Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1926-09-09
GOVT OPENS CASE
Continued from, Page One)

ciete Suisse Pour Naleurs de MetauX
of which he, German citizen, was
agent, was owned by the Metall-
gesellschaft and the Metallbank,
German companies of which Merton
was an officer at the time Dausherty
and Miller paid him approximately
$7,000.00 in lieu Of property Of the
American Metal Company, which
had been seized under the enemy
trading act.
District Attorney Buckner, in his
preliminary address outlining the
governments case, held that the re-
fund vas illegal, even without con-
sideration of the graft factor. since
the law required all such payments
to be made only to neutrals or COM
panies controlled by neutrals.
The government also produced
two letters, which were in files in
Miller's office, an alien property GUS
todian at the time of the restitution,
which showed partial German own
ership of the Societe Suisse.
Daugherty was charged by Mr..
Buckner with having personally de-
stroyed bank records to obliterate
the, trail of graft which the govern
ment contends marked the $1,000, 900
transfer, and out of which it is al
legged arose one of the biggest post
war graft cases affecting the govern
ment.
Mertons testimony followed that
of two other witnesses and four
hour opening address by Mr.. Buck
ner, who asserted he would show
that Daugherty and Miller partici-
pated in graft totalling $441,000 He
alleged that Dausherty's brother,
Nal s. Daugherty and Jesse Smith.
an aide of Daugherty who committed
suicide. destroyed or arranged to
have destroyed records of the Mid
land National Bank. at Washington
Courthouse, Ohio, which would have
revealed that some of the $441, 900
was deposited to Daugherty's ac-
count.
Mr.. Buckner said he would show
that $4,000 of the $391.000 in Lib
erty loan bonds Merton is alleged to
have given Jesse Smith, were traced
to a brokerage account of Miller.
The first witness called was Miss
Virginia Ward, a clerk IN the alien
property custodian's Office at Wash
ington. She identified documents
she had delivered to department of
justice agents InNeSliSdtiuS TIC
charges against Dausherty and
Miller They included the claims of
the Societe Suisse.
Mrs. Edna Earle, OF Newton. Mass.
the second of the three witnesses,
was accountant in the office of the
alien property custodian during
Millers incumbency. She identified
a number of ledgers and documents
offered as exhibits.
Merton's testimony centered upon
his meeting with John T. King, who
wa sindicted with Daugherty and
Miller. but died shortly after the in
dictment was returned Merton tes-
titled he met King through a friend,
with whom he was transactins bust
ness not related to the case. King.
he said. introduced him to Jesse
Smith and Miller.
Merton was asked what he wanted
of King.
Il wanted him to bring me into
contact with people who knew what
should be done to get a prompt and
fair hearing of the claims for res
toration of the American Metal
Company property. I wanted him to
put me in contact with the men who
could decide such matters"
, After he had explained these
things to King. the latter introduce
ed him to Smith. Merton then told
his wishes to Smith. he said, and
Smith said he would introduce him
to Miller King and Smith took him
to a hotel and introduced him to
Miller, he testified.
At this point court adjourned un-
til Friday morning.