The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1945-07-03
By WEsTBROOK PEGLER

ers. His articles serve the good purpose
| of making people think)
BY WEsTBROOK PEGLER
| Copyright, 1885, by King Features Syndicate)
| NEW YORK.-Davsd G. Baird of Montclair,
| N. j., an insurance man with one of the
largest New York firms and with offices in
the Wall street district, loaned Elliott Roose-
welt $7O 900 for one of Elliott's radio ventures,
the Transcontinental Broadcasting System, in
| November, 1899 Philanthropy is a hobby with
| Mr. Baird who contributes to a number of
charities and has established memorial
foundation in honor of deceased member
of his family. He is a director of Hudson
Motors and recently became director of the
Marine Midland bank of New York.
| Before this in August of 1899, Mr.. Baird
had been instrumental in arranging a loan Of
$4,000 to Elliott for his Texas state network
by New Jersey manufacturer who happened
to have amount of cash for which he
was seeking an investment
| In January and February of 1912, after ne
| gotiations with Jesse JONES' of Houston, Tex
as, the financier who was then Secretary of
Commerce in the late President Roosevelt's
cabinet, both of these loans were settled for
about 100000 which Elliott had received
| through liquidation of Transcontinental, Del
aware corporation. The two losers prorated
| the salvaged money between them.
| Mr.. Jones performed similar service for
his friend, the President, in the settlement of
a debt of 5000, 900 which Elliott owed John
Hartford, president of the Atlantic and Pa
cific chain of grocery stores, for $4,000.
| Like Hartford, Mr.. Baird reported his loss
of about $4,000 as a bad debt in his income
tax return for 1912. I do not know whether
the man who made the $4,000 loan scheduled
as a bad debt his loss, which was about $685.
600. This $4,000 loan was covered by five
notes of $4,000 each. One of them was re-
tired promptly or maturity and the interest
on the others was paid for one year
Unlike Mr. Hartford, who did not personal
ly ascertain what Elliott did with his 5000, 900
and says he does not yet know, Mr. Baird
examined the companies and satisfied him
self that the $4,000 loan did go into the Texas
state network and that the $1,000 used
for Transcontinental. 1t was covered by five
notes of $4,000 each which interest
| ever paid.
William Sirovich, the democratic new deal
congressman from New York, was instru-
mental in attracting the interest of Mr.. Baird
| just as, earlier that year, he had participated
| in the approaches to Hartford. However, Hall
Roosevelt, the late brother of Mrs Eleanor
Roosevelt, and thus Elliotts uncle, did not
| participate in the deal as he had in the Hart
| ford loan, and Mr. Baird never met him.
Congressman Sirovich died on December 10,
1899.
In the Hartford negotiations, it occurred to
John Hartford that there might be question
| of propriety in loan to the Presidents son.
inasmuch as his grocery chain was under fire
in Congress and the Roosevelt administration
was hostile to his firm. Therefore President
Roosevelt was consulted by phone and gave
his approval. Being Under no pressure from
the government Mr. Baird saw no question
of propriety and therefore the President was
| IL.
says he did not meet Mr.. Roosevelt until the
spring of 1910 when he went to Warm Springs
on philanthropic mission and had a visit
| with the President and that he never dis
cussed the loan with him.
The stock which was to be Baird's collateral
was not delivered to him but was placed in
the hands of an attorney, representing Elliott,
who held it until Baird and the attorney
eventually made a trip to Washington to con-
fer with Jesse Jones.
Mr. Baird did not know about the Hartford
loan which was made early in 1889 and like
Hartford he made effort to collect. He
says, however, that in the beginning he be-
| lieved the broadcasting system would work
out all right.
| The Associated Press recently reported
from Wilmington, Delaware, that court rec
ords there revealed the liquidation of the
broadcasting system which had been placed
| AS to whether Elliott ever reported as in
come any of the money which he thus Dor
| rowed the Treasury is not permitted to make
any statement, except on a demand by Con-
gress However, Treasury regulation has
been cited which holds that when a taxpayer
buys back his obligations at less than their
face value the difference is taxable income
If this were the case here, it might be con-
tended that Elliott received an income of
S196, 900 on the Hartford settlement and $780,
600 by way of the settlement of the other
two loans at deep discount On the other
hand number of readers have written in
d'gnant letters of protest against the allow.
ance of bad debt losses where, as in this
| case, the losers did not make diligent efforts
70 collect the money Cases have been cited
in which such claims were disalowed because
the creditors did not sue and obtain judg-
ment. And against this position others argue
that it is Unfair to compel taxpayer to
throw good money after bad in hiring counsel
and prosecuting suit when it is obvious that
the debtor cannot pay.
| AS matters stand, the government and the
mass of the taxpayers seem to have taken
the loss while Elliott seems to have had the
use of the money.