The Waterbury Democrat., 1940-05-01
Attorneys For Phillips
 Can Inspect Minutes
Continued Prom Page D

that any question Is Co be asked on redirect in respect 10 the contents of the minutes before the grand jury the court will first rule on relc- vance and materially in the ab- Scnae Of the Jury, ."
 Attorney Harold CorbIn, counsel for MT. Phillips, 1t is understood, put up vigorous battle Co have the minutes submitted as evidence and also-to have the jury present when anything was read from them and to hear discussions on the same.
 McKcSSOn Stock Not Solid
 In the course of questioning by U, s, Attorney General Irving Kauf- mann this morning admission was made by Mr. Phillips that he did not consider McKesson gilt-edge or exceptionally high-vnluc stock, He had been asked concerning his own personal opinion and that of the R. F. Griggs Company on the stock of the proposed McKesson, Ltd,
 The witness replied that he never considered the stock solid at the start, but in between speculative, He said he later regarded 1t as "Solid", however He said at the start Is wasn't an A-l stock nor n ZZ-7, It was reasonably good, he claimed. It wasn't Of gilt-edge quality, but of high quality,
 Kaufman said to him, "Yct you sold 1t konwing there was no manu- featuring going on in Canada, didn't you?"
 Didn't you consider 1t a god in- VeStment for widow in l927?" "f considered it good invest ment for certain portion of wid- ows" replied Phillips, and in re- sponse to query If he had actual ly recommended 1t to any widows, said he might have,
 Definition of Gesture
 When court finally opened this morning Prosecutor Kaufmann im- mediately returned to the defini- ton of the word, gesture on which he dwelt so long late yester- day afternoon and which he had eX- tractod from one of the many Phil lips letters now in evidence. Phillips had used this word in a letter to Horace MerWin, the Bridgeport banker who is one of the co-de- fendants In the case, written Oc- tober l3, 1927.
 Kauimann at this point read from the minutes of the grand jury In which Phillips admitted to this body seeing the letter above mentioned before he went into the grand jury room.
 MT, Phillips also testified that he took very, very prominent part In drawing up the prospectus used in promoting sales of McKes- son, Ltd, He was questioned at some length on his part in this work by Kaufman who asked him about letter he wrote to MT, Merwin on September of 1927, about the $900,- 900 plan. It was brought out that there were two types of circulars, one In which the stock price was used, the other in which no mention Of price was made.
 Letters Quoted
 Several letters were quoted, one from Phillips to Jonathan Grout, a Bridgeport banker, in which Phillips sought advice on whether he should mention in the circular the amount of taxes.
 Another letter to Merwin quoted Phillips as saying he hoped to get the circular polished up shortly. Still another written to MerWin on vacation in Canada stated that he (Philiips) was very anxious to | get started.
 Phillips admitted he sent the cir cular to the printers-the fleming way Press of Waterbury. He also said that Griggs company distributed the circulars to underwriters.
 Another angle opened up today was revealed in letter Phillips wrote to Coster saying that Whit tleseys of New Haven Ca drug house. thought something was wrong with McKesson's and that they had an idea that bootlegging was going or
 Kaufman asked Phillips what he had done to run down this report 1 and Phillips said he never could veri- fly it.
 Probably Not" Another question was whether Phillips intended William c. Coding- ham, Canadian head of Sherwin- Williams Co.,, be put in as a dummy director in McKesson, Ltd. MT Phillips responded, Probably not.
 Kaufman also asked what was the hurry to put through the stock plan to which Phillips responded that market conditions were good in 1927 and that you couldn't sell fur-coatS in Havana. Kaufman tried to get an admission that they were seeking q good market for the bankers, but Phillips said No" to this as well as to the prosecutors query that they were afraid they couldn't sell the stock at any price unless it was rushed through.
 Kaufman also asked the defendant why McKesson's couldn't have bought a small plant in Canada for $25, 900 and started manufacturing there instead of floating a million dollar scheme for set-up that con- talned nothing. Phillips said they always planned to manufacture In Canada.
 Another battle of words between Kaufman and Corbin during this period was brought to a close with sharp reprimand for both from Judge Moscowitz plus an admoni- ton 10 the jury to overlook these wrangles and not to consider them in pondering evidence.