Turnabout

At first the Senate's investigation of the Reconstruction Finance Corporation went along swimmingly. If Harry Truman wanted a fight over the report charging favoritism and undue influence in RFC loans, the Senators were more than willing to oblige. As a prime example of what they were talking about, they dug further into the case of E. Merl Young (TIME, Feb. 12), a slender, nervous man with Democratic National Committee and White House connections (e.g., his wife is a White House stenographer). In their earlier investigations, the Senators had found Young to be "the individual named most frequently in the reports of alleged influence."

Squinting through horn-rimmed glasses with the air of a frightened and maligned owl, Young took the stand to deny all. He complained that he had done nothing to merit the Senators' charges, that as a result of what the committee had said, the press was distorting his private life into "a Roman holiday to amuse the readers." His troubles, sighed Young, stemmed only from the fact that "I was born in Missouri and I know certain people from my home state."

For an Old Friend. Witness Ross Bohannon took the stand. A Texas lawyer, he testified that in trying to get an RFC loan for the Texmass Petroleum Co. in 1949, he talked with Merl Young. Young, he swore, offered to help in return for a fee of $10,000 cash--plus $7,500 a year for the next ten years. Young denied the story, said it was Bohannon who had talked about a big fee, and declared that he hadn't even been tempted. New Hampshire's Charles W. Tobey intervened.

"One of these men is lying," he said coldly. "Their words are as far apart as Dan and Beersheba." "I'm not lying," insisted Bohannon. Young insisted likewise.

The Senators turned to William E. Willett, one of the three RFC directors charged by the investigating subcommittee with submitting to improper pressure from outside RFC. Willett insisted that he had never done anything unusual as an RFC director. But a few minutes later he admitted that he had taken the "very unusual" step of personally assigning an RFC examiner so that an "old friend" would get a $300,000 RFC loan. (The old friend: Charles E. Rowe, who is now an RFC director himself.)

Director Willett also defended Young, said he believed Young's version of the Texmass story. "Senator," he went on, "we hear about things like that almost every day. What do you want me to do about it?" Subcommittee Chairman J. William Fulbright glared at the witness. "Then the situation is much worse than I thought," he snapped. "It is' shocking."

For the President. Up to that point, the Senators were having it all their own way. They had already succeeded in forcing the President to reconsider his renominations of the five RFC directors for new terms, and to make a proposal--recommended earlier by Fulbright's subcommittee--to run RFC through a single administrator (TIME, Feb. 26).

But at week's end, the committeemen suddenly found themselves shifting uneasily over to the defensive. They learned from one RFC official that some RFC correspondence had been photostated and "sent to the Executive Department." "To the President's office?" cried a Senator in astonishment. RFC directors and officials were summoned in a steady stream to explain. One RFC official mumbled something about the lady "in charge of the files." Who was the lady? None other than Mrs. Alva Dawson, wife of Donald Dawson, the President's patronage adviser.

Alva Dawson was summoned posthaste. She appeared, cool and confident, a study in purple hat, ostrich feather, snood, gloves and coat--and calmly explained that "between 700 and 800" letters in the RFC's files had been photostated at her direction. All of them were letters from Congressmen and Senators; it seemed that members of Congress also had a lot of requests, hints, suggestions and proposals to make on RFC business. Who in the White House wanted them? the Senators snapped. Alva Dawson imagined "they were for the President's use."

Mea Culpa. The White House, it turned out, had taken particular pains to get correspondence in RFC files from Senators on the RFC investigating subcommittee. With a slightly embarrassed sarcasm, Democrat Fulbright told one of the RFC officials: "I hope you did not overlook any of my letters." (Fulbright had written concerning a loan to an Arkansas firm in 1948.) The RFC man thought he got them all.

"I hope you did not overlook any of mine," chimed in Paul Douglas of Illinois, who, with Fulbright, had been most energetic in pressing home the RFC inquiry. Douglas had already sung a fervent mea culpa in the committee room, confessing that in his early days as a Senator in 1948 --"when I was green"--he had urged three loans on RFC, one of them the wobbly Waltham Watch Co. loan. "I think now," he said sadly, "that it was improper." With a flourish, Douglas produced a file of all his correspondence with RFC and turned it over to the committee.

No Secret. The Senators of the subcommittee indignantly protested that the President was trying to intimidate them. But the Senators' plaint had hardly arisen before Harry Truman sidestepped neatly. With the hint of a worldly bow, the White House announced that the President had wanted the correspondence simply to help him plan RFC's reorganization. There had been no secret about it; he had produced the file at his press conference two weeks before. "Since the President knows of no evidence of illegal influence on the RFC by any member of the executive branch or the legislative branch," added the White House blandly, "he sees no useful purpose in making public the congressional correspondence."

Outfoxed for the moment in the kind of little political scuffle where Harry Truman bows to no master, the Senators turned back to the scrutiny of other juicy loans on the books of RFC. Their inquiry was far from over, but some of the fun had gone out of it.

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