Rich Men Scared

(See front cover)

"The best client," Frank J. Hogan tells his friends in private, "is a rich man who is scared." In Pittsburgh last week Attorney Hogan was serving the best client of his career. Andrew William Mellon had hired Washington's No. 1 criminal lawyer to play the desperate game which the New Deal had forced upon the 79-year-old onetime (1921-32) Secretary of the Treasury. The New Deal's stake: $139,045 and the reputation of its Attorney General Homer Stille Cummings, charged with forcing the game for personal spite and political advantage. Mr. Mellon's stake: $3,075,103 and his reputation as an honest man and loyal public servant.

Fortnight ago began the Board of Tax Appeals hearings on: 1) the Government's claim for $3,075,103 in back taxes and penalties, based on a charge that Mr. Mellon had deliberately cheated in his 1931 income tax return; 2) Mr. Mellon's counterclaim for a $139,045 refund on that return, based on an assertion that he had not reported all his philanthropies. Last week spry Counsel Hogan's chief job was to tackle government counsel as it attempted to dart out of bounds on what looked like purely grandstand plays. Once the Government's Chief Counsel, Robert Houghwout Jackson,* tried to prove that Mr. Mellon had bought stocks by way of the famed J. P. Morgan preferred list. Up bobbed Counsel Hogan to cry "Irrelevant!" His objection was sustained. Again Counsel Jackson devoted an elaborate series of questions to showing that in the crisis of 1933 Mr. Mellon had backed up his family's banks in the Pittsburgh area, let his chief local rivals' Bank of Pittsburgh fail. "If you can find," sneered Counsel Hogan, "anything in connection with the tax return of this petitioner for 1931 that has anything to do with whether a bank in which he had no interest did or did not receive money from him in 1933, I respectfully submit you will have to indulge in mental gymnastics or forget all the laws of evidence." Objection sustained.

"Ask a Lot." As it had the first week, the Government spent most of last week plodding through the maze of Andrew Mellon's security portfolios, brokerage accounts, private ledgers, holding companies, in an effort to prove that by juggling his securities among them he had fraudulently established the losses which he claimed in his 1931 tax return (TIME, March 4). All facts & figures came from Mr. Mellon's longtime private secretary, Howard M. Johnson, a frail, grey little man seated pale and trembling behind a stack of ledgers and account books. In the handsome, high-ceilinged courtroom, with only a scattering of typical courtroom loungers looking on, Mr. Mellon sat each day at the counsel table beside Lawyer Hogan. Mostly he seemed bored and restless, glancing often at his chainless watch, appearing to doze off in the late afternoons. Once a young bailiff caught him smoking one of his pencil-thin cigars in the courtroom during recess (see cut).

"You can't smoke in here," growled the bailiff.

"Oh, I'm sorry," said Mr. Mellon.

Frequently mentioned in the testimony as nominal directors of the Mellon holding companies were Son Paul Mellon, 27, last week honeymooning in Europe, and Daughter Ailsa Mellon Bruce, thirtyish, last week shuttling between Pittsburgh & New York. In one of the after-session, off-the-record receptions which Mr. Mellon and his handsome son-in-law David K. E. Bruce held almost every day for newshawks, the frosty old financier tried to warm up by explaining that Daughter Ailsa had named her personal holding company Ascalot "because people ask a lot." Then, as the newshawks tittered, he added gravely: "That and Tennyson, you know."

Ahead of Mr. Mellon, who is so painfully shy that his low quavering voice fades even in private conversation, lay a dreadful ordeal--his own appearance on the witness stand. Secretary Johnson had testified that he himself prepared his employer's 1931 tax return, that, in the confusion of his departure for London as Ambassador to the Court of St. James's, Mr. Mellon barely glanced at it, did not swear to it. But Counsel Hogan announced that when he took the stand Mr. Mellon would assume full responsibility for the return.

At week's end the Government finished cross-examining Secretary Johnson, turned him back to counsel for Mellon. For two and one-half hours, face flushed and eyes snapping, Lawyer Hogan peppered the Government's charges and innuendoes with crackling sarcasm and Irish wit. But when the fireworks were over the only memorable fact to stand revealed was that in 1931 Andrew Mellon was worth some $200,000,000.

Smalltowner. For Robert Houghwout Jackson, 43, the Mellon hearings meant a maiden appearance in the national spotlight. He appeared to dislike it. Only last year his boyhood friend, Secretary of the Treasury Morgenthau, plucked him from a prosperous but relatively obscure private & corporation practice in small Jamestown, N. Y. to be general counsel of the Bureau of Internal Revenue. Shy, husky, genial, he likes to dance, ride over his farm near Jamestown, boat on Lake Chautauqua. To newshawks he protests: "I've never done anything. I'm just a country lawyer." But after two weeks of curt, pointed questioning and repartee in. Pittsburgh, observers were rating him an able opponent of Lawyer Hogan.

"Sundowner." A dapper, distinguished little fellow with pink cheeks and silvery hair, Frank Joseph Hogan is rated as the Federal Government's No. 1 legal antagonist. Last week he reckoned up the score of his 30-year game at: Hogan 20; Government, 5.

Fifty-eight years ago he was born in Brooklyn to desperately poor parents, a puny, sickly babe, given small chance to survive. When he was five his father died. Soon his mother took him to Charleston, S. C. to live with her sister, Mrs. Elizabeth Byrnes. There young Frank had his cousin Jim for playmate and foster brother. Today Cousin Jim Byrnes is junior U. S. Senator from South Carolina and a great & good friend of President Roosevelt. But in that hard-pressed family of women and children there was small time for play. At 12 Frank went to work as cash boy in a Charleston department store. Six months later he got a job as messenger with the Southern Railway, eking out his $8-per-month wage with tips and newspaper-selling at night. After seven years his salary was $35 per month. Meantime he had learned shorthand and typing, got a schooling in literature from an old classical scholar fallen on evil days. In 1896 a move to Savannah gave him a chance to study mathematics at night under the city's Superintendent of Schools.

Turned down for military service in the Spanish-American War because of his health, Frank Hogan became secretary to the Chief Quartermaster in Cuba. That led to marriage and Washington, with a clerkship in the War Department. In three years of night study he got a law degree with the highest marks then ever earned at Georgetown. For two more years he was what Washington calls a '"sundowner," working for the Government by day, practicing law by night. Then in 1904, with a $180 pay check as capital, he cast out on his own.

Traction. From 1904 to 1913 Washington's Capital Traction Co. (street railways) lost each & every personal injury suit in which the claimant was represented by Frank J. Hogan. In 1913 Capital Traction Co. hired Frank J. Hogan as its general counsel, has kept him ever since. Two years later the whole nation heard about him. Accused by the Government of trading in securities in violation of the National Banking Act was Washington's famed old Riggs National Bank, where every President from Buchanan to Wilson kept his personal funds. To secure an injunction against government interference the bank's officers swore that it was not dealing in securities. The Government promptly produced the bank's brokerage accounts, moved to indict its officers for perjury.

Riggs. Against the Government's famed Louis Brandeis and Samuel Untermyer, the Riggs bankers sent young, obscure Frank Hogan. He proceeded to put the case on the world's front pages by issuing subpoenas for ex-Presidents Roosevelt and Taft, putting them on the stand as character witnesses. Then he created a minor sensation by himself taking the witness stand. The grand jury refused to indict and the injunction against the Government was made permanent. From that day to this Frank Hogan has been general counsel for Riggs National Bank.

Oil. Primed & pointed was Lawyer Hogan when the oil scandals of the 1920's raised up a bumper crop of rich men who were thoroughly scared. In 1926 Oilman Edward Laurence Doheny reputedly paid Lawyer Hogan $1,000,000 for persuading a Washington jury to acquit him and onetime Secretary of the Interior Albert B. Fall of a charge of conspiracy to defraud the Government in the leasing of the Elk Hills naval oil reserves. Next year Lawyer Hogan tried & failed to keep the U. S. Supreme Court from indignantly canceling that lease on grounds of conspiracy and fraud. But then there was no jury for that smart little lawyer to work on. He got a real setback in 1929 when, despite tears and eloquence, a jury convicted Fall of accepting a $100,000 bribe from Mr. Doheny. But five months later Lawyer Hogan triumphantly vindicated himself by persuading another jury that what was a bribe as accepted by Fall had been only a legitimate loan as made by Doheny. For that amazing feat grateful Oilman Doheny reputedly gave his lawyer another $1,000,000. Lawyer Hogan still spends about half of each year in California as Doheny's most trusted counsellor.

Contempt. With little to dramatize in the case, Lawyer Hogan in 1930 failed to persuade a District of Columbia court that the Government should allow Meatpackers Armour and Swift to sell other things besides meat. And the very guile with which he strove last year to keep onetime Assistant Secretary of Commerce William P. MacCracken out of jail for contempt of the Senate contributed largely to the fact that MacCracken last week went to jail* (see p. 14). Lawyer Hogan has probably the largest non-lobbying law firm in Washington to maintain. Though he has represented Mr. Mellon on previous occasions, he was no doubt deeply grateful to the Government last week for putting him in the way of what should be his fattest fee in years.

Had Frank J. Hogan chosen to use his nimble talents for his Government instead of against it he might have risen to be, perhaps, an obscure, respected Assistant Attorney General at $9,000 per year. Besides fame and money, the course which he chose has brought him, from a part of the public and from his more conservative but less gifted colleagues, a certain suspicion and disdain. Socially ambitious, he has never been accepted in Washington society's inner circle. But many a Washingtonian, including members of the Gridiron Club whom he entertains every year, is glad to attend the large and elaborate dinners he gives in his home on swank Sheridan Circle. Sentimental, warmhearted, likable, democratic, he is president of Washington's Alfalfa Club (men's dining), onetime president of the Washington Community Chest. Still frail in health, his only hobby is collecting first editions, rare copies, manuscripts of English and U. S. literary works. Last week he acquired the manuscript of Longfellow's paean to honest poverty, "The Village Blacksmith.''

Patriotism. Like every good actor, Frank Hogan spends hours preparing for his performances. He scribbles copious notes, reads them over to a stenographer. But with an actor's memory he seldom needs to refer to them in court. In one Doheny trial he spoke for six hours, reeling off figure after figure about costs of leases, acres of oil shale and barrel production by months and years, without once glancing at his notes. He prepares his opponent's case almost as carefully as his own, often neatly deflates the opposition by presenting its best points first--with his own interpretation. In court, if occasion demands, he will start a fight with a witness, leap in the air, howl, weep, do anything to distract or sway a jury. But his colleagues know that he is completely under control. An industrious if not profound student of the law, he lectured on wills, evidence and partnership at Georgetown Law School for seven years. He has been president of the District of Columbia Bar Association, Executive Committeeman of the American Bar Association.

With a high-pitched, flexible, mellow voice Lawyer Hogan has, like Secretary Hull, Senator Cutting and Representative Blanton, a speech impediment which turns his r's into w's. But his best courtroom asset remains his florid, verbose eloquence and its best adjunct, the U. S. flag. Adept at word portraits, he paints his clients red, white & blue. Under his touch Edward L. Doheny and Albert B. Fall became ardent patriots whose sole thought was to develop the naval oil reserves against the threat of Japanese war. Recalling how Mr. Doheny had had his son carry the $100,000 to Mr. Fall in a "little black bag," Lawyer Hogan throbbed: "In that struggle [the War] just a few years before this transaction, that old man offered that young man's life upon the altar of patriotism. He went on the ships of war over the turbulent and submarine-infested oceans in his country's service--the only son, the only child. And you are asked to believe that when Edward L. Doheny, near the end of his life, corruptly intended to bribe Albert B. Fall, a Secretary in the Cabinet of Warren G. Harding, he deliberately and purposely used as an instrument therefor his son, the pride of his youth, the hope of his maturity, the solace of his old age. . . . Do you think that a man . . . who with pick & shovel sunk wells that he might bring out the . . . liquid that today means safety for the world . . . would, even if he could, stoop so low as to bribe a Cabinet officer of the United States of America? . . ."

In his opening address for Mr. Mellon last fortnight Lawyer Hogan woke echoes of that old plea when he cried: "God Almighty did not create a man who could at the same time and with the same heart be giving . . . a great gift to humanity and, on the other hand, be scheming to steal from his Government."

Commented Counsel Jackson when the three-hour oration was finished: "Time and again in listening to Mr. Hogan's eloquence I kept asking myself where the jury was."

*Not to be confused with Lawyer Robert Jackson of New Hampshire, onetime (1928-33) Democratic National Committeeman.

*Also to jail because he obeyed his counsel, the late Martin W. Littleton, and refused to testify before the Senate concerning Teapot Dome went Oilman Harry Ford Sinclair in 1929.

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