The Washington times., 1923-07-11
NJ ADOO SAVE
|NORSEF|RM
FROM RUIN
Got Money Due From Shipping
Board, Preventing Receiver
ship, Partner Testifies. II

The law firm of William Gibbs
McAdoo, by "dunning'' the United
States Shipping Board for pay
ments due Charles w. Morse's
shipbuilding plant at Alexandria,
Va, prevented the firm going into
the hands Of a receiver, it was
testified today at the Morse con-
spiracy trial by Thurlow M. Cor
don, New York, law partner Of
the former Secretary of the
Treasury. Due to efforts Of Nc
Adoo's firm, Gordon declared, a
500, 900 payment. was obtained
for Morse's firm and numerous
small creditors were paid off by
the Government.
McAdoO Ordered Probe.
II made a thorough investigation
Of the Morse plant in 1919 at the
request of Mr.. McAdoo," said Cor
serious legal and financial difficult
ties. They were caused by the COM
pany's inability to secure any prog
ress payments for work done on the
construction of ships. The delay in
these payments, totaling about
81, 900 900, made 1t impossible for
the Morse company to pay it's bills.
and something had to be done to
prevent it going. into the hands Of a
receiver"
Gordon testified the. McAdoo firm
finally obtained the payment and
saved the company from the danger
Of receivership.
Being examined by Attorney VIII
ton J. Lambert, of counsel for the de.
Tense, Gordon said that he became
partner OF the law firm Of McAdoo.
Cotton and Franklin, New York, in
1919, after McAdoo had resigned as
Secretary of the Treasury. Gordon
said he made q thorough investiga.
ton of the Virginia plant at the re-
quest Of McAdoo and that he found
the company in serious legal ana
financial difficulties.
what caused these difficulties?
asked Attorney Lambert.
Of the company to secure any
progress payments for work done at
the yard on the construction or
ships. Gibboney' who then was at
torney for the company, had done
everything to help the concern and
in his constant reminders addressed
to the Shipping Board to render as.
sistance, made himself Objectionable
to the members and he thought it
advisable to resign as legal adviser
Of the Virginia company.
Gordon continued, that Gibboney
visited his law firm in New York
and asked the members to represent
the Virginia company. After In
vestigating the proposition, the Nc
Adoo firm accepted a retainer from
Gibboney. The witness stated that
he then made the thorough investiga-
ton Of the plant, and found 1t a
bee hive Of activity. Gordon said he
also made a searching examination
Of the legal aspects of the contracts
between the company and the
Shipping Board and made report
| to McAdoo.
Refusal>Of Payments.
1--WE went into this proposition, "
continued witness, with a view to
presenting to the Shipping Board the
legal claim based on the contracts
the Virginia concern had to progress
payments" Gordon said that the
Virginia plant was entitled to about
thirty-one progress payments amount
ing to about 81 100000.
Questioned with reference to diff
ferences arising between the Ship.
ping Board and the Virginia concern
regarding certain items, the witness
said that the board refused some pdy-
n1ents on account of the increase OF
wages at the yard during the war,
and the expenses incurred in placing
proper guards around the yard to
prevent espionage, and similar items.
ut was simply impossible for the
contractors to put up $4,000, 900 in
ships and yards without receiving
any progress payments from the
Shipping Board" said witness, which
remark was objected to by the dis
trict attorney.
The McAdoo law firm advised the
Shipping Board that the Virginia
company was entitled as a matter of
law to the progress payments, said
the "ltneSs, VINO then related what
happened at three meetings repre-.
sentatiVes of his firm had with Off
Gals Of the Shipping Board.
The Shipping Board was told, &C
cording to the witness, that the
Withholding Of the progress pay
rnents had made it impossible for
the Virginia plant to pay bills and
that something had to be done to
prevent 1t from going into the hands
u receiver, (which no one
wanted"
II WAS agreed that the Shipping
Board make an advance of 100000
TO the Alexandria plant, and have n
conference with it's creditors and
submit plan to satisfy them.
The final result Of the three meet
fnes was that the Shipping Board
advanced the 100000 to the Vir-
GINA yard snd made small cash pay
rhNnts 10 some of the latter's credi.
tors
A the third meeting Of the Ship
ping Board and representatives OF
the yard, and the New York McAdoO
isW firm, Judge John Barton Payne
presided. having succeeded F. N
Hurley as chairman of the Shipping
Board Emergency Fleet Corporation
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