be sure that what representation the Chairman makes today, we would observe knowingly. So, consequently, I for one-whether it be due to my ignorance or unintelligibility-am unable to properly comprehend just exactly what the phraseology "being a compensation for valuable services rendered by each " is intended to cover. If the gentleman would kindly enlighten us as to that, we would probably be able to vote upon this Canon intelligently and with the firm determination that none of our acts or conduct would be contrary to this Canon.

Mr. Boston:

The gentleman has omitted all of the limitations except one. I have an idea if he would go through the respective limitations I have omitted in reading, he would not have the same obfuscation.

My saying I was not engaged in the collection branch of the profession was not intended to discriminate against anybody. It was merely an explanation of my failure to carry in my own recollection the rather long rate schedule which has been adopted by a number of people, with which I should have been entirely familiar if I had been engaged in that branch of the profession. I have the same ground for pride that the gentleman who has last spoken has.

Julius Henry Cohen, of New York:

In view of the discussion that has taken place, I move that we separate the consideration of that portion of the Supplementary Canons that deals with Division of Fees at the bottom of page 245 from the rest of the report.

(At this juncture, Chairman Whitman retired, and Past President Chester I. Long assumed the Chair.)

J. Purdon Wright, of Maryland:

On behalf of a great many commercial lawyers throughout the country, I would like to say this with respect to this Canon, and also as a member of this committee of which Mr. Boston is the Chairman

Mr. Boston:

I yield the floor. Mr. Wright is a member of our committee. I would like to resume the floor. I am not surrendering it.

Chairman Long:

The question before the house is whether there should be a division, or whether all Canons should be voted on at the same time. Are you in favor of the division or opposed to it?

Mr. Wright:

I am opposed to the separation of this Canon from the others. Chairman Long:

On the vote?

Mr. Wright: On the vote. This committee, as Mr. Boston has explained, has been in existence for four years and has worked very hard on the subject of these Canons. They have given the greatest consideration to the arguments for and against the Canon on Division of Fees. I represent a large body of commercial lawyers and I think I can speak for them. If you care to call that "collection business," you may. I am not ashamed of that. I want to say to you that the commercial lawyers in the country make a distinction between commission on collections and the fee which is charged for a suit on that collection. The commercial lawyers are anxious to have a rule laid down and a canon established which will prevent any lists and any organization advertising that they divide their fees.

The commercial business, however, must go on. On a division of the commission now, there is a distinction between a legal fee and a commission, in the opinion of the commercial lawyer. If a matter comes in as a collection and it is collected without suit, there is simply commission. If it is necessary to carry it to litigation, arrangements are made for a suit fee, or for trial fee, or for retainer. Now as to that fee, that is purely a legal fee and not a commission. As Mr. Boston has said, it is a fine distinction, but there is a distinction.

Now it seems to me you will be doing a great injustice to the committee that has spent so much time in preparing this report and, as your Chairman has explained to you, considered the question from both sides and has had delegations of commercial lawyers before it trying to explain to it how they do their business, by cutting out this Canon from the report. You will do a great injustice to the commercial lawyer because you will make it im

possible for him, unless you adopt a Canon such as this, to quit dividing his fee. Heretofore it has been a common practiceI want to get away from it—to divide the legal fee with laymen. Why? Because certain lists ask or require division of fees.

The commercial lawyer wants to get away from division of the legal fee, but he does not want to get away from division of the collection commission. If you cut those out, you remove the Canon that will enable the Committee on Ethics to enforce, or the Grievance Committee to enforce the rule, which otherwise they would not be able to enforce. In other words, we practicing commercial lawyers are anxious that our legal fees shall be undisturbed as far as the layman is concerned. We are not anxious, however, to have the practice of dividing the collection commission with a layman interfered with. The collection commission rate has been established recently again at fifteen per cent, as Mr. Boston says, on $500 and so on, and on a pro rata basis. That is the established way of doing a collection business. And throughout the country of the United States there are many lawyers, especially in the country districts, who depend on the collection business for a good deal of their livelihood. I say to you gentlemen that it would be a great mistake to remove this. Canon from the consideration of the report or in any other way to interfere with the language.

Mr. Cohen:

May I be heard on the matter, Mr. Chairman?

Chairman Long:

The question before the house is not on the merits of this particular Canon. It is the question whether it shall be voted on separately. Am I right on that?

Mr. Cohen:

It is my motion, Sir, and that is my intention. I think the previous speaker misunderstood the situation and proceeded to a discussion of the merits of this particular Canon. That is not my motion. At the appropriate time I hope to be heard on this particular Canon and on its phraseology. All that I hope to do at this particular time is to indicate that we could perform our work more efficiently if we separated the discussion of this portion of

the report from the rest of the report; and for the purpose of making my point, and without discussing the merits of the Canon either in form or in substance, I find myself in such difficulties as these.

On page 248 the report says:

The canons of the American Bar Association apply to all branches of the legal profession; specialists in particular branches are not to be considered as exempt from the application of these principles.

The last argument that was made was upon the theory that there is a specialty in the law which is entitled to exemption. I find on page 246 under the head of " Intermediaries":

The professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between client and lawyer.

I cannot reconcile that with any system which permits a forwarder, a lay agent, to go out and solicit and advertise and develop business and get one-third of the commission for doing it. I want this thing clarified. If we are going to adopt Supplementary Canons, let us do it as the gentleman from San Francisco requests, giving clear, definite advice to the lawyers of the country. If we are going to split the practice into halves or quarters or thirds and make one set of rules for so-called commercial lawyers because they have organized into a separate group, then don't let us condemn it as improper under this last Canon which we have adopted. At least let us act as lawyers, with clarity and intelligence and understanding.

My understanding has been exactly as the San Francisco lawyer says, and as Mr. Wright has just said, that the custom has been to divide, the lawyer who receives with the forwarder. Personally I have never been able to justify that. I have not done it in my particular practice, and I don't propose by any act of mine to let the laity of this country control that any further, and that is what this amounts to. And we must be very careful in the statements that we are making that we will not be too ready to compromise in one paragraph and denounce in another. My motion is to separate so that we may vote intelligently on each one of these propositions.

James M. Graham, of Illinois:

I am in favor of the motion made for the separation of this paragraph or section from the rest, and I think that the Chairman, Mr. Boston, has confessed judgment on that point. In answer to my remarks a while ago he stated an illustration of a fee of $7.50 and admitted that it made very little difference whether the lawyer gets five and sends $2.50 to the forwarder or not. Now we are considering a question of professional ethics under the head of Ethics, and it does seem to me it makes a very great difference, that it is not a question merely of degree, but a question of principle. I think that the two matters should be handled separately, and that the paragraph at the bottom of page 245 should be considered by itself.

Mr. Boston:

Mr. Chairman, having been accused of confessing judgment I rise to a question of personal privilege. I think, Mr. Graham, that dividing the suit fee would be a violation of this Canon.

Chairman Long:

The question before the house is on the separation only. The Chair does not wish to direct the form of this debate, but I hope that the speakers will confine themselves to the question now before the house, and that is whether we shall vote on them all together or whether we shall separate the other canons from this one at the bottom of page 245.

Joseph Matsen, of Washington:

I am not in favor of separating these. I think the Canon as drawn is proper. I think the facts arising or which might arise with every collection have been overlooked. When a man forwards a $300 collection, we will say, to a lawyer, if that collection is effected without suit there is a commission of $45. One-third goes to the forwarder and two-thirds is retained by the lawyer. If, however, the lawyer is unable to effect collection he recommende perhaps that suit be brought. If suit is authorized he makes a charge for the institution of that proceeding and the taking of a judgment but does not insure that the suit will effect collection. If, after the institution of suit or taking of a judgment, he does effect collection he is then entitled, as I understand it, not only to