Evening star., 1924-04-09
| MOVE ON WHEELER
| SPURS INVESTIGATION
Daugherty Inquiry Will Proceed
With Renewed Force, Chair
man Brookhart Says.
INDICTMENT IS DISCUSSED
Accountant Testiies on Bosch
Magnetic Sales.

The Senate committee appointed to
| investigate the Department of JUS
tice and the official acts of Harry
M. Daugherty announced after an
executive session today that it's in
| quiry would proceed with renewed
force, despite the indictment in Mon
tana of the committee prosecutor,
| Senator Wheeler
At the meeting behind closed doors
the indictment returned against the
Montana senator was discussed at
length. and afterward Chairman
Brookhart made this statement:
This investigation will proceed
and proceed with a force and de-
termination it has never shown be-
fore
The chairman then called TO the
stand in open session George w.
Storck, the Department of Justice
accountant, who testified yesterday.
| and he was questioned about a list
OF department cases on which he had
worked. Most of his testimony yes
| terday had to do with the Old Hick-
ory powder plant. but today his ex-
animation swung into phases of
another of the big postwar cases,
that involving the Bosch Magnetic
Company.
| Had Guney Indicted.
! Storck said he had worked on the
| proceedings against Joseph F. Cuff
fey. a democratic leader in PennsyI-
4
! Tor the allen property custodian He
said, Il indicted Guffey after an in
vestigation of the case"
| reading from his examination OF
Gufey's books, Storck said there was
| a shortage" in interest amounting
| TO S3SS,O00. An indictment for en-
/ hezzlement was returned against
Guffey, but nothing done on it," the
| witness said. and the shortage was
! made good" in March, 1921, after
\ various negotiations between the
alien property custodian and the
! Treasury Department
| Il know that this money was used
| by Mr.. Guffey for his personal use
| and that it subsequently found its
| way into the Treasury" Storck SAID
I Guffey invariably" retained funds
| for some months when he made SALE,
| he added, and these funds were earn
| ing 2l2 to per cent while he held
! them.
! The alien property custodian. A.
! Mitchell Palmer, he said. was aware
| of this condition.
Had Use of Funds.
The Bosch Magnetic Company sale
! d $4,000 900 transaction. was handled
| by GuffeE as a trustee account in the
] Chase National Bank, New York
Storck said. and Guffey had the use
of the Bosch proceeds for fifty-two
! days"
Guffey used" some of the sales
| funds in his custody to take up a
| personal loan," ne asserted.
| Guffey was in financial straits" at
the time of the banking transactions,
the witness continued, owing to fail
| ure of the ''Guffey-GiIlespic" Oil
! Company. Going into details about
the sale of the Bosch Magnetic Com
pany stock, he said that Secretary
! Weeks lis not and has not been for
| fifteen years" a member of the firm
! of Hornblower & Weeks, which fig
ured in the sale. The name now is
merely "a firm name" he said.
| Did Guffey use that money to pro-
mote the Guffey-Gillcspie Oil Com
pany asked Senator Wheeler.
| He used that money to borrow
money to promote that corporation,
: Storck said.
Persuaded by Kern.
/ Martin E. Kern of Allentown, Pa,
! had told him, the witness said, that
/ he (Kern) induced Palmer to seize
| the Bosch concern as alien property.
| Kern's police record was read at this
! point, showing various arrests, con-
| victions and sentences.
Kern purchased this property
when he was not a citizen of the
; United States, in violation of law,
! he said, and added that Kern never
| was prosecuted in the case. His as
sociates made a million dollars on
! the Bosch deal, Stock declared, with
! out putting up a red nick el."
| Asked to give the total borrow ed
| personally by Guffey from banks in
| which he had trust funds, Storck
said these loans aggregated $2,147,-
! 900, "and some of these are still un-
| paid"
| Turning to the part played by A
f, Mitchell Palmer in the case, the wit
ness said Palmer put in a board OF
directors for the Bosch company
/! which Immediately voted themselves
/ salaries up to $4,000 and additional
| directors fees" which in one case
! amounted to $500. Going over the
| legal expenses" of the Bosch COM
| pany under these directors, the wit
| ness cited payments Of $1,000 and
$25, 900 to ]. H. Covington, whom he
/ identified as "Palmers campaign
manager"
! WHEELER TO REMAIN,