drought INTO being, though for an en-
urely different line of inquiry. tho
eNtfaordinary grand jury, which has re-
turned blll against his party chief
tam. Murphy is the first head Of
Iammany Hail since "Billp Tweed 70
be indicted.
The Indictment against Murphy.
Smith and the others was the mvs'
terloAS document handed I'D by the
grand jury late Tuesday afternoon,
It's contents were kept secret until YES
terday afternoon, but those in touch
with the grand jury had permitted the
mistaken belief to circulate that the
persons indicted were city officials who
had engaged in a controversy with
Assistant District Attorney Smith over
wee and police prosecutions.
Smith Furnishes Bond
Justice Weeks granted counsel for
the defendants until next Monday 70
make any necessary motions he said
ne desired that all proliminaries he dis
posed OF before court adjourned for
the summer. 1t is not expected that
the case will go TO trial before the fall.
'Mr. Smith furnished a $1,000 bond.
BALDWIN Is in Europe and Mccarthy
and Walden, as well as Murphy. are
out OF town. They viii give bail when
District Attorney Edward Swami. at
the Manhattan Club last night. said
that he had not suspended Smith and
did rot intend to DO 50.
He VIII 60 right ahead with mis-
work in the regular way" SAID Mr..
Swami.
The Indictment. which takes up
th'rty-two typewriter pages, traces
the business dealings between Murphy
and Haroc, which were aired last wear
in suit and counter suit between the
the North Kensington Refining Com
pany, engaged in making Malto-Dex-
trlne, corn syrup, the principal in-
gredlent = which was glucose. He
mad 5000 900 contract to furnish
Ma DeXtrine to the British govern
ment and. It IS alleged, found himself
unable 10 obtain enough glucose, which
vas 70 De had from the Corn Products
Company
Murphy Becomes Stakeholder
Murphy who, in the words Of the in
d;ctment, had large political and
financial interests throughout the
State OF New York" is asserted 10
have orally agreed with Hartog, March
., to acquire one-ffth interest in
the business, the cons deration TO con-
sist Of q cash payment and the exert
ing by Murphy and Baldwin. his coun-
sci, "os such influence as they might
be able TO bring to bear to induce the
Corn Products Refining Company to
sell and deliver to the said Louis n.
Fartog as large quantities Of glucose
as possible
Iasce ne.ks later, the indictment
goes on, tElS agreement was put into
writing. the capital stock of Hartog's
company was raised from 81 900 to
81 ,000o00 OF which Murphy was to
purchase $3.50, 900 worth. OF this sum,
it is averrcd, he paid down st25 0o0,
promised TO pay the remainder IN
thirty, sixty and ninety days. and took
an option on 100000 worth of stock
additional. Hartog, it is set forth. WAS
to put up sl5o,ooo and Murphy $4,000
for working capital.
At this time, the bill asserts. the
business was flourshing TO such an ex-
tent that the prospective profits were
estimated at S1,0o0.00o n year. This
sum. it is set forth, would be subject
to an excess profits tax of so per cent
and. IN the event Of an amendment
then contemplated being enacted, TO a
TAX of 50 per cent
Evasion of Tax Payment Charged
/; WAS to make possible the evasion
OF the payment of this, tax TO the gov
ernment. it is charged, that the first