Evening star., 1952-03-15
Ship Deal Probe Ends
with Highly Critical
Report Indicated
By Robert K. Walsh

uatlOnal FOunQaLlOn, Inc, ana
singing report on big-profit ship
deals were forecast today as the
outcome Of a Senate subcommittee
inquiry.
The Senate Investigations Sub
committee plans to state its find-
ings within a month or so." For
several months it studied and
since February 18 it took testi-
mony on the complicated ship
transactions. Those related main-
" to former Representative Jo-
seph e. Casey and several prom
inent associates who netted more
than So million on original out
lays of only $1O1,000
Critical Report Indicated.
Comments already made by sub
committee members as well as the
part which Newbold Morris had
in the proceedings indicate a
highly critical report. But even
as the subcommittee wound up
its open sessions yesterday there
were signs that the Justice De-
partment, Internal Revenue Bu-
reau and the Maritime Admins
tration would act in advance OF
subcommittee formal recommen-
dationS.
The subcommittee sent to the
Justice Department and the In
ternal Revenue Bureau its 2-foot-
thick record of the hearings on
the course Of eight surplus tank
ers purchased from the Govern
ment in 1947-48 by the Casey
group.
This record included testimony
yesterday by Thomas E. Stakem
a Maritime Administration Of
fetal. He declared the Govern.
ment will try, to seize some Al
surplus ships II it finds that they
came into control of foreigners
in violation of the law after be-
ing sold by the old Maritime
Commission to American citizen
buyers.
Interested in Tax Angle.
The American Overseas Tanker
Corp. organized in 1947 by the
Casey group. bought eight tank
ers from the Government
Through the National Tanker
Corp, another company set up
by Mr.. Casey and two associates
three of the eight were sold ia
United Tanker Corp. The China
international Foundation, Inc.
OF which Mr.. Morris is president
owns United Tanker.
Subcommittee members said
they were particularly interested
in possible tax evasion or tar
avoidance devices in the network
OF corporations which figured in
the intricate ship deals. They
want to know the tax status OF
China International Foundation
Inc Mr.. Morris testified early
this week that the Internal Reve-
nue. Bureau was asked for a rulins
in 194S but has not yet acted.
Morris Replacement Predicted.
The future of Mr.. Morris as CHIEF
OF a probe of wrongdoing in Gov.
ernment also has become majo,
question as a result Of the Subcom-
mittee hearings. Senator Nixon
Republican, of California, last
night predicted that President
Truman would have to replace MIR
Morris because of his conduct be-
fore the subcommittee.
Mr.. Morris has denied that he
his New York law firm which rep
resented United Tanker, or the
Chinese International Foundation
did anything illegal or improper In
the ship deals. He wound up two
days Of stormy testimony last
Wednesday by accusing the three
Republican members Of the sub
committee. Senators Nixon. Mundt
Of South Dakota and Mccarthy OF
Wisconsin Of trying to destroy his
character.
The inquiry branched out into
questioning of Mr.. Morris ano
others about several oil shipments
to Red China by two tankers
owned by United Tanker Corp.
How Ships Were Disposed Of.
Mr.. Stakem told the subcom-
mittee yesterday that the AZ ships
which his agency is challenging
were eventually disposed of as
follows: Five to the American
Overseas Tanker Corp, six to
United Tanker. Is to the North
American Shipping & Trading Co
and 2l to the u. S. Petroleum
Carriers Corp.
American Overseas was organ
lied by Mr.. Casey, the late Sec
retary Of State Edward r. Stet-
tinius, jr.; Admiral William F.
Halsey. Julius c. Holmes, now
minister at the American EN-
bassy in London, and others. The
group eventually sold it's interest
to companies owned by Stavros
Marches. Greek National.
United Tanker, an American
incorporated company financed
largely by Chinese Nationalists, is
owned by the foundation which
Mr.. Morris described as a charit-
able organization set up in 1946
in behalf Of Chinese students in
this country and better UNDER
standing between the United
States and China.
Tknsp Ton~a.1