CORRUPTION: Trial

(3 of 3)

Then came a dinner. Mr. Merton, no ingrate, gathered about him in a private room of the Ritz-Carlton, Colonel Miller, Jesse Smith, John T. King. There was champagne. Colonel Miller had journeyed from 'Washington that afternoon with checks for $6,500,000 in his pocket. Mr. Merton presented his guests with gold cigaret case "mementos"; he had previously given John T. King a $50,000 "retainer." The merry little coterie toasted, joshed—and Colonel Miller gave Mr. Merton $6,500,000. Later Messrs. King, Smith and Miller left Mr. Merton, who "did not go out because with $7,000,000 in his pocket he somehow did not feel like it."

The next morning Mr. King and Mr. Merton met in Goldman, Sachs & Co. (Manhattan brokers). Mr. Merton handed Mr. King a bulky bundle containing $391,000. "I gave those bonds to Mr. King," said Mr. Merton, ". . . we separated in front of the building, King taking a taxicab, or walking to the subway—I don't know what he did. . . ."

Mr. Merton's testimony had been vivid, compelling, but at no time had definitely proved the necessary point—"conspiracy" by Messrs. Miller and Daugherty. Shrewd cross-examination by defense counsel resulted in temporary setbacks to the Government. It finally resulted in a ruling by Judge Julian Mack that the U. S. Supreme Court had decided that neutral corporations whose property was seized during the war were entitled to have their holdings returned by the Alien Property Custodian even though a majority of the stock of such companies was held by persons classed as enemies during the War —a ruling which virtually eliminated point two of the prosecution.