Evening star., 1947-11-12
Continued From First PageD

He explained he was talking about
| l per cent interest short-term Gov
ernment bonds which would mature
in 1924
Then Senator Ferguson read into
the record a part of Gen. Meyers
testimony to the committee last
July. The Senator quoted Gen.
Meyers as saying then that he had
talked to Mr.. Morgenthau before he
bought his bonds.
The general also was quoted as
saying he had discussed the matter
with Mr.. Eccles.
July Testimony Recalled.
Mr.. Meyers testimony in July was:
"Morgenthau said he wouldn't tell
me to do it, but he said he didn't
see how I could 60 wrong"
| He also said then he thought Mr..
EccleS had told him the same thing.
| Gen. Meyers then said the July
| testimony had refreshed his memory.
II believe he (Mr. Morgenthau) did
say I couldn't go wrong" the gen.
eral declared.
| Before he turned to the bond deal,
Senator Ferguson had Gen. Meyers
60 back over previous testimony
that Mr.. Hughes offered him
$25O,0O0 loan, a job on which he
would write your own ticket as
to salary, and the gift of a house
near Los Angeles.
/ Senator Ferguson suggested 1t was
corrupt" if Mr.. Hughes made such
offers to an Army officer in posi-
ton to pass on warplane contracts.
Gen. Meyers was deputy chief OF
Air Force procurement in 1943 and
1914, the time he says the offers
were made.
Gen. Meyers refused to agree to
the word corrupt" but said he
probably erred" in not telling su-
periors about the offers.
On the bond deal, Mr.. Hughes
account was that Gen. Meyers pro-
posed to buy the bonds on margin
and wanted Mr.. Hughes to guaran-
tee him against loss If the price OF
the bonds went down. In event they
went up, Mr.. Hughes would get his
loan back and Gen. Meyers would
get the profit.
Mr.. Hughes said Gen. Meyers
claimed he could make $1,000,00 If
Mr.. Hughes would lend him
100000.
Senator Ferguson asked Gen.
Meyers to explain how he proposed
to make s1,0O0,oo0 by buying $l0,-
100000 worth of War Bonds on
margin"
: Could Borrow Balance.
Gen. Meyers-still denying he
asked Mr.. Hughes for the money
said that after obtaining 100000,
money could be borrowed from the
banks at l per cent interest to make
up the balance-S9,8 100000
He said the bonds paid per cent
interest and that this would net a
person a l per cent profit.
Then you could double your
money in a year?" Senator Ferguson
asked.
Gen. Meyers said that was right,
but that there also was gamble on
depreciation. He acknowledged
under further questioning that the
bonds did not depreciate, but at one
time went up half point in few
weeks time.
What was the most they went up
in a year?" Senator Ferguson. de-
manded.
j Those went up to 1o3 or lo4,'
Gen. Meyers replied.
He agreed with Senator Ferguson
that under these circumstances a
! person could make four or five times
his original investment.
Lovett Mentioned.
Gen. Meyers said that last sum-
mer he discussed his bond trans
actions with Robert Lovett, former
Assistant Secretary for Air and now
Undersecretary of State. He said
he had gone to Mr.. Lovett primarily
to tell him that the Senate COM
mittee had secured recordings OF
War Department telephone CONVEX
sations which mentioned Mr.. Low
ett's name.
Mr.. Lovett told him, Gen. Myers
said, that Gen. Arnold had spoken
to him about buying bonds on a
| per cent margin and he had ad-
vlsed against it as too speculative
But you had eliminated tnat
speculation by conference with the
Secretary of the Treasury" Senator
Ferguson interjected.
! Lots of people did not share
Mr.. Morgenthau's and Mr.. Eccies'
belief that Government bonds would
not fall below par, Gen. Myers an
sWered.
] He was not able to recall the
exact words of discussions he had
had with Mr.. Morgenthau and Mr..
Eccles, but said their whole atti-
tude" was that the bonds would be
supported at par level.
Couldn't Lose on Deal.
Senator Ferguson Then you
couldn't lose your per cent?
Gen. Meyers-Yes, that is right.
, Senator Ferguson-Was this re-
i. fore you bought bonds?
= Gen. Meyers-Yes.
Gen. Meyer said he never told
f Gen. Arnold that Mr.. Hughes had
offered him money for bond specu-
lation and added, Il guess / should
! have"
BY buying bonds on l per cent
margin, Gen. Meyers said, SIS, ,000.-
900 worth could be purchased with
$250O00 Othe amount he said was
offered him through Mr. Hughes at
. torney, Mr.. Mccarthy.
) Gen. Meyers said he and his wife
bought S2,0O0.000 in bonds at par
then later made additional pur-
chases that raised their holdings
to S4,OOOO0O
And you made about 90,000?
asked Senator Ferguson.
Gen. Meyers; Yes. but We didn't
sell out then"
Senator Ferguson asked if Gen
Movers told Mr.. Lovett about the
Hughes offer
TT never entered my head" Gen
Meyers declared. Il made a mis-
take, I guess"
Gen. Meyers also testified:
That several months ago he tried
to borrow money from Mr.. Hughes