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The one great rtati of composition -is to speak the truth. Thoreau Orxas Obstrurr An Independent Liberal Weekly Newspaper We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. Yol. 47 TEXAS, JANUARY 18, 1956 10c per copy No. .47 The Second Look Begins aunders Says U.S. Trust May Not Be Declared Insolvent; 70 to 85 Percent Refund’s Possible 1 Mrs. Roosevelt Says Help Friends AUSTIN It was a relatively tranquil hearing the senators had here Tuesday. Shortly before the Observer went to press Insurance Commission Chairman Byron Saunders had explained that the investors in U.S. Trust & Guaranty may get back 70 to 85 percent of their money _and that the company might not have been insolvent, after all. He testified all day with the other two commissioners sitting behind him silent. The new Senate investigating coinrnittee chairman, Senator Bill Fly of Victoria, asked Saunders if he knew whether Felix Einsolm, Dallas auditor, “began to manage” U.S. Trust in the fall of this year. Fly said he had been told that U.S. Trust president Bs Shoemakestill lingering in life in Wacohad paid “a lot of money to buy the management back.” Saunders said he didn’t know about it. Satuaders said that he had not told Reline Allred, Jr., then attorney for the liquidator in the saintlier, 1954, that U.S, Trust was “broke,” as Allred had testified. Saunders attacked w,ho was to testify Wednesday on certain explosive matters. Saunders reasiewed what he called athe Commission’s “constant surveil-. lance” of U.S. Trust and its subsidiaries since it began an investigation in the summer and fall of 1954. He said those who have criticized the ‘board have done a good bit of “Sunday morning quarterbacking.” Saunders said it cannot now be said for sure that the courts will find U.S Trust insolvent. The insurance cornthissioners told the Observer last month that they were certain it was insolvent. The Observer will review the testimony before the legislative committees in detail next week , THE LEGISLATIVE. COM’ Asaittees themselves. will have to double time for a good while before they can AUSTIN Bascom Giles, who wanted to be governor, surrendered himself to the Huntsville state prison at 6:15 Monday morning. He drove there from Austin in the dark. He left behind him the statement that no other state official or employee was involved in any of the transactiCns for which he was convicted. He will be confined at .Huntsville for from 14 months and 12 dayshis minimum with time off for good behavior s and paroleto a maximum of six years. Formal appeals from his 13 prison sentences are designed to cause them all to start on the same day, because they are all for six years or less, and they will all be served at once. In aggregate they total 75 years twelve of six years and one of three but by agreement between the state, the county prosecution officials, and the defense lawyers, judges in San Antonio, Crystal City, and Austin have made all the terms concurrent. . The prosecution will probably drop a charge pending in Austin that Giles was an accomplice to theft of state funds of $85,875 in November, 1954, because the maximum term for that offense would be five years, and all prosecution officials months ago stopped thinking about recommending that an .Liiles’s Wins be added make the public forget the secret-session explosion last week. As four other members insisted on a secret session on the State Auditor’s report on :payments to legislators and then. released it to the press, Sen. Searcy Bracewell of Houston resigned as chairman and member and went back to Houston; Sen. Jimmy Phillips of Angleton said Bracewell was right, the other four should resign, and a whitewash. is on; whereupon Senator Johnnie B. Rogers of Austin, one of the four, counter-proposed that he and Phillips make their income sources public at Sixth and Congress in Austin. give you three .days to draw a crowd,” Rogers told Phillips. Phillips. said fine: let all the senators on the committee do it. This suggestion, however, did not meet with unqualified approval of the committee. senators Jarrard Secrest of Temple, Rogers, and Wardlow Lane of Center indicated they would make their income sources public if everyone on the committee was required to do so. Senator Ottis Lock of Lufkin said he had nothing to hide but would not permit the committee to be used for “political purposes.” Chairman Bill Fly, Victoria, did not voice a Campaign Funds AUSTIN Garland Smith, insurance commissioner, has’ confirmed that he accepted “small” political contributions for Gov.. Shivers last summer while he was chairman of the Insurance Commission, He said they came from people from “all walks of life,” perhaps’ineluding insurance. “I accepted them and turned them into campaign headquarters I did not keep any records so I do not have any amounts or names,” Smith said. His Terms Add Up to 75 Years But Will All Run at Once to, instead of made simultaneous with, his previous sentences. Another charge pending in Zavala County that he agreed to accept a bribe of $15,000 will be dismissed, since he has paid a $33,000 civil judgment. in the case, and the deal was that if he would do that, the criminal count would be dropped. Last week in Austin he came before the judicial bench of District. Judge Charles 0. Betts. Fifty spectators watched his final He rested an arm on the bench, ‘put his other hand in his pocket, and admitted nine times that he had “advised, encouraged, and aided” B. R. Sheffield of Brady in stealing a total of $58,875 from the state in a veterans’ land transaction in Kinney County. This was the deal in which the Rosenow Ranch was sub-divided and sold to the state at an inflated price for resale to 53 veterans on. long-term notes. Ten of the veterans said they didn’t know they were buying land and diclas’t want it. Ix the first of these ten cases, he pleaded not guilty and was sentenced to three years by n!jury k the position. \(Phillips then commented that all public officials should make Secrest, by the way, was the Senate sponsor of H. B. 240 to regulate U.S. Trust & Guaranty last year. He said last week he would never be a party to “the suppression of information.” Lock did not make any remarks during the debate on ‘whether the secret session should be held last week.. He has stated Shoemake did not offer him a retainer. Rep. Tom Joseph of Waco, author of H.B. 240 which would have put U.S. Trust under the State Banking Commission, remarked.: “It must be noted with great interest : ‘Who is trying to hide what?’ Just as a reminder Sena*tor.Lock was on the Banking Committee which failed to act on this matter at the last session of the Legislature.” Lock cast two votes against reporting H.B. 240 to the Senate floor. P HILLIPS ALSO TOOK occasion to land on Sen. Price Daniel, who is expected to make his gubernatorial intentions clear this weekend during the Texas Press Association convention in Austin. Phillips said Daniel as Attorney General “stamped his approval on the illegal organization of the General American Casualty Company, signing a certificate stating that he had carefully examined its articles of incorporation,” and “he approved U. S. Trust and Guaranty Company’s stock expansion from 25,000 shares to 1,000,000 shares.” Daniel replied . from Washington that he wouldn’t. comment on what any candidate said about him, and then he added : “Approvals by the attorney general of . insurance charters and amendments are limited by law solely to matters of legal form and do not relate to the merits, assets, or worth of any company. Those are matters wholly within the jurisdiction of the State Insurance Commission, No same courtroom where last week lie was pleading guilty to the other nine counts. Occasionally during the 2.1-minute ordeal last week, a suggestion of . a smile played on the lips of the former Land Commissioner. He flushed when he said “guilty” the first time; but he took the rest of it with grave dignity. Betts asked D.A. Les Procter for a recommendation on the penalty, and Procter recommended six years in each case. \(Ten years is the maximum tenced him to six years, each term concurrent, on all nine counts, and Giles paid $18,000 bond and went out of the courthouse. He said he would begin his prison term this month or early next month. He has paid $80,000 in judgments and interest assessed in civil suits and is still a joint defendant in other civil suits amounting to more than $170,-000. He has admitted .he agreed to accept $74,000 in bribes. Sheffield is expected to come to trial in. Austin iR March. The state recovered $61,550 in a veterans’ land civil case last week, alleging the parties authorized J. Paul Little of Crystal City to act as their agent in the sale of Zavala and Dimmit county land. The total civil recovery by the. state in land deals now stands at $442,584 1,500 Liberals Honor FDR at Dallas Meeting DALLAS About 1,500 I i be r al s of Texas cheered Mrs. Eleanor Roosevelt and paid honor to her late husband with a program at once progressive and confident here Monday night. Mrs. Roosevelt. urged support for the March of Dimes and the sponsoring group, Americans for Democratic Action ; she urged everyone to pay their poll tax ; and she called for more economic aid to starving people abroad and for more federal control of our natural resourceswater forests, and grazing lands. She recalled that Congress debated five months on how to pay for wheat for famine-ridden India. Rations in famine areas were two tablespoons of cereal per day, so the old and the babies were dying in the streets, she said. The Russians sent a little wheatbut right away. Mrs. Roosevelt said the communists are bent on world rule in flexibly and that such blundering here gives them a boost. “You have to think about your friends,” she said. “You have to think about how they might have a better life.” The program honoring the late president featured recorded excerpts from his speeches, played while a spotlight focused on Mrs. Roosevelt and a portrait of Roosevelt behind her. Several otherS spoke. Fred Schmidt of Texas C.I.O. said : “Texas labor submits that we cannot be good the world when we deny to a citizen a meal because of the color of his skin” or “exploit the nationals of a neighboring country to maintain low wages in our own state.” Alex Dickie of the Texas Farmers Union said that the economic problem is underconsumption, not overproduction. “I see a world with half its citizens hungry every night, thousands dying daily in the streets of Calcutta. and Bombay, while they holler in Washington about too much food being grown. When are we going to use it to feed the hungry, clothe the naked, and win people to democracy ?” he asked. . Jerry Holleman of Texas AFL spoke of the four freedoms and the need to extend them to other nations. Edwin C. Washington, Jr, Dallas Negro leader, quoting Roosevelt that “democracy is every man and woman who loves democracy and serves the cause of :freedom,” added that “those who do not serve the cause of freedom do not love democracy.” Franklin Jones of Marshall, the toastmaster, said in mock that he had told GoVernor Shivers of the meeting and invited him but that the Governor had replied :. “I don’t believe a word of itI haven’t read a word about it in the Dallas Morning News.” Jones said that as he left him, the Governor was “muttering about free enterprise, tidelands, and the school kiddies.” Other speakers were Otto Mullinax of Dallas, Mrs. Minnie Fisher Cunning -ham of New Waverly, and Ken neth Holbert of Dallas. Messages were read from the three Democratic candidates for the:presidency, Senator Johnson and Speaker Rayburn, former President Truman, and others, GILES ENTERS PRISON AT HUNTSVILLE