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Vol. 49 10c per copy No. 10 Oixao 1,1hrrurr Newspaper The one great rule of corn pesition is to speak the truth. Thoreau 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. An Ind 6 II.9 9 11,91.4A,sS s 1\\1 c O 19, 1957 Banking Board Grants Re-Hearing IT’S ELKINS VS. McASHAN . FOR HOUSTON CHARTER Fired Tech Prof Is Not Candidate AUSTIN One of the most unprecedented and politically pregnant bank charter controversies in recent years has pitted a resources group clustered around Judge James Elkins of Houston against another Houston group led by Harris McAshan and including R. D. Randolph. Last Thursday the State Banking Board, acting by a two-to-one vote, granted a motion for a rehearing on the groups’ charter applications after Atty. Gen. Will Wilson, the “swing man” in the dispute, apparently changed his mind on the matter and voted with State Treasurer Jesse James against Banking Commissioner J. M. Falkner. It was, the board members agreed, the first time in board history a motion for a rehearing had been granted. Under the law applicants have recourse to district court from the board’s decisions. Falkner’s position was that the board would regret its decision “for years to come.” For the Elkins group to get the charter, another precedent would have to be broken. In the past, whenever two qualified banking groups have applied for a charter in the same area, the first applicant has been voted on first and awarded the charter. Wilson and Falkner agree both groups are qualified, while James voted aye on both applications, against Wilson and Falkner, at a June 20 meeting. The McAshan group’s application, according to Commissioner Falkner, was received by the state on Feb. 11. The Elkins group fol Ronnie Dugger lowed with its application Feb. 15. Falkner says if the Elkins group is to get the charter, “somebody’s got to change their vote.” Both sides want to open a bank in. the new Meyerland Shopping Center in Houston. The two-mile trade area around the center contained 40,300 residents as of January, 1956. Two downtown Houston banks, First City National and Texas National, are sponsoring the competing applications. The Elkins group is associated with the for mer, the McAshan group with Texas National. Randolph is vice president of Texas National. His wife is the Democratic national committeewoman from Texas. On June 20 Falkner and Wilson as a board majority turned down both applications on grounds that Houston has enough banks. The Texas National group thereupon applied for a national charter. Then First City National’s group filed its motion for rehearng in Austin. “As a protectve measure,” as McAshan told the board, the Texas National group then also filed a motion for rehearing. Attorneys from three of the strongest law firms in the state Vincent, Elkin s, Searls, and Weems of Houston and Looney, Clark, and Moorhead of Austin for the Elkins City National group, and Baker, Botts, Andrews and Shepherd for the McAshan grouptraded arguments bitterly at the hearing on granting the rehearing Monday of last week. It is relatively unusual in banking circles for two groups to apply for the same charter, but it has been happening recently. Last year, for example, applicants competed for charters in Corpus Christi, Deer Park, and Port Arthur, Falkner said. In each case AUSTIN, LUBBOCK Dr. Byron Abernethy, 48, late of Texas Technological College, is not now and intends never to be, a candidate for public office. “I’ve never been interested in running for anything,” Abernethy told the Observer, “and I think it would be improper to capitalize on this controversy for political reasons.” Thus, Abernethy refuted any validity in the flurry of daily press stories which followed his firing this week, along with two other Texas Tech faculty members. He also dashed the springing hopes of some liberal Democrats who, searching for candidates to run for statewide office in 1958’s races, seized upon his firing and its background as another “Rainey case.” By “this controversy,” Abernethy meant the background of his discharge, along with Dr. Herbert Greenberg and Dr. Per Stensland, by Tech’s nine-man board of directors, a board dom Mated, a member of Tech’s administrative staff told the Observer, by J. Evetts Haley of Canyon, rancher, historian, sometime teacher and a 1956 candidate for governor on a platform of white supremacy. Other members of the board of directors are: W. D. Watkins of Abilene, a cotton oil mill executive; Jim Lindsey of Midland, a daily newspaper managing editor; P. C. Callaway or Corpus Christi, a businessman; Tom Linebery of Kermit, a rancher; Douglas Orme of Big Spring, an oil man; Harold Hinn of Plainview, a mill and elevator operator; Floyd A. Wooldridge of Dallas, a business executive; and C. I. Wall of Amarillo, a gas utility executive. way, Haley, Lineberry and Orme were appointed to the board of the tax supported college by former Gov. Allan Shivers. Gov . \(Continued on. Training Chief Muzzled by the Air Force SAN ANTONIO The official muzzling of an Air Force full colonel at Lackland Air Force Base has, temporarily, at least, dropped a blackout curtain in front of a controversy involving the nation’s only Air Force recruit-training unit and, therefore, the national interest. Ingredients of the controversy include charges that Air Force recruits in basic training were being allowed to substitute roller skating and horseback riding at civilian concessions on the base for the traditional military calesthenics method of physical conditioning, and that officers were ordered to encourage trainee use of commercial concessions. The silenced colonel is James A. Smyrl, 39, a New Hampshire Yankee by birth and a soldier by trade. He’s married to the daughter of a former commander of the French Foreign Legion. For 14 years he’s been an Air Force officer-pilot. He’s a regular \(but a his future would be predictable: A set of brigadier’s stars, possi bly; a cushioned retirement, perhaps even at San Antonio, certainly. But on March 22, 1957, after 26 months in command, Smyrl was fired as chief of the 3720th Basic Military Training Groupa 17,squadron unit with an average trainee turnover rate of about 10,000 men per month and the Air Force’s sole source of replacement airmen. Smyrl was relieved by Major General H. L. Grills, Lackland’s base commander since the retirement, Nov. 1, 1956, of Major General John A. McCormick. Smyrl commanded the training unit 21 and one-half months under McCormick; f our and one-half months under Grills. Smyrl’s relief carried with it an order to appeal, if appeal he wanted, only through military channelsthereby choking off his ability to make public statements. Oil Companies Fight Tax Bite District Judge John Snell has blocked, temporarily, a Sinclair Refining Co. attempt to delay payment of 1956 school taxes to the Pasadena Independent School District. Snell refused Sinclair’s request to enjoin the district from claiming taxes of $576,904 on the ground the company actually owed only ,$424,397. Simultaneously, Sinclair offered to settle at the lower figure with the district school board. The board refused the offer and is preparing suit to collect the higher Sinclair’s petition for the injunction said the board’s assessment of its properties at $38,205,620 was $7,452,130 too high. Meantime, Magnolia Petroleum Co. had asked an Upshur County district judge to enjoin the Gladewater County Line Independent School District from collecting 1957 ad valorem taxes. Magnolia says certain of its properties are assessed far too high and alleges the company is the victim of “unfair and unequal taxation.” Lyman Jones His only actions thus far have been to hire a civilian lawyer, James F. Gardner of the San Antonio firm of Dibbrell, Gardner and Dotson, and to ask the Air Force to convene a court of inquiry to investigate the circumstances of his firing. \(Gardner has requested investigations and help for Smyrl from three U.S. Senators: Texas’s Lyndon Johnson and Ralph YarborRalph Yarborough, and New Hampshire’s Morris Cotton. Yarborough, said Gardner, has shown perfunctory interest and Cotton `some interest.” Gardner quoted Johnson as saying he believes the Air Force could be trusted in the Smyrl case, since “we trust it A team of investigators from the Air Force Inspector General’s Department has flown into Lackland from Washington and elsewhere, talked to Smyrl, suggested he substitute a request for a “board” of inguiry for his original request for a “court.” The difference is that in a “court” of inquiry, Smyrl could subpoena, examine, and cross-examine witnesses; in a “board” inquiry, he would have no such rights. The IG investigators also told Smyrl, it is understood, that he had no right to hire civilian counsel. Smyrl has obeyed the order to confine discussion of his case to military channels \(he refused to be interviewed by the Observer him have talked freely, if fragmentarily, to press and radio reporters. At least one officer hostile to Smyrl has discussed the case on a San Antonio television station. Here, for the moment, the case rests, stalemated, apparently at Smyrl’s insistence that a court of inquiry be called and the Air Force’s refusal, until now, to convene such a court. However, Smyrl’s story has been told in detail in one place: THE MERGER MEET BEGINS JULY 30 AUSTIN About 1,700 delegates, visitors, and members of families of delegates are expected in. Austin next Tuesday through Sunday for the founding convention of the Texas State AFL-CIO July 30 and meetings of 14 state labor associations. The merged convention will have 14 committees. Nominations of officers will be made it 11 o’clock Wednesday morning after caucuses of districts and international unions. Each of the 12 districts established will have one vice-president except Dallas and Houston, which will have .two each. Each international union with more than 10,000 members affiliated with the new organization will also have one vicepresident. In the founding convention, caucus choices for vice presidents will be automatically elected, but in future conventions, such nominations will be accepted from the floor, a State Federation o f Labor news release says. A letter he sent on April 15, 1957 to Headquarters, Technical Training Air Force, of which Lackland is a part. This letter, which takes the form of a sworn statement by Smyrl, is now an official Air Force Document, but it has been read by an Observer reporter. Here, telescoped from the letter, is Smyrl’s own version of his relief and the events leading to it: “On 19 January, 1955, I assumed command of the 3720th Basic Military Training Group. … I was relieved of my command by Major General H. L. Grills who had replaced General McCormick …. “During the time I was in comcomposed of 17 squadrons, 1,700 permanently assigned officers and airmen and an average of 18,000 basic trainees. Strength figures for the group have at times gone as high as 24,000 basic trainees … this is the only basic training group in the Air Force … “In 1956 General McCormick undertook to provide Lackland Air Force Base with additional recreational facilities … the Base Exchange sought private money sources to invest in on-base recreational projects. One of the numerous enterprises of one Mr. Morris Jaffe of San Antonio was awarded a contract to construct a roller skating rink …. it finally ended up in a $275,000 investment with a 10 year concession contract being given to Mr. Morris Jaffe I participated in a discussion in General McCormick’s office beMcCormick … The outcome of that discussion was that one point was clearly understood by all and that