The New York herald., 1922-06-05
WARRANT IS ISSUED
. FOR J.L.PHILLIPS ON
WAR GRAFT CHARGE
Georgia Republican Chair
man Sought as Result of
Lumber Sales.
HAD LARGE CONTRACT
Accusations Believed to Be
Same as Made by Wood
ruff in House.
HAD LARGE CONTRACT
$1,850,000 DUE Is ALLEGED
Representative Asserted Gov
ernment Had Made No Eff
fort to Collect 1t.

Special Dispatch to THE NEW YORK HEnALp
New York Herald Bureau.
washington ID. c., June 4.
United States Commissioner Isaac
X. Hit has issued a warrant for the
arrest of j. L. Phillips of the lumber
firm of Phillips & Stephens and Re-
publican State chairman of Georgia,
The warrant was sworn out by agents
of the Department of Justice and
charges violation Of the penal code
covering conspiracy to defraud the
Government and carrying penalties
up to $4,000 fine and Imprisonment.
Phillips. whose home is In Georgia,
but who passes much of his time in
Washington, had not been arrested
late tonight. 1t is expected, how
ever. that he will be within the next
few days
The case is one Of the first in the
program of prosecutions under war
time contracts, just instituted by the
Department of Justice. It is not
known definitely, of course, but it is
understood this is one of the cases
that has been taken up by the spe-
cial Federal Grand Jury now in ses-
sion in Washington. No indictment
however has been returned.
Figures compiled by the audit sec
ton Of the War Department indicate
that Phillips is indebted to the Govern
menu to the extent OF s1.s54.076. grow
ing cut Of his purchase of surplus lum-
Der from the War Department. Phil
lips. 1t is said. arranged to buy -four
hemlock.
Report of Auditors.
The audit section declares the record
shows that lumber in excess of this
amo ant was turned over, and that no
payments were received. 1t is the con-
tentfon of the War Department that
approximately fifty varieties of lumber
were delivered to him. including mahog-
any. cherry. walnut and other valuable
hardwoods.
When the War Department reported
it's findings to the Department of Jus
tice, Assistant Attorney General Grim
began working on the case. That was
six months ago. The case was fully pre-
pared in consequence. so that II could be
taken up first by the Grand Jury.
Witnesses from the War Department
audit bureau were called They took
with them records which showed in de-
tail the transactions of Phillips with the
Government. The Grand Jury retained
the records for consideration and the
application Of the Department of Justice
for warrant for Phillips came as a
surprise.
Phillips maintains a legal residence
at Thomasville. Ga. but he has also a
home and extensive business interests In
Philadelphia. In Washington his resi-
dence has been at the Raleigh Hotel
He is said to own large tracts of lumber
in southern Georgia.
Within the last few years Phillips has
been active in Georgia politics. attempt
ing to build up among business men a
strong organization for the Republican
party in the hope that sooner or later
the deep seated Democratic control
could be overthrown. To this end he has
who have had to deal with patronage
and consequently is well known.
Woodruff Charges.
Phillips as a member of the contract
Ing firm Of Phillips & Stephens obtained
a contract soon after the armistice from
the Government to dispose of surplus
lumber left over from cantonment and
camp construction and other war build
ing operations. The firm was delegated
by conference of lumber dealers 70
act as their agent. The exact details OF
the accusations against Phillips could
not be learned tonight. but II Is believed
they are the same as made against him
in a speech by Representative Roy o.
Woodruff (Mich.) on April IL. 1922.
Mr.. Woodruff charged Phillips with
gross fraud in the execution of the con-
tract given to him by the Government.
alleging that his firm still owed the
Government more than sl.S0,0Oo. and
that no effort had been made by the
Government to collect the sum.
80 far as can learn" said Mr..
Woodruff mo proceedings whatever
nave been instituted In this connection" "
Mr.. Woodruff in his speech charged
that Government auditors in September
cf 1921 filed report showing that the
firm owes TO the Government this
amount of money and that there had
been many gross Irregularities in con-
nection with the execution of the con-
tract given to Phillips & stephens.
Mr. Woodruff presented and had
printed in the Congressional Record a
copy of a memorandum under date OF
March II. 1922. written by Ernest G.
Steward, in charge OF the contract audit
section. This memorandum details the
contract entered into between the Gov
ernment and the Phillips Arm for the
sale Of the surplus lumber. and says:
"A list OF base prices for the four
kinds OF lumber specifically named In
the contract. to wit. spruce. pine. fir and
hemlock, was supposed to have been
submitted for the various localities IN
the United States in which the surplus
lumber lay for each month during the
life Of the contract. and presuma bly,
these base prices we're TO bear some
Confined on Page Three.