"Shocking, Disgusting"

Said retiring Treasury Secretary Henry Morgenthau Jr.: the case was one of the most "shocking, revolting and disgusting" experiences of his twelve years in the Treasury. It concerned a New York restaurant chain operator suspected of evading income taxes on his wartime profits. Legally bound to secrecy, Secretary Morgenthau named no names.

Last week, Manhattan's tabloid Daily News supplied the name for him: dark, dapper Henry Lustig, millionaire operator of the plushy, well-stocked, high-priced Longchamps chain (twelve restaurants in New York). Said the News: Treasury agents are investigating Lustig for alleged income-tax evasions of $5 million in the boom period of 1942-44. The Treasury suspected that Restaurateur Lustig had failed to report large, systematic with drawals of cash, $1,000 at a time, from his various tills. This cash, said the News, had been placed in safe-deposit boxes ($1,500,000 in one; $50,000 in another), "and conveniently forgotten in tax reports."

Lustig promptly protested the News story. He insisted that the Treasury's probe had been requested by him to straighten out his books, that much of the cash owed the Treasury had already been paid. His explanation for the cash on hand revealed some of the tribulations of running a restaurant chain under OPA ceilings. Said he, with unblushing candor: "It is common knowledge today that many articles for consumption in public eating places as well as at home can only be purchased with cash."

Secretary Morgenthau, tightlipped, called for a special Federal Grand Jury to investigate.

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