The New York herald., 1922-01-26
BOSCH SALE CHARGE
.LEADST0ANNQUIRY
INTO CARAVANS firm
Chemical Foundation Co.
Got Dye Processes From
German Concern.
PAPERS ARE MISSING
Important Data for Mag
netO Case Can't Be Found
by Daugherty.
PAYMENT Is LOOKED UP
Sale Of $50 Shares Recorded
Jan. I, but U. s. Fails to Get
Money Until Feb. q.
PAYMENT Is LOOKED UP
Special Dispatch to THE NEW YorK HKnALp.
New York Herald Bureau,
Wash1nwf0n n. e.. Ham SH

Special Dispatch to THE New YolK HKnALp
New York Herald Bureau,
Washinston. d. c., Jan. Is.
The Governments inquiry into all
phases of the seizure and sale Of the
properties of the Bosch Magnetic Com
pany, a S7,0OO.000 corporation, by the
Alien Property Custodian during the
war and it's later sale for s4,150,00o to
Martin e. Kern, banker and news
widened to-day at tho Department of
Justice on the order of Attorney Gen
eral Daugherty.
The inquiry of the Government is
to include also the organization of the
Chemical Foundation Company, which,
is headed by Francis p. Garvan, for
mer Alien Property Custodian. This
concern is in possession now of former
German dye processes and formulas
Indications point to the inquiry being
extended later to include other seiz-
ures and sales, of German property
during and since the war.
The action Of the Attorney General
was prompted by the subpoenas issued
by the Federal District Court in Bos-
ton to the Alien Property Custodian
here for the production on Friday Of all
papers and documents in his possession
relating to the seizure and sale of the
magnetic company's property.
Important Papers Gone.
While officials of the Alien Property
Custodian's office remained silent con-
cerrtng the contents of the document,
until after they have been presented 10
the court, 1t was asserted that the dis
covcry has been made that some of the
most important OF the papers relating
to tfc. sale are missing from the files,
and that the records are only partly
complete.
In the list OF documents that are un-
derstood to be missing is the question
aaire which Mr.. Kern. In conformity
with the Federal statutes covering the
sale Of alien property. filed with the
Alien Property Custodian at the time
the sale was made to him. a thorough
search for this document, which Is OF
fundamental. importance. has failed to
reveal its whereabouts.
The sale of the Magnetic company was
made TO AR. Kern on January 1, 1919,
according to the records of the Alien
Property Custodian. Records of the
Treasury Department show, however,
that the money for the purchase of ESQ
shares Of stock was not deposited until
February 81. The Attorney General is
seeking to find out whether the money
for the purchase OF the property of the
company was paid at the time the sale
was made or whether negotiable notes
were given to the Alien Property Custo-
dian.
Scrutiny of the sales Of the stock o.
the magnetic concern during the two
months after Mr.. Kern bought the COM
pany have been undertaken by the De-
partment of Justice for the purpose OF
finding out whether the money that was
eventually paid for the company was
raised through profits gained in spec
ulation in the stock OF the concern.
No Trace Of Some Papers.
Officials Of the Alien Property Gus
todian's office were unhb BILE to-day to
tell the whereabouts of the papers and
records Of the company understood to
have been delivered by Otto Helms. an
official of the concern under It's for
mer management. on April rs. 1918
These papers are specifically called for
in the subpoena issued by the Federal
Court in Boston.
Officials suggested the possibility to-
day of delay in the presentation OF the
reports and records called for by the
subpoenas served on Thomas W. Miller.
Alien Property Custodian.
Mr. Miller spent to-day in New York
comforting with the Federal officials
and In an endeavor to complete his file
OF exhibits and documents so that his
presentation TO the court in Boston
would meet the fourteen points con-
tained in the subpoena. He will be in
his office again IN Washington to-mor-
row morning, officials declared to-day.
assertions were made by officials in
MIR. Miller's office that the records as
examined now do not indicate lrregu-
larities in the sale of the company. The
sale was approved by a committee con-
sisting OF former Judge Ingram OF the
New York Court OF Appeals. James Ban
mart OF the New York Trust Company.
and Joseph @. Guffey Of Pittsburgh.
who at that time was director of sales
In the Allen Property Custodan's office.
William g. Fitzpatrick. new general
counsel for the Detroit United Rail-
ways Company was named as tho at
torney who approved for the magnetic
company the price at which the proper
ties were sold TO Mr. Kern.
II Is believed that before the inquiry
ends the Government will have felt Justi
fed In going into some Of the ether sales
oc German property about which COM
! iaints have been lodged with the De-
partment OF Justice and are now sched-
uicd TO be made the basis of investiga-
tion.