Lively returned to West Virginia in January or February 1920. Posing as a coal miner, he investigated the robbery of a company store and the burning of coal mining equipment. While engaged in those probes, Lively became known as a union sympathizer, for which he was fired. This firing only enhanced his reputation with union coal miners. After his firing, he was assigned to
Williamson,
Merrimac and then to Matewan in
Mingo County, West Virginia, a scene of labor unrest, drawing a salary of $225 a month plus expenses from Baldwin-Felts. Lively was in
Charleston, West Virginia, at UMWA headquarters at the time of the battle,
Killing of Sid Hatfield and Edward Chambers While he was in Washington testifying before the Senate, at the same hearing at which Lively testified, Hatfield and his deputy, Edward Chambers, were indicted in
McDowell County for "shooting up" a mining encampment in
Mohawk, West Virginia. Lively supplied the information that was the basis of the prosecution. They stood trial in
Welch, West Virginia on conspiracy charges. The county was anti-union, and Hatfield felt he was being brought there to be killed. On August 1, 1921, the two men, both unarmed, were fatally shot on the steps of the courthouse by at least three Baldwin-Felts agents, Lively among them. The first to fire was Lively, shooting two guns at Hatfield, killing him. According to later testimony by Chambers' widow, Lively administered the
coup de grâce to Chambers, shooting the wounded man in the head. One of the Baldwin-Felts men fired shots into the granite face of the courthouse and placed the guns in the dead hands of Hatfield and Chambers in order to lay the groundwork for a self-defense claim. The Baldwin-Felts men claimed self-defense. In December 1921, Lively and two other Baldwin-Felts employees, George Pence and William Salters, were acquitted of murder charges in the Chambers killing. The jury deliberated for 51 minutes before reaching a verdict. In April 1922, the three men were acquitted in the Hatfield slaying. In his biography of Lively, author R. G. Yoho writes that there is "no conclusive proof" that the leadership of Baldwin-Felts conspired to kill Hatfield and Chambers, but that "circumstances and evidence strain credulity to think otherwise." Yoho points out that Thomas Felts was traumatized by the murder of his two brothers and the acquittal of Hatfield and the other defendants, that Lively had no reason to be at the courthouse, and that Lively's son Charles Albert Lively has written that his father stated that when the Felts brothers were killed Hatfield "signed his own death warrant". Yoho writes that there is "overwhelming proof" that Baldwin-Felts conspired with Lively to ensure that no one was convicted for the killings. == After Matewan ==