Evening star., 1935-08-02
SCHULTZ IS FREED;
NEW CASE WEIGHED
Jury Lashed by Judge fol-
Tax Verdict-JurorS
Deny Guilt Proved.
ny the Associated Press.

ALBANY, N. Y, August 2.-The
State tax commission announced TO-
day that 1t would be impossible under
New York statutes for the State TO
prosecute Dutch Schultz for failure TO
file returns on his prohibition era in
come, but that an investigation had
been started into Schultz's income for
1893 and 1884
At the same time, Mark Graves,
president Of the commission. said he
had been informally advised by
Schultz's lawyers that the former
Bronx beer lord was ready to meet the
Empire States demand for s36,3sl84
in taxes on his income for 1880, 1881
and 1882.
Graves said an examination of the
State law had revealed that the statute
Of limitations protected Schultz from
State prosecution The statute re-
quires prosecution for a misdemeanor
10 begin within two years after the
alleged offense
Probe 1893 and 1894
while it is generally believed that
he was in seclusion and out of buSi-
ness in 1889 and 1884, his income is
being investigated; and If it should
develop that he was guilty Of any
criminal offense in failing TO file re-
turns for these years. prosecution Will
be Immediately instigated," Graves
said.
Meanwhile, in Malone. N. Y, today
members OF the jury which acquitted
Schultz of charges of evasion Of Fed
eral income taxes gave their explana-
ton Of why the Government lost its
case.
IF the Government had shown us
only $1,000 gross income, We would
have convicted" said Leon Chapin,
foreman of the jury.
we feel that the Government just
didn't prove its income tax evasion
charge"
Inferentially, Chaplin. director Of the
New York Dairymen's League, replied
to the bitter rebuke with which Fed
eral Judge Frederick H. Bryant laShed
the jurors after their verdict.
I'VE took the judges instructions
and followed them" he declared. We
were instructed to follow the evidence,
and We feel we did"
BIames Conboys Tantics.
Hollis Child. a farmer member Of
the jury, sat at home today nursing
. headache.
We just didn't like the attack on
George Moore" Child said. We all
know Moore and it didnt seem just
right Conboy went little too far"
Moore was the attorney who sum-
med up for the defense During the
summation OF Martin Conboy, special
prosecutor, the former United States
district attorney waggled his fingers
in Moore's face This was the Incl
dent which Child referred to.
Vows to Pay Tax.
Schultz, still in Malone but plan
ming TO leave tonight for New York
City, reiterated his promise to pay the
se2, 900 back taxes he owes the Gov
eminent, plus interest and penalties.
Visibly elated at the not guilty.
verdict which clirnaxed the end of his
second trial on the evasion indict-
r1ent he seemed unperturbed by the
Federal judges scathing denunciation
Of the jury.
Tall, stern Judge Bryant spoke Bit
terly 10 the jury His voice was low
and trembling with rage as he said:
"A verdict such as you have Just
rendered shakes the confidence of law
abiding people. You will 90 home
with the satisfaction you have rem
dered blow against law enforce
ment"
Schultz trial was marked by an at
tempt on the part of the prosecution
TO emphasize not so much the ques-
ton of whether he evaded income tax
payments, but his former connections
with New York gangs and their bloody
warfare.
There was silence in the Govern
ment encampment after the acquittal.
For four years Federal officials have
worked TO send Schultz along the
prison road over which they drove Al
Capone of Chicago and "Waxey" Cor
don Of New York, both Illicit liquor
entrepreneurs.