Testifying reluctantly, the former wife of Sen. Herman E. Talmadge told a Senate committee yesterday that the powerful Georgia Democrat kept a hoard of cash-sometimes $45,000 or more-in their home for more than 25 years.
Betty Talmadge told the Senate Select Committee on Ethics that the money first appeared in bills of $5, $10 and $20 denominations stuffed in envelopes in a bureau drawer in their Lovejoy, Ga., home when Talmadge was the governor of that state. Later, she said, when Talmadge was elected to the Senate, the cash in the envelopes became $100 bills that were kept in a pocket of an old overcoat in their Washington apartment.
She said she never asked about the source of the money but that both she and Talmadge dipped freely into the funds whenever they needed cash.
"It was a way of life," she said.
Mrs. Talmadge, described herself to the committee as a "meat broker." She said she took over the family ham business and put $10,000 of her own money into it after her husband ran for governor in the mid-1940s.
"I ran the business for 18 years," she said, "and it grew from a small business where I was peddling hams out of the back of our car to a business doing $3 million a year."
Mrs. Talmadge said the business was sold in 1960 and she later formed Betty Talmadge and Associates, a meat firm she still runs.
Talmadge is under investigation by the Ethics Committee on five allegations of financial misconduct. He has said publicly that the used $5 and $10 donations pressed on him by his Georgia supporters for his day-to-day living expenses. So far, during nearly six weeks of hearings, no witness has told the committee they saw such gifts made to the senator.
While the testimony yesterday by Betty Talmadge raised new questions about the senator's sources of funds, the testimony did not appear to add substantially to the case that the committee's special counsel, Carl Eardley, has been trying to make against Talmadge.
Eardley is to end his chase today. Talmadge's attorneys have indicated to the committee that they will ask that the hearings be dropped because of a lack of sufficient evidence against the senator, sources said yesterday.
The most serious charges against Talmadge have come from his former chief aide, Daniel Minchew. During eight days of testimony Minchew told the committee that both he and Talmadge benefited from a secret account Minchew opened in the senator's name at the Riggs National Bank here.
Minchew said that more than $39,000 in false Senate Expense claims and in campaign contributions, most of them unreported, went into the account in 1973 and 1974. He also said he gave Talmadge about $5,000 from a second secret cache he kept locked in the senator's office here.
An investigator for the ethics committee testified yesterday, however that he had not been able to make a connection between the reserve allegedly kept by Talmadge at his home and the secret account in the Riggs bank.
John Marshall, the committee investigator, said he traced 70 of the $100 bills that Betty Talmadge described as part of the cache in the Talmadge home to a Federal Reserve bank in Houston. Marshall said the money was sent to the bank from Washington in 1971 and was put into circulation in the Houston Federal Reserve region.
Mrs. Talmadge turned over 77 of the $100 bills to the committee in April. Yesterday she told the ethics panel that the bills were part of about $12,000 to $15,000 she took from the overcoat in January 1974 after an argument with the senator and members of his staff.
She told the committee the money she took for herself was about onethird of the amount hidden in the overcoat.
Over the years, she said, the hidden money supply was "sometime more and sometimes less" than was in the overcoat in January 1974.
She said she spent some of the $12.000 to $15.000 while she was still married to Talmadge and put the rest the 77 $100 bills-away after their divorce in 1977.
She said she never took any more money from the hiding place because Talmadge moved what was left and she couldn't find it.
Why, Eardley asked, did she put the upspent bills from the secret cache away from 1974 until this year instead of spending them?
"I can't explain it," she answered.
Mrs. Talmadge, who was testifying under a subpoena from the committee, said in an opening statement that she was not "a willing witness in this matter."
She said she did not turn over the $100 bills to the committee voluntarily. Her attorney, W. Stell Hule, asked that she be excused from testifying yesterday, citing federal rules of evidence covering the confidentiality of communications between a husband and wife.
Committee Chairman Sen. Adlai E. Stevenson (D-III.) ruled that Mrs. Talmadge had to testify about "acts" between herself and Talmadge but not about their "confidential communications."
Stevenson's ruling left Eardley and the other committee members delicately avoiding some questions about Talmadge's finances. Mrs. Talmadge said she had no "independent knowledge" about the source of the funds in the overcoat but she was not asked what Talmadge told her about the money supply.
After the hearing, attorneys for the senator's former wife declined to allow reporters to question her. She left without making any comment. CAPTION: Illustration, Betty Talmadge, after telling Senate Select Committee on Ethics she was not "a willing witness," testifies about her former husband's financial conduct. By Peggy Gage for The Washington Post; Picture, Talmadge greets his former wife before the beginning of her testimony yesterday.By James K. W. Atherton-The Washinton Post