Page 5


The one great rule of composition is to speak the truth’. Thoreau Trxas Obitrurr An Independent ‘Liberal Weekly Newspaper We will serve so group or party but will hew hard to the truth as we find it and the right as we see it. Vol. 47 TEXAS, FEBRUARY 1; 1956 10c per copy No. 39 Officials’ Loans Reported Whites Accused In Negro Death ‘Playful Night of Gunfire’ .Ranger Quotes Accused AUSTIN TWo white men, 21 and 22′ years of ,age, may face trial in East Texas on a charge that they .murdered a Pi-yearTold Negro boy, John Reese, and injured . two . younger, Negro girl:, in what a Ranger caPtain said they called “a playful night of gunfire’ , near Longview October 22. The two were arrested’ la_St week. They both made . statements. District Attorney Ralph Prince told the Associated .Press it was “a case of two irresponsible boys who were attempting to have some fun by scaring NegroeS.” Later he told a Houston reporter that the :two -acctised parties felt their acts were not racial. “That was their impression. The boys. They didn’t feel it’ was racial,” Prince said -. ‘ . Asked if he agreed with them,Prince replied : “Oh, certainly it . was part racial. The impression we’ve been having to smother is that -it is racial.” Ranger Captain Bob Crowder was quoted as stating last . week “In our investigation, . we failed to find anyoneincluding Dean ROSS Observer editor accused; replies. Pad; 7. who will say there is a racial disturbance issue at alt at any time, in theSe shootings.'” . Prince_Said would call an Austin weekly newspa per editor before the grand jury to explain why he failed to turn over “important evidence.” The Observer’s editor said he would be “delighted” to appear. Prince charged the -editor “tried to create the insinuation that a .racial .issue .was at stake and the ‘lives of Negroes were in Crowder arrested Dean Ross, 22, while he was on his way to the chemical plant near . Marshall where’ he works. Joe .Simpson, 21, was ‘arrested in Houston. They are both from Tatum, near Longvieviz:. The Ranger said Ross told him he -and Simpson had been drinking beer after seeing a movie in Longview and “the thought ,occurred to us,’Let’s make a raid’.” Crowder was quoted as saying that Simpson admited responsibility . for firing into a Negro school bus down the road from the cafe at which the fatal bullets’ were fired Oct. 22, and that Ross admitted firing into the home of John Beckworth, a Negro and a relative of the school principal in Mayflower. \(Mrs. Beckworth has stated she was kneeling at her bedside saying her midnight prayers and that Crowder stated Ross told him in the presence of newsmen that he was also responsible for other shootings in the Negro community of Mayflower in March, April, and June last year< Rangers were reported searching through driftwood along the banks of the Sabine.,;River for the .22-caliber rifle that was reported to have been tied to a log and set adrift on the Sabine. 4We have hopes it may have lodged in a drift," Crowder said. Earlier police reports said 27 bullets were fired, but news re-ports cited the figure 24 last week. Justice of the Peace W. M. MeHar Continued on page AUSTIN 'A wholly-owned subsidiary of a Houston insurance company has made mortgage loans on the homes of three Austin officials and one .specialist in pOlitical public 'relations here, but there is no indicatiOn at this time that they were other than ordinary loans. American General Investment Corporation, a mortgage loan house entirely owned by American General Insurance Company' of Houston, accepted indebtedness notes on homes from rnsttrance 'Commission Chairman J. Byron -.Saunders; Herman Begeman, head of the automobile department in Saunders's casualty sion of the Cominission ; and Jack Dillard, appointment secretary to . Governor Allan Shivers. The sums of the promissory notes were .$17,500, $9,500; and $17,000, respectively. The deed of trust records in Travis County courthOuSe do. not specify the interest rate :of the loans, but Begeman stated his was 4.7.5'percent and Dillard is paying 5 percent. These are standard charges,* the Observer is informed. . . Saunders: could not be reached early this -week.: His note -provides for re payment of $113.09 on March 1; 1954, and each month through Jan. 1, 1974, and the balance'Feb. 1; 1974. , All of these notes were consutn-mated after 'these officials accepted their present positions in the stategovernment. The same investment company has alSo extended a $25,000 -mortgage loan to John .VanCronkhite, former campaign aide to Shivers and presently a AUSTIN Turmoil continues in Texas insurance as the Waco 'grand jury resumes its probe this week. Garland Smith has resigned the Insurance COmmission, Governor Shivers has blasted the industry, Rep. Sadler says maybe Shivers shOuld be impeached, more -companies cloSe. It alniost takes a program to find -one's way -through the maze of charges and events. Smith quit under fire Monday. He said his doctor said he needed to "rest for an indefinite period of time." Shivers accepted the resignation with regret, noting that although Smith is being criticized for clOsing unsound companies, ,"I believe -the future will commend him for initiating this worthwhile program." Smith, who came up the political ladder with Shivers, stepped down as commission chairman earlier in January and then entered a hospital wh e n his ulcers began bleeding. Smith said his conscience was clear of "any sense of wrongdoing" and that any error he made had been "of judgment." He told, the Governor he had been made a "whipping boy" and that the real motive of criticism of him was "to strike at you by attacking me." Sen. William. Fly, chairman of the Senate investigating group, said "It is best that Shiith has resigned." The Governor, who said in January he has "full confidence" in all the commissioners, charged the insurance Sindustry has "done very little" to avoid its -present trouble. James Swift, vice president oi Sout,lkisrgliem Life 'political adviser to Reuben Senterfitt, an announced candidate for governor. VanCronkhite told the Observer in Austin he believes the interest rate is "about five percent." The loan is on his home. A spokesman for American General InvestmentCorporation told the Cobserver from Houston: "I can definitely assure you that they would be nothing but routine business'. Our operation is entirely separate *pm the insurance company., . If He said he didn't recall any of the loans but the one to Saunders. He said the company has "several hundreds of thousands" of dollars in loans outstanding in Austin. Deed records for the county reflect extensive company activity here. . American General Investment is one of the large mortgage lending firms in the state. It represents a number of out-of-state financial institutions, such as Metropolitan Life. E. R. Barrow, vice-president of Ainerican General. Life Insurance of Houston, told the' Observer that the going iiiterest rate for such loans in Austin is now about five percent. . Dillard said: '"I had several compa.nies I could have Made the loan through."' He said he had an insurance policy with American General Life:before he joined the Governor's staff in September, 1954. The note, dated December, 1954, is payable $109,86 monthly to December 1, 1974 and the balance Jan. 1, 1975. It is on his home at 3513 Lakewood Drive. Bergman said he became head of the auto department in. 1951. His loan on his home at 3313 Bomtie Roadis dated Dee. 1953, and is payable $73.90 Ex-Commissioner Says Critics Aim at Shivers Dallas, .prdvoked the remark by recommending a one-commissioner insurance authority. Ralph Yarborough called Shivers's complaint "a shocking confession of governmental incompetence.", Legislators called for a special session. A Houston Chronicle questionnaire drew statements from 17 'solons that they . see such a need. Rep: Jerry Sadler, Percilla, agreed, said impeachmetit of Shivers should be considered if he keeps backing the insurance commissioners, and .called for impeachment of some legislators who were paid by U.S. Trust & Guaranty, resignation of House Speaker Jim Lindsey because he's also holding a-private job \(executive vim-president of the Texas Good Roads Assn., backed, says 'Sadler, by cement interests trying to sell House probers heard'A. J. Bristany, U.S. Trust claims attorney, tell of Dallas C.P.A. -Felix Einsohn's mYsterions. role as manager of the company from July through September. "Einsohn seemed, to be a front man of some kited," Bristany said. "He had a heck of a lot more authOrky than I realized, btat he seemed. to be getting his orders from somebody else, who, I don't know." Bristany felt 'Shoemake was "bound" by whomever Einsohn represented. \( See Observer for Dec. 28, subsequent issues. The Observer has been informed by Sen. Parkhouse of Datlas that BenJaek Cage of Insurance Company of Texas was to be a member of the prospective new man a month from Feb. 1, 1954, through Dec. 1, 1968 and the balance on Jan. 1, 1969. VanCronkhite s.a id his loan was "the same kind you'd have on your , house." He resides at 2414. Harris Blvd. in" Austin. His $25,000 note is 'payable $197:47 a month from Jan. 1, 1956 to Nov. 1, 1970, and the balance Dec. 1; 1970. It is dated Nov. 28, 1955. Mark Wentz, the other insurance commissioner, also boUght a home after his appointment to the board. Great .National Life Insurance Co. carries his $15,000 note on his home. . L AST WEEK. the Houston Post reported . that Garland Smith, now resigned from the Insurance commission, borrowed . $6,000 -at 4 percent on two Austin lots from International Life Insurance Co. of Aus-. tin. This was done two weeks after the state's new rental agreement with the firm went into effect. The -Board of Control 'explained the fact that the state had agreed to pay International Life `$6,643 rental a month for the Insurance Commission's offices in the International Life Building, in spite of the fact that it had receiveda. lower bid, because the low bidder' did not ,have as much space as the Insurance CommiSSion needed.. Will Knox, former state insurance liquidator, now ,general counsel for International Life, explained his failtire to file the deed -of trust. on the $6,000 note to Smith by saying: just couldn't see any sense of spending the $2 for filing." Charles -McCormick, president, of the company, said. it was "a routine loan" and he would guess "most of the o Continues Rentte Allred. former attorney for the 'state's liqUidator, suggested the House committee call Atty. Gen. John Ben Shepperd to elaborate on statements . Shepperd made indicating he did not trust the Insurance Commission with advance information on a legal action against an insurance company and that he was getting resist -ance in prosecutions. Tzvo reporters, Torn Martin of the 'Houston Post and Ronnie Dugger of the .Observer; should also be -called, Allred told the . committee, to detail quotes they published from' Commissioner Saunders that he might have told . -Allred in mid-1954 that U.S. Trust was 'insolvent. Allred testified Saunders told him it was "broke," and, Saunders flatly denied it on the stand. he might have said it was insolvent. Senate investigators were told by Paul Connor, legal examiner of the board, that "actually there was no difference" in the board's position between June, 1955, when it found the company insolvent, and . December, 1955, when it closed the companyit says -nowto prevent a. run on its asU.S. Trust officers and directors said in Austin court Monday that they were merely "employees with titles" and that Shoemake was the "king bee." The Waco D.A., Tom Moore, told Houston Jaycees unanswered questions abotit U.S. Trust include these: why did the commission allow U.S. Trust to operate 18 months after it knew its generalcondition ? have other Smith Quits; Turmoil