Indianapolis Times, Volume 43, Number 292, Indianapolis, Marion County, 15 April 1932 — Page 1

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HUGE UTILITY TAX EVASION IS CHARGED Action of State Board in Slashing Valuations Is Flayed by Kivett. TOWNSHIP FILES SUIT Attorney Starts Battle to Recover Millions in Lost Revenue. BY BEN STERN Searching inquiry into reasons for action of the state tax board, over a six-year period, in slashing $47,418,816 from the admitted tax valuation of the Indiana Electric Corporation, an Insult holding, was being conducted today by S. V. Kivett, Martinsville attorney. “These arbitrary reductions by the state tax board have resulted in loss of hundreds of thousands of dollars in revenue to the .various taxing units in which the company operates,” Kivett charges. He ha* been retained by Perry township authorities to institute suits to regain the revenue which is charged has been lost by the tax board’s reductions, not only in valuation of the electric corporation, but other utilities having property in the township. Sait Is Filed As Jirst, step in Perry township’s fight to regain the revenue, Kivett has filed suit in superior court two to obtain $175,000 in back taxes plus interest, which, he charges, was lost through “fraud.” The suit avers the utility and tax board did not follow the law in fixing appraisals. The statutes, according to the suit, provide that a utility must make an annual report to the board. This return is supposed to set out the amount of the corporation’s capital stock, both common and preferred, authorized and outstanding. In addition, the true cash value of the stock and the real estate, structures, machinery, fixtures and equipment also are supposed to be enumerated. Must Show Indebtedness The return also is to list the name and value of each franchise and privilege, owned by the utility and further is required to show the total amount of indebtedness, including mortgages. These then are added and deductions made for the amount of real property tax already assessed in each taxing unit. Remainder is evaluated and apportioned to the units in proportion to the extent of the company's tangible property within its boundaries. Kivett charges the utility did not state its true valuation in the report. He alleges amount of mortgages was not written into the return and. instead of showing for deduction purposes, the assessed valuation of the real property, a book value, which was a larger figure, instead was given. Fraud Is Alleged This, he charges, is fraud. Kivett cites this alleged example in his suit. In • 1928, the utility’s real property had an assessed valuation for taxation of $2,251,430. Instead of subtracting this figurp, the company’s officials wrote in the book value, which they fixed at $3,957,828, which was $1,706,398 more than the amount really paid upon. Total of increased deductions obtained by this method alone over a six-year period was $12,043,019, Kivett charges. He also asserts for “no known reason” the tax board arbitrarily reduced the valuation for taxation admitted by the utility, which. Kivett charges, was millions less than its real value for taxation and much less for rate making purposes. Tabulation Is Given Tabulation in the six-year period from 1926 through 1931 reveals the company admitted a total valuation of $88,506,766, which, Kivett says, was millions too low. and the tax board reduced this total to $41,087.950. This is a total reduction of $47.418.816. The company’s figures were millions lower than would be found by investigation, he avers. The financial outlay, as taken from the company’s admitted valuation, the figure set by the board and the loss to the state, follows: Valuation by Valuatton bv Company. Board. Reduction. 1926 $12,137,169 $ 4.180.820 $ 7,956.349 JM] -• THSSS2 8:959.519 5 600.700 9.448,966 •••• 8 - 4M °o° 6.799.516 1930 .... 15.542,567 8,950,000 8.592,567 1931 17,061.149 9.399.250 7.661.899 Totals $86,506,766 $41,087,950 $47,418,816 Kivett charges that as “a direct and proximate result,” Perry township was deprived of a just and lawful assessment of the property of the utility and lost the right to collect taxes upon the sum which fraudulently and illegally was assessed and distributed to the township and the true and legal sum which should have been assessed. Because of these arbitrary’ reductions by the tax board, the township lo6t an assessed valuation of $11,318,750, which, at its various tax levies for the period in question, would have brought in $152,855.72. Kivett charges. In addition to this. Kivett charges loss of the use of the money, and damages totaling $175,000 are asked from the Public Service Company of Indiana.

VETERANS GIVE THEIR VIEWS ON THE BONUS. EIGHT COLUMNS OF LETTERS ON PAGE 14. WATCH FOR THE SECOND PAGE OF LETTERS IN SATURDAY’S TIMES.

The Indianapolis Times

VOLUME 43—NUMBER 292

CRUSADES FOR AGED

Ex-City Teacher, 82, Returns

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FIFTY years ago Lillien J. Martin resigned as a professor of physics at Shortridge high school. Dr. Lillien J. Martin—doctor of philosophy, professor emeritus of psychology of Leland Stanford, globe trotter, consulting psychologist, aviation addict, driver of her own car—returned to this city Thursday as the apostle of the right of age to work and completely sold members of the Personnel Managers’ Association on the theory that to discharge men and women because of age is unscientific. uneconomical end monstrous in its brutality. At the age of 82, she is crossing the continent in her own car, with a mechanic as companion, to deliver her message before learned societies and groups of industrialists in the east. Her stop in Indianapolis was a redemption of a promise made to herself a half century ago to return some time to a place where, she believed, a welcome always would be given to ideas and ideals. Most of the pupils of her early days are gone. Those who remain remembered, and her hotel rooms were filled with flowers sent. by those who have followed the career of this remarkable woman. “Old age is the most .glorious period of life, the most satisfying, the most useful,” was her declaration. “I have made a study, as a consultant, of many businesses and industries. I was told that men and women are slow: that (Turn to Page 20)

KILLER IN HONOR’ CASE TO BE NAMED

Story of Attack by Gang of Natives on Wife Related by Officer. BY DAN CAMPBELL llnitrd Pres* Staff Corresnondmt (CoovriKht. 1932, bv United Pressi HONOLULU, April 15.—Judge and jury waited in a sultry courtroom today for a white-faced, shuddering young navy officer to unmask the honor slayer of Joe Kahahakai, Hawaiian. Only this final drama of the tragedy of his life remained to be

told by Lieut. Thomas Hedges Massie as he related the stirring events culminating in K a h a h a w ai's death and the murder trial of Massie, his society matron mother - in-law, Mrs. Grace Bell Fortescue, and two seamen, Albert Orren Jones and Edward John Lord.

Clarence Darrow stemmed the 26-year-old Kentuckian's rising emotions which neared the breaking point when he described the brutal attack on his blue-eyed bride by a gang of native hoodlums—of whom Kahahawai was alleged to be one. Darrow announced insanity would be a defense plea, and Massie added to his tale in a passionate outburst 1 , “It had a strange effect on my mind.” The famous Ala Moana case, as the trial of five natives accused of attacking Mrs. Massie was knewn, became the defense of the four Americans when Massie was called as their first witness. Florid-faced John Kelley, who had just concluded the prosecution’s circumstantial evidence, interruptiTum to Page Nine) WATER EPIDEMIC CAUSE Blamed for Strange Malady in West Coast City, By United Press SANTA PAULA. Cal.. April 15Danger from contaminated city water, blamed for the illness of nearly 500 persons here, was believed past today after flushing of mains and conduits, believed, poisoned by cesspool seepage.

Dr. Lillien J. Martin

ELLIS TO SEEK WATER FIGURES Commissioner Wants Data Mayor Used in Speech. An attempt to obtain operating figures of the Indianapolis Water Company as a preliminary step in reopening the “rate compromise” case, was to be made this afternoon by Howell Ellis, public service commissioner. After learning that Mayor Reginald H. Sullivan had obtained figures for presentation at a south side civic meeting recently, Ellis said he saw no reason why the commission could not check the records. Scores of complaints on the “compromise rate” have been received by the commission. Commissioner Harry K. Cuthbertson, who handled the rate case, is at Martinsville and not expected to return to the statehouse for a week. Ellis lost an attempt to reopen the case last week when a 2 to 2 vote blocked the action. Hourly Temperatures 6a. m 36 10 a. m 52 7a. m 37 11 a. m 55 Ba. m 47 12 (noon)., 55 9 a. m 50

Rather Gooey By l nited Press CHICAGO, April 15. A pleasant young man entered a south side candy shop and said to Frances Alloway, 23, the clerk: “You're a sweet girl in a sweet place.” Then he drew a revolver and told her to give him the money in the cash register. “You’re too sweet to deceive me,” he said as she handover sl4. “It was sweet of him to leave without this,” said Miss Alloway today, displaying S7O she hid under the counter during the stream of wisecracks.

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POSTAL WARNINGS STOP Police Halt ‘‘Follow-up System” on Traffic Violators, Postal card follow-up of stickers placed on automobiles is at an end, ifc was announced today by Louis Adams, deputy prosecutor assigned to municipal courts. Hereafter, a motorist who is given a sticker will be arrested unless he reports to police headquarters within seventytwo hours.

Massie

Lindy Pleads With Press for Secrecy, Hinting Climax Is Near in Kidnap Hunt

By United Press HOPEWELL. N. J.. April 15. Colonel Charles A. Lindbergh, expressing the appreciation Mrs. Lindbergh and himself felt lor the press co-operation given them in the forty-five-day hunt for their kidnaped son, have issued this statement: ' ‘‘Mrs. Lindbergh and I want to express our great appreciation to those members of the press who, in many instances, have given us their co-operation, often to their own disadvantage. “It is still of utmost importance for us and our representatives to move about without being questioned or followed, and we are again re-

Fair tonight, followed by increasing jeloudiness Saturday; slowly rising temperature.

INDIANAPOLIS, FRIDAY, APRIL 15, 1932

LEGION STAND ATTACKED IN BOMB FIGHT Delegates Voted Against Instructions at Detroit, Congressman Says. FARMERS BACK MOVE National Union in Favor of Payment, Committee Is Told by President. By United Press WASHINGTON, April 15.—The $2,000,000,000 cash bonus for veterans was indorsed today before the house ways and means committee by Representative Condon (Dem., R. I.) as a measure “which would benefit not only the soldiers, but the whole nation as well.” The Rhode Island member said that the legion convention at Detroit, which went on record as opposing the bonus, did not represent the true sentiment of the rank and file of veterans. “A number of delegates,” he said, violated their instructions on the bonus question and voted against it. I know that two Rhode Island delegates did so. My state ‘ overwhelmingly favors the bonus and the sentiment is not confined to veterans.” Representative Cochran (Dem.. Mo.), followed Condon and urged favorable consideration of a bonus bill which would pay the veterans from a tax on legalized alcoholic beer. Farmers’ Help Pledged The support of at least a portion of organized agriculture W£*s thrown behind the bonus bill, when John Simpson, president of the Nation Farmers’ union, testified in its behalf. “We must get a bigger crop of money in the country,” he said. “This bill provides the best crop for years. “It is best because it will not be under control of bankers. No group of bankers will be able to retire this currency. I want to say the Farmers’ union backs the Patman bill.” Simpson, as well as previous speakers,' was applauded loudly by the audience in the committee room, largely composed of veterans. Chairman Crisp was forced to lecture the spectators, telling them that decorum must be preserved. Others Support Bonus Representatives of veterans’ organizations followed Simpson. L. S. Ray, legislative agent of the Veterans of Foreign Wars, and Thomas Kirby, representative of the Disabled American Veterans, told the committee that their organizations were soltaly behind immediate cash payment; of the bonus. Kirby said'that a smrvey last July had shown that mor than one out of every four disabled veterans able to work were unemployed. Two Oklahoma Democratic congressmen, Representatives Swank and Hastings, briefly addressed the committee, stating that they desired to place themselves on record as supporting the cash bonus. HOOVER IS ADVISED"TO STICK TO HIS OFFICE Politicians Want Him to Cancel Olympic Games Trip. By United Press WASHINGTON. April 15.—President Hoover, if he follows advice that political friends now are showering upon him, will conduct his re-election campaign from the White House and the banks of the Rapidan. The-United Press was reliably informed today that pressure is being brought on Mr. Hoover by Republicans to cancel his scheduled trip to California. He had planned to attend the opening of the Olympic games in Los Angeles on July 30 and spend part of the summer at his Palo Alto (Cal.) home. * JAPAN STAND ASSAILED China Charges Frustration of All Manchuria Efforts. By United Press GENEVA, April 15.—China charged in a memorandum to the league of nations today that Japan had frustrated all attempts to carry out league provisions for settlement of the Manchurian situation and therefore was responsible for abnormal conditions in the three eastern provinces.

questing the complete co-operation of all members of the press to this end. CHARLES A. LINDBERGH.” Baby Alive and Well By United Press NORFOLK, Va. April 15—New information has been received which leads three Norfolk investigators to believe that the kidnaped Lindbergh baby still is alive and well, Dean H. Dobson-Peacock said today. The rector had just conferred with his two associates, John Hughes Curtis and Rear Admiral Guy H. Burrage. who returned home early this morning after being away on mysterious missions for several days. Neither has made a statement. Dean 'Peacock reiterated a pre-

7 KILLED, 60 INJURED IN MYSTERY EXPLOSION AT NEW OHIO STATE OFFICE

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Upper: Inside view of Ohio's new $6,500,000 state office building, showing terrific force of explosion Lower: General view of the structure with outline marking portion blown out by blast.

GANG CHIEF, TWO GUARDS ARE SLAIN

Racketeer Is Riddled by Machine Gun Fire on Downtown Street. By United Press MADISON, 111., April 15.—Thomas E. (Tommy) Hayes, notorious gang leader, and his two bodyguards were ambushed and shot to death today with machine guns without a chance to defend themselves. In a futile attempt to protect their leader, William Conrad Wilbert and Harry L. (Pretty Boy) Lechler were shot to death in an automobile in which they were following Hayes. The killers trailed Hayes and his bodyguards from Chicago Thursday night and attacked the trio first near Granite City. 111. Wilbert and Lechler were killed there. Hayes fled in his armored automobile after his two escorts were slain, but the killers kept on his trail, and finally overtook him on a downtown street here. In an attempt to escape, Hayes drove his automobile through a fence surrounding the Hollywood Athletic Club, but two of the killers pursued him on foot. They threw open the right hand door of the car and stepped back with a machine gun leveled at the door. As Hayes scrambled out he w r as shot in the back as he fled. He fell dead twenty paces from the automobile. Sixteen bullet holes were found in his body.

vious statement that the Norfolk plans would not permit another ransom hoax to be perpetrated against Colonel Charles A. Lindbergh. Secrecy Over Activities By United Press NEW YORK, April 15.—Secrecy thrown about every phase of activity to return the kidnaped son of Colonel Charles A. Lindbergh gave hint today of an approaching climax to the baffling crime whicl. has held world interest since March 1. John P Condon. “Jafsie." asked to be given rein in his efforts to recover the baby after he and Colonel Lindbergh were doublecrossed in the $50,000 ransom deal on April 2.

Entered as Second-Class Matter at Poatoffice. Indianapolis

GENUINE {certified} mm USED CARS LISTED ON PAGE 22

SHERIFF FACING FIGHT County Prepares to Oppose Road Patrol Funds Mandate. Charles B. Clarke, county attorney, today prepared for a court fight against the mandate filed by Sheriff Charles L. (Buck) Sumner for a $26,700 appropriation to reestablish his road patrol. Clarke was instructed to fight the suit by the county council Thursday. The council held it acted legally in abolishing the patrol as an economy movement.

Lindbergh, likewise, asked the co-operation of the press, insisting that it was of the utmost importance that he and his representatives be not followed or questioned. These facts indicated the Lindbergh family still places the greatest hope in private negotiations. New York police undertook the almost impossible task of tracing the S2O bank note from the ransom fund. That was among the 3,000 deposits made at the East River Savings bank here on April 4 and 5. Colonel Henry Breckenridge, legal adviser to Lindbergh, asked Police Commissioner Edward P. Molrooney to interview every one of the depositors in an effort to trace the biiL

Heavy Slabs of Marble Are Hurled 300 Feet; Damage Million. By United Press COLUMBUS. 0., April 15—State agencies, led by Governor George White, today plunged into a dou-ble-edged investigation of the explosion which late Thursday converted the first two floors of Ohio’s gleaming new $5,000,000 office building into an ugly chaos of broken marble and twisted steel. Seven workmen were injured fatally and sixty others were injured when the explosion hurled huge bronze doors from their hangings, sprayed glass for many yards and brought down a shower of marble blocks. Two objectives were aimed at the inquiry—the cause, and an estimate of the exact damage to the structure. A committee appointed by the Governor and the. state building commission followed the two paths of inquiry. It was estimated that damage to the building would be more than $1,000,000. No Odor of Gas Found Harry F. Hake of Cincinnati, the architect who saw the building grow into a tall white monument on the bank of the Scioto river, was called and asked to construct shoring to prevent further collapse of the interior. Hake wiped tears from his cheeks as he moved about the ruins. Prosecutor Donald Hoskins, Franklin county, joined the investigation cause. James Berry, chief of the division of mines, an authority on dust explosions, today flatly stated that marble dust could not have caused the explosion. No odor of gas was apparent and no gas piping had been installed in the building, which was nearing completion. Marble dust, accumulated in the finishing of the stone work, would not have caused such a violent blast, in the opinion of officials who believed the blast was caused by a bomb. Union Labor Used Three times during the construction of the building strikes interfered. The state construction board had insisted on the use of union labor. The possibility that a bomb caused the explosion was expressed by Fire Chief L. Nice and Frank Henry, chief state marshal, on the basis of a report from assistant Fire Chief C. W. Ogburn. Ogburn said he detected a “sweet odor” when he first entered the shattered building and thought this odor might have been the fumes of nitroglycerin. Nearly 125 men were at work at the time of the blast, with three govi ernment building inspectors.

HOME EDITION PRICE TWO CENTS Outside Marion County, 3 Cents

GIANT INSULL UNIT IN HANDS OF RECEIVERS Utility Magnate Is One of Trio Appointed by Federal Judge. •CAN’T MEET DEBTS' Action Against Great Middle West Cos. Is Biggest in History. By United Press CHICAGO, April 15.—Samuel Instill. whose midas touch built the $2,500,000,000 Middle West Utilities Company, and two other Chicago leading business leaders were appointed today as receivers for the company, the principal unit in Insull’s vast utilities network. United States District Judge Walter C. Lindley named Insull, Charles A. McCulloch, chairman of the board of the John R. Thompson restaurant chain, and Edward N. Hurley, president of the Hurley Manufacturing Company and former United States shipping board head. Naming of Insull was possible, since the petition for receivership was a friendly action brought by the Lincoln Printing Company in which Insull is a large stockholder. The petition was based on a claim of but SB,OOO. Judge Lindley was sitting for Judge James H. Wilkerson before whom the petition was filed Thursday. A bitter fight against the receivership, the largest ever ordered in American business history, was waged by a dimunitive lawyer, W. A. Leopold, who said he represented “the owher of 100 shares of stock.” Tremendous Ramification's Insisting that the receivership would be the “beginning of the end,’ and that stockholders would lose all they had because “big bankers will squeeze out the little stockholders by this trick,” Leopold urged that the petition be denied. Judge Lindley. who had heard Attorney William Lattimer, representing the Middle West Company, and attorney Thurlow G. Essington, for the Lincoln Printing Company, explain that the company wa3 not in position to meet its financial obligations and was compelled to refinance, refused to heed Leopold's objections. “Chaos and turmoil will result if I do not order the receivership,” Judge Lindley said. The tremendous ramifications of the company, which touch industry at virtually every important industrial center on the continent, make the receivership perhaps the most important in the history of finance, the floating debt of which aggregates $600,000,000. Action Long Anticipated The action long has been anticipated as a means of conserving the depression-shrunk assets of the holding concern which controls properties estimated at well over two and a half billion dollars in value. Middle West Utilities itself is a $600,000,000 firm. Insull, whose optimism the prospective receivership would not dampen, hastened to assure investors, that condition of the operating companies was excellent, despite poor economic outlook and that only the investment concern was affected. Revenues of the three largest operating companies. Commonwealth Edison Company. Peoples Gas, Light and Coke Company and Public Service Company of Northern Illinois have been maintained on a high level. Refinancing Causes Trouble Difficulties of the Middle West Utilities arise, as the receivership petition, pointed out, from refinancing. Similar action is expected for Insull Utility Investments, Inc., and Corporation Sedurities Company of Chicago, Investments Trusts of the Insull interests and both large holders of Middle West and other Insull securities. The receivership petition asserted the Middle West Utilities had bank loans of $27,000,000, of which $24,000,000 are demand loans no longer protected by sufficient collateral. Tn addition, $10,000,000 of a $40,000,000 serial gold note issue comes due’ on June 1. Middle West securities holders number about 100,000 holding Id, ,00,000 shares of common stock, priced at 25 cents at Thursday’s close, and 607,000 shares of preferred stock. Operate in 30 States The vast interlocking structure of the Insull interests which the brilliant Chicago industrialist forged out of hundreds of small units is difficult even for the specialist in finance to conceive. The concern was founded in 1912 and grew in giant strides with the growth of the nation. Operations were carried on in more than thirty states and in well over 5,000 separate communities. Its customers number approximately 2,000,000. There are eighty-five individual public utilities in the group including electric generating and distributing companies, electric railway systems, bus Unes.’pipe lines, ice companies, textile units and steam generating plants. In all, there are 119 subsidiary corporations. Joliet Warden Transferred WASHINGTON, April 15.—Major Henry C. Hill, warden at the federal penitentiary at Joliet, til., since 1929. today was appointed warden at the l northeastern federal penitentiary at Lewisburgh, Pa., the justice department announced.