Indianapolis Times, Indianapolis, Marion County, 14 December 1938 — Page 8

OVERVALUATION OF 90 PER CENT

omep AT TRIAL 8

U. S. Presents Evidence of

Duplicate Warehouse Receipts.

5 A former salesman for a Con-| : , tinental Credit Corp. subsidiary, to-

day told a Federal Court jury hearing the alleged million-dollar mail fraud case that collateral on rehouse receipts was A than 90 per cent by one of the defendants. : The witness, Grand Benedict, Toledo, formerly was employed by the Mineral Felt Co. of Toledo. He testified that the certificates were

signed by Ralph 8S. Phillips, treas-| §F

urer of the firm. Ih nine cases, Mr. Benedict said, _ redeipts having a certified value of $3500 each were worth only $243

each at the standard market price. Seven other certificates, bearing a certified value of trom $2600 to $37C0, had an actual sales value of from $185 to $365, he said. Other defendants include officers of the Continental Credit Corp. of ‘Winchester or of its subsidiaries. . Evidence of alleged duplicate warehouse receipts was presented Josterdal. Said They Resigned

Several witnesses also testified that they had resigned . from the Continental Corp. when they found duplicate receipts were being issued against beans and tobacco. WwW. G. Zechar of Versailles, O., a salesman for the Indiana Warehouse Corp. told the jury that James P. Goodrich, former Indiana Governor, had discharged him when he “reported the discovery of duplicate warehouse receipts.” . Witnesses have testified that Mr. | Goodrich was a stockholder in the Warehouse Corp., a subsidiary Continental Credit. : Mr. Zechar stated that on June 7, 1937. C. A. McCorkle. cashier of the Farmers State Bank of Wingate, “tame to the warehouse and asked | to see the tobacco for which he held! a warehouse receipt. . “1 was very much surprised at | this,” Mr. Zechar said, “because the| tcbacco had been sold in January, 1937. to the W. H. Winstead Co.” Proceeds of the sale went to the]

Continental Credit Corp., Mr. Zechar'

testified. : No Reason for Discharge

i Immediately after the visit of Mr. McCorkle, Mr. Zechar phoned the Credit Corp. he said. He was told John W. Moore Jr. vice president pf the Warehouse Corp. and one of the defendants, was ill Forty-five minutes later, he stated, Mr. Goodrich phoned him and told him he fea discharged, Mr. Zechar testied { Mr. Goodrich gave him no reason for his discharge, he said. A few

hours previous to Mr. McCorkle's|

visit, he had mailed a letter of resignation to Continental, the Indiana Warehouse Corp., and the Erhart; Leaf Tobacco Corp. He did not tell the court his reason for resigning. Warehouse receipts also were. is-| sud on other. collateral which he later found had previously been | sold, he testified. He identified a bundle of warehouse receipts, all! of which he said had been issued in duplicate. Upon investigation, he stated. he found that 285 notes cov-! ering 405 receipts valued at $770,000 | had been issued. | A further check, he said, revealed |

that some 65 additional duplicate’

receipts backed by receipts valued at $165,000 had been issued. More than $1,000,000 in warehouse receipts were issued all together, he testified.

Said Tobacco Missing

0. B. Ruth ot Columbus, O., sales‘man for the Credit Corp., told the jury upon investigating a list of warehouse receipts. he found two quantities of tobacco missing. He had received the letter, he said. from E. B. Strecker, president of the Citizens National Bank at Marietta, O., asking him to check an inclosed list of receipts. After he found the tobacco missing. he added, he immediately wrote his resignation. He testified he then told Russell E. Wise of Union City, counsel for Continental, another defendant, that unless the money to cover the receip's was received by him k=fore noon the following day, he would notify the banks holding the notes. Mr. Rutb told the court that Mr. Wise said to another man present at the time, “we can't let him do this. It would stir things up.’

Charge 6000 Bags Short

Later he notified banks at Marjetta and Canal-Winchester, O., of the shortage, he said.’ Several days later Hiram W. Browne, financial adviser for the Continental and a defendant who “has pleaded guilty, ‘called him by phone, Mr. Ruth said. Mr. Browne asked him if he could move some of the Lang Industries notes, Mr. Ruth told the Court.

After he was appointed receiver, |

he said, he checked warehouse re-

ceipts against the contents of six

warehouses and found that where

there was supposed to be 7150 bags

of beans there were only 1052.

~ Other defendants are John W.

Moore Sr., Kenneth P. Kimball,

~ president of Kim-Murph Co. and © Ralph S. Phillips, Mineral Pelt Co.

. treasurer.

of |

‘Holy Night’ Play at School 69

school girls are included in the cast of “Holy Night,” | a religious play to be presented tomorrow night at | School 69 under the direction of Miss Wilma Sonne- '

| tion but that bridges are a part of |

the the highway system and that feeder | |

for than they are at present.”

Times Photo. . Three first grade pupils and two junior high field. They are, left to right—Jean Sedam, Doris Jeanette Wilson, Gloria Kennard and Mary Dunnewold, who take the parts of angels, and Grace Yovanovich (seated), who portrays the Virgin Mary.

roads must be more amply provided

SCHOOL MONEY PLANS WATCHED

Farm Suresd will Oppose. Any Legislation Favoring Urban Centers.

The Indiana Farm Bureau will |oppose any plan in the 1939 Generlal. Assembly to distribute a greater’

portion of State funds to schools in |urban centers, Hassil E. Schenk, president, announced today. “We do not desire an unfair or (unequal portion of State funds to {come into our rural communities for school purposes,” he said, “but we shall continue to insist and keep a diligent guard chroughout the session of the General Assembly to maintain for our rural people and rural schools an equitable distribu-_ tion of these monies.’ The Farm Bureau leader asserted. that individuals in large municipalities contend that cities should have a larger distribution of school costs, which are borne largely by | the Gross Income Tax.

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“They say that since most of the income tax is paid in the larger centers, they should have a larger share of it in return.” he said. “The Gross Income Tax paid from these centers is based on their volume of business, which is due in | part only to city purchases. If we | {remove the rural sections from the 3 (State, the mercantile establishments | would soon close their doors.” Mr. Schenk warned that there! would be “an intensive effort by cer- | tain groups” to repeal the law pro- | viding a moratorium on the issuance of road building bonds. “We not only wish to continue this law,” he said, “but. to have numerous | clarifications made as to the use of certain types of motor vehicles on | the road, particularly farm trucks’ and tractors. “We also want to have the road law redefined as to leave no ques-

LA PORTE’S MAYOR TO AID PROS PROSECUTOR

LA PORTE, Dec. 14 (U. P).— Mayor Alban Smith of La Porte! who was defeated for re-election last ‘month, will become La Porte County deputy prosecutor, When his term as Mayor ends Dec. 31. His ap-| pointment was announced by Presecutor Mark Storen. Mr. Smith is the attorney for D.| C. Stephenson, former grand dragon of the Ku Klux Klan serving a life sentence for murder in the State Prison, who has been trying to re- | gain his freedom for 11 years. i Mr. Smith succeeds Norman sal- | # lawasser, who resigned to become | % La Porte City Attorney. | ; | |

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