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Washington Reports Speaker’s Race WASHINGTON Congress drove toward some form of solution for two national political issuesthe $1.25 minimum wage and medical aid for the agedbefore the recess until after the national conventions. Texas AFL-CIO President Jerry Holleman was in Washington to join the labor forces working for the national minimum and the Forand bill for the needy aged. Meanwhile, the Senate liberals’ gains on tax issues vanished in the House-Senate conference committee, just as they had in 1959. With support from Sens. Lyndon Johnson and Ralph Yarborough, Senate liberals had struck the four percent dividend credit on income tax. With Johnson’s opposition and Yarborough’s support, they had added an amendment aimed at ending certain business entertainment deductions. The conference committee, including Sens. Byrd and Kerr, dropped these changes. In the angry debate Tuesday, the report was accepted, 61-32, Johnson voting aye, Yarborough voting no. After the vote, Johnson denounced a published report he “demanded” Sen. Frear change his vote from no to aye on the dividend tax change before it passed 42-41. He said he agreed with the report of the conference committee. Sen. Douglas said, “This type of bipartisan coalition control dominates all committees in money matters. It is frustrating to the great industrial sections of the northeast, and to the country.” Calling Castro an “unsound, Islanderous, double dealing tyrant,” Yarborough advocated a cut in quotas on sugar imports from Cuba and allocation of more production to U.S., particularly Texas, growers. Texas sugar acreage, he said, is less than three square miles. “You could run down the mall here and have a larger area than that,” he said. The President requested power to alter the Cuban sugar quota. Favoring this, Yarborough said, “The decision of Castro to enter into economic agreements with Russia, and his continuous hostile and insulting manner in whipping up resentment against America, makes it mandatory to approve the President’s request. . . . “Farmers of many counties in the Texas Panhandle and upper South Plains can produce excellent beet sugar crops, and it will bring more money than most crops. Yet Texas farmers are allotted only 1,800 acres for sugar beet production. “We should not leave a substantial supply of the ‘vital commodity THE TEXAS OBSERVER Page 2 July 1, 1960 to the whim of an unsound, slanderous, double dealing tyrant,” Yarborough said. The House passed a medical aid bill which would affect no more than one million of the nation’s 16 million citizens 65 and over. Texans provided five of the 23 no votes as this bill passed 381-23. The nay-saying Texans were Alger, Burleson, Fisher, Mahon, and Rogers. Other Texans voting approved. Alger and Dowdy okayed recommitting a farm bill to substitute Senate language while the other Texans opposed that move. Then Alger, Burleson, Casey, Dowdy, and Thomas parted from the rest of their Texas colleagues and voted to kill the farm bill, which was done, 236-170. The Senate foreign relations committee approved Diablo Dam near Del Rio on the Rio Grande but specified that all power features be “self-liquidating.” The House has approved a dam with public power. \(Interior Secretary Fred Seaton officiated at ground breaking ceremonies for the Three Rivers near San Angelo. The dam is to span three streams and extend for eight miles the second largest earth-filled dam the U.S. government has built. Seaton said that the project will exhaust the water yield possibilities of the Concho River; if more water is needed, he said it will have to come from regional and interregional projRep. Omar Burleson, Anson, announced to the House that hereafter members get only $12 a day expenses or $25 if they get advance permission. He said : past procedures let “bounty hunters … sell half truths and insinuations to publications who have an ax to grind and an ulterior motive” and “are able to destroy a degree of confidence in the eople’s elected officials far greater than a .subversive group working in our country toward that purpose.” Burleson, as chairman of the House committee in charge of expense accounts, came under fire from Life Magazine and the Knight newspapers for his own and others’ expense accounts. Sens. Yarborough, in his radio report to Texans, emphasized “pockets of poverty”; 3.5 million workers unemployed, nearly five percent of -the U.S. workforce, including 150,000 Texans; four more major U.S. corporations entering the lists of 45 others with annual sales over $1 billion last year while 1\(10,672 small businesses went bankrupt the same year; 7.5 million U.S. families, 14 percent, with total incomes of less than $2,000 a year. goof Some Texas dailies seemed to be bracing for the outcome of the Los Angeles convention. Dallas News writer Wayne Gard, in an editorial-page feature, said Richard Nixon “seems likely to become the next president” and commends a book he says “shows clearly the falsity of the smears” on Nixon. The pro-Johnson Abilene Reporter-News said John Kennedy is “disregarding Southern feeling entirely” and Adlai Stevenson if renominated would ignore Southern sentiment again, “with the same result.” E_ Rejoicing continues in the dailies over the ouster of Mrs. R. D. Randolph as Democratic national committeewoman from Texas. The Abilene ReporterNews looked forward to her loss “with good cheer.” Allen Duckworth in the Dallas News, calling her “a Johnson hater who wants to vote for Adlai Stevenson,” speculates that her right to her halfvote in the convention apart from the Texas unit rule will come before the national convention. frof The Texas State Journal of Medicine, reiterating opposition of Texas physicians to social security for themselves, says that for physicians, “social security is nothing more than an additional progressive income tax.” Burke Construction Co., all of San Antonio, and Sands Motor Hotel, Inc., and El Motel Sands, Inc., of Laredo. Late in 1955, Bennett and Matteson were insurance partners; the Burkes were engaged in land development a n d subdivision through the named companies, each of which, it is alleged, were “entirely dominated -and controlled” by the Burkes. Langdeau asks the court to “pierce the corporate veil” to -make the Burkes individually responsible as the alter egos of the companies. Main Bank and Trust Co. was organized by Bennett, Peace, Burke, Jr., and Matteson in October, 1955. \(The bank says they have not been -connected with the The petition states that in December, 1955, the four named were all directors of the Main Bank. About Sept., 1955, it is alleged, Bennett and Matteson wanted ‘to buy control of the insurance company “by withdrawing . . . funds from the company.” In December, it is argued, “a joint adventure and conspiracy” was conceived -by all the defendants, “with the advice and counsel of their co-conspirator, the attorney of all defendants, to wit: John Peace,” “. . . to enter into the scheme and conspiracy to defraud the company” with the Burkes and Peace in the background and Bennett and Matteson to “appear openly and apparently as the sole parties in interest.” “It was agreed,” the petition maintains, “by and between the defendants that they would accomplish their unlawful end results by coordinated management and mismanagement, which on its face was to appear as independent, arms length, dealings between independent parties, but that any action -taken in such joint adventure would be upon the advice and consent of defendant John Peace whose duty it was to guide and direct the path of such joint adventure . . . to insure that the parties defendant would attain control of the company by the use of the company’s own assets, retain control and domination of the company by directing the actions of defendants \(Bennett and therefrom if possible, or if not, to por Texas AFL-CIO News states Gov. Daniel’s new commissioner of the Bureau of Labor Statistics, “has devoted considerable time and effort for development of in .dustrial safety programs in Texas and is expected to continue those efforts in his new position.” vi Ed C. Burris, Texas Manu facturers’ Assn. vice-president, writes in current. Texas Industry, the TMA magazine, about “this continuing controversy between the union-leader, liberal, socialistic forces and the conservtive, pro-job-making, business-. minded groups.” Political Intelli\(2ence I.40 The Speaker’s race obvious ly was not decided by the legislative runoffs. If it had been, one of the two candidates, Wade Spilman of McAllen or Jim Tur man of Gober, would have laid out his pledged majority publicly by now. Turman laid out 78 pledges and promises for a se lected press group, but not for publication, and including some second-choice pledges after first votes for minor candidates for the job. Turman condemned “the sin ister influence of big-money pres sure.” Spilman said he is assured insure that if any money was lost in the joint adventure it would be lost by the company and not by the -parties defendant.” The petition charges that the scheme was that the Burkes were to get an interim loan to buy the controlling stock and thereafter to use certain portions of their property as security and by means of a loan so secured “to withdraw sufficient funds from the company to pay off said interim loan.” The Burkes were to hold the controlling stock until their property was returned to them free and clear, it is alleged. Transactions Complicated transactions are then reviewed in -the petition’s allegations: Dec. 16, 1955, Bennett and Matteson agreed to buy 68 percent of the company’s stock for $409,000. Dec. 29, .1955, Bennett and Matteson borrowed $407,605 from Main Bank, the promissory notes secured -by Highland Hills, the Burke firm, to repurchase -them if they were not paid off by Jan. 7, 1956. \(The receiver alleges that, since beneficiaries of the loan were also directors of Main Bank, but a majority of the directors of the bank had not approved the loan and spread approval upon their minutes, a provision of the banking code was violated. This cited provision carries a fine of not more than $5,000 or a five-year penitentiary term or both for violaDec. 30, 1955, Bennett and Matteson bought the stock and took control of the company and “began liquidating the stocks, bonds, and other securities of the company and converting -them into cash.” Jan. 9, 1956, -Bennett and Matteson, “over the objection of a financial advisor on the board of directors, took $484,000 from the company and paid their indebtedness to the Main Bank.” The petition said “they attempted to make this -appear as a legal transaction” in this way: Highland Hills for $484,000 delivered to the insurance company a promissory note for that amount payable by July 10, 1956. On the same day Highland Hills delivered -to the insurance company a valid lien on some property. Highland Hills “then professed to loan” the $484, of victory, many Turman claims are incorrect, and Turman has made improper promises of “jobs and committee chairmanships.” Spilman named no figures. Rep. Byron Tunnell, Tyler, withdrew from the race in Spilman’s favor, saying “we must practice conservatism in every area possible” to furnish needed services. Rep. W. S. Heatly, Paducah, chairman of the House appropriations panel, the next day announced for Spilman, saying the contest is an “out-andout” liberal-conservative battle for control. Rep. C. W. Pearcy, Temple, countered Heatly, announcing his support of Turman and denying that the conservative-liberal issue would be settled by anything but the composition of the House. I_ Ousted Texas Young Demo crats’ vice-president Jesse Price of Dallas, condemning “goggle-eyed liberalsultra, ultra liberals” he said are included in the dominant group led by State President Bill Kilgarlin, told the Dallas News that “moderates” will try to set up a new organization in September coincident with the state convention that month. Price said the state party leaders will support his group, especially since Mrs. R. D. Randolph will not be committeewoman. 000 “which they had received from the company for this purpose” to Bennett and Matteson individually. Bennett and Matteson “purportedly” pledged all the stock thus acquired to Highland Hills as -security for the personal loan to them. At this point, Langdeau charges, the defendants “had wrongfully abstracted $484,000 from the company and -had paid off the $407,604.64 indebtedness, plus interest, to the Main Bank.” Jan. 13, 1956, “defendants caused to be issued” 12,239 shares of Franklin American Co. stock to Peace and each of the Burkes. On March 24, it is said, Bennett and Matteson each received 96,902 shares in the insurance company. About Nov. 19, 1956, the petition charges, Bennett and Matteson purported to release the $484,000 note and deed of trust lien by an instrument that “recited payment in full” of the $484,000. The petition charges this release “was executed wholly without legal consideration.” Dec. 31, 1956, the petition concedes, defendants “caused to be deposited to the credit of the company” $100,000 from Highland Hills, as credit on a new note of $484,000 from Highland Hills. Control Sold In March and April, 1957, the petition continues, the Pioneer Fisher interests agreed to buy all the controlling stock of the insurance company, the company obtaining shares of InsurOmedic stock with a book value of $73,551. The petition alleged that during this transaction, def endants “f r a u d u lently misappropriated $30,451” of Franklin American’s money to buy other InsurOmedic stock. After tracing out the legal history of land involved in these transactions, the petition asserts that in Dec. 1956, the defendants became delinquent in the payment of a note for $484,000, and owe the money plus interest to the receiver. The $30,451 plus interest is claimed. The defendants have not yet filed their answer to the receiver’s allegations. Clearly much of the