The Birmingham age-herald., 1924-12-17
TEXHOMA OFFICER ADMITS PURCHASE $l,N)0,0OO Government Scores In Testimony At Oil Fraud
 Hearing DIVIDENDS ARE PAID TO AID STOCK SALE Bond Issue Proposed In
 Effort To Weather
 1921 Panic

Holdings of the Texhoma Oil com pany were sold to Walker Consoli- dated Petroleum company at net profit of $1,000, 1000, A: H. Taylor, Texhoma secretary and treasurer, testified Tuesday in the trial of four officials of the latter company on charges of using the mails Tn connection with alleged fraudulent stock sales of $3,000,0OO.
 Taylor, one of ten witnesses intro duced during the day by the defense, made this admission on cross-examina- tion by Assistant District Attorney Jim c. Smith. His testimony was considered important, in view of the government s contention that the two companies had interlocking directorates and that the Walker company technically took over the properties of Texhoma in return for huge sums of cash which saved "the legitimate company" from finan- cial disaster.
 Finances Low.
 Taylor also told how, on October l, 1920. he advised A. w. Walker and Hudmon Hopson, two of the defend ant officials, that the financial co9di- tion of Walker Consolidated did not justify the payment of 3 per cent. dividend to stockholders, and how they replied: "Well, we'll pay it anyhow
 tIn other words," Assistant District Attorney Smith asked, "this dividend was merely a bait to aid further stock sales?"
 Judge Grubb sustained a chorus of objections from defense attorneys and stopped the witness from answering this question.
 The defense questioned all it's wit nesses in an effort to prove that the value of the Texhoma properties was greater than the amount actually paid for them by Walker Consolidated, and that the increase of $1, ,800,000 in prop erty values placed on the books in l92l was legitimate entry.
 Judge Hay Testifies. Judge W. l.. Hay, of Sherman, Tex.i A director and stcokholder in the de funct oil company, testified for the defense that desperate efforts" were made to carry the company through the near panic of 1921, and that the proposal to float a $4,O00,OO0 bond issue to staye off disaster came from him.
 Isn't it a fact that the defendants did sell some bonds and keep the money until they were threatened with criml nal prosecution?" District Attorney c B. Kennamer demanded.
 q can't say as to that" the jurist answered. He then identified a let ter he received in October, 1921, from Hudmon Hopson, saying that the com pany was in good shape and only owed the banks and the Texhoma com pany."
 Auditors for the prosecution had pre- viously testified that in October, 1921 a deficit of $2,000,000 existed.
 Other witnesses put up by the de fense were c. w. Snider, director II the Texhoma company and president of the City National bank; N. H. Mar tin. yice-president of the Texhoma com pany; J. F. Boyd, banker of Iowa Park, Tex; Julius Foba, a geologist T. A. Ballard, Alabama blue sky" law l investigator, and number of character | witnesses.
 Numbers of the defense witnesse: were directors and stockholders in tht Texhoma company, and the government attorneys caused them to admit tha they benefited directly from the Walk CT Consolidated stock sales, by reason of the deal between the two concerns Valuations Fair. These witnesses asserted that, II their judgment, the valuations placed on the properties were not. excessive and that the intentions of the defend ants were good, but that a period O l financial depression overlook them Foha, the geologist, said he highl! recommended location in Arkansas to the Walker company and that turned out to be dry, although another company, drilling close by, struck oi and got 30,000-barrel wells.
 Mir. Ballard said he investigated th' company before it began operations il Alabama and recommended it highly
 At Wednesdays sessiOn-the tentl day of the trial, the defense will pu up Joe Hutchison, q Texas auditor wh' checked up for the Walker Consoli dated books for the defendants aftel the company hit the rocks. The gov ernment prosecutors plan to grill hln for several hours on cross-examlna tion.
 Court attaches expect the case t' rest with the jury by Friday afternoon A. w. Walker, Harold Walker, Sidne! MenascO and HudmOn Hopson, the de fendants, are under indictments con taining 34 counts. The maximum pc alty on conviction is five years on eacl count.