Evening star., 1935-04-12
CRIMINAL ACTION
THREAT IS VOICED
AT HOTEL PROBE
SABBATH, House Chairman,
Shouts Intention at
Mortgage Hearing.
ATTORNEY ACCUSES
COURT OF COLLISION
Second Foreclosure Suit in Ward
man Proceedings Cited
by Thomas.

denominations was made today by
Chairman Adolph J. SABBATH of the
special House Committee investigating
mortgage foreclosures.
"It has been suggested the Situa-
ton here in Washington is too COM
plicated for us and that We are afraid
to penetrate it, the committee chair
man shouted angrily.
It want to say right here that we
are going to the bottom of the mat
ter. and if we find that any one has
been guilty of criminal acts We are
going to see that they are prosecuted"
This assertion was made after a
witness. w. Bissell Thomas, accused
the District Supreme Court of enter
tanning a collusive foreclosure suit in
the Wardman Park Hotel.
Filed First Suit.
Thomas, local attorney. repre-
sented a client owning from $1,000 to
$4,000 in Wardman bonds and filed
the first foreclosure suit. A few days
later a second foreclosure proceeding
was instituted by the corporate trustee
of the first mortgage.
Did you view that as collusive
proceeding?" Representative Francis
Culkin, Republican, of New York,
asked.
"Yes, it was admitted to be So"
Thomas said
do you view that as indictment of
the local courts which permitted the
suit to stand?"
"Yes, I do"
Thomas said he had filed charges
against two District Supreme Court
justices in this matter, which are still
pending before the House Judiciary
Committee.
Written Report Asked.
After he had described bond houses
floating the local issues as princes
of chiselers,' Chairman SABBATH asked
. him to submit a written report on
his views.
Chairman SABBATH announced that
United States Attorney Leslie c. Gar
, nett and two other prospective wit
nesses, William B. O'Connell and Har-
old Smaller, will not be called. He
said the facts at their disposal have
already been presented by other wit
nesses
It was announced the committee will
meet tonight in an effort to conclude
its investigation some time tomorrow.
Impliedly criticized by some men,
bers of the committee, Attorney
Joseph Low, who has represented
minority bond interests here, was
urged earlier In the day to withdraw
from his activities in connection with
the Mayflower Hotel.
Low was principal witness be-
fore the committee as it directed its
inquiry to the ref1nancing of local
hotels and apartment houses.
Active for several years in contest
ing plans of so-called protective COM
mittees acting for holders of bonds
on the Wardman Park and Mayflower
Hotels, Low became indignant when
Culkin suggested he had not acted in
good faith.
IF you think that" Low exclaimed,
Il am willing to withdraw now from
the case"
In that case, I think it might be
desirable for you to do so,' Culkin
replied.
On Board Of Directors
Other committee members said they
did not want to suggest that he with
draw Low is member of the board
of directors of the new company
owning the Mayflower.
Paul E. Lesh, attorney representing
the Majority Bondholders' Committee.
took the stand and said he considered
Low the "pick" of the minority at
torneys.
II would rather deal with him than
any of the Others" he said.
1t was brought out that reorganiza-
ton claims in the Mayfower costs
aggregate $600,000, whereas the Ma
tional Press Club was relatively mex
pensive.
Costs Held Not Great.
Lawrence B. Campbell, trustee for
the National Press Building, was
called first for the announced purpose
of demonstrating that "reorganiZat-
lions can be conducted inexpensively.
He said his compensation has been
$4,000 year and that the Reorganiza-
ton Committee receives no fees.
Campbell also said he has been able
to handle the job alone. although
three trustees are usually appointed.
Chairman SABBATH said he wanted to
commend Campbell and District
Supreme Court Justice oscar r. Luhr-
ing, who appointed him, for the man
ner in which the reorganization has
been conducted.
II believe holders Of bonds on many
other projects would be better off if
you had acted for them," he added.
Unfairness Charged.
Low accused E.. Jay Comber, COM
mittee counsel, of being unfair in his
question. Comber had asked him a
general question as to his claim for
fees In the Mayflower case and Low
insisted on answering exactly in fair
ness to himself. He said he made no
claim, but estimated the value OF his
services at about $35,000.
Low said his client, Harold Smaller,
owned $4,000 in bonds on the May
flower and Wardman Park Hotels,
for which he paid less than 20 cents
on the dollar.
He was asked if he hadn't sug-
gested to a representative of the ma
jority bondholders that he would set
tie his entire claim for $4,000. He
denied making any such offer. The
attorney said he ultimately came to
represent Sl,200,o00 i'll bonds. He
said he has charged them no fees
- l-s.~
tion on service rendered all the bend
holders In resisting claims of protec-
tive committees. Almost single
handed, he said, he has effected ma
terial savings.
The committee attempted to show
he was interested only In getting o,