Evening star., 1951-03-03
RFC
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kfC
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at the hearings earlier this week
that Joseph H. Rosenbaum, a
Washington attorney. active in
behalf of RFC loan applications,
paid for a mink coat for Mr.. and
Mrs. E. Merl Young.
Mr.. Young, whose wife is a
White House stenographer, has
been mentioned frequently along
with Mr.. Rosenbaum and others
in testimony indicating they sought
to influence some RFC directors on
loans.
Senator Fulbright made no di-
rect comment on The Star edi-
torial's suggestion that Donald
Dawson be fired as an aide to
President Truman unless he vol
unfairly testifies before the SUBJ
committee on testimony linking
him to a web of influence" af-
fecting RFC.
Still Wants His Testimony
The Arkansas Democrat held to
his previous stand that Mr.. Daw-
son should not be subpoenaed to
testify, although he believes the
subcommittee has a legal right to
subpoena any presidential assist
ant.
II think this confidante Of the
President ought to testify, but I
am not going to force him to.
Senator Fulbright said.
The subcommittee. he explained.
has encountered added diff
Guilty because of a tendency .in
the press and elsewhere" to look
upon the inquiry as a "sort of
chess game between the White
House and Congress. It is not
question of the executive or
legislative branch trying to out
smart" the other. he contended.
1t is a question Of propriety in
official conduct. he said.
IT couldn't possibly win in such
chess game" he said. THE
purpose of this subcommittee is
to determine whether RFC direc-
tors have yielded to influence-not
necessarily Illegally. but improp-
erly. I believe these hearings
have achieved their purpose
Senator Fulbright's comments
followed another session of COM
plicated and conflicting testimony
yesterday concerning moves in
connection with RFC loans total
ing $37.5 million to the Lustron
Corp. of Columbus. Ohio. The
company, now bankrupt, manu-
factured prefabricated houses.
Accepted $4,000. Check.
Mr.. Rosenbaum admitted he
accepted a $4,000 check as part
of a 100000 retainer fee from
the Commercial Home Equipment
Co., that contracted to operate
trailers and trucks for Lustron.
He explained he was retained to
try to work out a reorganization
plan for Lustron that would safe
guard its loan from RFC and pro-
tect Commercials interest in
financial success of Lustron.
Roy Fruehauf, president Of a
company that contracted to pro-
vide trailers for Commercial to
use on the Lustron project, as
serted, however, that Mr.. Rosen-
baum told him, in 1949, he could
save" Lustron because he had
RFC Directors Walter L. Dunham
and William E. Willett in his "hip
pocket"
Mr.. Rosenbaum denied he said
that. Mr.. Fruehauf, as we'll as
a sworn written statement by
Howard E. Buhse, a Chicago rep
resentative of Lustron stock
holders, fatty contradicted him.
Mr.. Fruehauf testified also that
Mr.. Dunham, in a conversation in
February, 1850, seemed favorably
inclined to plan by Mr.. Frue-
hauf and others to save Lustron
from financial collapse.
Later the same day, Mr.. Dun
ham suddenly changed his mind
and blocked those efforts Mr..
Fruehauf said. That was imme-
diately after an official of the
commercial firm withdrew a $10,-
900 retainer check to Mr.. Rosen-
baum, he declared.
Check Later Returned.
The check was returned to Mr..
Rosenbaum two weeks later and
the retainer arrangement was de-
clared still in effect, the subcom-
mittee was told.
Mr.. Fruehauf said he had op-
posed any dealings with Mr..
Rosenbaum.
The testimony created so many
conflicts that Senator Fulbright
instructed the official reporter to
note that a subcommittee quorum
was present.
Senator Fulbright told news
men later he did this "just in
case" somebody raised a ques-
ton of perjury. Such action, he
said, would be up to the JUS
tice Department.
"But never heard such lying in