Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1922-06-06
GEORGIA C. O.P.
CHAIRMAN Gets
BAIL ON CHARGE
Warrant Says Conspir-
acy to Defraud y. S.
in Lumber Deal
Arraigned Before Commission
er and Released on $4,000
Bail-Grand Jury to Pass on
Charges-Director of Sales
Tells Story to Justice Officials

Washington, June John Lewis
Phillips, Republican state chiirEt1 L
for Georgia, for whose arrest a T'&r
rant was issued late Saturday on
complaint of the Department Of Jus
tice, alleging conspiracy to defrcEi
the United States in connection with
4 war contract for the disposal Of
surplus lumber, surrendered t.
deputy United States marshal On his
arrival here today from Philadelphia.
He was Immediately arraigned BY
United States Commissioner Hit.
who issued the warrant, waived eE-
animation and was released In So,
600 bail for action of the grand Jury
The warrant for Mr.. Phillips arrest
sworn to by Marcus Borchant, speclal
assistant to the attorney general act
ing for Assistant Attorney General
John w. Grim. was issued While the
special grand jury was still conduct
ing its investigation of the lumber
disposal contract made by the war
department with the firm of Phillips
the Lumber interests. No indictment
has yet been returned by the grand
jury and it was understood by Mr.
Phillips today that witnesses Wee
still being heard.
At the moment Mr.. Phillips was
being arraigned c. Willing Hare Of
Philadelphia, who as director of sales
for the war department signed the
contract for Phillips and Stephens
vas at the Department of Justice u
tell what he knew Of the lumber dis
posal case.
The COMPLAINT as made public TO-
day by the department of justice re-
cited that :. conference between IL
hcers of the war department, tie
war industries board and the war
service committees on building ma
terials in January 1919, to devise me-
thods for the disposal of surplus
lumber. repr eSentatives of the l'm-
her industry protested against selling
the amount of lumber involved dir
cctly to dealers and consumers on
the ground that it would be Gc:fi-
mental TO tie industry, that the con-
ference then arranged. in order TO
protect the industry, for the safes 10
be made through existing organi-a-
tons within the industry and the
war department agreed to recognize
John Lewis Phillips and JOHN
Stephens" as agents of the lumber
interests in the handling of the sales.
Philips ana Stephens Wee to -is-
:,butc the lumber, the compluint
- on ,NF ~,
conference that they should not re-
Coive any of improvisation other than
l. per cc' commission which was
considered Sufficient to consider tho
expenses of distribution.
The arrangement was embodied in a
contract which was formally executed
by C. w. Hare on behalf of the gov
eminent and Phillips * Stevens, Feb
ruary 25, 1919.
Notwithstanding the duty and OBJ
legation of said John Lewis Phillips
and John Stevens" the complaint said
ito conduct the business of disposing
of said surplus lumber fairly and hon
cstly in accordance with the under
standing arrived at said conference,
in behalf Of the United States and OF
said lumber industry, said John. Phil
lips and John Stevens. continuously
from said February %, 1919, until the
date of this complaint, unlawfully and
feloniously have conspired
to defraud the United States
by conducting said business in their
own personal interests without regard
to the interests of the United States or
of the lumber industry. whereby large
sums of money aggregating more than
100000 would be lost to the United
States and the purpose of the agree
ment arrived at at said conference
would be utterly defeated ..
Said Phillips and Stephens instead
of disposing of said surplus lumber
through the usual and ordinary
channels of the lumber trade and to
the best interests of the u ted
Sstaes as was contemplated by said
conference and agreement We're to
enter into fraudulent and secret
agreements with persons not thereto
fore established in the lumber indus
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