RICHMOND, VA., April 22, 1939. Re: S. 1042: For the relief of Epes Transportation Corporation. Chairman, Committee on Claims, United States Senate, Washington, D. C. DEAR SIR: Upon suggestion, on behalf of the claimant in the above-mentioned Senate bill introduced by Senator Byrd of Virginia, I desire to submit the following: Shortly prior to April 1, 1934, the petitioner who was at the time engaged in the business of trucking, or inland marine as a common carrier of freight, undertook to convey certain tobacco products for the Reynolds Tobacco Co. from Winston-Salem, N. C., to Norfolk, Va., the particular shipment here involved being a truckload of cigarettes and tobacco products which had been sold by the Reynolds Tobacco Co. to foreign purchasers whose names and residences were as listed. (See exhibits attached.) These goods were, on April 4, 1934, delivered to agents of the claimant for transportation to Norfolk, Va., from which point they were to be taken overseas to respective foreign consignees, the cigarettes and tobacco products being intended for foreign consumption being especially packed in corrugated shipping cases and being exports in contemplation of law, such when packed, carrying an export label in lieu of the ordinary internal-revenue stamp required by law to be attached to each individual package. The character of such labels and the method of packing will be shown from the samples attached to a letter from the Reynolds Tobacco Co. addressed to the undersigned bearing date April 4, 1939, which is enclosed herewith. The shipment, a few hours after the same was delivered to the claimant, was hijacked by a band of criminals about 1:30 o'clock in the morning of April 5 on the main highway between Norlina and Weldon, N. C. The criminals engaged in this enterprise were a band known by police authorities and the Federal Bureau of Investigation as the Tri-State Gang composed of notorious criminals such as George Phillips who was subsequently killed at Washington by members of the Federal Bureau of Investigation in an effort to escape; Walter Legenza, who, with Maise, was subsequently electrocuted at the Virginia Penitentiary in 1936 for the murder of an employee of the American Express Co.; a man named Kaufman who was later killed by a member of the gang and several others. A contemporaneous account of occurrence may be read in a photostatic copy of the WinstonSalem Journal of Friday morning, April 6, 1934, herein enclosed. Immediately after the occurrence related, Mr. W. G. Epes, Jr., the principal owner of the Epes Transportation Corporation, got into communication with the Federal Bureau of Investigation at Washington and it is believed that the information furnished by him and his employees was most helpful in bringing about the identification of the men involved and possibly the ultimate elimination of this desperate gang of criminals by the Bureau. Shortly after the occurrence mentioned, there was a demand made on behalf of the Government through C. H. Robertson, collector of internal revenue for the district of North Carolina against the R. J. Reynolds Tobacco Co. for the payment of an internal-revenue tax upon the tobacco products and cigarettes noted upon the theory that such tobacco products were subject to assessment notwithstanding the fact that previous to the hijacking of the same such had been sold and consigned to foreign purchasers and delivered to a common carrier as exports. The tax demanded which, plus penalty and interest, amounted to $6,537.95, was paid by the R. J. Reynolds Tobacco Co. to the collector of internal revenue mentioned on May 10, 1935, the payment being made under protest as it was the position of counsel who had been employed by the Reynolds Tobacco Co. at the instance of the Epes Transportation Corporation that the tax constituted exports within the meaning of article I of section 9, clause 5, of the United States Constitution, and that such was not, therefore, liable for tax having entered into its final journey in the ordinary course of exports. The legal proceeding which grew out of the position taken in respect to this question, which was decided in favor of the Government, is reported in the two cases of R. J. Reynolds Tobacco Co. v. Robertson, Collector (80 Fed. (2d), 966; 94 Fed. (2) 167); and certiorari refused (304 U. S. 563). The petition for a certiorari was denied on May 23, 1938. From an examination of these decisions it will be observed that no opportunity was open for the courts to pass upon the equities involved, the sole question turning upon whether or not actual proof of exportation was the test of legal status of exports claimed to have been exempt under the article of the Constitution referred to. According to our information, although a diligent investigation was launched at the time, no part of the cigarettes and tobacco products were ever ascertained to have entered domestic trade or use. Furthermore, it is our belief that we can produce testimony showing that it would be next to impossible for such tobacco products so packed and branded to have entered the domestic trade if an effort to dispose of such had been made by the criminals who hijacked these cigarettes. It is further interesting to note that Legenza told the lawyers who represented him in this city when the matter came under discussion in other matters arising in his case that these goods had been thrown into a river at the time. I am enclosing herewith a letter from one of the lawyers and he tells me he will be glad to appear before the committee to assure them of the probability of this statement. Mr. Epes, as heretofore stated, was in frequent conference with the representatives of the Federal Bureau of Investigation. According to my information this bill has been referred to the Federal Bureau of Investigation and it is hoped that a report from such Bureau will disclose the assistance furnished by Epes when this matter arose. In conclusion, it might be well to give a brief résumé of the happenings involved growing out of this incident, which is unusually interesting in view of the fact that we have the account both from the criminals themselves through their lawyers, and account of Epes and his associates, together with such report as you may receive through the officers of the Federal Bureau of Investigation direct; such account shows the death of Huband, the American Express employee here on March 7; the hijacking and kidnaping on April 4, following; the reading and remembering of the car license by Epes' truckmen of the black sedan owned by the gangster George Phillips; the identification by this truckman of two of the seven criminals from the rogue's gallery, namely, Legenza and Kaufman; the identification of the black sedan in Washington by G-men from the number furnished through Epes; the killing of Phillips while entering the sedan with Legenza in Washington by G-men while attempting to escape; the escape of Legenza and his subsequent arrest and identification by Epes' employee; the death of Kaufman by one of the gangsters; the conviction of Legenza for the murder of Huband at Richmond; the escape of Legenza and Maise through shooting up the jail and murdering a policeman; the final capture, conviction, and destruction_of_the Tri-State Gang, brought about through the persistent efforts of the Federal Bureau of Investigation. We are further informed that the agents of Federal Bureau of Investigation recovered a certain sum of money which had been "planted" by the criminals mentioned at the home of the father of George Phillips in North Carolina. In view of the foregoing facts, which we will be glad to establish where possible, through the testimony of witnesses, if permitted to do so, it is respectfully submitted that the relief sought through the passage of bill S. 1042, is deserved, and that it would be contrary to sound public policy for the Government not to return the tax so assessed under the conditions related. Respectfully, ALEXANDER H. SANDS. R. J. REYNOLDS TOBACCO Co., Winston-Salem, N. C., April 4, 1939. Re: R. J. Reynolds Tobacco Co., Winston-Salem, N. C. Richmond, Va. DEAR MR. SANDS: Mr. Braswell has requested the undersigned to answer your letter of the 30th ultimo in the above-entitled matter. Our shipments of cigarettes for the domestic market are, and were on April 4, 1934, packed in corrugated shipping cases, while the export shipments, which were stolen on or about April 4-5, 1934, were packed in wooden cases, most of them being metal lined. The big difference in the two characters of shipments, however, lies in the fact that each individual oval package containing 20 cigarettes intended for the domestic market carries a regulation internal-revenue stamp as evidence that the tax has been paid, while each package intended for export carries a plain export label similar to the samples enclosed. A comparison of one of the enclosed samples with the stamp on a package of Camel cigarettes available on the Richmond market, will disclose this vast difference. We have in our factory separate space for the packing of export cigarettes, and they are segregated in advance from those designed for domestic trade. The export cigarettes are manufactured and packed under the supervision of the Internal Revenue Department, and each shipping case shows that the cigarettes are manufactured for export and the law requires that they be inspected by a representative of the Internal Revenue Department of our Government, and each case carries the date of such inspection. Of the hijacked cigarettes, 2,500,000 were manufactured for export to the Republic of Panama, and we enclose a sheet which will indicate to you the exact marks stenciled on each case. We also enclose two oval packages in the flat from which you will note that each package containing 20 cigarettes carried the label "Packed for Panama." In addition to this, each of the 2,500,000 individual cigarettes carried the word "Panama” die stamped thereon in the same manner as the trade-mark "Camel." The foregoing will make it evident to you that it would be practically impossible for the hijackers to dispose in the domestic market of the cigarettes which were manufactured for export and on which the tax was subsequently paid. We do not know who furnished data as to the license number of the black sedan which accompanied the gang when the hijacking occurred but we understand that the information was given by the drivers of the truck containing the cigarettes. These drivers were employees of Epes Transport Corporation. We do not happen to have any newspaper clipping reciting the hijacking but our local publishing company has been kind enough to permit us to make a photostat copy of the front page of the Winston-Salem Journal of April 6, 1934, in which the occurrence appeared under prominent headlines. We are pleased to enclose this photostat copy herewith. We wish to express our best wishes for the success of your efforts in this connection, and remain, with best regards. Yours very truly, R. J. REYNOLDS TOBACCO Co., Mr. ALEXANDER H. SANDS, Attorney at law, Richmond, Va. RICHMOND, VA., February 28, 1939. DEAR MR. SANDS: Relative to your inquiry of statements made to me by Walter Legenza, concerning the hijacking of an automobile truck loaded with tobacco, between the Reynolds Tobacco Factory at Winston-Salem, N. C., and the Virginia State line the year previous to his arrest, I have this distinct recollection; while acting as counsel for Maise and Legenza when they were charged with the murder of an employee of the American Express Co. in Richmond, Va., he stated to me that Maise was not with him in this affair, that the party was composed of George Phillips, who was afterwards killed in Washington, D. C., and George Kaufman, who was later killed by Mesumas, and Mesumas and one or two others and himself, that they captured this truck and drove it off of the highway and transferred the tobacco to another truck and then carried the two operators of the truck for some considerable distance with them where they were tied and left in the woods, that after leaving the drivers in the woods and before reaching their destination they became apprehensive of capture and threw the tobacco into a river. Legenza talked to me about this tobacco affair on two occasions, bota before and after his trial. On the first occasion I had learned that the prosecuting attorney had summoned the two operators of this truck to see if they could identify Maise and Legenza, and I asked Legenza the particulars of this affair so I could be prepared to show that the evidence was inadmissable in their trial for murder; and on the second occasion Legenza voluntarily repeated some of the facts to me because Mesumas had, while testifying for the State against him, stated that "he (Legenza) had wanted to shoot both of these men while they were tied to the tree before leaving them," which Legenza denied. Personally, I can see no motive that this man could have had for making this statement if it was not true. You will recall that I told you that I had mentioned the matter to Mr. Charles W. Moss who had represented this man before I was taken into the case, and Moss tells me that the same statement was made to him by Legenza soon after he was employed in 1934. I understand from you that Mr. Wilfred Epps of the Epps Transfer Corporation has asked Senator Byrd to introduce a bill seeking the recovery of the amount of tax paid upon this tobacco, which he was required to pay the Government to protect his employees, the Reynolds Tobacco Co., and I will be perfectly willing to go before any committee or other body to testify as to all I know about the matter. Yours very truly O M. HALEY SHELTON. 1st Session No. 1125 ALLIE HOLSOMBACK AND LONNIE TAYLOR JULY 13, 1939.-Committed to the Committee of the Whole House and ordered to be printed Mr. EBERHARTER, from the Committee on Claims, submitted the following REPORT [To accompany S. 1414] The Committee on Claims, to whom was referred the bill (S. 1414) for the relief of Allie Holsomback and Lonnie Taylor, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. The purpose of the proposed legislation is to pay the sum of $759 to Allie Holsomback, of Wyatt, La., and the sum of $175 to Lonnie Taylor, of Natchez, Miss., in full and final settlement of their claims against the United States for personal injuries and property damage sustained by them on October 28, 1937, near Hodge, La., when a Ford coach owned by the Government and operated in connection with the Soil Conservation Service, collided with Allie Holsomback's wagon and a truck owned by Lonnie Taylor. The facts are fully set forth in Senate Report No. 478, which is appended hereto and made a part of this report. This committee concurs in the recommendation of the Senate. [S. Rept. No. 478, 76th Cong., 1st sess.] The Acting Secretary of Agriculture reports on this bill that "notwithstanding the absence of legal liability it seems only equitable to state here that from claimants' point of view their injuries were caused by a governmental instrumentality, and through no fault of theirs." While concluding the Government is not legally responsible for claimants' damages, the Acting Secretary suggests compensation be limited to amounts set forth in his report if the claims are allowed by Congress. The facts in this case, based almost entirely upon statements of the driver of the Government car, a Civilian Conservation Corps auto mechanic, appear as follows: About 9 a. m. on October 28, 1937, the Government driver was proceeding north on the 18-foot Highway No. 167 at about 35 miles an hour en route from Jonesboro to Hodge, La., and Allie Holsomback was proceeding north in his wagon directly in front of the Government car. Hesler Taylor, driving the truck owned by his |