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2 Ex-Chairmen Of Insurance Are Indicted \(See page 2 for a discussion, of the Dallas and Travis AUSTIN Two men who held the top state jobs in insurance regulation in Texas last year now stand accused of lying about money paid out by the ICT enterprises, a n d BenJack Cage, the ICT promoter, is accused of bribing them both. The Travis County grand jury returned indictments against J. Byron Saunders and Garland Smith, former chairmen of the Insurance Commission; Max Rychlik, Smith’s son-in-law; and Cage. ICT Discount Corp. paid Saunders $7,000 which Saunders explained as payments for an oil PALESTINE Everybody was ready for the speaking to begin but first they had to send somebody across the street to the Dogwood Grill to get the juke box turned down, because it was warm for an October night even in Anderson County, and the song blarebounced through the open windows of the courtroom in the pillared courthouse on the hill where the 500 people had waited an hour : “In the middle of an island, in the middle of the ocean. You and I together, darlin’, just the monkeys and the palm trees … The music snapped off, and somebody said, “I can’t call ’em Negroes, nohow,” and this was too loud now because the music was stopped. M6thers said, “you hushup, now,” to some fidgeting children, and a tiny old lady with a corduroy face whispered, “that Mr. Jerry; he’s a somethin’, ain’t he?” to her neighbor, who nod b h A Meeting In Palestine ded and put a finger meaning “shhh” to his lips. “Judge” W. A. Hughes of Dallas, who used to be county judge of Gregg County, but who now is high ,up in the Texas White Citizens Council movement, moved to the microphone and began the invocation: “Almighty God,” he began, and harumphed in his throat, and Lyman Jones looked straight at his audience, its faces dappled by the shadow of the whirling wooden blades of the fans hung from the high, groined ceiling. “Almighty God of our fathers, be with us tonight. Be with us especially in this 1 tragic hour when the black shadow of federal bayonets hangs u t Cox, Harmon Meet Again Desegregation Is Endorsed By Dallas News DALLAS After several years of resistance, the Dallas News is advocating the gradual integration of Dallas schools. This development, important in Dallas since a federal judge has ordered integration there at mid-term, is closely related to President Eisenhower’s use of troops at Little Rock. In an editorial October 3 and several others since then, the which can reasonably be made the basis of a consent decree … to arrive at an intermingling of the races in the school system ..” that integrate upon federal court orders from the last legislature’s law denying state school funds to schools which integrate without give the governor power to close schools ; taken over by federal troops. The News also fanned out reporters across the state to get the views of the citizens on integration. Their mood, concluded the newspaper, “ranges from anger in the East to detachment in the West,” but all Texans agree “they do not want a Battle of Little Rock in this state,” and “they agree in their minds and hearts on another point: Acceptance of the eventual mixing of white and The one great rule of composition is to speak the truth. Thoreau. Orxtto Ohurru 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 Independent-Liberal Weekly Newspaper Vol. 49 TEXAS, OCTOBER 11, 1957 10c per copy No. 22 AUSTIN James E. Cox, the former representative from Conroe, went to trial in Austin this week on a charge of agreeing to accept a $5,000 bribe from a San Antonio naturopath to kill a bill he had sponsored and support an amendment to help the naturopaths. The details of the case were, for those who follow Austin developments closely, old-hat. A House committee earlier this year dragged into the open every bizarre circumstance surrounding the tape-recorded talk last Feb. 20 between Cox and Dr. Howard Harmon, the natty, mustachioed naturopath in the case. But if the facts were not news, the trial was. Mrs. Cox, a tallattractive woman, sat beside her husband throughout, listening eagerly, once saying something to him and laughing softly. Cox watched and listened even moie closely. Key evidence in the case, of course, is Harmon’s tape recording of his talk with Cox in which Cox said he wanted the $5,000 in return for what Harmon wanted him to do. John Cofer, attorney for Cox, strenuously objected to the tape being played before the jury. It was, he said, “unintelligible,” as well as prejudicial, at several points, to Cox. Judge Mace Thurman, Jr., agreed to a playing of it with the jury out of the room so Cofer could enter his objections. Harmon, swinging softly in the witness chair, chin on his hand, listened carefully as the tape was played, Cox sitting across two tables from him, DA Les Procter pacing back and forth, then sitting at the wall by the side of the courtroom staring at Cox. When the part came where Harmon said, “I think it’s worth 5 G’s,” Harmon laughed embarassedly and ducked his head to the side. Mrs. Cox listened quietly, her face expressionless, her fingers drumming idly on her : In chair. EARLIER TUESDAY it was mostly a contest between lawyers Cofer and Procter. At one point Cofer objected because Procter was standing up as he questioned. Harmon. Procter agreed to sit down while interrogating Harmon, provided, Procter said, “I don’t have to ask permission to stand up.” Cofer, carrying out Cox’s original defense in his passionate appearance in the House chamber in March, revealed the line of the defense: that Cox was planning to trap Harmon, just as Harmon was planning to trap Cox. Cofer asked Harmon if it wasn’t “just as reasonable” that Cox was trying to “show you up” as that Harmon was trying to show up Cox. “No,” Harmon replied. Procter objected to the question and was overruled; Cofer then asked it again, and Harmon replied this time, “I’d have to be honest and say that it’s just as reasonable, yes, I would.” Cofer asked Harmon whether it wasn’t so that a deal, including an exact amount of money, was never actually agreed upon. \(Harmon said he tried to get Cox down to $3,500 but that Cox inknew,” Harmon told Cofer, “the deal was made. He expected to meet me Tuesday with the money.” Cofer also asked whether taking the tape recording would not have been “a method by which you could have enforced the agreement” had he, Harmon, actually intended to carry out the bribe. “I’m afraid you have more fertile an imagination than I. That never occurred to me,” Harmon replied. Cofer countered it very well might occur to “the type of mind that deals with the cloak and dagger activities you were engaging in” and pressed the question. “I suppose that’s a way to look at it,” Harmon conceded. But then Procter came in and asked, “If you had been intending to do that … could you conceive of any circumstances under which Them!’ over our land, and our Southein way of life …” “Amen,” said Hughes, softly, at his prayer’s end. “Amen,” whispered two or three voices from the pew-seats of the courtroom, softer still. These were the evening’s last soft or quiet words. “…. STATES RIGHTS AND OUR SOUTHERN WAY OF LIFE,” roared State Rep. Jerry Sadler of Percilla, master of ceremonies for the evening. “We are honored, to have with us here tonight, those men, who stood up with us, when the going got rough, who stood up with us down at Austin, against the N DOUBLE A C P, the left-wing journalists, the eastern Republicans, the long-haired preachers and profs, and the SEXUAL PERVERTS! and all of their kind who came to Austin to force desegregation on us. “The long-hairedhell, I can’t say what they are; they’s ladies heretried to coerce the legislature. These men stood fast. Without this East Texas delegation, you’d right now have integration in every school in Texas.” Sadler told his audience who they were by saying who he was: “In 1835, my great-grandfather came to Anderson County. My grandfather was the first white child born in Anderson County …. and now the Supreme Court is tryin’ to cram desegregation down our throats. I told you back when I asked you to send me to Austin, I told you there’d be desegregation. Some people said `politics, that’s all politics’ when I said that. WASHINGTON ++The United States Senate! antitrust and monopoly subcommittee will investigate, and hold open hearings on, the Texas loan sharks. This the Observer learned as the State Insurance Commission in Austin prepared to reconsider credit insurance rates which lenders have used to increase their income from small loans. The rate hearing of the commission starts Monday. Investigators from Sen. Langer’s subcommittee are expected in the state late next week. Peter Chumbris, counsel to the minority, advises the Observer that a public hearing will follow. “Here are some of the questions to which, in this inquiry, the subcommittee seeks definite answers,” says Chumbris: “In the sale of credit insurance, are there any abuses which our present federal antitrust and monopoly statutes intend to prevent, but which nevertheless are not covered by such laws as presently written? “If so, how should such federal laws be amended to cope with such abuses? “Do such antitrust and monopoly practices embrace coercion and intimidation? “Do such coercive and intimidating practices exist because of lack of state regulation?” The Langer panel held its first hearing in small loan practices in 1954. They revealed unlawful and usurious interest rates charged by small loan companies and the forcing of insurance policies on the borrowers which, Chumbris says, “Made their rates run sometimes .as high as one thousand percent interest on a loan.” Since these investigations, the Supreme Courts of Kansas, North Dakota, and Alabama have held that their attorneys general are permitted to file injunctions against operators of small loan firms who constitute a public nuisance. Lanver has been communicating with Atty. Gen. Will Wilson of Texas. Wilson has been investigating the sharks in Texas and will report to the insurance board Monday. After that Wilson may go further in regulating loan sharks through the injunctive powers of his office, the Observer understands. Wilson said in. Austin his office will give Langer “full cooperation.” He said there have been several conferences. He is for any hearing “which will give constructive results.” At the Langer group’s recent hearings in Alabama, Langer said “Many complaints and stories have reached me indicating that Alabama appears to be competing with Texas for the title of ‘Loan Shark State’.” Langer considered a Texas investigation two years ago, but you would immediately turn it Speaker of the House?” “None whatsoever,” replied H a rmon, who had called Speaker Waggoner Carr the night he took the recording and made an appointment for the next morning, when he gave Carr the tape. COFER ALSO sought to raise issues about Harmon, himself. He asked him whether he was not practicing naturopathy “in violation of the law.” Harmon pointed out that as long as the case to deny the naturopaths the right to do business in Texas is in litigation, he is entitled to practice. Cofer asked if Harmon had not admitted to the House panel he was drinking “considerably” the night of the tape recording, and Harmon said he had never said thathe had merely admitted he had had “two or three” drinks. Procter insisted Cofer produce such testimony if it existed, and Cofer cited testimony in which Harmon. declined to say he had been drinking “quite a bit.” Cofer asked Harmon if he was under indictment for DWI in San Antonio. “No,” Harmon replied. Had charges been filed? Yes, said Harmon. Procter later drew from Harmon testimony that the district attorney’s office in San Antonio had asked the charges be dismissed for “lack of evidence.” They were dismissed. Harmon also testified he paid two $50 fines for selling an herb called “snake root” after its name had been changed to “serpentinia” and it had been classified as a drug. He said it was an herb in its native state and had been used in India under the name “snake750 years. Wednesday morning Judge Thurman ruled that the tape recording would be introduced in evidence. The juryten men, two womenseemed in for a gruelling week. R.D. Langer Tex ,s Bound