The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1922-02-28
THREE SONS ALSO
INCLUDED AMONG
THOSE INDICTED
Action Grows Out Of Alleged
Crookedness in Connection
With Shipping Contracts.
.TWO CHARGES MADE OUT
AGAINST EACH DEFENDANT
NOISE Says That Daugherty In
stigated Action Because of
Personal Feelings.
tnx The Assoela.ed Pressl

WASHINGTON, Feb 27-Charles W.
Morse, New York shipbuilder; his three
sons. Erwin. Benjamin and Harry Morse,
and eight others alleged to have been
associated with him in connection with
war time shipping contracts, were today
indicted by the federal grand jury on
charges Of conspiracy to defraud" the
United States and the Emergency Fleet
Corporation.
his sons were:
Colin H. Livingston, former president
OF the Virginia Shpbuilding Corporation
and president OF the Boy Scouts OF
America.
George NJ Burdett. attorney for the
Morse interests. especially the United
States transportation Company, Inc.
NehemiaI III. Campbell. of New York,
assistant treasurer, United States Trans
portation Company. Inc.
Rupert M. Much, Augusta. Maine, as
slstant treasurer, Virginia Shipbuiiding
Corporation.
w. w. scott Washington. d. c.. at
torney for Virginia Shipbuilding Corpora :
tion.
Philip Reinhardt. auditor for United
States Fleet Corporation at Alexandra,
Wa.
Leonard d. Christie, treasurer Virginia
Shpbuilding Corporation.
Robert o. White, assistant treasurer
Groton Iron Works and president United
States Transport Company, Inc.
Two indictments were returned, both
covering identical transactions and ac-
cusing the rarne -ersona ons charses
IA conspiracy to defraud the Omitted
~ 9TH -Qn TO
mmit an offense against the United
Ates by defrauding the United States
perbihg Board.
United states Attorney Peyton Gordon,
n was stated, win require the de-
PENDANTS to appear in the District of
koIumbia supreme court for arraignment,
when they can be released under $4,000
bond in each case.
In a statement issued after the indict-
ments were returned Mr.. Morse charged
that "the indictment. which is terribly
unjust as viii be proven later. believe
was secured because OF personal feeling
against me on the part of Attorney Cen
eral Daugherty and certain present Of
flciais OF the United States Shipping
Board" Mr. Morse's attorney, Wilton j.
Lambert said that indictments against
Mr.. Morse and his associates would
. never have been returned had they been
permitted to appear before the grand
Jury and that the defendants all will
be promptly acquitted as soon as the
''reaI and actual evidence is presented.
The contracts between the emergency
feet corporation and the Gorton Iron
Works and the Virginia Shipbuilding
CORPORATION, on which the charges re-
sulting In the indictments We're based.
involved an amount said r. approximate
$40 00e 900. No estimate was made. how
ever. in the indictments OF the full
amount which the defendants are charged
with having misappropriated and Fletcher
Dobyns OF Chicago, special assistant to
the attorney General who prosecuted the
investigations for the government, de-
clined after the indictments were re-
turned. 10 estimate the amount of money
out or which IL IL alleged the United
states was defrauded, but il was under
stood the sums which the government
alleged were mlsaYpropriated amounts
10 several million dollars
The indictments charged the defend
ants specifically with falsely pretending
10 the Shipping Board and the Fleet Cor
poration that the shipbuildIng corpora
tions they represented would be able to
erect and equip from their own funds
shphuilding plants of sufficient size to
enable them 70 carry out contracts given
them by the fleet corporation and to
ppceed without delay to the construction
!, of vessels. The intention OF the de-
fesdants Il was alleged was to obtain
laHse sums OF money from the feet cor
pdation by falsely representing that said
aaounts would be used for construction
olVessels, and to divert large sums from
te ship construction and TO divert and
lse the same for the erection and equip
tsent Of plants and housing facilities and
bus convert the funds TO the use OF the
shpbuildng corporations and themselves
and to delay ship construction.
The indictments further charge that
the defendants falsely pretended that
large sums Of money were due from the
fleet corporation as progress payments.
hnd obtained the money when they well
knew 1t was not due" Similar charges
were made that when the defendants
represented that their corporations had
invested large amounts In shIpbuilding-
Il.lants and for that reason alleged the
plants were adequate security for loans
and advances. they "defrauded. ali the
time knowing IN truth and in fact the
corporations would not have invested In
said plant the large sums attributed to
them.
Large quantities OF material were OBJ
tanned for the feet corporation by the
defendants Tor the construction of ves-
sells and later the indictments charged.
tho defsndant sold great masses OF the
material ana converted the proceeds Of
the sales TO the corporations and them
selves"