Evening star., 1922-10-27
WITNESSES HEARD
IN s6,OlD,0DO SUIT
Trial at Alexandria Of Ship
building Firms Claim
Against Fleet Corporation.
Special D,spatch tn The star.

Special Dispatch tn The Star.
ALEXANDRIA, Va, October Ell.
Z. Vaughn. jr., travelling auditor for
the Emergency Fleet Corporation.
was the first witness put on by the
government today at the trial before
Judge Edmund Waddiu in the United
States court for the eastern district
of Virginia of the six million d liar
suit brought by the Virginia Ship
building Corporation against the
Emergency Fleet Corporation.
His testimony was to the effect that
he audited the books of the United
States Transport Company. and his
examination disclosed that someth ng
more than $1,000.000 had been usei
for other purposes than the payment
OF current bills.
Attorney Conway n Witness.
H. r. Conway. attorney connected
with the Shipping Board. testified as
to the number of suits brought
against the Virginia ShiphuildinE
Corporation. In addition to the fore
going witnesses the government Of
fered documentary e;idtnce in the
shape of letters between the Virginia
Shipbuilding Corporation and the
United States Emergency Fleet Cor
pOratlOn.
The government owes the Virginia
Shipbuilding Cooperation balance of
30, ,fO5 1908, according to the books
of that concern. as examined by A.
Lee Rawlings Norfolk, Va. certified
public accountant. Mr.. Rawlings tes-
titled.
+. A. Morse Denies Fund Division.
p. A. Morse. former pres dent of Il e
Virginia Shipbuilding Corporation.
took the stand and testified that the
local yards cost to construct between
S3.000,000 and $3.500,000. In reply to
n question of Attorney Dobyns for the
government witness denied that any
of the money was used for any other
purposes than it was originally in
tended.
Dates of the seizures of certain ships
belonging to the Virginia Shipbuild-
were given by w. w Nottingham. as
sistant counsel for the United States
Shipping Board.
Government Motion Lost.
Attempts by counsel for the gov
ernment TO Withdraw adj charges OF
conspiracy and fraud laid against
Charles w. Morse in the case failed
today, when Judge Waddil refused
to entertain the motion. The court
upheld attorneys for the companies
in their contention that II would he
most unfair to their clients TO amend
the bill so drastically at this late
date. after the charges had been so
widely published.
The governments motion was sub
mitted by former Senator Edgar t.
Brackett. acting as special assistant
TO Attorney General DauEherty in
the case against the Morse COM
panieS His actio created a surprise
in the crowded courtroom. which had
listened throughout the day to dull
testimony regarding the financial
condition of the associated companies
and details of the contracts given
some of them by the Emergency
Fleet Corporation.
Earlier in the day Senator Brackett
had moved to eliminate from the
case all reference to the Groton Iron
Works of Groton. Conn, which was
named with the Virginia Shipbuild
ing Corporation in the goverhmen nts
suit to recover about S1S.oOO.OOO ad-
vanced to cover construction ev-
penses. Objection was made on the
ground that the same charges of
fraud" lay against the Groton COM
pany as against the other defend
ants.
Conspiracy Charge Read.
William A. Barber. counsel for
Morse, then read in detail paragraph
25 of the complaint bill. which
charged that the defendants had
"conspired together to defraud the
United States government by obtain
ing large sums of money to which
they were not entitled" through
manipulation of the stock and assets
of the Individual corporations.
Judge Waddill. after a short con-
sideration, denied the motion as to
the Groton company and that which
would have eliminated all reference
TO conspiracy and fraud wherever
appearing.
An exception was taken on the
part of the government. indicating
that in case of appeal the refusal of
the court to permit the withdrawal
of the charges would be one of the
points carried to the higher courts.