Trial by Whisper

Three hundred eager citizens went early last week to Manhattan's Federal Building and scurried to find seats in a courtroom on the third floor, a courtroom with faded yellow walls, with cracks and patches and the dingy paint and plaster off its ceiling. In this grim auditorium with miserable acoustics, they settled down to see a show. As prolog they enjoyed 20 minutes of minor prohibition and narcotic cases. Then court bailiffs cleared the auditorium.

When the curtain rose on the first act, those present consisted only of the cast, the critics and one spectator.

The cast:

Charles Edwin Mitchell, onetime head of National City Bank, wearing a short black coat, grey striped trousers, handkerchief in breast pocket, his granite jaw set, his fierce eyes peering intently from beneath his big brow crowned with a stiff brush of upstanding grey hair, was on trial for alleged evasion of income taxes: 1) in 1929 by making a fictitious sale of 18,300 shares of National City stock to his wife to establish a loss of $2,872,000, thereby avoiding a tax of $728,000; 2) in 1930 by making a fictitious sale to William D. Thornton, president of Greene

Cananea Copper Co., to establish a loss of $759,000, and failing to report a bonus of $666,666.67 from National City Co., thereby avoiding a tax of $130,000. Penalty if convicted: not more than five years in jail nor more than $10,000 fine.

Judge Henry Warren Goddard, black-robed, black-suited, urbane and smiling; on the bench.

U. S. Attorney George Zerdin Medalie, short, swart, pince-nezed, portly, open and benevolent in manner; at the prosecutor's table.

Max David Steuer, slick little crook-defender, very quiet, very polite, very imperturbable, sitting at Mr. Mitchell's side.

90 veniremen--butchers, bakers, businessmen--from whom twelve jurors and two alternates were to be chosen.

The critics:

Two long tables lined with 40 newshawks; they face the jury box and windows with a view of upper Broadway and the Empire State Building, but are unable to see the witness chair (concealed from them by the Judge's bench).

The spectator:

Mrs. Carrie Medalie, present to see her husband try his most celebrated and perhaps his last case, as U. S. Attorney; in the front row of spectators' seats.

(Important stage direction: the Judge, the prosecutor, and the defense attorney are all recovering from severe colds. The Judge, normally firm-voiced, speaks in a stage whisper. Mr. Medalie starts vigorously, soon grows hoarse and his voice fades. Mr. Steuer, always soft spoken, can hardly be heard at all.)

Act I--probably the most important in the play--is the selecting of a jury. This is no ordinary case--not a case where the jury must decide "Did he or did he not fire the fatal shot?"--but a case where the physical facts will be fairly obvious, and decision depends upon fine points of law and morals, could be easily influenced by prejudice.

In Federal courts, unlike some state courts, veniremen may be questioned as a group as well as singly, the judge often taking part to hasten matters. Seldom is more than an hour taken in selecting a jury. Not so in this case. Mr. Steuer approaches the jury box and in a suave, confidential manner breathes an inaudible question, stands stiff waiting for an answer, relaxes when it comes, cogitates gently, whispers another query. Says the Judge: "Mr. Steuer, will you speak a little louder?" More whispered queries. The Judge motions the court stenographers to move their table to Mr. Steuer's elbow. At last the Judge himself comes down from the bench and with his hands in his pockets stands near Mr. Steuer.

Mr. Steuer asks one venireman after another: Is he prejudiced against bankers? Against the payment of large bonuses to executives? Has he had dealings with National City? Has he lost money in the bank? Several men are excused. John Barry, venireman No. 5, white-haired employe of a Wall Street broker, admits that he does not think Lawyer Steuer would have been retained unless Mr. Mitchell were "in serious difficulty."

"Do you mean that it is just a difficult case or that the defendant may therefore be guilty?" asks Mr. Medalie.

"That he is probably guilty."

Lawyer Steuer turns plaintively to the Judge: "If all jurors thought that way, either no one would retain me, or I should have to retire from the practice of law."

Venireman Barry is excused.

Mr. Medalie addresses the veniremen in a body. Have they any connections, social or business, with Mr. Mitchell through his companies, his friends, or his clubs? Do they know any of the servants in Mr. Mitchell's Manhattan, Tuxedo, or Southampton homes? Are they prejudiced against the income tax?

Venireman Brock Pemberton, theatrical producer, admits having met Mr. Mitchell, that their daughters go to the same school, that he knows two members of Cravath, Degersdorff, Swaine & Wood who advised Mr. Mitchell in income tax matters, but says he is not prejudiced. Mr. Medalie eliminates him by a peremptory challenge. Once the two lawyers shout at each other. Their voices crack. The judge quietly tells them to go on with the examination.

At 7 p. m. the Judge commands a recess for three days to allow all to recover their voices. Then once again the court convenes, and 32 veniremen having been dismissed (19 for cause, 13 by peremptory challenges), the jury is complete. The jury consists of a hotel manager, a clerk, a publisher, a traffic manager, a contractor from The Bronx, etc. One of them is an architect hailing from Groton, Yale, and the Beaux-Arts, another a Parkavian civil engineer. The vital first act is over. If Mr. Mitchell is convicted it will not be by the prejudices of a proletarian jury.

Spectacular as is the Government's effort to convict one Manhattan big banker of tax evasion, not so spectacular is it as another which last week was suggested: an effort to catch Andrew William Mellon for tax evasion. Louis T. McFadden, Congressman from Pennsylvania, charged in the House that Mr. Mellon in 1931 had sold 60,000 shares of Western Public Service, and 123,000 shares of Pittsburgh Coal to establish losses of $6,700,000, had through a Mellon-owned corporation repurchased them 31 days after the sale. Said Attorney General Cummings: "The charges are serious and the investigation will be serious and thorough." The Mitchell trial may make business history but a Mellon trial would make political history as well.

Not income tax evasion by bankers but downright defalcation was the subject when the Senate sub-committee investigating the closing of Manhattan's Harriman National Bank (TIME, March 27) got John William Pole, onetime Comptroller of the Currency, before it. The committee wanted to know why he had not personally investigated the case of Joseph Wright Harriman, accused of crockery.

Mr. Pole: "Defalcations are common matters in the Comptroller's office, you know. It was only a routine matter."

Senator Robinson (of Indiana): "You mean defalcations of bank presidents are common?"

Mr. Pole (calmly): "Yes. . . ."

Senator Robinson: "If defalcations of bank presidents are common, no wonder the people have no confidence in banks."

Mr. Pole: "No wonder at all."

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