The New York herald., 1922-03-07
Financier Ex0nerates Law
yer in Controversy
About Estate.
BAR SEEMS TO BE DIVIDED
No Personal Profit Charged to
Counsel, but Much Feeling
Is Being Displayed.

A letter written by George J. Gould
year ago completely exoueratiny
Thomas l.. Chadbournc from any
knowledge of the disposal of the
profits in the sale of the Gould es-
tate's Western Union stock viii be the
principal item of defense when charges
against the lawyer are presented TO
the Appellate Division of the Supreme
Court by the Association of the Ear
of the City of New York, which 1as
accused Mr.. Chadbourne OF pro-es-
sional misconduct.
II became known also that Mr.. Chad
bourne's accusers had taken up an al
legged deal in Missouri Pacific bonds
which cost the road s4,000.000 and
would make it the basis of additional
charges.
William d. Guthrie, counsel for Mr..
Chadbourne, said last night that it
would be shown conclusively at the
time of the hearing that his client was
not counsel for the Missouri Pacific at
the time Of this transaction, and there
fore was blameless OF any infraction
Of the ethical code.
The Gould letter denied cateeorically
that the lawyer knew Mr.. Gould intended
10 keep the profits and not include them
In his accounting OF the estate, or that
the matter was ever discussed between
counsel and client.
When a prominent member OF the Bar
Association who has been present at
practically every session of the many
hearings by the grievance committee of
the association in the last year was in
formed Of the existence OF the letter. and
that it would play an important part in
the respondents defense, he said
THE relationship between Mr.. Gould
and Mr.. Chadbourne was such that
have no doubt that he could get a score
of letters of this sort. but the crcum-
stances point strongly TO a knowledge
on the part of the lawyer. l am not
prepared to say what proof we have os
this fact, but we have gone very care
fully into the case and have taken the
Only action that seems justihable.'
Intimntfons Made of Malice.
Several OF the lawyers friends have
q concerted drive instigated in n certain
clique within the Bar Association TO
have the Chadbourne-Gould transactions
Investigated. and II has been hinted that
this group has been none too friendly In
its feelings toward the Gould counsel
Members of the Bar Association who
are conversant with the proceedings de-
clare. on the contrary. that the Chad
bourne case has been considered with
Tho tttY1 fv,,f, taI ,a hot Z
with a sense OF extreme regret that they
were forced to prefer charges against n
fellow member
THE whole New York city bar was
aroused by Justice Whtakers decision
In the Western Union stock TRANSACT
ton" said one OF the members. and
we were constantly being asked whether
we were getting busy There was such
a general agitation for an investigation
that there was only one thing to do.
and we did il. No individual or group
OF individuals Is responsible for our
decision, and any one intimating this
Is not telling the truth"
The additional charges involving the
transaction in Missouri Pacific stock. Il
was said, would be presented at the same
time the charges in connection with the
Western Union transaction arc filed.
Mr.. Chadbourne already stands nc.
as executor Of the Gould estate profited
in the sale OF 229,052 shares OF Western
Union Telegraph Company ctoclS to the
extent OF S620,40l. and retained the
money without notifying the Gould os-
tate of the transaction until eight years
later, when Frank j. Gould sued for m
accounting. That was one Of the ae-
tfons which led Justice Whitaker 70 -.
move George J. Gould as trustee Of his
fathers estate and led to severe con-
demnation from the court.
Fee l. Called Legitimate.
Tho contention or Mr.. Cbadbourne's 5
counsel, William r.. Guthrie, Is that Mr.
Chndbourne received s125 900 a. leEiti-
mate fee FOR his services in transac-
tion chat involved tho sale OF SCI, 900, 900
worth OF stock and which covered 4 pc
riod or several months of intensive ef-
fort, and that the lawyer knew nothing
whatever of Mr.. Gould's intentions re-
garding the commissions.
In che latest set OF charges 81 Is
alleged that through the naneuvers or
Mr.. Gould In the bond market the AIis.
souri, Pacific Railroad lost more than
$4,000 600. and that several financial
men, including Mr.. Gould, were enriched
70 that extent in varying amounts Mr..
Chadbourne i not accused OF having
profited through this transaction. and
no sum Of money Is mentioned as hav-
Ing been paid 70 him as a fee. but again
the question of ethical conduct enters.
and the complaint is that a lawyer In 4
professional capacity should not have
acpuiesced IN manipulation OF that
character.
Mr.. Chadbourne was counsel ut The
time for both the railroad and Mr.
Gould, who was It's president. During
the reorganizatlon several years ago.
according 70 Tho allegation. n bond issue
OF sl5.O0oo00 was voted. upon which r.
Euffern Taller e. Co had an option al
81. Originally Mr. Gould had taken q
half interest ~ the option but with
drew. Later, when Kuhn. Loeb * Co
sErcta g undertake the reorganiza ton
OF the road, IL Is alleged that Mr. Gould
realizing that the bonds would advance.
insisted upon his interest being rein-
stated. and instead OF cancelling the
option at the low price joined with
Taller e. Co and purchased tho bonds
at 81. They were then sold to Kuhn
Loeb & CO. at ~. according 10 the
enr,nraittNHso t+arefnt, ~ fEa f,...,,-., 4tx..