The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1944-01-14
BY WEsTBROOK PEGLER

NEW YORK.-We have seen the United
and highway robbery as the special privileges
of favored groups but the public may not
know that in still another case, the New York
Supreme Court has held that officer of a
corporation is justified in ignoring the police
and the public prosecutors and dealing di-
rectly with extortioners.
The case was suit by certain stockholders
ton, ITSELF and the officers of the company
who paid 100000 to Willie Bioff and George
Browne, of the so-called Movie Employees
Union of the AFL. The plaintiffs asked that
these individuals be forced to reimburse the
stockholders and it was shown in the trial
that tire money was paid secretly by few
individuals out of the companys funds with
out the knowledge of the directorate as
whole at the time. Later, when Bloff and
Brown had been indicted for eXtortion, the
directors voted to ratfy retroactively pay
ments which had been disguised on the books.
Judge Carroll G. Walter, who wrote the
opinion justified this secrecy on the ground
that ''if such knowledge became widespread in
a company whose interests were as far-flung
as Paramount's, the purpose of making the
payments very well might thereby have been
defeated.''
The principal negotiator for the company in
these dealings was Austin G. Keough of New
York, a well-known lawyer, who was vice
president a director and general counsel of
Paramount Other Well-knoWn and impressive
names appear among the long list Of defend
ants and the picture is presented of an enor-
nous company with 10000 stockholders. 90,
600 employees and a weekly turnover of ST.,
900 afraid to trust the law-enforcement
agencies provided by the lawful governments
of the states and the nation to thwart and
| catch the blackmailers who were threatening
to shut down the movie theaters throughout
the country if the money was not paid.
The courts view seems to be that law en-
forcement has broken down to such extent
that if Mr.. Keough and his associates had
appealed to the courts and the police for pro-
lection from the criminals, Bioff and Brown
would have ruined their companies by calling
out the theater employees. Under new deal
law and policy they had the arbitrary power
to do this without taking vote of the workers
| or giving any reason for darkening all the
movie theaters of the country. However, the
citizen may ask whether if Paramount and
the other big companies had defied Bioff and
Browne and the theaters had been closed
the company officers could not have blasted
the conspiracy by going to the public with a
| 1ull dCCOuIlI OIL the plOL.
! The companies were not in the position of
Wayfarer on dark street who is confronted
with a gum No individuals life was in i'm
mlnent danger and there was time for Mr.
Keough and the others who made the deci-
sion to appeal to Tom Dewey, for example,
and even to the President of the United States
Public opinion also would have been power
full friend of the moving picture companies
because obviously the millions of patrons of
the movies would have asked why they Wire
denied their entertainment and the officials
| could have told them that they were being
held up in the name of organized labor, but to
the detriment of many thousands of idle work.
ers, by gangster who was reported to be
member of the Capone mob in Chicago Bioffs
reputation was we'll established in the indus
try by that time.
| Nevertheless, the companies decided to pay
and the court in the Paramount case decided
that this was sound decision and dismissed
the complaint.
| The suit has already been appealed to the
appellate division and unanimously affirmed
and is now before the Court of Appeals the
highest court in the state, further appeal
| On the question whether the operation con-
stituted extortion bribery the court held
that it was extortion with the victims sub
hitting, not initiating or conspiring But in so
deciding, the court also bowed to state of af-
fairs in which criminals are so strong that the
victim is justified in dealing with them for ex-
pediency.
r