Evening star., 1935-12-06
TAX TRIAL Jury
IS GIVEN SECRETS
Of WIRE TAPPERS
AIIeued Conversation In
voIving $4,000 Con-
Spiracy Repeated.
McCARTER PHONE CALL
CHARGED TO McELHILL
Two Former Revenue Bureau En-
ployes Relate Incident Re-
ported as Fraudulent.

alleged conSpiratorS, as overheard py
Federal wire tapperS, were related to
a jury in District Supreme Court to-
day at the trial of two former Internal
Revenue Bureau employees and New
York tax consultant on charges of
defraudins the Government.
Over strenuous and repeated objec-
tions by the defense, the Government
"wire technicians" and special agents
told of phone calls made by Frank
B. McElhill New York tax conSultant,
to Thomas N. McCarter, president of
the New Jersey Public Service Corp,
in connection with an alleged plot
to settle" McCarter'S income tax
troubles for $4,000 McCarter's pro-
tests to Secretary Morgenthau re-
suited in indictment of McElhill and
the two bureau employees, John w.
Hardgrove former chief conferee, and
Henning r. Nelson. an auditor.
Another conversation, asSertedly be-
tween McElhill and Hardgrove over
long-distance telephone, referred to
"our friend across the river" who,
according to the quoted conversation
of McElhill, had given the latter "the
letter" In a conversation previously
with McCarter, McElhill had asked
for a letter conveying to him a power
of attorney to act in McCarters tax
case.
Revenue Agent John Saxon, jr.. read
to the jury from stenographic notes
he made of telephone conversation
on August 13, 1884, between McElhill
in New York and McCarter in New
Jersey. During this conversation, ac-
cording to the agent, the question of
compensation for McElhill's services
arose.
Anything you think fair, I'll agree
TO-" the agent said McElhill told Nc
Carter
$4,000 Offer Reported.
IF you produce a final result by
September l." McCarter was quoted
as replying, "I will pay you, say,
$4,000.
That's a very short time" McElhill
was quoted as saying. Gould you give
me about four weeks time?"s-
McCarter was quoted as agreeing to
saying:
so there won't be any misunder-
standing, let me repeat. If you pro-
duce that letter by September 4, I'll
pay you $4,000"
It can clear it up in few days"
the tax consultant was quoted as re-
spending, but getting the letter takes
time"
McElhill then was represented as
inquiring about a power of attorney
and McCarter as saying he had had
letter along that line prepared by
his tax conSultant, John A. Conlin.
The agent then described a telephone
conversation which McElhill had with
Conlin regarding the power of attor-
ney.
Call BY McElhilI."
The call. which McElhill was repre-
sented as making to Hardgrove at the
Internal Revenue Bureau after the
conversations with McCarter and
Conlin, was said to have run as follows:
McElhill-"Hello, John"
Hardgrove-"Yes?"
McElhill-"How are you? Listen.
saw our friend across the river and
he gave me the letter all right"
Hardgrove-"YeS."
McElhill-"Ill do anything YOU want
me to do on your vacation. Can you
play some golf? I'd like to have
you join us"
Hardgrove-"All right"
McElhill-"You think it over and let
me know"
The business of wire-tapping was
explained to the jury by William ].
Mellin, special agent of the inteln-
gence unit, Internal Revenue Bureau:
H. w. Olson, special investigator, alco-
hol tax unit, and l. A. Harris, wire
techn1cian, alcohol tax unit
They told how the wires leading to
McElhill's Office in New York City and
TO Hardgrove's Office at home here
and to the home of Nelson, were tap
PED so that agents could listen in on all
conversations. The agents said the
tapping here was done under direction
OF John R. Cox, special agent in
charge Of the Washington Office of the
intelligence unit. "-
E. C.. Palmer. another revenue
agent, told of listening in on the cali
from McElhill in New York to Hard
grove here and confirmed the version
OF the conversation previously given
the jury by Agent Saxon.
Because of other court business
Justice F. Dickinson Let's adjourned
the trial early this afternoon until
Monday morning.
Testimony Is Opposed.
CoxS testimony regarding his in
tervlews with Hardgrove and Nelson
were objected to vigorously by defense
attorneys on the ground the agent
arrested the revenue employe with
out authority of law" Cox, when
questioned, said he had no power of
arrest other than that of a private
citizen, but denied he had arrested
the men or used compulsion in OBJ
tanning their statements. Justice
Let's allowed Cox to testify. Sis
The agent said he questioned Hard
grove, Nelson and one or two other
employees about the McCarter case.
When he asked Hardgrove about tele-
phone calls made to him by McElhill. |
Cox said, the employe explained the
call had to do with playing a game
of golf" that he thought McElhill |
must be drunk and didn't pay much |
attention to him.
Cox said he questioned Hardgrove
about meeting with Nelson in the
park west of the Commerce Depart
ment Building and that Hardgrove
said he merely wished to borrow $40
from Nelson. United States Attorney
Garnett, in his opening statement, re-
ferred to such meeting in connection
with the furtherance Of the alleged
plot. l