Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-09
Brookhart Asks Bar AssoCia-
ton to Investigate Sums
Paid R. Golden Donaldson.
SAYS BANKER COLLECTED
100000 FOR ASSISTANCE
Senator Would Also Have Con-
troller of Currency Make
an Inquiry.

menL Co., also received COIlInlSSAOI4s
from contractors for assisting them to
Smith company. The Senator alleged
that in two instances Mr.. Donaldson
received total of 100000.
Mr.. Donaldson issued the following
statement today:
1.-The statements made by Senator
Brookhart on the floor of the Senate
have just been brought to my attention.
I do not propose to enter into any con-
troversy through the newspapers with
him"
Senator Brookhart declared near the
close of his speech that the DISTRICT
Bar Association should consider under
what queer quirk of legal ethics DON
aldson, as the retained attorney for the
r, H. Smith Investment Co., could re-
ceive more than 100000, in these two
instances alone, under an agreement to
influence his client in favor Of the
contractor who split with him"
The Senator placed in the Congress.
sional Record a copy Of what purported
TO be letter written to Mr.. Donald
son by the Boyle-R Robertson Construc-
ton Co., which stated the construction
company agreed to pay Mr.. Donaldson
$4,000 "in consideration of the serv-
ices rendered by you in assisting us to
secure, through the F. H. Smith Co.,
the contract for the erection Of the
Boulevard Apartment building at No.
2121 New York avenue"
In addition to calling on the bar
association to consider the charges,
Senator Brookhart suggested also that
the controller of the currency also
should make an inquiry.
Taking the floor in the Senate shortly
before adjournment yesterday after
noon. Senator Brookhart said:
Mr.. President, few days ago had
occasion to refer to the Governments
investigation Of the activities of the
F. H. Smith Co., of this city, and GER
tain of its officers, in connection with
the sale of bonds of an extremely du-
bious nature through the United States
mails. Some of these bonds went into
the State that represent; but, aside
from that, have a very great interest
In the matter by reason of the fact that
it appears to me that the institution
that has conducted the sale of these
securities throughout the United States
has succeeded In selling many millions
of dollars of such securities because
they operated from the National Cap
ital and through the United States
mails-lending a false sense of security
on the part of their victims to their
operations.
ut is an old adage that 'straws show
which way the wind blows and when
found that the president of large
local bank was exacting rake-offs from
the contracts that were let to build the
various buildings upon which the Sc
curities were based, became even more
suspicious Of the general operations of
the F. H. Smith Investment Co., for
which the bank president, Donaldson,
was attorney. Since I last spoke to
the Senate, I have investigated this
phase Of he matter also, and find, az
expected to find, that the contractor
who was forced to pay Donaldson, the
bank president and lawyer, a rake-off
was also borrower from his bank. The
vtciousneSs Of this transaction is in
stantly apparent. This bank president
Is In position to favor the contractor
with loans from his institution. He is
also In position, because he is attorney
for the F. H. Smith Investment Co., to
surreptitiously advise the acceptance of
the contractors bid. and in a position
loans If the latter fails to come across
with the $4,000 fee
Says Proof IndisputabIe.
eff they have not done so, I would
suggest that the controller of the cur
rency order an immediate examination,
and frequent examinations, of the bank
of which this man is president, to the
end that no disaster may occur to it by
reason Of such practices. This is no
matter Of speculation. The proof filed
with the statement made by Nugent
Dodds, special assistant to the Attorney
General, who is in charge of the in
vestigation of the F. H. Smith Co., is
tndisputable. At the very time that the
minutes of that corporation show DON
aldson to have been its retained attor-
ney, he accepted two contracts, each for
q $4,000 rake-of from the contractor
whose bid was to be submitted to his
client. And he got the money, and re-
ceipted for it.
IT hold here in my hand as I speak
(exhibiting) another contract between
this banker-it is a photostatic copy of
the contract-and certain building con-
tractors for a rake-off of the same
nature as has been heretofore mentioned
ON another building, however. This
one, dated January IL, 1926, contracts
the payment of $4,000 to the banker
in case the contractor is awarded con-
tract for the building of the Boulevard
Apartment Building, at 2l2l New York
avenue, in this city; and on the con-
tract itself is receipt for the payment
OF the money signed by Donaldson.
would like to know whether he paid
this money into the bank of which he
was president and had it credited on his
salary from that Institution, or whether
he kept the money as fee to himself
for the payment of $4,000 to the banker
the bid OF the contractor who paid him
the rake-off.
IT do not want to have to introduce
any more resolutions concerning thesC
matters, and 1t is for that reason thai
I suggest that the controller of thu
currency Immediately take the step
that are so obviously proper in thu
premises. Also, would like to know
from an immediate examination o
DonaldSon'S bank to Just what extern
the contractor who paid the rake-of
was borrower from Donaldson's in
Stitution.
1t also seems to me that, know
ing the facts, the Bar Association O
the District Of Columbia, should de
termine under what queer quirk O
legal ethics Donaldson, as the retained
attorney for the F. H. Smith Invest,
ment Co., could receive more than $50,
600, In these two instances alone, unde
an agreement to influence his client II
favor OF the contractor who split will
him."
Copy Of Letter.
The copy of the letter which Senate
Brookhart placed in the record with hi
speech Is as follows:
Washington, d. c., January IL, 1926
Mr.. r. Golden Donaldson,
Washington, D. C.
Dear Sir: Pursuant to our yerba
agreement, and in consideration of tn
services rendered by you in assisting u
to secure, through the F. H. Smith Co
= the contract for the erection of tn
Boulevard Apartment Building, at Nc
2121 New York avenue, Washington
$4,000. rs follows: IS 900 .oSb of .eac