Evening star., 1934-12-10
M'CARTER CALLED
IN TAXPL0T" QUIZ
Utilities Official to Describe
to Jury IDEAL" Offered Him
by Bureau Men.

Thomas N. McCarter, New Jersey
utilities official whose revelations to
Secretary of the Treasury Morgenthau
brought about the investigation into
an alleged income tax conspiracy, was
called by the District grand jury to-
day as a volunteer witness against six
suspected plotters-four of them form
erly in the bureau.
McCarter was the principal witness
for the Government in the criminal
proceedings against group Of men
who, according to Secretary Morgen-
thau, sought to "sell out the Govern
ment."
Other witnesses who were to testify
included John A. Conlin Of McCarter's s
advisory staff and the following
agents Of the Internal Revenue INTEL
ligence unit: John Cox, John s.
Saxon, F. M. Woodward, F. c. Pond,
T. F. Hurney, E. A. Hill, w. E. Kahn
and Walter P. Murphy.
Indictments to Be Asked.
Indictment of four or possibly six
persons involved in the preliminary
investigation ordered by Revenue
Commissioner Guy T. Helvering Will
be asked by the Treasury authorities.
The charge against them would be
conspiracy to defraud the Government
in connection Vith attempted liking
of income tax cases.
McCarter, president of the New
Jersey Public Service Corp. and also
of the Edison Electric Institute, was
expected to tell the grand jury OF a
proposal to settle pending $150,00O
tax item made to him by two tax con-
sultants in New York City.
According to the story McCarter
told Secretary Morgenthau, the tax
consultants represented that through
inside connections" at the Internal
Revenue Bureau they could guarantee
satisfactory termination Of efforts OF
the bureau to collect the tax II Nc
Carter would promise them 20 per
cent of the amount he would be saved.
McCarter Informed Morgenthau.
McCarter STALLED" the consultants
of for several days and secretly ad-
vised Morgenthau Of the proposition.
The Treasury Secretary said he was
shocked" at the suggestion that a
tax case could be fixed" and asked
McCarter's cooperation in investigat-
ing the proposal McCarter agreed.
When the consultants returned Nc
Carter reported he dickered with them
over the commission they wanted and
finally offered them fiat $4,000 fee.
After consultation among the alleged
conspirators, it is declared, the tax
experts consented to accept the
mailer fee.
Before the deal could be consum-
mated, however, the plotters are said
to have been tipped of that an in
vestigation was being made by Gov
ernment agents and the transaction
came to an abrupt end.
Agents Continue Inquiry.
Investigators working under direc-
ton of Elmer L. T'ey, chief of the
Intelligence Unit, re said to have
collected evidence upon which the
Government will seek the conspiracy
indictments and possibly indictments
on other charges, In addition. The
agents are continuing their inquiry
with a view to checking all tax cases
handled by the suspected employees
over long period of years.
Two employees at headquarters here
were discharged when the alleged plot
was discovered several weeks ago, and
two revenue agents in New York are
facing dismissal also. The tax con-
sultants have been barred from fur
ther relations with the Treasury.
Assistant United States Attorney
George Mcneil is handling the pro-
ceedings before the grand jury.