CORRUPTION: Bonds, Bank Records

The Daugherty-Miller trial (TIME, Sept. 13 et seq.) had crept from screaming front-page headlines into the technical seclusion of inner-page stories long before its third week had begun. But as the third week ended, it again leaped back into prominence with revelations of peripatetic Liberty bonds and burned bank records. Important developments:

1) The Government traced C00043203, a $10,000 Liberty bond, to the 1922 private brokerage account of onetime (1921-25) Alien Property Custodian Thomas Woodnutt Miller. It was further shown that this bond was one of a $441,000 block which Richard Merton, German metals potentate, had said he paid to the late John T. King in 1921 for speeding through his claim to seven million dollars’ worth of War-seized stock of the American Metal Co. Through witnesses, bonds, and documents Prosecutor Emory R. Buckner has succeeded in tracing a total of $49,000 to Colonel Miller.

2) With the Government’s case against Colonel Miller practically complete, Mr. Buckner then began his onslaught on onetime (1921-24)U.S. Attorney General Harry Micajah Daugherty. He traced a $22,163.81 check of John T. King’s to a deposit in the Midland National Bank of Washington Court House, Ohio, on Oct. 13, 1921. It happens that Harry M. Daugherty’s brother, Mai S. Daugherty, is president of this bank; that the records for Oct. 13 and 14, 1921, have disappeared; that the accounts of Harry M. Daugherty, Mai S. Daugherty, and Jesse Smith are missing. But it was demonstrated that none of the 1,900 other accounts was credited with as much as $22,163.81 on either Oct. 13 or 14.

3) The next day Mai S. Daugherty, who had been in the courtroom since the trial opened, suddenly became probably the Government’s most important witness. He merely stated that his brother Harry had burned the missing bank records. Max D. Steuer, defense attorney, questioned brother Mai a second time:

Question: “Did your brother [Harry] say anything about how or why he destroyed the bank records ? ”

Answer: “No, he merely said he took them to his shack and burned them.”

Question: “But why?”

Answer: “Well, he said he could not make anything out of them.”

Finally, Prosecutor Buckner rounded out his case against Harry M. Daugherty by showing that a $40,000 block of the bonds handed by Herr Merton to Mr. King was sent to Otis & Co., Cleveland brokers, and that the proceeds were credited to Mr. Daugherty’s account in his brother’sWashington Court House bank.

The Government finished its case against Messrs. Miller and Daugherty as the fourth week of the trial opened. It remained for attorneys William Rand and Max D. Steuer to present their defense; for the jury to decide on conspiracy or no conspiracy.

Meanwhile, shrewd Washington observer Mark Sullivan remarked: “Politicians surmise, however, that the trial will have no effect on national politics.”