Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-07-12

by John Memolo, associate receivers
counsel
Mr. Memolo, he said, arranged for
his appointment as auditor, under
order from the court"
OF this amount, he testified, he
received $1,000 in cash land not
cent more"
This payment, he said, was made
by Mr. Memolo who took care" of
cashing the $3l,075 check from
Bethlehem. The check, Mr.. Maloney
said, had been made in his favor.
Before he received the check, Mr..
Maloney testified, Mr.. Memolo asked
him what he ordinarily would have
charged for an audit such as that
performed for the wire company"
II told him about 5000 to 81 900"
Mr.. Maloney said.
$1,000 Gift Revealed.
He testified that after Mr.. Memolo
had arranged for the cashing of the
check, Mr. Memolo gave him the
$1,000 and expressed the opinion
that this should be satisfactory.
Il said it wasn't quite satisfac-
tory" Mr.. Maloney related, land
told him that inasmuch as the $3l,-
OTIS check was made out to me that
I would be compelled to pay income
taxes on it."
Subsequently, he said, he received
from Mr.. Memolo personal check
for more than $4,000" to cover the
income tax charges. He paid the
tax, he said, in quarterly install
ments.
Mr.. Memolo, he testified, never
told him what became of the re-
naming $3l,075.
Scranton Attorney "AstOnished."
Harry w. Mumford, Scranton at
torney for Bethlehem Steel, told the
committee he was "astoniShed" at
the attitude of Mr.. Memolo had
shown toward his court-given trust
during a discussion in 1886.
He said this was large case in
which killing could be made" Mr..
Mumford testified.
He said it (the Williamsport Wire
CO.. was a big industry big re-
ceiVership-and the boys want to
make killing"
What boys?" the witness was
asked by committee counsel.
Mr. Mumford hesitated, then said
under further questioning he sur
missed" that the johnson boys" were
among the group he said Mr.. Me-
molo had described. The witness did
not further identify the johnson
boys"
Mr.. Memolo Mr.. Mumford added,
mentioned a figure of 100000.
The discussion arose. he said, from
an attempt by Mr. Memolo, at that
time, to learn what Bethlehem
Steel wanted" to be done in the
receivership case.
Jude's Son Invalued.
Later, Mr.. Mumford said, Mr.
Memolo had hold him, after New
York conference on the wire rope
case that:
Don and a friend came down
Ito New York; to get the money.
They're going to be disappointed.
Don" Committee Counsel M. H.
Goldschein said, was the judges son,
Donald M. Johnson. ..
Mr.. Mumford said he "suspicioned"
there was a deal on" between Mr..
Memolo and Bethlehem Steel, and
thought of resigning from the case.
Why don't you say that the rea-
son you wanted to get out of the
~ Mopon1n
erting undue influence on Judge
Johnson" asked Representative
Walter, Democrat, of Pennsylvania.
L have no objection to saying
that" Mr.. Mumford said.
He said there had been gen
eral rumor for years" in Scranton
that there had been deals in re-
ownership cases.
Testimony at the public sessions,
which began Tuesday, has been de-
voted to Judge Johnson's handling
of the Wire Rope Co. receivership
between 1882 and 1888, when the
Third Circuit Conrt upheld his order
selling the firm to Bethlehem Steel
Co.
Assets Brought 100000.
M. H. Goldschein, committee coun-
sci, declared in an opening review
that Bethlehem obtained Williams
port Wire Rope assets Of $8,340,2l5,
including $1,051,747 in cash, for a
cash payment of only $4,000.
Williamsport Wire Rope, prior to
1882. was the third largest producer
of its kind in the country and man.
ufactured 10 per cent of the Ma
tons wire rope needs, he declared.
Bethlehem Steel actually bid So
800 1000 for the firm. But Mr.. Gold
schein said Bethlehem was allowed
credit at face value for $1,000 900 of
bonds it bought at 10 cents on the
dollar and 100000 in unsecured
claims against the company it
bought at 40 cents on the dollar.
Fee Splits Alleged.
He said stockholders and receivers
Of WilliamSport Wire Rope opposed
the foreclosure, but Judge johnson
dismissed their objections and or
dered the sale.
Surrounding the long litigation