Indianapolis Times, Indianapolis, Marion County, 4 February 1952 — Page 1

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3, 1052 System, and on agencies, ase in postal

7-month per«

decreases in gencies ————— -~

;

to fit lined ‘satin. uality e and ensive nly in

more!

ON NE!

ON KS!

“its common stocks, served as a di-

Indianapolis Times

FORECAST: Light. rain, occasional spow ending tonight. Gradual clearing tomorrow. - Low tonight, 30. High tomorrow, 40.

The Story of Empire—

62d YEAR—NUMBER 329

‘Brass Cuts

McHale Helped Start $34 Million pefense Tab 'War Baby," Senate Group Told $19 Billion

By IRVING LEIBOWITZ Times Staff Writer

NEW YORK, Feb. 4—Em-| pire. Ordnance got its start in| [ndianapolis, according to a| suit today found on file in| New York's Southern District

Federal Court.

The suit charges Empire grew out Frank Cohen's manipulation "of Indiana's Reserve Loan Life Insurance Co.

It also charges fraud, and the

bribery of three men, and it names

the men.

It was filed by Meyer Krechmer, | former Cohen partner, who al-|

ifeged he was “frozen out” and who went to court demanding ‘his share of the fabulous Empire Corp. that became 14 corporations with eight factories, a shipyard and an aairplane plant, that sold guns to the British Army and tractors to Peron’s Argentina and food to the U. 8. armed services —and that collected huge sims from the United States for munitions that were never ordered and never produced. Mr. Krech-

not been tried, but is still pend-'as “a friend of mine,”

ing. . Whatever-the basis of It was Reserve Loan Life Insur-

| .. — th wesssrmsemmane | HERE, FOR THE FIRST TIME, is the story of Empire ' Ordnance—the launched by a New York promoter, an Indiana politician and a Chicago brewer with Capone gang connections. It had a root hére in Indianapolis—its shadow stretched from Buenos Aires to Bengazi—its ‘“connec-

war-time

munitions mushroom

tions” reached high into politics andygoverrnment. It started on a shoestring, juggled stocks and corporations and war-plants, landed $34 millions in war contracts, collected big awards from the U. S. government

for munitions it never produced, made huge profits for high political figures. The President of the United States has suppressed the official report of its amazing operations.

But some of its activities got into the public records

anyway.

Here is what the record shows.

By United Press

WASHINGTON, - Feb. 4— Defense Secretary Robert A. Lovett disclosed today that (the fiscal 1953 military spend{Ing budget already has been [slashed about $19 billion below the amount originally sought by the Joint. Chiefs of Staff. He warned an economy-minded

would not be “prudent.” Flanked by civilian chiefs of all three armed services, Mr. Lovett

[testified before a Senate appro-|

{for $52 billion for the military in {the fiscal July 1. -, Demanding Cuts Lawmakers of both parties have been demanding substantial cuts

made a $30,000 down payment on

the

long-unused Pencoyd

Steel

plant—the plant in which parts of the original Panama Canal locks

had been made. to be $300,000.

Total pfice was

Then he borrowed $30,000 from mer has since died. The case has! John Roberts, whom he described

sociate in the Reserve Loan Life] the; suit, Insurance Co. deal, and with that | Walker.

paid back Mr.

an old as-

Mr.

Summary of

Today's News In The Times |

Local

first Walker later got some common (NO 2d trial of LaDuron is

|{in all federal spending items, injcluding the military budget, to reduce the prospective deficit of | [more than $10 billion. Mr. Lovett {met the economy drive head-on | by testifying that the Services| originally sought $71 billion to reach “an acceptable state of readiness” this year. {

{the total to $55 billion and Presi- | dent Truman ordered a further jcut of $3 billion before sending

ance Co. dealings ‘that the budget to Congress. brought together for’ the public|stock when the corporation was planned ...... seresenns tose 2 Mr. Lovett explained that the | record the major figures who formed. [Padies of two local Gls reach {reductions were peeomplished| owned and built Empire. With a plant in hand he tried Bo veasninsss seseréeinne mainly by “stretching out e|

They were: : MR. COHEN, promoter and stock manipulator, once indicted but never convicted, who got control of the Indiana insurance company in a series of complicated stock transactions. FRANK "McHALE, Democratic gNational Committeeman for Indiana, and a powerful figure in national politics, who became attorney for the Cohen interests after another Indianapolis lawyer withdrew. JOHN A. ROBERTS, president of “Canadian Ace” which the Kefauver (Senate) Crime Committee called a “Capone | brewery,” who invested money in the deal. ALEXANDER GREENBERG, close associate of Chicago’s Capone gang and financial adviser of Frank (“The Enforcer”) Nitti, a Capone mob chieftain, also linked with Conadian Ace, who put money into the deal. ! All figured in the insurance deal in Indianapolis. All were assoeiated thereafter in the founding and building .of Empire Ordnance and its subsidiaries—Mr, Cohen, Mr. McHale and Mr. Roberts putting up most of the cash on which it started. To them was added, a little later, Elisha Walker, Wall Street financier, who loaned the budding Empire $25,000, owned some of

rector, and also served as the

ito finance his munitions dream

|An assistant fire chief and

three others hurt in car

period in which readiness is to be |achieved”—that is, by postponing

MONDAY, FEBRUARY 4, 1952

{Congress that any further cuts |

[priations subcommittee consider-| ing President Truman's request |

year - beginning next|

¥ He said his own office trimmed |

———————— a

| : As

~~ Over PO

Indianapolis, Indfana

Entered a3 Second-Class Matter at PostoMoe Issued Dally

——————————————

"rE

_ FINAL HOME

L28

_PRICE FIVE CENTS

‘Armistice Closer’ Accord

Nears

| $12,500.

by a complicated stock deal in{volving 200,000 shares of Willys[Overland stock, worth some $500,-| (000. That fell through, with a| {loss to the owners of the Willys-

\Overland shares of $20,000, and Harold Ickes receives in death what he seldom got in life—

(Mr. Cohen sought straight in-| {vestors. | He testified they were: Frank McHale, Democratic | National Committeeman for In- | diana, $25,000, - Charles Griffiths, New York |

| lawyer, $10,000.

W. Orgill, Cleveland lawyer, |

smash-up

National

kind words

Foreign

{Sen. McCarthy labels President | Truman ‘Nare Caller’. {U.8. Agency accused of vast | grain storage fund waste: 14

Page on the assumption that there will|

8 the target dates for reaching the goals of a 143-group Air Force, a 21-division Army, a Navy with

Page 408 ships, and a three-divigion

(Marine Corps. Calculates Risks

8 Hé did not give the new “readi-|

ness” dates but said that the post?/ponement will mean that the nation is taking “all the calculated risks considered prudent.” It had been reported previously that the “stretch-out” was based

John Roberts,

head of the | “Capone brewery,” $40,000.

| | | {

{Kremlin's control over Russian people is not seriously challenged today from inside the

be no general war in the next two | (years. ‘That apparently was the main “calculated risk” which Mr.

awards Day an

| prepare to present her George Martin, Harol

That made $87,500. Mr. Cohen

specified the amount of

Sports

Soviet Union .......... “ess testified he paid off the rest to, ‘Carlsen “the 24’ clings to [the Willys-Overland stock owners! |($42,500) though he never actu-!| {ally {money he did pay them.

grounded vessel ...........

Pag

For that, he said, each got pfe- Butler cagers meet Iowa to-

ferred stock of face value €qual to the sum he Invested, and

MEL: owns. in ad-|The Press Box...Williams... 12

dition the common stock of Em-|Olymps ask Ft. Wayne game pire Ordnance Corp. was divided] be replayed..i Anderson .... among them as a bonus, Mr. Co- Prep cagers start “shakedown”

2 {Lovett had in mind. | - Mr. Lovett said military leaders 3 fully realize that “maintaining a {strong civilian economy” is a vital |part of preparedness, and theree fore indorse gradual rearmament as “best for the long-term se-

ceesessss 1g{curity of the nation.

/Clara's 4th

. hen and his family getting 45 cruise...Frudenthal ....... 1s Confirmed per cent. > 'Kegler’s Korner...Welsh ..... 18 B R d So Empife Ordnance was up, | y Kecoras .

from an original $5000 to a‘ total paid-in” capital of $130,000, ac-| cording to Mr.

Cohen's sworn Dear Boss . .

Editorial Page

. By Dan

Page

Kid-

| By JOHN V. WILSON

Curvaceous Clara, the redhead!

statement, which was all the capital it had. : :

$20 Millions In War Orders

ney . . . Detroit and the soup kitchen ........... eee 10

who

|cently, has confirmed a fourth marriage.

Given to Grand Jury

hester Thom as,

“Four Indianapolis

policemen |cupants until on-duty police arand three firemen will be honored Fis to take over.

"Lee 0. Idol, 23-yeat-old postal for heroism and alertness by the! Police worker . accused of causing two RODison-Ragsdale Post of the On Jan. 1, 1951, while walking his ment” and” that new ones are , American

women’s death in a hit-run acel~ dent Jan. 26, was bound to Marion County Grand Jury today. Municipal Court-3 Judge Phillip L. Bayt placed Idol under bond totaling $3600 on three charges reckless homicide, leaving the {scene of an accident and driving

dropped three husbands re-|with improper plates. . i

Two men who roomed at the

Legion tonight.

‘beat he

The 20th annual open house handed

p.m Church.

apparently having motor trouble, They noticed a bullet hole in the

in the Central

The awards and citations: Police Officers Eugene Sowers oot was recovered. and Harold Day—On Apr. 8,

Christian ‘ton St.

| HERO AWARDS—Legionnaires Ray Cox and Richard Cooley of the Robison-Ragsdale Post to Jett to right) Eugene Sowers, Lee Fulmer, James F. Gibbs,

Hit-Run Case Police, Firemen Win Honors for Heroism

aught a burglar red bound ‘as re SEGRE LIS dinner program will start at 6:30 barber shop at 465 . Washing- recommendations to nts, The ‘burglar had cut a The Communists are expected to

UN Declares Latest Talk 'Pleasantest’

* By United Press

PANMUNJOM, Korea, Feb,

4 (UP)—Allied and Commus

nist truce negotiators have

‘moved closer to an armistice . + . within the foreseeable future, The chief United Nations come mand spokesman said tonight. Rear Adm. Ruthven E. Libby, chief United Nations negotiator on war prisoners, said meanwhile, that Monday's meeting on that issue was “one of the pleasantest we ever had.” In Monday's talks the truce delegates neared final agreement on an exchange of war prisoners. They also atranged a plenary session of the full truce delegations for 7 p. m. Tuesday, Indi~ anapolis time, to start discussion of the final item on the armistice program—recommendations to be |made to the belligerent governs ments for a final peace” settle. ment, Moved Closer

The atmosphere in the nego

has been moving toward ime provement since last week, ; “We have moved closer to an armistice in the last few days” Chief’ Allied spokesman Brig, Gen. Willlam P. Nuckols said. “The fact that the Communists agreed to initial talks on Item {Five is indicative of the fact that they want an armistice within the foreseeable future,” he added. This statement was .the most optimistic by a United Nations spokesman in weeks,

to pop up, a/gards the fifth

‘hole through the wall into a liquor insist on this point that all fore

Fire Capt. Lee Fulmer and Pvt. 1951, the officers saw a taxicab, Chester Thomas—on the night of Feb. 19, 1051, the two firemen

One

Then it landed some $20 mil-\Who was right, Taft or Lewis? By Fred W2

lion in contracts for munitions]

representative of the U.S. War|

for. the British government, got|

Perkins

cleanup he’s

« «» Labor ,

sess senasn crane

sticking to... A Talburt Cartoon

Department and trustee for Em-|{$5 million cash in advance to-/A Senator turns detective

pire affairs. 1

Empire “Owned By All”

In sworn testimony before a, Senate Investigating Committee Mr. Cohen later said ‘the stock-| holders of Empire Ordnanee own stock in all its subsidiary com-|

‘panies, all in the same amount.”|

Boards of directors varied from corporation to corporation, however, and not all the associates were directors of all the corporations. Mr. McHale, for example, lists himself in “Who's Who" as director of two of them—the parent Empire Ordnance and WilkesBarre Carriage Co., a subsidiary of Empire. : : When he got control of Reserve Loan Life Insurance Co. after complicated stock interchanges with Fidelity Fire Insurance Co. of New Jersey, and one criminal ‘indictment ‘that| grew out of them, Mr. Cohen pro-| posed to invest its assets in Texas] oil stocks, |

‘Reserve’ Goes to Texas

The Indiana State Insurance Commission ruled that this investment was forbidden by Indina law, and that'it would endanger policies held by those who, had bought life insurance from| Reserve. * Shortly after Mr. McHale be-| came attorney for Reserve, how-

‘ever, the Indiana attorney general

[]

from Elisha Walker giving

issued an opinion that the investment was legal, and the Insurance Commission accepted the ruling, Reserve assets were traded for securities of a Texas oil combine in which Mr. Cohen was alleged to own a half-interest. Subsequently Reserve was moved to Texas, where oil ‘stocks are a legal investment for life insurance company funds. New capital later appeared and it is operating there now under another name. The Krechmer suit alleges that Mr. Cohen used, profits he made out of the Reserve Loan Life Insurance Co. deal to buy an unused steel mill from Carnegie-Illinois Steel Co., and thus launch Empire Qrdnance Corp. Mr. Cohen himself tells a somewhat different story. gthe carpet in "1941 before the Senate Committee“Investigating the National Defense Program, of which Sen. Harry 8. Truman was chairman, he relue-

tantly described the financing of |

Empire. .' a © $25,000 on Post-Dated Checks 4 According ‘to his sworn testi-

~ mgny Mr. Cohen took $5000 of his.

own , . borrowed $25,000

ward the order—apd Empire was in business, Within a year it owned, besides; the main company at Philadel-| phia: ® The West Pitiston Iron Works, West Pittston, Pa., which. processed armor for t4nks; | The Wissahicken Tool Works, | Inc., Philadelphia, which made re-|

Donna Jo Robison..... Local Sarah Lawrence College women to entertain alumnae director

ses ess assess

coil mechanisms for 75 mm guns; GOP women set Lincoln The Wilkes-Barre Carriage C0. luncheon... veo ovesv Er

Wilkes-Barre, Pa., which made|Caprices by Christy {Mrs.

mounts for 75 mm tank cannon; Schuykill Manufacturing - Co, | Philadelphia, which overhauled! and repaired Navy guns; The Vulcan Iron Works, WilkesBarre, Pa., 100-lear-old locomotive factory;

Sports Earl Wilson Women's. ....

Instrument |

W. W. Revels’

Other Features:

Amusements c...ca000000 Bridge .. Crossword scsscescsesese 11 Editorials «... Harold Hartley ..iie.uess 14 In Hollywood...icoeseeee Radio, Television...ceu.. Ed Sovola...... ¢ avai sessed, 13

essssnssrpens

sess ssssenses

cerrsseisiid, 5 1

Day

magic transforms the ordinary...

ven. 4

sssssessess 10

6 «HH

ee’ 9

Clara Katherine Kendall's state-

++ 10/ment of husband No. 1 was made

in an application for a job as an {Indianapolis emergency police{woman last year. The applica~-

{tion still is on file with the Board

{same address as Jdol, 733 N. Pennsylvania St., waived preliminary hearing and were bound to the Grand Jury, charged with

commission of a felony.

Judge Bayt placed Donald

the —ad-1Boach, 23, .under $750 bond, and

[ventures of Clara was announced Jon T. McNamara, 25, under

4 made by an Indianapolis meat- | truck driver to the prosecutor last {week that he married Clara six |years ago. | In the application, Clara .gave 4 her age as 25. That conflicts with 8ithe statement last week of one 50 her attorneys that she is only 21. The application says she married the truck driver in September, 1945, in Hoboken, N. J. This marriage apparently establishes the truck driver as the first of Clara’s four husbands. She previously has admitted mar: rying without benefit of divorce. After the truck driver came Angelo P. Benequisto, Schenectady, N. Y, then Indianapolis tavernkeeper Earl Stamatkins, followed by Dr. Euclid T. Gaddy, prosperqus Indianapolis physician.

{control instruments. {

In about 18 months, according to Mr. Cohen's sworn testimony, the Empire associates had run their $130,000 up to “$6 millions, or $7 millions” in assets. ‘It also] had debts of about $1 million less | than that. | So, in net corporate assets, if Mr. Cohen’s testimony was true, his own . $42,500 had grown to about $450,000, and the investments of the other associates proportionately according to their stock holdings. : In addition, Empire had $5 million in cash, advanced by the British. government as a down payment on guns that were still to be made. : 3 a And Empire held more than $34 million in war contracts.

wi NEXT: Empire and the “Men With Influence.”

8th Traffic Death Here

of 1952 occurred yesterday afterhoon in Methodist Hospital. , John Raridon, 68, of 230 8S. Warman St., died of injuries suffiered Jan. 24 at Warman and Washington Sts.- - \ Driver of the car that. hit him was Elton R. Joseph, 47, of 562 8. Warman St. : .

Tax Refund List

dated checks--as ‘secur

A y o 2 inn =

een “ TR

Indianapolis’ eighth traffic death|

Double-Take

By BOB BARNES

“Well, what's it going to be

and push or sit

here all nig

\}.. Clara currently is finder Grand

jjlJury ‘investigation on a bigamy fjicharge filed by Prosecutor Fairchild,, Mr. Fairchild saidA3afety Board

He said it apparently is still the active file.

\ [records show no action taken on! her application for policewoman. ! in

Police say the two men knew, | but failed to report, Idol was the]

story writer. ,', , By Fred- of Safety. erick C. Othman reeesaaees 1 The new twist in hy Women's {today by Prosecutor Fairchild. (3/00 bond. Page =” yr Lovely lady ° of tomorrow— IT CONFIRMED a statement

Street. {

Questioning by Idol's: defense attorneys, Lloyd Newlin and For-| rest Rau, today couldn't shake the| testimony of taxi driver Lawrence Stephens, 55, of 919 N. Pennsyk* vania St. Mr. Stephens stubbornly held to his story of seeing Idol and Idol's damaged .car at the accident scene immediately after the women were hurled through the air,

One Slain in Tunisia

TUNIS, Tunisia, Feb. 4 (UP) —Police opened fire today on a crowd forming on the streets and killed one person in a renewal of ‘violence in this Ftench protecto: rate. Seventy persons have been killed and more than 200 injured since rioting broke out Jan. 18 over demands for more self-rule.

Secure Better . : Housing NOW Many wise Indianapolis families have decided to find the security of better living conditions while they still have the advantage of a wide selection of home offerings from which to choose. . These VALUE-WISE folks ‘ make a regular habit of reading The Times classified real estate advertising. You should, too! You will find the

habit informative and profitable. - .

ONLY : 5-Rm. semi-modern. 3; Acre on en Davis. Call

Eile BE aie nr 0470, : McCONNELL CLARK. : REALTORS : BE-9565 Shown here is a sample ad - from the many. hundreds in today's Times real estate pages. Read them over . . . select several interesting ones and arrange to inspect them right away, Soon you'll find _, the comfortable home you've always wanted! ~~ : . The lis Times Is.

. Indianapolis ’ 2] Indiana’s Largest Real ¢

BOUND OVER—Appearing ' Attorney Evelyn Pitschke, Danald

dol. A = g a

door window. The driver said his

fare had shot him.

Officer Sowers drew his being accessories after the fact in 20d approached the cab as the and opened fire at pointblank range. The officers returned the fire, killing the men who-a short time earHer-had killed the cab driver and taken

driver jumped out

his taxicab.

Nabbed Stolen Car

driver of a car which struck and| Police Officer James 8. Gibbs—| killed Mrs, Mary Throckmorton, While off-duty on May 4, 1951, he|

30, of 1024 Albany St. and Mrs. Spotted, chased and caught up . He held the oc-|/ back of the speeding fire truck. Betty Stinson, 23, of 526 N. Noble With a stolen car. He he I" He held onto his buddy for two|

'storé. A large quantity of liquor|/eign troops be withdrawn from

{Korea at once. There was a sunburst of de velopments Monday including:

ONE--The negotiators reached

donned gas masks to rescue threé general agreement on a parole men overcome by a strange gasiclause binding released prisoners iin a 12-by-15-foot vat at the Na-inever to fight in gun tional Starch Products Co, Thelagain. {men were rescued after 30 minutes and recovered. Saved Fellow Firemen Fire Pvt. John Burns—on Oct.| 12, 1951, while en route to a fire, [proposed that the “ta Pvt. Jones saved his fire-mate,/changé of Red prison

the Korean War

TWO-There was agreement that sick and wounded prisoners {be given priority in exchange,

et” for exrs be exe

Pvt. Leo Shanahan, from possible tended from 60 to 90 days be-

Good Glaves Seats Still Available |

You'll want a good seat for the thrilling ‘Championship Fi- | Times-Legion Golden Gloves Friday night at the N. Pennsylvania St.

nals of the

mory.

To get choice seats buy them in advance at these downtown sporting goods stones: 136 E. Washington St.; Em-Roe, 209 W. Washington St.; Sportsman's Store, 126 - penne ——— LOCAL TEMPERATURES

Callahan,

N.. Pennsylvania St. Prices:

served, $1.50. General admission—$§1 for adults and children ~—go on sale Friday night at

the Armory.

Ringside and row balcony, $2; downstairs re-

{blocks before the driver realized

Ar-

what had happened and stopped the truck.c

No Time to Beef WASHINGTON, Feb. 4 (UP)— [President Truman afe a steak [dinner at the Capitol today with

Democratic members of the Mis-

Bush-

[souri congressional {The host, Rep. Phil J. Welch (D. {Mo.) said there were no speeches, “just good food and good conver{sation,” he-said. :

ga m.. 3 Latest humidity ........95%

delegation.

first 6a m.. 39 10a m.. 3% Ta. m.. 38 11 a. nm... 38 $a m.. 38 12 (Noon) 35

i|/that threatened to stop an ime

|death. Pvt. Shanahan became {ll|cause of the large number of and blacked out, but Pvt. Burns grabbed him with one hand as the (ill fireman started to fall off the

Communist - prisoners The Communists promise to ree turn all Allied prisoners within 30 days, ’ FOUR — There was general agreement that - other sites in addition to Panmunjom may be selected as exchange points for prisoners if necessary.

{to. exchange data on prisoners (Who have died in captivity.

SIX — The negotiators ag that Red Cross workers fryins sides may aid and visit prisoners. SEVEN — Both sides that civilians should be assisted to return to their former homes. The Reds still resisted United Nation efforts to write safes guards into the civilian program,

EIGHT — The United Nations offered to trim its proposed monthly troop rotation from 75,000 to 60,000 includi: rest trips and temporary duty assignment. The Communists want to. limit total rotation to 25,000.

NINE—The Allies offered to

- scale down the number of “points

of entry” for troops and supplies to be inspected during an armise tice from 12 to 10 on each’ side, The Reds want only three on each side. ‘

Walcott Gets

: * » Suspension Lifted ~~ Another story, Page-18 World's Heavyweight Boxing

A |Champion’ Jersey Joe Walcott was . i back in the good graces of the

Indiana Athletic Commission to+ day after paying the $200 fing

pending title. bout. x Fred Lizenby, secretary of the Indiana commission, said Wale

tiations, Monday's talks showed, .

But Gen. Nuckols. warned that ; the “main major points (of dis. George Martin. pute) are still in major disagrees

involved,

FIVE—There was agreement

< v,

Swaps

THREE—The United Nations |

RIA imc isons