The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-03-28
BANK COvERUP
POLICY ENDED
BY ROOSEVELT
President Demands Speedy
Action on Financial
Irregularities.
HERALDS BIG SHAKEUP.
Thorough Inquiry Forecast
Into Prosecution Delay
in Hartman Case.
BY RAY TUCKER
Times Special Writer

Times Special Writer
WASHINGTON, March 28-Pres-
ident Roosevelt holds that banking
irregularities discovered by national
examiners Or conServatorS in charge
of suspended institutions should be
reported Immediately to the proper
federal authorities for prosecution.
In announcing this policy on be-
half of the administration, William
H. Woodin, secretary of the treas
ury. said that the President did not
believe it to be incompatible with
the best public interest, nor is it
believed that taking prompt action
in such matters work to the detri-
ment Of any sound banking institu-
/ ton"
Fear of aggravating a disturbed
banking situation is the explanation
given by Hoover officials for nom
! action.
COverup Is Revealed
The announcement was prompted
by the disclosure that the treasury,
comptroller, and department of JUS
tice under the Hoover regime had
delayed for nine months prosecution
of Joseph w. Hartman, former
president of the closed Hartman
National Bank and Trust Company
of New York, for alleged falsifca-
ton of accounts.
He now is under indictment. At
torney-General Homer Cummings
has held the delay was justified.
The Hoover administration also
took no action against Charles f.
Mitchell, former president of the
National City bank of New York.
after he testified to income tax
transactions which now are the
basis of an indictment against him.
1t was not until the statute of
limitations was within two weeks
OF operating to stop prosecution
that this international financier
was indicted at the Roosevelt adj
mlnlstratiOn'S prompting. for alleged
failure to pay $4,000 in income
taxes for 1929.
May Bring Cleanup
Inc Roosevelt policy may point
TO great turnover of personnel in
all these departments, including the
bureau of internal revenue. AL
though hlgher-up holdovers from
the Hoover administration probably
will be replaced in any event. the
White House dissatisfaction with
the practices of delay and Iaxity
may mean that attorneys: account
ants, examiners, and others in &C
tual charge of detailed work may
be let out.
The explanation by Hoover Off
Gals for their failure to act against
Hartman is that news of indict-
ment Of such an important finan-
clal figure at the time further would
have upset the banking world.
1t was on this plea that Acting
Controller F. G. Await and depart
ment of justice representatives
agreed to a delay, and restrained
George T. Medalie, United States
attorney at New York, from going
ahead.
He acted within tWenty-four hours
after the Roosevelt administration
notified him to prosecute. Both
Cummings and Await since have de-
clared that the delay was justified
under the delicate condition of the
New York banking situation.
Inquiries Are Pushed
Meanwhile, two Investigations re-
Sultlng from these and alleged
treasury irregularities seem assured
on Capitol Hill. Ferdinand Pecora.
counsel for the senate banking and
currency committee, may return
here today after examination of
New York records in the Hartman
affair. He was requested to de-
termine the need for an inquiry bv
Chairman Duncan U. Fletcher
(Demo F'la) Of the committee.
Senator Burton K. Wheeler
Dem. Mont) has introduced a res
olution for justice department in
curry INTO charges that Andrew w
Mellon and Ogden L. Mills, who
headed the treasury under the Hoo
yer administration, illegally failed
10 collect hundreds of millions in
taxes from foreign steamship COM
panies. Yin
inns allegation has been made bv
David A. Olson, former emplove If
the banking and currency commit
tee, who also has brought suit
other treasury and internal revenue
against Messrs. Mellon, Mills and
officials. Senator Wheeler also is
Planning TO propose a senate invest
lgatlon Of the situation.
Accuses Melons
Olson resigned as investigator for
the committee last February alleo-
ing that he had been blocked in his
duties, and placing the responsibility
upon Chairman Norbeck. His first
SUIT accused Andrew w. Mellon. Og-
zen l.. Mills, Arthur A. Ballantine
David H. Blair, and Alexander w
Gregg, all former treasury officials
with having permitted 100 foreign
steamship companies to escape in
come tax payments of 500 900 600
and with having allowed them a re-
fund OF $4,000 900, contrary to law.
Double damages were demanded.
amounting to 100000, 900.
The second action alleged that w.
L. Mellon, nephew of former Score
tary A. w. Mellon, and six associate
executives of the Gulf Oil corpora
ton, Of Pittsburgh, had been en-
aoled to escape payment of more
than 100000 in income taxes.