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Taylorology Issue 35
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* T A Y L O R O L O G Y *
* A Continuing Exploration of the Life and Death of William Desmond Taylor *
* *
* Issue 35 -- November 1995 Editor: Bruce Long bruce@asu.edu *
* TAYLOROLOGY may be freely distributed *
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CONTENTS OF THIS ISSUE:
Testimony of Charlotte Shelby
Testimony of Leslie Henry
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What is TAYLOROLOGY?
TAYLOROLOGY is a newsletter focusing on the life and death of William Desmond
Taylor, a top Paramount film director in early Hollywood who was shot to
death on February 1, 1922. His unsolved murder was one of Hollywood's major
scandals. This newsletter will deal with: (a) The facts of Taylor's life;
(b) The facts and rumors of Taylor's murder; (c) The impact of the Taylor
murder on Hollywood and the nation; (d) Taylor's associates and the Hollywood
silent film industry in which Taylor worked. Primary emphasis will be given
toward reprinting, referencing and analyzing source material, and sifting it
for accuracy.
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Special thanks to Dave Downey, for providing the transcript material
reprinted in this issue!
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Testimony of Charlotte Shelby
Charlotte Shelby, the mother of actress Mary Miles Minter, was one of
the major suspects in the 1922 Taylor murder. Her broker, Leslie Henry,
was later charged with stealing money from her account; he pleaded guilty
and in 1933 was convicted of grand theft and forgery. Shelby and Minter
subsequently sued his employer, Blyth & Company, in an effort to recover
the money taken by Henry. The civil case went to trial in 1936, but was
settled out of court before the trial concluded.
Most of the testimony in the two trials pertains to the intricate
details of financial transactions. But there are some interesting insights
into to the relationship of Charlotte Shelby with her family and her broker.
The following are extracts from a pre-trial deposition given by Charlotte
Shelby.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Q. ...I am talking now about a contract whereby you had a portion of the
earnings of Miss Minter...Now, I am asking you one specific, very definite
question; what percentage did that contract give you, as you remember it?
A. To the best of my recollection I think it was thirty percent.
Q. Of the gross earnings?
A. Yes, of the gross.
...
Q. Now, this contract with the Famous Players was made on the 17th of June
1919...Prior to April 1, 1920, what did you do with Miss Minter's
earnings? By that, I mean simply this: did you take them as your own, on
the theory that she was a minor, or did you put any part of them in a
separate bank account?
A. It was in one bank account -- or in several bank accounts; I can't say
just one.
Q. Well, was it in her name or yours?
A. Some of it was in her name; some in mine.
Q. ...Now, after April 1, 1920, did you receive the payments due Miss Minter
under the Famous Players contract?
A. Naturally, as Miss Minter's mother and her business manager I collected--
Q. I didn't ask you that. Just answer the question yes or no.
A. I collected the moneys; I collected the moneys from the studio, yes.
Q. Do you remember how you collected them, whether they were in currency or
by check?
A. By check.
Q. Do you remember how the checks were payable?
A. To Mary Miles Minter.
Q. And when you collected them what did you do with them?
A. I signed them and deposited them in the bank.
Q. You say you signed them; you mean you signed your daughter's name to the
checks?
A. Yes, I have always signed her name to her checks.
Q. In whose name did you deposit them?
A. In my name, principally--for the investment account. I deposited some in
her name.
Q. I didn't ask you anything about an investment account. We will come to
that later. I am asking you now about your bank account. Did you keep
any bank account in the name of Mary Miles Minter?
A. I kept a checking account in her name.
Q. With what bank?
A. First National Bank of Los Angeles.
Q. And you had a bank account in the First National Bank in your own name?
A. Yes.
Q. Did you deposit the seventy percent of her checks in her name?
A. No.
Q. Have you any idea what percentage you did deposit in her name? I am
talking now from April 1st on -- April 1, 1920.
A. I can't answer you. I kept no memory in perfect detail of the banking
account. I deposited earnings with the exception of her checking account,
in the First National Bank of Los Angeles.
Q. Well, you made all the deposits there in your name, did you not?
A. Not altogether. She had a checking account.
Q. And about how much did that average, if you remember?...
A. I can't answer you how much. I don't remember...My daughter was given a
checking account which she used for just spending money around the studio,
and whatever she needed.
Q. And the rest of the money you deposited in your own personal account?
A. Yes, in the name of Charlotte Shelby.
Q. Now, I will ask you this before we leave it; have you any idea how much
per month you deposited to the credit of your daughter Mary?
A. No, I don't remember...
...
Q. Did you instruct either Mr. Babcock or Mr. Henry to purchase securities in
the name of your mother?
A. No; Mr. Babcock and Mr. Henry discussed the diversity of purchases after I
had related to them what an income tax specialist had told me; and I
believe it had used in the accounting with some other of the stars because
of the large surtax and the heavy income of money, and it had been
suggested to me that if the account was distributed with the other members
of the family that it would considerably relieve the paying of a very
large surtax.
Q. You say it had been suggested.
A. Yes.
Q. Who made that suggestion?
A. The party who was then making up my income tax reports. She was a Miss
Marjorie Berger.
Q. She was the one who suggested it to you?
A. Yes, she made the reports of most of the -- a great many of the stars in
the motion picture business; stars and directors. And she did not say "Do
it." She said it had been done in the report of others, and she thought
it was a very fine thing; I mentioned it casually to Mr. Henry and Mr.
Babcock, and they thought it was very fine -- "We will do that."
Q. Can you place the time when Miss Berger made this suggestion to you?
A. Well, it was during the winter of 1919 and 1920. It was while she was
making out the income tax report, which was filed before March 1920.
...
A. I was very proud of being associated with a firm [Blyth & Company] whose
growth I participated in, for they handled every dollar that I earned and
my two children earned from 1919 to the present time.
Q. Well, now, you say "you earned." Did you have any earnings, other than
the thirty per cent from moneys out of your daughter's -- Miss Mary Miles
Minter's -- money?
A. I have always earned money. I have never had anyone to provide for me, so
I have been left dependent upon myself to provide the wherewithal for
myself and my children until they could make money.
Q. All right; now what earnings did you have outside of the thirty per cent
from Miss Minter's contract, what other earnings did you have?
A. I was in no other business at that particular time except as manager for
my daughter.
...
Q. About what time of the year did she leave home?
A. In the autumn of 1922.
...
Q. Did you ever prepare any statement to show the amount of money that you
had invested for your daughter Mary?
A. No.
Q. Did you ever prepare or have anyone prepare a statement for you?
A. I never asked anyone to.
Q. Now, Mary finally employed counsel to represent her, did she not?
A. Oh, after some time; I don't remember at what time it was, but some time
after she left home.
Q. Did you employ any counsel to represent you?
A. No, I didn't employ any counsel to represent me. I only went to my
attorney, Mr. Mott, who represented the family -- Mary as well as myself.
Q. You went to Mr. Mott at what time?
A. Oh, I had always gone to Mr. Mott since he had been recommended by my
attorney, Dennis O'Brien in New York City, out here.
Q. Mary was at first represented by Mr. Neil McCarthy, was she not?
A. Yes, she engaged him first; or rather, he was engaged for her first; she
did not engage him.
...
A. It is a simple matter. I had decided before I bought the property in
Laughlin Park that I would take a substantial part, or a part, of the
thirty percent which had been allotted to me by mutual agreement of
counsel, and Mary -- and that I would put what little I could save into
real estate; and that is how I know that that which I put into real estate
were moneys that I had in mind investing for the purpose of seeing if I
could make something other than just interest on bonds, or just -- in
other words, I would put money allotted to me in real estate, but I
couldn't afford to put any money of my daughter's in real estate, because
of the uncertainty of it; I felt sure -- my banker, my lawyer, and my bond
house all told me "Bonds are the things to invest Mary's money in," but I
was willing to take a little part that I earned as her manager and see
what I could do in the real estate business.
Q. Then am I to understand that in this mental record which you kept of these
transactions, the bonds that you bought were hers and the money you put in
real estate was yours?
A. I never invested any of Mary's money in real estate...I put that which had
been allotted to me in real estate...
Q. Madam, the point I am getting at is: did you invest all your thirty
percent in real estate, or did you claim an interest in some of the bonds
which you had bought?
A. No, I did not consume all of the thirty percent allotted to me; a portion
of it -- in real estate. The rest was invested in bonds.
...
A. ...The first time I went to New Orleans after my return from Europe was
after my mother's death in 1925. I think I went in January, 1926, to
appear in the settling of my mother's estate -- or in a suit, rather, that
had been developed after my mother's death.
Q. You went on from New Orleans to New York, did you not?
A. Not directly, no.
Q. Well, did you ultimately go to New York?
A. Yes...I went from New Orleans to Florida; and having recuperated from
illness in Florida, for which I was forced to go to a hot climate
immediately, after recuperating, I went to New York. And I think it was
some time in February; the latter part of January or the first of
February.
Q. What hotel did you stay at in New York, do you remember?
A. I went to Louisiana by appointment to meet an attorney, and to visit a
relative.
Q. Well, I didn't ask you that.
A. And to appear in the suit which had been filed against my mother's estate,
and having been born in Louisiana, having a very vast and wide
acquaintance in Louisiana, I am very, very well known; certainly I
registered as I was known, and am.
Q. What name was that?
A. Charlotte Shelby.
Q. And when you got to New York, whatever hotel it was that you stayed at,
did you register in your own name there?
A. I registered in my legal name there.
Q. What is your legal name?
A. Mrs. Pearl Miles Reilly.
Q. Well, then, your name of Charlotte Shelby is not your legal name?
A. No; it is a family name, but not my legal, married name.
...
Q. ...Now, you went to Europe the first time, as I remember, in 1927.
A. In 1921, my two daughters and I went to Europe.
MR. LEWINSON: 1921, and then 1926.
...
Q. What was the date of that settlement?
A. I met my daughter [Mary] in Paris before the Christmas holidays, some
little time before the Christmas holidays, and we got together some short
time before Christmas.
Q. Well, that was the year 1926?
A. Yes, in December of 1926; and she understood -- partly -- her mother;
anyway we came together; and we went down to the Western Union office as
we had planned, and we sent a cable to each of our attorneys stating that
we had met, and we had settled our affairs between ourselves; and she
instructed her attorney to dismiss the suit, and I telegraphed -- cabled
-- my attorney that God had intervened and brought mother and daughter
together.
...
Q. Mrs. Shelby, can you tell us now -- you bought a piece of property in
Laughlin Park I think I asked you about; you took that in your own name,
did you not?
A. I bought it with my own money, took title to it.
Q. I didn't ask you about that. You took the title in your own name?
A. Certainly.
Q. You also bought this residence that you afterwards turned into an
apartment house hotel, which is referred to as the Casa Margarita, did not
you?
A. Yes; that was a business venture.
Q. And you took title to that in your own name?
A. Yes.
Q. You purchased that with your own funds?
A. Yes.
Q. The Laughlin Park place you sold, did you not, later?
A. No, I did not sell it. My daughter [Margaret] sold it for me.
Q. Well --
A. I permitted it to be sold.
Q. Well, I say, you sold it, didn't you?
A. As owner, yes.
Q. You signed the deed to it and took the profit from it, did you not?
A. No.
Q. You did not?
A. No.
Q. You bought that, approximately, as I remember, for $35,000, and sold it
for how much?
A. I paid $36,000 for it.
Q. What was the gross selling price?
A. $180,000.
Q. And out of that you had to pay commissions, and so forth -- did you pay
your daughter Margaret commission?
A. No.
Q. You did not?
A. No.
Q. Did you pay any other real estate agent any commission?
A. Yes.
Q. Who?
A. I have forgotten the name. I did not negotiate the property, nor was I
present during the time; my daughter negotiated the entire deal for me.
Q. Well, you did not pay her any commission, then?
A. No.
Q. Your daughter, Mrs. Fillmore, would then be able to tell us about the
negotiations and who they were with?
A. Yes, she could tell you all about it.
...
A. I bought the New Hampshire property in 1921; we moved into the New
Hampshire house I think in May, or some time in the spring; soon after we
went into the house, we went to Europe. We returned from Europe in 1921
in August; very late in the autumn of 1921. Mrs. Fillmore had completed
the first house she was building in a new subdivision of Frank Meline's.
We temporarily moved into Mrs. Fillmore's little home as a wish of Mary's.
I may add this -- Mrs. Fillmore's house was built as a real estate
venture; she had built the house, of course, to sell it; and the house
being completed, Mary fell in love with the little house, and insisted
that we go over and live in it until Margaret sold it; to please her and
make her happy, we took some of the New Hampshire furnishings and remained
in Margaret's home until Margaret did sell the home, which was in the
spring of 1922; at that time we moved back into the New Hampshire house.
...
Q. Miss Berger was your income tax expert from 1920 on until after you left
for Europe, was she not?
A. No.
Q. Well, how long did she represent you?
A. Until after my connection and my daughter's connection with the studio had
finished.
Q. That was in 1923?
A. Yes. I don't remember if she made out my 1922 tax; I have forgotten.
...
Q. I understand from your testimony thus far, Madam, that the first year
after you started doing business with Blyth & Company, when it came time
for Miss Berger to prepare your income tax return, that you asked Mr.
Henry to gather the necessary data with reference to the investments which
you had made through Blyth & Company; is that correct?
A. That is correct.
Q. And that thereafter, it is your recollection that he furnished from year
to year -- he furnished the same data to Miss Berger without any specific
request on your part to do so.
A. Yes; to Miss Berger and to Mr. Mitchell, who made our tax report after
Miss Berger -- and later to Colonel Hutchins.
Q. Well, now, when did you employ Mr. Mitchell, if ever at all, as an
accountant for you?
A. Well, after the termination of my daughter's, Miss Minter's, contract with
the Famous Players-Lasky Company; I no longer needed the expert advice of
an income tax specialist, who specialized or made it a special business
for the motion picture stars and others connected with the motion picture
industry; I then asked Mr. Mott if he knew somebody who would make out the
tax for me, and he suggested his accountant, Mr. Mitchell, and he made up
the tax for -- I don't know whether it was one year or two years. For one
year, I know. I don't know whether he made it for two years or not.
Q. Well, wasn't Mr. Mitchell employed by you as an accountant in connection
with the accounting suit which Miss Minter had brought against you through
the O'Melveny firm?
A. No, I never employed any accountant in that suit. I don't know what Mr.
Mott did, but as far as I am concerned, I never employed anyone; but Mr.
Mitchell made out my income tax report.
Q. Did you ever have any discussions with Mr. Mitchell about this accounting
suit?
A. No.
Q. In 1920 and 1921, did you attend to having the income tax return made for
your daughter, Miss Minter, as well as yourself?
A. No; I did not make out their return at all; Miss Berger made out the tax
report.
Q. I understand that.
A. I furnished all data, all canceled checks and wardrobe -- publicity -- and
general -- expense account.
Q. Did your daughter, Miss Minter, have anything to do with the making out of
this return herself?
A. No, she didn't know anything about it.
Q. As her manager --
A. I furnished the data.
Q. Well, you saw to the making of her return; by that I mean, not that you
made it up personally, but you attended to it, the same as you did, and to
the same extent only as you did, your personal tax? In other words, you
say as her manager you attended to seeing that a tax return was prepared
for her, did you not?
A. Yes, I saw that Miss Berger had all of the data prepared that she
demanded.
Q. Now, how about Miss Minter's tax return for the year 1922; that would be
made normally in March of 1923, which as I understand was after she left
your abode?
A. Yes.
Q. Did you attend to making her tax return for that year?
A. No, I only supplied to Miss Berger the data that I had on hand; it would
not be complete, because the year was not completed, nor was the contract
completed, before Miss Minter left home.
Q. Well, I do not mean to imply that you yourself prepared the return in any
way. What I am trying to get at is, after Miss Minter left your house in
1922, did she attend to seeing that a return was prepared for her, or did
you continue to give instructions to Miss Berger to prepare it, and
furnish whatever data you had?
A. Miss Minter herself went to Miss Berger's office and took with her
whatever data she had. Meantime, I had taken all the available data that
I had to Miss Berger.
...
Q. Now, Mrs. Shelby, did you ever, before leaving for Paris in 1926, discuss
with Mr. Henry the Taylor murder case.
A. Oh, yes.
Q. And when did that occur?...
A. I came back from New York at one time, and a lot of publicity had burst
forth --
Q. I am not asking you about that.
A. I arrived --
Q. I just asked the date, if you remember.
A. Now, I am telling you; I am trying to fix the date, if necessary -- if you
will bear with me; I can't give you the date.
Q. All right.
A. I arrived in Los Angeles soon after a lot of publicity and during the time
of a lot of publicity about that affair; being quite indignant, I suppose
I expressed myself not only to Mr. Henry but to anyone else I happened to
come in contact with.
Q. Did you ever discuss with Mr. Henry between the period of 1919 and the
time you left for Europe in 1926, any of your income tax problems?
A. No. Problems? I had no problems?
Q. Well, then, if we eliminate the word "problems" and simply say your income
tax for any of those various years, did you discuss that with him?
A. I had no discussions and conversations with him...
...
Q. ...Did you tell Mr. Babcock that if Mr. Henry left the firm, that you
would take your business wherever he went?
A. What?
(Question read.)
A. Why, of course not. What an absurd question.
...
Q. Now, getting back to your first meeting with Mr. Gilmour, did you
establish what year that was? It was the time you say your daughter
[Margaret] sold you out of house and home?
A. Yes; sold the house at Fremont Place, and we had to spend the holidays in
New York, waiting for the Ambassador Hotel to be opened; and I think it
was 1920.
...
Q. I am not asking you how much you had invested as a total. But your
testimony is to the effect that you were collecting all of the earnings of
your daughter Mary, and that you endorsed her name on them with your name
under it, or wrote your name under it.
A. Well, I don't think I ever wrote my name under it. I just wrote "Mary
Miles Minter" -- been doing that since she was a little kid, five years
old -- six years old -- seven years old -- always.
Q. You are mistaken on that, Mrs. Shelby, because we have photostatic copies
which I will show you, if you wish.
A. Of her signature?
Q. No, of her name with your name written under it.
A. Oh, it may have been, at times; I don't remember. It wasn't important
anyway, about the money.
...
A. ...and then later, on another occasion when Gordon Chester came to the
house in the evening to go over more data that he was gathering to take
down to Blyth and Company's office, Mr. Chester said "Henry said to me 'I
could blackmail Mrs. Shelby if I wanted to.'" "Well," I said, "he has
nothing to blackmail me for;" and I had no fear -- forgot it. And then I
thought no more about it, and I didn't take that as blackmail; I didn't
take it even as intimidation, because I knew there was nothing to even
frighten me, and I was not worried or frightened; there was nothing for me
to be concerned about; and after Henry got out of jail he called me -- I
don't know when it was; I don't know what time he got out of jail, in fact
-- but I was called in a very short time, in the dead hours of the night
-- it must have been twelve or one o'clock -- and I was told, he said
"Mrs. Shelby, this is Mr. Henry." He said "I have some letters, and you
had better see me;" at that time, I put up the receiver. He called me the
next night or the night thereafter -- I cannot be certain about the times;
my maid was occupying the guest room next to me, and when this phone would
ring she would come in frantic with fear, for having this criminal who was
out of jail call the house; and she probably would remember. Well, I
called the next night and said I had to see him -- if I knew what was good
for me, I would see him; that he had some letters. Well, letters did not
concern me, and I put the receiver up. I am accurate in my knowledge of
what he did and what his criminal lawyer did; his criminal lawyer kept
telephoning me -- we had to have Deputy District Attorney Burgess stop it;
terrorized my house, terrorized my maid, and he threatened me; he said if
I knew what was good for me --
Q. You say he threatened you. You mean Mr. Henry or Mr. Judson?
A. Harold Judson, -- yes.
MR. LEWINSON: Well, pardon me just a minute. I think the witness already
testified that Henry threatened her...Now, she testifies also that Judson
threatened her.
A. Yes. Then my daughter Mary was visited in was visited in her home by a
party with the letters, all of my letters --
Q. Well, who was the party?
A. I may say a party unknown to me, because I did not see the party; I would
prefer to say a party unknown to me at the time; so the letters were shown
to her, and she was told that she should indict me for robbing and
swindling her, and that she should have the Federal Government indict me
for fraud; and as a matter of fact she was strongly urged to see that I
went to jail immediately -- exactly. I not only have it from my daughter
Mary; I have that from her maid, who was the housekeeping woman at the
time, a woman of very strong character and very well known -- one Dorothy
Herbertson; very well known in Los Angeles, and has been for years.
Q. Madam, all you have testified is strictly improper, because it is all
hearsay.
A. Improper? It is quite the truth, if you want to investigate it. So much
the truth, Mr. Sterry, that it even almost took my daughter Mary's life;
at a late hour in the evening I called her on the telephone and she told
me she was going to blow her brains out.
MR. LEWINSON: Mrs. Shelby, please confine your answer to the question.
A. Yes, I am going to tell it. Why should I hold back anything to shield
Blyth & Company or that villain, Henry, or anybody connected with them?
Why shouldn't you know it? Yes, I held the receiver when she was going to
blow her brains out, and while I heard it, my maid ran in from the guest
room and she listened, and I held the receiver so we could both hear, and
I was terrified.
Q. Mrs. Shelby, you cannot testify to matters which are outside of your
knowledge.
A. That is not outside of my own knowledge. I got it from Mary's maid next
morning, that when I was talking to Mary on that telephone, that Dorothy
Herbertson walked into the kitchen, picked up the receiver, and having
heard a few of these words, ran to Mary's room and took the gun away from
her. Now, there are not only Mary and myself, but there are two witnesses
to testify to the truth of it.
...
A. A segregation of the bonds belonging to Mrs. Fillmore -- they would
certainly have been separate and apart from any bonds belonging to myself
and/or Mary.
Q. Well, how about the segregation between the bonds belonging to you and
those belonging to Mary?
A. Oh, I was not concerned about "segregation."
Q. What?
A. I was not concerned about what belonged to me and what belonged to Mary.
...
Q. You testified that you had decided to put your thirty percent of Mary's
earnings into real estate and Mary's money into bonds; do you remember
your testimony?
A. Yes, I did that from time to time.
Q. Did you discuss that subject with Mary?
A. No, I don't know that I did at all. That is amusing, most amusing; I
mean, why should you inquire? Why should anyone be interested in our
affairs? I am sure she had no idea of even questioning what I did with my
thirty percent, or even her own; she knew that I invested her money with
Blyth, Witter & Company in bonds, and depended on me, and I depended upon
that firm to give her good service.
Q. Well, Mary, you said, had no business ability or knowledge or experience.
A. Not a bit in the world -- not a particle -- and never will have.
Q. So you did not discuss with her at all that fact, that you would put your
money in real estate and hers in bonds?
A. Why, no. I was not called upon to do so.
...
Q. Did you have any discussion with him [Henry] in 1922 about certificates of
stock having been delivered to you in names of persons other than yourself
or members of your family?
A. No. I did not buy securities in anybody's "name;" I bought them and paid
for them; they were delivered to me. No names were discussed.
Q. Did you have any discussion on that subject with him in any of the
succeeding years?
A. No.
...
MR. LEWINSON: First, with reference to the date of the birth of Mary, and
her birthplace, I now state that Mrs. Shelby if interrogated on that
subject, would testify--and I stipulate the fact to be -- that Mary was
born on April 1, 1902, at Shreveport, Louisiana; that the place of her
birth was a rented house in the city of Shreveport, the street address of
which Mrs. Shelby is now unable to give. I suggest, however, in that
connection, that the vital statistics on file in Shreveport will give you
that information.
MR. SCHWARTZ: If any.
MR. LEWINSON: Well -- if any? There is the information available; she was
born in a place, and the place has an address.
MR. STERRY: I suppose he means if they have vital statistics. Well, she was
born under the name of Juliet Reilly?
MR. LEWINSON: Juliet Reilly.
*****************************************************************************
Testimony of Leslie Henry
The following are depositions and trial testimony made during April
through July 1933 by Leslie Henry regarding his trial for forgery and
grand theft. [Also see Taylorology #5.] He pleaded guilty and testified
voluntarily. There are a number of interesting discrepancies between
his testimony and the testimony of Charlotte Shelby reprinted above.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
A. ...There are lots of people who have confidence in the house [of Blyth &
Co.]. In the case of Mrs. Shelby -- securities left by Mrs. Shelby were
not left with Blyth and Co. for that purpose. They were left with me.
I am talking to you just as honestly as I can. I want you to get that
clear.
Q. As long as you are on that subject, tell me what is on your mind.
A. While I gave her receipts of Blyth & Co., nevertheless so far as the
handling of securities was concerned and the placing of them in Blyth &
Co. where Blyth & Co. would have known what they consisted of, that was
very remote from Mrs. Shelby's thought or intention.
Q. Well in developing that, I would like to have you state the facts and the
circumstances under which the securities were received and why you make
that statement.
A. I receipted for them in that way for the simple reason that Mrs. Shelby
was afraid that Miss Minter's attorney would arrive at what Mrs. Shelby's
bond holdings were, or the location of the property and had Blyth & Co.
been in possession of them -- I don't know if you have the right to go in
and join the bond house as a litigant and compel them to show up holdings.
She was afraid of that. While I receipted for them for Blyth & Co., the
bonds were not to be held in safekeeping with Blyth & Co.
Q. Where were they to be kept?
A. They were to be kept by me in Pasadena or anywhere else in order to keep
them from being discovered by one of two parties, either by the Government
or by Miss Minter's attorneys in particular.
Q. Why did you give a receipt for them in the name of Blyth & Co.
A. For two reasons. First for Mrs. Shelby -- for one reason very largely.
Mrs. Shelby herself -- while Mrs. Shelby wanted me to keep those
securities out of any knowledge of Blyth & Co. that would become available
to Miss Minter's attorneys who might seize them or attempt to locate the
securities and seize them -- while she wanted me to have them and keep
them away from that contact or knowledge of Blyth & Co., she still wanted
to be under the protection of Blyth & Co. by having the receipt made by me
as representing Blyth & Co.
Q. Go ahead with your explanation.
A. That is my explanation...She was solicitous that different property she
had, and particularly that which was here, was to be unknown to anybody,
and particularly to Blyth & Co., because of the acquaintance of our
officers, the members of our firm with O'Melveny's office or firm, and
things of that nature, so that either through personal contact or by legal
action there could be compelled a showup of Mrs. Shelby's holdings. That
was her reason for the selling of the securities in 1925 and the
repurchase in 1925 and 1926 under fictitious names. It was to keep that
element of concealment.
...
Q. I noticed there were a lot of fictitious accounts in December, 1922. What
was the explanation for those?
A. When Mary left home in 1921 [sic] that was when Mrs. Shelby again got one
of these ideas of concealment.
Q. That was the first time, as a matter of fact?
A. Yes.
...
A. ...What the situation was then, I was in the position of having to
maintain secrecy for Mrs. Shelby concerning her securities. She had made
a very heavy conversion of her securities under fictitious names to
accomplish that...Mrs. Shelby was maintaining a position at that time
toward her daughter and toward Mr. O'Melveny that after the payment of any
such settlement as they agreed on, that she would only have some fifty or
seventy-five thousand dollar securities left.
Q. Was that before she went to Europe?
A. Yes, before she went to Europe. When he tried to make a settlement. Mr.
Mott and I and Mr. O'Melveny met. The first demand was on a half million
dollar basis, and then they talked of even a $250,000 basis that is
including the Casa property. Mrs. Shelby maintaining a representation
then that her holdings were only somewhere between fifty and seventy five
thousand dollars. It was vitally important as she saw it, to have no
access through Blyth & Co. by record or otherwise, that would indicate
what her actual holdings were...It was left strictly to her how they were
kept, so long as they were kept out of the knowledge of Blyth & Co. and
O'Melveny's office or the Government Agents for fear that through any
government inspection of income tax return of anything of that character,
the information might be uncovered to Miss Minter or Miss Minter's
attorney.
Q. You did not actually tell her that there would be no record of the
securities, did you?
A. No record in Blyth & Co. I told her so far as these securities purchased
under fictitious names were concerned, there would be no record in Blyth &
Co...
Q. But as to those that were taken under fictitious names, there would be a
record with Blyth & Co. under the fictitious names?
A. Yes, but there would not be anything to indicate they were Mrs. Shelby's
holdings...Many of these so-called fictitious names were actually clients
of Blyth & Co. The purchases made under those names were not placed on
the cards of those clients in our office. Otherwise, it would be
confusing. They belonged to Mrs. Shelby or Mrs. Fillmore. Those holdings
would be entered under Mrs. Shelby's or Mrs. Fillmore's name on some card.
...
Q. How did it come, when you had the whole telephone book to draw from, the
names of customers were selected.
A. We are going into a long story of dishonesty. There was a credit of $2.50
for every new client. Had I used new names, I would have been credited
with new clients. In other words, I could have used ten or fifteen or
twenty new names, which would have constituted new clients. I would have
been entitled to a bonus. I would have had that as a rating over other
salesmen.
...
A. ...Mrs. Shelby, however, had this in mind, Mr. Lewinson. She had the
determination in her mind that litigation or no litigation, by any manner
or means in which she would beat the attorneys to it -- when I use that
term I mean have the advantage by movement over them in any way that she
would not have to surrender a dollar of anything to Mary, as far as she
could.
Q. That is to Mary personally?
A. Yes.
Q. And the idea of that, in part at least, was the protection of Mary and
others?
A. That was stated continuously.
Q. At this time in collaborating with Mrs. Shelby and in purchasing
securities under fictitious names, you were not conscious of doing
anything dishonest?
A. Not at all. That matter of concealment was a problem of hers and was one
which I saw was vital to her, in determining that the securities --
Q. And her ideas may have been legitimate and proper, and so far as she
expressed them, they were?
A. Yes.
...
A. The only thing is that at that time it was just a perfect uproar. I never
went through hell and high water higher than that was.
Q. Will you enlarge upon that?
A. I suddenly discovered a new picture so far as feelings were concerned.
There was extreme bitterness between her [Mary's] mother and herself that
seemed to go beyond business. The mother, on the other hand, was critical
of the daughter as being wayward and things of that character, and
absolutely unwilling to have any advice from her or discussion with her.
Mrs. Shelby then told me that her daughter was then charging, that Mary
was then passing the word that she had killed Taylor.
Q. That who had killed Taylor?
A. Mrs. Shelby. That Mary was doing that because her mother was jealous of
Taylor and her associations -- I hope I cannot be sued for libel, because
I am trying to tell you the truth.
Q. You need not have any apprehension on that score.
A. I am trusting you and trying to tell you what I know of this thing. Then
came very clearly into line the intense bitterness between Margaret and
her sister. I saw little of it in Mary because I saw little of her.
...
A. Whatever I have been discussing here -- all purchases of securities under
new names, all of the rest of this I have been discussing here in relation
to the employment of the different counsel, I am positive came after the
Taylor murder. There was untold bitterness mixed up in that.
...
Q. Did you prepare such a schedule or statement?
A. I did. It was a long extensive thing...The purpose of that paper, as
eventually developed, Mrs. Shelby told me, was that this showed that at no
time had Miss Minter had any cash available for the purchase of the
Laughlin Park property. She kept her all invested up. It eliminated the
Laughlin Park property as any property that Miss Minter could have
possibly purchased because at all times she had this block of securities
she had purchased. There was a lot of bitterness over that Laughlin Park
property...
Q. You understood it at the time, did you not, Henry, that Mrs. Shelby was
making the claim in good faith that it was her money that went into
Laughlin Park property?
A. She was making a claim all right.
Q. You understood there was a basis for the claim?
A. You are drawing a conclusion in my mind. I had purchased no securities
for Miss Minter. This total block of securities at that time -- I could
not differentieate between what should be assigned to Miss Minter or what
should be assigned to her mother. Here was a big block of securities,
while purchased in a variety of names, was in Mrs. Shelby's personal
account. Anything developed out of them was retained by her -- a
commission was paid to Margaret for the purchase of that property.
Q. You stated a moment ago that you were surprised that your accounting
showed that the Laughlin Park property was purchased with Mrs. Shelby's
and not with Mary's money.
A. I was not surprised at it. It was only to establish clearly -- I don't
question it probably was Mrs. Shelby's money. I was handling any money
that was there, and it was up to me to determine whether it was her money
as manager's compensation, or whether it was her portion of what was
earned which was used to buy the Laughlin Park property. What actually
developed was that here where possibly there was no designation of bonds
as being Miss Minter's property and reported as such in her income tax
form, anything of that character, it suddenly came around in this set up
whereby there was not a possibility under it to show where there had been
at any time cash available for the purchase of this property by Miss
Minter...
Q. At the time you prepared this account, you regarded it as an honest
account, did you not?
A. If that was Mrs. Shelby's use of the money? I don't quite get you.
Q. Let me put it this way.
A. I recognized Mrs. Shelby as her daughter's manager, and if she said that
was the way the money went, that was the way the money went.
Q. In other words, you did not regard the account you had gotten up as being
a dishonest contract to defraud Mary?
A. No, I didn't at the time, because at the time I prepared that statement it
was to show what Mary was supposed to own. I didn't and I don't know
whether Mrs. Shelby had the idea when it was first prepared but it
eventually wound up against the possibility of Mary ever having the money
to buy Laughlin Park property. That was really surprising to me.
Q. So apparently it was prepared with that plan in mind?
A. I don't know what the plan was. I did what I was expected to do. Later
it was used in that way.
...
Q. You met Mrs. Charlotte Shelby, I believe, as has been stated from the
probation report, during the Liberty Loan campaign in 1917?
A. Either late in 1917 or early in 1918.
Q. Your first business relations with her, I believe, were in February 1920?
A. Yes.
Q. At that time you were employed by Blyth, Witter & Company?
A. Yes.
Q. The report also showed, I believe, that at the beginning of the business
relationship between you and Mrs. Shelby, she insisted that you should be
personally responsible for any securities you might sell her?
A. She did.
Q. What was your answer to any such request by her?
A. I told Mrs. Shelby that the house I represented nor myself could guarantee
the securities that were sold, by reason of the quantity of them and the
number of investors to whom they would be sold, and that for me to assure
her that she would be personally guaranteed in her investments would be an
injustice to others who might not assert a requirement of that kind, and
on the other hand that for me or the house to make any such guarantee to
her was unfair, for the simple reason that it would be a physical
impossibility for any house, with millions of dollars of securities
outstanding, to make them all good in the event of loss.
Q. Were you later called upon to make good any securities which had defaulted
in any way?
A. I was, yes.
Q. When was the first time, Mr. Henry?
A. I made good in the winter of 1922, or early in 1923.
...
Q. What did you state to Mrs. Shelby on those occasions as to her request to
pay that back?
A. I told Mrs. Shelby I could not pay the interest on the Portland Flouring
Mills; that I did not think in the first place it would be necessary and
that is she would wait until the adjustment was made between dividends and
interest on those defaulted bonds, through an exchange for the Sperry
Flour Mills Company preferred stock, that she would probably be taken care
of. Mrs. Shelby said, "I haven't anything to wait for, I have my money
now," and I told her that the adjustment I was satisfied would take care
of it. She said, "You understood very well when I first dealt with you
the circumstances under which I dealt with Mr. Stoddard Jess, who was
president of the First National Bank. He had always been in the position
where if anything went wrong with my securities, he would take care of me
personally." I told her the situation was an impossible situation, and
that I thought it would have been an injustice to Mr. Jess to have imposed
it on him. She said, "It would not have been any imposition on him, for
the simple reason that he was himself the head of the bank, and would see
that the First National Bank took care of anything she had." She came
back and drove at me on the point that I did understand that any
obligations I sold her became my personal obligation, if I could not get
it out of the house, and as a result, in the winter of 1922 or the spring
of 1923 I paid her the interest.
...
Q. BY THE COURT...Why was it necessary for you to make good to Mrs. Shelby on
the interest of bonds she had bought, when there was a default in those
bonds, to make good her losses; that isn't the usual custom of brokerage
houses, is it?
A. No sir.
Q. When you sell customers securities, you do not guarantee that those
securities will continue to pay interest, do you?
A. No, you don't; you maintain quite the contrary position, and the only
answer, Your Honor, that I can give is this: Mrs. Shelby is a hard
trading woman in the first place, as far as business is concerned, in my
personal situation I was confronted by a woman who so far as any other
person I knew of with whom she had done business--well, she pressed down
on them, not only pressed down, but after breaking with them, abused them
or passed criticism on them throughout the business community, and put
them in a position of where, as in my particular case, had developed out
of the income tax situation, put them in a position of, or rather put me
in a position of where, even if I had broken with the account -- it was a
good account and I want that thoroughly understood -- but had I broken
with her, I would not only have lost the business, but I would have been
subject to abuse, and certainly I would never have been free of the
liability that approached a criminal nature, so far as the income tax
return of 1920 was concerned, by reason of one thing I had done in
connection with the return.
Q. BY THE COURT: Then, your position is, in effect, that Mrs. Shelby was in
a position to blackmail you, and you felt she would use that power?
A. I would not say blackmail me, but had any investigation developed out of
the income tax situation, which was certain to come if she went into
litigation with her daughter, the complete onus for what she had done and
been the beneficiary of, with regard to the 1920, 1921 and 1922 tax
returns would have been thrown on me, on the basis of complete ignorance
of what was involved in her income tax picture.
Q. Did you make any inquiry when you were first approached on the subject of
responsibility, to find out whether the statement was true that Stoddard
Jess had also guaranteed her against loss?
A. I couldn't, Judge, and I wouldn't have done it. As a matter of fact, to
me it sounded more like a woman talking at the time and trying to lay the
foundation for something that might happen in the future. Stoddard Jess,
as a matter of fact, was sick, which sickness turned out fatally, as Your
Honor will remember, and it was on his recommendation that she came to me.
...
A. Mrs. Shelby called me [in 1920] and told me she would have a dinner at her
home, and said it would be just a little family party, herself and her
mother Mrs. Miles, and Mary and Margaret and myself. She said she wanted
me to absolutely be there, and that she expected I would have an
opportunity to talk with Mary, and not only listen to Mary, but possibly
correct Mary's viewpoint or attitude toward herself.
Q. At that time, Mr. Henry, did you have any idea that Mrs. Shelby was
attempting to, or going to attempt to deprive Mary of her earnings?
A. Not at all.
Q. Incidentally, when was the first time that you became fully cognizant of
the fact that such an intention existed on the part of Mrs. Shelby?
A. After the preparation of a set of charts by me, some time late in 1923.
Q. Up to that time in 1923, what was your feeling in respect to Mrs. Shelby's
attitude towards Mary and her earnings?
A. I felt that Mrs. Shelby was holding on to the control of the money much
beyond any good effect, so far as Mary was concerned. What I mean, not
holding the actual possession, but withholding information from the girl,
which would possibly raise some question in the girl's mind against Mrs.
Shelby.
Q. What did you feel as to Mrs. Shelby's attitude, whether it was one of
attempting to deprive Mary, or to protect her, up to this time in 1923.
A. I felt very much that Mrs. Shelby was trying to protect Mary. I thought
she was doing it in a very unintelligent way, and I told her so.
Q. The things you did at that time, and later, up to 1923, did you do with
the intention in mind, of assisting Mrs. Shelby in doing what you and she
considered to be the best thing by Mary?
A. Yes, I did.
Q. On this theory, I wish you would state what took place there.
A. I sat next to Mary. Mary was at one end of the table, and Mrs. Shelby at
the far end, and I was seated next to Mary. The dinner itself, the
conversation at the dinner, was valueless, so far as this testimony is
concerned, other than that Mary would only answer "yes," or "no," so far
as her mother was concerned, and Margaret was ignored, even by Mrs. Miles,
so just a very desultory conversation with me was had...After dinner, as
we came away from the table, Mrs. Shelby came up to me and she whispered
to me, "I wish you would make some opportunity to have a few words with
Mary alone." I moved around the table with Mary and stood alongside of
the fireplace that was on the side of the room. I went into part of the
conversation I had with Mary at the dinner table. I said, "Mary, you talk
of never again working, so far as the Government is concerned, and Liberty
Loan campaigns, if the necessity arises. I don't think you believe that.
I think you would be the very first one to step out and do anything you
could under those circumstances." Mary very forcefully said, "I would not
have anything to do with it, if I had to do it over again; I would never
have had anything to do with the Liberty Loan campaigns, nor with any war
work in the future." She said, "I was exploited commercially throughout
that entire situation. My what appears to be patriotism, I felt, was done
for nothing at all but to exploit me for the value of the box office."
Q. Did she say who was exploiting her?
A. She told me, "My mother carried me around from one place to another under
circumstances which I did not like, for the sole purpose of getting the
publicity value from the effort...From the time I have been a little girl,
an infant virtually, my mother has used me for commercial purposes, and
has used me for my earning power." She said, "I have been surrounded
always with the business associates and friends of my mother, who could be
of value in making further commercial progress." She said, "I have been
deprived of my childhood; I have never been permitted to play with
children of my own age or associate with them," and called my attention to
the night before I had gone to Australia, when at Mrs. Shelby's request I
had attended a dinner in the Helen Mathewson house. She said, "You
remember the type of people you saw there. That has been my life ever
since I was a child." She wasn't much more than a child then. "As a
matter of fact," she said, "whenever I have had a chance to be with those
of my own age, my mother has seen to it that they have been eliminated,
and I have been associating only with studio directors, accountants and
business managers of the film companies, and advertising men," and so
forth. She ran down the line of the type of associations of her mother's
that she had to find her life with. She said, "You know, when I came out
to Santa Barbara, I was only about 14 years old." She said, "That has
been my life, and that was my life even before then, and has been my life
since." Mary called to mind my own youngster. I had a little girl who
was then 5...she said, "You see to it, as the result of my experience,
that the daughter of yours, Barbara, always plays with people of her own
age, and has the association of children and young people, and her own
life." She said, "I am getting -- I am awfully sick of Hollywood, I am
sick of the commercialized existence I have been living in, and the first
time I can, either through the contract ending, the immediate contract
ending or some other way, get out, I am going to leave everything and live
my own life."
Q. Did you report the extent of this conversation to Mrs. Shelby?
A. Yes.
Q. When?
A. That same evening.
Q. You told her what had been said?
A. I told Mrs. Shelby and her daughter Margaret of the effect of my talk with
Mary, and I told them that I felt she was very much dissatisfied, and Mrs.
Shelby said to me, "Just ignore it, do not pay any attention to it; she is
being influenced by someone on the outside."
Q. At this time, in 1920, did you purchase any securities in the name of
Margaret Shelby?
A. Yes...The conversation was substantially that Mrs. Shelby told me she
wished to buy securities in the name of her daughter Margaret Shelby; that
Mary wanted to provide $100,000.00 as a protection for Margaret, and that
Margaret, as a matter of fact, from not being associated with the film
industry, although an actress, was entitled to protection, entitled to
some remuneration from Mary by reason of not being a competitor with her.
Q. Go ahead; did you ever talk to Miss Minter about that matter?
A. I did.
Q. When?
A. In 1923.
Q. What did Miss Minter say about this $100,000.00 fund for Margaret, for not
being a competitor?
A. She told me, "If there is a $100,000.00 fund to be created for Margaret,
it should have been created out of her [Shelby's] own 30 per cent of the
contract;" that so far as she was concerned, she owed Margaret nothing;
that she has maintained her for years in luxury and idleness, and that all
she received from her was envy and criticism. I told her, I said, "Your
mother has told me and Margaret has told me that Margaret was an actress
in the East and that she stayed out of pictures so as not to be a
competitor with you," and Mary told me, "If my mother or Mrs. Shelby could
have made an actress out of Margaret acceptable to the pictures, she would
have had her in them long ago," and she told me that she had attempted by
various facial operations to make her presentable before a camera, and
having failed in doing that, she was now making a misrepresentation so far
as her being a competitor with Mary was concerned, and that if any
provision was to be made for Margaret, it would have to be made out of
Mrs. Shelby's own 30 per cent of the contract.
...
Q. Do you know whether anyone was acting as income tax expert for Mrs. Shelby
in 1920 and 1921, and if so, who was it?
A. Mrs. Marjorie Berger.
THE COURT: She wound up in the Federal penitentiary, didn't she?
A. Yes, sir.
Q. Did you have any discussion with Mrs. Shelby along in March of 1921
concerning Marjorie Berger?
A. Yes, Mrs. Shelby told me that Mrs. Berger would probably call on me for
information concerning her investments, and asked me neither to give it to
her nor to discuss her affairs in any degree with Mrs. Berger, and later
Mrs. Berger did call me and asked that I indicate the securities from
which the income was derived that was to be reported, and I told her that
I did not understand that would be necessary and withheld the information.
Mrs. Shelby, on my telling her of this, told me that Mrs. Berger was
altogether too friendly with Mary, and that any information which she
would receive on investments, she might carry on to Mary, and it was for
that reason she did not want Mrs. Berger to know about them.
...
A. Now, with regard to the income tax. In the income tax for 1921, when I
was consulted with regard to Mrs. Shelby, there were considerable profits
derived through the sale of securities. Mrs. Shelby wanted the profits
shown on the returns of Julia Miles and Margaret Shelby, and not on her
own, while any losses might be taken to her own account. I prepared
statements of those investments made in the previous year or two years,
and submitted them to her and pointed out to her where she was only
courting trouble for herself so far as the government was concerned in
making statements which were contrary to the books of Blyth, Witter &
Company, so far as the purchase of securities were concerned; and
secondly, that the very unusual matter for returns under the name of Julia
Miles and particularly under the name of Margaret Shelby, were not
supported by any figures on Blyth, Witter & Company's books or even by the
ownership certificates filed with the bond coupons during the year. Mrs.
Shelby's only answer to that was, "Mr. Henry, this is my property, and I
can do with it as I please, as between myself, my daughter and my mother.
Whatever income I wish to show as paid to them is quite sufficient." In
so far as my own position was concerned, and she said, "Marjorie Berger
will take care of that, on the information by the return of the Federal
Agent before the return is actually made." I was simply in the position
of having to accept the statement of the woman on her own distribution of
the property and the statement of the income for those years, and the
profits and losses, and take them according to her own allocation of the
property, but so far as the Government is concerned, the return was made
by Marjorie Berger and Mrs. Shelby in association, and the only thing I
could do was to take the very figures compiled and submit them.
Q. Did you do that each year?
A. I did.
Q. You gave Mrs. Shelby the figures showing her actual income on the
securities purchased through Blyth, Witter & Company?
A. Yes.
Q. You turned that over to her?
A. Yes, sir.
Q. And did you know until 1928 that she had not returned the income, or
declared the profits and dividends received by her and turned over by you
to her -- did you know that during any period up until 1928?
A. No, I did not: the only concern I had about her income tax return for the
years 1921, '22, and '23, was the possibility that if an investigation was
held, the Government would show that income had not been allotted
according to the purchases on the books of Blyth, Witter & Company, and
Mrs. Shelby and Mrs. Berger would deny any possible knowledge, and would
refer to me as her financial agent, and as the only one who had prepared a
statement of the income from her securities; but it wasn't until 1928 that
I did know that she had not returned a penny of it.
...
Q. Did you have numerous discussions with Mrs. Shelby, at her request,
concerning the Taylor murder, or supposed murder?
A. I did, yes.
Q. In other words, you were called upon to advise her as to various things
arising out of that?
A. I can say this, Mr. Judson, that immediately after the Taylor murder case
a telephone call came through to my office from Miss Margaret Shelby. I
dodged answering it; I knew what the call would mean, and it was several
days afterward that I finally did come to the house and excuse myself to
Mrs. Shelby for not showing up.
Q. The deposition shows you had numerous discussions about that time
concerning the suppression of publicity, and the purchase of letters from
a Los Angeles newspaper, and so forth, that they had obtained possession
of.
A. Yes.
Q. You also had further discussions about that affair I believe in 1925, when
the case was agitated again, and there was a possibility of the indictment
of Mrs. Shelby?
A. It was in the spring of 1926.
Q. Did you have numerous discussions at that time with her upon the subject
of her possible indictment for the murder of Taylor?
A. It was the possible indictment of Mrs. Shelby in the Taylor murder case
that was the one thing that made me agree, so far as Mrs. Shelby was
concerned, on leaving the country, and her feeling concerning the
possibility of that indictment.
Q. In these troubles between Miss Minter and Mrs. Shelby, were you called
upon by Mrs. Shelby to prepare various charts, accounting statements, and
discuss them with Mrs. Shelby's attorney and various accountants?
A. I was.
Q. What was the first statement you prepared, just in brief, without stating
the details of it? About when was the time of that?
A. I am glad you asked the question, because it is in line with another
observation of Your Honor's, and I would like to straighten it out. It
was in connection with -- in 1923, Miss Minter had again told her mother
apparently, that she had engaged a lawyer, and her mother had established
through some source that Mary had actually visited a lawyer, and Mary
demanded an accounting. I urged Mrs. Shelby to make an accounting to Mary
at that time, and make a segregation of the property, but by all means to
put it in trust for the girl, a plan that once and for all would close out
the troubles that existed between them. Mrs. Shelby insisted upon me
making an account, and furnished me three income tax returns, 1920, 1921
and 1922, which were the sole basis for any making any statement to her.
I protested that to her on the basis that it would unsettle further Mary's
confidence, and unquestionably challenge a genuine accounting from her,
which bothered or worried Mrs. Shelby immensely. This statement, so-
called, was the $165,000.00 statement, and not a settlement, and I would
like to make it thoroughly understood here, that so far as that statement
was concerned, I had no more intention of appearing to represent that to
Mary Miles Minter as a settlement of the property between her mother and
herself, than I would have had of killing the girl. The whole purpose of
the statement at that time to her of any kind was with the idea that it
might relieve the accounting which was large in Mrs. Shelby's mind.
Q. After the discussion you had with Miss Minter concerning this statement
you had a talk with Mrs. Shelby, did you not?
A. Yes.
Q. In which you recommended that Mrs. Shelby knock off of these income tax
returns the expenses charged against Mary, which Mary had said were
clothing purchased by Margaret Shelby and Mrs. Shelby? Didn't you
recommend that to Mrs. Shelby?...
A. I told Mrs. Shelby that if she did not have an accountant go through and
actually analyze the expenses charged against Mary on the income tax
return for 1920, 1921 and 1922, that she should make at least a flat
arbitrary cut in those charges. Incidentally, the charges and expenses on
Mary Miles Minter's income tax return, as returned for 1921, 1922 and
1923, resulted in 1928 in the government assessing an extra tax of
$146,000.00, and to that extent was Mary right in charging that no
accounting based upon the income tax returns was right, and it was with a
knowledge of something of that, that I urged Mrs. Shelby at the time to
have a stringent accounting made.
THE COURT: Let's see if I follow you on that, Mr. Henry. I gain the idea
from what you have said, and also from the probation report, that you had
made a list of the securities carried on the books of Blyth, Witter &
Company, as purchased by Mrs. Shelby, and the income derived from these
securities; that you presented the list to Mrs. Shelby, and that she had
returned to the government a statement in respect to income tax
assessments, which did not c
orrectly set forth the income derived from
these securities, but omitted considerable of that. Is that a correct
statement?
A. I think I am a little confused, Your Honor. I don't know whether the list
of investments made by Mrs. Shelby refers to the forms which I had made up
in 1921, when Mrs. Shelby wished arbitrarily to throw all profit to Julia
Miles.
THE COURT: As I understand it, this list was made up showing the amount she
actually had invested in securities and the income derived from it.
A. Yes.
Q. But instead of using that as a basis for income tax, some other basis was
used, which did not correctly show the securities she held?
A. No, sir; the amounts reported to the government had they been reported
which I did not discover --
Q. That is what I am trying to find out. Won't you please try to answer one
question in a direct manner? Is it or is it not true -- I will make it
simpler, so there cannot be any misunderstanding -- is it or is it not
true that you furnished Mrs. Shelby a list of her investments and the
amount received therefrom?
A. Yes.
Q. Did she or did she not use that list in making up her income tax report?
A. Of 1921?
Q. Yes.
A. She did not.
Q. What did she use?
A. None.
Q. So her income tax report, according to her statement for that year, did
not show the amount of her investments or the receipts therefrom?
A. No.
Q. I see. Now, then, if I understand you further, in making an accounting or
statement to her daughter, she used as the basis for that statement, the
figures returned to the government, and not the actual figures showing the
amount of stocks and bonds she owned?
A. Yes.
...
Q. When was the first time that you felt that Mrs. Shelby intended to deprive
Miss Minter of her earnings?
MR. CHOATE: What is the materiality of that?
MR. JUDSON: It is this: the report states that Mr. Henry assisted Mrs. Shelby
in defrauding Mary Miles Minter, and I intend to show that Mr. Henry felt
that everything he did, up until late in 1923, or the early part of 1924,
was done in the bona fide belief that Mary Miles Minter was in need of
just such protection, and that they could not afford to let her have her
securities, and that it was only at that time in 1924, that he realized
that Mrs. Shelby did not have any such laudable idea in mind, but intended
to keep everything she had, which was everything. That is the purpose of
it.
THE COURT: I think that is a proper line of inquiry, but that question only
calls for a date.
A. Late in 1923.
Q. Do you recall what brought that forcibly to your mind?
A. Yes.
Q. What was it?
A. A meeting in Mr. Mott's office, and the preparation of a four-page report
of investments supposedly made for Miss Minter, of an accounting of funds
due her.
Q. What particular circumstances concerning that matter and this report
caused you to feel that way?
A. Mr. Mott, after looking over that statement, said "That is fine, so far as
the statement of the securities purchased for Miss Minter is concerned,
but her attorney is anxious to know about the Laughlin Park property and
Casa Margarita, and the property at 721 New Hampshire. What about that?"
and Mrs. Shelby turned to the statement and said, "Mr. Henry has taken
full account of that..." and it showed that in the years from 1920 to 1923
that Miss Minter could never have had the money to buy the Laughlin Park
property which had just sold for $185,000.00.
Q. In other words, by means of this chart, which you yourself prepared, you
were fortified in a position which wiped out any possibility of Miss
Minter being entitled to any part of that $150,000.000 profit made on that
property?
A. Yes.
Q. When you prepared the chart, did you have any such thing in mind?
A. I did not.
Q. Did you know that Mrs. Shelby was going to use it for any such purpose?
A. I did not.
Q. This lawsuit and this trouble went on for a period of several years, did
it not, between Miss Minter and Mrs. Shelby?
A. Yes, it lasted from 1920 up until the final lawsuit, which I don't think
was dismissed until February of 1928.
Q. During that time you were called upon to see Mr. Mott, Mrs. Shelby's
attorney?
A. Yes.
Q. And Mr. O'Melveny, Miss Minter's attorney?
A. Yes.
Q. ...And go over these various charts you had prepared?
A. I did.
Q. Were there various legal matters taken up by Mrs. Shelby with you, at
which time she told you she would not discuss them with anybody else,
other than you, and did you perform services as the result of those
things?
A. I did, yes.
THE COURT: I have come to the conclusion that Mrs. Shelby's handling of her
daughter's affairs was not for the best interest of the daughter, but in
effect she was feathering her own nest at her daughter's expense. Did you
confide that discovery to Miss Minter?
A. Did I?
Q. Yes, did you tell Miss Minter about it?
A. No.
Q. Did you go to the District Attorney's office with any information that
might lead to any investigation?
A. I did not.
Q. You continued to work for Mrs. Shelby and aid her in her schemes?
A. Well, if Your Honor please --
Q. Can't you say "yes" or "no"?
A. I worked with Mrs. Shelby.
...
Q. The thing I cannot understand is this: if you felt that Mrs. Shelby owed
you money, and I can very well understand your feeling that, considering
all the time you had put in on her affairs, why you didn't ever ask her
for money, or render her a bill.
A. Had I asked Mrs. Shelby for five cents, in connection with that matter, in
view of what had transpired so far as the income tax and the rest of it
was concerned, Mrs. Shelby would have looked on me as a blackmailer.
Q. That is your conclusion.
A. My conclusion, yes, but I had had to talk to her about her own attorneys,
one after the other, about real estate men that dealt with her, about
moving picture people who had dealt with her, about her own daughter, and
in no single case did I ever find one word of appreciation for a service
rendered where money had been paid for it, and in every case did I find an
effort to avoid payment. I did have, so far as the account was concerned,
the desire to maintain that account for the house; the house looked to me
for the maintenance of it as a matter of business. On the other hand,
this long period of association that I had with her, the various channels
into which it carried me, all that Mrs. Shelby saw in that was -- well,
what she saw in it I cannot tell you, unless she seemed to think it was a
beautiful friendship of some kind.
...
Q. Did Mrs. Shelby authorize you to deposit various and sundry amounts of her
money in your own account?
A. She did.
Q. In your personal account?
A. Yes.
Q. Not even a trustee?
A. Not even a trustee. I made checks out, made them personally, Leslie
Henry, without "trustee."
Q. Then you took checks and drew them out of that account and made them
payable to the fictitious persons and deposited them to your own account,
didn't you?
A. I don't understand exactly what you mean.
Q. You took money out of these so-called fictitious accounts and took
proceeds from time to time and put the amounts in your own account?
A. What fictitious accounts are you referring to? There were no fictitious
accounts.
Q. How about the name of Landis?
A. Those were names of persons through whom Mrs. Shelby purchased securities
for herself and her daughter, Margaret Fillmore.
Q. You took money out of the Landis account by check --
A. Not at all.
Q. How was it taken out?
A. It was Mrs. Shelby's own money used for the purchase of those securities
and when those securities were surrendered to Mrs. Shelby in the name of
the fictitious persons, the receipts for the bonds bearing the names of
the fictitious persons were signed by Mrs. Shelby herself or her daughter
Margaret.
Q. In many instances those checks were endorsed by your secretary, Miss
Baber?
A. I don't quite understand you.
Q. You don't follow me?
A. No. Let me ask you this: do you mean dividend checks received in the
names of fictitious persons on stock?
Q. That is correct.
A. Exactly.
Q. Yes.
A. Those were received in the names of fictitious persons: they were the
property of Mrs. Shelby, and the fictitious person's name was endorsed,
and Miss Baber initialed it or I did and deposited it, and the funds
forwarded to Mrs. Shelby.
Q. What happened to the funds when the check was endorsed?
A. It was deposited in my account, the account of L. B. Henry, Trustee.
Q. In many instances, it was your personal account, wasn't it?
A. Oh, yes.
Q. And how did you, in your own account, distinguish between the assets of
Mrs. Shelby's account and your own?
A. It was difficult to establish.
Q. It was almost like a family affair, wasn't it? You put her money in your
account, and you just used it when you wished?
A. Mrs. Shelby, at the time you are referring to, was in Europe, and the
funds advanced to her, or to her daughter, were on her own order, those
funds made available to her as she required them. They were not supposed
to be in the account of Blyth & Company, but they were supposed to be in
my personal possession. She knew about that, and knew I was the purchaser
of drafts forwarded to her in France.
Q. There was no written agreement between you and Mrs. Shelby for the
transaction of her business?
A. There is enough -- no, there was no written agreement.
Q. At the time she began to transact business with you, she did not agree to
pay you a salary, or retainer?
A. Not at all.
Q. Then your own statement that she had not paid you anything was -- the fact
she did not pay you anything, was not the refusal to live up to any
agreement on her part?
A. No.
Q. There never was any understanding between you and Mrs. Shelby with respect
to payment for your services?
A. None.
Q. And as the Court asked you at the inception of this hearing, you never
tendered an account to her asking her to pay for any of these services?
A. Exactly.
...
THE COURT [after rendering a verdict]: Now, there is just one other
thing that I feel it is my duty to say in this connection, gentlemen.
In summing up the matters set forth in the Probation Officer's
report, and in referring to the matters, or some of the matters contained
in the deposition, the Court has had occasion to say that it appears
therefrom that Mrs. Shelby is just as culpable in one way as Mr. Henry is
in another. I make that statement, however, solely by reason of the
statements set forth in the Probation Officer's report and the statements
made by Mr. Henry, and also from some material in letters attached to the
deposition in the civil case, which letters were written by Mrs. Shelby to
Mr. Henry. Mrs. Shelby, of course, is not on trial here, but naturally
her name has had to be brought into this matter and I don't want anything
I have said to be regarded as condemnation by the Court of someone not
before the court on trial. I do say this, however, that sufficient has
developed here that I believe it to be the District Attorney's duty to
make a very thorough investigation, either through his own staff of
investigators, or by referring the matter to the Grand Jury of this
county, to determine whether or not sufficient evidence upon which to base
an information or an indictment against Mrs. Shelby in connection with the
use by her of funds belonging to her daughter, Mary Miles Minter, if it
develops that has been done, can be obtained. I think the District
Attorney should have such an investigation made, and I think it is the
duty of the District Attorney, and I request him to perform that duty, to
take the matter up with the Federal authorities, in order that they may
make such investigation as they may deem proper with respect to the
alleged violation of the federal income tax law on the part of Mrs.
Shelby, or possibly on the theory of conspiracy between Mrs. Shelby and
Mr. Henry, for the purpose of defeating that law and evading the payment
of those taxes. I don't say that I am convinced that Mrs. Shelby has been
guilty of those things; she isn't on trial, but I do think that sufficient
has developed by the statements of Mr. Henry and by the letters that Mrs.
Shelby herself has written to make such an investigation not only proper
but desirable. I therefore make that request to the District Attorney
that he have those matters gone into very thoroughly...
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For more information about Taylor, see
WILLIAM DESMOND TAYLOR: A DOSSIER (Scarecrow Press, 1991)
Back issues of Taylorology are available via Gopher or FTP at
gopher.etext.org
in the directory Zines/Taylorology
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