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allan shivers’s authorized biographers titled their chapter about the 1954 campaign “The Mean One.” Bitter and taxing, the 1954 race had brought out the very worst in him. By the campaign’s end, the election was not about whether he or Ralph Yarborough would most improve life for Texans. Instead, he explained to an Austin audience as the runoff race drew to a close, “opposition to Allan Shivers for re-election . . . is part of a nationwide conspiracy to infiltrate, then adulterate, and finally to take over and change our Democratic Party and our system of government as we know it today.” The year 1955 witnessed a marked decline in Shivers’s political fortunes. Scandals within the insurance industry and state government harmed him. He also struggled to find a place in the Democratic Party, thus disappointing his Republican admirers. Ironically, he attracted more national attention than ever and already appeared to be an important actor in the coming 1956 presidential contest . As his popularity receded, Shivers chose to stake his political future on the defense of segregation. As the year closed, he pondered his chances for a fourth term as governor of Texas.1 Insurance company failures had complicated his bid for a third term, but those incidents represented only the beginning. The trend accelerated through 1955. By 1957, five hundred thousand customers had lost millions of dollars to Texas insurance companies. The Saturday Evening Post skewered the state government’s handling of the crisis. Bad publicity led Shivers to hunker down and complain about the magazine’s failure to properly examine the information he had provided its reporters. Shivers’s papers preserved in Texas’s state archives do little to illuminate the situation. The governor accused the Saturday Evening Post of acting against him at the behest of national Democratic leaders. ch apter eight Scandals and Decline 1955 Insurance executive A. B. Shoemake suggested a national television appearance with reporter Drew Pearson to calm fears about the state’s insurance industry. Shoemake’s own firm had hired Pearson to do commercials, so he figured the reporter’s show would be a good venue for defending the state and its insurers. Shivers aide Jack Dillard, on the other hand, advised against such an appearance, reminding the governor that it had been Pearson who had revealed his office’s ties to Lloyd’s of North America.2 Shoemake’s own U.S. Trust and Guarantee failed in December, 1955. One reporter described the company as “a hybrid bank-like firm.” Investors purchased policies and, when these matured, were paid the principal plus interest. Premiums taken in by the company were reinvested in four subsidiaries owned by Shoemake, whose ownership remained legally obscured. The subsidiaries then invested those funds elsewhere. When it failed, U.S. Trust had $800,000 in cash, a mortgage on a Waco residence overvalued at $100,000, and $6 million in bonds issued by U.S. Automobile Service, a subsidiary. The insurance company’s 128,000 investors had $5 million invested and suffered significant losses. U.S. Trust had bloated its accounts by overappraising insured properties. For example, a farm worth $400,000 and property worth $180,000 were both insured for $1 million . Shoemake shot himself in the head, but survived. The bullet, however, passed through his brain, rendering him incapable of testifying to U.S. Trust’s activities.3 Subsequent legislative investigations revealed that state regulators had been watching U.S. Trust for more than a year and had known of its insolvency six months before the firm’s collapse. Governor Shivers could no longer duck responsibility , as he had succeeded in doing with the 1953–54 insurance company failures. He had appointed two members of the state insurance board, including its chair, Garland Smith. Smith had served in the state senate, as Shivers’s 1946 campaign manager, and on the governor’s personal staff. However, he had no insurance experience. The governor had relied upon insurance industry insiders to tutor the new chief regulator. A grand jury indicted Byron Saunders, Shivers’s other appointee, for accepting a position with a crooked insurance company while on the insurance board. Shivers defended his appointees far longer than politically wise, then later complained that getting the best men for government positions had proved difficult because of the low pay.4 scandal in the state agency charged with making cheap land availabletoveteransprovedevenmoretroublesome.ShortlyafterShiversdefeated token Republican opposition in the November, 1954, general election, news of...

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