Silk Stocking Project

In 1921 Congress created the job of U. S. Comptroller General and gave him the duty of passing on all Government expenditures to make sure they conformed to the law. So Congress tried to keep the power of the purse in its own hands. Result when Franklin Roosevelt began to spend was an awful series of squabbles between the open-handed New Deal and crusty Comptroller General John Raymond McCarl. When Mr. McCarl's 15-year term of office expired two and a half years ago, Franklin Roosevelt did not bother to appoint a successor. In his great Reorganization Bill he proposed to set up an Auditor General to audit expenditures after they were made, transfer to the Treasury Department's Budget Bureau the job of approving them beforehand.

Twice the President miscalculated. Richard Nash Elliott, a bald, chunky Republican of 65 who served Indiana in Congress for 14 years and was named Assistant Comptroller General by Hoover in 1931, automatically became Acting Comptroller. At first he was accounted an amenable stooge. Of Mr. McCarl's dogged devotion to duty, he amiably remarked: "Times and conditions change."

But for Richard N. Elliott, times and conditions also changed when Congress stiffened its back over the Reorganization Bill. Before that he had confined his blue pencil to Government expenses for publicity, such frills as an expense account turned in by the President's ten-man junket to study European marketing co operatives. More recently Mr. Elliott refused to O. K. expenditures for AAA's scheme to pay growers $10 a bale for cotton surrendered for loans, termed a Navy contract with Cleveland's Wellman Engineering Co. "illegal," watched complacently from the sidelines as three of his accountants last November filled the TV A investigating committee with unflattering accounts of TVA accounting practices.

Last week Mr. Elliott fired a gun big enough to be heard by Franklin Roosevelt. He announced his decision to veto $3,050,000 in loans promised by Farm Security Administration to five cooperatives of Southern subsistence homesteaders to build factories to manufacture silk hosiery on contract for Dexdale Hosiery Mills of Lansdale, Pa. His explanation:

"It is to be supposed that such loans were intended by Congress to have some relation to agricultural pursuits or at least to activities of a type usually carried on in rural communities. . . . Subsidizing the manufacture of silk hosiery does not appear to come within such contemplated fields . .. [besides] giving rise to increased competition with cotton, the chief agricultural product of the South." With no high hopes, FSA planned to present "new evidence" to persuade Mr. Elliott that its silk-stocking project is legal.

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