Empire Dust

In his smoke-begrimed frame on a wall of Tennessee's capitol, Andrew Jackson seemed to cock his long ears expectantly one day last week. Below him sat the House, strangely hushed. Another hot political battle--the kind Old Hickory loved so well--was rumbling into Nashville. To his feet rose Representative John Tipton of Tipton to announce:

"We have found that . . . the admitted and uncontroverted facts alone warrant the impeachment of Governor Henry Hollis Horton and, pursuant to the orders of this House ... we are engaged in the preparation of articles of impeachment."

Thus did the Tennessee Legislature take its first decisive step toward removing from office the diffident, mild-mannered, 65-year-old Democrat who succeeded to the Governorship in 1927 upon the death of Austin Peay. An Alabaman by birth, Governor Horton was a village school-teacher who turned to law, practiced in Chattanooga, reached the State Senate just before his elevation. Though not a strong political personality, he was nevertheless elected Governor in 1928, re-elected in 1930.

The charge against him: criminal conspiracy. Named as his coconspirators: Luke Lea (52), onetime U. S. Senator, publisher of the Nashville Tennessean, the man who tried to kidnap the Kaiser from Holland as a Christmas present for President Wilson; and Rogers Clark ("Bank On the South") Caldwell, high-flying Tennessee financier and promoter. Last November Lea-Caldwell enterprises, which were beginning to take the whole South for their province, went crashing down into the dust of Depression (TIME, Nov. 24). Last week it seemed likely that their financial crash would rock Governor Horton, their friend and ally, down into political ruin.

Rogers Caldwell had a dream of economic empire in the South. Caldwell & Co. was the nest in which he hatched banks, corporations, holding companies, investment trusts, realty developments. His domain spread into Kentucky, Missouri, Alabama, Georgia, Arkansas, North Carolina. Self-confident, ambitious, no financial scheme was too big for him to tackle. He believed in the economic destiny of the South, sought to force its maturity. To his aid he drew Col. Lea, an experienced politician and publicist. Together they bought newspapers, extended their holdings, yearned for more power. Times were good. They borrowed heavily for fresh expansions, pyramided one new financial structure on top of another. Needing a friend at Nashville they "adopted" Governor Horton, insured his election with their press. Always in this new combine of politics and finance Mr. Caldwell was the looming background figure, Col. Lea the shrewd middleman, Governor Horton the small figurehead.

For a year after the 1929 stockmarket crash, the Lea-Caldwell enterprises tottered along, then suddenly collapsed. Their banks went under one after another, stripping thousands and thousands of citizens in and out of Tennessee of their deposits. Three bank officials committed suicide. Lea-Caldwell newspapers were thrown into receivership and Messrs. Lea and Caldwell were indicted in State and Federal courts.

The political temper of Tennessee rose in angry remonstrance as it explored the wreckage. Discovered was the fact that $6,400,000 in State funds were on deposit in four of the defunct Lea-Caldwell banks. Mass meetings were held at which it was charged that Messrs. Caldwell, Lea and Horton had looted the State. Adolph Ochs's Chattanooga Times (with echoes in his New York Times') began a crusade to expose wrong-doing at Nashville. Prodded by popular demand, the Legislature last January appointed a committee of 14 to investigate State affairs and discover the connection, if any, between the Lea-Caldwell failure and the Horton Administration. With trembling voice Governor Horton, in his address to the Legislature, declared the smash was the result of the "worldwide Depression," an "unfortunate situation." Said the Governor: "Every man guilty of a betrayal of trust, however exalted his position, should be exposed, condemned and removed from office." Last week his enemies threw these words back in Governor Horton's face.

For four months the Committee investigated. Witnesses told over & over how Messrs. Lea and Caldwell dominated Governor Horton, got whatever they wanted from him. They were accused of inveigling State funds into their banks far beyond the legal limit and then using these public deposits for large private borrowings for the use of Caldwell & Co. and its subsidiaries. One trust officer admitted that, on Mr. Caldwell's order, he had substituted near-worthless securities for sound stocks. He said he would have used confederate money for collateral if he had been so instructed. Evidence was uncovered that Messrs. Lea & Caldwell whooped it up for State Highway bond issues, joined a syndicate for their purchase and then, through their political influence, had the proceeds deposited in their own banks. Mr. Lea was charged with causing the dismissal of a highway commissioner because he refused to specify the use of "Kyrock," a road building material in which Mr. Caldwell was interested. He also "suggested" to Governor Horton the appointment of a State Bank Superintendent and thereafter was able to tip off banks when a State examination of records was coming. State funds were almost shovelled into the Lea-Caldwell banks, auditors reported, in a vain attempt to bolster them up near the end.

To the ex parte case the investigators built up against them, Messrs. Caldwell & Lea made no official reply beyond broad denials of wrongdoing. They withheld the specifications of their defense until required in a court of law. This did not prevent State Representatives from denouncing them as "men who have robbed, cheated, defrauded and stolen from the taxpayers of Tennessee."

Last week the legislative investigating committee finished its work, reported that Governor Horton was virtually a Lea-Caldwell dummy. Fifty of the 99 House votes are required to impeach. By a vote of 71 to 25 the House named another committee to study the investigators' report and from it, if necessary, prepare impeachment articles. Chairman of this committee was Representative Tipton who, a day after his portentous announcement, brought in his first article with more to follow. Described in a 65-page accusation was a Horton-Lea-Caldwell conspiracy "to commit acts for the personal aggrandizement and pecuniary gain of the co-conspirators . . . and for the purpose of enabling . . . Henry H. Horton continuously to be able to remain in the office of Governor and use the powers and influence of that office for his own advantage, gain and advancement. . . ."

Leader of the move to impeach Governor Horton was no State legislator at Nashville. He was Democratic Congressman Edward Hull Crump, 65, the white-haired, bushy-browed boss of Memphis, a city which Senator Nye on one of his slush-fund investigating trips characterized as "the Philadelphia of the South." Boss Crump, who rose from harness dealer to Mayor of Memphis and boasts of 14 election certificates, controls the Shelby County delegation at Nashville (three Senators, eight Representatives). He dictated the elections of the Speakers of the House and of the Senate. Tennessee has no Lieutenant Governor. If Governor Horton were impeached, Boss Crump's Speaker would succeed to the Governorship.

Boss Crump has long been itching to smash the Horton-Lea-Caldwell combine. The Lea-Caldwell collapse gave him his chance. But he is not popular in rural Tennessee where he is denounced as a "boss of a city machine." To this his henchmen reply: "Why, Ed rode into Memphis from a Mississippi farm at the age of 18 on a bull calf."

To prove the purity of his friend's motives, Crumpman Scott Fitzhugh last week resigned as Speaker of the Senate, even though that body had voted confidence in him.

This file is automatically generated by a robot program, so reader's discretion is required.