Evening star., 1922-08-07
Jury HOLDS THREE
IN WAR FRAUD CASE
Morse, Davis and Phillips Ac-
cused of Conspiracy to
Rob Government.
ST. 600, 900 LOST BY U. S.
Juggling of Bids in Sale of Power
Plant Laid to De- '''sl'
PENDANTS.
100000 LOST BY U. S.

Ernest c. Morse, former director OF
sales of the War Department. now
president of the Foreign Sales Supply
Company; Everly NJ. Davis. president
of the E. NJ. Davis Chemical Company
New York. and Alexander w. Phillips
said to be associated with Davis. who
has an office in the Chemist building,
for alleged conspiracy in connection
with the sale of the Old Hickory Pow
er Plant. at Jacksonville, Tenn, by
the special grand jury which is inves-
tigating war frauds under a special
appropriation of 100000 from Con-
gress asked by Attorney General
Daugherty. 1t is charged that the
men conspired to have Morse secure
the approval of Newton D. Baker, then
Secretary of War, to the sale of the
plant. which cost the government
SS0,000.000, to the Nashville Industrial
Corporation for $3.500.O00 when other
persons were willing to pay approx
mateiy s1.O00,000 more for the prop
erty.
Morse. who was recently indicted
in connection with the disposition of
excess lumber from cantonments. is
said to be in Warsaw. Poland The
two New York men will arrange to
give bail, it is understood.
Charges in Indictment.
The indictment sets forth that June
%. 1920, the Old Hickory plant was
declared by the War Department to
be a surplus plant and it's sale au-
thorized. Proposals were advertised
during August, 1920. in divers pub
lications for sealed bids for the pur-
chase of the plant. and the bids were
opened September 80. and among the
bidders were the Nashville Indus
trial Corpora ton. the Buffalo House
Wrecking and Salvage Company and
the National Metals Company At
this time, it is stated, Morse was in
the government employ, Davis was a
manufacturer of chemicals and Phil
lips was associated with him in busi-
ness.
August 9, 1920, it is declared, the
Nashville Industrial Corporation was
organized primarily for the purpose
of submitting z bid for the Old Hick
ory plant, and Davis and Phillips be-
came interested in a syndicate which
purchased a large block of the stock
legged conspiracy, Davis and Phillips
were to cause the Nashville Industrial
Corporation to bid a sum greatly in
excess of any sum which any other
bidder would be likely to make, but
to attach such conditions. deductions
and reservations, not permitted by
the printed instructions to bidders, as
would make, in fact, the bid much
less than any other bidder would
submit.
Bakers Approval Secured
Morse is charged with knowing the
character of the bid, and it was
agreed, it is alleged, that in violation
of his duty as a government official
he would advise the Secretary of War
to accept the Nashville company's bid
and thus bring about the sale of the
plant for nearly $1.000.000 less than
others stood willing to offer. In
furtherance of the agreement, it Ia
charged, Morse secured the approval
OF Secretary Baker when the latter
was passing through Washington Oc-
tober 9 after speaking campaign In
New England.
The government was represented in
the presentation of the evidence to
the special grand jury by United
States Attorney Gordon. George p.
Hoover and Oliver E. Pagan. as spe-
cial assistants to the Attorney Cen
eral, and Heber H. Rice, special as
sistant to Mai. Gordon. Among the
witnesses heard was former Secretary
Baker, who came from Ohio to testify.
The maximum penalty under the
900 and two years Imprisonment in
the penftentfary.