Evening star., 1951-12-10
Mckinney Defends 68-to-1 Profit
In Stock in Bankrupt Company;
GrunewaId Tied TO Fix MESSAGE
Democratic Chief
And McHuIe ell
Of10-Month Gains
By Robert K. Walsh

Frank E. Mckinney, Democratic
national chairman, made a quick
profit of $74,000 in 1947 from a
$1,000 investment in common
stock of a company that sold 700
tractors to the Government, bank
ruptcy hearing records in Phil
adelphia indicated today.
Frank M. McHale, Indiana
Democratic committeeman who
sponsored Mr.. Mckinney for the
party post recently, made SINH
lar amount after reselling 1000
shares of common stock to the
Empire Tractor Co., from which
he had purchased it 10 months
previously, the records indicated.
Mr.. McHale'S wife netted $18,500
from $3.50 she invested.
At a press conference here,
called after disclosure of the rec
ords, Mr.. Mckinney declared his
profits were only $4,000. The ma
tional chairman said he had in
vested $4,000, in 1916, of which
$4,000 was in preferred stock.
When he resold all of the stock
10 months later he got back his
original $4,000 on the preferred
stock and about $4,000 on the
$1-a-Share common stock invest
ment.
McHale Tells of Net.
Reached by telephone in In
dianapolis, Mr.. McHale told The
Star that his original investment
in the tractor firm was $26, 900, of
which $1,000 was for common
stock and the rest for preferred.
His profit on the common stock
at the time of the sale was $69, 1853,
he said.
Mr.. Mckinney and Mr.. McHale
bought the stock from Frank
Cohen. head of Empire Tractor.
Mr.. Cohen had headed the En-
pire Ordnance Co., a World War
II munitions combine which came
in for considerable criticism by
the then Truman committee in
the Senate. Empire Tractor was
q subsidiary of Empire Ordnance.
The national chairman said he
had known little about Mr.. Cohen
or the Empire Tractor when he
bought the stock in 1916. He did
SO at the suggestion of Oscar
Salenger, who was president of
the Milwaukee American ASsocia-
ton baseball club at the time Mr..
Mckinney was an official of the
Indianapolis club.
Charges Distortion.
Defending the stock transaction
as a business venture that paid
off, and denying that any deal was
involved, Mr.. Mckinney told re-
porters that critics have gone out
of their way to dig up and dis
tort" something that took place
years ago.
II don't intend to take this lying
down." he declared, II am per-
fectly willing to give a Is or 20
year resume of all my investments,
if necessary. I have made other
investments just as good and I
have made investments with cor
responding losses. Only a year
after that investment. I bought
$4,000 ina new company under
very much the same circumstances
and it all went down the drain" 4"
Mr.. Mckinney and Mr.. McHale,
In. their separate explanations,
said they sold the stock in the
belief that there was an argu-
ment over control of the company.
Mr.. Mckinney said MIR. Salenger
suggested that he hold on to the
stock. But Mr.. Mckinney said
he never believed in sitting too
long on an egg" when a good
profit was available. He also
told reporters that he regarded
the $4,000 total investment in
Empire Tractor as comparatively
small"
Didn't Investigate.
Mr.. Mckinney said he made no
investigation of the company when
he bought the stock. The bank
ruptcy record in Philadelphia dis
closed today that the company
got contract for 1000 tractors
from an Argentine company but
the contract was cancelled later.
Both Mr.. Mckinney and Mr..
McHale recalled that they had to
buy $50 shares of preferred stock
at 500 share before they could
buy the common stock at ST. a
share. Mr.. McHale added that
he had never represented the COM
pany as a lawyer or otherwise.
Mr.. Mckinney, a banker who
has extensive interests in other
business fields, said he never had
transactions or personal dealings
with Mr.. Cohen except for this
(See MCKINNEY, Page A-2.)
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