New-York tribune., 1922-06-06
c.,-ia Committee Chair
sfe' Arrested at Wash
'a,on Union Station as
ll;eh,s From Train
o.,...ed in S25, 900 Bail
. ..r, Of Government Off.
O'I III: 10 Aid in Lumber
Can Conspiracy Also Charged

-..,,r 70 defraud the k0''' '''''''
..s,;r,. millionaire lunberman and
s,'l,-.s s Of the Republican STATE Com .sa-
s' :, Georgia. was arrested this
S'F warrant issued BY Unit
!, t,,.sss ..,.. conuissiOnsr Hit.
,,r,,. vas ordered as an out
= ~ n. Federal Grand Jury's
/ ..i,,,ion Of wartime contracts and
-. .lJ.s.d IN connection Herewith.
:. ,''.-, !. ,..rr.d that Phillips. along with
~. /, s,,vens ard others. oonspired
80. :. -, The government in connection
% ,.-A.r contracts and that the
We i.u..-,.spt .-'. lost heavily BY their oper-
',s.,i s..,,,,. "a, arrested BY Deputy
L..ss'ss ss,,.ss Marshal as he stepped
80. s,sin A. Union station and
ii9n h.sore Commissioner Hit ior
s.s,;sr. bot he refused 10 say any
.s;.S srtil he had sent for a iawyer.
y. h ne first Of the alleged .proilteers
y. ~ .srs = -. 70 ire notice Of the special
r,,,J iurv. He pleaded not guilty Snd
- - -sisased on $4,000 bond. The war
-. fsr his arrest was sworn out last
s..rrdsv while he was at a country
-. rear Philadelphia and he knew
...h;,g of il until he read Of II in
,Is newspapers. He then came 10
Warrington.
Case Reviewed in Affidavit
n. Department Of Justice tonight
,,,nsd a statement containing the af-
sSsvit Of Marcus Borehardt, special
...;..sst 10 the Attorney General, on
~liss Commissioner Hit issued the
xsrrsrt FOR the arrest Of Phillips.
Tss complaint asserts that the War
i,ssstries Board and the War Service
cornittee Of building material and
=, eff;cers Of the War Department
~ % decide upon methods for the
Hs,,sal Of surplus lumber. and that
N !unber industry protested against
Ming the amount Of lumber involved
u Dealers. on the ground that this
rton would be detrimental 20 the
b,sinsss. Il is charged that the con-
ference then arranged for the sale OF
he lumber through existing orgsniza-
tors within the industry and that the
Var Department promised TO recognize
John L. Philips and John Stevens
a agents Of the lumber people. They
we're 70 distribute the lumber without
compensation except for II per cent
commission. contract to this effect
vss entered into, according 70 the
complaint which then continues:
'NotxitAstanding the duty and obliga-
,isn sf sid John Lewis Phillips and
lokr Sirns 70 conduct the business
o dispositg Of said surplus lumber
faifJ and honestly in accordance with
re understanding arrived at at said
s'sssrenee, in behalf of the United
Nies and Of said lumber industry,
nd John Lewis Phillips and John
stFens. continuously from said Feb
rary Is, 1919, until the date Of this
r1plaini, unlawfully and feloniously
hIt eonspired, ombined, confederated
rs sgreed together and with divers
etsr persons 20 this afEiant unknown,
q ard in the District Of Columbia, to
Hfrsud the nited States, and 20 COM
,li divers offenses against the United
saiss, by conducting said business in
1fr own personal interests without
sprd 70 the interests Of the United
hos or of the lumber industry,
rssby large sums Of money, agge-
E,g more than S1.000.0O0. would be
so the United States, and the pur-
= Of the agreement arrived at at
-. ......1I l. i.
he'd; which said unlawful and feloni-
n conspiracy, combination, confeder-
"a and agreement was 10 be effected
\ the means and methods following,
sr is to say:
Illegal Rebates Charged
Said Phillips and Stevens, instead
4 eisposing Of said surplus lumber
trough the usual and ordinary chan
s.s Of the lumber trade, and 70 the
ist interests Of the United States, as
vas contemplated by said conference
Ird agreement. were 10 enter into
fraudulent and secret agreements with
persons not heretofore established in
me lumber industry, as we'll as with
fhers who we're so established, 70 dis
pose Of said lumber 10 such persons
not only a. prices very much less than
iae market prices Of such lumber at
ne tine Of such disposition, but upon
trms which would involve the receipt
" SAID Philips and Stevens Of rebates
ara commissions from those persons
Joy ne personal benefit and advantage
y y ssid Phillips aGd Stevens; and said
flAiips and Stevens were 70 bribe
s'iain government officials who had
e.ls. 70 perform in the premises; and
Ae Phillips and Stevens were there
~ 70 make returns 10 the United
s.'ss IN which their said fraudulent
wlooet would be concealed, and were
. Hiaeuee said officials 70 do likewise.
Ansnt further says that, in order
tHeci the object Of said unlawful
80 itionious conspiracy, combination,
,,,lisoeration and agreement, said John
.sals Phillips, on May 2. 1919, az and
= ne District Of Columbia. prepared
sso y caused 70 be signed a certain letter
" ne tenor following:
"'May 2. 1919.
~. Roland Perry, Washington, d. C.;
eonsiderstion Of your having
..'hi'hea Information relative 70 pur-
s.s" ~. and sale o. your services in aid.
ss Is purchase from Phillips and
i.'ssns s..,sns ipProximately 100000 feet Of
;-noef a Neenah. Wis. and supplying
~ .ino,,naton as 70 how and where 10
- lumber az q profit and your agree
70 serve as In connection with
mipnent and our efforts 20 mar
= .n 0. this lumber up 20 one half
=. . '.sI tine, We agree to pay you 81
=. a'vVo ieet upon all lumber sold and
,s-'ss,ssed BY us in lieu Of salary and
sing expenses and in full COM
"s.stion 30 Tor your services.
Your truly.
METROPOLITAN LUMBER co.
AN oy A. A. HENRY, President
~. ny transactions with the govern.
~ were clean and above board" Mr..
s'ps declared tonight. Questioned
n,a1ning the warrant issued for mis-
- ne said: This is the penalty
"Nltf nav frr krf--. i. ~ofttt~-