Evening star., 1934-02-13
ARMY BASE LEASE
PROBE IS SOUGHT
New Jersey Legislator Says
Firm Made Million on
Contract.
BY REX COLLIER.

partment of Justice Investigation OF
reports that some War Department
officials were guests at world series
and theater parties arranged by a New
Jersey warehousing corporation hold
ing profitable Government lease was
indicated today as the grand Jury ques-
toned other ranking officers in con-
nection with an 100000 supply
deal" that failed.
With indictments of at least three
persons expected this week by investi-
gators who prepared grand jury evi-
dence on alleged irregularities in
negotiations for motor truck, saddle,
tarpaulin and other supply contracts,
the Governments inquiry into War
Department business relations entered
sensational new phase at the CAPITOL.
The new investigation, called for by
Representative Fred A. Hartley, jr..
Republican of New Jersey, involves
the lease to the Army by the Mercur
Corporation of what is known as the
Port Newark Army Supply Base
which provides docking and storage
facilities for the War Department.
To Present Evidence.
Representative Hartley said TODAY
ne Will present either to the House
Mlltary Affairs Committee or the
department OF Justice-he has not
decided which-a mass of evidence
winch ne declares will show that the
Mercur Corporation has netted more
than $l,500000 out Of a lease under
which 80 per cent Of the profits were
10 be turned over to the War Depart
ment
In spite Of that provision" Hartley
SAID, the Government has received
approximately 81 year for the past
SIX years. The explanation given is
tnat the Governments share was
eaten up by repairs and other ex-
penses- 1 want this whole matter
thoroughly Investigated.
Hartley Is known to be in possession
OF information TO the effect that a
group OF Army officers have accepted
1avors from the corporation in the
way Of choice seats at the last world
series base ball games and were en-
tertained at theater parties prize
fights snd other events by oficials of
the Mercur Corporation.
Suit Filed.
A suit recently filed in New York
City by Ollie V. KeSSler, former War
Department auditor, charged that the
Mercur Corporation has defrauded
the Government out of S454, 600 due
IL under the leasing arranRement.
kesSler also filed a $1,000 damage
suit against the corporation and sew
eral Army officers, alleging he was
dismissed from the War Department
through a conspiracy" to prevent
him from exposing alleged frauds.
Representative Hartley has intro
duced resolution for a committee
investigation, with a view to cancel
ing the lease and renting or selling
the base to the city Of Newark. He
declared the city has been deprived
OF $l,5O0,000 in taxes rightfully due
it on the property.
Details of certain negotiations al
legged to have been made by a group
of outside influential friends" of high
War Department officials in connec-
ton with the proposed purchase from
the department of Army saddles,
brides. tarpaulins, leggings and other
military equipment were being in
veStigated today by the Federal grand
! jury.
Gen. Douglas Macarthur, chief Of
/ stan OF the Army. and two of his
general staff associates were ques-
/ toned at length yesterday about this
suggested deal" which involved
property valued in excess Of S8,0O0,-
| 600. 1t Is understood.
| Today this line of questioning con-
tinued, with Brig. Gen. A. E. VIII
liams, acting quartermaSter general
Of the Army, and Brig. Gen. John L.
De Witt, whose term as quartermaster
| general ended recently, leading the
file Of witnesses.
The proposed sale to private par
ties, one Of whom is reported to have
been Joseph Silverman. jr., oft-men-
toned figure in the grand Jury in
qulry, was halted on vigorous objec-
ton Of general staff and quarter
master officers, The Star has learned.
Besse Is Witness.
Another grand jury witness today
was Capt. E. H. Besse Of Camp Hola-
bird, where technical studies of motor
cars and accessories for military use
are made prior to drawing I'D speci-
| fcations and signing of contracts.
Capt. BeSse'S testimony was desired.
1t Is said, in connection with an i'm
portant phase of the inquiry having
to do with allegations of irregularity
In changes of specifications made at
the War Department subsequent to
action by Capt. Besse and other officers
at Holabird.
1t has been claimed by representa-
tlVes OF motor car manufacturers that
revisions Of improper nature were
made in specifications for types of
fabrication, axles and other features
OF motor trucks, so as to give GER
tain firms preference in the bidding.
United States Attorney Leslie C.
Garnett, in charge of the grand fury
inquiry, said today he expects a re-
port from the grand jury probably
by Thursday Of this week. Although
Garnett refused to predict the find
ings OF the grand jury, other observers
In touch with the proceedings are
looking for from three to as MANY as
six indictments. A group of men
who have been prominent in American
Legion activities may find their names
in the grand jury's report.
WOOdring Expected.
Assistant Secreary Of War WoodrinV.
who was one of the first witnesses
questioned by the grand jury, probably
win be among the last to take the
witness stand Thursday. He is to be
recalled for further questioning
Thursday mornins.
Meanwhile, Department Of Justice
agents continued their intensive search
for Frank Speicher, puncture-proof
tire agent, whose testimony Is urgent
ly wanted by the grand jury. r. C.
Remick, an associate Of the missing
VTif mas l.