The New York herald., 1922-05-10

any such consideration.
"The transactions involved in these
cases for the most part took place i'm the
District of Columbia and venue can be
more definitely established in this dis
ltrict than in any other. Under existing
law there Is provision for only one grand
jury for both Federal and local cases.
During the last several months the time
OF this Grand Jury has been entirely
taken up with the consideration of the
knickerbocker Theater disaster, the
Morse case and local business of a most
pressing nature. There is now pending
in Congress a bill which prepared and
recommended and which II is hoped will
become law within a few days. provid-
ing for an additional grand jury in the
District of Columbia. 1t is planned to
convene this second grand jury immedi-
ately upon the passage Of the bill and to
employ 1t as long as may be necessary
for the consideration of war contract
cases. the venue of which falls within
this district
Two cases of the first rnagnlt,re are
ready for prompt submission. One of
these Is nationwide In cope. and the
investigation has covered a wide range.
IL this case had been presented without
such preliminary investigatio:. the
principals might possibly have prem in
dicted and their liability to the Govern
ment in large amounts estac lished.
However. this investigation conducted
in the most confidential way. has devel
oped that great many others WHO have
been lurking in the shadows are also
involved in the unlawful transaction.
The result is that not only will the
principals and several Others in all
probability be indicted hera, but other
indictments against the PRINCIPALS and
different groups of individuals may be
expected to follow in other parts Of the
country. When these two cases have
been fully presented third case, which
has been under investigation for many
months and which has received con-
siderable publicity. will h3 ready for
presentation. Others now in course of
preparation will follow and 1t IS ex-
pected that the work Of preparing and
presenting these cases will continue
throughout the entire summer.
ITO avoid aggravating the already
congested condition in the lo>ai courts
cases will be presented In ether districts
wherever possible.
Millions Already Recovered.
"Of the two hundred odd cases of this
general description which I have men
toned, a great majority represent claims
for civic recovery without the element
of fraud. In the matter OF amounts in
volved they range all the way from
claims for a few hundred dollars to
claims reaching into the millions. The
aggregate possible recoveries in these
cases, if the Government, should be COM
pleteiy successful in each. would prob
ably equal $100,000,000. The War De-
partment with the assistance of this
department hos already recovered
millions OF dollars from those who were
overpaid or who knowingly overcharged
their Government. These claims come
to this department mainly in the form
of statements and audits from other
departments.
II have reason to believe that as the
work of auditing accounts and settle
ments progresses in the several depart
ments this department will continue to
receive such claims in increasing num-
bers. Cases of outstanding Importance
are being studied and prepared for suit
in the department, and to the extent
that the funds placed at my disposal
will permit will be prosecuted by skilled
special counsel The remainder have
been referred to the United States Attor-
neys i'm the districts in which the debtors
are located for appropriate action. In
cluded among these are many cases in
volving large sums of money and COM
plicated states OF fact.
CAS- is well known, the United States
Attorneys and the Federal courts are
literally swamped with the increased
business which has developed in recent
years. and Notwithstanding their ability
and devotion to the Governments inter-
est they have neither the time nor the
facilities adequately to handle these i'm
portant and difficult cases. 1t was be-
cause of this congestion that / recon-
mended to be introduced in Congress the
bill providing for twenty-three addi-
tional Federal Judges-and which it is
hoped will soon become law.
Lincoln Motor Claim.
I'm view of the criticism which has
been directed at the Department of JUS
tice in connection with it's handling of
the claim against the Lincoln Motor
Company | deem 1t my duty to lay the
facts before you. This case involved
alleged Irregularities in connection with
the adjustment of a contract with that
company for the manufacture of Liberty
motors. Before--the completion of the
War Departments audit the assets and
PiSPSi eA'S "a Nhc CViIipdlly ndu Dten SOlQ
at receivers sale and the proceeds we're
being held for the benefit Of creditors.
THE audit when completed disclosed
q maximum claim against the company
of S9.1SS,561.9S, and possible grounds for
criminal proceedings. BY letter dated
February IA. 1922. the department ad-
vised the Department of Justice of the
result of the audit and requested that
claim be filed with the receiver and
that the usual priority rights be as
serted. On February 10, 1922, this de-
partment instructed the United States
Attorney at Detroit, Mich. TO prepare
the claim for filing and at the same
time arranged with the War Depart
ment that persons familiar with the facts
should be sent TO Detroit TO assist him.
The receiver, the Detroit Trust Com
pany. the officer OF the court, requested
on the ground that at the time of its
appointment 1t was generally understood
that the Government had no claim
against the assets in its hands due to
the settlement made by the War De-
partment during the former Admins
tration with the Lincoln Motor Com
pany. Under the circumstances the de-
partment properly granted the request
and the United States Attorney at De-
troit, with the consent of the receiver,
obtained an extension OF the time In
which the Government might file and
prosecute its claim. After hearing counl
sci for the receiver and other interested
parties / concluded that the matter
should be submitted to judicial deter