Meddlie's Blurt

From the moment President Roosevelt in his inaugural address opened fire on "unscrupulous money changers and their false leadership" his Attorney General, Homer Stille Cummings, has concentrated his efforts on rooting out what political Washington calls "bad bankers." One of his methods is to prosecute them obliquely under the Federal Income Tax law as in the case of Manhattan's Charles Edwin Mitchell.* Another is to catch them directly for violation of the national banking act. Such was the method which last week continued to make news in the case of Joseph Wright Harriman, arrested on his Manhattan sick bed fortnight ago on the charge of a $1,661,170 falsification of the deposit records of his Harriman National Bank & Trust Co. (TIME, March 27)./-

While U. S. Attorney George Zerdin Medalie, a Republican who last year ran for the Senate, presented the Federal Grand Jury with evidence of Bankster Harriman's misdeeds, a depositors' committee revealed that the Treasury and Justice Departments in Washington had known of the bank's condition for months but had failed to act. Facts for prosecution were laid before Attorney Medalie Dec. 24. To clear his own skirts, he blurted:

"The Comptroller of the Currency, as well as counsel for the New York Clearing House, requested the Department of Justice, at the time the facts were transmitted to me, to withhold action until the bank's affairs could, if possible, be straightened out. This request was acceded to by the Department of Justice. I acted within 24 hours after the restriction upon my proceedings was removed."

Acting Comptroller of the Currency Await admitted that his office had known about Harriman irregularities as long ago as July 23 but that prosecutions were delayed in the hope of salvaging deposits. The Treasury hesitated ("in the public interest") to act lest it disturb the already critical banking situation.

Though Attorney General Cummings said he had no criticism to make of the delay in the Harriman case, members of the Senate Committee on Banking & Currency felt strongly otherwise. Ferdinand Pecora, the Committee's special counsel and investigator, was dispatched to Manhattan to get the facts.

*Asked the New York Evening Post last week: "Is it fair, as the Government did in the Al Capone case, to arrest [Mitchell] for one offense in order to punish him for another?" The New York Police last week broadcast a descriptive circular for the arrest of Racketeer Arthur ("'Dutch Schultz") Flegenheimer who also was wanted for violation of Federal Income Tax Law.

/-Two days before Harriman National was closed and later put in the hands of a Federal Conservator, stockholders of the Bank of U. S., who are being sued by New York State for their liability in that institution's scandalous failure, deposited a good-sized legal defense fund in Harriman National, stand to lose part of it.

This file is automatically generated by a robot program, so reader's discretion is required.