Morning Oregonian. (Portland, Or.) 1861-1937, January 17, 1921, Page 3, Image 3

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( man who half befriended him all'
along and soufrht advice. He also
j consulted his attorneys and. to show
the Ingratitude of the man, he cause
I to be prepared a statement of the fl
I nancial condition of the corporation
' he told his attorneys and Mr. Morris.
neport Sbotrs Good .Margin.
"This showed the affairs solvent
with a margin of perhaps 1250,000
, over and above liabilities, which h
maintained was his equity. Thl
utatcment he prepared before his ef
rort to have himself elected by tn.
Shrine. In order to tide him over tha
.event and to silence, if possible, the
rumors that were about the city as to
Morris Bros.. Int.-.. affairs.
J no .Monday following his aeieai
. . , n n . a r- niiAn-rl hl ine onrine. jineriuKe save um
PRFSFN I NUUMt anUM 'statement, since proved to have
! been false, to his attorney. Mr. Lopan,
I and Mr. Logan took that, in good
faith, to the newspapers of this city
and asked that, In view of the firm s
.1080 Millions Goal foe 1921
Investment Yield.
Capital Siiy When Earnings Are
Jjow and Boost May Be Granted
to Keep Up Improvements.
Fpe-lal rorn-Bpondent of Th Or-conlan.)
(CoDVrlirht. 121. by The ores:onan.
WASHINGTON". Jan. IS. What the
railroads must do In 1921 has Jut
been mapped out In detail by their
presidents and other high operating
officials. Through their national or
ganization, the American Kailway as
sociation, they distributed among
tlipmeives memoranda of their work.
The proirramme calls for a net
profit on their Investment of $1,080,
eoo.000. Somehow they must make
that profit. Otherwise one of two
things will happen when the year
closes. .
Thousands of shareholders ana
bondholders will not obtain tha return
to which the Interstate commerce
nrnmiminn hMleved they were en
titled when rates were raised last
August, or the roads will have to go
again to the commission and ask for
another tncrease in rates.
Hoada Falling Behind ow.
Making the billion-dollar profit Is
oing to be, from present indications,
one of the biggest Jobs ever tackled
in railroad history. The railroads are
not doing It at the present time. They
are not coming anywhere near do
ing it.
Intead of earning 6 per ceni on
their plant, they made about 414 per
cent in October and aDout per ceni
In September. .-ovemuei """"s
I Xii3tA that October's record will
In other words, according to the
figures of the roads, the carriers must
nilH about half again as large a
nrofit as thev are now making to in
duce capital to come to their aid in
making improvements regarded as
absolutely necessary.
If they don't make the goal they
believe that capital will remain shy
of railroad offerings and that there
will be insufficient funds avauapie
for more cars, more locomotives, big
ger yards, increased terminal facili
ties and other improvements.
'good' financial condition, publication
of Etheridge's record be withheld
That was done. But the newspaper
publishers and editors wanted to
know the true condition by means of
a complete audit by impartial people
and it was sought to have this made
by the Clearing House association
but to this Ktheridee demurred; no.
indeed, he wanted no honest audit of
his books: he knew too well what
they showed.
Improvement Only Hope.
And unless these improvements are
forthcoming, there is no adequate
cure for the ever-recurring car short
ages and congestion that have tied
the roads in knots periodically dur
ing the last four or five years.
The memorandum just issued by
the American Railroad association
goes into elaborate detail as to what
must be done in the way of earnings
to toe the mark. For instance, dur
ing the present month the railroads
must earn net Jfi7.2T2.000. Next month,
a short one .they must earn $56,599.
000 In October, their big month,
they must show a profit of $112,
435 000.
For the purposes of their calcu
lations, they have divided the coun
try into three districts, using the
valuation figures of the interstate
commerce commission as follows:
Eastern district. JS.400.000,000;
southern district, $1,900,000,000; west
ern district. $7,700,000,000.
!t Earning Nereaaary Huge.
These figures represent the capital
Invested in the class one railroads.
To make expenses and pay interest
on that capital, the memorandum dis-
closes, the roads are expected to earn,
net. the following profits in 1921:
Eastern district. J504, 000,000 south
ern district. $114,000,000; western dis
trict, $462,000,000.
rrnntimied From Flrrt PaBf )
ehowdown on the corporation's busi
ness condition.
"Etheridge evaded he truth, and we
are prepared to prove It. to get Mr.
Morris to take over affairs, and it
was only when Mr. Morris went to
the office of the corporation the Fri
day morning following Etheridge's
departure from the city that he was
Informed by Etheridge's own private
secretary that the corporation had
outstanding $4TG.000 more In interim
receipts on Edmonton bonds than
Etheridge had shown in a prepared
atatement which he had handed to
John K. Logan and T. G. Ryan, at
torneys for Etheridge. and to Mr.
Morris Thursday night before leaving
the city.
Morria Out of It. Defenae.
"Mr. Etheridge had run the corpor
ation for a long time before he
actually took it over when Mr. Morris
sold it to him for 1100,000 in Feb
ruary, 1919. but, taking this subject
up on that date, it is a matter of rec
ord, absolutely, that Mr. Morris had
nothing whatever to do with the cor
poration's affairs officially. This we
will prove beyond the shadow of a
doubt when the case gets into a court
of law.
"Etheridge has testified in chancery
proceedings that Mr. Morris proposed
to him the organization of a $1,000,000
corporation, raised on the foundation
of the $10.000 one. but this Is false
and we will prove that by Etheridge's
own employes. For one thing, we will
show that he had a system, followed
a long time, of 'overselling' an issue
of some perfectly good bond and.
when the buyers called for it. he
would explain how sorry he was that
the issue h: d been 'oversold,' and
eay 'I have a choice Edmonton bond,
though, that I recommend.' In that
way we will show that he put out
those famous Edmonton securities
and got rid of those interim receipts.
Morria Said to Be Investor.
"Now we stand ready to prove be
yond douia to any fair person that
Mr. Morris, after selling out his in
terests in tho former corporation in
Fehrifary, IU19, had absolutely noth
ing officially to do with Morris Bros..
Inc.. except to make some investments
himself through it. He knew nothing
whatever about Mr. Etheridge's op
eration until he was appealed to by
Mr. Etheridge himself on December
il. when it was revealed to him for
tne first time that Etheridge had
reached the limit of his physical en
durance: that he had been beaten in
bis mad ambition to be elected a dele
gate to the imperial council of the
Khrine and that his prison record and
other things were perhaps to be pub
lished. "Incidentally. Mr. Morris had heard
of Etheridge's campaign, managed by
bis confidant. Ray Kike, for election
to the Shrine council and in kindness
advised him agair.s: it. Etheridge,
however, insisted and went the limit
on it and was defeated, of course, for
the truth concerning him had leaked
out sufficiently to accomplish his de
feat. "After Etheridge had found himself
absolutely lost, so far as continuing
bis business, be turned to the one
Business Offered for $100,000.
"At this juncture, things moved
mighty fast. Etheridge took his false
statement to his friend, Mr. Morris.
told him what had happened and
begged him to buy the corporation's
business, which Etheridge offered
him for $100,000. Mr. Morris said he
could not buy the business, but that,
if everything was regular and he
could finance $500,000 worth of the
Interims, which Mr. Etheridge, told
him were outstanding, he would do
so for a salary of $1000 a month,
which Etheridge had offered him on
a nrevlous date. That. It was ex
plained, would be only up to tho time
of Etheridge s return irom nis vaca
tion. "Mr. Morris made some Inquiries of
bankers, with whom he had trans
acted business, and, upon his state
ment that things seemed to be all
right at the corporation's office, bas
ing his belief upon the Etheridge so
called trial balance, he was Informed
hat If he needed some money he
could have It, of course, on the usual
terms of the day. With this under
standing and with the belief that
things were as Etheridge told him.
Mr. Morris bade Etheridge and Mrs.
Etheridge good-bye, gave them
money with which to take their vaca
tion trip and they went on their way
Thursday night. December 23.
"It might be stated right here that
Mr. Morria had advised) against Mrs.
Etheridge accompanying Etheridge
and that, out of the kindness of his
heart, he invited her to remain at his
own home, saying that Mrs. Morris
would treat her as a daughter. But
she went with her husband, at the
latter's request.
Morris Tries to Save House.
"Friday morning at 8:30 A. M., Mr.
Morris went to the headquarters of
Morris Bros., Inc. bearing papers
that had been hurriedly fixed up in
Mr. Logan's office the previous eve
ning. These included resignations of
Etheridge and Mrs. Etheridge, powers
of attorney, etc., and It was Mr. Mor
ris' intention, for the sake of the
corporation and Etheridge himself,
who laid claim to an equity of a
quarter of a million dollars there, to
call a meeting of the directors and
see what should -be done to save the
"When Mr. Morris entered the cor
poration's offices he conferred with
Miss Agler, Etheridge's private sec
retary, who knows all about the af
fairs there, and asked her if the in
terims represented as outstanding on
the so-called trial balance, since
found to be false, were all that were
out. To his utter amazement Miss
Agler replied that they were not;
that there were at least $476,000 more
out. Staggered by this disclosure and
realizing for the first time the seri
ous situation, also that he had been
betrayed by Etheridge. Mr. Morris
did what any other honest man would
have done. He went to his attorneys,
to his bankers and to District Attor
ney Evans with the facts.
"The bankers told him he must not
continue the business, having found
it insolvent; that he could not take
people's money any longer. As soon
as he could engage them, Mr. Morris
put the accountant firm of Whitfield.
Whltcomb & Co. on the books audit
ing them, and stopped business with
the close of Friday's office hours.
Then Doora Are Closed.
"Saturday was Christmas, then fol
lowed Sunday, and with that evening
came Mr. Morris' announcement that
the doors would not open Monday
morning and other disclosures, in
cluding the fact that he had found
the corporation Insolvent: that he had
consulted District Attorney Evans
and had sworn to a warrant against
"Etheridge. despite these facts,
provable at any time, swore in chan
cery proceedings that 'Morris be
trayed me and the creditors." What
happened was that Mr. Morris nevel
told anyone Etheridge had fled. but.
as Etheridge had promised Mr. Morris
he would keep in touch with him and
had not done so. he believed It his
duty to swear out a warrant to pro
tect the creditors. Then, when Fike
came back from Taeoma and said
that he had driven Etheridge to the
Canadian line, jt looked all the more
like he had fled.
"Mr. Morris has at all times acted
to protect the funds of the creditors,
as is shown by the fact that when
Etheridge first pleaded with him to
take over the corporation's affairs,
and offered him a salary of $25,000 a
ear to do so, Mr. Morris refused It.
Mr. Morris also vetoed the elaborate
bonuses Etheridge had promised his
employes Christmas night, and this
did not add anything to Mr. Morris'
popularity, I understand, among the
i:theridge Said to Faintly.
"It is pure 'bunk' that Mr. Morris
or his sister have any property be
longing to the corporation, and no
one knows it better than Etheridge,
who. to save himself, came back from
Minneapolis when arrested there and
told his big story about Mr. Morris,
the man who had befriended him and
who trusted him and who gave him
his wonderful opportunity to .ake
good in the world after his prison
"There has been some criticism of
Mr. Morris because he allowed his
name to be carried with the purely
thin-air $1,000,000 corporation, which
Jack' Etheridge created. Mr. Mvrris
had no power to do otherwise, even
had he known it was but thin air,
for he had sold his interests and one
of the chief assets, as has been shown,
was the good name of Morris.
"But Mr. Morris believed Etheridge
when he declared that, because of his
rise in the business world of Port
land and his business ability, he
had enlisted friends who would pro
vide the necessary money to create
the new corporation. Mr. Morris
thought all the time that this cor
poration was genuine, until the facts
were revealed in the final conferences
before Etheridge left Portland."
Law Enforcement Declared
Organization's Object.
Religious Tolerance Asserted to Be
One of Tenets of Secret
Order of Sonth.
Mayflower Fire Damage $72,000.
WASHINGTON, Jan. lS.The board
of inquiry which investigated the fire
ahoard the president's yacht May
flower, on December 28, found that
the damage was $72,000 and that the
blaze probably was caused by defect
ive wiring. Secretary Daniels ap
proved the findings today.
Best grades coal. Prompt dcliverv.
Diamond Coal Co. Bdwy. 3037 Adv.
BIRMINGHAM. Ala.. Jan. 10
(Special.) This city recently had its
wave of crime' and the Ku liiux
Klan offered its services to the city
officials to helD bring it to an end
The offer was accepted and the total
membership of the klan here, about
00 men, in every conceivable walk
of life, turned out to help the police.
Their work was done entirely in
secret. The evil has been largely
stamped out, and the Ku Klux Klan
claims that H was one of the chief
factors In this successful campaign.
Birmingham is one of the strong
holds of the klan and the center of
ts activities throughout Alabama. Its
efforts were directed against crim-
nals and undesirable citizens of both
the white and blacn races. It is one
of the arguments of the executive
officers of the klan. and it should not
be regarded as simply an anti-negro
organization because it happens that
up to this time its active operations
have been confined to the southern
states, where the criminal undesira
bles are for the most part negroes.
It would be different in the north.
they assert, where any person, re
gardless of color, who opposed the
onatituted authorities, so sougnt Dy
any means to flaunt or undermine the
governmental institutions or tne
United States, would feel the heavy
hand of the klansmen.
Membership Includes roller,
Here, as in other cities of the south.
has been impressed that no opera-
ions of the klan, authorized by its
xecutive officers, have been without
the full sanction of the law-enforcement
officers of the community. It
is the first aim of the organizers of
he klan to get the local-law-enforce
ment officers into the organization
and in the south they have been
lareelv successful. Mayors, sheriffs,
captains of police and the rank and
le of the police force are inemoers
in a erreat many localities.
It appears that one of the rules of
the order is that any member oi any
local branch that violates the law in
anv way. or runs contrary to the
wishes of the regularly constituted
law officers of the community, shall
be banished from the klan. This ap
parently is done without a trial and
merely upon the order of Colonel
William J. Simmons, the imperial
wizard, in Atlanta, upon information
presented to him and after an inde
pendent investigation. There have
been some banishments of this kind
many in fact, although few in pro
portion to the klan membership
within the last two or three years.
A "weeding process" is going on all
the time.
"Just as in the reconstruction pe
riod," said a klan officer, in discuss
ing this phase of the subject, "there
were unscrupulous men who made use
of the disguise and name of the Ku
Klux to cover their lawless acts, and
there are attempts to do this today.
Northern people should discriminate
and remember first of all that the
real Ku Klux Klan stands for pure
Americanism, which means respect
for law and order."
Law and Order Sought.
A few weeks ago there was a pa
rade of the Klan in Jacksonville, Fla.
It occurred at night and the men
were masked and clad In the long
white robes or sheets which were
worn by the members of the original
klan when they sought to intimidate
the recently liberated and Ignorant
negroes and renegrade carpetbaggers
who made life in certain communities
of the south unsafe in the late 60s.
The parade was accompanied by no
disturbance of any kind. The several
hundred white-sheeted figures rode
like ghosts through the darkness.
Back of this "parade," which was the
term applied to It by the officers of
the klan themselves, there is an in
teresting story which serves to throw
light on methods of the organization
just as the recent happenings in this
city have done.
When it became known to some of
the local authorities of Jacksonville,
including the mayor, that the klan
purposed to parade through the
streets of the city some of the city
officials immediately became alarmed.
They did not want anything to occur
that might lead to a public disturb
ance, a possible race riot.
The local members of the klan
called Colonel Simmons on the long
distance telephone at Atlanta and ex
plained the situation to him. At once
instructions were given to counter
mand the orders for the parade. At
the same time a high official of the
order was sent to Jacksonville to
confer with the mayor and explain
to him that the organization believed
in the preservation of law and order
and that it would do nothing to dis
turb the peace of the city.
As it happened, certain of the high
officials of Jacksonville and a very
large proportion of the members of
the police force were Klansmen. The
mayor was finally convinced that the
purpose of the organization was to
act as a voluntary auxiliary to the
law enforcement officers only on
their request or with their full ac
quiescence. Ho agreed that the pa
rade should be held. Silently through
the streets of Jacksonville several
hundred of the masked white robed
figures rode, scattering their circu
lars. which read:
"Warning Undesirables, both white
and black, we know you. This loaf
ing, thieving and prowling roun
must stop. (Signed)
"Knights of the Ku Klux Klan."
The klan is mado up of men in
every conceivable walk of lif
judges, members of congress, minis
ters of the gospel, lawyers, bankers,
business men, editors, superintendents
of manufacturing plants, doctors,
sheriffs, chief of police, policemen
city officials of every rank, skilled
and unskilled working men in fact
there is no station in life not repre
sented in the order. But every man
must be "100 per cent white Amer
lean, native born.
All Native Born Americans.
The following is question 20, asked
In the application for membership,
which must be answered In the af
firmative upon the most solemn oath
before an applicant is admitted:
"Do we owe any kind of allegiance
to any foreign nation, government,
institution, sect, people, ruler or per
This is broad enough to rule out
Irishmen or Irish-Americans who
profess to owe allegiance to the so
called Irish republic, persons who
owe allegiance to any church the
head of which is not an American
and, of course, bolshevists and for
eigners who would bring foreign
political nostruius into this country
and substitute them for the govern
ment established by the men who
framed the American constitution.
It is not an anti-Catholic organiza
tion, but at present it is not accept
ing members who belong to that
religious faith. It is understood the
time may soon come when it may do
so under certain conditions.
The question seems to be not so
much the religious faith of the appli
cant for membership as whether or
not he owes allegiance of "any kind
to any "institution, sect, people, ruler
or person" outside of the United
Religious intolerance such as has
been bringing Protestant bodies to
gether in certain communities to aid
in the propaganda for Sunday blue
laws is absolutely contrary to the
tenets of the order. It has no sym
pathy with the lobbies that have been
established in Washington and state
capitols to further this sort of thing.
It believes the whole movement un
American. A high official of the
klan who stand3 next to Colonel Sim
mons, said:
Religious Intolerance Banned.
"We believe in the fundamental
ideas upon which the American con
stitution is based. Religious intoler
ance is not one of them. The church,
as such, or its representatives as
such no matter whether Catholic or
Protestant have no business to mix
into American political or govern
mental affairs. They are doing it
everywhere a great deal more than
most people believe and it Is a bad
sign of the times.
"The Ku Klux stands for law en
forcement. The prohibition amend
ment and the Volstead enforcement
act are part of the law of the land.
The klan may be counted upon at all
times to help the officers of the law
enforce them.'
"But let us not run mad. Let the
religious and semi-religious moral re
formers beware, who would carry
this thing so far as to destroy the
sanctity of the home of an American
citizen by permitting law officers to
enter it and pry into the most private
alfairs of the American citizen.
'The home of an American citizen
used to be his castle. The Ku Klux
Klan wants to keep it so."
or comror ;
with Hot Water Heat
People Becoming Afraid to Ven
ture Out of Doors; De Valera's
Manifesto Is Due Soon.
DUBLIN, Jan. 16. (By the Asso
ciated Press.) The period of com
parative quiet wlrich began in Dublin
at Christmas proved short-lived.
During the last week there was a
continuous succession of tragedies in
which crown forces and persons
identified with the Sinn Fein move
ment appeared to have suffered
about equally.
The atmosphere now is similar to
that in Cork before martial law was
declared. The people are becoming
afraid to venture out owing to the
fatalities among innocent civilians.
The city is alive with rumors.
According to one report ambus
cades against crown forces, which
have been staged chiefly after the
curfew hour, will take place in day
light, regardless of the risk of such
attacks to pedestrians, to force an
extension of martial law.
That martial law will be instituted
generally is credited. The belief
prevails that it will be put into
effect in the next few days and be
accompanied by the changing of the
curfew hour from 10 to 8 P. M.
The military authorities were
never more active in the streets than
now: there is not only a marked in-
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De Moines, Omaha, Denver, San Francisco, Los Angeles, Seattle, Spokane, Portland, Toronto. No. 254
crease in the number of raids on
houses, but people walking in the
streets are undergoing in increased
numbers the ordeal of sudden chal
lenge and search.
Notwithstanding the renewed peace
talk appearing in the English press,
the Irish people eeem to have aban
doned hope of an early settlement.
Eamonn. de Valera is1 said to nave
passed a busy .week conferring with
his associates and attending at least
one cabinet meeting. It is said that
the republican government will con
tinue to function without interrup
tion. Regarding De Valera'a delayed
manifesto, it Is said that it may not
be issued until the end of next week.
It is' understood that it will contain
a review or the situation as ue
Valera found it and perhaps deal
with the result of attempts to bring
about peace negotiations.
Mather, physician missionary, oi his
return from Pao Ting Fu.
"More than 15.000.000 persons face
immediate prospect of starvation," he
said, "and 46,000.000 others are af
fected in the famine zone of 100,000
square miles."
Ei-Minister Passes Away.
LITTLE ROCK. Ark., Jan. 16.
George William Caruth, 79, who was
minister to Portugal during the sec
ond administration of President Cleve
land, died late yeBterday.
45,000,000 in 100,000 Square
Miles Starving in China.
'EW YORK. Jan. 16. Famine in
China will claim more lives in the
next six months than were lost in
all the armies during the world war,
unless other nations come to the res-
ene on a. tremendous scale, it was
predicted yesterday by the Rev. W. A
Why Wear Ready-Made Clothes
Built for the Other Fellow?
when you can get "Greenland
Quality" clothes made-to-measure
and made to fit from $75 to $100.
will be saved every year
to bank depositors of Port
land, when they all enjoy
Broadway Service or its
on Regular Savings.
3, on Special Savings sub
ject to check.
No charge to depositors
for collecting out - of - town
No service charge on check
ing accounts.
Open all day Saturdays
till 8 P. SI.
f JNfn ; mm
i .aflfeas. mw tv f'jL 'il i v. r i lid i ii
I 1 ( J . ..Tn J. 11' ' 1 I 1 1 T . I I II B 1.
Broadway and Stark
A Million in Deposits the
First Year
i Musical i
I Instruments I
I Sacrificed I
1 McDougall Music Co. 1
E 325 Alder Street.
Between Sixth and Broadway.
F:5f .B4?'!:irfi 3
A Victrola for him
He will come home tired tonight. He will want
rest, relaxation.
Prepare a little surprise for him. Have a Vic
trola and some well-selected records ready. Put
on his favorite melody or the latest popular
hit. Then watch!
Watch his face light up! Notice how he sinks
back in his easy chair, and grins! The day's
troubles are already forgotten.
A Vidrola is so easy to own it is made in so
many styles, ranging in price from $25 to 1500
that we know we can please you.
Wt will gladly arrange convenient
payment terms
plav & Co.
Sixth and Morrison Streets
Opposite Postofflce