Indianapolis Times, Indianapolis, Marion County, 10 December 1951 — Page 1

Page PDF (9.35 MB)

Back to issue view

, . $269.95 , . 349.00 .. 50.00

. .$668.95

' Treasury to help cut down fed-

The

62d YEAR—NUMBER 283

961 Indiana

| Employers

Face Tax Ax

Nearly 1000 Indiana employers have been withholding and the rest of the world situ-| their workers’ taxes from Uncle Sam and using them for|ation for an hour today, but “no

their own purposes.

Internal Revenue officials here have issued warrants advisers after abruptly ending against them—961 up to Nov. 30, —in an attempt to collect $409,000 deductions| which the delinquent bosses have held back from the government. | The number of warrants outstanding and the total amount of | the delinquency was confirmed today by Wilbur O. Plummer, as-| sistant U. 8. Internal Revenue)

in workers’ payroll

collector for Indiana. Follows Lucey Story

His disclosure came on the

heels of Scripps-Howard Staff]

Writer Charles Lucey’s

— - * >» : 3s

dianapolis Times

Fair to partly cloudy tonight and tomorrow. Warmer tomorrow. Low tonight 27. High tomorrow 45.

| MONDAY, DECEMBER 10, 1951

Truman, Advisers.

In Huddle

WASHINGTON, Dec, 10 (UP) —President. Truman and his mili{tary and diplomatic advisers dis-| | cussed the Korean truce talks

policy decisions were made.” | | Mr. Truman huddled with his|

this Florida vacation to give his

{payroll taxes over the nation.

quent taxes. Indiana is the nation’s ninth

story/ largest tax collecting district.

Firms Short $100 Million In U. S. Payroll Tax Funds

- inn BY CHARLES. LUCEY me

; Seripps-Howard Staff Writer

WASHINGTON, Dec. 10—A whopping $100 million tax delinquency due to employers’ failure to pass on workers’

payroll deductions to the government was disclosed today. |issue In 1952. Some employers apparently: use employees’ tax funds

as part of the working /tcapital for their businesses. e is widespread disregard of provisions that such money—made up of withholding, unemployment and old-age pension levies—must be deposited in banks monthly and paid in quarterly installments to the federal Treasury.

Pressing for CoMNection

Some of the most flagrant abuses have occurred in Internal Revenue collectors’ districts cited

for bad practices in the current tax scandal inquiry. Third District in New York City and the San Francisco district are examples, -

This money doesn’t represent all bad debt—Internal Revenue officials here say they are pressing . for collection and that ' $9,085,000 was paid in October. The outstanding balance on Oct. 31, for which" ts had been ‘issued, was. $96,594,000. That represented 197,000 accounts. But many offenders are fly-by-'nighters—night clubs, cabarets, carnivals, small war contractors, subcontractors in the garment industry—who may never = be caught. Or, if caught, they are so heavily mortgaged that the government must stand in line with other creditors.

Often, tax officials say, the payroll tax dodger is a man who runs short of capital, dips into the funds of which he is custodian with the. idea that he’ll make them up by the end of the "quarter, then finds when the time comes that he cannot. Of course reputable companies, do not resort to this practice.

Cite Law's Weaknesses

Revenue officials say two weaknesses in the law encourage the delinquencies: ONE: Although the employer is supposed to deposit payroll funds monthly, there .is no penalty.for failure to do this. TWO: The embezzlement laws do not apply to those wrongfully turning such funds to their own use. The government charges 6 per cent interest on such delinquent funds and slaps or a penalty of an additional 5 per cent a month. But these provisions alone aren’t strong enough for good enforcement. "As the system operates now, when employers’ payments of payroll deductions become overdue, deputy collectors in the 64 revenue districts notify them to pay up. If they don’t, the collector visits them. He has legal authority to seize and sell if necessary, to enforce collection.

Supposed to Show Receipts At the end of each quarter, the

employer is supposed to provide/are spending the money YOU the collectors’ offices with receipts have contributed to the Clothefor deposits of two months and|/A-Child fund and to the Mile-O-thre money involved .or a deposit Dimes.

receipt for the third month,

The system of deposit receipts|

was started with two ideas in mind—{first, to get the money isolated and beyond temptation and, second, to furnish funds as ‘rapidly as possible to the federal

‘eral borrowing. When delinquency occurs and the employer is balky, a lien can be applied to his property. But referees in bankruptcy have held

The big Brooklyn,

{Fear that the people of Indianap-

[20 W. Maryland St, we're telling

Editorial, Page 12

that unless the find and identify the money not turned over to the | Treasury, it gets no preference.

| Examples Given |

government can

{for “distraint warrants” issued] for unpaid payroll tax deductions| {in various cities: {

| New York (Second) District,| 7741 warrants totaling $3,852,000; 12916 warrants

for! warrants for $4,406,000. i

$1,241,000. Cleveland (18th District), 4348 warrants for $1,543,000.

1171 warrants for $314,000. Columbus (11th District) 205 warrants for $57,600. {Conyrishs, 1951, Scripps-Howard Newspapers

Clothe-A-Child—

By ART WRIGHT !

Everybody's starting to shiver| now.

really is, ask one of the ragged children who come to The Times] |Clothe-A-Child for help. i

{ | There's more than a plea for!

{help in their eyes. There's fear.|

olis won't realize how cold it’s go- | ing to be this winter , . . and! won't realize how important it is| for them to put every dime and] dollar they can into the Clothe-A-/

(Child fund."

At Clothe-A-Child headquarters,

these needy youngsters that their kind neighbors WON'T forget. ®hat they never have in the 22 years that Clothe-A-Child has ‘been the only hope for these shivering children.

Christmas Drawing Near

But it is mighty important, Mr. and Mrs. Indianapolis, to keep those contributions pouring in now. There are only-12 more shopping days until Christmas. In that time, Clothe-A-Child has a tremendous job to do to outfit the hundreds of children desperately in need of warm clothes so they can go to school, to Sunday school, to be out of doors. = i Times’ shoppers are going to} the stores every day now with| groups ‘of needy children. They

Individual donors who!

MILE-O-DIMES

10-DAY ESTIMATE 22 Lines .........$8291.20

It will take 38 MORE lines to reach a full mile « « and there are ONLY 14 more days to do it.

Drop your dimes on The Times Mile-O-Dimes NOW, They are desparately needed to provide money to buy warm clothing for Indianapolis’ needy children, The Mile - O - Dimes "Closes Christmas eve. You can deposit any amount at the Mile-O-..Dimes . . . or you can obtain change from uniformed city firemen any hour of the day or night. The firemen on duty at the “mile” are recruited by Firemen's Post No. 42 of the American Legion. It's YOUR dime that's needed to bring Christmas happiness to the needy

from Washington reporting a!gomestic problems, {$100 million delinquency in U, 8.

Workers from whose pay checks morrow his plans for a con-| deductions have been taken by ference with Attorney General J.|

{employers are not liable and do, (not have to pay the amount again. |

But Ralph W. Cripe, Indiana |collector, said officers of bankrupt|

[corporations can become person-.man would call Mr. McGrath in| |ally liable for. their firms’ delin-!

actual |

{walked out a week ago Saturday. |

Cincinnati (First Ohio District),

Tell You How Cold It Is ™ "ommmmer ser tie tian rit { College, and has taken graduate re) ou ow Oo : S Attended Butler U.

If you want to know how cold it/to children from Clothe-A-Child

|personal attention to foreign and, particularly | the tax scandals, He postponed at least until to-

Howard McGrath and other Jus-| tice Department officials on a| {possible dramatic move to rid {the administration of corruption.| The White House said Mr. Tru-|

|“soon.” Mr. Truman had said] last night on his return from |Key West that he might see Mr. | McGrath today. Democratic National Chairman | Frank E. McKinney told a press conference today he believes Mr. Truman should take whatever action is necessary to ‘restore| public confidence” in the government, ° } He said he plans to talk to Mr.| Truman about: the corruption {charges soon and hopes it will {be wiped out and not become an|

Bus Strikes Still Stalemated |

| Bus strikes which stopped local |

MRS. AGNES OSTROM—Received national recognition.

Mrs. Agnes Ostrom Head | ° % ’ : Here are exampies of ius 11,00 Ioana Tairat ke Times' Women's Department

{service in Terre Haute and alll lintercity and Ft. Harrison senvica of Indiana Railroad dragged on today with no letup in sight.

riders in and out of Indianapolis,! company and union officials were o meet Wednesday. ig uleq ere ee. | Tirhes was announced today by souri. She has been a member {Donald H. Robinson, managing of The Times women's departeditor. | ment staff for four years. Mrs. Ostrom, as clubs editor, In the departmental change,

Appointment of Mrs. Agnes gree of Master of Arts in Journal-

Hobart Autterson, state con-

iciliator, said no meetings had

furnishings

{of blood in the United States. She! {obtained the co-operation of more| (than 700 women’s clubs, with!

Fashion, Society Editors

Well, Well

by Nsdthaniel Pete Burnett, 1533 their drive for blood donors. Madison Ave. The campaign raised Indianapo'lis contributions of blood by more than 250 per cent in one month, | made the city first in the nation.|2f the Los

{wide response for blood for E3press. until

| Castanias as society editor.

Angeles she joined The

“ (wounded fighting men, and limes staff recently, Any Ragged Child Can Mrs. Ostrom, and The| Miss Castanias, is a graduate of

{Times, national recognition from Bradford Junior College, Bradford,

{work at Butler University. She 5 ud She attended Butler University, was society editor of the Haversee a real “Merry Christmas” In was graduated from Indiana Uni-|hill, Mass., Gazette until she

the happy eyes of children they versity and took a graduate de-|joined The Times staff last June.

Caudle Tells His Side Of Tax Shakedown

By United Press

every day. Others have made donor appointments in advance for other days before Christmas. Yet enough hasn't been done yet. More money is needed to make it possible for the Times’ shoppers to keep going to the

stories with new groups of chil- WA SHTN os I ren every day. ~ ON, Dec. 10—ynow Mr Grunewald “if he Wait for Clothes {Ousted Assistant Attorney Gen-|\w.jued into the room.” but that Each day these shivering eral T. Lamar Caudle testified no ynew him by reputation. Mr. . today he heard last August that Grunewald, who is now in George-

needy children wait for their clothes is another day of tears lS name was being used in con-|town Hospital here, has been

for them. That's why your help 0eCtion with an attempted $500.-|served with a subpena to testify. is needed now . . . today ,, . in 000 tax shakedown of Chicago ,. * Oliphant has admitted these three ways: ! (Attorney Abraham Teitelbaum. |inengship with Mr. Grunewald ONE—Send a contribution—no| Mr. Caudle told a House Ways yn4 owes him $1300. Mr. Caudle matter how small—to Clothe-A-/and Means Subcommittee investi- testified he met Naster about a Child, Indianapolis Times, 214 W. gating tax scandals that when|year ago He sald he learned Maryland St. Your name will be he heard of the purported shake- shortly afterward that Naster listed in The Times with your down plot he became “so enraged” n.q a prison record for income contribution in whatever way you that he telephoned Frank Nathan |¢ay fraud. But he had “no feeldesignate. {in Florida and told him “to Quit ing at all against Naster.” TWO--Telephone PL aza 5351 bandying my name about.” | : and make a donor appointment Mr Caudle conceded that ~° for Nathan, Mr. Caudle said to take one or more Clothe-A- Nathan—promoter, gambler and he checked up on him after meetChild youngsters to the store and “influence peddler”—has been a!ing Nathan two and a half years axamoney to out]it them. friend of his. Nathan and Bert ago. He said mahy prominent |K. Naster, Hollywood, Fia., Were| washington people vouched for

the Times Mile-O-Dimes on w. . accused by Mr, Teitelbaum last . Kresge Co. Every dime placed 1°8ed attempt to get him to pay! | Double-Take

Mr. Caudle said he wouldn't

there will be spent for clothing them $500,000 for getting his tax for these needy children. case fixed.

Myste ry Man’ i CONTRIBUTIONS B « y BOB BARNES Previous balance ....... $3461.50 Mr. Caudle said the shakedown

story was "told him by his friend! | L. T. Cohen, an Atlanta attorney Chureh ............... 50.00 Who also testified today. ATIRNS cirri °500 Mr. Teletelbaum had told Mr. In Jesus’ Name ......... 5.00 Cohen of getting an anonymous A Friend ............... 10o/telephone call from a man with

The Lamp Lighters Class of Center Methodist

Elizabeth Fletcher ...... 15.00/32 “deep guttural” voice who George Collier .......... 5.00 Warned Mr. Teitelbaum that NaThe Stitch and Chatter |than and Naster had Mr. Caudle

3.00 and Charles Oliphant, who re-! ‘ssigned last week as Internal Rev-| . 5.00/enué Bureau chief counsel, in| 20.00| “their vest pockets.” Mr. Caudle 5.00 testified that when Mr. Cohen told him of this call he imme-

Club ....... Saseasrnes Ziegy's Outside Inn Barbecue

“hbo nnnn

AFriend ....cc.00000:10 Jd. J. Corcoran ....oooeus .

seen

that he knew him as “the Dutchman.”

That's how Charles OC. Cochran, of the Truck No. 172

| - |

strom as women’s editor of The ism at the University of Mis-|

Editor, specializing! and

| more than 25,000 members, in the ra a need th : garded it as merely a ‘small deal” A federal gambling tax stamp st such Pogrant ever under- 1 the depgrtmental post of ¥ash- neas affair.” {was bought during the week-en en, organ and co-ordinated) : : ; ns : flon Editor and Misa Christy “I have never been asked by

Mrs. Locher, a graduate of But{ler University, was Fashion Editor Herald-

Total .....coonveenste.. $114.00 diately’ thought of Henry W. LOCAL TEMPERATURES Grunewald, Washington “mystery Cam. Ham. 20 Total to date ...........$3575.50 man” who describes himself as a sa ; 1 3 Mate 2 1 > Hee ne “The men get pretty rough: Public relations counselor and in- “eNow I'll show you how to ride it : " m,. . ¥ 1 Bs 33 sometimes, but they have a vestigator. Mr. Caudle said he sanding on the seat. 34 Mery 2 2 (Noon) 33 heart of gold ...” : had never met Grunewald but . Mays p.m...

Indianapolis, Indiana, Issued Daily

“FINAL | HOME

PRICE FIVE CENTS

Tell of Stock Deals After Company Feud

Ran Shares

National Democratic Cha

up to $70

irman Frank E. McKinney and

| National Democratic Committeeman Frank McHale today | admitted they made huge profits in a stock transaction in{volving a firm which sold tractors to the United Nations,

| A witness in a bankruptcy case|-

| testified the Indiana politicians made $74,000 each on $1000 worth of stock in the now bankrupt Empire Tractor Corp. of Philadephia four years ago. Mr. McHale and Mr. McKinney said the figure was not entirely correct, © Both“ explained their profits amounted to about $68,000 apiece on that transaction: : CET SGuabble ‘Begley Mr. McHale said he bought 1000 shares of common stock at $1 a share in 1946 when the firm was organized. . “But I had to buy $25,250 of preferred stock in the company in order to buy the common stock,” he said. “A year later a fight developed among officers of the corporation for control of the stock and they bid each other up to $70 a share for the common stock, land I sold it for $70,000. I sold {the preferred stock at par.” Mr. McKinney in Washington said he didn’t remember the exact figures but that he sold “more {than $26,000 worth of stock in

{the company for about $94,000.” | Both Mr. McHale and Mr. Mc-

Kinney denied there was anything unethical about the transaction.

| ‘Baltimore (Maryland and Dis- been set since 80 drivers and me- TéCently directed The Times cam-|Mrs. Jean Spicklemire will be. © had no connection with the trict of .Columbia) 4114 warrants chanics in Terre Haute failed to P2i8n for blood for the armed come Homes for $1,507,000. show up for work Saturday. Some | forces, which produced in Indian- in household Pittsburgh, 2560 warrants for|5000 normally ride local busses in 2POlis the highest per capita gifts decorations.

{Terre Haute every. day,.

‘management of the firm ‘what ever. It was just a stock transaction,” Mr. McHale said.

Business Affair Chairman McKinney said he re-

Frank McHale to enter any shady dealings or do anything of a shady character,” Mr. McKinney declared. Mr. McKinney objected to a headline in the New York Her-ald-Tribune today which said: “Court Is Told McKinney, McHale Each Made $74,000 on $1,000 in Empire Co. Promoter's Stock.” He said the story was factual but the headline was a “distortion” which would make his children “think their father was a damned crook.” {| “Is it eriminal or unethical for the Democratic chairman to hold business interests?” he demanded. “If some -people had their way we would have to go into an abbey and choose a monk as party chairman.” | Mr. McKinney said he expects 'to lose money, rather than gain, during his one-year service as party chairman. He said his hands are clean and he will open to the public the record of every business deal he has made in the last 15 years if necessary to prove it.

Friends 18 Years

The two Hoosiers have been political friends for 18 years, Mr. McHale having sponsored Mr. McKinney for national Democratic chairman recently. At the bankruptcy hearing in Philadelphia, Referee L. Leroy Deininger said testimony also showed that Mr. McHale's wife, Mabel, received a return of $18,750 on a $250 investment in the same firm. | The transactions were revealed, Mr, Deininger said, in testimony by Frank Cohen, head of the {Empire Tractor Corp. of Phila{delphia, which went into bankruptey on Oct. 29, 1948, one year after completion of the deal. The bankruptcy referee said the testimony was taken in 1949 and that he made it public when a New York Herald-Tribune re-

Took Over Old Works

Mr. Deininger quoted Mr, Cohen's testimony as saying he

Hoosiers Back In the Freezer

Latest humidity ...... 61%

and ‘that it was a routine “‘busi-

organized the firm in 1946 out of the remnants of the Empire Ordnance Co, a World War II munitions firm which took over the old Pencoyd Iron Works in the Manayunk section of the city.

Tells Source of Tip

Mr. McKinney said he knew very little about Mr. Cohen. He said the stock purchase was first

mentioned to-him by Oscar Salen~

ger, who was president of the Milwaukee American Association baseball club when Mr. McKinney was vice president of the Indianapolis club of the same league. He said he went into the venture on the presentation that Empire Tractor was in position to manufacture small farm tractors, which had become scarce during World War II. : However, he said he didn't investigate the venture, because the new company obviously had “no performance record.” He did not consider an investment that size,‘without investigation, as unusual. He said that when Mr. Cohen telephoned an offer to buy the stock back, at a big profit, he took it ‘because ‘1 don't believe in sitting on an egg too long."

Denies Connection The New York Herald-Tribune recently accused Mr. McHale of being an “influence peddler” in connection with his legal work with the Empire Ordnance Corp. The Indianapolis lawyer and Democratic leader made a claim

‘court action. the U., 8. Oourt of Claims. Mr. McHalé said that Empire

with the Empiré Ordnance Co., |despite testimony at the bank|ruptey bearing that the tractor firm was organized from rems{nants of the Ordnance Co. Empire Ordnance was the tar-

get of wartime investigations by

the Senate War Investigating Committee, headed by thén Sen. {Harry 8. Truman. According to Mr, Deininger, Mr.

Cohen said that he bought all 10,-

{000 shares of common stock issued by Empire Tractor for $1 per share and resold some of it |at the same price to associates, |{including his wife, his son, Mr. |McKinney, Mr. McHale, and Mrs. |McHale.

| Mr. Deininger said Mr. Cohen {testified that in August, 1947, he {repurchased the stock from his |associates, paying McKinney and {McHale $75,000 each for their {shares and Miss McHale $18,750 |for her $250 worth of stock.

| Borrows Money

Mr. Cohen said that he borrowed the money to repurchase the stock from the company, according to Mr. Deininger, who said the testimony listed no reason for the high price Mr. Cohen {paid to get the stock back. Mr. Cohen testified that he bought back the stock because Stephen Pan Britz, a New York exporter, agreed to enter the business only if he and Mr. Cohen controlled the entire stock {through a new parent company,

{Empire South American Indus(tries, Inc.

| Buys Surplus Parts

{for $93,000 legal fees for representing the firm in five years of It was upheld by

Tractor Corp. has no connedtion

68 To 1 Profit Admitted By M'Kinney, M'Hale

Mrs. Mabel McHale

Flying Knife Blade Kills Boy Here

A 4-year-old boy was fatally injured this afternoon by the flying piece of a knife blade his father was sharpening, The boy, whose last name police said was Claw, was cut in the neck when the blade broke pgainst an emery wheel at his ome, 911 E. Washington St. ... The boy died a few minutes later.

Years of Joy In Your Own Home

In a more suitable homs: of your own your family will: have more peace of mind, A" greater sense of security,” more family unity and greats: er happiness for many years. Plan NOW to buy a home for your family in 1952. : To find the home of your choice, shop where you will

| Empire Tractor bought surplus

(parts from the government to! {make its first tractors and con- | (tracted in March, 1947, to sell! {more than 1000 to the govern-!

ment for $1225 each: About 700 of those were de-|

porter asked him to check photo- (livered, for the use of the United | static copies of the transcript of Nations Relief and Rehabilita-| !the case.

(tion Administration, before the| contract was cancelled in June of the same year. i

The company's only other big | sale was to the Argentine Institute of Trade Promotion, which ordered 7000 tractors in a con-| tract engineered by Mr. Britz. { The firm’s creditors are presently trying to collect a claim on that contract. The Argentine government corporation has filed a counter-claim,

find the largest number of homes offered For Sale. In the Real Estate pages of The Indianapolis Times

10 HIGHLAND: MANOR CT;

$00 WEST KESSLER BOULEVARD

(3d House South on Lieber Rd) Outstanding new stone ranch-type home, 2 bedrooms. 2 baths, activities room; disposal, dishwasher, auto. 3% rage doors. large lot, $38,750 all FR-5832 or WA-1080. WILLIS ADAMS, REALTOR

Here is one from the many hundreds of home values advertised in The Times today. From this wide selection you - are sure to find homes you'll want to inspect personally. .

THE TIMES IS INDIANA'S * LARGEST REAL ESTATE ° DIRECTORY!

" lineman crew of the Indianap-

olis Power & Light Co. announced that the linemen are raising thoney to outfit Clothe-A-Child children. i The linemen have agreed to silence any swearing on the job in the rugged outdoors. The men have volunteered to pay a “fine” if caught swearing, Mr. Cochran said. “That money will “go to Clothe-A-Child.” Mr, Cochran reports that some of the men have “paid

children through the Times

Clothe-A-Child, 2 1. ni

a a an up

Subcommittee Counsel Adrian W. DeWind wanted to know how Mr. Grunewald’s name would immediately pop into Mr. Caudle’s mind if he had never met Grénewald. - ! ; Mr. Caudle said that just before he left for Europe Naster had telephoned him and wanted him to meet Mr. Grunewald,

+ Wouldn't Know Him “I did not want to meet him" Caudle sald. “But knowing that Grunewald was called ‘The Dutch.

them swear,

man,’ I surmised that must be the | a. # TUS be the, A

dipped - below freezing early this | morning for the first time in 11 days. | Lows were 26 downtown, 25 at | the airport. That was. nippier!

{than the 28 degrees recorded Nov. ''We demand unconditional

29,

| Indianapolis residents won't,

find much comfort in today’s high of 37, but can “thaw out”.in 42-degree weather tomorrow, the Wedtherman said.

exchange of prisoners ...... A purge may be under way in C

The United States has been urged to advise Britain to pull out “7

~% of Egypt Keser nntrnnetBane nian asin anaes annie

ohib

~~by the action of the General

Other Features:

Amusements ......0000e 8 “Crossword ssesasasntrese 8 Hditorials Sess nNBi brn 12 Harold Hartley tras sanie 18.

truce team has demanded the Reds discuss

Inside The Times

Indianapolis temperatures The United Nations

SB BB ANE AAIAEI IANA R EEN

BEER asso siniins a wh

3 4 9

ition. of tha atomic bamb now Assembly Andrei Vishinsky

ERR ERR

ol Ruark ...osevvsn 5 -Sovola srvesavasensee 1300