The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-07-19
MILLIONS
TAKEN, IS
CLAIM
Suspect Plot to Discredit Fed
eraI Contro-TWo Already
Indicted.
Rv WILLIAM HARD.

ColncldentaIly with Mr.. W1Illam
G. McAdoo's visit to Washington
it became known here today that
charge sof graft and mismanage-
ment in gigantic volume are be-
ing pressed against railroad of
ficials and railroad agents by the
Interstate Commerce Commission
on the basis of transactions hap
pening during the Government
guarantee period" Of the year
1920.
It also became known that So
called progressive" Senators will
next December demand the whole
sale pressing Of similar charges
against railroad officials and rail-
road agents by the United States
Railroad Administration on the
basis on things done during the
period of outright wartime "Fed-
eral control" when Mr.. McAdoo
was at the head of the Railroad
Administration.
Charged With Fraud.
From the investigation by the
Interstate Commerce Commission
two indictments have already re-
suited. One is against Henry L.
Joyce, former manager of the ma
rii1e department Of the Central Rail-
road Of New Jersey. He is charged
with having fraudulently increased
the operating expenses of the Cen
trail Railroad of New Jersey in the
sum Of 100000.
He thus, it is asserted, increased
by 100000 the amount of money
paid by the Government to the rail-
roads of the country during the
Government guarantee period"
The second indictment already re-
turned, according to information
here received. is against the Ashur
Detective Agency of Buffalo, which
is charged with having fraudulently
padded it's expense accounts to the
New York Central Railroad Com
pany during the so-called outlaw
strike" of the yardnen in 1920.
These indictments are regarded
as only the first sproutings Of the
seeds which the Interstate Com
MERGE Commission has been nourisif-
fishing under cover in the course of
one of the largest auditing in
quiries ever conducted by any Gov
ernmental body in Washington.
More to Follow.
An Interstate Commerce Commits
sion official today said:
when the commission starts an
inquiry 1t has facts in mind which
justify It. The commission does
not start cunning till it knows
where the game is. The two indict
ments already found are revelations
Of outright diversions of Govern
ment funds. We shall doubtless
continue till all such diversions are
revealed
This official then made COM
ment on the broad political aspect
of the investigation. He said:
This investigation may go far
toward determining the justice of
the complaint made often by the
friends and advocates of Federal
control They have charged that
railroad officials adopted unwar-
ranted and unjustifiable practices in
order to give Federal control an
appearance. Of failure. This inves-
tigation will perhaps do much to
prove or disprove that charge"
Mr.. McAdoo was approached to-
day and was asked his opinion Of
the development thus disclosed. He
said:
1.-THE Interstate Commerce Com
mission in directing this investi-
CATION is performing a service Of
the utmost public interest, the re-
suits of which are certain to be
beneficial"
Practical Railroad Man.
The man who was Mr. McAdoo's
right-hand man for many important
matters in the Railroad Administra-
ton during the war is now a mem
her Of the Interstate Commerce
Commission, having just recently
been appointed to it by President
Harding. This man-Mr. Frank
McNdanamy-is an old experienced
railroad employe who was once A
section hand or the like and who
subsequently was one of Washing
ton's best-known railroad labor rep
reeentatives.
He continued to be a high official
of the Railroad Administration till
President Harding transferred him
to a seat in the Interstate Com.
nnerce Commission. He had much
10 do with the handling of the &C.
counts FeIlOSIcu ny the IdIITOdQS TO
the Railroad Administration during
he period Of the 1920 Govern
mert guarantee.
1t is now absolutely certain thai
an inquiry into the previous period
of Federal control will be veh@-
mently demanded next December by
Senators who will point to the reve-
Iations already made regarding
alleged anti-governmental efforts
by the railroads during the guar
antee" period which ensued.
McManamy is already on record
ss to alleged padded payrolls' by
railroad arrangements under Fed
eral control"
On December 16, 1918. in a report
10 the Railroad Administration. II
is found that Mr.. McManamy said:
THE Pennsylvania railroad Off