Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1925-11-05
suit SEEKS TO
VOID AMERICAN
co. CONTRACTS
More Than Sl,700,000 Is
Involved; Would Cam
eel Charter; Asks Re-
turn Of $650,000
CBy The Associated Press.)


AUSTIN. Tex, Nov. Suit
asking cancellation of all state
highway contracts in Texas held
by the American Road company
was filed here today by Attor-
ney General Dan Moody. The
suit charges fraud and demands
cancellation of the companys
permit to do business in Texas.
This action is considered the
elimination of a highway inves-
tigation conducted by the attor-
ney general, which gave rise to
demands for special legislative
session "to investigate depart
ments at Austin"
The company holds contracts for
more than $1,7OO,O00 worth of re-sur-
facing work in various parts Of Texns.
The attorney general began an audit of
the company's books when county. conf
missioners Of a number of counties
complained that the re-surfacing pri-
ces were too high. evz-5s .-iss
Dissatisfaction over highway con-
tracts let by the highway commission
appointed by Governor Miriam A. Fer
guson inspired a member of the legis-
Iature to issue to issue a call for sre-
cial session and were the cause of a
grand jury Investigation of the high
way department at the instigation of
Mr. Moody.
Impeachment Talked
Officials Of the road company named
as individual defendants are: \ z. s.
Heyser, w. X. McIllyar, Whitaker Broc-
Miss H. L. Johnson.
Some Of the critics Of the admins
tration went so far as to use the worl
impeachment in connection with the
highway investigation. Under the Tex
as law any commission or state officer
may be impeached by the legislature.
At last reports those asking a special
session had not obtained sufficient
signatures to make the call effective.
The attorney general asks recovery of
$65O.O00 from the defendant, alleging
that the company made profit of ST.
115,0OO on gross business of $1,700.-
600 from April ], 1926 to October I.
1925.
He sets forth that in the execution
Of these contracts the American Road
company spent only $603,768. -,
This profit is alleged to represent
three kinds Of contracts which the de-
fendant company had with the highway
commission. One was for the re-sur-
facing with asphalt treatment Of sew
k.r1 - %ho hSrwH
ways in Parker county and the main
tenance of highways in Dallas and Tar
rant counties. He alleges that the
company received $59,957 for the main
tenance of highways in Dallas county;
that the cost to the company was $21,-
95725 and that in the period Of time,
April l to October /, profit was $685.
0O0.41.
Charge Excessive Profit
For maintenance in Tarrant county
the defendant is alleged to have receiv-
ed 55,633.70 and to have spent $27,-
618.76. representing profit Of $685.
014.94; that on maintenance alone,
there was a profit of $66,015.35 on
gross income from the state for main
tenance $115,591.36.
The company is alleged to have re-
ceived total Of $1,s33, ,269.05 for re-
surfacing which, it is claimed, cost the
company S394,219S4, and on which work
they are alleged to have made profit
of 1898, 9,049.21 between Aprif1 and Oc-
tober /. For the reconstruction Of the
highways in Parker county the COM
pany represented to have received
$270,620 on work which cost the COM
Continued on Page Two.)