Evening star., 1921-01-24
AUDITOR SUPPORTS
STORY OF S26O,oDO
SCHWAB SHIP BILL
Testifies Voucher Was Re-
ported to Abadie After
Audit Was Called Off.
SAYS ATTORNEYS FEES
WERE CALLED OVERHEAD
Declares Memo Attached to Big
Item Showed It Was to Be
Charged to Construction.
By the Associa ted Press.

Charged to Construction.
By the Associated Press
NEW YORK. January 24.-Perley
Morse. whose accounting firm audited
ing Company. today appeared before
the Walsh committee investigating
affairs of the United States Shipping
Board and corroborated testimony OF
Col. E. II. Abadie. former general
controller, concerning discovery o:
a voucher for $3.50. 600 alleged to cover
personal expenses of Charles ~
Schwab for October. 1918.
Mr.. Morse said he tod Col. Abadie.
under whose direction the audit was
carried out, of the discovery of the
voucher by one of his accountants and
of the existence OF oiher vouchers.
One of these was for $4,000. paid to
Paul d. Cravain. attorney for the
Bethlehem company and was charged
to overhead, he said.
While Morse said he had not seen
the voucher. it was reported to him
by one of his men and he mentioned
it to Col. Abadie after the audit had
been called off by Chairman Payne.
The information given by his ac-
count. he declared. was that the
voucher was IN the Office of the
Bethlehem Corporation and on their
books on February Is. 1918.
$lS.OOO for Fees.
The voucher. he told the committee.
was entered in the trial balance.
which his auditors made. under the
heading of administration and ex-
pense in general" Mention OF the
voucher was made to Col. Abadie. Mr..
Morse explained, in connection with
other things. which included the
voucher of $4,000 to Mr.. Cravath.
This charge. he said. was for at
torney's fees.
Questioned concerning the $260,000
voucher, he said a memorandum was
attached to the voucher. showing that
100000 was to be charged to ship
construction.
The matter was called to the at
tention of one of the Bethlehem en-
ployes by one of his accountants
told his auditor that the item aIrea..
had been disailowed.
Work Not Carried Out.
Mr.. Morse explained that when ,h-
audit was resumed his firm had tir
auditing of only the material aE
labor accounts. and the field woi
for the overhead was to have b.,
handled by the auditors of the Em.@
gency Fleet Corporation. His fri
however. was to have general dir
tfon Of the work, but this plan, i
said, was not carried out.
The statement of Martin ]. Gillei
former assistant to the chairman
committee, to. the effect that "a.
Morse had agred that the item w.
not charged to ship construction, W.T..
denied by the witness.
Mr.. Morse declared he had no knowi
edge of how the item was handled o.
the books Of the shipbuilding Cur
poration after his work was inter
rrpted.
The contract for the audit, he said
was made with Col. Abadie on Janu :
ary 10. 1920.
Reads From Menorandun.
Mr.. Morse then read the following
from a memorandum concerning til
s260.000 voucher:
This voucher was No. CAB gen.
eral. the designation referring to the
shipbuilding account number. The
voucher was No. 699. the only de-
scription that it contained was pro-
portion OF B-44 expense (B-44 is the
Bethlehem Steel administration and
general expenses account)-amount,
100000
"Our accountant looked at B-44 gen.
eral expense account for an explana-
t!oh Va tMiS SnaFeS anu 1Ounu entered
thereon Voucher No. 114,980, c. N. s..
$269.543.53.'
He then asked an assistant in the
Office Of Mr.. Hauch for this voucher
and it was produced from the files
and read: Expenses of c. NJ. Schwab
during October, 1918, $269,543.5s' A
memorandum was attached to the
voucher stating that 100000 was to
be charged to ship construction. Mr.
Transieu, who produced the voucher
for our accountant, stated immedf-
ately that the sum of 100000 had
already been disallowed.
Nevertheless, it was noted by our
accountant that it was included in
the total of account C-44. posted to
distribution of general expenses,
book C. November, 1s1S'"
Declaring he knew nothing of what
after February 1. 1920. Mr.. Morse
said his relations with the Beth
lehem people had extended over two
or three years. and were very
pleasant until after. the finding or
this voucher"
Did Not Know Objects Of Audfts.
Previous to making an audit of the
Bethlehem books for the Shipping
Board. aait Mr.. NJ Morse declared. he had
Company and the Luckenbach Steam,
ship Company in connection with the
Of ships for these two
What the object of these audits
was the witness declared he did not
know. but explained that both con-
Germs paid him and that before under-
taking similar work for the Shipping
Board. he got permission from both
as matter OF profess
sional ethics"
The audit Of the Shipping Board
books still continues. he said, and has
already cost tho board nearly $400, 900.
The board pays for between seventy
and eighty men at this work at scales
from $50 a day for superin-
ants. he explained Asked how he
paid his men, Mr.. Morse said by the
year, or stipulated sums for special
work.