Indianapolis Times, Volume 46, Number 104, Indianapolis, Marion County, 10 September 1934 — Page 5

SEPT. 10,193*.

CORRUPT GUARDS ‘PAID OFF’ IN DELIVERY OF DILLINGER MOBSTERS, PROBER IS TOLD Officials, Inmates Differ Only on Amount Paid, Ranging From $5,000 to $10,000; Battle Between Old, New Regimes Blamed. BY RAHIL GALLAGHER I>ibm Staff Writer No one at the Indiana state prison—officials, guards or inmates—seriously doubts that a large sum of money was parsed to loose the Dillinger gangsters on a shocked populace.

Only the amount paid to corrupt guards, officials and trustees differs. Reported sums range from $5,000 to SIO,OOO. Just why the fuilt for allowing Harry Pierpont and nine other desperate characters to walk armed from the heavily guarded penitentiary to launch a series of outrages which cost a score of lives and millions of dollars never has been fixed on individuals is one of those mysteries which one finds nicely bound up in political red tape. More than forty old-time guards are reported to have been dismissed by the present administration and new men' substituted. The former deputy warden was fired shortly after the delivery of the Dillinger gangsters, along with several guards. Penal experts refuse to allow all the culpability for the escapes of Harry Pierpont and his pals to be placed on the old administration. "The new administration should have known that things were oound to be bad with two warring factions among the guards and officials.” said an Indian penal expert who has investigated the prison many times, "and taken steps to clean house before the trouble started.” Battle Between Old. New The fundamental cause of the delivery on Sept. 26. 1933. is given by reliable penal experts as a personal enmity between the old order officials and the new when the present administration took office. That and money supplied through John Dillinger. Prison experts point out that had a cwil service system of selecting ant. retaining competent officials been ;n effect in Indiana, such as The Times proposes for adoption, the likelihood of such conditions would have been reduced substantial)’. Governor Paul V. McNutt repeatedly lies said in speeches that offi-, rials expect to prove a pay-off in connection with the big break. But a year has passed and no satisfactory explanation ever has been made. The Times has unsolicited affidavits in which former convicts give names, dates and places which trace the whole history of the amazing plot. But because they are statements of convicts who may bear malice. The Times hesitates to place too much credence in the affidavits. Former Guard Involved The writer talked to D. C. Stephenson and other prisoners about the "big break.” He also asked officials about their version. Discrepancies cropped up in the course of the interviews concerning the names of guards who received the money. "No. he didn't figure in that way.” or "I don't think he got that much” were the unial Answers to questions concerning the guilt or innocence of individuals. Stephenson named a former guard of the prison as the chief plotter in the escape of the gangsters. He. with scores of other prisoners and guards in the institution, knew that "something” was coming off.” it was learned. Officials Knew of Plot There is no question that certain officials in the prison also knew about the proposed escape. The Tunes has been informed. But there the story ends so far as official verification is concerned. A former convict who told The Times that he had been working in the office of the prison for several years pnor to the delivery of the Dillinger gangsters, gave anew version of the sensational escape. He stated he was sitting at his desk near the warden's office one night several weeks before the break, w hen a trusty came in and handed an official of the prison a packagd wrapped in newspaper. The official, according to the affidavit of the former convict, opened the package in front of him and produced two pistols, a .45 and a .32. Guns Near Shirt Shop The official made no effort to hide the guns, the former prisoner declared, and attempted to stuff them in his coat pocket, but they bulged. Next day. according to The Times’ informant's affidavit, he found the guns lying near the shirt shop. He says lie recognized them as the guns he had seen the night before in the warden's office, because they were wrapjvd around with cartridges and S2B ir. cash was tied to the trigger of one gun. The prisoner did not touch the pistols, he stated, but told an official of the prison, since dismissed, of his find. The former prison employe is alleged to have told the prisoner to keep his mouth shut if he wanted to keep his "soft job." The prisoner stated that the plot-

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ters meant to have the first two pistols delivered in order to "cover up” on the delivery to the jail of the twelve pistols with which Pierpont and the band of ten felons made their escape. He said the twelve pistols w’ere delivered to the jail the night before the "break” by the same trusty who had delivered the pistols which wrre found. ‘ On the night of the break.” The Times' informant said, "the trusty gave me two boxes of cartridges wrapped in a newspaper to deliver to an official. I gave them to the official and he said all right, if you want me I'll be down in the shirt shop * It had not been the official's custom. In my years in the prison I never had seen him go to the shirt shop at night before.” "Some of the men who escaped had been assigned to the shirt shop a few days before the break.” False, Coy Claims Wayne Coy, state official who investigated the break of the Dillinger gangsters, termed The Times’ informant's story false. He did not deny, however, that there was evidence of a pay-off and collusion of guards. A fierce resentment burned in the eyes of the dark young man who sat across from me at the long tabic in the prison reception room. "I've been a liar and a thief almost all my life, but now I'm a killer. I'm afraid.” he said. "Maybe you think I shouldn’t be resentful.” the convict says. “I've got a soft job here clerking and I’ll probably get a parole when my time comes around. I was ‘rapped’ for grand larceny. Steal for Starving Families "But when you live in a place like this,” he continued, "you see things that make you hate the law and everything about organized society. "You see men brought in here for stealing a few' dollars. Perhaps the 'prisoner has been on county relief. He steals to help his starving family, and there are lots of cases like that in here. And then you see the poor guy turned down by the parole board for violation of some slight technicality. "And while the parole board is turning him down,” the prisoner continued, “you see another prisoner who has some political pull or some money, suddenly released, although he has broken every rule in the place.” The Times withholds the name of this prisoner fearing he may be subjected to discipline which he doesn't deserve for giving this newspaper information.

The coneluding installment of this series will be published tomorrow and will deal with smuggling of contraband through the co-operation of guards. NRA PARLEY IS TONIGHT Roosevelt and Johnson to Confer on Reorganization. By I nitrd Prr ** HYDE PARK. N. Y.. Sept. 10.— Complex problems of NRA reorganization and legislation will be put up to President Roosevelt tonight. These matters, which already have provoked sharp cleavage in New Deal ranks, are to be projected when Mr. Roosevelt meets with Gen. Hugh S. Johnson, his fiery recovery administrator, at the summer W’hite House.

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The Coming American Boom a a a a a a ana By Major Lawrence L. B. Angas

(Continued From Page Onei

as if money is expected to depreciate, owing, say, to credit expansion, holders of money balances tend to spend them more rapidly on goods and industrial securities. In i this way factors relating to money itself, and to changes in its quantity and in its expected future value as compared wth goods, may largely influence its short-run flow and thus affect general business. u n tt THE crucial question with which this book deals is whether a government can, by deliberately fostering changes in the supply of money, hasten the end of depression? Can, in fact, an artificially created redundancy of spending power in the pockets and pass books of the public terminate the present industrial stagnation? Such a policy is, I am convinced, the consistent underlying theme of the Roosevelt recovery plan. By devoluing and then revaluing the dollar he has widened the basis of credit to an extent that would permit, were is fully used, a level of prices and a volume of business many times that even of the boom period of the late 1920'5. The significance of his enormous scheme of public works financed mainly by heavy borrowing from the banks, is that it meets the need not only for expanding the bank credit currency, but also for forcing it rapidly into active circulation. Many claim that in America “inflation” has already failed; the truth is that it has only just begun. It has, in fact, taken a year to prepare the groundwork for the great and necessary expansion of credit w'hich is now being maneuvered. Though a rise of say 10 per cent in the money balances held by the public may not immediately prove effective, a rise of 25 per cent may, and of 50 per cent almost certainly will have the desired effect of forcing the possessors of idle balances to spend them and thus start the virtuous circle of rising prices, rising wages and rising profit margins, which constitute recovery.

MISSION’S HOSPITAL DRIVE IS LAUNCHED Dr. Benson Asserts City Can Finance New Tuberculosis Unit. "Indianapolis has the ability to finance not only Industrial enterprise, but philanthropic and moral enterprise as well,” Dr. John G. Benson, general superintendent of the Methodist hospital, declared today at a luncheon at the Columbia Club at w'hich the Flower Mission tuberculosis hospital campaign was launched. Frank B. Flanner, campaign chairman, presided. Others speaking w'ere Mrs. David Ross, Flow’er Mission president; Mayor Reginald H. Sullivan and William J. Mooney Sr., campaign vice-chairman. SIX GO TO MEETING Indianapolis Florists in Denver for Convention. Six Indianapolis people are attending the annuaL convention of the International Florists Telegraph Delivery Association, meeting in Denver. They are C. R. Greene, Irwin Bertermann, Clara Aulvach, A. G. Aulvach and Mr. and Mrs. C. E. Steinkamp.

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THE INDIANAPOLIS TIMES

THE experiment may be compared | to the boiling of a liquid. For i some time the observer can detect no 1 change as he gazes upon the sur- j face of the water. Just as he is ! beginning to discredit the efficacy ; of the fire, the pot begins to bubble j and boil. This is what I venture to forecast is about to happen with credit! expansion in America. The chief economic feature of Roosevelt's recovery policy— even though some people venture to say that he personally does not realize it—is that since his government borrowing gives rise to bank credit currency expansion it will set in motion the irresistible economic force of the so-called redundand money balance; namely, that people who have more and more money pumped into their passbooks gradually begin to feel richer, become more confident, spend money more freely and thus revive trade. The various phases of this monetary action are as follows; 1. Roosevelt has devalued the dollar and thus widened the gold basis foi bank credit. 2. This enables the banks to increase their investments and also their loans to industry. 3. Since, however, lack of confidence may delay investment by the banks and also borrowing by industry', Mr. Roosevelt is hastening the whole process on by arranging that the government shall borrow from the banks (either on short term or by getting them to subscribe to long term loans) for the purpose of public works, etc. 4. The expenditure among contractors, etc., of this borrowed bank money is itself a direct improvement to certain industries. But of even greater importance is the indirect effect, namely, that such borrowing increases the bank money in the passbooks of the public and creates the important conditic&i of monetary redundancy. 5. To start with, the public, although they hold extra money, may not increase the speed of their expenditure. But if the procedure is progressively continued, the policy will at last reach flash-point and begin to take effect; especially as the cheapening of money, which results from the banks having surplus reserves and consequently buying more investments, gradually makes all securities rise and makes people in general feel richer on paper—and, therefore, more willing to spend their surplus bank balances. tt tt tt IT is true that lately there has been a temporary lull in trade after the recent sharp increase since March, 1933, but it is economically certain that the continuance of government borrowing and expenditure will, by further increasing the balances of the public with the banks, lead to an increase in the volume

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and velocity of private expenditure also, and this will terminate the present seasonal reaction and lead to another new upswing in trade. When this occurs general confidence will revive and the movement will gather momentum, for there will then come into general operation all the virtuous-circle factors of the business cycle; larger purchases; a fall in retail stocks; increased orders to manufacturers; increased manufacture and larger industrial incomes paid out in the course of production; larger expenditure by workers before the new' production is completed; a further decline in inventories and the prospectof still higher prices; increased manufacture by makers for stock in the hope of a rise; hurried buying by consumers in the fear of it; increased borrowing from the bankS by middlemen, manufacturers and speculators, and a further increase in the bank credit currency. A “virtuous” upward spiral will thus have begun; the vicious circle will be forgotten. Boom psychology will add fuel to the flames. Keep a curve of demand-deposits. Its increase can spell only one thing —a boom TOMORROW—How the administration’s policy of credit inflation through government borrowing is now getting under way through delayed circulation of money for public works. (Copyright 1934 by Simon and Schuster. Inc.; distributed by United Feature Syndicate, Inc.)

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SCHOOL DAYS RECALL 70,000 CITYCHILDREN Pupils End Vacations When New Terms Start; Classes Tomorrow. City househ6lds were in a jitter today. Seventy thousand Toms and Marys got a last ear inspection, a final clothes-brushing and a parting reminder of “No monkey-shines. Do as your teacher Tells you!” as city schools swung their doors wide open for the beginning of the first term.

Enrollment in elementary grades and high schools was expected to reach 62.000 with parochial school registration bringing the registratoll to 70,000. The grade schools opened at 8:30 with recesses at noon, following a morning of registration. Formal classwork will begin tomorrow. High school pupils registered and had short classes. Their schools also were dismissed at noon. New pupils registered in the afternoon. All-day sessions begin tomorrow in all schools. Half-day sessions will be in order if the weather becomes too warm. Parochial grade school pupils attended mass at 8 today and began school work at 8:30. "Registration in its entirety will not end in the city schools for two

weeks.” said Paul C. Stetson, school superintendent. All city high schools, with the exception of Technical high school, held registration for upper classes at 8:30, with freshmen ar.d new students reporting at 1:30. High school principals addressed the new pupils. . At Technical upper classmen reported at 9 while freshmen and new students registered at 1 with convocation at 2:15. Cathedral high school. St. John’s academy. St. Agnes’ academy. St. Mary's acedemy and Sacred Heart academy held morning sessions today. Ladvwood academy wall not open until Sept. 18. Indiana Central college also opened today. In the Air Weather conditions at 9 a. m.: South southwest wind, 8 miles an hour; barometric pressure, 30.22 at sea level; temperature, 68: general conditions, clear; ceiling, unlimited; visibility, four miles, smoky.

What a Break! FOR ALL INDIANAPOLIS IT RAINED i/L LAST THURSDAY > I M.a Hr for further announcements \ see tomorrow's papers Y*

PAGE 5

TWO YOUTHS ESCAPE FROM STATE FIRM Prisoners Flee From Work Detail. Is Report. By Uttittd Prrtt PUTNAMVILLE. Ind.. Sept. 10.— Two prisoners who escaped from a work detail at the Indiana state farm were sought by guards and police throughout the state today. They are William Deaton, 18, London. Ky„ sentenced from Harrison county, and Taylor Brewer, 19, Manchester. Ky., sentenced from Dearborn county. State farm officials said they escaped while working on construction of a corn crib near the institution.