The New York herald., 1921-01-25


s26s.5435S against Bethlehem Ship
building Corporation as its share of this
expense.
Then Bethlehem .Shipbuilding Cor
poration journal entry voucher was pre-
pared Photographic copy annexed)
showing the ABSORPTION OF this 100000
in its general expense account
"The item of 100000 was thereupor
entered in the general expense account
upon the books of the Bethlehem Ship
building Corporation. No part of thai
item was ever charged against ship con-
struction.
Agreement Between Auditors.
Under the practice in vogue during
the period of construction for the Elmer
gency Fleet Corporation no general ex-
penses were charged in the first instance
against the construction of Government
ships.
"The practice in dealing with general
expenses as between the Shipbuilding
Corporation and the Fleet Corporation
was as follows: When the auditors of
the Fleet Corporation made their month
L.
building Corporations general expenses
for the month were turned over to them.
They then selected the items, portion
of which was in their opinion properly
chargeable to the cost OF Government
ships The result was that no state
ment of general expenses chargeable to
Government ships existed until this
statement had been prepared by the
auditors OF the Fleet Corporation.
IF the Bethlehem auditors were dis
satisfied with the failure to include
any items they would make their argu-
ment in favor of the inclusion of those
items. sometimes succeeding and some
times failing.
after the beginning of the audit by
the Emergency Fleet Corporation in
1917. certain practices and understand
ings became accepted as between the
auditors of the two parties. One was
that no items of expense. general or
otherwise, were to be considered by the
auditors of the Fleet Corporation unless
they were supported by statement of
full details regarding the expenditure.
AS a result of this practice such an
expenditure as the 100000 in question
would not be included by the auditors
of the Fleet Corporation because not
supported by detail.
Annexed hereto is Photographic
copy OF the statement of November. 1918,
showing the items of expense on the
Bethlehem Corporations books. which
were not included in the statement of
allowed expenses prepared by the Emer-
gency Fleet Corporation auditors. IT
will be observed that among the items
therein mentioned as not being included
is the 500, 900 item in question.
'It will thus be seen that under
the practice adopted Bethlehem never
claimed or requested the inclusion of
that item
Before Mr.. Grace was called to tho
witness stand the morning and after
noon sessions of the committee III the
Pennsylvania Hotel had been devoted
to taking the testimony of Perley
Morse and three of his associates and
employees, who had some part in the
audit of the Bethlehem company :
books which was stopped summary
by a telegraphed order from Judge
John Barton Payne. then the chair
man of the Shipping Board.
Col. Eugene II. Abadie. formerly gem
eral comptroller of the board, was vim
dicated in that Mr.. Morse and his SUD-
ordinates swore that they had told him
precisely what he quoted them as hav-
ing said in relation to the Schwah
voucher turned up by them Mr.. Morse
himself expressed the salient fact N
his own evidence when he said: There
is no question as to the voucher. the
only question is what was the procedure
after the audit had been called Off and
our men We're refused furtner access
to the books and even to the company
blildingS.'