Evening star. [volume] (Washington, D.C.) 1854-1972, 1951-03-25
investigators Urge
WATCHDOG Over RFC
Until Fate Is Settled
By Robert X. Wotsh

The Senate subcommittee in
vestigating the Reconstruction
Finance Corp. may become Il
watchdog" to see that the agency
functions effectively until Con-
gress decides it's fate, subcon,
mittee sources said yesterday.
Heads of three Senate groups
Immediately concerned with RFC
favor far-reaching reorganization.
They have indicated, however, chat
a bill to abolish RFC would not get
through Congress or at least not
survive a presidential veto.
Meanwhile, the agency faces a
critical period during which spe-
cial supervision by Congress is de-
sirable. some Senators believe. y
Chairman Mcclellan of the Ex-
penditures Committee considering
President Humans proposal for
reorganizing RFC urged that &C
ton be delayed until Congress can
work out basic revamping of the
agency.
April Hearings Arranged.
Chairman Maybank of the
Banking Committee. arranging for
hearings early in April on a vari-
ETY. of measures to revise or liqui-
date the agency. said Congress
might need at least two months to
prepare and pass a satisfactory
measure.
Chairman Fulbrig t, of the
Banking subcommittee which will
resume hearings Tuesday on ''in-
f1uence and favoritism" in RFC, /
regards the Presidents plan as a
first step. He advocates broader
reforms, particularly a goldfish
bowl type of publicity for all fu-
ture activities of the huge Gov
eminent money-lending agency.
Senator Fulbright has not COM
mented on the possible watch
dog" role of his subcommittee.
Some of his associates said yester-
day that especially close congress
sional supervision and publicity
are essential for RFC in "its pres
ent period of uncertainty and con-
fusion"
Could Be Blocked in Senate.
The Presidents plan, narrowly
accepted in the House, goes into
effect April 20 unless rejected by
the Senate by majority vote of
at least 40 Senators. The Expen-
ditures Committee will conduct
another day of hearings April 3
when Senator Capehart, Republic
can, of Indiana. sponsor of the
rejection resolution, and Senator
Fulbright will testify.
Advocates of the Presidents
plan for a single administrator
noted that the immediate result
of rejection would be to leave
the present five directors in Office
until the Senate acted on their
nominations or until Congress en-
acts reorganization or abolition
bill. Some sort of congressional
watchdog committee" will be
necessary so that the agency's
morale and efficiency will not be
further impaired, they indicated. I
Battle lines on the abolition
issue were strengthened yesterday.
Wendell Berge, former chief of
the Justice Departments antitrust
division, announced formation of
Small Manufacturers Emer-
gency Committee to fight for the
life of RFC.
Jesse Jones, former head of
RFC. in a letter to Senator Byrd,
Democrat, of Virginia renewed his
suggestion that RFC be abolished.
Senator Byrd is the principal
Democratic senatorial sponsor of
an abolition bill.
Duff Supports Inquiry.
The drive to continue a search
Ing inquiry into RFC-no matter
what Congress eventually decides
to do about the agency-was sup
ported by Senator Duff, Repub-
hcan, of Pennsylvania.
1T would be a terrible letdown
to the people of the United States
If the Investigations were stopped
now" he declared. He urged ex-
tension of the authority not only
of the Fulbright subcommittee but
of the Kefauver committee in
vestigating organized crime. /
The subcommittee investigating
RFC decided last week to continue
its inquiry for an indefinite
period.
Continuance of the subcommit-
tee hearings will intensity efforts
by Republican members to call
Donald Dawson as a witness, Sen
ator Capehart indicated yesterday.
Mr.. Dawson. an administrative
assistant to President Truman,
has been named by the subcom-
mlttee as key figure in a pat
tern of influence" on RFC. He
has ignored a written invitation
by Senator Fulbright to appear at
the hearings.
Senator Capehart told reporters
he feels the subcommittee has am