Evening star., 1923-06-14
C0ONLEY EXPLAINS
LOANS TO MORSES
Says Fleet Corporation End
ed Advances When Mort
gage Promise Failed.

Howard Coonley. vice predsient OF
the fleet corporation in charge OF
administration. testified today as q
witness for the prosecution at the
trial before Justice Stafford and q
jury in Criminal Division l OF
Charles w. Morse, his three sons and
four others, charged with conspiracy
to defraud the government and the
feet corporation through wartime
contracts.
Acting on the solicitation of two OF
the sons of Morse. Mr.. Coonley said
he made certain advances or loans to
the Morse companies until he found
out that the legal department of the
fleet corporation was unable to Sc
cure promised mortgage on GER
tain ships belonging to Morse, when
he stopped further loans
Mr.. Coonley said it was early in
January, 1913, that he was visited at
the offices of the fleet corporation in
Philadelphia by Benjamin w. Morse
and Erwin A. Morse, who were seek
ing loan of s750,000. The Morses
On the piona ana
mortgage on three ships owned by
them. The witness said he received
the application favorably, and because
Of enia the sondI5i9n of the wir
s150,000 January 10. 1919, taking a
second mortgage on the plant for Sc
curity. The fleet corporation held a
first mortgage of $4,000 on the
plant, it was stated.
Unable to Get Mortgage.
February 81, 1919. Mr. Coonley said,
he advanced 100000 more to the
Virginia company and $150.000 to
Groton, still expecting to get the
mortgage on the ships. 1t was late
in March when he learned from the
legal department of the fleet cor
poration that 1t had not been able to
get the ship mortgage.
The jurors substituted miniature
American flags in the lapels of their
coats in lieu of the usual flower to-
day because of Flag day.
Lawyer Testifes.
Chester w. Cuthell, a lawyer of
New York, who was formerly general
Corporation, testified at the Morse
trial that Charles w. Morse had told
him the action of the government
by the United States Steamship Com
pany had disrupted his plans for
financing the shipyards at Alex
andria, Va, and Groton, Conn. Mr..
he had expected to use these ships as
security for financing.
Mr.. Cuthell, who was called as a
government witness. testified also
that Morse had complained of delays
by the Fleet Corporation in making
progress payments and loss OF time
in obtaining materials because OF
transportation difficulties and orders
and regulations of the war industries
and other special government war
agencies. Complaint also was made
the witness continued, that the gov
ernment was not paying for the ships
ccmmandeered. Asked if this was
true, Mr. Cuthell said payments Were
slow, due to disagreements as tc
amounts and terms.
Was Seeking Loan.
These Complaints were made at &
from the government to help finance
the completion OF the Groton and Alex
/ andria pants. Mr.. Cuthell said he tolc
Morse that he would have to have am,
pie security for the loans, because III
knew Morse had trouble in bankint
TRANSACTIONS IN New York. A loan O.
$750,0U0 for the Virginia plant eventu
ally was made. the witness testified tn,
money being placed in a controlled &C
count and disbursed on joint checks o
the Virginia Shipbuiding Corporation
and the Emergency Fleet Corporation.
This arrangement was insisted upor
by the fleet corporation, Mr.. Cuthel
said, so as 20 make certain that non,
of the fund was diverted to other uses
Later J. G. Vaughan, a governmen
auditor, testified that $358, 1854 Of th
$750,000 was used to pay bills con
tracted before the loan was negotiated