Evening Star Newspaper, July 15, 1936, Page 5

THE EVENING STAR. WASHINGTON : U S RUUNDS UP 24!New Navy Yard Commander [}IRGUS TAX FRAUI] Says Acting Not His Line > ON FRAUD CHARGES Group Is Indicted With Five Corporations in Stock Swindle Case. BY the Associated Press. Federal agents today began a round- up of 24 individuals indicted with 5 corporations yesterday in what was described by the Securities and Ex- change Commission as one of the largest stock-swindling schemes on record. The indictment was returned by & special Federal grand jury in Gaines- ville, Ga. The defendants were charged specifically with using “ma- nipulative devices” to alter prices of stocks bought by thousands of in- vestors on & time-payment plan. This, it was contended, constituted a fraud- ulent use of the mails and a violation of the securities act. The information on which the in- dictment was based was gathered by postal inspectors and agents of the Justice Department and Securities Commission. It was presented to the grand jurors by United States District Attorney Lawrence Camp of Atlanta. Offices in Dozen Cities. John J. Burns, counsel for the Com- mission, said the defendants had of- fices in a dozen cities, centering in Chicago. He explained the evidence was submitted to the Gainesville grand hJ because the group had been ac- tive in Georgia. Three of the 24 men named in the | fndictment were arrested today in9 Chicago. They Henry Bernstein and Joseph Mendel- son. The men were released under $2,500 bond each pending a removal hearing, which was held up at the | request of Government officials, who expect eight other Chicago defendants to surrender soon. Chief Postal Inspector Walter John- | son, of Chicago said operations of the | ring involved “several million dollars.” | Rear Admiral George T. Pet Yard. He consented to pose for PETTINGILL took command of the Washington Navy Yard today, after making it clear to photographers that “I'm no actor.” were Frank Btr?el’,‘REAR ADMIRAL GEORGE T.| eran of 38 years of sea service will shortly after taking over command of the Washington Navy raphers know he was averse to “acting.” For the next three years, the vet- | be in charge of the yard, the Ma- | ministration building and went to| rine Barracks in the yard, the Naval | work. Air Station at Anacostia, the Belle- | tingill, shown at his desk today this photo after letting photog- —Star Staff Photo. ‘When photographers asked him :a; pose shaking hands with the acting | | commandant, Capt. Stephen C. Ro- | wan, he replied: | “We're no actors.” After the salute, the admiral, a hero of the Boxer Rebellion and the World | | War, retired to his office in the ad- | Under Admiral Pettingill's com- In other quarters it was esnmated“vue Naval Magazine and the Naval mand are 8200 civilian employes, 50 | this figure would run as high as $10,- 000.000. The charges, it was said, arose from transactions in stock of the Stutz Mo- tor Co. and the National Service Corp. Other Defendants. Other individual defendants include: Leonard I. Sutterman, Chicago; Joseph N. Sherman, Cincinnati, New York and Chicago: M. Lewis Ehren- berg of Chicago; Henry K. Kopald, Minneapolis, Chicago and Atlanta; M. Frank McCormick, Minneapolis; Samuel Phillipson, Chicago; Gould, Chicago; Samuel Genis, New York; Benjamin C. Waller, Chicago; Robert Belmont, Chicago and New York; Harry K. Newberger, Chicago; A. L. Novak, Chicago; Maurice L. Chyenkus, Minneapolis; Max Oxman, Detroit, and Samuel Sherman, Meyer ‘Wolfson, Joseph Ricebaum and Albert ‘Trause, all of Chicago. The corporations named were: B. J.| Gun Factory in the yard. He ordered the usual elaborate cere- mony of greeting a new commandant |limited to raising the commandant’s flag, two stars on a blue fleld, and |a 13-gun salute. naval officers, exclusive of those at | |the air station; 350 bluejackets at the receiving station, and 150 men in | | the Yard's Marine Barracks. He | | comes here from Battleship Division | 2, which he commanded. | Moran (Continued From First Page) shouting when they arrived at the | Malone-Moran residence on North Havenhurst drive. They reported they rushed to the called the sheriff's office “I'm through with him,” the officers quoted Miss Moran as saying. “I've been married to him three years and after this I'm through with him ‘The deputies said that Miss Moran Kopald-Quinn & Co., McCormick & | was clad in a kimono and crying Co., Robert Barr & Co.. E. Gould & | Co., and Frank Muncn & Co., all char- | tered in Illinois. LOSS NEARLY 5 MILLIONS. sterically when they arrived. “I recognized her as the actress at once,” said Schottmiller. Malone, however, insisted that her name was Mrs. Malone, but she identified her- Warning Seen by Prosecutor in Swindle Indictments. ATLANTA, Ga., July 15 (#.—Fed- eral District Attorney Lawrence Camp * said today the indictment of 24 men | 0 for participation in a Nation-wide stock swindle was a warning to “per- sons who mighi otherwise think they can get away with crooked securities.” Camp said evidence in his possession showed investors in the five corpora- uons indicted had lost between $2,- 500,000 to $5,000,000 through the group’s operations. Camp said all of the group's activ- fties were conducted by telephone. The five corporations indicted, he de- clared, opened up in communities suc- cessively without disclosing that they ‘were connected. - Inflation (Continued From First Page.) 000,000,000 would be cut to about $1,- | 900,000,000 on August 14. “The portion of existing excess re- | serves which will be absorbed by the | board’s action, if permitted to become the basis of a tenfold or even larger expansion of bank credit, would create an injurious credit expansion,” said Eccles. “It is for this reason that the board decided to lock up this part of the present volume of member bank re- serves as a measure of prevention on | the one hand and of further encour- | agement to sound business recovery | and confidence in the long-term in- vestment market on the other hand.” | There is no excessive credit expan- sion now, he said. He argued that it was better for the Reserve Board to act now than when expansion occurs, because then the action might bring on a “deflationary cycle.” The action was taken under powers granted the Reserve Board by the | banking act of 1935, which allows the | board to increase reserve requirements | by as much as 100 per cent. | “It is far better to sterilize a part | of these superfluous reserves , while they aré still unused than to permit a credit structure to be erected upon them and then to withdraw the foun- dation of the structure,” Eccles said. He added the present excess was caused almost entirely by the inflow of gold from abroad and not from the system’s policies of encouraging re- covery through the creation and main- tenance of easy money conditions. “This easy-money policy remains unchanged and will be continued,” he #aid. “The part of the excess reserves thus eliminated is superfluous for all pres- ent or prospective needs of commerce, industry and agriculture, and can be absorbed at this time without affecting money rates and without restrictive influence upon member banks. “Furthermore, by this action, the remaining volume of excess reserves, which will still be larger than at any time in the system’s history prior to the recent large inflow of gold, is brought within the scope of control by the Federal Open Market Committee, which, as constituted by the banking act of 1935, consists of the members of the Board of Governors and five representatives elected regionally by the Federal Reserve banks.” Eccles said that board surveys dis- closed the reserve balances were so ‘well distributed that virtually all mem- Yer banks were in a position to meet &he new increases, either by utilizing their excess balances or by drawing upon their excess balances with cor- tespondent banks. “Unless large additional increases in reserves occur through gold imports or otherwise, no occasion for further ad- Justment in reserve requirements is likely to arise in the near future,” Ec- [ self at once. “After we took him to the Beverly Hills police station we asked him if his name was Mr. Polly Moran and he blew up.” Schottmiller said Malone offered considerable resistance before they subdued him. The struggles occurred at the entrance to the residence. of holes.” the officers quoted Malone as shouting at them. To Swear Out Complaint. Schottmiller said the actress told him she would go later to the office of Justice Cecil B. Holland in Beverly Hills and swear out a complaint | i against her husband. The disturbance occurred eariy hours of the morning. When the officers drove up in their automobile they said they could see Malone silhonetted against an upstairs window, a pistol in his hand. | Miss Moran at that time was screaming and trying to break away from his grasp, they said. The officers reported Malone point- ed his pistol at them after they shouted to him to let them in, and in the confusion Miss Moran slipped | away from him and ran downstairs, unlatching the door. Malone followed her, they said, and & wild scuffie ensued. Jorgeson snapped the handcuffs on Malone, Was Arranging Benefit. The officers said she told them she went out last night to a dance hall to arrange a benefit to raise funds for a new chemical fire-fighting truck to be | used in forest and brush fires. While she was talking over details, Malone slipped away and when he re- turned she said it was obvious he had | been drinking, the officers said she told them. They started to argue as they drove home, she told the deputies, and the dispute reached its climax when he picked up a pistol and started snap- | ping the trigger in vain. | Twenty-three years ago Miss Morgan came to the movies. This was after she had become known as the most traveled vaudeville star in the world, having crossed the Atlantic 14 times. She was as big a hit as & monologuist in Europe and South Africa as in America. Played With De Wolf Hopper. She appeared in a number of De Wolf Hopper comedies before coming to Hollywood in 1913. Her first step in the movies was in Mack Sennett comedies as Charlie Murray's wife in “The Janitor.” Then Sennett starred her in a long series of comedies as the western character, “Sheriff Nell.” The 134-pound, 5-foot-4-inch ac- tress never teamed with any one on the stage or screen until the movie duo of Marie Dressler-Polly Moran was formed several years ago. Born in Chicago, her real name is Pauline Theresa Moran, her father, Tom Moran, having been & contractor. Three years ago she married Marvin Malone, attorney. She has a 14-year- old son by a former marriage. ey DECORATORS ELECT Francis L. Lenygon of New York Chosen at Convention. MACKINAC ISLAND, Mich, July 15 (#).—The American Institute of Interior Decorators elected Francis H. Leynygon of New York City president at the annual convention here yes- terday. Other officers include Louis Rorimer, Cleveland; William A. Kimbel, New York, and Katherine Duff Watson, San Prancisco, vice presidents; Mras. James C. Rogerson, New York, secre- tary, and James H. Blauvelt, New York, treasurer. 1 in the home when some one in the vicinity | “Get out of here or I'll £l you full {and Dorothy Hawes of the Wheatley :PROGRAMS CONTINUED | | BY RAMBLING THEATER Girls From Georgetown, Montrose and Hoover Playgrounds Are Participating. Weekly “Rambling Theater” pro- grams, sponsored by the Community | | Center Department and .the National | Capital Parks Office. were to be | continued this afternoon under the direction of the District Playground Department with a show at Montrose | | Park, Thirtieth and R streets. Groups of girls from the George- town, Montrose and Hoover play-| | grounds are participating, under the | | direction of Miss Maude N. Parker, di- rector of girls’ and women’s activities. Those scheduled to appear in acts were Anna Leigus, Mildred Hardesty, Peggy Wilson, Eileen Lennon, kie Miller, Marjorie Butler, Mary Walling, Virginia Bradfield, Dorothy McCarthy. | Dorothy Jett, Lorraine Howard, Betty Kees, Catherine Kees, Lavina Skinner, | Margaret Helwig, Anna Tomlinscn, | Rilla Hall and Faith Elliott. Martha | playground were to act as mistresses of ceremonies. 38 HELD IN POLAND Drive Against Secret Nazi Or- ganizations Is Effective. KATOWICE, Poland, July 15 (#).— Poland’s drive against secret Nazi or- ganizations was announced today to have resulted in the arrest of 38 per- sons during the last three days. At the present time the total num- ber of persons facing trial for illegal political ectivities is 90. —— e “HEART” BABY DIES EDMONTON, Alberta, July 15 (#).— A 3-day-old baby, born with its heart outside its body, died late last night in University Hospital here. No operation was performed, Dr. E. Hitchin, acting superintendent, an- nounced, and surgeons earlier had said the child had no chance of remaining alive. STAPLES FLOOR WAX A fine floor wax of- fered at an outstand- ingly low priece! Quantity is limited. Full Pound Can 29. ISLAIDTO SIXMEN Lawyer and U. S. Agents In- dicted as $3,359,016 Con- spiracy Is Charged. Br the Associated Press. NEW YORK, July 15.—Ten indict- ments were returned by a Federal grand jury yesterday charging six men with conspiracy to defraud the Government of $3,359,01648 on in- come tax returns of the Ringling Bros.-Barnum & Bailey combined shows from 1918 to 1932, inclusive. None of the Ringling family was named as a defendant. John M. Kelley, a lawyer and member of the Wisconsin and Florida bars, was named in all of the true bills. The others indicted were Ralph D. Sullivan, Chillicothe, Ohio, formerly Wwith the Bureau of Internal Revenue; Nathaniel F. Rabner, formerly an Internal Revenue Bureau auditor, whose address was given as the Na- tional Press Building, Washington, D. C.; Charles D. M. Greer, an internal revenue agent, Sarasota, Fla.; William Blum of the Bureau of Internal Revenue, Tomkinsville, Mo., and Richard Fuchs, secretary to John Ringling from 1919 to 1934, now a| Brooklyn, N. Y., resident. Kelley, general attorney for the Ringling interests since 1908, could not be reached immediately for com- ment at his New York office. He main- tains homes in Harrington Park,N.J, and Sanford, Fla. The indictments were the culmina- | tion of two years of investigation in New York, Sarasota, Chicago, Los Angeles and Washington by special agent$ of the Department of Juallve; and Internal Revenue Bureau agents. | ‘The indictments charged that ap-| proximately $2,000,000 in spectacles | produced and abandoned by the circus interests before 1915 were fraudulently deducted as depreciation between the years 1918 to 1925. A statement issued by United States Attorney Lamar Hardy set forth that “Kelly * * * fabricated inven-| tories of circus properties that were never owned by the circus * * * upon his own responsibility and with- | | out the knowledge or "consent of the Ringling brothers or the representa- Sports! Tans! Blacks! Every pair men’s shoes ac money saving prices! Nunn Bush shoes $6.85 to $7.85. Some to $9.85. EDGERTON SHOES ON SALE AT $4.45 10 $5.35 MENS SHOP 1331 F ment by the Nunn-Bush Shoe Co. which will move to a new o8 i location to be announced later. POSITIVELY FINAL WEEK Reilly’s Sensational PAINT ‘This week winds up this tremendous Summer sale of Outside White Lead, Zinc and Linseed Oil House Paint, made for us by one of the country’s leading manufacturers to meet U. S. Govt. specifications T T P-36. Only because of our tremendous purchasing power can we offer such a bargain in a house paint of really outstanding quality. But we would offer nothing less, because when Hugh Reilly offers a Special, it is only when price can be combined with real QUALITY. LET US RECOMMEND A .RELIABLE PAINTE VETERANS! Paint protection for that home is s money one of the BEST thin, can buy. Your adjusted com sation payment offers the o and protect your home. CALL PAINTS i ppor- tunity ‘of a lifetime to beautify hEW R Brush 65c During this Sale we are offering a 3-inch brush for 65c. pen- 1334 NEW YORK AVENUE Since 1888 1703 FOR QUICK DELIVERY HUGH REILLY CO. Owned and Operated by Hugh Reilly Fammly D. C, Youngsters Gain Weight at Health Camp s Pleasg’d over their increase in weight, these children, from 4 to 7 years of age, are shown exam- ining their own health charts at the Nutrition Class of the Tuberculosis Association’s Health Camp at Thirteenth and Allison streets. Fifty (-)uldrfl_t have gained an average of 1.1 pounds since the camp opened July 1, it was an- nounced at the first official visiting day yesterday. Ceremonies included a brief address by Dr. A. Barklie Coulter, director of the Tuberculosis Bureaw of the Health Department, and an explana- tion of progress by Mrs, Margaret Craig Marsh, superintendent of the camp. The camp is operated On junds raised by the sale of Christmas seals. tives of the deceased Ringling brother The indictments set the gross in- come of the Ringling interests from 1918 to 1932 at $53,456,889.20. and the net income at $10,789.691.02. They also cited taxes allegedly due on the incomes of each of six Ringling broth- ers who engaged in the circus business, of whom only John 1s now living. Doctors agree that ; ’ Neuritis 1s caused by the accumulation of acids and poisons in housands have found ni rinking Mountain Valley Mine om famous Ho! Sprin for booklet Mountain Valley Mineral Water MEL. 1062 1405 K ST. N.W. STREET SALE In (-Gallon Tins 32'45 A Gallon In 5-Gallon Tins 32'35 A Gallo (WHITE ONLY) GLASS WEDNESDAY, JULY 15, 1936. Nurse Sara Shriner holds the charts. REV.A. J. TYLER, MT. AIRY, EXPIRES Funeral Services Friday Morning for Colored Baptist Clergyman. Rev. A. J. Tyler, 69, colored, pastor of Mount Airy Baptist Church since 1906, died yesterday at Garfield Hos- pital. He lived at 67 N street A native of Caroline County, Va., he came to his pastorate here from Mc- Keesport, Pa Besides a son, Rev. E. K. Tyler, a sistant pastor at the Mount Airy Church, the deceased is survived by his widow and two daughters, Mrs, Sadie T. Marze and Mrs. Amy T. Bell. Funeral services will be held at 11:30 am. Friday at the church. Burial will be in Lincoln Memorial Cemetery. Importance of Nose. ‘The nose is a much more important organ than many people think, for its function of smell belongs to only a very small area in it, its real impor- tance lying in the fact that it is the entrance to the lungs. Wheel Bra Relined GUARANTEED! ! Material and Work. FREE ! ! Unlimited testing and adjustments, L X Bne| ! 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