Jake Butcher Banking

The Republicans and Democrats were together on one thing in Claiborne County and that was that they were not going to allow the Butcher Banks into the County.

I remember a community dinner, The Old Fashion Supper, that I attended hosted by the Dogwood Community Lady's. This supper used to be held every year in the cafeteria of Soldiers Memorial Middle School. This was late 1977. I had been substitute teaching and Eleanor Yoakum, with whom I had been aquatinted with for years had asked that I be there. Senator Howard Baker, Jr. was the guest speaker, introduced by Hazel Davis, an acquaintance of my family from Harrogate. She was the wife of Judge William (Bill) Davis. The speech centered on Howard's time at LMU and his visits with Judge and Hazel while a student there before joining the Navy.

After supper I was invited to a small social gathering at the home of Philip Mabe who was then living in the old Hugh Murphy Welch house on Cedar Fork Road. We talked of the Butcher brothers and how they were suspicious, especially to the solvent banks here in Claiborne County. I remember Mr. Butcher from the Jake Butcher American Service Station that his family ran on the corner of Old Knoxville Road and U.S. 33 between the Tazewells and had even talked to him when I was in High School. Philip's mother Aileen Standifer was also there. I figured at that time that they knew what they were talking about. I took that to heart in years to come.

My brother, George Payne, had met Jake Butcher while a student at the University of Tennessee in the early 1950's. He had stayed in touch with him through the years and even been instrumental in getting my sister Betsy Payne Blackstock a job with the Southern Industrial Banking Corporation while she was a student at the University of Tennessee in the early 1970's.

Democrats are sometimes the big VILLAINS TOO. Remember Jake Butcher and the mighty United American Bank (UAB) and Southern Industrial Banking Corporation (SIBC). We are coming up on the 23rd anniversary of the collapse of that empire on February 14, 1983. I worked for two years for the Federal Deposit Insurance Corporation (1985-1987) and would like to BLOG on how I held the Mighty Butcher Empire at Bay during the late 1970's by using my brain and a good lawyer, Michael Ellis. Having borrowed $1000 from the Halls Branch of SIBC where an old friend Steve Hodges was managing a branch office I had defaulted on the loan. Actually it was through recommendation of my sister Betsy that Steve had gotten the job but let's not get into that. As you can see from the picture to the right, taken in the early 1990's at the Marana Training Facility, Marana, AZ.

Marana is sometimes known as the home of Air America - Marana was the principal continental United States maintenance base for Southeast Asia CIA operations including Air America and Continental Air Services. Today, Evergreen Aircraft Maintenance Facility and Silverbell Army Heliport make use of the site, with the Western Army National Guard Aviation Training Site (WAATS) and other numerous National Guard units located inside SAHP. The WAATS and is used principally for all ARNG AH-64 Apache Attack Helicopter training by the 'Gunfighter University'. It is also extensively used by the British Army for 'Conversion To Role' training for Apache combat operations in Afghanistan.
Pinal Airpark also hosts the U.S. Special Operations Command's Parachute Training and Testing Facility.

Well, back to the great UAB-SIBC fiasco. I had discovered in the Bert Vincent Memorial Library, Lincoln Memorial University, a clause in the Tennessee State Code that said if SIBC was actually a banking entity in the State of Tennessee and filed under Charter as such that they, according to the Tennessee Code, were not allowed to charge a borrow over 10% interest on a revolving interest loan under something called the Tennessee State Usury (Usury-biblical) Laws and Interest Rates Regulation. I was attending Lincoln Memorial University and worked on the work study program both in the newly built Lincoln Museum and finally in the Bert Vincent Memorial Library. I was a student there 1976-1978 graduating with a degree in Business Administration and am now a graduate student there (2010). It seems that SIBC was charging me in excess of 18% on the revolving loan. I gathered all the information together and proceeded to search for a honest lawyer. I found Michael Ellis, on suggestion of someone whose name will remain anonymous. Michael made one phone call and charged me $15.00 and said that if they bothered me again he would take the case on consignment. They never bothered me again. (I have saved all the paperwork, copies of Tennessee Code, letters between SIBC and myself and from Mike Ellis and will scan those for you). Michael where ever you are I thank you my friend and thanks for referring to me as a "Gumshoe Detective".

Now all this happened before I graduated from LMU in August of 1978. The boat I bought from Bob Costanzo of Middlesboro, now a Judge. He and his family were acquaintances of mine from back in High School. The boat ran good for a short period before it malfunctioned. The letter above shows the intention of SIBC to reposes the boat. I was asked about this loan and what I knew about the Southern Industrial organization before I started work for the Federal Deposit Insurance Corporation in 1985 and explained to them the circumstances. They seemed to take my side.

I was later told of the board meetings held for managers and staff of UAB and SIBC in the Plaza Tower where large amounts of money were wheeled around in grocery carts and many other events that I will not go into here. My sister followed Jake Butcher on the campaign trail when he ran for Governor against Lamar Alexander in 1972. She was working for the SIBC on Clinch Ave. and her and a friend Kathy Woodson of Lafollete along with Langston Hill were all strong Butcher followers. I attended one of those rallies and was invited to a gathering after but did not attend.

As we all know Jake did not win the 1972 election for Governor and then the rest of the story we can say is history.

Although I have tried all my life to be honest I have to say there were a couple of times I have resorted to cheating on tests. One such time was soon after I returned from Washington, D.C. in 1973. I had been working for the U.S. Postal Department during Christmas and was trying to attend the University of Tennessee but was having a hard time finding suitable employment. I talked to a friend; Doyle Whitaker who asked me to come on board with a company called American Centennial Corporation (continued below) .

Probably had nothing to do with this Delaware company called American Centennial Insurance Corporation. Maybe the Butcher Company was American Centennial Corporation and the other company was American Centennial Insurance Corporation but I find it funny that both became guilty of FRAUD. Using the 200th birthday of our country for illegal purposes will catch up with you. American Centennial Insurance Corporation had large holdings in the Grand Cayman Islands and from 1983 with assets of 0 went to assets of over $40,000,000.00, not only that but this company's parent group, White Mountain Group, had assets of $19,418,000,000.00

Also See Incorporated: 1929 as Beneficial Finance Corporation
Beneficial's two primary insurers, the Central National Life Insurance Company of Omaha and American Centennial Insurance Co., offered a wide range of coverage from life to property. Beneficial entered reinsurance in 1977, lured by potentially quick profits from high interest rates.
By its own admission, Beneficial had known very little about reinsurance when it entered the field in 1977, so it hired ten managing general agents to handle it through American Centennial Insurance. But one of the agents defrauded the company, diverting millions of dollars in premiums while distributing the risk to fraudulent or insolvent reinsurers. Two other agents, Beneficial later claimed, grossly under-reported losses likely to be claimed from programs they wrote.
The sale of American Centennial Insurance was complicated by regulatory hurdles stemming from the insurer's poor financial condition. The deal nevertheless went through, leaving Beneficial free to pursue its core businesses. By 1990 the firm was the third-largest issuer of second mortgages in the United States and had $8.4 billion in assets. It charged 14 percent interest for second mortgages and 23 percent for unsecured personal loans. Beneficial also was expanding into Europe, opening offices in Dresden and Leipzig, both in the former East Germany.

(continued from above) This 1976-1977 company was going to be the first Insurance company in eleven years to apply for and receive a Charter to sell stock at public offerings in the State of Tennessee. The primary stockholders were of course none other than Jake and C.H. Butcher, Jr.

The company had a renowned list of directors. Halbert Carter, Jr., past Commissioner of Insurance for the State of Tennessee during Winfield Dunn's Governor, was the focal point of the company but behind the scenes was an inscrutable man by the name of Leonard M. Hurst. Hurst t was large and mean looking but he had all the knowledge and charisma to make him appear to know what he was talking about. There was much excitement regarding this first offering intended to coincide with the nations 2nd Centennial celebration. The company sold stock throughout the state of Tennessee giving its salesmen a prospectus that said in essence that they were guaranteed to go public and become a license Tennessee Insurance Company by January 1977.

I am afraid the above never happened and many good people lost money because of it. I, along with many others such as Doyle Whitaker and University of Tennessee basketball players Lloyd Richardson of Rogersville and Larry Robinson, the first black to receive a scholarship to play basketball at the University of Tennessee, got suckered into believing and then selling the stock. One of the "perks" for selling the most stock each week was for the top two

salesman each to drive two brand new Jaguar XKE automobiles for a week. They would sit those cars outside at the Hyatt Regency after every sales meeting and hand the keys to those top two salesmen and I know that Mr. Richardson and Robinson usually drove those cars off after most of the meetings I attended. The Securities and Exchange Commission came in and stopped the first offering of stock because of what was called “false prospectus selling “, (Click on Picture to the Left) but not before Mr. Leonard M. Hurst left with all the companies’ money. I heard he was under indictment in Florida for money laundering at last count.

I am afraid that the only good work I ever did other than with the Federal Deposit Insurance Corporation that involved the Butcher family was just out of high school 1968-1969 when I worked for their boat manufacturing company, Lakeland Homes in Maynardville. By far some of the fastest boats for their size I have ever seen on Norris Lake. They were 42 feet V-hull cruisers with two 383 cid marine inboard engines. Had it not been for the manager Rocky Rockstead and a couple of very small incidences I think I would have called it the best time of my life.

I truly hope that Jake and all his family for all the trouble they have had are living large but honestly somewhere.

My first year at LMU - 1967 I was elected REPORTER OF THE FRESHMAN CLASS - all my friends were so called YANKEE'S by the locals - this was the first year

that an African-American attended LMU from my High School graduating Class

I must admit that after years of hearing "The South Shall Rise Again", it was nice to see some reinforcements. The picture to the left is a picture of the Freshman Class Officers - 1967 at Lincoln Memorial University - I knew that I was part of something MUCH BIGGER - Building with Federal Funds - the East and West Dorms at LMU and the Student Center were all Federally Funded with the help of Congressman John J. Duncan, Jr. Now the Law School? That will be built in a building with a Southern look, the old courthouse in downtown Knoxville.
Let's say if you didn't need Federal Funds that you had someone foolish enough to think that the Civil War should have been won by the South. Enough to start a MOVEMENT - You need PROPULSION - You would need DOCTORS, right? Then you would need LAWYERS? Oh well, we know where they sit, in TAZEWELL. What will you do about your MILITARY? Maybe Doug was right "The South Will Rise Again". Maybe the F.B.I. should keep an eye on these REBELS

Eddie Smith - Vice President

Sam McCullough - President

Barbara Williams - Treasurer

Joe Payne - Reporter

Carol Brewster - Secretary

It was no mistake that after having considered starting my college career at Centre University in Oberlin, Ohio I was latched on to by one of the nastiest of all Claiborne County politicians. Not only was this fellow told to take the Scholastic Aptitude Test with me I allowed him to set beside me and cheat off my test, of course we both failed and not by chance made the exact same score. My failure to realize just how much help this fellow had by allowing him to room with me in East Dorm my Freshman year at Lincoln Memorial University and then allowing the established Democratic Party of my county to send people to work for a Congressman each time I traveled to Washington to work for the Federal Government, thus swaying my convictions to remain an honest and productive member of the organized establishment caused me great anguish and embarrassment.

As they flourish I survive. Ah, to go back and do it again.

One thing about the Payne family, they sure know how to care for one another. Just like the Walton's. Sure. Al George Payne, Steven Payne, Betty Payne and Jimmy John Duncan, Sr. My father traveled to Washington during the later part of 1975 to see if he could sway the good Congressman to help him with his Rural Letter Carrier's grievance, among other things. The Robert and Al Payne family were close through the years, up until 1986 when my father passed away.