Evening star., 1922-04-28
MORSE ASSOCIATES
PLEAD NOT GUILTY
Nineteen Others to Answer
Next Week to Charge of
Fraud by Mail.
BY the Associated Press.

BY the Associated Press.
NEW YORK, April 2S.-Four of the
twenty-three men indicted by fed
| eral grand jury with Charles w.
! Morse yesterday for using the mails
| to defraud investors, appeared be-
fore Federal Judge Mack today and
entered tentative pleas of not guilty.
They were Stuart G. Gibboney.
William A Barbour and George NJ.
Burditt. Lawyers who represented the
Morse shipping interests. and Rich
ard Q. White. former president of the
United States Transport Company.
Morse, his three sons. and the other
indicted men are expected to appear
for pleading next week.
Ihey were accused, in federal in.
dictment, of having used the mails
! to defraud Investors in the stocks OF
various steamship companies.
The aggregate authorized capital of
the sundry corporations ran into scores
Of millions Of dollars. and included the
| Cnited States Steamship Company and
its subsidiaries. United States Trans
port Company. Inc, and the holding
organization known as the United States
Shipping Corporation.
The principal defendants" charged
with conspiring since May, 1919, to de.
| fraud investors and put their alleged
| swindling scheme into effect by use of
! advertising matter sent through the
mails. were named as follows:
Charles W. Morse and his sons.
| Erwin A. of Washington, Benjamin
! W.. New York. and Harry F., Green
| wich, Conn; Martin j.. Gillian, William
| A. Barber, Mark L. Gilbert. Stoning-
| ton. Conn: George NJ Burditt. Nehe-
( miah H. Campbell. Brooklyn; Richard
| o. White, New York: Stuart G.. Glib
! honey, lawyer; Gienbard S. Foster.
| Orange. N: j.: Henry E. Boughton,
| Warren, Mass: William H. Dennis.
New York; James Gill and Milton
Quinn. alias Milton C. Quimby.
Among the charges was alleged
Misrepresentation in advertising that
the United States Steamship Com
! pany. with an authorized capital of
| $25.000.000, and it's underlying COM
panies. such as the Croton Iron Works,
Virginia Shipbuilding Company and
Hudson Navigation Company, were
going concerns with large contracts.
both governmental and private, for
building and repairing ships and car
Trying freight, and that they were
paying bona fide dividends and were
backed by valuable assets. and that,
therefore, to buy stocks in these or
ganizations would prove profitable to
investors both in speculation and in
dividends.
The contracts were not as repre-
sented. the grand jurors alleged: NOR
were the assets, and the companies
were not paying dividen Is. The in
dictment charged that the defendants
knew investors had been precluded
from profiting by their own misman-
agement.
The defendants were accused of hav-
ing intended to. pay themselves -ex-
cessive salaries, ito waste and dissi-
pate the fssonrces. of the United
States Steamship Company, appropri-
ate it's asseta, to- themselves along
with some df ths capital stock with
out making any valuable return, and
to permit the corporation to incur ex-
cessive obligations. -
There also were included agree
ments alleged to have been entered
into by Mr.. Morse as the representa-
tive Of Charles w. Morse & Co.
and James O'Brien whereby James
o'Brien q Co: brokers. were given,
an option to buy 100000 shares Of
the stock of the United States Ship
ping Corporation, with a par value of
$40. at from 90 to $3.50 a share. The
O'Brien brokerage house also. was to
assist in creating a market" for the
stock.
There also were letters saying the
companies had a $40,000,000 contract
with the Emergency Fleet Corpora-
tion and that if the Shipping Board
had lived up to its contract, instead
of having done everything possible
to wreck our subsidiaries" the con-
Germs would be in better shape.