Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-23
NATION WILL WATCH.
|E.H. SMITH CO. TRIAL
Major Interest Seen in Case
Involving Three Ex-0fficers
Set for Tomorrow.

After months of maneuvering, the
J stage has been cleared for the trial
in the District Supreme Court tomor-
| row Of three former officers of the
F H. Smith Co., charged with con-
spiracy to embezzle $5,000,000 of the
companys funds and to destroy al
legedly discriminating records.
The defendants will be G. Bryan
Pitts, former chairman of the Smith
| company board of directors; John H.
Edwards, jr., former vice president, and
G. Ebert Anadale, at one time secretary
| OF the company. Samuel ]. Henry,
| formerly president Of the concern, was
| indicted with the others, but has been
| granted q severance.
Defense Counsel Imposing.
That the charge will be bitterly and
| Skillfully contested Is indicated by the
imposing array Of counsel retained for
| the defense. They include the local
| flrm Of Wilton j. Lambert, Rudolph
Yeatman and George D. Horning, jr.,
and Frank G. Raichle and Edmund
| Toland of the New York firm of don
| ovan 81 Raichle. William j. Donovan,
| Raichle's associate, was formerly AS
| sistant Attorney General in charge of
criminal prosecutions.
The prosecution of the case will be
in the hands of Nugent Dodds, special
assistant to the Attorney General, and
Neil Burhnshaw, assistant United
States attorney. They will be assisted
by number OF agents loaned to Mr..
Dodds by j. Edgar Hoover, chief of
the Bureau of Investigation of the De-
partment of Justice.
SubpoenaS for witnesses on both sides
have gone out, but the lists are being
carefully guarded. The Government
has released partial list containing
81 names, but 1t is known that a num-
Der of other witnesses will be called,
| including several recognized leaders in
national financial circles.
| A truckload Of documents to be used
as evidence was taken to the court house
yesterday, and in all probability even
more material of this nature will be
used before the trial is concluded.
Arrangements Made for Crowds.
| The trial will be held in Criminal
Division 2, before Justice William Hitz.
] Special arrangements have been made
| to care for the crowds expected to at
tend.
The towering financial structure built
| up by the Smith company began TO
crumble in May, 1929. when Pitts and
Anadale were indicted for perjury in
connection with testimony given at a
bankruptcy hearing involving the Ham
| ilton Hotel.
The Bureau of Investigation con-
tinued its probe of Smith company
affairs, and in December, 1929, an in
dictment charging use of the mails to
| defraud was returned against Pitts,
Henry, Anadale, Edwards, Representa-
| tive Frederick N. Zihlman OF Mary
land, Daniel r. Crissinger, former
controller of the currency, and H. c.
Maddux Of the Maddux Hotels, Inc.
In April, 1880, an indictment was re-
turned against Pitts alone, charging
him with embezzling more than 81 ,000,-
600 of the company's funds. A few
days later the District grand jury re-
turned the indictment which will be
tried beginning tomorrow.
Entire Nation Interested.
The eyes of the entire Nation are
conferred on the trial, as the Smith
company had financed buildings in
Washirl ton, Pittsburgh, Buffalo and
| Albany, and had sold its bonds and
preferred stock throughout the world.
The Smith company had issued and
sold S7,500,000 worth Of preferred stock,
but this sum is relatively small when
compared with the total of bonds out
standing on properties 1t had financed.
As q result of the charges brought
against the company, the market value
OF these securities collapsed and in
many cases they are now practically
worthless.
The first hint Of criminal proceedings
against the Smith Co. officers was the
signal for the launching of civil suits
in widely scattered jurisdictions, but
centering principally in Wilmington,
Della, birthplace Of the corporation
Various committees were formed for
| IA faFNNn -
holders and petition for dissolution
OF the company Is now pending in the
| courts Of Delaware. The courts have
been variously asked to cancel the
common or voting stock to appoint
receivers for individual properties and
| for the company as q whole and to
grant injunctions restraining the off,
GERS from performing various acts.
The financial house, which once
boosted that its investors had never
suffered loss in 81 years" has now
passed several interest and dividend
payments. with several Of its former
officers openly stating that they are
broke"
U. 9. Prepares Outside Case.
In preparing its evidence, the De-
partment of Justice worked up what
Is known as an outside" case. That
Is. all OF the material which Will be
used against the defendants was OBJ
tanned from individuals and sources
outside the company.
Mr.. Dodds, who was in direct charge
Of the investigation, is a graduate of
the University of Michigan and has
acted as special prosecutor in Michi-
gan. He has prosecuted with much
success important bank cases on the
Pacific Coast, in the Middle West and
in the South. In 1928 he successfully
prosecuted charges of misconduct
against officers Of the Kansas City
Joint Land Bank
Mr. Dodds has been assisted through
out the entire investigation and prose-
cution by agents from the Bureau of
Investigation, under the direction Of
Mr. Hoover
First among these was Louis Loeble,
known as one of the bureaus ACE"
investigators. Loeble was born in Hun
gary and is a member of the bar there.
He speaks half a dozen languages
fiuently. He was recently a special In
vestigator for the House Judiciary Com
mittee, detailed to New York City for
work in the investigation of Federal
Judge Francis Winslow.
Charles T. Malone, another agent
, and certified public accountant, has fig
ured prominently in the preparation of
the case. Malone served in the World
War as a member of the famous La
fayette Escadrille.
NJ -