Evening star., 1951-03-07
|RFC Director Says Friends Have Used Him
Continued From First Page.)


and that I was obviously regarded
as new member Of their social
group. I knew that Mr.. Jacobs
was active in the Democratic
Party and had some degree of
White House entree. My impress
sion was that the group was solely
interested in the welfare of the
Truman administration and that
any RFC interest they had was
along this line"
Received Advice From Dawson.
He added that my assumption
as to their integrity" were SEEM
ingly borne out when he led an
RFC Board move to "get tough"
on the $37.5 million Lustron Corp
loan and collided with Carl
Strandlund, president of that
company. Mr.. Young was then
an $4,000 Lustron vice presi-
dent. @
when I insisted that Mr..
Strandlund had to make econo-
mics in his executive payroll" Mr..
Dunham says, "he noted very
pointedly that such economies
would necessitate the discharge of
Merl Young. who, he emphasized,
was exceedingly well connected at
the White House.
Il Immediately contacted Mr..
Dawson, the only man I knew at
! the White House, and the results
encouraged my high opinion OF
his motives, and therefore of those
of his close friends who had be-
come my friends. Mr.. Dawson
informed me that the President
said to go ahead and do, what
ever was best regarding Lustron
without regard for the status of
Mr.. Young"
First Feeling of Doubt.
But Mr.. Dunham added that
"out of this Lustron matter came
my first feeling of doubt as to my
association with Mr.. Jacobs and
his friends in Washington" He
said his nomination of Mr.. Jacobs
las a production expert" to sur
vey the Lustron operation may
have been suggested by Mr..
Jacobs himself, or it may have
been suggested by Mr.. Windham. !"
In any case, Mr. Dunham says,
he recommended Mr.. Jacobs to
other board members.
Some weeks after Mr.. Jacobs
submitted his report, Mr.. Dunham
said, he and Mrs. Dunham refused
an invitation to visit Mr.. Jacobs
Florida ranch. Then, he said, a
Washington correspondent came
to him checking tip that
meeting had been held at the
Jacobs ranch ito engineer a grab
of the Lustron plant"
u was impressed" Mr.. Dunham
said, "by the fact that the man
had an accurate guest list: Mr..
and Mrs. Dawson, Mr.. and Mrs.
Young and several others. I tele-
phoned either Mr.. Windham or
Mr.. Jacobs and the matter of the
reported grab was treated as a
Joke. I told the newspaperman ]
couldn't conceive of Mr.. Jacobs
wanting to go into Lustron, since
he knew it would require consid-
cradle capital and since the RFC
had decided the project was one
| in which no more Federal funds
would be spent.
II was, however, worried about
the matter and, as I look back.
now, I feel my changed feeling
was reflected in my attitude
toward Messrs. Jacobs, Young, ct
al. In any case. shortly there
after, it became apparent that my
old friends had cooled in regard
to me- AS you will see by check
ing my diary, whereas their calls
were most frequent during my
first year of RFC service, they
suddenly stopped and I have seen
or heard practically nothing from
them in the past year.
Defends Kaiser-Frazer Loan.
Mr.. Dunham defended the
S66 million Kaiser Frazer grant as
"a good loan" Admitting that
he once had an argument over it
with Kaiser Frazer executive,
he denied he had asked Mr..
Jacobs to act as an intermediary"
to settle the problem with Edgar
Kaiser, the corporation president,
as Mr.. Jacobs had testified. and
also denied knowing that Mr..
Jacobs suggested that Mr.. Kaiser
hire the law firm of William
Boyle. Democratic National Com
mittee chairman, to handle their
RFC work.
MY secretary" Mr.. Dunham
wrote the committee, knew how
to reach Mr.. Kaiser if I had
wanted him and I will leave it to
the judgment of you gentlemen
whether, with a multimillion-
dollar loan pending, Mr.. Kaiser
would have made himself un-
available to an RFC director
trying to telephone him"
Mr.. Dunham said that, on the
basis of Mr.. Jacobs committee
testimony, he is now convinced
"that he heard of the dispute
with the Kaiser eXecutive) from
some one and that he made use
of this piece of information as
an indicator of his close relation
ship and, therefore, his influence
with me-"
Got Calls From Boyle.
Since coming to Washington, I"
Mr.. Dunham wrote, II am positive
no one has succeeded in exerting
any improper influence on my de-
cisions. I now feel, however, that
some of the gentlemen with whom