New-York tribune., 1921-01-25
Grace Defends
Schwab; Admits
$269,00O Bill
tcontinusd from pass ene)

yesterday and heard Mr.. Morse's testi-
mony. He may be called as a witness,
The witness denied emphatically che
statement made before the committee
by Martin j. Gillen, formerly special
executive assistant to John Barton
Payne when he was chairman of the
Shipping Board, and to Admiral Ben
son. that he (Morse) had told Gillen
that there was nothing wrong about
the $269,o00 voucher. Gillens state
nent, Mr.. Morse testified. was "abso-
lutely and unqualifiedly false" The
witness said that he had not seen Mr..
Glllen since the conference held at the
offices of the Shipping Board in Wash
ington shortly after the cancellation of
the first contract given. his firm To
audit the Bethlehem's books.
Despite his substantiation Of Colone.
Abadies testimony, however, and his
contradiction Of Mr.. Schwab's denial,
Mr.. Morse submitted copy of re-
rort made by him to the Shipping
Board, December /, 1920, in which,
while calling certain facts to the at
tcntion Of the Shipping Board, among
them the payment of the 1868 900
voucher to Mr.. Schwab, he did not un-
dertake to certify to the correctness
of the information without further in
curry and verification. On this point
the witness clashed repeatedly with
members of the committee, particularly
Representative Foster, of Ohio, who in
sisted on knowing why Mr.. Morse made
his charges while refusing to certify
to them.
s339,230 in ''Misplaced Charges
In addition to testifying on the
voucher question, MIR. Morse also testi-
lied that the investigation made by his
y,
en- the books Of the Bethlehem Ship
building Corporation amounting to
S339.23O.
Mr.. Morse explained, however, that
when he made his report to the Ship
ping Board he could not tell then and
cannot tell now that these items were
not eventually alocated or changed.
He said his audit of the company's
books was halted before he could def
nitely establish whether these accounts
were finally left up against ship con-
struction. The shipbuilding accounts,
Mr.. Morse said, we're kept at the Phila-
building Corporation.
LAS matter Of fact" asked Chair
man Walsh, "did you learn whether any
part of this voucher referring to the
$3.50 Schwab payment was charged
to ship construction %
"All | can say" replied the witness,
lis that the voucher was there and it
appeared in the books. have the
pages of the book. The voucher was
seen by one OF our accountants, who
had it in his hands Another account
ant saw the entry in the books. The
only question in my mind is as to the
procedure that took place after we
were refused access to the Bethlehem
books"
Confers With Schwab and Grace
A sensational part of Mr.. Morse,
testimony was when he told the COM
nlttee that since Charles M. Schwab
had appeared before it he had met both
tlr. Schwab and President Grace of
the Bethlehem Steel Corporation at the
Hotel st. Regis, in this city.
1he conference, Mr.. Noise said, took
place through the efforts Of Mr.. Wild
man, friend Of Mr.. Schwab's. At this
conference, Mr.. Morse testified, he and
voucher and agreed as to the details.
Mr.. Schwab, the witness said, denied
absolutely at, this conference that he
got 100000 on the voucher.
The story Of the conference was. told
BY the. witness in response to a uues
tion from Representative Foster. Asked
by Chairman Walsh whether he ac-
cepted Mr.. Schwab's denial Mr.. Morse
said:
IF he says he did not get the money
and that the money was not charged up
to the government I suppose it's true.''
Mr.. Morse emphasized several times
during his testimony that he did not
believe Mr.. Schwab actually knew Of
the transaction in dispute.
Several times after going on the
stand Mr.. Morse tried to read into the
record q prepared statement ncerninc O
the $269,oOO voucher, but was baked
by Chairman Walsh, who insisted on
direct testimony. After the witness
demonstrated, however, that the state
ment was prepared from data ne had
brought along with him he was per
! mlt.ed to read it.
Mr.. Morse's- statement follows:
ihe voucher was numbered CA
B-General, the designation referring to
che shipbuilding number. The voucher
number was 699. The only description
that 1t contained was as follows: pro-
portion B-44-Expense. BID is the
bethlehem's admin stration and general
expense account.
Our accountant looked at B-44.
steel company general expense account,
sor explanation Of this charge. and
found the entry: Voucher No. l44.9SO.
see Ms 269,54353. He then asked an
assistant in the Office of Mr.. Hauck for
this voucher. 1t was produced from
the files and read as follows: Expense
=; NJ. Schvab during October, 1918,
269,543-53.
"a memorandum was attached to thi,
voucher stating that 100000 had al
ready been disallowed. Nevertheless, it
was noted by our accountant that this
amount was included in the total &C
count of distribution of general ex-
pense Book c, November, 1918"
Mr.. Morse testified that opposition on
the part of the Bethlehem Shipbui!ding
Cor.porasion to his continuing with the
audit of the company's books became
evident Immediately upon discovery OF
TINS voucher. He said that charge
were raised against him and efforts
were made to discredit him. The ques-
ton was raised whether his real name
was not "Moscowitz' and whether he
was citizen.
II was called crook, and even a
murderer" said Mr.. Morse. Before
this voucher was found. the witness
! said, his relations with the Bethlehem
company were friendly.
Denies Work Is Unprofessional
IN my doing this work. said Mr.. Morse,
unless unprofessional means uncov-
ering things of this kind"
Mr.. Morse testified that the govern
ment had paid thus far between $780,
900 and 100000 for the audit of the
Bethlehem books. In answer to Il