Evening star., 1930-12-16
PITTS QUESTIONED
BY PROSECUTOR ON
EARNINGS SINCE II
Government Contends In
come insufficient to Pur-
chase Stock He Held.
TAX RETURNS OFFERED
AS EVIDENCE IN CASE
Principal Defendant Denies Bor-
rowing Money to Make
First Investment.

Efforts to show that G. Bryan Pitts,
principal figure in the F. H. Smith Co.
conspiracy trial, had not earned enough
money to purchase stock he admitted
holding were made today by the Gov
ernment in its oss-examination of the
witness. Pitts, who is on trial with C..
Elbert Anadale and John H. Edwards,
jr., for an alleged conspiracy to en-
bezzle funds and destroy records of the
Smith Co., completed his direct testi-
mony this morning.
His defense was along two general
lines. In some cases he denied ever re-
ceiving money which the Government
claimed had been embezzled. In other
instances he admitted receiving the
money, approximately 100000, but en-
deavored to show that he was entitled
to It,
Under cross-examination, Nugent
Dodds, special assistant to the Attor-
ney General attempted to break down
Pitts testimony by showing that his
expenditures were greater than his
legitimate income from 1917 to 1927.
Battle Of Wits.
He first obtained admissions from
the witness that in 1927 he owned ap-
proximately $750,000 of Smith company
preferred stock. Pitts said all but
100000 Of this amount was paid in
cash. He also testified that a year
later he bought and furnished home
IN Florida for approximately $3.50, ,000
Dodds then introduced income tax
ref hxyT
1925, showing total income for that
period of approximately $556,000. It
was pointed out by the Government
attorney that this was about one-half
of the sum Pitts said he had paid for
his stock and his home.
The cross-examination developed into
a battle of wits between the two men
when the Government attorney at
tempted to probe Pitts business affairs
over the past IL years. Pitts frequently
replied that he could not remember"
when questions were put to him.
Denies Borrowing Money.
He denied emphatically, however,
that he had borrowed money from
Samuel j. Henry, former president of
the Smith Co, TO buy his first block Of
preferred stock
Pitts also denied he had ever seen
the cash disbursements journal or the
general journal of the Smith Co. These
were among the records which the Gov
ernment has charged the defendants
with concealing.
Pitts said that at one time his in
come as chairman of the board of di-
rectors of the Smith company was
$4,000 year. In 1917, when he be-
came affiliated with the Smith company
his income was $500 a year, according
TO his income tax return. In 1913 It
was $8,277; in 1919, $13,561; in 1920,
$l8,933; in 1921, $2s,s69; in 1922,
$80,757; in 1923, $66,644; in 1924
sos, lO3; in 1925, $103,975, and In
1925, SITS, 3,458.
Pitts had accounted for $500 600 of
the 81 100000 allegedly embezzled when
ne finished his testimony. The balance
OF the money had already been ac-
counted for by defense accountant.
Pitts admitted that money had been
deposited in various banks to his credit
as charged by the Government. but con-
tended that he received 1t legally from
three subsidiary corporations of the
smith Co. He said he was principal
stockholder In the subsidiaries. the
Beverly Building Corporation. the Mont
clalr Corporation and the Forty-Third
and Locust Street Corporation.
He testified that the money was due
MN from surpluses in the treasures
CONTINUED on Page 2. Column S.