Indianapolis Times, Volume 35, Number 162, Indianapolis, Marion County, 20 November 1923 — Page 1

Horn® Edatiomi FULL service of United Press, United News, United Finan cial, NEA, Scripps Alliance and Pacific Coast Service.

VOLUME 35—NUMBER 162

M’CRAY HEARING LIMITED

INCREASE IN WATER RATES EXPECTED BY COMMISSION ORDER

GRANDVIEW BANK I RECORDS LOCKED j UP BX COLLINS McCray Note Understood to Be Among Items Impounded for Grand Jury,

Following testimony today before the Marion County grand jury investigating financial affairs of' Governor McCray by Joseph Forsythe, cashie| of the Grandview (Ind.) Bank, “certain notes, documents and papers ' were ordered impounded in a safety deposit vault here under > custody of Clarence W. Nichols, special prose cutor. The order was issued by Criminal Judge James A. Collins on petition of Nichols. Judge Collins recently impounded records Tfoni the Discount and Deposit State Bank of Kentland. A note for 51.500 dated July JJ, 1923, payable to the order of Warren T. McCray, and signed by H. A. Reinhart & Cos., is understood to he among the documents impounded. It is due Dec. 2, 1923. and was indorsed _by Warren T. McCray. Another note in the collection is one for $2,000 made out to McCray by' the Morgan County Stock Farm Company, W. J. Hendry, manager, on July 1, 1923. It was indorsed by the Governor, and is due Jan. 2, 1924. Letters in Collection Three letters from Warren T. McCray. dated June 6, June 9 and Dec. HU 1921, tn the Grandview Bank were deluded In the Impounding, it was learned, as were three letters from the bank cashier In reply. It was thought the documents were Introduced In evidence before the jury this morning, and their impounding Indicates they will be considered again by the body. Other witnesses to appear were Ross H. Wallace, president of the Aetna Savings and Trust Company, Indianapolis. and Amos Morris, cashier of the Discount and Deposit State Bank, Kentland, Ind. It was said that none of the witnesses have been discharged. James P. Goodrich, former Governor of Indiana and president of the National City Bank, has been subpoenaed to appear before grand jury. He was expected to appear before the jury Wednesday. Morris in Conference Morris was in conference with Clarence W. Nichols, special prosecutor In charge of the investigation, nearly all Monday afternoon. The Kentland bank Is Involved in the deal through which McCray obtained $155,000 of State board of agriculture money. In the transaction In which McCray says he used SIO,OOO of State money by mistake, and in numerous other McCray transactions. Goodrich is believed to know considerable about McCray's affairs. He headed the pool of $350,000. which met the Governor's most pressing obligations. including those to the board of and to the Kentland bank. LONE BANK BANDIT GETS $5,000 CASH AT DAYTON Sv United Pretf DAYTON, Ohio, Non 20.—An armed man walked into the east end branch of the Dayton Savings and Trust Bank today, forced Charles McMullen, cashier, to scoop ss*ooo or more in currency into a bag, walked out with the loot and disappeared. The robbery occurred at a busy corner where scores of people were passing. HOURLY TEMPERATURE 6 a. m 35 10 a. m 47 7 a. m 36 11 a. m.. 51 8 a. m 38 12 (noon) 56 9 a. m. - • • 43 *1 p. m. 59

‘INVESTORS’ LOSE MORE THAN BILLION DOLLARS IN OIL STOCK SWINDLE

- EDITORS NOTE | n I EFORE you buy anj form of eeurI Kl ity INVESTIGATE Thousands of I U I persons in parts of the United States ' 4 when they received allurine literature of irresponsible oil companies operating in and around Ft. Worth. Texas, failed to heed this warning. 'They bought—now Federal authorities are investigating To date, forty have been convicted or pleaded guilty to fraud charges. In the hope of protecting our\ readers from ■‘'similar mtsfortune the Indianapolis Time* arid ME A Service sent Roy Gibbons • o Ft. Worth to investigate for the home kplks. ■ This is the first of a series of stories by Gibbons : stories every man. woman and rbOd in Indianapolis should read. By ROY J. GIBBONS NEA Service Writer F r ~“I T. WORTH, Texas. Nov. 20. Never before in all the history of "come-on” games has so monstrous and conscienceless a piece of fraud been perpetrated pn the American public, as- here iy flimflam artists When I say this, I do so unequivocally and without fear of

The Indianapolis Times.

High Spots Salient Pmnts Developed at Mci'ray Bankruptcy Hearing in Federal Court Today.

Salient points developed in the hearing upon the petition to declare Governor McCray bankrupt before Federal Referee Harry C. Sheridan today were: • * • THAT McCray forgot last Friday to include a batch of notes In his statement of security given the State agriculture board for the $J55,000 loan and that the security' totaled $125,726.46 instead of SBO,OOO. •* * “ THAT it is impossible to present an Übcurate statement of JJcCray’s finan■rial standing as of San. 1, 1923. until Wednesday' and as of Jan. 1, f923, until even later, according to the Governor's attorneys. * • • THAT plaintiff attorneys are at tempting to show that during the 1920 campaign McCray devoted more time to politics than farming. • • v--THAT McCray h'as no Idea what h,!s indebtedness was when he became Governor nor to how many banks he has sold notes. •• i THAT practically' all McCray's bank loans were obtained since he became Governor. • • • THAT McCray conducted negotiations for loans both by personal visit and mail. • • • THAT all the referee is interested in is whether McCray is a farm©*, whether he Is insolvent and committed sets of bankruptcy and the amount of indebtedenss and when contracted. ** * i THAT the referee holds it is not relevant to,inquire w'hether McCray obtained money in “fraudulent or criminal” transactions. • * * THAT McCray contends that with few exceptions the loans he obtained were used for purchase of or operation of farms. • • • THAT a McCray farm manager in Morgan County got $lO6 a month and "a share In the profits, if any.” • • • THAT McCray’s total indebtedness as of Oct. 6, 1923, was $2,032,320.69, according to McCray'. THIEF GANG IS TRACED Detectives Say They Expect to Get Important Confession. Detectives this afternoon said they were about to obtain a confession from one of five men arrested in connection with an automobile theft Monday' night W'hich would clear tJ(p many motor accessory robberies in the last y'ear. Hundreds of dollars worth of loot was taken by the gang which is expected to be uncovered, it was said.

WHISKERS AND LAW . WIN FOR BENEDICT ‘Reception Committee' Will Now Give Jack Eyler a ‘Real Wedding Present' After Mustache Episode,

Deprived of half his mustache and sideburns, Jack Eyler, 316 E. North St., a recent benedict, is going to get a "real” wedding present. Coming back from / a. honeymoon Nov. 8 fifteen of his fellow workers at the Beech Grove shops of the Big Four Railroad decided they would remember him with a little gift. They captured Eyler and bound him while one, of the reception committee neatly sheared and clipped just half of his mustache and sideburns. To “get even.” Eyler then filed affi davits against George Crofts, 2062 Ashland Ave., and William Burkert, 1035 N. Delaware St., charging them with assault and battery. In city court today Judge Delbert

warranted contradiction for the following reasons: That my statements are reinforced by voluminous testimony and evidence in possession of the Federal Government. That I have drawn an unbiased conclusion from first hand investigation of the facts in a survey Just completed for NEA Service and The which sent me here to get the truth to protect its readers against future fraud schemes. Government in vesti gators estimate that 11,250,000,000 has Been paid in by investors since fake oil promoters started operating in Texas. They also estimate that the total cap tabzation of these cornpan es will aggregate two billions of dollars. T*.s estimate Includes the operations now under investigation and others dating back over a period of several years. All the Rufus WaTHngfords and

Action Will*Terminate Bitter Battle by City and Civic Clubs, Revenues of the Indianapolis. | Water Company will be in- : creased slightly by the public service commission within the | next few days. The action will j terminate one fff hardest i fought contents in the history of ! the commission, a contest in which the -city of Indianapolis | and numerous civic organizations i battled to prevent an increase. The company sought an increase approximately 20 per cent, asking for a valuation of appproxitnately $17,000,000. and for meterization of serv- | ice. Only a part of these demands will be met. On Metered Basis It is understood the order of the commission will contemplate most ''cqmsumers on a metered oasis. This will mean, it Is said, that rates will j he increase,! only to consumers who j use more water than covered by the '•minimum monthly charge. This | charge is expected to be $1.50. i rt is expected, also, that the com- : mission will increase the fire hydrant j rental to the city. This is one of the | propose.!* increases that was fought ! barest by the city. The net result of the order is ex j peeted to be little or no change In the ! cost of service to the very small consumer, but an Increase to the larger ! consumers and a consequent increase In revenues to the water company. The commission has not yet agreed on a valuation of the company's property, but it is expected to be somewhere between the valuation of sll,000.000 claimed by the city ~and the valuation of $17,000,000 claimed by the company. The commission's valuation may be in the neighborhood of $15,000,000. Dodging Federal Court? There am indications the commis : sion does not intend to have the water I case thrown into federal Court, as previous utility cases have been. The J rate is expected to be such that the company will not contest further, ' and still such that the entire increase : asked by t|ie company will not result. 1 Meanwhile, the water company is ; conducting an advertising campaign I ; through the newspapers to "educate” the public concerning the water sup- ; ply of the city. TWO MIDDIE CHANGES Shapley and Zeuber Made Regulars, for West Point Clash. Bu United Pre** ANNAPOLIS, Md., Nov: 20.—Surprise was caused here by the announcement today Jhat Shapley would replace Barchet, the star Navy back, and that Zeuber would play center instead of Matthew* in the Army game Saturday.

O. Wilmeth asked Burket, who pleaded guilty, “Do you have a barber’s license?” Burket muttered In surprise, “Why, No.” "Hm!” the judge said solemnly. “Have you bought Eyler a wedding present yet?" “Not exactly,” Berket answered. Deputy Prosecutor J. Burdette Little had a happy thought amid the tangle of whiskers, barber license and a wedding present. “I would recommend dismissal of the charge If the fifteen men chip In $2 apiece for a real wedding present,” said Little. The judge had an affirmative look. The men were dismissed.

get-rich-quick men that ever ventured iruthe lane of frenzied finance were as mere pikers compared w.th these who lured victims who coulu ill afford to lose, into their camouflaged traps. High Government officials who have spent lifetimes in pursuit of suave shysters using the mails to defraud, make bland admission that this is the truth and further admit that even they are dumfoUnded at the enormity of the operations. Holding aloft a snaring vision of golden fleece which they promised to shear for their trusting, gullible investors from profits in wells never sunk, or else purposely drilled past oil level production, these vultureturned fleecers themselves. The scant teacups of oil they produced with the vist sums duped from an unwary public, .made the oil cost something like $5,000 a bar-

INDIANAPOLIS, TUESDAY, NOV. 20, 1923

Say, Harry! “Why should it take from 10 a. m. Wednesday until 4 p. m. Saturday for a letter to go two blocks?” inquired Mrs. George Catterson, Thirty - Third and Meridian Sts., today. Mrs Catterson Is a cousin of Postmaster General Harry S. 'New. # "He'll get a letter from me,” Mrs. Catterson said. Mrs. Catterson said she had asked the postoffice this and an Investigation was being made. She handed the letter to the postman in front of her home and then waited three days for delivery to the addressee two blocks west of her home. She would have thought little of it, she said, if she had not learned that of 100 letters sent out by officials last Tuesday morning announcing a meeting last Tuesday evening only one or two were delivered in time and several persons said they received them as late at Saturday.

LABOR COMBINE CHARGED IN U. S. COURT,COIf LAIN! Contractor on Athletic Club Sues Unions and Local Company,. Alleging a nation-wide conspiracy on ihe part of trade unions and contractors belonging to the National Board of Jurisdictional Awards, the Unitpd Metal Products Company. Can ton. Ohio, today sought an injunction against the Bedford Stone and Construction Company and Indianapolis trade unions. An order to restrain them from interfering with installation of steel work on tb© new Indianapolis is sought. Work on the building was stopped by the controversy. _• According to the complaint, the company holds contracts for metal work amounting to $16,200, practically all of which has been delivered, and much of It already placed in the athletic club building. In October, 1823, John J. McNamara, aecretary and business agent of the ’local Iron Workers’ Union, threatened to cal! a strike unless the United Metal Products Company employ union Iron workers, the complaint states. The strike was called in Nov. 1. When the Bedford Stone and Construction Company, general contractors, agreed to employ carpenters agreeable to the unions, the strike was called off. ‘The complaint also, sbeks damages from the Bedford company. Mathews Fletcher, secretary-treas-urer of the Bedford Stone and Construction Company, declared the compiaint was merely part of a fight over jurisdiction between the carpenters and Iron workers’ unions. “We are not a party to any conspiracy to keep the United Metal Products Company out of the market.” he said.

JACK DUNN DIES' OFHEARTAJTACK Democratic Leader Was HI / Only One Week, Jack Dunn, 52, prominent In Democratic circles, died 8:30 a. m. today at the home of his brother-in-law, Ted Sullivan, 414 N. State Ave. from heart trouble. He had been 111 a week. 1 / Services will he held 8:30 a. m. Friday at the home and 9 a. m. at the Holy Cross Catholic Church. Burial In Holy Cross cemetery. Mr. Dunn, born In Richmond, Ind., lived in Indianapolis thirty-five years.' He was a member of the Ancient Order of Hiberians. the Holy Cross Church and an active political worker In the old Eighth and Ninth Wards. Surviving: Three sisters, Mrs. Ted Sullivan, Miss Anna Dunn arid Miss Margaret Dunn, and two brothers, Thomas and George Dunn.

rel. This is the estimate of Government accountants who have checked the swindle operations. Something for nothing, or a lot for a little was their particular stock in trade. By means of high-power, flamboy-

Methods Used by Swindlers

This involves nothing but a simple operation whereby the promoter would christen his oil stock by some different and high-sounding phras-- For example, he would no longer call it stock, but probably Units, royalty rights, plan royalties, blocks, mineral deeds, interests ans gusher rights. All, of course, mean the same

Shades of Cicero! Boy, 7, Lectures His Schoolmates

: . . ...i

Shades of Cicero! The oratorical sages of Rome would turn over in their graves to see Edward Brown, 7, of 431 N. California St,, filling their shoe*. Every day, as president of the Health and Happiness Club of grade 28. school 5. California and W. Washington Sts., Edward addresses his fellow members concerning their conduct as constituents of a civic community, the schoolroom. “Captains report!'' comes from the president. “Row 6 has conducted itself without reproach. Mr. ITetildent.” And if row 6 hasn't been especially good it gets a stem lecture from Edward.

BLIND GIRL BRAVE AS TRAGEDY STALKS Family Killed by Gas, Student at School Here Bears Up Under Shock of Loss of Family.

“Well, ray parents will not have to worry about rne any more,” said Miss Margaret Werner. 18, student at the State School for the Blind, when informed by her roommate Miss Mary Bullock and Miss Adeline Carson, in ! charge of religious work, that her ! father, mother and sister, had been ] found dead in their new home at Rockford, 111. Then, holding back the tears, the girl, who is beloved at the school for her kindly disposition, set about to reconstruct her dark little world. She went blind when she 6. She has been a student at the school since. Furnacer gas Is believed to have caused the deattm of her loved ones, Walter Vallner, a roomer, also was killed. Miss Werner slept little Monday ni .ht. She was taken to Rensselaer today. Funerals are to be held there. After the last rites Miss Werner TELEPHONE CHIEF, DIES President of Ohio Beil Company Succumbs in Columbus Hospital llv United Press COLUMBUS, Ohio, Nov. 20.—Eugene V. Reed, 43, president of the Ohio Bell Telephone Company, died In a hospital today. Reed - underwent an abdominal operation Saturday.

ant literature, advertisements and misleading circulars, they bombarded %he country with a cloudburst of roseate promises mostly built upon veiled misrepresentations and day dreams of finding oil. Mention of the name "of that

thing at law. But the promoter wanted the public to believe he had something different to offer, and discovered that whenever he changed the brand of his wares his sales jumped by leaps and bounds. The only thing he had to do first to change the new nami, and then hang onto it until it was played out.

EDWARD BROWN

“Any speeches today?” Then follow serious-minded Utterances by students on their own conduct on the street and in the schoolroom. The president's address follows, summing up the general attitude of his followers and reminding them that lessons must be strictly attended to during this, Education Week. Emma Smith, 7, of 323 Blake St., Is, captain of the girls. Miss Elizabeth Mills, the teacher, is responsible for the organization of the Health and Happiness Club apd in putting her pupils upon their own responsibility.

will return to school. She will graduate In June. The dead sister, Karine, formerly was a student at the Teachers* College of Indianapolis. HUNTERS MUSSING; ACCIDENT FEARED Police Asked to Aid in Search for Two Men, John H. Flagles, 746 Union St., and Lincoln Cummings,- 1814 Martindale Ave., left home Monday to go hunting near Martinsville. They have not returned, according to police, who were asked to aid in search. They were to return at 6 p. m. Monday. The Mor** gaft County sheriff reported that Ije had no trace of the men, police said. An automobile or a hunting accident is feared, relatives said.

sticky, black fluid was as a magic spell which called for entrance into meager purses. /' From start to finish it was the poor man’s Waterloo. The rich, never needy of far-flung opportunity for gain, were immune from the oil promoter’s wiles by very reason of their financial state. Only the money hoardeU away in stocking and pantry crock against a rainy day on the oil promotional coffers. And behind each offering stinted for and sacrificed, were widows and orphans, the lame, the halt, the blind. aged and the feeble and even disabled war veterans, all hoping to make up for former misfortune In one jump to moneyed ease. They parted with their Liberty bonds in trusting confidence. Then they mortgaged their homes, as hundreds of cases testify, to satisfy

Entered as Second-class Matter at Postoffice, Indianapolis. Published Daily Except Suiuiav.

Referee in Bankruptcy Says Questions as to 'Morality’ of Methods by Which Governor Obtained Loans Are-Irrelevant. TOTAL INDEBTEDNESS IS LISTED AT $2,032,920.69 Testimony of Last Friday That Security Given State AgrK culture Board Totaled fn Excess SBO,OOO Is Changed to $125,726,46, Scope of the hearing on the bankruptcy petition filed against Governor Warren T. McCray by thrtle Ft. Wayne banks was limited to a question of the Governor’s occupation and solvency by Harry C. Sheridan, referee in bankruptcy, when the hearing went into its third day, after a three-day recess, at the Federal building today. “It is not pertinent here to inquire whether Governor McCray was criminally or morally wrong, or whether he obtained money in transactions by fraudulent or immoral means,” Sheridan said. “The only questions in which this court is interested are whether' his occupation was principally farming—tilling the soil — and whether hb committed an act of bankruptcy at a time when be was insolvent.” Sheridan made this statement when Hume Sammons of Kentland, one of the attorneys for the petitioning banks, attempted to question McCray as to representations made by him in obtaining loans. The Governor’s attorneys objected to the question. McCray said bis total indebtedness on Oct. 6, the date the bankruptcy petition was filed, was $2,032,920.69. Friday Sheridan ordered McCray to prepare a complete list of bis indebtedness.

Sheridan said he expected to con- I tlnu.e the sessions through Friday. He said he believed all of these Sessions would be held in Indianapolis Statement Corrected Whdh McCray resumed his testimony today, he asked permission to correct a statement made Friday regarding the apiount of notes he gave the Stave board of agriculture as security for a loan of $155,000. He said: “These notes amounted to $125,726.46. If I recollect' rightly. Friday I overlooked one batch of notes.” In his testimony Friday, McCray gave the amount in etxcess of SBO,OOO. Mr. t Sammons of Kentland took i.p the examination of the witness in place of W. J. Vesey. who examined ! the Governor the first two days. "After the State hoard of agriculj ture loan was paid, what became of the notes?” Sammons asked. "They were turned over to ffie Aetna Trust Company,” the Governor replied. McCray submitted in evidence what he said was a complete list of the notes. Statement Is Delayed At the opening of the hearing today, James W. Noel, McCray’s at torney, said it would be impossible to have a complete statement of McCray’s financial affairs as of Jan. 1, 1923, ready until Wednesday, and as j or Jan. 1, 1922, until still later. ! Thomas D. Barr, of Stato banking | department was expected to be a, ! witness. With great reluctnnciN MeCray said Friday that Barr had paid off a note for him of $1,250 to the Marshfield State Bank, at Marshfield, because “Barr had recommended the loan and felt a moral responsibility for it.” “Were any of these notes ever returned to you after the board of agriculture loan was paid?” Sammons asked. , “No; they are with the Aetna Trust Company," McCray replied. Pool Collateral Only “Are these notes collateral for any loan except the $350,000 pool (the “Goodrich" pool, formed by friends of McCray In an attempt to his debts)?” “Not so far as I know.” “If they were, you would know it?” - “Probably so.” Sammons went” into detail concerning the McCray campaign for the governorship. He evidently attempted to show that McCray devoted more time to politics than to farming. “What time in 1920 did you announce your candidacy?” Sammons queried. “I announced my candidacy some tithe in the fall of 1919,” the Governor answered. “How soon after you announced your candidacy did you start your active campaign?” * “We opened headquarters in November, 1919, in the Claypool hotel.” “Who had charge?”

the appetites of the promoters who baited their prey on to further misery with telegraphic followups to the literature already sent. , At the time of this writing, some forty of these promoters have either been tried or else pleaded guilty and been given prison terms. Os the ninety-two persons indicted as conspirators in the swindle plot at meeting of the Jury, many have yet to be arraigned. An army of postal inspectors—as many as are usually distributed over a postal district of three or more States —sent here upon orders from Washington, Is now going over the investigation of a prospective list of some 400 additional promotional enterprises. Some scope of the oil swindle ring will be gained fcy picturing the countless truckloads of question-

Forecast FA.IR tonight and Wednesday, Slightly warmer tonight. Colder Wednesday afternoon or night.

TWO CENTS

“Fred Robinson, Miss Adah Bush and Lawrence Lyons.” “From that time, you devoted nearly your entire time to the campaign?” “Yes. sir. I made it a rule to be home on Sundays and Mondays.” “From your nomination until the election, did you devote most of your time to the campaign?” “I didn't start an active campaign until September." “You were elected?” “Yes, sir.” ‘'Front that time to the Inauguration, yoti devoted a great deal of time to getting ready to assume your new duties?” “Yes, sir.” Returns to Finarrres j Sammons then returned to an in* j quiry into McCray's financial affairs. | “DO you know your mortgage in- ! debtedness on Jan. 1, 1921?” he asked. “No,-sir,” was the reply. “Do you know approximately the amount?” “No, sir, not offhand.** “Is it a fact that soon after you were inaugurated the Fletcher Savings and Trust Company offered a line of your cattle paper for sale?", “I don't think they did. I have no recollection of it. “Did no) one of the Fletcher companies offer a line of your cattle paper for sale.?” “I thijrk the Fletcher American Company at one time offered some certificates and sold them. I think ifTvas about $60,000.” “Was any of your paper offered by any Indianapolis banks for sale before you got out-the preferred stock of the Warren T. McCray Farms Realty Company’” ' “The Meyer-Kiser Bank offered some.” “How much?” “I don't know.” t’4 “How did they offer it?** “T don’t know.” “What was it they offered?** “They offered my notes, signed by myself.” Merger Idea Bom In 1921 “When was the idea of merging a number of your farms into the Wrarren T. McCray Realty Company conceived?” “In the fall of 1921.” “What acreage went into it?” “About 5,470 acres.” “After the company was formed, was a preferred stock issue offered?” “Yes. It was handled by the MeyerKiser Bank.” “Do you reiYiember the amount sold?” “About $520,000 after the commission was taken off.” “The common stock of this corporation was owned by your family?** “Yes, sir.” “What part of the $520,000 went to take up mortgages on land?”' “On land that was incorporated, about $350,000.” “What upas your bank Indebtedness when you went into office?” (Continued on Page II)

able oil promotion literature which were dumped daily into the postal inspection offices here when the probe first started. Tons and tons of it were gathered. So much has accumulated that the inquiry division now occupies almost half a floor in one of Ft. Worth’s modern skyscrapers. All of it in lurid pictures and by honeyed word promised rivers of oil. x But what really came of these promises were rivers of tears and teacups of oil as we bhall see in later chapters of this series. (Copyright, 1923, by NEA Service.) NEXT, Gibbons will tell the methods used by the crooked ofl stock promoter.