The New York herald., 1921-01-25
Amount Paid in Regular
Way by Bethlehem Co. for
Expenditures Made in
It's Business.
PHOTOS OF THE RECORDS
$1,000 Charged to Ship
building Subsidiary and Not
to Cost Of Ships, as Testi-
fled To by Abadie.

Eugene G. Grace. president Of the
Bethlehem Steel Corporation, took the
witness stand at $50 o'clock last night
In the Walsh Congressional investiga
ton into the transactions of the United
States Shipping Board, and within ten
minutes thereafter the bottom had
dropped out of the Charles NJ. Schwab
S26O,000 voucher scandal, which for
four days has made the friends of the
steel master increasingly indignant.
AS Mr.. Grace and Mr.. Schwab said
from the first, there was voucher
which, in some sort, was like the one
described. The basic fallacy lay in
the assumption that 100000, or any
other part of the sum named, ever was
charged against the United States
Emergency Fleet Corporations ship
construction account. Paul d. Cra-
vath who. as counsel, sat beside Mr..
Grace during the greater part Of yes
terday's session of the Walsh inquiry,
seemed to summarize the general feel
lUB aItcI MI. bli iCc iidd AiiASbSA LIS
statement when he said: This whole
affair has been much ado about moth
i1g.''
Mr. Grace explained that the pay
lnent OF s269, ,54S53-the actual amount
or the celebrated voucher-had been
made to Mr.. schwab in accordance
with the regular method pursued in
reinfbursing Mr.. Schwab for expendi-
lures made by him. and his office or
SANITATION in connection with the
Bethlehem company's business.
Photos Of Vouchers shown.
In distributing this particular ex-
pense item among the various depart
rnents of the business, 100000 Of 1t
wes charged to the Bethlehem Ship
building Corporation, the Bethlehem
subsidiary concern in charge Of ship
building. and not to the cost of ships,
as Col Abadie had testified he had
been informed by employees or the
certified public accounting firm Of
Ierley Morse & Co.
As a matter of fact, Mr.. Grace testi-
fed. the Bethlehem company never
claimed this 100000 as an item of cost
against the Government ships. the
amount actually having been charged on
the company's books to profit and loss
accounts. The Bethlehem president sub
nitted TO the committee and to repre-
sentatives Of the press photostatic copies
Of the various vouchers and the other
documents concerned in the controversy
which showed the bookkeeping history
OF this item from beginning to end.
Among the exhibits submitted by him
were these:
/. Photographic copy OF the original
s2Ss.543.5S Bethlehem Steel Company
G. NJ. Schwab special expense voucher
.. Photographic copy of the Bethlehem
Steel Company's Journal entry voucher
transferring $780, 200 Of the s26e.543.63
10 the Bethlehem Shipbuilding Corpora
ton.
3. Photographic copy OF the Bethle-
lem Shipbuildng Corporation journal
entry voucher charging this item OF
s100.00o to general expense accounts.
4. Photographic copy of the Bethlehem
Shipbuildlng Corporations statement OF
general expense items for November,
1918, entered on its general books. but
not included in the items of cost billed
against the Emergency Fleet Corpora
ton contracts. In this list appears the
100000 item
statement Clears II Up.
From these exhibits. friends OF Mr..
Schwap and Mr.. Grace contend. ii Is
clearly established that no part of the
100000 in question ever was charged
against the Emergency Fleet contracts
or ever was sent up by the Bethlehem
company as "a charge against those con-
tracts In the statement which MIR.
Grace delivered TO the chairman of the
committee In typed form. together with
the photostatic exhibits. he said:
.'This voucher of the Bethlehem Steel
Company Is dated November 80. 1918,
as appears from the annexed photograph
of the voucher. IT Is. In favor OF G. NJ.
schwab. and IL for special expenses
and the amount Is S26s.543.03. This
voucher. which was against the Bethle-
hem steel Company. was paid by hat
company, and the payment appears upon
its books.
1T is Bethlehem's practice TO distrib-
ute items Of general expense among the
subsidiary companies that operate the
various departments OF the enterprise.
Therefore. in ordinary practice a por-
tion of the payment in question would
be charged to bethlehem Shipbuilding
Corporation, Ltd, the Bethlehem sub
sidiary operating the shipbuilding de-
partment.
Accordingly, Bethlehem Steel COM
pany journal entry voucher (photo-
mn r1ro ed
charging s1o0. 600 of the expenditure OF