Evening star., 1951-02-17
Young toAppear
As0ne Of First
RFC Witnesses
Former Examiner
Will Be Asked About
Report Of $85, 900 Fee
By Robert X. Walsh


Senate subcommittee hearings
on reported outside influence on
Reconstruction Finance Corp.
lending activities will have E.
Merl Young as one of its first
witnesses Wednesday. officials
said today.
Mr.. Young, former RFC exam
liner criticized in the subcom-
mittee's recent report, will be
asked particularly whether he de-
manded an $85. 1000 fee for in
fluence he said he could exert in
helping get $40 million loan for
the Texmass Corp, Chairman
Fulbright of the Senate Banking
subcommittee told reporters.
Two Weeks of Hearings.
Another subcommittee source
disclosed that Mr.. Young. whose
wife is a White House stenog-
rapher, has notified the subcom-
mittee he will testify.
The subcommittee is to meet in
closed session Monday to map out
the list of witnesses and the scope
OF the hearings, expected to last
about two weeks,
1t might decide at that time
whether to call Donald S. Daw-
son, President Truman's assistant
on personnel matters. The Pres
ident said last week he saw no
reason why Mr.. Dawson should
appear before the committee.
Subcommittee officials indicated
today that Mr.. Dawson probably
will not be Subpoenaed but that,
he will be given advance notice of
hearing days on which his name
Is likely to come up in testimony.
Casey Asks to Testify.
The only subpoena signed thus
far. Senator Fulbright said, is
for Ross Bohannon. a Dallas
(TexD attorney. Mr.. Bohannon
was quoted in the subcommittee
report as having told investigators
that Mr.. Young offered to use
influence in getting a loan for
Texmass if he were paid an $751;
600 fee. Mr.. Bohannon said, ac-
cording to the report, that no fee
was paid.
The only prospective witness
who has publicly requested an op-
portunity to testify is former Rep
resentative Joseph E. Casey of
Massachusetts,. E. Edward Rowe,
one of the three RFC directors
criticized in the report two weeks
ago, said at the time he would
appear if asked. Subcommittee
officials said none of the directors
has yet offered to testify but that
possibly all five directors will be
invited.
RFC Chairman w. Elmer
Harber told The Star today
that he would be glad to appear
before the subcommittee if re-
quested. He said that since he
was not mentioned in the recent
report he does not know whether
he will be called.
There is a possibility, he added,
that the subcommittee might want
to ask his views on proposed legis-
lation to replace the board of
directors by single administrator.
Mr.. Harber, an Oklahoma bank
er. appointed to the board by
President Truman last August,
summarized several tighter rules
and administrative procedure
changes made by RFC in recent
months.
Reform Measures Outlined.
Most of the changes or re
forms were made before issuance
OF the subcommittee's report TWO
weeks ago and have previously
been announced, he said.
The administrative setup for
handling of synthetic rubber and
tin operations has been strength
ened by appointment of new man
oSCAACI1G, llC odiO.
Other reforms included:
l. A ban on authorization of
any loan over 81 million except
by majority vote of the five
member board of directors. Chair
man Maybank of the Senate
Banking Committee announced
several days ago he would sponsor
a bill to that effect.
2. Requirements that lawyers
and "expediters'' representing
prospective borrowers register with
RFC. and that such agents have
letters of authorization from their
clients.
3. A rule that any firm receiving
RFC loans of more than 100000
cannot hire, within two years, any
former RFC employe who had a
voice in RFC lending operations.
4. An administrative economy
move to save S. million year in
RFC operating expenses.
5. An increase in the interest
rate from 4 to per cent on loans.
This recently was put into effect.
6. A handling fee" on loan ap-
plications, starting with $40 on
loans up to 100000.
7. A charge on funds borrowed