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THE COX CASE The one great ride of composition is to speak the truth. Thoreau 011r Trxas Milorrurr We will serve ow group or party but will hew hard to the truth as we find it and the right as we see it. An Independent Liberal Weekly Newspaper Vol. 48 TEXAS, MARCH 19, 1957 10c per copy No. 46 Heat is on Smith, Saunders, Others Dies Hunts ‘Radicals’, Ralph Hunts Ibn Saud ICT Financial Links Found f + AUSTIN A new committee, “Texans for Dies,” is circulating large mailing lists saying Congressman-at-Large Martin Dies’s post “will be eliminated when the state is redistricted shortly” and charging “It is a realistic fact that all the Socialists, Radical Liberals, Marxists and Internationalists will be organized under the direction of paid professional propagandists and trained political campaigners to liquidate Martin Dies.” Hugh Prather, Jr., is state coordinator of the committee. It states in another piece of literature Dies is for cutting taxes, the national debt, and foreign aid, is against federal aid to education and the “so-called civil rights bill,” and signed the Southern Manifesto condemning school integration. Dies himself warned of “Nor Yarborough Said Strong In the Brush Country AUSTIN The Observer has received surprising reports that Ralph Yarborough, who has never been very strong in South Texas, will carry a substantial portion of the brush country this election. The Webb County machine has not taken a stand on the election yet, and we have learned from Laredo that Webb County Independent Club leaders consulting with Governor Daniel in Austin have not been able to elicit from him an expression of preference among the candidates. Yarborough sentiment is growing throughout t h e counties around Webb, and an endorse them money” in the election, said he is against federal aid to education and backed crippling amendments to the Brownell civil rights bill, and called for statements of views by the other candidates. Ralph Yarborough was endorsed by the El Paso HeraldPost. He visited Cactus Jack Garner, former vice president, in Uvalde, and an aide said Garner advised him: “Win, son.” Formation of “Texas Women for Yarborough” was announced with Mrs. R. D. Randolph of Houston, Democratic national committeewoman from Texas, the chairman. Yarborough plugged an increase in’ personal income tax exemptions from $600 to $800 a person and continued his criticism of $200 million U.S. aid to King Ibn Saud of Saudi Arabia. “If King Ibn Saud … can pick up $200 .million of American taxpayers’ money in two weeks, then the American taxpayer ought to be entitled to a little $200 additional credit for a whole year,” he said. “I believe that drouth-stricken Americans are entitled to at least as much consideration as this slave-trading kingdom.” Thad Hutcheson, the GOP Senate candidate, led a radio station KLIF poll in. Dallas-Fort Worth, 25 percent to 23 for Dies, 21 for Yarborough, and 19 for Searcy Bracewell. He hit Dies for failing to vote on the Middle East resolution, calling it “ducking” an issue. He told a Negro audience in Houston he is a moderate on segregation and believes in “gradualism, humanitarianism, education, good will,” and as much local control as possible. Hutcheson released a letter from President Eisenhower saying that “both for Texas and for in AUSTIN The Insurance Company of Texas, which grew to a multi-million dollar operation in which thousands of Texans lost money, was born illegally and kept alive by financial manipulations a n d possibly by favors to key officials and employees of the Insurance Commission, it is now indicated. BenJack Cage, towering, persuasive president of the insurance empire, entered into an oil royalty transaction in which ICT paid Insurance Commission member J. Byron Saunders $7,000 in monthly payments of $300 and $500. Cage also made a deal to pay Insurance Commission Chairman young son-in-law, Max Wayne Rychlik, with whom Smith is now in private business, a salary of $700 a month on a job that involved no work. In addition, ICT payments of $75 monthly for “retainers” for accountants were made to two examiners for the Insurance Commission, R. R. Butler and L. W. Blanchard. Both Saunder and Smith appeared before the special House investigating committe probing ICT affairs and denied that the business transactions had any connection with or bearing on their duties or decisions as insurance commissioners. Saunders, under questioning by Atty. General Will Wilson, testified he had simply needed cash, so he sold some oil properties he owned in Wood County to Cage, who was acting for the ICT Discount Corporation. He produced a contract agreement dated Jan. 11, 1954, in which he agreed to convey his small but valuable equity in nine asphalt-grade oil wells to ICT for $6000, with the company to let the royalties of approximately $100 a month from the property’s production. apply to pay off a $4000 bank lien. The former commissioner said he had originally paid $6,500 for the property, paying $1,000 down and executing a note at a Tyler bank for $5,500 with an arrangement for royalty payments to be paid to the bank to retire the note. He said he sold the properties, which he had been told were worth over their anticipated production years about $15,000 to $20,000 to ICT for “approximately $10,000,” that was, $6,000 and the remainder of the note of around $4,000. Saunders disclosed he made the deal with Cage about the second time he ever met him. The $6,000 cash was, he said, to be paid at the rate of $300 monthly from Jan., 1954, through June, 1955; then the payment was to increase to $500 monthly until the remainder of the $6000 was paid. Wilson, with polite but firm examination, produced 17 ICT checks to Saunders totaling $7,000 a full $1,000 over the stated sale price. The checks varied from a $900 payment on April 16, 1954, to ten $300 checks from August 17, 1954, to June 8, 1955, followed by five $500 checks from July 8 to Nov. 14, 1955. There was also a $600 check on Oct. 5. Looking quite puzzled, Saunders told the committee he guessed Cage had just “overpaid” I him for the property. He later’ said under questioning by Rep. James Cotten, Weatherford, that he would “repay’: the money to ICT and that this was the first time he had been aware it had occurred, if it actually did. Several other significant facts AUSTIN People were heard pro and con on the segregation bills last Wednesday night, and the fascinating arguments were, to be repeated and varied again Monday and Wednesday nights’ of this week. The Observer in a special feature on page eight capitulates the tense debates the 21-member state affairs committee heard from church men, Young Democrats, representatives, and lawyers. Members of the committee did not respond to the private, and then the public pleas of Rep. Babe Schwartz, Galveston, that the bills be referred to Atty, Gen. Will Wilson for a ruling on their constitutionality. This boded well Stevenson Firm Told Fate Is in the Balance AUSTIN Former Govern or Coke Stevenson’s firm, Physicians Life and Accident of Dallas, now stands charged by the state to prove why it should stay in business. Most explosive allegation against the company is that it sold stock to individuals for $251,000 and let the money be retained by certain corporate directors; that these directors transferred their personally owned stock to the buyers instead of the company stock. The Insurance Commission says the capital of the stock legal reserve life insurance company is impaired by more than 50 percent and the firm does not have minimum capital required by law. Stevenson retained control of the company at a stockholders’ meeting but admitted the future looked dim. The Insurance Commission also issued an order to Legal Security Life of Dallas to make an additional appraisal of its assets, and the Senate insurance committee is investigating five firms besides ICT Insurance Co. about the Saunders-Cage transaction were developed. First, Saunders listed the income for tax purposes simply as straight income rather than showing it as a business profit and taking advantage of exemptions for his original investment of $1,000 and the $1,500 payments on his note. His tax statement for 1954 showed $3,600 of the money as a “legal retainer,” and in 1955 $3400 was shown as “law services.” Pointing up this fact, Wilson declared: “In other words, you for the bills themselves, for it indicated some of Speaker Waggoner Carr’s followers are not under pressure from him to resist them. Schwartz was seen moving from committee member to committee member early in the fivehour hearing. Toward midnight he rose, told the committee he didn’t want to vote for any unconstitutional legislation, a n d asked that “one member” propose a ruling be sought from Wilson. “If a member of the committee will stick his neck out …. I have talked to individual members of your committee and I have found no member of the committee who has been willing to make the request,” Schwartz said. “It’s the only decent right thing to do for the legislature of which you are a member.” “Would you appreciate an opinion on the bill’s constitutionality?” Schwartz asked Rep. Alonzo Jamison. Jamison indicated assent. “Would you make a motion to that effect?” Schwartz asked. After a moment Jamison said: “I’ll make the motionI’ll move that be done when it’s proper to do it, Mr. Chairman.” \(The chairman is Rep. W. S. Heatly, PaduRep. Bob Mullen, Alice, who, like Schwartz; is not on. the committee, backed him up in his request for a constitutionality ruling. “I feel that they probably won’t be constitutional,” Mullen said. At 12:47 in the morning, the testimony finally ceased, but Jamison didn’t make the motion. Heatly observed: “They \(the segregation bill had a very definite understanding, we have had definite cooperation. We owe it to them \(not the motionif not, let ’em proceed.” Schwartz looked at Jamison. Jamison shook his head negatively. Heatly sent the bills to subcommittees that are sure to return them approved. For another 15 minutes Jamison, Schwartz, and others stood around talking it over. ment by the Martins of Webb the advancement of the general would cinch the area for Yarborprinciples o f government ough if it developed. Schwartz Asked Ruling on Race Bills; Rejected