Mrs. HUTTON. It is all the same account.

Mr. KAUFFMAN. I did not mean it was the same account, when I came back yesterday, I said, “Mrs. Hutton, get me the ledger sheet on this legal expense account that we have," and she said, "I can give you the ledger sheet."

I said, "Isn't it a special account," and she said, "No; I put it in the same account with the Spring Time Frolic. I did not see the need for anything else."

I said, "All right; there is nothing unusual as to how the money is kept." I can show it to you very quickly.

I want, therefore, to set out the things I said yesterday. I want. to remove the mystery as though I had rubbed Aladdin's lamp and had impounded thousands of dollars to do a lot of things, which would be the last thing in the world I would think about. We have too much at stake and it would be silly.

As I say this money came in at various times. As I told you, sir, that having men promise to support the situation, and collecting that money, they are two entirely different things. As a result the money did not come in at one time, but came in in nearly a year or 9 months. The dates are here [indicating].

That sum was collected and it amounted to $1,200.

Now, to further substantiate what this money was for I have here I told you yesterday that at one of the meetings Dr. Stapsy had reached the point in this Lansburgh litigation that he felt he had spent an awful lot of money defending a business that might have been any one of us, and he told us so and he said it might have been any one of the men sitting here [indicating those sitting around the table] that the other group may sue and therefore we think there is a common interest and a common cause because, if we lose this case, he said, "You are out of business as well as ourselves."

We agreed with him after much conversation.

We wanted something specific to go by. So it was simply business, a commercial understanding that we should have a specific status; and as a result of much conversation, pro and con, I finally called in my secretary and that was the first time she attended those meetings. There was no need for her to sit there all day, and I dictated in the presence of all of these men an understanding which just as a coincidence will convey completely to this committee exactly what this money was used for, its intent, purpose, and what it has been used for since.

It was also written on February 14, as follows:

1. We expect a definite commitment for maximum fee and retainer including all services rendered on an appeal, whether that appeal be to defend a decision, or to fight one. This figure, we understand, is not to include court record costs and other miscellaneous printing expenses.

2. This group will commit themselves to pay one-half of your share of the present court record cost which we understand to be $375 or $750 for your share, which is half of the whole.

3. That it be understood that if an adverse opinion is received in your case, you will immediately appeal same to the next higher court, and in that event that you will take your position as one of this group on the prorated expense of the aforesaid.

Further substantiating that fact on April 3, of the year I sent through the mails to the Buhl Optical Co., Inc., 204 Fifth Avenue, Pittsburgh, Pa., a letter which is self-explanatory in itself, and it goes as follows:

First I wish to acknowledge receipt of Mr. J. Fischler's letter dated March 29, advising us of Dr. Stapsy's illness for which we are sorry. You further advised us that according to the plan outlined relative to the Washington group and Dr. Stapsy for the Buhl Optical Co., you acknowledge your willingness to go along with this group on the plan outlined under date of February 14. I think, under the circumstances, that it is fair to outline the understanding of that day in order that your file may be complete relative to the amount, as follows:

1. We expect a definite commitment for maximum fee and retainer including all services rendered on an appeal, whether that appeal be to defend a decision, or to fight one. This figure, we understand, is not to include court record costs or other miscellaneaus expenses. This commitment is to be made by the offices of Lyon & Lyon, Washington, D. C., to Dr. Stapsy.

2. This group will commit itself to pay one-half of Dr. Stapsy's, or the Buhl Optical Co.'s share of the present court record cost, the total of which is not to exceed $750.

3. That it be understood that if an adverse opinion is received in the Buhl Optical Co.'s case you will immediately appeal same to the next higher court, and in that event you will take your position as one of this group on the prorated expense of the aforesaid (No. 1), as well as relative to court record costs or other miscellaneous printing expenses.

In compliance with our understanding, before we feel free to remit one-half of $454.60, as suggested in your letter of March 29, we think it only fair that we have assurances from you that under paragraph No. 3 of our agreement you will immediately appeal to the next higher court in the District of Columbia for further suit.

Sincerely,

C. D. KAUFMANN.

Mr. KAUFMAN. As a result of that I, on April 4, received a letter as follows:

CECIL KAUFMANN,

Kay Jewelry Co.,

Homer Building, Washington, D. C.

BUHL OPTICAL CO., INC., Pittsburgh, Pa., April 4, 1939.

DEAR MR. KAUFMANN: This will acknowledge receipt of your letter of April 3, with reference to our agreement concerning the litigation between Silver-Dicus and our company.

We confirm the statement of the contents of our agreement as contained in your letter, this being in full accord with the understanding between your group and Dr. Stapsy.

In compliance with this agreement, we will greatly appreciate it if you will forward direct to Lyon & Lyon your check for $227.30, this being your share of the cost of the transcript.

Very truly yours,

BUHL OPTICA CO., (signed) J. FISCHLER.

Mr. KAUFMANN. Now, you will recall that yesterday we were corrected about the sum of $1,700 or $1,500 that we thought that transcript would cost. Subsequently, we were very much pleased to find that that transcript cost was only nine-hundred-and-odd dollars, and this is a complete tie-up therefore of the whole situation. There is no mystery involved whatever.

I would like to call Miss W. Sarnecki and have her give her testimony.

STATEMENT OF MISS W. SARNECKI

Mr. KAUFMANN. Miss Sarnecki, do you remember this contract or this agreement?

Miss SARNECKI. Yes, sir.

Mr. KAUFMANN. Where did you get it?

Miss SARNECKI. I entered the conference room when you called me and dictated it to me in front of all of the people who were at the meeting.

Mr. KAUFMANN. Do you remember these letters [indicating]?
Miss SARNECKI. Yes.

Mr. KAUFMANN. Did you write this letter [indicating]?

Miss SARNECKI. Yes.

Mr. KAUFMANN. Do you gentlemen want to ask her any questions? Mr. BATES. No.

Mr. KAUFMANN. Here are the checks [indicating]; the one written April 10, canceled, as you see, by E. R. Hutton, special, covering the tying up with the rest.

Mr. SMITH. You did not specify what year.

Mr. KAUFMANN. Of this year. This ties up with the rest which was mentioned, and here [indicating] is the only other sum. Mrs. Hutton did not know who it would be paying and it is deposited only for checking and that is an attorney, a member of the bar in the District of Columbia.

Now, the only thing that I am going to ask you is to not print these names in the record. I am perfectly willing to show it to you gentlemen, and in the end I am perfectly_willing to do as you say, but if you ask me if I have a preference, I am perfectly willing to show this sheet to you, but because of the same request that was made to you yesterday, that it would be embarrassing to people, I likewise make a request that it would be embarrassing as I explained in the beginning; I would appreciate not having these names on the record. My name, of course, you can use, but the other names are more or less in confidence, and in previous hearings here the witnesses requested the names be withheld.

The only point I am making on this is that it might prove embarrassing. This is a perfectly legitimate procedure and somebody here quoted somebody else on several occasions, and I was asked not to divulge the names. However, I am willing to go further on it if you want me to. I am willing to divulge the names to you gentlemen, but I would prefer not to have it a part of the record because of the embarrassment involved.

Mr. BATES. There is no embarrassment by your giving for the record the attorney to whom you paid this money.

Mr. KAUFMANN. No, sir; that is right there [indicating].

Mr. BATES. I have a special reason for wanting that in the record. Mr. KAUFMANN. All right; the $227.30 was paid to the firm of Lyon & Lyon, for the purpose of paying the group's rated share of the transcript cost in the case of Silver et al. v. Lansburgh & Bros. et al.

Mr. BATES. And you have not paid any money from any other fund on any account?

Mr. KAUFMANN. This is in Mrs. Hutton's fund, the spring time frolic.

Mr. BATES. You have not paid anything to any other attorney? Mr. KAUFMANN. Not as yet.

Mr. BATES. Are you obligated to any other attorneys?

Mr. KAUFMANN. Yes, sir; this other one was paid to Sam Hirschman on E. R. Hutton special account, $200, and we have not received a bill from a third attorney involved in this-not involved, but who has a right to state a fee for rendering services, by the name of A. K. Shipe.

Mr. BATES. My reason for asking Mr. Kaufmann was that I knew there was an attorney who had not been paid. There was a rumor that a certain attorney was paid out of the slush fund and I knew it was not so; and I wanted the record to show that he had not been paid.

Mr. KAUFMANN. Thank you.

Mr. BATES. These rumors can fly pretty fast around here some time.

Mr. KAUFMANN. I found that out.

Now, can you comply with my request to not note the contributors in the record as part of my testimony?

Dr. TENEROWICZ. The Chair will not enter it in the record.

Mr. KAUFMANN. Thank you; all right.

Mr. BATES. This Mr. Shipe has been here as your counsel?

Mr. KAUFMANN. He was here right along, except that he was called out of town the day before yesterday. He was expected back this morning but, unfortunately, he had to stay over.

Dr. TENEROWICZ. Mr. Kaufmann, you testified a minute ago about these two checks-one for $200, and one or $227.30?

Mr. KAUFMANN. Yes, sir.

Dr. TENEROWICZ. And you say there was another check due a third attorney in this case; is that right?

Mr. KAUFMANN. Yes, sir.

Dr. TENEROWICZ. Leaving a balance in this fund that we were talking about yesterday of about how much? Do you have that information?

Mr. KAUFMANN. I would rather not say; I do not know; I do not remember. Well, the fund is right here.

Dr. TENEROWICZ. The amount collected is what?

Mr. KAUFMANN. That leaves $772.70 for the net now in the fund. Now, may I elaborate on one point about this money? Obviously, if we sit here today and we forecast into the future about costs of an intangible, that is a very difficult thing to do. We do not know what the expenses will be if this case goes on and on and on.

We have expenses involved through the writing of the bill H. R. 5238 by attorneys, as well. These gentlemen that were at these meetings, I am quite sure, do not understand. I do understand that they will not be asked for $227.30 and be through, because it is a contingent thing. We have experienced it in other States where litigation has gone on not for 6 months, but 2, 3, and 4 years, and no sooner is it done than another bill is introduced and the same thing is happening all over again, so that if you would ask me exactly what the expense in the future will be relative to these litigations, I could not answer it direct, because I do not think anybody could.

Mr. BATES. That is right, nobody could.

Dr. TENEROWICZ. I wanted to ask you that question.

I think you mentioned here in your last statement where the question came up about H. R. 5238 and H. R. 278, was the balance of this money that was paid in paid to these attorneys for this case in court, or was it paid to the three attorneys for drawing up H. R. 5238?

Mr. KAUFMANN. No; I do not think they would be satisfied with $200; that would be obvious. I will tell you how that happened.

At the first or second meeting, and one of these meetings after much discussion, it was concluded that the sensible thing in view of the proposed legislation on H. R. 278, that we propose a counter bill; at least that was the opinion of the attorneys and we followed it, and so for the group I asked the attorneys that were present, namely, the group that are a matter of record yesterday, to compose and to write this bill and to present it to us for reading.

We got together again as a result of that bill after it was written and argued about it back and forth and made deletions and additions just as anybody would, and that was also part of this whole thing.

Does that answer your question?

Dr. TENEROWICZ. Mr. Kaufmann, these three attorneys that you speak about.

Mr. KAUFMANN. There were four.

Dr. TENEROWICZ. Who was the fourth gentleman?

Mr. KAUFMANN. This man right here [indicating Robert Rosenberg]. He was at one of the meetings and made comments as to the structure of the bill which had been prepared.

Dr. TENEROWICZ. What is your name?

Mr. ROSENBERG. Robert Rosenberg, of Harrisburg, Pa.

Mr. KAUFMANN. The others were Mr. Shipe, Mr. Hirschman, and Lyon & Lyon, those four.

Mr. BATES. May I ask you a few questions before we go on with the main line of evidence?

Mr. KAUFMANN. Yes.

Mr. BATES. You have employed these three gentlemen as attorneys in addition to the gentleman from Harrisburg, Mr. Rosenberg? Mr. KAUFMANN. No, sir.

Mr. BATES. You have not?

Mr. KAUFMANN. No, sir; I have not employed them, the group bas.

Mr. BATES. You have not?

Mr. KAUFMANN. Yes, sir; and in the second place, some of these. attorneys are not employed by the group at all; they have common interests and are on retainers, fortunately.

Mr. BATES. When you decided or your organization decided that it was necessary that a counter bill be introduced to H. R. 278Mr. KAUFMANN. Yes.

Mr. BATES (continuing). You asked these attorneys or somebody in your organization to draw this H. R. 5238, or whatever the number is?

Mr. KAUFMANN. Yes, sir.

Mr. BATES. Or did you ask Mr. Nichols to draw the bill? What was the purpose in drawing the bill?

Mr. KAUFMANN. That I believe will have to be answered by Mr. Shipe, because the precise procedure on that I am not certain of.