The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-09-02
LIMITATION STATUTE.
HALTS GRAFT CASES
Daugherty Finds Many Gov
eminent Defrauders Immune
Through Lapse of Time.
CIVIL SUITS POSSIBLE
Will Ask Congress to Amend
Law to Prevent More
Escaping Trial.
Special Despatch 10 THE NEW YORK HERALD
New York Herald Bureau.
NH Ii emf. l.

Special Despatch 10 THE NEW YORK HERALD.
New York Herald Bureau.
Washington. ID. G.. sept. L. >
AttorneyCiencral Daugherty's war
graft inquiry has struck snag. 1t de-
velops that large number of war
grafters will be free from criminal pros
ecutions by the Government for frauds
on war contracts because their offences
were committed more than three years
ago. Hundreds of alleged offenders
through counsel are now prepared 10
plead the statute OF limitations as bar
to any action of a criminal nature that
the Government may take.
The Department of Justice tonight
admitted officially that this offence is
To be set up by large numbers of con-
tractor >4s- others who have been un-
der investigation and probably viii de-
feat the Government in its plan in 50
far as punishment under the criminal
sections Of the statute is concerned.
Officials, as a result. have been COM
PEELED to shift their investigation to a
new phase, to establish when overt
acts" OF the alleged offenders were COM
mitted Actual criminality under con-
tract made with the Government for
war supplies may not have ended with
the final settlement OF claim by the
Government, officials said. They now
are seeking in the cases under inquiry
to determine how far these alleged con-
spiracies may have been extended in the
rticl1lar of cases i'll question.
impeachment Is Serious.
Whatever the outcome of the Depart
ment's latest inquiry, designed to de-
ternine the dates and character of the
covert acts" officials admitted that
there now has arisen a very serious inn
pediment, which possibly may be used
successfully against the Government.
The Government, therefore, faces de-
feat in numerous cases growing out OF
contracts made for war supplies OF va
rious kinds just after the United States
entered the war in April 1917. In many
Of these contracts, entered into soon
after the declaration of war and con-
summated within year and long be-
fore the arnstice. it was said to be
possible for the prospective defendants
TO plead the statute of limitation. which
in their cases has run three years and
exempts them from criminal actions.
The department now finds also that
other groups of cases in which the stat
ute of limitations soon will begin to run
are vitality affected Consequently the
department has decided to go before
Congress when it resumes and urge the
immediate passage OF the bill introduced
by Senator New CInd) increasing the
statutory limit from three to six years
in such actions. Mr.. Daugherty and his
staff have decided that unless this leg
islation is secured the Government will
be hopelessly beaten in any efforts to
prosecute alleged offenders in the cases
falling within the class described.
Although recognizing the new difficult
ties the Department of Justice is con-
WINGED that in the groups Of cases in
which the statute OF limitations already
has served as a bar to criminal action
there still is left to the Government the
right to proceed against the offenders
under civil proceedings. Under such ac-
tions the Government would seek to re-
cover amounts believed to have been
collected by fraudulent means These
sums are said to aggregate as high as
81 900, 600, 900.
Prospective defendants in cases in
which the Government may row be
estopped from criminal procedure fig
ured in deals made with the Aircraft
Board. the Shipping Board. the War De-
partment and many other governmental
agencies.