The Pecos Independent and Enterprise
April 16, 1962
Estes receiver sets `status quo' goal
A harried Harry T. Moore Jr. returned to Pecos today as he continued his efforts to untangle the financial affairs of Billie Sol Estes.
Moore, an El Pasoan, resigned his job with the El Paso National Bank to accept an appointment as receiver of the Estes affairs after the 37-year-old financial giant filed a debtor's petition in federal court in El Paso.
Estes and three associates have been indicted on charges of fraud in connection with chattel mortgages on anhydrous ammonia fertilizer tanks.
No big changes in the Estes businesses - which ranged from grain storage to fertilizer to a daily newspaper and a funeral home -- are planned, Moore indicated.
"We're going to try to hold the status quo," the receiver said, "until we can get the figures on all the operations."
"Right now we're attempting to get the businesses operating that were shut down" after Estes filed the debtor's petition.
Among the businesses closed were grain storage operations and the Farmer's Company, which sells fertilizer and insecticides in the Pecos and El Paso area. Also closed was Estes' central office in Pecos.
Mooore was still hopeful that arrangements could be worked out for the $10 million bond which must be posted before he can take over the grain storage operations of Estes.
Commodity Credit Corporation, which pays the storage fees, has demanded the huge surety.
He said the large finance companies, which claim Estes owes them some $24 million, "have to be desirous of continuing the enterprises" if the bond is to be met.
The receiver said he had no way of personally posting the bond, but if it is posted CCD has "indicated they would accept it."
The bond had not been posted Monday.
An agreement between Anderson, Clayton and Company to manage the Estes farms "is not being disturbed," Moore said.
Thye farm lending firm took over operation of the Estes farms before the debtor's petition was filed. Estes' loan on the year's cotton crop was approximately $650,000 on some 1,600 acres of cotton.
"Right now we have no definite plan of action," the slender El Pasoan said, "other than trying to get things rolling again."
Clear picture emerges at antitrust hearing
A clearer picture of the dealings of Billie Sol Estes emerged here Saturday as Attorney General Will Wilson conducted his fourth court of inquiry into the Pecos financier's operations.
Witnesses here testified of a fertilizer business that continually lost money, of buying automobiles for a former finance company official, of buying an expensive hat and other favors for a Department of Agriculture official and of forged chattel mortgages in the four and a half hour hearing.
A packed courtroom heard Wilson and Assistant Attorney General Jack Price question employees of Estes and farmers in the Pecos area about the 37-year-old Pecosite's business dealings.
Wilson left the hearing just prior to the afternoon session for Austin after saying the Estes business cycle "is quite clear."
"As the grain storage expanded, so did the fertilizer," Wilson said, "and that created a demand for a bigger fertilizer market. He lost heavily on the fertilizer and these losses led him to excessive borrowing and finally into double and fictitious borrowing."
A.B. Foster Jr., general manager for Estes Enterprises, said, "Yes, I believe it has," when asked if the fertilizer business had been losing money since Estes began selling it.
Foster said several other businesses in which Estes owns stock are making monty but said it was the grain storage operations which financed Estes Enterprises.
Estes did not receive the money from the grain storage business. Instead the money went to Commercial Solvents Corporation and Commercial Solvents sent Estes anhydrous ammonia fertilizer. This fertilizer had to be sold by Estes to be converted to cash.
This was elicited from testimony of C.M. "Chuck" Wesson, sales maager for Estes Enterprises.
Wesson said the fertilizer was bought from Commercial Solvents at the posted price at the company's Louisiana plant, and there was "no limit on the quantity" they could buy.
Wesson said that when he went to work for Estes the retail price of fertilizer was six or seven cents a pound. But in June or July of 1958, Wesson testified, Estes dropped the price to four cents a pound and down to one cent a pound.
A man identified as a former representative of CIT Corporation, Jim Turiff, received a Chevrolet sedan while working with CIT, Wesson said. Foster later said the man also received a Thunderbird, which is carried on the Estes records as an Estes car.
Foster also said that Turiff bought some land in the Pecos area, which Estes later bought from Turiff. Foster said he did not know the difference in the purchase price paid for the land.
The Estes business manager said the Chevrolet was financed through a finance company. "That's the way I found out about it," he said.
The owner of a Pecos clothing store, Henry Blackwell, testified that on March 2, 1961, Estes bought a Department of Agriculture official a $100 hat.
Blackwell identifed the man as William Morris, an assistant ssecretary of agriculture. He quoted Estes as saying he "wanted him (Morris) to have a Western hat."
Estes' pilot, Joe Henderson, testified that Morris had been a passenger in Estes' plane on at least six separate occasions, according to daily flight logs kept by the pilot.
The last flight Morris made in the Estes plane was on March 28, 1962, the day before Estes and three officials of Superior Manufacturing Company were arrested for conspiracy and transporting a fraudulent chattel mortgage in interstate commerce.
Testimony also showed that an Alice Morris, identified as William Morris' wife, received $296 per month for February and March of this year from the Pecos Daily News for a weekly column.
Estes is the major stockholder of the newspaper, said Preston Hawks, the publisher.
Six Pecos farmers also testified at the court of inquiry. Five of them said their names had been forged on chattel mortgages for anhydrous ammonia tanks, while another said his name was on a mortgagte for 100 tanks for 10 months and he knew nothing about it.
W.J. Worsham, partner in Worsham Enterprises, one of the largest farming operations in the Pecos Valley, said he sold his fertilizer business in 1957 because of a price war.
Worsham also said he quit the crop dusting business in the Pecos area because "I heard he (Estes) had bought some airplanes, so I figured the handwriting was on the wall."
Worsham and his brother-partner, L.G. Worsham, along with Jack and Robert Bradley and Thomas Bell, said their namnes had been forged on documents.
All owe huge amounts for anhydrous ammonia tanks which they say they leased to the Farmer's Company, an Estes Enterprise.
Adam Garcia, yard foreman for the Farmer's Company, said Estes had 460 or 461 ammonia tanks and approximately 200 rubber-lined acid tanks.
Garcia said he had changed serial number plates on the tanks at the yard of the fertilizer and insecticide company. He said there were "quite a few boxes of (serial number) plates" in a room at the Farmer's Company.
A former receptionist for Estes said she wrote letters attesting to the good credit of farmers for managers of five different Estes businesses.
Mrs. Carol Wicker, now an attorney's secretary, said she used different typewriters, different company letterheads and different initials folr herself for each of the companies.
The quoted a manager of one of the businesses as saying, "It's nice to know I do business with this man." The remark was made as the manager was signing one of the letters of credit recommendation.
(Editor's Note: How does someone separated by many miles and with interests not connected with cotton or grain feel about the "Billie Sol Estes" story? One opinion which we feel is indicitave of how other people in other parts of the state feel was expressed by H.A. Butler, editor of the Rising Star (Texas) Record. Here are Mr. Butler's thoughts on the subject.)
The apparent -- and certainly spectacular-- collapse of the Billie Sol Estes financial empire is a distressing thing. It is something which broods within our system like a bad consciencne.
I would suggest that a brilliant young man, an extremely able financial manipulator, created something which grew too fast for its support and which, like Frankenstein, at length seized control of its creator and carried him helplessly along. It was not, I should think, so much a case of innate dishonesty as of compulsion. It was a matter of time, and the time of reckoning arrived.
Such things do not occur of themselves.They are the product of other conditions, basically unreal and insecure. The most unfortunate fact is that they affect, not one man, not a few, but many. In
We can hope fervently enough for the sake of the many innocent and for the integrity of our system that the Estes situation will be resolved without too great loss.
But Estes and his associates are not alone to blame. The federal government, which now becomes the virtuous prosecutor and defender of the faith, must take a portion of the blame to its own conscience.
The Estes fantasy germinated in conditions of the government's own creation. It exploded like a dream of Aladdin from the unrealities of political sinning against the laws of nature. It was a child of its climate. It obeyed the economic fiat of the Wallaces and the Brannons and all those heaven-sent planners of a social blessedness who forgot that human government can only govern men -- sometiems -- and tried to tell God what to do.
On the one hand the Agriculture Department poured millions into the Estes coffers for storing grain for which there was no use; on the other the organization reaped fantastic profits from selling the means of increasing the surplus grain on which to receive rentals. Can Estes be exclusively blamed for conceiving that the inflationary process might as reasonably be extended to assets?
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