Indianapolis Times, Volume 43, Number 293, Indianapolis, Marion County, 16 April 1932 — Page 3

'APRIL 16, 1932-

HUGE UTILITY TAX EVASION ISJHARGED Action of State Board in Slashing Valuations Is Flayed by Kivett. BY BEN STEEN Searching inquiry into reasons fcr action of the state tax board, over a six-year period, in slashing $47,413,816 from the admitted tax valuation of the Indiana Electric Corporation, an Insull holding, was being conducted Friday 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 has 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. Suit Is Filed As first 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, apeording 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 rapital 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 allege! 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 figure, 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 fbr “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 Valuation by Company. Board. Reduction. 1926 ....$12,137,169 $ 4,180.820 $ 7.956,349 1927 .... 13,466.699 4,507.180 8,959,519 1928 .... 15.049.666 5,600,700 9,448,966 1929 .... 15,249,516 8,450,000 6,799,516 1930 .... 15.542,567 8.950.000 6.592,567 1931 .... 17,061.149 9.399,250 7,661,899 Totals $88,506,766 *11,087,950 $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 lost 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. PEACH DAMAGE HEAVY 95 Per Cent of State’s Crop Injured by Freeze. By United Press LAFAYETTE, Ind., April 16. Damage to peaches in the main peach-growing section of Indiana, extending from Oaktown to Evansville, approximately 95 per cent, it was estimated today by the Purdue university horticulture department. The freeze during the early part of March was found to have destroyed virtually the entire Elbert crop, the principal commercial variety, C. L. Burkholder of the horticulture staff, announced. COPS PROBE S2OO FIRE Firemen Blame Incendiary for Walnut Street Blaze. Following statements by firemen that fire in two double houses in the 400 block West Walnut street Friday night was of incendiary origin, police are making an investigation today. All the houses are vacant. Damage is estimated at S2OO. The houses are at 401-403 and 405-407 West Walnut street.

Wouldn’t This Tickle King Cole?

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Here are fiddlers eight, representing as many states, who formed a national orchestra during the silver anniversary of the musical supervisors’ national conference at Cleveland, O. They are, left to right, back row: Janice Aiken,

‘Hush, ’ Judith Tells Audience

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Flees Noose; Free for 18 Years; Given Life

By United Press CHARLESTON, W. Va., April 16—The law caught up with Frank Pauletta today, eighteen years after he had escaped from jail just as he was to have been hanged for murder. He was sentenced today to prison “for the rest of his natural life.” Two conflicting characterizations of Pauletta were presented to Governor William G. Conley today before he made his decision on the life term for Pauletta. One was given by Judge M. A. Musmanno of Pittsburgh, defense counsel, portraying the prisoner as a respected citizen of Coverdale, Pa., who lived eighteen years of fugitive torture.

The other was from the Governor’s investigators who reported that Pauletta lived only five months at Coverdale, had been arrested on liquor charges, and had threatened witnesses who were to appear against him. n m Frank gilberti was killed during a quarrel at a dance hall at Clarksburg, W. Va., in 1914. Pauletta was convicted. The gallows were ready. A jailer went to the condemned man’s cell. He was gone. Records of the case faded in the pages of the Harrison county courts. A man who called himself Louis Ross moved from place to place in mining fields. He was married and became the father of four children. Mussmanno told the Governor there was a worse punishment than prison. Louis Ross, said the attorney, paid a thousand penalties for Frank Pauletta and shuddered at shadows in which he saw the fantastic shapes of policemen come to take Ross to pay Pauletta’s penalty. “Pauletta’s crime was one of passion, not more than second degree murder,” said Mussmanno. “Ross, the other Pauletta, was a good citizen. Each knock on the door struck terror into his heart.” BEARS LIGHT SLEEPERS Brain Breaks Hibernation to Attack Ranger-Photographer. By United Press YOSEMITE PARK, Cal., April 16. —Hibernating bears sleep lightly, if you ask ranger Ralph Anderson. Anderson received a badly gashed hand recently when he was attacked by a bear which he believed sleeping soundly in winter hibernation. He was attempting to photograph the bear in her den.

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Judith Anderson

BEES MISS DEPRESSION Use of Honey in Candy Keeps Up Value of Product. By United Press WASHINGTON, April 16.—The bee business isn’t much affected by the depression, the department of agriculture reports. Last year’s honey crop was worth about $10,000,000, and beeswax about $1,000,000. The value of bees in the pollination of fruit was said to be great, although it is inestimable. New methods of preparing and wrapping honey have stimulated the market, the department states. Likewise, nickel candy bars containing honey and almonds have had a huge sale and consequently increased the use of honey.

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Ketchikan, Alaska; Hazel Brown, Colorado Springs, Colo.; Olga Sarceeti, Rock Springs, Wyo.; Jenevieve Worth, Blackton, 111. Front row: Thelma Kamie, Mobile, Ala.; Marie Barnes, Charleston, W. Va.; Mary Alice Jenkins, Ft. Worth, Tex., and Katherine Lee, Jamestown, N. Y.

Kissing Scene Spoiled by Titters By Times Special KANSAS CITY, Mo., April 16. Judith Anderson doesn’t care for tittering audiences, and she wasn’t at all backward here Thursday night in voicing her resentment. At a performance of “Mourning Becomes Electra,” last night, Miss Anderson and Eric Kalhurst stood alone, paying attention to a long kiss. . Before the lover’s lips parted soft laughter rippled over the audience. Miss Anderson continued her part, but the titters did not abate. Suddenly sne turned slightly toward the audience. “Oh, please be quiet,’’ she said. The audience became quiet. FRAUD BY HYPNOTISM BARED IN MIDWEST Aged Men Forced to Pay Huge Sums While Under “Spells.” By United Press INDEPENDENCE, Kan., April 16. —Fraud by hypnotism is the latest racket uncovered in the middle west. Two aged men, R. J. Debusk, 73, of Havana, and G. W. Reed, 88, of Elk City, told police they had been forced, under the spell of two hypnotists, to pay large sums of money for “eye treatments.” The racketeers presented themselves to Debusk and Reed as "eye specialists,” and visited the men in their homes to give" them treatments. Debusk said that, "under a spell,” he withdrew S9OO from the bank to pay the men. Reed contributed S3OO. Doctors here said the men apparently had been hypnotized.

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THE INDIANAPOLIS TIMES

LESLIE REFUSES 1 EIGHTH DISTRICT ELECT|ON CALL Successor to Vestal Will Not Be Chosen Until Next November. BY DANIEL M. KIDNEY Governor Harry G. Leslie has announced he will not call an election in the old Eighth district to fill the congressional vacancy caused by the death of Albert H. Vestal. The Constitution of the United States states: “When vacancies happen in the representation from any state, the executive authority thereof, shall issue writs of election to fill such vacancies.” “Shall” means “must,” according to an unofficial opinion from the office of the attorney-general. But it is bad business for the G. O. P. to be having elections that can be avoided at this time, observers pointed out. A Democrat elected in Vestal’s place might discourage Republican hopefuls. Leslie says there will be no special election as there is “no demand for it.” In addition, it would cost $40,000, he asserts. If there is any voting on the post it will be at the regular election next fall, he said. "Why he did not immediately arrange for the special election so it could be included in the primaries, May 3, was not explained. Injury Kills Young Athlete By United Press LAFAYETTE, Ind., April 16— Bernard Noll, 17, Klondike high school athlete, died at St. Elizabeth hospital Friday night of a skull fracture sustained a week ago. Apparently the victim of a hit-run motorist, he was found lying on Road 52 near Klondike. He never regained consciousness.

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Wants Balm

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Their names are the same, but they aren’t related, even by marriage. In fact, that’s the complaint of Miss Eva Bromley, pretty manicurist of Minneapolis, Minn., who has filed a breach of promise suit against Kenneth Bromley, publicity agent for a Hollywood film company. She asks $50,000 balm, alleging Kenneth promised to marry her two months ago, but wed another girl five weeks later.

GIANT INSULL UNIT IN HANDS OF RECEIVERS Utility Magnate Is One of Trio Appointed by Federal Judge. By United Press CHICAGO, April 16.—Samuel Insull, 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 f or Judge James H. Wilkerson before whom the petition was filed Thursday. A bitter fight against the receivership, the largest ever ordered m American business history, was waged by a dimunitive lawyer, W. A. Leopold, who said he represented “the owner of 100 shares of stock.” 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

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Attorney William Lattimer, representing the Middle West Company, and attorney Thurlow G. Essington, for the Lincoln Printing Company, explain that the company was 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. BAN ON LOAN COMPANY Permanent Injunction Placed on Capitol Trading Firm. Permanent injunction against an alleged loan shark concern was issued Friday by Judge Edgar A. Rice of Crawfordsville, sitting as a special judge in Hendricks circuit court. The injunction was handed down against the Capitol Trading Company of Indianapolis, operated by Amos G. Haines and J. F. Hansen.

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