The Waterbury Democrat., 1938-12-05

be other eggs broken.
 For behind the SECS action is one of the bitterest inner Admin istration feuds in the history of the New Deal.
 The chief rivals are William Douglas, tousel . haired, uncom- promising head of the SEC, and short, hawk faced Mariner s. Eccles of Utah, millionaire boss of the Federal Reserve Board.
 Also involved in the vendetta are Secretary of the Treasurer are Secretary of the Treasury Henry Morgenthau, who has fre- quently crossed swords with Eccles on his own account; ex-Senator William Gibbs McAdoo; former Comptroller of Currency "Jefty" O'Connor, who ran a poor fifth in California for the Democratic gub- ernatorial nomination; and last, but not least, President Roosevelt.
 Douglas and Eccies are the most important financial exc cutives in the Administration, next to Morgenthau. Both are very close to the President. But A. P. and l.. M. Giannini, rulers of the giant Bank of America system, are the only tOp-hole financiers in the country who have supported the New Deal.
 Not even the spectacular prim- ary purge involved such an array of warning titanS. And there is going to be slugging as sure as shooting - unless Eccles gives up and the Gianninis make terms with the SEC.
 Douglas Vs. Eccles
 Douglas, who brought the New York Stock Exchange to its knees, has never run from a fight in his life. He started this one and either he will finish it or it will finish him.
 The affair started more than a year ago. David Schenker, head of the SECS investment trust in- vestigation, reported to Douglas that he had received certain infor- nation warranting an examina- tion of Transamerica's application for registration.
 Douglas told him to send sev- eral investigators to California. Copies of their report were dis patched to Eccles, OCOnnOr, Morgenthau and the Federal Deposit Insurance Corporation. Eccles and O'Connor did noth- ing about it. Morgenthau and the FDIC urged further inquiry, which Douglas promptly got un- der way.
 After several months of secret investigation, Douglas reported ad- ditional findings to Eccles, O'Con- nor, and the others. This time Eccles voiced sharp disapproval of the probe, but made no move to stop 1t. Later, when he went west for a vacations, reports reached Washington that he was making disparaging remarks about the SEC. Runs to Papa
 Two weeks ago the SEC com- pleted its investigation and was ready to proceed against the Gianninis.
 Douglas personally inform ed Roosevelt, Morgenthau, the FDIC, and Preston Delano, new Comp troller of the Currency, and sent word direct to Eccles. All approv- ed instituting action against the Gianninis-except Eccles.
 Instead, he took a train to Warm Springs and rushed to the President with an mitigation protest that the SEC move was 'precipi- tate, ill-adviSed and immature" Roosevelt made no comment, but several days later a full report of Eccles' fulminations reached both Douglas and Morgenthau. To say that they hit the ceiling is putt ting it mildly.
 The showdown with Eccles will occur before or during the sus- pension hearings, scheduled for O0AddAy 4VS dCpCAAAAA6 OAA WAAob AAC does. Among the things he will be asked to expain are:
 l. Why the Federal Reserve
 Board issued 8 permit to the
 Transamerica Corp oration to
 vote the stock of the Bank of
 America.
 2. Why he is so wrought up
 about the SECS action.
 3. Whether he is receiving
 compensation as an official of
 8 corporation-not the Giannini
 firms-in violation of the law
 which bars Reserve Board mem-
 bers from engaging in private
 business.
 NOTE-The SEC case does not OFF THE RECORD