Evening star., 1947-11-12


Ira C. Eaker, former deputy
chief of the Air Force.
Mai. Gen. Bennett E. Meyers
told the Senate War Investigat-
ing Subcommittee today he and
his wife netted 100000 from a
S4,0O0,0OO wartime bond deal
about which he said he con-
suited then Secretary of the
Treasury Morgenthau.
Mr.. Morgenthau told him he
didn't see how I could go wrong" :"
Meyers said.
The retired generals story of the
transaction came atop contradictory
testimony from him and Howard
Hughes as to whether Gen. Meyers
sought a loan from the airplane
manufacturer for a bond deal,
Mr.. Hughes testified Gen. Meyers
tried to borrow 100000 to finance
a Sl0,0O0,000 bond speculation at a
time when Gen. Meyers, as an Air
Force officer, was negotiating with
Mr.. Hughes on Warplane contracts.
Gen. Meyers called that lie He
said Hughes, through Neif Nc
Carthy, Los Angeles attorney, Of
fered to lend him s2500O0, but he
refused the loan in indignation.
Says He Talked to Eccles.
When Gen. Meyers related that he
actually made a bond deal, he said
he talked about it with Chairman
Mariner Eccles of the Federal Re-
serve Board as well as Mr.. Morgen-
thau. He said he believes Mr.. Eccles
told him the same thing Mr.. Nor
genthau did
In New York, Mr. Morgenthau
said. Its an outright lie when
told of Gen. Meyers testimony. He
said "the conversation never took
place"
Our whole practice there (Treas-
ury Department., Mr.. Morgenthau
said. was to discourage speculation
in Government bonds and to make
it impossible for people to speculate
in Government bonds"
Reporters, seeking to ask Mr..
Eccles about Gen. Meyers story, were
sent word through an associate that
he had never given such advice to
Gen. Meyers, or any one else, and
would not have done so under any
circumstances.
Mr.. Eccles further relayed word
that he "abhorred" speculation in
L0r,Ir fIot In o111
the Federal Reserve Board had done
everything they could to prevent it.
Says He Talked to Arnold.
Gen. Meyers told his story as he
testified for the second day in the
subcommittee inquiry into circum-
stances of $40,000000 in plane con-
tracts received by Mr.. Hughes.
Chairman Ferguson asked Wheth-
er Gen. Meyers ever had discussed
the proposed bond deal with any one
in the Army or with any one "in the
Government outside the Army"
Gen. Meyers first said that he
had not discussed it with any nom
Army Government officials, but had
talked to Gen. H. H. Arnold, for
mer head of the Air Forces, about it..
AS he recalled it, he said, he told
Gen. Arnold he had made bond
purchase. He added that he told
Gen. Arnold he didn't see why more
people didn't do it, and that I
didn't see why he Gen. Arnold
didn't"
What did Gen. Arnold say?"
Senator Ferguson asked.
He said it certainly had appeal
and that he would think about it.
Did you ever talk to the Secre-
tary of the Treasury about it," Sem
ator Ferguson pressed.
Questioned at Secret Hearing.
mo, not about this particular
transaction"
Then it was disclosed that the
committee had questioned Ger.
Meyers about bond dealings at a
secret hearing last July.
When that was recalled to Gen.
Meyers, the witness said he thought
he had testified then that he talked
to Mr.. Morgenthau about bonds in
general"
He said that on one occasion he
talked with Mr.. Morgenthau was
when he Gen. Meyers was a men,
ber of the board of Army Emer-
Continued on Page AS, Column o.
- ~ REuII