Evening star., 1933-05-17
TESTIMONY BEGINS
IN MITCHELL TRIAL
U. S. Official and EmpIoye of
Morgan Are First to
Appear.
~ the Associated Press.

NEW YORK, May 17-Testimony be-
gan today in the income tax fraud trial
Of Charles E. Mitchell. former president
Of the National City Bank. who Is &C
cused Of evading payment Of any tax in
1929 and 1890 on income of more than
81, ,00o, ,O0o
The first witness was . Government
odicial and the second was an employe
of the banking house Of J. p. Morgan
& Co.
The Morgan firm held as collateral
for q loan 1t made Mitchell National
City stock part of which figures in
this case.
The Government: charges that al
| though this stock was pledged by
Mitchell for the loan he pretended to
give more than half of it to his wife
In order to turn an actual net income
into an apparent loss SO that he would
have to pay no income tax.
Reconvenes At s:s5 AM.
The trial of Mitchell reconvened in
Federal Court at 9:35 am.
George z. Medalie, Federal prose-
cutor. and Max D. Steuer, Mitchells
chief counsel, conferred with Judge
Henry w. Goddard at the bench Tor 70
minutes Immediately after court mao
I! opened. Opening statements TO the
| jury were completed yesterday.
After todays conference at the bench
Steuer returned to the counsel table and
held a prolonged whispered conVersa-
| ton with his client, after which attoI-
| news for both sides again went INTO
conference with Judge GODDARD
The second conference lasted 10 MN
utes, and then Frederick Sommers'
deputy collector Of internal revenue,
VAS called as the first witness. He tes-
! tined he had examined the income tax
! returns Of Mitchell for 1929 and 1880.
| MitcheIl's Federal income tax returns
for 1929 and 1880 were introduced IN
evidence and. questioned by Medanc,
Sommers went over their contents IN
detail. ..
p Morgan & Co., in charge OF the
companys fles. then took the stano.
Reveals Mitchell Debt.
Keyes. after examining q ledger ne
carried with him, said MltcneA on
December 20, 1929. owed the Morgan
| firm $6.096. ITO. s ~.
Moraans. Keyes said, $3.50, s,038.30 and
the same sum on March q, 1882.
At Medalie's request. Keyes produced
a list Of the collateral backing the loans
by the Morgans to Mitchell.
Keyes. asked II in the Morgan rec
ords there was any written notinca-
ton by Mitchell that he had solo 70
Mrs Mitchell in 1929 18,300 shares OF
National City Bank stock, replied no.
The stock was in possession OF the MOI
gan company, held Is collateral ON .
loan to Mitchell.
Reads Letter to Jury.
Medalie read to the jury letter oateo
October co. 1929, from Mhcneil, 70 Lne
MORAN company, arranging 1or trans
fer to the Morgans' possession, as col
| lateral. of certain of his securities, m
cluding National City Bank stock. In
exchange for q loan not to exceed
$4,000, ,o00." He then read letter
from the National City Co. to the Nor
rans. dated October 81, 1929, turning
over to them as collateral, l8,300 shares
of National City Bank stock, and asking,
on Mitchell's behalf, loan OF $o'7ol'-
90550.
After presenting evidence about the
Morgan loans to Mitchell. Medane intro
duced in evidence records OF loans py
the Morgans to w. D. Thornton, presl-
dent of the Greene Cananea Copper Co.,
! to whom Mitchell claims he sold $500
shares of Anaconda Copper stock In
1880 at so great loss that 1t relieved
| him of the necessity Of paying any IN
come tax that year. ,,-
The Government charges that this
sale was lust as spurious as the one to
Mrs. Mitchell the year before is alleged
| to have ben.
Re1ds Stock Transfers.
Under cross examination by Stcuer,
Keyes read long list OF stock trans.
| fers covering the years 1880, 1881. 1882
and the early part OF 1888, Mitcneii
| having added to or diminished MS COL
lateral as the market fell or rose.
Steuer asked Keyes to prepare .
statement showing how much Mitchell
now owes the Morgans and what Sc
curities they now hold as collateral.
The next witness was william Wer-
| ling. assistant to the head accountant
Of the National City Co. .
He testified that the company had
had from 1917 to February, 1880, q Gus
| todian account for e. Rendt Mitchell" /"
whom he identified as Mrs. Mitchell.
Photostatic copies Of the account ledger
were introduced in evidence.
At ll:56 an. court adjourned until
PIN.
Addressing the jury late yesterday,
Steuer, In q voice that ranged from .
whisper to shrill siren notes, said:
is then to be made the victim? Some
underdog? No. We need big fish, and
Charles Z. Mitchell was q big fish,"