STATES AND CITIES: Hearst v. Kelly

(See front cover)

Late one afternoon last week Chicago's Mayor Edward Joseph Kelly started to leave his spacious fifth-floor office at City for home when a newshawk from William Randolph Hearst's Herald & Examiner stepped up to him. "You want to see me?" asked Mayor Kelly. "Yes," replied the Hearstling. "Questions?" "Yes" Mayor Kelly turned on his heel, strode back into his office, shot over his shoulder: "There's no use your waiting around." The reporter departed. Next morning the Herex blazoned this headline across its front page:

MAYOR KELLY IN BIG U.S. INCOME TAX SCANDAL!

50 PCT. FRAUD PENALTY PAID TO GOVERNMENT;

AMOUNT OF 'SETTLEMENT' MORE THAN $105,000

Thus did Publisher Hearst's sudden crusade to oust the Mayor of the No. 2 U.S. city finally come crashing out into the open. For a week the front pages of the Herex and the afternoon American had been smeared with thundering innuendos to the effect that a top-notch Chicago politician had been in an income tax jam with the Federal Government. The constant use of Mayor Kelly's picture left readers in small doubt as to who was meant. All the Mayor would say when questioned was: "Any answer I might make would put me on the spot. I have paid my income tax every year and have nothing to fear on that score." But when the Herex finally broadcast the fact that Ed Kelly had failed to report income of $450,000 in 1926-28 and had settled with the U.S. Treasury in May 1932 for $70,000 in taxes and $35,000 in penalties, it was bigger news for Chicago than the Century of Progress.