Evening star., 1933-09-27
SLEMP FEE CITED
IN MAIL INQUIRY
Probers Told Attorney Sought
$4,000, Got $4,000 for
Contract Work.
Continued From First Page.)

sion to the company When ltS uaplu-
ties were $3,o52,000 and its assets ST.
172199.
Herberman said his Shipping Board
contracts were all through O'Connor
and that -"rve been playing poker with
him for 25 years"
Herberman said in reply to questions
that he had arranged for Mrs. Irvine
to buy some property for him during
the Florida land boom.
Herberman was accompanied by
physician, who sat with him at the wit
tess table and frequently felt his pulse.
Eadcr questioning, HerbC--nan said
ne had sent a shipment OF cattle to
Mr.. Pattiana in California and that
Pattiana was the father-in-law of r.
D. Gatewood, a naval commander as
signed to the Shipping Board in charge
OF construction and repair of ships.
Black asked if Gatewood was not the
first to have to approve the repair OF
the ships he bought, but Herberman
&aid that was untrue.
The witness also said he advanced be-
tween $4,000 and $4,000 to the Pat
tiana ranch in California to prevent
foreclosure of mortgage by bank be-
cause he thought it was good invest
ment."
Explaining his purchase of the cattle
N 1924, Herberman said his ships op-
Grated to Greece and at the time that
country was in distress and he had
planned to donate the cattle to Greece,
but found charity articles sent there
were being sold. He testified he had
paid R. NJ. King, president of the union
stevedores, $780, for the cattle and
sent the INTO Pattiana.
Earlier E. V. NeVen, treasurer OF the
Export Steamship Co., testified that
after the line had borrowed funds from
the Shipping Board to build four ships
for the Atlantic c-Mediterranean trade,
to cost more than S2,000,000 each, 1t
had sought an extension of the loans.
Senator Black asked him If the re-
quest had been placed before the Hoo
yer cabinet and the witness replied that
he understood it had. Black said this
was after Controller Parmalee Of the
Shipping Board had submitted report
that the export company owed So for
every one it owned.
Reads Lamont Letter.
The Alabaman presented the report
(which said the export company had
liabilities of 1892 900 and assets of
s$1, ,172 ,199, and tien read from let
ster saying Secrett:ry Lamont wrote that
Che saw no objection to the extension
sol the construction loans on the ships.
Explaining the purchase of the Flor
sida properties through Mrs. Irvine,
sgoing down there in 1927 and he
sthought he would pick up some easy
smoney" and asked her to buy him some
s1otS. He said he advanced some money,
zone payment being $4,000, and added
: that Mrs Irvine also put some money
sin the property.
Z Herberman said he had a lot of real
sestate and that he used his chauffeur,
Joseph Sci ,ultz, as dummy" He said
: he put some of his properties in
ssSchultz's name, including IS acres of
sland at Iakehurst, N. j.
: Herberr1an testified he received a
zdeed to the Pattiana ranch in 1927
: after he had advanced the money to
prevent it's foreclosure and had the
deed made out to Schultz
: Later, he added, he transferred the
deed to his own name by signing
Schultz's name. Questioned sharply by
chairman Black, the shipping man said
: the chauffeur had never known the
property was in his name.
= Black asked for the name of the
= notary who had witnessed the sigma
: ture of Schultz's name, but Herberman
!. said he did not know it.
= The chairman asked if Herberman
> knew all these facts were obtained by
: tie Justice Department two years ago
: e nd turned over to the Attorney Gen
: eral, and the witness said he did not
! know about their being reported to the
= Cabinet officer.
:. The witness said in answer to another
= question that he had not seen letter
: from Gatewood to his father-in-
. telling the latter to deny to Depart
: ment of Justice agents that he owned
: the cattle turned over by Herberman.
: Black questioned Herberman at length
. about what he had done with more
/. than a million dollars the committee
{ chairman said he had received between
1926 and 1882 from his companies for
expenses and salaries.
The chairman called attention to
number of large payments for enter
tainment, noting that in a single month
in 1927-the year that the Shipping
Board granted the extension on his
f. construction loans-they ran to $11 1850.
Herberman said much of this money
went for propaganda, adding that he
. had backed a magazine to tell about
the merchant marine.
Lived at Same Hotels.
Herberman testified he lived at the
Hamilton Hotel here when OConnor
did, and later when the Shipping Board
head moved to the Mayf1oWer he went
there.
Il didn't bother with any one else on
the board but O'Connor," the ship
ping man said, 1--WE known him Is
years"
A few minutes later the witness said
O'Connor had been with the Shipping
Board IL years land I've been playing
poker with him for 25."
Herberman testified he had never
operated ocean ships until he got the
Shipping Board contracts. The Export
Steamship Corporation was organized
in 1919 with 1000 capital and $4,000
credited to good will, he said, adding he
had purchased it for s65,000 or $4,000
later.
$ He recorded that purchase price, he
explained, SO that if he were asked
about it later he could prove it. Black
: inquired why he thought that necessary.
Because they might say what they
are always saying, that I never pay
for anything" the witness replied.
The shipping man testified his COM
pany now owes the Government $8,000,-
1000 on construction loans, of which
$975, 900 is past due.
Z Black placed in the record figures
which he said showed the ships Herber-
man acquired from the Government for
slightly over million dollars cost the
Government $40 900, 900, and that in ad-
dition he got mail contracts assuring
payments to him over 10-year period
of S18,000,0O0.
After the hearing the chairman told
newspaper men the record showed in
one case Herberman's company was
paid $13,672 for carrying one pound
of mail; $4,000 in another case for
six pounds, and $14915 in another for
transporting five pounds.