Henderson Daily News (Henderson, Tex.), Vol. 9, No. 129, Ed. 1 Wednesday, August 16, 1939 Page: 5 of 10
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THE HENDERSON DAI WuWs, WDNESDAY, AUG. 16, 1989
$,
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7
and a day and fined 15,000.
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silent. He appealed to the Internal
1985 and 1936, it developed, he
x 7
♦
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16
his
Courthouse
Records
in
fabric.
airplane crash in 1938.
290
1
sh.
k,
MEN WHO DRESS
GOOD and WELL
9
SAVE MONEY AT BEALL’S
29
BEALL CREST
ADVANCE
-
SELLING
...
98c
ON OUR LAY-A-WAY PLAN
/7
IS
1
Boys’
Striped
I
d
A.‘e
98c
WOOL CAPS 2$C
SHOP CAPS 25C
L
Black and fancy stripes, 8 shapes
Truck Driver*’ Uniform
98c
pl
%
A
ie well,
vou ran
1
I
come
79c
A
770
a
$1.98
But the Best of Styles and the Newest of Colors
Beall-Craft
Ladies New
Small Deposit holds yours.
SO NEW
Fall Shoes
COATS
Smart
9
$1.98
»
Silk alpacas and
WHITE LAPIN FUK
77c
$1.98
novelty weaves
PLAID 0’ PLAIN
2.98
9.85
See them!
4
THE BUSIESI CORNEK IN Asi.KSUie '
“THE BUSIEST CORNER IN HENDERSON"
“THE BUSIES I CORNER IN HENDERSON”
“THE BUSIEST CORNER IN HENDEKSUN
c un-
waepwgtnem Men
w-
..
*
■ »’ 9
u
0
K
■
CHRISTIANSTO
Dine Friday
Caps
All sizes
Sugar Heir's New
Wife Is Baroness
Plain Tailored
in Smart Tweeds and
Plain Woolens.
Mt. Union School
Joins Mt. Enterprise
Only present stock to
go at this price.
$3.98
Only Mo Down:
Pendergast
Continued From Page 1
!
nder of
ushand
Officials Invited to
Attend Institute
Mi
M
fluid.'
an
aantity
j
Clean Up
Men’s 1.00
SUMMER
BELTS
Large •
Size
50x50
Checked
TABLE
CLOTHS
SPORT OXFORDS
The latest styles in
Tans - Blacks
Browns - Wines
1.98-2.98
49.
Each
25c
Each
with Hat and Muff
to match.
Single 25% Wool
BLANKETS
Lay away your
BLANKETS
Now! Beltex
66x78 Double
Real Buy!
Shadow
Proof
Lace
Trimmed
SLIPS
The Smartest of
FALL BAGS
AU colors in the
Largest Selection
• ■ 3
16.50-34.50
asure
it.
9
onna.
istex-i
The Best the Market
Can Give!
VELVET STEP
The perfect arch.
Smart Dress Shoes
for women.
$4.98
Porto
Rican
Rand Emb.
Hot Weather
GOWNS
• 0"
9
Q o
o\o
O\/
I
O’Malley pleaded guilty five days
later and wag sentenced to a year
Just in
For Early
Fall
500 New Smart
FALL FELTS
Genuine Fur Felts with Satin
lining, sweat bands resistant,
1.98 2.98
A big variety of colors and
sizes.
65
5)
* For Our Trimmed and Plain Tailored
SMART FALL COATS
—
ing a 50 per cent j
ffwmey. StfF Street
evasion of income taxes by
_____ report money receive!
the rate litigation, dividends
Travel
LUGGAGE
. White
Black f
and Mercerized
Colored
THREAD
Always the
Lowest Price
4c Spool
at
Beall’s
al well,
the top
y large
pi ise
1
Dress Shirts
Sew Colors, New Patterns
$1.00
«ou’ll want a
supply
w8 w
• 89
888 4m
HSm a
.memmmdhdf
Baroness Emily von Romberg,
above, 27-year-old Santa Bar-
bara widow, became the second
wife of Dolph B. Spreckles, Jr.,
sugar fortune heir, after an air-
All
SPORTS
SHIRTS
Regardless
of Former
Price
h.
Rusk County officials have been
invited to participate in the Texas
Government Institute to be held
at the Stephen F. Austin State
Teachers College, Nacogdoches, on
Sept. 7-8.
County Judge Reg L. Jones was
uncertain today whether he might
attend the meeting. All commis-
sioners and judges in the 354 Tex-
as counties are given a special In-
vitation to attend the school, while
any other interested citizens will
be welcome.
Fancy 15x80
CUP TOWELS1Q, N
With printed I UU ’
Pattern
Boys’ Blue Denim 7Kc
Wash Pants .... U
9.85-14.85-
ice
by the
.” Pud,
istructs
Death
f well-
=-=-**=#
. • . -V! ( ' " ’
-b ■
-s
“Screen Star"
The Smartest Children’s
Full cut, fast color fKe
Fancy Shorts, ea. . Iv
NEW AUTO REGISTRATIONS. plane elopement to Reno, Nev
Henderson, Baron von Romberg died in an-
cumulated the $87,500 in cash he
handled in 18 months during
1935 and 1936.
The agents decided to let Mc-
Cormack alone for a while This
time they found that it was time
for another look at Pendergast.
This time they found that he was
heavily in debt in. 1934, largely
The smartest of new
Fall styles. Fur trim-
med with wide flared
skirts.
Twenty Mt. Union school dis-
trict pupils have been transferred
to Mt. Enterprise for the next
school year after an agreement to-
day between the school boards of
the two districts, it was revealed
at the office of County Supt.
Harvey Hays.
J. P. Dobbs, who taught at Mt.
Union, also was added to the Mt.
Enterprise faculty.
An election has been ordered by
County Judge Reg L. Jones for
the Sulphus Springs and Mt. En-
Terprise districts to decide on con-
Wolidation Saturday, but since the
Robert E. Pierce,
> s 1:
098
9′03
O o l
\o o
o o
■ J
Our feature this
season. The re-
versible blanket
chief witness.
On May 22, Pendergast pleaded
guilty and was sent to the Fed-
eral penitentiary for a year and
three months and fined $10,000.
“---■
if
for himself; $32,500 for McCor-
mack and $22,500 for O’Malley.
McCormack was told to deliver
O’Malley’s share.
The court approved the com-
Regular 1.98 Washable
Summer f 6
Pants, pair ... I aU U
Second •h
Big 4
Shipment 4
Wool Filled
and
Down Filled
COMFORTS
4.98..
19.50 J
telephone McCormack and told
him to be in Chicago on April 1.
McCormack kept the appoint-
ment on April 1, 1935. He went
to Street’s office. Street gave
him $880,000 in cash. He stuffed
the money into e gladstone bag
and headed back to Kansas City
by train. He taxied to Pender-
gast’s home at 5650 Wark Park-
way. There the bag was opened
and the portly boss personally
split the cash—$40,000 for Mc-
Cormack, $40,000 for O’Malley
and the rest for himself.
Those were the essential details
of McCormack’s story to the
5000 Yards. The largest and most
outstanding selection of
Fall Prints
Frere10c 0 17c,
3
g
the screws a little harder, assess-
Treasury Henry Morgenthau, Jr.
Pendergast was no small fry. He
wag a powerful figure in Missouri
and in the Democratic party.
Morgenthau reminded Irey that
politics was to be no consideration
in matters of law enforcement.
“You have Carte Blanche on
this and any other case involv-
ing law violations,’ 'the Secretary
said.
Irey’s men examined Pender-
gast’s income tax returns. They
contained no clue. So the agents
turned back to Street. He lapsed
into defiant silence. The Queen
Mary had arrived. Pendergast had
returned to his Kansas , City
domain, and Street had seen him.
Treasury agents informed Street
that he would have to pay a tax
on the $100,500. He did. On
March 8, 1937, he filed an amend-
ed income tax return for the
year 1935. The additional tax was
$47,093. The Treasury tightened
» 500 PAIR
■ 38: . . 8,332388888
r' A
EA
1K. 4
1 9 “MhumawW.2
Apparently mindful of the
agent’s warning, Street wrote him
on May 4, 1936:
"Learing for South Dakota. On
my return next week will take a
run to Mo. on business anyway—
and see what they have to say.
Don't think can do anything at
least before the Queen Mary
comes in.”
The Queen Mary?
The agent was puzzled. But not
for long. The giant British super-
liner was to start on its maiden
voyage from England within a
few days. The passenger list was
checked and there among the P‘s
were the names—Mr. and Mrs.
Thomas J. Pendergast. It was the
first definite indication that Boss
Tom was the man behind the
scenes in the insurance scandal.
When this information reached
Irey, he reported the finding to
his superior, Secretary of the
- 180 in. wide, 10 in. ruffle
BED ROOM
CURTAINS
All good colon j
Federal grand jury which ret
ed indictments against Penden
and O’Malley on April 7
year.
Pendergast wag charged 5
had paid up most of his back
debts. And he paid in cash. Tele-
graphic money orders -to debtor
New York and New Jersey book-
makers were found. All this was
interesting but not evidential.
It was now time to turn to Mc-
Cormack again, the agents hoped
the six months he had dangled in
uncertainty might loosen his
dergast was the "someone"—the
man to see. Two dayg later, on
Jan. 16, 1986, McCormack met
Street in Chicago. He related his
conversation with O’Malley, and
Street said he wanted to talk to
Pendergast,
A few days later, Pendergast
was. Chicago-bound. He went to
McCormack's suite in the Palmer
House. Street was there. He
wasted no words, recounted the
trouble the rate litigation had
caused the insurance companies
and wanted to know whether
Pendergast could settle the whole
thing. Big Tom said it could be
arranged. Street then wanted to
know how much it would cost.
Pendergast insisted on an offer.
Street suggested $200,000. That
wasn’t enough for Pendergast.
Street boosted ’ the figure to
$500,000. Pendergast accepted.
Several months • passed and
nothing happened. McCormack
Isabel Chapel school has been
' changed to its original status, the
election will not likely be an issue.
All Isabel Chapel students have
transferred to Mt. Enterprise,
thereby eliminating the congestion
that existed at Sulphur Springs.
It was because of that congestion
that the boards' sought the elec-
tion on consolidation.
Sulphur Springs school will con-
tinue as a 11-grade school next
year since the agreement of the
two school boards not to consoli-
date, County Supt. Hays said.
--0----------
MANGUM LECTURES TO
BEGIN HERE TONIGHT
The Rev. G. C. Mangum, presid-
ing elder of the Tyler Assembly of
God district, will begin a series
of lectures at the local church,
700 West Elk Street, tonight at
8 o’clock.
Topics will be on current events
in the light of Biblical prophecies
and will be illustrated in colored
pictures and. slides, the Rev.
Charles G. Lonsford, pastor, said.
BLUESHIRTS 25c0c
Sw-cga ce2-
6AESSS-KHAKI SUITS
• „d The Best for This Price 1.77
gast was paid only $430,000.
I Treasury agents explained that
the $750,000 figure apparently
was just “conversation” which
was not lived up to in perform-
ance. ,
McCormack was summoned to
Chicago on May 8, 1935. There
Street gave him $50,000 in cash
and directed him to deliver it to
Pendergast. McCormack flew to
Kansas City and handed the cash
—first installment of the “pay-
off”—to Pendergast in the Boss’
office at 1908 Main Street. Pen-
dergast kept it all.
The agreement, providing for
distribution of the impounded in-
surance premiums was completed
and signed between May 14 and
May 18, less thas a fortnight aft-
er Pendergast received the $50,-
000 installment. .
On May 20, McCormack was
called back to Chicago. Street
gave him another $50,000 for de-
livery to Pendergast. This time
Pendergast counted out $5,000
lieved Street should have offered
more than $500,000, according
to McCormack’s story to the gov-
ernment, although there was no
evidence that the companies
knew what was being done with
the money. McCormack recalled
that Pendergast happened to be
in Chicago. He arranged a meet-
ing between Pendergast and
Street in the Stevens Hotel. There
Street said he felt Pendergast
-'hould have $750,000 for his
trouble. The “Boss” said it was
O. K
it developed later that Pender-
■
2
' 1
E
$s
promise agreement on Feb. 1, evasion
1936, and freed the impounded ing to
funds. A few days later Street ‘
mack had handled at least $87,500
in cash. They traced it to the
purchase of securities, a home,
reduction of bank loan* and bank
account deposits. He explained
that the cash represented savings
over a long period of years.
It was an unconvincing explana-
tion. It spurred the Treasury
agents to go still deeper into his
past. They rooted out every fi-
nancial transaction he had made
since he was old enough to write
his name. At the end, a computa-
tion showed that even if he had
spent absolutely nothing for food,
clothing and shelter in .all those
years, he still couldn’t have ac-
tongue. Their hopes were fulfill-
ed They talked to him on March
17, 1937 and his resistance col-
lapsed. With it went the seem-
ingly impregnable wall around
Pendergast.
McCormack .according to the
Treasury’s confidential files, ad-
mitted he was the “pay-off” man
in the insurance scandal and he
named Pendergast as the master
mind. He repeated the full story
to the U S. District Attorney and
to the Federal grand jury which
indicted Pendergast and his
henchman, former Insurance Su-
perintendent O’Malley. Here is
the version taken by Treasury
agents •
On January 13. 1935, McCor-
mack met O’Malley in the Coro-
nado Hotel, St. LmiW During a
conversation, -Maey casually
suggested that the insurance com-
panies might like to settle the
rate controversy. McCormack re-
plied affirmatively. When O’Mal-
ley asked how much the com-
panies would pay “someone” to
settle, McCormack replied he
would have to talk to Street in
Chicago.
O’Malley authorized McCor-
mack tell Street that Tom Pen-
cent of the impounded $9,000,000
fund was to be paid to the in-
surance companies,.. 20 per cent
to be distributed to policy, hold-
era, and 30 per cent to be set
aside in a trust fund with Street
and Folonie as trustees. The trust
fund was to be used to pay law-
years’ fees and various expenses.
The remainder, if any, was to go
to the insurance companies.
The deal finally got the court’s
approval, and soon the whisper-
ings began.
Rumors of a big fee reached
Elmer Lincoln Irey, soft-spoken
chief of the Treasury’s Intelli-
gence unit, who not many years
before prepared the case that sent
Al Capone to Alcatraz. Trey, cu-
rious to know whether the Fed-
eral government was getting its
full share of taxes, ordered his
men to work.
Right from the beginning, the
investigators suspected that the
deal couldn’t have been nut across
without Boss Pendergast’s bless-
ing. Quietlv, they began to look
into his affairs. They discovered
Pendergast always paid in cash
and usually was paid in cash And
cash was hard to trace. They were
temporarily stymied.
Then came the lucky break that
changed the suspicion of Trey’s
men to conviction that Pendergast
I was chin-deep in the peculiar in-
surance settlement. An internal
revenue agent made a routine ex-
amination of the books of
Folonie’s law firm in Chicago. He
discovered that on May 9, 1935,
Charles R. Street—the’ insurance
settlement negotiator—had deliv-
ered to the law partnership 14
checks totaling $100,500. These
checks came from several insur-
ance companies, were endorsed
and deposited in the partnership
bank account. The same day, the
books showed, the partnership
issued three checks to Street;
two for $50,000 each and one for
$500.
An Intelligence unit agent ques-
tioned Street about the $100,500.
First, Street said it belonged to
him. When it was pointed out to
him that he would have to pay
an income tax on it, he changed
his story.
Street said he had handed it to
a person “high in the political
ranks of Missouri but not a pub-
lic official.” Then he decided he
had talked too much and refused
to say another thing. The agent
left Street with the stern remind-
er that he was dealing with the
U. S. government and that a
more satisfactory explanation
was expected.
Plymouth sedan.
Robert McKee, Henderson,
Plymouth fordor sedan.
A. M. Reece, Overton, Chrysler
Qoya sedan.
G. W. Cooper, Henderson,
Chevrolet town sedan.
Oscar Wilson, Henderson,
Dodge tudor sedan.
D. Crouch, Henderson, Chrysler
royal six sedan.
ceived from stocks owned by him a
but recorded in the names of •
others, and salaries received by 1
him which were credited to oth- 5
ers. O'Malley was cited for fail-
ing to pav income taxes on his .
-hare. Action on McCormack’s M
nape was held in abeyance be- 79
cause he was the government’s
•• - - km
- Chenille
BATH ROOM An
SETS U8C
’Stool Cover & Rug.
Revenue Bureau against the pen-
alty and the matter dragged along
still unsettled when he died on
Feb: 1, 1938.
But Treasury agents were mov-
ing along other trails. The once
impounded premium fund was
studied minutelv. ' Everything
seemed in order. The records of
the trustees for the 30 per cent
portion of the insurance fund
were checked. No trace of wrong-
doing could be found there. The
various expenses had been liqui-
dated out of the fund and 11 ner
cen remaining had been dis-
tributed among the insurance
companies.
Then the agents checked Street’s
bank accounts. In the City Na-
tional Bank & Trust Co., Chi-
cago, they found an account in
the name of “Charles R. Street,
Agent.” Street used it occasional-
ly for depositing small premiums.
The Treasury men discovered
that between March 23 and Anril
1, 1936, $317,049 had passed in
and out of the Street account.
The withdrawals during those two
months Were made payable to
Street and he converted every
one of those checks into cash on
Anril 1, 1936.
The same day, the agents found.
Street borrowed $10,000 from
the bank on his personal note He
issued a personal check for $12.-
950 and cashed it. When he left
the bank that day. he was carry-
ing $330,000 cash With the
$100,500 previously unearthed
by the Treasury operatives, that
brought the total in cash handled
bv Street in less than a year to
$430,500. Why?
Irev's men turned for an an-
swer to the deposit tickets that
had popped into Street’s bank
account. The deposited checks,
they discovered, had been issued
by the 137 fire insurance com-
panies involved in the Missouri
litigation.
More investigators now were
called in and began the terrific
task of examining the records of
each of the insurance companies.
From this wholesale job, emerged
these developments, Treasury
records show:
Each company, on receiving )its
share of the 11 per cent remain-
ing in the 30 per cent trust fund,
had remitted five per cent of its
share of the total $9,000,000 fund
to Street. That explained the
$817,000 item in Street’s account.
The insurance companies’ records
also solved the mystery of the
$100,500 which Street had re-
ceived earlier. Fourteen insur-
ance companies had contributed
toward that amount and were al-
lowed to deduct their contribu-
tions from the five per cent later
remitted to Street, the agents re-
ported.
With Street dead, the agents
turned to an examination of his
estate. Among his 1936 cancelled
checks, they found two which
they traced to A. L. McCormack,
the St. Louis insurance broker
who had been present at the
settlement negotiations.
McCormack had been overlook-
ed by the investigators. But the
discovery of the cancelled checks
sent them prying into his affairs.
McCormack offered no help. |
The agents soon discovered that
beginning in May, 1935, the
month of the rate settlement, and
through to Sept., 1936, McCor-
Bright new pattern*, fast color
36-Inch
FALL PRINTS 7, H
। TOO yd* to select f U yu•
i from
For right now
Semi-sheer
ALPACA - TQp yd.
Navy and Black f UU
with chalk stripe
, , .. . g: met Stree on March 28, 1935,
penalty for, de-lbecause of his con8istent__tLa.d_lv.ck and.fouid him worried.--------
street rematmet iTT hors o racebetting: Butdurmhg The insuran ce cornpantesi !>•-
100 New Pieces Fall
COSTUME
JEWELRY QQp
Clips, heavy gold UUU
Pins
Come now and save. Large Field
Peakskill k
RAYONS 69C yd.
Hot Days a<%ea
Rare Values Just at the
m Beginning of the
VVV Fall Season
The Rev. J. E. Montgomery, pas-
tor of the First Christian Church
of Longview, will be the principal
speaker Friday evening at the $5-
per-plate debt-raising banquet of
the Henderson Christian Church,
the Rev. G. T. Reaves, pastor and
chairman of the program commit-
tee, said today.
The dinner will be held at 7:80
p.m. Friday at the local American
Legion Hut.
“The Rev. Montgomery has the
reputation of not only being a
great preacher, but one of the
best after-dinner speakers in this
section of the state,” Reaves said.
About 200 guests are expected
for the banquet, which will cost
—=55-perplete,Feeves-sateAni-"-
teresting and entertaining pro.
gram has been arranged.
aThe church, together with furn-
Whings, will cost approximately
$20,000 and the purpose of the
dinner is to raise the remainder
of the money necessary for its
construction. Bodenhamer and
Green, the contractors, expect to
have the building ready for occu-
pation about Sept. 10, Reaves
stated.
The church building is being
built on the site formerly occupied
by an old frame structure, owned
by the congregation, on North
Main Street.
------------o-----------
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Henderson Daily News (Henderson, Tex.), Vol. 9, No. 129, Ed. 1 Wednesday, August 16, 1939, newspaper, August 16, 1939; Henderson, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1425852/m1/5/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Rusk County Library.