Evening star., 1951-09-16

o'Mohoney Predicts Success for Move to
End Controct Poyoffs. Poee Alb
KEN Demonds Probe Of Money Handling
by Agriculture offieiols. Poee Ais
opening of hearings last Thursday,
to investigate published stories
that William NJ. Boyle, jr., present
Democratic National Committee
chairman, helped the American
Lithofold Corp. of st. Louis to
obtain $3.50, 900 in RFC loans in
1949.
But sometimes conflicting or
halting testimony by witnesses
yesterday, as we'll as comments
by subcommittee member and
admittedly hearsay remarks by an
RFC examiner, led the Senate in
vestigators to say that the real
digging has just started.
Mr.. Boyle is believed almost
certain to be called as a witness.
Subcommittee Chairman Hoey
&aid there has been no final de-
- ian on whether or when to
hear MIN. Mr.. Boyle has publicly
denied he had anything to do
voiced willingness to Cooperate
100 per cent" with the subcom-
mittee.
Boyle Quiz May Be Delayed.
Because of the widening sub
jects of inquiry and the lengthen-
list of probable witnesses, subcom-
mittee sources indicated Mr..
Boyle's appearance may be de-
layed until next wek. The sub
committee repeatedly has about
given up hope of finishing the
hearings by next Friday.
The reference to "gratuities" IN
connections with the Lithofold
loans came yesterday from Sena-
tor Mundt, Republican, of South
Dakota. He disclosed that the
subcommittee has evidence that
'some people got gratuities far
greater" than the kind that re-
suited in dismissal of an RFC
official late Friday.
In that instance, RFC Admin
istrator w. Stuart Symington fired
Oliver r. Kraft, assistant man
ager of the St. Louis branch Of
flee, who testified earlier~in the
day that expenses of his vaca-
ton trip in August, 1949, were
paid by R. j. Blauner, president
of Lithofold.
Tells of "By-Passing."
Senator Mundt told reporters
that evidence of gratuities to RFC
employees would be developed at
hearings this week. He would not
say whether money payments were
involved. Earlier last week Sena-
tor Mccarthy. Republican, of Wis
conSin, another member of the
subcommittee, limited at evidence
he said would show that a Litho-
fold representative gave such gifts
as cameras and perfume to one
unidentified RFC official.
Ernest B. Howard veteran RFC
employe who headed the business
loans division in 1949, testified yes
terday his Office as well as the
agency's general reviewing system
was "by-passed" in the handling
of Lithofold loan applications ap-
proved in the fall of r949 by RFC
directors. despite three previous
recommended reflections.
He told the subcommittee he
had faint recollection" that in
1949 he informed John E. Toole,
then treasurer of the st. Louis
concern, that the second of the
company'S loans was proceSsed by
higher-upS in the agency without
going through normal steps.
Mr.. Toole, equipped with a
three-volume diary, testified earli-
er in the week that Mr.. Boyle
arranged a conference between
Lithofold officials and Harley
Hise, then RFC chairman, on Feb
ruary %, 1949.
Entire Obligations Repaid.
Three days later, an $4,000
working capital" loan was ap-
proved for the company, the rec
ords showed. In September of
that year the directors approved
a $465, 900 loan and in Novem-
Der another 100000. Part OF
the $565, 900 total went to pay
off the $4,000. Then the entire
obligations was repaid in August
1850.
The loans which, according to
the testimony, were handled ir
the higher eschelon of RFC, were
those granted in September anc