New-York tribune., 1920-05-13
Admits Shipping
Board Advanced
Million to Morse
E. E. McNary Tells Congress
sional Committee Gov
eImment Owed Croton
Concern Only $4,000

The Congressional committee which
is Investigating the relations between
the United States Shipping Board and
the International Mercantile Marine
shifted from discussion of the amount
spent on reconditioning the Leviathan,
at its yesterdays session in New York,
TO consideration of relations of Charles
". Morse with the board.
During the afternoon session the
committee broke in upon the eXamina-
ton of witnesses who were testifying
concerning the Morse shipyards and
withdrew to hold secret session
When asked concerning this Chairman
Walsh said:
AT the request of the Department
OF Justice we went into executive ses-
sion on matters that have so developed
they are likely to be presented to a
,ederal grand jury. At the request of
the Attorney General, what was trans
acted cannot be disclosed"
When asked whether the executive
session was concerned with the Morse
interests Mr.. Walsh refused to reply.
The committee then went ahead
hearing testimony having to do with
the Groton Iron Works, Of Grotcn,
Conn, Morse concern.
+. A. ). Franklin, president of the
International Mercantile Marine, who
testified Tuesday that he had called a
meeting Of ship repairmen TO consider
the renovating of the Leviathan before
1t had been turned over to his concern
by the government, corrected his testi-
mony yesterday.
He testified that in going over his
records he found the following lette,.
dated November IA. The conference of
the shipbuilders was held early in De-
cember:
owe hereby assign to the Interna-
tional Mercantile Marine the S. S.
Leviathan for management and opera
ton. +. GOODMAN.
"(For the assistant director of opera
tions.)"
Mr.. Franklin sa d he did not know
Goodman.
Z. f. McNary, controller of the New
York District for the Emergency Fleet
Corporation, testified he had informa-
ton that the Groton Iron Works had
spent a halfmillion dollars of ship
building funds at it's plant, and there
after had to call on the government
for money TO compelte ships.
McNary said that the Groton concern
exhausted $16,l55 900 on contract for
SnlpS ana only completed 81 per cent
of the contract. Five hundred thousand
dollars, he continued, was credited to
the concern, owing to the cancellation
by(the government of orders for three
hulls, but this could not be paid to the
company .untl the contract had been
completed.
In consequence, he continued. the
financial stress Of the Groton concern
resulted in a meeting of the board of
trustees of the Emergency Fleet Cor
poration. At this gathering, Mr.
McNary said, resolution was adopted
authorizing financial agreement that
would enable the company to complete
its ships. 1t was the official opinion of
officials, he said, that if this action was
not taken, the government would have
to foot the loss.
When asked by Chairman Walsh of
the committee if the advancing of ST.
100000 by the government when the
sole item it owed the Groton company
was 100000, did not leave $500 900 of
the governments money unprotected
Mr.. McNary replied it was protected
by written guarantee taken upon the
Virginia sShipbuild'ng Company, an
other Morse concern with total net
liquid assets of more than S4,00O,00O