10 (Sec 1 Statesman, Salem, Ore.. WecU April 21, 1954
Testimony in FHA
Loan Probe Points
To Bribe
WASHINGTON Iff) Charges of
bribe-seeking and possible corrup
tion in setting FHA loan insurance
were aired Tuesday amid testi
mony that 1,149 apartment builders
reaped more than 65 million dollars
in quick profits from their opera
tiohs. No names were mentioned in
testimony at twin hearings by the
Senate Banking Committee and the
Joint Committee en Reduction of
Non-Essential Federal Expendi
tures headed by Sen. Byrd (D-Va).
Albert M. Cole, head of the Hous
ing and Home Finance Agency
HHFA) told the Banking Commit
tee headed by Sen. Capehart (R
Jnd) that one FHA official was
permitted to resign while investi
gators were looking into reports
that he had been "gambling in
large amounts" and 'demanding
money from people for the purpose
of securing commitments from the
FHA."
Corruption Indicated
Before the Byrd group. Internal
Revenue Commissioner T. Coleman
Andrews said there was one situa-
Irrigation at
Yamhill Gains
New Interest
By LILLIE L. MADSEN
Farm Editor, The Statesman
Two recent events have re
sulted in stimulating new inter
est in Yamhill County in de
velopment of potential irrigation
projects in the area, Bill Moore,
staff writer on the McMinnville
Daily News Register, reported
this week.
First of these, according to
Moore, was the withdrawal of
the U.S. Army engineers from
participation in the operation of
the Lafayette Locks on the Yam
hill River, which leaves in doubt
the up-river pool that is the
source of water for sprinkling
irrigation of some 1,800 acres.
Second was the move in the
south central part of the county
by Chambers of Commerce of
Sheridan and Willamina to re
vive the Yamhill project, which
has been more or less dormant
since World War II.
Third Project
A third project is now active
in the Hopewell area where far
mers south of Dayton are getting
behind a move to irrigate some
4,400 acres from a proposed
pumping plant across the Wil
lamette from Windsor Island,
about two miles south of the
Polk County line. From this,
water would be carried by canal
along the base of the Amity hills
approximately five miles north
ward from HopewelL
The reconnaisance survey on
the Hopewell project is complet
ed and, according to O. M.
Browne, acting regional planning
engineer, can be given detailed
studies when "additional and pos
itive local interest and support
are in evidence, and when ade
quate general investigation funds
are available."
Carl H. Francis, Dayton at
torney, and Lawrence E. Sohr
weid, McMinnville farmer, have
taken a lead to determine the
status of the proposed irrigation
district to utilize the Lafayette
Locks and pool. A conference
between interested irrigators and
representatives of the U.S. Army
engineers is being planned to
discuss this project.
Sees Activity Renewal
Clifford Elliott, manager of
the McMinnville Chamber of
Commerce, reports that he be
lieves the now dormant Yamhill
project might be returned to ac
tivity, if farmers and other or
ganized groups of the county will
make their desires known to the
Bureau of Reclamation and the
Corps of Army Engineers. Quite
a bit of survey work was done
between 1941 and 1944, but evi
dently dropped after farmers
failed to attend a meeting called
in 1944 to push the project
It was estimated this week,
that the "forgotten" Yamhill
project would provide water for
the irrigation of 65,780 acres.
At the time the project was
alive, it was laid out in three main
units: The Amity on the south
of the South Yamhill River; the
McMinnville on the north of the
South Yamhill, and the Carlton
or. the North Yamhill River.
The year-by-year depletion of
water flow in the Yamhill River
is worrying farmers now using
the river for irrigation systems.
Innocent Plea
In FHA Case
PORTLAND m John Milton
Owen of Portland, accused of
making false statements in deal
ings with the Federal Housing
Administration entered a plea of
innocent in federal court Tuesday.
Trial was set for June 1.
Owen, 47, is accused of making
misstatements in connection with
FHA loan credit applications, com
pletion certificates and purchase
- Seeking
tion in which "we think there was
corruption in appraising" the cost
of a project to get an FHA loan
guarantee. He gave no details.
Andrews also testified about the
65 million dollar profit which he
said came "almost entirely from
the difference between . amounts
borrowed and amounts spent" on
the 1,149 projects. The loans totaled
$1419,674,000, he said.
The Revenue Service is investi
gating L819 such cases, he said,
but he presented a statistical sum
mary only for the smaller number.
Byrd mentioned one project. Glen
Oaks Village in Queens County, N.
Y., and said loans on it totaled 24
millions although: it was built for
20 millions. Andrews said not all
the loans on that project were FHA
insured, however. He said there
appeared to be no fraud in that
case, either civil or criminal, be
cause the builders had fully dis
closed their income in tax returns.
Rents Higher
Byrd said he understood rents in
the Glen Oaks project were "15, or
20 or 25 per cent higher" because
of the size of the loan.
Cole told the Banking Committee
he would recommend within a week
ways of closing loopholes to "tight
en up the organization, the pro
grams and the procedures" of
housing legislation.
Capehart asked the recommenda
tions to permit the committee to
proceed with work on a general
housing bill now; before it. Some
have expressed fear that the cur
rent housing probe might interfere
with passage of the new housing
program asked by President Eisen
hower. Both the Capehart and Byrd com
mittees ordered public hearings
after the administration announced
last week it was accepting the res
ignation of FHA Commissioner Guy
T. O. Hollyday and making its own
probe.
Asked Resignation
Cole said he asked the White
House to obtain Hollyday's resigna
tion because of FHA s laxity in in
vestigating and punishing alleged
frauds and abuses. He criticized
Hollyday for accepting, with a
"laudatory letter" the resignation
of the unnamed official who was
under suspicion of gambling and
demanding money.
He said he discussed the case
with Hollyday in July, 1953, and
"suggested that since this person
had important decisions to make
as to whether one company or
another should get an FHA com
mitment, there Should be an in
vestigation made."
Cole insisted that he himself had
no authority to discharge the man
or to force FHA to take any such
action.
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AOAD OF
1 T 1 - JU
Wife Rejects
Settlement?
LOS ANGELES (A - James
Roosevelt's estranged wife. Ro
melle, Tuesday rejected Jus com
promise offer of a divorce and
property settlement, labeling it
"just another publicity; stunt"
Arthur E. Schiffermah, her at
torney, said the move "is designed
to attempt to prejudice; the court
and to arouse public opinion and
sympathy in Mr. Roosevelt's be
half. Apparently Mr. J Roosevelt
prefers to make emotional appeals
to public opinion rather than fb
leave this matter for judicial de
termination." i .
The attorney said that while
Roosevelt's desire for a; divorce is
not new, his wife never has wanted
one. "She filed her action for sepa
rate maintenance and she sees no
reason for becoming a party to
any collusive divorce! arrange
ment" Roosevelt, who is running for
Congress, Monday made the prop
erty settlement and divorce offer
in filing notice in Pasadena Super
ior Court that he will petition on
April 30 for permission! to amend
his separate maintenance suit to
ask for a divorce instead.
The filings quote a letter be
tween the opposing attorneys in
dicating that Mrs. Roosevelt also
will ask for divorce on grounds of
unspecified cruelty, dropping alle
gations of adultery, which Roose
velt has denied.
In essence, Roosevelt offered
half his holdings and net income
to Mrs. Roosevelt and their three
children. The offer is similar to
one contained in a 1945 letter to
her he signed. However, Roosevelt,
who is seeking the Democratic
nomination in the 28th Congression
al District, insists that letter is
not a binding contract.
Roosevelt is under court order
to pay his wife $1,025 a month
temporary support. She had sought
$3,500.
Bank Robber
Gets 2 Years
PORTLAND UP! Luray White,
who robbed the Hollywood branch
of the First National Bank of $711
here last October, was sentenced
Tuesday to two years in prison.
Federal Judge Gus J. Solomon
said he was giving a light sentence
because of White's "fairly good"
record in the past, and the fact
that he did not use a gun in the
robbery. He held his hand in a
sack in imitation of a gun.
NO PROGRESS MADE
PORTLAND UPV Federal media
tors reported Tuesday that "no
progress" had been made in
Woodworkers and representatives
of about 400 Pacific Northwest
logging operators.
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THE DAILY STREAMLINERS
Huge Airplanes to Serve as Sprayers
i I
I-1
- - ' -- '
i i ii in i
Leo "Ace" Demers, Salem crop duster and sprayer who is one of the few men in the nation using
multi-engine airplanes as sprayers, has recently purchased two huge Navy PBY airplanes to use as
sprayers this season. One of the unusual looking craft is shown above being inspected by Demers'
two sons, Leo Jr., and James. In addition to the PBY's, Demers has three twin-engine B-18s, all
based at the Salem airport (Statesman photo.)
3 Sources of
Oregon Road
Funds Decline
Three of four sources of state
highway revenues showed a de
crease for the first quarter of
this year. Secretary of State Earl
T. Newbry reported Tuesday.
The gasoline tax, motor car
rier fees, and fines for traffic
violations were below collections
for 1953. Motor vehicle registra
tions were the only source of
highway revenues to show an in
crease. In the first quarter of 1953
these four sources of highway
revenues showed collections of
11,996,676. The 1954 figure was
$11,601,223, a decrease of ap
proximately 395,000 below a year
ago.
Newbry pointed out that cities
and counties participate in these
highway revenues at the rate of
110 per cent and 19 per cent re
spectively. Some $434,000 of the
$3,630,000 collected in registra
tion fees in the first quarter will
be distributed in the second
quarter.
Demand for crocodile leather
is so great that crocodiles are be
coming scarce in many areas of
the world says the National Geo
graphic Society.
BETWEEN I
4
-;rM
tfTITT I I
I I I
(III IN)
ii i I )'U'" j,ll.-'!.1
Sack Enters
PORTLAND UP) George F.
Sack, 57, whose two previous
wives met violent deaths, entered
a plea of innocent Tuesday to a
charge of first degree murder of
his third wife.
He is accused of slaying Mrs.
Goldie Goodrich Sack Feb. 16, by
placing her in the trunk of his
automobile where she was asphyxi
ated. The body was found in a
clump of bushes in the outskirts
of Portland Feb. 18.
Migration to Australia
Decreases in 1953
CANBERRA W) Australia
gained only 42,883 people from
migration in 1953, less than half
the 1952 figure. There were 74,
915 arrivals but 32,032 people, in
cluding 25,295 Australians, left
the country.
Many Australians who leave
the coutnry are young people in
their early twenties going chiefly
to England to study or gain ex
perience. Many marry and remain
away indefinitely.
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Kelly's Supply Co.
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J. R mlay & Son
V Oregon
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P. O. Box 158, Caaby, Oregon
Calking Craft Boat Co.
P. O. Bex 491, Delate, Oretjoa
John Warren Hardware Inc.
771-775 Willamette, P. O. Bex 849,
Eugene, Oregon
' i u. . i I
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Innocent Plea
Sack's first wife died in a Chicago
apartment house fire in the early
1920s. His second wife was shot
to death several years later. Sack
was accused of first degree mur
der in the shooting, but was found
insane and committed to an
Illinois asylum. He was released
in 1932.
Sack also has been questioned
about the disappearance of two
persons in Washington state.
ATTENTION!
Members of Cannery Workers Local 670. Pue to conflicting
meeting dates, the regular meeting of Cannery Workers
Local 670 has been changed to
Wednesday, April 21st - 8:00 P. M., Hall
No. 1 Labor Temple. IMPORTANT MEETING
CONTRACT REPORTS TO DATE
LABOR TEMPLE
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Gilsons' Hardware
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Gilson's Hardware
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Allen
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Batdorf' s Home & Auto
2095 Fairgrounds R&, Salem, Oregon
Harry
147 S, Commercial, Salem, Oregon
Man Acquitted,
Another Sent
To Grand Jiny
One man was; acquitted of a
charge involving; stolen property
and another man was bound over
to the grand jury on a burglary
charge when they appeared in
Marion County District Court
John Miles: Avery, Salem,
charged with burglarizing the
Bishop Building in downtown Sa
lem early Sunday, was ordered
held for the grand jury by Judge
Val Sloper. Avery is held in
lieu of $2,500 bail.
A district court jury acquitted
Walter Stanley Carbaugh, 605
Spruce St., of a charge of con
cealing stolen property following
a trial Tuesday. Carbaugh was
arrested by Salem city police last
Feb. 20. Police said he had in
his car several articles reported
stolen in recent burglries.
Carbaugh's defense at his trial
Tuesday was that the articles
were taken by his younger broth
er and that he was only return
ing them to rightful owners. The
younger brother has since been
sent to MacLaren School for Boys.
City police are still waiting for
an improvement of Fred Lind
say's condition at Salem Memo
rial Hospital before talking with
him about the Bishop Building
burglary. In a signed statement,
Avery named Lindsay, a room
mate of his in a local hotel, as an
accomplice in the burglary. Lind
say was picked up in the street
by Willamette Ambulance person
nel half a block from the build
ing and about two hours before
discovery of the entry Sunday.
He told ambulancemen he had
been struck by a hit and run
driver. He was admitted to the
hospital with a fractured ankle.
Avery claims that Lindsay was
injured in a 25-foot drop through
a skylight on the roof of the build
ing and dragged himself to the
street.
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REO MOTORS, INC
Hardware
W. Scott
Portland Talks of
Payroll Cutback ,
PORTLAND tf The City
Council is considering' lopping
about 100 workers off the. city
payroll for economy reasons.
The council said it has budget
requests for IS ft million dollars
and expects income of about 13 H -million.
The council estimated dis
missal of 100 workers would save
about $360,000 a year.
The police chief and fire chief
at once objected that their depart
ments could not stand .any
reductions.
11 Climbers
Missing in
Italian Alps
ROME (J Eleven Italian holi
day mountain, climbers were miss
ing Tuesday night in the snow
swept Alpine and Dolomite Moun
tains as storms and cold lashed
Italy for the fifth straight day.
More than 50 carabinieri and
alpinists returned from Grignetta
Mountain north of Milan at dusk
and said eight Easter holiday
climbers still were missing there
after 36 hours. Six other members
of the party were found, unharmed,
earlier Tuesday.
Three other climbers, identified
as Italian students, still were miss
ing after having set out to climb
a Dolomite peak near Trent. Al
pine guides hunted for them all
day Tuesday.
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Valley Farm Hardware
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