Evening star., 1947-05-24
Steel Sales Inquiry
10 Summon Broker
Al Hearing tuesday
i shs Assseiaisd Press

Senators investigating huge sales
.of steel through Unusual channels
win resume hearings Tuesday, with
Herbert M. Karp Of New York
tentatively slated as . witness.
Businessmen already heard BY the
Senate Small Business Subconmit-
tee have described the New York
lawyer. as mid dleman In arrang-
ing big transactions
Percy Nagle, representing Ar
|gentine and Chilean companies,
testified yesterday that Mr.. Karp
agreed to get him 195, 600 tons Of
steel, estimated by committee aides
as . $25 ,o0o. COO deal
Law Violations to BE Referred.
Referring to the investigation In
general, George F. Meredith, execu-
tive director Of the committee, told
La reporter:
If there are any violations OF
law, we will turn them over 10 the
proper authorities for prosecution.
Even where no law is violated, the
Icommittee will expose these prac-
tices because they are bad for the
economy Of the country"
Mr.. Meredith added that Eve are
satisfied that q diversion Of such
magnitude Is having an inf1ationary
effect"
Hundreds Of Letters Received.
He said the committee has hun
dreds OF letters from small business
men saying they cannot get steel,
or when they do get 1t, they have
to pay two or three times fair
market value.
Mr.. Meredith said the subcommit-
tee is determined to get all the
way to the bottom" Of a mysterious
$50, 900, 900 steel deal which E. A.
Kerschbaumer, Pittsburgh steel
broker, testified he tried to arrange
through Mr.. Karp- -only to have 1t
fall through.
Charles Margiotti, attorney for
Mr.. Kerschbaumer, told the COM
mittee yesterday Mr.. Karp Offered
his client 248, 600 tons of steel If he
would pay $62.50 a ton extra, to be
split with executives of five big
steel companies The executives
were not identified.
Karp's Testimony Sought.
Senator Martin, Republican, of
Pennsylvania, chairman of the steel
subcommittee, said he expects to
call Mr. Karp to testify at the next
hearing Tuesday. Mr.. Meredith
added, "if we can produce him."
Mr.. Kerschbaumer has testified
that Mr.. Karp showed him letter
purporting to confirm the 248,000-
ton sale, written on a Firth Stirling
Co. letterhead and signed "a. r.
zapp."
However, the company later dis
claimed the letter and said 1t had
not authorized the sale.
Mr.. Kerschbaumer testified before
the subcommittee Thursday that
James Boyle, New York business
man, had with him two apparent
gangsters" during the discussion of
a steel transaction in New York
hotel room.
Witness Tells of Meeting.
The witness said Mr.. Boyle told
him he understood" some steel was
available and declared he wanted
his-"or else" Mr.. Kerschbaumer
said two men were with Mr.. Boyle
and added they were apparent
gangsters. The two gunmen with
him made it very evident to me
what he meant"
Mr.. Boyle, who identified himself
as general manager of the United
Nations Trading Co., issued state
ment yesterday in New York which
declared the assertions of the witness
were absolutely false and fantastic" +"
Mr.. Boyle said he would welcome
the opportunity to appear before
the same Senate subcommittee and
produce papers and kilograms from
Mr.. Kerschbaumer's firm substan-
tiating my denialP