Evening star., 1926-09-10
Star Witness in Daugherty
Case Says Money Was Paid
at Champagne Dinner.
TESTIFIES HE AND KING
AGREED ON TERMS OF FEE
Latter Was to Get Percentage and
Cash-Payment Was Germans
Own Suggestion, He Asserts.

! By the Associated Press.
NEW YORK, September 10.-Rich
ard Merton, German metal magnate
testified today that it was he who sug
gested paying the late John r. King
something" for his aid in obtaining
the return to allegedly German owners
Of $7,000,000 realized from the sale of
American Metals Co. stock during the
war.
Merton is the Governments star wit
| ness in the trial Of Harry NJ. Daugh-
erty. former Attorney General. and
Thomas w. Miller. former alien prop
| erty custodian. for conspiracy to de-
| fraud the United States in the transfer
Of the $7,000,0oo. John 7. King. who
died soon after the first Indictment in
the case was returned, is alleged by
the Government to have pulled the
strings in the deal.
| Agreed on Fee.
Merton said that under the terms of
an agreement he finally reached with
King. in July. 1921, he agreed to pay
| the latter per cent of the amount
of assets recovered, provided the tran
! saction was completed before August
! IS, 1921. If the transaction was not
completed before August 10, Merton
said. he was to pay King 212 per cent
| of the amount recovered. In addition,
he testified, he agreed to pay King
! $50, 900 in cash, and shortly thereafter
gave King a check for that amount,
! drawn on the Chase National Bank.
| Merton said he had not seen the
cancelled check, but he knew that it
had been cashed.
| Merton said he obtained the serv
ices of King because he thought it
would be less expensive than hiring
| a lawyer. King was once Republl
| can national committeeman from Con
necticut and one of the most inf1uen
tial men in the Republican party.
Money Paid at Dinner.
| Telling of the actual transfer of the
$1,000 900. Merton testified that at a
| champagne dinner in a private room
| at the RitZ-Carlton Hotel in this city,
| Miller handed him two checks. total
ling about 100000 He could not
fix the date of the dinner. The Gov
ernment alleged it took place on Sep
| tember 30 1921.
King, the late Jesse w. Smith and
Miller attended the champagne din
ner, Merton testified. He gave each
of his three guests a gold cigarette
case as souvenirs, the witness said
Two bottles Of champagne We're con
sumed, he asserted
Merton said Miller had come from
| Washington personally to deliver the
| checks. because he Mertonl, had
| turn to Germany.
Sl,od fn oxn1aiO the 6iSa nnaa ra nCc
| of the $50 900 check which he said he
| gave to King, the witness said its
| disappearance may be explained by a
custom he had at that time. of return
ing Cancelled checks to the men in
whose favor they were drawn.
RecOunts Incidents at Dinner.
United States District Attorney
| Buckner asked Merton to tell what
happened at the champa gne dinner.
WELL" he said. "Mr. King came
about o'clock that night and brought
two bottles of champagne. A little
later Mr.. Miller and Mr.. Smith came
! together. Mr.. Miller gave me two
checks; together they came to about
/ $1,00O,000 in round numbers. They
were made out to the Swiss Bank. l
thanked Mr.. Miller. He had been very
kind TO me, and l put the checks and
the receipts in my pocket and we sat
down to dinner.
When shown the checks, which re-
| Vealed that they had been made pay
able to the Societe Suisse Pour Va.
| leurs de MetauX, Merton admitted that
his memory had been faulty on that
point.
Relating what happened after the
dinner, the witness said:
! Il told Mr.. King that I would not
feel comfortable walking around with
| $l.000,0OO worth of checks in my
pocket and asked him to go to the
| bank with me the next morning. lie
cam the next morning in a taxica h
and we went to the National City
Bank together.
Checks Were Deposited.
The checks We're deposited and the
receipts turned in. the witness said
WAS there something about bonds
that transpired that day." asked Mr.
Buckner.
Yes" answered the witness, 81
had left word with the bank that
the bonds were to be sent TO Goldman
! Sachs & Co."
Buckncr brought out the fact that
Merton had arranged with the Ma
| tional City Bank for this disposition
of certain Liberty bonds, part of the
assets claimed by the Societe Suisse
and which had been held by the alien
| property custodian. Goldman, Sachs
| & Co., is a brokerage firm in Pine
street.
Talked With Miller.
Merton told of his trip to Washing
ton. where he discussed with Miller
his proposal for the return of the ST..
600 900 to the alien claimants. whom
Merton represented as agent. The
move for return of the money was
made on behalf of the Societe Suisse
Pour Ealeusa de Metaux, a subsidiary
of the Merton interests, organized in
Switzerland in 1910 as a holding com
pany for the interests of the Germa n
family.
On the witness stand Wednesday
Merton had told of meeting Miller, to
gether with King and the late Jesse
w. Smith. in New York several days
before he saw Miller in Washington.
Can you tell us what conversation
YOU had with Mr.. Miller when yol
first met him in New York;" asked
United States District Attorney Buck
ner. who is personally handling the
| Governments case in the trial
I'm afraid that l can't recollec1
that clearly" answered Merton. Il
remember his telling me he had beer
only shortly in office and did not know
| ,..N1 oh hi hue II