The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1926-05-07
Charges Follow Probe of
Alien Property Custo-
dams Office.
1891, 900 FEE INVOLVED
Thomas w. Miller and John
T. King Also Accused.

RU United Press
NEW YORK. May HAIRY NJ.
Daugherty, attorney general in the
Cabinet Of President Harding, to-
day was indicted by a Federal grand
jury here on charges of conspiracy
to defraud the Government,
The indictment was returned In
connection with the investigation of
the affairs of the office of allen
property custodian during the time
Thomas w. Miller was custodian.
With Daugherty, Miller and John
T. King, former Republican ma
tional committeeman from Connec-
ticut, also were indicted.
Specifically, the Indictment
charges Daugherty, Miller and King
conspired TO return to German and
Swiss owners $700O,0OO of stock and
assets of the American Metals Com.
pany which had been seized as alien
property during the war.
Specific Charge
The indictment reads that the
three allegedly conspired to "defraud
the Government of its rights and
functions" as distinguished from an
indictment charging fraud involving
property. The reason lies In the
fact that the German property held
by the allen property custodian was
not considered actually to be gov
ernment property.
The indictment alleges a fee of
1891 900" was paid In connection with
the returns of the assets.
The indictment does not directly
say who ultimately received the
| 1891 900 fee" but II is alleged to
have been paid in 1921 at the Wal
dorf Astoria Hotel in New York by
representatives of the German and
| Swiss concerns.
Jess Smith, the mysterious fig
ure who was close to Daugherty
during the time Daugherty was
attorney general and who later
committed suicide. is said to have
TtCeINeu llle money.
The Indictment supercedes one re.
turned a few months ago in the
same case In which Miller and sew.
eral German and Swiss bankers and
corporations were charged with con
spiracy. In the previous indictment
King was mentioned, but no charge
was made against him and the name
of Daugherty did not appear That
indictment was returned after weeks
of investigation here. during which
King was said to have been a star
witness.
German Is Witness
Later Assistant Attorney General
Kenneth Thompson went to Ger
many and Richard Morton, a banker
of Frankfort-on-Main, Germany, who
was one of those indicted, returned
here with him.
The investigation was reopened.
Morton was a leading witness and
1t was reported today that in return
for his testimony the indictment
against him. his brother and the
German and Swiss interests involved,
Will be vacated entirely.
Before Grand Jury
The grand jury's investigation has
been surrounded by the deepest Sc
crecy 1t was known, however, that
Daugherty was examined. For a
time he refused to testify on the
ground that he might incriminate
himself. Later, however, under
heavy pressure, he became a wit
ness.
Roxie Stinson, the wife Of Jesse
Smith, who figured so largely in the
Washington senatorial investigation
of the Department Of Justice, was
another witness. SO was CASTOR
Means. former Government agent.
who also figured in the senatorial in
quiries and in other cases.
Daugherty, appointed by President
Harding. served under President
Coolidge for a short time after the
death of Mr.. Harding.
Then came the senatorial in.
vestigation and the department Of
Justice; bringing before the public
the names of Jess Smith and Roxie
Stinson; causing a nationwide
furor.