New-York tribune., 1921-02-06
Craig Accused
In IO Million
Loan to B. X. Z.
Said TO Have Given Approval
10 Deal With War Finance
Board Without Obtaining
the Proper Authority
Comptroller Makes Denial
Replies to La Guardia and
Reiterates Demand City Be
Repaid for His Messages

Inc eight figure" sensation Gin
volving high city official" which F. H.
La Guardia, President of the Board of
Aldermen, promised Friday night in a
speech in the Bronx w&@ sprung yes
terday by Congressman Lester D. Volk,
of Brooklyn. 1t turned out to be an
accusation that Comptroller Charles L.
Craig gave his approval to a loan of
Sl6,566,900 by the War Finance Corpo-
ration to the Brooklyn Rapid Transit
, Company without consulting the proper
city authorities.
Comptroller Craig came right back
not only with denial but with new
demand that Mr.. La Guardia reimburse
the city for his personal telegraph bills
it paid for him or take the legal con-
sequences, adding that while he was
about it Mr.. La Gusrdia had better send
check also for $12S.91 worth of per-
sonal telephone calls for which the
city paid.
Congressman Volk said that he was
going to introduce resolution in the
House tomorrow calling upon the Sec
retary of the Treasury to submit all
papers connected with the alleged loan
to the Brooklyn Rapid Transit Com
pany as we'll as an itemized statement
of expenditures.
Shortly after the issuing of Repre-
sentative Volk's statement Comptroller
Craig replied that his approval Of the
loan in question was made not on his
own responsibility but after consulta-
tion with Mayor Hylan and Eugene
Meyer jr., of the War Finance Corpo-
ration.
Voik's Statement
In announcing that he. would intro
duce q resolution on Monday calling
for Information 'onthe B. r. 7. loan
Congressman Volk said:
"1n the course of my investigation Of
B. r. 7. conditions and my resolution
asking for an inquiry of the B. r. T
receivership l found that in June OF
July of 1918 the B. Il. 7. asked for
a large loan and succeeded in OBJ
tanning $16,566,900 from the Wa,
it's maturing bonds. In following up
the negotiations on this loan / learned
that the War Finance Corporation re-,
quired consent or acquiescence from
the authorities of the City of New York
before granting this loan.
II was startled to find that this con.
sent was obtained from Comptrolle,
Craig. I have been unable to find any
authority on the part of the Board Of
Estimate and 'Apportionment of the
City of New York to Mr.. Craig to give
such consent. l have spoken with high
officials of the city, members of the
Hno md OF Al
the matter was never presented to the
board for its consideration and de-
cision.,"
This statement was followed by quo
tations from letters and other CORE
spondence exchanged between officials
of the War Finance Corporation snd
Comptroller Craig. First came a letter
written by Eugene Meyer jr., to Comp
troller Craig asking for an expression
of views from the city authorities on
the application Of the B. 4. r. for a
loan. This letter was dated June 1A,
1918. Next came Comptroller Craie's
reply, written June Is, 1918, in which
MIR. Craig said that the pro oposed loan
would be entirely consistent with the
interests Of the City Of New York"
kilograms in confirmation of this let
tee between the War Finance Corpor-
alton and Comptroller Craig followed.
"rhe fact that the War Finance Cor
poration was eager to get an express
sion of views from the city authorities,
but did not go to the extent of ascer-
tanning who had authority to speak for
the City of New York, would seem to
indicate a desire to haste in the grant
ing of the Brooklyn Rapid Transit ap-
plication and that the loan was rather
friendly one, and one which / believe
justifes Congress asking for all of the
facts" Mr.. Volk said.
~ have conferred with President La
Guardia of the Board of Aldermen and
ahaye turned over to him copies Of cor
respondence so that he may present
tccntnped on pase sID