The Washington times., 1922-04-28
MORSE AND23
M0RE|ND|CTED
|. FORMA|LFRAUD
Ship Builder and Three Sons
Face New Charges in Sell
ing Scheme.

NEW YORK, April 28.-Ar-
raignment Of Charles w. Morse,
millionaire. his three sons, and
twenty co-defendants, who were
yesterday indicted under a Fed
eral warrant for the use of the
mails to defraud investors in
stocks Of various steamship COM
panies, was ordered today.
They will be given prelim-
mary trial, it is expected, next
week, following their hearing in
Washington tomorrow. when they
will be given q hearing on other
Federal indictments charging them
with conspiracy and cmbczzle-
ment to defraud the United States
Shipping Corporation.
Charge Deceit In Mail.
In the indictment preferred against
the twenty.four defendants here yes
terday. It is alleged that they used
the malls TO disseminate stock selling
schemes and that their operations
ran into scores of millions OF dollars.
Among the charges IL is alleged
that they misrepresented in their ad.
vertising, gent through the mail. that
the United States Steamship Com.
pany was going concern with an
authorized capital of $4,000. 900. and
that II held valuable subsidiary con-
Germs, on which in1ated values were
placed.
The concerns named, which IL is
claimed that Morse and his co-defend.
ants sold millions OF stock. are the
Croton Iron Works, Virginia Ship.
building Company and Hudson Navi.
cation Company.
The indictment alleges that this
stock was sold on representation that
these companies were paying bona
fide dividends and were backed by
valuable assets. and tnat investments
In these concerns would, therefore,
prove both valuable and safe to in
vestors.
Assets Not Valuable.
Attached to the indictment were
copies OF various letters sent through
the mail, II is alleged. by the de-
PENDANTS, offering this stock for sale.
The charge Is made that at one time
1000 letters were sent through the
mail, alleging that stocks and assets
OF a valuable character would be sold
the prospective purchaser, when II
was known that the assets were not
as valuable as represented
II is also charged that the defen.
dants knew at the time that pur-
chasers and investors would not have
any profits from their investments.
One OF the counts OF the indict.
ment is that Morse and his fellow
promoters represented that they Lad
a $40 900. 900 contract with the Emer.
gency Fleet Corporation. while add.
tional counts deal with ''ballooning"
of 100000 shares OF United States
Shipping Corporation stock. placed
at a par value OF SO to $3.50 per
share, but which 1t is alleged were
sold for $40 per share.
The indictments preferred yester.
day is separate action by the Gov.
ernment and has nothing 10 do with
the prosecution OF the Department
Of Justice now being made in Wash
ington dealing with the wartime con.
tracts of the Morse subsidiaries.
Many Others Named.
The following were named I'm the
indictment, charged with misuse of
lht OulNtu oldltS mail, Yesterday.
Charles w. Morse; his three sons,
Erwin A, Benjamin w, and Harry
F. Morse; Martin j. Gillen, formerly
assistant to the chairman of the
United Shipping Board: William A.
Barber, former attorney general OF
South Carolina; Mark l.. Gilbert,
former president OF the Ship Con.
struction and Trading Company,
Stonington. Conn; George NJ. Bur
dit, attorney for Morse interest:
Nehemiah II. Campbell, former head
OF several of Morse's enterprises. Of
Brookliyn; Richard o. White, former
president of the United States Trans
port Company, of New York; Stuart
@. Gibboney, associated with VIII.
liam Gibbs McAdoo and William
F.. McCombs in the Democratic cam.
paign of 1917; Glenhard s. Foster,
Orange, n. J., former head of G.. S.
Foster & Co.; Henry f. Boughton,
Warren, Mass, former head OF an
investment and security corporation:
William II. Dennis, certified public
accountant of New York: Rubbert
NJ. Much, Augusta. Me; James
GIL, publicity man for Morse, and
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