The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1922-02-28
Grand Jury Charges IL
With Embezzlement
And Conspiracy.
GROUP INCLUDES
C. H. LIVINGSTONE
Three Ship Building
Firms and Officials
Are Involved.

Charles w. Morse, financier and
shipbuilder. his three sons and eight
associates were indicted yesterday
on two charges each of embezzle-
ment and conspiracy to defraud-t
ne against the United States gov
ernment, the other against the
United States Shipping Board, by the
Federal grand jury.
The three sons indicted are Erwin
A.. Benjamin and Harry Morse. The
eight associates indicted are Colin
II. Livingston. head of the American
Boy Scout organization and former
president of the Virginia Shipbuild-
ing Corporation; George NJ. Bur-
-dette, a New York lawyer: Rupert
NJ. Much. of Augusta. Me. treasurer
Of the Virginia corporations; william
W. Scott. a Washington lawyer:
Nehemiah Campbell. president Of the
United States Transport Company:
Philip Reinhardt. of Baltimore. for
mer auditor of the Shipping Board:
IL. ID. Christie. assistant treasurer Of
the Virginia concern: and Robert o.
White, assistant treasurer, Groton
Iron Works.
Alleges Loss Of Millions.
The indictments followed an in
vestigation of three months by the
Department of Justice into alleged
locses to the government of between
IS 100000 and S1O. 900. 900 and involv-
ing contracts with the Shipping
Eoard amounting to about $40. .Oo0.-
600 in which the Morse Interests
were connected
The alleged losse involve
transactions with the government
by Morse and his associates during
the war as members of three ship
building and constructing firms.
Changes in government contracts,
unknown to the Shipping Beard:
disposition of government property
for their own profit and diversian
OF government money into their
pockets and for the use of the Vir-
ginia Shipbufiding Corporation. the
United States Transport Company
and the Groton Iron Works of
Connecticut. constitutes the princi-
pal charges Of the grand Jury
against the twelve men.
Probe Began i'm November.
The indictment of Colin Livings-
tone and other members of the group
came as a distinct surprise to many
who have followed operations of
the Morse interests.
1t had been known for he past
month that the grand jury was
probing the operations of Morse
and his sons during their wartime
transaction with the government
as members of shipbuilding firms.
The Department of Justice investi-
CATION into the dealings of the
Morse inteJests became known last
November shortly before the ap-
prehension of Morse in France by,
the State Department. Morse was
ordered at that time to return to
this country.
The Virginia ShipbuiIdinE Corpo-
ration, mentioned in the indictment,
was located in Alexandra. Va.
Alleges Fifty Overt Acts.
The first allegation charges that
contracts calling for construction
of twelve wooden cargo hulls by
the GrOton Iron Works. Of
Noank. Conn, at a price of S3OO, GOO
a hull, were changed to make the
purchase price of four hulls, $780,
600. each, and four others 100000
each. Contracts for the four other
hulls were cancelled.
Fifty overt acts are charged in
the indictments. These relate %
tn" alleged obtaining If money
under false pretenses.
The indictments do no. TlvntIon
any specific sum. CT money in the
chalges that money was cmbezzled
or the government defrauded
The indictments allege that con-
tinuously from April is, 1918, to
the finding and presentment of the
indictment, the group named "un-
lawfully and feloniously conspired,
combined. confederated and agreed
together, and with divers other
persons unknown did defraud the
United Stat
AlIegessSaIe of Materials.
1T is also charged that the al
legged unlawful conspiracy has re-
suited in the defendants convert
ing to their owns use and to the
use of the corporations large guam
titles of material for use in build
ing of vessels under contract as
well as selling, it is alleged, such
material to the public and convert
ing the proceeds to their own use
and the use of the corporations
without lawful authority to do So
1T is further charged that the
alleged conspiracy resulted in GER
tain vessels being operated as
freighters by the defendants-tne
proceeds from such operation, to a
large extent. being converted 10 the
use of the defendants and the Vir-
Sinia Shipbuilding Corporation and
United States Transport Company,
and, it is claimed, intended to re-
fuse to liquidate the greater part
of the charges incurred in the op-
Grafton of these vessels and to per-
nit. 1t is set forth. such charges
to become liens upon vessels which
the Shipping Board would be
obliged to pay"
Warrants to BE Issued.
Bench warrants for all of the
absent defendants will be issued,
District Attorney Gordon said last
night.
District Attorney Gordon last
night ridiculed a published state
ment attributed to Morse which de-
clared that the indictments were
the result of a grudge held by Al
torney General Harry Daugherty
against Morse.
Morse was sentenced to SCI We fif-
teen years in the penitentiary at
Atlanta. Ca, on January 3, 1910,
for violations of the Sherman anti
trust laws. He was released on
Continued on Page Too.