Winners Take 7 1/2%

When the U. S. Supreme Court ordered Illinois Bell Telephone Co. to refund $20,700,000 to its coin-box subscribers last April, the historic Chicago rate case was by no means closed. Gathering dust in the company's files were no less than 45,000,000 collection records--115 tons of them--which had to be recalculated. Some 1,900 clerks will labor at this mighty bookkeeping for three years. More than 1,000,000 checks have to be made out, signed and mailed. And not until last week did Federal judges in Chicago fix the fee for the three lawyers who outsmarted the legal battalion of American Telephone & Telegraph Co., biggest corporation in the U. S. As just compensation for their victory, the court awarded them 7 1/2% of the takings--$1,552,000.

The original order for a rate reduction was entered in 1923, but Illinois Bell promptly obtained an injunction. The case was not brought to trial until 1927. The City of Chicago in behalf of subscribers retained a bright young lawyer named Benjamin F. Goldstein, legislative investigator of the Armour Grain scandal, who had prowled through the books of the telephone company for a minority stockholder. Mr. Goldstein, then 34, suggested that two other experienced lawyers were also needed. George Ives Haight, a gruff, strapping patent attorney and his partner, big, jovial Edmund David Alcock, joined the fight.

It was a perfect combination. Messrs. Haight & Alcock had such clients as Standard Oil of Indiana and A. O. Smith Corp. But they found time for daily table-thumping conferences with Lawyer Goldstein, who did most of the drudgery. In four years, Mr. Goldstein spent 14,000 hours on the case, wore out three secretaries. He grew so preoccupied that he failed to recognize friends in the halls of his office. Messrs. Haight, Alcock & Goldstein took the case on a contingent basis--no victory, no fees, no expenses. They spent thousands from their own pockets and borrowed $210,000 from the City of Chicago. The first verdict was against them but on appeal the Supreme Court sent the case back for retrial. Again they lost but won their appeal with a unanimous Supreme Court reversal.

From their $1,552,000 fee, Messrs. Haight, Alcock & Goldstein will have to repay their loan from the City of Chicago. High-bracket income taxes will take another $400,000 to $500,000. The division of the remainder was secret, but La Salle Street expected Lawyer Goldstein to receive at least a half for his four-year campaign.

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