Evening star., 1940-02-25
81. Louis School
Business Practices
Probed by Jury
Numerous DismissuIs
And Two Suicides
Arouse Public

BY the Associated Press.
ST. LOUIS. Feb. 24-It's been said
nothing smells so bad as a school
scandal.
st. Louisans are learning the
meaning of this.
The city has long boasted of the
high caliber of its school system.
which spends $4,000, 900 annually in
educating 100000 children But dur
ing recent months there has been
q series of startling disclosures of
slleged scandalous business prac-
tices in many departments.
The conviction of one department
lead on charges of embezzlement
STARTED the ball rolling. Then fol-
lowed numerous designations, dis
mlssals, two suicides and finally a
grand jury investigation of the en-
tire school setup.
Now the aroused public is ask
ing:
ryhat more will come out of the
mess?"
Orders Grand Jury Probe.
The grand jury was charged by
Circuit Judge Ernest F. Oakley to
"sift the school scandals to the bot
tom" and return indictments if the
evidence warrants.
He demanded the situation be
brought into the open after AUDITORS
employed by the School Board
uncovered apparent bookkeeping
irregularities, pay roll padding, un-
accommodation school property, lax
enforcement of building contracts
and speculation with school funds.
To date, the jury has called
number Of witnesses, including
School Board members and en-
ployes, but the investigation is ex-
p&ted to require several weeks.
Most recent developments were
the designations of DR.. Henry ].
Gerling as superintendent and
Arthur Blumeyer, member of the
Board OF Education for II years, and
petition demanding the resigna-
ZION OF another member, Richard
Murphy, broker.
Mr.. Gerlng, head of the schools
Tor 10 years, quit after auditors dis
closed he had purchased stocks and
ponds, through Mr.. Murphy, and
speculated in real estate with money
from various school relief funds az
in alb of which he was trustee. Mr.
Gerling, 10 and in ill health, denied
ne made the investments for per-
sonal gain and insisted all funds
remained intact.
Head of Board Resigns.
When majority of the board re-
fused to oust Mr.. Murphy, President
Mark D. Eagleton, a lawyer, an
nounced he would resign. Mr..
Eagleton was one of the leaders of
the cleanup" movement.
Mr. Blumeyer, president of the
industrial Bank & Trust Co., then
resigned "to place the board in an
easier position" regarding business
relations with school employees. His
bank has 5000 school EMPLOYEES
among its active customers.
Auditors first found a shortage in
the accounts of Charges Lee Barr.
commissioner of the supply depart
ment. which statesmen protested was
a closed corporation"
subsequently Barr pleaded guilty
TO embezzhng school funds and was
sentenced to four years in the State
penitentiary.
= Previously George w. Sanger.
building commissioner, and Frank
A. Borgstead, his chief aide, were
found dead. A coroner's report of
suicide was returned in each case.
Investigation of this and other de-
partments led to the dismissal of
several veteran employees.
President Eagleton commented
that the sweeping grand jury probe
was in line with what the occasion
demands"
Maybe they'll uncork something
else," he added. Lay on, MacDuff!"