The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-09-04
SENATE COMMITTEE
OPENS PROBE into
MUN|T|0N DEALINGS
Evidence Shows Sir Basil "a
haroff Received $4,000
From U. S. Firm
SUBMARINE SALES AIRED
Carse Testifies vickers Ltd. OF
England and His Company
Have Alliances

building company was accused by
Chairman Nye Of the senate NUM-
tions committe of having helped Sir
Basil zaharoff. Europes so-called
man Of mystery, avoid paying the
United States income tax on COM
missions he received from the con-
Germ.
Zaharoff was identified as the
Spanish agent for the Electric Boat
company of New London. Conn.,, by
Henry r. Carse, head of the COM
pany. after testimony that the Elec-
trio Boat and Vickers, Ltd, an Eng
lish firm. had agreed to divide the
worlds submarine building between
themselves.
More than a million dollars in COM
missions were involved in the taxes.
Nye put into the record a letter to
Carse from firm of American at
torneys who advised that Zaharoff
inform the United States treasury he
had received the money as transfer
agent and not as personal income.
Carse said he had merely relayed
the letter to Zaharoff without init
mate knOWledge OF the case.
Paid Zaharoff S766, 900
Carse said his concern had paid
Zaharoff commissions amounting to
$766, 900 on business between 1919 and
1890. The boat company official said
Zaharoff received commissions on
Spanish business
"Ye don't pay him." Carse said,
but under an old agreement Ger
tain percentage is paid us and we
transmit it to Sir Basil Zaharoff. and
later we get commission which we
retain"
The committee was told that the
German u" boats of the World war
had been built upon an American
owned patent.
Carse testified that his concern had
an agreement with Vickers, Ltd, of
England, for the sale of submarines
to foreign governments by which the
trading territory was divided.
He said the German ~" boats had
been built through an infringement
of patents obtained through an Aus
TRAN concern with which Electric
Boat had contract.
Electric Boat claimed SIT 100000 for
infringement Of the contract. he said,
but had not received anything.
Carse said the Germans obtained
the patents through the Austrian
concern.
~" Boats Stole Patents
The Germans. he said, could not
have built the ~" boats without the
American patents.
Nye turned the questioning to Sir
Basil Zaharaff.
The boat company president said
his concern had paid commissions
amounting to three quarters of a
million dollars between 1919 and 1890.
who is Zaharoff?" Nye asked sud-
denly.
"Sir BASIL Carse said, lis called
the mystery man Of Europe"
There has been all sorts of stories
but think he probably is Greek.
He is also Knight of the Garter of
Great Britain"
us he F'renchman, too?" Nye said.
Il think not" Carse said, al
though he has lived in Paris and
Monte Carlo. He also is a Spanish
duke.
Il regard him very able. very bril-
liant man. met him in 1924. think
he is one of the greatest men I ever
knew"
Zaharoff Agent Of Firm
Under questioning by Clarke, Carse
disclosed that zaharoff got all the
Spanish business for his concern.
Carsc said Vickers was customer |
rather than a competitor Of Electric
Boat.
Other testimony went into the rec
ord that the boats were sold to for
eign countries and that the United
States navy used some of the basic
patents owned by Electric Boat.
Carse said his company made a
profit every time Vickers sold a SUBJ
marine because Of the use of Electric
Boat patents. He added that his
company lost about $4,000 subma-
rine on 400 German submarines built
during the World war because Of
patent infringement.
Senator Nye, Rep., N. d. said at
the outset the hearing would be con-
tinued for several months.
The members Of the committee
present besides Nye were George d.,
Ca, Pipe udaho), Bone. 3D., Wash),
Clark, d.. Mo-. and Barbour, r.,
N. j..
L. Y. Spear, vice president, Henry
r. Sutphen, also q vice president,
were sworn with Carse.