El Paso Herald-Post from El Paso, Texas • 1

vt'wop i WWSWWVOa The Amazing Story of a Bubble That Burst Rise and Fall of El Paso Insurance High FByer A Herald-Post Public Service Report to Make Your Insurance Dollars Safer at other military Installations around the country according to Treharne By the middle of 1953 some 30000 servicemen and civilians were covered by United Lloyd's and Treharne was branching out He bought the airplane and the Lincoln convertible and together with his partner in a real estate business he bought a summer home at Ruidoso which he said would be used for employes of Lloyd's The real estate business was named Tex-Spence Properties His partner in the business was MaJ Gen Hompr Sanders formerly commanding general at Biggs Air Force Base now with the Technical Air Command at Langley Field Va Somewhere along in 1953 Treharne met Deborah Dean a blonde dancer in a Juarez night club They married March 20 even as the first omens of unrest began to rumble throughout the Treharne insurance empire For it was about this that Attorney General John Ben Shepperd began to eye with suspicion the operations of United Lloyd's To find out if his suspicions were well founded the attorney general put one of his ace assistants to work on the case The assistant Rudy Rice began and a year later had dug the foundation of Treharne's insurance empire clear away Attorney General Shepperd brought Treharne's companies into court in early 1954 and the empire began to disintegrate The $60000 Treharne put up to start United Lloyd's Mr Shepperd prosed consisted of $5000 of his and $55000 he had borrowed from the El Paso bank shorlly before he got his certificate from the Insurance commission Several days after getting the certificate the attorney general proved Treharne repaid the bank leaving Spencer Treharne Finds And Loses Pot of Cold THOMAS MARTIN Let no youth with Horatio Alger instincts a minimum of scruples and a lively Imagination despair that today he Is living In an age that frowns on initiative and cultivates the laggard The youth should study the Texas insurance code for at the end of that legal rainbow dotted liber-ally with big loopholes he may find his pot of gold If the budding Alger doesn't believe this he should study the case of United Lloyd's of El Paso and particularly the rise and fall of the company's founder Spencer Treharne The lush promise of Texas and the loophole-ridden Texas Insurance laws that foster and fulfill this promise of the pot of gold beckoned to Mr Treharne as they have beckoned to few men The course he followed catapulted 1 from the position of an ordinary general Insurance agent writing countless policies to that of an insurance magnate who hobnobbed with at least one movie star who went into business with a general of the Air Force who lived in I i bJsI 41 a summer resort In New Mexico drove his Lincoln convertible and flew around the state in his private airplane That the attorney general later labeled his operations a fraud and that a district court stripped him of his numerous insurance companies is also Important to the story But the career Spencer Treharne demonstrates without doubt that a man bent on cleaning up in the Insurance business can do so without too much trouble because Texas insurance laws and their enforcement shaped to admit only fully-qualified Insurance companies to the fold but in fact are designed to permit the organization and operation of fly-by-night operations A man who had been a captain in the Air Force (at Hick-ham Field when it was bombed Dec 7 1941) Treharne was by 1950 operating a string of Insurance agencies that sold policies mainly to military personnel There were among others the Armed Force Insurance Underwriters Air Forces Insurance Underwriters United Military Insurance Underwriters United Service Insurance Underwriters Military Personnel Underwriters Then Treharne formed his that came in 1952 He organized United Lloyd's of El Paso He did this simply by flashing a deposit slip on an El Paso bank before the State Insurance Commission The deposit slip showed he had on deposit in the El Paso bank $60000 (required for the guarantee fund) and a small surplus The commission promptly Issued him the certificate to do business On the surface United Lloyd's did a thriving business It wrote business at Ft Bliss and Biggs Air Force Base and his guarantee fund depleted and the company insolvent" from the beginning The attorney general and his assistants turned up other interesting memoranda They found that when United submitted its annual statement to the Insurance commission Dec 31 1952 it listed assets of $14712204 The attorney general discovered that $70000 of this money was borrowed from an El Paso bank Dec and repaid Jan 5 1953 On March 31 1953 the attorney general proved United Lloyd's told an insurance examiner it had $12176649 on deposit in an El Paso bank The attorney general found however that $75000 of this had been borrowed from the bank March then repaid to the bank on April 4 The company listed among its assets by Oct 31 1953 a first mortgage note on a plot of land valued at $322000 The land just outside El Paso was to be used for real estate development purposes Treharne said The attorney general investigated He found that the land had been sold to Treharne's father for only $30000 several days before it was listed in the company's assets The difference between $30000 and $322000 the attorney general said was a All told said Attorney General Shepperd when his department finally finished checking United Lloyd's it had (Continued on Pago 8 Col 1) peBBer Fmslhies Indochina Moves Near Vita! Delta City Hanoi Apprehensive As Fire Draws Close EXCLUSIVE! Pupil Misspells in 7th Round Co Id we 1 1 'Bacillus' Barbara Jean Anderson Is 30th Student Eliminated at Washington Wins Cash Award By MARSHALL IIAIL Hrraia-Paul lull Wrllrr WASHINGTON May William ('ashore 14 8th grade wen the Natiunal Spelling llee today He la from I 'enter Square Pa and wai sponsored by the Norristown Herald lie apellrd "unrlnatad" and then la win He won Ml and a trip te New York William Kelley II 7th grade Iierrlnr Me sponsored by the Memphis Press-Srlmllar Keripps-lloward newspaper won second place Patriris Brown 14 SI Anthony's School Birmingham Ala apon-sored by the Hirniingham Pont Srripps-llowsrd newspaper wen third place She spelled Georgia Slates South-wide Meet On Segregation Invite 1 7 State Legal Officers to Conference Bv United Prm ATLANTA May Georgia called a conference of top legal officers from 17 segregation states today and the governor of Virginia asked chief executives of 11 Southern states to confer on issues confronting Dixie as a result of the Supreme Court's segregation decision A conference of attorneys gener-' al of all states affected by the court's action in outlawing racial barriers in the nation's schoolrooms will meet in Atlanta next Wednesday They will search for a legal way to sidestep the court's ban Wires Governor Governor Thomas Stanley wired 15 other governors asking them to meet in Richmond June 7-8 His action came about the time Governor Johnston Murry of Oklahoma chairman of the Southern Governor's Conference announced! there would be no official confer- ence of that group on the segre-' gation issue Stanley's telegram laid appears a meeting of the governors of the 18 Southern states concerned could serve a most useful purpose for the exchange of information and views This suggestion ii prompted by the thought the governors would have an opportunity to consult together freely without contemplating any organization or adoption of any group plan" To Shivers Tlie telegram was sent to governors of Georgia Florida Louisiana North Carolina South Carolina Texas Delaware Alabama Arkansas Kentucky Maryland Oklahoma Tennessee West Virginia and Mississippi Murray said he has talked by I Continued ou Page 18 Col 41 DismitF Driving Charge The Marquess and Marchioness of Milford Haven Marchioness Flies To for Juarez Divorce The marchioness of Milfnrd-Ha-settlement included a five-figure vrn was due to arrive in FI Paso lump-sum payment this afternoon to get a divorce in The marchioness the American-Juarez She was flying to El Pasonm Romaine Simpson has been from New York bv American Air-'reeeiving 800 monthly alimony lines plane She planned to leave The marchioness denied pub-E1 Paso tomorrow iislied reports that she will become I The Associated Press reported Hie wife of New York Socialite today that counsel fur tho marrh-Wallcr Nichnlls as soon as she nb-i lioness said in New York that ahe'tains her decree She said she in- received a satisfactory aettlemenl'tend to keep right on Lady from the Marquess of Milford Ha-iMilford Haven" jven her estranged husband The marchioness wa the Amer-' The settlement was disclosed ycs-ican born Mrs Romaine Dahlgren 'teiviay when the attorney Harold HiPierce Simpson when she Corbin loid State Supreme Cnurtjmarried the 34-ycar-old cousin of iJustire McNally in a etterQueen Elizabeth and the Duke of that there was no further need tn'Edinburgh in 1910 Although the pursue two motions dealing with'marqucss was a favorite of the' tho couple's countersuits for di- royal couple the queen never re-vorec jeeived the marchioness at court I Corbin declined to discuss dntailbrcause of tradition frowning on Other sources have indicated theidivorce By JIM IITAS Rtilsss-Heirsrd Staff Writer HANOI May The is moving into the Red River delta There are any number of smaller in Indochina There's one around Hue and another around Tourane In Central Viet Nam There's a third around Nam Dinh a good-sized one around Phu-Ly and still another near Haiphong the port tor North Viet Nam An air war is flaring up again around Dicn Bien Phu But the war" la the one to which Communist On Vo Nguyen Giap gives hia personal attention and that ii the one moving into the delta i Bloody Angla The delta has heen palled the angle'' of Indochina where actually the fighting' has never stopped not even for a night in the war that's now right years old Every night in Hanoi at the apex of the della the sound of artillery is louder than the night before Last night there was machine gun fire They say it was at Ha Dong seven miles from here A street car which runs past my house on Rue Can Ba Quat gets you there in 20 minutes A wooded area five miles past Ha Dong is controlled by the enemy From this cover they esn dart in and nut at will So far no French unit has been strengthened enough to go in after them Last night however Ha Dong's defenders went to meet them out-aide the town One French soldier was wounded The Viet Minh as usual carried their casualties back with them Surround Village Over near Haiphong the Viets have a village surrounded Thej weather was good yesterday and the French used bombers and fighters to relieve pressure on the village But when I asked to go there today I was told it wai impossible No one gets or out At Sept Pagodes down toward! Haiphong the French killed seven and wounded 10 yesterday The Vieta however have 14 battalions along the Hanoi-Haiphong highway At lent they did two weeks ago There may be more now and 17 raaualtiea are hardly a crippling blow The French said at a briefing that numerous boxcars had been destroyed by mines on the rail line But the French killed several guerrillas before the highway and railroad were oprned this morning Hanoi is uneasy Two nights ago most of the city's lights failed (Continued on Page 3 Col 3) WASHINGTON May Barbara Jean Anderson El Paso's spelling champ was eliminated from the National Spelling Bee today when she mlspellcd the word Barbara apelled It Thirtren-year-ull Barbara a into (car upon thinking aha mis-leiglitli grader from Coldwell School''hed a word in the fifth round I whs tin- Kith speller eliminated lMk her loss calmly illius pulling her 28lli from the tup Sim ent'icd the eonlcsl with Nlir won a ill prize of $411 equal rompoiure when she walked She Unbilled on "burillux" in the intu Dm stage of Hip Department seventh i 'mill after Die lunch-liinc of Cuminm-e auditorium this morn- inlei mii-miiii She had survived the ing amid teli'visiuri lights and flash 'fust rounds by spelling correct- Imlbs ly tii-re surds: iron lhe warmup The Bee stnr'cd off slowly After wiii'ii kerosene innate crystallize spelling her wai in up word piiejneral caterwaul and imperim- ye wril mi to spell krrnsrrle land "innate'' correctly She was Mill fly Bark -till going strong at the first in- i Tim Southwest sieing champ tei'minioii though nine of hrr ri-will receive her prize award at a had gone down 'banquet here tomorrow night She A Close Shave 1U i will fir hark to Fl Paso 8aturday After the morning intermission IN NATIONAL Baroara Juan Anderson spent in National jirrivin thorr at Barbara iwilM through Bee at Washlnon Barbara who earlier had broken snH On the mill round ahe drew th iContinued mi Tags 18 Col Z) Railman Calls For Rate Cuts II Gilbert president of the Brotherhood of Locomotive Firemen and Engine-men today in El Paso advocated reduced freight rates to stimulate business Page 5 City Charter No 7 How New Document Affects City Department Organization Although two Ciiy departments signed to special duty will receive hve 'fn combined under the new Read the Editorial extra pay from the Cily City charter the organization of CHARTERITES Several changos are required In operating agenrirs will he Rage 18 other Cily department Tho job little affeeted by the new dneu- Cily warehouse custodian is i1' The operainns if the Pmce and lhf The rui- The Sanitation Department wuch'jirfl nrparimn I jf inventory Lone City Policeman Rids Bridge Area of Thugs By AL WFGEMFR El Pasoans who visit Juarez now can walk In relative safety from the Santa Fe street bridge to where their cars are parked It no longer is dangerous to walk from the bridge to nearby parking lots and taxicab stands Muggers rift packers and hop- tours of the parking lota and dark heads have been driven from the alleyways in the vicinity He looks for loiterers potential crooks in the doorways of apartment houses and business establishments C'etchee Phtol Totem He scrutinizes the petrona of lunch stands located near the District Attorney William Clayton has dismissed a charge of murder while driving while drunk against SJ'Tk Abhre- of 105 Abshire had beSIT' aecured of causing the death of Pedro Lopez in an automobile arcirient in themnst hbiak Hihwy 80 Ea5t Lopez who lived a SMB Porter street was struck down as he was' crowing the highwav now operates independently wll he fpitc hy l)ip rpv (II a IV suppkrx and is required nl Taylor and prr drorn rf the City en- hnu(Vl 1P kP nioithiy repuit to the Ci'n lie dire to- of puhkr Jn cv jp 1r if)ivi mauagir lidmg aI of the Ctv's will also tie in charge of it-i1 mpphivt and equipment Requirements that the al- Sheriff's Officer Paul Lopez reported sh'i An-hue was drunk when tries -iw him ini- mediately after the are dent wnrks wm avi by rivil f0rvi(A lhf "Jr' ltl sciui'ili'ii'peridcit Traffic Fn- fiumrn vicinity of the bridge City Policeman Roberson is largely responsible for this Policeman Succeeds It took Patrolman Roberson fix months to accomplish the cleanup Until recent weeks the interna- bridge When he sees a suspicious ni 1 person he asks questions and tionol bridge was a gathering point chppk! identification papers for thugs novice ard professional He gives almost as much careful and tor prostitute dope peddlers scrutiny to those entering Juarez pctiy thieves and pickpockets as to those returning Hoodlums lurked in the shadow- lie has helped catch a score of in parking lots or behind nearby reiidiers absent without leave de- buildings waiting for victims en sorters pistol toters fugitives and route to or coming from Juarez car prowlers The thieves prostitutes and dope close Co-operation peddlers were more bold Theyi palrolman RoborMn workl close waited near the immediate ap- proach to the bridge to ply their wlUl Military Police Air Police tradea and Shore Patrol assigned to the Lola of Shoe Leather bridge El Paso residents and visitors During rush hours the military were attacked nrar the bridge policemen are unable to check each They were beaten slugged stabbed draft male returning from Insidc Your Herald-Post Weather Forecast: Tartly cloudy tomorrow (Details on Page 7) Page ClB pIC(n and Ashby who was ralud to loei Department veriie fir bids on ail laige pur- scene as coroner said the 1 nw ma aPPnnl'd "iicrm chtljM haip nii(lcK nrei man was not drunk I Tne Ly enneer wu now th Cy may cln5p public strmgenl When an item costing Frank Arellano of Ysleta a wit- be in rhargo of building nspec- paoei provent "a breach of the n-ore than $1001) is needed the pur-' hMr'tnntherhSrSlt0n' maintendnce' pilbllc peace" The Fire Department iRcha sing agent must deliver specif i-j Amuse menu 38 limmary nearing on thar rge street cleaning garbage 'injlMrrJi cation fhr the item to all Ann Carrell 8 Report Fair Skies Ahead for El Paso buildings whirh threaten to ignite may also send the specification Crossword Fouls new streets ana adjoining ones powers are to suppliers outside the City On Hr I I Conner The charter give the Cily the also enumerated in the prerent' nrms costing $2000 or more the option of operating a City-County charter City must advertise for bids Under Health Unit nr a separate health A fl' nrw thP fh'' mav prevents puiieemrn from takii'g buy lem rusting less than $2000 department If the depa men i vap Pi) lP employment in crculatng epenfirations 33 18 Editorials 18 Foreign Scene 18 I ties Robb I 38 MarkrU 34 Olhman IS stomped and robbed Juarez Patrolman Roberson back- I 24 34 18 18-11 If 13-11 Fair skies vine fnreaM fur El separate the mu- he a hPr as nffii-eis Thus an nnd withnut calling fur bids Paao after yesterday's rain and hail qualified physiciai nff-dutv could not he Tne C1v Pai Department has Hail fell fom Five Pom's east An advisory Bnaid of Ileath if imed direr'ty ep nrli i al tne men organized on the same ban! and covered the ground at some created by the matter Trt mem- Coliseum or other puilic place as in the current charier with the pomta late yeeteiday ibers of the Board al! doetors and Persons or frma who want spe- rxception of the manager-appointed Total fall" amounted to 18 inchJdentuts are appointed hv the Court-rial poker prc-rtion wil hive to depai 'nivit head bringing the total for the month to'cil al the nomina'inr of the County hire pnkn nirn through the Poke-1 J2 and A0 tor the year MediCal and Dental Suvietes 'Department Odiccrs who are as- (ReUled cwi on Fage i) Prgler People Radio and TV Trogranu Side-Bar Remarks Sports Stoke Women's New Patrolman Roberson was assigned to bridge duty in December He 0PS the military officers was given one order: rid the area Bridge duty has proved a rugged of thugs and troublemakers assignment Patrolman Roberson rnrtinucs to Hot bloods who go to Juarez to carry nut that order He is doing fill up on red eye arc belligerant the job by using a lot shoe when they walk back across the leather bridge They hold the notion thev Instead of sitting on a chair in can lirk anyone "even that cop" an office at the bridge Patrolman Patrolnvm Roberzor has dispelled Roberson nightly nukes numerous such a noLon more than once 1 Whan a woman laughs at a man's joltai it may not bo because they are clever but because she is.