The New York herald., 1922-05-10
President Harding's Letter.


Washington, ID. C., May 8, 1922.
My DEAR CONGRESSMAN MoNDLLL:
In view of the fact that the House
has under considerat lion the matter
of entering upon an investiea zion of
the handling of war contract adjust
ments by the War Department and
the prosecution of claims By the De-
partment of Justice l am sending
you herewith a recital of the si.ua-
tion that 1 have just received from
the Attorney-General in response to
an inquiry from me concerning this
work. / have thought the informa-
tion contained in the lettc- OF the
Attorney-General would be helpful
to the House in deciding upon its
course in this matter.
Very truly yours.
WARREN G. HARDING.
Hon. FRANK w. MoNpELL,
House of Representatives.
Mr. Daugherty's letter was as fol-
lows:
MAY 9. 1922
MY DEAR PRESIDENT:
In view OF the interest manifested in
Congress and the press in the, matter of
the investigation and prosecution of the
so-called war contract cases 1 feel that
l should advise you of the nature and
extent of these cases and of the vel y
substantial progress which has been
made by the Department of Justice not
withstanding the lack Of adequate facili-
ties in funds and men,
All patriotic citizens are agreed that
the persons and corporations who took
advantage of the extraordinary oppor-
tunities afforded by the war to defraud
and despoil the Government should be
vigorously prosecuted to the full extent
OF the law and should be made to dis
gorge the unholy profits of their treason
able conduct. These crimes and offenses
are all the more reprehensible when
committed or connived at by sworn off,
GERS and employees Of the Government.
Raps Wilson Administrations.
The transactions out of which these
cases grow in vast majority of in
stances took place during the preceding
Administration. Naturally little or
nothing was done during that Admins
tration to bring these matters to light.
AS the country will soon have reason to
know. influential personages in the Gov
ernment. who had knowledge of thes.
transactions and were in a position t.
make disclosures, were personally inter-
ested in concealing them. 1t is not to
De wondered, therefore. that upon COM
ing into office found not only that prac :
ticaily nothing had been done in the way
OF investigating and prosecuting these
oHenses but that no machinery had been
set up for handling the cases in an
orderly and systematic way.
The task of creating an organizatio
Tor TINS work came coincidently with the
well founded popular demand for re-
trenchment in Governmental expendi-
lures. The Department of Justice, in
common with the other Government es-
adjustments. has felt the effect of the
laudable efforts of Congress to meet
this demand. Because of this. I have
not been able to realize the ideal I have
mad in mind of an adequately equipped
separate division for the handling of all
cases of this general class. A number
OF the more important ones have been
centered in the office of the Assistant
to the Attorney General, but the re-
mainder have of necessity been distrib-
uted among the regularly established
divisions.
Before taking up the departments
accomplishments in this work 1 feel
that should state a few of the out
standing facts which emphasize the
need of increased appropriations.
Work Is mt It's Peak.
While the wartime activities of many
or the departments and bureaus have
been completed or are nearing compile
ton. the work of this department in
connection with those activities is at
its peak. The department now is hand
ling, in one stage or another. upward
OF two hundred cases coming under the
general head of war contract cases.
This includes only Investigations and
proceedings looking to the punishment
OF individuals for defrauding the Gov
ernment and to the recovery Of moneys
due the Government. 1t does not take
into account the almost equal number
OF cases brought against the Govern
ment on claims growing out of war time
operations and in which the Govern
ment's interest must be protected
Notwithstanding the serious handi-
cap Of lack of funds. the Department OF
Justice has made gratifying progress In
these war contract gases The work
thus far has been largely in the way Of
organization and investigation. The
hearings before the several sub-commit-
tees of the select committee on ex-
penditures in the War Department. OF
which William J. Graham OF Illinois
was chairman, have been examined and
the testimony relating to the more inn
portant cases digested and analyzed.
while these hearings in numerous
instances developed some valuable evi-
dence and pointed to irregularities, il
has been found necessary to supplement
them by audits Of accounts and further
investigation in the way of interviews
with prospective witnesses and other in
terested persons. The work Of auditing
these transactions is being carried on
by the War Department, and. of course
the Department Of Justice cannot ,lsti-
tute legal proceedings until those au6its
are completed and furnished. AS these
audits are received from time TO time
they are promptly taken up and studied
by this department and the work OF pre-
pairing for appropriate legal proceedings
is begun. You. of course. understand
that these audits are In form mere
claim. and that the work of collecting
the evidence and personally interviewing
the witnesses I'm many parts OF the coun-
try devolves upon this department.
"TerribIe Thing TO Charge"
at is n terrible thing 10 charge a
citizen with robbing his own Govern
ment and have insisted upon the most
painstalSIng investigation OF all cases in
volving charges OF criminality.
The Investigations In number OF
the more important cases have been
completed or are rapidly nearing com
pletion. In each instance they disclose
a sufficient indication that a crime has
been committed to warrant submitting
them TO Grand Jury. IL is regrettable
that public attention should have been