Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1922-02-28
said plants the large sums attributed


obtained from the Fleet Corpora
ton by the defendants for the con-
| struction Of vessels and later, the in
| dictment charged the ;. defendants
sold great masses Of the material
and converted the proceeds of the
| sales to the corporations and them
selves. 1t was also charged that the
defendants induced the Shipping
| Board officials to turn over to the
Virginia Shipbuilding Corporation
| such Of the vessels that would be fin
ished at the Virginia plant and to
| the United States Transport Co.. Inc,
such of the vessels as were built at
the plant of the Groton Iron Works,
at Groton. Connecticut, under man
| aging and operating contracts
whereby these corporations were TO
| operate the ships in interstate and
| foreign commerce, and to account to
the Shipping Board for the revenue
resulting from such operations. AT
the time the ships were turned over,
the indictments charged, the defend
ants expected and minded to fail and
! refuse to account for a large part of
such revenue and to convert a large
| part Of the revenue to the use Of
themselves and to fail and refuse to
liQuidate the gerater part OF the
| charges against the vessels incurred
in their operation and to permit such
| changes to become liens upon them
| which the Fleet Corporation would
have to pay.
The indictments further charged
that continuously throughout the
i time from April is, 1917, to the day
of the finding of the indictment, the
defendants 'conapired, combined,
| confederatcd and agreed together,
and with divers other persons I'M
known. to commit offenses against
| the United States" Each OF the Of
| lenses alleged TO have been commit
| ted, according to the indictments,
consisted of the defendants know
| ingly and wlfully, and for the pur-
pose of cheating. swindling and de-
frauding the Fleet Corporation in
which the United States is stock
! holder, making false and fraudulent
! statements to the Fleet Corporation"
| The names of William G.. McAGoo.
former secretary Of the treasury, and
| of Attorney Sturt G. Gibboney, were
mentioned in the indictments as hav-
ing conveyed to shipping board officials
! statements alleging excellent financial
| condition of the Virginia ShipbuildinG
! Corporation. 1t is not claimed that
! these men, acting as attorneys for
the corporation, knew of the alleged
role 80 ~ l,t,
Morse or of any of the others indict-
cd. 1t was stated in the indictments
| that Mr.. McAdoo was said to have
submitted to the fleet corporation and
| to John Barton Payne, its chairman
| at that time, a document containing
the statement that more than $1,000
900 in cash had been contributed by
the Virginia stockholders and invested
| in its plans and assets; that an offer
OF $50, 900 for each Of three vessels.
under construction by the company.
had been made. and another statement
| that at least S1,400000 was due the
| company.
| 1t was also asserted that some of the
accused according Mr.. Gibboney, who
| then was said to have been acting rs
attorney for the Virginia company. 10
state orally to the board of trustees of
the fleet corporation that the Virginia
| company had spent s1,S1s,000 on its
plant.
The object Of the grand jury in re
turning two indictments which carried
the identical allegations and state
ments and defendants, District Attor-
] ney Gordon announced, was for the
| purpose of assuring absolute certainty
of the governments right to prosecute
| the charges against the defendants,
as it might be contended, he added,
| that the Emergency Fleet Corporation
was not ''the United States
! In the second indictment the pre-
| amble was devoted to the establish
! ment of the authority Of the shipping
! board to create the Emergency Fleet
Corporation and to build ships ana
, yards. 1t then repcate dthe history
of the contracts let to the Morse COM
panies and included an agreement sail
to have been entered into on March Is.
! 1920. between the fleet corporation ana
the United States Transportation Co.
| Inc. whereby the latter was appointed
to act as the fleets managing agent
! to manage and operate as cargo-carrE-
| ing craft such vessels as had been
and were to be completed by the Gro
| ton Iron Works and as might be as
signed to it, The transport company
was to account for all receipts AMI
to pay to the feet corporation the net
revenue derived, it was stated.
Mr.. Livingston. one of those indict-
! ed, is vice president of the American
! National Bank here and for many
years has been identified with the
business and financial interests which
have controlled the Washington and
Old Dominion Railway, of which he IS
president.
Mr.. Morse on January ;. 1910. was
sentenced to serve Is years in the At
1ana penitentiary for misappropria-
ton of funds of the National Bank If
North America, but was paroled on
January 49,. 1912. by President Taft
who had been advised that if longer
incarcerated Mr.. Morse would probanI-
succumb to tuberculosis.
The Investigations by the shipping
board which resulted today in the IN
dictments of Morse and his associates.
were begun last June when the present
shipping board personnel assumed Of
fee. The cttention of Chairman Las
ker and General Counsel Schlessngcr
was brought to Morses transactions
with the board. it was said soon after
taking Office and Investigations suhse
uuentlv thew Informed the deD3rt-