Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-10

and fraudulent arcticles and repre-
sensations concerning the value of the
Hamilton Hotel and value Of the capi-
tai stock of the Properties Investment
Corporation, and fraudulently recon-
mended the purchase of the said bonds
of the Properties Investment Corpora
ton and other bonds of like nature
as secure investments to persons to be
defrauded."
The report then goes into great de-
tail to cover the foundations OF the
charges against the company in con-
nection with its financing Of various
other enterprises in Washington, and in
other cities. Attached to the report are
nearly a hundred letters and advertis-
ing circulars of the F. H. Smith Co.
Offering its securities for sale.
Statement on Donaldson.
The grand jury'S recommendation re-
garding r. Golden Donaldson follows:
The grand jurors, at said term and
inquiring for said District Of Columbia,
inform this honorable court that IN the
course of an investigation lately con-
Quoted by said grand jury into the
affairs of the F. H. Smith Co., a corpo-
ration of Washington, D. c., it has
come to the attention of the grand jury
that one r. Golden Donaldson OF the
bar of this court, while acting as q
retained attorney of the r. H. Smith
Investment Co., the name of which said
corporation was later changed to the
r. II. Smith Co., solicited, obtained and
accepted sums of money aggregating
approximately 100000 from the Boyle
Robertson Construction Co. OF said city
of Washington, in consideration for said
Donaldson Influencing his client, said
m ri
divers contracts for the construction OF
buildings to said Boyle Robertson Con-
struction Co.; and this, when afore-
said, said Donaldson, was the retained
attorney of said +. H. Smith Investment
Co., and when he was also president
of the Commercial National Bank OF
washington, from which bank said
oyle-Robertson Construction Co. bor-
roWed large sums of money from time
to time our1ng the period when they
were so paying said Donaldson to IN
f1uence his said client, the F. II. Smith
Investment Co.
Therefore, this grand Jury recon-
melIdS to this court that the facts In
connection with this matter be investi-
gated and proper charges filed to
the end that this court may know the
exact facts in connection herewith, and
that appropriate action be thereupon
taken"
History Of Case.
The first major step toward prose-
cution of officials OF the F. H. Smith
Co. on various charges relating to its
method of operation was taken May Q,
last, when G. Bryan Pitts, chairman of
the board Of the investment concern,
was indicted in special report by the
District grand jury, charging him with
making o false oath before Ralph d.
Quinter, former referee in bankruptcy
of the Hamilton Hotel Corporation,
which formerly conducted the hostelry
at Fourteenth and K streets, which
went into bankruptcy early in 1926.
Pitts was accused of having commit
ted perjury in statements to Referee
Quinter and declaring that the Smith
Co, had no connection with the pur-
chase of the property and that it made
no profit out of the transaction. The
alleged false statements were said to
have been made May 10, 1925, and
would have been outlawed the day after
the grand jury returned its indictment
by operation of the statute of lim1ta-
tons.
The indictment alleged the facts to
be that the Hamilton Hotel Co. was a
subsidiary of the F. H. Smith Co. and
bLlAG ia AIOdbAlb q lOhAl lAlC PAOHCAby
the F. H. Smith Co. was paid bonus
of $4,000. The indictment was in
four counts, the first charging that the
hotel company was a part of the F. H.
Smith Co, and that the latter company
took active part In the purchase of the
land and the building of the hotel and
that Pitts denied this in his testimony.
The second count dealt with the
hotel company as a separate corpora
ton, but asserted that the Smith Co.
was interested in the building and the
floating OF loans on which 1t was paid
the bonus.
The third count dealt with the al
legged declaration by Pitts that the
company made no profits out of the
hotel transaction, and the fourth count
refers back to the first question pro-
pounded to the witness regarding the
starting of the hotel project and to
which he is said to have answered that
the Smith Co. was in no way connected
with 1t.
Start Of Investigation.
The perjury indictments, however,
proved but start in the investigation
of the operations of the company. The
Department of Justice continued its
investigation Of the concern and in
the Fall moved to gain access to records
of the Smith Co. John Doe subpoenas
were sought to force officials OF the
concern to produce their books showing
details Of their operation, but these
were resisted by the Smith concern.
In order to force the operations of
the concern into the spotlight of the
grand jury and the Department OF
Justice, DoddS was forced to seek new
Subpoenas from the District STpreme
Court, in which he brought into the
matter the names of Representative
Zihlman and Crissinger.
The subpoenas set forth that the grand
ilIry was investigating charges Of con-