The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-04-28
C. W.MORSE, HISS0NS
AND 20 NAMED HERE
ACKNOWLEDGMENT
Misuse of Mails i'm Selling
U. S. Steamship Stock to
Public Charged.
MANY BROKERS IN LIST
Value of Plants Said to Have
Been Exaggerated in
Literature.
NJ. J. GILLEN A DEFENDANT
Kohler and Bremen, Bankrupt
Dealers in Securities, Among
Those Accused.

/
and twenty other individuals were in
dcted yesterday by the Federal Grand
Jury. which handed to Judge Julian
w. Mack a presentment accusing them
in a conspiracy to use the mails in
scheme to defraud in connection with
TIE sale Of capital stock of the United
States Steamship Company.
Mr.. Morse and his three sons and
others of the defendants also were in
dicted by the Federal Grand Jury in
Washington on February 81 in con-
nection with shipbuilding contracts.
The newer indictment said the con-
spiracy began on or about May 1, 1919.
I. charged that Morse and the other
defendants were officers, directors, at
torneys, agents or other employees in
the management of the United States
Steamship Company, a Maine corpo-
ration, and as such participated in the
operation of the corporation. and took
part in or were parties to the alleged
conspiracy.
Among those named in the indictment
are Stuart G. Gibboney and William A.
Barber of Barber & Gibboney, law
yers, 165 Broadway; Erwin A. Morse.
Harry +. Morse. and Benjamin w. Morse.
sons of Charles w. Morse: George M
Burditt, lawyer; Rupert NJ. Much, an
officer of the company: Nehemiah H..
Campbell, vice-president; Richard O..
White. Martin J. Gillen. former assistant
Al. III. - ~ -s.tk
| Shipping Board: James GfIi. publicity
man for the Morse concern: Mark l..
Gilbert Gienhard S. Foster. Henry r.
Boughton. stock brokers'; William III.
Dennis. accountant James O'Brien,
James r. Nelson, Arthur w. Kohler.
Lawrence n. Bremen. Maurice M. O.
Purdy and Edward Lucas. Curb brokers
George Z. Wells and Milton Quinn, also
known as Milton Quimby.
| OF those named Burditt. Campbell,
Much and White also are under indict-
ment in Washington with the four
Morses. Martin j. Gillen. formerly con-
nected with the United States Shipping
Board and the Emergency Fleet Cor
poration under the administration of
john Barton Payne, chairman was a
prominent witness before the Walsh
4
gated the affairs of the United States
Shipping Board here last year.
| stock Frauds Charged.
Arthur w. Kohler and Lawrence N.
Bremer We're members Of the brokerage
| firm of Kohler, Bremen & Co. 80
Broadway which failed on February 20
! for S350.000. This firm. which was
backed by the late Senator James NJ.
Emerson. was a member OF the ConsoIi-
dated Exchange Just before the failure
| Its ticker service was taken out by the
New York Stock Exchange
| The indictment specifically charged a
! conspiracy in the use of mails for selling
stock. and set out in detail overt acts
dealing with the matter sent through the
mails. The United States Steamship
Company. 1t was explained. was the
parent corporation, and at various times
acquired the capital stock Of other cor
porations which were represented to be
prosperous and going concerns.
More than 1000 letters, writings. cir
| culars, advertisements and other printed
| matter concerning the corporation were
referred TO in the Indictment, which said
! the defendants knew that representa-
tions in them were false and fraudulent.
Ii was alleged that the defendants knew
that the underlying corporations of the
United States Steamship Company did
not own property as valuable as was
represented in the matter sent through
the mails. Great misconduct OF the
business affairs of the United States
Steamship Company on the part of the
principal defendants" also was mem
| toned.
Valuation Of S12,5OO,OOO Attached.
Excessive expenditures were made bv
the underlying corporations great
portion of their resources was dissl-
pated, and excessive obligations in
Cured due to the paying OF salaries or
unusual size, large commissions and ex-
cessive compensations. said the indict-
ment, which charged that the payments
were entirely unwarranted and wholly
unnecessary. Actual misappropration
OF funds belonging TO the corporations
was charged.
Among the specific overt acte named
was that on May %. 1919. Benjamin w.
Morse gave out a press notice TO A. G..
Continued on pare FIffecu