The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-05-03
CH MORSE
IS CHARGED
WITH FRAUD

- - ~ - ~
al Indic ctInent 0 f
SeHin Worthless
Stock
New York. April % Charles w.
Morse. New York financier, his
fhrse sons and 20 others, some.
resasnesaf in shipping, legal and,
brokerage circles. were accused in
Z federal Indictment. today with
having used the mails TO defraud
savesters ii the stocks OF various
steamship companies.
The aggregate authorized capi-
stal Of the sandsy corporations ran
into scores OF millions of dollars,
and included the United States
Sreamship Company and ifs sabsi-
diaries, United States Transport
eolnpany. me. and the holding
Organization known as the United
States Shipping corporation.
The prineipal defendants, =
charged with eonspir;ng since May,
1919. TO defraud investors and put
their alleged swinahng scheme into
effect by use of advertising mat.
( fer sent through the mails, were
named as follows:
Charles W Morse and his sons.
Erwin A.. OF Washington; Benz. W..
New York. and Harry f.. Green
wieh Conn: Martin j. Gillen. for.
neriy assistant to the chairman OF
the Enited States Shipping Board:
I William A. Barber, former attorney
general OF South Carol lisss::S Mark Z.
Gilbert, former president Ship Con
sfruetion and Trading Company,
Stonington, Conn; George NJ. Bur
Gift. attorney for Morse interests:
Nehemiah H. Campbell. Brooklyn,
{ one time head OF several Morse
enterprises: Richard @. White. New
York. former president United
States Transport Company: Stuart
Gibboney, lawyer; GlenbarG s..
Foster. Orange, y. j.. former head
OF 6. S Foster s: ca. curb brok-'
eFs: Henry E. Boughton. Warren.
Mass, former head OF q concern
dealing IN investments and securi-:
ties: AIylian II. Dennis certified
public accountant Of New York:
Jas GIL pnbficity Morse.
and aasltons Quinn. alias Million c.
Qninby, former Morse agent.
These men. tho Indictment al
lesed, have since May 1913. con-,
s1ired to defraud investors WITH a
view to their own proft by divers
schemes and artifces,
Among these was alleged nisrep-
resentation in. advertising that the
United States Steamship Company
With an authorized capital OF s25,-
001. 600, and its underlying compa-
MES, such as the Croton Iron Works,
Virginia Shipbuilding Company and
Hudson Navigation Company, were
& going concerns. with large con-
tracts. both governmental and
private, for building and repairing
ships and carrying freight, and
that t.ssay were paying bona fide
dividenas. and We're Backed by val
liable assets, and that, therefore,
TO buy stocks in thesesorganizations
would prove profitable to investors
both in speculation and in divi-
dends.
The contracts We're not as repre-
sented, the grand 5nrors alleged: !:
nor were the assets. and the COM
panies were not paying dividends.
The Indictment charged that the
defendants knew investors had
been precluded from, profteering
by their own mismanagement.
The principal defendants knew
they sent 1000 letters through
the mail. the Indictment alleged.
that the assets and prospects CT the
companies were not as valuable as
represented.
The defendants were accused of
having intended to pay themselves
excessive salaries. ITO waste and
dissipate" the resources of the
United States Steamship Company.
appropriate its assets to themselves
along with some OIL the capltat
stock without making any valuable
return. and to permit the corpora
ton to incur excessive obligations.
There also were included agree
menfs alleged 10 have been entered
by Mr.. Morse as the Representative
of Charles ". Morse & Co.. and
James O'Brien whereby James
O'Brien & Co, brokers. were given
an option to buy 100000 shares of
The stock ofNthe United States
Shipping CORPORATION, with a par
vaiae of $40, at from SO to $3.50 a
share.
There were carried in the in
dietment letters saying the COM
panies had s40.000.000 contract
with the Emergency Fleet Corpora
ton. and that If the Shipping Board
8 had lived mp to its contracts in
stead OF having done everything
possible to wreck our subsidiaries. :"
the concerns would be in better
shape.