New-York tribune., 1921-01-25

ment prepared by him stating that
charges may be offset by credit which
had not been reached when the work
Tas stopped"
II also stated" said Mr., Morse. "tisat
the accounting firm did not certify
that all Of these misplaced items had
been included in the cost of Emergency
Fleet Corporation hulls.'
Event: which led up TO the employ
ment OF Perley Morse L. Co. 10 audit
the Bethlenen,'s books were described
by George S. Burgess, a member Of the
Morse firm.
Has No Personal knowledge of Voucher
Burgess said that he had called to
the attention Of A. NJ. Fisher, invest
gator for the committee, certain data
ne possessed relating to charges found
IN previous audits in a number of shin
yards. Mr.. Fisher sent him to Alonzo
T"eedale, then treasurer OF the Ship
ping Board, and with Mr.. Tweedale he
went to Colonel Abadie, then general
controller of the board
Burgess and his associates then made
up a list of fifty items relating to al
legged misapplied charges on govern
ment vessels which he submitted to
the comptroller. The contract to make
an audit OH the Bethlehenl's books. Mr..
Burgess said, came a short time later.
Mr.. Burgess testified that he had no
personal knowledge of the $3.50 900
charged to personal expense of Mr.
Schwab other than that obtained from
the men VINO made the audit He said
he had seen the work sheet and went
to Philadelphia, but when he arrived
there the auditors OF his company had
been excluded from the shpyard. After
the audit was resumed in a modified
form, wherever his company had moth
ing to do with Investigating the over
head, ne paid no further attention to it..
Mr.. Burgess supported Mr.. Morse
by saying that he never heard that
Martin J. Gillen was told that the
$3.50, 900 voucher was call right" until
he read Gillen's testimony before the
committee in the press.
In reply to questions by Representa-
tive Foster Mr.. Burgess said that he
mad dictated the statement read earlier
III the day into the record by Mr..
Morse concerning the so69.OoO voucher.
He confirmed Mr.. Morse's testimony
that his firm has already presented to
the Shipping Board such matters as
its auditors had found existing and
would not testify to anything which
might be termed conclusive.
Two Accountants Saw Records
| The two accountants who actually
saw the record of the S269.OOO voucher
and the 100000 charge to ship con-
struction on the books of the Bethle-
hem corporation also testified at the
night session of the committee. Both
corroborated the testimony given by
Mr.. Morse.
Irving NJ. Kutner was the accountant
actually at work on the books who first
noticed the entry He testified that
on February IS, 1920, he came across
the item in the general administers
tion and expense account. AT his re-
quest, he said. q certain Ny. Transieu
of the Bethlehem corporation, got out
the original voucher from the files, on
the face of which appeared Expense
Account of Charles NJ. Schwab, Octo-
! ber," and the amount.
i Mr.. Transieu Immediately informed
| him. Kutner testified, that the item had
been disallowed, but the books showed
! it charged on the November, 1918, ac-
counts and no credit to take care of the
disallowance appeared in the December
accounts. Whether or not the sum was
credited in the accounts of some subse-
quent month Kutner could not say.
Asked by Chairman Walsh whether
this item had been charged to ship
construction, Kutner said he could not
tell unless the entire audit was com
pleted At the time the item was dis
covered, he testified, he assumed that
it was so charged because the account
| ing practice OF the Bethlehem corpora
tion was to prorate the general ad-
ministration expense to the various
/ shipyards to be charged to ship con-
struction. The presence of the 100000
portion Of the $4,000 voucher in the
account caused~&im to assume this at
/ the time, kutHer testified.
Benjamin T. Tanner, another en-
ployee OF Perley, Morse & CO., and
Kutners superior, testified he had seen
the book entry referred to by Kutner
although he had not seen the original
voucher. In general he corroborated d
! the resi-. of GItner's testimony.